Green Plains Inc.
Green Plains Inc. (Form: 10-Q, Received: 11/03/2016 16:59:09)

 









 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________



FORM 10-Q



Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934



For the Quarterly Period Ended September 30, 2016



Commission File Number 001-32924



Green Plains Inc.

(Exact name of registrant as specified in its charter)





 

Iowa

84-1652107

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)



 

450 Regency Parkway, Suite 400, Omaha, NE 68114

(402) 884-8700

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes   No



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   No



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer        Accelerated filer      Non-accelerated filer     Smaller reporting company



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 



Yes   No



The number of shares of common stock, par value $0.001 per share, outstanding as of October 31 ,  2 016, was   38,368,478   shares .

 

 


 

 

TABLE OF CONTENTS





 

 



 

 



Page

 Commonly Used Defined Terms

2

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

 



 

 



Consolidated Balance Sheets  

3



 

 



Consolidated Statements of Operations

4



 

 



Consolidated Statements of Comprehensive Income (Loss)  

5



 

 



Consolidated Statements of Cash Flows  

6



 

 



Notes to Consolidated Financial Statements  

8



 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28



 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk  

39



 

 

Item 4.

Controls and Procedures

41



 

 



 

 

PART II – OTHER INFORMATION

 



 

 

Item 1.

Legal Proceedings

42



 

 

Item 1A.

Risk Factors

42



 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

43



 

 

Item 3.

Defaults Upon Senior Securities

43



 

 

Item 4.

Mine Safety Disclosures

43



 

 

Item 5.

Other Information

43



 

 

Item 6.

Exhibits

44



 

 

 Signatures

45



 

1

 


 

 







Commonly Used Defined Terms



Green Plains Inc. and Subsidiaries:





 

Green Plains; the company

Green Plains Inc. and its subsidiaries

BioProcess Algae

BioProcess Algae LLC

Fleischmann’s Vinegar

Fleischmann’s Vinegar Company, Inc.

Green Plains Cattle

Green Plains Cattle Company LLC

Green Plains Grain

Green Plains Grain Company LLC

Green Plains Partners; the partnership

Green Plains Partners LP

Green Plains Processing

Green Plains Processing LLC and its subsidiaries

Green Plains Trade

Green Plains Trade Group LLC

SCI Ingredients

SCI Ingredients Holdings, Inc.



Accounting Defined Terms:





 

ASC

Accounting Standards Codification

EBITDA

Earnings before interest, income taxes, depreciation and amortization

EPS

Earnings per share

Exchange Act

Securities Exchange Act of 1934, as amended

GAAP

U.S. Generally Accepted Accounting Principles

IPO

Initial public offering of Green Plains Partners LP

LIBOR

London Interbank Offered Rate

LTIP

Green Plains Partners LP 2015 Long-Term Incentive Plan

Nasdaq

The Nasdaq Global Market

SEC

Securities and Exchange Commission



Industry Defined Terms:





 

Bgy

Billion gallons per year

BTU

British Thermal Units

E15

Gasoline blended with up to 15% ethanol by volume

EIA

U.S. Energy Information Administration

EPA

U.S. Environmental Protection Agency

Mmg

Million gallons

Mmgy

Million gallons per year

RBOB

Reformulated blendstock for oxygenate blending

RIN

Renewable identification number

U.S.

United States

USDA

U.S. Department of Agriculture

WASDE

World Agriculture Supply and Demand Estimates











2

 


 

 

GREEN PLAINS INC. AND SUBSIDIARIES

 

  CONSOLIDATED BALANCE SHEETS



(in thousands, except share amounts)









 

 

 

 

 



 

 

 

 

 



September 30,

 

December 31,



2016

 

2015



 

 

 

 

 



(unaudited)

 

 

 

ASSETS

Current assets

 

 

 

 

 

Cash and cash equivalents

$

407,359 

 

$

384,867 

Restricted cash

 

34,219 

 

 

27,018 

Accounts receivable, net of allowances of $342 and $285 , respectively

 

132,574 

 

 

96,150 

Income taxes receivable

 

4,806 

 

 

9,104 

Inventories

 

324,287 

 

 

353,957 

Prepaid expenses and other

 

11,200 

 

 

10,941 

Derivative financial instruments

 

38,577 

 

 

30,540 

Total current assets

 

953,022 

 

 

912,577 

Property and equipment, net of accumulated depreciation of
$397,470 and $338,558 , respectively

 

1,139,592 

 

 

922,070 

Goodwill

 

