Green Plains Inc

Previous wording

•Ethanol Production. Our ethanol production segment includes the production, storage and transportation of ethanol, distillers grains, Ultra-High Protein and renewable corn oil at ten biorefineries in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 310 million bushels of corn per year and producing approximately 903 million gallons of ethanol, 2.2 million tons of distillers grains and Ultra-High Protein, and 300 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel and renewable diesel. This segment also includes 24 ethanol storage facilities, two fuel terminal facilities and approximately 2,180 leased railcars. We are one of the largest ethanol producers in North America.

Current wording

•Ethanol Production. Our ethanol production segment includes the production, storage and transportation of ethanol, distillers grains, Ultra-High Protein and renewable corn oil at ten biorefineries in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 310 million bushels of corn per year and producing approximately 903 million gallons of ethanol, 2.2 million tons of distillers grains and Ultra-High Protein, and 300 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel and renewable diesel. This segment also includes 24 ethanol storage facilities, one fuel terminal facility and approximately 2,200 leased ethanol railcars. We are one of the largest ethanol producers in North America.

Previous wording

We began pilot scale batch operations at the FQT CST™ production facility at our Innovation Center at York in the second quarter of 2021, which allows for the production of both food and industrial grade low carbon-intensity glucose and dextrose corn syrups to target applications in food production, renewable chemicals and synthetic biology. The world's first commercial scale FQT CST™ facility in Shenandoah, Iowa is mechanically complete, and we continue to work through process flow adjustments in the commissioning phase, with shipments expected to begin in the third quarter of 2024. We also anticipate modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer demands.

Current wording

We began pilot scale batch operations at the FQT CST™ production facility at our Innovation Center at York in the second quarter of 2021, which allows for the production of both food and industrial grade low carbon-intensity glucose and dextrose corn syrups to target applications in food production, renewable chemicals and synthetic biology. The world's first commercial scale FQT CST™ facility in Shenandoah, Iowa is now producing, with shipments expected to begin in the fourth quarter of 2024. We also anticipate modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer demands.

Previous wording

The company announced a strategic review process in February 2024 to explore a broad range of opportunities to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or sale, partnerships and financings. The Board of Directors continues to progress the strategic review process and has formed a Special Committee to assist the Board with the evaluation of various alternatives. In addition, the company has engaged Bank of America as its financial advisor and Vinson & Elkins LLP as its legal advisor. There is no deadline or definitive timetable for completion of the strategic review process, and there can be no assurances that the process will result in a transaction or any other outcome. The company does not intend to make any further public comment regarding the review until the Board has approved a specific action or otherwise determines that additional disclosure is appropriate or required.

Current wording

As previously announced, the company initiated a strategic review process in February 2024 to explore a broad range of opportunities to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or sale, partnerships and financings. The Board of Directors continues to progress the strategic review process, working with its financial advisors, BMO Capital Markets Corp. and Moelis & Company, and legal advisors Vinson & Elkins LLP. There is no deadline or definitive timetable for completion of the strategic review process, and there can be no assurances that the process will result in a transaction or any other outcome. The company does not intend to make any further public comment regarding the review until the Board has approved a specific action or otherwise determines that additional disclosure is appropriate or required.

Previous wording

On January 9, 2024, the transactions contemplated by the Merger Agreement were completed and the company acquired all of the publicly held common units of the partnership not already owned by the company and its affiliates. Refer to Note 3 - Acquisition in the notes to the consolidated financial statements included herein for more information.

Current wording

On January 9, 2024, the transactions contemplated by the Merger Agreement were completed and the company acquired all of the publicly held common units of the partnership not already owned by the company and its affiliates. Refer to Note 3 – Merger and Dispositions in the notes to the consolidated financial statements included herein for more information.

Previous wording

During the second quarter of 2024, we maintained an average utilization rate of approximately 92.6% of capacity, resulting in ethanol production of 208.5 mmg, compared with 194.7 mmg, or 81.5% of capacity, for the same quarter last year. Our operating strategy is to transform our company to a value-add agricultural technology company. Depending on the margin environment, we may exercise operational discretion that results in reductions in production volumes. It is possible that throughput volumes could fluctuate in the future, depending on various factors that drive each biorefinery’s variable contribution margin, including future driving and gasoline demand for the industry, demand for valuable coproducts we produce, and the supply and pricing of renewable feedstocks needed to operate our biorefineries. We are currently producing Ultra-High Protein at five of our biorefineries.

