What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 154 added, 73 removed, 315 unchanged (42% of the section changed)

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All eight of our operating ethanol plants have generated production tax credits under Section 45Z in 2026.

The company has agreements to purchase RECs covering the three months ended March 31, 2026, to lower CI scores at certain plants.

Based on production and CI scores for the three months ended March 31, 2026, the company recorded credits net of discounts totaling $65.6 million, reducing costs of goods sold, related to Section 45Z production tax credits at the eight qualifying plants.

The company has agreements to purchase RECs covering the six months ended June 30, 2026, to lower CI scores at certain plants.

Based on production and CI scores for the three and six months ended June 30, 2026, the company recorded credits net of discounts totaling $68.4 million and $134.0 million, respectively, reducing costs of goods sold, related to Section 45Z production tax credits at the eight qualifying plants.

Under the current statutory framework, Section 45Z production credits are set to expire in 2029.

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Results of Operations

During the first quarter of 2026, our plants in operation maintained an average utilization rate of approximately 97% of capacity, resulting in ethanol production of 174.2 mmg, compared with 195.2 mmg, or 92% of capacity, for the same quarter last year.

During the second quarter of 2026, our plants in operation maintained an average utilization rate of approximately 88.3% of capacity, resulting in ethanol production of 160.7 mmg, compared with 193.6 mmg, or 91.3% of capacity, for the same quarter last year.

The prior period utilization above has been adjusted to reflect updated capacity and for comparative purposes to align with our current period presentation.

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Ethanol Supply and Demand

According to the EIA, domestic ethanol production averaged 1.10 million barrels per day during the first quarter of 2026, which was approximately 2.0% higher than the 1.08 million barrels per day for the same quarter last year.

Refiner and blender input volume was 857 thousand barrels per day for the first quarter of 2026, compared with 855 thousand barrels per day for the same quarter last year.

Gasoline demand for the first quarter of 2026 was in line with the prior year quarter at 8.5 million barrels per day.

domestic ethanol ending stocks decreased by approximately 0.6 million barrels compared to the prior year, or 2.3%, to 26.0 million barrels as of March 31, 2026.

According to the EIA, domestic ethanol production averaged 1.09 million barrels per day during the second quarter of 2026, which was approximately 3.0% higher than the 1.05 million barrels per day for the same quarter last year.

Refiner and blender input volume was 911 thousand barrels per day for the second quarter of 2026, compared with 910 thousand barrels per day for the same quarter last year.

Gasoline demand for the second quarter of 2026 was consistent with the same quarter last year at 8.9 million barrels per day during the second quarter of 2026.

domestic ethanol ending stocks increased by approximately 0.6 million barrels compared to the prior year, or 2.4%, to 24.7 million barrels as of June 30, 2026.

Global Ethanol Supply and Demand

According to the USDA Foreign Agriculture Service, domestic ethanol exports through February 28, 2026, were approximately 422 mmg, up from the 337 mmg for the same period of 2025.

According to the USDA Foreign Agriculture Service, domestic ethanol exports through May 31, 2026, were approximately 1,001 mmg, up from the 890 mmg for the same period of 2025.

Year to date, Canada was the largest export destination for U.S.

ethanol accounting for approximately 35% of domestic ethanol export volume, driven in part by their national clean fuel standard.

Netherlands, Brazil, India and Colombia accounted for approximately 18%, 15%, 9%, and 5%, respectively, of U.S.

The Netherlands, Brazil, Colombia, South Korea and the Philippines accounted for approximately 18%, 7%, 5%, 5% and 5%, respectively, of U.S.

ethanol exports.

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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 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.

While global protein demand has continued to grow, so too has the production of vegetable proteins, most notably in U.S.

soy crushing capacity.

Soybean processing capacity in the U.S.

has been expanding to meet the rising demand for vegetable oils to produce renewable fuels.

According to the National Oilseed Processors Association, for the first quarter of 2026, soybean crush was approximately 656.6 million bushels, up 83.7 million bushels from the 572.9 million bushels crushed during the first quarter of 2025.

Soybean oil stocks for the first quarter of 2026 were 2.0 billion pounds, which was up 0.5 billion pounds from the 1.5 billion pounds of stocks as of March 31, 2025.

Soybean meal production was 15.6 million short tons for the first quarter of 2026, up 2.0 million short tons from the 13.6 million short tons from the same period in the prior year.

According to the National Oilseed Processors Association, for the second quarter of 2026, soybean crush was approximately 635.0 million bushels, up 66.3 million bushels from the 568.7 million bushels crushed during the second quarter of 2025.

Soybean oil stocks for the second quarter of 2026 were 1.5 billion pounds compared with 1.4 billion pounds for the same quarter last year.

Soybean meal production was 15.1 million short tons for the second quarter of 2026, up 1.6 million short tons from the 13.5 million short tons from the same period in the prior year.

