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Item 7. Management’s Discussion and Analysis

2025-02-07 compared with 2024-02-09 · 182 added, 196 removed, 370 unchanged (51% of the section changed)

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Green Plains is an Iowa corporation, founded in June 2004 as a producer of low-carbon fuels and has grown to be a leading biorefining company maximizing the potential of existing resources through fermentation and patented agribusiness technologies.

We continue the transition from a commodity-processing business to a value-added agricultural technology company creating sustainable, high-value ingredients from existing resources.

To that end, we are currently executing on a number of initiatives to develop and implement proven agricultural, food and industrial biotechnology systems that allow for product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as Ultra-High Protein, dextrose, renewable corn oil and more, as well as offering these technologies to the broader biofuels industry.

Green Plains Partners LP, a master limited partnership, is our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce.

As of December 31, 2023, we owned a 48.8% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights.

The public owned the remaining 49.2% limited partner interest.

The partnership is consolidated in our financial statements, and we record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.

We continue the transition from a commodity-processing business to a value-added agricultural technology company creating lower carbon, high-value ingredients from existing resources.

To that end, we are currently executing on a number of initiatives to develop and implement proven agricultural, food and industrial biotechnology systems that allow for product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as Ultra-High Protein, glucose and dextrose corn syrups, renewable corn oil and more, as well as offering these technologies to the broader biofuels industry.

Green Plains Partners LP, a master limited partnership, was our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce.

On January 9, 2024, pursuant to the Merger Agreement, we completed the acquisition of all the publicly held common units of the partnership not already owned by us and our affiliates.

As a result of the Merger, the partnership common units are no longer publicly traded.

Refer to Note 5 - Acquisition and Dispositions included in the notes to the audited consolidated financial statements included herein for more information.

During the fourth quarter of 2024, the partnership was dissolved.

Refer to Note 4 – Merger and Dispositions included in the notes to the audited consolidated financial statements included herein for more information.

We have installed and are operating FQT MSC™ technology at five of our biorefineries.

Through our value-added ingredients initiative, we produce Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater and yeast concentrations of 25%, increase production of renewable corn oil and produce other higher value products, such as post-MSC™ distillers grains.

We successfully completed full scale 60% protein production runs using FQT's MSC™ system.

In 2021, we formed a 50/50 joint venture with Tharaldson Ethanol, which will own the MSC™ technology assets added adjacent to the Tharaldson Ethanol plant in North Dakota to produce Ultra-High Protein and increase renewable corn oil yields.

We anticipate these assets will be operational in early 2024.

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 glucose and dextrose to target applications in food production, renewable chemicals and synthetic biology.

In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT CST™ at commercial scale.

We also anticipate modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer demands.

We successfully completed full scale 60% protein production runs using FQT's MSC™ system, which is our new specialty feed ingredient branded as Sequence™.

Our 50/50 joint venture with Tharaldson Ethanol Plant I LLC (Tharaldson Ethanol) owns the MSC™ technology assets added adjacent to the Tharaldson Ethanol plant in Casselton, North Dakota which produces Ultra-High Protein and increases renewable corn oil yields.

These assets completed commissioning and shipped the first commercial quantities during the second quarter of 2024.

Including GP Turnkey Tharaldson's capacity, the annual Ultra-High Protein capacity we market is approximately 430 thousand tons.

The world's first commercial scale FQT CST™ facility in Shenandoah, Iowa has achieved successful ongoing production of dextrose syrups with CST™.

The FQT CST™ technology 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 facility is currently capable of producing 60 million pounds of product per year, and we also anticipate modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer demand.

Additionally, we have taken advantage of opportunities to divest certain assets to reallocate capital toward our current growth initiatives.

We are focused on generating stable and growing operating margins through our business segments and risk management strategy.

As part of our carbon reduction strategy, we committed our seven biorefineries in Nebraska, Iowa and Minnesota to carbon capture and sequestration projects through carbon pipeline transport, four with Summit Carbon Solutions and three with Trailblazer CO2 Pipeline LLC, which will lower GHG emissions through the capture of biogenic carbon dioxide at each of these biorefineries, significantly lowering their CI.

We have executed agreements for the future purchase, financing and installation of carbon capture equipment at our three Nebraska plants.

The rights of way for the laterals to connect our Nebraska biorefineries have been secured, and all necessary Class VI sequestration well permits have been issued.

We anticipate completion of these Nebraska biorefinery carbon capture projects in the second half of 2025.

Summit Carbon Solutions intends to be operational in 2027.

In addition, we are collaborating with global partners to explore innovative options for carbon use where pipeline transport or direct injection may not be feasible.

Reducing the CI of our fuel ethanol could allow us to benefit from state and federal clean fuel programs, including LCFS and federal tax credits under the IRA, and could position our low-carbon ethanol as a potential feedstock for ATJ pathways to produce SAF.

SAF is a drop-in fuel, chemically identical to petroleum-based jet fuel and can be blended into the fuel supply at varying levels.

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In January 2023, Green Plains, United Airlines and Tallgrass formed a joint venture, Blue Blade Energy, to develop and then commercialize a novel ATJ SAF technology.

As part of our carbon reduction strategy, we committed our seven biorefineries in Nebraska, Iowa and Minnesota to carbon capture and sequestration projects through carbon pipeline transport, four with Summit Carbon Solutions and three with another provider, which will lower GHG emissions through the capture of carbon dioxide at each of these biorefineries, significantly lowering their CI.

We anticipate completion of our three Nebraska biorefinery carbon capture projects in 2025,

and the Summit Carbon Solutions projects in 2026.

In addition, we are collaborating with global partners to explore innovative options for carbon use, such as synthetic methane production at Madison and Obion.

We intend to sequester the carbon from fermentation at Mount Vernon as well.

In July 2023, we announced a technology collaboration with Equilon Enterprises LLC, which allows us to use FQT’s precision separation and processing technology with Shell Fiber Conversion Technology.

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This has the potential to create a new process to liberate all available distillers corn oil currently bound in the fiber fraction of the corn kernel, generate cellulosic sugars for production of low-carbon ethanol, and enhance and expand available high protein to produce high-quality ingredients for global animal feed diets.

Our collaboration is expected to complete the construction of a facility at Green Plains York and begin commissioning in early 2024.

Our collaboration completed the construction of a facility at Green Plains York and began commissioning during 2024.