Current wording

During the third quarter of 2024, we maintained an average utilization rate of approximately 96.8% of capacity, resulting in ethanol production of 220.2 mmg, compared with 223.4 mmg, or 93.9% of capacity, for the same quarter last year. Our operating strategy is to transform our company into a value-add agricultural technology company. Depending on the margin environment, we may exercise operational discretion that results in reductions in production volumes. It is possible that throughput volumes could fluctuate in the future, depending on various factors that drive each biorefinery’s variable contribution margin, including future driving and gasoline demand for the industry, demand for valuable coproducts we produce, and the supply and pricing of renewable feedstocks needed to operate our biorefineries. We are currently producing Ultra-High Protein at five of our biorefineries.

Previous wording

According to the EIA, domestic ethanol production averaged 1.02 million barrels per day during the second quarter of 2024, which was 1.0% higher than the 1.01 million barrels per day for the same quarter last year. Refiner and blender input volume was 915 thousand barrels per day for the second quarter of 2024, compared with 905 thousand barrels per day for the same quarter last year. Gasoline demand was 2.4% lower than the prior year at 8.9 million barrels per day during the second quarter of 2024. U.S. domestic ethanol ending stocks increased by approximately 1.3 million barrels compared to the prior year, or 5.8%, to 23.6 million barrels as of June 30, 2024. As of this filing, according to Prime the Pump, there were approximately 3,244 retail stations selling E15 year-round.

Current wording

According to the EIA, domestic ethanol production averaged 1.07 million barrels per day during the third quarter of 2024, which was 3.1%higher than the 1.04 million barrels per day for the same quarter last year. Refiner and blender input volume was 914 thousand barrels per day for the third quarter of 2024, compared with 907 thousand barrels per day for the same quarter last year. Gasoline demand was 2.7% higher than the prior year at 9.0 million barrels per day during the third quarter of 2024. U.S. domestic ethanol ending stocks increased by approximately 1.6 million barrels compared to the prior year, or 7.2%, to 23.5 million barrels as of September 30, 2024. As of this filing, according to Prime the Pump, there were approximately 3,571 retail stations selling E15 year-round.

Previous wording

According to the USDA Foreign Agriculture Service, domestic ethanol exports through May 31, 2024, were approximately 817 mmg, up from the 573 mmg for the same period of 2023. Canada was the largest export destination for U.S. ethanol accounting for approximately 34% of domestic ethanol export volume, driven in part by their national clean fuel standard. The United Kingdom and India accounted for approximately 12% and 11%, respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from 1.6 to 1.8 billion gallons in 2024, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce GHG 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.

Current wording

According to the USDA Foreign Agriculture Service, domestic ethanol exports through August 31, 2024, were approximately 1,240 mmg, up from the 921 mmg for the same period of 2023. Canada was the largest export destination for U.S. ethanol accounting for approximately 35% of domestic ethanol export volume, driven in part by their national clean fuel standard. The United Kingdom, India, Colombia, and the Netherlands accounted for approximately 13%, 10%, 7% and 6%, respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from 1.7 to 1.9 billion gallons in 2024, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce GHG 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.

Previous wording

Our dried distillers grains and high protein ingredients compete against other ethanol producers domestically and abroad, as well as with soybean meal, canola meal and other protein feed ingredients. Likewise, our distillers corn oil, which is a feedstock for producing biodiesel, renewable diesel and to some extent SAF, competes against other vegetable oils such as soybean oil, canola oil, and to some extent palm oil, as well as against waste oils such as used cooking oils, animal fats and tallow. Soybean processing capacity in the U.S. has been expanding to meet the rising demand for vegetable oils to produce renewable fuels. According to the National Oilseed Processors Association, for the second quarter of 2024, soybean crush was approximately 525 million bushels, up 9 million bushels from the 516 million bushels crushed during the second quarter of 2023. Soybean oil stocks were 1.6 billion pounds, which was down from the 1.7 billion pounds of stocks as of June 30, 2023. Soybean meal production was 12.4 million short tons for the second quarter of 2024, up slightly from the 12.3 million short tons from the same period in the prior year.