Legislation and Regulation

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and (vi) require use of the most current Treasury‑approved 45Z‑GREET lifecycle analysis model.

The final form of these regulations, including future updates to the 45Z‑GREET model and integration of climate‑smart agricultural practices, may or may not reflect the guidance in the proposed regulations and could materially impact the value of the credit and our ability to benefit from it.

The final form of these regulations, including future updates to the 45Z‑GREET model and integration of regenerative agricultural practices, may or may not reflect the guidance in the proposed regulations and could materially impact the value of the credit and our ability to benefit from it.

The IRA also expanded the carbon capture and sequestration credit under Section 45Q of the Internal Revenue Code to $85 per metric ton of carbon dioxide permanently sequestered.

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

In March 2026, the EPA finalized RVOs for 2026 and 2027, setting the implied conventional ethanol levels at 15 billion gallons for 2026 and 2027.

In March 2026, the EPA finalized RVOs for 2026 and 2027 (RFS "Set 2"), setting the implied conventional ethanol levels at 15 billion gallons for 2026 and 2027.

The EPA also finalized an increase in biomass based diesel volumes setting the volumes at 5.4 billion for 2026 and 5.7 billion for 2027.

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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.

In June 2025, the U.S.

Supreme Court ruled that legal challenges to EPA SRE decisions must be brought exclusively in the U.S.

Court of Appeals for the District of Columbia, resolving prior conflicting appellate court decisions and limiting venue selection in future SRE litigation.

While this ruling provides greater procedural certainty, ongoing litigation and future EPA policy regarding SREs could continue to impact RFS implementation and market dynamics.

Supreme Court ruled that legal challenges to EPA RFS decisions must be brought exclusively in the U.S.

Court of Appeals for the District of Columbia, resolving prior conflicting appellate court decisions and limiting venue selection in future RFS litigation.

On May 28, 2026, several environmental groups filed a lawsuit challenging RFS “Set 2” rule, claiming the EPA failed to properly account for the environmental impacts of crop-based biofuel.

On May 29, 2026, the American Fuel & Petrochemical Manufacturers Association filed a lawsuit challenging the 2026-2027 RVOs citing increased compliance costs.

On June 1, 2026, the Renewable Natural Gas Coalition filed a lawsuit challenging the EPA’s decision to partially waive the cellulosic RVO in the RFS “Set 2” rule.

Court of Appeals for the District of Columbia quickly consolidated these lawsuits by June 3, 2026.

While these lawsuits were an expected outcome of the most recent “Set 2” rule, ongoing litigation and future EPA policy regarding SREs could continue to impact RFS implementation and market dynamics.

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.

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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 2026 driving season marking the eighth consecutive year that E15 is able to be sold year-round nationwide.

year-round nationwide.

The EPA has also allowed for the elimination of the One-Pound Waiver for E10 in several Midwestern states, 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.

Legislation to resolve this issue has been introduced multiple times over the past five years.

In December 2024, a provision to permanently authorize nationwide year-round sales of E15 was included in a government spending bill but was subsequently removed prior to enactment.

In early 2026, legislation to authorize year-round nationwide sales of E15 was expected to be included in the Farm Bill but was ultimately removed prior to House passage.

On May 13, 2026, the U.S.

House of Representatives passed the Nationwide Consumer and Fuel Retailer Choice Act, legislation that would permit nationwide year-round sales of E15 and would also amend certain provisions of the Renewable Fuel Standard.

As of July 31, 2026, year-round E15 provisions were reintroduced for consideration as part of ongoing Farm Bill negotiations, providing an additional potential legislative pathway to permanently authorize nationwide year-round sales of E15.

Although the current Administration has signaled it would sign E15 legislation into law, the future of a legislative fix to summertime E15 remains uncertain as it must pass both chambers of Congress.

A string of 2024 U.S.

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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.

During 2025 and 2026, the United States implemented a series of tariff actions affecting imports from numerous trading partners, and the Office of the U.S.

Trade Representative ("USTR") initiated a Section 301 investigation into certain Brazilian trade practices, including ethanol market access.

In July 2026, USTR announced the imposition of additional tariffs on most imports from Brazil, citing, among other factors, Brazil's treatment of U.S.

ethanol imports.

These actions may affect global ethanol trade flows and the relative competitiveness of imported and exported ethanol.

In addition, the United States-Mexico-Canada Agreement ("USMCA"), which governs a significant portion of North American trade, entered its scheduled six-year review process in 2026.

On July 1, 2026, the United States declined to agree to a 16-year extension of USMCA in its current form, triggering annual joint reviews of the agreement through 2036, although the agreement remains in effect.

These developments, including the potential renegotiation of certain USMCA provisions and changes in trade relations with Canada, a significant export market for U.S.

ethanol, may affect global ethanol trade flows and the relative competitiveness of imported and exported ethanol.

