0001309402-20-000116 | 10-Q | XBRL Viewer

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Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2020	Nov. 02, 2020
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity File Number	001-32924
Entity Registrant Name	Green Plains Inc.
Entity Central Index Key	0001309402
Entity Incorporation, State or Country Code	IA
Entity Tax Identification Number	84-1652107
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		35,658,284
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GPRE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Amendment Flag	false
Entity Address, Address Line One	1811 Aksarben Drive
Entity Address, City or Town	Omaha
Entity Address, State or Province	NE
Entity Address, Postal Zip Code	68106
City Area Code	402
Local Phone Number	884-8700
Entity Shell Company	false

Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

Current assets

Cash and cash equivalents

$ 150,407

$ 245,977

Restricted cash

31,877

23,919

Accounts receivable, net of allowances of $191 and $166, respectively

54,482

107,183

Income taxes receivable

57,929

6,216

Inventories

184,661

252,992

Prepaid expenses and other

14,634

13,685

Derivative financial instruments

14,687

17,941

Total current assets

508,677

667,913

Property and equipment, net of accumulated depreciation and amortization of $541,690 and $486,677, respectively

858,490

827,271

Operating lease right-of-use assets

56,904

52,476

Investment in equity method investees

73,563

68,998

Other assets

39,786

81,560

Total assets

^[1]

1,537,420

1,698,218

Current liabilities

Accounts payable

89,566

156,693

Accrued and other liabilities

28,682

39,384

Derivative financial instruments

17,577

8,721

Operating lease current liabilities

14,663

16,626

Short-term notes payable and other borrowings

146,614

187,812

Current maturities of long-term debt

34,378

132,555

Total current liabilities

331,480

541,791

Long-term debt

345,056

243,990

Operating lease long-term liabilities

45,360

38,314

Other liabilities

11,969

8,837

Total liabilities

733,865

832,932

Commitments and contingencies (Note 14)

Stockholders’ equity

Common stock, $0.001 par value; 75,000,000 shares authorized; 47,466,527 and 46,964,115 shares issued, and 35,653,366 and 36,031,933 shares outstanding, respectively

Additional paid-in capital

738,774

734,580

Retained earnings

89,005

148,150

Accumulated other comprehensive loss

(10,913)

(11,064)

Treasury stock, 11,813,161 and 10,932,182 shares, respectively

(131,287)

(119,808)

Total Green Plains stockholders’ equity

685,626

751,905

Noncontrolling interests

117,929

113,381

Total stockholders’ equity

803,555

865,286

Total liabilities and stockholders’ equity

$ 1,537,420

$ 1,698,218

[1]	Asset balances by segment exclude intercompany balances

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowances	$ 191	$ 166
Property, and equipment, accumulated depreciation and amortization	$ 541,690	$ 486,677
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	47,466,527	46,964,115
Common stock, shares outstanding	35,653,366	36,031,933
Treasury stock, shares	11,813,161	10,932,182

Consolidated Statements Of Operations - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

Revenues

Revenues

$ 424,062

$ 632,350

^[1]

$ 1,444,955

$ 1,701,560

Costs and expenses

Cost of goods sold (excluding depreciation and amortization expenses reflected below)

393,933

632,129

1,372,057

1,700,481

Operations and maintenance expenses

6,647

6,216

19,410

19,314

Selling, general and administrative expenses

19,934

18,542

62,090

56,450

Goodwill impairment

24,091

Gain on sale of asset

(2,000)

Depreciation and amortization expenses

19,753

17,828

57,208

52,963

Total costs and expenses

438,267

674,715

1,532,856

1,829,208

Operating loss from continuing operations

(14,205)

(42,365)

(87,901)

(127,648)

Other income (expense)

Interest income

767

643

2,813

Interest expense

(10,169)

(10,548)

(29,536)

(31,528)

Other, net

862

630

Total other expense

(10,154)

(9,693)

(28,031)

(28,085)

Loss from continuing operations before income taxes and income from equity method investees

(24,359)

(52,058)

(115,932)

(155,733)

Income tax benefit (expense)

(7,280)

