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Cost of goods sold in the ethanol production segment increased $326.8 million, for the year ended December 31, 2010 as
compared to the year ended December 31, 2009, primarily due to increased sales volumes as a result of the additional
production discussed above. Our largest component of cost of goods sold is corn, which increased due to the increased
volumes of production and an increase in average cost per bushel of approximately 21% compared to the prior year. Included
in the ethanol production segment’s cost of goods sold during the year ended December 31, 2009 is a one-time charge of $4.6
million related to the cancellation of third-party ethanol marketing arrangements. Gross profit for the ethanol production
segment increased $57.3 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009
due primarily to the additional operations discussed above as well as an increase in the ethanol yield per bushel of corn
consumed.
Operating income increased $54.6 million for the year ended December 31, 2010, compared to the year ended December
31, 2009 due to the factors discussed above.
Corn Oil Production Segment
We initiated corn oil production in the fourth quarter of 2010 and therefore did not have any corn oil operations in 2009.
During the year ended December 31, 2010, we had revenues of $1.7 million from the sale of corn oil.
Agribusiness Segment
The table below presents key operating data within our agribusiness segment for the periods indicated:
Grain sold
56,215
32,780
(thousands of bushels)
Fertilizer sold
60,653
48,108
(tons)
Year EndedDecember 31,
2010
2009
Our agribusiness segment had increases of $148.8 million in revenue, $2.6 million in gross profit, and a decrease of $3.2
million in operating income for the year ended December 31, 2010 compared to the year ended December 31, 2009. These
revenue and gross profit increases are primarily attributable to the acquisition of agribusiness operations in western
Tennessee in April 2010. The 2010 results included eight months of activity from the acquired operations, contributing
$141.6 million to 2010 revenue. The decrease in operating income is primarily due to an increase in selling, general and
administrative expenses of $5.9 million as a result of additional expenses related to the Tennessee operations. Also, operating
income was affected by a decrease in grain drying income in Iowa as a result of a considerably drier harvest in 2010
compared with 2009. These negative effects on operating income were greater than the additional operating income
attributable to the Tennessee acquisition.
Marketing and Distribution Segment
Marketing and distribution revenues increased $725.3 million for the year ended December 31, 2010, as compared to the
year ended December 31, 2009. The Company sold 917 million gallons of ethanol within the marketing and distribution
segment during the 2010, compared to 653 million gallons sold during 2009. The increase in revenues was primarily due to
an increase in ethanol-related marketing and distribution of $710.6 million and an increase in marketing and distribution for
distillers grains of $12.4 million. Gross profit for the marketing and distribution segment increased $7.6 million for the year
ended December 31, 2010 as compared to the year ended December 31, 2009. As described above, the increase in gross
profit was due to greater volume of marketing and distribution as compared to the prior year.
Initially, our Superior, Bluffton and Obion ethanol plants sold our ethanol production exclusively to outside marketers at
a price per gallon based on a market price at the time of sale, less certain marketing, storage, and transportation costs, as well
as a profit margin for each gallon sold. We stopped selling our ethanol production to outside marketers during the first
quarter of 2009. Following completion of the VBV merger and prior to the termination of the agreements, nearly all of our
ethanol that was sold to one of the outside marketers was repurchased by Green Plains Trade, reflected in the marketing and
distribution segment, and resold to other customers. Corresponding revenues and related costs of goods sold were eliminated
in consolidation.