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Item 5. Market for Registrant’s Common Equity

2024-03-14 compared with 2023-03-14 · 186 added, 201 removed, 209 unchanged (65% of the section changed)

Market for Registrant ’

s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The shares of our common stock are traded on the NYSE under the trading symbol “FF”.

As of March 14, 2024, there are 43,763,243 shares of our common stock outstanding.

The shares of our common stock were held by approximately 294 holders of record on March 14, 2023 as recorded on our transfer agents’

The shares of our common stock were held by approximately 294 holders of record on March 14, 2024 as recorded on our transfer agents’ register.

We believe that the number of beneficial owners of our common stock is substantially greater than the number of holders of record.

The payment of cash dividends by us is dependent upon our existing cash and cash equivalents, future earnings, capital requirements, and overall financial condition.

We declared and paid regular cash dividends for 2022 and 2021, a special dividend in 2021, and we have also declared dividends for 2023.

We declared and paid regular cash dividends for 2023 and 2022, and we have also declared dividends for 2024.

While we anticipate similar regular cash dividends after 2024, no assurances can be given that we will declare or pay dividends for years after 2024.

Additionally, during the first quarter of 2024, we declared a special cash dividend of $2.50 per share on our common stock payable on April 9, 2024, to the holders of record of all the issued and outstanding shares of common stock as of the close of business on March 26, 2024.

Securities Authorized for Issuance Under Equity Compensation Plan

Our board of directors adopted an omnibus incentive plan, which was approved by our shareholders at our 2017 annual shareholder meeting (the “Incentive Plan”).

We do not maintain any other equity compensation plan or individual equity compensation arrangement.

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The shares to be issued under the Incentive Plan were registered with the SEC on a Form S-8 filed on November 9, 2017.

Through December 31, 2022, we issued 64,000 options to purchase shares of our common stock and awarded no shares to participants under the Incentive Plan.

Following is additional information regarding the incentive plans as of December 31, 2022.

Plan Category

Through December 31, 2023, we issued 64,000 options to purchase shares of our common stock and awarded no shares to participants under the Incentive Plan.

Following is additional information regarding the incentive plans as of December 31, 2023.

Number of securities

to be issued upon

outstanding options,

warrants and rights

Weighted-average

exercise price

of outstanding

options, warrants

Number of securities

to be issued upon

exercise price of

remaining available for future

outstanding options,

issuance under equity

outstanding options,

compensation plans (excluding

warrants and rights

securities reflected in column (a))

Plan Category

Equity compensation plans approved by security holders

Performance Graph

The graph below matches the cumulative 5-Year total return of holders of the Company’s common stock with the cumulative total returns of the Russell 2000 index and a group of 26 companies grouped by SIC code (chemical industry), and customized peer group that includes:

Aemetis Inc., Albemarle Corp, Alto Ingredients Inc., Amyris Inc., Archer-Daniels-Midland Co., Arkema Sa, Bunge Ltd, Cabot Corp, Celanese Corp, Chemours Co, Darling Ingredients Inc, Dow Inc, Eastman Chemical Co, Gevo Inc, Green Plains Inc, Hudson Technologies Inc, Huntsman Corp, Kronos Worldwide Inc, Lanxess Ag, Lyondellbasell Industries Nv, Olin Corp, Rex American Resources Corp, Solvay Sa, Stepan Co, and Westlake Corp.

The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2017 and tracks it through December 31, 2022.

Recent Sales of Securities

We did not sell any of our securities within the period covered by this report in transactions that were not registered under the Securities Act.

The graph below compares the cumulative 5-Year total return to holders of the Company's common stock relative to the cumulative total returns of the Russell 2000 index and 24 companies, listed in footnote 1 below.

An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2018 and its relative performance is tracked through December 31,2023.

(1.) The 24 companies included in the company's peer group are:

Archer-Daniels-Midland Co, Arkema S.A., Albemarle Corp, Alto Ingredients Inc, Aemetis Inc, Bunge Global S.A., Cabot Corp, Chemours Co, Celanese Corp, Darling Ingredients Inc, Dow Inc, Eastman Chemical Co, Gevo Inc, Green Plains Inc, Hudson Technologies Inc, Huntsman Corp, Kronos Worldwide Inc, Lanxess A.G., Lyondellbasell Industries N.V., Olin Corp, Rex American Resources Corp, Stepan Co, Solvay S.A., and Westlake Corp.

Unregistered Sales of Equity Securities

We did not sell any of our securities within the period covered by this report in transactions that were not registered under the Securities Act.

Purchase of Securities by Us

During 2023, neither we, nor anyone acting on our behalf, purchased any shares of our common stock, which is the only class of our equity securities that is registered pursuant to Section 12 of the Exchange Act.

Management ’

s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our consolidated financial statements, including the Notes thereto, set forth herein.

On March 12, 2024, the Company’s board of directors authorized the repurchase of up to $25.0 million of Company common stock through a stock repurchase program expiring March 12, 2026.

The program could be suspended or discontinued at any time, based on market, economic, or business conditions.

The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, and other factors.

[TBR1] The ultimate language should be aligned here and in the earnings release.

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

This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance.

Actual results may differ materially from those anticipated in these forward-looking statements.

See “Forward-Looking Information”

below for additional discussion regarding risks associated with forward-looking statements.

See “Forward-Looking Information” below for additional discussion regarding risks associated with forward-looking statements.

Unless otherwise stated, all dollar amounts are in thousands.

Overview  

Our company is managed and reported in two reporting segments:

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Major products in the custom chemicals group include:

(i) consumer products (cosmetics and personal care products, specialty polymers, and specialty products used in the fuels industry) ;

(ii) chlorinated polyolefin adhesion promoters and antioxidant precursors for a customer;

and (iii) a biocide intermediate for another customer.

