Debt | 6 Months Ended |
Jun. 30, 2014 |
Debt [Abstract] | ' |
Debt | ' |
8. DEBT |
|
The principal balances of the components of long-term debt are as follows (in thousands): |
|
|
|
|
| | | | | |
| June 30, | | December 31, |
| 2014 | | 2013 |
Green Plains Bluffton: | | | | | |
$70.0 million term loan | $ | - | | $ | 26,621 |
$20.0 million revolving term loan | | - | | | 15,000 |
$22.0 million revenue bond | | 14,865 | | | 15,780 |
Green Plains Central City: | | | | | |
$55.0 million term loan | | - | | | 33,100 |
$30.5 million revolving term loan | | - | | | 17,739 |
Equipment financing loan | | - | | | 36 |
Green Plains Fairmont and Green Plains Wood River: | | | | | |
$50.0 million term loan | | 45,000 | | | 50,000 |
$27.0 million term loan | | - | | | 26,756 |
Tax increment financing bond | | 3,897 | | | 3,626 |
Capital leases on grain facilities | | 9,994 | | | 9,994 |
Capital leases on equipment and other | | 4,399 | | | 5,489 |
Green Plains Holdings II: | | | | | |
$46.8 million term loans | | 33,010 | | | 15,914 |
$20.0 million revolving term loan | | 9,954 | | | 31,960 |
Green Plains Obion: | | | | | |
$60.0 million term loan | | - | | | 3,879 |
$37.4 million revolving term loan | | 25,425 | | | 28,400 |
Equipment financing loan | | 40 | | | 126 |
Economic development grant | | 1,200 | | | 1,245 |
Green Plains Ord: | | | | | |
$25.0 million term loan | | - | | | 15,143 |
$13.0 million revolving term loan | | - | | | 2,151 |
Green Plains Otter Tail: | | | | | |
$30.3 million term loan | | - | | | 17,960 |
$19.2 million note payable | | - | | | 19,151 |
Equipment financing loan | | 12 | | | - |
Green Plains Processing: | | | | | |
$225.0 million term loan | | 225,000 | | | - |
Green Plains Shenandoah: | | | | | |
$17.0 million revolving term loan | | - | | | 9,000 |
Green Plains Superior: | | | | | |
$40.0 million term loan | | 7,000 | | | 9,750 |
$10.0 million revolving term loan | | 10,000 | | | 8,000 |
Equipment financing loan | | - | | | 18 |
Corporate: | | | | | |
$90.0 million convertible notes | | - | | | 90,000 |
$120.0 million convertible notes | | 98,707 | | | 96,653 |
Capital lease | | 76 | | | 188 |
Other | | 11,560 | | | 10,000 |
Total long-term debt | | 500,139 | | | 563,679 |
Less: current portion of long-term debt | | -38,226 | | | -82,933 |
Long-term debt | $ | 461,913 | | $ | 480,746 |
|
|
|
Short-term notes payable and other borrowings at June 30, 2014 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $42.0 million and $89.6 million, respectively. Short-term notes payable and other borrowings at December 31, 2013 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $95.0 million and $76.5 million, respectively. |
|
Ethanol Production Segment |
|
Term Loans |
|
Scheduled principal payments are as follows: |
|
|
| | | | | |
• | Green Plains Fairmont and Green Plains | $2.5 million per quarter, decreasing | | | |
| Wood River $50.0 million term loan | to $1.3 million per quarter in 2015 | | | |
• | Green Plains Holdings II | $1.8 million per quarter | | | |
• | Green Plains Processing | $0.6 million per quarter | | | |
• | Green Plains Superior | $1.4 million per quarter | | | |
|
Final maturity dates (at the latest) are as follows: |
|
|
| | | | | |
• | Green Plains Fairmont and Green Plains | | | | |
| Wood River $50.0 million term loan | 27-Nov-15 | | | |
• | Green Plains Holdings II | 1-Jul-19 | | | |
• | Green Plains Processing | 30-Jun-20 | | | |
• | 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 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 $0.8 million on a quarterly basis commencing on August 20, 2014. Interest-only payments are due each month on all revolving term loans until their final respective maturity dates. |
|
Final maturity dates (at the latest) are as follows: |
|
|
| | | | | |
• | Green Plains Holdings II | 1-Jul-19 | | | |
• | Green Plains Obion | 20-May-20 | | | |
• | Green Plains Superior | 1-Jul-17 | | | |
|
During the second quarter of 2014, Green Plains Processing LLC, a wholly-owned subsidiary of Green Plains Inc., issued term debt under a $225 million Term Loan B facility, which was used to repay all term loans and revolving term loans at Green Plains Bluffton, Green Plains Central City, Green Plains Ord, Green Plains Otter Tail and Green Plains Shenandoah, including the Green Plains Bluffton Revenue Bonds. The new facility is secured by the Atkinson, Bluffton, Central City, Ord, Otter Tail and Shenandoah ethanol plants and bears interest at a rate equal to 5.5% plus LIBOR, subject to a 1.0% floor. At June 30, 2014, the interest rate on this term debt was 6.5%. The facility matures on June 30, 2020. |
|
In 2007, Green Plains Bluffton issued $22.0 million of Subordinate Solid Waste Disposal Facility Revenue Bonds bearing interest at 7.50% per annum with the City of Bluffton, Indiana. The revenue bonds required: (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 $3.7 million on September 1, 2019. On July 16, 2014, the revenue bonds were paid in full in accordance with the terms of the $225 million Term Loan B facility. |
|
Green Plains Otter Tail issued $19.2 million in senior notes under New Market Tax Credits financing. The notes bear interest at an annual 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. These senior notes, which were scheduled to mature in September 2018, were extinguished on April 25, 2014, with $2.2 million of the outstanding obligation forgiven according to terms of the financing, which is included in other income in the consolidated financial statements for the three and six months ended June 30, 2014. |
