Green Plains Partners Reports Fourth Quarter and Full Year 2018 Financial Results
February 11 2019 - 7:31AM
Green Plains Partners LP (NASDAQ:GPP) today announced financial and
operating results for the fourth quarter of 2018. Net income was
$14.1 million, or $0.51 per common unit, for the fourth quarter of
2018 compared with $16.3 million, or $0.50 per common unit, for the
same period in 2017. The partnership reported adjusted EBITDA of
$15.2 million and distributable cash flow of $13.1 million for the
fourth quarter of 2018, compared with adjusted EBITDA of $19.0
million and distributable cash flow of $17.6 million for the same
period in 2017. Distribution coverage was 1.16x for the three
months ended December 31, 2018.
“We are fully committed to Green Plains Partners and its
business model, which remains a value-added segment and a driver of
growth. Our primary focus is to provide terminal and logistics
services to our customers, while seeking accretive growth
opportunities that diversify our revenue through acquisitions and
expansion of our product offerings,” said Todd Becker, president
and chief executive officer of Green Plains Partners. “While the
current ethanol environment may negatively impact put-through
volumes at some of our storage locations, we remain focused on
maintaining distributable cash flow per unit.”
Full Year Highlights
- In April 2018, NLR Energy Logistics LLC, the partnership’s
50/50 joint venture with Delek Renewables LLC, commenced operations
of its ethanol unit train terminal. The total cost of the project
was approximately $7.0 million.
- On July 16, 2018, Green Plains Inc. appointed Martin Salinas,
Jr. as an independent director of Green Plains Partners’ general
partner, Green Plains Holdings LLC. Mr. Salinas serves as a member
of the board’s audit and conflicts committees.
- On August 13, 2018, all of the 15,889,642 outstanding
subordinated units held by Green Plains Inc. were converted into
common units on a one-for-one basis. The conversion of the
subordinated units did not impact the amount of cash distributions
paid or the total number of outstanding units.
- On November 15, 2018, Green Plains Inc. closed on the sale of
three of its ethanol plants located in Bluffton, Ind., Lakota,
Iowa, and Riga, Mich. to Valero Renewable Fuels Company, LLC
(“Valero”). Correspondingly, the partnership’s storage assets
located adjacent to such plants were sold to Green Plains Inc. for
$120.9 million. As consideration, the partnership received 8.7
million Green Plains Inc. units and a portion of the general
partner interest equating to 0.2 million equivalent limited partner
units to maintain the general partner’s 2% interest, resulting in
an accretive transaction for the unitholders. In conjunction with
the sale:
- The partnership received cash consideration of $2.7 million
from Valero for the assignment of certain railcar operating
leases.
- The partnership amended the storage and throughput agreement
with Green Plains Inc. to reduce the minimum volume commitment from
296.6 mmg of product per calendar quarter to 235.7 mmg, and to
extend the terms an additional three years to June 30, 2028.
- The Green Plains Partners revolver was reduced from $235
million to $200 million.
Results of OperationsConsolidated revenues
decreased $5.0 million for the three months ended December 31,
2018, compared with the same period for 2017. Storage and
throughput revenue decreased $3.4 million primarily due to a
decrease in throughput and transload volumes driven by lower
capacity utilization by Green Plains Inc., as well as Green Plains
Inc.’s sale of the Bluffton, Lakota, and Riga plants. Revenues
generated from rail transportation services decreased $1.5 million
due to lower average rates charged for the railcar volumetric
capacity provided as well as the reduction in volumetric capacity
associated with the assignment of railcar operating leases to
Valero in the fourth quarter of 2018. Revenues generated from
terminal services decreased $0.1 million due to lower throughput at
our fuel terminals.
Operations and maintenance expenses decreased $1.1 million for
the three months ended December 31, 2018 compared with the same
period for 2017, primarily due to a decrease in railcar lease
expense.
General and administrative expenses increased $0.6 million for
the three months ended December 31, 2018 compared with the same
period for 2017, due to transaction costs incurred as part of the
Valero transaction.
