On August 1, 2018, the company acquired two cattle-feeding operations from Bartlett Cattle Company, L.P. for $16.2 million, plus working capital of approximately $106.6 million primarily consisting of work-in-process inventory. The transaction included the feed yards located in Sublette, Kansas and Tulia, Texas, which added combined feedlot capacity of 97,000 head of cattle to the company’s operations. The transaction was financed using cash on hand and proceeds from the Green Plains Cattle senior secured asset-based revolving credit facility. There were no material acquisition costs recorded for the acquisition.

The following is a summary of the assets acquired and liabilities assumed (in thousands):

The amounts above reflect the final purchase price allocation, which included working capital true-up payments by the company of $0.9 million made during 2018. After the disposition of GPCC, the assets and liabilities of the acquired feedlots were reclassified as discontinued operations. See Disposition of Green Plains Cattle Company LLC described below.

On May 16, 2017, the company acquired two cattle-feeding operations from Cargill Cattle Feeders, LLC for $59.3 million, including certain working capital adjustments. The transaction included the feed yards located in Leoti, Kansas and Eckley, Colorado, which added combined feedlot capacity of 155,000 head of cattle to the company’s operations. The transaction was financed using cash on hand. There were no material acquisition costs recorded for the acquisition.

As part of the transaction, the company also entered into a long-term cattle supply agreement with Cargill Meat Solutions Corporation. Under the cattle supply agreement, all cattle placed in the Leoti and Eckley feedlots are sold exclusively to Cargill Meat Solutions under an agreed upon pricing arrangement.

The following is a summary of the assets acquired and liabilities assumed (in thousands):

The amounts above reflect the final purchase price allocation, which included working capital true-up payments by the company of $1.6 million made during 2018. After the disposition of GPCC, the assets and liabilities of the acquired feedlots were reclassified as discontinued operations. See Disposition of Green Plains Cattle Company LLC described below.

On November 27, 2018, the company and Green Plains II LLC, an indirect wholly-owned subsidiary of the company, completed the sale of Fleischmann’s Vinegar Company, Inc. to Kerry Holding Co. (“Kerry”). The company received as net consideration from Kerry $354.0 million in cash and restricted cash, excluding net working capital adjustments. The divested

assets were reported within the company’s food and ingredients segment. The company recorded a pre-tax gain on the sale of Fleischmann’s Vinegar of $58.2 million, including offsetting related transaction costs of $7.4 million within the corporate segment.

The assets and liabilities of Fleischmann’s Vinegar at closing on November 27, 2018 were as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Cash		$	2,107
Accounts receivable, net			16,142
Inventory			15,167
Prepaid expenses and other			853
Property and equipment			64,552
Other assets			79,389

Current liabilities			(8,837)
Deferred tax liabilities			(26,617)
	Total identifiable net assets		142,756

Goodwill			142,002
	Net assets disposed	$	284,758

The amounts above reflect the final purchase price allocation, including a working capital payment made to and received from Kerry of $0.3 million and $0.3 million during the first and third quarters of 2019, respectively.

Disposition of Bluffton, Lakota and Riga Ethanol Plants

On November 15, 2018, the company completed the sale of three ethanol plants located in Bluffton, Indiana, Lakota, Iowa, and Riga, Michigan, and certain related assets from subsidiaries, to Valero Renewable Fuels Company, LLC (“Valero”) for the sale price of $323.2 million, including net working capital and other adjustments. Correspondingly, the partnership’s storage assets located adjacent to such plants were sold to Green Plains Inc. for $120.9 million. The company received as consideration from Valero approximately $323.2 million, while the partnership received as consideration from the company 8.7 million partnership units and a portion of the general partner interest equating to 0.2 million equivalent limited partner units to maintain the general partner’s 2% interest. In addition, the partnership also received additional consideration of approximately $2.7 million from Valero for the assignment of certain railcar operating leases. The divested assets were reported within the company’s ethanol production, agribusiness and energy services and partnership segments. The company recorded a pre-tax gain on the sale of the three ethanol plants of $92.2 million, of which $89.5 million was recorded within the corporate segment and $2.7 million was recorded within the partnership segment, including offsetting transaction costs of $4.2 million, of which $3.7 million were recorded within the corporate segment and $0.5 million were recorded within the partnership segment.

The assets and liabilities of the Bluffton, Lakota and Riga ethanol plants at closing on November 15, 2018 were as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Inventory		$	36,812
Prepaid expenses and other			189
Property and equipment			184,970
Other assets			1,717

Current liabilities			(746)
Other liabilities			(4,706)
	Total identifiable net assets		218,236

Goodwill			6,188
	Net assets disposed	$	224,424

The amounts above reflect the final working capital true-up payments by Valero of $3.4 million received during the first quarter of 2019.