The custom chemicals group historically included a laundry detergent additive manufactured exclusively for a customer for use in a household detergent.

Revenues generated from the laundry detergent additive were based on a supply agreement with the customer which ended in 2020.

No further sales of such products are expected.

In addition, our supply agreement with a major multi-national life sciences company to manufacture an intermediate for a herbicide was not extended past 2020.

No further sales are anticipated.

(i) consumer products (cosmetics and personal care products, specialty polymers, and specialty products used in the fuels industry); (ii) chlorinated polyolefin adhesion promoters and antioxidant precursors for a customer; and (iii) a biocide intermediate.

Pricing for the other custom manufacturing products is negotiated directly with the customer.

Some, but not all, of these products have pricing mechanisms and/or protections against raw material or conversion cost changes.

Some, but not all, of these products have pricing mechanisms and/or protections against raw material, energy, or conversion cost changes.

Performance chemicals consist of specialty chemicals that are manufactured to general market-determined specifications and are sold to a broad customer base.

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This group of products also includes other sulfonated monomers and hydrotropes, specialty solvents, polymer additives, and chemical intermediates, such as glycerin.

SSIPA/LiSIPA revenues are generated from a diverse customer base of nylon fiber manufacturers and other customers that produce condensation polymers.

Contract sales are, in certain instances, indexed to key raw materials for inflation;

otherwise, there is no pricing mechanism or specific protection against raw material or conversion cost changes.

SSIPA/LiSIPA revenues are generated from a diverse customer base of nylon and polyester fiber manufacturers and other customers that produce condensation polymers.

Contract sales are, in certain instances, indexed to key raw materials for inflation; otherwise, there is no pricing mechanism or specific protection against raw material or conversion cost changes.

Pricing for the other performance chemical products is established based upon competitive market conditions.

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We can receive feedstock by rail or truck, and we have substantial storage capacity to acquire feedstock at advantaged prices when market conditions permit.

Our annual biodiesel production capacity is in excess of 58 million gallons per year.

Our annual biodiesel production capacity is 59 million gallons per year.

There currently is uncertainty as to whether we will produce biodiesel in the future.

This uncertainty results from changes in feedstock prices relative to biodiesel prices and the lack of permanency of government mandates including the blenders’

tax credit, the small producer’s tax credit, the renewable fuels program, and the California low carbon fuel program credits.

See “Risk Factors”

above as well as Note 3 to our consolidated financial statements.

This uncertainty results from changes in feedstock prices relative to biodiesel prices and the lack of permanency of government mandates including the BTC, the small producer’s tax credit, the CFPC (effective January 1, 2025), the renewable fuels program, and the California low carbon fuel program credits.

See “Risk Factors” above as well as Note 3 to our consolidated financial statements.

This uncertainty also results from government mandates that strengthen markets that we compete against including renewable diesel and electric vehicles.

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In addition, we deliver blended product to a small group of customers within our region.

We also sell D4 RINs from time to time.

At December 31, 2022, we had 1.5 million D4 RINs in inventory.

We also sell D4 and D6 RINs from time to time.

At December 31, 2023 we held 4.3 million RINs with a market value of $6,567 and at December 31, 2022, we held 1.5 million RINs in inventory with a market value of $2,557.

Most of our sales are FOB the Batesville plant, although some transfer points are in other states or foreign ports.

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The discussion of results of operations that follows is based on revenue and expenses in total and for individual product lines and does not differentiate related party transactions.

Fiscal Year Ended December 31, 2022  

Compared to Fiscal Year Ended December 31, 2021

Fiscal Year Ended December 31, 2023 Compared to Fiscal Year Ended December 31, 2022

Set forth below is a summary of certain financial information for the periods indicated.

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Adjusted EBITDA*

* Adjusted EBITDA for 2022 has been restated to be consistent with 2023 reporting.

Adjusted EBITDA in both years excludes the impact from unrealized gains or losses on derivatives.

Realized gains and losses are included in Adjusted EBITDA in both 2022 and 2023.

We use adjusted EBITDA as a key operating metric to measure both performance and liquidity.

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Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results as reported under GAAP.

We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization expenses, excluding, when applicable, non-cash stock-based compensation expenses, public offering expenses, acquisition-related transaction costs, purchase accounting adjustments, losses on disposal of property and equipment, gains or losses on derivative instruments, and other non-operating income or expenses.

We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization expenses, excluding, when applicable, non-cash stock-based compensation expenses, public offering expenses, acquisition-related transaction costs, purchase accounting adjustments, losses on disposal of property and equipment, unrealized gains or losses on derivative instruments, and other non-operating income or expenses.

Information relating to adjusted EBITDA is provided so that investors have the same data that we employ in assessing the overall operation and liquidity of our business.

Our calculation of adjusted EBITDA may be different from similarly titled measures used by other companies;

therefore, the results of our calculation are not necessarily comparable to the results of other companies.

Our calculation of adjusted EBITDA may be different from similarly titled measures used by other companies; therefore, the results of our calculation are not necessarily comparable to the results of other companies.

Adjusted EBITDA allows our chief operating decision makers to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures and to pay dividends.

In particular, our management believes that adjusted EBITDA permits a comparative assessment of our operating performance and liquidity, relative to a performance and liquidity based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among our operating segments without any correlation to their underlying operating performance, and of non-cash stock-based compensation expense, which is a non-cash expense that varies widely among similar companies, and gains and losses on derivative instruments, which can cause net income to appear volatile from period to period relative to the sale of the underlying physical product.

In particular, our management believes that adjusted EBITDA permits a comparative assessment of our operating performance and liquidity, relative to a performance and liquidity based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among our operating segments without any correlation to their underlying operating performance, and of non-cash stock-based compensation expense, which is a non-cash expense that varies widely among similar companies, and unrealized gains and losses on derivative instruments, which can cause net income to appear volatile from period to period relative to the sale of the underlying physical product.

