UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended ~~June~~September 30, 2023

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

For the transition period from ______ to ______

Commission File Number 001-37469

GREEN PLAINS PARTNERS LP

(Exact name of registrant as specified in its charter)


Delaware			47-3822258
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1811 Aksarben Drive, Omaha, NE 68106			(402) 884-8700
(Address of principal executive offices, including zip code)			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units, Representing Limited Partner Interests

GPP

The Nasdaq Stock Market LLC

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.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

x Yes o No

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


Large Accelerated Filer o			Accelerated Filer x
Non-Accelerated Filer ¨
Smaller Reporting Company o			Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

o Yes x No

The registrant had 23,264,833 common units outstanding as of ~~July~~October 2826, 2023.

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TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Commonly Used Defined Terms		3
Item 1.	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2225
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3135
Item 4.	Controls and Procedures	3135
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	3236
Item 1A.	Risk Factors	3236
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3238
Item 3.	Defaults Upon Senior Securities	3238
Item 4.	Mine Safety Disclosures	3238
Item 5.	Other Information	3238
Item 6.	Exhibits	3339
Signatures.		3440

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Commonly Used Defined Terms

The abbreviations, acronyms and industry terminology used in this quarterly report are defined as follows:

Green Plains Partners LP, Subsidiaries, and Partners:
Green Plains Operating Company			Green Plains Operating Company LLC
Green Plains Partners; the partnership			Green Plains Partners LP and its subsidiaries
NLR			NLR Energy Logistics LLC
Green Plains Inc. and Subsidiaries:
Green Plains; the parent or sponsor			Green Plains Inc. and its subsidiaries
Green Plains Holdings, the general partner			Green Plains Holdings LLC
Green Plains Trade			Green Plains Trade Group LLC
Other Defined Terms:
2022 annual report			The partnership’s annual report on Form 10-K for the year ended December 31, 2022, filed February 10, 2023
ATJ			Alcohol-to-Jet
ARO			Asset retirement obligation
ASC			Accounting Standards Codification
Bgy			Billion gallons per year
BlackRock			Funds and accounts managed by BlackRock
CI			Carbon intensity
Conflicts committee			The partnership’s committee responsible for reviewing situations involving certain transactions with affiliates or other potential conflicts of interest
Conflicts Committee			The partnership’s committee responsible for reviewing situations involving certain transactions with affiliates or other potential conflicts of interest
D.C.			District of Columbia
DOE			Department of Energy
E10			Gasoline blended with up to 10% ethanol by volume
E15			Gasoline blended with up to 15% ethanol by volume
EBITDA			Earnings before interest, taxes, depreciation and amortization
EIA			U.S. Energy Information Administration
EPA			U.S. Environmental Protection Agency
EV			Electric Vehicle
Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FFV			Flexible-fuel vehicle
GAAP			U.S. Generally Accepted Accounting Principles
LIBOR			London Interbank Offered Rate
LTIP			Green Plains Partners LP 2015 Long-Term Incentive Plan
Mmg			Million gallons
MSC™			Maximized Stillage Coproducts produced using process technology developed by Fluid Quip Technologies LLC
MTBE			Methyl tertiary-butyl ether
Partnership agreement			First Amended and Restated Agreement of Limited Partnership of Green Plains Partners LP, dated as of July 1, 2015, between Green Plains Holdings LLC and Green Plains Inc.
RFS			Renewable Fuels Standard
RIN			Renewable identification number
RVO			Renewable volume obligation
SAF			Sustainable Aviation Fuel
SEC			Securities and Exchange Commission
SOFR			Secured Overnight Financing Rate
SRE			Small refinery exemption
U.S.			United States
USDA			U.S. Department of Agriculture

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

GREEN PLAINS PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit amounts)

	June 30,2023		December 31, 2022
	September 30,2023		December 31, 2022
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1519,~~550~~096	$	20,166
Accounts receivable	~~1,044~~408		255
Accounts receivable from affiliates	1411,~~156~~573		12,742
Prepaid expenses and other	1,~~520~~521		1,410
Total current assets	32,~~270~~598		34,573
Property and equipment, net of accumulated depreciation and amortization of $37,961 and $36,323, respectively	25,984		26,137
Property and equipment, net of accumulated depreciation and amortization of $34,653 and $36,323, respectively	24,764		26,137
Operating lease right-of-use assets	5548,~~189~~740		47,002
Goodwill	10,598		10,598
Investment in equity method investee	3,~~100~~295		2,680
Other assets	~~378~~351		432
Total assets	$	~~127~~120,~~519~~346	$	121,422
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	35,~~554~~180	$	3,086
Accounts payable to affiliates	~~489~~456		1,139
Accrued and other liabilities	65,~~022~~044		4,849
Asset retirement obligations	1,~~476~~307		1,861
Operating lease current liabilities	1715,~~226~~736		14,734
Total current liabilities	2827,~~767~~723		25,669
Long-term debt	5755,~~101~~631		58,559
Asset retirement obligations	3,~~534~~409		2,862
Operating lease long-term liabilities	3934,~~583~~680		33,582
Total liabilities	~~128~~121,~~985~~443		120,672
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 9)
Partners' equity (deficit)
Common unitholders - public (11,660,274 units issued and outstanding)	133,993		135,025
Common unitholders - public (11,678,285 and 11,660,274 units issued and outstanding, respectively)	133,368		135,025
Common unitholders - Green Plains (11,586,548 units issued and outstanding)	(~~135~~134,~~434~~455)		(134,296)
General partner interests	(2510)		21
Total partners' equity (deficit)	(1,~~466~~097)		750
Total liabilities and partners' equity (deficit)	$	~~127~~120,~~519~~346	$	121,422

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per unit amounts)

	Three Months EndedJune 30,				Six Months EndedJune 30,
	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2023		2022		2023		2022
Revenues
Affiliate	$	19,~~460~~191	$	1819,~~742~~030	$	3958,~~116~~307	$	3655,~~837~~867
Non-affiliate	~~1,063~~954		~~912~~1,036		23,~~182~~136		12,~~917~~953
Total revenues	20,~~523~~145		1920,~~654~~066		4161,~~298~~443		3858,~~754~~820
Operating expenses
Operations and maintenance (excluding depreciation and amortization reflected below)	76,~~070~~709		6,~~160~~287		1421,~~323~~032		1118,~~725~~012
General and administrative	12,~~625~~705		~~925~~949		25,~~855~~560		23,~~110~~059
Depreciation and amortization	828		823		1,644		1,721
Gain on sale of assets	(1,057)		—		(1,057)		—
Total operating expenses	9,523		7,908		18,822		15,556
Depreciation and amortization	780		1,194		2,424		2,915
Operating income	11,000		11,746		22,476		23,198
Total operating expenses	9,137		8,430		27,959		23,986
Interest income	238		—		363		—
Operating income	11,008		11,636		33,484		34,834
Interest expense	(1,910)		(1,384)		(3,807)		(2,623)
Interest income	235		—		598		—
Income before income taxes and income from equity method investee	9,328		10,362		19,032		20,575
Interest expense	(1,999)		(1,516)		(5,806)		(4,139)
Income tax expense	(293)		(39)		(194)		(77)
Income before income taxes and income from equity method investee	9,244		10,120		28,276		30,695
Income from equity method investee	311		196		420		371
Income tax expense	(30)		(37)		(224)		(114)
Net income	$	9,346	$	10,519	$	19,258	$	20,869
Income from equity method investee	195		83		615		454
Net income	$	9,409	$	10,166	$	28,667	$	31,035
Net income attributable to partners' ownership interests
General partner	$	~~188~~187	$	~~210~~204	$	~~386~~573	$	~~417~~621
Limited partners - common unitholders	9,~~158~~222		109,~~309~~962		1828,~~872~~094		2030,~~452~~414
Earnings per limited partner unit (basic and diluted)
Common units	$	0.3940	$	0.4443	$	01.8121	$	01.8831
Weighted average limited partner units outstanding (basic and diluted)
Common units	23,~~227~~246		23,~~208~~228		23,~~227~~234		23,~~208~~215

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

	Six Months EndedJune 30,
	Nine Months EndedSeptember 30,
	2023		2022
Cash flows from operating activities
Net income	$	1928,~~258~~667	$	2031,~~869~~035
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	12,~~644~~424		12,~~721~~915
Accretion	~~203~~281		~~133~~196
Amortization of debt issuance costs	5888		6695
Unit-based compensation	119		119
Gain on sale of assets	(1,057)		—
Income from equity method investee	(420)		(371)
Unit-based compensation	179		180
Other	(359)		—
Income from equity method investee	(615)		(454)
Changes in operating assets and liabilities
Other	(359)		(372)
Accounts receivable	(789)		62
Changes in operating assets and liabilities before effects of asset dispositions:
Accounts receivable from affiliates	(1,414)		(1,982)
Accounts receivable	(153)		46
Prepaid expenses and other assets	645		(371)
Accounts receivable from affiliates	1,179		(2,376)
Accounts payable and accrued liabilities	(42)		671
Prepaid expenses and other assets	644		(318)
Accounts payable to affiliates	(650)		(217)
Accounts payable and accrued liabilities	411		(145)
Operating lease liabilities and right-of-use assets	306		494
Accounts payable to affiliates	(683)		(325)
Other	56		—
Operating lease liabilities and right-of-use assets	362		733
Net cash provided by operating activities	18,615		21,194
Other	50		—
Net cash provided by operating activities	31,418		31,210
Cash flows from investing activities
Purchases of property and equipment	(~~129~~394)		(~~305~~432)
Net cash used in investing activities	(129)		(305)
Proceeds from disposition of assets	3,310		—
Net cash provided by (used in) investing activities	2,916		(432)
Cash flows from financing activities
Payments of distributions	(2132,~~586~~388)		(2031,~~976~~650)
Principal payments on long-term debt	(13,~~500~~000)		(1,031)
Payments of loan fees	(16)		—
Net cash used in financing activities	(2335,~~102~~404)		(2232,~~007~~681)
Net change in cash and cash equivalents	(41,~~616~~070)		(1,~~118~~903)
Cash and cash equivalents, beginning of period	20,166		17,645
Cash and cash equivalents, end of period	$	1519,~~550~~096	$	1615,~~527~~742
Supplemental disclosures of cash flow
Cash paid for income taxes	$	198	$	76
Cash paid for interest	$	35,~~766~~720	$	24,~~549~~010

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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

Organization

References to “we,” “our,” “us” or “the partnership” in the consolidated financial statements and notes to the consolidated financial statements refer to Green Plains Partners LP and its subsidiaries.

Green Plains Holdings LLC, a wholly owned subsidiary of Green Plains Inc., serves as the general partner of the partnership. References to (i) “the general partner” and “Green Plains Holdings” refer to Green Plains Holdings LLC; (ii) “the parent,” “the sponsor”, "GPRE" and “Green Plains” refer to Green Plains Inc.; and (iii) “Green Plains Trade” refers to Green Plains Trade Group LLC, a wholly owned subsidiary of Green Plains.

On ~~May~~September 316, 2023, ~~the Board of Directors of the general partner received~~ a ~~non-binding,~~definitive ~~preliminary~~agreement ~~proposal~~ ("the ~~Proposal~~"Merger Agreement") ~~from~~and ~~the~~plan ~~parent to acquire all~~ of ~~the outstanding common units representing limited partner interests in the partnership not already owned by the parent and its affiliates pursuant to a stock-for-unit~~ merger ~~that would result in the partnership becoming a direct, wholly owned subsidiary of the parent. The conflicts committee of the Board of Directors of the general partner~~ (the "~~Conflicts Committee~~Merger") ~~has~~was ~~been~~entered ~~delegated~~into ~~the~~by ~~authority to evaluate~~ and ~~negotiate~~among the ~~possible terms of a proposed transaction. Any transaction involving the parent and the~~ partnership, ~~is subject to~~ the ~~execution of a mutually satisfactory definitive agreement and approval of such definitive agreement and the transactions contemplated thereunder by the boards of directors of the parent and the~~ general partner, the ~~Conflicts Committee~~parent, asGPLP ~~well~~Holdings asInc., ~~the~~and ~~majority~~GPLP ofMerger ~~the~~Sub ~~partnership's unitholders~~LLC. ~~There~~Refer ~~can~~to beNote no3 ~~assurance~~- ~~that~~Merger ~~the~~and ~~parties~~Disposition ~~will~~included ~~reach~~herein ~~agreement~~for onmore ~~the terms of a transaction, that a definitive agreement will be executed or that a transaction will be approved or consummated~~information.

Consolidated Financial Statements

The consolidated financial statements include the accounts of the partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated on a consolidated basis for reporting purposes. Results for the interim periods presented are not necessarily indicative of the expected results for the entire year.

The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and 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 partnership’s 2022 annual report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 10, 2023.

The partnership accounts for its interest in joint ventures using the equity method of accounting, with its investment recorded at the acquisition cost plus the partnership’s share of equity in undistributed earnings and reduced by the partnership’s share of equity in undistributed losses and distributions received.

Use of Estimates in the Preparation of Consolidated Financial Statements

Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting period. The partnership bases its estimates on historical experience and assumptions it believes are proper and reasonable under the circumstances. The partnership regularly evaluates the appropriateness of these estimates and assumptions. Actual results could differ from those estimates. Certain accounting policies, including, but not limited to, those related to leases, depreciation of property and equipment, asset retirement obligations, and impairment of long-lived assets and goodwill are impacted by judgments, assumptions and estimates used to prepare the consolidated financial statements.

Description of Business

The partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. The partnership is its parent’s primary downstream logistics provider to support the parent’s approximately 0.9 bgy ethanol marketing and distribution business since the partnership’s assets are the principal method of storing and delivering the ethanol the parent produces. The ethanol produced by the parent is fuel grade, made principally from starch extracted from corn, and is primarily used for blending with gasoline. Ethanol is an economical source of octane and oxygenates for blending into the fuel supply. The partnership does not take ownership of, or receive any payments based on the value of the ethanol or other

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~~Description~~fuels ofit ~~Business~~handles; as a result, the partnership does not have any direct exposure to fluctuations in commodity prices. However, commodity prices can potentially impact the demand for the products that we handle.

The partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. The partnership is its parent’s primary downstream logistics provider to support the parent’s approximately 1.0 bgy ethanol marketing and distribution business since the partnership’s assets are the principal method of storing and delivering the ethanol the parent produces. The ethanol produced by the parent is fuel grade, made principally from starch extracted from corn, and is primarily used for blending with gasoline. Ethanol is an economical source of octane and oxygenates for blending into the fuel supply. The partnership does not take ownership of, or receive any payments based on the value of the ethanol or other fuels it handles; as a result, the partnership does not have any direct exposure to fluctuations in commodity prices. However, commodity prices can potentially impact the demand for the products that we handle.

Revenue Recognition

The partnership recognizes revenue when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the completion of services or the transfer of control of products to the customer or another specified third party. For contracts with customers in which a take-or-pay commitment exists, any minimum volume deficiency charges are recognized as revenue in the period incurred and are not allowed to be credited towards excess volumes in future periods.

The partnership generates a substantial portion of its revenues under fee-based commercial agreements with Green Plains Trade. Operating lease revenue related to minimum volume commitments is recognized on a straight-line basis over the term of the lease. Under the terms of the storage and throughput agreement with Green Plains Trade, 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.