The company continues to monitor developments related to U.S.

trade policy, tariffs, USMCA negotiations and potential retaliatory measures that could impact domestic and international markets for ethanol and related agricultural products.

Environmental and Other Regulation

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Ethanol production

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Cost of goods sold

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Ethanol production (1) (2)

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Depreciation and amortization

1 unchanged sentence

Agribusiness and energy services (3)

31 3,860 (99.2) 62 4,458 (98.6)

Corporate activities 745 782 (4.7) 1,133 1,536 (26.2)

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Operating income (loss)

Ethanol production (2) (4) (5)

$ 70,977 $ (12,218) * $ 110,399 $ (51,768) *

Agribusiness and energy services (3)

6,699 849 * 20,531 3,282 *

Corporate activities (6) (7)

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$ 67,874 $ (28,363) * $ 112,646 $ (90,623) *

(1) Ethanol production includes $56.1 million of Section 45Z production tax credits net of discounts and other costs for the three months ended March 31, 2026, recorded as a reduction of cost of goods sold.

(2) Corporate activities includes $10.3 million of restructuring costs for the three months ended March 31, 2025 as a result of the company's cost reduction initiative, including severance related to the departure of its former CEO.

(1) Ethanol production includes $60.4 million and $116.5 million of Section 45Z production tax credits net of discounts and other costs for the three and six months ended June 30, 2026, recorded as a reduction of cost of goods sold.

(2) Ethanol production includes margins from a one-time sale of accumulated RINs of $22.6 million for the three and six months ended June 30, 2025.

(3) Depreciation and amortization for agribusiness and energy services includes impairment of property and equipment of $3.1 million for the three and six months ended June 30, 2025.

(4) Ethanol production includes $58.7 million and $113.9 million of 45Z production tax credits recorded net of discounts, other costs and selling, general and administrative expenses for the three and six months ended June 30, 2026, respectively.

(5) Ethanol production includes impairment of assets held for sale of $10.7 million for the three and six months ended June 30, 2025.

(6) Corporate activities includes $1.7 million and $12.0 million of restructuring costs for the three and six months ended June 30, 2025 as a result of the company's cost reduction initiative, including severance related to the departure of its former CEO.

(7) Corporate activities include a pretax loss on sale of assets of $4.0 million for the three and six months ended June 30, 2025.

We use EBITDA, adjusted EBITDA, and segment EBITDA as measures of profitability to compare the financial performance of our reportable segments and manage those segments.

EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs.

Adjusted EBITDA includes adjustments related to restructuring costs and our proportional share of EBITDA adjustments of our equity method investees.

Adjusted EBITDA includes adjustments related to restructuring costs, loss on sale of assets, impairment of assets held for sale, loss on sale of equity method investment and our proportional share of EBITDA adjustments of our equity method investees.

We believe EBITDA, adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies.

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Accordingly, our computation of EBITDA, adjusted EBITDA, and segment EBITDA may not be comparable with a similarly titled measure of other companies.

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

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

Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Net income (loss) $ 67,206 $ (72,227) * $ 100,671 $ (144,868) *

Interest expense 8,130 13,899 (41.5) 19,615 22,812 (14.0)

Income tax expense (benefit), net of equity method income taxes 2,916 (165) *

Income tax (benefit) expense, net of equity method income taxes (5,485) 1,885 * (2,569) 1,720 *

Depreciation and amortization (1)

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Restructuring costs — 2,520 * — 19,106 *

Loss on sale of assets — 4,044 * — 4,044 *

Impairment of assets held for sale — 10,724 * — 10,724 *

Loss on sale of equity method investment — 26,987 * 26,987 *

Proportional share of EBITDA adjustments to equity method investees 45 1,050 (95.7) 90 1,828 (95.1)

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Three Months Ended

Variance Six Months Ended

2026 2025 2026 2025

Adjusted EBITDA

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Restructuring costs — 2,520 * — 19,106 *

Loss on sale of assets — 4,044 * — 4,044 *

Impairment of assets held for sale — 10,724 * — 10,724 *

Loss on sale of equity method investment — 26,987 * — 26,987 *

Proportional share of EBITDA adjustments to equity method investees 45 1,050 (95.7) 90 1,828 (95.1)

$ 93,345 $ 16,442 * $ 164,893 $ (7,700) *

(1) Ethanol production includes $55.2 million of Section 45Z production tax credits recorded net of discounts and other costs for the three months ended March 31, 2026.

(2) Corporate activities includes $10.3 million of restructuring costs recorded within selling, general and administrative expenses for the three months ended March 31, 2025 as a result of the company's cost reduction initiative, including severance related to the departure of its former CEO.

