Green Plains Partners Reports Second Quarter 2023 Financial Results

August 4, 2023

Results for the Second Quarter of 2023

Net income of $9.3 million, or $0.39 per common unit
Adjusted EBITDA of $12.7 million and distributable cash flow of $10.7 million
Quarterly cash distribution of $0.455 per unit
Distribution coverage ratio of 0.99x; LTM distribution coverage ratio of 1.01x
Leverage ratio, net of cash; 0.82x Adjusted EBITDA

OMAHA, Neb.–(BUSINESS WIRE)–Green Plains Partners LP (NASDAQ:GPP) today announced financial and operating results for the second quarter of 2023. Net income attributable to the partnership was $9.3 million, or $0.39 per common unit, for the second quarter of 2023, compared with net income of $10.5 million, or $0.44 per common unit, for the same period in 2022.

The partnership also reported adjusted EBITDA of $12.7 million and distributable cash flow of $10.7 million for the second quarter of 2023, compared with adjusted EBITDA of $12.9 million and distributable cash flow of $11.3 million for the same period in 2022. Distribution coverage was 0.99x for the three months ended June 30, 2023.

Second Quarter Highlights and Recent Developments

On July 20, 2023, the board of directors of the partnership’s general partner declared a quarterly cash distribution of $0.455 per unit, or approximately $10.8 million, for the second quarter of 2023. The distribution is payable on August 11, 2023, to unitholders of record at the close of business on August 4, 2023.

Results of Operations

Consolidated revenues for the three months ended June 30, 2023 increased by $0.9 million compared with the same period for 2022 primarily due to an increase in transportation service fees charged as a result of upgrading our leased railcar fleet to comply with government regulations and higher railcar volumetric capacity. Operations and maintenance expenses increased by $0.9 million for the three months ended June 30, 2023, compared with the same period for 2022, primarily due to higher railcar lease expense as a result of upgrading our leased railcar fleet. General and administrative expenses increased $0.7 million for the three months ended June 30, 2023 compared with the same period for 2022 primarily due to transaction costs related to the proposal from our parent to acquire all outstanding units of the partnership.

During the second quarter of 2023, Green Plains Inc.’s average production utilization rate was approximately 81.5% of capacity. Ethanol throughput was 196.1 million gallons, which was below the contracted minimum volume commitment. As a result, the Partnership charged Green Plains Trade $1.2 million related to the minimum volume commitment deficiency for the quarter, resulting in a credit to be applied against excess volumes in future periods. The cumulative balance of minimum volume deficiency credits available to Green Plains Trade as of June 30, 2023 was $1.7 million. If these credits are unused by Green Plains Trade, $0.5 million will expire on March 31, 2024 and $1.2 million will expire on June 30, 2024. These credits have been recognized in revenue by the partnership, and as such, future volumes throughput by Green Plains Trade in excess of the quarterly minimum volume commitment, up to the amount of these credits, will not be recognized in revenue in future periods.

GREEN PLAINS PARTNERS LP SELECTED OPERATING DATA (unaudited, in million gallons)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023	2022	% Var.		2023	2022	% Var.
Product volumes (mmg)
Storage and throughput services	196.1	232.5	(15.7	)%	404.2	429.7	(5.9	)%

Terminal services
Affiliate	30.1	27.7	8.7		56.4	55.0	2.5
Non-affiliate	25.9	23.7	9.3		50.5	45.2	11.7
	56.0	51.4	8.9		106.9	100.2	6.7

Railcar capacity billed (daily avg.)	70.7	74.5	(5.1	)	71.7	72.1	(0.6	)

Liquidity and Capital Resources

Total liquidity as of June 30, 2023 consisted of $15.6 million in cash and cash equivalents. Total debt outstanding was $57.1 million, net of unamortized debt issuance costs of $0.4 million.