Please refer to Note 2 - Revenue to the consolidated financial statements for further details.

Operations and Maintenance Expenses

The partnership’s operations and maintenance expenses consist primarily of lease expenses related to the transportation assets, labor expenses, outside contractor expenses, insurance premiums, repairs and maintenance expenses, and utility costs. These expenses also include fees for certain management, maintenance and operational services to support the storage and terminal facilities, trucks, and leased railcar fleet allocated by Green Plains under the operational services and secondment agreement.

Concentrations of Credit Risk

In the normal course of business, the partnership is exposed to credit risk resulting from the possibility a loss may occur due to failure of another party to perform according to the terms of their contract. The partnership provides fuel storage and transportation services for various parties with a significant portion of its revenues earned from Green Plains Trade. The partnership continually monitors its credit risk exposure and concentrations. Please refer to Note 2 – Revenue and Note 910 – Related Party Transactions to the consolidated financial statements for additional information.

Impairment of Long-Lived Assets and Goodwill

The partnership reviews its long-lived assets, currently consisting primarily of property and equipment and operating lease right-of-use assets, for impairment when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. No triggering events were identified for the periods reported.

The partnership’s goodwill currently is comprised of amounts recognized by the partnership's predecessor related to terminal services assets. The partnership reviews goodwill at the reporting unit level for impairment at least annually, as of October 1, or more frequently when events or changes in circumstances indicate that impairment may have occurred.

Leases

The partnership leases certain facilities, parcels of land, and railcars. These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the lease term. The term of the lease may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. For leases with initial terms greater than 12 months, the partnership records operating lease right-of-use assets and corresponding operating lease liabilities. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The

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~~Leases~~partnership did not incur any material short-term lease expense for either the three and nine months ended September 30, 2023 or September 30, 2022.

Operating lease right-of-use assets represent the right to control an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the partnership’s leases do not provide an implicit rate, the incremental borrowing rate is used based on information available at the commencement date to determine the present value of future payments.

The partnership utilizes a portfolio approach for lease classification, which allows for an entity to group together leases with similar characteristics, provided that its application does not create a material difference when compared to accounting for the leases at a contract level. For the partnership’s railcar leases, the partnership combines the railcars within each contract rider and accounts for each contract rider as an individual lease.

From a lessee perspective, the partnership combines both the lease and non-lease components and accounts for them as one lease. Certain of the partnership’s railcar agreements provide for maintenance costs to be the responsibility of the partnership as incurred or charged by the lessor. This maintenance cost is a non-lease component that the partnership combines with the monthly rental payment and accounts for the total cost as operating lease expense. In addition, the partnership has a land lease that contains a non-lease component for the handling and unloading services the landlord provides. The partnership combines the cost of services with the land lease cost and accounts for the total as operating lease expense.

The partnership records operating lease revenue as part of its operating lease agreements for storage and throughput services, rail transportation services, and certain terminal services. In addition, the partnership may sublease certain of its railcars to third parties on a short-term basis. These subleases are classified as operating leases, with the associated sublease revenue recognized on a straight-line basis over the sublease lease term.

From a lessor perspective, the partnership combines, by class of underlying asset, both the lease and non-lease components and accounts for them as one lease. The storage and throughput agreement consists of lease costs paid by Green Plains Trade for the rental of the terminal facilities as well as non-lease costs for the throughput services provided by the partnership. For this agreement, the partnership combines the facility rental revenue and the service revenue and accounts for the total as leasing revenue. The railcar transportation services agreement consists of lease costs paid by Green Plains Trade for the use of the partnership’s railcar assets as well as non-lease costs for logistical operations management and other services. For this agreement, the partnership combines the railcar rental revenue and the service revenue and accounts for the total as leasing revenue.

Please refer to Note 89 – Commitments and Contingencies to the consolidated financial statements for further details on operating lease expense and revenue. Please refer to Note 2 - Revenue to the consolidated financial statements for further details on the operating lease agreements in which the partnership is a lessor.

Asset Retirement Obligations

The partnership records an ARO for the fair value of the estimated costs to retire a tangible long-lived asset in the period incurred if it can be reasonably estimated, which is subsequently adjusted for accretion expense. Corresponding asset retirement costs are capitalized as a long-lived asset and depreciated on a straight-line basis over the asset’s remaining useful life. The expected present value technique used to calculate the fair value of the AROs includes assumptions about costs, settlement dates, interest accretion, and inflation. Changes in assumptions, such as the amount or timing of estimated cash flows, could increase or decrease the AROs. The partnership’s AROs are based on legal obligations to perform remedial activity related to land, machinery and equipment when certain operating leases expire.

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Segment Reporting

The partnership accounts for segment reporting in accordance with ASC 280, Segment Reporting, which establishes standards for entities reporting information about the operating segments and geographic areas in which they operate. Management evaluated how its chief operating decision maker has organized the partnership for purposes of making operating decisions and assessing performance, and concluded it has one reportable segment.

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2. REVENUE

Revenue by Source

The following table disaggregates our revenue by major source (in thousands):

Three Months EndedJune 30,

Six Months EndedJune 30,

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2023

2022

2023

2022

Revenues

Service revenues

Terminal services

2,~~173~~163

21,~~036~~864

46,~~250~~413

45,~~120~~984

Trucking and other

~~416~~71

~~929~~1,022

1,~~241~~312

12,~~735~~757

Total service revenues

2,~~589~~234

2,~~965~~886

57,~~491~~725

58,~~855~~741

Leasing revenues (1)

Storage and throughput services

11,~~565~~564

11,~~570~~565

2334,~~129~~693

2334,~~128~~693

Railcar transportation services

6,~~369~~347

5,~~119~~615

1219,~~678~~025

915,~~771~~386

Total leasing revenues

17,~~934~~911

1617,~~689~~180

3553,~~807~~718

3250,~~899~~079

Total revenues

20,~~523~~145

1920,~~654~~066

4161,~~298~~443

3858,~~754~~820

(1) Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, Revenue from Contracts with Customers, and are accounted for under ASC 842, Leases.

Terminal Services Revenue

The partnership provides terminal services and logistics solutions to Green Plains Trade, and other customers, through its fuel terminal facilities under various terminal service agreements, some of which have minimum volume commitments. If Green Plains Trade, or other customers, fail to meet their minimum volume commitments during the applicable term, a deficiency payment equal to the deficient volume multiplied by the applicable fee is charged. Deficiency payments related to the partnership’s terminal services revenue may not be utilized as credits toward future volumes. At terminals where customers have shared use of terminal and tank storage assets, revenue is generated from contracts with customers and accounted for as service revenue. This service revenue is recognized at the point in time when product is withdrawn from tank storage.

At terminals where a customer is predominantly provided exclusive use of the terminal or tank storage assets, the partnership is considered a lessor as part of an operating lease agreement. Revenue is recognized over the term of the lease based on the minimum volume commitment or total actual throughput if in excess of the minimum volume commitment.

Trucking and Other Revenue

The partnership transports ethanol, natural gasoline, other refined fuels and feedstocks by truck from identified receipt points to various delivery points. Trucking revenue is recognized over time based on the percentage of total miles traveled, which is on average less than 100 miles. The partnership discontinued trucking operations during the second quarter of 2023.

Railcar Transportation Services Revenue

Under the rail transportation services agreement, Green Plains Trade is obligated to use the partnership to transport ethanol and other fuels from receipt points identified by Green Plains Trade to nominated delivery points. Green Plains Trade is required to pay the partnership fees for the minimum railcar volumetric capacity provided, regardless of utilization of that capacity. However, Green Plains Trade is not charged for railcar volumetric capacity that is not available for use due to inspections, upgrades or routine repairs and maintenance. Revenue associated with the rail transportation services fee is considered leasing revenue and is recognized over the term of the lease based on the actual average daily railcar volumetric capacity provided. The partnership may also charge Green Plains Trade a related services fee for logistical operations management of railcar volumetric capacity utilized by Green Plains Trade which is not provided by the partnership.

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~~of that capacity. However, Green Plains Trade is not charged for railcar volumetric capacity that is not available for use due to inspections, upgrades or routine repairs and maintenance.~~ Revenue associated with the rail transportation services fee is considered leasing revenue and is recognized over the term of the lease based on the actual average daily railcar volumetric capacity provided. The partnership may also charge Green Plains Trade a related services fee ~~for logistical operations management of railcar volumetric capacity utilized by Green Plains Trade which~~ is ~~not provided by the partnership. Revenue associated with the related services fee is~~ also considered leasing revenue and recognized over the term of the lease based on the average volumetric capacity for which services are provided.

Storage and Throughput Revenue

The partnership generates leasing revenue from its storage and throughput agreement with Green Plains Trade based on contractual rates charged for the handling, storage and throughput of ethanol. Under this agreement, Green Plains Trade is required to pay the partnership a fee for a minimum volume commitment regardless of the actual volume delivered. If Green Plains Trade fails to meet its minimum volume commitment during any quarter, the partnership charges Green Plains Trade a deficiency payment equal to the deficient volume multiplied by the applicable fee. The deficiency payment may be applied as a credit toward volumes delivered by Green Plains Trade in excess of the minimum volume commitment during the following four quarters, after which time any unused credits will expire. Revenue is recognized over the term of the lease based on the minimum volume commitment or total actual throughput if in excess of the minimum volume commitment.

Payment Terms

The partnership has standard payment terms, which vary depending on the nature of the services provided, with the majority of terms falling within 10 to 30 days after transfer of control or completion of services. Contracts generally do not include a significant financing component in instances where the timing of revenue recognition differs from the timing of invoicing.

Major Customers

Revenue from Green Plains Trade Group was $19.42 million and $3958.13 million for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, and $1819.70 million and $3655.89 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, which exceeds 10% of the partnership’s total revenue.

Contract Liabilities

The partnership records unearned revenue when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of service and lease agreements. Unearned revenue from service agreements, which represents a contract liability, is recorded for fees that have been charged to the customer prior to the completion of performance obligations, and is generally recognized in the subsequent quarter.

The following table reflects the changes in our unearned revenue from service agreements, which is recorded in accrued and other liabilities on the consolidated balance sheets, for the three and ~~six~~nine months ended ~~June~~September 30, 2023 (in thousands):

	Amount
Balance at January 1, 2023	$	153
Revenue recognized included in beginning balance	(153)
Net additions	124
Balance at March 31, 2023	124
Revenue recognized included in beginning balance	(124)
Net additions	234
Balance at June 30, 2023	$234	~~234~~
Revenue recognized included in beginning balance	(234)
Net additions	135
Balance at September 30, 2023	$	135

The partnership expects to recognize all of the unearned revenue associated with service agreements from contracts with customers as of ~~June~~September 30, 2023, in the subsequent quarter when the product is withdrawn from tank storage.

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3. ~~DEBT~~MERGER AND DISPOSITION

Green Plains Inc. Merger

On September 16, 2023, the partnership, the general partner, the parent, GPLP Holdings Inc. (“Holdings”), and GPLP Merger Sub LLC (“Merger Sub”), entered into an Agreement and Plan of Merger, pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the partnership, with the partnership surviving as an indirect, wholly owned subsidiary of the parent. Assuming timely satisfaction or waiver of the closing conditions, the Merger is expected to close in the fourth quarter of 2023. The partnership recognized $1.7 million and $2.2 million of expenses directly attributable to the Merger, including financial advisory, legal services and other professional fees for the three and nine months ended September 30, 2023, respectively, which are recorded within general and administrative expenses in the Consolidated Statements of Operations.

Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding common unit representing a limited partner interest in the partnership (each, a “Partnership Common Unit”) other than Partnership Common Units owned by Green Plains, the general partner and their respective affiliates (each, a “Public Common Unit”) will be converted into the right to receive, subject to adjustment as described in the Merger Agreement, (i) 0.405 shares of common stock, par value $0.001 per share, of Green Plains (the “GPRE Common Stock” and the shares of Green Plains common stock to be issued in the Merger, the “Stock Consideration”) and (ii) an amount of cash equal to the sum of (a) $2.00 plus (b) the product of (x) $0.455 divided by 90, multiplied by (y) the number of days from, but excluding, the last day of the calendar quarter with respect to which the general partner has declared a quarterly cash distribution to the holders of Partnership Common Units of no less than $0.455 per Partnership Common Unit with a record date prior to the date of the closing of the Merger, to, but excluding, the closing date, computed on the basis of a 360-day year comprised of twelve 30-day months and the actual number of days for any period less than a calendar month, and rounded to the nearest whole cent, without interest (the “Cash Consideration” and, together with the Stock Consideration, the “Merger Consideration”). In addition, at the Effective Time, each of the outstanding awards relating to a Partnership Common Unit issued under a Partnership Long-Term Incentive Plan will become fully vested and will be automatically canceled and converted into the right to receive, with respect to each Partnership Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). Except for the incentive distribution rights representing limited partner interests in the partnership, which will be automatically canceled immediately prior to the Effective Time for no consideration in accordance with the First Amended and Restated Agreement of Limited Partnership of the partnership, dated as of July 1, 2015 , the limited partner interests in the partnership owned by Green Plains, the general partner and their respective affiliates prior to the Effective Time will remain outstanding as limited partner interests in the surviving entity. The economic general partner interest in the partnership will remain outstanding as a general partner interest in the surviving entity immediately following the Effective Time, and the general partner will continue as the sole general partner of the surviving entity.

The Conflicts Committee of the board of directors of the general partner (the “GPP Board”) has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the partnership, including the holders of Public Common Units, (ii) approved the transaction documents related to the Merger (the "Transaction Documents") and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth in the Transaction Documents and (iii) recommended to the GPP Board the approval by the GPP Board of the Transaction Documents and the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby, including the Merger. The GPP Board has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the partnership, including the holders of Public Common Units, (ii) approved the Transaction Documents and the transactions contemplated thereby, including the Merger, (iii) authorized the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth in the Transaction Documents and (iv) directed that the Merger Agreement and the Merger be submitted to a vote of the limited partners of the partnership for approval pursuant to Section 14.3 of the Partnership Agreement and authorized the limited partners to act by written consent pursuant to Section 13.11 of the Partnership Agreement.

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partnership’s conduct of business during the interim period between the execution of the Merger Agreement and the Effective Time and (ii) the obligation to use reasonable best efforts to cause the Merger to be consummated.

Completion of the Merger is subject to certain customary conditions, including, among others: (i) the receipt of the written consent as contemplated by the Merger Agreement; (ii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (iii) the effectiveness of a registration statement on Form S-4 (the “Registration Statement”) relating to the shares of GPRE Common Stock to be issued as the Stock Consideration; (iv) approval for listing on The Nasdaq Stock Market LLC of the shares of GPRE Common Stock to be issued as the Stock Consideration; (v) subject to specified materiality standards, the accuracy of certain representations and warranties of each party; and (vi) compliance by each party in all material respects with its covenants.

The Merger Agreement provides for certain termination rights for both the parent and the partnership, including in the event that (i) the parties agree by mutual written consent to terminate the Merger Agreement, (ii) the Merger is not consummated by March 16, 2024, (iii) a law or injunction prohibiting the consummation of the transactions contemplated by the Merger Agreement is in effect and has become final and non-appealable, or (iv) the other party is in material breach of the Merger Agreement. The Merger Agreement provides that upon termination of the Merger Agreement under certain circumstances, (i) Green Plains will be obligated to reimburse the partnership for its out-of-pocket fees and expenses and (ii) the partnership will be obligated to reimburse the parent for its out-of-pocket fees and expenses, in each case, in an amount not to exceed $5 million.