(1) Ethanol production includes $58.7 million and $113.9 million of 45Z production tax credits recorded net of discounts, other costs and selling, general and administrative expenses for the three and six months ended June 30, 2026, respectively.

(2) Ethanol production includes margins from a one-time sale of accumulated RINs of $22.6 million for the three and six months ended June 30, 2025.

(3) Ethanol production includes impairment of assets held for sale of $10.7 million for the three and six months ended June 30, 2025.

(4) Corporate activities include a pretax loss on sale of assets of $4.0 million and a pretax loss on sale of equity method investment of $27.0 million for the three and six months ended June 30, 2025, respectively.

* Percentage variance not considered meaningful.

Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025

Consolidated Results

Consolidated revenues decreased $155.7 million for the three months ended March 31, 2026 compared with the same period in 2025, primarily due to lower revenues within our ethanol production segment as a result of lower volumes sold primarily driven by the disposition of our Obion, Tennessee plant and lower weighted average selling prices on ethanol, as well as lower revenues in our agribusiness and energy services segment as a result of the company ceasing a third-party marketing agreement with Tharaldson Ethanol Plant I LLC effective April 1, 2025.

Net income increased $106.1 million and adjusted EBITDA increased $95.7 million for the three months ended March 31, 2026 compared with the same period last year primarily due to recognition of $55.2 million of Section 45Z production tax credits net of discounts and other costs, higher margins in our ethanol production and agribusiness and energy services segments and $23.4 million of lower selling, general and administrative expenses primarily as a result of restructuring costs of $16.6 million incurred during the three months ended March 31, 2025.

Interest expense increased $2.6 million for the three months ended March 31, 2026 compared with the same period in 2025 primarily due to higher debt balances associated with carbon sequestration equipment.

Income tax expense was $2.9 million for the three months ended March 31, 2026, compared with income tax expense of $0.1 million for the same period in 2025 primarily due to the increase in pre-tax book income, which was partially offset by the generation of non-taxable income from the Section 45Z production tax credits, and changes in the valuation allowance on deferred tax assets.

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

Consolidated revenues decreased $106.6 million for the three months ended June 30, 2026 compared with the same period in 2025, primarily due to lower revenues within our ethanol production segment as a result of lower volumes sold primarily driven by the disposition of our Obion, Tennessee plant.

Net income increased $139.4 million and adjusted EBITDA increased $76.9 million for the three months ended June 30, 2026 compared with the same period last year primarily due to recognition of $58.7 million of Section 45Z production tax credits recorded net of discounts, other costs and selling, general and administrative expenses, higher margins in our ethanol production and agribusiness and energy services segments and $5.9 million of lower selling, general and administrative expenses primarily as a result of restructuring costs of $2.5 million incurred during the three months ended June 30, 2025.

Interest expense decreased $5.8 million for the three months ended June 30, 2026 compared with the same period in 2025 primarily due to prior year loan fees related to the issuance and modification of warrants in conjunction with access to a short-term line of credit and an amendment on our Junior Notes, offset by higher debt balances associated with carbon sequestration equipment.

Income tax benefit was $5.5 million for the three months ended June 30, 2026, compared with income tax expense of $2.3 million for the same period in 2025 primarily due to changes in the valuation allowance on deferred tax assets, offset by an increase in pre-tax book income from the generation of non-taxable 45Z production tax credits.

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

Ethanol Production Segment

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Corn consumed (bushels) 54,558 65,312 (16.5)

Revenues in our ethanol production segment decreased $104.4 million for the three months ended March 31, 2026 compared with the same period in 2025, primarily due to lower ethanol, distillers grains and renewable corn oil volumes sold resulting in decreased revenues of $40.8 million, $10.8 million and $2.8 million, respectively, lower weighted average selling prices on ethanol resulting in decreased revenues of $57.6 million, and decreased revenues as a result of hedging activities of $12.3 million, partially offset by higher project revenues of $5.8 million and higher renewable corn oil weighted average selling prices resulting in increased revenues of $7.4 million.

Cost of goods sold in our ethanol production segment decreased $181.8 million for the three months ended March 31, 2026 compared with the same period last year primarily due to the recognition of $56.1 million of Section 45Z production tax credits net of discounts and other costs, as well as lower freight costs, lower corn volumes purchased, decreased weighted average corn prices, lower ethanol volumes purchased and hedging activities resulting in decreased costs of $37.3 million, $35.7 million, $24.4 million, $14.5 million and $7.5 million, respectively.

Operating income in our ethanol production segment increased $79.0 million for the three months ended March 31, 2026 compared with the same period in 2025 primarily due to increased margins as outlined above.

Depreciation and amortization expense for the ethanol production segment was $23.2 million for the three months ended March 31, 2026, compared with $21.0 million for the same period last year, with the increase driven by carbon sequestration equipment placed in service during the fourth quarter of 2025.