Current wording

Our dried distillers grains and high protein ingredients compete against other ethanol producers domestically and abroad, as well as with soybean meal, canola meal and other protein feed ingredients. Likewise, our distillers corn oil, which is a feedstock for producing biodiesel, renewable diesel and to some extent SAF, competes against other vegetable oils such as soybean oil, canola oil, and to some extent palm oil, as well as against waste oils such as used cooking oils, animal fats and tallow. Soybean processing capacity in the U.S. has been expanding to meet the rising demand for vegetable oils to produce renewable fuels. According to the National Oilseed Processors Association, for the third quarter of 2024, soybean crush was approximately 518 million bushels, up 18 million bushels from the 500 million bushels crushed during the third quarter of 2023. Soybean oil stocks as of September 30, 2024, were 1.1 billion pounds, which was consistent with stocks as of the prior year. Soybean meal production was 12.2 million short tons for the third quarter of 2024, up from the 11.8 million short tons from the same period in the prior year.

Previous wording

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 U.S. farmers and reducing the country’s dependence on foreign oil. Consumer acceptance of FFVs, availability of higher ethanol blends 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 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 approximately 330 thousand vehicles during the second quarter of 2024, which represented approximately 8% of new vehicles sales, up 11% year over year. Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.

Current wording

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 U.S. farmers and reducing the country’s dependence on foreign oil. Consumer acceptance of FFVs, availability of higher ethanol blends 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 proposed Corporate Average Fuel Economy (CAFE) standards further incentivize EV production, with the current administration's stated goal of having EVs represent two-thirds of vehicles sold by 2032. Sales of EVs in the U.S. were approximately 346 thousand vehicles during the third quarter of 2024, an 11% year over year increase. During the third quarter ended September 30, 2024, EV market share reached 8.9%, the highest on record. Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.

Previous wording

The IRA, which was signed into law on August 16, 2022, is a sweeping policy that could have many potential impacts on our business which we 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 fuel ethanol, depending on the level of GHG reduction for each gallon; (2) created a new tax credit for SAF, section 40B of the Internal Revenue Code, 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 renewable corn oil or low carbon ethanol as feedstock 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 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 renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and bio-diesel 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 EVs, 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 us and our overall competitiveness. Regulatory rulemaking for the administration of these programs is underway, and the final regulations could impact many aspects of our business. On April 30, 2024, the U.S. Department of Treasury issued regulatory guidance along with an updated GREET lifecycle assessment model for the 40B SAF tax credit, which included a pathway for U.S. corn ethanol to qualify as a feedstock for SAF if the carbon intensity is lowered through utilization of various technologies and practices, including carbon capture and climate smart agriculture practices. On June 22, 2…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The IRA, which was signed into law on August 16, 2022, is a sweeping policy that could have many potential impacts on our business which we are continuing to evaluate. The legislation (1) created a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code, of $0.02 per gallon per CI point reduction for any fuel below a 50 CI threshold from 2025 to 2027, which could impact our fuel ethanol, depending on the level of GHG reduction for each gallon; (2) created a new tax credit for SAF, section 40B of the Internal Revenue Code, 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 renewable corn oil or low carbon ethanol as feedstock 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 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 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 EVs, 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 us and our overall competitiveness. Regulatory rulemaking for the administration of these programs is underway, and the final regulations could impact many aspects of our business. On April 30, 2024, the U.S. Department of Treasury issued regulatory guidance along with an updated GREET lifecycle assessment model for the 40B SAF tax credit, which included a pathway for U.S. corn ethanol to qualify as a feedstock for SAF if the carbon intensity is lowered through utilization of various technologies and practices, including carbon capture and climate smart agriculture practices. On June 22, 2…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Under the RFS, RINs impact 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. SREs can reduce or waive entirely the obligation for a refinery, which has the practical effect of reducing the RVO, and by extension the amount of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple on-going legal challenges to how the EPA has handled SREs and RFS rulemakings.