40,877 

 

 

40,877 

Other assets

 

43,467 

 

 

42,396 

Total assets

$

2,176,958 

 

$

1,917,920 



 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

 

 

 

 

 

Accounts payable

$

129,317 

 

$

166,963 

Accrued and other liabilities

 

46,373 

 

 

32,026 

Derivative financial instruments

 

20,831 

 

 

8,245 

Income taxes payable

 

4,096 

 

 

 -

Short-term notes payable and other borrowings

 

229,086 

 

 

226,928 

Current maturities of long-term debt

 

13,244 

 

 

4,507 

Total current liabilities

 

442,947 

 

 

438,669 

Long-term debt

 

681,182 

 

 

432,139 

Deferred income taxes

 

80,932 

 

 

81,797 

Other liabilities

 

6,358 

 

 

6,406 

Total liabilities

 

1,211,419 

 

 

959,011 



 

 

 

 

 

Stockholders' equity

 

 

 

 

 

Common stock, $0.001 par value; 75,000,000 shares authorized;
46,051,685 and 45,281,571 shares issued, and 38,336,695
and 37,889,871 shares outstanding, respectively

 

46 

 

 

45 

Additional paid-in capital

 

656,522 

 

 

577,787 

Retained earnings

 

269,135 

 

 

290,974 

Accumulated other comprehensive loss

 

(54)

 

 

(1,165)

Treasury stock, 7,714,990 and 7,391,700 shares, respectively

 

(75,816)

 

 

(69,811)

Total Green Plains stockholders' equity

 

849,833 

 

 

797,830 

Noncontrolling interests

 

115,706 

 

 

161,079 

Total stockholders' equity

 

965,539 

 

 

958,909 

Total liabilities and stockholders' equity

$

2,176,958 

 

$

1,917,920 



See accompanying notes to the consolidated financial statements.

3

 


 

 

GREEN PLAINS INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS



(unaudited and in thousands, except per share amounts)









 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended
September 30,

 

Nine Months Ended
September 30,



2016

 

2015

 

2016

 

2015



 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Product revenues

$

839,786 

 

$

740,634 

 

$

2,472,741 

 

$

2,219,319 

Service revenues

 

2,066 

 

 

2,163 

 

 

6,042 

 

 

6,356 

Total revenues

 

841,852 

 

 

742,797 

 

 

2,478,783 

 

 

2,225,675 



 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

758,883 

 

 

679,348 

 

 

2,293,095 

 

 

2,048,379 

Operations and maintenance expenses

 

8,564 

 

 

7,715 

 

 

25,713 

 

 

21,850 

Selling, general and administrative expenses

 

24,264 

 

 

19,280 

 

 

68,225 

 

 

58,473 

Depreciation and amortization expenses

 

19,286 

 

 

16,621 

 

 

56,132 

 

 

48,634 

Total costs and expenses

 

810,997 

 

 

722,964 

 

 

2,443,165 

 

 

2,177,336 

Operating income

 

30,855 

 

 

19,833 

 

 

35,618 

 

 

48,339 



 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

484 

 

 

319 

 

 

1,263 

 

 

749 

Interest expense

 

(11,819)

 

 

(10,196)

 

 

(33,117)

 

 

(29,918)

Other, net

 

(1,553)

 

 

(519)

 

 

(2,050)

 

 

(2,484)

Total other expense

 

(12,888)

 

 

(10,396)

 

 

(33,904)

 

 

(31,653)

Income before income taxes

 

17,967 

 

 

9,437 

 

 

1,714 

 

 

16,686 

Income tax expense (benefit)

 

5,083 

 

 

(604)

 

 

(4,339)

 

 

2,171 

Net income

 

12,884 

 

 

10,041 

 

 

6,053 

 

 

14,515 

Net income attributable to noncontrolling interests

 

4,956 

 

 

3,862 

 

 

14,072 

 

 

3,862 

Net income (loss) attributable to Green Plains

$

7,928 

 

$

6,179 

 

$

(8,019)

 

$

10,653 



 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Green Plains - basic

$

0.21 

 

$

0.16 

 

$

(0.21)

 

$

0.28 

Net income (loss) attributable to Green Plains - diluted

$

0.20 

 

$

0.16 

 

$

(0.21)

 

$

0.27 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

38,282 

 

 

38,066 

 

 

38,301 

 

 

37,966 

Diluted

 

39,136 

 

 

38,556 

 

 

38,301 

 

 

39,266 



 

 

 

 

 

 

 

 

 

 

 

Cash dividend declared per share

$

0.12 

 

$

0.12 

 

$

0.36 

 

$

0.28 



 

 

 

 

 

 

 

 

 

 

 





See accompanying notes to the consolidated financial statements.