Atkinson Disposition

On September 7, 2023, our parent closed on the sale of its ethanol plant located in Atkinson, Nebraska. Correspondingly, the storage assets located adjacent to the Atkinson plant were sold to our parent for $2.1 million along with the transfer of associated railcar operating leases. There was no change to the quarterly minimum volume commitment as a result of the sale.

This transaction was accounted for as a transfer between entities under common control and was approved by the Conflicts Committee. There were no material transaction costs recorded for the disposition. The following is a summary of assets and liabilities disposed of or assumed (in thousands):


Total consideration	$	2,100
Identifiable assets and liabilities disposed of:
Property and equipment, net	581
Operating lease right-of-use assets	3,428
Operating lease current liabilities	(1,332)
Operating lease long-term liabilities	(2,096)
Asset retirement obligations long-term	(173)
Total identifiable net assets	408
Partners' equity effect	$	1,692

4. DEBT

Term Loan Facility

Green Plains Operating Company has a term loan to fund working capital, capital expenditures and other general partnership purposes. The term loan has a maturity date of July 20, 2026. Under the terms of the agreement, Green Plains Partners and its affiliates are allowed to repurchase outstanding notes from the lenders. Interest on the term loan is based on three-month SOFR plus 8.26%. Interest is payable on the 15th day of each March, June, September and December during the term. The term loan does not require any principal payments; however, the partnership has the option to prepay $1.5 million per quarter. Principal prepayments ~~totaling~~ of $1.5 million and $3.0 million were made during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively. The partnership repurchased $1.0 million of ~~the~~ outstanding notes during the ~~six~~nine months ended ~~June~~September 30, 2022. The term loan had an outstanding balance of $5756.50 million, $0.43 million of unamortized debt issuance costs, and an interest rate of 13.5267% as of ~~June~~September 30, 2023. The partnership believes the carrying amount of its debt approximated fair value at both ~~June~~September 30, 2023 and December 31, 2022. On October 30, 2023, the

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partnership entered into an amendment to the term loan to include written consent from the lenders to permit the Merger to be completed.

The partnership’s obligations under the term loan are secured by a first priority lien on (i) the equity interests of the partnership’s present and future subsidiaries, (ii) all of the partnership’s present and future personal property, such as investment property, general intangibles and contract rights, including rights under any agreements with Green Plains Trade, (iii) all proceeds and products of the equity interests of the partnership’s present and future subsidiaries and its personal property and (iv) substantially all of the partnership’s real property and material leases of real property. The terms impose affirmative and negative covenants, including restrictions on the partnership’s ability to incur additional debt, acquire and sell assets, create liens, invest capital, pay distributions and materially amend the partnership’s commercial agreements with Green Plains Trade. The term loan also requires the partnership to maintain a maximum consolidated leverage ratio and a minimum consolidated debt service coverage ratio, each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period. As of the end of any fiscal quarter, the maximum consolidated leverage ratio is required to be no more than 2.50x and the minimum debt service coverage ratio is required to be no less than 1.10x. The consolidated leverage ratio is calculated by dividing total funded indebtedness by the sum of the four preceding fiscal quarters’ consolidated EBITDA. The consolidated debt service coverage ratio is calculated by taking the sum of the four preceding fiscal quarters’ consolidated EBITDA minus income taxes and consolidated capital expenditures for such period divided by the sum of the four preceding fiscal quarters’ consolidated interest charges plus consolidated scheduled funded debt payments for such period. Under the terms of the loan, the partnership has no restrictions on the amount of quarterly distribution payments, so long as (i) no default has occurred and is continuing, or would result from payment of the distribution, and (ii) the partnership and its subsidiaries are in compliance with its financial covenants and remain in compliance after payment of the distribution.

Covenant Compliance

The partnership, including all of its subsidiaries, was in compliance with its debt covenants as of ~~June~~September 30, 2023.

45. UNIT-BASED COMPENSATION

The LTIP is intended to promote the interests of the partnership, its general partner and affiliates by providing unit-based incentive compensation awards to employees, consultants and directors to encourage superior performance. The LTIP reserves 2,500,000 common limited partner units for issuance in the form of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation rights, unit awards, profit interest units or other unit-based awards. The partnership measures unit-based compensation grants at fair value on the grant date and records noncash compensation expense related to the awards on a straight-line basis over the requisite service period of one year.

The non-vested unit-based award activity for the ~~six~~nine months ended ~~June~~September 30, 2023, is as follows:


	Non-Vested Units	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)
Non-vested at December 31, 2022	19,707	$	12.18
Granted	18,549	12.94
Vested	(19,707)	12.18
Non-vested at September 30, 2023 (1)	18,549	$	12.94	0.8

(1)Per the Merger Agreement, each of these unvested units will become fully vested at the Effective Time.

Compensation costs related to the unit-based awards of $60 thousand and $179 thousand were recognized during both the three and nine months ended September 30, 2023, respectively. Compensation costs related to the unit-based awards of $61 thousand and $180 thousand were recognized during the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, there was $180 thousand of unrecognized compensation costs from unit-based compensation awards.

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	Non-Vested Units	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)
Non-vested at December 31, 2022	19,707	$	12.18
Vested	(19,707)	12.18
Non-vested at June 30, 2023	—	$	—	0.0

6. PARTNERS’ EQUITY (DEFICIT)

Compensation costs related to the unit-based awards of $60 thousand and $119 thousand were recognized during both the three and six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, there were no unrecognized compensation costs from unit-based compensation awards.

5. PARTNERS’ EQUITY (DEFICIT)

Changes in partners’ equity (deficit) are as follows (in thousands):

	Limited Partners				General Partner		Total
	Common Units-Public		Common Units- Green Plains
Balance, December 31, 2022	$	135,025	$	(134,296)	$	21	$	750
Quarterly cash distributions to unitholders ($0.455 per unit)	(5,305)		(5,272)		(216)		(10,793)
Net income	4,873		4,841		198		9,912
Unit-based compensation	59		—		—		59
Balance, March 31, 2023	$	134,652	$	(134,727)	$	3	$	(72)
Quarterly cash distributions to unitholders ($0.455 per unit)	(5,305)		(5,272)		(216)		(10,793)
Net income	4,593		4,565		188		9,346
Unit-based compensation	53		—		—		53
Balance, June 30, 2023	$	133,993	$	(135,434)	$	(25)	$	(1,466)
Quarterly cash distributions to unitholders ($0.455 per unit)	(5,314)		(5,272)		(216)		(10,802)
Net income	4,629		4,593		187		9,409
Disposition of Atkinson assets	—		1,658		34		1,692
Unit-based compensation, including general partner net contributions	60		—		10		70
Balance, September 30, 2023	$	133,368	$	(134,455)	$	(10)	$	(1,097)

	Limited Partners				General Partner		Total
	Common Units-Public		Common Units- Green Plains
Balance, December 31, 2021	$	135,666	$	(133,420)	$	57	$	2,303
Quarterly cash distributions to unitholders ($0.44 per unit)	(5,122)		(5,098)		(209)		(10,429)
Net income	5,083		5,060		207		10,350
Unit-based compensation	59		—		—		59
Balance, March 31, 2022	$	135,686	$	(133,458)	$	55	$	2,283
Quarterly cash distributions to unitholders ($0.445 per unit)	(5,180)		(5,156)		(211)		(10,547)
Net income	5,167		5,142		210		10,519
Unit-based compensation	60		—		—		60
Balance, June 30, 2022	$	135,733	$	(133,472)	$	54	$	2,315
Quarterly cash distributions to unitholders ($0.45 per unit)	(5,247)		(5,214)		(213)		(10,674)
Net income	4,997		4,965		204		10,166
Unit-based compensation, including general partner net contributions	61		—		—		61
Balance, September 30, 2022	$	135,544	$	(133,721)	$	45	$	1,868

~~There~~A ~~was~~roll noforward ~~change~~of in the number of common limited partner units outstanding ~~during~~is ~~the~~as ~~six months ended June 30, 2023.~~follows:

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	Common Units- Public	Common Units- Green Plains	Total
Units, December 31, 2022	11,660,274	11,586,548	23,246,822
Units issued under the LTIP	18,549	—	18,549
Units surrendered for tax withholdings under the LTIP	(538)	—	(538)
Units, September 30, 2023	11,678,285	11,586,548	23,264,833

Issuance of Additional Securities

The partnership agreement authorizes the partnership to issue unlimited additional partnership interests on the terms and conditions determined by the general partner without unitholder approval.

Cash Distribution Policy

Quarterly distributions are made from available cash within 45 days after the end of each calendar quarter, assuming the partnership has available cash. Available cash generally means all cash and cash equivalents on hand at the end of that quarter less cash reserves established by the general partner, including those for future capital expenditures, future acquisitions and anticipated future debt service requirements, plus all or any portion of the cash on hand resulting from working capital borrowings made subsequent to the end of that quarter.

The general partner also holds incentive distribution rights that entitle it to receive increasing percentages, up to 48%, of available cash distributed from operating surplus, as defined in the partnership agreement, in excess of $0.46 per unit per quarter. The maximum distribution of 48% does not include any distributions the general partner or its affiliates may receive on its general partner interest or common units.

On February 10, 2023, the partnership distributed $10.8 million to unitholders of record as of February 3, 2023, related to the quarterly cash distribution of $0.455 per unit that was declared on January 19, 2023, for the quarter ended December 31, 2022.

On May 12, 2023, the partnership distributed $10.8 million to unitholders of record as of May 5, 2023, related to the quarterly cash distribution of $0.455 per unit that was declared on April 20, 2023, for the quarter ended March 31, 2023.

On ~~July 20~~August 11, 2023, the ~~board~~partnership distributed $10.8 million to unitholders of ~~directors~~record as of ~~the~~August 4, ~~general~~2023, ~~partner~~related ~~declared~~to athe quarterly cash distribution of $0.455 per unit, orthat ~~approximately~~was ~~$10.8~~declared ~~million~~on July 20, 2023, for the quarter ended June 30, 2023. ~~The distribution is payable on August 11, 2023, to unitholders of record at the close of business on August 4, 2023.~~

~~The~~On ~~total~~October ~~cash~~19, ~~distributions~~2023, ~~declared~~the ~~for~~board of directors of the ~~three~~general ~~and~~partner ~~six~~declared ~~months~~a quarterly cash distribution of $0.455 per unit, or approximately $10.8 million, for the quarter ended ~~June~~ September 30, 2023. ~~and~~The ~~2022~~distribution is payable on November 10, ~~are~~2023, asto ~~follows~~unitholders ~~(in~~of ~~thousands):~~record at the close of business on November 3, 2023.

	Three Months EndedJune 30,				Six Months EndedJune 30,
	2023		2022		2023		2022
General partner distributions	$	216	$	213	$	432	$	424
Limited partner common units - public	5,314		5,239		10,619		10,419
Limited partner common units - Green Plains	5,272		5,214		10,544		10,370
Total distributions to limited partners	10,586		10,453		21,163		20,789
Total distributions declared	$	10,802	$	10,666	$	21,595	$	21,213

Assuming timely satisfaction or waiver of the closing conditions, the Merger is expected to close in the fourth quarter of 2023. As a result of the conversion and cancellation of Partnership Common Units in connection with the closing of the Merger, the partnership will no longer make quarterly distributions following the closing (other than distributions, if any, with a record date prior to the date of the closing).

~~6. EARNINGS PER UNIT~~16

The partnership computes earnings per unit using the two-class method. Earnings per unit applicable to common units is calculated by dividing the respective limited partners’ interest in net income by the weighted average number of common units outstanding during the period, adjusted for the dilutive effect of any outstanding dilutive securities. Diluted earnings per limited partner unit was the same as basic earnings per limited partner unit as there were no potentially dilutive common units outstanding as of June 30, 2023.

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The total cash distributions declared for the three and nine months ended September 30, 2023 and 2022, are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
General partner distributions	$	216	$	216	$	648	$	640

Limited partner common units - public	5,314		5,305		15,933		15,733
Limited partner common units - Green Plains	5,272		5,272		15,816		15,642
Total distributions to limited partners	10,586		10,577		31,749		31,375
Total distributions declared	$	10,802	$	10,793	$	32,397	$	32,015

7. EARNINGS PER UNIT

The following tables show the calculation of earnings per limited partner unit – basic and diluted (in thousands, except for per unit data):

	Three Months EndedJune 30, 2023
	Three Months EndedSeptember 30, 2023
	Limited PartnerCommon Units		General Partner		Total
Net income
Distributions declared	$	10,586	$	216	$	10,802
Earnings less than distributions	(1,~~428~~364)		(2829)		(1,~~456~~393)
Total net income	$	9,~~158~~222	$	~~188~~187	$	9,~~346~~409
Weighted-average units outstanding - basic and diluted	23,~~227~~246
Earnings per limited partner unit - basic and diluted	$	0.3940

	Six Months EndedJune 30, 2023
	Limited PartnerCommon Units		General Partner		Total
Net income
Distributions declared	$	21,163	$	432	$	21,595
Earnings less than distributions	(2,291)		(46)		(2,337)
Total net income	$	18,872	$	386	$	19,258
Weighted-average units outstanding - basic and diluted	23,227
Earnings per limited partner unit - basic and diluted	$	0.81

	Three Months EndedJune 30, 2022
	Limited PartnerCommon Units		General Partner		Total
Net income
Distributions declared	$	10,453	$	213	$	10,666
Earnings less than distributions	(144)		(3)		(147)
Total net income	$	10,309	$	210	$	10,519
Weighted-average units outstanding - basic and diluted	23,208
Earnings per limited partner unit - basic and diluted	$	0.44

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Six Months EndedJune 30, 2022

Nine Months EndedSeptember 30, 2023

Limited PartnerCommon Units

General Partner

Total

Net income

Distributions declared

2031,~~789~~749

~~424~~648

2132,~~213~~397

Earnings less than distributions

(~~337~~3,655)

(775)

(~~344~~3,730)

Total net income

2028,~~452~~094

~~417~~573

2028,~~869~~667

Weighted-average units outstanding - basic and diluted

23,~~208~~234

Earnings per limited partner unit - basic and diluted

01.8821

7. INCOME TAXES


	Three Months Ended September 30, 2022
	Limited Partner Common Units		General Partner		Total
Net income
Distributions declared	$	10,577	$	216	$	10,793
Earnings less than distributions	(615)		(12)		(627)
Total net income	$	9,962	$	204	$	10,166

Weighted-average units outstanding - basic and diluted	23,228

Earnings per limited partner unit - basic and diluted	$	0.43


	Nine Months Ended September 30, 2022
	Limited Partner Common Units		General Partner		Total
Net income
Distributions declared	$	31,375	$	640	$	32,015
Earnings less than distributions	(961)		(19)		(980)
Total net income	$	30,414	$	621	$	31,035

Weighted-average units outstanding - basic and diluted	23,215

Earnings per limited partner unit - basic and diluted	$	1.31

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8. INCOME TAXES

The partnership is a limited partnership, which is not subject to federal income taxes. However, the partnership is subject to state income taxes in certain states. As a result, the financial statements reflect a provision or benefit for such income taxes. The general partner and the unitholders are responsible for paying federal and state income taxes on their share of the partnership’s taxable income. The partnership’s income tax balances did not have a material impact on the financial statements.

