Debt | 9 Months Ended |
Sep. 30, 2013 |
Debt [Abstract] | ' |
Debt | ' |
7. DEBT |
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The principal balances of the components of long-term debt are as follows (in thousands): |
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| September 30, | | December 31, |
| 2013 | | 2012 |
Green Plains Bluffton: | | | | | |
$70.0 million term loan | $ | 27,395 | | $ | 41,018 |
$20.0 million revolving term loan | | 20,000 | | | 20,000 |
$22.0 million revenue bond | | 15,780 | | | 17,510 |
Green Plains Central City: | | | | | |
$55.0 million term loan | | 34,512 | | | 38,635 |
$30.5 million revolving term loan | | 28,639 | | | 28,639 |
$11.0 million revolving line of credit | | 10,600 | | | 10,600 |
Equipment financing loan | | 54 | | | 105 |
Green Plains Holdings II: | | | | | |
$26.4 million term loan | | 17,414 | | | 21,914 |
$51.1 million revolving term loan | | 42,640 | | | 45,320 |
Green Plains Obion: | | | | | |
$60.0 million term loan | | 6,279 | | | 13,479 |
$37.4 million revolving term loan | | 37,400 | | | 37,400 |
Equipment financing loan | | 179 | | | 334 |
Economic development grant | | 1,268 | | | 1,335 |
Green Plains Ord: | | | | | |
$25.0 million term loan | | 15,789 | | | 17,675 |
$13.0 million revolving term loan | | 12,151 | | | 12,151 |
$5.0 million revolving line of credit | | 4,749 | | | 4,749 |
Green Plains Otter Tail: | | | | | |
$30.3 million term loan | | 19,190 | | | 22,791 |
$4.7 million revolver | | 4,675 | | | 4,675 |
$19.2 million note payable | | 19,116 | | | 19,014 |
Capital lease payable | | - | | | 53 |
Green Plains Shenandoah: | | | | | |
$17.0 million revolving term loan | | 16,000 | | | 17,000 |
Green Plains Superior: | | | | | |
$40.0 million term loan | | 11,125 | | | 15,250 |
$10.0 million revolving term loan | | 10,000 | | | 10,000 |
Equipment financing loan | | 36 | | | 89 |
Corporate: | | | | | |
$90.0 million convertible notes | | 90,000 | | | 90,000 |
$120.0 million convertible notes | | 95,538 | | | - |
Notes payable | | - | | | 1,625 |
Capital lease | | 243 | | | 403 |
Other | | 10,000 | | | 211 |
Total long-term debt | | 550,772 | | | 491,975 |
Less: current portion of long-term debt | | -62,846 | | | -129,426 |
Long-term debt | $ | 487,926 | | $ | 362,549 |
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Short-term notes payable and other borrowings at September 30, 2013 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $38.0 million and $58.4 million, respectively. Short-term notes payable and other borrowings at December 31, 2012 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $105.0 million and $39.1 million, respectively, and a $27.2 million short-term note payable issued in conjunction with the March 2012 repurchase of common stock. |
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Ethanol Production Segment |
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· | Term Loans | | | | |
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o | Scheduled principal payments are as follows: | | | | |
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• | Green Plains Bluffton | $0.3 million per month | | | |
• | Green Plains Central City | $0.5 million per month | | | |
• | Green Plains Holdings II | $1.5 million per quarter | | | |
• | Green Plains Obion | $2.4 million per quarter | | | |
• | Green Plains Ord | $0.2 million per month | | | |
• | Green Plains Otter Tail | $0.4 million per month | | | |
• | Green Plains Superior | $1.4 million per quarter | | | |
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o | Final maturity dates (at the latest) are as follows: | | | | |
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• | Green Plains Bluffton | 31-Jan-15 | | | |
• | Green Plains Central City | 1-Jul-16 | | | |
• | Green Plains Holdings II | 1-Jul-16 | | | |
• | Green Plains Obion | 20-May-14 | | | |
• | Green Plains Ord | 1-Jul-16 | | | |
• | Green Plains Otter Tail | 1-Sep-18 | | | |
• | Green Plains Superior | 20-Jul-15 | | | |
· | Revolving Term Loans – The revolving term loans are generally available for advances throughout the life of the commitment, subject, in certain cases, to borrowing base restrictions. Allowable advances under the Green Plains Shenandoah loan agreement are reduced by $1.0 million each six-month period commencing on June 1, 2013. Allowable advances under the Green Plains Superior loan agreement are reduced by $2.5 million each six-month period commencing on the first day of the month beginning six months after repayment of the term loan, but in no event later than January 1, 2016. Allowable advances under the Green Plains Obion loan agreement are reduced by $4.7 million on a semi-annual basis commencing on March 1, 2015. Allowable advances under the Green Plains Holdings II loan agreement are reduced by $2.7 million on a semi-annual basis commencing on April 1, 2012 and are reduced by $5.7 million on a semi-annual basis commencing on October 1, 2016. Interest-only payments are due each month on all revolving term loans until the final maturity date for the Green Plains Bluffton, Green Plains Central City, Green Plains Ord, Green Plains Shenandoah, and Green Plains Superior loan agreements. | | | | |