4

 


 

 

GREEN PLAINS INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



(unaudited and in thousands)







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended
September 30,

 

Nine Months Ended
September 30,



2016

 

2015

 

2016

 

2015



 

 

 

 

 

 

 

 

 

 

 

Net income

$

12,884 

 

$

10,041 

 

$

6,053 

 

$

14,515 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on derivatives arising during period,
net of tax (expense) benefit of $(1,331),   $(2,232), $762
and $(5,554), respectively

 

1,919 

 

 

3,682 

 

 

(1,395)

 

 

9,245 

Reclassification of realized (gains) losses on derivatives, net
of tax expense (benefit) of $(1,144),   $547, $(1,369) and $(420), respectively

 

2,150 

 

 

(903)

 

 

2,506 

 

 

700 

Total other comprehensive income, net of tax

 

4,069 

 

 

2,779 

 

 

1,111 

 

 

9,945 

Comprehensive income

 

16,953 

 

 

12,820 

 

 

7,164 

 

 

24,460 

Comprehensive income attributable to noncontrolling interests

 

4,956 

 

 

3,862 

 

 

14,072 

 

 

3,862 

Comprehensive income (loss) attributable to Green Plains

$

11,997 

 

$

8,958 

 

$

(6,908)

 

$

20,598 





See accompanying notes to the consolidated financial statements.



5

 


 

 

GREEN PLAINS INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS



(unaudited and in thousands)





 

 

 

 

 



 

 

 

 

 



Nine Months Ended
September 30,



2016

 

2015

Cash flows from operating activities:

 

 

 

 

 

Net income

$

6,053 

 

$

14,515 

Adjustments to reconcile net income to net cash provided
(used) by operating activities:

 

 

 

 

 

Depreciation and amortization

 

56,132 

 

 

48,634 

Amortization of debt issuance costs and debt discount

 

7,588 

 

 

5,756 

Deferred income taxes

 

(16,413)

 

 

(39,645)

Stock-based compensation

 

4,837 

 

 

3,207 

Undistributed equity in loss of affiliates

 

2,067 

 

 

2,678 

Other

 

57 

 

 

104 

Changes in operating assets and liabilities before
effects of business combinations:

 

 

 

 

 

Accounts receivable

 

(36,431)

 

 

(3,051)

Inventories

 

46,126 

 

 

(8,045)

Derivative financial instruments

 

6,279 

 

 

18,503 

Prepaid expenses and other assets

 

(849)

 

 

6,732 

Accounts payable and accrued liabilities

 

(23,704)

 

 

(56,636)

Current income taxes

 

8,089 

 

 

(1,532)

Other

 

1,150 

 

 

1,300 

Net cash provided (used) by operating activities

 

60,981 

 

 

(7,480)



 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property and equipment

 

(35,658)

 

 

(44,464)

Acquisition of businesses, net of cash acquired

 

(252,488)

 

 

 -

Investments in unconsolidated subsidiaries

 

(1,388)

 

 

(3,309)

Net cash used by investing activities

 

(289,534)

 

 

(47,773)



 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from the issuance of long-term debt

 

337,000 

 

 

178,400 

Payments of principal on long-term debt

 

(40,578)

 

 

(194,819)

Proceeds from short-term borrowings

 

2,969,034 

 

 

2,382,589 

Payments on short-term borrowings

 

(2,967,191)

 

 

(2,391,874)

Proceeds from issuance of Green Plains Partners common units, net

 

 -

 

 

157,422 

Payments for repurchase of common stock

 

(6,005)

 

 

(4,003)

Payments of cash dividends and distributions

 

(27,837)

 

 

(10,646)

Change in restricted cash

 

(7,200)

 

 

13,085 

Payments of loan fees

 

(7,810)

 

 

(5,314)

Proceeds from exercises of stock options

 

1,632 

 

 

766 

Net cash provided by financing activities

 

251,045 

 

 

125,606 



 

 

 

 

 

Net change in cash and cash equivalents

 

22,492 

 

 

70,353 

Cash and cash equivalents, beginning of period

 

384,867 

 

 

425,510 

Cash and cash equivalents, end of period

$

407,359 

 

$

495,863 



 

 

 

 

 

Continued on the following page

 

 

 

 

 

6

 


 

 



GREEN PLAINS INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS



(unaudited and in thousands)











 

 

 

 

 



 

 

 

 

 

Continued from the previous page

 

 

 

 

 



Nine Months Ended
September 30,



2016

 

2015



 

 

 

 

 

Supplemental disclosures of cash flow

 

 

 

 

 

Cash paid for income taxes

$

3,348 

 

$

43,347 

Cash paid for interest

$

24,280 

 

$

23,262 



 

 

 

 

 







See accompanying notes to the consolidated financial statements.

