Green Plains Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing; the supplied filing text does not provide a clear set of standalone fourth-quarter financial results.
Business context
Green Plains produces ethanol and co-products, markets agricultural commodities, and provides fuel storage and transportation through its consolidated partnership. It operated 11 ethanol plants, with approximately 1.0 billion gallons of annual capacity. The company is shifting from commodity processing toward higher-value products, particularly Ultra-High Protein and increased corn-oil yields.
Financial and operating results
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $2.827 billion | $1.924 billion |
| Operating income (loss) | $25.5 million | $(122.7) million |
| Net loss, including noncontrolling interests | $(44.1) million | $(89.7) million |
| Net loss attributable to Green Plains | $(66.0) million | $(108.8) million |
| Adjusted EBITDA | $87.4 million | $36.7 million |
| Net cash from operating activities | $4.2 million | $98.9 million |
| Capital expenditures | $187.3 million | $111.8 million |
- Revenue rose about 47%, primarily from higher realized prices for ethanol, distillers grains and corn oil, plus increased trading activity. Ethanol sales volume declined to 750.6 million gallons from 793.7 million.
- Ethanol production segment operating loss narrowed to $28.0 million from $129.6 million. Agribusiness and energy services reported $17.5 million of operating income; the partnership segment reported $48.7 million.
- Operating results improved, but the company remained loss-making. Net loss attributable to Green Plains was $1.41 per share, versus $3.14 in 2020.
- Average ethanol plant utilization was approximately 77%, up from 71%. Higher corn and chemical costs partly offset better production margins.
- At year-end, cash and cash equivalents were $426.2 million, restricted cash was $134.7 million, and marketable securities were $124.9 million. The company also reported $287.8 million available under committed revolving facilities and a delayed-draw loan, subject to restrictions and lending conditions.
- Balance-sheet debt included $173.4 million of short-term notes and borrowings, $35.3 million of current maturities of long-term debt, and $514.0 million of long-term debt. Variable-rate debt was reported at $232.9 million; management estimated a 10% rate increase would add about $1.0 million in annual interest cost.
Changes, outlook and key risks
- Year-over-year improvement: Operating income swung to positive, and adjusted EBITDA increased by $50.6 million. A $29.6 million net gain on asset sales in 2021 contributed; 2020 included a $24.1 million goodwill impairment and losses on asset sales.
- Cash generation: Operating cash flow fell sharply to $4.2 million, with management citing working-capital changes. Investing cash outflow increased, reflecting marketable-security purchases and higher capital spending.
- Financing and dilution: Two 2021 common-stock offerings generated $356.0 million in net proceeds. The company also issued $230.0 million of 2.25% convertible notes due 2027 and used part of the proceeds to repurchase 2022 convertible notes. Common shares outstanding increased substantially during the year.
- Investment plans: Management projected 2022 capital spending of approximately $250–$300 million, mainly for Ultra-High Protein installations and maintenance. Three additional protein installations were under construction, with expected start-up during 2022; deployment elsewhere was expected over several years. No formal earnings or margin guidance is provided in the supplied text.
- Debt refinancing: Green Plains Grain and Green Plains Trade working-capital facilities were due to mature in June and July 2022, respectively. Management said replacement financing was probable but negotiations were not finalized at filing. The company was in covenant compliance at year-end.
- Unusual commodity/hedge effects: 2021 revenue included $254.4 million of net derivative losses, while cost of goods sold included $33.4 million of net derivative gains, underscoring the potential for material period-to-period accounting and cash-flow volatility.
- Principal risks: Profitability depends on volatile spreads among corn, natural gas, ethanol and co-products; hedging and margin calls can pressure liquidity. Other material uncertainties include RFS/EPA decisions and E15 rules, demand and fuel-policy shifts, construction and product-yield execution, supply-chain and inflationary pressures, and export tariffs. COVID-19 caused some supply-chain issues, but the company reported no direct material adverse effect on its ability to operate in 2021.
- The company suspended its quarterly dividend in 2019 and made no share repurchases in 2021. Management said ordinary-course litigation was not expected to materially affect financial position, results or cash flows.
Investor verification priorities
- Confirm the reported net loss attributable to Green Plains versus consolidated net loss, which includes noncontrolling interests, and assess the effect of the Ord plant sale gain on operating results.
- Review working-capital movements behind the sharp decline in operating cash flow and the availability and restrictions on cash held at subsidiaries.
- Verify refinancing or replacement of the June and July 2022 working-capital facilities, and repayment or conversion of the remaining 2022 convertible notes.
- Track actual 2022 capital spending, installation timing, production yields and realized margins for the Ultra-High Protein and corn-oil initiatives against management’s plans.
- Assess the sensitivity of earnings and liquidity to commodity spreads, derivative positions and potential margin calls, alongside regulatory changes affecting ethanol blending and demand.