Exhibit 99.1
GREEN PLAINS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AND RELATED NOTES THERETO
Introduction and Basis of Presentation
On October 8, 2018, Green Plains Inc. (the “Company”) entered into an asset purchase agreement for the sale of three ethanol plants located in Bluffton, Indiana, Lakota, Iowa, and Riga, Michigan, and certain related assets from subsidiaries, to Valero Renewable Fuels Company, LLC (“Valero”) for the sale price of $319.8 million, including net working capital and other adjustments (the “Valero Transaction”). Correspondingly, the Company entered into a separate asset purchase agreement with Green Plains Partners LP (the “Partnership”) for $120.9 million (the “Partnership Transaction”) to acquire the related storage assets to be disposed of in the sale to Valero and convey 460 of the 3,500 railcars leased by the Partnership to the Company. The Company received as consideration from Valero approximately $319.8 million, while the Partnership received as consideration from the Company 8.7 million Partnership units and a portion of the general partner interest equating to 0.2 million hypothetical limited partner units to maintain the general partner’s 2% interest. In addition, the Partnership also received as additional consideration approximately $2.6 million in cash related to the present value gain on railcars transferred, subject to certain post-closing adjustments. On November 15, 2018, the Company closed on both the Partnership Transaction and the Valero Transaction. The transactions were previously described in a Current Report of the Company on Form 8-K filed with the United States Securities and Exchange Commission on October 10, 2018 and a Current Report of the Company on Form 8-K/A filed with the United States Securities and Exchange Commission on November 21, 2018.
On October 23, 2018, the Company and Green Plains II LLC (“GP II”), an indirect wholly-owned subsidiary of the Company, entered into a stock purchase agreement with Kerry Holding Co. (“Kerry”) for GP II to sell all of the issued and outstanding capital stock of Fleischmann’s Vinegar Company, Inc. (the “Kerry Transaction”). On November 27, 2018, the Company closed on the Kerry Transaction. The Company received as consideration from Kerry $353.9 million in cash and restricted cash, including net working capital adjustments. The transaction was previously described in Current Reports of the Company on Form 8-K filed with the United States Securities and Exchange Commission on October 25, 2018 and November 28, 2018.
The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2018, of the Company is presented as if the Valero Transaction, the Partnership Transaction and the Kerry Transaction had occurred on September 30, 2018. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2018, and for the year ended December 31, 2017, are presented as if such events had occurred on January 1, 2017.
The unaudited pro forma condensed consolidated balance sheet and statements of operations included herein are for informational purposes only and are not necessarily indicative of the results that might have occurred had the Valero Transaction, the Partnership Transaction and the Kerry Transaction taken place on the respective dates assumed. Actual results may differ significantly from those reflected in the unaudited condensed consolidated pro forma financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma condensed consolidated financial statements and actual results. The pro forma adjustments in the unaudited pro forma condensed consolidated balance sheet and the statements of operations included herein include the use of estimates and assumptions as described in the accompanying notes. The pro forma adjustments are based on information available to the Company at the time these unaudited pro forma condensed consolidated financial statements were prepared. The Company believes its current estimates provide a reasonable basis of presenting the significant effects of the Valero Transaction, the Partnership Transaction and the Kerry Transaction.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the accompanying notes in addition to the following:
•the historical financial statements of the Company as of and for the year ended December 31, 2017, and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017;
•the historical unaudited financial statements of the Company as of and for the nine months ended September 30, 2018, and the related notes included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS INC. AND SUBSIDIARIES | ||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||||||||
AS OF SEPTEMBER 30, 2018 | ||||||||||||||
(in thousands) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro Forma |
|
| ||||
| Green |
| Disposition of |
| Disposition of |
| Adjustments |
| Pro Forma | |||||
| Plains Inc. |
| Ethanol Plants |
| Vinegar Plants |
| (Note 2) |
| Consolidated | |||||
|
|
|
|
|
|
|
|
|
|
| ||||
ASSETS | ||||||||||||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents | $ | 171,674 |
| $ | (3,622) |
| $ | 958 |
| $ | 666,758 | (a) | $ | 325,822 |
|
|
|
|
|
|
|
|
|
|
| (516,023) | (b) |
|
|
|
|
|
|
|
|
|
|
|
|
| 749 | (c) |
|
|
Restricted cash |
| 62,797 |
|
| 8,252 |
|
| - |
|
| 7,000 | (a) |
| 61,545 |
Accounts receivable, net |
| 134,950 |
|
| 4,314 |
|
| 17,411 |
|
| - |
|
| 113,225 |
Income taxes receivable |
| 13,211 |
|
| - |
|
| - |
|
| (15) | (d) |
| 13,196 |
Inventories |
| 765,198 |
|
| 30,514 |
|
| 16,965 |
|
| - |
|
| 717,719 |
Prepaid expenses and other |
| 15,529 |
|
| 1,076 |
|
| 444 |
|
| - |
|
| 14,009 |
Derivative financial instruments |
| 24,254 |
|
| 4,649 |
|
| - |
|
| - |
|
| 19,605 |
Total current assets |
| 1,187,613 |
|
| 45,183 |
|
| 35,778 |
|
| 158,469 |
|
| 1,265,121 |
Property and equipment, net |
| 1,143,551 |
|
| 184,476 |
|
| 62,789 |
|
| - |
|
| 896,286 |
Goodwill |
| 182,879 |
|
| 6,188 |
|
| 142,002 |
|
| - |
|
| 34,689 |
Deferred income taxes |
| - |
|
| - |
|
| - |
|
| 24,698 | (d) |
| 24,698 |
Other assets |
| 170,791 |
|
| 4,897 |
|
| 79,833 |
|
| - |
|
| 86,061 |
Total assets | $ | 2,684,834 |
| $ | 240,744 |
| $ | 320,402 |
| $ | 183,167 |
| $ | 2,306,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable | $ | 155,663 |
| $ | 8,012 |
| $ | 6,268 |
| $ | - |
| $ | 141,383 |
Accrued and other liabilities |
| 47,955 |
|
| 5,437 |
|
| 1,207 |
|
| - |
|
| 41,311 |
Derivative financial instruments |
| 41,725 |
|
| 3,841 |
|
| - |
|
| - |
|
| 37,884 |
Short-term notes payable and other borrowings |
| 556,566 |
|
| - |
|
| - |
|
| (21,023) | (b) |
| 535,543 |
Current maturities of long-term debt |
| 65,614 |
|
| - |
|
| - |
|
| - |
|
| 65,614 |
Total current liabilities |
| 867,523 |
|
| 17,290 |
|
| 7,475 |
|
| (21,023) |
|
| 821,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
| 767,177 |
|
| - |
|
| - |
|
| (495,000) | (b) |
| 285,553 |
|
|
|
|
|
|
|
|
|
|
| 13,376 | (e) |
|
|
Deferred income taxes |
| 21,764 |
|
| 25,272 |
|
| 25,947 |
|
| 29,455 | (d) |
| - |
Other liabilities |
| 14,235 |
|
| 4,662 |
|
| - |
|
| - |
|
| 9,573 |
Total liabilities |
| 1,670,699 |
|
| 47,224 |
|
| 33,422 |
|
| (473,192) |
|
| 1,116,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
| 47 |
|
| - |
|
| - |
|
| - |
|
| 47 |
Additional paid-in capital |
| 695,143 |
|
| - |
|
| - |
|
| - |
|
| 695,143 |
Retained earnings |
| 276,083 |
|
| 193,520 |
|
| 287,023 |
|
| 656,359 | (f) |
| 451,899 |
Accumulated other comprehensive loss |
| (17,176) |
|
| - |
|
| (43) |
|
| - |
|
| (17,133) |
Treasury stock |
| (55,184) |
|
| - |
|
| - |
|
| - |
|
| (55,184) |
Total Green Plains stockholders' equity |
| 898,913 |
|
| 193,520 |
|
| 286,980 |
|
| 656,359 |
|
| 1,074,772 |
Noncontrolling interests |
| 115,222 |
|
| - |
|
| - |
|
| - |
|
| 115,222 |
Total stockholders' equity |
| 1,014,135 |
|
| 193,520 |
|
| 286,980 |
|
| 656,359 |
|
| 1,189,994 |
Total liabilities and stockholders' equity | $ | 2,684,834 |
| $ | 240,744 |
| $ | 320,402 |
| $ | 183,167 |
| $ | 2,306,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS INC. AND SUBSIDIARIES |
| ||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
| ||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 |
| ||||||||||||||
(in thousands, except per share amounts) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro Forma |
|
|
|
| |||
| Green |
| Disposition of |
| Disposition of |
| Adjustments |
| Pro Forma |
| |||||
| Plains Inc. |