7

 


 

 

GREEN PLAINS INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(unaudited)



1.  BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



References to the Company



References to “Green Plains” or the “company” in the consolidated financial statements and in these notes to the consolidated financial statements refer to Green Plains Inc., an Iowa corporation, and its subsidiaries.



Consolidated Financial Statements



The consolidated financial statements include the company’s accounts and all significant intercompany balances and transactions are eliminated. Unconsolidated entities are included in the financial statements on an equity basis. Interim period results are not necessarily indicative of the results to be expected for the entire year. Effective April 1, 2016, the company increased its ownership of BioProcess Algae, a joint venture formed in 2008, to 82.8% and consolidated BioProcess Algae in its consolidated financial statements beginning on that date.



The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Because they do not include all of the information and footnotes required by GAAP, the consolidated financial statements should be read in conjunction with the company’s annual report on Form 10-K for the year ended December 31, 2015 .



The unaudited financial information reflects adjustments which are, in the opinion of management, necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented. The adjustments are normal and recurring in nature, unless otherwise noted.



Reclassifications



Certain prior year amounts were reclassified to conform to the current year presentation. These reclassifications did not affect total revenues, costs and expenses, net income or stockholders’ equity.



Use of Estimates in the Preparation of Consolidated Financial Statements



The preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The company bases its estimates on historical experience and assumptions it believes are proper and reasonable under the circumstances and regularly evaluates the appropriateness of its estimates and assumptions. Actual results could differ from those estimates. Key accounting policies, including but not limited to those relating to revenue recognition, depreciation of property and equipment, impairment of long-lived assets and goodwill, derivative financial instruments, and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.



Description of Business



Green Plains is the third largest ethanol producer in North America. The company operates within four business 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. The company is also a partner in a joint venture focused on developing technology to grow and harvest algae in commercially viable quantities.



8

 


 

 

Revenue Recognition



The company recognizes revenue when the following criteria are satisfied: persuasive evidence that an arrangement exists, title of product and risk of loss are transferred to the customer, price is fixed and determinable and collectability is reasonably assured.



Sales of ethanol, distillers grains, corn oil , natural gas and other commodities by the company’s marketing business are recognized when title of product and risk of loss are transferred to an external customer. Revenues related to marketing for third parties are presented on a gross basis when the company takes title of the product and assumes risk of loss. Unearned revenue is recorded for goods in transit when the company has received payment but the title has not yet been transferred to the customer. Revenues for receiving, storing, transferring and transporting ethanol and other fuels are recognized when the product is delivered to the customer.



The company routinely enters into fixed-price, physical-delivery energy commodity purchase and sale agreements. At times, the company settles these transactions by transferring its obligations to other counterparties rather than delivering the physical commodity. These transactions are reported net as a component of revenues. Revenues also include realized gains and losses on related derivative financial instruments, ineffectiveness on cash flow hedges and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income or loss.



Sales of agricultural commodities, including cattle, are recognized when title of product and risk of loss are transferred to the customer, which depends on the agreed upon terms. The sales terms provide passage of title when shipment is made or the commodity is delivered. Revenues related to grain merchandising are presented gross and include shipping and handling, which is also a component of cost of goods sold. Revenues from grain storage are recognized when services are rendered.



A substantial portion of the partnership revenues are derived from fixed-fee commercial agreements for storage, terminal or transportation services. The partnership recognizes revenue when there is evidence an arrangement exists; risk of loss and title transfer to the customer; the price is fixed or determinable; and collectability is reasonably as sured. Revenues from base storage, terminal or transportation services are recognized once these services are performed, which occurs when the product is delivered to the customer.



Cost of Goods Sold



Cost of goods sold includes direct labor, materials and plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in ethanol plant and cattle feedlot operations. Grain purchasing and receiving costs, excluding labor costs for grain buyers and scale operators, are also included in cost of goods sold. Materials include the cost of corn feedstock, denaturant, process chemicals, cattle and veterinary supplies. Corn feedstock costs include unrealized gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and transfer costs as well as realized gains and losses on related derivative financial instruments, ineffectiveness on cash flow hedges and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income or loss. Plant overhead consists primarily of plant and feedlot utilities, repairs and maintenance, yard expenses and outbound freight charges. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold.