|
Allowable dividends and other non-overhead distributions from each respective subsidiary are subject to certain additional restrictions including compliance with all loan covenants, terms and conditions, as follows: |
|
|
| | | | | |
• | Green Plains Fairmont and | Up to amounts equal to permitted tax distributions, as defined in the | | | |
| Green Plains Wood River | loan agreement | | | |
• | Green Plains Holdings II | Up to 40% of net profit before tax, and unlimited if working capital is greater | | | |
| | than or equal to $20.0 million | | | |
• | Green Plains Obion | Up to 40% of net profit before tax, and unlimited if working capital is greater | | | |
| | than or equal to $15.0 million | | | |
• | Green Plains Processing | Unlimited amount may be distributed after free cash flow payment is made, as | | | |
| | defined in the loan agreement | | | |
• | Green Plains Superior | Up to 40% of net profit before tax, and unlimited after free cash flow payment | | | |
| | is made | | | |
|
In February 2014, the Green Plains Holdings II credit agreement was amended and in June 2014, the Green Plains Obion revolving term loan was amended. The discussions above have been updated to reflect the amendments. |
|
Agribusiness Segment |
|
Green Plains Grain has a $125.0 million senior secured asset-based revolving credit facility with various lenders to provide for working capital financing subject to a borrowing base as defined in the facility. The lenders will make loans up to the maximum commitment based on eligible collateral. The amount of eligible collateral is determined by a calculated borrowing base value equal to the sum of percentages of eligible cash, eligible receivables and eligible inventories, less certain miscellaneous adjustments. 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. 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. 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. |
|
Marketing and Distribution Segment |
|
Green Plains Trade has a $130.0 million senior secured asset-based revolving credit facility with various lenders to provide for working capital financing subject to a borrowing base as defined in the facility. The lenders will make loans up to $130.0 million based on eligible collateral. 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 matures on April 26, 2016. In addition to other customary covenants, this revolving credit facility contains restrictions on distributions with respect to capital stock, with exceptions for distributions with respect to tax obligations, subject to certain conditions, 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 June 30, 2014, Green Plains Trade had $18.0 million presented as restricted cash on the consolidated balance sheets, the use of which was restricted for repayment towards the outstanding loan balance. |
|
In June 2013, subsidiaries of the Company executed a New Markets Tax Credits financing transaction related to the Birmingham, Alabama terminal. 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. |
|
Corporate Activities |
|
In September 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. At the time the Company issued the 3.25% Notes, it was only permitted to settle conversions with shares of its common stock. The Company received shareholder approval at its 2014 annual meeting, held in the second quarter, to allow for flexible settlement which gives it the option to settle conversions in cash, shares of common stock, or any combination thereof. The Company intends to satisfy conversion of the 3.25% Notes with cash for the principal amount of the debt and cash or shares of common stock for any related conversion premium. 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 for comparable debt of the Company without conversion rights. 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 noncash 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 noncash 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. |
|
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. 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. |
|
On February 14, 2014, the Company gave notice of its intention to redeem all of its previously-issued and outstanding $90.0 million of 5.75% Convertible Senior Notes due 2015, or the 5.75% Notes, pursuant to the optional redemption right in the indenture governing the 5.75% Notes. The 5.75% Notes were convertible into shares of the Company’s common stock at the conversion rate of 72.5846 shares of common stock for each $1,000 principal amount of 5.75% Notes from February 14, 2014 through February 28, 2014. From March 1, 2014 through March 19, 2014, the conversion rate was adjusted to 72.6961 shares of common stock for each $1,000 principal amount as a result of the quarterly cash dividend. Approximately $89.95 million of the 5.75% Notes were submitted for conversion into 6,532,713 shares of common stock through March 19, 2014. On March 20, 2014, the Company redeemed the remaining 5.75% Notes at par value plus accrued and unpaid interest through March 19, 2014. All $90.0 million of the 5.75% Notes were retired effective March 20, 2014. |
|
Covenant Compliance |
|
The Company, including all of its subsidiaries, was in compliance with its debt covenants as of June 30, 2014. |
|
Capitalized Interest |
|
The Company had $25 thousand in capitalized interest during the three and six months ended June 30, 2014. |
|
Restricted Net Assets |
|
At June 30, 2014, there were approximately $663.0 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. |
|