We enter into commodity derivative instruments to protect our operations from downward movements in commodity prices and to provide greater certainty of cash flows associated with sales of our commodities.

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Thus, our results in any given period can be impacted, and sometimes significantly, by changes in market prices relative to our contract price along with the timing of the valuation change in the derivative instruments relative to the sale of biofuel.

We include this item as an adjustment as we believe it provides a relevant indicator of the underlying performance of our business in a given period.

The following table reconciles adjusted EBITDA with net income, the most directly comparable GAAP financial measure. 

We include the unrealized gains and losses on the derivative instruments as an adjustment as we believe it provides a relevant indicator of the underlying performance of our business in a given period.

The following table reconciles adjusted EBITDA with net income, the most directly comparable GAAP financial measure.

(Dollars in thousands)

Twelve months ended December 31:

Years ended December 31:

Non-cash stock-based compensation

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Loss on disposal of property and equipment

Loss on derivative instruments

Loss on marketable securities

Income tax benefit

Unrealized gain on derivative instruments

(Gain) loss on marketable securities

Income tax provision (benefit)

Adjusted EBITDA*

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(Dollars in thousands)

Twelve months ended December 31:

Years ended December 31:

Net cash provided by operating activities

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Interest and dividend income

Income tax benefit

Loss on derivative instruments

Change in fair value of derivative instruments

Income tax provision (benefit)

Changes in operating assets and liabilities, net

Other non-operating income

Impairment of intangible asset

Other non-operating (income) expense

Adjusted EBITDA*

Results  

* Adjusted EBITDA for 2022 has been restated to be consistent with 2023 reporting.

Adjusted EBITDA in both years excludes the impact from unrealized gains or losses on derivatives.

Realized gains and losses are included in Adjusted EBITDA in both 2022 and 2023.

Results of Operations

2023 Compared to 2022:

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Operating expense

Other expense (income)

Other (income) expense

Pretax income

Income tax benefit

Income tax provision (benefit)

2023 Compared to 2022

Consolidated sales revenue increased 23.2% or $74,628 in 2022 compared to 2021 primarily from higher average sales prices in the biofuel segment and, to a lesser extent, in the chemical segment.

Consolidated sales revenue decreased 7.0% or $27,764 in 2023 compared to 2022 primarily from lower average sales prices in the biofuel segment ($71,198) and, to a lesser extent, in the chemical segment ($1,916).

This decrease was partially offset by higher biodiesel sales volumes in the biofuel segment ($44,994).

Gross profit increased 41.3% or $11,986 in 2023 compared to 2022.

This comparative increase was primarily attributable to improved margins in both the biofuel and chemical segments inclusive of (i) the change in the realized activity of derivative instruments in comparison to the prior year with a gain of $694 as compared to a loss of $24,703 in the prior year;

the prior year loss included an unfavorable impact of volatility in the NYMEX heating oil futures market of $10,500 and (ii) the change in the unrealized activity of derivative instruments in comparison to the prior year with a gain of $1,878 in the current year and a gain of $343 in the prior year.

Also contributing to this improved margin was the benefit from the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting which increased gross profit $10,334 in 2023 and decreased gross profit $3,944 in 2022 (net of a liquidation of $1,850 from exiting the pipeline business).

Operating expenses increased $2,164 in 2023 compared to 2022.

This increase was primarily the result of increased compensation expense.

Other income was $10,015 in 2023 as compared to other expenses of $3,808.

During 2023, we exited our position in marketable securities and transferred the funds to interest earning deposits.

As a result, interest and dividend income increased $4,707 in 2023 as compared to 2022.

The net realized gain on the sale of marketable securities was $575 in 2023 as compared to an unrealized loss of $8,546 in 2022 (see Note 7 of our consolidated financial statements for further details).

Income tax provision (benefit)

The income tax provision was $1 in 2023 or an effective tax rate of 0.0% as compared to a benefit in 2022 of ($1,473) or an effective tax rate of (10.7%).

The Company’s effective tax rates for the years 2023 and 2022 reflect the positive effect of certain tax credits and incentives, the most significant of which are the BTC and the Small Agri-biodiesel Producer Tax Credit.

Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income.

See Note 3 to our consolidated financial statements for a discussion of the pretax earnings impact of the BTC.

The Company’s effective tax rate for 2023 and 2022 includes an expense of $6,821 or 18.2% and $7,392 or 53.8%, respectively, from the recording of a valuation allowance against its deferred tax assets.

The Company evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized.

As of December 31, 2023, based on all available and allowable evidence, the Company determined that its deferred tax assets are more likely than not realizable only to the extent of its deferred tax liabilities and recorded the resulting valuation allowance.

The Company’s unrecognized tax benefit totaled $0 at December 31, 2023 and 2022.

2022 Compared to 2021

Consolidated sales revenue increased 23.2% or $74,628 in 2022 compared to 2021 primarily from higher average sales prices in the biofuel segment and, to a lesser extent, in the chemical segment.

This increase was reduced in part by lower sales volumes primarily in the biofuels segment and, to a lesser extent, in the chemicals segment.

Gross profit increased 23.2% or $5,456 in 2022 compared to 2021.

Gross profit increased 23.2% or $5,456 in 2022 compared to 2021.

This comparative increase was primarily attributable to:

(i) improved margins in the chemical segment, and (ii) the prior year was unfavorably impacted by significantly atypical natural gas prices incurred in February 2021 from Winter Storm Uri.

Partially offsetting this improvement in gross profit was the unfavorable change in the realized and unrealized activity of derivative instruments which resulted in a reduction in gross profit of $24,360 in 2022, as compared to a reduction in gross profit in 2021 by $10,377.

