Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
The following discussion and analysis includes information management believes is relevant to understand and assess our consolidated financial condition and results of operations. This section should be read in conjunction with our consolidated financial statements, accompanying notes and the risk factors contained in this report.
Overview
Incorporated in Iowa, Green Plains is a renewable fuels and agricultural technology company focused on producing low-cost, low-CI ethanol and related co-products, including high protein feeds and corn oil from locally sourced corn. Our goal is to create value through an operational excellence focus including disciplined operations, cost leadership and carbon reduction as we position the company to benefit from expanding low-carbon fuel markets.
Founded in 2004, Green Plains now owns nine strategically located plants across the Midwest, capable of processing approximately 287 million bushels of corn annually, when all plants are operating. Today, our focus is to continue operating safely, efficiently and cost-effectively while reducing the CI of our products and maintaining financial flexibility to support long-term growth. During the year, under new leadership, the company completed targeted asset sales, strengthened liquidity and reduced debt, positioning Green Plains to capture value from the next phase of the low-carbon transition. Our streamlined platform is positioned to create value through our focus on operational excellence, continuous improvement and disciplined capital allocation.
Our carbon reduction strategy plays a central role in achieving lower CI biofuel production and participation in various clean fuel programs. Carbon capture and storage ("CCS") is operational at our three Nebraska facilities. These plants are connected to the Tallgrass Trailblazer CO2 Pipeline, while our Iowa and Minnesota locations are committed to CCS through Summit Carbon Solutions, which publicly projects operations commencing in 2028. CCS initiatives are expected to significantly lower CI across our platform. Further, the company has purchased RECs to lower CIs at certain plants. Based on current CI score estimates, all eight operational Green Plains facilities are expected to qualify for the Section 45Z Clean Fuel Production Credit beginning in 2026, with six facilities qualifying in 2025, inclusive of three non-CCS facilities. 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 OBBB, and could position our low-carbon ethanol as a potential feedstock for ATJ pathways to produce SAF.
We have installed and are operating FQT MSC™ technology at four 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%, and increase production of renewable corn oil. We successfully completed full scale 60% protein production runs using FQT's MSC™ system, which is our new specialty feed ingredient branded as Sequence™.
In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT's CST™ at commercial scale, and during 2024 the company successfully commissioned the CST™ equipment in the Shenandoah facility. FQT's CST™ technology allows for the production of both food and industrial grade dextrose at a dry mill ethanol plant to target applications in food production, in addition to serving as a feedstock for renewable chemicals and synthetic biology. The facility has a rated capacity of 60 million pounds of product per year. The facility has been idled since the first quarter of 2025 as the company focuses on optimizing its product mix to maximize current returns. The decision to temporarily pause operations presents an opportunity to make some related infrastructure improvements, which would require additional investment.
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.
SAF is a drop-in fuel, chemically identical to petroleum-based jet fuel and can be blended into the fuel supply at varying levels. There is an increasing focus on using this fuel to reduce the carbon footprint of air travel. SAF can be produced from vegetable and waste oil feedstocks, such as our renewable corn oil. Additionally, ATJ technologies are emerging and being commercialized that use low-CI ethanol as a feedstock to produce SAF.
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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. The two technologies will combine fermentation, mechanical separation and processing, and fiber conversion into one platform. This has the potential to create a new process to liberate nearly 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. The large-scale demonstration facility is operational and technology and product development has continued to advance through 2025.
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. Since market price fluctuations of these commodities are not always correlated, our operations may be unprofitable at times. We use a variety of risk management tools and hedging strategies to monitor price risk exposure at our ethanol plants and lock in favorable margins or reduce production when margins are compressed. Our profitability could be significantly impacted by price movements of the aforementioned commodities.
More information about our business, properties and strategy can be found under Item 1 – Business and a description of our risk factors can be found under Item 1A – Risk Factors .
Industry Factors Affecting our Results of Operations
U.S. Ethanol Supply and Demand
According to the EIA, domestic ethanol production averaged 1.1 million barrels per day during both 2025 and 2024. Refiner and blender input volume was 893 thousand barrels per day for 2025, which was consistent with the 895 thousand barrels per day in 2024. Gasoline demand was consistent compared to the prior year at 8,802 thousand barrels per day in 2025. U.S. domestic ethanol ending stocks decreased by approximately 0.7 million barrels compared to the prior year to 22.9 million barrels as of December 31, 2025.
Global Ethanol Supply and Demand
According to the USDA Foreign Agriculture Service, domestic ethanol exports through October 31, 2025, were approximately 1,750 mmg, which was 14% higher than 1,532 mmg for the same period of 2024. Canada was the largest export destination for U.S. ethanol accounting for approximately 37% of domestic ethanol export volume, driven in part by their national clean fuel standard. The Netherlands, the United Kingdom, India and Columbia accounted for approximately 16%, 9%, 9% and 6%, respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from 2.1 to 2.3 billion gallons in 2026, 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. Dollar could impact the U.S. ethanol competitiveness in the global market.
Protein and Vegetable Oil Supply and Demand
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, for the fourth quarter of 2025, soybean crush was 669 million bushels, up 69 million bushels from the 600 million bushels crushed during the fourth quarter of 2024. Soybean oil stocks were at 1.64 billion pounds as of December 31, 2025, which was up from the 1.24 billion pounds of stocks as of December 31, 2024. Soybean meal production was 15.9 million short tons for the fourth quarter of 2025, up from the 14.2 million short tons from the same period in the prior year.