The company determined that the dispositions noted above did not meet the criteria for discontinued operations presentation as the disposition of these businesses did not represent a strategic shift that will have a major effect on its operations and financial results.

Disposition of Green Plains Cattle Company LLC

On September 1, 2019, the company, TGAM and StepStone formed a joint venture and entered into the LLC Agreement. GPCC was previously a wholly owned subsidiary of Green Plains. Green Plains also entered into a Securities Purchase Agreement with TGAM and StepStone, whereby TGAM and StepStone purchased an aggregate of 50% of the membership interests of GPCC from Green Plains for approximately $76.9 million in cash. There was no gain or loss recorded as part of this transaction. The LLC Agreement contains certain earn-out or bonus provisions to be paid by or received from GPCC if certain EBITDA thresholds are met. The company does not believe these are reasonably estimable and therefore has not recorded these amounts in the consolidated financial statements.

Under the LLC Agreement, Green Plains has certain rights and obligations, including but not limited to, the right or obligation: (i) to designate two Managers to the Board of Managers of GPCC (the “Board”), or in the event the size of the Board is increased, the number of Managers equal to two-fifths of the Board, rounded up, and (ii) to fund additional capital contributions in accordance with their percentage interest upon mutual agreement by Green Plains, TGAM and StepStone. Additionally, TGAM and StepStone both have the right or obligation to designate one Manager, or in the event the size of the Board is increased, the number of Managers equal to one-fifths of the Board, rounded up. Each Manager serving on the Board shall have one vote and a majority of the Managers serving on the Board shall constitute a quorum for the transaction of business of the Board. Green Plains’ allocation under the LLC Agreement will be subject to certain adjustments.

The assets and liabilities of the GPCC at closing on September 1, 2019 were as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Cash		$	2
Accounts receivable, net			17,920
Inventory			387,534
Derivative financial instruments			48,189
Property and equipment			71,678
Other assets			2,291

Current liabilities			(49,297)
Short-term notes payable and other borrowings			(38)
Current maturities of long-term debt			(324,028)
Long-term debt			(80)
Other liabilities			(403)
	Total identifiable net assets disposed	$	153,768

DISCONTINUED OPERATIONS

After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20. As such, GPCC results prior to its disposition are classified as discontinued operations for all periods provided. Furthermore, the related assets and liabilities of GPCC have been presented as discontinued operations on the December 31, 2018 consolidated balance sheet. Financial results of GPCC were previously recorded within the food and ingredients segment.

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Assets and Liabilities in the Consolidated Balance Sheet Attributable to Discontinued Operations

The following table presents assets and liabilities associated with our discontinued operations.


	December 31, ‎2018
Assets
Cash and cash equivalents	$	2
Restricted cash		34,909
Accounts receivable, net of allowances		11,860
Inventories		432,283
Prepaid expenses and other		345
Current assets of discontinued operations	$	479,399

Property and equipment, net of accumulated depreciation and amortization	$	71,341
Other assets		1,719
Noncurrent assets of discontinued operations	$	73,060

Liabilities
Accounts payable	$	21,072
Accrued and other liabilities		6,410
Derivative financial instruments		16,924
Short-term notes payable and other borrowings		374,492
Current maturities of long-term debt		38
Current liabilities of discontinued operations	$	418,936

Long-term debt	$	80
Other liabilities		2
Noncurrent liabilities of discontinued operations	$	82

‎

The following table presents the results of our discontinued operations for the periods presented. GPCC was disposed of on September 1, 2019, as such operational results through August 31, 2019 are included in the fiscal year 2019 amounts presented below.


	Year Ended December 31,
	2019⁽¹⁾		2018⁽¹⁾		2017⁽¹⁾

Product revenues	$	638,122	$	884,072	$	328,874

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)		614,671		845,160		302,438
Selling, general and administrative expenses		5,931		7,775		4,659
Depreciation and amortization expenses		4,198		5,361		3,779
Total costs and expenses		624,800		858,296		310,876
Operating income		13,322		25,776		17,998

Other income (expense)
Interest income		182		147		10
Interest expense		(12,417)		(13,576)		(6,460)
Other, net		-		2,613		729
Total other expense		(12,235)		(10,816)		(5,721)
Income before income taxes		1,087		14,960		12,277
Income tax expense		(258)		(3,421)		(7,279)
Net income	$	829	$	11,539	$	4,998