Revenues in our ethanol production segment decreased $116.4 million for the three months ended June 30, 2026 compared with the same period in 2025, primarily due to the disposition of our Obion, Tennessee plant resulting in decreased revenues of $60.6 million, decreased ethanol revenues of $11.0 million driven by lower freight revenue and $25.0 million driven by timing of ethanol revenue recognition during the three months ended June 30, 2025 both as a result of our transition to a third party marketing arrangement, a one-time sale of accumulated RINs of $22.6 million during the three months ended June 30, 2025, lower ethanol and distillers grains volumes sold resulting in decreased revenues of $12.3 million and $6.3 million, respectively, decreased revenues as a result of hedging activities of $15.2 million, and lower weighted average selling prices on distillers grains resulting in decreased revenues of $1.2 million, partially offset by higher ethanol and renewable corn oil weighted average selling prices resulting in increased revenues of $15.9 million and $2.0 million, respectively, higher project revenues of $12.2 million and higher renewable corn oil volumes sold resulting in increased revenue of $6.9 million.

Cost of goods sold in our ethanol production segment decreased $187.1 million for the three months ended June 30, 2026 compared with the same period last year primarily due to the recognition of $60.4 million of Section 45Z production tax credits net of discounts and other costs, as well as lower corn volumes purchased, lower ethanol volumes purchased, decreased weighted average corn prices, lower freight costs, and hedging activities resulting in decreased costs of $50.5 million, $45.3 million, $21.4 million, $11.2 million, and $1.6 million, respectively.

Operating income in our ethanol production segment increased $83.2 million for the three months ended June 30, 2026 compared with the same period in 2025 primarily due to increased margins as outlined above.

Depreciation and

amortization expense for the ethanol production segment was $22.7 million for the three months ended June 30, 2026, compared with $22.9 million for the same period last year.

Agribusiness and Energy Services Segment

Revenues in our agribusiness and energy services segment decreased $51.2 million while operating income increased $11.4 million for the three months ended March 31, 2026, compared with the same period in 2025.

Revenues in our agribusiness and energy services segment increased $8.0 million while operating income increased $5.9 million for the three months ended June 30, 2026, compared with the same period in 2025.

The increase in revenues was primarily due to increased ethanol trading revenues.

The increase in operating income was primarily due to higher natural gas trading margins.

Intersegment Eliminations

Intersegment eliminations of revenues decreased by $1.8 million for the three months ended June 30, 2026 primarily due to decreased marketing and corn origination fees paid to the agribusiness and energy services segment as a result of lower volumes processed.

Corporate Activities

Operating loss was impacted by an decrease in corporate activities of $7.2 million for the three months ended June 30, 2026 compared with 2025 primarily due to higher personnel costs as a result of restructuring in the prior period.

Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 2025

Consolidated Results

Consolidated revenues decreased $262.3 million for the six months ended June 30, 2026 compared with the same period in 2025, primarily due to lower revenues within our ethanol production segment as a result of lower volumes sold primarily driven by the disposition of our Obion, Tennessee plant, as well as lower revenues in our agribusiness and energy services segment as a result of the company ceasing a third-party marketing agreement with Tharaldson Ethanol Plant I LLC effective April 1, 2025.

Net income increased $245.5 million and adjusted EBITDA increased $172.6 million for the six months ended June 30, 2026 compared with the same period last year primarily due to recognition of $113.9 million of Section 45Z production tax credits recorded net of discounts, other costs and selling, general and administrative expenses, higher margins in our ethanol production and agribusiness and energy services segments and $29.3 million of lower selling, general and administrative expenses primarily as a result of restructuring costs of $19.1 million incurred during the six months ended June 30, 2025.

Interest expense decreased $3.2 million for the six months ended June 30, 2026 compared with the same period in 2025 primarily due to prior year loan fees related to the issuance and modification of warrants in conjunction with access to a short-term line of credit and an amendment on our Junior Notes, partially offset by higher debt balances associated with carbon sequestration equipment.

Income tax benefit was $2.6 million for the six months ended June 30, 2026, compared with income tax expense of $2.4 million for the same period in 2025 primarily due to changes in the valuation allowance on deferred tax assets, offset by an increase in pre-tax book income from the generation of non-taxable 45Z production tax credits.