Conference Call Information

On August 4, 2023, Green Plains Partners LP and Green Plains Inc. will host a joint conference call at 9 a.m. Eastern time (8 a.m. Central time) to discuss second quarter of 2023 financial and operating results for each company. Domestic and international participants can access the conference call by dialing 888.210.4215 and 646.960.0269, respectively, and referencing conference ID 5027523. Participants are advised to call at least 10 minutes prior to the start time. Alternatively, the conference call will be accessible on Green Plains Partners’ website here.

Non-GAAP Financial Measures

Adjusted EBITDA and distributable cash flow are supplemental financial measures used to assess the partnership’s financial performance. Management believes adjusted EBITDA and distributable cash flow provide investors useful information in assessing the partnership’s financial condition and results of operations. Adjusted EBITDA is defined as earnings before interest, depreciation and amortization, plus adjustments for transaction costs related to acquisitions or financing transactions, unit-based compensation expense, net gains or losses on asset sales, and the partnership’s proportional share of EBITDA adjustments of our equity method investee. Distributable cash flow is defined as adjusted EBITDA less interest paid or payable, net of interest received, income taxes paid or payable, maintenance capital expenditures and the partnership’s proportionate share of distributable cash flow adjustments of our equity method investee. References to LTM refer to results from the immediately preceding twelve-month period. Adjusted EBITDA and distributable cash flow are not presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and therefore should not be considered in isolation or as alternatives to net income or any other measure of financial performance presented in accordance with GAAP to analyze the partnership’s results.

About Green Plains Partners LP

Green Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. For more information about Green Plains Partners, visit www.greenplainspartners.com.

About Green Plains Inc.

Green Plains Inc. (NASDAQ:GPRE) is a leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of ultra-high protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.8% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, visit www.gpreinc.com.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management’s current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as “believe,” “expect,” “may,” “should,” “will” and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied are discussed in Green Plains Partners’ reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains Partners assumes no obligation to update any such forward-looking statements, except as required by law.

Consolidated Financial Results

GREEN PLAINS PARTNERS LP CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	June 30, 2023			December 31, 2022
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	15,550		$	20,166
Accounts receivable, including from affiliates		15,200			12,997
Other current assets		1,520			1,410
Total current assets		32,270			34,573
Property and equipment, net		25,984			26,137
Operating lease right-of-use assets		55,189			47,002
Other assets		14,076			13,710
Total assets	$	127,519		$	121,422

LIABILITIES AND PARTNERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable, including to affiliates	$	4,043		$	4,225
Operating lease current liabilities		17,226			14,734
Other current liabilities		7,498			6,710
Total current liabilities		28,767			25,669
Long-term debt		57,101			58,559
Asset retirement obligations		3,534			2,862
Operating lease long-term liabilities		39,583			33,582
Total liabilities		128,985			120,672

Partners’ equity (deficit)		(1,466	)		750
Total liabilities and partners’ equity (deficit)	$	127,519		$	121,422

GREEN PLAINS PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands except per unit amounts)

	Three Months Ended June 30,								Six Months Ended June 30,
		2023			2022		% Var.			2023			2022		% Var.
Revenues
Affiliate	$	19,460		$	18,742		3.8	%	$	39,116		$	36,837		6.2	%
Non-affiliate		1,063			912		16.6			2,182			1,917		13.8
Total revenues		20,523			19,654		4.4			41,298			38,754		6.6
Operating expenses
Operations and maintenance (excluding depreciation and amortization reflected below)		7,070			6,160		14.8			14,323			11,725		22.2
General and administrative		1,625			925		75.7			2,855			2,110		35.3
Depreciation and amortization		828			823		0.6			1,644			1,721		(4.5	)
Total operating expenses		9,523			7,908		20.4			18,822			15,556		21.0
Operating income		11,000			11,746		(6.4	)		22,476			23,198		(3.1	)
Interest income		238			—		100.0			363			—		100.0
Interest expense		(1,910	)		(1,384	)	38.0			(3,807	)		(2,623	)	45.1
Income before income taxes and income from equity method investee		9,328			10,362		(10.0	)		19,032			20,575		(7.5	)
Income tax expense		(293	)		(39	)	651.3			(194	)		(77	)	151.9
Income from equity method investee		311			196		58.7			420			371		13.2
Net income	$	9,346		$	10,519		(11.2	)%	$	19,258		$	20,869		(7.7	)%