The partnership recognizes uncertainties in income taxes based upon the technical merits of the position, and measures the maximum benefit and degree of likelihood to determine the tax liability in the financial statements. The partnership does not have any material uncertain tax positions as of ~~June~~September 30, 2023.

89. COMMITMENTS AND CONTINGENCIES

Operating Lease Expense

The partnership leases certain facilities, parcels of land, and railcars with remaining terms ranging from less than one year to approximately 8.31 years, including renewal options reasonably certain to be exercised for the land and facility leases. Railcar agreement renewals are not considered reasonably certain to be exercised as they typically renew with different underlying terms.

The components of lease expense for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, are as follows (in thousands):

	Three Months EndedJune 30,				Six Months EndedJune 30,
	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2023		2022		2023		2022
Lease expense
Operating lease expense	$	4,~~855~~754	$	3,~~676~~680	$	914,~~714~~468	$	710,~~169~~849
Variable lease expense (benefit) (1)	(206)		187		(173)		162
Variable lease expense (1)	184		172		11		334
Total lease expense	$	4,~~649~~938	$	3,~~863~~852	$	914,~~541~~479	$	711,~~331~~183

(1) Represents railcar lease abatements provided by the lessor when railcars are out of service during periods of maintenance or upgrade, offset by amounts incurred in excess of the minimum payments required for the handling and unloading of railcars for a certain lease.

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Supplemental cash flow information related to operating leases is as follows (in thousands):

	Three Months EndedJune 30,				Six Months EndedJune 30,
	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,~~749~~733	$	3,~~329~~357	$	913,~~196~~929	$	610,~~687~~044
Right-of-use assets obtained in exchange for lease obligations
Operating leases	—1,063		~~3,031~~—		1617,~~576~~639		7,740
Right-of-use assets and lease obligations derecognized due to lease modifications
Operating leases (1)	3,428		—		3,428		—

(1) As part of the Atkinson disposition, the partnership derecognized $3.4 million of right-of-use assets and lease obligations related to railcar operating leases.

Supplemental balance sheet information related to operating leases is as follows:

	June 30,2023		December 31,2022
	September 30,2023		December 31,2022
Weighted average remaining lease term	3.87 years		3.8 years
Weighted average discount rate	4.7097	%	3.93	%

Aggregate minimum lease payments under the operating lease agreements for the remainder of 2023 and in future years are as follows (in thousands):

Year Ending December 31,	Amount
2023	$	104,~~088~~992
2024	1817,~~121~~032
2025	1514,~~508~~419
2026	9,~~385~~436
2027	67,~~790~~068
Thereafter	2,384
Total	6255,~~276~~331
Less: Present value discount	(54,~~467~~915)
Operating lease liabilities	$	5650,~~809~~416

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Lease Revenue

The components of lease revenue for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, are as follows (in thousands):

Three Months EndedJune 30,

Six Months EndedJune 30,

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2023

2022

2023

2022

Lease revenue

Operating lease revenue

17,~~287~~220

1516,~~833~~656

3451,~~493~~713

3148,~~591~~247

Variable lease revenue (1)

~~647~~691

~~856~~524

12,~~314~~005

1,~~308~~832

Total lease revenue

17,~~934~~911

1617,~~689~~180

3553,~~807~~718

3250,~~899~~079

(1) Represents amounts charged to Green Plains Trade under the storage and throughput agreement in excess of the initial rate of $0.05 per gallon, amounts delivered by Green Plains Trade and other customers in excess of various minimum volume commitments, and the difference between the contracted railcar volumetric capacity and the actual amount provided to Green Plains Trade during the period.

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In accordance with the amended storage and throughput agreement, Green Plains Trade is obligated to deliver a minimum volume of 217.7 mmg per calendar quarter to the partnership’s storage facilities and pay $0.05312 per gallon on all volume it throughputs associated with the agreement.

The remaining lease term for the storage and throughput agreement is 65.08 years with automatic one year renewal periods in which either party has the right to terminate the contract. Due to the unilateral right to termination during the renewal period, the lease contract would no longer contain enforceable rights or obligations. Therefore, the lease term does not include the successive one year renewal periods. Anticipated minimum operating lease revenue under this agreement assuming a consistent rate of $0.05312 per gallon for the remainder of 2023 and in future years, is as follows (in thousands):

Year Ending December 31,	Amount
2023	$	2311,~~128~~564
2024	46,257
2025	46,257
2026	46,257
2027	46,257
Thereafter	69,385
Total	$	~~277~~265,~~541~~977

In accordance with the amended rail transportation services agreement with Green Plains Trade, Green Plains Trade is required to pay the rail transportation services fee for railcar volumetric capacity provided by the partnership. The remaining lease term for this agreement is 65.08 years, with automatic one year renewal periods in which either party has the right to terminate the contract. Due to the unilateral right to termination during the renewal period, the lease contract would no longer contain enforceable rights or obligations. Therefore, the lease term does not include the successive one year renewal periods. Under the terms of the agreement, Green Plains Trade is not required to pay for volumetric capacity that is not available due to inspections, upgrades, or routine repairs and maintenance. As a result, the actual volumetric capacity billed may be reduced based on the amount of volumetric capacity available for use during any applicable period. ~~Anticipated minimum operating lease revenue under this agreement for the remainder of 2023 and in future years is as follows (in thousands):~~

Year Ending December 31,	Amount
2023	$	12,953
2024	23,530
2025	20,096
2026	11,386
2027	8,526
Thereafter	1,073
Total	$	77,564

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Anticipated minimum operating lease revenue under this agreement for the remainder of 2023 and in future years is as follows (in thousands):


Year Ending December 31,	Amount
2023	$	6,045
2024	21,812
2025	18,383
2026	11,386
2027	8,526
Thereafter	1,073
Total	$	67,225

Legal

The partnership may be involved in litigation that arises during the ordinary course of business. Currently, the partnership is not a party to any material litigation.

910. RELATED PARTY TRANSACTIONS

The partnership engages in various related party transactions with Green Plains and subsidiaries of Green Plains. During the quarter, the partnership entered into a Merger Agreement with Green Plains and a sale of storage assets located adjacent to the Atkinson plant. Refer to Note 3 - Merger and Disposition included herein for more information. Green Plains provides a variety of shared services to the partnership, including general management, accounting and finance, payroll and human resources, information technology, legal, communications and treasury activities. These costs are proportionally allocated by Green Plains to its subsidiaries based on common financial metrics management believes are reasonable. The partnership recorded expenses related to these shared services of $01.90 million and $12.9 million, respectively, for the three and ~~six~~nine months ended ~~June~~September 30, 2023. Of these shared service expenses, $0.5 million and $1.16 million were recorded in operations and maintenance expenses and $0.45 million and $1.3 million were recorded within general and administrative expenses, respectively, for the three and nine months ended September 30, 2023. The partnership recorded expenses related to these shared services of $0.8 million and $2.5 million, respectively, for the three and nine months ended September 30, 2022. Of these shared service expenses, $0.4 million and $1.4 million were recorded in operations and maintenance expenses and $0.4 million and $1.1 million were recorded within general and administrative expenses, respectively, for the three and nine months ended September 30, 2022. In addition, the partnership reimburses Green Plains for wages and benefit costs of employees directly performing services on its behalf. Green Plains may also pay certain direct costs on behalf of the partnership, which are reimbursed by the partnership. The partnership believes the consolidated financial statements reflect all material costs of doing business related to its operations, including expenses incurred by other entities on its behalf.

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general and administrative expenses, respectively, for the three and six months ended June 30, 2023. The partnership recorded expenses related to these shared services of $0.8 million and $1.7 million, respectively, for the three and six months ended June 30, 2022. Of these shared service expenses, $0.4 million and $1.0 million were recorded in operations and maintenance expenses and $0.4 million and $0.7 million were recorded within general and administrative expenses, respectively, for the three and six months ended June 30, 2022. In addition, the partnership reimburses Green Plains for wages and benefit costs of employees directly performing services on its behalf. Green Plains may also pay certain direct costs on behalf of the partnership, which are reimbursed by the partnership. The partnership believes the consolidated financial statements reflect all material costs of doing business related to its operations, including expenses incurred by other entities on its behalf.

Omnibus Agreement

The partnership has entered into an omnibus agreement, as amended, with Green Plains and its affiliates which, among other terms and conditions, addresses the partnership’s obligation to reimburse Green Plains for direct or allocated costs and expenses incurred by Green Plains for general and administrative services; the prohibition of Green Plains and its subsidiaries from owning, operating or investing in any business that owns or operates fuel terminals or fuel transportation assets; the partnership’s right of first offer to acquire assets if Green Plains decides to sell them; a nontransferable, nonexclusive, royalty-free license to use the Green Plains trademark and name; the allocation of taxes among the parent, the partnership and its affiliates and the parent’s preparation and filing of tax returns; and an indemnity by Green Plains for certain environmental and other liabilities.

If Green Plains or its affiliates cease to control the general partner, then either Green Plains or the partnership may terminate the omnibus agreement, provided that (i) the indemnification obligations of the parties survive according to their respective terms; and (ii) Green Plains’ obligation to reimburse the partnership for operational failures survives according to its terms.

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Operating Services and Secondment Agreement

The general partner has entered into an operational services and secondment agreement, as amended, with Green Plains. Under the terms of the agreement, Green Plains seconds employees to the general partner to provide management, maintenance and operational functions for the partnership, including regulatory matters, health, environment, safety and security programs, operational services, emergency response, employee training, finance and administration, human resources, business operations and planning. The seconded personnel are under the direct management and supervision of the general partner who reimburses the parent for the cost of the seconded employees, including wages and benefits. If a seconded employee does not devote 100% of his or her time providing services to the general partner, the general partner reimburses the parent for a prorated portion of the employee’s overall wages and benefits based on the percentage of time the employee spent working for the general partner.

Under the operational services and secondment agreement, Green Plains will indemnify the partnership from any claims, losses or liabilities incurred by the partnership, including third-party claims, arising from their performance of the operational services secondment agreement; provided, however, that Green Plains will not be obligated to indemnify the partnership for any claims, losses or liabilities arising out of the partnership’s gross negligence, willful misconduct or bad faith with respect to any services provided under the operational services and secondment agreement.

Commercial Agreements

The partnership has various fee-based commercial agreements with Green Plains Trade, including:

•Storage and throughput agreement, expiring on June 30, 2029;

•Rail transportation services agreement, expiring on June 30, 2029;

•Terminal services agreement for the Birmingham, Alabama unit train terminal, expiring on December 31, 2023; and

•Terminal services agreement for the Collins, Mississippi terminal, expiring on December 31, 2023.

The storage and throughput and rail transportation services agreements have various automatic renewal terms if not cancelled by either party within specified timeframes.

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The storage and throughput agreement and terminal services agreements are supported by minimum volume commitments. The rail transportation services agreement is supported by minimum take-or-pay volumetric capacity commitments.

Under the storage and throughput agreement, as amended, Green Plains Trade is obligated to deliver a minimum volume of 217.7 mmg of product per calendar quarter to the partnership’s storage facilities and pay $0.05312 per gallon on all volume it throughputs associated with the agreement.

If Green Plains Trade fails to meet its minimum volume commitment during any quarter, Green Plains Trade will pay the partnership a deficiency payment equal to the deficient volume multiplied by the applicable fee. The deficiency payment may be applied as a credit toward payments due on future volumes delivered by Green Plains Trade in excess of the minimum volume commitment during the following four quarters, after which time this option will expire.

For the three months ended ~~June~~September 30, 2023, ~~the partnership charged~~ Green Plains Trade ~~$1.2~~exceeded ~~million related to~~ the minimum volume commitment ~~deficiency~~and ~~for~~utilized ~~the~~a ~~quarter,~~prior ~~resulting~~period indeficiency a credit toof be$0.4 ~~applied~~million ~~against~~toward the excess ~~volumes in future periods~~volume. The cumulative balance of minimum volume deficiency credits available to Green Plains Trade is $1.73 million as of ~~June~~September 30, 2023. These credits expire, if unused, as follows:

• $0.51 million, expiring on March 31, 2024; and

• $1.2 million, expiring on June 30, 2024.

The above credits have been recognized as revenue by the partnership in the period in which the deficiency occurred, 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.

Under the rail transportation services agreement, Green Plains Trade is obligated to use the partnership to transport ethanol and other fuels from receipt points identified by Green Plains Trade to nominated delivery points. The average daily railcar volumetric capacity provided by the partnership was 70.7 mmg and 71.7 mmg, respectively, and the associated average monthly fee was approximately $0.0301 and $0.0296 per gallon, respectively, during the three and six months ended June 30, 2023. The average daily railcar volumetric capacity provided by the partnership was 74.5 mmg and 72.1 mmg, respectively, and the associated monthly fee was approximately $0.0229 and $0.0228 per gallon, respectively, during the three and six months ended June 30, 2022. The partnership’s leased railcar fleet consisted of approximately 2,360 and 2,530 railcars as of June 30, 2023 and 2022, respectively.23

Green Plains Trade is also obligated to use the partnership for logistical operations management and other services related to average daily railcar volumetric capacity provided by Green Plains Trade, which was approximately 0.7 mmg during the three and six months ended June 30, 2023 and 2022. Green Plains Trade is obligated to pay a monthly fee of approximately $0.0013 per gallon for these services. In addition, Green Plains Trade reimburses the partnership for costs related to: (1) railcar switching and unloading fees; (2) increased costs related to changes in law or governmental regulation related to the specification, operation or maintenance of railcars; (3) demurrage charges, except when the charges are due to the partnership’s gross negligence or willful misconduct; and (4) fees related to rail transportation services under transportation contracts with third-party common carriers. As needed, Green Plains Trade contracts with the partnership for additional railcar volumetric capacity during the normal course of business at comparable margins.

Under the existing Birmingham terminal services agreement, effective through December 31, 2023, Green Plains Trade is obligated to throughput a minimum volume commitment of approximately 8.3 mmg per month and pay associated throughput fees, as well as fees for ancillary services.

The partnership recorded revenues from Green Plains Trade under the storage and throughput agreement and rail transportation services agreement of $17.9 million and $35.8 million for the three and six months ended June 30, 2023, respectively, and $16.7 million and $32.9 million for the three and six months ended June 30, 2022, respectively. In addition, the partnership recorded revenues from Green Plains Trade and other Green Plains subsidiaries related to trucking and terminal services of $1.5 million and $3.3 million for the three and six months ended June 30, 2023, respectively, and $2.0 million and $3.9 million for the three and six months ended June 30, 2022, respectively.

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Under the rail transportation services agreement, Green Plains Trade is obligated to use the partnership to transport ethanol and other fuels from receipt points identified by Green Plains Trade to nominated delivery points. The average daily railcar volumetric capacity provided by the partnership was 69.6 mmg and 71.0 mmg, respectively, and the associated average monthly fee was approximately $0.0305 and $0.0299 per gallon, respectively, during the three and nine months ended September 30, 2023. The average daily railcar volumetric capacity provided by the partnership was 74.7 mmg and 73.0 mmg, respectively, and the associated average monthly fee was approximately $0.0250 and $0.0236 per gallon, respectively, during the three and nine months ended September 30, 2022. The partnership’s leased railcar fleet consisted of approximately 2,210 and 2,500 railcars as of September 30, 2023 and 2022, respectively.