Our profitability is highly dependent on commodity prices, particularly for ethanol, distillers grains, Ultra-High Protein, renewable corn oil, soybean meal, corn, and natural gas.

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Strategic Review

The Board of Directors is initiating a formal review process to evaluate strategic alternatives for the company.

This comprehensive evaluation is intended to explore a broad range of opportunities for the company to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or sale, partnerships and financings.

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.

As part of the strategic review process, in early 2025, the company idled its Fairmont, Minnesota facility and launched a corporate reorganization and cost reduction initiative that will significantly reduce selling, general and administrative expenses on an ongoing basis.

As part of this initiative, the company has identified early in 2025 approximately $30 million of financial improvement annually, inclusive of savings from idling the Fairmont facility and realigning corporate and trade group selling, general and administrative functions to reflect current strategic priorities, and is continuing to identify more opportunities that may reduce selling, general and administrative functions further.

As a result of the reorganization, the company expects to take a one-time charge in the first quarter of 2025 of approximately $5 million to $7 million based on current estimates.

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.

We do 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.

Cooperation Agreement

On February 6, 2024, we entered into a Cooperation Agreement with a large shareholder whereby we agreed to announce our strategic review and the large shareholder agreed to certain standstill and voting obligations.

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.

Industry Factors Affecting our Results of Operations

Ethanol Supply and Demand

According to the EIA, domestic ethanol production averaged 1.0 million barrels per day for both 2023 and 2022.

Refiner and blender input volume increased to 888 thousand barrels per day for 2023, which was consistent compared with the 884 thousand barrels per day in 2022.

Gasoline demand increased approximately 0.1 million barrels per day, or 1%, in 2023 compared to the prior year.

domestic ethanol ending stocks decreased by approximately 0.9 million barrels compared to the prior year, or 4%, to 23.6 million barrels as of December 31, 2023.

According to the EIA, domestic ethanol production averaged 1.1 million barrels per day during 2024 and compared to 1.0 million per day in 2023.

Refiner and blender input volume increased to 895 thousand barrels per day for 2024, which was 1% higher than the 888 thousand barrels per day in 2023.

Gasoline demand was consistent compared to the prior year at 8,840 thousand barrels per day in 2024.

domestic ethanol ending stocks increased by approximately 0.1 million barrels compared to the prior year to 23.6 million barrels as of December 31, 2024.

As of this filing, according to Prime the Pump, there were approximately 3,724 retail stations selling E15 year-round, up from 3,244 at the beginning of the year.

Global Ethanol Supply and Demand

According to the USDA Foreign Agriculture Service, domestic ethanol exports through November 30, 2023, were approximately 1,274 mmg, which was consistent with the 1,277 mmg for the same period of 2022.

According to the USDA Foreign Agriculture Service, domestic ethanol exports through November 30, 2024, were approximately 1,720 mmg, which was 35% higher than 1,274 mmg for the same period of 2023.

Canada was the largest export destination for U.S.

ethanol accounting for approximately 36% of domestic ethanol export volume, driven in part by their national clean fuel standard.

The United Kingdom, the Netherlands, South Korea, and India accounted for approximately 11%, 8%, 7% and 6%, respectively, of U.S.

The United Kingdom, India, Columbia, and the Netherlands accounted for approximately

13%, 10%, 7% and 7%, respectively, of U.S.

ethanol exports.

We currently estimate that net ethanol exports will range from 1.4 to 1.6 billion gallons in 2024, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce greenhouse gas emissions through low carbon fuel programs and eliminate

MTBE from their own fuel supplies.

We currently estimate that net ethanol exports will range from 1.8 to 2.0 billion gallons in 2025, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce greenhouse gas emissions through low carbon fuel programs and eliminate MTBE from their own fuel supplies.

Fluctuations in currencies relative to the U.S.

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Protein and Vegetable Oil Supply and Demand

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.

We continue to believe that over time demand will outpace supply leading to higher co-product returns.

Our dried distillers grains and Ultra-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.

While global protein demand has continued to grow precipitously since the advent of our transformation, so too has the production of vegetable proteins from multiple companies in an effort to capitalize on this trend, most notably in U.S.

soy crushing capacity, which has led to an over-supplied domestic market and compressed protein values.

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, as of December 31, 2023, soybean crush was 195.3 million bushels, up from the 177.5 million bushels as of December 31, 2022.

According to the National Oilseed Processors Association, for the fourth quarter of 2024, soybean crush was 600 million bushels, up 26 million bushels from the 574 million bushels crushed during the fourth quarter of 2023.

Soybean oil stocks were at 1.24 billion pounds as of December 31, 2024, which was slightly down from the 1.36 billion pounds of stocks as of December 31, 2023.

Soybean meal production was 14.2 million short tons for the fourth quarter of 2024, up from the 13.5 million short tons from the same period in the prior year.

Legislation and Regulation

We are sensitive to government programs and policies that affect the supply and demand for ethanol and other fuels, which in turn may impact the volume of ethanol and other products we handle.

We are sensitive to domestic and foreign government programs and policies that affect the supply and demand for ethanol and other fuels, which in turn may impact the volume of ethanol and other products we handle.

Over the years, various bills and amendments have been proposed in the House and Senate, which would eliminate the RFS entirely, eliminate the corn based ethanol portion of the mandate, lower the price of RINs and make it more difficult to sell fuel blends with higher levels of ethanol.

Bills have also been introduced to require higher levels of octane blending, allow for year-round sales of higher blends of ethanol and require car manufacturers to produce vehicles that can operate on higher ethanol blends.

We believe it is unlikely that any of these bills will become law in the current Congress.

Bills have also been introduced to require or otherwise incentivize higher levels of octane blending, allow for year-round sales of higher blends of ethanol, require car manufacturers to produce vehicles that can operate on higher ethanol blends and provide incentives for reducing the CI of biofuels including ethanol.

In addition, the manner in which the EPA administers the RFS and related regulations can have a significant impact on the actual amount of ethanol and other biofuels blended into the domestic fuel supply.

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.

Federal and foreign 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 and increased use of higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in the U.S.

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 recently 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.

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.

Sales of EVs in the U.S.

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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 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 low carbon ethanol 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);

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 expired 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);

(4) extended the $1.00 per gallon biomass-based diesel tax credit (this credit expired 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 electric vehicles, 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.