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Legislation and Regulation
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 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 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, 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 way in which the EPA implements the Corporate Average Fuel Economy (CAFE) standards has fluctuated between further incentivizing EV production and being more accommodating to liquid fuels, depending on the administration. Sales of EVs in the U.S. were approximately 1.3 million vehicles during 2025, which represented approximately 7.8% of new vehicles sales, up from 8.1% in 2024. Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.
The Clean Fuel Production Credit under Section 45Z of the Internal Revenue Code was enacted as part of the Inflation Reduction Act of 2022 and subsequently amended by the One Big Beautiful Bill Act of 2025 (“OBBB”). Section 45Z provides a production tax credit for domestically produced transportation fuel with lifecycle greenhouse gas emissions below a specified threshold for fuel produced after December 31, 2024 and sold before January 1, 2030. The value of the credit is determined based on the fuel’s CI score, subject to prevailing wage and apprenticeship requirements, and may be transferred to third parties.
On February 3, 2026, the U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations governing administration of the Section 45Z Clean Fuel Production Credit. The proposed regulations provide guidance on credit eligibility, emissions rate determination, registration and certification requirements, and implementation of amendments made by the OBBB. Among other things, the proposed regulations (i) limit eligible feedstocks to those grown or produced in the United States, Canada, or Mexico; (ii) eliminate indirect land use change (“iLUC”) from CI calculations; (iii) prohibit negative emissions rates except in limited circumstances; (iv) include anti‑abuse and prohibited foreign entity provisions; (v) allow credit eligibility for fuel sold through intermediaries and, in certain circumstances, related parties; and (vi) require use of the most current Treasury‑approved 45Z‑GREET lifecycle analysis model. The proposed regulations remain subject to a 60 day comment period. 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 Inflation Reduction Act 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. However, Section 45Q credits generally cannot be claimed on the same emissions reductions used to calculate Section 45Z credits, which may affect the economics and timing of carbon capture investments.
The RFS sets a floor for biofuels use in the United States. In June 2025, the EPA proposed RVOs for 2026 and 2027, setting the implied conventional ethanol levels at 15 billion gallons for 2026 and 2027. The EPA also proposed an increase in biomass based diesel volumes setting the volumes at 5.61 billion for 2026 and 5.86 billion for 2027. The EPA proposed that any foreign produced fuel or fuel produced with foreign feedstocks would only generate 50% of the RIN value. In September 2025, the EPA issued a supplemental RVO proposal to reallocate 2023-2025 volumes waived by SREs. They co-proposed two options: 50% or 100% reallocation. Final 2026-2027 RVOs have not been published as of this filing.
Under the RFS, RINs impact supply and demand. The EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use in each annual RVO based on their percentage of total production of domestic transportation fuel sales. Obligated parties use RINs to show compliance with the RFS mandated volumes. Ethanol
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producers assign RINs to each gallon of renewable fuel they produce and the RINs are detached when the renewable fuel is blended with transportation fuel domestically. Market participants can trade the detached RINs in the open market. The market price of detached RINs can affect the price of ethanol in certain markets and can influence purchasing decisions by obligated parties. SREs can reduce or waive entirely the obligation for a refinery, which has the practical effect of reducing the RVO, and by extension the number of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple on-going legal challenges to how the EPA has handled SREs and RFS rulemakings. On October 21, 2024, the U.S. Supreme Court agreed to review the various Circuit Court rulings on SREs to determine the proper venue. 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.
The One-Pound Waiver, which was extended in May 2019 to allow E15 to be sold year-round to all vehicles model year 2001 and newer, was challenged in an action filed in Federal District Court for the D.C. Circuit. On July 2, 2021, the Circuit Court vacated the EPA’s rule so the future of summertime, defined as June 1 to September 15, sales of E15 is uncertain. The Supreme Court subsequently declined to hear a challenge to this ruling. In 2022, the EPA issued emergency waivers to allow for the continued sale of E15 during the summer months and similar summertime waivers have been issued each year since then, with the 2025 driving season marking the seventh consecutive year that E15 is able to be sold year-round nationwide. 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.
In October 2019, the White House directed the USDA and EPA to move forward with rulemaking to expand access to higher blends of biofuels. This includes funding for infrastructure, labeling changes and allowing E15 to be sold through E10 infrastructure. The USDA rolled out the Higher Blend Infrastructure Incentive Program in the summer of 2020, providing competitive grants to fuel terminals and retailers for installing equipment capable of dispensing higher blends of ethanol and biodiesel. In December 2021, the USDA announced it would administer another infrastructure grant program. The IRA provided for an additional $500 million in USDA grants for biofuel infrastructure. On June 26, 2023, the USDA announced the initial $50 million in awards, and laid out a process for distributing the remaining $450 million, with $90 million being made available each quarter.
A string of 2024 U.S. Supreme Court decisions, namely Loper Bright Enterprises v. Raimondo, SEC v. Jarkesy and Corner Post, Inc. v. 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. v. 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
Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol, crude oil and other liquid hydrocarbon materials. Compliance with existing and anticipated environmental laws and regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate and upgrade equipment and facilities. Our business may also be impacted by domestic and foreign government policies, such as incentives, tariffs, duties, subsidies, import and export restrictions and outright embargos.