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o | Final maturity dates (at the latest) are as follows: | | | | |
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• | Green Plains Bluffton | 31-Jan-15 | | | |
• | Green Plains Central City | 1-Jul-16 | | | |
• | Green Plains Holdings II | 1-Oct-18 | | | |
• | Green Plains Obion | 1-Jun-18 | | | |
• | Green Plains Ord | 1-Jul-16 | | | |
• | Green Plains Shenandoah | 1-Mar-18 | | | |
• | Green Plains Superior | 1-Jul-17 | | | |
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Green Plains Bluffton issued a $22.0 million Subordinate Solid Waste Disposal Facility Revenue Bond with the City of Bluffton, Indiana. The revenue bond requires: (1) semi-annual principal and interest payments of approximately $1.5 million through March 1, 2019, and (2) a final principal and interest payment of $3.745 million on September 1, 2019. At September 30, 2013, Green Plains Bluffton had $2.5 million of cash, presented as restricted cash with the long-term portion in other assets on the consolidated balance sheets, the use of which was restricted for principal and interest payments towards the revenue bond. |
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Green Plains Otter Tail issued $19.2 million in senior notes under New Market Tax Credits financing. The notes bear interest at a rate equal to the prime rate (as defined) plus 1.5%, but not less than 4.0%, payable monthly, and require monthly principal payments of approximately $0.3 million beginning in September 2014. The notes mature on September 1, 2018 with an expected outstanding balance of $4.7 million upon maturity. |
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Allowable dividends or other annual distributions from each respective subsidiary, subject to certain additional restrictions including compliance with all loan covenants, terms and conditions, are as follows: |
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• | Green Plains Bluffton | Up to 35% of net profit before tax, and up to an additional 15% of net profit before tax, | | | |
| | after free cash flow payment is made | | | |
• | Green Plains Central City | | | | |
| and Green Plains Ord | Up to 35% of net profit before tax, and an unlimited amount may be distributed after | | | |
| | free cash flow payment is made, provided maintenance of 70% tangible owners’ equity | | | |
• | Green Plains Holdings II | Up to 40% of net profit before tax, and unlimited after free cash flow payment is made | | | |
• | Green Plains Obion | Up to 40% of net profit before tax, and unlimited after free cash flow payment is made | | | |
• | Green Plains Otter Tail | Up to 40% of net profit before tax, and an amount reasonably acceptable to the lender | | | |
| | may be distributed provided maintenance of 40% tangible owner equity | | | |
• | Green Plains Superior | Up to 40% of net profit before tax, and unlimited after free cash flow payment is made | | | |
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In October 2013, the Green Plains Shenandoah revolving term loan was amended to remove the restriction on allowable dividends and to revise the working capital and net worth covenants. The working capital covenant, previously to be not less than $8.0 million, was amended to be not less than $6.0 million. The net worth covenant, previously to be not less than $60.0 million, was amended to be not less than $65.0 million. |
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Agribusiness Segment |
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Green Plains Grain has a $125.0 million senior secured revolving credit facility with various lenders, as amended on August 27, 2013, to provide the agribusiness segment with working capital funding subject to a borrowing base as defined in the facility. The revolving credit facility matures on August 26, 2016. The revolving credit facility includes total revolving credit commitments of $125.0 million and an accordion feature whereby amounts available under the facility may be increased by up to $75.0 million of new lender commitments upon agent approval. The facility also allows for additional seasonal borrowings up to $50.0 million. The total commitments outstanding under the facility cannot exceed $250.0 million. As security for the revolving credit facility, the lender received a first priority lien on certain cash, inventory, accounts receivable and other assets owned by subsidiaries of the agribusiness segment. Advances are subject to interest charges at a rate per annum equal to the LIBOR rate for the outstanding period plus the applicable margin or a rate per annum equal to the base rate plus the applicable margin. In addition to other customary covenants, this revolving credit facility contains restrictions on distributions with respect to capital stock, with exceptions for distributions of up to 40% of net profit before tax, subject to certain conditions. |
