Debt | 3 Months Ended |
Mar. 31, 2015 |
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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| March 31, | | December 31, |
| 2015 | | 2014 |
Green Plains Fairmont and Green Plains Wood River: | | | | | |
$62.5 million term loan | $ | 38,750 | | $ | 40,000 |
Green Plains Holdings II: | | | | | |
$46.8 million term loans | | 27,760 | | | 29,510 |
$20.0 million revolving term loan | | 9,000 | | | 6,000 |
Green Plains Obion: | | | | | |
$37.4 million revolving term loan | | 27,400 | | | 27,400 |
Economic development grant | | 1,133 | | | 1,156 |
Green Plains Processing: | | | | | |
$225.0 million term loan | | 213,213 | | | 213,775 |
Green Plains Superior: | | | | | |
$15.6 million revolving term loan | | 14,425 | | | 15,025 |
Corporate: | | | | | |
$120.0 million convertible notes | | 101,947 | | | 100,845 |
Other | | 27,215 | | | 29,194 |
Total long-term debt | | 460,843 | | | 462,905 |
Less: current portion of long-term debt | | -62,220 | | | -63,465 |
Long-term debt | $ | 398,623 | | $ | 399,440 |
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Short-term notes payable and other borrowings at March 31, 2015 included working capital revolvers at Green Plains Cattle, Green Plains Grain and Green Plains Trade with outstanding balances of $87.9 million, $93.0 million and $58.4 million, respectively. Short-term notes payable and other borrowings at December 31, 2014 included working capital revolvers at Green Plains Cattle, Green Plains Grain and Green Plains Trade with outstanding balances of $77.0 million, $37.0 million and $95.9 million, respectively. |
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Ethanol Production Segment |
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Term Loans |
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Scheduled principal payments are as follows: |
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• | Green Plains Fairmont and Green Plains | | | | |
| Wood River | $1.3 million per quarter | | | |
• | Green Plains Holdings II | $1.8 million per quarter | | | |
• | Green Plains Processing | $0.6 million per quarter | | | |
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Final maturity dates (at the latest) are as follows: |
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• | Green Plains Fairmont and Green Plains | | | | |
| Wood River | 27-Nov-15 | | | |
• | Green Plains Holdings II | 1-Jul-19 | | | |
• | Green Plains Processing | 30-Jun-20 | | | |
Revolving Term Loans – The revolving term loans are generally available for advances throughout the life of the commitment. Allowable advances under the Green Plains Superior loan agreement are reduced by $0.6 million each quarter commencing on October 20, 2014. Allowable advances under the Green Plains Obion loan agreement are reduced by $0.8 million each quarter commencing on August 20, 2014. Interest-only payments are due each month on all revolving term loans until their final respective maturity dates. |
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Final maturity dates (at the latest) are as follows: |
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• | Green Plains Holdings II | 1-Jul-19 | | | |
• | Green Plains Obion | 20-May-20 | | | |
• | Green Plains Superior | 20-Oct-19 | | | |
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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: |
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• | 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 | Amounts may be distributed after quarterly free cash flow payment is made, | | | |
| | subject to certain limitations, 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 | | | |
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Effective February 1, 2015, the Green Plains Fairmont and Green Plains Wood River $62.5 million term loan was amended to modify various financial covenants. The descriptions and covenants above reflect the most recent amendment. |
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Agribusiness Segment |
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Green Plains Grain has a $125.0 million senior secured asset-based revolving credit facility with various lenders to provide for working capital financing. 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 plus the applicable margin or 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 within the agribusiness segment. The loan agreement includes affirmative covenants and negative covenants including maintenance of working capital of $18.0 million, maintenance of net worth of $26.3 million, maintenance of a fixed charge coverage ratio of 1.25 to 1.00, maintenance of an annual leverage ratio of 6.00 to 1.00 and capital expenditure limitation of $15.0 million annually. 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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Green Plains Cattle has a $100.0 million senior secured asset-based revolving credit facility with various lenders to provide for working capital financing for the cattle feedlot operations. 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 receivables, eligible inventories and eligible other current assets, less certain miscellaneous adjustments. Advances are subject to interest charges at a variable rate per annum equal to the LIBOR rate for the outstanding period plus 3.00%, 2.50%, or 2.00%, depending upon availability. The revolving credit facility matures on October 31, 2017. The revolving credit facility includes total revolving credit commitments of $100.0 million and an accordion feature whereby amounts available under the facility may be increased by up to $50.0 million of new lender commitments upon agent approval. The loan agreement includes affirmative covenants and negative covenants including maintenance of working capital of $15.0 million, maintenance of net worth of $20.0 million plus 50% of prior year net income, maintenance of an annual leverage ratio of 3.50 to 1.00 and capital expenditure limitation of $3.0 million annually. As security for the revolving credit facility, the lender received a first priority lien on certain cash, inventory, accounts receivable, property and equipment and other assets owned by Green Plains Cattle. |
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Marketing and Distribution Segment |
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Green Plains Trade has a $150.0 million senior secured asset-based revolving credit facility with various lenders to provide for working capital financing. The lenders will make loans up to $150.0 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 November 26, 2019. 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. The loan agreement includes affirmative covenants and negative covenants including maintenance of a fixed charge coverage ratio of 1.15 to 1.00 and capital expenditure limitation of $1.0 million annually. At March 31, 2015, Green Plains Trade had $7.8 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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Corporate Activities |
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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 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. As a result, the conversion rate was recently adjusted to 48.1383 shares of common stock per $1,000 principal amount of 3.25% Notes, which is equal to a current conversion price of approximately $20.77 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. 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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Covenant Compliance |
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The Company, including all of its subsidiaries, was in compliance with its debt covenants as of March 31, 2015. |
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Capitalized Interest |
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The Company had $175 thousand in capitalized interest during the three months ended March 31, 2015. |
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Restricted Net Assets |
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At March 31, 2015, there were approximately $633.4 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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