| Ethanol Plants |
| Vinegar Plants |
| (Note 2) |
| Consolidated |
| |||||
Revenues |
|
|
|
|
|
|
| �� |
|
|
|
|
|
|
|
Product revenues | $ | 3,589,981 |
| $ | 421,866 |
| $ | 116,006 |
| $ | - |
| $ | 3,052,109 |
|
Service revenues |
| 6,185 |
|
| - |
|
| - |
|
| - |
|
| 6,185 |
|
Total revenues |
| 3,596,166 |
|
| 421,866 |
|
| 116,006 |
|
| - |
|
| 3,058,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold (excluding depreciation and amortization expenses reflected below) |
| 3,301,587 |
|
| 401,165 |
|
| 82,785 |
|
| - |
|
| 2,817,637 |
|
Operations and maintenance expenses |
| 33,448 |
|
| 3,915 |
|
| - |
|
| - |
|
| 29,533 |
|
Selling, general and administrative expenses |
| 112,024 |
|
| 6,084 |
|
| 6,277 |
|
| - |
|
| 99,663 |
|
Depreciation and amortization expenses |
| 107,361 |
|
| 21,056 |
|
| 9,325 |
|
| - |
|
| 76,980 |
|
Total costs and expenses |
| 3,554,420 |
|
| 432,220 |
|
| 98,387 |
|
| - |
|
| 3,023,813 |
|
Operating income (loss) |
| 41,746 |
|
| (10,354) |
|
| 17,619 |
|
| - |
|
| 34,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| 1,597 |
|
| 11 |
|
| - |
|
| - |
|
| 1,586 |
|
Interest expense |
| (90,160) |
|
| - |
|
| (16,728) |
|
| 26,276 | (g) |
| (47,156) |
|
Other, net |
| 3,666 |
|
| 2,759 |
|
| - |
|
| - |
|
| 907 |
|
Total other income (expense) |
| (84,897) |
|
| 2,770 |
|
| (16,728) |
|
| 26,276 |
|
| (44,663) |
|
Income (loss) before income taxes |
| (43,151) |
|
| (7,584) |
|
| 891 |
|
| 26,276 |
|
| (10,182) |
|
Income tax benefit (expense) |
| 124,782 |
|
| 29,305 |
|
| 17,523 |
|
| (9,906) | (d) |
| 68,048 |
|
Net income |
| 81,631 |
|
| 21,721 |
|
| 18,414 |
|
| 16,370 |
|
| 57,866 |
|
Net income attributable to noncontrolling interests |
| 20,570 |
|
| 305 |
|
| - |
|
| - |
|
| 20,265 |
|
Net income attributable to Green Plains | $ | 61,061 |
| $ | 21,416 |
| $ | 18,414 |
| $ | 16,370 |
| $ | 37,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Green Plains - basic | $ | 1.56 |
|
|
|
|
|
|
|
|
|
| $ | 0.96 |
|
Net income attributable to Green Plains - diluted | $ | 1.47 | (h) |
|
|
|
|
|
|
|
| $ | 0.94 | (h) | |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| 39,247 |
|
|
|
|
|
|
|
|
|
|
| 39,247 |
|
Diluted |
| 50,240 | (h) |
|
|
|
|
|
|
|
|
| 39,960 | (h) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS INC. AND SUBSIDIARIES | ||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 | ||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro Forma |
|
|
| |||
| Green |
| Disposition of |
| Disposition of |
| Adjustments |
| Pro Forma | |||||
| Plains Inc. |
| Ethanol Plants |
| Vinegar Plants |
| (Note 2) |
| Consolidated | |||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues | $ | 3,027,678 |
| $ | 330,850 |
| $ | 90,228 |
| $ | - |
| $ | 2,606,600 |
Service revenues |
| 4,546 |
|
| - |
|
| - |
|
| - |
|
| 4,546 |
Total revenues |
| 3,032,224 |
|
| 330,850 |
|
| 90,228 |
|
| - |
|
| 2,611,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold (excluding depreciation and amortization expenses reflected below) |
| 2,835,344 |
|
| 310,765 |
|
| 67,433 |
|
| - |
|
| 2,457,146 |
Operations and maintenance expenses |
| 23,564 |
|
| 2,562 |
|
| - |
|
| - |
|
| 21,002 |
Selling, general and administrative expenses |
| 80,817 |
|
| 4,138 |
|
| 3,170 |
|
| (749) | (c) |
| 72,760 |
Depreciation and amortization expenses |
| 84,010 |
|
| 16,890 |
|
| 6,788 |
|
| - |
|
| 60,332 |
Total costs and expenses |
| 3,023,735 |
|
| 334,355 |
|
| 77,391 |
|
| (749) |
|
| 2,611,240 |
Operating income (loss) |
| 8,489 |
|
| (3,505) |
|
| 12,837 |
|
| 749 |
|
| (94) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| 2,136 |
|
| 9 |
|
| - |
|
| - |
|
| 2,127 |
Interest expense |
| (67,548) |
|
| - |
|
| (9,412) |
|
| 18,750 | (g) |
| (39,386) |
Other, net |
| 2,362 |
|
| 1 |
|
| - |
|
| - |
|
| 2,361 |
Total other income (expense) |
| (63,050) |
|
| 10 |
|
| (9,412) |
|
| 18,750 |
|
| (34,898) |
Loss before income taxes |
| (54,561) |
|
| (3,495) |
|
| 3,425 |
|
| 19,499 |
|
| (34,992) |
Income tax benefit (expense) |
| 31,438 |
|
| 5,429 |
|
| (1,191) |
|
| (4,771) | (d) |
| 22,429 |
Net income (loss) |
| (23,123) |
|
| 1,934 |
|
| 2,234 |
|
| 14,728 |
|
| (12,563) |
Net income attributable to noncontrolling interests |