12,530

48,461

40,692

Income from equity method investees, net of income taxes

906

644

20,917

534

Net loss from continuing operations including noncontrolling interest

(30,733)

(38,884)

(46,554)

(114,507)

Net income from discontinued operations, net of income taxes

3,393

966

Net loss

(30,733)

(35,491)

(46,554)

(113,541)

Net income attributable to noncontrolling interests

3,753

3,479

12,591

13,570

Net loss attributable to Green Plains

$ (34,486)

$ (38,970)

$ (59,145)

$ (127,111)

Earnings per share - basic and diluted

Net loss from continuing operations

$ (1.00)

$ (1.15)

$ (1.71)

$ (3.28)

Net income from discontinued operations

0.09

0.03

Net loss attributable to Green Plains

$ (1.00)

$ (1.06)

$ (1.71)

$ (3.25)

Weighted average shares outstanding:

Basic

34,629

36,913

34,632

39,092

Diluted

34,629

36,913

34,632

39,092

Product [Member]

Revenues

Revenues

$ 423,027

$ 631,032

$ 1,441,248

$ 1,696,245

Service [Member]

Revenues

Revenues

$ 1,035

$ 1,318

$ 3,707

$ 5,315

[1]

Product revenues, costs of goods sold and selling, general and administrative expenses include certain revenue and expense items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation. These revenue and costs of goods sold transactions total $5.5 million and $14.5 million for the three and nine months ended September 30, 2019, respectively.

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Consolidated Statements Of Comprehensive Income [Abstract]
Net loss	$ (30,733)	$ (35,491)	$ (46,554)	$ (113,541)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of $859, ($5,149), ($160) and ($12,953), respectively	(2,696)	28,095	503	54,472
Reclassification of realized gains on derivatives, net of tax expense of $0, $13,445, $1,431 and $9,358, respectively		(53,255)	(4,492)	(39,439)
Other comprehensive income (loss), net of tax	(2,696)	(25,160)	(3,989)	15,033
Share of equity method investees other comprehensive income (loss) arising during the period, net of tax benefit (expense) of $6,705, $3,555, ($1,318) and $3,555, respectively	(21,057)	(10,771)	4,140	(10,771)
Total other comprehensive income (loss), net of tax	(23,753)	(35,931)	151	4,262
Comprehensive loss	(54,486)	(71,422)	(46,403)	(109,279)
Comprehensive income attributable to noncontrolling interests	3,753	3,479	12,591	13,570
Comprehensive loss attributable to Green Plains	$ (58,239)	$ (74,901)	$ (58,994)	$ (122,849)

Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Consolidated Statements Of Comprehensive Income [Abstract]
Unrealized gains (losses) on derivatives arising during period, tax benefit (expense)	$ 859	$ (5,149)	$ (160)	$ (12,953)
Reclassification of realized losses (gains) on derivatives, tax expense (benefit)	0	13,445	1,431	9,358
Share of equity method investees other comprehensive income arising during the period, tax expense	$ 6,705	$ 3,555	$ (1,318)	$ 3,555

