Green Plains Partners LP(GPP) - 2023 Q1 - Quarterly Report

Financial Performance - For Q1 2023, total revenues increased by 8.8% to $20.775 million compared to $19.100 million in Q1 2022[119] - Adjusted EBITDA for Q1 2023 was $12.505 million, slightly down from $12.629 million in Q1 2022[116] - Distributable cash flow decreased by $0.5 million to $10.752 million in Q1 2023 compared to $11.220 million in Q1 2022[123] - The coverage ratio for distributions declared was 1.00x in Q1 2023, compared to 1.06x in Q1 2022[116] - The partnership distributed $10.8 million to unitholders for the quarter ended March 31, 2023, with a quarterly cash distribution of $0.455 per unit[147] Revenue Sources - Railcar transportation services revenue rose by 35.6% to $6.309 million, primarily due to increased transportation service fees and higher railcar volumetric capacity[121] - U.S. domestic ethanol production averaged 1.01 million barrels per day in Q1 2023, a 1.0% decrease from the same period last year[124] - Domestic ethanol exports were approximately 222 million gallons through February 2023, down from 267 million gallons in the same period of 2022[125] Operational Metrics - Average utilization rate for the parent company was approximately 87.5% in Q1 2023, with ethanol throughput at 208.1 million gallons, below the contracted minimum volume commitment[109] - Operations and maintenance expenses increased by 30.3% to $7.253 million, largely due to higher railcar lease expenses[122] Cash and Debt Management - As of March 31, 2023, the company had $18.1 million in cash and cash equivalents, with net cash provided by operating activities of $8.9 million for the three months ended March 31, 2023[138][139] - The term loan has an outstanding balance of $59.0 million with an interest rate of 13.14%, and no principal payments were made during the three months ended March 31, 2023[142] - The company incurred capital expenditures of $0.1 million for maintenance and upgrades for the three months ended March 31, 2023, with an expectation of approximately $0.5 million for the remainder of 2023[140] Regulatory and Market Environment - The Inflation Reduction Act of 2022 includes a Clean Fuel Production Credit of $1.00 per gallon from 2025 to 2027, which may impact fuel ethanol depending on GHG reduction levels[128] - The EPA has proposed Renewable Volume Obligations (RVOs) of 15.25 billion gallons for conventional ethanol for 2023, 2024, and 2025, including 250 million gallons of supplemental volume for 2023[129] - The Inflation Reduction Act allocated $500 million for biofuel blending infrastructure, which could enhance the availability of higher-level ethanol blended fuel[128] - The company is subject to environmental regulations that may increase overall costs, including capital costs for compliance with existing and anticipated laws[134] Risk Management - A 10% change in interest rates would affect the company's interest expense by approximately $0.8 million per year, based on the outstanding term loan[155] - The company does not have any direct exposure to fluctuating commodity prices as it does not own the ethanol and other fuels stored or transported[157] - The company does not have direct exposure to risks associated with fluctuating commodity prices[157] Credits and Deficiencies - The cumulative balance of minimum volume deficiency credits available to Green Plains Trade is $0.5 million, set to expire on March 31, 2024[110]