Current wording

Under the RFS, RINs impact 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. SREs can reduce or waive entirely the obligation for a refinery, which has the practical effect of reducing the RVO, and by extension the number of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple on-going legal challenges to how the EPA has handled SREs and RFS rulemakings. On October 21, 2024, the U.S. Supreme Court agreed to review the various Circuit Court rulings on SREs to determine the proper venue.

Previous wording

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. In 2022, the EPA issued emergency waivers to allow for the continued sale of E15 during the summer months and similar summertime waivers have been issued each year since then, with the 2024 driving season marking the sixth consecutive year that E15 is able to be sold year-round nationwide, with the exception of California which has not approved the fuel. The EPA has also allowed for the elimination of the One-Pound Waiver for E10 in several Midwestern states beginning with the 2025 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.

Current wording

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 subsequently declined to hear a challenge to this ruling. In 2022, the EPA issued emergency waivers to allow for the continued sale of E15 during the summer months and similar summertime waivers have been issued each year since then, with the 2024 driving season marking the sixth consecutive year that E15 is able to be sold year-round nationwide, with the exception of California which has not approved the fuel. The EPA has also allowed for the elimination of the One-Pound Waiver for E10 in several Midwestern states beginning with the 2025 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.

Previous wording

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 IRA, signed into law in 2022, provided for an additional $500 million in USDA grants for biofuel infrastructure. On June

Current wording

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 capable of dispensing higher blends of ethanol and biodiesel. In December 2021, the USDA announced it would administer another infrastructure grant program. The IRA, 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.

Previous wording

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. We employ maintenance and operations personnel at each of our facilities, which are regulated by the Occupational Safety and Health Administration.

Current wording

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.

Previous wording

There are various events that could affect comparability of our operating results, including fluctuations in our production rates in 2024 compared to 2023, along with the disposition of our Atkinson, Nebraska ethanol plant in September 2023 and losses associated with an extended shut down in spring of 2023 at a facility.

Current wording

There are various events that could affect comparability of our operating results, including fluctuations in our production rates in 2024 compared to 2023, along with the disposition of our terminal in Birmingham, Alabama, on September 30, 2024, the disposition of our Atkinson, Nebraska ethanol plant in September 2023 and losses associated with an extended shut down in spring of 2023 at a facility.

Previous wording

Corporate activities include selling, general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment.

Current wording

Corporate activities include gain on sale of assets and selling, general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment.

Previous wording

(2)Operating loss for ethanol production includes an inventory lower of average cost or net realizable value adjustment of $9.5 million for the three and six months ended June 30, 2023.

Current wording

(3)Ethanol production includes an inventory lower of average cost or net realizable value adjustment of $10.1 million and $1.7 million for the three and nine months ended September 30, 2024 and 2023, respectively.

Previous wording

We use EBITDA, adjusted EBITDA, and segment EBITDA as measures of profitability to compare the financial performance of our reportable segments and manage those segments. EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs. Adjusted EBITDA includes adjustments related to our proportional share of EBITDA adjustments of our equity method investees. We believe EBITDA, adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies. These measures should not be considered an alternative to, or more meaningful than, net income, which is prepared in accordance with GAAP. EBITDA, adjusted EBITDA, and segment EBITDA calculations may vary from company to company. Accordingly, our computation of EBITDA, adjusted EBITDA, and segment EBITDA may not be comparable with a similarly titled measure of other companies.

Current wording

We use EBITDA, adjusted EBITDA, and segment EBITDA as measures of profitability to compare the financial performance of our reportable segments and manage those segments. EBITDA is defined as earnings before interest expense, income taxes, including related income taxes of equity method investments, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs. Adjusted EBITDA includes adjustments related to other income associated with the USDA COVID-19 relief grant, gain on asset dispositions, and our proportional share of EBITDA adjustments of our equity method investees. We believe EBITDA, adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies. These measures should not be considered an alternative to, or more meaningful than, net income, which is prepared in accordance with GAAP. EBITDA, adjusted EBITDA, and segment EBITDA calculations may vary from company to company. Accordingly, our computation of EBITDA, adjusted EBITDA, and segment EBITDA may not be comparable with a similarly titled measure of other companies.