During the fourth quarter of 2018, Green Plains Inc.’s average
utilization rate was approximately 62.5% of capacity, resulting in
ethanol production of 205.1 million gallons, which was below the
contracted minimum volume commitment. As a result, the partnership
charged Green Plains Trade a deficiency payment of $3.0 million
related to the minimum volume commitment during the fourth quarter
of 2018. Total throughput for the fourth quarter of 2018 was 208.0
million gallons, which included an incremental 2.5 million gallons
related to transload volumes.
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GREEN PLAINS PARTNERS LP |
SELECTED OPERATING DATA |
(unaudited, in million gallons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
|
% Var. |
|
2018 |
|
2017 |
|
% Var. |
Product volumes |
|
|
|
|
|
|
|
|
|
|
|
Storage and throughput
services |
208.0 |
|
335.0 |
|
(37.9 |
)% |
|
1,134.7 |
|
1,248.9 |
|
(9.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Terminal services: |
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
32.4 |
|
37.0 |
|
(12.4 |
) |
|
133.7 |
|
161.5 |
|
(17.2 |
) |
Non-affiliate |
25.5 |
|
32.5 |
|
(21.5 |
) |
|
116.2 |
|
131.8 |
|
(11.8 |
) |
|
57.9 |
|
69.5 |
|
(16.7 |
) |
|
249.9 |
|
293.3 |
|
(14.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Railcar capacity billed
(daily average) |
91.8 |
|
98.2 |
|
(6.5 |
) |
|
96.9 |
|
93.5 |
|
3.6 |
|
Liquidity and Capital ResourcesTotal liquidity
as of December 31, 2018, was $66.6 million, including $0.6 million
in cash and cash equivalents, and $66.0 million available under the
partnership’s revolving credit facility. The balance outstanding on
the partnership’s revolving credit facility was $134.0 million as
of December 31, 2018.
Conference Call InformationGreen Plains
Partners LP and Green Plains Inc. will host a joint conference call
Monday Feb. 11th at 11 a.m. Eastern time (10 a.m. Central time), to
discuss fourth quarter 2018 financial and operating results for
each company. Domestic and international participants can access
the conference call by dialing 877.711.2374 and 281.542.4862,
respectively, and referencing conference ID 3273159. Participants
are advised to call at least 10 minutes prior to the start time.
Alternatively, the conference call, transcript and presentation
will be accessible on Green Plains Partners’ website at
http://ir.greenplainspartners.com.
Non-GAAP Financial MeasuresAdjusted 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 expense, income tax expense, depreciation
and amortization, plus adjustments for transaction costs related to
acquisitions or financings, minimum volume commitment deficiency
payments, unit-based compensation expense, net gains or losses on
asset sales and the partnership’s proportional share of EBITDA
adjustments of equity method investees. Distributable cash flow is
defined as adjusted EBITDA less interest paid or payable, income
taxes paid or payable, maintenance capital expenditures and the
partnership’s proportionate share of distributable cash flow
adjustments of equity method investees. Adjusted EBITDA and
distributable cash flow are not presented in accordance with
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 LPGreen 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 tanks, 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 diversified commodity-processing business with
operations related to ethanol production, grain handling and
storage, cattle feeding, and commodity marketing and logistics
services. The company is one of the leading producers of ethanol in
the world and, through its adjacent businesses, is focused on the
production of high-protein feed ingredients and export growth
opportunities. Green Plains owns a 49.1% limited partner interest
and a 2.0% general partner interest in Green Plains Partners. For
more information about Green Plains, visit www.gpreinc.com.