Green Plains Trade is also obligated to use the partnership for logistical operations management and other services related to average daily railcar volumetric capacity provided by Green Plains Trade, which was approximately 0.7 mmg during the three and nine months ended September 30, 2023 and 2022. Green Plains Trade is obligated to pay a monthly fee of approximately $0.0013 per gallon for these services. In addition, Green Plains Trade reimburses the partnership for costs related to: (1) railcar switching and unloading fees; (2) increased costs related to changes in law or governmental regulation related to the specification, operation or maintenance of railcars; (3) demurrage charges, except when the charges are due to the partnership’s gross negligence or willful misconduct; and (4) fees related to rail transportation services under transportation contracts with third-party common carriers. As needed, Green Plains Trade contracts with the partnership for additional railcar volumetric capacity during the normal course of business at comparable margins.

The partnership recorded revenues from Green Plains Trade under the storage and throughput agreement and rail transportation services agreement of $17.9 million and $53.7 million for the three and nine months ended September 30, 2023, respectively, and $17.2 million and $50.1 million for the three and nine months ended September 30, 2022, respectively. In addition, the partnership recorded revenues from Green Plains Trade and other Green Plains subsidiaries related to trucking and terminal services of $1.3 million and $4.6 million for the three and nine months ended September 30, 2023, respectively, and $1.9 million and $5.8 million for the three and nine months ended September 30, 2022, respectively.

Cash Distributions

The partnership distributed $5.5 million and $1116.05 million to Green Plains related to the quarterly cash distribution paid for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, and $5.4 million and $1016.71 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively.

1011. EQUITY METHOD INVESTMENT

NLR Energy Logistics LLC

The partnership and Delek Renewables LLC have a 50/50 joint venture, NLR Energy Logistics LLC, which operates a unit train terminal in the Little Rock, Arkansas area with capacity to unload 110-car unit trains and provide approximately 100,000 barrels of storage. As of ~~June~~September 30, 2023, the partnership’s investment balance in the joint venture was $3.13 million.

The partnership does not consolidate any part of the assets or liabilities or operating results of its equity method investee. The partnership’s share of net income or loss in the investee increases or decreases, as applicable, the carrying value of the investment. With respect to NLR, the partnership determined that this entity does not represent a variable interest entity and consolidation is not required. In addition, although the partnership has the ability to exercise significant influence over the joint venture through board representation and voting rights, all significant decisions require the consent of the other investor without regard to economic interest.

~~11. SUBSEQUENT EVENTS~~24

On July 25, 2023, Green Plains entered into an asset purchase agreement to sell its ethanol plant located in Atkinson, Nebraska. Correspondingly, the partnership entered into an asset purchase agreement to sell its storage assets located adjacent to the Atkinson plant to Green Plains, along with the transfer of associated railcar operating leases. The transaction is anticipated to close within 30 days in conjunction with the completion of the Green Plains Atkinson LLC ethanol asset sale, subject to customary closing conditions. The terms of this transaction were approved by both the board of directors of the general partner and the board of directors’ conflicts committee, which consists entirely of independent directors.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information we believe is relevant to understand our consolidated financial condition and results of operations. This discussion should be read in conjunction with our unaudited consolidated financial statements and accompanying notes contained in this report together with our 2022 annual report. The results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023, are not necessarily indicative of the results we expect for the full year.

Cautionary Information Regarding Forward-Looking Statements

Forward-looking statements are made in accordance with safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations that involve a number of risks and uncertainties and do not relate strictly to historical or current facts, but rather to plans and objectives for future operations. These statements may be identified by words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “predict,” “may,” “could,” “should,” “will” and similar expressions, as well as statements regarding future operating or financial performance or guidance, business strategy, environment, key trends and benefits of actual or planned acquisitions.

Factors that could cause actual results to differ from those expressed or implied in the forward-looking statements include those discussed in Part I, Item 1A, “Risk Factors,” of our 2022 annual report and in Part II, Item 1A, “Risk Factors,” in this report, or incorporated by reference. Specifically, we may experience fluctuations in future operating results due to changes in general economic, market or business conditions; foreign imports of ethanol; fluctuations in demand for ethanol and other fuels; risks of accidents or other unscheduled shutdowns affecting our assets, including mechanical breakdown of equipment or infrastructure; risks associated with changes to federal policy or regulation; ability to comply with changing government usage mandates and regulations affecting the ethanol industry; price, availability and acceptance of alternative fuels and alternative fuel vehicles, and laws mandating such fuels or vehicles; changes in operational costs at our facilities and for our railcars; failure to realize the benefits projected for capital projects; competition; inability to successfully implement growth strategies; the supply of corn and other feedstocks; unusual or severe weather conditions and natural disasters; ability and willingness of parties with whom we have material relationships, including Green Plains Trade, to fulfill their obligations; labor and material shortages; changes in the availability of unsecured credit and changes affecting the credit markets in general; disruption caused by health epidemics, such as the COVID-19 outbreak; certain risks associated with the pending Merger such as the timing of closing, changes in the market value of consideration until closing, potentially substantial transaction or termination costs or financial projections not proving accurate; and other risk factors detailed in our reports filed with the SEC.

We believe our expectations regarding future events are based on reasonable assumptions. However, these assumptions may not be accurate or account for all risks and uncertainties. Consequently, forward-looking statements are not guaranteed. Actual results may vary materially from those expressed or implied in our forward-looking statements. In addition, we are not obligated nor do we intend to update our forward-looking statements as a result of new information unless it is required by applicable securities laws. We caution investors not to place undue reliance on forward-looking statements, which represent management’s views as of the date of this report or documents incorporated by reference.

Overview

Green Plains Partners provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage facilities, terminals, transportation assets and other related assets and businesses. We are Green Plains’ primary downstream logistics provider and generate a substantial portion of our revenues under fee-based commercial agreements with Green Plains Trade for receiving, storing, transferring and transporting ethanol and other fuels, which are supported by minimum volume or take-or-pay capacity commitments.

Recent Developments

OnGreen ~~May~~Plains 3, 2023, the Board of Directors of the general partner received a non-binding, preliminary proposal ("the Proposal") from the parent to acquire all of the outstanding common units representing limited partner interests in the partnership not already owned by the parent and its affiliates pursuant to a stock-for-unit merger that would result in the partnership becoming a direct, wholly owned subsidiary of the parentInc. The conflicts committee of the Board of Directors of the general partner (the "Conflicts Committee") has been delegated the authority to evaluate and negotiate the possible terms of a proposed transaction. Any transaction involving the parent and the partnership is subject to the execution of a mutually satisfactory definitive agreement and approval of such definitive agreement and the transactions contemplated thereunder by the boards of directors of the parent and the general partner, the Conflicts Committee, as well as the majority Merger

22On September 16, 2023, the partnership, the general partner, the parent, GPLP Holdings Inc. (“Holdings”), and GPLP Merger Sub LLC (“Merger Sub”), entered into an Agreement and Plan of Merger, pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the partnership, with the

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~~of the~~ partnership's ~~unitholders.~~surviving ~~There~~as ~~can~~an beindirect, nowholly ~~assurance~~owned ~~that~~subsidiary of the ~~parties~~parent. ~~will~~Assuming ~~reach~~timely ~~agreement~~satisfaction onor ~~the~~waiver ~~terms~~ of athe ~~transaction~~closing conditions, ~~that~~the aMerger ~~definitive~~is ~~agreement~~expected ~~will~~to beclose ~~executed~~in orthe ~~that~~fourth aquarter ~~transaction~~of ~~will be approved or consummated~~2023.

OnUnder ~~July~~the 25terms of the Merger Agreement, ~~2023~~at the effective time of the Merger (the “Effective Time”), each outstanding common unit representing a limited partner interest in the partnership (each, a “Partnership Common Unit”) other than Partnership Common Units owned by Green Plains, ~~entered~~the ~~into~~general anpartner ~~asset~~and ~~purchase~~their ~~agreement~~respective affiliates (each, a “Public Common Unit”) will be converted into the right to ~~sell~~receive, ~~its~~subject ~~ethanol~~to ~~plant~~adjustment ~~located~~as described in ~~Atkinson~~the Merger Agreement, ~~Nebraska~~(i) 0.405 ~~Correspondingly~~shares of common stock, par value $0.001 per share, of Green Plains (the ~~partnership~~“GPRE ~~entered~~Common ~~into~~Stock” anand ~~asset~~the ~~purchase~~shares ~~agreement~~of Green Plains common stock to ~~sell~~be ~~its~~issued ~~storage~~in ~~assets~~the ~~located~~Merger, ~~adjacent~~the “Stock Consideration”) and (ii) an amount of cash equal to the ~~Atkinson~~sum ~~plant~~of to(a) ~~Green~~$2.00 ~~Plains~~plus (b) the product of (x) $0.455 divided by 90, ~~along~~multiplied by (y) the number of days from, but excluding, the last day of the calendar quarter with respect to which the ~~transfer~~general partner has declared a quarterly cash distribution to the holders of ~~associated~~Partnership ~~railcar~~Common ~~operating~~Units ~~leases~~of no less than $0.455 ~~The~~per ~~transaction~~Partnership isCommon ~~anticipated~~Unit with a record date prior to ~~close~~the ~~within~~date of the closing of the Merger, to, but excluding, the closing date, computed on the basis of a 360-day year comprised of twelve 30-day months and the actual number of days infor ~~conjunction~~any period less than a calendar month, and rounded to the nearest whole cent, without interest (the “Cash Consideration” and, together with the ~~completion~~Stock Consideration, the “Merger Consideration”). In addition, at the Effective Time, each of the ~~Green~~outstanding ~~Plains~~awards ~~Atkinson~~relating ~~LLC~~to ~~ethanol~~a ~~asset~~Partnership ~~sale~~Common Unit issued under a Partnership Long-Term Incentive Plan will become fully vested and will be automatically canceled and converted into the right to receive, with respect to each Partnership Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to ~~customary~~distribution ~~closing~~equivalent ~~conditions~~rights). ~~The~~Except ~~terms~~for ofthe ~~this~~incentive ~~transaction~~distribution ~~were~~rights ~~approved~~representing bylimited ~~both~~partner interests in the ~~board~~partnership, which will be automatically canceled immediately prior to the Effective Time for no consideration in accordance with the First Amended and Restated Agreement of ~~directors~~Limited Partnership of the partnership, dated as of July 1, 2015 , the limited partner interests in the partnership owned by Green Plains, the general partner and their respective affiliates prior to the ~~board~~Effective ofTime ~~directors’~~will ~~conflicts~~remain ~~committee~~outstanding as limited partner interests in the surviving entity. The economic general partner interest in the partnership will remain outstanding as a general partner interest in the surviving entity immediately following the Effective Time, ~~which~~and ~~consists~~the ~~entirely~~general partner will continue as the sole general partner of ~~independent~~the ~~directors~~surviving entity.

The Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants applicable to such party, including, among others, covenants relating to (i) the parent’s and the partnership’s conduct of business during the interim period between the execution of the Merger Agreement and the Effective Time and (ii) the obligation to use reasonable best efforts to cause the Merger to be consummated.

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by the Merger Agreement is in effect and has become final and non-appealable, or (iv) the other party is in material breach of the Merger Agreement. The Merger Agreement provides that upon termination of the Merger Agreement under certain circumstances, (i) Green Plains will be obligated to reimburse the partnership for its out-of-pocket fees and expenses and (ii) the partnership will be obligated to reimburse the parent for its out-of-pocket fees and expenses, in each case, in an amount not to exceed $5 million.

Atkinson Disposition

Results of Operations

During the ~~second~~third quarter of 2023, our parent maintained an average utilization rate of approximately 8193.59% of capacity. Ethanol throughput was ~~196~~225.1 mmg, which ~~was~~exceeded ~~below~~ the contracted minimum volume commitment per quarter. As a result, ~~the Partnership charged~~ Green Plains Trade ~~$1.2~~utilized ~~million~~prior ~~related~~period tocredits in the ~~minimum~~amount ~~volume~~of ~~commitment~~$0.4 ~~deficiency~~million for the third quarter, ~~resulting~~of ~~in a credit to be applied against excess volumes in future periods~~2023. The cumulative balance of minimum volume deficiency credits available to Green Plains Trade is $1.73 million as of ~~June~~September 30, 2023. These credits expire, if unused, as follows:

•$0.51 million, expiring on March 31, 2024; and

•$1.2 million, expiring on June 30, 2024.

Our parent’s operating strategy is to transform to a value-added agricultural technology company creating sustainable high value ingredients. Depending on the margin environment, our parent may exercise operational discretion that results in reductions in throughput volumes. It is possible that throughput volumes could be below minimum volume commitments in the future, depending on various factors that drive each of our parent's biorefineries variable contribution margin, including future driving and gasoline demand for the industry and the availability and price of renewable feedstocks. As part of this strategy, our parent is deploying MSC™ technology, to help meet growing global demand for protein feed ingredients and low-carbon renewable corn oil, which could lead to our parent having more consistent margins and operating throughput rates over time.

Adjusted EBITDA and Distributable Cash Flow

Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization excluding the amortization of right-of-use assets, plus adjustments for transaction costs related to acquisitions or financing transactions, unit-based compensation expense, net gains or losses on asset sales, and our 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 income received, income taxes paid or payable, maintenance capital expenditures, which are defined under our partnership agreement as cash expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain our operating capacity or operating income, and our proportional share of distributable cash flow adjustments of our equity method investee.

Adjusted EBITDA and distributable cash flow are supplemental financial measures that we use to assess our financial performance. We believe their presentation provides useful information to investors in assessing our financial condition and results of operations. However, these presentations are not made in accordance with GAAP. The GAAP measure most directly comparable to adjusted EBITDA and distributable cash flow is net income. Since adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, our definitions of adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, diminishing their utility. Adjusted EBITDA and distributable cash flow 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 our financial performance and operating results.~~

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~~The~~or ~~following~~any ~~table~~other ~~presents~~measure ~~reconciliations~~ of ~~net~~financial ~~income~~performance topresented ~~adjusted~~in ~~EBITDA~~accordance ~~and~~with GAAP to ~~distributable~~analyze ~~cash~~our ~~flow,~~financial ~~for~~performance ~~the three~~ and ~~six~~operating ~~months ended June 30, 2023 and 2022 (unaudited, dollars in thousands):~~results.

