Segment Information | 6. SEGMENT INFORMATION As a result of the IPO, the company implemented organizational changes during the third quarter of 2015 . Company management now reports the financ ial and operating performance in the following four operating segments: (1) ethanol production, which includes the production of ethanol, distillers grains and corn oil, (2) agribusiness, which includes grain handling and storage and cattle feedlot operation s , (3) marketing and distribution, which includes marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil and other commodities, and (4) partnership, which includes fuel storage and transportation services. Prior periods have been reclassified to conform to the revised segment presentation. When transferring assets between entities under common control under GAAP, the entity receiving the net assets initially recognizes the carrying amounts of the assets and liabilities at the date of transfer. The transferee’s prior period financial statements are restated for all periods its operations were part of the parent’s consolidated financial statements. On July 1, 2015, Green Plains Partners received ethanol storage and railcar assets and liabilities in a transfer between entities under common control. The transferred assets and liabilities are recognized at the company’s historical cost and reflected retroactively in the segment information of the consolidated financial statem ents presented in this Form 10-K . The assets of Green Plains Partners were previously included in the ethanol production and marketing and distribution segments. Expenses related to the ethanol storage and railcar assets, such as depreciation, amortization and railcar lease expenses, are also reflected retroactively in the following segment information. There are no revenues related to the operation of these ethanol storage and railcar assets in the partnership segment prior to July 1, 2015, the date the related commercial agreements with Green Plains Trade became effective. Corporate activities include selling, general and administrative expenses, consisting primarily of corporate employee compensation, professional fees and overhead costs not directly related to a specific operating segment. During the normal course of business, the operating segments do business with each other. For example, the ethanol production segment sells ethanol to the marketing and distribution segment, the agribusiness segment sells grain to the ethanol production segment and the partnership segment provides fuel storage and transportation services for the marketing and distribution segment. These intersegment activities are treated like third-party transactions and recorded at market values. Consequently, these transactions affect segment performance; however, they do not impact the company’s consolidated results since the revenues and corresponding costs are eliminated in consolidation. The following tables set forth certain financial data for the company’s operating segments (in thousands): Year Ended December 31, 2015 2014 2013 Revenues: Ethanol production: Revenues from external customers (1) $ 196,443 $ (51,424) $ 128,395 Intersegment revenues 1,549,884 2,286,452 1,972,550 Total segment revenues 1,746,327 2,235,028 2,100,945 Agribusiness: Revenues from external customers (1) 249,834 100,436 51,883 Intersegment revenues 1,131,466 1,208,120 761,835 Total segment revenues 1,381,300 1,308,556 813,718 Marketing and distribution: Revenues from external customers (1) 2,510,924 3,178,115 2,853,554 Intersegment revenues 120,687 171,372 33,932 Total segment revenues 2,631,611 3,349,487 2,887,486 Partnership: Revenues from external customers 8,388 8,484 7,179 Intersegment revenues 42,549 4,359 3,853 Total segment revenues 50,937 12,843 11,032 Revenues including intersegment activity 5,810,175 6,905,914 5,813,181 Intersegment eliminations (2,844,586) (3,670,303) (2,772,170) Revenues as reported $ 2,965,589 $ 3,235,611 $ 3,041,011 (1) Revenues from external customers include realized gains and losses from derivative financial instruments. Cost of goods sold: Ethanol production $ 1,626,327 $ 1,879,547 $ 1,926,098 Agribusiness 1,362,001 1,293,274 807,459 Marketing and distribution 2,588,738 3,281,191 2,840,840 Partnership - - - Intersegment eliminations (2,847,467) (3,670,967) (2,765,583) $ 2,729,599 $ 2,783,045 $ 2,808,814 Operating income (loss): Ethanol production $ 40,568 $ 281,332 $ 113,645 Agribusiness 10,206 8,497 3,324 Marketing and distribution 25,560 48,460 38,192 Partnership 13,263 (19,975) (11,285) Intersegment eliminations 2,960 666 (6,588) Corporate activities (31,480) (32,706) (29,437) $ 61,077 $ 286,274 $ 107,851 Income (loss) before income taxes: Ethanol production $ 18,973 $ 265,437 $ 94,695 Agribusiness 5,807 5,996 793 Marketing and distribution 23,937 43,775 35,037 Partnership 12,967 (20,038) (12,003) Intersegment eliminations 2,960 666 (6,588) Corporate activities (43,179) (45,406) (39,653) $ 21,465 $ 250,430 $ 72,281 Depreciation and amortization: Ethanol production $ 55,283 $ 53,141 $ 45,595 Agribusiness 2,532 1,441 362 Marketing and distribution 375 337 8 Partnership 5,787 5,544 3,572 Corporate activities 1,973 1,676 1,317 $ 65,950 $ 62,139 $ 50,854 Interest expense: Ethanol production $ 22,727 $ 22,749 $ 18,988 Agribusiness 4,565 2,591 2,531 Marketing and distribution 3,483 5,129 3,311 Partnership 381 138 768 Intersegment eliminations (70) (238) (982) Corporate activities 9,280 9,539 8,741 $ 40,366 $ 39,908 $ 33,357 Capital expenditures: Ethanol production $ 48,691 $ 40,203 $ 10,251 Agribusiness 13,601 17,166 6,514 Marketing and distribution 190 788 1,225 Partnership 1,496 547 1,122 Corporate activities 1,589 2,829 652 $ 65,567 $ 61,533 $ 19,764 The following table sets forth total assets by operating segment (in thousands): Year Ended December 31, 2015 2014 Total assets (1) : Ethanol production $ 1,017,584 $ 991,260 Agribusiness 300,364 234,626 Marketing and distribution 230,651 259,246 Partnership 75,203 76,762 Corporate assets 316,389 282,628 Intersegment eliminations (10,863) (23,460) $ 1,929,328 $ 1,821,062 (1) Asset balances by segment exclude intercompany payable and receivable balances. The following table sets forth revenues by product line (in thousands): Year Ended December 31, 2015 2014 2013 Revenues: Ethanol $ 1,868,043 $ 2,362,812 $ 2,330,884 Distillers grains 474,699 531,696 488,376 Corn oil 101,126 99,167 74,251 Grain 240,466 174,997 92,487 Cattle 219,046 29,262 - Service revenues 8,388 8,484 7,179 Other 53,821 29,193 47,834 $ 2,965,589 $ 3,235,611 $ 3,041,011 |