The company uses exchange-traded futures and options contracts to minimize the effect of price changes on the agribusiness segment’s grain and cattle inventories and forward purchase and sales contracts. Exchange-traded futures and options contracts are valued at quoted market prices and settled predominantly in cash. The company is exposed to loss when counterparties default on forward purchase and sale contracts. Grain inventories held for sale and forward purchase and sale contracts are valued at market prices when available or other market quotes adjusted for differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based. Changes in the fair value of grain inventories held for sale, forward purchase and sale contracts, and exchange-traded futures and options contracts are recognized as a component of cost of goods sold.



Operations and Maintenance Expenses



In the partnership segment, transportation expenses represent the primary component of operations and maintenance expenses. Transportation expenses includes railcar leases, freight and shipping of the company’s ethanol and co-products, as well as costs incurred storing ethanol at destination terminals.



9

 


 

 

Derivative Financial Instruments



The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to minimize risk and the effect of price changes related to corn, ethanol, cattle and natural gas. The company monitors and manages this exposure as part of its overall risk management policy to reduce the adverse effect market volatility may have on its operating results. The company may hedge these commodities as one way to mitigate risk, however, there may be situations when the hedging activities themselves result in losses.



By using derivatives to hedge exposures to changes in commodity prices, the company is exposed to credit and market risk. The company’s exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the terms of the derivative contract. The company minimizes credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring their financial condition. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. The company manages market risk by incorporating parameters to monitor exposure within its risk management strategy which limits the types of derivative instruments and strategies the company can use and the degree of market risk it can take using derivative instruments.



The company evaluates its physical delivery contracts to determine if they qualify for normal purchase or sale exemptions which are expected to be used or sold over a reasonable period in the normal course of business. Contracts that do not meet the normal purchase or sale criteria are recorded at fair value. Changes in fair value are recorded in operating income unless the contracts qualify for, and the company elects to use, hedge accounting treatment.



Certain qualifying derivatives related to the ethanol production and agribusiness segments are designated as cash flow hedges. The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow hedges. Ineffectiveness is recognized in current period results, while other unrealized gains and losses are reflected in accumulated other comprehensive income until the gain or loss from the underlying hedged transaction is realized. When it becomes probable a forecasted transaction will not occur, the cash flow hedge treatment is discontinued, which affects earnings. These derivative financial instruments are recognized in current assets or other current liabilities at fair value.



At times, the company hedges its exposure to changes in the value of inventories and designates qualifying derivatives as fair value hedges. The carrying amount of the hedged inventory is adjusted in current period results for changes in fair value. Ineffectiveness is recognized in current period results to the extent the change in fair value of the inventory is not offset by the change in fair value of the derivative.



Recent Accounting Pronouncements



Effective January 1, 2016, the company adopted the amended guidance in ASC Topic 835-30, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a deduction from the carrying amount of the debt, consistent with debt discounts. The amended guidance has been applied on a retrospective basis, and the balance sheet of each individual period presented has been adjusted to reflect the period-specific effects of the new guidance.



Effective January 1, 2017, the company will adopt the amended guidance in ASC 718, Compensation – Stock Compensation , which requires all income tax effects of awards to be recognized in the income statement when the awards vest or settle. The amended guidance also will allow an employer to repurchase more of an employee’s shares than it can currently for tax withholding purposes without trigger ing liability accounting and make a policy election to account for forfeitures as they occur. Early application is permitted. The company is currently evaluating the impact the adoption of the amended guidance will have on the consolidated financial statements and related disclosures.



Effective January 1, 2017, the company will adopt the amended guidance in ASC 330, Inventory: Simplifying the Measurement of Inventory , which requires inventory to be measured at lower of cost or net realizable value. Net realizable value is the estimated selling prices during the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amended guidance will be applied prospectively.



Effective January 1, 2018, the company will adopt the amended guidance in ASC 606, Revenue from Contracts with Customers , which requires revenue recognition to reflect the transfer of promised goods or services to customers. The updated standard permits either the retrospective or cumulative effect transition method. Early application beginning January 1, 2017 , is permitted. The company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

10

 


 

 



Effective January 1, 2019, the company will adopt the amended guidance in ASC 842, Leases , which aims to make leasing activities more transparent and comparable and requires substantially all leases to be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. Early application is permitted. The company is currently evaluating the impact the adoption of the amended guidance will have on the consolidated financial statements and related disclosures.