Variability of Commodity Prices
Our business is highly sensitive to commodity price fluctuations, particularly for corn, ethanol, renewable corn oil, distillers grains, Ultra-High Protein, and natural gas, which are impacted by factors that are outside of our control, including weather conditions, corn yield, changes in domestic and global ethanol supply and demand, government programs and policies and the price of crude oil, gasoline and substitute fuels. We use various financial instruments to manage and reduce our exposure to price variability. For more information about our commodity price risk, refer to Item 7A. - Qualitative and Quantitative Disclosures About Market Risk, Commodity Price Risk in this report.
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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. Moreover, we have fixed price arrangements with our customers and are not able to pass those costs along in most instances. As such, inflationary pressures could have a material adverse effect on our performance and financial statements. Inflation has and may continue to impact the interest rate environment in which we operate, resulting in a higher cost of capital. Refer to Item 7A. - Qualitative and Quantitative Disclosures About Market Risk, Commodity Price Risk in this report for additional information related to interest rate risk.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements requires that we use estimates that affect the reported assets, liabilities, revenue and expense and related disclosures for contingent assets and liabilities. We base our estimates on experience and assumptions we believe are proper and reasonable. While we regularly evaluate the appropriateness of these estimates, actual results could differ materially from our estimates. The following accounting policies, in particular, may be impacted by judgments, assumptions and estimates used in the preparation of our consolidated financial statements.
Derivative Financial Instruments
We use various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes, including but not limited to, corn, ethanol, natural gas and other agricultural and energy products. We monitor and manage this exposure as part of our overall risk management policy to reduce the adverse effect market volatility may have on our operating results. We may hedge these commodities as one way to mitigate risk; however, there may be situations when these hedging activities themselves result in losses.
By using derivatives to hedge exposures to changes in commodity prices, we are exposed to credit and market risk. Our exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the terms of the derivative contract. We minimize our credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring their financial condition. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. We manage market risk by incorporating parameters to monitor exposure within our risk management strategy, which limits the types of derivative instruments and strategies we can use and the degree of market risk we can take using derivative instruments.
Forward contracts are recorded at fair value unless the contracts qualify for, and we elect, normal purchase or sale exceptions. Changes in fair value are recorded in operating income unless the contracts qualify for, and we elect, cash flow hedge accounting treatment.
Please refer to Note 10 - Derivative Financial Instruments included in the notes to the audited consolidated financial statements included herein for further details.
Accounting for Income Taxes
We adopted a new accounting policy related to the recognition, measurement, and presentation of transferable Clean Fuel Production Credits under Section 45Z of the Internal Revenue Code. In accordance with ASC 740, Accounting for Income Taxes, accounting guidance states it is most appropriate to apply ASC 740 to nonrefundable transferable tax credits. Under ASC 740, a company should recognize tax credits when it is “more-likely-than-not” ("MLTN") the underlying qualifying activity has occurred giving rise to the credit, and the company expects to earn and use or sell the tax credit. If it is uncertain whether the company will be able to use or sell the credit, a valuation allowance is established against the deferred tax asset. We have determined that it is MLTN the underlying qualifying activity has occurred to earn the tax credit and therefore, recognized a tax benefit for gallons produced and sold at certain qualifying plants during the year ended December 31, 2025.
Under this new policy, we recognize the Section 45Z production tax credits as a deferred tax asset, which is treated as a deferred income tax benefit, net of a valuation allowance to recognize the fair value of the tax credits, and is determined based on the expected transfer price of the credits. The recognition of the production tax credits is contingent on meeting the
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requirements of Section 45Z.
Income taxes are accounted for under the asset and liability method in accordance with GAAP. Deferred tax assets and liabilities are recognized for future tax consequences between existing assets and liabilities and their respective tax basis, and for net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in years temporary differences are expected to be recovered or settled. The effect of a tax rate change is recognized in the period that includes the enactment date. The realization of deferred tax assets depends on the generation of future taxable income during the periods in which temporary differences become deductible. Management considers scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies to make this assessment. A valuation allowance is recorded by the company when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers the positive and negative evidence to support the need for, or reversal of, a valuation allowance. The weight given to the potential effects of positive and negative evidence is based on the extent it can be objectively verified.
To account for uncertainty in income taxes, we gauge the likelihood of a tax position based on the technical merits of the position, perform a subsequent measurement related to the maximum benefit and degree of likelihood, and determine the benefit to be recognized in the financial statements, if any.
Please refer to Note 15 - Income Taxes included in the notes to the audited consolidated financial statements included herein for further details.
Recently Issued Accounting Pronouncements
For information related to recent accounting pronouncements, see Note 2 – Summary of Significant Accounting Policies included in the notes to the audited consolidated financial statements included herein.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Components of Revenues and Expenses
Revenues . 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 distillers grains and renewable corn oil that we market for our ethanol plants, in which we earn a marketing fee. Our agribusiness and energy services segment also marketed ethanol produced by the plants until April 2025, when the company executed an agreement for Eco-Energy, LLC to market this production. This segment's revenues also contain sales of ethanol we marketed for a third-party, which ceased in April of 2025, and Ultra-High Protein we marketed for a third-party, which ceased in October of 2025, 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.
Cost of Goods Sold. For our ethanol production segment, cost of goods sold includes materials, direct labor, shipping and plant overhead costs. Materials include the cost of corn feedstock, natural gas, denaturant and process chemicals. 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. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold. Plant overhead consists primarily of plant utilities, repairs and maintenance, and outbound freight charges.
For our agribusiness and energy services segment, purchases of ethanol, distillers grains, renewable corn oil and grain are the primary component of cost of goods sold. Fair value hedged inventories and forward purchase and sale contracts are valued at market prices when available or other market quotes adjusted for differences, such as transportation, between the exchange-traded market and local markets where the terms of the contracts are based. 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.
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Selling, General and Administrative Expenses. Selling, general and administrative expenses are recognized at the operating segment and corporate level. These expenses consist of employee salaries, incentives and benefits; office expenses; director fees; and professional fees for accounting, legal, consulting and investor relations services. Personnel costs, which include employee salaries, incentives and benefits, as well as severance and separation costs, are the largest expenditure. 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 ethanol plant located in Rives, Tennessee in September 2025, resulting in a pretax gain of $35.8 million recorded at the corporate level. We also completed the sale of our 75% interest in Proventus LLC in May of 2025, resulting in a pretax loss of $4.0 million recorded at the corporate level. We completed the sale of the terminal located in Birmingham, Alabama in September 2024, resulting 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, resulting in a pretax gain of $4.1 million recorded at the corporate level.
Other Income (Expense). Other income (expense) includes interest earned, interest expense, inclusive of losses from debt extinguishments of $36.9 million for the year ended December 31, 2025, and other non-operating items including $3.4 million of grants received from the USDA for the year ended December 31, 2023 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 and includes a pretax loss on the sale of our 50% investment in GP Turnkey Tharaldson of $26.9 million for the year ended December 31, 2025.
Income Tax Benefit (Expense). Income tax benefit (expense) includes clean fuel production tax credits allowable under the IRA and OBBB. The credits are recognized as a tax benefit in the period in which production occurs, and the product is sold in a qualifying manner. The tax benefit recognized is determined based on the company's CI score to date and the expected sales price of the credits.
Results of Operations
We maintained an average utilization rate of approximately 82%, or 94% excluding Fairmont, of capacity during 2025, compared with 87% of capacity for the prior year, with both years measured using our updated capacity as discussed in Item 1 of this filing. 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 co-products we produce, and the supply and pricing of renewable feedstocks needed to operate our biorefineries.
Comparability
The following summarizes various events that affect the comparability of our operating results for the past three years:
• September 2025
Sale of ethanol plant in Rives, Tennessee (or the "Obion Transaction")
• April 2025
Ceasing of a third-party ethanol marketing agreement effective April 1, 2025
• January 2025
Began generating Section 45Z clean fuel production tax credits
• January 2025
Began corporate restructuring and cost savings initiatives lasting throughout 2025
• January 2025
Idling of ethanol plant in Fairmont, Minnesota
• September 2024
Sale of terminal located in Birmingham, Alabama
• September 2023
Sale of ethanol plant located in Atkinson, Nebraska
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 7, 2025.
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Segment Results
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.
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, 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. Consequently, these transactions affect segment performance; however, they do not impact our consolidated results since the revenues and corresponding costs are eliminated.
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):
Year Ended December 31,
Revenues
Ethanol production
Revenues from external customers
Intersegment revenues
Total segment revenues
Agribusiness and energy services
Revenues from external customers
Intersegment revenues
Total segment revenues
Revenues including intersegment activity
Intersegment eliminations
Year Ended December 31,
Cost of goods sold
Ethanol production
Agribusiness and energy services
Intersegment eliminations
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Year Ended December 31,
Gross margin
Ethanol production (1)(2)
Agribusiness and energy services
Year Ended December 31,
Depreciation and amortization
Ethanol production
Agribusiness and energy services (3)
Corporate activities (4)
Year Ended December 31,
Operating income (loss)
Ethanol production (1)(2)(5)
Agribusiness and energy services (3)
Corporate activities (4)(6)(7)
(1) Ethanol production includes inventory lower of cost or net realizable value adjustments of $1.5 million, $2.1 million, and $2.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.
(2) Ethanol production includes margins from a one-time sale of accumulated RINs of $22.6 million for the year ended December 31, 2025.
(3) Depreciation and amortization for agribusiness and energy services includes impairment of property and equipment of $3.1 million for the year ended December 31, 2025.
(4) 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.
(5) Ethanol production includes impairment of assets held for sale of $14.6 million for the year ended December 31, 2025.
(6) Corporate activities includes $16.1 million of restructuring costs for the year ended December 31, 2025, as a result of the company's cost reduction initiative, including severance related to the departure of its former CEO.
(7) Corporate activities for the years ended December 31, 2025 and 2024 include a pretax gain on sale of assets, net of $31.5 million and $30.7 million, 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. 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, net gain on sale of assets, loss on sale of equity method investment, impairment of assets held for sale, our proportional share of EBITDA adjustments of our equity method investees, 45Z production tax credits, and other (income) expense related to liability-based warrant expense and the USDA COVID-19 relief grants. We believe EBITDA, adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies. These measures should not be considered an alternative to, or more meaningful than, net income, which is prepared in accordance with GAAP. EBITDA, adjusted EBITDA, and segment EBITDA calculations may vary from company to company. Accordingly, our computation of EBITDA, adjusted EBITDA, and segment EBITDA may not be comparable with a similarly titled measure of other companies.
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The following table reconciles net loss including noncontrolling interest to adjusted EBITDA (in thousands):
Year Ended December 31,
Net loss
Interest expense
Income tax expense (benefit), net of equity method income taxes
Depreciation and amortization (1)
EBITDA
Restructuring costs
Gain on sale of assets, net
Impairment of assets held for sale
Other (income) expense (2)
45Z production tax credits (3)
Loss on sale of equity method investment
Proportional share of EBITDA adjustments to equity method investees
Adjusted EBITDA
(1) Excludes the amortization of operating lease right-of-use assets and amortization of debt issuance costs.
(2) Other (income) expense for the year ended December 31, 2025 includes non-cash expense related to the revaluation of liability-based warrants recorded within other, net on the consolidated statements of operations, while the year ended December 31, 2023 includes grants received from the USDA related to the Biofuel Producer Program of $3.4 million.
(3) 45Z production tax credits are recorded in income tax benefit on the consolidated statements of operations for the year ended December 31, 2025.
The following table reconciles segment EBITDA to consolidated adjusted EBITDA (in thousands):
Year Ended December 31,
Adjusted EBITDA:
Ethanol production (1)
Agribusiness and energy services
Corporate activities (2)(3)
EBITDA
Restructuring costs
Gain on sale of assets, net
Impairment of assets held for sale
Other (income) expense (4)
45Z production tax credits (5)
Loss on sale of equity method investment
Proportional share of EBITDA adjustments to equity method investees
Adjusted EBITDA
(1) Ethanol production includes margins from a one-time sale of accumulated RINs of $22.6 million for the year ended December 31, 2025, offset by impairment of assets held for sale of $14.6 million for the year ended December 31, 2025, and an inventory lower of cost or net realizable value adjustment of $1.5 million, $2.1 million and $2.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
(2) Corporate activities includes $16.1 million of restructuring costs for the year ended December 31, 2025 as a result of the company's cost reduction initiative, including severance related to the departure of its former CEO.
(3) Corporate activities include a net pretax gain on sale of assets of $31.5 million for the year ended December 31, 2025, and a pretax loss on the sale of equity method investment of $26.9 million for the same period. Corporate activities include a net pretax gain on sale of assets of $30.7 million for the year ended December 31, 2024.
(4) Other (income) expense for the year ended December 31, 2025 includes non-cash expense related to the revaluation of liability-based warrants recorded within other, net on the consolidated statements of operations, while the year ended December 31, 2023 includes grants received from the USDA related to the Biofuel Producer Program of $3.4 million.
(5) 45Z production tax credits are recorded in income tax benefit on the consolidated statements of operations for the year ended December 31, 2025.
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Total assets by segment are as follows (in thousands):
Year Ended December 31,
Total assets (1)
Ethanol production
Agribusiness and energy services
Corporate assets
Intersegment eliminations
(1) Asset balances by segment exclude intercompany balances.
Year Ended December 31, 2025 compared with the Year Ended December 31, 2024
Consolidated Results
Consolidated revenues decreased $367.1 million in 2025 compared with 2024 primarily as a result of lower ethanol volumes sold, as well as the company ceasing a third-party ethanol marketing agreement with Tharaldson Ethanol Plant I LLC effective April 1, 2025.
Net loss increased $39.8 million in 2025 compared with 2024 primarily due to $36.9 million of non-recurring interest expense related to the junior mezzanine notes extinguished and the convertible notes exchange in 2025, a $26.9 million loss on sale of equity method investment and non-recurring restructuring costs of $24.3 million, partially offset by the recognition of $54.2 million of 45Z production tax credits in 2025. Adjusted EBITDA increased $75.3 million in 2025 compared with 2024 primarily due to $54.2 million of year-to-date Section 45Z production tax credit value net of discounts recorded as income tax benefit in 2025. Interest expense increased $43.6 million in 2025 compared with 2024 driven primarily by the refinancing and extinguishment of the Junior Notes and the convertible notes exchange in 2025. Income tax benefit, including income tax benefit from equity method investees, was $52.4 million in 2025 compared to an income tax expense of $5.2 million in 2024 with the change primarily due to the recognition of $54.2 million of 45Z production tax credits in 2025.
The following discussion provides greater detail about our segment performance.
Ethanol Production Segment
Key operating data for our ethanol production segment is as follows:
Year Ended December 31,
Ethanol (thousands of gallons)
Distillers grains (thousands of equivalent dried tons)
Ultra-High Protein (thousands of tons)
Renewable corn oil (thousands of pounds)
Corn (thousands of bushels)
Revenues in our ethanol production segment decreased $165.2 million in 2025 compared with 2024 primarily due to lower ethanol, distillers grains, and renewable corn oil volumes sold resulting in decreased revenues of $145.1 million, $39.8 million and $11.5 million, respectively, in addition to lower average selling prices of distillers grains resulting in decreased revenues of $18.9 million, partially offset by higher weighted average selling prices of ethanol and renewable corn oil volumes sold resulting in increased revenues of $20.2 million and $27.7 million, respectively, as well as $22.6 million related to a one-time sale of accumulated RINs. Revenues also decreased as a result of hedging activities by $21.7 million.
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Cost of goods sold in our ethanol production segment decreased $179.2 million for 2025 compared with 2024 primarily due to lower corn volumes processed, lower freight costs, lower repair and maintenance costs, lower chemical costs and hedging activities resulting in decreases of $137.5 million, $80.7 million, $12.6 million, $4.8 million and $1.2 million, respectively, partially offset by higher ethanol volumes purchased and higher weighted average corn prices resulting in increased costs of $52.5 million and $17.5 million, respectively.
Operating loss in our ethanol production segment increased $14.7 million in 2025 compared with 2024 primarily due to impact to margins as outlined above, impairment of assets held for sale of $14.6 million, an increase in depreciation and amortization expense of $7.8 million as a result of additional assets being placed in service and non-recurring increased personnel costs as a result of restructuring.
Agribusiness and Energy Services Segment
Revenues in our agribusiness and energy services segment decreased $207.8 million while operating income decreased $7.5 million in 2025 compared with 2024. The decrease in revenues was primarily a result of the company ceasing a third-party ethanol marketing agreement with Tharaldson Ethanol Plant I LLC effective April 1, 2025. Operating income decreased primarily as a result of the impairment of property and equipment of $3.1 million as well as non-recurring increased personnel costs as a result of restructuring in 2025.
Intersegment Eliminations
Intersegment eliminations of revenues decreased by $5.9 million for 2025 compared with 2024 primarily due to decreased freight revenue associated with the ethanol production segment as well as 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 a decrease in corporate activities of $2.4 million for 2025 compared with 2024, which was primarily due to an increase in gain on sale of assets and a decrease in selling, general and administrative expenses as a result of the company's corporate reorganization and cost reduction initiative, partially offset by non-recurring increased personnel costs as a result of restructuring.
Income Taxes
We recorded income tax benefit, including income tax benefit from equity method investees of $52.4 million for 2025 compared to an income tax expense of $5.2 million in 2024 with the change primarily due to the recognition in 2025 of 45Z production tax credits.
Liquidity and Capital Resources
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. 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 December 31, 2025, we had $182.3 million in cash and cash equivalents and $47.8 million in restricted cash. We also had $325.0 million available under our committed revolving credit agreement, subject to restrictions or other lending conditions based specifically on the availability of sufficient eligible collateral to support additional borrowings. Total corporate liquidity consisting of unrestricted cash and distributable cash from subsidiaries was $138.5 million as of December 31, 2025. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution. At December 31, 2025, our subsidiaries had approximately $36.8 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 (used in) operating activities was $110.9 million in 2025 compared to $(30.0) million in 2024. Operating activities compared to the prior year were primarily affected by lower receivable and inventory balances due to a
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shortened cash conversion cycle resulting from the marketing agreement with Eco-Energy, LLC. This improvement was partially offset by a higher net loss compared to the prior year. Net cash provided by (used in) investing activities was $162.1 million in 2025 compared to $(62.1) million in 2024 primarily due to increases in proceeds from sale of assets and equity method investment, partially offset by decreases in capital expenditures. Net cash used in financing activities was $252.3 million in 2025 compared to $77.4 million in 2024 primarily due to the repayment of the Junior Notes, payments for repurchase of common stock and higher net payments on the revolver, partially offset by the prior period extinguishment of non-controlling interest when compared to 2024.
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 net capital expenditures of $ 37.2 million in 2025, related to various capital projects. The current projected estimate for capital spending related to maintenance, environmental, health and safety is approximately $15 million to $25 million in 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 2026.
The company financed the CCS projects at its three Nebraska plants. The company anticipates payments to begin in 2026 and projects annualized payments of $17.1 million.
The company recognized $54.2 million of income tax benefit related to 45Z production tax credits during the year ended December 31, 2025. Based on current production outlook and eligible gallons the company expects to generate at least $188 million of 45Z-related of adjusted EBITDA, net of discounts and applicable operating expenses, for the year ended December 31, 2026. This is subject to change based on actual production volumes and CI factors at eligible plants.
During the year ended December 31, 2025, the company recognized a loss on debt extinguishment of $36.9 million, which was recorded within interest expense on the consolidated statements of operations. Further, on October 27, 2025 the company completed a $200.0 million convertible note exchange resulting in $170.0 million of the 2.25% senior notes due 2027 being extinguished. The interest rate on the new convertible notes due 2030 is 5.25%. When considering the extinguishment of the Junior Notes, the increased interest rate on convertible notes, the increased amount of outstanding convertible notes and anticipated interest expense related to the carbon equipment financing, the company expects annualized interest expense of approximately $30 to $35 million for the year ended December 31, 2026. This estimate is subject to change based on actual working capital revolver usage and market interest rates in future periods.
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. Sudden changes in commodity prices may require cash deposits with brokers for margin calls or significant liquidity with little advanced notice to meet margin calls, depending on our open derivative positions. We continuously monitor our exposure to margin calls and believe we will continue to maintain adequate liquidity to cover margin calls from our operating results and borrowings.
Our board of directors authorized a share repurchase program of up to $200.0 million of our common stock. Under the program, we may repurchase shares in open market transactions, privately negotiated transactions, accelerated share buyback programs, tender offers or by other means. The timing and amount of repurchase transactions are determined by our management based on market conditions, share price, legal requirements and other factors. The program may be suspended, modified or discontinued at any time without prior notice. On October 27, 2025, in conjunction with the privately negotiated exchange and subscription agreements for the 2030 Notes, the company repurchased 2.9 million shares of its common stock for a total of $30.0 million under the repurchase program. No other repurchase was made during 2025. We did not repurchase any common stock in 2024 or 2023. To date, we have repurchased approximately 10.3 million shares of common stock for approximately $122.8 million under the program. At February 10, 2026, $77.2 million in share repurchase authorization remained.
We believe we have sufficient working capital for our existing operations. A continued sustained period of unprofitable operations, however, may strain our liquidity. We may sell additional assets or equity or borrow capital to improve or preserve our liquidity, expand our business or acquire businesses.
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Debt
We were in compliance with our debt covenants at December 31, 2025. Based on our forecasts, we anticipate we will maintain compliance at each of our subsidiaries for the next twelve months. 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. In the event a subsidiary is unable to comply with its debt covenants, the subsidiary’s lenders may determine that an event of default has occurred, and following notice, the lenders may terminate the commitment and declare the unpaid balance due and payable.
Corporate Activities
In March 2021, we issued $230.0 million of unsecured 2.25% convertible senior notes due in 2027 (the "2027 Notes"). The 2027 Notes bear interest at a rate of 2.25% per year, payable on March 15 and September 15 of each year. The initial conversion rate is 31.6206 shares of our common stock per $1,000 principal amount of 2027 Notes (equivalent to an initial conversion price of approximately $31.62 per share of our common stock), representing an approximately 37.5% premium over the offering price of our common stock. The conversion rate is subject to adjustment upon the occurrence of certain events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and warrants; spinoffs; or a tender or exchange offering. In addition, we may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including our calling the 2027 Notes for redemption. We may settle the 2027 Notes in cash, common stock or a combination of cash and common stock.
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”). Additionally, the company completed separate, privately negotiated subscription agreements pursuant to which it issued $30 million of 2030 Notes for $30 million in cash (the “subscription transactions”). $200 million in aggregate principal amount of the 2030 Notes is now outstanding, and $60 million in aggregate principal amount of the 2027 Notes remains outstanding with existing terms unchanged. The 2030 Notes will bear interest at a rate of 5.25% per year, payable on May 1 and November 1 of each year, beginning May 1, 2026. The notes will be general senior, unsecured obligations of the company. 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 December 31, 2025, the outstanding principal balances on the remaining 2027 Notes and the 2030 Notes was $60.0 million and $200.0 million, respectively.
On May 7, 2025, we entered into a secured $30 million revolving credit facility with Ancora Alternatives LLC, that gave us additional flexibility in order to continue the implementation of our strategic plan. The facility matured on July 30, 2025. The facility bore interest at 10% on borrowings and had a 0.5% fee on the unused balance. Interest and fees were due on the 5th of each month. Also executed as part of the credit facility, the company issued 1,504,140 stock warrants at a strike price of $0.01 per share. The warrants had a ten year exercise period.
Ethanol Production Segment
On September 25, 2025, proceeds from the Obion Transaction were used to fully retire the Junior Notes. The Junior Notes were originally issued on February 9, 2021, by Green Plains SPE LLC, a wholly-owned special purpose subsidiary and parent of Green Plains Obion and Green Plains Mount Vernon for $125.0 million due February 2026 with BlackRock. The Junior Notes were secured by a pledge of the membership interests in and the real property owned by Green Plains Obion and Green Plains Mount Vernon. On May 7, 2025 the Junior Notes were amended to give the company additional flexibility in order to continue the implementation of our strategic plan, which extended the maturity date from February 9, 2026 to May 15, 2026, with an amendment fee of 2.0% added to the principal balance of the Junior Notes, payable at the maturity date. Further, the strike price of warrants previously issued in conjunction with the Junior Notes was revised from $22.00 to $0.01 and the maturity date extended from April 28, 2026 to December 31, 2029. As of July 31, 2025, the Junior Notes also were secured by a pledge of the membership interests in, the assets and the real property owned by Green Plains Madison LLC, Green Plains Superior LLC, Green Plains Fairmont LLC, Green Plains Otter Tail LLC, Green Plains Wood River and Green Plains York LLC, as well as the assets and membership interests of Fluid Quip Mechanical, LLC.
On August 10, 2025, the company amended and restated the indenture covering the Junior Notes with BlackRock to extend the maturity date to September 15, 2026, with an amendment fee of 2.5% added to the principal balance of the Junior
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Notes, payable at the maturity date. The interest rate increased by 0.5% after the amendment, and by an additional 0.5% each quarter on each scheduled interest payment date. In addition to assets and equity securities pledged, the Junior Notes were then also secured by the assets and the real property owned by Green Plains Central City LLC. The amendment added certain financial covenant requirements, including restrictions on additional debt and certain transfer of assets. Also as part of the amendment, the company executed a subscription agreement with certain funds and accounts under management by BlackRock pursuant to which the company agreed to issue, and certain funds and accounts under management by BlackRock purchased, 3,250,000 stock warrants at a strike price of $0.01 per share with a ten year exercise period. The amendment also included the right for such funds and accounts to exchange up to 750,000 warrants for a pro rata share of $6 million of outstanding principal of Junior Notes. The subscription agreement obligated the company to register for resale the shares of common stock underlying warrants issued to BlackRock.
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, 2025, the outstanding principal balance was $70.1 million on the loan and the interest rate was 6.52%.
On and after July 24, 2023, Green Plains York Capture Company LLC, a wholly-owned subsidiary of the company, entered into a series of agreements with Tallgrass High Plains Carbon Storage, LLC and its affiliates to finance, construct and operate carbon capture, transportation and sequestration assets associated with the Company’s York, Nebraska ethanol facility. Under the agreements, Green Plains York Capture Company LLC is obligated to repay Tallgrass all costs associated with the construction of the carbon capture and compression facilities over a 144-month delivery period. The payment structure is designed to provide Tallgrass with a 9% pretax, unlevered internal rate of return (IRR) on its investment. As of December 31, 2025, this project has met criteria for substantial completion and is classified as debt. The total estimated value of this debt recorded on the balance sheet is $34.5 million. Repayments commenced in January 2026. This debt is secured by substantially all real and personal property interests associated with the Green Plains York Capture Company LLC. Green Plains Inc. further supports the obligation through a Parent Guaranty, under which it unconditionally guarantees Green Plains York Capture Company LLC’s performance and payment obligations. Green Plains York Capture Company LLC may pre-repay the obligation early by providing Tallgrass at least ninety days prior written notice and remitting the prepayment, which represents the amount required for Tallgrass to achieve its contracted 9% pretax, unlevered internal rate of return on its investments.
The total spend related to the other two Nebraska CCS construction projects has been recorded within carbon equipment liabilities on the consolidated balance sheets. While fully operational as of December 31, 2025, these two projects did not reach substantial completion until January of 2026. The amounts presented as carbon equipment liabilities as of December 31, 2025 will be reclassified and presented as debt on the consolidated balance sheets in January of 2026.
We also have small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.
Agribusiness and Energy Services Segment
Green Plains Finance Company, Green Plains Grain and Green Plains Trade have 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. The facility matures in March 2027. 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. The unused portion of the facility is also subject to a commitment fee of 0.275% to 0.375%, dependent on undrawn availability. At December 31, 2025, the outstanding principal balance was $25.0 million on the facility and the interest rate was 7.48%.
Green Plains Commodity Management has an uncommitted secured revolving credit facility to finance margins related to its hedging programs, which is secured by cash and securities held in its brokerage accounts. During the first quarter of 2023, this revolving credit facility was extended five years to mature on April 30, 2028. On June 18, 2025, the credit facility was amended, reducing the $40.0 million borrowing limit to $20.0 million. Advances are subject to variable interest rates equal to SOFR plus 1.75%. At December 31, 2025, the outstanding principal balance was $8.6 million on the facility and the interest rate was 5.46%.
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Green Plains Grain has a short-term inventory financing agreement with a financial institution. The company has accounted for the agreement as short-term notes, rather than revenues, and has elected the fair value option to offset fluctuations in market prices of the inventory. 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 December 31, 2025.
Refer to Note 11 – Debt included in the notes to the audited consolidated financial statements included herein for more information about our debt.
Contractual Obligations and Commitments
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, 2025 totale d $72.3 million. As of December 31, 2025, we had contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $202.2 million, future commitments for storage and transportation valued at approximate ly $31.4 million, and accumulated commitments related to the construction of carbon capture and sequestration equipment at our three Nebraska plants of $104.2 million. Refer to Note 16 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.
Item 7A. Qualitative and Quantitative Disclosures About Market Risk.
We use various financial instruments to manage and reduce our exposure to various market risks, including changes in commodity prices and interest rates. We conduct the majority of our business in U.S. dollars and are not currently exposed to material foreign currency risk.
Interest Rate Risk
We are exposed to interest rate risk through our loans which bear interest at variable rates. Interest rates on our variable-rate debt are based on the market rate for the lender’s prime rate or SOFR. At December 31, 2025, we had $408.1 million in debt, $33.6 million of which had variable interest rates. A 10% increase in interest rates would affect our interest cost by approximately $0.3 million per year.
Refer to Note 11 – Debt included in the notes to the audited consolidated financial statements included herein for more information about our debt.
Commodity Price Risk
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 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.
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. We focus on locking in favorable operating margins, when available, using a model that continually monitors market prices for corn, natural gas and other inputs relative to the price for ethanol and distillers grains at each of our production facilities. We create offsetting positions using a combination of forward fixed-price purchases, sales contracts and derivative financial instruments. As a result, we frequently have gains on derivative financial instruments that are offset by losses on forward fixed-price physical contracts or inventories and vice versa. Our results are impacted by 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. For the year ended December 31, 2025, revenues included net losses of $12.9 million and cost of goods sold included net of $6.1 million associated with derivative instruments.
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Ethanol Production Segment
In the ethanol production segment, net gains and losses from settled derivative instruments are offset by physical commodity purchases or sales to achieve the intended operating margins. To reduce commodity price risk caused by market fluctuations, we enter into exchange-traded futures and options contracts that serve as economic hedges.
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, 2025, are as follows (in thousands):
Commodity
Estimated Total Volume
Requirements for the
Next 12 Months (1)
Unit of
Measure
Net Income Effect of
Approximate 10%
Change in Price
Ethanol
Gallons
Corn
Bushels
Distillers grains (2)
Tons (3)
Renewable corn oil
Pounds
Natural gas
MmBTU
(1) Estimated volumes assume production at full capacity, excluding the idled Fairmont, Minnesota plant.
(2) Includes Ultra-High Protein
(3) Distillers grains quantities are stated on an equivalent dried ton basis.
Agribusiness and Energy Services Segment
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. 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 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.