Forward-Looking StatementsThis 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
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GREEN PLAINS PARTNERS LP |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
(unaudited) |
|
|
|
Current assets |
|
|
|
|
|
Cash and
cash equivalents |
$ |
569 |
|
|
$ |
502 |
|
Accounts
receivable, including from affiliates |
|
15,357 |
|
|
|
19,974 |
|
Other
current assets |
|
690 |
|
|
|
1,158 |
|
Total current assets |
|
16,616 |
|
|
|
21,634 |
|
Property and equipment,
net |
|
40,911 |
|
|
|
48,305 |
|
Other assets |
|
23,617 |
|
|
|
22,329 |
|
Total
assets |
$ |
81,144 |
|
|
$ |
92,268 |
|
|
|
|
|
|
|
LIABILITIES AND
PARTNERS' CAPITAL |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts
payable, including to affiliates |
$ |
3,177 |
|
|
$ |
7,960 |
|
Other
current liabilities |
|
5,011 |
|
|
|
8,098 |
|
Total current liabilities |
|
8,188 |
|
|
|
16,058 |
|
Long-term debt |
|
142,025 |
|
|
|
134,875 |
|
Other liabilities |
|
3,385 |
|
|
|
4,181 |
|
Total liabilities |
|
153,598 |
|
|
|
155,114 |
|
|
|
|
|
|
|
Partners' capital |
|
(72,454 |
) |
|
|
(62,846 |
) |
Total liabilities and partners' capital |
$ |
81,144 |
|
|
$ |
92,268 |
|
GREEN PLAINS PARTNERS LP |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited, in thousands except per unit amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2018 |
|
|
2017 |
|
|
% Var. |
|
2018 |
|
|
2017 |
|
|
% Var. |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate |
$ |
21,318 |
|
|
$ |
26,789 |
|
|
(20.4 |
)% |
|
$ |
94,267 |
|
|
$ |
100,808 |
|
|
(6.5 |
)% |
Non-affiliate |
|
1,935 |
|
|
|
1,461 |
|
|
32.4 |
|
|
|
6,481 |
|
|
|
6,185 |
|
|
4.8 |
|
Total
revenues |
|
23,253 |
|
|
|
28,250 |
|
|
(17.7 |
) |
|
|
100,748 |
|
|
|
106,993 |
|
|
(5.8 |
) |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations and maintenance (excluding depreciation andamortization
reflected below) |
|
7,280 |
|
|
|
8,340 |
|
|
(12.7 |
) |
|
|
30,866 |
|
|
|
33,501 |
|
|
(7.9 |
) |
General
and administrative |
|
1,569 |
|
|
|
965 |
|
|
62.6 |
|
|
|
5,258 |
|
|
|
4,223 |
|
|
24.5 |
|
Depreciation and amortization |
|
1,036 |
|
|
|
1,330 |
|
|
(22.1 |
) |
|
|
4,442 |
|
|
|
5,111 |
|
|
(13.1 |
) |
Gain on
assignment of operating leases |
|
(2,721 |
) |
|
|
- |
|
|
* |
|
|
|
(2,721 |
) |
|
|
- |
|
|
* |
|
Total operating expenses |
|
7,164 |
|
|
|
10,635 |
|
|
(32.6 |
) |
|
|
37,845 |
|
|
|
42,835 |
|
|
(11.6 |
) |
Operating
income |
|
16,089 |
|
|
|
17,615 |
|
|
(8.7 |
) |
|
|
62,903 |
|
|
|
64,158 |
|
|
(2.0 |
) |
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
20 |
|
|
|
20 |
|
|
- |
|
|
|
81 |
|
|
|
81 |
|
|
- |
|
Interest
expense |
|
(2,054 |
) |
|
|
(1,461 |
) |
|
40.6 |
|
|
|
(7,307 |
) |
|
|
(5,402 |
) |
|
35.3 |
|
Other,
net |
|
44 |
|
|
|
150 |
|
|
(70.7 |
) |
|
|
119 |
|
|
|
150 |
|
|
(20.7 |
) |
Total other expense |
|
(1,990 |
) |
|
|
(1,291 |
) |
|
54.1 |
|
|
|
(7,107 |
) |
|
|
(5,171 |
) |
|
37.4 |
|
Income before income
