Green Plains Inc.

Green Plains Inc. is a renewable fuels and agricultural technology company focused on producing low-cost, low-Carbon Intensity (CI) ethanol and related co-products from locally sourced corn. The company's goal is to create value through operational excellence, cost leadership, and carbon reduction, positioning itself to benefit from expanding low-carbon fuel markets. Green Plains owns nine strategically located plants across the Midwest, capable of processing approximately 287 million bushels of corn annually when all plants are operating. The company's business model revolves around the production and marketing of ethanol, distillers grains, Ultra-High Protein, and renewable corn oil, with a strong emphasis on reducing the carbon intensity of its products to capitalize on clean fuel programs and tax credits.

The company's core business is divided into two operating segments: Ethanol Production and Agribusiness and Energy Services. The Ethanol Production segment involves the production, storage, and transportation of ethanol, distillers grains, Ultra-High Protein, and renewable corn oil at its nine biorefineries. At full capacity, these facilities can produce approximately 850 million gallons of ethanol, 2.0 million tons of distillers grains and Ultra-High Protein, and 296 million pounds of renewable corn oil annually. The Agribusiness and Energy Services segment includes grain procurement, storage, and commodity marketing, handling both company-produced and third-party commodities. This segment also provides marketing services for co-products and natural gas procurement for the ethanol plants.

In the Ethanol Production segment, the company's nine plants are located in Illinois, Indiana, Iowa, Minnesota, and Nebraska. Eight of these facilities are currently in operation, capable of processing approximately 246 million bushels of corn and producing 730 million gallons of ethanol, 1.7 million tons of distillers grains and Ultra-High Protein, and 254 million pounds of renewable corn oil. The Fairmont, Minnesota plant, with a stated production capacity of 120 million gallons per year (mmgy) ¹, was idled in January 2025 due to persistent margin pressures. The company produces Ultra-High Protein using Fluid Quip Technologies' (FQT) Maximized Stillage Co-products (MSC™) technology, which yields protein concentrations of 50% or greater and yeast concentrations of 25%. Its specialty feed ingredient, Sequence™, achieves protein concentrations of approximately 60%. Renewable corn oil, a low-carbon feedstock for biodiesel and renewable diesel, is extracted at an average rate of approximately 1.0 pound per bushel of corn across the platform.

The Agribusiness and Energy Services segment manages grain storage at the ethanol plants, totaling approximately 12.0 million bushels ². This segment procures grain, primarily corn, from local producers and provides grain drying and storage services. While Green Plains Trade historically marketed ethanol for the company's plants, this ceased in April 2025, with Eco-Energy, LLC taking over ethanol marketing. Green Plains Trade continues to market all other co-products and provides natural gas procurement services for the ethanol plants.

For the fiscal year ended December 31, 2025, Green Plains reported total revenues of $2,091,680 thousand ³, a decrease of $367.1 million ⁴ from 2024. The consolidated net loss for the period was $121,000 thousand ⁵, compared to a net loss of $81,189 thousand ⁶ in 2024. Basic and diluted EPS were $(1.80) ⁷. Gross margin for the company was $136,926 thousand ⁸. Operating loss was $(67,248) thousand ⁹. The company recognized an income tax benefit of $51,746 thousand ¹⁰, primarily due to $54.2 million ¹¹ in Section 45Z production tax credits. Cash and cash equivalents stood at $182,319 thousand ¹², with restricted cash of $47,813 thousand ¹³. Total debt was $408.1 million ¹⁴, with long-term debt at $361,992 thousand ¹⁵ and short-term notes payable and other borrowings at $33,584 thousand ¹⁶. Net cash provided by operating activities was $110,864 thousand ¹⁷.

Year-over-year, consolidated revenues decreased by $367.1 million ⁴ in 2025 compared to 2024, primarily due to lower ethanol volumes sold and the cessation of a third-party ethanol marketing agreement. Ethanol Production segment revenues decreased by $165.2 million ¹⁸, driven by lower volumes of ethanol, distillers grains, and renewable corn oil sold, partially offset by higher average selling prices for ethanol and renewable corn oil, and a one-time sale of accumulated RINs of $22.6 million ¹⁹. The segment's operating loss increased by $14.7 million ²⁰ due to margin impacts, a $14.6 million ²¹ impairment of assets held for sale, increased depreciation and amortization of $7.8 million ²², and non-recurring personnel costs from restructuring. Agribusiness and Energy Services segment revenues decreased by $207.8 million ²³, and operating income decreased by $7.5 million ²⁴, mainly due to the termination of a third-party ethanol marketing agreement and a $3.1 million ²⁵ impairment of property and equipment.