| 14,457 |
|
| 238 |
|
| - |
|
| - |
|
| 14,219 |
Net income (loss) attributable to Green Plains | $ | (37,580) |
| $ | 1,696 |
| $ | 2,234 |
| $ | 14,728 |
| $ | (26,782) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Green Plains - basic | $ | (0.94) |
|
|
|
|
|
|
|
|
|
| $ | (0.67) |
Net loss attributable to Green Plains - diluted | $ | (0.94) |
|
|
|
|
|
|
|
|
|
| $ | (0.67) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| 40,189 |
|
|
|
|
|
|
|
|
|
|
| 40,189 |
Diluted |
| 40,189 |
|
|
|
|
|
|
|
|
|
|
| 40,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. | BASIS OF PRESENTATION |
See “Introduction” for more information regarding the basis of presentation for our unaudited pro forma condensed consolidated financial statements. For the purposes of this pro forma analysis, the sale price, including estimated working capital adjustments, have been allocated. Finalization of working capital adjustments is not expected to materially impact the adjustments shown above.
2. | PRO FORMA ADJUSTMENTS |
Adjustments under the heading “Pro Forma Adjustment” in the accompanying pro forma condensed consolidated financial statements represent the following:
(a) | Reflects cash received at closing on the sale of ethanol plants of $319.8 million and the vinegar plants of $346.9 milllion, including working capital considerations. The Company also received $7.0 million of restricted cash on the sale of the vinegar plants. |
(b) | Reflects the actual repayment of debt that occurred following the sale of the ethanol plants of $271.0 million, which included the repayment of short-term debt, and the vinegar plants of $245.0 milion. |
(c) | Reflects the reversal of transaction costs incurred through September 30, 2018 of $0.2 million associated with the sale of the ethanol plants and $0.5 million associated with the sale of the vinegar plants. |
(d) | Reflects the income tax impact related to interest savings as a result of repayment of debt of $516.0 million, and the reclassification of net deferred tax assets as an asset as a result of the transactions. |
(e) | Reflects the write-off of debt issuance costs as a result of debt extinguishment, which is not presented in the pro forma condensed consolidated statement of operations as it is nonrecurring in nature and will not have a continuing impact on the Company. |
(f) | Reflects the impact on equity related to the cash received at closing on the sale of the ethanol and vinegar plants, the gain on the sale of the ethanol plants of $96.6 million and the vinegar plants of $60.1 million, the write-off of debt issuance costs and the reversal of transaction costs incurred through September 30, 2018. The gain on the sale of the ethanol and vinegar plants is not presented in the pro forma condensed consolidated statement of operations as it is nonrecurring in nature and will not have a continuing impact on the Company. |
(g) | Reflects the interest foregone as a result of repayment of debt. For the periods ended December 31, 2017 and September 30, 2018, the weighted average interest rate on the outstanding debt was approximately 6.9% and 7.3%, respectively. During the period ended December 31, 2017, Fleischmann Vinegar’s senior secured term loan was extinguished in full on August 29, 2017 with proceeds from the new $500.0 million secured term loan facility, and the Company wrote off deferred financing fees of $3.5 million and paid a prepayment penalty of $2.9 million. |
(h) | The Company computed diluted earnings per share (“EPS”) for 2017 by dividing net income on an if-converted basis, adjusted to add back net interest expense related to the convertible debt instruments, by the weighted average number of common shares outstanding during the period, adjusted to include the shares that would be issued if the convertible debt instruments were converted to common shares and the effect of any outstanding dilutive securities. If the impact of the convertible debt instruments are antidilutive, the impact is excluded from the diluted EPS calculation. For additional information related to EPS, see Note 13 – Earnings Per Share in the notes to consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. |