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

Ethanol Production Segment

Key operating data for our ethanol production segment is as follows:

Six Months Ended

2026 2025 % Variance

Ethanol (gallons) 334,896 388,899 (13.9)%

Distillers grains (equivalent dried tons) 685 830 (17.5)

Ultra-High Protein (tons) 103 134 (23.1)

Renewable corn oil (pounds) 116,808 129,494 (9.8)

Corn consumed (bushels) 113,360 131,576 (13.8)

Revenues in our ethanol production segment decreased $220.8 million for the six months ended June 30, 2026 compared with the same period in 2025, primarily due to the disposition of our Obion, Tennessee plant resulting in decreased revenues of $127.4 million, decreased ethanol revenues of $47.1 million driven by lower freight revenue and $33.7 million driven by timing of ethanol revenue recognition during the six months ended June 30, 2025 both as a result of our transition to a third party marketing arrangement, decreased revenues as a result of hedging activities of $27.5 million, a one-time sale of accumulated RINs of $22.6 million during the six months ended June 30, 2025, and lower distillers grains volumes sold resulting in decreased revenues of $6.1 million, partially offset by higher project revenues of $17.2 million, higher renewable corn oil and distillers grains weighted average selling prices resulting in increased revenues of $15.7 million and $2.0 million, respectively, and higher corn oil volumes sold resulting in increased revenues of $2.3 million.

Cost of goods sold in our ethanol production segment decreased $369.0 million for the six months ended June 30, 2026 compared with the same period last year primarily due to the recognition of $116.5 million of Section 45Z production tax credits net of discounts and other costs, as well as lower corn volumes purchased, lower ethanol volumes purchased, lower freight costs, decreased weighted average corn prices, and hedging activities resulting in decreased costs of $86.4 million, $69.3 million, $48.5 million, $45.6 million and $9.1 million, respectively.

Operating income in our ethanol production segment increased $162.2 million for the six months ended June 30, 2026 compared with the same period in 2025 primarily due to increased margins as outlined above.

Depreciation and amortization expense for the ethanol production segment was $45.9 million for the six months ended June 30, 2026, compared with $44.0 million for the same period last year, with the increase driven by carbon sequestration equipment placed in service during the fourth quarter of 2025.

Agribusiness and Energy Services Segment

Revenues in our agribusiness and energy services segment decreased $43.2 million while operating income increased $17.2 million for the six months ended June 30, 2026, compared with the same period in 2025.

The decrease in revenues was primarily due to the company ceasing a third-party marketing agreement with Tharaldson Ethanol Plant I LLC effective April 1, 2025, offset by higher natural gas revenues.

1 unchanged sentence

Intersegment Eliminations

Intersegment eliminations of revenues increased by $0.1 million for the three months ended March 31, 2026.

Intersegment eliminations of revenues decreased by $1.7 million for the six months ended June 30, 2026 primarily due to decreased marketing and corn origination fees paid to the agribusiness and energy services segment as a result of lower volumes processed.

Corporate Activities

Operating loss was impacted by an decrease in corporate activities of $16.7 million for the three months ended March 31, 2026 compared with 2025 primarily due to higher personnel costs as a result of restructuring in the prior period.

Operating loss was impacted by an decrease in corporate activities of $23.9 million for the six months ended June 30, 2026 compared with 2025 primarily due to higher personnel costs as a result of restructuring in the prior period.

Liquidity and Capital Resources

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

We believe that our ability to

obtain financing at reasonable rates based on these factors remains sufficient and provides a solid foundation to meet our future liquidity and capital resource requirements.

On March 31, 2026, we had $95.7 million in cash and cash equivalents and $87.4 million in restricted cash.

We believe that our ability to obtain financing at reasonable rates based on these factors remains sufficient and provides a solid foundation to meet our future liquidity and capital resource requirements.

On June 30, 2026, we had $185.4 million in cash and cash equivalents and $57.7 million in restricted cash.

We also had $290.0 million available under our committed revolving credit agreement, subject to restrictions or other lending conditions.

Total corporate liquidity consisting of unrestricted cash, distributable cash from subsidiaries and credit facility availability was $148.3 million as of March 31, 2026.

Total corporate liquidity consisting of unrestricted cash, distributable cash from subsidiaries and credit facility availability was $196.4 million as of June 30, 2026.

Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution.

At March 31, 2026, our subsidiaries had approximately $43.4 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.

On April 17, 2026, the Revolver Facility was amended by the Second Amendment to the Loan and Security Agreement and the borrowing limit was reduced from $350 million to $300 million which reduced our total corporate liquidity.

Net cash used in operating activities was $39.5 million for the three months ended March 31, 2026, compared with net cash used in operating activities of $55.0 million for the same period in 2025.

Net cash used in operating activities compared to the prior year decreased primarily due to higher net income and changes in derivative financial instruments partially offset by working capital changes related to inventories, production tax credits and accounts payable.

Net cash used in investing activities was $4.4 million for the three months ended March 31, 2026, compared with net cash used in investing activities of $20.7 million for the same period in 2025.

At June 30, 2026, our subsidiaries had approximately $44.0 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.

Net cash provided by operating activities was $46.8 million for the six months ended June 30, 2026, compared with net cash provided by operating activities of $3.8 million for the same period in 2025.

Net cash provided by operating activities compared to the prior year increased primarily due to higher net income and changes in derivative financial instruments partially offset by working capital changes related to production tax credits, inventories and accounts payable.