2.  GREEN PLAINS PARTNERS LP



Initial Public Offering of Subsidiary



On July 1, 2015, Green Plains Partners LP, or the partnership, a newly formed subsidiary of the company, closed its initial public offering, or the IPO. In conjunction with the IPO, the company contributed its downstream ethanol transportation and storage assets to the partnership. A total of 11,500,000 common units, representing limited partner interests , including 1,500,000 common units pursuant to the underwriters’ overallotment option, were sold to the public for $15.00 per common unit. The partnership received net proceeds of approximately $157.5 million, after deducting underwriting discounts, structuring fees and offering expenses. The partnership used the proceeds to make a distribution to the company of $155.3 million and to pay approximately $0.9 million in origination fees under its new $100.0 million revolving credit facility. The remaining $1.3 million was retained for general partnership purposes. The company now owns a 62.5% limited partner interest, consisting of 4,389,642 common units and 15,889,642 subordinated units, and a 2.0% general partner interest in the partnership. The public owns the remaining 35.5% limited partner interest in the partnership. As such, the partnership is consolidated in the company’s financial statements.



The partnership is a fee-based master limited partnership formed by Green Plains to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses. The partnership’s assets currently include (i) 3 8 ethanol storage facilities , located at or near the company’s 17 ethanol production plants , which have the ability to efficiently and effectively store and load railcars and tanker trucks with all of the ethanol produced at the company’s ethanol production plants, (ii) eight fuel terminal facilities, located near major rail lines, which enable the partnership to receive, store and deliver fuels from and to markets that seek a ccess to renewable fuels, and (iii) transportation assets, including a lease d railcar fleet of approximately   3, 1 00 railcars , which is contracted to transport ethanol from the company’s ethanol p roduction plants to refineries throughout the United States and international export terminals. The partnership expects to be the company’s primary downstream logistics provider to support its approximately 1.5 Bgy ethanol marketing and distribution business since the partnership’s assets are the principal method of storing and delivering the ethanol the company produces.



A substantial portion of the partnership’s revenues are derived from long-term, fee-based commercial agreements with Green Plains Trade, a subsidiary of the company. In connection with the IPO, the partnership (1) entered into (i) a ten -year fee-based storage and throughput agreement; (ii) a six -year fee-based rail transportation services agreement; and (iii) a one -year fee-based trucking transportation agreement, and (2) assumed (i) an approximately 2.5 -year terminal services agreement for the partnership’s Birmingham, Alabama-unit train terminal; and (ii) various other terminal services agreements for its other fuel terminal facilities, each with Green Plains Trade. The partnership’s storage and throughput agreement, and certain terminal services agreements, including the terminal services agreement for the Birmingham facility, are supported by minimum volume commitments. The partnership’s rail transportation services agreement is supported by minimum take-or-pay capacity commitments. The company also has agreements which establish fees for general and administrative, and operational and maintenance services it provides. These transactions are eliminated in the presentation of consolidated financial results.



3.  ACQUISITION S



Acquisition of Abengoa Ethanol Plants



On September 23 , 2016, the company acquired three ethanol plants located in Madison, Illinois, Mount Vernon, Indiana, and York, Nebraska from subsidiaries of Abengoa S.A. for approximately $237.4   million for the ethanol plant assets and $15.2 million for working capital acquired or assumed , subject to certain post-closing adjustments .   The se ethanol facilities have a combined annual production capacity of 236 mmgy. The company recorded $0.8 million of acquisition costs for the Abengoa ethanol plants to selling, general and administrative expenses during the three months ended September 30, 2016.

11

 


 

 

The purchase price allocation is based on the preliminary results of an independent valuation. The purchase price and purchase price allocation are preliminary until contractual post-closing working capital adjustments are finalized and the final independent valuation report is issued. The following is a summary of the preliminary purchase price of assets acquired and liabilities assumed (in thousands):







 

 

 

 

Amounts of Identifiable Assets Acquired
and Liabilities Assumed

Inventory

 

$

16,456 

Accounts receivable, net

 

1,588 

Prepaid expenses and other

 

 

457 

Property and equipment, net

 

235,395 

Other assets

 

 

60 



 

 

 

 

Current liabilities

 

(1,403)



Total identifiable net assets

$

252,553 



Concurrently with the company’s acquisition of the Abengoa ethanol plants, on September 23, 2016, the partnership acquired the storage assets of the Abengoa ethanol plants from the company for $90 million in a transfer between entities under common control and entered into amendments to the related commercial agreements with Green Plains Trade.  