The comparative unfavorable change was primarily from the unprecedented volatility in the NYMEX heating oil futures market.

Operating expenses increased $808 in 2022 compared to 2021.

Operating expenses increased $808 in 2022 compared to 2021.

This increase was primarily the result of increased compensation expense.

Other expense increased $6,840 from 2022 primarily from realized and unrealized losses on equity securities with a loss of $8,546 in 2022 as compared to a loss of $70 in 2021 (see Note 7 of our consolidated financial statements for further details).

Income tax benefit  

The income tax benefit in 2022 was $1,473 or an effective tax rate of (10.7%) as compared to a benefit in 2021 of $10,325 or an effective tax rate of (64.8%). 

The Company’s effective tax rates for the years 2022 and 2021 reflect the positive effect of certain tax credits and incentives, the most significant of which are the BTC and the Small Agri-biodiesel Producer Tax Credit.

Other expense increased $6,840 from 2022 primarily from realized and unrealized losses on equity securities with a loss of $8,546 in 2022 as compared to a loss of $70 in 2021.

Income tax benefit (provision)

The income tax benefit in 2022 was $1,473 or an effective tax rate of (10.7%) as compared to a benefit in 2021 of $10,325 or an effective tax rate of (64.8%).

The Company’s effective tax rates for the years 2022 and 2021 reflect the positive effect of certain tax credits and incentives, the most significant of which was the BTC and the Small Agri-biodiesel Producer Tax Credit.

Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income.

See Note 3 to our consolidated financial statements for a discussion of the pretax earnings impact of the BTC.

The Company’s effective tax rate for 2022 includes an expense of $7,392 or 53.8% from the recording of a valuation allowance against its deferred tax assets.

The Company evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized.

As of December 31, 2022, based on all available and allowable evidence, the Company determined that its deferred tax assets are more likely than not realizable only to the extent of its deferred tax liabilities and recorded the resulting valuation allowance.

The Company’s unrecognized tax benefit totaled $0 at December 31, 2022 and 2021.

Compared to 2020

Consolidated sales revenue increased 57.2% or $116,881 in 2021 compared to 2020.

This increase primarily resulted from higher average sales prices in the biofuel segment reduced in part by lower sales volumes in both the biofuels and chemicals segment.

Gross profit decreased 24.8% or $7,770 in 2021 compared to 2020.

This decrease was primarily attributable to exorbitant natural gas prices incurred in February from Winter Storm Uri and the absence of two chemical contracts which expired in 2020. 

Partially improving gross profit in the same comparative period was higher margins on biodiesel inclusive of the change the realized and unrealized activity of derivative instruments which resulted in a reduction in gross profit in 2021 by $10,377, as compared to an increase in gross profit of $4,379 in 2020.

Operating expenses increased $1,671 in 2021 compared to 2020.

This increase was primarily the result of an impairment of intangible assets in 2021 (See Note 10 of our consolidated financials for details) and higher research and development expense primarily for the benefit of GMP.

Other income decreased $6,407 in 2021 primarily from non-operating income recognized in 2020 of $8,350. Partially improving other income was the absence of realized and unrealized losses on equity securities in 2021 as compared to 2020 (see Note 7 of our consolidated financial statements).

Income tax benefit  

The income tax benefit in 2021 was $10,325 or an effective tax rate of (64.8%) as compared to a benefit in 2020 of $14,786 or an effective tax rate of  (46.5%).

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (Pub.L.

116-136) (“CARES Act”).

The CARES Act, among other things, provides that Net Operating Losses (“NOLs”) arising in a taxable year beginning after December 31, 2017 and before January 1, 2021 shall be treated as a carryback available to offset 100% of taxable income in each of the 5 preceding taxable years unless the taxpayer elects to forego the carryback.

The Company’s effective tax rate for the year 2020 was positively impacted by its ability to carry back both its 2019 and 2020 federal NOLs in full to tax years with 35% marginal tax rates, rather than forward to years with anticipated 21% tax rates.

In the fourth quarter of 2020, the Company filed a refund claim of $7,695 and accrued an additional refund claim of $1,211, subsequently filed in January 2021, relating to the carryback of its NOL generated in 2019.

Refunds in the amount of $7,695 were subsequently received in 2021;

the $1,211 remains outstanding as of December 31, 2021.

In the fourth quarter of 2021, the Company filed a refund claim of $8,463 relating to the carryback of its NOL generated in 2020.

None of these refunds have been received as of December 31, 2021.

States in which the Company conducts the majority of its business have not conformed to the CARES Act’s enhanced NOL carryback provisions, and the anticipated benefits of these state NOL carryforwards are accordingly classified as deferred tax assets.

The Company’s effective tax rates for the years 2021 and 2020 reflect the positive effect of certain tax credits and incentives, the most significant of which are the BTC and the Small Agri-biodiesel Producer Tax Credit.

Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income.

See Note 3 for a discussion of the pretax earnings impact of the BTC.

The Company’s unrecognized tax benefit totaled $0 at December 31, 2021 and 2020.

The Company’s unrecognized tax benefit totaled $0 at December 31, 2022 and 2021.

Chemicals Segment

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2023 Compared to 2022

Chemical sales revenue increased 19.8% or $13,351 in 2022 compared with 2021.

Chemical sales revenue decreased 1.9% or $1,560 in 2023 compared with 2022.

Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $64,286, an increase of 9.4% or $5,549 from 2022.

Included in this net increase was higher sales volumes of chemical intermediates in the oil and gas industry and contractual price increases partially offset by reduced amortization of deferred revenue of $3,081 (see Note 4 of our consolidated financial statements for further details).

Performance chemicals revenue (comprised of multi-customer products which are sold based on specification) was $15,047 in 2023, a decrease of 32.1% or $7,109 from 2022.