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2023			2022			2023			2022
Reconciliations to Non-GAAP Financial Measures:
Net income	$	9,346		$	10,519		$	19,258		$	20,869
Interest expense, net	1,672			1,384			3,444			2,623
Income tax expense	293			39			194			77
Depreciation and amortization	828			823			1,644			1,721
Transaction costs	455			—			455			—
Unit-based compensation expense	60			60			119			119
Proportional share of EBITDA adjustments of equity method investee (1)	45			45			90			90
Adjusted EBITDA	12,699			12,870			25,204			25,499
Interest paid or payable, net of interest received	(1,672)			(1,384)			(3,444)			(2,623)
Income taxes paid or payable	(293)			(39)			(194)			(77)
Maintenance capital expenditures	(4)			(126)			(84)			(258)
Distributable cash flow (2)	$	10,730		$	11,321		$	21,482		$	22,541
Distributions declared (3)	$	10,802		$	10,666		$	21,595		$	21,213
Coverage ratio	0.99		x	1.06		x	0.99		x	1.06		x

The following table presents reconciliations of net income to adjusted EBITDA and to distributable cash flow, for the three and nine months ended September 30, 2023 and 2022 (unaudited, dollars in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Reconciliations to Non-GAAP Financial Measures:
Net income	$	9,409		$	10,166		$	28,667		$	31,035
Interest expense, net	1,764			1,516			5,208			4,139
Income tax expense	30			37			224			114
Depreciation and amortization	780			1,194			2,424			2,915
Transaction costs	1,704			—			2,159			—
Gain on sale of assets	(1,057)			—			(1,057)			—
Unit-based compensation expense	60			61			179			180
Proportional share of EBITDA adjustments of equity method investee (1)	45			45			135			135
Adjusted EBITDA	12,735			13,019			37,939			38,518
Interest paid or payable, net of interest received	(1,764)			(1,516)			(5,208)			(4,139)
Income taxes paid or payable	(30)			(37)			(224)			(114)
Maintenance capital expenditures	(194)			(124)			(278)			(382)
Distributable cash flow (2)	$	10,747		$	11,342		$	32,229		$	33,883

Distributions declared (3)	$	10,802		$	10,793		$	32,397		$	32,015

Coverage ratio	0.99		x	1.05		x	0.99		x	1.06		x

(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 and $3.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively. Distributable cash flow does not include adjustments for the principal payment on the term loan of $1.0 million for the ~~six~~nine months ended ~~June~~September 30, 2022.

(3) Represents distributions declared for the applicable period and paid in the subsequent quarter.

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Selected Financial Information and Operating Data

The following discussion reflects the results of the partnership for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

Selected financial information for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, is as follows (unaudited, in thousands):

	Three Months EndedJune 30,					Six Months EndedJune 30,
	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2023		2022		% Var.	2023		2022		% Var.
Revenues
Storage and throughput services	$	11,~~565~~564	$	11,~~570~~565	—%	$	2334,~~129~~693	$	2334,~~128~~693	—%
Railcar transportation services	6,~~369~~347		5,~~119~~615		2413.40	1219,~~678~~025		915,~~771~~386		2923.87
Terminal services	2,~~173~~163		21,~~036~~864		616.70	46,~~250~~413		45,~~120~~984		37.2
Trucking and other	~~416~~71		~~929~~1,022		(5593.21)	1,~~241~~312		12,~~735~~757		(2852.54)
Total revenues	20,~~523~~145		1920,~~654~~066		40.4	4161,~~298~~443		3858,~~754~~820		64.65
Operating expenses
Operations and maintenance (excluding depreciation and amortization reflected below)	76,~~070~~709		6,~~160~~287		146.87	1421,~~323~~032		1118,~~725~~012		2216.28
General and administrative	12,~~625~~705		~~925~~949		75185.70	25,~~855~~560		23,~~110~~059		3581.38
Depreciation and amortization	828		823		0.6	1,644		1,721		(4.5)
Gain on sale of assets	(1,057)		—		100.0	(1,057)		—		100.0
Total operating expenses	9,523		7,908		20.4	18,822		15,556		21.0
Depreciation and amortization	780		1,194		(34.7)	2,424		2,915		(16.8)
Operating income	$	11,000	$	11,746	(6.4)%	$	22,476	$	23,198	(3.1)%
Total operating expenses	9,137		8,430		8.4	27,959		23,986		16.6
Operating income	$	11,008	$	11,636	(5.4)%	$	33,484	$	34,834	(3.9)%

Selected operating data for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, is as follows (unaudited):

	Three Months EndedJune 30,			Six Months EndedJune 30,
	Three Months EndedSeptember 30,			Nine Months EndedSeptember 30,
	2023	2022	% Var.	2023	2022	% Var.
Product volumes (mmg)
Storage and throughput services	~~196~~225.1	~~232~~219.57	~~(15~~2.7)5%	~~404~~629.23	~~429~~649.74	(53.91)%
Terminal services
Affiliate	3032.18	2724.72	835.75	5689.42	5579.02	212.56
Non-affiliate	2523.96	23.7	9(0.34)	5074.51	4568.29	~~11.~~7.5
	56.0	51.4	8.9	106.9	100.2	6.7
	56.4	47.9	17.7	163.3	148.1	10.3
Railcar capacity billed (daily avg.)	7069.76	74.57	(56.18)	71.70	7273.10	(02.67)

Three Months Ended ~~June~~ September 30, 2023, Compared with the Three Months Ended ~~June~~ September 30, 2022

Consolidated revenues for the three months ended ~~June~~September 30, 2023 increased $0.91 million compared with the same period for 2022. Storage and throughput services revenue ~~and~~was ~~terminal services revenue were~~ consistent with the prior year. Railcar transportation services revenue increased $10.37 million primarily due to an increase in transportation service fees charged as a result of upgrading our leased railcar fleet to comply with DOT 117 regulations. Terminal services revenue increased $0.3 million due to higher throughput at our terminals. Trucking and other revenue decreased $01.50 million compared to the prior year primarily due to the discontinuance of trucking operations that occurred ~~during~~in ~~the~~May ~~period~~of 2023.

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Operations and maintenance expenses increased $0.94 million for the three months ended ~~June~~September 30, 2023, compared with the same period for 2022 ~~primarily~~ due to $1.1 million of higher railcar lease ~~expense~~expenses as a result of upgrading our leased railcar fleet to comply with DOT 117 regulations partially offset by a $0.7 million reduction in expenses due to the discontinuance of trucking operations that occurred in May of 2023.

General and administrative expenses increased $01.78 million for the three months ended ~~June~~September 30, 2023 compared with the same period for 2022 primarily due to $01.57 million in transaction costs related to the ~~proposal~~Merger ~~from~~Agreement for our parent to acquire all outstanding units of the partnership.

~~Distributable~~Gain ~~cash~~on ~~flow~~sale ~~decreased~~of assets increased $01.61 million for the three months ended ~~June~~September 30, 2023, compared with the same period for 2022, ~~primarily~~due ~~associated~~to ~~with~~gains arealized ~~$1.2~~on ~~million~~the ~~decrease~~sale inof ~~net~~trucking ~~income offset by $0~~assets.~~5 million in transaction costs.~~

~~Six~~Depreciation ~~Months~~and ~~Ended~~amortization ~~June~~expenses decreased $0.4 million for the three months ended September 30, 2023, ~~Compared~~compared with the ~~Six~~same ~~Months~~period ~~Ended~~for ~~June 30,~~ 2022 primarily due to assets becoming fully depreciated between periods.

~~Consolidated~~Distributable ~~revenues~~cash ~~increased~~flow decreased $20.56 million for the ~~six~~three months ended ~~June~~September 30, 2023, compared with the same period for 2022., ~~Storage~~due ~~and~~to ~~throughput~~an ~~services~~increase ~~revenue~~in ~~and~~gain ~~terminal~~on ~~services~~sale ~~revenue~~of ~~were~~assets ~~consistent~~of ~~with the prior year~~$1.1 ~~Railcar~~million, ~~transportation~~a ~~services revenue increased~~ $20.98 million ~~primarily~~decrease ~~due to an increase~~ in ~~transportation~~net ~~service~~income ~~fees~~and ~~charged as~~ a ~~result~~$0.4 ofmillion ~~upgrading~~decrease ~~our~~in ~~leased~~depreciation ~~railcar~~and ~~fleet~~amortization topartially ~~comply~~offset ~~with~~by ~~DOT~~an ~~117~~increase ~~regulations.~~of ~~Trucking and other revenue decreased~~ $01.57 million ~~primarily~~in ~~due~~transaction ~~to the discontinuance of trucking operations that occurred during the period~~costs.

~~Operations~~Nine ~~and~~Months ~~maintenance~~Ended ~~expenses~~September ~~increased $2.6 million for the six months ended June~~ 30, 2023, ~~compared~~Compared with the ~~same~~Nine ~~period~~Months ~~for~~Ended ~~2022~~September ~~primarily~~30, ~~due to higher railcar lease expense as a result of upgrading our leased railcar fleet to comply with DOT 117 regulations.~~2022

~~General~~Consolidated ~~and~~revenues ~~administrative expenses~~ increased $02.76 million for the ~~six~~nine months ended ~~June~~September 30, 2023, compared with the same period for 2022. Storage and throughput services revenue was consistent with the prior year. Railcar transportation services revenue increased $3.6 million primarily due to an increase in transportation service fees charged as a result of upgrading our leased railcar fleet to comply with DOT 117 regulations. Terminal services revenue increased $0.54 million indue ~~transaction~~to ~~costs~~higher ~~related~~throughput toat ~~the~~our ~~proposal~~terminals. ~~from~~Trucking ~~our~~and ~~parent~~other torevenue ~~acquire~~decreased ~~all~~$1.4 ~~outstanding~~million ~~units~~primarily ofdue to the ~~partnership~~discontinuance of trucking operations that occurred in May of 2023.

~~Distributable~~Operations ~~cash~~and ~~flow~~maintenance ~~decreased~~expenses increased $13.10 million for the ~~six~~nine months ended ~~June~~September 30, 2023, compared with the same period for 2022, ~~associated~~primarily ~~with~~due ato $13.67 million ~~decrease~~of inhigher ~~net~~railcar ~~income~~lease expense as a result of upgrading our leased railcar fleet to comply with DOT 117 regulations partially offset by a $0.58 million reduction in ~~transaction~~expenses ~~costs~~due to the discontinuance of trucking operations that occurred in May of 2023.

General and administrative expenses increased $2.5 million for the nine months ended September 30, 2023 compared with the same period for 2022 due to $2.2 million in transaction costs related to the Merger Agreement for our parent to acquire all outstanding units of the partnership and an increase of $0.2 million in costs allocated by our parent under the Secondment Agreement.

Gain on sale of assets increased $1.1 million for the nine months ended September 30, 2023 compared with the same period for 2022 due to a gain realized on the sale of trucking assets.

Depreciation and amortization expenses decreased $0.5 million for the nine months ended September 30, 2023 compared with the same period for 2022 primarily due to assets becoming fully depreciated between periods.

Distributable cash flow decreased $1.7 million for the nine months ended September 30, 2023, compared with the same period for 2022, primarily due to a $2.4 million decrease in net income, an increase in gain on sale of assets of $1.1 million and a $0.5 million decrease in depreciation and amortization partially offset by an increase of $2.2 million in transaction costs.

Industry Factors Affecting our Results of Operations

U.S. Ethanol Supply and Demand

According to the EIA, domestic ethanol production averaged 1.0104 million barrels per day during the ~~second~~third quarter of 2023, which was ~~consistent~~6.2% ~~with~~higher than the 979 thousand barrels per day for the same quarter last year. Refiner and blender input volume was ~~905~~907 thousand barrels per day for the ~~second~~third quarter of 2023, compared with ~~898~~902 thousand barrels per day for the same quarter last year. Gasoline demand ~~increased~~was ~~0.3~~consistent ~~million~~with ~~barrels~~the ~~per~~third ~~day,~~quarter orof ~~3.5% during~~ the ~~second~~prior ~~quarter~~year ofat ~~2023~~8.8 ~~compared~~million tobarrels ~~the~~per ~~prior year~~day. U.S. domestic ethanol ending stocks ~~decreased~~increased by approximately 0.42 million barrels compared to the prior year, or 1.8%, to 22.3 million barrels as of June 30, 2023. As of this filing, according to Prime the Pump, there were approximately 3,159 retail stations selling E15 year-round in 31 states, and approximately 386 suppliers at 113 pipeline terminal locations now offering E15 to wholesale customers.

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0.9%, to 21.9 million barrels as of September 30, 2023. As of this filing, according to Prime the Pump, there were approximately 3,244 retail stations selling E15 year-round in 31 states, and approximately 386 suppliers at 113 pipeline terminal locations now offering E15 to wholesale customers.

Global Ethanol Supply and Demand

According to the USDA Foreign Agriculture Service, domestic ethanol exports through ~~May~~August 31, 2023, were approximately ~~593~~921 mmg, down from ~~726~~1,012 mmg for the same period of 2022. Canada was the largest export destination for U.S. ethanol accounting for 4146% of domestic ethanol export volume, driven in part by their national clean fuel standard. The ~~Netherlands~~United Kingdom, the ~~United Kingdom~~Netherlands, South Korea and India accounted for 1011%, 109%, 8% and 85% respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from 1.3 to 1.5 billion gallons in 2023, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce greenhouse gas emissions through low-carbon fuel programs and eliminate MTBE from their own fuel supplies. Fluctuations in currencies relative to the U.S. dollar could impact the U.S. ethanol competitiveness in the global market.

Legislation and Regulation

Our parent is sensitive to government programs and policies that affect the supply and demand for ethanol and other fuels, which in turn may impact the volume of ethanol and other products we handle. Over the years, various bills and amendments have been proposed in the House and Senate, which would eliminate the RFS entirely, eliminate the corn based ethanol portion of the mandate, lower the price of RINs and make it more difficult to sell fuel blends with higher levels of ethanol. Bills have also been introduced to require higher levels of octane blending, allow for year-round sales of higher blends of ethanol and require car manufacturers to produce vehicles that can operate on higher ethanol blends. We believe it is unlikely that any of these bills will become law in the current Congress. In addition, the manner in which the EPA administers the RFS and related regulations can have a significant impact on the actual amount of ethanol and other biofuels blended into the domestic fuel supply.

26Federal mandates and state-level clean fuel standards supporting the use of renewable fuels are a significant driver of ethanol demand in the U.S. Ethanol policies are influenced by concerns for the environment, diversifying the fuel supply, supporting U.S. farmers and reducing the country’s dependence on foreign oil. Consumer acceptance of FFVs and increased use of higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in the U.S. light duty surface transportation fleet market share. In addition, expansion of clean fuel standards in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how they are structured. Incentives for automakers to produce FFVs phased out in 2020, and the EPA's recently proposed Corporate Average Fuel Economy (CAFE) standards further incentivize EV production, with the administration's stated goal of having EVs represent two-thirds of vehicles sold by 2032. Sales of EVs in the U.S. were 313,000 vehicles in the third quarter of 2023, which represented approximately 7.9% of new vehicles sales. Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.