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, 2024, the USDA put out a Request for Information on the Production of Biofuel Feedstocks using climate smart practices, which could inform rulemaking for the 45Z Clean Fuel Production Credit.

On January 10, 2025, the U.S.

Department of Treasury issued a notice of intent to propose rulemaking on the 45Z Clean Fuel Production Credit, which it published on February 3, 2025 in Internal Revenue Bulletin 2025-6, and on January 15, 2025 the Department of Energy released an updated 45Z GREET LCA model for calculating CI values of various feedstocks and finished fuels under 45Z.

Additionally, on January 15, 2025, the USDA put forth interim rules around climate smart agriculture for crops serving as feedstocks for biofuel production, including corn, soybeans and sorghum, though it was not incorporated into Treasury’s 45Z proposed rulemaking at this time.

While the proposed regulations are subject to change, and the GREET model could continue to be updated, as of this filing the GREET model indicates that CCS could reduce the CI of corn ethanol by 32 points, and that distillers corn oil used to produce biodiesel, renewable diesel or SAF has a lower CI score relative to most other feedstocks.

Additionally, the 45Z rulemaking excluded imported used cooking oil from qualifying for the credit if used as a feedstock to produce on-road fuels, though it still qualifies to produce SAF.

The RFS sets a floor for biofuels use in the United States.

In June 2023, the EPA finalized RVOs for 2023, 2024 and 2025, setting the implied conventional ethanol levels at 15.25 billion gallons for 2023, and 15 billion for 2024 and 2025, inclusive of 250 million gallons of supplemental volume in 2023 to reflect a court-ordered remand of a previously lowered RVO.

In June 2023, the EPA finalized RVOs for 2024 and 2025, setting the implied conventional ethanol levels at 15 billion gallons for 2024 and 2025.

The EPA also proposed a modest increase in biomass based diesel volumes over the three years, setting the volumes at 2.82 billion for 2023, 3.04 billion for 2024 and 3.35 billion for 2025.

The EPA also indicated that corn kernel fiber would contribute to the finalized cellulosic volumes, and could move to approve registrations that have been languishing for years at the agency.

The EPA also removed a proposed e-RIN program to support electric vehicles from the final rule, but indicated they may move forward with it in a separate rulemaking.

The EPA also removed a proposed e-RIN program to support EVs from the final rule, but indicated they may move forward with it in a separate rulemaking.

The EPA was required to propose RVOs for 2026 by November 2024, but the administration indicated on July 8, 2024 that it intends to propose RVOs for 2026 and potentially additional years in March 2025, and finalize them in December 2025.

The new administration has not indicated an updated timeline for these rules.

Under the RFS, RINs impact supply and demand.

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The market price of detached RINs can affect the price of ethanol in certain markets and can influence purchasing decisions by obligated parties.

Of note, the RIN mechanism for proposed e-RINs could vary from the traditional process.

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.

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.

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.

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.

On April 12, 2022, the President announced that he had directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the summer months, and that the temporary waiver should be extended as long as the gasoline supply emergency lasts.

On April 28, 2023, the administration announced emergency waivers for the 2023 summer driving season of June 1 to September 15.

The EPA has also indicated it will undertake rulemaking to allow for the elimination of the One-Pound Waiver for E10 in several Midwestern states in time for the 2024 summer driving season, which would have the practical effect of allowing for E15 to be sold year round in the following states:

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.

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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.

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.

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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.

To respond to COVID-19 health crisis and attempt to offset the subsequent economic damage, Congress passed multiple relief measures, most notably the CARES Act in March 2020, which created and funded multiple programs that have impacted our industry.

The CARES Act also allowed for certain net operating loss carrybacks, which has allowed us to receive certain tax refunds.

In December 2020, Congress passed and the then President signed into law an annual spending package coupled with another COVID relief bill, which included additional funds for the Secretary of Agriculture to distribute to those impacted by the pandemic.

The language of the bill specifically included biofuels producers as eligible for some of this aid, and in May 2022, the USDA distributed funds to us in the amount of $27.7 million pursuant to this bill.

In July 2023, the USDA distributed supplemental program funds to us in the amount of $3.4 million.

A string of 2024 U.S.

Supreme Court decisions, namely Loper Bright Enterprises v.

Raimondo, SEC v.

Jarkesy and Corner Post, Inc.

Board of Governors of the Federal Reserve, have redefined the power of federal agencies, as well as overturned the important principle of administrative law called "Chevron deference," based on a landmark case, Chevron U.S.A., Inc.

Natural Resources Defense Council, Inc.

The Chevron deference was a doctrine of judicial deference to administrative interpretations.

The general shift in power from agencies to the judicial system resulting from these decisions could impact various regulatory rules affecting our business in ways that could affect our business, prospects and operations, and our financial performance positively or negatively.

Environmental and Other Regulation

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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.

ethanol industry relies heavily on tank cars to deliver its product to market.

In 2015, the DOT finalized the Enhanced Tank Car Standard and Operational Controls for High-Hazard and Flammable Trains, or DOT specification 117, which established a schedule to retrofit or replace older tank cars that carry crude oil and ethanol, braking standards intended to reduce the severity of accidents and new operational protocols.

The rule has increased the lease costs for railcars in the short term and may increase the lease costs long term.

Our partnership's fleet is DOT 117 compliant.

Our business may also be impacted by domestic and foreign government policies, such as incentives, tariffs, duties, subsidies, import and export restrictions and outright embargos.

Variability of Commodity Prices

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Effects of Inflation

While inflation has increased relative to recent years, we do not expect it to have a material impact on our future results of operations.

We do not expect inflation to have a material impact on our future results of operations.

However, inflation has and may continue to impact the interest rate environment in which we operate, resulting in a higher cost of capital.

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For our ethanol production segment, our revenues are derived primarily from the sale of ethanol, distillers grains, Ultra-High Protein and renewable corn oil.

For our agribusiness and energy services segment, our primary sources of revenue include sales of ethanol, distillers grains and renewable corn oil that we market for our ethanol plants, in which we earn a marketing fee, sales of ethanol we market for a third-party and sales of other commodities purchased in the open market.

For our agribusiness and energy services segment, our primary sources of revenue include sales of ethanol, distillers grains and renewable corn oil that we market for our ethanol plants, in which we earn a marketing fee, sales of ethanol and Ultra-High Protein we market for a third-party and sales of other commodities purchased in the open market.