Net cash used in investing activities was $15.1 million for the six months ended June 30, 2026, compared with net cash used in investing activities of $32.3 million for the same period in 2025.

Investing activities were primarily affected by lower capital expenditures in the current period.

Net cash used in financing activities was $3.0 million for the three months ended March 31, 2026, compared with net cash used in financing activities of $7.0 million for the same period in 2025, primarily due higher net payments on short-term borrowings in 2025.

Net cash used in financing activities was $18.7 million for the six months ended June 30, 2026, compared with net cash used in financing activities of $28.1 million for the same period in 2025, primarily due higher net payments on short-term borrowings in 2025 offset by proceeds from a product financing arrangement in 2025.

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 approximately $6.4 million during the three months ended March 31, 2026, primarily for various capital projects.

We incurred net capital expenditures of approximately $17.1 million during the six months ended June 30, 2026, primarily for various capital projects.

The current projected estimate for capital spending related to maintenance, environmental, health and safety is approximately $10 million to $15 million for the remainder of 2026, 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.

We expect additional capital spending related to growth projects during the remainder of 2026.

We expect additional capital spending related to efficiency projects during the remainder of 2026 of $20 million to $25 million, primarily for the addition of a grain storage building at our Wood River facility.

The company financed the CCS projects at its three Nebraska plants.

The payments have commenced and the company is estimating annualized payments to total $17.1 million in 2026.

The company generated $55.2 million of EBITDA resulting from Section 45Z production tax credits net of discounts and other costs during the three months ended March 31, 2026.

Estimated based on the current production outlook, eligible gallons, and price assumptions similar to the production tax credits that were agreed to in the fall of 2025, the company expects to generate between $200 million and $225 million of EBITDA from the generation of 45Z production tax credits for the year ended December 31, 2026.

The company generated $58.7 million and $113.9 million of EBITDA resulting from Section 45Z production tax credits net of discounts and other costs during the three and six months ended June 30, 2026, respectively.

Estimated based on the current production outlook, eligible gallons, and expected sales of the production tax credits, the company expects to generate between $200 million and $225 million of EBITDA from the generation of 45Z production tax credits for the year ended December 31, 2026.

This is subject to change based on actual production volumes, CI factors at eligible plants, and the final sales price of production tax credits generated in 2026.

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Since inception of the repurchase program, we have repurchased 10.3 million shares of common stock for approximately $122.8 million under the program.

We did not repurchase any shares of common stock during the first quarter of 2026.

We did not repurchase any shares of common stock during the second quarter of 2026.

We believe we have sufficient working capital for our existing operations.

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We may sell additional assets or equity or borrow capital to improve or preserve our liquidity.

We were in compliance with our debt covenants at March 31, 2026.

We were in compliance with our debt covenants at June 30, 2026.

Based on our forecasts, we anticipate we will maintain compliance at each of our subsidiaries for the next twelve months.

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We may settle the 2027 Notes in cash, common stock or a combination of cash and common stock.

We plan to settle the 2027 Notes with cash generated from operating activities upon maturity.

On October 27, 2025, the company executed separate, privately negotiated exchange agreements with certain of the holders of its existing 2027 Notes to exchange (the “exchange transactions”) $170 million aggregate principal amount of the 2027 Notes for $170 million of newly issued 5.25% Convertible Senior Notes due November 2030 (the “2030 Notes”).

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The initial conversion rate of the 2030 Notes is 63.6132 shares of common stock per $1,000 principal amount of 2030 Notes (equivalent to an initial conversion price of approximately $15.72 per share of common stock, which represents a conversion premium of approximately 50% over the offering price of our common stock), and is subject to customary anti-dilution adjustments.

At March 31, 2026, the outstanding principal balances on the remaining 2027 Notes and the 2030 Notes were $60.0 million and $200.0 million, respectively.

At June 30, 2026, the outstanding principal balances on the remaining 2027 Notes and the 2030 Notes were $60.0 million and $200.0 million, respectively.

Ethanol Production Segment

Green Plains Shenandoah, a wholly-owned subsidiary, has a $75.0 million secured loan agreement, which matures on September 1, 2035.

At March 31, 2026, the outstanding principal balance was $69.8 million on the loan and the interest rate was 6.52%.

At June 30, 2026, the outstanding principal balance was $69.4 million on the loan and the interest rate was 5.77%.

On and after July 24, 2023, Green Plains Central City Capture Company LLC, Green Plains Wood River Capture Company LLC, and Green Plains York Capture Company LLC, (collectively, the "capture companies") which are all wholly-owned subsidiaries of the company, entered into a series of agreements with Tallgrass High Plains Carbon Storage, LLC ("Tallgrass") and its affiliates to finance, construct and operate carbon capture, transportation and sequestration assets associated with the company’s Central City, Wood River, and York ethanol facilities in Nebraska.