The Inflation Reduction Act of 2022, which was signed into law on August 16, 2022, is a sweeping policy that could have many potential impacts on our parent's business which they are continuing to evaluate. The legislation (1) created a new Clean Fuel Production Credit of $0.02 per gallon per CI point reduction for any fuel below a 50 CI threshold from 2025 to 2027, section 45Z of the Internal Revenue Code, which could impact our parent's fuel ethanol, depending on the level of GHG reduction for each gallon; (2) created a new tax credit for SAF of $1.25 to $1.75 per gallon for 2023 and 2024, depending on the GHG reduction for each gallon, that could possibly involve some of our parent's low-carbon ethanol through an ATJ pathway, depending on the life cycle analysis model being used (this credit expires after 2024 and shifts to the 45Z Clean Fuel Production Credit, where it qualifies for up to $0.035 per gallon per CI point reduction below a 50 CI threshold); (3) expanded the carbon capture and sequestration credit, section 45Q of the Internal Revenue Code, to $85 for each metric ton of carbon dioxide sequestered, which could impact our parent's carbon capture strategies, though it cannot be claimed in conjunction with the 45Z Clean Fuel Production Credit, which could prove to be more valuable; (4) extended the $1.00 per gallon biomass-based diesel tax credit through 2024, which could impact our parent's renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biodiesel production (this credit expires after 2024 and shifts to the 45Z Clean Fuel Production credit, where all non-SAF fuels qualify for $0.02 per gallon for each point of CI reduction under the 50 CI threshold); (5) funded $500 million of biofuel blending infrastructure, which could impact the availability of higher level ethanol blended fuel; (6) increased funding for climate smart agriculture and working lands conservation programs for farmers by $20 billion; and (7) provided credits for the production and purchase of electric vehicles, which could impact the amount of internal combustion engines built and sold longer term, and by extension impact the demand for liquid fuels including ethanol. There are numerous additional clean energy credits included in this law, including investment tax credits for construction of clean energy infrastructure, that could impact our

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~~amendments~~parent ~~have been proposed in the House~~ and ~~Senate,~~their ~~which~~overall ~~would eliminate the RFS entirely, eliminate the corn based ethanol portion of the mandate, lower the price of RINs and make it more difficult to sell fuel blends with higher levels of ethanol~~competitiveness. ~~Bills~~Regulatory ~~have~~rulemaking ~~also been introduced to require higher levels of octane blending, allow~~ for ~~year-round~~the ~~sales~~administration of ~~higher~~these ~~blends~~programs ~~of ethanol and require car manufacturers to produce vehicles that can operate on higher ethanol blends. We believe it~~ is ~~unlikely that any of these bills will become law in the current Congress. In addition~~underway, ~~the~~and ~~manner in which~~ the ~~EPA~~final ~~administers the RFS and related~~ regulations ~~can~~could ~~have a significant~~ impact onmany ~~the~~aspects ~~actual amount~~ of ~~ethanol~~our ~~and~~parent's ~~other biofuels blended into the domestic fuel supply~~business.

Federal mandates and state-level clean fuel standards supporting the use of renewable fuels are a significant driver of ethanol demand in the U.S. Ethanol policies are influenced by concerns for the environment, diversifying the fuel supply, supporting agricultural production and reducing the country’s dependence on foreign oil. Consumer acceptance of FFVs and higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in the U.S. light duty surface transportation fleet market share. In addition, expansion of clean fuel standards in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how they are structured. Incentives for automakers to produce FFVs phased out in 2020, and the EPA's recently proposed Corporate Average Fuel Economy (CAFE) standards further incentivize EV production, with the administration's stated goal of having two-thirds of vehicles sold in 2032 be EVs. Sales of EVs in the U.S. were close to 300,000 vehicles in the second quarter of 2023, which represented approximately 7.2% of new vehicles sales. Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.

The RFS sets a floor for biofuels use in the United States. On June 21, 2023, the EPA finalized RVOs for 2023, 2024 and 2025, setting the implied conventional ethanol levels at 15.25 billion gallons for 2023, and 15 billion for 2024 and 2025, inclusive of 250 million gallons of supplemental volume in 2023 to reflect a court-ordered remand of a previously lowered RVO. The EPA also proposed a modest increase in biomass based diesel volumes over the three years, setting the volumes at 2.82 billion for 2023, 3.04 billion for 2024 and 3.35 billion for 2025. The EPA also indicated that corn kernel fiber would contribute to the cellulosic volumes finalized, and could move to approve registrations that have been languishing for years at the agency. The EPA also removed a proposed e-RIN program from the final rule, but indicated it may move forward with it in a separate rulemaking.

Under the RFS, RINs and SREs are important tools impacting supply and demand. The EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use in each annual RVO based on their percentage of total production of domestic transportation fuel sales. Obligated parties use RINs to show compliance with the RFS mandated volumes. Ethanol producers assign RINs to each gallon of renewable fuel they produce and the RINs are detached when the renewable fuel is blended with transportation fuel domestically. Market participants can trade the detached RINs in the open market. The market price of detached RINs can affect the price of ethanol in certain markets and can influence purchasing decisions by obligated parties. Of note, the RIN mechanism for proposed e-RINs could vary from the traditional process.

27As it relates to SREs, a small refinery is defined as one that processes fewer than 75,000 barrels of petroleum per day. Small refineries can petition the EPA for an SRE which, if approved, waives their portion of the annual RVO requirements. The EPA, through consultation with the DOE and the USDA can grant them a full or partial waiver, or deny it outright within 90 days of submittal. The EPA granted significantly more of these waivers for the 2016, 2017 and 2018 reporting years than it had in prior years, totaling 790 mmg of waived requirements for the 2016 compliance year, 1.82 billion gallons for 2017 and 1.43 billion gallons for 2018. In doing so, the EPA effectively reduced the RFS mandated volumes for those compliance years by those amounts respectively, and as a result, RIN values declined significantly. In the waning days of the previous administration, the EPA approved three additional SREs, reversing one denial from 2018 and granting two from 2019. A total of 88 SREs were granted under the previous administration, erasing a total 4.3 billion gallons of blending requirements. Under the current administration, the EPA reversed the three SREs issued in the final weeks of the previous administration, and in conjunction with the RVO rulemaking for 2020, 2021, and 2022, denied all pending SREs; however, the EPA allowed for so-called "alternative compliance" for these refineries, which in practice waived their blending obligations for those years. The EPA has reiterated its stance on denying all SRE applications in the final 2023, 2024 and 2025 RVO rulemaking, and on July 14, 2023 announced that they had denied 26 SREs for the 2016-2018 and 2021-2023 compliance years, leaving only two SREs pending. There are multiple on-going legal challenges to how the EPA has handled SREs and RFS rulemakings.

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As it relates to SREs, a small refinery is defined as one that processes fewer than 75,000 barrels of petroleum per day. Small refineries can petition the EPA for an SRE which, if approved, waives their portion of the annual RVO requirements. The EPA, through consultation with the DOE and the USDA can grant them a full or partial waiver, or deny it outright within 90 days of submittal. The EPA granted significantly more of these waivers for the 2016, 2017 and 2018 reporting years than it had in prior years, totaling 790 mmg of waived requirements for the 2016 compliance year, 1.82 billion gallons for 2017 and 1.43 billion gallons for 2018. In doing so, the EPA effectively reduced the RFS mandated volumes for those compliance years by those amounts respectively, and as a result, RIN values declined significantly. In the waning days of the previous administration, the EPA approved three additional SREs, reversing one denial from 2018 and granting two from 2019. A total of 88 SREs were granted under the previous administration, erasing a total 4.3 billion gallons of blending requirements. Under the current administration, the EPA reversed the three SREs issued in the final weeks of the previous administration, and in conjunction with the RVO rulemaking for 2020, 2021, and 2022, denied all pending SREs; however, the EPA allowed for so-called "alternative compliance" for these refineries, which in practice waived their blending obligations for those years. The EPA has reiterated its stance on denying all SRE applications in the final 2023, 2024 and 2025 RVO rulemaking, and there are multiple on-going legal challenges to how it has handled SREs and RFS rulemakings.

The One-Pound Waiver, which was extended in May 2019 to allow E15 to be sold year-round to all vehicles model year 2001 and newer, was challenged in an action filed in Federal District Court for the D.C. Circuit. On July 2, 2021, the Circuit Court vacated the EPA’s rule so the future of summertime, defined as June 1 to September 15, sales of E15 is uncertain. The Supreme Court declined to hear a challenge to this ruling. On April 12, 2022, the President announced that he had directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the summer months, and that the temporary waiver should be extended as long as the gasoline supply emergency lasts. On April 28, 2023, the administration announced emergency waivers for the 2023 summer driving season of June 1 to September 15. The EPA has also indicated it will undertake rulemaking to allow for the elimination of the One-Pound Waiver for E10 in several Midwestern states in time for the 2024 summer driving season, which would have the practical effect of allowing for E15 to be sold year round in the following states: Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin.

In October 2019, the White House directed the USDA and EPA to move forward with rulemaking to expand access to higher blends of biofuels. This includes funding for infrastructure, labeling changes and allowing E15 to be sold through E10 infrastructure. The USDA rolled out the Higher Blend Infrastructure Incentive Program in the summer of 2020, providing competitive grants to fuel terminals and retailers for installing equipment for dispensing higher blends of ethanol and biodiesel. In December 2021, the USDA announced it would administer another infrastructure grant program. The Inflation Reduction Act, signed into law in 2022, provided for an additional $500 million in USDA grants for biofuel infrastructure. On June 26, 2023, the USDA announced the initial $50 million in awards, and laid out a process for distributing the remaining $450 million, with $90 million being made available each quarter.

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Environmental and Other Regulation

Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol, crude oil and other liquid hydrocarbon materials. Compliance with existing and anticipated environmental laws and regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate and upgrade equipment and facilities. Our business may also be impacted by government policies, such as tariffs, duties, subsidies, import and export restrictions and outright embargos. Our parent employs maintenance and operations personnel at each of its facilities, which are regulated by the Occupational Safety and Health Administration.

The U.S. ethanol industry relies heavily on tank cars to deliver its product to market. In 2015, the DOT finalized the Enhanced Tank Car Standard and Operational Controls for High-Hazard and Flammable Trains, or DOT specification 117, which established a schedule to retrofit or replace older tank cars that carry crude oil and ethanol, braking standards intended to reduce the severity of accidents and new operational protocols. The rule has increased the lease costs for railcars in the short term and may increase the lease costs long term, which will in turn result in an increase in the fees we charge for railcar capacity. The deadline for compliance with DOT specification 117 was May 1, 2023. Our fleet was DOT 117 compliant by the deadline.

Liquidity and Capital Resources

Our principal sources of liquidity include cash generated from operating activities. We expect operating cash flows will be sufficient to meet our liquidity needs. We consider opportunities to repay or refinance our debt, depending on market conditions, as part of our normal course of doing business. Our ability to meet our debt service obligations and other capital requirements depends on our future operating performance, which is subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. We plan to utilize a combination of operating cash, refinancing and other strategic actions, to repay debt obligations as they come due.

28As of September 30, 2023, we had $19.1 million of cash and cash equivalents.

~~Table~~Net cash provided by operating activities was $31.4 million for the nine months ended September 30, 2023, compared with $31.2 million for the nine months ended September 30, 2022. Net cash provided by investing activities was $2.9 million for the nine months ended September 30, 2023, compared with net cash used in investing activities of ~~Contents~~$0.4 million for the nine months ended September 30, 2022, with the change primarily due to the Atkinson disposition and proceeds from the sale of trucking assets in the nine months ended September 30, 2023. Net cash used in financing activities was $35.4 million for the nine months ended September 30, 2023, compared with $32.7 million for the nine months ended September 30, 2022. The increase was due to higher principal payments on the term loan as well as an increase in our quarterly distribution payments.

~~market~~We ~~conditions,~~incurred ascapital ~~part~~expenditures of ~~our normal course of doing business~~$0.4 ~~Our~~million ~~ability~~for tothe ~~meet~~nine ~~our~~months ~~debt~~ended ~~service obligations and other capital requirements depends on our future operating performance~~September 30, ~~which~~2023 isfor ~~subject~~various tomaintenance ~~general economic, financial, business, competitive, legislative, regulatory~~ and ~~other conditions, many of which are beyond our control~~upgrades. We ~~plan~~expect to ~~utilize~~incur aapproximately ~~combination~~$0.3 ofmillion ~~operating~~for ~~cash,~~the ~~refinancing~~remainder ~~and~~of ~~other~~2023 ~~strategic~~for ~~actions,~~additional tocapitalized ~~repay debt obligations as they come due~~costs.

AsWe ofdid ~~June~~not make any equity method investee contributions related to the NLR joint venture for the nine months ended September 30, 2023, and we ~~had~~do ~~$15.6~~not ~~million~~anticipate making significant equity contributions to NLR for the remainder of ~~cash~~2023. ~~and~~We anticipate receiving future distributions from NLR as excess cash ~~equivalents~~becomes available.

Net cash provided by operating activities was $18.6 million for the six months ended June 30, 2023, compared with $21.2 million for the six months ended June 30, 2022. The decrease in cash flows from operating activities was primarily due to changes in net working capital and a reduction of net income. Net cash used by investing activities was $0.1 million for the six months ended June 30, 2023, compared with net cash used in investing activities of $0.3 million for the six months ended June 30, 2022, with the change primarily due to less capital expenditures in the six months ended June 30, 2023. Net cash used in financing activities was $23.1 million for the six months ended June 30, 2023, compared with $22.0 million for the six months ended June 30, 2022. The increase was due to higher principal payments on the term loan as well as an increase in our quarterly distribution payment.

We incurred capital expenditures of $0.1 million for the six months ended June 30, 2023 for various maintenance and upgrades. We expect to incur approximately $0.6 million for the remainder of 2023 for additional capitalized costs.

We did not make any equity method investee contributions related to the NLR joint venture for the six months ended June 30, 2023, and we do not anticipate making significant equity contributions to NLR for the remainder of 2023. We anticipate receiving future distributions from NLR as excess cash becomes available.

Term Loan Facility

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Financial covenants of the term loan include a maximum consolidated leverage ratio of no more than 2.50x and a minimum consolidated debt service coverage ratio of no less than 1.10x. The term loan is secured by substantially all of the assets of the partnership.

The administrator of LIBOR ceased publication of the one-week and two-month LIBOR settings immediately following the LIBOR publication on December 31, 2021, and announced that the remaining USD LIBOR settings, including the three-month LIBOR, ceased immediately following the LIBOR publication on June 30, 2023. Our term loan was amended on April 19, 2023 to change the underlying floating interest rate to a SOFR-based rate from a LIBOR-based rate. The impact of the amendment is not material to interest expense.

For more information related to our debt, see Note 34 – Debt to the consolidated financial statements in this report.

Distributions to Unitholders

29On August 11, 2023, the partnership distributed $10.8 million to unitholders of record as of August 4, 2023, related to the quarterly cash distribution of $0.455 per unit that was declared on July 20, 2023, for the quarter ended June 30, 2023.

~~Table~~On October 19, 2023, the board of ~~Contents~~directors of the general partner declared a quarterly cash distribution of $0.455 per unit, or approximately $10.8 million, for the quarter ended September 30, 2023. The distribution is payable on November 10, 2023, to unitholders of record at the close of business on November 3, 2023.

OnAssuming ~~July~~timely ~~20,~~satisfaction ~~2023~~or waiver of the closing conditions, the ~~board~~Merger ofis ~~directors~~expected ofto close in the ~~general~~fourth ~~partner~~quarter ~~declared~~of a2023. ~~quarterly~~As ~~cash~~a ~~distribution~~result of ~~$0.455~~the ~~per~~conversion ~~unit,~~and orcancellation ~~approximately~~of ~~$10.8~~Partnership ~~million,~~Common ~~for~~Units in connection with the ~~quarter~~closing ~~ended~~of ~~June~~the 30Merger, ~~2023.~~the ~~The~~partnership ~~distribution~~will isno ~~payable~~longer onmake ~~August~~quarterly ~~11,~~distributions ~~2023~~following the closing (other than distributions, toif ~~unitholders~~any, ofwith a record atdate prior to the ~~close~~date of ~~business~~the ~~on August 4, 2023~~closing).