This decrease resulted from lower selling prices of our glycerin products partially offset by higher volumes.

Gross profit for the chemicals segment increased 16.7% or $4,291 in 2023 compared with 2022.

This improvement was primarily from the change in adjustments in the carrying value of our inventory as determined utilizing the last-in, first-out (“LIFO”) method of inventory accounting which increased gross profit $1,920 in 2023 and decreased gross profit $1,093 in 2022.

Also contributing to this increase was stronger margins and higher sales volumes in products sold into the oil and gas industry.

Partially reducing these improvements was the change in the timing of deferred revenue amortization of $3,081 and lower margins from glycerin products on reduced selling price from increased imports.

2022 Compared to 2021

Chemical sales revenue increased 19.8% or $13,351 in 2022 compared with 2021.

Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $58,737, an increase of 15.9% or $8,062 from 2021.

This increase was primarily from higher sales volumes of chemical intermediates in the oil and gas industry.

Performance chemicals revenue (comprised of multi-customer products which are sold based on specification) was $22,156 in 2022, an increase of 31.4% or $5,289 from 2021.

Performance chemicals revenue (comprised of multi-customer products which were sold based on specification) was $22,156 in 2022, an increase of 31.4% or $5,289 from 2021.

This increase resulted from higher selling prices of our glycerin products partially offset by lower volumes of polymer modifiers.

Gross profit for the chemicals segment increased 83.6% or $11,675 in 2022 compared with 2021.

This increase resulted primarily from stronger margins and higher sales volumes in products sold into the oil and gas industry and glycerin markets.

In addition, the prior year gross profit was negatively impacted from higher natural gas prices incurred from Winter Storm Uri.

Compared to 2020

Chemical sales revenue decreased 14.7% or $11,636 in 2021 compared with 2020.

Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $50,675, a decrease of 20.7% or $13,219 from 2020.

This decrease was primarily driven by the loss of two products we no longer sell partially offset by increased volumes of other custom chemicals.

Performance chemicals revenue (comprised of multi-customer products which are sold based on specification) was $16,867 in 2021, an increase of 10.4% or $1,583 from 2020.

This increase resulted from higher selling prices of our glycerin products.

Gross profit for the chemicals segment decreased 45.3% or $11,548 in 2021 compared with 2020.

This decrease resulted primarily from: (i) the loss of two custom chemical products we no longer sell;

(ii) the impact of higher natural gas prices incurred during Winter Storm Uri in February 2021;

and (iii) increased material cost driven by inflation and the supply chain disruption caused by the COVID-19 pandemic and the responses to it.

Gross profit for the chemicals segment increased 83.6% or $11,675 in 2022 compared with 2021.

This increase resulted primarily from stronger margins and higher sales volumes in products sold into the oil and gas industry and glycerin markets.

In addition, the prior year gross profit was negatively impacted from higher natural gas prices incurred from Winter Storm Uri.

Biofuel Segment

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2023 Compared to 2022

Biofuels sales revenue increased 24.1% or $61,277 in 2022 compared to 2021, primarily from increased selling prices of biodiesel and biodiesel blends, inclusive of separated RIN sales.

Sales revenue declined in part on lower sales volumes as margins narrowed from the prior year.

A portion of our biodiesel sold was to two major refiners in the United States in 2022 as compared with three major refiners in 2021.

Biofuels sales revenue decreased 8.3% or $26,204 in 2023 compared to 2022, primarily from decreased selling prices of biodiesel and biodiesel blends, inclusive of a decline in separated RIN sale prices.

RIN prices declined during 2023 as production levels exceeded the renewable volume obligations set by the EPA.

A portion of our biodiesel sold was to two major refiners in the United States in 2023 and 2022.

No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize.

We do not believe that the loss of this customer would have a material adverse effect on our biofuels segment or on us as a whole in that:

(i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base;

(ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity;

(iii) our sales to this customer are not under fixed terms and the customer has no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders;

and (iv) the prices we receive from this customer are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Biofuels gross profit decreased 65.0% or $6,219 in 2022 compared to 2021.

Gross profit primarily decreased due to the unprecedented volatility in the heating oil futures market which resulted in a basis risk loss of $10,500 and lower sales volumes.

Partially improving gross profit was (i) the change in adjustments in the carrying value of our inventory as determined utilizing the last-in, first-out (“LIFO”) method of inventory accounting reduced gross profit $9,921 in 2021 as compared to $5,794 in 2022, (ii) the liquidation effect of exiting the pipeline business, which increased profits $1,851 in 2022, and (iii) 2021 gross profit was unfavorably impacted by higher natural gas prices incurred from Winter Storm Uri.

(i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base; (ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity; (iii) our sales to this customer are not under fixed terms and the customer has no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders; and (iv) the prices we receive from this customer are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Biofuels gross profit increased $7,695 in 2023 compared to 2022.

Gross profit primarily increased from the prior year from:

(i) the change in the realized activity of derivative instruments in comparison to the prior year with a gain of $694 as compared to a loss of $24,360 in the prior year;

the prior year was unfavorably impacted by the volatility in the NYMEX heating oil futures market which generated realized losses of $10,500 and (ii) the change in the unrealized activity of derivative instruments in comparison to the prior year with a gain of $1,878 in the current year and a gain of $343 in the prior year.

Also improving gross profit was the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting increased gross profit $8,414 in 2023 as compared to a decrease in gross profit of $5,794 in 2022.

In 2022, the liquidation effect of exiting the pipeline business increased gross profit $1,851 in 2022;

no such liquidation occurred in 2023.

2022 Compared to 2021

Biofuels sales revenue increased 102.5% or $128,517 in 2021 compared to 2020, primarily from increased selling prices of biodiesel and biodiesel blends, inclusive of separated RIN sales.

