United States securities and exchange commission logo
July 19, 2022
G. Patrich Simpkins
Chief Financial Officer
Green Plains Inc.
1811 Aksarben Drive
Omaha, Nebraska 68106
Re: Green Plains Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed February 18,
2022
File No: 001-32924
Dear Mr. Simpkins:
We have reviewed your May 27, 2022 response to our comment letter
and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
May 13, 2022 letter.
Form 10-K for fiscal year ended December 31,2021
Results of Operations
Ethanol Production Segment , page 45
1. We acknowledge your
response to prior comment four and proposed revised disclosure.
However, we continue to
have difficulty in understanding the key factors driving period-
to-period changes in
reported revenues and gross profit for your ethanol production
segment. Please provide
us the following information and revise your analysis of
operating results
accordingly.
Quantify the
impact that your forward physical contracts and derivative financial
instruments had on
your reported revenues and costs of goods sold for each period
G. Patrich Simpkins
FirstName LastNameG. Patrich Simpkins
Green Plains Inc.
Comapany
July NameGreen Plains Inc.
19, 2022
July 19,
Page 2 2022 Page 2
FirstName LastName
presented. In this regard, we refer to your disclosure on page 50
that you create
offsetting positions using a combination of forward fixed-price
purchases, sales
contracts, and derivative financial instruments, and that as a
result, you frequently
have gains on derivative financial instruments that are offset by
losses on forward
physical contracts or inventories and vice versa. With respect to
gains/losses on
derivative instruments, separately quantify the amount
reclassified from AOCI and
the amount related to derivatives not designated as hedging
instruments as disclosed
in Note 11.
With respect to your key operating data, provide information
regarding average
prices of your commodities during each period to provide a better
understanding of
the extent to which your revenues were impacted by prices vs
volumes.
Explain the factors underlying the impact on commodity contract
revenues
from derivatives not designated as hedging instruments, which
decreased reported
revenues by $194.1 million in 2021 compared to decreases of $10.8
million in 2020
and $10.2 million in 2019, as disclosed on page F-27.
Describe and quantify key factors underlying changes in gross
profit for ethanol,
distiller grains and corn oil sold through the ethanol production
segment
for each period presented. In this regard, we note your
disclosure on page 50 that net
gains and losses from settled derivative instruments are offset
by physical commodity
purchases or sales to achieve the intended operating margins.
Illustrate for us the
impact that your pricing risk strategy had on your gross profit
margin for the periods
presented.
Notes to the Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Revenue Recognition, page F-11
2. We note your response to prior comment five; however, we continue to
have difficulty
understanding the difference between your "energy trading
transactions", which are
accounted for as derivatives, and your "commodity sales contracts",
which are accounted
for under ASC 606. Please address the following:
As previously requested, describe each stage in your process
for selling ethanol and
other commodities and each stage in your process for managing
associated price risk
that addresses commodity products produced in your plants,
marketed for third
parties or purchased in the open market. Provide a breakdown of
revenues for each of
these commodity product categories for each period presented.
Describe in more specificity the key differences between your
energy trading
transactions and commodity sales contracts and provide an example
of each. For
each example, explain how you evaluated the provisions of the
contract to determine
whether it met the normal purchases and sales exception in ASC
815-10-15-22.
G. Patrich Simpkins
Green Plains Inc.
July 19, 2022
Page 3
Describe the circumstances that would trigger settlement of
your physical delivery
energy contracts through the transfer of your contractual
obligations to other
counterparties in lieu of physical delivery to your customer and
quantify the level of
these activities for each period presented.
You may contact Frank Wyman at 202-551-3660 or Angela Connell at
202-551-3426, if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNameG. Patrich Simpkins Sincerely,
Comapany NameGreen Plains Inc.
Division of
Corporation Finance
July 19, 2022 Page 3 Office of Life
Sciences
FirstName LastName