Segment Information | 5 . SEGMENT INFORMATION Company management r eports 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 operations, (3) marketing and distribution, which includes marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil , natural gas and other commodities, and (4) partnership, which includes fuel storage and transportation services. Under GAAP, when transferring assets between entities under common control, 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. Effective January 1, 2016, the partnership acquired the storage and transportati on assets of the Hereford and Hopewell production facilities in a transfer between entities under common control and entered into amendments to the related commercial agreements with Green Plains Trade . The transferred assets and liabilities are recognized at our historical cost and reflected retroactively in the segment information of the consolidated financial statements presented in this Form 10-Q. 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 we re no revenues related to the operation of the ethanol storage and railcar assets in the partnership segment prior to their respective transfers to the partnership, when th e related commercial agreements with Green Plains Trade became effective. Corporate activities include selling , general and administrative expenses, consisting primarily of 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): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues (1) : Ethanol production: Revenues from external customers $ 74,892 $ 37,702 $ 222,424 $ 140,640 Intersegment revenues 457,549 352,215 1,249,333 1,145,879 Total segment revenues 532,441 389,917 1,471,757 1,286,519 Agribusiness: Revenues from external customers 83,615 54,519 242,049 191,495 Intersegment revenues 359,715 255,671 1,058,813 783,388 Total segment revenues 443,330 310,190 1,300,862 974,883 Marketing and distribution: Revenues from external customers 681,279 648,413 2,008,268 1,887,184 Intersegment revenues 54,704 21,914 165,558 93,176 Total segment revenues 735,983 670,327 2,173,826 1,980,360 Partnership: Revenues from external customers 2,066 2,163 6,042 6,356 Intersegment revenues 24,139 19,247 69,445 21,895 Total segment revenues 26,205 21,410 75,487 28,251 Revenues including intersegment activity 1,737,959 1,391,844 5,021,932 4,270,013 Intersegment eliminations (896,107) (649,047) (2,543,149) (2,044,338) Revenues as reported $ 841,852 $ 742,797 $ 2,478,783 $ 2,225,675 (1) Revenues from external customers include realized gains and losses from derivative financial instruments. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Cost of goods sold: Ethanol production $ 494,225 $ 365,348 $ 1,410,720 $ 1,184,595 Agribusiness 434,582 307,995 1,278,211 962,979 Marketing and distribution 726,323 656,934 2,147,803 1,950,327 Intersegment eliminations (896,247) (650,929) (2,543,639) (2,049,522) $ 758,883 $ 679,348 $ 2,293,095 $ 2,048,379 Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Operating income (loss): Ethanol production $ 15,311 $ 5,528 $ (7,385) $ 43,139 Agribusiness 6,251 365 15,039 5,833 Marketing and distribution 5,252 9,406 13,908 17,446 Partnership 15,084 11,030 42,958 416 Intersegment eliminations 141 1,882 491 5,264 Corporate activities (11,184) (8,378) (29,393) (23,759) $ 30,855 $ 19,833 $ 35,618 $ 48,339 The following table sets forth third-party r evenues by product line (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Ethanol $ 550,724 $ 468,005 $ 1,622,168 $ 1,381,203 Distillers grains 129,345 121,273 357,070 359,164 Corn oil 49,844 28,949 111,727 67,649 Grain 30,003 47,106 145,800 199,982 Cattle 70,012 56,904 201,423 168,381 Service revenues 2,066 2,163 6,042 6,356 Other 9,858 18,397 34,553 42,940 $ 841,852 $ 742,797 $ 2,478,783 $ 2,225,675 The following table sets forth total assets by operating segment (in thousands): September 30, December 31, 2016 2015 Total assets (1) : Ethanol production $ 1,199,374 $ 1,002,270 Agribusiness 271,290 300,364 Marketing and distribution 279,368 230,651 Partnership 75,541 81,430 Corporate assets 362,121 314,068 Intersegment eliminations (10,736) (10,863) $ 2,176,958 $ 1,917,920 (1) Asset balances by segment exclude intercompany payable and receivable balances . |