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The payment structure is designed to provide Tallgrass with a 9% pretax, unlevered internal rate of return ("IRR") on its investment.

All projects met criteria for substantial completion and are classified as debt.

All projects met criteria for substantial completion and

are classified as debt.

The total estimated value of this debt recorded on the balance sheet is $125.3 million.

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Agribusiness and Energy Services Segment

At March 31, 2026, Green Plains Finance Company, Green Plains Grain and Green Plains Trade had total senior secured revolving commitments of $350.0 million and an accordion feature whereby amounts available under the Facility may be increased by up to $100.0 million of new lender commitments subject to certain conditions.

Green Plains Finance Company, Green Plains Grain and Green Plains Trade had total senior secured revolving commitments of $300.0 million and an accordion feature whereby amounts available under the Facility may be increased by up to $100.0 million of new lender commitments subject to certain conditions.

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.

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The unused portion of the Facility is also subject to a commitment fee of 0.275% to 0.375%, dependent on undrawn availability.

At March 31, 2026, the outstanding principal balance was $14.0 million on the facility and the interest rate was 6.83%.

At June 30, 2026, the outstanding principal balance was $10.0 million on the facility and the interest rate was 6.24%.

On April 17, 2026, the Facility was further amended by the Second Amendment to the Loan and Security Agreement (the “Second Revolver Amendment”).

The Second Revolver Amendment (i) extends the termination date of the Facility from March 25, 2027 to September 25, 2027 and (ii) reduces the size of the Facility commitment from $350 million to $300 million.

The Second Revolver Amendment (i) extended the termination date of the Facility from March 25, 2027 to September 25, 2027 and (ii) reduced the size of the Facility commitment from $350 million to $300 million.

Green Plains Commodity Management has an uncommitted $20.0 million secured revolving credit facility to finance margins related to its hedging programs that matures on April 30, 2028.

Advances are subject to variable interest rates equal to SOFR plus 1.75%.

At March 31, 2026, the outstanding principal balance was $20.0 million on the facility and the interest rate was 5.45%.

At June 30, 2026, the outstanding principal balance was $17.0 million on the facility and the interest rate was 5.34%.

Green Plains Grain has a short-term inventory financing agreement with a financial institution.

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This agreement is subject to negotiated variable interest rates.

The company had no outstanding short-term notes payable related to the inventory financing agreement as of March 31, 2026.

The company had no outstanding short-term notes payable related to the inventory financing agreement as of June 30, 2026.

Refer to Note 8 - Debt in the notes to the consolidated financial statements included herein for more information about our debt.

Effects of Inflation

We have experienced inflationary impacts on labor costs, wages, components, equipment, other inputs and services across our business and inflation and its impact could escalate in future quarters, many of which are beyond our control.

We have experienced inflationary impacts on labor costs, wages, components, equipment, other inputs and services across our business, many of which are beyond our control, and inflation and its impact could escalate in future quarters.

Moreover, we have fixed price arrangements with our customers and are not able to pass those costs along in most instances.

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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 March 31, 2026 totaled $73.5 million.

As of March 31, 2026, we had contracted future purchases of grain, distillers grains and natural gas valued at approximately $270.1 million, future commitments for storage and transportation valued at approximately $36.6 million, and accumulated commitments related to the construction of carbon capture and sequestration equipment at our three Nebraska plants of $12.9 million.

Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of June 30, 2026 totaled $71.3 million.

As of June 30, 2026, we had contracted future purchases of grain, distillers grains and natural gas valued at approximately $204.3 million, future commitments for storage and transportation valued at approximately $32.9 million, and accumulated commitments related to the construction of carbon capture and sequestration equipment at our three Nebraska plants of $12.4 million.

Refer to Note 13 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.

Critical Accounting Policies and Estimates

Critical accounting policies, including those relating to derivative financial instruments and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.

financial statements.

Information about our critical accounting policies and estimates are included in our annual report on Form 10-K for the year ended December 31, 2025.

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Concurrently, the company elected to change its accounting policy related to the recognition of Section 45Z clean fuel production tax credits.

Under this new policy, the recognition of the production tax credits is contingent on meeting the requirements of Section 45Z and the credits are generated after the low-carbon ethanol is produced.

We recognize the Section 45Z production tax credits at fair value, which is determined by the expected transfer

price of the credits.

Under this new policy, the recognition of the production tax credits occurs when the ethanol is produced, which is when compliance with the 45Z tax credit conditions is deemed probable.

We recognize the Section 45Z production tax credits at fair value, which is determined by the expected transfer price of the credits.

The production tax credits are recognized as current assets in the consolidated balance sheets and as a reduction of cost of goods sold in the consolidated statements 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-Q

Item 2. Management’s Discussion and Analysis