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss from continuing operations including noncontrolling interest	$ (46,554)	$ (114,507)
Net income from discontinued operations, net of income taxes		966
Net loss	(46,554)	(113,541)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	57,208	52,963
Amortization of debt issuance costs and debt discount	16,097	15,633
Goodwill impairment	24,091
Gain on sale of assets, net	(1,405)
Deferred income taxes	(10,569)	(38,918)
Stock-based compensation	5,720	7,406
Income from equity method investees, net of income taxes	(20,917)	(534)
Distribution from equity method investments	27,910
Other	18	1,245
Changes in operating assets and liabilities before effects of business combinations and dispositions:
Accounts receivable	54,683	21,106
Inventories	68,301	52,400
Derivative financial instruments	5,532	7,208
Prepaid expenses and other assets	2,051	3,900
Accounts payable and accrued liabilities	(78,091)	(22,359)
Current income taxes	(26,825)	(2,175)
Other	(802)	(2,167)
Net cash provided by (used in) operating activities - continuing operations	76,448	(17,833)
Net cash provided by operating activities - discontinued operations		17,469
Net cash provided by (used in) operating activities	76,448	(364)
Cash flows from investing activities:
Purchases of property and equipment, net	(85,376)	(43,372)
Proceeds from the sale of discontinued operations, net of cash divested		77,240
Proceeds from the sale of assets, net		3,469
Other investing activities	(4,098)	(100)
Net cash provided by (used in) investing activities - continuing operations	(89,474)	37,237
Net cash used in investing activities - discontinued operations		(4,169)
Net cash provided by (used in) investing activities	(89,474)	33,068
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	13,000	180,100
Payments of principal on long-term debt	(12,933)	(68,235)
Proceeds from short-term borrowings	1,816,821	1,994,777
Payments on short-term borrowings	(1,866,526)	(2,070,273)
Payments for repurchase of common stock	(11,479)	(55,884)
Payments of cash dividends and distributions	(8,281)	(26,189)
Proceeds from disgorgement of shareholder short-swing profits		6,699
Payments of loan fees	(3,900)	(5,290)
Payments related to tax withholdings for stock-based compensation	(1,288)	(2,101)
Net cash used in financing activities - continuing operations	(74,586)	(46,396)
Net cash used in financing activities - discontinued operations		(50,464)
Net cash used in financing activities	(74,586)	(96,860)
Net change in cash, cash equivalents and restricted cash	(87,612)	(64,156)
Cash, cash equivalents and restricted cash, beginning of period	269,896	283,284
Discontinued operations cash activity included above:
Cash, cash equivalents and restricted cash, end of period	182,284	254,039
Reconciliation of total cash, cash equivalents and restricted cash:
Total cash, cash equivalents and restricted cash	182,284	254,039
Assets disposed of in sale		527,614
Less: liabilities disposed		(373,846)
Net assets disposed		153,768
Supplemental disclosures of cash flow:
Cash paid (refunded) for income taxes	(4,533)	640
Cash paid for interest of continuing operations	$ 20,325	21,777
Cash paid for interest of discontinued operations		$ 11,556

Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation, Description Of Business And Summary Of Significant Accounting Policies

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. The company owns a 48.9% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. Public investors own the remaining 49.1% limited partner interest in the partnership. The company determined that the limited partners in the partnership with equity at risk lack the power, through voting rights or similar rights, to direct the activities that most significantly impact partnership’s economic performance; therefore, the partnership is considered a variable interest entity. The company, through its ownership of the general partner interest in the partnership, has the power to direct the activities that most significantly affect economic performance and is obligated to absorb losses and has the right to receive benefits that could be significant to the partnership. Therefore, the company is considered the primary beneficiary and consolidates the partnership in the company’s financial statements. The assets of the partnership cannot be used by the company for general corporate purposes. The partnership’s consolidated total assets as of September 30, 2020 and December 31, 2019, excluding intercompany balances, are $87.3 million and $90.0 million, respectively, and primarily consist of property and equipment, operating lease right-of-use assets and goodwill. The partnership’s consolidated total liabilities as of September 30, 2020 and December 31, 2019, excluding intercompany balances, are $165.1 million and $180.9 million, respectively, which primarily consist of long-term debt as discussed in Note 9 – Debt and operating lease liabilities. The liabilities recognized as a result of consolidating the partnership do not represent additional claims on our general assets.

GPCC, a previously a wholly owned subsidiary of Green Plains, was disposed of during the third quarter of 2019. After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”) to be presented as discontinued operations. As such, GPCC results prior to its disposition are classified as discontinued operations in prior period consolidated financial statements. See Note 3 - Dispositions and Discontinued Operations and Note 17 – Subsequent Events for further details.

The company also owns a 90.0% interest in BioProcess Algae, a joint venture formed in 2008, and consolidates their results in its consolidated financial statements.

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 notes 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, 2019, filed with the SEC on February 20, 2020.

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. Interim period results are not necessarily indicative of the results to be expected for the entire year.