The vast majority of our revenues are from forward contracts accounted for as derivatives under ASC 815 as disclosed in the tables within Note 3 - Revenue and Note 10 - Derivative Financial Instruments included in the notes to the audited consolidated financial statements included herein.

Revenues include net gains or losses from derivatives related to products sold.

For our partnership segment, our revenues consist primarily of fees for receiving, storing, transferring and transporting ethanol and other fuels.

Cost of Goods Sold.

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Corn feedstock costs include gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and transfer costs, as well as reclassifications of gains and losses on cash flow hedges from accumulated other comprehensive income or loss.

Direct labor includes all compensation and related benefits of personnel

involved in ethanol production.

Direct labor includes all compensation and related benefits of personnel involved in ethanol production.

Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold.

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Changes in the market value of grain inventories, forward purchase and sale contracts, and exchange-traded futures and options contracts are recognized as a component of cost of goods sold.

Operations and Maintenance Expense.

For our partnership segment, transportation expense is the primary component of operations and maintenance expense.

Transportation expense includes rail car leases, shipping and freight and costs incurred for storing ethanol at destination terminals.

Gain on Sale of Assets.

We completed the sale of the ethanol plant located in Atkinson, Nebraska in September 2023.

The sale of Atkinson resulted in a pretax gain of $4.1 million recorded at the corporate level.

We also completed the sale of the ethanol plant located in Ord, Nebraska in March 2021.

The sale of Ord resulted in a pretax gain of $35.9 million recorded at the corporate level.

Selling, General and Administrative Expense.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses are recognized at the operating segment and corporate level.

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Selling, general and administrative expenses that cannot be allocated to an operating segment are referred to as corporate activities.

Gain on Sale of Assets.

We completed the sale of the terminal located in Birmingham, Alabama in September 2024.

The sale of the terminal resulted in a pretax gain of $30.7 million recorded at the corporate level.

We also completed the sale of the ethanol plant located in Atkinson, Nebraska in September 2023.

The sale of Atkinson resulted in a pretax gain of $4.1 million recorded at the corporate level.

Other Income (Expense).

Other income (expense) includes interest earned, interest expense and other non-operating items, as well as $3.4 million and $27.7 million grants received from the USDA for the year-ended December 31, 2023 and 2022, respectively, related to the Biofuel Producer Program.

Income from Equity Method Investees.

Income from equity method investees represents our proportional share of earnings from our equity method investees.

Other income (expense) includes interest earned, interest expense and other non-operating items, as well as $3.4 million and $27.7 million grants received from the USDA for the years-ended December 31, 2023 and 2022, respectively, related to the Biofuel Producer Program.

Income (Loss) from Equity Method Investees, Net of Income Taxes.

Income (loss) from equity method investees, net of income taxes represents our proportional share of earnings from our equity method investees.

Results of Operations

We maintained an average utilization rate of approximately 94% of capacity during 2024, compared with 89% of capacity for the prior year.

Our operating strategy is to transform our company to a value-add agricultural technology company.

Our operating strategy is to transform our company to a value-add agricultural technology company creating lower carbon, high-value ingredients from existing resources.

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.

and pricing of renewable feedstocks needed to operate our biorefineries.

Comparability

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• September 2024

Atkinson, Nebraska ethanol plant was sold and certain storage assets of this plant were acquired from the partnership prior to being sold.

Sale of terminal located in Birmingham, Alabama

• September 2023

Sale of ethanol plant located in Atkinson, Nebraska

Received a $27.7 million grant from the USDA as part of the Biofuel Producer Program.

An additional $3.4 million was received in July 2023.

Ord, Nebraska ethanol plant was sold and certain storage assets of this plant were acquired from the partnership prior to being sold.

A discussion regarding our financial condition and results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 9, 2024.

Segment Results

We report the financial and operating performance for the following three operating segments:

(1) ethanol production, which includes the production of ethanol, distillers grains, Ultra-High Protein and renewable corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, renewable corn oil, natural gas and other commodities, and (3) partnership, which includes fuel storage and transportation services.

We report the financial and operating performance for the following two operating segments:

(1) ethanol production, which includes the production, storage, and transportation of ethanol, distillers grains, Ultra-High Protein and renewable corn oil and (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, renewable corn oil, natural gas and other commodities.

As a result of the Merger, the partnership's operations are included in the ethanol production operating segment.

The following changes were made to the company's operating segments:

• The revenue and operating results from fuel storage and transportation services previously disclosed within the partnership segment are now included within the ethanol production segment.

• Intersegment activities between the partnership and Green Plains Trade associated with ethanol storage and transportation services previously treated like third-party transactions and eliminated on a consolidated level are now eliminated within the ethanol production segment.

Intersegment activities between the remaining terminal and Green Plains Trade associated with terminal services transacted with the agribusiness and energy services segment will continue to be eliminated on a consolidated level.

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.

During the normal course of business, our operating segments do business with each other.

For example, our agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains and renewable corn oil of our ethanol production segment.

Our partnership segment provides fuel storage and transportation services for our agribusiness and energy services segment.

For example, our agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains, Ultra-High Protein, and renewable corn oil of our ethanol production segment.

These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values.

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however, they do not impact our consolidated results since the revenues and corresponding costs are eliminated.

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.

When we evaluate segment performance, we review the following segment information as well as earnings before interest expense, income taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA.

The selected operating segment financial information are as follows (in thousands):

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Total segment revenues 421,107 500,903 615,615

Revenues from external customers 4,113 4,003 4,274

Intersegment revenues 76,970 75,764 74,178

Total segment revenues 81,083 79,767 78,452

Revenues including intersegment activity 2,488,196 3,325,444 3,694,255

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Ethanol production (1)(2)

$ 1,983,460 $ 2,705,917 $ 3,018,625

Agribusiness and energy services 374,286 454,776 562,950

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Ethanol production (1)(2)

$ 83,629 $ 118,624 $ 60,015

Agribusiness and energy services 46,821 46,127 52,665

Partnership 81,083 79,767 78,452

Intersegment eliminations 114 3,580 (587)

$ 130,450 $ 164,751 $ 112,680

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2024 2023 2022

Operating income (loss)

Depreciation and amortization

Ethanol production $ 82,784 $ 92,712 $ 85,638

$ (66,931) $ (117,764) $ (27,996)

Agribusiness and energy services 2,185 2,360 3,466

Partnership 46,859 47,699 48,672

Intersegment eliminations 114 3,580 (587)

Corporate activities (3)

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$ 90,587 $ 98,244 $ 92,698

(1) Operating loss for ethanol production includes an inventory lower of average cost or net realizable value adjustment of $2.6 million and $12.3 million for the year-ended December 31, 2023 and 2022, respectively.