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Marketing and Distribution Segment |
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Green Plains Trade has a senior secured asset-based revolving credit facility pursuant to which the lender will loan up to $130.0 million on eligible collateral. This credit facility was increased from $70.0 million in April 2013. The amount of eligible collateral is determined by a calculated borrowing base value equal to the sum of percentages of eligible receivables and eligible inventories, less certain miscellaneous adjustments. The outstanding balance, if any, is subject to interest charges at the lender’s floating base rate plus the applicable margin or LIBOR plus the applicable margin. The revolving credit facility expires on April 25, 2016. In addition to other customary covenants, this revolving credit facility contains restrictions on distributions with respect to capital stock, with exceptions (i) for distributions with respect to tax obligations, subject to certain conditions, and (ii) whereby distributions may be made in an amount up to 50% of net income if (a) undrawn availability under this facility, on a pro forma basis, is greater than $10.0 million for the preceding 30 days and (b) as of the date of the distribution, the borrower would be in compliance with the fixed charge coverage ratio on a pro forma basis. At September 30, 2013, Green Plains Trade had $27.4 million, presented as restricted cash on the consolidated balance sheets, the use of which was restricted for repayment towards the outstanding loan balance. |
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In June 2013, subsidiaries of the Company executed a New Markets Tax Credits financing transaction. In order to facilitate this financing transaction, the Company was required to issue promissory notes payable in the amount of $10.0 million and a note receivable in the amount of $8.1 million. The promissory notes payable and note receivable bear interest at 1% per annum, payable quarterly. Beginning in March 2020, the promissory notes and note receivable each require quarterly principal and interest payments of approximately $0.2 million; the Company retains the right to call $8.1 million of the promissory notes in 2020. The promissory notes payable and note receivable mature on September 15, 2031 and will be fully amortized upon maturity. In connection with the New Markets Tax Credits financing transaction, income tax credits were generated for the benefit of the lender. The Company has guaranteed the lender the value of these income tax credits over their statutory lives, a period of seven years, in the event that the income tax credits are recaptured or reduced. The value of the income tax credits was anticipated to be $5.0 million at the time of the transaction. The Company believes the likelihood of recapture or reduction of the income tax credits is remote, and therefore has not established a liability in connection with this guarantee. |
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Corporate Activities |
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On September 20, 2013, the Company issued $120.0 million of 3.25% Convertible Senior Notes due 2018, or the 3.25% Notes. The 3.25% Notes represent senior, unsecured obligations of the Company, with interest payable on April 1 and October 1 of each year. Conversion of the 3.25% Notes may only be settled in shares of the Company’s common stock unless shareholder approval is received to allow for flexible settlement consisting of, at the Company's election, cash, shares of the Company's common stock, or a combination of cash and shares of the Company's common stock (and cash in lieu of fractional shares) until the close of business on the scheduled trading day immediately preceding the maturity date. As a result, the 3.25% Notes contain liability and equity components which were bifurcated and accounted for separately. The liability component of the 3.25% Notes, as of the issuance date, was calculated by estimating the fair value of a similar liability issued at an 8.21% effective interest rate, which was determined by considering the rate of return investors would require in the Company’s debt structure. The amount of the equity component