Significant operational developments during the period include the commencement of Carbon Capture and Storage (CCS) operations at three Nebraska biorefineries in Q4 2025, connected to the Tallgrass Trailblazer CO2 Pipeline. The company recorded an income tax benefit of $54.2 million ¹¹ from Section 45Z production tax credits. Green Plains executed privately negotiated exchange agreements for $170 million ²⁶ aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 for $170 million ²⁷ of newly issued 5.25% Convertible Senior Notes due November 2030, and issued an additional $30 million ²⁸ of 2030 Notes for cash. The company also sold its ethanol plant in Rives, Tennessee, for $170 million ²⁹ plus working capital, resulting in a gain of $35.8 million ³⁰. The Junior Notes were fully retired using proceeds from this sale. The company also sold its 50% investment in GP Turnkey Tharaldson for $24.3 million ³¹, incurring a pretax loss of $26.9 million ³². A secured $30 million ³³ revolving credit facility with Ancora Alternatives LLC was entered into and matured in July 2025. The company also entered into an ethanol marketing agreement with Eco-Energy, LLC, effective April 16, 2025, and underwent a corporate reorganization and cost reduction initiative, resulting in $24.3 million ³⁴ in one-time restructuring costs. The Clean Sugar Technology (CST™) facility in Shenandoah, Iowa, was idled in Q1 2025 to optimize product mix.

Green Plains anticipates continued benefits from clean energy-related tax credits, with all eight operational ethanol plants projected to qualify for Section 45Z Clean Fuel Production Credits in 2026, building on the six facilities that qualified in 2025. The company expects to generate at least $188 million ³⁵ of 45Z-related adjusted EBITDA, net of discounts and applicable operating expenses, for the year ended December 31, 2026. This projection is subject to actual production volumes and CI factors at eligible plants.

A major growth area for the company is its carbon reduction strategy, particularly through Carbon Capture and Storage (CCS) operations. CCS is currently operational at the three Nebraska facilities, which are connected to the Tallgrass Trailblazer CO2 Pipeline. The company has also committed its four Iowa and Minnesota facilities to Summit Carbon Solutions, with publicly projected operations commencing in 2028. These CCS initiatives are expected to significantly lower the CI of the company's ethanol, in some cases by more than half, positioning it to benefit from state, federal, and foreign clean fuel programs, including Low Carbon Fuel Standard (LCFS) programs and federal tax credits under the Inflation Reduction Act (IRA) and One Big Beautiful Bill Act (OBBB). The company financed the build and installation of carbon capture equipment at its three Nebraska plants with Tallgrass and expects to begin repayment during the first quarter of 2026, with annualized payments projected at $17.1 million ³⁶.

Another significant growth vector is the company's value-added ingredients initiative, focusing on high protein feeds and renewable corn oil. The company has deployed FQT's MSC™ technology across four biorefinery locations to meet growing demand for protein feed ingredients and low-carbon renewable corn oil, which serves as a feedstock for advanced biofuels like renewable diesel, biodiesel, and Sustainable Aviation Fuel (SAF). The company successfully completed full-scale 60% protein production runs using FQT's MSC™ system, branded as Sequence™. Additionally, a technology collaboration with Equilon Enterprises LLC, announced in July 2023, combines FQT's precision separation and processing technology with Shell Fiber Conversion Technology. This collaboration aims to liberate nearly all remaining distillers corn oil from the fiber fraction of the corn kernel, generate cellulosic sugars for low-carbon ethanol production, and enhance high protein yields for global animal feed diets. The large-scale demonstration facility for this collaboration is operational, and technology and product development has continued to advance through 2025.

Regarding operational outlook, the company launched a corporate reorganization and cost reduction initiative in early 2025, which has significantly reduced selling, general and administrative expenses on an ongoing basis. This initiative identified approximately $50 million ³⁷ of annual financial improvement, including savings from idling the Fairmont, Minnesota facility, transitioning to a third-party ethanol marketer, and realigning corporate and trade group selling, general and administrative functions. The company expects annualized interest expense of approximately $30 million to $35 million ³⁸ for the year ended December 31, 2026, considering the extinguishment of Junior Notes, increased interest rates on convertible notes, and anticipated interest expense related to carbon equipment financing.

Planned capital allocation for 2026 includes approximately $15 million to $25 million ³⁹ for maintenance, environmental, health, and safety capital spending, which is expected to be financed with cash on hand and operating cash flows. Additional capital spending related to growth projects is also expected during 2026. The company's board of directors authorized a share repurchase program of up to $200.0 million ⁴⁰ of its common stock, with $77.2 million ⁴¹ remaining in authorization as of February 10, 2026. The company does not anticipate declaring cash dividends on its common stock for the foreseeable future.