(2) Corporate activities for the year-ended December 31, 2023 and 2021 includes a $4.1 million and $29.6 million net gain on sale of assets, respectively.

Year Ended December 31,

2024 2023 2022

Depreciation and amortization

Operating income (loss)

Ethanol production (2)

$ (40,758) $ (19,958) $ (66,485)

Agribusiness and energy services 28,156 28,100 36,415

Partnership 3,175 4,093 3,737

Corporate activities (4)

(34,857) (69,720) (68,878)

$ (47,459) $ (61,578) $ (98,948)

(1) Costs historically reported as operations and maintenance expenses in the consolidated statements of operations are now being reported within cost of goods sold, resulting in increased cost of goods sold and decreased gross margin within the ethanol production segment.

(2) Ethanol production includes an inventory lower of cost or net realizable value adjustment of $2.1 million, $2.6 million, and $12.3 million for the years-ended December 31, 2024, 2023, and 2022, respectively.

(3) Depreciation and amortization for corporate activities includes impairment of a research and development technology intangible asset of $3.5 million for the year-ended December 31, 2024.

(4) Corporate activities for the years-ended December 31, 2024 and 2023 include a $30.7 million and $4.1 million gain on sale of assets, respectively.

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.

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Interest expense 33,095 37,703 32,642

37,703 32,642 67,144

Income tax expense (benefit) (5,617) 4,747 1,845

Income tax expense (benefit), net of equity method income taxes 5,153 (5,617) 4,747

Depreciation and amortization (1)

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— (3,440) (27,712)

Gain on sale of assets, net (5,265) — (29,601)

Gain on sale of assets (30,723) (5,265) —

Proportional share of EBITDA adjustments to equity method investees 1,792 180 180

Adjusted EBITDA $ 18,715 $ 45,506 $ (822)

(1) Interest expense for the year ended December 31, 2021 includes a loss on extinguishment of convertible notes of $22.1 million and a loss on settlement of convertible notes of $9.5 million.

(1) Excludes the amortization of operating lease right-of-use assets and amortization of debt issuance costs.

(3) Other income for the year-ended December 31, 2023 and 2022, includes a grant received from the USDA related to the Biofuel Producer Program of $3.4 million and $27.7 million, respectively.

(2) Other income for the years-ended December 31, 2023 and 2022, include grants received from the USDA related to the Biofuel Producer Program of $3.4 million and $27.7 million, respectively.

The following table reconciles segment EBITDA to consolidated adjusted EBITDA (in thousands):

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Agribusiness and energy services 31,935 31,689 39,798

Partnership 51,678 52,429 53,109

Intersegment eliminations 114 3,580 (587)

Corporate activities (2)

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— (3,440) (27,712)

Gain on sale of assets, net (5,265) — (29,601)

Gain on sale of assets (30,723) (5,265) —

Proportional share of EBITDA adjustments to equity method investees 1,792 180 180

Adjusted EBITDA $ 18,715 $ 45,506 $ (822)

(2) Corporate activities for the year-ended December 31, 2023 and 2021 includes a $4.1 million and $29.6 million net gain on sale of assets, respectively.

(3) Other income for the year-ended December 31, 2023 and 2022, includes a grant received from the USDA related to the Biofuel Producer Program of $3.4 million and $27.7 million, respectively.

(1) Ethanol production includes an inventory lower of cost or net realizable value adjustment of $2.1 million, $2.6 million, and $12.3 million for the years-ended December 31, 2024, 2023, and 2022, respectively.

(2) Corporate activities for the years-ended December 31, 2024 and 2023 include a $30.7 million and $4.1 million gain on sale of assets, respectively.

(3) Other income for the years-ended December 31, 2023 and 2022 include grants received from the USDA related to the Biofuel Producer Program of $3.4 million and $27.7 million, respectively.

Total assets by segment are as follows (in thousands):

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Agribusiness and energy services 412,006 413,937

Partnership 102,776 108,680

Corporate assets 143,716 254,300

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Consolidated Results

Consolidated revenues decreased $367.1 million in 2023 compared with 2022 primarily due to lower average selling prices and lower volumes sold on ethanol, distillers grains and renewable corn oil within our ethanol production segment as described below.

Additionally, we had lower revenues within our agribusiness and energy services segment as a result of decreased trading margins.

Net loss decreased $27.1 million in 2023 compared with 2022 primarily due to higher margins in our ethanol production segment, partially offset by lower margins in our agribusiness and energy services segment.

Adjusted EBITDA increased $46.3 million in 2023 compared with 2022 primarily due to higher margins in our ethanol production segment, partially offset by lower margins in our agribusiness and energy services segment and lower other income from the grants received from the USDA related to the Biofuel Producer Program.

Interest expense increased $5.1 million in 2023 compared with 2022 primarily due to a decrease in the amount of capitalized interest.

Income tax benefit was $5.6 million in 2023 compared to an income tax expense of $4.7 million in 2022 primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets.

Consolidated revenues decreased $836.9 million in 2024 compared with 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.

Net loss increased $4.9 million in 2024 compared with 2023 primarily due to lower margins in our ethanol production segment partially offset by a gain on the sale of assets from the Birmingham Transaction and decreased depreciation expense.

Adjusted EBITDA decreased $26.8 million in 2024 compared with 2023 primarily due to lower margins in our ethanol production segment, partially offset by lower corporate personnel costs.

Interest expense decreased $4.6 million in 2024 compared with 2023 primarily due to lower debt balances.

Income tax expense, including income tax benefit from equity method investees, was $5.2 million in 2024 compared to an income tax benefit of $5.6 million in 2023 primarily due to an agreement in-principle with the IRS Independent Office of Appeals covering the tax years 2013 through 2018 in the fourth quarter 2024.

The following discussion provides greater detail about our segment performance.