Sales revenue declined in part on lower sales volumes as a result of Winter Storm Uri in February 2021 with its after effects in bringing the plant back to normal operations.

A portion of our biodiesel sold was to three major refiners in the United States in 2021 as compared with one major refiner in 2020.

Biofuels sales revenue increased 24.1% or $61,277 in 2022 compared to 2021, primarily from increased selling prices of biodiesel and biodiesel blends, inclusive of separated RIN sales.

Sales revenue declined in part on lower sales volumes as margins narrowed from the prior year.

A portion of our biodiesel sold was to two major refiners in the United States in 2022 as compared with three major refiners in 2021.

No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize.

We do not believe that the loss of this customer would have a material adverse effect on our biofuels segment or on us as a whole in that:

(i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base;

(ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity;

(iii) our sales to this customer are not under fixed terms and the customer has no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders;

and (iv) the prices we receive from this customer are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Biofuels gross profit increased 65.3% or $3,778 in 2021 compared to 2020.

Gross profit primarily increased due to improved profit margins experienced in the petroleum and renewable industry.

The comparative margins in 2020 were weakened from the effects of the COVID-19 pandemic on the transportation market.

Partially reducing gross profit in 2021 was the change in the realized and unrealized activity of derivative instruments in comparison to the prior year with a loss of $10,377 as compared to a gain of $4,379 in 2020.

Biofuels gross profit decreased 65.0% or $6,219 in 2022 compared to 2021.

Gross profit primarily decreased due to the unprecedented volatility in the heating oil futures market which resulted in a basis risk loss of $10,500 and lower sales volumes.

Partially improving gross profit was (i) the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting reduced gross profit $9,921 in 2021 as compared to $5,794 in 2022, (ii) the liquidation effect of exiting the pipeline business, which increased profits $1,851 in 2022, and (iii) 2021 gross profit was unfavorably impacted by higher natural gas prices incurred from Winter Storm Uri.

Critical Accounting Policies and Estimates

Useful Lives of Property, Plant, and Equipment

We primarily base our estimate of an asset’s useful life on our experience with other similar assets.

The actual useful life of an asset may differ significantly from our estimate for such reasons as the asset’s build quality, the manner in which the asset is used, or changes in the business climate.

We primarily base our estimate of an asset’s useful life on our experience with other similar assets.

We monitor the estimated useful lives of our assets.

Depreciation is provided for using the straight-line method over the associated asset’s estimated useful lives.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , when performance obligations of the customer contract are satisfied.

We sell to customers through master sales agreements or standalone purchase orders.

The majority of our revenue is from short-term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer is satisfied.

Accordingly, we recognize revenue when control is transferred to the customer, which is when products are considered to meet customer specification per the customer contract and title and risk of loss are transferred.

The majority of our revenue is from short-term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer is satisfied.

Accordingly, we recognize revenue when control is transferred to the customer, which is when products are considered to meet customer specification per the customer contract and title and risk of loss are transferred.

This typically occurs at the time of shipment or delivery;

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We sell products directly to customers generally under agreements with payment terms of 30 to 75 days for chemical segment customers and 2 to 10 days for biofuels segment customers.

Certain long-term contracts have an upfront non-refundable payment considered a material right.

The Company applies the renewal option approach in allocating the transaction price to the material right.

Certain long-term contracts have an upfront non-refundable payment considered a material right.

The Company applies the renewal option approach in allocating the transaction price to the material right.

For each of these contracts, the Company estimated the expected contractual term and expected volumes to be sold at the most likely expected sales price as a basis for allocating the transaction price to the material right.

Each estimate is updated quarterly on a prospective basis.

Each estimate is updated quarterly on a prospective basis.

These custom chemical contracts have payment terms of 30 days.

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Biodiesel selling prices can at times fluctuate based on the timing of unsold, internally generated RINs.

From time to time, sales of biodiesel are on a “RINs-free”

From time to time, sales of biodiesel are on a “RINs-free” basis.

Such method of selling results in applicable RINs being held.

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Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred.

Bill-and-hold transactions for 2022 and 2021 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer.

Bill-and-hold transactions for 2023 and 2022 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer.

These sales were subject to written monthly purchase orders with agreement that production was reasonable.

The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer.

Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers.

Sales revenue under bill-and-hold arrangements were $36,805, $34,655, and $32,779 for the years ended December 31, 2022, 2021, and 2020, respectively.

At December 31, 2022 and 2021, $4,473 and $3,154, respectively, was included in revenue for products that had not shipped.

The latter amounts do not include Contract Assets of $775 and $362 that have not been billed nor shipped at December 31, 2022 and 2021, respectively.

Sales revenue under bill-and-hold arrangements were $43,766, $36,805, and $34,695 for the years ended December 31, 2023, 2022 and 2021, respectively.

At December 31, 2023 and 2022, $4,317 and $4,473, respectively, was included in revenue for products that had not shipped.

The latter amounts do not include Contract Assets of $734 and $775 that have not been billed nor shipped at December 31, 2023 and 2022, respectively.

Taxes collected from customers and remitted to governmental authorities are recorded on a net basis within cost of goods sold.

Shipping and handling fees related to sales transactions were billed to customers and recorded as sales revenue.

The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for (benefit from) income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. 

The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes.

Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.

The provision for (benefit from) income taxes represent income taxes paid or payable for the current year plus the change in deferred taxes during the year.

Deferred taxes result from differences between the financial and tax bases of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

A tax valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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In making this determination, the Company considers positive evidence in the form of projections of future taxable income, reversing temporary differences, and tax planning strategies.

In years in which the Company has experienced objective negative evidence in the form of three cumulative years of tax losses, the Company no longer uses taxable income projections to overcome the presumption of losses and deferred tax asset valuations are computed taking into account tax planning strategies and the reversing net deferred tax liability as a source of income. 