Management has explicitly flagged several structural headwinds and execution risks to its growth plan. The final form of proposed regulations governing the Section 45Z Clean Fuel Production Credit, including future updates to the 45Z-GREET model and integration of climate-smart agricultural practices, may not reflect current guidance and could materially impact the credit's value and the company's ability to benefit. Delays in permitting, construction, or operational issues with supporting infrastructure for CCS, such as carbon pipelines and injection wells, could impair the ability to capture or permanently sequester CO2, limiting or nullifying the benefits of CCS facility-level investments. Rapid expansion of soybean crushing capacity to meet renewable diesel demand could lead to an oversupply of soybean meal, depressing prices for protein feed ingredients and negatively impacting anticipated financial returns from Ultra-High Protein. The transition of the light duty surface transportation fleet from internal combustion engines to electric vehicles (EVs) could decrease demand for ethanol, biodiesel, and renewable diesel.

The company faces material risks including operational, regulatory, and market uncertainties related to its Carbon Capture and Storage (CCS) projects and 45Z production tax credits. Facility operational issues could delay, reduce, or suspend carbon capture operations and/or reduce tax benefits. Regulatory Carbon Intensity (CI) modeling frameworks may change, and federal policies, such as those under the Inflation Reduction Act (IRA), could be modified, adversely impacting corn-based ethanol's access to key tax incentives or reducing potential benefits. Delays in issuing or finalizing regulations, or the rescission of clean energy or carbon capture tax credits, could negatively affect carbon initiatives. The company is also exposed to risks in monetizing Section 45Z production tax credits and voluntary carbon credits at expected values, due to uncertainty in tax credit markets, changes in demand, or regulatory shifts. Furthermore, factors outside the company's control, such as delays in permitting, construction, or operational issues with supporting infrastructure like carbon pipelines and injection wells, could impair CO2 capture and sequestration, limiting or nullifying the benefits of CCS investments. The company's margins are highly dependent on the spread between the prices of corn, natural gas, ethanol, distillers grains, Ultra-High Protein, and renewable corn oil, which are subject to volatile market forces including weather, global supply and demand, political issues, and government policies. Rapid expansion of soybean crushing capacity could lead to an oversupply of soybean meal, depressing prices for protein feed ingredients and negatively impacting financial returns from Ultra-High Protein. Changes in domestic and foreign government biofuels programs, including the Renewable Fuels Standard (RFS) and Low Carbon Fuel Standard (LCFS) programs, or the widespread adoption of electric vehicles, could adversely affect ethanol demand. The company's risk management and commodity trading strategies may be ineffective, exposing it to decreased liquidity from margin calls due to sudden commodity price changes. The company has incurred operating losses in the past and could incur substantial future losses, impacting its stock price and the realizability of deferred tax assets. International trade agreements and policies, such as tariffs and import restrictions, could materially adversely affect the business, financial condition, and results of operations. The company's indebtedness could negatively affect its financial condition and liquidity, and disruptions in the credit market could limit access to capital. Production levels may fluctuate due to planned and unplanned downtime, equipment failures, labor shortages, raw material availability, adverse pricing, or poor rail service. Compliance with evolving environmental, health, and safety laws, particularly those related to climate change, could be costly, and new ethanol process technologies could emerge, placing the company at a competitive disadvantage. The company is exposed to credit risk from customers and counterparties, and as a holding company, its ability to receive distributions from subsidiaries may be limited by financing agreements. Supply chain issues and inflation may impact costs and/or availability of materials, inputs, and labor, adversely affecting operating results. Climate change itself may cause more extreme weather conditions, interfering with operations and causing uninsured damages. The company's insurance policies do not cover all losses, and the price of its common stock may be highly volatile due to factors beyond its control.

Management's overall tone emphasizes a strategic pivot towards becoming a value-add agricultural technology company, focused on producing lower carbon, high-value ingredients. The company has undergone a significant transformation under new leadership, completing targeted asset sales, strengthening liquidity, and reducing debt to position itself for the next phase of the low-carbon transition. A key strategic priority is operational excellence, continuous improvement, and disciplined capital allocation. Management is committed to reducing the Carbon Intensity (CI) of its products through initiatives like Carbon Capture and Storage (CCS) and the purchase of Renewable Energy Certificates (RECs), aiming to benefit from clean fuel programs and tax credits. The company explicitly guides that it expects to generate at least $188 million ³⁵ of 45Z-related adjusted EBITDA, net of discounts and applicable operating expenses, for the year ended December 31, 2026, though this is subject to actual production volumes and CI factors. Another strategic priority is the expansion of its value-added ingredients portfolio, including Ultra-High Protein and renewable corn oil, leveraging FQT's MSC™ and CST™ technologies, and exploring new applications in food production, renewable chemicals, and synthetic biology. The company also highlights its disciplined risk management approach to commodity price volatility as a core competency.