Previous wording

The following table reconciles net loss including noncontrolling interest to adjusted EBITDA (in thousands):

Current wording

The following table reconciles net income (loss) including noncontrolling interest to adjusted EBITDA (in thousands):

Previous wording

(1)Ethanol production includes an inventory lower of average cost or net realizable value adjustment of $9.5 million for the three and six months ended June 30, 2023.

Current wording

(1)Ethanol production includes an inventory lower of average cost or net realizable value adjustment of $10.1 million and $1.7 million for the three and nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Consolidated revenues decreased $474.5 million for the six months ended June 30, 2024 compared with the same period in 2023 primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil, partially offset by higher volumes sold on ethanol, distillers grains (including Ultra-High Protein) and renewable corn oil within our ethanol production segment as described below. Revenues were also lower within our agribusiness and energy services segment as a result of decreased trading volumes.

Current wording

Consolidated revenues decreased $234.0 million for the three months ended September 30, 2024 compared with the same period in 2023 primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil, as well as lower volumes sold on ethanol and distillers grains within our ethanol production segment as described below. Revenues were also lower within our agribusiness and energy services segment primarily due to lower weighted average ethanol trading prices.

Previous wording

Net loss decreased $24.3 million and adjusted EBITDA increased $20.0 million for the three months ended June 30, 2024 compared with the same period last year primarily due to higher margins in our ethanol production segment. Interest expense decreased for the three months ended June 30, 2024 compared with the same period in 2023 primarily due to lower working capital revolver balances. Income tax benefit was $0.3 million for the three months ended June 30, 2024 compared with income tax benefit of $1.0 million for the same period in 2023 primarily due to an increase in the valuation allowance recorded against certain deferred tax assets for the three months ended June 30, 2024.

Current wording

Net income increased $22.3 million for the three months ended September 30, 2024 compared with the same period last year primarily due to a gain on the sale of assets from the Birmingham Transaction and higher margins in our ethanol production segment. Adjusted EBITDA increased $10.4 million primarily due to higher margins in our ethanol production segment. Interest expense was $10.1 million for three months ended September 30, 2024 compared to $9.6 million for the same period in 2023 due to higher loan fees in connection with the repayment of the Green Plains Partners term loan. Income tax benefit, including income tax benefit from equity method investees, was $1.5 million for the three months ended September 30, 2024 compared with income tax benefit of $7.8 million for the same period in 2023 primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets for the three months ended September 30, 2023.

Previous wording

The following discussion provides greater detail about our second quarter segment performance.

Current wording

The following discussion provides greater detail about our third quarter segment performance.

Previous wording

Revenues in our ethanol production segment decreased $203.5 million for the three months ended June 30, 2024 compared with the same period in 2023, primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil resulting in decreased revenues of $203.7 million, $38.4 million and $9.5 million, respectively, partially offset by higher ethanol, distillers grain and renewable corn oil volumes sold resulting in increased revenues of $38.9 million, $6.3 million and $5.2 million, respectively. Revenues also decreased as a result of hedging activities by $1.8 million.

Current wording

Revenues in our ethanol production segment decreased $210.9 million for the three months ended September 30, 2024 compared with the same period in 2023, primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil resulting in decreased revenues of $174.5 million, $27.6 million and $15.9 million, respectively, in addition to lower ethanol and distillers grain volumes sold resulting in decreased revenues of $8.6 million and $3.1 million, respectively. Revenues also increased as a result of hedging activities by $16.2 million.

Previous wording

Cost of goods sold in our ethanol production segment decreased $224.8 million for the three months ended June 30, 2024 compared with the same period last year primarily due to lower weighted average corn prices, ethanol volumes purchased and utilities, chemicals and other costs including losses associated with an extended plant shutdown in 2023, of $172.4 million, $46.1 million and $34.6 million, respectively, partially offset by higher corn volumes processed resulting in increased costs of $31.4 million. Costs also decreased as a result of hedging activities of $3.3 million.

Current wording

Cost of goods sold in our ethanol production segment decreased $218.2 million for the three months ended September 30, 2024 compared with the same period last year primarily due to lower weighted average corn prices, ethanol volumes purchased and input costs related to natural gas of $123.3 million, $69.6 million and $23.9 million, respectively. Costs also decreased as a result of hedging activities of $9.1 million.