Disclosure of pro forma combined total revenues and net income (loss) information for the acquisition of the Abengoa ethanol plants is not currently practicable because financial statements for the acquired plants are currently under audit and have not yet been provided by the sellers. The company expects to report pro forma financial information in the annual report on Form 10-K for the year ending December 31, 2016. 



Acquisition of Hereford Ethanol Plant

 

On November 12, 2015, the company acquired an ethanol production facility in Hereford, Texas, with an annual production capacity of approximately 100 mmgy for approximately $78.8 million for the ethanol plant assets, as well as working capital acquired or assumed of approximately $19.4   million.



The following is a summary of the final purchase price of assets acquired and liabilities assumed (in thousands):













 

 

 

 

Amounts of Identifiable Assets Acquired
and Liabilities Assumed

Inventory

 

$

20,487 

Derivative financial instruments

 

2,625 

Property and equipment, net

 

78,786 



 

 

 

 

Current liabilities

 

(2,542)

Other liabilities

 

(1,128)



Total identifiable net assets

$

98,228 



Effective January 1, 2016, the partnership acquired the storage and transportation assets of the Hereford and Hopewell production facilities in a transfer between entities under common control for approximately $62.3 million and entered into amendments to the related commercial agreements with Green Plains Trade.











4 .  FAIR VALUE DISCLOSURES



The following methods, assumptions and valuation techniques were used to estimate the fair value of the company’s financial instruments:



12

 


 

 

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities the company can access at the measurement date. Level 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open trade equity and option values in the company’s brokerage accounts.



Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or other means. Grain inventories held for sale in the agribusiness segment are valued at nearby futures values, plus or minus nearby basis.



Level 3 – unobservable inputs that are supported by little or no market activity and comprise a significant component of the fair value of the assets or liabilities. The company currently does not have any recurring Level 3 financial instruments.



There have been no changes in valuation techniques and inputs used in measuring fair value. The company’s assets and liabilities by level are as follows (in thousands):





 

 

 

 

 

 

 

 

 

 

 



Fair Value Measurements at September 30, 2016



Quoted Prices in
Active Markets for
Identical Assets

 

Significant Other
Observable Inputs

 

Reclassification for
Balance Sheet

 

 

 



(Level 1)

 

(Level 2)

 

Presentation

 

Total



 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

407,359 

 

$

 -

 

$

 -

 

$

407,359 

Restricted cash

 

34,219 

 

 

 -

 

 

 -

 

 

34,219 

Margin deposits

 

8,792 

 

 

 -

 

 

(8,792)

 

 

 -

Inventories carried at market

 

 -

 

 

45,199 

 

 

 -

 

 

45,199 

Unrealized gains on derivatives

 

26,098 

 

 

17,468 

 

 

(4,989)

 

 

38,577 

Other assets

 

116 

 

 

 -

 

 

 -

 

 

116 

Total assets measured at fair value

$

476,584 

 

$

62,667 

 

$

(13,781)

 

$

525,470 



 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on derivatives

$

10,938 

 

$

23,674 

 

$

(13,781)

 

$

20,831 

Other

 

 -

 

 

15 

 

 

 -

 

 

15 

Total liabilities measured at fair value

$

10,938 

 

$

23,689 

 

$

(13,781)

 

$

20,846 









 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2015



Quoted Prices in
Active Markets for
Identical Assets

 

Significant Other
Observable Inputs

 

Reclassification for
Balance Sheet

 

 

 



(Level 1)

 

(Level 2)

 

Presentation

 

Total



 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

384,867 

 

$

 -

 

$

 -

 

$

384,867 

Restricted cash

 

27,018 

 

 

 -

 

 

 -

 

 

27,018 

Margin deposits

 

7,658 

 

 

 -

 

 

(7,658)

 

 

 -

Inventories carried at market

 

 -

 

 

43,936 

 

 

 -

 

 

43,936 

Unrealized gains on derivatives

 

19,756 

 

 

7,145 

 

 

3,639 

 

 

30,540 

Other assets

 

117 

 

 

 -

 

 

 -

 

 

117 

Total assets measured at fair value

$

439,416 

 

$

51,081 

 

$

(4,019)

 

$

486,478 



 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on derivatives

$

4,492 

 