Effects of Inflation

We have experienced inflationary impacts on labor costs, wages, components, equipment, other inputs and services across our business and inflation and its impact could escalate in future quarters, many of which are beyond our control. Moreover, we have fixed price arrangements with our customers and are not able to pass those costs along in most instances. As such, inflationary pressures could have a material adverse effect on our performance and financial statements.

Contractual Obligations and Commitments

In addition to debt, our material future obligations include certain lease agreements associated with our railcar fleet. Aggregate minimum lease payments under these operating lease agreements for future fiscal years as ~~June~~September 30, 2023 totaled $6255.3 million. Refer to Note 89 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.

Critical Accounting Policies and Estimates

Critical accounting policies relating to leases and impairment of goodwill are impacted significantly by judgments, assumptions and estimates used to prepare our consolidated financial statements. Information about our critical accounting policies and estimates is included in our 2022 annual report.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices. At this time, we conduct all of our business in U.S. dollars and are not exposed to foreign currency risk.

Interest Rate Risk

We are exposed to interest rate risk through our term loan, which bears interest at variable rates. At ~~June~~September 30, 2023, we had $5756.50 million outstanding under our credit facility. A 10% change in interest rates would affect our interest expense by approximately $0.8 million per year, assuming no changes in the amount outstanding or other variables.

Other details about our outstanding debt are discussed in the notes to the consolidated financial statements included in this report and in our 2022 annual report.

Commodity Price Risk

We do not have any direct exposure to risks associated with fluctuating commodity prices because we do not own the ethanol and other fuels that are stored at our facilities or transported by our railcars.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure information that must be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and participation of our chief executive officer and chief financial officer, management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~June~~September 30, 2023, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act and concluded that our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

Management is responsible for establishing and maintaining effective internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We may be involved in litigation that arises during the ordinary course of business. We are not, however, involved in any material litigation at this time.

Item 1A. Risk Factors.

Investors should carefully consider the discussion of risks and the other information in our annual report on Form 10-K for the year ended December 31, 2022, in Part I, Item 1A, “Risk Factors,” and the discussion of risks and other information in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under “Cautionary Information Regarding Forward-Looking Statements” of this report. Although we have attempted to discuss key factors, our investors need to be aware that other risks may prove to be important in the future. New risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. The following risk ~~factor~~factors ~~supplements~~supplement and/or ~~updates~~update risk factors previously disclosed and should be considered in conjunction with the other information included in, or incorporated by reference in, this quarterly report on Form 10-Q.

~~There~~Because ~~can~~the beExchange noRatio ~~assurances~~is ~~that~~fixed weand ~~will~~because ~~enter~~the ~~into~~market aprice ~~definitive~~of ~~agreement~~GPRE ~~with~~Common ~~our~~Stock ~~parent~~will ~~related~~fluctuate prior to ~~its~~the ~~proposal~~completion toof ~~acquire~~the ~~all~~Merger, holders of ~~our~~Public Common Units ~~that~~cannot itbe ~~does~~sure ~~not~~of ~~already~~the ~~own,~~market orvalue of GPRE Common Stock that wethey will ~~complete~~receive ~~any~~as ~~transaction~~part ~~contemplated~~of bythe ~~such~~Merger anConsideration ~~agreement~~relative to the value of the Partnership Common Units that they will exchange in connection with the Merger.

OnThe ~~May~~market 3,value ~~2023, the Board~~ of ~~Directors of~~ the ~~general~~Stock ~~partner~~Consideration ~~received~~that aGPP ~~non-binding,~~Unitholders ~~preliminary~~will ~~proposal~~receive ~~("the~~in ~~Proposal") from~~ the ~~parent~~Merger towill ~~acquire~~depend ~~all~~on of the ~~outstanding~~trading ~~common~~price ~~units~~of ~~representing~~GPRE ~~limited~~Common ~~partner~~Stock ~~interests~~at in the ~~partnership~~Closing. ~~not~~Subject ~~already~~to ~~owned~~any byapplicable ~~the~~withholding ~~parent~~tax, ~~and~~the ~~its~~Exchange ~~affiliates~~Ratio ~~pursuant to a stock-for-unit merger~~ that ~~would~~determines ~~result in~~ the ~~partnership~~number ~~becoming~~of ashares ~~direct, wholly owned subsidiary~~ of ~~the~~GPRE ~~parent.~~Common ~~The~~Stock ~~conflicts~~that ~~committee~~holders of ~~the~~Public ~~Board~~Common ofUnits ~~Directors~~will ofreceive ~~the~~in ~~general partner (~~the ~~"Conflicts~~Merger ~~Committee")~~is ~~has~~fixed ~~been~~at ~~delegated~~0.405 ~~the~~shares ~~authority~~of toGPRE ~~evaluate~~Common ~~and~~Stock ~~negotiate~~for ~~the~~each ~~possible~~Partnership ~~terms~~Common ofUnit athey ~~proposed transaction~~own. ~~Any~~This ~~transaction~~means ~~involving~~that ~~the~~there ~~parent~~is ~~and~~no ~~the~~mechanism ~~partnership~~contained isin ~~subject to~~ the ~~execution~~Merger ofAgreement athat ~~mutually~~would ~~satisfactory~~adjust ~~definitive~~the ~~agreement~~number ~~and~~of ~~approval~~shares of ~~such~~GPRE ~~definitive~~Common ~~agreement~~Stock ~~and~~that ~~the~~holders ~~transactions contemplated thereunder by the boards~~ of ~~directors~~Public ofCommon ~~the~~Units ~~parent~~will ~~and~~receive ~~the~~based ~~general~~on ~~partner,~~any ~~the~~decreases ~~Conflicts~~or ~~Committee,~~increases asin ~~well as~~ the ~~majority~~trading price of ~~the~~GPRE ~~partnership's~~Common ~~unitholders~~Stock. ~~There~~Changes ~~can~~in beper noshare ~~assurance~~or ~~that~~per ~~the~~unit ~~parties~~price ~~will~~may ~~reach~~result ~~agreement~~from ona ~~the~~variety ~~terms~~ of afactors ~~transaction,~~(many ~~that~~of awhich ~~definitive~~are ~~agreement~~beyond ~~will~~Green bePlains’ ~~executed~~and orthe ~~that~~partnership’s acontrol), ~~transaction will be approved or consummated.~~including:

•changes in Green Plains’ or the partnership’s business, operations and prospects;

•changes in market assessments of Green Plains’ or the partnership’s business, operations and prospects;

•changes in market assessments of the likelihood that the Merger will be completed;

•changes in interest rates, commodity prices, general market, industry and economic conditions and other factors generally affecting the price of GPRE Common Stock or Partnership Common Units; and

•federal, state and local legislation, governmental regulation and legal developments in the businesses in which Green Plains and the partnership operate.

If the price of GPRE Common Stock at the Closing is less than the price of GPRE Common Stock on the date that the Merger Agreement was signed, then the market value of the Stock Consideration will be less than contemplated at the time the Merger Agreement was signed.

The Merger is subject to conditions, including some conditions that may not be satisfied on a timely basis, if at all. Failure to complete the Merger, or significant delays in completing the Merger, could negatively affect each party’s future business and financial results and the trading prices of shares of GPRE Common Stock and GPP Common Units.

The completion of the Merger is subject to a number of conditions. The completion of the Merger is not assured and is subject to risks. The Merger Agreement contains conditions, some of which are beyond the parties’ control, that, if not satisfied or waived, may prevent, delay or otherwise result in the Merger not occurring.

If the Merger is not completed, or if there are significant delays in completing the Merger, Green Plains’ and the partnership’s future business and financial results and the trading prices of shares of GPRE Common Stock and GPP Common Units could be negatively affected, and each of the parties will be subject to several risks, including the following:

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•the parties may be liable for fees or expenses to one another under the terms and conditions of the Merger Agreement;

•there may be negative reactions from the financial markets due to the fact that current prices of shares of GPRE Common Stock and GPP Common Units may reflect a market assumption that the Merger will be completed; and

•the attention of management will have been diverted to the Merger rather than their own operations and pursuit of other opportunities that could have been beneficial to their respective businesses.

The date the holders of Public Common Units will receive the Merger Consideration depends on the completion date of the Merger, which is uncertain.

Completing the Merger is subject to several conditions, not all of which are controllable by Green Plains or the partnership. Accordingly, the date on which holders of Public Common Units will receive Merger Consideration depends on the completion date of the Merger, which is uncertain and subject to several other closing conditions.

The partnership may incur substantial transaction‑related costs in connection with the Merger. If the Merger does not occur, the partnership will not benefit from these costs.

The partnership expects to incur substantial expenses in connection with completing the Merger, including fees paid to legal, financial and accounting advisors, filing fees, written consent costs and printing costs. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time.

If the Merger Agreement is terminated, Green Plains or the partnership may, under specified circumstances, be responsible for the terminating party’s expenses in an amount up to $5 million.

If the Merger Agreement is terminated, Green Plains or the partnership may, under specified circumstances, be required to make a payment of up to $5 million in respect of the terminating party’s expenses. If such termination expenses are payable, the payment of such termination expenses could have an adverse consequence to the financial condition and operations of the party responsible for such payment.

Certain executive officers and directors of the General Partner and Green Plains have interests in the Merger that are different from, or in addition to, the interests they may have as GPP Unitholders or GPRE Shareholders, respectively, which could have influenced their decision to support or approve the Merger.

Certain executive officers and directors of the General Partner own equity interests in Green Plains, receive fees and other compensation from Green Plains and will have rights to ongoing indemnification and insurance coverage by the surviving company that give them interests in the Merger that may be different from, or be in addition to, interests of a holder of Public Common Units.

Additionally, certain of Green Plains’ executive officers and directors beneficially own GPP Common Units and will receive the applicable Merger Consideration upon completion of the Merger, receive fees and other compensation from Green Plains and are entitled to indemnification arrangements with Green Plains that give them interests in the Merger that may be different from, or be in addition to, interests a holder of GPRE Common Stock may have as a GPRE Shareholder.

Financial projections of Green Plains and/or the partnership may not prove to be accurate.

In connection with the Merger, Green Plains and the partnership prepared and considered, among other things, internal financial forecasts for Green Plains and the partnership, respectively. These forecasts speak only as of the date made and will not be updated. These financial projections were not provided with a view to public disclosure, are subject to significant economic, competitive, industry and other uncertainties, and may not be achieved in full, at all or within projected time frames. In addition, the failure of businesses to achieve projected results could have a material adverse effect on the share price of the GPRE Common Stock and financial position following the Merger.

The Merger will be a taxable transaction to holders of Public Common Units and, in such case, the resulting tax liability of a holder of Public Common Units, if any, will depend on the unitholder’s particular situation. The tax liability of a holder of Public Common Units as a result of the Merger could be more than expected and could be more than the cash received pursuant to the Merger.

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Holders of Public Common Units will receive shares of GPRE Common Stock and cash as consideration for the Merger. The exchange of GPP Public Common Units for GPRE Common Stock and cash will be treated as a taxable sale by holders of GPP Public Common Units for U.S. federal income tax purposes. In such case, as a result of the Merger, a holder of Public Common Units will recognize gain or loss for U.S. federal income tax purposes equal to the difference between such unitholder’s amount realized (which is, the sum of the fair market value of the shares of GPRE Common Stock and the Cash Consideration received in the Merger) and the unitholder’s adjusted tax basis in the GPP Public Common Units, which will be increased by the unitholder’s share of certain items related to business interest not yet deductible by such unitholder due to applicable limitations on the deductibility of such business interest. The amount of gain or loss recognized by each holder of Public Common Units in the Merger will vary depending on each unitholder’s particular situation, including the value of the shares of the GPRE Common Stock and the Cash Consideration received by each unitholder in the Merger, the adjusted tax basis in the GPP Public Common Units exchanged by each unitholder in the Merger, and the amount of any suspended passive losses that may be available to a particular unitholder to offset all or a portion of the gain recognized by the unitholder.

Because the value of any GPRE Common Stock received in the Merger will not be known until the Effective Time, a holder of Public Common Units will not be able to determine its amount realized, and therefore its taxable gain or loss, until such time. In addition, because prior distributions in excess of a holder of Public Common Units’ allocable share of the partnership’s net taxable income decreases the unitholder’s tax basis in its GPP Public Common Units, the amount, if any, of the prior excess distributions with respect to such GPP Public Common Units will, in effect, become taxable income to a unitholder if the aggregate value of the consideration received in the Merger is greater than the unitholder’s adjusted tax basis in its GPP Public Common Units, even if the aggregate value of the consideration received in the Merger is less than the unitholder’s original cost basis in its GPP Public Common Units. Furthermore, a portion of the amount realized, which amount could be substantial, will be separately computed and taxed as ordinary income to the extent attributable to “unrealized receivables,” including depreciation recapture, or to “inventory items” owned by the partnership and its subsidiaries. Consequently, a holder of Public Common Units may recognize both ordinary income and capital loss upon the exchange of GPP Common Units in the Merger even if there is a net taxable loss realized on the exchange of such unitholder’s GPP Public Common Units pursuant to the Merger. The deductibility of capital losses is subject to limitations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~None~~Directors may surrender units when restricted unit awards are vested to satisfy income tax withholding obligations.

The following table lists the units that were surrendered during the third quarter of 2023:


Period	Total Number of Shares Withheld	Average Price per Share
July 1 - July 31	538	$	12.94
August 1 - August 31	—	—
September 1 - September 30	—	—
Total	538	$	12.94

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended ~~June~~September 30, 2023, no director or officer of the partnership adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K .

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Item 6. Exhibits.

Exhibit No.			Description of Exhibit
10.1			Amendment No. 2 to the Amended and Restated Credit Agreement, dated April 19, 2023, by and among Green Plains Operating Company LLC, as the Borrower, the guarantors identified therein, TMI Trust Company, as Administrative Agent and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 of the partnership’s Quarterly Report on Form 10-Q filed May 4, 2023).
2.1			Agreement and Plan of Merger, dated September 16, 2023, by and among Green Plains Inc., GPLP Holdings Inc., GPLP Merger Sub LLC, Green Plains Holdings LLC and Green Plains Partners LP. (The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.) (incorporated herein by reference to Exhibit 2.1 to the company's Current Report on Form 8-K filed September 18, 2023).
10.1			Amendment No. 3 to the Amended and Restated Credit Agreement, dated October 30, 2023, by and among Green Plains Operating Company LLC, as the Borrower, the guarantors identified therein, Argent Institutional Trust Company, as Administrative Agent and the other lenders party thereto (The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request).
10.2			Support Agreement, dated September 16, 2023, by and among Green Plains Partners LP, Green Plains Inc., and the parties listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on Form 8-K filed September 18, 2023).
31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			The following information from Green Plains Partners LP Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements.
104			The cover page from Green Plains Partners LP Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, 2023, formatted in iXBRL.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		GREEN PLAINS PARTNERS LP
		(Registrant)
	By:	Green Plains Holdings LLC, its general partner
Date: August 4, 2023	By:	/s/ Todd A. Becker
Date: October 31, 2023	By:	/s/ Todd A. Becker
		Todd A. Becker
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: August 4, 2023	By:	/s/ James E. Stark
Date: October 31, 2023	By:	/s/ James E. Stark
		James E. Stark
		Chief Financial Officer
		(Principal Financial Officer)

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Filing Compare · Green Plains Partners LP