Previous wording

Operating loss in our ethanol production segment decreased $22.9 million for the three months ended June 30, 2024 compared with the same period in 2023 primarily due to increased margins as outlined above. Depreciation and amortization expense for the ethanol production segment was $20.5 million for the three months ended June 30, 2024, compared with $23.3 million for the same period last year.

Current wording

Operating income in our ethanol production segment increased $11.3 million for the three months ended September 30, 2024 compared with the same period in 2023 primarily due to increased margins as outlined above. Depreciation and amortization expense for the ethanol production segment was $21.4 million for the three months ended September 30, 2024, compared with $22.6 million for the same period last year.

Previous wording

Revenues in our agribusiness and energy services segment decreased $78.3 million while operating income increased $1.9 million for the six months ended June 30, 2024 compared with the same period in 2023. The decrease in revenues was primarily due to a decrease in ethanol, natural gas and distillers grains trading prices. Operating income increased primarily as a result of higher grain storage volumes.

Current wording

Revenues in our agribusiness and energy services segment decreased $23.2 million while operating income decreased $3.5 million for the three months ended September 30, 2024 compared with the same period in 2023. The decrease in revenues was primarily due to lower weighted average ethanol trading prices.

Previous wording

Intersegment eliminations of revenues was relatively consistent for the three months ended June 30, 2024 compared with the same period in 2023.

Current wording

Intersegment eliminations of revenues were consistent for the three months ended September 30, 2024 compared with the same period in 2023.

Previous wording

Consolidated revenues decreased $238.8 million for the three months ended June 30, 2024 compared with the same period in 2023 primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil, partially offset by higher volumes sold on ethanol, distillers grains and renewable corn oil within our ethanol production segment as described below. Revenues were also lower within our agribusiness and energy services segment as a result of decreased ethanol and distillers grains trading volumes.

Current wording

Consolidated revenues decreased $708.6 million for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil, partially offset by higher volumes sold on ethanol and renewable corn oil within our ethanol production segment as described below. Revenues were also lower within our agribusiness and energy services segment primarily due to lower weighted average ethanol and natural gas trading prices.

Previous wording

Net loss decreased $39.4 million for the six months ended June 30, 2024 compared with the same period last year primarily due to higher margins in our ethanol production segment, higher trading margins in our agribusiness and energy services segment and decreased depreciation expense. Adjusted EBITDA increased $26.1 million for the six months ended June 30, 2024 compared with the same period last year primarily due to higher margins in our ethanol production segment. Interest expense decreased $4.2 million for the six months ended June 30, 2024 compared with the same period in 2023 primarily due to lower working capital revolver balances. Income tax expense was $0.1 million for the six months ended June 30, 2024, compared with income tax expense of $2.4 million for the same period in 2023 primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets for the six months ended June 30, 2024.

Current wording

Net loss decreased $61.8 million for the nine months ended September 30, 2024 compared with the same period last year primarily due to higher margins in our ethanol production segment, a gain on the sale of assets from the Birmingham Transaction and decreased depreciation expense. Adjusted EBITDA increased $36.5 million for the nine months ended September 30, 2024 compared with the same period last year primarily due to higher margins in our ethanol production segment. Interest expense decreased $3.7 million for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to lower working capital revolver balances. Income tax benefit, including income tax benefit from equity method investees, was $1.4 million for the nine months ended September 30, 2024, compared with income tax benefit of $5.4 million for the same period in 2023 primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets for the nine months ended September 30, 2023.

Previous wording

Revenues in our ethanol production segment decreased $395.6 million for the six months ended June 30, 2024 compared with the same period in 2023, primarily due to lower weighted average selling prices on ethanol, distillers grains, and renewable corn oil resulting in decreased revenues of $357.3 million, $70.7 million, and $19.2 million, respectively, partially offset by higher ethanol, distillers grains (including Ultra-High Protein), and renewable corn oil volumes sold resulting in increased revenues of $38.8 million, $5.1 million and $4.7 million, respectively. Revenues also increased as a result of hedging activities by $3.0 million.