In years in which the Company has experienced objective negative evidence in the form of three cumulative years of tax losses, the Company no longer uses taxable income projections to overcome the presumption of losses and deferred tax asset valuations are computed taking into account tax planning strategies and the reversing net deferred tax liability from temporary differences as sources of income.

The Company recognizes income tax positions that meet the more likely than not threshold and accrues interest related to unrecognized income tax positions which is recorded as a component of the income tax provision.

Liquidity and Capital Resources

Our net cash provided by (used in) operating activities, investing activities, and financing activities for the years ended December 31, 2022, 2021, and 2020 are set forth in the following table.

(Dollars in thousands) 

Our net cash provided by (used in) operating activities, investing activities, and financing activities for the years ended December 31, 2023, 2022 and 2021 are set forth in the following table.

(Dollars in thousands)

Net cash provided by operating activities

Net cash (used) provided by investing activities

Net cash provided by (used in) investing activities

Net cash used in financing activities

Operating Activities

Cash provided by operating activities increased in 2022 to $52,451 from $44,084 in 2021, a net increase of $8,367.

This increase was attributed to the change in (i) accounts receivable, including accounts receivable - related parties, of $9,731 and (ii) accounts payable, including accounts payable-related parties, of $4,656.

Primarily offsetting the increase in cash from operations was the increase of $6,807 in inventory in 2022 compared to 2021.

Cash provided by operating activities decreased in 2023 to $23,985 from $52,451 in 2022, a net decrease of $28,466.

This decrease was attributed to the change in accounts receivable, including accounts receivable - related parties, of $98,602.

The BTC increased cash from accounts receivable in 2020 by $97,295. Additionally, net income decreased in 2021 compared to 2020 by $20,309.

Primarily offsetting the decrease in cash from operations was the increase in accounts payable, including accounts payable –

related parties, of $57,932, $39,423 of which was rebates owed to customers for the BTC.

This decrease was attributed to the change in (i) accounts payable, including accounts payable - related parties, of $27,928, (ii) fair value of equity securities of $11,414 with the sale of marketable securities, (iii) income taxes receivable of $7,773, and (iv) inventory of $6,379.

Partially offsetting the decrease in cash from operations was the increase of $22,137 in net income in 2023 compared to 2022.

Cash provided by operating activities increased in 2022 to $52,451 from $44,084 in 2021, a net increase of $8,367.

This increase was attributed to the change in (i) accounts receivable, including accounts receivable - related parties, of $9,731 and (ii) accounts payable, including accounts payable-related parties, of $4,656.

Primarily offsetting the increase in cash from operations was the increase of $6,807 in inventory in 2022 compared to 2021.

Investing Activities

Cash used by investing activities was $3,829 in 2022 compared to cash provided by investing activities of $14,993 in 2021 for a net decrease in cash of $18,822.

This decrease was primarily attributable to sales of marketable securities in 2022 of $1,292 compared to the net sales of marketable securities in 2021 of $17,106.

Cash provided by investing activities was $30,336 in 2023 compared to cash used by investing activities of $3,829 in 2022 for a net increase in cash of $34,165.

This increase was primarily attributable to the sale of marketable securities in 2023 of $37,701 compared to sales of marketable securities in 2022 of $1,292.

Increased capital expenditures decreased cash from investing activities by $1,244.

Cash provided by investing activities was $14,993 in 2021 compared to $474 in 2020 for a net increase in cash from investing activities of $14,519.

This increase was primarily attributable to a $12,376 increase in the net sales of marketable securities in 2021 compared to the net sales of marketable securities in 2020.

Such net sales totaled $17,106 in 2021, as compared to total net sales of $4,730 in 2020.

Reduced capital expenditures increased cash from investing activities by $3,008.

Cash used by investing activities was $3,829 in 2022 compared to cash provided by investing activities of $14,993 in 2021 for a net decrease in cash of $18,822.

This decrease was primarily attributable to sales of marketable securities in 2022 of $1,292 compared to the net sales of marketable securities in 2021 of $17,106.

Increased capital expenditures decreased cash from investing activities by $3,322.

Financing Activities

Cash used in financing activities decreased to $10,503 in 2022, from $119,678 in 2021, a net increase of $109,175.

This increase resulted from the payment of special cash dividends in 2021 of $109,408 compared to $0 in 2022.

Cash used in financing activities decreased from $142,086 in 2020 to $119,678 in 2021, a net decrease of $22,408.

This decrease resulted from the payment of special dividends in 2021 of $109,408 compared to the payment of special dividends in 2020 of $131,230.

Cash used in financing activities was $10,517 in 2023, primarily from the payment of dividends of $10,503.

Cash used in financing activities decreased to $10,503 in 2022, from $119,678 in 2021, a net decrease of $109,175.

This decrease resulted from the payment of special cash dividends in 2021 of $109,408 compared to $0 in 2022.

Capital Expenditure Commitments

We had $1,515 of infrastructure capital repair projects that generated commitments as of December 31, 2022.

We had $560 of infrastructure capital repair projects that generated commitments as of December 31, 2023.

Historically, we finance capital requirements for our business with cash flows from operations and have not had the need to incur bank indebtedness to finance any of our operations during the periods discussed herein.

Credit Facility

On March 30, 2020, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 (as amended, the “Prior Credit Agreement”) with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent.

The Credit Agreement consists of a five-year revolving credit facility in a dollar amount of up to $100,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”).

The Credit Facility expires on March 30, 2025.

The primary amendments from the Prior Credit Agreement were a reduction in the facility’s credit limit by $65,000, a reduction in the facility’s applicable interest rate by 0.25%, a reduction in the commitment fee, and elimination of the minimum consolidated fixed charge coverage ratio.

We will be permitted to use net proceeds of any borrowings under the Credit Facility for working capital and other general corporate purposes.