taxes and income (loss) from equity method investees |
|
14,099 |
|
|
|
16,324 |
|
|
(13.6 |
) |
|
|
55,796 |
|
|
|
58,987 |
|
|
(5.4 |
) |
Income tax (expense)
benefit |
|
(31 |
) |
|
|
26 |
|
|
* |
|
|
|
(101 |
) |
|
|
(109 |
) |
|
(7.3 |
) |
Income (loss) from
equity method investees |
|
68 |
|
|
|
(11 |
) |
|
* |
|
|
|
(14 |
) |
|
|
(11 |
) |
|
27.3 |
|
Net income |
$ |
14,136 |
|
|
$ |
16,339 |
|
|
(13.5 |
)% |
|
$ |
55,681 |
|
|
$ |
58,867 |
|
|
(5.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to partners' ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
partner |
$ |
283 |
|
|
$ |
326 |
|
|
(13.2 |
)% |
|
$ |
1,114 |
|
|
$ |
1,177 |
|
|
(5.4 |
)% |
Limited
partners - common unitholders |
|
13,853 |
|
|
|
8,013 |
|
|
72.9 |
|
|
|
37,868 |
|
|
|
28,869 |
|
|
31.2 |
|
Limited
partners - subordinated unitholders |
|
- |
|
|
|
8,000 |
|
|
* |
|
|
|
16,699 |
|
|
|
28,821 |
|
|
(42.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per limited
partner unit (basic and diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
units |
$ |
0.51 |
|
|
$ |
0.50 |
|
|
2.0 |
% |
|
$ |
1.81 |
|
|
$ |
1.81 |
|
|
- |
% |
Subordinated units |
$ |
- |
|
|
$ |
0.50 |
|
|
* |
|
|
$ |
1.71 |
|
|
$ |
1.81 |
|
|
(5.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding (basicand diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
units |
|
27,390 |
|
|
|
15,922 |
|
|
|
|
|
20,950 |
|
|
|
15,916 |
|
|
|
Subordinated units |
|
- |
|
|
|
15,890 |
|
|
|
|
|
9,752 |
|
|
|
15,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Revenues Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and throughput
services |
$ |
13,325 |
|
|
$ |
16,748 |
|
|
(20.4 |
)% |
|
$ |
59,290 |
|
|
$ |
62,443 |
|
|
(5.0 |
)% |
Railcar transportation
services |
|
6,275 |
|
|
|
7,770 |
|
|
(19.2 |
) |
|
|
26,055 |
|
|
|
29,939 |
|
|
(13.0 |
) |
Terminal services |
|
2,470 |
|
|
|
2,593 |
|
|
(4.7 |
) |
|
|
10,498 |
|
|
|
11,309 |
|
|
(7.2 |
) |
Trucking and other |
|
1,183 |
|
|
|
1,139 |
|
|
3.9 |
|
|
|
4,905 |
|
|
|
3,302 |
|
|
48.5 |
|
Total
revenues |
$ |
23,253 |
|
|
$ |
28,250 |
|
|
(17.7 |
)% |
|
$ |
100,748 |
|
|
$ |
106,993 |
|
|
(5.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Percentage variance
not considered meaningful. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREEN PLAINS PARTNERS LP |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(unaudited, in thousands) |
|
Twelve Months Ended |
|
December 31, |
|
2018 |
|
|
2017 |
|
Cash flows
from operating activities: |
|
|
|
|
|
Net income |
$ |
55,681 |
|
|
$ |
58,867 |
|
Noncash operating adjustments: |
|
|
|
|
|
Depreciation and amortization |
|
4,442 |
|
|
|
5,111 |
|
Gain on assignment of operating leases |
|
(2,721 |
) |
|
|
- |
|
Other |
|
1,152 |
|
|
|
1,038 |
|
Net change in working capital |
|
(3,163 |
) |
|
|
(962 |
) |
Net cash provided by operating activities |
|
55,391 |
|
|
|
64,054 |
|
Cash flows
from investing activities: |
|
|
|
|
|
Purchases of property and equipment, net |
|
(1,256 |