Current wording

Revenues in our ethanol production segment decreased $606.4 million for the nine months ended September 30, 2024 compared with the same period in 2023, primarily due to lower weighted average selling prices on ethanol, distillers grains, and renewable corn oil resulting in decreased revenues of $532.3 million, $97.1 million, and $35.2 million, respectively, partially offset by higher ethanol and renewable corn oil volumes sold resulting in increased revenues of $30.8 million and $6.7 million, respectively. Revenues also increased as a result of hedging activities by $19.2 million.

Previous wording

Cost of goods sold in our ethanol production segment decreased $422.7 million for the six months ended June 30, 2024 compared with the same period last year primarily due to lower weighted average corn prices resulting in $346.9 million in decreased costs, lower ethanol volumes purchased of $75.4 million, lower utilities costs of $52.7 million and lower freight costs of $6.8 million, partially offset by higher corn volumes processed resulting in increased corn costs of $31.7 million and hedging activities of $8.1 million.

Current wording

Cost of goods sold in our ethanol production segment decreased $640.9 million for the nine months ended September 30, 2024 compared with the same period last year primarily due to lower weighted average corn prices, ethanol volumes purchased and lower input costs related to natural gas resulting in decreased costs of $467.4 million, $145.1 million and $78.0 million, respectively, partially offset by higher corn volumes processed resulting in increased corn costs of $20.6 million.

Previous wording

Operating loss decreased $31.2 million for the six months ended June 30, 2024 compared with the same period in 2023 primarily due to increased margins in ethanol production as outlined above. Depreciation and amortization expense for the ethanol production segment was $41.1 million for the six months ended June 30, 2024, compared with $47.0 million for the same period last year, with the decrease primarily due to certain assets becoming fully depreciated.

Current wording

Operating loss decreased $42.5 million for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to increased margins as outlined above. Depreciation and amortization expense for the ethanol production segment was $62.5 million for the nine months ended September 30, 2024, compared with $69.6 million for the same period last year, with the decrease primarily due to certain assets becoming fully depreciated.

Previous wording

Revenues in our agribusiness and energy services segment decreased $34.9 million while operating income remained consistent for the three months ended June 30, 2024 compared with the same period in 2023. The decrease in revenues was primarily due to a decrease in ethanol and distillers grains trading prices, partially offset by an increase in natural gas trading volumes.

Current wording

Revenues in our agribusiness and energy services segment decreased $101.5 million while operating income decreased $1.6 million for the nine months ended September 30, 2024 compared with the same period in 2023. The decrease in revenues was primarily due to lower weighted average ethanol and natural gas trading prices.

Previous wording

Intersegment eliminations of revenues increased by $0.7 million for the six months ended June 30, 2024 compared with the same period in 2023 primarily due to increased corn origination fees paid to the agribusiness and energy services segment as a result of higher corn volumes processed.

Current wording

Intersegment eliminations of revenues increased by $0.7 million for the nine months ended September 30, 2024 compared with the same period in 2023 primarily due to increased corn origination fees paid to the agribusiness and energy services segment as a result of higher corn volumes processed.

Previous wording

On June 30, 2024, we had $195.6 million in cash and cash equivalents and $29.5 million in restricted cash. We also had $219.6 million available under our committed revolving credit agreement, subject to restrictions or other lending conditions. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution. At June 30, 2024, our subsidiaries had approximately $112.8 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.

Current wording

On September 30, 2024, we had $227.5 million in cash and cash equivalents and $24.5 million in restricted cash. We also had $228.5 million available under our committed revolving credit agreement, subject to restrictions or other lending conditions. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution. At September 30, 2024, our subsidiaries had approximately $92.0 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.

Previous wording

Net cash used in operating activities was $65.7 million for the six months ended June 30, 2024, compared with net cash used in operating activities of $168.4 million for the same period in 2023. Net cash used in operating activities compared to the prior year was primarily affected by a lower net loss as well as a decrease in cash used related to lower payments of accounts payables and for inventory when compared to the same period of the prior year. Net cash used in investing activities was $55.5 million for the six months ended June 30, 2024 compared with net cash used in investing activities of $57.6 million for the same period in 2023. Investing activities compared to the prior year were primarily affected by a decrease in capital expenditures partially offset by an increase in investments in equity method investments. Net cash used in financing activities was $32.4 million for the six months ended June 30, 2024 compared with net cash provided by financing activities of $85.5 million for the same period in 2023, primarily due to lower net proceeds from short-term borrowing arrangements and the extinguishment of non-controlling interest when compared to the same period in 2023.