was calculated by deducting the fair value of the liability component from the principal amount of the 3.25% Notes, resulting in the initial recognition of $24.5 million as debt discount costs recorded in additional paid-in capital. The carrying amount of the 3.25% Notes will be accreted to the principal amount over the remaining term to maturity and the Company will record a corresponding amount of non-cash interest expense. Additionally, the Company incurred debt issuance costs of $5.1 million related to the 3.25% Notes and allocated $4.0 million of debt issuance costs to the liability component of the 3.25% Notes. These costs will be amortized to non-cash interest expense over the five-year term of the 3.25% Notes. Prior to April 1, 2018, the 3.25% Notes will not be convertible unless certain conditions are satisfied. The initial conversion rate is 47.9627 shares of common stock per $1,000 principal amount of 3.25% Notes, which is equal to an initial conversion price of approximately $20.85 per share. The conversion rate is subject to adjustment upon the occurrence of certain events, including the payment of a quarterly cash dividend that exceeds $0.04 per share. In addition, the Company may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including the Company calling the 3.25% Notes for redemption. |
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The Company may redeem for cash all, but not less than all, of the 3.25% Notes at any time on or after October 1, 2016 if the sale price of the Company's common stock equals or exceeds 140% of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the Company delivers notice of the redemption. The redemption price will equal 100% of the principal amount of the 3.25% Notes, plus any accrued and unpaid interest to, but excluding, the redemption date. In addition, upon the occurrence of a fundamental change, such as a change in control, holders of the 3.25% Notes will have the right, at their option, to require the Company to repurchase their 3.25% Notes in cash at a price equal to 100% of the principal amount of the 3.25% Notes to be repurchased, plus accrued and unpaid interest. Default with respect to any loan in excess of $10.0 million constitutes an event of default under the 3.25% Notes, which could result in the 3.25% Notes being declared due and payable. |
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In November 2010, the Company issued $90.0 million of 5.75% Convertible Senior Notes due 2015, or the 5.75% Notes. The 5.75% Notes represent senior, unsecured obligations of the Company, with interest payable on May 1 and November 1 of each year. The 5.75% Notes may be converted into shares of the Company’s common stock and cash in lieu of fractional shares of the common stock based on a conversion rate equal to 69.9527 shares of the common stock per $1,000 principal amount of 5.75% Notes, which is equal to a conversion price of approximately $14.30 per share. The conversion rate is subject to adjustment upon the occurrence of specified events, including the payment of a cash dividend. The conversion rate was adjusted to reflect the payment of a cash dividend of $0.04 per common share paid on September 26, 2013 to all shareholders of record as of September 5, 2013. The Company may redeem for cash all, but not less than all, of the 5.75% Notes at any time on or after November 1, 2013, if the last reported sale price of the Company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period, at a redemption price equal to 100% of the principal amount of the 5.75% Notes, plus accrued and unpaid interest. Default with respect to any loan in excess of $10.0 million constitutes an event of default under the 5.75% Notes, which could result in the 5.75% Notes being declared due and payable. |
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A $27.2 million note payable to a subsidiary of NTR plc, which previously was the Company’s largest shareholder, was paid in full during the first quarter of 2013. |
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Covenant Compliance |
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The Company, including all of its subsidiaries, was in compliance with its debt covenants as of September 30, 2013. |
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Capitalized Interest |
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The Company had no capitalized interest during the nine months ended September 30, 2013. |
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Restricted Net Assets |
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At September 30, 2013, there were approximately $548.4 million of net assets at the Company’s subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries. |
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