) |
|
|
(1,914 |
) |
Proceeds from assignment of operating leases |
|
2,721 |
|
|
|
- |
|
Contributions to equity method investees |
|
(1,425 |
) |
|
|
(2,248 |
) |
Net cash provided by (used in) investing activities |
|
40 |
|
|
|
(4,162 |
) |
Cash flows
from financing activities: |
|
|
|
|
|
Payments of distributions |
|
(61,805 |
) |
|
|
(57,771 |
) |
Net proceeds (payments) - revolving credit facility |
|
7,100 |
|
|
|
(2,100 |
) |
Payments of loan fees |
|
(665 |
) |
|
|
- |
|
Other |
|
6 |
|
|
|
(141 |
) |
Net cash used in financing activities |
|
(55,364 |
) |
|
|
(60,012 |
) |
Net change
in cash and cash equivalents |
|
67 |
|
|
|
(120 |
) |
Cash and
cash equivalents, beginning of period |
|
502 |
|
|
|
622 |
|
Cash and
cash equivalents, end of period |
$ |
569 |
|
|
$ |
502 |
|
|
|
|
|
|
|
|
|
|
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|
GREEN PLAINS PARTNERS LP |
RECONCILIATIONS TO NON-GAAP FINANCIAL
MEASURES |
(unaudited, dollars in thousands) |
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income |
$ |
14,136 |
|
|
$ |
16,339 |
|
|
$ |
55,681 |
|
|
$ |
58,867 |
|
Interest
expense |
|
2,054 |
|
|
|
1,461 |
|
|
|
7,307 |
|
|
|
5,402 |
|
Income
tax expense (benefit) |
|
31 |
|
|
|
(26 |
) |
|
|
101 |
|
|
|
109 |
|
Depreciation and amortization |
|
1,036 |
|
|
|
1,330 |
|
|
|
4,442 |
|
|
|
5,111 |
|
Minimum
volume commitment adjustments (1) |
|
- |
|
|
|
(182 |
) |
|
|
- |
|
|
|
- |
|
Transaction costs |
|
517 |
|
|
|
- |
|
|
|
805 |
|
|
|
- |
|
Unit-based compensation expense |
|
81 |
|
|
|
60 |
|
|
|
277 |
|
|
|
219 |
|
Proportional share of EBITDA adjustments of equitymethod investees
(2) |
|
35 |
|
|
|
- |
|
|
|
80 |
|
|
|
- |
|
Gain on
assignment of operating leases (3) |
|
(2,721 |
) |
|
|
- |
|
|
|
(2,721 |
) |
|
|
- |
|
Adjusted EBITDA |
|
15,169 |
|
|
|
18,982 |
|
|
|
65,972 |
|
|
|
69,708 |
|
Interest
paid or payable |
|
(2,054 |
) |
|
|
(1,461 |
) |
|
|
(7,307 |
) |
|
|
(5,402 |
) |
Income
taxes paid or payable |
|
(33 |
) |
|
|
46 |
|
|
|
(101 |
) |
|
|
(89 |
) |
Maintenance capital expenditures |
|
- |
|
|
|
(2 |
) |
|
|
(50 |
) |
|
|
(184 |
) |
Distributable cash
flow |
$ |
13,082 |
|
|
$ |
17,565 |
|
|
$ |
58,514 |
|
|
$ |
64,033 |
|
Distributions declared
(4) |
$ |
11,268 |
|
|
$ |
15,306 |
|
|
$ |
57,767 |
|
|
$ |
59,124 |
|
Coverage ratio |
|
1.16x |
|
|
|
1.15x |
|
|
|
1.01x |
|
|
|
1.08x |
|
(1)
Adjustments related to the storage and throughput quarterly minimum
volume commitments. |
(2)
Represents our proportional share of depreciation and amortization,
interest expense, and income tax expense of equity method
investees. |
(3)
Consideration received related to the assignment of railcar
operating leases to Valero Renewable Fuels Company, LLC. |
(4)
Distributions declared for the applicable period and paid in the
subsequent quarter. |
Contact: Jim Stark | Vice President, Investor
& Media Relations | 402.884.8700 | jim.stark@gpreinc.com |
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