No borrowings were made under the Credit Agreement or the Prior Credit Agreement as of December 31, 2023 and 2022.

See Note 13 of the consolidated financial statements for additional information regarding our Credit Agreement.

See Note 13 of the consolidated financial statements for additional information regarding our Credit Agreement.

The Credit Facility contains certain affirmative and negative covenants, including negative covenants that limit or restrict, among other things, indebtedness, liens and encumbrances, dividends, burdensome agreements, mergers and fundamental changes, assets sales, investments, transactions with affiliates, changes in fiscal years, and other matters customarily restricted in such agreements.

On March 1, 2023, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”).

The First Amendment primarily amends the Credit Agreement to transition the Credit Facility from LIBOR to SOFR and to reflect other conforming changes, in each case as more specifically set forth in the First Amendment.

 The First Amendment does not modify the aggregate amount, or expiration date, of the Credit Facility.

We do not expect the transition from LIBOR to have a material impact on the Credit Facility.

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We do not expect the transition from LIBOR to have a material impact on the Credit Facility or any new agreement we might enter into.

Consolidated Leverage Ratio

Adjusted SOFR

Consolidated Leverage Ratio

and Letter of Credit Fee

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Commitment Fee

≥ 1.00:1.0 And < 1.50:1.0

≥ 1.50:1.0 And < 2.00:1.0

≥ 2.00:1.0 And < 2.50:1.0

Certain of our subsidiaries have entered into guarantees of payment on behalf of the Company for amounts outstanding under the Credit Facility.

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In 2023, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed.

The regular cash dividends totaled $10,503.

The regular cash dividends declared in 2023 totaled $10,503 to be paid in 2024.

In 2022, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed.

The regular cash dividends totaled $10,498.

On May 10, 2021, we also declared a special cash dividend of $2.50 per share on our common stock.

This special cash dividend paid on June 4, 2021, amounted to $109,408.

Total cash dividends paid in 2021 were $119,906.

The regular cash dividends declared in 2022 totaled $21,006;

$10,503 paid in 2022 and $10,503 paid in 2023.

In 2021, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed.

The regular cash dividends totaled $10,498.

On March 23, 2020, we also declared a special cash dividend of $3.00 per share on our common stock.

This special cash dividend paid on April 17, 2020, amounted to $131,230.

On May 10, 2021, we also declared a special cash dividend of $2.50 per share on our common stock.

This special cash dividend paid on June 4, 2021, amounted to $109,408.

Total cash dividends paid in 2021 were $119,906.

On December 3, 2020, we declared normal quarterly dividends of $0.06 per share on our common stock with record dates and payment dates as previously discussed.

Dividends declared, but not paid, were accrued at December 31, 2020.

Capital Management

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A significant portion of these funds were held in cash or cash equivalents at multiple financial institutions.

In 2022 and 2021, we also had investments in certain preferred stock and other equity instruments measured at fair value and changes in fair value recognized in net income.

We also hold certain trust preferred securities.

We classify these investments as current assets in the accompanying consolidated balance sheets and designate them as being “available-for-sale”.

Accordingly, they are recorded at fair value with the unrealized gains and losses, net of taxes, reported as a component of stockholders’

The fair value of these preferred stock, trust preferred securities, and other equity instruments, including accrued dividends and interest, totaled $37,126 and $47,190 as of December 31, 2022 and 2021, respectively.

The unrealized losses on equity securities were $8,297 and $904 for December 31, 2022 and 2021, respectively.

In the first six months of 2023 and the twelve months of 2022, we also had investments in certain preferred stock and other equity instruments measured at fair value and changes in fair value recognized in net income.

We also held certain trust preferred securities.

We classified these investments as current assets in the accompanying consolidated balance sheets and designate them as being “available-for-sale”.

Accordingly, they were recorded at fair value with the unrealized gains and losses, net of taxes, reported as a component of stockholders’ equity.

We exited our position in these marketable securities during 2023.

The fair value of these preferred stock, trust preferred securities, and other equity instruments, including accrued dividends and interest, totaled $0 and $37,126 as of December 31, 2023 and 2022, respectively.

The unrealized losses on equity securities were $0 and $8,297 as of December 31, 2023 and 2022, respectively.

Lastly, we maintain depository accounts such as checking accounts, money market accounts, and other similar accounts at selected financial institutions.

As of December 31, 2023, approximately 55% of these deposits were insured by the Federal Deposit Insurance Corporation.

Off-Balance Sheet Arrangements

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First, we hedge our biofuels sales through the purchase and sale of futures contracts and options on futures contracts of energy commodities.

This activity was captured on our consolidated balance sheets at December 31, 2022 and 2021.

This activity was captured on our consolidated balance sheets at December 31, 2023 and 2022.

Second, we hedge our biofuels feedstock through the execution of purchase contracts and supply agreements with certain vendors which meet the normal purchase and normal sales exception of ASC 815 Derivatives and Hedging .

These hedging transactions are recognized in earnings and do not qualify as a hedge accounting treatment on our consolidated balance sheets at December 31, 2022 or 2021, as they do not meet the definition of a hedge instrument as defined under GAAP.

These hedging transactions are recognized in earnings and do not qualify as a hedge accounting treatment on our consolidated balance sheets at December 31, 2023 or 2022, as they do not meet the definition of a hedge instrument as defined under GAAP.

The purchase of biofuels feedstock generally involves two components:

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More than 5 years

A component of other noncurrent liabilities is a reserve for asset retirement obligations and environmental contingencies of $1,396 at December 31, 2022.

A component of other noncurrent liabilities is a reserve for asset retirement obligations and environmental contingencies of $1,431 at December 31, 2023.

We are liable for these asset retirement obligations and environmental contingencies only in certain events, primarily the closure of our Batesville, Arkansas facility.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity