Green Plains Inc. Aktie

Hello, and welcome to the Annual Meeting of Shareholders of Green Plains Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Chris Osowski, Chief Executive Officer of Green Plains. Chris, please go ahead.

Good morning, and thank you for joining our meeting. Joining me today are Jim Anderson, Chairman of the Board; Ryan Loneman, General Counsel and Secretary; Ann Reis, Chief Financial Officer; and Will Joekel, Vice President of Investor Relations and Treasurer.

Before we begin the formal meeting, I'd like to introduce the additional members of the Board of Directors for Green Plains Inc. Farha Aslam, Steve Furcich, Carl Grassi, Brian Peterson, Martin Salinas, Jr., Patrick Sweeney and Kimberly Wagner. Also joining today's call from KPMG are representatives of the firm. Thank you all for joining us.

At this time, I'd like to turn the meeting over to our Chairman, Jim Anderson.

Thanks, Chris. Good morning, and welcome to the 2026 Annual Meeting of the Shareholders of Green Plains Inc.

Today's meeting is being held as a virtual-only live webcast. We believe this format provides an efficient opportunity for engagement with our shareholders regardless of their location. Thank you to those who are participating today.

At this time, I will call the meeting to order. We will follow the meeting agenda displayed on the screen. Links to our annual report and proxy statement are also available. After the formal portion of the meeting, we will address questions submitted during the webcast.

The Board of Directors set April 10, 2026, as the record date for determining the shareholders entitled to notice of and to vote at this particular meeting. We have a record of shareholders as of that date, and it is available for inspection by any shareholder by appointment during business hours.

I'll now call on the Secretary, Ryan Loneman, to report the presence of the quorum and notice of the meeting. Ryan, is there a quorum present?

Yes. There are present online or represented by proxy, the holders of 55,824,237 shares of common stock entitled to vote at the meeting out of a total of 70,035,240 shares.

Since the majority of the company's shares are represented, a quorum is present and business may be transacted.

Ryan, please file the proxies with the company's records.

Present here is a certified list of shareholders as of April 10, 2026, along with the meeting notice, proxy statement, proxy, annual report and the affidavit from the company's transfer agent regarding the mailing thereof.

We're going to waive reading of the minutes. If you would like a copy of the minutes from the 2025 Annual Meeting, you may request one from the Secretary. We will not read them today.

I'm going to appoint the Inspector of Election. I hereby appoint Carolyn Beer of Computershare as Inspector of Election for this meeting.

We have 4 items of business to be voted on today, which are described in the proxy statement. The first is the election of directors. We elect 9 directors to serve 1-year terms that expire at the end of 2027 Annual Meeting. The company did not receive any shareholder recommendations for consideration prior to the 2026 Annual Meeting of Shareholders. As such, the individuals included in the proxy statement for the election of directors are nominated. The director nominees are: James Anderson, Farha Aslam, Steve Furcich, Carl Grassi, Chris Osowski, Brian Peterson, Martin Salinas, Patrick Sweeney and Kimberly Wagner. Directors are elected by a majority of votes cast at the meeting.

The second item of business is the approval of an amendment to the company's 2019 equity incentive plan. The amendment would increase the number of shares available for issuance under the plan from 5,710,000 to 7,710,000 and update certain provisions as described in the proxy statement. The amendment to the 2019 equity incentive plan must be approved by a majority of votes cast.

The third order of business is the ratification of the selection of the company's auditors. The Board of Directors and Audit Committee believe the continued retention of KPMG to serve as the company's independent registered public accounting firm is in the best interest of the shareholders. Accordingly, the Audit Committee has recommended that KPMG serve as the company's independent auditors for fiscal year 2026. The ratification of the selection of KPMG as the company's independent auditors for 2026 fiscal year must be approved by a majority of votes cast.

The fourth and final item of business is an advisory vote to approve the compensation of the company's named executive officers as described in the compensation discussion and analysis section and related disclosures in the proxy statement. The vote is advisory in nature and is not binding on the company or the Board of Directors.

As no other business is scheduled, I declare the polls open and direct that the votes by shareholders be tabulated by electronic ballot. Each holder of common stock is entitled to 1 vote for each share held at the close of business on the record date. Shareholders who have previously provided their proxies do not need to vote unless they want to revoke their proxy and vote by electronic ballot at this meeting. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. If you have already voted and have no changes, there is no need to take further action. We will pause now for a moment while the votes are tallied.

[Voting]

All shareholders present online or by proxy have had the opportunity to vote. The online voting will now be closed.

Based on the preliminary results provided by the inspector of election, all director nominees have been elected. The equity plan amendment has been approved by KPMG and has been ratified as the company's auditors and the executive compensation proposal has received the support of shareholders. The inspector of election will furnish the Secretary with a written report of the final vote count for all matters voted on today, which shall be included as part of the minutes of the meeting.

We'll now close the official business portion of the meeting. Thank you very much for joining us online for our Annual Shareholder Meeting. We can now proceed to answer any questions you may have. You may submit your questions online by clicking on the dialogue icon in the upper right-hand corner of the meeting center screen. Are there any questions?

Seeing no further questions, thank you for joining us today at the Green Plains Annual Shareholder Meeting.

This concludes the meeting. You may now disconnect.

Good morning, and welcome to the Green Plains Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to your host, Will Joekel, Vice President and Treasurer. Will, please go ahead.

Thank you, and good morning, everyone. Welcome to the Green Plains Inc. First Quarter 2026 Earnings Conference Call. Joining me on today's call are Chris Osowski, President and Chief Executive Officer; Ann Reis, Chief Financial Officer; and Imre Havasi, Senior Vice President of Trading and Commercial Operations, along with the rest of the leadership team. There is a slide presentation available on the Investor page under the Events and Presentations links on our website.

During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results can materially differ because of risk factors discussed in today's press release, comments made during this call, and in the Risk Factors section of our Form 10-K, 10-Q, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements.

With that, I'll turn the call over to Chris.

Thanks, Will, and good morning, everyone. The first quarter reflected a different operating environment than a year ago and, more importantly, a different level of execution across the business. First quarter adjusted EBITDA was $71.5 million, up $22 million from Q4 and more than $95 million higher than the first quarter of 2025. The first quarter is traditionally the most challenging period of the year for ethanol producers. Our first quarter results are a strong example of what this organization can deliver when we stay focused on the fundamentals.

Four things drove the improvement. First, our continued focus on operational excellence allowed us to run the platform at high rates. Second, strong sustainable demand for our products resulted in a favorable pricing environment, while input costs remain in check. Third, the cost structure and simplification work we've been executing on for several quarters continues to compound. And finally, our carbon program contributed $55 million of EBITDA in its first full quarter following the start-ups completed last year.

I also want to recognize the work the team has done in terms of safety. We completed the first quarter with no recordable injuries, which is an important milestone and exactly how we expect to operate. Safety is a prerequisite for everything we're trying to accomplish. A clear example of this is our Central City plant, which achieved highly protected risk recognition from our property insurer, FM, a recognition that reflects exceptional operational discipline and safety standards, reinforcing the culture our team has built.

On the production front, our focus on operational excellence once again paid dividends with the plants producing 174 million gallons during the quarter or approximately 97% of our operating capacity. In our York, Nebraska facility, we set a monthly production record in March, and our Superior, Iowa facility set a new quarterly production record during the quarter. These achievements are a direct reflection of the operational improvements the teams have made and gives us the confidence in the sustainability of these production rates. At the same time, ethanol, corn oil, and protein yields remained strong across the fleet and have been solid contributors to our gross margin.

A key accomplishment for us in this quarter was the continued progress in our carbon strategy. Construction and start-up was completed last year, and the focus has shifted toward operational performance, monetization, and incremental opportunities to maximize 45Z. Capture performance is now near our expected long-term rates, which reduces CI and creates substantial value for the business. As shown in our results, our carbon program is improving results in a meaningful way. In February, we guided to at least $188 million of EBITDA contribution from 45Z production tax credits. Based on Q1 performance and operational data, we're raising that range to $200 million to $225 million for the full year with Advantage Nebraska contributing $140 million to $165 million of that.

I'll now hand the call over to Ann to review the financials.

Thanks, Chris. Consolidated crush margins improved meaningfully year-over-year, driven by stronger ethanol margins, higher demand for corn oil, and the contribution from 45Z. During the quarter, we generated gross margin of $88 million, compared to $3 million in the first quarter of 2025. Revenue for the quarter was $446 million, reflecting lower gallons following the sale of the Obion, Tennessee facility. Net income attributable to Green Plains was $33 million or $0.42 per diluted share, compared to a net loss of $1.14 in the first quarter of 2025.

On the cost side, consolidated SG&A totaled $19.5 million in Q1, continuing to trend lower year-over-year, and we remain on track for our full year SG&A target of approximately $90 million. Interest expense was $11.5 million, and we expect full-year interest expense to be in line with our previous guidance of approximately $35 million for the year. Depreciation and amortization expenses during the quarter were $23.6 million.

Beginning in the first quarter, we early adopted ASU 2025-10, which provides a framework for accounting for government grants. As a result, our 45Z production tax credits are now reflected as earned credits recorded as a current asset and recognized as a reduction to cost of goods sold rather than through the income tax line. This change improves transparency around operating performance and does not impact cash flow or the underlying economics of the business. Please note that prior periods have been recast for comparability. On a gross basis, we generated $65.6 million of 45Z tax credit value. Net of monetization discounts and operating costs, the generation of production tax credits contributed $55.2 million to adjusted EBITDA in the first quarter. The $32 million increase in 45Z contribution to EBITDA compared to the fourth quarter was primarily the result of having a full quarter of operational carbon sequestration at our three Nebraska facilities. We consider our Q1 carbon results to be an appropriate baseline, and we expect the net contribution from our carbon strategy to generate approximately $200 million to $225 million of EBITDA for fiscal year 2026.

As Chris mentioned, Advantage Nebraska is currently forecasted to generate approximately $140 million to $165 million of net EBITDA with the balance of the plants contributing approximately $60 million. We reported $95.7 million of unrestricted cash and equivalents as of March 31, a decline from December 31 that is primarily driven by our normal seasonal working capital requirements. The final cash payment from the sale of our 2025 45Z credits was received in April, and we're ensuring that we have all the compliance requirements in place to monetize our 2026 tax credits. Today, our cash and restricted cash balance is over $200 million. Capital expenditures in the first quarter were $6.4 million and primarily related to maintenance projects. We expect sustaining capital expenditures for maintenance, safety, and regulatory projects to total $15 million to $25 million for the year.

Turning to the balance sheet. During the quarter, we completed the reclassification of our carbon compression equipment obligations. As the carbon sequestration projects at our three Nebraska facilities reached substantial completion late last year, the majority of liabilities related to carbon equipment moved into long-term debt, consistent with the underlying financing terms. The remaining $60 million of 2027 convertible notes became a current maturity during the quarter, and we expect to address those notes with available cash at maturity. In April, we reduced the size of our working capital facility and extended the maturity by 6 months. These modifications will allow for immediate cost savings and give us runway to execute a longer-term extension later this year.

I'll now let Imre cover the commercial update.

Thank you, Ann. Unlike the past several years, the first quarter delivered strong ethanol crush margins, particularly in the second half of the quarter. Industry economics were supported by lower corn prices, solid ethanol demand, both domestically and internationally, and increasing corn oil values. Energy commodity prices were a tailwind during March, supported in part by elevated geopolitical risk premiums. Even before 45Z contributions, our gross margin per gallon was approximately $0.10 higher compared to the first quarter of last year.

Exports were again an important part of the story. We continue to see strong demand pull for U.S. ethanol helping to balance the market and provide margin support during the quarter. Demand is coming from mandated blending and compliance requirements at destination markets, which have supported steady and sustainable export flow.

I'd like to spend a little time on the Renewable Fuel Standard. The EPA finalized 2026 and 2027 renewable volume obligations in March at the highest levels in the program's history. Conventional ethanol volumes remain at 15 billion gallons, while biomass-based diesel volumes moved sharply higher. Combined with some restrictions on imported feedstocks, we see continued strong demand for our low CI corn oil for the foreseeable future. Pricing has been improving significantly, making corn oil an important component of our earnings. Protein remains a solid contributor to the overall gross margin. The relative value of our ultra-high protein product versus soybean meal has been strengthening. Our customers recognize ultra-high protein as a differentiated high-quality ingredient.

Looking to the second quarter, current margins, co-product pricing, and carbon contribution all support a stronger result than in Q1. Our hedging strategy remains consistent and disciplined with a clear focus on downside protection while preserving meaningful upside participation. Importantly, our risk management philosophy spans the full margin stack, inclusive of all of our co-products and key commodity inputs like physical corn ownership and natural gas. The goal is total margin protection and cost certainty across all the moving parts of the business, not just the headline simple crush.

Proactive risk management produced a $0.04 per gallon hedging adjustment with ethanol rallying late in the quarter as geopolitical events drove energy prices higher. That outcome reflects the trade-off we intentionally accept because it locked in part of our margin well above historical averages and protected the cash flow we need for capital deployment. Importantly, the strategy worked as designed, and we remain comfortable with our overall hedge framework and positioning going forward.

I'll now hand the call over to Chris.

As we look ahead, our focus has shifted from stabilization and simplification to disciplined execution and capital deployment. The first quarter demonstrates the earnings power of the platform when the plants are running well, risk is managed appropriately and carbon is fully operational. From here, the opportunity is protecting and enhancing margins, converting earnings into cash and putting that cash to work in the highest return opportunities available to us. We expect 2026 margin and cash flow performance to be driven by sustained operational execution across the fleet, continued contribution from the carbon program, disciplined commercial risk management, and growing demand for products. These four factors produced a great first quarter and are what will support cash flow generation for the rest of 2026 and beyond.

That cash flow underpins our capital allocation priorities. Sustaining CapEx comes first, $15 million to $25 million to keep the fleet running reliably and keep our employees safe. Plant reliability is critical to margin capture, and we're focused on keeping our facilities running at a high level. From there, we're allocating capital to efficiency and CI improvement projects, which are modest in size, have a short payback, and will improve the earnings of the base plants for years to come. Our objective is to be a performance leader within the ethanol industry, and we're undertaking formal benchmarking exercises across our plants to identify operational gaps and best practices, and we're directing capital toward projects that improve reliability, efficiency, and lower carbon intensity. We're also planning on retiring $60 million of the 2027 convertible notes at maturity. And beyond that, we will continue to evaluate the highest return use of incremental capital, whether that is additional efficiency projects, growth opportunities, or capital structure optimization.

To highlight a couple of the growth projects we are initiating: First, at Wood River, Nebraska, we've approved building approximately 4.5 million bushels of grain storage. This is a straightforward investment that reduces corn basis risk and supports consistent plant operations. Additionally, it will improve procurement flexibility, which will allow us to procure more bushels directly from the farmer, which will improve yields and maximize the opportunity from on-farm practices and further reduce carbon intensity scores. It's a perfect example of capital that is modest in scale, operationally grounded, and will improve the earnings power of the plant. As we complete this project and measure the results, we'll evaluate replicating it at other facilities where the return profile is similarly attractive.

Also in York, Nebraska, we're engineering low-energy distillation upgrades. This investment is focused on reducing energy consumption and lowering operating costs to further reduce the carbon intensity score of the plant. Taken together, these projects reflect how we're deploying capital today, focusing on reliability and efficiency, permanently taking costs out, and improving CI scores. As these types of projects are replicated across the fleet, they will structurally increase cash generation.

In summary, Green Plains is operating from a much stronger position than it was a year ago. Reliability across the platform has improved, the balance sheet has been strengthened, and all of our products are seeing strong sustainable demand. The structural backdrop for our products, ethanol, corn oil, and protein is as positive as it has been in years. Gross margins remain well above historical averages, and our carbon program is generating significant value. Going forward, we remain focused on disciplined execution and thoughtful capital allocation.

Operator, we can now open it up for questions.

[Operator Instructions] Your first question is from the line of Andrew Strelzik with BMO.

First thing, I guess, I wanted to ask about the update to the 45Z guidance you provided. And I guess I'm just curious with the Q1 run rate kind of putting you at the high end of that range, and it's not a seasonally peak period. How should we think about the moving pieces within that range? If you could just maybe help us think through that.

Yes. Thanks for the question. First and foremost, our plants ran at high utilization rates in Q1, so 97%. Going into Q2 is traditionally the time period where we take spring maintenance. We also take fall maintenance activities. So, we have to balance that out in terms of what that 45Z cash generation looks like through the entirety of the year. But in general, what's occurred is we've got a few months of run rate under our belt. We've gained confidence in the ability of the system to operate at a high capture efficiency, and we're comfortable with updating that projection.

Okay. And the other question I wanted to ask was around corn oil, in particular, especially with the yields that you guys realized on that. I mean the company used to talk about kind of the sensitivity to changes in corn oil prices. Is there any kind of framework that you can provide on an updated basis to help us think about that?

Yes, this is Imre. Yes, I mean, the context after the EPA ruling is very supportive, right? There are different nuances that will influence the demand for the next 2 years and then past. But in general, structurally, there is very strong demand for corn oil and both for the CI aspect of it, but also the relative tightness of the domestic supply. So, I think in terms of pricing, it will always be a function of the soy complex and the energy complex. But in relative terms, it will remain a very significant contributor on a per gallon basis to our margins. And that is for the next several years.

Okay. And I just want to quickly follow up on that. I guess with now the 45Z, with the changes that are impacting corn oil, I know that we've got some temporarily high energy prices here. But when you think about the durability of the different components of your margin structure, I guess, how are you thinking about that on a go forward? It seems much more durable than in the past. But I guess would love your perspective on that.

Yes. I think from a product perspective, the demand is going to be solid, right? So, you got a significant ethanol pull more from international customers because of those mandates overseas and the deficit there. I don't want to go too much into detail, but if you also think about the long-term effects of the war in the Middle East, the diversification of fuel inputs would suggest that biofuel will continue to play and actually will play an increased role in fuel supply around the world.

Of course, from an ethanol perspective, it's just the U.S. and Brazil exporting. The other regions are deficit and demand is growing. So that is supportive. We've already discussed corn oil. That's all domestic and the domestic demand will continue to be very, very strong. Protein is -- I don't expect anything like really special, but we have a customer base and a product portfolio that will be supportive. So, I think the only thing that can have an impact on overall industry margins is corn. Input cost, corn and natural gas, those are the ones that we're also monitoring, but that's largely unknown. The corn crop -- next year's corn crop is the one that we're monitoring. The planting progress is good so far. It will all come down to weather.

Your next question is from the line of Matthew Blair with TPH.

Did any of the increase to the 2026 45Z outlook come from the on-farm practice benefits that you referenced on the last call? And I guess, if not, how much could that raise future 45Z contributions? And then also, it looks like the contributions from the non-Nebraska plants moved up a fair amount. I have it as originally you were expecting $38 million. Now it sounds like it's up to $60 million. Could you talk about what's driving that increase? Is that just a function of better operations and marginal gains in CI scores?

Yes. Thanks, Matthew. Yes. So, if we start with your question around the on-farm practices and whether or not that's baked into our current guidance. And the answer is not. So, the proposed ruling is out there from the Treasury, and it definitely mentions that we will -- we foresee -- we believe that we'll be able to use that in the future. But we're still waiting on final guidance to really understand and that final calculator, which hasn't been released yet to be able to truly understand what the impacts might be able -- what we might be able to capture there.

We do think that there is opportunities there, particularly in our regions where our facilities are, that get quite a few farmer bushels, and that is definitely one of the drivers for the Wood River corn expansion that Chris discussed. All of that helps get -- when farmers go through harvest and they want to deliver corn; they want to be able to deliver it quickly. And so being able to have good facilities and receiving facilities promotes their continued bushels to us. So, that is definitely one of the drivers that we're looking at with adding that additional storage.

It's all favorable. We believe it will all be favorable. As far as the range goes, still TBD based on how the calculator is published and what those amounts look like right now, they have a beta version that's been released, and you can -- it definitely varies from county to county. So really some -- a lot of numbers that we'll just have to see how everything pans out. But we've got a good plan in place. We feel like we have an ability to be able to capture that when those numbers are finalized. But as far as what it might do to the CI score, I don't think we're really prepared to release that at this moment.

When it comes to your other question, -- on the non-Nebraska plants. So really, what's driving that, right, is there's a couple of factors. One is that they removed the iLUC penalty for corn starting here in 2026. So that was a reduction of approximately 6 CI points. The other piece that we've been able to take advantage of is the ability to buy RECs to offset our electricity. So, the combination between those two things plus just the plants operating more efficiently, as Chris noted, has been able to increase that dollar amount that we intend to capture over during 2026.

Your next question is from the line of Kristen Owen with Oppenheimer.

I also wanted to follow up on DCO, but more from a production side because you do have some technology in-house to sort of torque those yields a bit higher. So, I'm wondering, as you're considering your capital allocation priorities, some of that low dollar amount but high impact, if DCO capacity is on that list of potential projects.

Yes. Thanks for the question, Kristen. And the answer is yes. I mean, as part of the operational excellence program that we've got working through our plant network, we're looking at any opportunity to improve processing yields, starting with ethanol yields because that translates into good protein yields and good DCO yields. And in fact, we do have the MSC technology in numerous plants, which helps increase our per bushel oil yield, but we're also looking at opportunities for the non-MSC plants where they can boost their oil yields to historically high levels, and we're seeing good results with that. So, that will be part of that capital plan going forward and what we can do to further drive yield improvements to effectively improve the base business profitability.

Okay. Great. And then just two sort of related questions on cash flow statement. It looks like Q1, I mean, you called out the seasonal use of working capital, but it does seem a bit higher. So maybe I'm missing a few moving pieces with the restatement. If you could speak to the working capital use and as well if there's any change in your timing expectations of cash receipts relative to EBITDA earned on those carbon credits.

Yes. Thanks, Kristen. Yes. So, with the reference to the working capital use, so a large portion of the farmers that we do business with, they prefer to be on a deferred payment schedule. So, a lot of those payments go out after the 1st of January. So that's -- you're going to see some seasonal changes and swings with the cash flow due to just that normal pattern that the farmers have operated on for years.

For your question around the 45Z and the cash flow associated with that, like I said, we received our 2025 last payment for the 2025 45Z credits here in April. And we're feeling very confident and very positive about the progress we're making on the monetization for the 2026 credits. And a majority -- really what our focus is, is around getting the best value for those credits for the company and also the best cash structure, right, to help our company be able to consistently receive cash flows each quarter in relation to our generation of the 45Z tax credits. So that is what we are heading towards. And while we don't have anything to officially announce today, we're very optimistic at the progress that we've been making.

And something to just keep in mind is that there is a lot of -- and I mentioned it in my prepared remarks around the compliance requirements for the 45Z. There is a fairly heavy lift when it comes to making sure that all of our plants are in compliance with PWA. We're being able to obtain the highest level of the tax credit as possible, plus all the audits that are associated with verifying our gallons and everything associated with it. So, there's quite a bit of audit work that goes along with this. And so, we're just making sure we're dotting all of our I's and crossing all of our T's to get the best value we can for those tax credits.

Your next question is from the line of Craig Irwin with ROTH Capital Partners.

So, I wanted to ask if there was any change in the CI score assumptions underlying the $55.2 million intake this quarter versus what you used in the December quarter?

Not as far as the inputs go. I mean the difference, obviously, was that the iLUC penalty was removed in 2026, so that's a bit different compared to 2025. But as far as how we've generally calculated it, it's really just a factor of how much ethanol we produce, what the efficiency of the plants are and how much carbon we're capturing. So, none of those factors have changed.

Okay. Understood. The second thing is, you did mention that some of the CapEx this year is actually related to CI as a focus. Can you maybe give us a little bit more detail on where you're spending those capital dollars and what sort of CI returns you expect on those?

Yes. And thanks for the question, Craig. So, a couple of things we talked about. First, we talked about increasing grain storage. And really, the basis for the returns calculations on those projects are about managing corn procurement. Now there is potentially the added benefit as a result of farm practices and having more farmer-procured bushels that can positively influence the CI score, but we're not factoring that into our justifications. So, we're making business decisions that are good for the base business outside of 45Z, and the 45Z impact potentially can be icing on top of that cake, if that comes to fruition. So, we feel good about those investments being business decisions that are good for the long haul of the plants.

When we speak about low energy distillation in York, this is one that is going to significantly reduce the energy consumption of the site, specifically around natural gas consumption, anywhere from 30% to 40% reduced. So that, first and foremost, is reducing the OpEx of the plant, which is going to pay dividends in perpetuity. On top of that, we'll have the benefit of a lower CI score and there will be contributions associated with 45Z. But we want to make sure that our base business is strong and durable and profitable for the long haul.

Understood. And if I could slip another one in here. So, first, I guess, can you confirm that you're selling your credits -- still selling your credits through a broker? And then there -- your 10-Q is not out yet. But in prior periods, there's been a little bit of a lag between when you recognize the credits on your P&L and when you actually receive the cash intake. Can you maybe talk a little bit about the cash intake for the December quarter? Is all that cash for those credits you sold already on the balance sheet? And then where do we stand for the $55.2 million from this quarter? Is that something you would expect to take in over the next few months?

Yes, Craig, I can take that one. So, with -- as far as we talk about the 45Z tax credits from 2025, we have collected all the cash for that. It occurred in April. That was the final payment. So, you won't see that in the Q1 earnings, but you will see it happen in Q2 just for the timing of that. From a 2026 perspective, so with the release of that ASU that I mentioned, that changed our ability to how we account for and how we look at the monetization piece of that.

So, what we're able to do, right? So, this is a production tax credit. So, we're able to recognize those gallons once they're produced and then verified at the end of the quarter. And obviously, we go through all of our checks on our CI scores to be able to calculate those correctly. And they go through the audit process, and everything is verified. And so, we're on a, kind of, a quarter lag, right? So, we just got through our first quarter. And at the end of the quarter, we were able to recognize those credits on the balance sheet for what we produced in the first quarter of 2026. Now -- and the cash flow, as I was talking about with Kristen, that will come in as we monetize. And so, then you'll see those credits shift off the balance sheet and turn into cash.

Your next question is from the line of Pooran Sharma with Stephens.

Congrats on the strong results. I guess my first question, and Imre, you kind of hit on this in your prepared remarks, but I was going to ask on the base business, you came into Q1 hedged and still posted $16 million of EBITDA, a better Q1 than what you would have expected on a seasonal basis. Could you maybe help us frame up the magnitude for upside potential in the base business for Q2? Maybe just some color around where you placed your hedges or maybe even how much capacity you have open for Q2?

We still -- we're fairly well hedged for Q2, and that's primarily because of the opportunity that the run-up in energy prices provided for us to execute that. But always -- we always have to talk about the entirety of our margins. So, at the gross margin level, looking at all different components, corn ownership, natural gas hedges from an input perspective and then simple crush, corn oil sales, protein sales, on the other end and ethanol basis. So, we're managing all those different components using a lot of analytics, developing that capability, and making decisions across that margin platform, if you like. So, we still do have -- we're not completely hedged for Q2, but we're well advanced. Our input costs are pretty much locked down. And like I said, over the last several weeks, we had a lot of opportunity to capture some really attractive margins and also longer-term corn oil sales.

So, we feel fairly comfortable with where we are. And you referred to my remarks, and we live by that just capture margins that are attractive using analytics, considering the overall market environment for the different components. But also, if we feel that way, we'll leave plenty of room for upside. And I think that's kind of what has happened in Q1 as well. That's why our results are perhaps better than anticipated. We were not fully hedged on the sell side. Our input costs were.

Okay. Appreciate that color there. I guess on the follow-up, I wanted to get a better sense of the ethanol S&D backdrop. Production has been a little bit elevated. It's not surprising just given the iLUC restriction removal at the start of the year. But you mentioned that demand domestic and international remains robust. There was momentum pre-war, and you talked about mandates abroad and those are growing as well. But have you seen incremental momentum from the conflict itself? And then I know you were trying to back away from this commentary, but I think it helps just to frame up what are your expectations if we do see resolution today, do you think it's going to take a while before we see oil prices back at pre-war levels?

Yes, maybe not crude oil that can drop lower, but refined products, rebuilding the supply chain. So, in our assessment, the impact of the war and particularly on the supply chain, of course, you have the short-term impact, we have to replenish stocks. We have to rebuild that supply chain, reorganize it. But then as I mentioned earlier, the long-term impact where fuel sources, the diversification of that supply chain, not just the origins, but the type of energy sources will have a positive impact on our products, corn oil particularly and ethanol.

So we think the short- and long-term impact of the war is supportive beyond than just the immediate shock to the market that has happened by the last couple of months. So, it will take a little bit to reset everything. So, we'll see strength in demand and prices. And then like I said, the long-term impact is beneficial as well, at least in our assessment.

And at this time, there are no further questions. I will turn the call back over to Chris for closing remarks.

Thank you again for participating in this morning's call and your interest in Green Plains. We remain excited about the opportunities ahead of us and look forward to sharing continued progress with you next quarter. Have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Hi, everyone, and after a small switch to our room for the [indiscernible], thank you for joining us for the Green Plains fireside chat. Today, we have actually a brand-new management team for the company versus the past few years. CEO, Chris Osowski; and recently joined CFO, Ann Reis. So thank you, firstly, both for coming here. I know you were busy coming from Orlando for another commitment.

I want to start a little bit with the big picture. So again, the management team has seen a big turnover. I think other members like General Counsel, et cetera. So now that you're this seat, what has changed in the way Green Plains is managed versus, say, the past 1, 2, 3 years?

It's a great question, Sal. And first, thanks for inviting us and giving us the opportunity to talk about what we're doing here at Green Plains. And if I think back what has changed, it starts with really a year ago, we welcomed 3 new Directors to our Board of Directors. At the same time, we've set up new committees with those Directors that are focused on risk management and then also on strategic planning. A year ago, we set out and we laid out some new expectations for our employees and how we're going to work.

We've built new processing models for each of our facilities to outline the financial impacts of all the different ways we could run those plants, and then which options have the best value for the overall company. We've also set up a sales and operations planning process where we have cross-functional involvement from finance, operations and the commercial teams to get involved in the day-to-day running of the business to make sure we're making data-driven decisions.

Perfect. And Ann, from your perspective, I know you joined more recently, but I think it's been a couple of months now that you're on this position, and you came from another ethanol producer. So any views so far?

No. I mean I think the company is on the right path for sure. Ethanol is in an exciting time with lots of opportunities. And it's an industry I have a lot of passion for. So I was excited to be able to join Green Plains and continue down that path and help them with kind of Green Plains 2.0.

Perfect. Now let's go to the biggest topic, which is carbon credits and 45Z. You obviously have discussed that this year, you should make over $180 million in EBITDA. We hosted ADM yesterday, and they're guiding officially to $100 million as a starting point for them. In your scenario, in your case, I believe when this discussion and the investment started, the number was quite small. I think it was around $100 million. So what has changed over the past year, whether it's regulatory-wise or what the company is doing specifically that has allowed you to boost these numbers so significantly?

Well, first, we do appreciate the guidance that we received here recently about the 45Z, and we view that, that guidance is really only positive to what we had expected. A couple of things that have changed and that we've built into those numbers. First and foremost, we've got the Advantage Nebraska project fully operational, capturing carbon at high recovery rates. We're very pleased on how that project has performed. But on top of that, the indirect land use removal from the CI calculation has benefited all of our locations and all of our plants are qualifying for 45Z credits.

And at the same time, improved efficiency in sites, driving operational excellence in all of our plants, improving ethanol yields is definitely helping us monetize 45Z. At the same time, the opportunity to buy renewable energy credits against our electrical consumption helps drive those CI scores even further lower.

Yes. Okay. Perfect. So I would say $188 million, I think, this year's guidance, that's kind of as a starting point. I believe you've mentioned that could go higher. So what could we expect? I'm not sure if it's for next year or further out, but what could be a target or -- and what levers do you have to actually move your EBITDA from carbon credits over that -- over this year's guidance?

Well, there are a couple of things. First and foremost, we still need the plants to run and perform well. And with respect to operational excellence, we always want to be improving that ethanol yield, key driver. At the same time, we always want to reduce our energy inputs to the plants and really make sure that the base business improves in terms of profitability outside of the carbon opportunity that we've got. So a couple of things we're working on. We've talked about before a handful of very fast returning projects, capital projects that reduce energy inputs and help us put more carbon in the pipe, so to speak. And those are very exciting for us.

But another part of the guidance is with respect to the farm practices impact on the CI score associated with corn. So while we don't know exactly what that is going to equate to, we are focused on improving our grain storage and our receiving infrastructure and plants to help drive up the percentage of farmer-originated corn. So we are in a good position to take advantage of that when we get that further guidance.

Perfect. And that was actually my next question. So my understanding is that farmer practices are now in consideration. Has this been finalized or is still in the final stages, firstly? And when it comes to that, what other options do you have? I believe there's another ethanol player that's talking about working towards farmers making low-carbon corn that will eventually make low-carbon methanol, right? Is it something you're looking at?

Yes. So what we have right now from the USDA is a beta version of the calculator, which has 5 elements essentially that the farmers can get credit for. So previously, under some of the other USDA guidance, there was really kind of a laundry list of items, like cover crops and all of that. They narrowed it down. So it's mostly focused on no till, strip till and different fertilizer applications, including the use of the manure. That's -- we're thinking that's what the final calculator from the USDA is going to look like, but we don't know for sure. They haven't released the final version. And then that has to tie into the DOE 45Z-GREET calculator.

So until we have that, and they said it would be at sometime in 2026 but really haven't given us any specific guidance as to when that's going to be released, we don't know exactly for sure, but we do know, to your point, the guidance that we gave around the $188 million, we did not assume that we were going to be able to use farming practices when we came out with that number. So this is definitely an opportunity. And we've done some pilots in the past to work with farmers. In our area, in the Nebraska and Iowa space, using no till or strip till in different fertilizer applications have been in practice for a long time because they realize that the quality of the soil is better.

It's more drought resistant. It's more pest resistant and less pesticides have to be used throughout the years or applications for disease and things like that on the corn. So these are not uncommon practices in our -- where our facilities are located. So we feel like we're positioned well to be able to take advantage of what seems to be coming down the pipeline here. But until we get the absolute final guidance, we won't be able to really put a number to it yet.

And I guess, since these practices are already used, actually, is this more of an opportunity or a disadvantage because I'm not sure where things are standing right now, but I believe initially, the idea with improved farm practices was they'll have to measure them against your benchmark, meaning that if you are a no till farmer, that's your benchmark. So continuing with no till not actually give you a better CI score. That was what was discussed 1 to 2 years ago.

Well, that was how it was historically done. There's been changes over the years. So I think what they realized with doing it that way was they were incentivizing farmers that have been capturing carbon in their land to go and till it up the next year, right, so that they can get credit for it. And it's not the behavior that they want to incentivize. So we don't believe that that's how the final guidance is going to come out. It's really going to be about what is your current year practices for that tax credit year. So it's really going to be a matter of us collecting the data, getting the farmer attestations and getting the documentation together to be able to prove the scores.

Perfect. Another opportunity that used to be discussed is the Summit pipeline. So can you give us an update or where does it stand? And I know historically, Green Plains never provided all the details, but our understanding for Green Plains, and I think overall the Summit agreements was that Summit puts all the CapEx, including carbon capture. They get all the credits. At the time, it was only 45Q to be received. And the benefit for the other companies was the low-carbon ethanol that could get a premium in the market. So is this still kind of the ideal? Or with 45Z, there's a lot more credits to be had?

Yes. And that is how Summit has structured their agreements, which is different than obviously our agreements with Tallgrass that we have on the Nebraska Advantage. From how Summit is operating and what looks in the future for them, there are 2 main legislation pieces that are going through the Iowa House and Senate right now. So one proposal within the House is that it completely would eliminate -- you cannot use eminent domain for any CO2 pipelines. That would be very detrimental to Summit trying to get their project going.

The other one that's being proposed within the Senate is that the eminent domain would be the last resort, right? So there's other things that can -- that need to be proven first before they would go to that last resort of eminent domain. So that really depends on how these legislative sessions turn out and what kind of Summit's next steps are depending on the legislation.

Okay. So it's still facing the hurdles. I guess, are there any other pipelines out there that you're seeing potentially being developed because the only one, Tallgrass, was an existing one, which made it much easier to take place.

I think the other theoretical pipeline you're investigating is opportunities for either truck or rail movement of liquid CO2 to a sequestration site. So we're evaluating some potential opportunities in our non-pipeline plants that have the potential to come to fruition.

Okay. I guess that would be a testament to how attractive 45Z is because railing liquid CO2 would sound quite expensive, right, compared to the traditional model, but it still could make money for you.

But kind of coming back to some of the organizational focuses, being a data-driven company, evaluating all the opportunities that we have with respect to capital and free cash flow leads us to look at all of the options for developing our network of plants and putting our focus on where we have the most return capital.

Okay. Perfect. Now that brings us to the other question, which is what is your view on 45Z in terms of post 2029, right? I think it expires in 2029. I don't know if you view it may be too early. But also, if it does expire, can you go back to 45Q? Or is it theoretically, you used already 45Z, there's no other option anymore?

No. So yes, 45Q is absolutely an option. So it runs from 12 years of when the carbon sequestration begins operations and -- but you can't double -- you can't stack it, right? You can't use Z and Q at the same time. So if Z ends in 2029, then we'll move into collecting the Q for those 3 Nebraska facilities where we have carbon capture. There is legislation that's being proposed out there to extend the Z to 2033, along with adding an additional benefit for SAF development and SAF credits. So we're staying in touch with all of that and just looking to see where everything goes. But we definitely have a few options, and Q is one of them.

The SAF credit, would that be on top of the current because the SAF credit is higher, right, several times.

So it's -- they reduced it in the recent 45Z guidance. So it had been at $1.75. Now it's -- and then it was reduced to $1. That's the new legislation is trying to get back up to $1.75. But yes, you would not be able to -- like we would not be able to collect the Z and sell the ethanol to a company that would collect the SAF credit. That's historically how they've been constructed. But until that legislation gets passed where -- you don't know for sure.

Perfect. And I will be talking about the financials for this year, the guidance specifically that $880 million EBITDA. So my understanding is this -- firstly, where do you stand actually on the credit sales? Because right now, you have to monetize them through this version -- this approach. Do you -- are you progressing on some of the firm agreements? And secondly, how should we think about the cash flow itself? Because my understanding is there are some -- well, not necessarily delays, but the structure doesn't provide you the cash as you realize the income, right? And last year, I think your income -- your EBITDA was around $45 million from 45Z, but the cash you pulled was $14 million with the rest coming, I assume, this year?

Yes. So I mean, we have marketed all the credits produced in 2025 and have took some of the cash associated with those tax credit sales back last year and are actively marketing the 2026 credits right now. And we're actually -- we feel very positive about the interest that we're seeing for those tax credits and look forward to making further announcements about that here in the near future. And I think there is potential upside based on the numbers we've talked about and getting more guidance around opportunities on farm practices to lower CI scores in plants, along with some of the current capital products we're working on to help further lower CI scores in plants.

Okay. Perfect. So switching to ethanol, I guess. Firstly, can you provide us an update, or we're 2 months into the quarter, how are margins for ethanol so far, are they versus your initial expectations roughly 2, 3 weeks ago when you provided your earnings update?

Well, I mean, we're pleased with our position in Q1 and where our current crush margins on a consolidated basis sit, especially relative to same quarter previous year on the back of what has been record corn yields and corn supply in the Midwest. On top of that, we're seeing more strength in the ethanol market at the same time here domestically. Plants are producing at strong rates, but we're not seeing the inventory stack up like we would have initially anticipated that. So that's been positive for us. At the same time, DCO values have strengthened through the first quarter. And our plants are running well and got through the cold spell we had here earlier in Q1, and we're looking pretty healthy right now.

And additionally, we're entering into kind of spring maintenance season, right? So there's -- all of the facilities run 24/7, majority of the year. And so in the springtime, everybody shuts down to clean and get it ready to run for another 360 days. So we're going to see production numbers. It's just a seasonal event that happens every year. So we're going to see that happen. And also the increase over the summer months with the increase in the driving, people going on vacations, things like that. So we're pleased with where everything is going and how we're headed into Q2.

Perfect. And as you said, margins look to be still better year-on-year for -- given the seasonality component. Demand doesn't seem to be great domestically, but what has been really helping is the export market. So can you do kind of a broad overview in some of the key end markets, key countries that are pulling U.S. ethanol? And if you're familiar with some of the more specific mandates and quotas, some of the countries or province, say, in Canada may have?

Yes. I mean we feel positive about demand, especially on the export side of things. Just coming from the National Ethanol Conference here earlier this week, the mantra wasn't about export growth. It was export acceleration was the term used. And so that's primarily going into Canada with, what, 30%, 35% of the export volume going there. And Canada's production volume is able to achieve like 40% of their domestic demand. So a lot of that extra volume will come from the United States. And also, we saw the Netherlands year-over-year increase a significant portion of that imported ethanol. And with the EU as a whole and India increasing their volumes, we expect that trend to continue.

Perfect. And do you participate directly in the export market? And are you familiar with what's the export ethanol price or netback differential versus the domestic one?

Well, to a very limited extent. We do have a facility in Northern Minnesota, where we do export roughly 15% of that plant's volume into Canada. So we play in that part at a small extent, but we're also very actually interested in the uptake rate of E15 going into California, thinking about the entire decarbonized ethanol volume of Nebraska being able to find its way into that market at some point in the future. That's probably more where we're focused at the moment.

Okay. Perfect. We'll touch base on that a little bit later but staying on kind of the theme of the supply and demand. Firstly, what are you seeing for U.S. supply from the standpoint of -- I think POET announced a new plant recently, the first, I think, greenfield in many, many years. Is this something that we should see, the start of a new wave of additions driven by 45Z and export demand? Or do you think that's a one-off?

Well, I think we're referring to expansion possibly of plants. I think there's -- in general, there's interest in that. From the Green Plains perspective, we want to be very disciplined with respect to increasing volume. I mean we expect to see that demand continue to grow as the export volumes increase and as the country continues to push for year-round E15. But we want to grow in a very responsible way and make sure that we measure twice and cut once and focus on improving, first and foremost, the efficiency of our existing plant infrastructure and making sure our base business is strong outside of tax credit opportunities.

Okay. And then globally, are you seeing anything in Canada, which is something I'm not as familiar. You just mentioned they cover 40% of the demand. But particularly Brazil, that is something where we paid more attention to. We actually went to Brazil in December, and there is a very big wave of corn ethanol mills. Now obviously, the U.S. being half of the global capacity, Brazil can add a lot of local supply and still may not be a huge amount from a global number. But I do believe it's probably mid-single digits or a little bit more of the global supply. Is this something that worries you? Is it something you expect to continue?

Well, it's definitely something we pay attention to. The majority of the world's supply of ethanol coming from Brazil into the United States. It's important to keep an eye on what's going on in Brazil as sugarcane plants add corn processing capabilities and switch volume away from sweeteners into the fuel market. That's an important impact to the global ethanol S&D. But at the same time, we have to remember that Brazil has been running on E30 for years and are working towards E40. So I think that they have the opportunity to manage the S&D in Brazil to some extent that will help take some pressure off of that global export.

Okay. Perfect. And are you seeing anything -- do you have any specific expectations from the sugarcane ethanol supply? I believe last year, last season, which was almost a year ago now, sugarcane plants ended up producing a lot more sugar versus ethanol versus expectations. We recently learned that the reason was they had committed to producing the sugar, even though at the time of the crush, the economics have shifted. So as -- I think the crush season starts now over the next couple of months, what are your expectations there potentially?

Well, I think we expect that the volume out of Brazil to increase like a 10% to 15% type range. I think we're kind of like in a wait-and-watch type phase at the moment. But we're connected to what's going on in Brazil. So we have line of sight to the changes that are happening with respect to volumes of sugarcane-based products. And as things change and evolve, we'll be on top of it.

On with the 45Z, right, I mean the guidance specifically out there, it states it has to be domestic, right? And the feedstock has to come from Canada or Mexico. So I mean that also has an impact, right, on where the feedstock that the ethanol that is able to qualify for 45Z can come from.

Perfect. Last component of the supply is, as you mentioned before, the industry has been running pretty hard. I believe -- I lost track of, with some exceptions, how many weeks, it's been at over 1.1 million barrels a day. Why have we seen -- I think it's roughly a 10% step-up from 2 years ago without obviously new nameplate capacity coming online. So why have we seen this big step-up? And is it tied actually to 45Z?

Well, I got to believe there is some impact associated with 45Z on current production rates. But we've got to remember that the wintertime plants run well when it's cold outside due to the ability to cool the process easier as opposed to hot summer months. And we've had, for the most part, outside of a couple of events, a pretty mild winter. So there hasn't been as many opportunities for freeze-ups to happen in plants that would negatively impact total production rates. But as Ann mentioned earlier in our conversation, we're coming up to that season where we're going to start seeing some plants take downtime and prepare for a strong run during the summer months. So we would expect to see that -- those numbers start to taper off a little bit here going forward.

Perfect. Switching to a little bit wider subject on ethanol. So you mentioned SAF. That was a much hotter topic, let's say, a couple of years ago. We actually had panels here, not just on SAF, but specifically alcohol-to-jet, which will be the outlet that use ethanol. And things seem to have fizzled. What do you think would ultimately happen with the industry? Is this something that you're still looking after? I believe there was a JV with Tallgrass that was in the end shelved.

Yes. That is kind of temporarily put on hold. But I mean, it's -- I wouldn't say that like new technology, right, there's always a big buzz around it. And then we're seeing the players that have, I think, a strong presence in it and the good technology are still expanding and they're still working on how to make it economical, right? Like that's the real question is, especially in our current economic environment, how much of the cost can they actually pass down to the consumers, the airlines, right? And so the -- what companies like LanzaJet or Honeywell and there's a few others that are really continuing to make process -- progress in the space. And I believe that they will be able to get there and be able to make it economical.

Whether that's in 5 years or 10 years, I can't tell you for sure from like a full production, full-scale facility. But I do think it will get there. And the ratio of alcohol-to-jet, right, is so 2 gallons of ethanol to 1 gallon of sustainable aviation fuel or synthetic aviation fuel. And so it provides a big opportunity when they get there. So there's also marine fuel, too. So that the marine industry is really looking at being able to use low CI ethanol for their feedstocks. And so there's a number of markets that are being developed, and it's an exciting time of year or time of an ethanol history to see where this all goes.

Yes. I mean SAF from what I recall, theoretically, if the entire U.S. aviation industry were to go to SAF, that would require double the global ethanol capacity, and that would be enough in use for cars. So those calculations we did 2 years ago. So certainly, an interesting area. And you brought up Maritime. I know Maersk has done some of their -- some trials. We have looked into this market, methanol, ammonia, all of them are being considered. How does ethanol play there? Is it something that goes into the mix with bunker fuel? Doesn't need separate engines, like an ammonia vessel? How would ethanol fit into that?

So there's been a number of pilots. And I don't know exactly what Maersk has been working on specifically and what their mix looks like. But there's been a number of really successful trials where they convert even just like diesel engines and semis that operate off of 100% ethanol. And so the technology is there and it exists. What exactly is the right mix to work? I'm not a chemical engineer, but I know that there's a lot of promise out there and a lot of technology that is working on being able to run these large engines even on 100% ethanol.

Okay. The other growth area could be E15, right? And we're seeing some tailwinds like California on the state level, but an overriding, let's say, federal legislation seems to always be a little bit missing. And can you tell us what are you seeing there? Because it looks to me that every 3 months, I'm reading about the legislation being proposed. It doesn't go through. It was supposed to be part of the Big Beautiful Bill. It was excluded in the end. So what is the pushback specifically on this proposal?

Yes. It's been a saga. And it is frustrating to get so close to having it completed. And then there's just kind of -- you have a couple of loud voices in the room that get concerned about whether it be SREs or whatever the answer is. There is a tremendous amount of bipartisan support around E15. And I do believe they will get there. It does take compromise on both ends to be able to get to a common goal. And I do believe and a majority of the industry believes that common sense will prevail. The administration has been incredibly vocal, right, about domestic energy needing to create it here in the United States.

This is the key way to do it. We have the President's full support around, and he said in Iowa just a month ago, right, as soon as he wants to see it done and as soon as that bill crosses his desk, he will sign it immediately, right? So there is -- and USDA has come out with recent, I think, even just this week, right, because the council was supposed to present the bill. We've got a handful of kind of midsized refiners that have some concerns around SREs, and that's really been a little bit of the linchpin that's prevented it from moving forward. But I do believe that it's in the best interest of our country, and it's a bipartisan issue. And I do believe that we'll get there with a negotiated solution.

And on that topic, have you seen -- like in states where E15 has been allowed all year and now more recently in California, have we actually been seeing the investments because they do require investments by gas stations, right? Have you seen the best investments to upgrade? Or is this just not enough for them?

So I would say that a majority, at least in the Midwest where we're from, there really isn't a lot of investment that needs to be done. The infrastructure is set and ready to be able to take E15. It's really just a signing of the pen that needs to happen to be able for that to happen year-round. All of the -- most of the facilities within our area sell E15 within the given time frame. And we've been giving some -- they've been -- the EPA has been issuing summer waivers for however many years now. So we've all had access to year-round E15 anyway. It's not what we want to have continue. We don't want to have to do -- have the EPA do this every 20 days during the summer to allow it. We want a final solution that's legislatively complete. It makes it easier for the refiners also, right?

Like they don't have to go through the blending changes. They can stick with the standard process. But we're seeing -- and I believe the National Ethanol Conference, they just quoted that we're -- the total blend rate for the United States at 2025 was above 10%. So it's like 10.5%. So -- and in some areas, it's even getting closer to the 11%. So we are seeing that adoption and the cars, everything has been shown that there's no impact to it. It really is just a legislative issue that needs to be resolved.

Great. And last topic is strategy. So firstly, you did a strategic review, you sold a few assets. You decided to not sell the company. Is this review now behind you? Does this mean no more asset sales? Does this mean the company will operate as a public company? Or could that door reopen?

I talked about, I think, a couple of earnings calls ago about the company being at an inflection point. We concluded the sale of the Obion, Tennessee location and paid off some debt overhang. And since then, I think we've really turned the corner as an organization. And right now, we're focused on being the low-cost, low-carbon biofuel producer in the Midwest. And with the opportunity we have in front of us with strong free cash flow in the future, we're really focused on our strong capital allocation strategy, and we want to grow. We want to be a company that goes from playing defense to playing offense, and we're looking forward to being in a position to do that.

Well, that's actually my next question and last for now, which is you're going to start generating cash probably -- I haven't been covering Green Plains for that long, several years, but this will be the first time, I think, that on a full year basis, there's going to be some free cash flow. So what do you do with that? What are your priorities?

Well, first and foremost, like I mentioned, we're going to have a very disciplined rigor approach to allocating capital. We have a strategic planning committee with our Board that we're going to work in lockstep with to make sure that we make the best possible decisions for our shareholders and the performance of the company. Number one, we're going to take care of our plant assets and make sure that they maintain a high utilization rate, and they have very good yields. We want our plant assets to be in the top 25th percentile of the industry, so at best-in-class type levels. We have plenty of opportunities to either further monetize 45Z, but at the same time, improve the base business.

So things like improving yields, lowering energy consumption, also improving our grains storage and receiving infrastructure, that opportunity is good not only with respect to improving or increasing farmer-originated grain, which will help us on the 45Z side for the farm practices benefits, but also it will help the base business for the long haul by giving us the opportunity to get more farmer-originated bushels, lowering our raw material costs and improving the overall crush margins in our plant assets. Also, we still have to keep mind of our debt, right? So we have opportunities to pay down debt potentially or return value to shareholders or grow the company through potential M&A.

Perfect. We have a couple of minutes left. I just want to see if there are any questions from investors here. There's a mic.

For your alcohol-to-jet process... Can you hear me? Okay. For the alcohol-to-jet process you have, how do you compare the cost competitiveness of that to like fatty to jet or other processes out there?

How do you compare your alcohol-to-jet process versus others? And I guess you don't have. You are exploring one. But you can talk about that.

Yes, the concept around alcohol-to-jet, right, is the feedstock has to be of a low CI. And so that is -- we have with our Nebraska plants, in particular, we are creating ethanol that could potentially be used in that process, but we do not yet have an alcohol-to-jet facility. We would just anticipate being able to be the feedstock that could be used in one of them.

Yes. So our focus is really on what's within our control right now in driving our CI scores as low as possible within our network of plants and ultimately to be the supplier or maybe a partner with respect to an ATJ process in the future.

Okay. Perfect. With that, I think we're at the end of our slot. So thank you very much for coming.

Appreciate the opportunity, Sal.

Thank you very much.

Thank you.

Good morning, and welcome to the Green Plains Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to your host, Will Joekel, Vice President and Treasurer. Will, please go ahead.

Welcome to the Green Plains Inc. Fourth Quarter 2025 Earnings Call. Joining me on today's call will be Chris Osowski, President and Chief Executive Officer; Ann Reis, Chief Financial Officer; Imre Havasi, Senior Vice President of Trading and Commercial Operations as well as the entire leadership team. There is a slide presentation available, and you can find it on the Investor page under the Events and Presentations link on our website.

During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results can materially differ because of factors discussed in today's press release and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

I'd like to thank you all for joining. It's my pleasure to hand the call over to our President and CEO, Chris Osowski.

Thank you, Will, and good morning, everyone. As we close out 2025, a year marked by both challenges and meaningful achievements, I want to start by thanking our employees for their dedication, our Board for their confidence, and our shareholders for their continued support.

Our teams delivered strong operational execution across the fleet while maintaining an exceptional safety record. As always, safety remains the center of everything we do. Nothing we accomplish matters unless we send people home safely every day.

For the year, four of our plants reached historical production volumes and seven plants achieved record ethanol yields. At the same time, protein and corn oil yields continue to increase across our fleet. These results reflect a culture of continuous improvement, measuring everything, learning quickly and applying the lessons learned.

During the fourth quarter, our operations teams continued to demonstrate the potential of our platform. Our fleet once again generated volumes above their original stated capacities. As we committed during our previous earnings call, we updated our maximum production volumes, which is a clear reflection of the team's progress. Our new stated production capacity for our plants, excluding Fairmont, have been increased to 730 million gallons per year, an increase of 10% over the previously stated capacity. We've increased the Central City and Wood River facilities to 120 million gallons per year each. We adjusted Mount Vernon to 110 million, Madison to 100 million and Shenandoah to 80 million gallons.

Finally, we moved Otter Tail and Superior both to 70 million gallons each and increased York from 50 million up to 60 million gallons. At Madison, we remain limited by state regulations, and we're currently working with the State of Illinois to increase the permitted production levels.

Q4 was highlighted by the start-up of our CO2 compression equipment at our three Nebraska plants where carbon capture is now fully operational. As we previously shared, CO2 from all three Nebraska plants is being sequestered in Wyoming and the impact is lowering CI scores for our plants and generating cash flow.

Financially, the focus on operational excellence and our efforts to remove costs from the business have resulted in considerably stronger results compared to last year. Q4 adjusted EBITDA of $49.1 million is an improvement of more than $67 million compared to Q4 of 2024. We continue to realize the benefits of the 45Z clean fuel production tax credit, which generated $27.7 million in the quarter, net of discounts, and we received our first payment for the transfer of credits.

Although we have not yet announced a tax credit agreement for the sale of our 2026 credits, we are encouraged by the interest we've received and expect to have something to announce soon.

Although it's early in the year, there is plenty to be excited about as we enter 2026. As we mentioned in earlier calls, the opportunity around carbon alone is expected to generate at least $188 million of adjusted EBITDA during the year, subject to actual production volumes and carbon intensity factors. That figure reflects the contribution of the 45Z production tax credit and voluntary credits at our Nebraska facilities that are sequestering CO2 as well as approximately $38 million of net 45Z benefits from our plants outside of Nebraska, all of which are producing low-carbon ethanol qualifying for 45Z.

While it's easy to get caught up in the opportunities around carbon, let's not forget about ethanol. Export demand remains strong, and we're coming off a record-breaking corn crop. From a policy standpoint, strong administration and bipartisan support across several fronts, RVOs, SREs and the push for year-round E15, can help strengthen biofuel markets and support American farmers. The release of Treasury's proposed 45Z clean fuel production credit regulations provides long-awaited clarity for the industry, recognition of CI improvements from on-farm practices and key One Big Beautiful Bill improvements such as the removal of the indirect land use change penalties, and clarification of the qualified sale definition.

We view this as a constructive step that should support our decarbonization program, strengthen domestic feedstock markets and create a favorable debt backdrop for our low CI platform. The continued strong production from our network of plants will allow us to capitalize on these tailwinds.

Finally, I'd like to introduce two new faces to the Green Plains senior leadership team, Ann Reis and Ryan Loneman. Ryan is leading our legal function and will serve as a key adviser on governance, regulatory and strategic transactions, while Ann leads our finance and accounting organization and is already providing insightful leadership in our tax credit monetization efforts and has brought a tremendous amount of industry experience to the role.

With that, I'll hand it over to Ann to review the financial results.

Thanks, Chris, and good morning, everyone. I'm extremely excited to be a member of the Green Plains team and I have been so warmly welcomed by everyone here over the past 4 weeks. 2026 is looking to be a positive year for Green Plains and the ethanol industry. But first, let's talk about the fourth -- the last quarter of 2025.

For the fourth quarter of 2025, we reported net income attributable to Green Plains of $11.9 million or $0.17 per diluted share versus Q4 2024's net loss of $54.9 million or a negative $0.86 per diluted share. Adjusted for $3.6 million of restructuring and noncash charges, primarily related to accelerated stock compensation and inclusive of the production tax credit benefit, Q4 2025 adjusted EBITDA ended at $49.1 million, compared to a negative $18.2 million in Q4 of 2024. These year-over-year improvements reflect the successful execution of operational and cost discipline and the beginning stages of our carbonization monetization strategy.

During the fourth quarter, we refinanced the majority of our 2027 convertible notes through a new $200 million convertible note due in 2030. We used $30 million from that transaction to repurchase approximately 2.9 million shares of stock. Outside of the $60 million of 2027 convertible notes that remain outstanding that we anticipate retiring with cash at maturity, we now have no near-term debt maturities and have the runway to focus on execution.

Revenue for the quarter was $428.8 million, down 26.6% year-over-year. Our Q4 revenue was lower due to the impact of the Obion plant sale, idling our Fairmont facility in January of last year and discontinuing ethanol marketing for a third party, all of which naturally reduced the gallons we had to sell.

SG&A totaled $22.9 million, which is $2.8 million lower than the prior year Q4. We continue to keep a sharp focus on expenses in the business, and we can see that reflected in the significant cost reductions compared to last year. We expect a consolidated SG&A run rate in the low $90 million range for 2026, an improvement of more than $25 million compared to 2024.

Q4 2025 depreciation and amortization finished at $23.5 million compared to $21.5 million in the fourth quarter of 2024. Depreciation is expected to increase modestly in Q1 as we take ownership and begin depreciating the remaining carbon compression equipment.

Interest expense was $6.1 million during the fourth quarter, a decrease of $1.6 million compared to the fourth quarter of 2024. We expect $30 million to $35 million of interest expense during 2026.

In the fourth quarter, we had an income tax benefit of 2.8 -- $28.5 million. Similar to last quarter, our 45Z clean fuel production tax credits are currently recorded under ASC 740 as a deferred tax asset and then adjusted with the valuation allowance to recognize the likelihood of monetization. We've included the production tax credits and adjusted EBITDA to match our view that these are operating results of our production assets.

In December of 2025, the Financial Accounting Standards Board issued ASU 2025-10, accounting for government grants received by business entities. The standard is effective after December 15, 2028, but it does permit early adoption. The company will consider the impact of early adoption in the first quarter of 2026, which would adjust the presentation of the 45Z tax credits within the financial statements.

At the end of the quarter, our federal net operating loss balance of $260.2 million will provide future tax efficiency. Our normalized tax rate going forward is expected to remain in the 23% to 24% range.

Our consolidated liquidity at quarter end included $230.1 million in cash, equivalents and restricted cash, $325 million in working capital revolver availability, which is primarily designated for financing commodity inventories and receivables within our business.

Capital expenditures in Q4 were $5.3 million. For 2026, we expect sustaining capital expenditures for maintenance, safety and regulatory spending to total $15 million to $25 million.

Our York compression equipment passed its final performance testing during the fourth quarter and the associated liability has moved into the debt portion of the balance sheet. The compression equipment liabilities for Central City and Wood River remain in a separate line item as of December 31, but that liability was moved into long-term debt in January. Inclusive of the carbon equipment liabilities, our total debt balance is approximately $504 million.

With that, I'll turn the call over to Imre for a commercial update.

Thanks, Ann. In the fourth quarter, ethanol margins remained resilient, thanks to industry fundamentals that were much better than in 2024. The ethanol inverse did not break until late November. The industry was slow to build stocks coming out of fall maintenance, thanks to both solid domestic blending and strong export demand. Ethanol margins remain well positioned due to a record corn crop that could help keep feedstock prices in check. As we mentioned on our last call, we were partially hedged heading into Q4, and those positions paid off as ethanol softened later in the quarter.

The first quarter of 2026 is shaping up to be stronger than the same period of last year and consistent with our disciplined risk management approach. We have a significant portion of our Q1 production margin locked in. Industry ethanol production has been higher compared to last year, but we expect supportive demand both domestically and internationally. Ethanol exports set a record last year, and we expect export demand to increase again in 2026. Domestically, E15 adoption continues to increase slowly, and it remains a massive opportunity for the industry. We are thankful to our local, state and federal representatives who continue to advance E15 to advocate for American agriculture.

Corn oil markets remained steady during the quarter with values that contribute nicely to our gross margin. Although protein pricing continued to be under pressure, corn costs remain low. And overall, we see relatively solid margins going forward.

With that, I would like to hand the call back over to Chris.

Thanks, Imre. 2025 was a year of change, and our team has thrived while confronting challenges. The plants are producing more than what was previously thought possible. Our carbon project and the resulting earnings are being delivered. The balance sheet has been transformed and derisked. It was a year defined by focus, safety, reliability, and a commitment to doing things the right way every time, which is exactly the mindset we're carrying into 2026.

As we enter an exciting time for the company, our attention is focused to capital allocation and delivering value for our shareholders. We are concentrating efforts towards 5 strategic priorities which include: improving energy efficiency and CI reduction projects; evaluating carbon sequestration opportunities for plants currently not on a pipeline, specifically how we capture carbonate plants before Summit comes online as well as for our plants that are not committed to a pipeline; debottlenecking or expanding opportunities at our facilities, which are currently being engineered; increasing on-site grain storage and receiving speed capabilities; and finally, balancing capital structure and returning capital to shareholders.

We look forward to putting this plan into action. Several efficiency and CI reduction projects are already underway and could be completed within the year. We are also completing FVL or front-end loading engineering on several larger energy reduction opportunities. It's important to note that these projects reduce energy consumption, which inherently lowers our OpEx, making our plants more competitive before adding on the returns from 45Z. This fully aligns with our strategy of being a low-cost, low-carbon biofuels producer.

We're also evaluating and expect to expand our on-site grain storage and receiving capabilities. When we think about prioritizing the efficiency of the base ethanol plant, adding additional storage will help us draw more farmer bushels and capitalize on new crop harvest opportunities, lowering feedstock costs and reducing operational risks. In keeping with our disciplined data-driven approach, every project will compete for capital and must support our low-cost, low-carbon strategy.

In closing, I'm incredibly proud of what our team has accomplished in 2025, and I'm confident in the direction we're headed. We remain focused on delivering the decarbonization program, driving operational excellence, and maintaining a disciplined hedging strategy. We look forward to carrying this momentum into 2026 and remain committed to building confidence and trust as we deliver value for our shareholders.

With that, operator, we will now take your questions.

Our first question comes from the line of Pooran Sharma with Stephens.

Congrats on the results this morning, and I appreciate the questions here. I just maybe wanted to start off by asking about something you said in your prepared comments. You mentioned you're starting to see interest for counterparties around the 2026 45Z credits at this point. I was just wondering how that engagement has influenced the range of potential pricing or structures versus what you saw in 2025.

Well, thanks for the question, Pooran, and I appreciate the feedback on the results. We are actively marketing these credits, and we feel confident in the strength of our platform's ability to deliver credits going forward. And I think in the near future, we'll be in a position to share more on the details around the execution of the sale process.

Okay. Appreciate that. I wanted to maybe get a sense of -- you mentioned, I think, in the release that there was some upside here to the $188 million total carbon. I think you mentioned there's some CI reduction projects in the mix. But just was wondering if you could just tease that out with a little bit more granularity. What do you think -- how much more do you think that opportunity can get to? And what are some of the projects that you're working on specifically?

Yes. And I appreciate the follow-up. So we have numerous plant efficiency projects, let's just say, in terms of total capital in the $5 million to $10 million range of spend that have very fast returns, inclusive of 45Z, things that are paying for themselves within a 2-year time period or even less in some cases, focused around the Nebraska locations. But we're also evaluating opportunities for larger investments that could lower the energy consumption in plant that lower our OpEx, specifically electrical and natural gas consumption that will help drive returns just beyond 45Z.

In terms of magnitude, I don't really have a specific range to share. But we're confident in the numbers we've provided so far, and there is potential upside, but we are working to optimize the carbon capture equipment that is running right now. All five compressors right now are online, capturing more than 90% of the CO2 that we're producing. So we feel very strongly about the numbers we provided so far.

And as soon as we start rolling out some of these projects, we'll communicate more on expected returns and potential upside.

Our next question comes from the line of Salvator Tiano with Bank of America.

Hakim Sanfo on for Salvator. Can you clarify why your 4Q cash flow from operations before working capital was around $16 million, much lower than EBITDA? And conversely, it appears you had a massive working capital tailwind for 4Q in the year. What drove that? And what does that mean for 2026 net working capital?

Sure. Thank you for the question. This is Will. So Q4, as we said in our prepared remarks, we had a nice uplift from our carbon earnings. We haven't taken full receipt of cash. We did take a small portion, $14 million, as we previously released, but we'll receive the rest of that cash in Q1. So that's going to be one of the deltas.

The second piece in talking about working capital is we did accelerate our receivables and our inventory, as previously discussed from the Eco transaction. And along with building farmer payments during the quarter, that helped generate some cash for us from a working capital standpoint in the quarter.

And as a quick follow-up, how should we think of 1Q ethanol EBITDA margin would suggest negative segment EBITDA for Green Plains. Is that what you're seeing in the market? And what about 2Q outlook so far?

Thanks for the question, Salvator. It is -- we're -- of course, seasonally, this is the low point usually of the year, but we're much better -- in much better shape as an industry and also our company compared to last year. When you look at the different components of that EBITDA margin, I mean, Chris already talked about our operational efficiency. Our plants are running well. Our yields are up. So we're putting out really good production volumes to the market.

And in terms of market fundamentals, the different components of our consolidated crush margins are holding up very nicely. Corn continues to be relatively inexpensive due to that large crop, and that got confirmed. Corn oil prices are significantly better than a year ago. And simple crush margins, which is just the corn futures and ethanol financials, they're also holding up relatively well. Again, reflecting some seasonally lower volumes. But overall, when you look at consolidated crush, they are much better than last year. And again, if you combine that with our operational efficiency, we're confident to show a very good number for Q1, especially when you compare it to a year prior.

Our next question comes from the line of Kristen Owen with Oppenheimer.

So I wanted to start with the $188 million of carbon expected here in 2026. If I look back a couple of quarters, that number was closer to $150 million. So I'm wondering if you could help us bridge how we got much better than that? How much of that came from the expanded capacity on your existing footprint, maybe some of the changes that you've made in the operations over the last couple of quarters?

And then my follow-up is related to that, just the monetization of those credits, what we should be thinking about in terms of discount to face value, sort of what you're seeing in the marketplace? And Ann, I would love your feedback on that, just given your background.

Yes. Thanks, Kristen. And maybe I'll start. In terms of the $188 million that number has moved a little bit, but it's really built around $150 million coming from the three Nebraska locations, inclusive of voluntary credits, which are probably in the $15 million to $20 million range out of that $150 million. And then the additional $38 million coming from the other facilities, that number changed as a result of the Obion plant sale. So in simple terms, it's 380 million gallons of capacity with 5 CI points being reduced. And that's how we're looking at that.

And that's also subject to the plants have to run. We have to maintain our yields. We have to maintain the energy efficiency in the locations. And our compression equipment has to continue to operate at a high utilization rate, which is getting there right now and has been ramping up over the duration of the fourth quarter to get to these levels.

And then, Ann, if you want to comment on the tax credits?

Sure. So the tax credits, there is -- there has been a lot of interest around it, and it continues. And now with the 45Z proposed guidance coming out this week, that's incredibly helpful.

There's a number of factors that go into the pricing around it. So when you're talking to the counterparties, their interest is around -- debating around whether you have insurance or not. It's around what the strength of your balance sheet is. It's the -- how many -- how long of credits you're looking to sell and whether or not you qualify for PWA and have a good compliance program around all of it. We feel very confident in all of those factors in our compliance program. And we've had very fruitful discussions with counterparties. And like we said, we expect to be able to announce something in the near future.

Our next question comes from the line of Eric Stine with Craig-Hallum.

Maybe just sticking on the carbon side, just to clarify, so you gave -- talking about projects or energy efficiency projects at other locations and talked about $5 million to $10 million, Chris. Is that -- just to be clear, I mean, that's separate above and beyond the $15 million to $25 million in CapEx that you gave for maintenance. And then also, is that $5 million to $10 million per plant, $5 million to $10 million in total? Just give us some clarity on that, that would be helpful.

Sure. Appreciate the question. And yes, in terms of our plant network, we talk about sustaining capital being around that $20 million range. We said our $20 million target. That's just to maintain the existing assets' health, and we're going to ensure as a first priority that we take care of our plants and they're capable of running at high utilization rates and yields. Yes, $5 million to $10 million of efficiency projects is on top of that for the company is what we have in our queue. And then we're also, like I mentioned, looking at grain storage opportunities for increasing capacity and receiving speed at locations, and that is yet to be determined when and where and how much.

Got it. Understood. And then maybe my follow-up, just on the 45Z, obviously, a nice contribution here. I mean, how should we think about -- I know you've got the new accounting guidance that is coming on for 2028, but something you need to factor in. I mean, how do you think about the linearity of recognizing those in 2026, just as we think about that from a modeling perspective above and beyond, obviously, our judgment on ethanol markets?

Yes. As we mentioned, we feel like we'll have something -- we feel strongly we'll have something here to announce in the future -- near future that will help you with that modeling aspect. And with the accounting guidance opportunity that we have to adopt early in Q1, that will be we appreciate that guidance. We feel like it is reflective of how we have always felt like the tax credit should be accounted for, and we'll have more to share with that with you guys in Q1 on that.

Our next question comes from the line of Craig Irwin with ROTH Capital.

So first thing I wanted to ask about is really CI score. There were some estimates shared last year. And just the way you gave us the $188 million with the 5-point reduction, I assume across the entire platform this year. I guess we're going to start with the mark. So can you share with us what the CI was on the platform exiting 2025? And maybe if you can talk about what's possibly achievable over the course of '26? Can we exceed that 5-point assumption in the $188 million? And what's feasible with the higher level of capital spending on the platform over the next couple of years?

Yes. Thanks for your question. It's -- the way the guidance reads, right, is you have -- we have to have a below a 50 score to be able to capture the CI. And all of our facilities starting in 2026 with the removal of the ILUC penalty do qualify for that. And then obviously, right, with our Nebraska facilities that are capturing carbon, it's well below that 50 mark.

Additionally, with the guidance coming out this week, we got a little bit of a surprise, I would say, with the addition of the on-farming practices now qualifying for a reduction in CI. So we'll be sharpening our pencils and taking a look at that and seeing what additional benefit that provides to us. But we -- as the $188 million was calculated, that was with the assumption of the full cost of a normal corn, and this will reduce it. And so we -- anything will be an upside with looking at the on-farming practices. So we're excited about that opportunity, and we'll be working towards coming up with a calculation for that here in the next quarter.

Okay. Just as a follow-up in that my second question, do you care to take a stab at what those on-farm practices could mean as far as an impact on Green Plains CI?

And then my second question is, can you please remind us on the payment terms for the third-party financing on carbon sequestration equipment and capital that's been invested?

Yes. So with the on-farming practices, there's a -- we'll have to calculate that. There's a number of components that includes how many bushels we're buying directly from producers versus commercial spaces, which majority of our facilities are -- that's a majority of the corn that we buy is directly from the farmers. So we have a lot of optimism around being able to capture some of that value. What that actually looks like at the moment, more to come on that, but we do feel like there is value there to capture.

And Will, I don't know if you want to talk about.

Yes. With respect to the compression liabilities, once we take ownership, which we've now taken ownership of all three facilities at our Nebraska plants, like Ann mentioned, that does flip it into the balance sheet debt category. And from now on, we will have monthly payments to pay down the P&I on those facilities. It really just works like an amortizing loan similar to a mortgage. So you'll see those reflected in our interest expense and debt repayments on the cash flow going forward.

Our next question comes from the line of Andrew Strelzik with BMO Capital Markets.

Obviously, the company has made a lot of progress from an execution, cost, operations perspective in relatively short order. I guess I'm curious how you're thinking about those opportunities going forward. Do you feel like you've executed against most of that at this point? Or where do you see the biggest opportunities to continue to get better from an execution and cost perspective?

Yes. Thanks for the question, Andrew. And just a couple of data points I'd like to share. Starting on the operational excellence front, our plants are -- as a whole are running at a $0.03 decrease in total OpEx year-over-year from 2024 to 2025. So we're seeing the fruits of that labor coming to fruition. At the same time, there's still a few more pennies that we have to go after in 2026. And some of that is continued performance of management in plants, but then also some of the capital projects that we mentioned earlier in the prepared remarks, getting implemented in locations where we have higher electrical costs and can take advantage of what is currently very low natural gas prices or historically low prices.

So we feel very positive about that. And then further investments in our infrastructure to reduce cost of raw materials. So we talked about grain storage, which for us is a very exciting opportunity to help us increase that percentage of farmer-originated bushels that lower our total cost, but then also potentially have a positive impact on CI score.

Okay. Great. And then you mentioned in the prepared remarks, E15 and the potential for E15. And I guess, how do you see the market's readiness for E15 adoption from an infrastructure perspective? And I guess, kind of how are you thinking about the regulatory environment here given some of the headlines in recent weeks?

Yes. Of course, a little bit of a disappointment, right, that it didn't make it into the bill last week. But there is a coalition growing. There is -- I think long term or we think long term, there is absolutely a need for that. We have to, as a country, generate more demand domestically, not just rely on export markets. So I think there's plenty of support for that in terms of just overall policy, and we're confident that it will be allowed yearlong at one point. There are some hurdles that we have to overcome. But it is long term, we believe, a necessary step and the outlook is positive.

Now in terms of infrastructure, there are a couple of components that may go hand to hand. One is there's plenty of infrastructure out there. But they would have to switch -- the gas station would have to switch between different grades at one point, and it goes hand-in-hand with consumer acceptance of the product. So I think the more certainty the industry has, the supply chain can adjust to it. We don't think it's going to have a major impact in '26. But after that, it can very nicely increase domestic blending demand, which, again, we believe is a necessary long-term step for U.S. ag and energy.

[Operator Instructions] Our next question comes from the line of Matthew Blair with TPH.

Congrats on the strong results. I had a question on your outlook for capital allocation in 2026, and thanks for the CapEx guide. But with these 45Z credits coming in, how much debt reduction should we pencil in for 2026? And do you anticipate getting to a point where you could do like regular quarterly share repurchases this year?

Yes. Thanks for the question, Matthew. And while we're not really in a position to provide guidance on that, let's say, growth capital allocation at the moment, we're effectively evaluating each opportunity that we have for free cash flow and where we can put the cash in the best position to provide value for shareholders, whether it's first and foremost, improving the efficiency of our plants for not only capitalizing on 45Z, but for the base OpEx cost of plant operations going forward, looking at opportunities to debottleneck or expand capacity where we have room to grow in the pipeline for carbon. So we've actually sized the compression stations and piping for our Wood River and Central City plants to be able to push more gas through the pipeline.

And then also, like we talked about the storage opportunities for raw materials. And then finally, looking at opportunities for debt reduction or managing share repurchase as an alternative option. But we do have a healthy list of opportunities to grow and improve the performance of the business that have quite attractive returns at the moment.

Okay. Sounds good. And then for my follow-up, it looks like the DOE data last week showed U.S. ethanol production really coming down. I think it dropped about 15% week-over-week, which I guess that was maybe due to either weather issues or the spike in natural gas. So apologies if I missed it, but did you provide a Q1 utilization target? And also, any thoughts on natural gas impact on your op costs in Q1. Is that something that you regularly hedge natural gas? Or could that be pushing off costs up a little bit in the first quarter?

Yes. This is Imre. Thanks for the question. Yes, we were fully hedged on nat gas. We had minor operational hiccups due to the weather. So it's a domino effect, right? So it's weather impacting both plant performance, just the low temperature, right, and things freezing up as well as nat gas supply and natural gas costs. So some plants decide because they can cover variable costs at certain levels. If they are not hedged, they might slow down, shut down for a few days, and others would have maybe some mechanical problems. But from our perspective, yes, we've also experienced some impact on our production. But in terms of nat gas, we were fully hedged and we did not feel an impact from a margin perspective.

At this time, we have no further questions. I will now turn the call back over to Chris Osowski for closing remarks.

Well, thank you for your participation in today's call and your interest in Green Plains. If you have additional questions for us, please reach out, and we look forward to connecting. Have a great day.

This concludes today's conference call. You may now disconnect your lines. Thank you for your participation.

Good morning, and welcome to the Green Plains Inc. Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to your host, Phil Boggs, Chief Financial Officer. Mr. Boggs, please go ahead.

Good morning, and welcome to the Green Plains Inc. Third Quarter 2025 Earnings Call. Joining me on today's call is Chris Osowski, President and Chief Executive Officer; and other members of our leadership team. There is a slide presentation available, and you can find it on the Investor page under the Events and Presentations link on our website.

During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements.

And now I'd like to turn the call over to Chris Osowski.

Thanks, Phil, and good morning, everyone. This has been a milestone quarter for Green Plains, one defined by operational excellence, discipline and execution. I want to first thank our employees for their hard work and dedication through what has been a very, very busy quarter. Also to our Board of Directors for their confidence in me and our leadership team and finally, to our shareholders for their continued support of Green Plains. I'm proud of what we have been able to accomplish, and I'm confident that we can and will continue to deliver sustainable, profitable results.

For the first time in years, we entered the fourth quarter with no near-term debt concerns. Our balance sheet is restructured. Our carbon capture systems are up and operational in all 3 Nebraska locations, and our plants continue to perform at record levels. We built a simpler, fundamentally restructured business, allowing us to focus on value creation and strong consistent cash flows.

In order to recap the major activities since our last call, we want to highlight the following. The first, we executed on the sale of the Obion, Tennessee facility and concluded our strategic review process. We used those funds to fully repay approximately $130 million of high-cost debt. And next, we refinanced most of our 2027 convertible debt with a new $200 million facility due in 2030. We also executed on our first 45Z clean fuel production tax credit monetization agreement. And finally, we commissioned and started up the carbon capture facility at York, Nebraska with the Wood River and Central City, Nebraska locations currently in the process of ramping up capture rates as we speak.

Operationally, we're continuing to deliver record performance with our network of plants hitting over 101% capacity utilization, the highest level we reported in over a decade. This has been driven by our operational excellence programs that have been working in the background to improve fermentation yields and reduce plant downtime. We are seeing the results of what a focused effort can do with record or near-record yields for this group of plants in ethanol, corn oil and protein.

Financially, this quarter's results, including $52.6 million in adjusted EBITDA and $11.9 million in net income reflect the new foundation we've laid, and this is just the start. During the quarter, we began realizing benefits from the 45Z clean fuel production tax credit, and we recognized $25 million of production tax credit value, net of discounts and costs during the quarter, and we anticipate another $15 million to $25 million of benefit in the fourth quarter. As we look to 2026, we anticipate these values to grow as we expand the program to all of our plants and see the impact from policy changes going into effect January 1.

We're proud of the progress that we've made to deliver on what we said we would do, which is positioning us to provide solid transparent results in the fourth quarter and beyond.

With that, I'll hand it back over to Phil to review the detailed financial results, and then I'll come back with a strategic update and commercial outlook.

Thanks, Chris. For the third quarter of 2025, we reported net income attributable to Green Plains of $11.9 million or $0.17 per share versus Q3 of 2024 of $48.2 million or $0.69 per diluted share. This quarter includes $35.7 million in nonrecurring interest expense tied to the extinguishment of our high-cost junior mezzanine debt. The result also includes $2.7 million in onetime restructuring charges related to our cost reduction and efficiency improvement programs. Adjusted for restructuring charges, noncash charges and inclusive of the production tax credit benefits, Q3 2025 adjusted EBITDA ended at $52.6 million compared to Q3 2024 of $53.3 million.

During the quarter, we strengthened our balance sheet and liquidity through the sale of our Obion asset in Tennessee. We used the proceeds to fully retire the junior mezzanine debt and enhance our liquidity. We also refinanced most of our 2027 convertible notes through a new $200 million convertible note due in 2030 and used $30 million from that transaction to buy back stock. We now have no significant debt maturities for the next several years.

Revenue for the quarter was $508.5 million, down 22.8% year-over-year. Like last quarter, our Q3 revenue was lower because we exited ethanol marketing for Tharaldson earlier this year and placed our Fairmont ethanol asset on care and maintenance in January of this year. These items naturally reduced the gallons we had to market.

SG&A totaled $29.3 million, which is $2.6 million higher than the prior year Q3. Last year's results benefited from some onetime true-ups related to compensation-related adjustments and payroll tax incentive refunds, while this quarter's results included some onetime expenses related to the final earn-outs at our FQT business. We continue to expect SG&A to improve on a go-forward run rate and remain on track to exit the year at a corporate and trade SG&A target of the low $40 million area with full company consolidated SG&A run rate in the low $90 million range, significantly improved from the $133 million and $118 million we incurred in 2023 and 2024.

Q3 2025 depreciation and amortization finished at $25 million compared to $26.1 million in the prior year quarter. Interest expense rose to $47.8 million, including onetime charges totaling $35.7 million tied to the extension and then the retirement of the mezzanine notes. With that behind us now, we anticipate our recurring interest costs will fall significantly in Q4 and into 2026.

We had an income tax benefit of $25.6 million. Our 45Z clean fuel production tax credits are recorded here under ASC 740 as deferred tax assets and then adjusted with the valuation allowance to recognize the likelihood of monetization resulting in the benefit. As a result, we recorded year-to-date production tax credits in the third quarter of $26.5 million, net of discounts. To match our view of operating performance, we've included the production tax credits in adjusted EBITDA. At the end of the quarter, our federal net operating loss balance of $200.5 million will provide future tax efficiency. Our normalized tax rate going forward is expected to remain in the 24% to 25% range.

On the balance sheet, our consolidated liquidity at quarter end included $211.6 million in cash equivalents and restricted cash, $325 million in working capital revolver availability, which is designated primarily for financing commodity inventories and receivables within our business. We had $136.7 million in unrestricted liquidity available to corporate.

Capital expenditures in Q3 were $4 million, including maintenance, safety and regulatory investments. For the remainder of 2025, we expect capital expenditures to be approximately $5 million to $10 million, which excludes the carbon capture equipment for our Nebraska operations, which are already fully financed.

Our balance sheet reflects the increase in the carbon equipment liability as anticipated as a natural result of progress that is occurring on the project. This now stands at $117.5 million, up from $82 million in the prior quarter. As the project reaches full completion, this will be reclassified to debt in future periods.

With that, I'll turn the call back to Chris to provide some strategic updates and the commercial outlook.

The balance sheet transformation we executed on earlier this year has fundamentally changed how this company operates. The sale of the Obion plant allowed us to fully retire high-cost mezzanine debt and simplify our capital structure. In October, we completed $200 million in privately negotiated exchange and subscription agreements to extend the maturity of our converts and further derisk the business.

We ended the third quarter with $353 million in total debt, down over $220 million from year-end 2024. While our carbon capture liabilities will move to debt in the near future, we have no near-term debt maturities on the horizon other than the small remaining balance of the 2027 converts, leaving us plenty of runway to focus on operational excellence initiatives and delivering value for our shareholders.

One of the significant operational excellence initiatives where we recently implemented is an overhaul of our CapEx policy and requirements for project justification and returns. This new rigor is aligned with our desire to be a data-driven organization that measures twice and cuts once. Going forward, we will apply these new processes as we prioritize our capital allocation strategy, which will be focusing on: number one, strengthening our plant assets and maintaining or improving throughput, reducing our plant's carbon intensity through projects such as low energy distillation or combined heat and power, debottlenecking plant assets are incrementally expanding capacity, delevering the balance sheet through targeted debt reductions and also options for returning capital to shareholders over time.

We're developing a clear capital allocation matrix that weighs returns across each of these options so we can deploy capital where it drives the most long-term value. This is just one of the significant operational excellence initiatives we executed on during Q3. We've also completely revamped our plant financial models, taking into account all production scenarios and corresponding carbon intensity and P&L impacts. At the same time, we implemented a cross-functional sales and operations planning process and updated forecasting process that has equal involvement from our commercial, operations and finance teams.

While in Q3, we delivered results marked by strong operational execution and one of our core expectations is continuous improvement. Previously, we mentioned in Q3, our plants achieved above 100% capacity utilization, and we feel it's time to raise the bar. As we complete our budget cycle, we will be reviewing the capacity of our fleet with an eye towards updating our baseline capacity numbers for 2026. With a focus on operational excellence, we are happy to be in a position to have to make this change.

From the commercial perspective, the overall margin structure improved significantly through the second half of the third quarter and early part of the fourth quarter, driven by tighter ethanol supplies, lower input costs and stronger corn oil values. Ethanol prices rallied roughly $0.25 to $0.30 per gallon in August and September off of the early summer lows, while corn prices stayed subdued despite earlier expectations of a tight balance sheet. Favorable weather ultimately supported larger yields and a more balanced corn outlook.

Corn oil prices increased early in Q3 following the 2026 RVO ruling before moderating late in the quarter. By contrast, DDGs and high protein values remained under pressure through much of the quarter given ample supply and typical seasonality. Looking ahead, with fall maintenance and peak summer driving behind us, ethanol prices have returned to more historical levels.

Margins in the fourth quarter still remain attractive, and we are set up for a solid Q4 performance. We're about 75% hedged on crush in the fourth quarter and have put positions on for Q1 and 2026 following our disciplined hedging strategy that we've been executing on for several quarters now.

Demand drivers are in place with healthy export volumes and a growing acceptance of E15, although we do expect to see typical seasonal volatility as we move through the back half of Q4 and into traditional weaker margin winter months.

Before we move on to Q&A, I want to leave you with this perspective. Green Plains is no longer approaching an inflection point. We're right in the middle of it. With all 3 of our Nebraska facilities, Central City, Wood River and York now capturing CO2. This isn't a future of promise anymore. It's happening today. The equipment is running across all 3 locations, carbon is delivered to the pipeline, and we're generating credits. Our Advantage Nebraska strategy is operational and our overall decarbonization strategy has expanded to our entire operating platform.

In closing, a lot of the heavy lifting has been done. We are entering a new chapter built on operational excellence, discipline and execution. We've simplified our business, strengthened our liquidity and have proven our ability to deliver. Our carbon strategy is now a reality. Physical CO2 is being captured and monetized and the earnings power of Green Plains is being transformed. We're confident in the path ahead as we finish 2025 on a strong note and look forward to 2026 and beyond.

Operator, we'll now take questions.

[Operator Instructions] Our first question comes from the line of Manav Gupta with UBS.

You came in at a very challenging time, and you have seemed to turn this boat very quickly and very efficiently. I want to congratulate you on that. My question here is, sir, as you look forward for the next 9 to 12 months, what are your key challenges that you still think you have to encounter to get GPRE back at a run rate where it was probably 3 or 4 years ago?

Yes, and thank you for the question. We really feel good about the actions taken over the last 6 to 9 months to manage costs in our network. We're really focused on making sure that our plant assets are competitive and the results of the operational excellence initiatives are really coming to fruition, whether it be looking at improved plant yields or reduced plant OpEx, we see these plants coming into a very competitive position.

And in terms of other obstacles going forward, we are going to focus on the things that are within our control, and we need to deliver on the opportunities the carbon program is going to provide us. So we still have to run the plants, we still have to put gas in the pipe, and we still have to monetize the tax credits on top of being great at what we do day-to-day, which is buying corn, running plants efficiently and marketing our products to our client base.

Perfect. My very quick follow-up is, as you move along this journey, it's becoming increasingly clear you are going from a state of cash burn to probably significant cash generation once all these plants start up and there is more policy clarity. Help us understand what could be the uses of some of those cash. As you said, you do not actually have any near-term maturities. So help us understand what could be the possible uses of this cash as you generate it in '26 and '27?

Yes, sure. And first and foremost, we are going to maintain the health of our operating assets. So we're going to ensure that our plants can produce at a competitive position. And we want to drive those plants into the top 25% quartile of the industry. Next, we have numerous opportunities to further reduce our carbon intensity scores in plants, whether it be moving toward low-energy distillation technologies to further reduce natural gas or electrical consumption in plant or considerations for combined heat and power in plants. There are a lot of opportunities that are still available to us. And then debottlenecking and adding capacity where it makes sense. So these are some of the opportunities, along with further debt reduction and returning value to shareholders.

Congrats on a very strong quarter.

Your next question comes from the line of Pooran Sharma with Stephens Inc.

Just wondering if maybe we could talk about some of the incremental unlocks beyond your Advantage Nebraska strategy. And apologies if I missed the details in your prepared remarks. But I think the last time -- last quarter, the plan was to get about $50 million of EBITDA contribution from these assets that are non-Nebraska. And so you kind of went into detail on some of the initiatives you're working on. Now that we've gotten some visibility into 45Z contribution on Nebraska. I was wondering if you could maybe peel the onion a little bit in terms of what can you do to unlock 45Z credits in your other assets beyond Nebraska? And how do you get to that $50 million essentially?

Yes, that's a good question, and I appreciate that. For the non-pipeline plants or let's say, non-Nebraska locations, we have worked very diligently to improve the efficiency of those operations. and effectively lower their CI scores to the point where we expect them to be [ sub-50 ], effectively earning 5 points of CI reduction going forward. So there are opportunities to further make those plants more efficient with additional technologies that we have opportunities to implement.

And we previously gave guidance around a $50 million P&L impact for those locations. We need to adjust that now that the Obion plant is not part of the fleet. So our adjusted number is around $38 million of P&L impact just based on 120 million gallon plant with 5 points of CI reduction. So that's really where we sit, and there is just opportunities to grow that here going forward.

Great. Great. And I guess for my follow-up, just maybe wanted to see if you could walk through the rationale on the converts. I mean, I imagine there's a tad bit of like a tug and pull between potential dilution, but then also just cleaning up your balance sheet and making sure that you all have a good runway to operate. So I was just wondering if maybe you could just provide some rationale on that move?

Yes. I mean I think in general, we talked about Green Plains being at an inflection point and with the desire to eliminate debt overhang and then provide the organization the opportunity to focus on execution and running the day-to-day business. We want our employees focused on being great at buying corn, being great at running plants and being great at selling products. And the rationale behind the finance moves are really just to give us the opportunity to focus on the day-to-day business operations.

Your next question comes from the line of Matthew Blair with TPH.

Congrats on the strong utilization, 101% in the quarter. Could you talk a little bit more about the changes you are making at the plants? We're noticing that your CapEx is pretty low here. So it seems like this is more process changes rather than throwing a lot of new money at the plant.

Yes. And that's a great question. I think what you're seeing is the results of a focused effort. We are not in the process of starting up new technologies or adding complexity to our business. Our teams are focused on the blocking and tackling of running and operating the plants and driving higher yields. So we're operating at higher yields than historically would have been anticipated when these plants were built. At the same time, a focused effort on reliability-centered maintenance to reduce planned and unplanned downtime and putting in technical solutions to the things that cause us to shut down. And that's really what's driving the improvements in capacity utilization to the point now where we want to rebaseline the performance of the plants for the future. But it's a lot about setting expectation and improving the technical capabilities of both our corporate operations team and the plant management teams to run the assets as best we can.

Sounds good. And then for the $15 million to $25 million of 45Z credits in the fourth quarter, is that all coming from the Trailblazer plants? Or is there some contribution from the non-Trailblazer plants as well? And then also, why the range seems a little wide. What would put you at the lower end of the range versus the upper end of the range for the fourth quarter here?

Sure. That's also a great question. And it's important to note that we still need to execute on the remainder of the fourth quarter. We've got the York, Nebraska plant up and fully operational at a very high capture efficiency. And we are in the process of getting Central City and Wood River ramped up in terms of capturing all the CO2 produced and putting it into the pipeline. So we still -- it's still a work in progress, but we are very confident in our ability to execute on that piece. We just have to deliver here the remainder of the fourth quarter.

And to comment on the non-pipeline plants contributing to 45Z, we are working through PWA compliance for those locations that are currently operating at a sub-50 CI score. And it's really just about executing on that piece and managing the energy consumption for those plants to drive those credit values higher.

Your next question comes from the line of Eric Stine with Craig-Hallum.

So you're just talking about the other plants, the non-pipeline connected plants, and you mentioned the $38 million in potential 45Z. But can you give an idea of just what the investment might be? I know you're considering a number of things. I know some of those plants are already sub-50. But just some thoughts, maybe I know it's early days, but some thoughts on what that investment might look like.

Yes. Good question. And we don't have a specific investment planned for any of those plants, but we do have numerous technologies we can deploy at any location now because effectively, starting January 1 with the removal of the ILUC or the indirect land use calculation on the CI score, we're going to see all of those plants effectively capturing 45Z value. So each technology that is available to our plants has an equal footing regardless of pipeline status in terms of how it can deliver. So we have a lot of options in front of us. And we're just focused on delivering this fourth quarter, generating free cash flow to give us the opportunity to then reinvest into the business.

Got it. So I mean, just as the calendar turns to 2026, it sounds like you do anticipate that you will start to capture some of that $38 million. It's just that there would be additional steps that you would need to take to fully capture it. Is that the way we should think about it?

No. We expect to get the $38 million. That is our expectation for a 2026 run rate, independent of any additional CapEx to drive CI scores lower.

Got it. Got it. That is very helpful. Maybe second one for me. This is -- I mean, gosh, the balance sheet and the flexibility you've got, you haven't had for a long, long time. I know you sold Obion. I mean, any thoughts, do you kind of feel like now with your 9 plants, this is where the platform should be? Or I mean, is it still kind of -- you've got a portfolio and depending on your options, there may be other asset sales?

Well, with respect to our portfolio of plants, I mean, we feel good about the assets that we have, especially with respect to the rate of improvement we're seeing in those plant assets. At the same time, we've done a lot of work to manage our total corporate SG&A. And I feel like we've gotten the organization to its fighting weight, so to speak, such that we can be competitive in the ethanol space with the assets we have. And in terms of whether it be growth of business, we have opportunities to grow volume in our existing footprint if and when we make that sort of decision. But no really anticipation of significant changes at this point in time.

Your next question comes from the line of Salvator Tiano with Bank of America.

This is [ Hakim ] on for Salvator. Quick question on the 45Z agreement on with Freepoint this year. Is it subject to any contingencies and how these credits will be finalized and audited in? And lastly, have you received any cash? And if not, when do you expect to receive cash flow?

Yes. Thanks for the question, Salvator. Yes, we earlier announced the completion of the 45Z production tax credit monetization agreement with Freepoint. And this is for effectively all of the carbon credits that we would generate during 2025. And we are actively marketing credits for 2026, and we feel good about the relationship with Freepoint. In terms of the cash flow, I mean, that is one that is at our discretion depending -- based on our relationship with Freepoint, and we'll leave it at that.

Your next question comes from the line of Laurence Alexander with Jefferies.

This is Carol Jiang on for Laurence Alexander. Could you add a bit more color on the status of clean sugar technology? Like what is the status and the near-term monetization path for CST given the prior comments about wrapping up the effort? And what are the 2026 cash cost implications if commercialization is kind of like deprioritized?

Yes. Very good question. With respect to CST, as previously mentioned on earnings calls, the CS technology does work, and it is functional. The issue we have is additional CapEx requirements to debottleneck the technology to get the full earnings potential out of that process. And with the recent policy changes with respect to 45Z, now we see a shift in focus in terms of putting any available cash that we have to the places where it can generate the best possible returns. And as it pertains specifically to the Shenandoah plant, we expect to -- we're in a position of capturing 45Z tax credits today based on how efficiently that plant is operating in terms of ethanol yields and total plant throughput. So we have to take that into account when it comes to justifying additional CapEx in CST.

And as we mentioned, I think in the last earnings call, we're going to reevaluate that mid-2026 in terms of the path forward. But once again, that additional capital investment is going to have to compete with all the other opportunities we have to invest in our plant network.

Your next question comes from the line of Andrew Strelzik with BMO.

I'm sorry if I missed this, but in the prepared remarks, you closed with a comment about the earnings power being transformed. And so I was just curious with the operational improvements you've done, the cost savings, these tax credit benefits, how do you think about the earnings power going forward? How would you frame that?

Yes. If I think of -- to frame up the ongoing earnings power, a couple of comments. We've talked about the Advantage Nebraska program delivering $150 million of P&L impact on a run rate basis. And just recently, we discussed the non-pipeline plants providing around a $38 million P&L impact. So that's a significant shift for us. At the same time, we also discussed reductions in SG&A on a year-over-year basis that are significant. And we talked earlier in this year about achieving over a $50 million cost reduction target. That on top of plant OpEx is reducing by more than $0.03 in 2025 relative to 2024. We've got a lot of good news to share, and we're very excited about being able to bring it to fruition here in 2026.

And Andrew, this is Phil. Just to add to that, on the balance sheet front, forward interest expense for next 12 months looks to be more in that $30 million to $35 million range with the restructuring of the balance sheet that we've done. So much improved from that standpoint as well. So as Chris noted, significant improvement in core operational expenses with that $50 million and then that combined $188 million of carbon-related 45Z production tax credits and voluntary tax credit earnings power for the full year of 2026, we do believe that we're in a significantly transformed earnings position going forward.

Okay. That's good color and super helpful. My other question kind of on the core underlying ethanol fundamentals. I think you said you're 75% hedged for the fourth quarter. How hedged are you for the first quarter? And in addition to that, how are you guys thinking about potential contributions next year from ethanol exports and E15? Obviously, a lot of headlines, trade agreements, those types of things. Can you kind of frame what a reasonable expectation around those 2 dynamics would be?

Yes. And with respect to position taking, we don't want to get into too much detail on where we sit, but we've talked about having a disciplined strategy. And effectively, we're going to be in the market every day looking for opportunities to lock in margin when the market provides that to us. So we're active in Q4 and Q1 of 2026.

With respect to questions around demand drivers, we see export demand strengthening on the basis of strong numbers, 2 billion-plus gallons in 2025. We expect that to grow with, in particular, demand coming from Canada, the EU and India based on government mandates in those countries. And also with respect to E15 acceptance in all 50 states is also an important driver of demand, but we don't really anticipate that to materialize until probably the second half of 2026 into 2027 based on the needs of developing infrastructure in that part of the world.

Final question comes from the line of Craig Irwin with ROTH Capital.

So you were very clear that the sequestration equipment is working and you're putting carbon in the pipeline. But can you clarify for us whether or not Trailblazer is injecting the carbon in the sequestration wells? And is there any uncertainty around some of the delays there impacting the value of credits that you announced the sale of today?

Thanks for the question, Craig. With respect to status of pipeline, just to recap, we have the York asset fully operational, we've got Central City and Wood River, where we've fully commissioned all of the equipment and are in the process of ramping up capture rates. And right now, the pipeline team is working on basically operationalizing the entire pipeline, sending the gas to Wyoming. So there's a little bit of a time delay between getting equipment commissioned on the capture side of things and the actual sequestration well itself. So like I mentioned, there's a little bit of time delay, but we are confident in our partners' ability to execute on the start-up and commissioning of that equipment. So we really feel good about where we're positioned.

Okay. So the second question then is, do you face a potential limit on the inventory of the carbon that you're putting into the pipeline given that there is a little bit of uncertainty around the injection at those wells in Wyoming? Or is there a fairly substantive potential to continue to put carbon into the pipeline?

Yes. There's plenty of capacity for all of our plants to put the gas in the well. And the range we provided in terms of carbon anticipated value in Q4 is really based around the timing and the capture efficiency of our assets and also the execution of our base plant operations through the balance of Q4.

Thank you, everyone. That concludes our Q&A session for today. I will now turn the call over back to Mr. Chris Osowski for closing remarks. Please go ahead, Mr. Osowski.

All right. Thank you, everyone, for your time today, and we look forward to updating you on our operational performance and financial results next quarter. If you have any follow-up questions for us, please reach out, and we'll find time to connect.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Have a nice day ahead, everyone.

Good morning, and welcome to the Green Plains Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions].

I'll now turn the call over to your host, Phil Boggs, Chief Financial Officer. Mr. Boggs, please go ahead.

Thank you, and good morning, everyone. Welcome to the Green Plains Inc. Second Quarter 2021 Earnings Call. Joining me on today's call are members of our Executive Committee. Michelle Mapes, Interim Principal Executive Officer and Chief Legal and Administration Officer; Jamie Herbert, Chief Human Resources Officer; Chris Osowski, Executive Vice President, Operations and Technology; Imre Havasi, Senior Vice President, Head of Trading and Commercial Operations. We're also pleased to have our Chairman, Jim Anderson, join us today to provide brief comments on Board level alignment around our strategy and outlook.

There is a slide presentation available, and you can find it on the Investor page under the Events and Presentations link on our website. During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. A -- actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements.

And now with that, I'd like to turn the call over to Jim Anderson.

Thank you, Phil. Hello to all. Thank you for joining our call. Q2 has been an active quarter. team has been adjusting the Green Plains asset base, which is required existing some activity -- exiting some activity and assets that are not consistent with our plan. We've also adjusted our SG&A expense, which is never easy, what has to be done.

Our go-to-market strategy has also changed. The execution of the company's plan is centered on changes to our culture RECONNECT which starts with a continued focus on operating safely, followed by a laser focus at fast-acting numbers-driven decision-making process. Culture demands top shelf real-time communications. So everyone in the company is clear on the results and the strategy and tactics we're using to deliver our strategy.

The Board has been very impressed with the leadership of the executive team and the speed and effort the entire Green Plains company is used to deliver on these positive changes. The company's daily and weekly reporting structure zeros in on the most critical measurements for every area of the company. The critical measurements of the company we used to assess our progress of showing material improvement. I want to formally thank all of the Green Plains team for their daily engagement and the pride they have in their company and each other. There have also been several market changes, including government policy, which improved our prospects.

Finally, I want to report on the CEO search process. The non-gov committee and the rest of the Board have spent significant time in this process. are in the final stages of our CEO search. It is our expectation, we'll be in a position to announce our new CEO in the very near term.

I'm pleased to hand the call over to Michelle Makes to begin a review of the quarter.

Thank you, Jim. We entered the second quarter with a clear focus, narrow the aperture of our business to core operations, unlock liquidity through noncore asset monetizations and deliver measurable progress on our path to improving profitability. That is exactly what we are doing. Important to the enhancement of our future earnings power is our carbon strategy and we have made material progress. The construction of our CCS infrastructure is on schedule with all major equipment on track and key installations underway.

As you would imagine, in a project like this, there are daily changes and you can follow it on our website. All indications point to a start-up during the fourth quarter, which we believe will unlock consistent cash flows and long-term value. We are in discussions with counterparties on monetization of our 45 carbon credits for '25 and '26. Based on those discussions and indications in hand, we believe we are in a good position to capture our anticipated pricing for these credits as the projects start-up.

During the quarter, the federal government created more clarity on their policies that has positively impacted our strategic investments to reduce CI. Of course, the most notable occurred on July 4 when the President signed into law the one big beautiful Bill Act. This legislation includes several favorable provisions for the renewable fuel sector, particularly confirmation and extension of the 45 clean fuel production tax credit.

The credit has been extended through 2029 and includes full transferability and the notable removal of the indirect land use change penalty, which improved CI by 5 to 6 points. The bill also eases qualified sale language and restricts eligible feedstocks to those sourced under USMCA ring-fencing the feedstock sourced in North America. -- with the reforms enacted the treasury department will propose and finalize regulations.

With the combination of efficiency gains and CI improvements at our plants, along with the policy changes, we believe our annualized EBITDA contribution from our decarbonization strategy will be greater than $150 million annually for 2026 from our Advantage Nebraska plants alone.

Further, we expect all 9 of our operating plans to qualify for the 45 V tax credits in 2026, which will provide additional upside to our projections. As we discussed in Q1 and reported again for Q2, we are achieving our cost reduction strategies. We have met our $50 million target through a combination of OpEx reductions at our plants and SG&A efficiencies.

The organization is committed to continuous improvement and are executing plans to streamline our business further. We are confident we will end fiscal year '25 with a run rate for corporate and trade SG&A in the low $40 million. Most get confused believing cost reduction programs are just about removing people, by far, the biggest impact comes from constantly testing the need for all of the processes used to run the company.

Continuous improvement demands removing things that don't add value, repurposing people and efforts to things that do add value. During the quarter, we executed several noncore asset sales, including our GP Farrelson joint venture and Proventus and took an impairment on our Hopewell asset. While we took a noncash charge for these items, it raised liquidity and eliminated time wasted on noncore activities and a drag on future earnings.

We also completed a sale of RINs in the quarter that had accumulated over the last several years. Combined, these actions bolstered our liquidity and reinforced our commitment to a disciplined capital allocation strategy and helped increase our focus on the core business.

Finally, we successfully extended the maturity of our junior mezzanine notes. We are maintaining our plan to repay these notes. The range of alternatives includes financing solutions and/or monetizing additional assets that would provide the funds to fully retire the debt. The company and the Board concluded obtaining a short-term extension was the best tactic to our strategy as we believe executing carbon capture monetization will provide better options for a longer-term solution.

While evaluating liquidity levers with our Board of Directors, we recently filed an S-3 registration statement. This is a regulatory requirement to maintain future optionality as we and our Board of Directors continues to evaluate how we finance and grow our business long term. No plans to issue securities pursuant to the shelf following effectiveness have been made at this time.

With that, I'll hand it over to Phil to review the financial results.

Thanks, Michelle. For Q2 2025, we reported a net loss attributable to Green Plains of $72.2 million or $1.09 per share versus Q2 2024 a loss of $24.4 million or $0.38 per share. These results include $44.9 million in noncash charges related to the sale or impairment of certain noncore assets and the sale of an equity method investment. The results also includes $2.5 million in onetime restructuring charges related to our cost reduction and efficiency improvement programs we've executed. Through our objective analysis, we believe this investment will return well for Green Plains.

During the quarter, we strengthened liquidity through execution of noncore asset sales while sharpening our focus on our business using a fast-acting numbers-based decision-making process, managing the daily measurements we feel are most important to each area of our company. Communication and teamwork provide the foundation to outstanding companies and organizations, and we have worked every single angle to increase both in Green Plains.

We also improved our working capital position by more than $50 million through various initiatives, including the transition to a third-party ethanol marketing provider and the intentional management of our balance sheet with a cross-functional team. Revenue for the quarter was $552.8 million down 10.7% year-over-year. Our Q2 revenue was lower because we exited ethanol marketing for Tharaldson and placed our Fairmont Ethanol asset on care and maintenance at the beginning of the year. This naturally reduced the gallons that we had to market.

Adjusted Q2 2025 EBITDA, excluding the restructuring charges and noncash charges, ended at $16.4 million compared to Q2 2024 of $5 million. totaled $27.6 million, which is a $6.3 million improvement from prior year. As we explained in Q1, we expect this to continue to improve through the rest of the year and remains on track to exit the year at a corporate and trade SG&A target of the low $40 million area and a consolidated SG&A target of $93 million.

Q2 2025 depreciation and amortization finished at million, which includes a $3.1 million impairment of property and equipment recorded in the Ag & Energy segment related to the closure of a noncore feed business. Interest expense was $13.9 million an increase of $6.4 million over the prior year, which was primarily driven by expenses associated with the accounting treatment for warrants related to the $30 million revolving line of credit and the prior extension of the junior mezzanine debt, as well as the absence of capitalized interest from prior year project construction. We had an income tax expense of $2.3 million.

Our federal net operating loss balance of $222.6 million will provide future tax efficiencies. Our normalized tax rate going forward is expected to remain in the 23% to 24% range. On the balance sheet, our consolidated liquidity at quarter end included $152.7 million in cash, equivalents and restricted cash, $258 million in working capital revolver availability, which is designated primarily for financing commodity inventories and receivables within our business, and we had $93.3 million in unrestricted liquidity available to corporate, inclusive of the $30 million line of credit that expired on July 30.

But note that since the end of the quarter, we collected $23.5 million in cash related to the sale of our Tharaldson JV. Capital expenditures in Q2 were $11 million, including maintenance, safety and regulatory investments. For the remainder of 2025, we expect capital expenditures to be approximately $10 million, which excludes the carbon capture equipment for our Nebraska operations, which are already fully financed.

As of June 30, 2025, our balance sheet has broken out the carbon equipment liability, which now stands at $82 million, up from $17.9 million at 12/31. This is the natural result of the ongoing progress in the project. The compression assets are recorded in property and equipment, but since these are funded directly by Tallgrass, it doesn't flow through our cash flow statement as CapEx.

We believe this provides better clarity to the reader. To satisfy our mandate for continuous improvement, we are taking fast and decisive actions across all fronts, continuing our focus to operate safely along with improving efficiency everywhere and disciplined short-term and long-term capital allocation using strict return metrics. We believe this is the best way to return the maximum value to all of our stakeholders.

And with that, I'll turn the call over to Chris for an update on our operations.

Thanks, Phil. Q2 marked another quarter of strong operational execution. Continuous improvement is the mandate. Across our fleet of operating assets, we achieved 99% capacity utilization, maintaining the discipline and consistency we demonstrated in Q1. These same plants ran at 93.8% in Q2 of 2024. Our plants produced the highest ethanol yields in Green Plains history, while operating at our second lowest quarterly OpEx costs since early 2023, only better by Q1 of this year. Our improved operational execution has carried over into the third quarter with strong throughput utilization across the platform. This includes improving ethanol and corn yields.

We are forecasting to maintain mid- to high 90% utilization for the remainder of Q3. At our Obion plant, the previously mentioned RTO project was commissioned and the results are exceeding our expectations. The plant has now shown the capability to produce over 3.5 pounds of protein per bushel of corn at the same time producing at rates over 120 million gallons on an annualized basis.

This project is reflective of our commitment to operational excellence that mandates the management of safe operations, using a numbers-based team-oriented decision-making process that includes detailed management of the most critical measurement daily.

Our operational excellence initiatives have contributed materially to surpassing our overall $50 million cost reduction goal. Our plant operations team has achieved OpEx reductions of $10 million on an annualized basis. A major portion of these savings are the result of our reengineered maintenance planning and execution strategy. This has reduced our R&M and contract labor sprint by disciplined and preventative maintenance management, which has increased reliability in our equipment and has built confidence in our team. We've also achieved reductions in Gen 1 chemical Easton enzyme spend as a result of aggressive recipe optimization.

Just like every area of Green Plains, our operations team will build on our improvements daily as we are a team committed to a culture of operational excellence, focused on safety, efficiency, continuous improvement and accountability. We are very proud of the enormous effort and professionalism our operations team has provided. I'd like to thank the team for the huge commitment.

With that, Imre, please take it from here on our commercial and market update.

Thanks, Chris. Our markets have improved in recent weeks, supported by strong ethanol exports and supportive policy on 45 renewable volume obligations and restrictions on imported feedstocks. Combined with a contract that continues to impress, ethanol crush margins have expanded in the back half of the calendar year. Industry run rate and yields have stayed high, which as per usual, must be assessed on a daily basis to execute our risk management programs, which include active hedging across our platform.

Our disciplined approach to locking in crush margins has yielded a good result. Currently, we are 65% crushed for the third quarter. Corn oil continues to be a bright spot, underpinning the need to maximize our coronary yields. The work our plant operations team is doing to consistently produce at capacity is an enormous contributor to the Green Plains margin creation and structure. I want to thank all of them for the huge effort.

[ Tokin ] values are under pressure with the seemingly never-ending capacity additions provided by the soy crushing industry. We are aggressively executing our strategy to diversify our protein customer portfolio, which after careful analysis, we believe, will be additive to our margins. we loaded our first bulk vessel with 6,000 tick tons of sequence or 60% protein product which is on its way to Chile for cement feed applications.

With that, I'll hand the call to Michele for closing comments.

Thank you, Imre. With respect to our strategic review, having executed numerous streamlining initiatives has positioned us well as all potential paths remain under consideration, including a company sale, asset divestitures and/or other material transactions. In closing, I will leave you with this, and monetization efforts are underway, further underpinned by constructive policy updates providing upside across our platform for low CI fuel production.

Our positive EBITDA outlook for Q3 and Q4 has strengthened, driven by our actions focused execution and aided by favorable market seroconverting , combined with full year carbon earnings, we are confident that our earnings power in 2026 will be fundamentally transformed.

We have exceeded our $50 million cost savings goal and continue to identify additional efficiencies as part of our operational excellence and continuous improvement strategy. Our core asset strategy is driving sharper focus and improved asset performance. We have some noncore asset sales and extended the maturity of our near-term debt. Our strategic review and CEO search are both active and progressing, and we look forward to providing additional insights at the appropriate time.

As you should expect, we are committed to continuing to operate safely executing a disciplined fast-acting number-based decision-making process that's fortified by a strong foundation of outstanding real-time communication in all areas of the company. We believe this is the best way to create total company team work [indiscernible] strategy and each other and shareholder value. We hope through our discussion today, you can see the entire Green Plains team is committed to execution and excellence with a goal of restoring profitability and unlocking value across the Green Plains platform.

[Operator Instructions]. Your first question comes from the line of Andrew Strelzik with BMO Capital Markets.

Obviously, a lot of moving parts here with the sale of the noncore assets. higher corn oil values like the decarbonization coming online, cost saves. So I guess what I was hoping is if you put all that together, is there a way for you to help us frame the RECONNECT EBITDA potential in the back half of the year and really in 4Q as we think about the run rate into 2026.

Phil, Would you like to respond?

Yes, happy to. And thanks, Andrew. Yes, back half of the year, stronger EBITDA margin outlook. It's been supported by rising corn oil prices, continued strong ethanol exports and a corn crop that that is looking solid from everything that we can tell. So we have a constructive set up. If you look at overall consolidated crush margins, we're probably sitting somewhere in the mid-teens today for the base business.

And then as we start monetizing the carbon opportunities that starts up sometime here, early fourth quarter. Here in 2025, before it start here in 2026, we'd previously given an indication that carbon would be about $100 million opportunity. So if you prorate that for a fourth quarter startup and tick off maybe a few weeks or something relative to the start-up of that. I mean, carbon ends up thing like a $20 million to $25 million sort of range for fourth quarter. So yes, a real strong setup for the back half of the year here in terms of crush margins.

Okay. Great. That was super helpful. And then my follow-up is just about the sale of the stake in the Tharaldson JV. I guess I was just curious for the thought process there. I suppose it was deemed noncore, but I just wanted to understand kind of how you thought about that piece and maybe more broadly how you thought about valuing that that asset as we think kind of about Hipro or kind of more holistically and longer term?

Thank you, Andrew. I think as you said, it really is our focus. It was not core to what we were doing. It was not a project that we were managing. And so as you -- as we've talked about, we are making data driven decisions here at Green Plains and the numbers basically indicated this was something that made sense for us to exit at this time. Chris, would you like to add anything to that as well?

Yes. I would say that also, we're really focused on this path of operational excellence for our existing assets and driving the yields in our existing MSC processes beyond what was originally planned or expected. And seeing those results Obion RTO project execution is a good example of that.

Your next question comes from the line of Salvator Tiano with Bank of America.

Firstly, I want to clarify a couple of things on the cash flows. I believe if we take our working capital this quarter, we had slightly negative cash flow from operations. I wonder if that includes the $22 million from RIN sales or any different. And can you clarify, you made the comment also on the Tharaldson sale. Did you already receive the proceeds? Or are they coming in Q3.

The $22.6 million of RIN sales was included in the revenue of our ethanol segment. So it is part of operating cash was really part of a commercial optimization strategy that we had accumulated we need to monetize those here in the quarter. I wouldn't count on those as being a recurring part of our go-forward strategy.

The turnkey asset, we have it in receivables as of June 30. We did collect that money in July. So I just added that comment and just to clarify that while it was sitting in it's sitting in an accrued item, not up in accounts receivable, but we have collected that cash.

Okay. Perfect. Secondly, I want to ask a little bit about -- well, if you can clarify a little bit the $100 million number for carbon capture was something that you had mentioned before. And it seems like this could be higher now. So with all the changes in regulations, is there a specific number we should think about? And also as you have your negotiations with potential buyers of credits have the discussions about the potential discount, whether that's 50% or 70% or 90% of the sales value change?

Sure. for 2026, our carbon number that we've talked about here on this call was $150 million. Previously, we've been talking about a $100 million number inclusive of voluntary credits. So the biggest change in that number is driven by the policy change. And so this was the favorable policy updates that we've seen in July.

The elimination of the indirect land use change penalty adds about 5 to 6 points. So when you factor that in to the 287 million gallons of carbon opportunity from our increase in the number by about $30 million. And then we're also continuing to evaluate our starting CI stores -- and Chris and his team in operations continue to focus on efficiencies, drive higher yields. So we're doing everything we can to drive lower starting CI scores, which increases our opportunity as well. So base Nebraska plants alone, I call it $150 million from those 3.

And then we also have some opportunity across the balance of our platform. We mentioned that all of our plants would qualify for 45 in 2026. And so that creates some additional opportunity for us. We're still working through all of the final numbers, but even rounding that's in place at the other 6 plants were rounded to 45 points, so we get 5 points. That's worth about $50 million on those 500 million gallons. So additional upside, we'll continue to clarify and refine that number as we go forward, but there's certainly some upside there. Michel, if you want to take the monetization piece?

Absolutely. Thanks, Bill. So we're in preliminary discussions, but things are going to move rapidly, we believe, in the next month or so. There's nothing that we've seen so far that would indicate a and we should be able to realize those values.

Your next question comes from the line of Pooran Sharma with Stephens.

And congratulations on the progress made thus far, looking forward to seeing how carbon kind of shapes up here in the back half of the year? Just wanted to understand the monetization a little bit and provided some great details thus far. But -- in terms of how should investors think about Green Plains position in the capital structure project financing waterfall? And -- in particular, what portion of like such financing or monetization is expected to flow to the company versus the project-level partners.

Phil, do you want to take a shot and I can follow up?

The financing waterfall, so we're having significant cash flow coming from this project, $150 million. We have that financed with Tallgrass at about a 9% rate over 12 years. So we do have significant cash flows that's going to accrue direct to the company and provide free cash flow so we can then reallocate and we'll continue to review that allocation of capital in terms of continued deleveraging or deploying that into additional growth projects. Again, every project is going to have to compete for capital, but we do expect significant cash flows to accrue from the card monetization efforts.

And I would add to that, you can expect operating expenses associated with that, that will be covered but like Phil said, significant cash flows flow from that. We're not talking about a tax is truly a monetization of the tax credits. So there will be no other takes off of those numbers.

Okay. Great. I appreciate that clarification. Maybe just for the follow-up, ahead of target on the cost savings, you mentioned $50 million captured already. Was wondering if you could give us a sense you could potentially reach for the year.

Jamie, do you want to take that and his follow-up.

You bet. So all stretches our culture. And 1 of -- you heard this morning the operational excellence theme throughout and embedded in that is a spirit of continuous improvement. And every aspect of the business, that's operations, commercial, finance, all of the support functions. We've got engaged teams all across the system.

That are looking at everything from plant-based teams, looking at driving utilization rates. And at the same time, they've made significant progress reducing chemical and R&M spend -- our finance team driving continuous improvements into the cash conversion cycle, our internal IT team continue to look at ways to streamline and simplify software or hardware utilization, decreasing expense -- so in addition to these examples, all driven by highly engaged work groups, we've got broader opportunities given that we're a leaner, more efficient company today.

And one example of that is right here in [indiscernible], the building we're sitting in right now, we're marketing our space. So the bottom line is we're taking a zero-based expense or zero-based approach to our expenses. We're forcing every dollar that we spend across the company to have an ROI associated with it.

Yes. And on top of that, in terms of operational excellence opportunities, we still work on the blocking and tackling of running plants and managing planned and unplanned downtime to improve overall [indiscernible] to continue to improve in that area going forward.

Thank you, Jamie. Thank you, Chris. I would just add to that. As you can imagine, with the streamlining of our operations, there are processes that aren't needed anymore. We continue to test that and eliminate any stuff that's not necessary. So that we can continue to be as efficient as possible and bring dollars to the bottomline.

Your next question comes from the line of Kristen Owen with Oppenheimer.

Phil, you articulated some of the incremental upside on the carbon opportunity from ILU and what you can do on the rest of the platform. But I'm wondering how we should think about upside on, say, corn oil pricing versus some of the crosswinds that you're seeing on the protein side. [Audio Gap].

Yes, for sure. I think [indiscernible] Support us. Kona Corn oil specifically, is 100% going to our renewable diesel today. And with the policy changes -- that's a product that continues to be structurally supported because there is just a limited supply of that. I think speaking of corn oil, the only risk that we see in terms of maybe not continuing to appreciate and perhaps decline a bit if the soy complex trades lower.

And there's only 1 reason that would happen in the lack of trade agreements with China I mean you can just see -- you could see overnight how sensitive the market is to comment about that, the complex rally just as the President indicated that that's a commodity or that's a set of commodities that could be leveraged in those trade negotiations. So overall, very positive. Chris can help me add on this one.

The Fenelon joint venture did not contribute as much in terms of oil of revenues. There was some marginal contribution based on the agreement we had in that joint venture. It was primarily focused on protein.

And we already talked about protein markets. They are the of competing in medians. But of course, we're going to be -- in our corner yields and corona production will continue to be strong and at the highest levels. And of course, by exiting the Belgium joint venture, we will have less protein to sell -- so we'll just manage the portfolio we had prior to that asset coming online. And that allows us to -- just so that allows us to better optimize our portfolio with less product.

Yes. And just to add to that, once again, as part of this operational excellence platform, we've got focused teams monitoring performance of oil yield in plants on a daily basis and putting it in corrective actions to boost that yield to what right now is the highest our platform has seen, and we still see upside on that. So that team will continue to work on driving the volume number up and creating value for the organization.

Just one follow-up question for me. This is our first quarter sort of seeing what bringing on EcoEnergy has done for the business, a lot of moving pieces in the OpEx line. So any early sort of learnings or proof points that you can share with us on that transition?

I'll take that first. One of the key benefits that we've seen is the improvement in working capital. So our finished goods inventory is lower and our accounts receivable are lower. We're achieving that $50 million or greater working capital benefit that we pointed to on the last call, which had occurred shortly after we had started putting that in place. So that has certainly driven some efficiencies, lowered our working capital borrowings, lowered our working capital financing costs. And then we're also seeing just greater level of efficiencies with regard to how we account for all of that in terms of the back office.

So we've driven those efficiencies through the organization. Q2, you see some of that come through the bottom line. But since we implemented it in April. You don't see a full quarter benefit from that. So that will start coming through in the third quarter. And then Emre, if there's any commercial points that you want to add to that and how that structure is working, that would be great.

Yes, for sure. We're very excited about this arrangement and collaboration. I think on the commercial front, I mean, as you can imagine, initially, first few weeks, it was more operationally focused and just getting the process more efficient. We have -- we continue to work on that. But right now, the focus is more on how we create value together and how this collaboration will benefit both organizations.

We're seeing already reductions in supply chain costs to access to markets that we have not had access to RECONNECT a slight improvement in prices back to our plants. And now, as you can imagine, making sure that has 45 week kicks in as carbon capture kicks in and 45 kicks in for us, we seamlessly execute in -- to capture those benefits. So it's just all high notes. I'm very excited about that. collaboration and working together with ECO.

Next question comes from the line of Eric Stine with Craig-Hallum Capital Group.

So maybe just starting on the 45Z, I mean you've mentioned ongoing discussions, and it sounds like progress to the point where you've got pretty good visibility into some near-term activity or things that you can share, just curious, I mean, what does that potentially look like given that you are still waiting on treasury guidance to dictate the value of those credits. Just any thoughts on that? I mean, is that is your commentary showing confidence that, that guidance is soon? Or is it more nuanced than that?

Thanks, Eric. Basically, I would say we're in a situation where the market does expect that guidance to occur. They do expect that guidance to occur sometime in the foreseeable future by the end of the year. depending upon who you talk to, you can get a different answer if it's coming this week, next week or 12/31. I think you will see some sort of small differentiation between '25 and '26 in generally related to the fact that there is the lack of guidance from treasury, but nothing significant in terms of overall value is really how we are thinking about it.

Got it. Okay. And then maybe second one for me, just kind of high level when you think about high proteins and you obviously talked about the market environment currently as it stands today and maybe updated thoughts on optimal mix between 50 pro and sequence. Obviously, in some -- for some end markets, you're pushing higher than that, but would love to kind of get an update on what your thoughts are going forward?

Imre, you take that, please?

Absolutely. I'll start with the comments that have been made on this score by different team members here in terms of how we make decisions, fat-based doing the commercial and financial analysis of what our portfolio should look like. We've been using those methods more and more in the last several months to see what is that -- exactly to your point, what is that optimal product portfolio is going to look like.

And as you can imagine, that depends on both on how we make it what's our lowest cost approach, considering the overall portfolio of products, right, including ethanol and corn oil, et cetera. And also what we can get in the marketplace. A lot of things have ice-protein space, a lot more computing ingredients, a lot more pressure. Sequence, 60% protein has a lot more value, but again, that also depends on how much it costs for us to make it. So -- we have our target customers. We continue to target the aqua industry for sequence and some of our 50 protein products. and then pad for the fit protein.

So how is that going to shake out and what that combination and portfolio will look like. Like I said, that will depend on the economics of both products. But we're actively working on defining that, now of course, where this value is when you have strategic partnerships. So once we build those strategic partnerships Chilean salmon, for example, then that's for the long term. So we're not going to be transactional with some of our customers, and that's one of the other goals is to continue to build out those strategic partnership with large pet food customers and large cement companies so that we can build that long-term relationship that's higher margin and beneficial for both. That's the commercial input.

I don't know if Chris has anything to that from an operational side. Perspective or feel from it.

Yes. I think in terms of operations, the more we've had opportunity to produce the 60 Pro sequence product, the better we've gotten at doing it. And specifically, with respect to managing changeover and/or campaigns of the product, we've gotten more precise in the process changes needed to get the purity to the necessary level to make in spec product. And in doing so, we're effectively lowering the OpEx cost of making that sequence material. So the more we make it, the more effective we get at doing it. And as a data-driven organization, we'll make the best decisions for the product mix for each plant that we have.

Your next question comes from the line of Matthew Blair with TPH.

It sounds like hedging was a tailwind in Q2. Could you help us quantify the benefit there? What was there a gain? And then so far in the third quarter, are you able to disclose what kind of volumes you locked in? Or what kind of EBITDA contribution you would expect in the third quarter?

Go ahead, Imre.

All right. I'll start with that. Q2 will -- we also -- as we alluded to it, margins picked up relatively slowly. I mean we were expecting margins to pick up a little faster, considering the seasonality and the summer demand for our product and for blending, we hedged and those worked, the way we hedge and actually, our hedging volume wasn't as huge in Q2 because margins were not as great. So we did hedge on for example, on days when we had an opportunity to lock in maybe a few cents higher margin. We also -- that's a simple crush, right? So that's the ethanol price and ethanol financials and corn futures. So the volumes were not as huge, like I said, because the margin -- simple crush margin wasn't as attractive and it just continued to improve throughout the quarter.

We did manage to a, I'm not saying short, but we had a lot of unsold corn oil position. that as corn appreciated in the second half of Q2, that helped enormously. And you can consider that as a hedge of not hedging, right, or not selling flat price. And then our core ownership was at or below market. I think when you add it all together, we had a small benefit, I think, in Q2. But like I said, we didn't really hedge larger volumes because of that margin just not being at levels that we reconsidered favorable in Q2. In terms of Q3, that's a whole different story. I think you guys follow the market and simple crush things picked up quite a bit at the end of July.

Of course, July is behind us. But as margins simple Crush appreciated, we put on a lot more. So we're seeing -- we said in our prepared remarks that we are 65% crushed. Of course, July is done, so that's part of it. But at current levels or as we were approaching current levels, we got a bit more aggressive. So we locked in margins for a good part of August in the last 2 weeks within the last 2 weeks as well as some of September.

And let's not forget, we're looking at a lot of different things, how the market is behaving, what are the fundamentals, technical analysis as well as what the corporate goals are in terms of in terms of different financial thresholds to help our earnings and that's why we're locking those in. But we're 2/3 closer to 70% in the last few days, margins logged in for the quarter. levels that are very close to where the market is today.

And again, just last comment. It's not just that simple crush, the ethanol price and corn futures, it's everything else, corn bought DDG sold corn oil getting priced at current levels that are very attractive.

Your next question comes from the line of Craig Irwin with ROTH Capital Partners.

My question is around cash needs in the third quarter. So I guess, last quarter, you had the $50 million benefit from working capital from a marketing partner and then you had the '26 from RIN sales. And now we've got Tharaldson, the asset sale there. How does this factor as far as the sequential cash use in the third quarter relative to the first and second quarters.

Craig, Cash flow will continue to be positive based on current markets right now. So where we've seen crush continue to expand, it's very positive to our overall cash flow situation. So when I think about just base free cash flow for Q3 and Q4, we should be strongly positive, where we were certainly negative in the first quarter, but that's turned around here nicely, Q2 beginning to benefit by Q3 and Q4, much better than the first half of the year.

Okay. So then in the third quarter, we should include Tharaldson as a $25 million positive contribution to cash flow? Or is that part of the positive $25 million with the $15 million and 26 that you showed us for the second quarter?

No. The $23 million, $24 million of cash from [ parelton ] that we mentioned has been received in July, so that will come through as a positive cash in the in the third quarter. It was not part of the $50 million working capital improvement that we had as a result of the EcoEnergy transaction.

Okay. Excellent. Next question is about the spot market. So -- the loading slate, I understand it's actually pretty strong right now, strongest it's been in a few years. It says that the market could probably get a little tighter actually over the next number of weeks. Can you maybe give us color on what you're seeing in the export markets? See now Is this tariff-driven or, I guess, trade deal driven. A lot of people don't really want to talk about the trade deals, but I guess, if there's markets that are out there and there's activity on people taking early early cargoes that might be healthy. What color can you share with us about the export markets and why they're firming so rapidly?

Thanks, Craig. Go ahead, Imre.

Yes. Well, certainly a bright spot isn't it, right? We are -- just when you look at -- I mean, our projections for the year are around -- to reach $2.1 billion. That's up from 1.9 billion gallons from last year. And yes, there may be at 1 point, there's been some early pool in terms of just hedging against tariff, but that's really not the case going forward. We we're seeing increased imports of -- or exports into Canada invoiced by the Canadians. India is up. The EU is up U.K. is kind of unchanged, but we expect that to be higher and then there are a lot of other customers. I think the broader picture in my opinion, in our opinion, is that that's on all the trade deals they are negotiating.

The -- what can the U.S. export a lot of energy and a lot of ag. And I think that will continue to be part of those negotiations. So I think the -- when you talk about how sustainable this export program is, there is a scenario, and I think a likely scenario where we will maintain a strong export program going forward. And you made a comment about stocks can get tight. Yes. I mean you need, of course, a bigger buffer when you're loading those larger volumes for exports, and we're getting -- we're heading into for maintenance. -- here very shortly.

So yes, that's something we have to watch. The industry can certainly run at a higher rate to satisfy those export demands. But as demand grows, the industry will, of course, be a lot more sensitive to supply disruption. So I think that's something that has to be taken into account, but we expect our export program to be sustained going through the end of the year into next year and maybe with a surprise to the upside, if some of these trade negotiations conclude and favor ethanol.

Great. And the last one, if I may. So if you have that much locked away in the third quarter and we're seeing this kind of improvement, you should have very high visibility on your crush margins in the quarter. be able to frame out for us what a reasonable EBITDA expectation could be for investors. Can you maybe get quantitative for us or cost out a range on what you think is reasonable for EBITDA performance for Green Plains in the third quarter?

Craig, as I mentioned earlier in the call, we expect consolidated crush margins to come in, in the mid-teens. July started off weaker we've seen crush margins expand in August and September to levels that are similar to where we were for all of Q3 and the prior year, and this is driven by what we're seeing in corn oil, in the corn markets, strength on the ethanol side driven from all of these different factors that we've discussed.

So overall EBITDA margins, I'd call it somewhere in the mid-teens. I don't want to put an exact number on it, but we've got a good portion of that crushed and basis what's on paper today, that's where we would land.

The next question comes from the line of Laurence Alexander with Jefferies.

Just one question left on the clean sugar for -- looking at the calendar for the ramp in capacity over the next few years, can you lay out what disclosures you expect to be able to give in terms of volumes, margins, return on capital, cash payback, any kind of metrics and when we might be to get them given like Shenandoah coming on next year and then the other plants towards the end of the decade.

Go ahead, Chris.

Yes. With regard to CST, I just first want to reiterate that prior to idling the asset to the beginning of the year, -- the technology has been proven out to produce food grade D95 syrup, and we have received all of the necessary food safety certifications for making food grade product. But with strengthening ethanol margins and what is the highest protein yield in our fleet of plants, we chose to run that generation one ethanol plant at full capacity. And in order to fully utilize the CST asset, we'll need to make an additional capital investment in order to process wastewater due to local municipality constraints, so consistent with our capital allocation strategy, which is driven by financial returns, we'll make the appropriate decision on that asset here going forward and plan on RECONNECT revisiting that here in the summer of 2026.

But the Shenandoah plant team is really focused on running the assets safely, efficiency -- and really, they're in a position to capitalize on 45 right now. So that's really what we're focused on delivering.

Your next question comes from the line of Kristen Owen with Oppenheimer.

It just seemed unfair not to give Jim the opportunity here. So I did want to follow up on sort of what you've talked about in terms of the portfolio, thinking 3 to 5 years out, if you can help us understand what are you aligning GPRE to be today? I mean we've seen what's happened in the protein markets. We've seen what's happened in the carbon markets. Arguably the outlook is much more favorable for you from a policy standpoint. So as you are thinking through this strategic review process, what -- how are you thinking about positioning the portfolio 3 to 5 years from now?

Thanks, Kristin. I actually will take that. I appreciate the follow-up question. The strategic review is comprehensive in how we are looking at things. But as we've talked about today, we're committed to doing what we said we were going to do. And much of that includes walking before we run and running out to that 3- to 5-year plan and where we're headed. So right now, as you can see, we're focused. We're focused on execution. We're focused on streamlining. We're focused on profitability. We're focused on building shareholder value, which -- that is where the team has been right now.

As you can tell, since the beginning of the year, this company has changed dramatically. And so as we now start to hit our stride with that focus, we are moving into the phase of launching into carbon. And an excellent government program that has allowed us some unique opportunities that we're uniquely positioned in Nebraska to take advantage of. So our low CI biofuel strategy is mission-critical to our 3- to 5-year outlook and who we are as a company. as well as continuing to operate our Gen 1 assets safely and in the most efficient manner that brings value to our shareholders. Beyond that, we have to really digest all that we're doing today and where carbon can take us. So that really is where our focus is right now.

More to come as we continue to work through the strategic review process. As I noted, it continues to be active. But as you can imagine, a strategic review process with the type of change our company has gone through can create all sorts of challenges as well as opportunities, which is why we continue to remain open to those opportunities for our shareholders. Sometimes, when you're trying to reach the best solution, it's not always the fastest solution, but we are committed to a disciplined process just like we're disciplined in all aspects of our business.

Thank you. I will now turn the call back over to Michelle Mapes for closing remarks. Please go ahead.

Thank you. I'd like to thank you all for your participation in today's call. If you have any follow-up questions, we were unable to answer, please reach out, and we will find time to connect. Thanks again.

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.

Hello, and welcome to the Annual Meeting of Shareholders of Green Plains Inc. Please note that today's meeting is being recorded. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Phil Boggs, Chief Financial Officer with Green Plains. Phil, please go ahead.

Thank you, and good morning, everyone. Thank you for joining our meeting today. Joining me today are Jim Anderson, Chairman of the Board; and Michelle Mapes, Interim Principal Executive Officer and Chief Legal and Administration Officer.

Before we begin the formal meeting, I would like to introduce the Board of Directors for Green Plains Inc. who are in attendance: Jim Anderson, Farha Aslam, Steve Furcich, Carl Grassi, Ejnar Knudsen, Brian Peterson, Martin Salinas, Jr.; Patrick Sweeney, Alain Treuer and Kimberly Wagner. Also joining today's call from KPMG are Andrew Schweitzer and Jason John. Thank you all for joining us.

Now I'd like to turn the meeting over to Board Chairman, Jim Anderson.

Thanks, Phil. Good morning, and welcome to the 2025 Annual Meeting of Shareholders for Green Plains Inc. It is my honor to serve our shareholders as Chairman of the company's Board of Directors. Today's meeting is a virtual-only live webcast. We believe this format creates an efficient opportunity for engagement of our shareholders regardless of location. Thank you very much to those of you who are participating today.

At this time, I'd like to call the meeting to order. We'll be following a meeting agenda this morning, which is on the first slide of the presentation, links to our annual report and proxy statement are also available there. You'll have the opportunity to ask questions by submitting them online during the meeting. After we conclude the formal business portion of the meeting, we will answer questions as they come in.

The Board of Directors set April 11, 2025, as the record of date for the determination of shareholders entitled to notice and voting at this annual meeting. We have a record of shareholders as of that date, and it is available for inspection by any shareholder by appointment during business hours.

I would like to call on the Secretary, Michelle Mapes, to report the presence of a quorum and notice of the meeting. Ms. Mapes, is there a quorum present?

Thank you, Jim. There are present online and represented by proxy the holders of 48,817,400 shares of common stock entitled to vote at the meeting out of a total of 65,389,117 shares.

Thank you. Since the majority of the company's shares are represented, a quorum is present and business may be transacted at the meeting. Ms. Mapes, please file the proxies with the company records.

Thank you, Jim. Present here is a certified list of the holders of the company's common stock at the close of business on April 11, 2025, the date fixed by the Board of Directors for determining the shareholders entitled to notice and voting at this meeting. Also presented or copies of the meeting notice, proxy statement, proxy, annual report and affidavit from the company's transfer agent regarding the mailing thereof.

We will waive reading of the minutes of the last annual meeting. If you'd like a copy of the minutes of the 2024 Annual Meeting, you may request a copy from the Secretary, but we won't read those here today.

Now I'd like to turn -- I hereby appoint Mr. Phil Boggs, CFO, to act as Inspector of the meeting at this time. We have 3 items of official business were described -- that are in the proxy statement. The first is the election of the 8 directors to serve on 1-year term that will expire at the 2026 Annual Meeting. Board members, Ejnar Knudsen and Alain Treuer are retiring from the Board and are not up for reelection. We thank them both for their years of dedicated service and wish them well in their new endeavors.

Shareholders wishing to recommend a new prospective Board nominee for the nominating and Governance Committee consideration can do so by writing to the Corporate Secretary. The company did not receive any shareholder recommendations for consideration prior to 2025 Annual Meeting of Shareholders. As such, the individuals included in the proxy statement for the election of directors are nominated. The director nominees are James Anderson, Farha Aslam, Steve Furcich, Carl Grassi, Brian Peterson, Martin Salinas, Patrick Sweeney and Kimberly Wagner. According to the company's bylaws, directors are elected by a majority of votes cast at a duly called meeting. Therefore, the 8 nominees receiving a majority of the votes at today's meeting will be elected as directors.

The second order of business is the ratification of the selection of the company's auditors. The Board of Directors and the Audit Committee believe the continued retention of KPMG to serve as the company's independent registered public accounting firm is in the best interest of our shareholders. Accordingly, the Audit Committee has recommended that the KPMG served as the company's independent auditors for the fiscal year 2025. The ratification of the selection of KPMG as the company's independent auditors for 2025 fiscal year must be approved by a majority of the votes cast.

Third and final formal business is the advisory vote to approve the company's executive compensation as described in the Compensation Discussion and Analysis section and related to disclosures in the proxy statement. This vote is not intended to address any specific item of compensation, but rather to overall the overall compensation of the company's named executive officers as well as the compensation philosophy, policies and practices.

As no other business is scheduled for shareholders, I declare the polls open and direct that votes be by shareholders to be tabulated by electronic ballot. Each holder of common stock is entitled to 1 vote for each share held as the close of business on the record date. Shareholders who have previously provided their proxies do not need to vote unless they want to revoke their proxy and vote by electronic ballot at this meeting. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. You have already voted and have no changes, there's no need to take any further action. We'll pause for a moment where the votes are tallied.

[Voting]

Based on the preliminary review of the votes cast, the inspector has informed me that all nominees for the Board of Directors have been elected. The appointment of KPMG as the company's auditors have been ratified, and the company's executive compensation proposal has been approved. The Inspector of the Election will furnish the secretary with a written report of the final vote count for all matters voted on today, which shall be included as part of the minutes of the meeting. We'll now close the official business portion of the meeting.

Thank you very much for joining us online for our Annual Shareholder Meeting. We can now proceed to answering any questions you may have. You may submit your questions online by clicking on the dialogue icon in the upper right corner of the meeting center screen. Are there any questions.

Thank you for joining us today at the Green Plains Annual Shareholder Meeting. I think that concludes our meeting.