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Year Ended December 31,

(thousands of gallons) 840,819 872,133

Distillers grains sold

(thousands of equivalent dried tons) 1,933 2,213

Ultra-High Protein Sold

(thousands of tons) 223 67

Renewable corn oil sold

(thousands of pounds) 279,861 281,730

Corn consumed

(thousands of bushels) 289,267 301,868

Revenues in our ethanol production segment decreased $254.3 million in 2023 compared with 2022 primarily due to lower ethanol, distillers grains and renewable corn oil volumes sold driven partially by the disposition of our Atkinson, Nebraska plant resulting in decreased revenues of $82.3 million, $28.4 million and $1.3 million, respectively, as well as lower weighted average selling prices on ethanol, distillers grains and renewable corn oil resulting in decreased revenues of $96.8 million, $32.4 million and $14.4 million, respectively.

Revenues increased as a result of hedging activities by $10.9 million.

Cost of goods sold in our ethanol production segment decreased $317.1 million for 2023 compared with 2022 due to lower weighted average corn prices, lower corn volumes processed and hedging activities, resulting in decreased costs of $300.2 million, $91.1 million and $46.3 million, respectively, as well as lower chemicals and other costs of $26.8 million and lower utility costs of $6.4 million, partially offset by higher ethanol volumes purchased of $150.2 million, as well as higher freight costs of $7.9 million.

Operating loss in our ethanol production segment decreased $50.8 million in 2023 compared with 2022 primarily due to increased margins on ethanol production as outlined above.

Depreciation and amortization expense for the ethanol production segment was $89.5 million for 2023 compared with $81.5 million during 2022, with the increase primarily due to Ultra-High Protein assets placed in service.

Ethanol (thousands of gallons) 846,226 840,819

Distillers grains (thousands of equivalent dried tons) 1,890 1,933

Ultra-High Protein (thousands of tons) 248 223

Renewable corn oil (thousands of pounds) 290,801 279,861

Corn (thousands of bushels) 289,454 289,267

Revenues in our ethanol production segment decreased $757.5 million in 2024 compared with 2023 primarily due to lower weighted average selling prices on ethanol, distillers grains and renewable corn oil resulting in decreased revenues of $614.5 million, $114.7 million and $49.8 million, respectively, partially offset by higher ethanol and renewable corn oil volumes sold resulting in increased revenues of $13.6 million and $7.0 million, respectively.

Revenues also increased as a result of hedging activities by $2.7 million.

Cost of goods sold in our ethanol production segment decreased $722.5 million for 2024 compared with 2023 primarily due to lower weighted average corn prices, lower ethanol volumes purchased and lower input costs related to natural gas resulting in decreased costs of $502.5 million, $166.1 million and $83.6 million, respectively, partially offset by higher production labor costs and higher repairs and maintenance costs resulting in increased costs of $15.9 million and $10.6 million, respectively.

Operating loss in our ethanol production segment increased $20.8 million in 2024 compared with 2023 primarily due to decreased margins on ethanol production as outlined above.

Depreciation and amortization expense for the ethanol production segment was $82.8 million for 2024 compared with $92.7 million during 2023, with the decrease primarily due to certain assets becoming fully depreciated.

Agribusiness and Energy Services Segment

Revenues in our agribusiness and energy services segment decreased $114.7 million while operating income also decreased $8.3 million in 2023 compared with 2022.

The decrease in revenues was primarily due to a decrease in ethanol, natural gas and distillers grains trading margins, partially offset by an increase in renewable corn oil trading volumes.

Operating income decreased primarily as a result of lower distillers grains trading margins.

Partnership Segment

Revenues generated by our partnership segment increased $1.3 million in 2023 compared with 2022.

Railcar transportation services revenue increased $3.5 million primarily due to an increase in transportation service fees charged as a result of the partnership upgrading its leased railcar fleet to comply with DOT 117 regulations.

Storage and throughput services revenue was consistent with the prior period.

Terminal services revenue increased $0.3 million primarily due to higher throughput at our partnership's terminals.

Trucking and other revenue decreased $2.5 million due to the discontinuance of trucking operations, which occurred in May 2023.

Operating income decreased $0.8 million in 2023 compared with 2022 primarily due to transaction costs related to the Merger Agreement, partially offset by gains realized on the sale of trucking assets.

Revenues in our agribusiness and energy services segment decreased $79.8 million while operating income increased $0.1 million in 2024 compared with 2023.

The decrease in revenues was primarily due to lower weighted average ethanol and natural gas trading prices.

Intersegment Eliminations

Intersegment eliminations of revenues decreased by $0.6 million for 2023 compared with 2022 primarily due to decreased intersegment marketing and commodity service fees within the agribusiness and energy services segment as a result of lower production volumes, partially offset by increased storage and throughput fees paid to the partnership segment.

Intersegment eliminations of revenues decreased by $0.3 million for 2024 compared with 2023 primarily due to decreased freight revenue associated with the ethanol production segment.

Corporate Activities

Operating loss was impacted by an increase in corporate activities of $0.8 million for 2023 compared with 2022, primarily due to increased personnel costs and transaction costs related to the Merger Agreement, partially offset by the gain on the sale of assets during 2023.

We recorded income tax benefit of $5.6 million for 2023 compared to an income tax expense of $4.7 million in 2022.

The increase in the amount of tax benefit recorded for 2023 was primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets.

Operating loss was impacted by a decrease in corporate activities of $34.9 million for 2024 compared with 2023, which was primarily due to an increase in gain on sale of assets and a decrease in personnel costs compared to the same period in 2023.

We recorded income tax expense, including income tax benefit from equity method investees of $5.2 million for 2024 compared to an income tax benefit of $5.6 million in 2023.

The increase in the amount of tax expense recorded for 2024 was primarily due to an agreement in-principle with the IRS Independent Office of Appeals covering the tax years 2013 through 2018 in the fourth quarter 2024.

Liquidity and Capital Resources

Our principal sources of liquidity include cash generated from operating activities and credit facilities.

Our principal sources of liquidity include cash generated from operating activities and bank credit facilities.

We fund our operating expenses and service debt primarily with operating cash flows.

Capital resources for maintenance and growth

expenditures are funded by a variety of sources, including cash generated from operating activities, borrowings under credit facilities, or issuance of public or private debt or equity securities.

Capital resources for maintenance and growth expenditures are funded by a variety of sources, including cash generated from operating activities, borrowings under credit facilities, or issuance of public or private debt or equity securities.