Net income attributable to partners’ ownership interests
General partner	$	188		$	210		(10.5	)%	$	386		$	417		(7.4	)%
Limited partners – common unitholders		9,158			10,309		(11.2	)		18,872			20,452		(7.7	)

Earnings per limited partner unit (basic and diluted)
Common units	$	0.39		$	0.44		(11.4	)%	$	0.81		$	0.88		(8.0	)%

Weighted average limited partner units outstanding (basic and diluted)
Common units		23,227			23,208					23,227			23,208

Supplemental Revenues Data
Storage and throughput services	$	11,565		$	11,570		—	%	$	23,129		$	23,128		—	%
Railcar transportation services		6,369			5,119		24.4			12,678			9,771		29.8
Terminal services		2,173			2,036		6.7			4,250			4,120		3.2
Trucking and other		416			929		(55.2	)		1,241			1,735		(28.5	)
Total revenues	$	20,523		$	19,654		4.4	%	$	41,298		$	38,754		6.6	%

GREEN PLAINS PARTNERS LP CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands)

	Six Months Ended June 30,
		2023			2022
Cash flows from operating activities
Net income	$	19,258		$	20,869
Noncash operating adjustments
Depreciation and amortization		1,644			1,721
Other		(399	)		(53	)
Net change in working capital		(1,888	)		(1,343	)
Net cash provided by operating activities		18,615			21,194

Cash flows from investing activities
Purchases of property and equipment		(129	)		(305	)
Net cash used in investing activities		(129	)		(305	)

Cash flows from financing activities
Payments of distributions		(21,586	)		(20,976	)
Principal payments on long-term debt		(1,500	)		(1,031	)
Other		(16	)		—
Net cash used in financing activities		(23,102	)		(22,007	)

Net change in cash and cash equivalents		(4,616	)		(1,118	)
Cash and cash equivalents, beginning of period		20,166			17,645
Cash and cash equivalents, end of period	$	15,550		$	16,527

GREEN PLAINS PARTNERS LP RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES (unaudited, in thousands except ratios)

	Three Months Ended June 30,						Six Months Ended June 30,						LTM Ended June 30,
		2023			2022			2023			2022			2023

Net income		9,346			10,519			19,258			20,869			39,039
Interest expense, net		1,672			1,384			3,444			2,623			6,745
Income tax expense		293			39			194			77			198
Depreciation and amortization		828			823			1,644			1,721			4,016
Transaction costs		455			—			455			—			455
Unit-based compensation expense		60			60			119			119			240
Proportional share of EBITDA adjustments of equity method investee ⁽¹⁾		45			45			90			90			180
Adjusted EBITDA		12,699			12,870			25,204			25,499			50,873
Interest paid or payable, net of interest received		(1,672	)		(1,384	)		(3,444	)		(2,623	)		(6,745	)
Income taxes paid or payable		(293	)		(39	)		(194	)		(77	)		(198	)
Maintenance capital expenditures		(4	)		(126	)		(84	)		(258	)		(410	)
Distributable cash flow ⁽²⁾	$	10,730		$	11,321		$	21,482		$	22,541		$	43,520
Distributions declared ⁽³⁾	$	10,802		$	10,666		$	21,595		$	21,213		$	43,190
Coverage ratio		0.99x			1.06x			0.99x			1.06x			1.01x

Long-term debt													$	57,101
Less: Cash and cash equivalents														15,550
Long-term debt, net of cash and cash equivalents													$	41,551
Adjusted EBITDA													$	50,873
Leverage ratio														0.82x

(1) Represents our proportional share of depreciation and amortization of our equity method investee. (2) Distributable cash flow does not include adjustments for the principal payment on the term loan of $1.5 million for the three and six months ended June 30, 2023. Distributable cash flow does not include adjustments for the principal payments on the term loan of $1.0 million for the six months ended June 30, 2022. (3) Represents distributions declared for the applicable period and paid in the subsequent quarter.