$

7,772 

 

$

(4,019)

 

$

8,245 

Total liabilities measured at fair value

$

4,492 

 

$

7,772 

 

$

(4,019)

 

$

8,245 



13

 


 

 

The company believes the fair value of its debt was approximately $913.8 million compared with a book value of $923.5 million   at September 30, 2016 , and the fair value of its debt was approximately $661.8 million compared with a book value of $663.6 million at December 31, 2015 . The company estimated the fair value of its outstanding debt using Level 2 inputs. The company believes the fair values of its accounts receivable and accounts payable approximated book value, which were $ 132.6 million and $ 129.3 million, respectively , at September 30, 2016 , and $ 96.2 million and $ 167.0 million , respectively, at December 31, 2015 .  



Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible assets and goodwill acquired and the equity component of convertible debt represent Level 3 measurements which were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued .





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.



14

 


 

 

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 



15

 


 

 

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.





6 .  INVENTORIES



Inventories are carried at lower of cost or market, except f or commodities held for sale and fair- value hedged inventories, which are reported at market value.



The components of inventories are as follows (in thousands):











 

 

 

 

 



September 30,

 

December 31,



2016

 

2015



 

 

 

 

 

Finished goods

$

68,654 

 

$

71,595 

Commodities held for sale

 

35,880 

 

 

43,936 

Raw materials

 

94,080 

 

 

116,673 

Work-in-process

 

95,303 

 

 

96,950 

Supplies and parts

 

30,370 

 

 

24,803 



$

324,287 

 

$

353,957 























7 .  GOODWILL



The company did not have any changes in the carrying amount of goodwill, which was $40.9 million at September 30, 2016 ,   and December 31, 2015. Goodwill of $ 30.3 million is attributable to the ethanol production segment and $ 10.6 million is attributable to the partnership segment.





16

 


 

 

8 .  DERIVATIVE FINANCIAL INSTRUMENTS



At September 30, 2016 , the company’s consolidated balance sheet reflected unrealized losses of $0.1 million, net of tax, in accumulated other comprehensive income (loss) . The company expects these losses will be reclassified in operating income over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating income will differ as commodity prices change.



Fair Values of Derivative Instruments



The fair values of the company’s derivative financial instruments and the line items on the consolidated balance sheets where they are reported are as follows (in thousands):











 

 

 

 

 

 

 

 

 

 

 

 



 

Asset Derivatives'

 

Liability Derivatives'



 

Fair Value

 

Fair Value



 

September 30,

 

December 31,

 

September 30,

 

December 31,



 

2016

 

2015

 

2016

 

2015

Derivative financial instruments (1)

 

$

29,785 

(2)

$

22,882 

(3)

$

 -

 

$

 -

Accrued and other liabilities

 

 

 -

 

 

 -

 

 

20,831 

 

 

8,245 

Other liabilities

 

 

 -

 

 

 -

 

 

15 

 

 

 -

Total

 

$

29,785 

 

$

22,882 

 

$

20,846 

 

$

8,245 



(1) Derivative financial instruments as reflected on the consolidated balance sheets are net of related margin deposit assets of $ 8.8 million and $ 7.7 million at September 30, 2016 and December 31, 2015 , respectively.

(2) Balance at September 30, 2016   includes $ 4.2 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments.

(3) Balance at December 31, 2015 includ es $ 2.3 million of net unrealized losses on deri vative financial instruments designated as cash flow hedging instruments.





Refer to Note 4 - Fair Value Disclosures , which contains fair value information related to derivative financial instruments.



Effect of Derivative Instruments on Consolidated Statements of Operations and Consolidated Statements of Stockholders’ Equity and Comprehensive Income



The gains or losses recognized in income and other comprehensive income related to the company’s derivative financial instruments and the line items on the consolidated financial statements where they are reported are as follows (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

Gains (Losses) on Derivative Instruments Not

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

Designated in a Hedging Relationship

 

2016

 

2015

 

2016

 

2015

Revenues

 

$

(1,084)

 

$

(9,431)

 

$

6,187 

 

$

(9,597)

Cost of goods sold

 

 

(39)

 

 

20,992 

 

 

(8,740)

 

 

2,783 

Net increase (decrease) recognized in earnings before tax

 

$

(1,123)

 

$

11,561 

 

$

(2,553)

 

$

(6,814)







 

 

 

 

 

 

 

 

 

 

 

 

Gains (Losses) Due to Ineffectiveness

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

of Cash Flow Hedges

 

2016