Our ability to access capital markets for debt under reasonable terms depends on our financial condition, credit ratings and market conditions.

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At December 31, 2024, our subsidiaries had approximately $12.8 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.

Net cash provided by operating activities was $56.3 million in 2023 compared to $69.7 million in 2022.

Operating activities compared to the prior year were primarily affected by higher cash provided by lower inventory and lower net loss compared to the prior year, partially offset by higher cash used related to lower accounts payables.

Net cash used in investing activities was $106.9 million in 2023 compared to $105.3 million in 2022 primarily due to higher cash provided by lower capital expenditures and proceeds from the sale of assets in 2023, offset by the proceeds from the sale of marketable securities in the prior year.

Net cash used in financing activities was $71.0 million in 2023 compared to $25.1 million in 2022 primarily due to higher debt proceeds in 2022 as a result of changes in our debt structure.

Net cash provided by (used in) operating activities was $(30.0) million in 2024 compared to $56.3 million in 2023.

Operating activities compared to the prior year were primarily affected by an increase in cash used for inventory and lower collections of accounts receivable.

Net cash used in investing activities was $62.1 million in 2024 compared to $106.9 million in 2023 primarily due to higher proceeds from the sale of assets, lower capital expenditures and lower investments in equity method investees.

Net cash used in financing activities was $77.4 million in 2024 compared to $71.0 million in 2023 primarily due to the retirement of debt related to the partnership and extinguishment of the partnership's non-controlling interest, offset by higher borrowings on our revolver and lower distributions paid as a result of the dissolution of the partnership.

Additionally, Green Plains Finance Company, Green Plains Trade, Green Plains Grain and Green Plains Commodity Management use revolving credit facilities to finance working capital requirements.

We frequently draw from and repay these facilities which results in significant cash movements reflected on a gross basis within financing activities as proceeds from and payments on short-term borrowings.

We incurred capital expenditures of $108.5 million in 2023 primarily for Ultra-High Protein expansion projects at Mount Vernon and Obion, the clean sugar expansion project at Shenandoah and for various other capital projects.

The current projected estimate for capital spending for 2024 is approximately $125 million to $150 million, which is subject to review prior to the initiation of any project.

The estimate includes additional expenditures for various capital projects, which are expected to be financed with cash on hand and with cash provided by operating activities.

Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains, Ultra-High Protein, renewable corn oil and natural gas.

We incurred capital expenditures of $95.1 million in 2024 primarily for the clean sugar expansion project at Shenandoah and for various other capital projects.

The current projected estimate for capital spending for 2025 is approximately $20 million to $35 million, which is subject to review prior to the initiation of any project, and expected to be financed with cash on hand and with cash provided by operating activities.

This excludes an estimated $110 million of additional expenditures related to our carbon capture and sequestration projects expected to occur in 2025 and to be funded through project related financing.

Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains (including Ultra-High Protein), renewable corn oil and natural gas.

We use derivative financial instruments to reduce the market risk associated with fluctuations in commodity prices.

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We were in compliance with our debt covenants at December 31, 2024.

Based on our forecasts, we believe we will maintain compliance at each of our subsidiaries for the next twelve months or have sufficient liquidity available on a consolidated basis to resolve noncompliance.

Based on our forecasts, we anticipate we will maintain compliance at each of our subsidiaries for the next twelve months and have sufficient liquidity available on a consolidated basis to resolve noncompliance.

We cannot provide assurance that actual results will approximate our forecasts or that we will inject the necessary capital into a subsidiary to maintain compliance with its respective covenants.

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In June 2019, we issued $115.0 million of 4.00% convertible senior notes due in 2024, or the 4.00% notes.

During May 2021, we entered into a privately negotiated agreement with certain noteholders of our 4.00% notes.

Under this agreement, approximately 3.6 million shares of our common stock were exchanged for $51.0 million in aggregate principal amount of the 4.00% notes.

On May 25, 2022, we gave notice calling for the redemption of our outstanding 4.00% notes, totaling an aggregate principal amount of $64.0 million.

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In August 2016, we issued $170.0 million of 4.125% convertible senior notes due in 2022, or the 4.125% notes, which were senior, unsecured obligations.

In March 2021, concurrent with the issuance of the 2.25% notes, we used approximately $156.5 million of the net proceeds of the 2.25% notes to repurchase approximately $135.7 million aggregate principal amount of the 4.125% notes due 2022, in privately negotiated transactions.

Pursuant to the guidance within ASC 470, Debt , we recorded a loss upon extinguishment of $22.1 million in interest expense.

This charge included $1.2 million of unamortized debt issuance costs related to the principal balance extinguished.

During August 2022, we entered into four privately negotiated exchange agreements with certain noteholders of the 4.125% notes to exchange approximately $32.6 million aggregate principal amount for approximately 1.2 million shares of our common stock.

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Ethanol Production Segment

On February 9, 2021, Green Plains SPE LLC, a wholly-owned special purpose subsidiary and parent of Green Plains Obion and Green Plains Mount Vernon issued $125.0 million of junior secured mezzanine notes due February 2026 with BlackRock for the purchase of all notes issued.

These notes will mature on February 9, 2026 and are secured by a pledge of the membership interests in, and the real property owned by, Green Plains Obion and Green Plains Mount Vernon.

At December 31, 2023, the outstanding principal balance was $125.0 million on the loan and the interest rate was 11.75%.

Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of us, have a $75.0 million secured loan agreement, which matures on September 1, 2035.

These notes accrue interest at an annual rate of 11.75% and will mature on February 9, 2026.

The company believes that it has adequate access to capital to source appropriate funding to refinance or extinguish the junior secured notes.

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 December 31, 2024, the outstanding principal balance was $71.6 million on the loan and the interest rate was 5.77%.

Green Plains Partners had a term loan to fund working capital, capital expenditures and other general partnership purposes.

Interest on the term loan was based on 3-month SOFR plus 8.26%.

On September 30, 2024, the proceeds from the Birmingham Transaction were used to repay the outstanding principal and interest of the loan in full.

Prepayments totaling $56.0 million, $3.0 million and $1.0 million were made during the years ended December 31, 2024, 2023 and 2022, respectively.

We also have small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.

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The facility matures in March 2027.