Reclassifications

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

‎

Revision of Previously Issued Financial Statements

During the third quarter of 2020, the company identified an immaterial issue which resulted in the overstatement of both revenues and cost of goods sold by $30.0 million within the agribusiness and energy services segment as previously reported for the three and six months ended June 30, 2020. The second quarter revenues and cost of goods sold reflected in the year to date consolidated statement of operations have been revised to correct these amounts. The company will update revenues and cost of goods sold in future filings to properly reflect these amounts for the three and six months ended June 30, 2020.

Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, 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, operating leases, 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

The company operates within four business segments: (1) ethanol production, which includes the production of ethanol, including industrial-grade alcohol, distillers grains, ultra-high protein and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which includes food-grade corn oil and (4) partnership, which includes fuel storage and transportation services.

Cash and Cash Equivalents

Cash and cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash

The company has restricted cash, which can only be used for funding letters of credit or for payment towards a revolving credit agreement. Restricted cash also includes cash margins and securities pledged to commodity exchange clearinghouses and at times, funds in escrow related to acquisition and disposition activities. To the degree these segregated balances are cash and cash equivalents, they are considered restricted cash on the consolidated balance sheets.

Revenue Recognition

The company recognizes revenue when obligations under the terms of a contract with a customer are satisfied. Generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Sales, value add, and other taxes the company collects concurrent with revenue-producing activities are excluded from revenue.

Sales of ethanol, distillers grains, corn oil, natural gas and other commodities by the company’s marketing business are recognized when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the transfer of control of products or services. Revenues related to marketing for third parties are presented on a gross basis as the company controls the product prior to the sale to the end customer, takes title of the product and has inventory risk. Unearned revenue is recorded for goods in transit when the company has received payment but control 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 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. Energy trading transactions are reported net as a component of revenue. Revenues include net gains or losses from derivatives related to products sold while cost of goods sold includes net gains or losses from derivatives related to commodities purchased. Revenues also include realized gains and losses on related derivative financial instruments and reclassifications of realized gains and losses on cash flow hedges from accumulated other comprehensive income or loss.

Sales of products, including agricultural commodities, are recognized when control of the product is transferred to the customer, which depends on the agreed upon shipment or delivery terms. 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 over time as the 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 upon transfer of control of product from its storage tanks and fuel terminals, when railcar volumetric capacity is provided, and as truck transportation services are performed. To the extent shortfalls associated with minimum volume commitments in the previous four quarters continue to exist, volumes in excess of the minimum volume commitment are applied to those shortfalls. Remaining excess volumes generating operating lease revenue are recognized as incurred.

Shipping and Handling Costs

The company accounts for shipping and handling activities related to contracts with customers as costs to fulfill its promise to transfer the associated products. Accordingly, the company records customer payments associated with shipping and handling costs as a component of revenue, and classifies such costs as a component of cost of goods sold.

Cost of Goods Sold

Cost of goods sold includes direct labor, materials, shipping and plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in ethanol production. 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, and process chemicals. Corn feedstock costs include 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 reclassifications of gains and losses on cash flow hedges from accumulated other comprehensive income or loss. Plant overhead consists primarily of plant utilities, repairs and maintenance 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 and forward purchase and sale contracts to attempt to minimize the effect of price changes on ethanol, grain and natural gas. 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 forward purchase 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 include railcar leases, freight and shipping of the company’s ethanol and co-products, as well as costs incurred storing ethanol at destination terminals.

Derivative Financial Instruments

The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes including but not limited to, corn, ethanol, natural gas and crude oil. 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 these 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 its 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, cash flow hedge accounting treatment.

Certain qualifying derivatives related to ethanol production and agribusiness and energy services are designated as cash flow hedges. The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow hedges. Unrealized gains and losses are reflected in accumulated other comprehensive income or loss until the gain or loss from the underlying hedged transaction is realized and the physical transaction is completed. 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 current liabilities at fair value.

At times, the company hedges its exposure to changes in inventory values and designates qualifying derivatives as fair value hedges. The carrying amount of the hedged inventory is adjusted in the current period for changes in fair value. Ineffectiveness of the hedges is recognized in the current period 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

In December 2019, the FASB issued amended guidance in ASC 740, Income Taxes - Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC 740 by clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. The company is evaluating the impact of this standard on its consolidated financial statements.

