Green Plains Inc. - FORM 8-K/A - EX-99.1

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8-K/A - 8-K/A - Green Plains Inc.	gpre-20181115x8ka.htm

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 transactions were previously described in a Current Report of the Partnership on Form 8-K filed with the United States Securities and Exchange Commission on October 10, 2018. On November 15, 2018, the Company closed on both the Partnership Transaction and the Valero Transaction. 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.

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2018, of the Company is presented as if the Valero Transaction and the Partnership 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 and the Partnership 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 and the Partnership 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		Adjustments			Pro Forma
	Plains Inc.		Ethanol Plants		(Note 2)			Consolidated

ASSETS
Current assets
Cash and cash equivalents	$	171,674	$	(3,622)	$	319,829	(a)	$	224,320
						(271,023)	(b)
						218	(c)
Restricted cash		62,797		8,252		-			54,545
Accounts receivable, net		134,950		4,314		-			130,636
Income taxes receivable		13,211		-		(15)	(d)		13,196
Inventories		765,198		30,514		-			734,684
Prepaid expenses and other		15,529		1,076		-			14,453
Derivative financial instruments		24,254		4,649		-			19,605
Total current assets		1,187,613		45,183		49,009			1,191,439
Property and equipment, net		1,143,551		184,476		-			959,075
Goodwill		182,879		6,188		-			176,691
Other assets		170,791		4,897		-			165,894
Total assets	$	2,684,834	$	240,744	$	49,009		$	2,493,099

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	155,663	$	8,012	$	-		$	147,651
Accrued and other liabilities		47,955		5,437		-			42,518
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		(21,023)			829,210

Long-term debt		767,177		-		(250,000)	(b)		523,933
						6,756	(e)
Deferred income taxes		21,764		25,272		3,713	(d)		205
Other liabilities		14,235		4,662		-			9,573
Total liabilities		1,670,699		47,224		(260,554)			1,362,921

Stockholders' equity
Common stock		47		-		-			47
Additional paid-in capital		695,143		-		-			695,143
Retained earnings		276,083		193,520		309,563	(f)		392,126
Accumulated other comprehensive loss		(17,176)		-		-			(17,176)
Treasury stock		(55,184)		-		-			(55,184)
Total Green Plains stockholders' equity		898,913		193,520		309,563			1,014,956
Noncontrolling interests		115,222		-		-			115,222
Total stockholders' equity		1,014,135		193,520		309,563			1,130,178
Total liabilities and stockholders' equity	$	2,684,834	$	240,744	$	49,009		$	2,493,099


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		Adjustments			Pro Forma
	Plains Inc.		Ethanol Plants		(Note 2)			Consolidated
Revenues
Product revenues	$	3,589,981	$	421,866	$	-		$	3,168,115
Service revenues		6,185		-		-			6,185
Total revenues		3,596,166		421,866		-			3,174,300

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)		3,301,587		401,165		-			2,900,422
Operations and maintenance expenses		33,448		3,915		-			29,533
Selling, general and administrative expenses		112,024		6,084		-			105,940
Depreciation and amortization expenses		107,361		21,056		-			86,305
Total costs and expenses		3,554,420		432,220		-			3,122,200
Operating income (loss)		41,746		(10,354)		-			52,100

Other income (expense)
Interest income		1,597		11		-			1,586
Interest expense		(90,160)		-		18,621	(g)		(71,539)
Other, net		3,666		2,759		-			907
Total other income (expense)		(84,897)		2,770		18,621			(69,046)
Income (loss) before income taxes		(43,151)		(7,584)		18,621			(16,946)
Income tax benefit (expense)		124,782		29,305		(7,020)	(d)		88,457
Net income		81,631		21,721		11,601			71,511
Net income attributable to noncontrolling interests		20,570		305		-			20,265
Net income attributable to Green Plains	$	61,061	$	21,416	$	11,601		$	51,246

Earnings per share:
Net income attributable to Green Plains - basic	$	1.56						$	1.31
Net income attributable to Green Plains - diluted	$	1.47						$	1.27
Weighted average shares outstanding:
Basic		39,247							39,247
Diluted		50,240							50,240


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		Adjustments			Pro Forma
	Plains Inc.		Ethanol Plants		(Note 2)			Consolidated
Revenues
Product revenues	$	3,027,678	$	330,850	$	-		$	2,696,828
Service revenues		4,546		-		-			4,546
Total revenues		3,032,224		330,850		-			2,701,374

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)		2,835,344		310,765		-			2,524,579
Operations and maintenance expenses		23,564		2,562		-			21,002
Selling, general and administrative expenses		80,817		4,138		(218)	(c)		76,461
Depreciation and amortization expenses		84,010		16,890		-			67,120
Total costs and expenses		3,023,735		334,355		(218)			2,689,162
Operating income (loss)		8,489		(3,505)		218			12,212

Other income (expense)
Interest income		2,136		9		-			2,127
Interest expense		(67,548)		-		15,016	(g)		(52,532)
Other, net		2,362		1		-			2,361
Total other income (expense)		(63,050)		10		15,016			(48,044)
Loss before income taxes		(54,561)		(3,495)		15,234			(35,832)
Income tax benefit (expense)		31,438		5,429		(3,728)	(d)		22,281
Net income (loss)		(23,123)		1,934		11,506			(13,551)
Net income attributable to noncontrolling interests		14,457		238		-			14,219
Net income (loss) attributable to Green Plains	$	(37,580)	$	1,696	$	11,506		$	(27,770)

Earnings per share:
Net loss attributable to Green Plains - basic	$	(0.94)						$	(0.69)
Net loss attributable to Green Plains - diluted	$	(0.94)						$	(0.69)
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)

BASIS OF PRESENTATION

See “Introduction” for more information regarding the basis of presentation for our unaudited pro forma condensed consolidated financial statements. For the purpose 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.

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 the ethonal plants, including working capital considerations.

(b)

Reflects the actual re-payment of debt that occurred upon closing.

(c)

Reflects the reversal of transaction costs incurred through September 30, 2018.

(d)

Reflects the income tax impact related to interest savings as a result of repayment of debt.

(e)

Reflects the write-off of a portion of debt issuance costs totaling $6.8 million, 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 plants, the gain on the sale of the ethanol plants of $96.6 million and the reversal of transaction costs incurred through September 30, 2018. The gain on the sale of the ethanol 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 debt repaid was approximately 6.9% and 7.4%, respectively.

Green Plains Inc. - FORM 8-K/A - EX-99.1 - November 21, 2018

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Green Plains Inc. Reports