SOFR rate loan shall bear interest for each day at a rate per annum equal to the Term SOFR rate for the outstanding period plus a Term SOFR adjustment and an applicable margin of 2.25% to 2.50%, which is dependent on undrawn availability under the facility.

Each SOFR rate loan shall bear interest for each day at a rate per annum equal to the Term SOFR rate for the outstanding period plus a Term SOFR adjustment and an applicable margin of 2.25% to 2.50%, which is dependent on undrawn availability under the facility.

Each base rate loan shall bear interest at a rate per annum equal to the base rate plus the applicable margin of 1.25% to 1.50%, which is dependent on undrawn availability under the facility.

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At December 31, 2024, the outstanding principal balance was $133.5 million on the facility and the interest rate was 7.88%.

Green Plains Commodity Management has an uncommitted $40.0 million revolving credit facility to finance margins related to its hedging programs, which is secured by cash and securities held in its brokerage accounts.

Green Plains Commodity Management has an uncommitted $40.0 million secured revolving credit facility to finance margins related to its hedging programs.

During the first quarter of 2023, this revolving credit facility was extended five years to mature on April 30, 2028.

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The company had no outstanding short-term notes payable related to the inventory financing agreement as of December 31, 2024.

Partnership Segment

Green Plains Partners, through a wholly owned subsidiary, has a secured term loan to fund working capital, capital expenditures and other general partnership purposes.

The term loan has a maturity date of July 20, 2026.

The term loan does not require any principal payments;

however, the partnership has the option to prepay $1.5 million per quarter.

The partnership repurchased $1.0 million of the outstanding notes during 2022.

Prepayments totaling $3.0 million were made during the year ended December 31, 2023.

On April 19, 2023, the term loan was amended to change the underlying floating interest rate to a SOFR-based rate from a LIBOR-based rate.

The impact of the amendment was not material to interest expense.

Interest on the term loan is based on 3-month SOFR plus 8.26%, and is payable on the 15th day of each March, June, September and December.

The term loan is secured by substantially all of the assets of the partnership.

As of December 31, 2023, the term loan had a balance of $56.0 million and an interest rate of 13.65%.

Refer to Note 11 – Debt included in the notes to the audited consolidated financial statements included herein for more information about our debt.

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In addition to debt, our material future obligations include certain lease agreements and contractual and purchase commitments related to commodities, storage and transportation.

Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of December 31, 2023 totaled $86.9 million .

As of December 31, 2023, we had contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $166.4 million and future commitments for storage and transportation valued at approximately $27.0 million .

Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of December 31, 2024 totale d $82.3 million.

As of December 31, 2024, we had contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $196.6 million, future commitments for storage and transportation valued at approximate ly $38.9 million, and accumulated commitments related to the construction of carbon capture and sequestration equipment at our three Nebraska plants of $17.9 million.

Refer to Note 16 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.

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Commodity Price Risk

Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains, Ultra-High Protein, renewable corn oil and natural gas.

Ethanol prices are sensitive to world crude oil supply and demand, the price of crude oil, gasoline, corn, the price of substitute fuels, refining capacity and utilization, government regulation and consumer demand for alternative fuels.

Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains (including Ultra-High Protein), renewable corn oil and natural gas.

Ethanol prices are sensitive to world crude oil supply and demand, the

price of crude oil, gasoline, corn, the price of substitute fuels, refining capacity and utilization, government regulation and consumer demand for alternative fuels.

Corn prices are affected by weather conditions, yield, changes in domestic and global supply and demand, and government programs and policies.

Distillers grains prices are impacted by livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production.

Distillers grains and Ultra-High Protein prices are impacted by livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production.

Renewable corn oil prices are impacted by prices for renewable diesel fuel, diesel fuel and competing feedstocks.

Natural gas prices are influenced by severe weather in the summer and winter and hurricanes in the spring, summer and fall.

Other factors include North American energy exploration and production, and the amount of natural gas in underground storage during injection and withdrawal seasons.

During 2022, we locked in natural gas purchases above current market rates, which adversely impacted our 2023 margins.

To reduce the risk associated with fluctuations in the price of ethanol, corn, distillers grains, Ultra-High Protein, renewable corn oil and natural gas, at times we use forward fixed-price physical contracts and derivative financial instruments, such as futures and options executed on the Chicago Board of Trade, the New York Mercantile Exchange and the Chicago Mercantile Exchange.

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To reduce commodity price risk caused by market fluctuations, we enter into exchange-traded futures and options contracts that serve as economic hedges.

Our results are impacted when there is a mismatch of gains or losses associated with the derivative instrument during a reporting period when the physical commodity purchases or sale has not yet occurred.

Our exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price purchase and sale contracts and derivatives, is based on the estimated net income effect resulting from a hypothetical 10% change in price for the next 12 months starting on December 31, 2024, are as follows (in thousands):

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Agribusiness and Energy Services Segment

In the agribusiness and energy services segment, our inventories, physical purchase and sale contracts and derivatives are marked to market.

Our inventories are carried at the lower of average cost or net realizable value, except fair-value hedged inventories.

In the agribusiness and energy services segment, our physical purchase and sale contracts and derivatives are marked to market.

Our inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories.

To reduce commodity price risk caused by market fluctuations for purchase and sale commitments of grain and grain held in inventory, we enter into exchange-traded futures and options contracts that serve as economic hedges.

The market value of exchange-traded futures and options used for hedging are highly correlated with the underlying market value of grain inventories and related purchase and sale contracts for grain.

The less correlated portion of inventory and purchase and sale contract market values, known as basis, is much less volatile than the overall market value of exchange-traded futures and tends to follow historical patterns.

The less correlated portion of inventory and purchase and sale contract market values, known as basis, is much less volatile than the overall market value of

exchange-traded futures and tends to follow historical patterns.

We manage this less volatile risk by constantly monitoring our position relative to the price changes in the market.

Inventory values are affected by the month-to-month spread in the futures markets.

These spreads are also less volatile than overall market value of our inventory and tend to follow historical patterns, but cannot be mitigated directly.

These spreads are also less volatile than the overall market value of our inventory and tend to follow historical patterns, but cannot be mitigated directly.

Our accounting policy for futures and options, as well as the underlying inventory held for sale and purchase and sale contracts, is to reflect their current market values and include gains and losses in the consolidated statement of operations.

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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 7. Management’s Discussion and Analysis