Current wording

Net cash used in operating activities was $3.0 million for the nine months ended September 30, 2024, compared with net cash used in operating activities of $55.4 million for the same period in 2023. Net cash used in operating activities compared to the prior year was primarily affected by a lower net loss as well as a decrease in cash used for inventory when compared to the same period of the prior year. Net cash used in investing activities was $34.6 million for the nine months ended September 30, 2024 compared with net cash used in investing activities of $69.1 million for the same period in 2023. Investing activities compared to the prior year were primarily affected by proceeds from the Birmingham Transaction in addition to a decrease in capital expenditures. Net cash used in financing activities was $89.2 million for the nine months ended September 30, 2024 compared with net cash used by financing activities of $9.7 million for the same period in 2023, primarily due to the retirement of debt related to the partnership along with the extinguishment of non-controlling interest when compared to the same period in 2023.

Previous wording

We incurred net capital expenditures of approximately $39.5 million during the six months ended June 30, 2024, primarily for the clean sugar expansion project at Shenandoah and for various other capital projects. Capital spending for the remainder of 2024 is expected to be between $50.0 million and $70.0 million, which is subject to review prior to the initiation of any project. This excludes an estimated $110 million of additional expenditures related to our carbon capture and sequestration projects expected to occur in 2024 and 2025 and to be funded through project related financing. The 2024 estimate includes additional expenditures to deploy FQT's CST™ technology, as well as expenditures for various other capital projects, which are expected to be financed with cash on hand and with cash provided by operating activities.

Current wording

We incurred net capital expenditures of approximately $67.8 million during the nine months ended September 30, 2024, primarily for the clean sugar expansion project at Shenandoah and for various other capital projects. Capital spending for the remainder of 2024 is expected to be between $20.0 million and $30.0 million, which is subject to review prior to the initiation of any project. This excludes an estimated $110 million of additional expenditures related to our carbon capture and sequestration projects expected to occur in 2024 and 2025 and to be funded through project related financing. The 2024 estimate includes expenditures for various capital projects, which are expected to be financed with cash on hand and with cash provided by operating activities.

Previous wording

In August 2014 and October 2019, our board of directors authorized a share repurchase program of up to $200.0 million of our common stock. Under the program, we may repurchase shares in open market transactions, privately negotiated transactions, accelerated share buyback programs, tender offers or by other means. The timing and amount of repurchase transactions are determined by our management based on market conditions, share price, legal requirements and other factors. The program may be suspended, modified or discontinued at any time without prior notice. Since inception of the repurchase program, we have repurchased 7.4 million shares of common stock for approximately $92.8 million under the program. We did not repurchase any shares of common stock during the second quarter of 2024.

Current wording

In August 2014 and October 2019, our board of directors authorized a share repurchase program of up to $200.0 million of our common stock. Under the program, we may repurchase shares in open market transactions, privately negotiated transactions, accelerated share buyback programs, tender offers or by other means. The timing and amount of repurchase transactions are determined by our management based on market conditions, share price, legal requirements and other factors. The program may be suspended, modified or discontinued at any time without prior notice. Since the inception of the repurchase program, we have repurchased 7.4 million shares of common stock for approximately $92.8 million under the program. We did not repurchase any shares of common stock during the third quarter of 2024.

Previous wording

Green Plains Shenandoah, a wholly-owned subsidiary, has a $75.0 million secured loan agreement, which matures on September 1, 2035. During the second quarter of 2024, the agreement was modified to remove the Wood River facility from the assets considered to be secured under the loan agreement and Green Plains Wood River was removed as a counterparty to the loan agreement. At June 30, 2024, the outstanding principal balance was $72.4 million on the loan and the interest rate was 5.02%.

Current wording

Green Plains Shenandoah, a wholly-owned subsidiary, has a $75.0 million secured loan agreement, which matures on September 1, 2035. During the second quarter of 2024, the agreement was modified to remove the Wood River facility from the assets considered to be secured under the loan agreement and Green Plains Wood River was removed as a counterparty to the loan agreement. At September 30, 2024, the outstanding principal balance was $72.0 million on the loan and the interest rate was 5.52%.