In March 2020, the FASB issued amended guidance in ASC 848, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates. The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The guidance is effective upon issuance and to be applied prospectively from any date beginning March 12, 2020 through December 31, 2022. The amended guidance is not expected to have a material impact on the company’s consolidated financial statements.

In August 2020, the FASB issued amended guidance in ASC 470-20, Debt - Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity - Accounting for Convertible Instruments and Contracts in an Equity’s Own Equity. The amended guidance simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. The amended guidance also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance. The amended guidance is effective for fiscal periods beginning after December 15, 2021, including interim periods within those fiscal periods. Early adoption is permitted, but no earlier than fiscal periods beginning after December 15, 2020. The amended guidance permits the use of either the modified retrospective or fully retrospective method of transition. The company is currently evaluating the timing of adoption and impact of this standard on its consolidated financial statements however anticipates it will result in an increase to long-term debt and a decrease in additional paid-in-capital as well as a reduction in non-cash interest expense related to the company’s convertible notes.

Revenue

9 Months Ended

Sep. 30, 2020

Revenue [Abstract]

Revenue

2. REVENUE

Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Sales, value add, and other taxes the company collects concurrent with revenue-producing activities are excluded from revenue.

Revenue by Source

The following tables disaggregate revenue by major source (in thousands):


	Three Months Ended September 30, 2020
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	-	$	-	$	-	$	-	$	-	$	-
Distillers grains		4,095		-		-		-		-		4,095
Corn oil		-		2,938		-		-		-		2,938
Service revenues		-		-		-		920		-		920
Other		66		1,408		-		-		-		1,474
Intersegment revenues		25		-		-		2,289		(2,314)		-
Total revenues from contracts with customers		4,186		4,346		-		3,209		(2,314)		9,427
Revenues from contracts accounted for as derivatives under ASC 815 ⁽¹⁾:
Ethanol		263,390		56,895		-		-		-		320,285
Distillers grains		51,692		10,696		-		-		-		62,388
Corn oil		12,433		5,805		-		-		-		18,238
Grain		1		11,099		-		-		-		11,100
Other		1,276		1,233		-		-		-		2,509
Intersegment revenues		-		5,354		-		-		(5,354)		-
Total revenues from contracts accounted for as derivatives		328,792		91,082		-		-		(5,354)		414,520
Leasing revenues under ASC 842 ⁽²⁾:		-		-		-		18,173		(18,058)		115
Total Revenues	$	332,978	$	95,428	$	-	$	21,382	$	(25,726)	$	424,062


	Nine Months Ended September 30, 2020
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	-	$	-	$	-	$	-	$	-	$	-
Distillers grains		25,159		-		-		-		-		25,159
Corn oil		-		2,938		-		-		-		2,938
Service revenues		-		-		-		3,366		-		3,366
Other		4,257		3,668		-		-		-		7,925
Intersegment revenues		75		-		-		6,201		(6,276)		-
Total revenues from contracts with customers		29,491		6,606		-		9,567		(6,276)		39,388
Revenues from contracts accounted for as derivatives under ASC 815 ⁽¹⁾:
Ethanol		849,298		243,930		-		-		-		1,093,228
Distillers grains		179,854		28,960		-		-		-		208,814
Corn oil		36,621		23,681		-		-		-		60,302
Grain		7		26,773		-		-		-		26,780
Other		3,974		12,128		-		-		-		16,102
Intersegment revenues		-		17,030		-		-		(17,030)		-
Total revenues from contracts accounted for as derivatives		1,069,754		352,502		-		-		(17,030)		1,405,226
Leasing revenues under ASC 842 ⁽²⁾:		-		-		-		52,467		(52,126)		341
Total Revenues	$	1,099,245	$	359,108	$	-	$	62,034	$	(75,432)	$	1,444,955

‎


	Three Months Ended September 30, 2019
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	-	$	-	$	-	$	-	$	-	$	-
Distillers grains		16,455		-		-		-		-		16,455
Service revenues		-		-		-		1,275		-		1,275
Other		127		895