管理層發言
Good morning, and welcome to the Green Plains Inc. Second Quarter 2026 Earnings Conference Call. Following the company's prepared remarks, instructions will be provided for Q&A. I will now hand the call over to your host, Will Joekel, Vice President of Investor Relations and Treasurer. Please go ahead, Will.
Thank you, and good morning. I would like to welcome everyone to the Green Plains Inc. Second Quarter 2026 Earnings Conference Call. Joining me on today's call are Chris Osowski, President and Chief Executive Officer; Ann Reis, Chief Financial Officer; Imre Havasi, Senior Vice President of Trading and Commercial Operations, along with the rest of our senior leadership team. There is a slide presentation available 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 and 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. I'll now hand the call over to Chris.
Thanks, Will, and good morning, everyone. The second quarter marked another period of strong execution for Green Plains. The team delivered adjusted EBITDA of $93.3 million despite downtime for spring maintenance, up from $71.5 million in the first quarter and a significant improvement from $16.4 million in the second quarter of last year. Successfully executing our maintenance program while achieving our strongest quarterly performance in years, highlights the strength of our operations and our team. Green Plains today is a fundamentally different company than it was a year ago. We are focused on operational excellence across our platform. We have a growing carbon business that is delivering significant value, and we are benefiting from favorable demand fundamentals across ethanol, corn oil and protein markets. Together, those advantages are creating a business with a higher floor, stronger free cash flow and significantly more flexibility than we've had before.
Before I discuss our outlook, I want to start with safety. Safety is the foundation for everything we do. A safe plant is a reliable plant and a reliable plant is what allows us to consistently deliver for our customers, our shareholders and our employees. During the quarter, our employees worked safely, and we continued to improve the risk profile of the fleet. Recently, our Superior, Iowa facility achieved highly protected status from FM, becoming our second facility to earn that recognition after Central City, Nebraska in Q1. Superior also recently surpassed 3 years without a recordable accident, which is a fantastic achievement. In June, we held our annual Safety Week across the organization with senior leadership team, spending time in our plants alongside our teams at Fluid Quip Technologies and Fluid Quip Mechanical. That kind of visible hands-on engagement reinforces that safety is owned by all of us every day.
Operationally, the quarter played out largely as planned. We produced nearly 161 million gallons of ethanol and ground over 54 million bushels of corn, while completing our normal spring maintenance. Capacity utilization averaged nearly 90%, reflecting those planned outages plus the molecular sieve beads change-out at Madison, Illinois. It's a normal course maintenance item, but one that typically occurs once in every 8 to 10 years. We remain on track for roughly 95% capacity utilization for the full year. These results give us confidence in our sustainability of our operating rates as we move through the back half of the year. That consistency matters because it's the foundation for everything we do, lowering CI scores, improving capture rates, raising yields, taking out costs and finding opportunities through our benchmarking efforts. Operational excellence isn't a side project here. It's the engine behind our earnings growth and long-term value creation, and nowhere is that more evident than in our carbon platform.
Capture performance is at or near our expected long-term rates and the earnings keep building. Our carbon platform contributed nearly $59 million of EBITDA in Q2, up from $55.2 million in the first quarter, bringing first half carbon EBITDA to approximately $114 million. We are earning 45Z credits as we produce qualifying low-carbon ethanol and the value we generate begins with operational execution. As we continue to execute, we increase the value of the credits we earn. We have not monetized any portion of our 2026 credits to date. Staying patient is allowing us to negotiate a deal that generates stable, predictable cash flows. And while we haven't announced a partner for these credits, we're pleased with the progress we've made and believe our approach is positioning us well. Our focus remains straightforward: maximize value while ensuring we maintain the necessary compliance and documentation to fully monetize the credits.
Ann will provide more detail on the accounting and cash flow considerations in her remarks. But before I hand it over to her, I want to spend a moment on the broader demand outlook for ethanol. We're seeing several demand drivers line up at once. Domestic demand remains healthy, exports are performing well and policy backdrop for the higher blends remains encouraging. Permanent year-round E15 remains an important opportunity, but it's only one part of a larger demand story. On the policy front, The Senate Agricultural Committee is set to formally schedule the Farm Bill markup later today. We also see growing interest in ethanol's role in maritime fuel applications, continued discussion around sustainable aviation fuel, expanding international blending mandates and a broader recognition of ethanol's role in energy security. Geopolitical uncertainty, evolving trade dynamics and changing global fuel requirements continue to create opportunities for low-carbon liquid fuels.
Weather, crop size and global grain flows will continue to influence feedstock markets, but the demand picture is solid. Importantly, these potential demand catalysts are not embedded in our current outlook, but they reinforce our positive long-term view of ethanol demand and the strategic position Green Plains has built. With that, I'll turn it over to Ann to review the financials.
Thanks, Chris. The second quarter reflected strong execution across the business and continued growth from our carbon platform. For the quarter, we reported net income attributable to Green Plains of $67.1 million or $0.83 per diluted share, compared with $0.42 per diluted share in the first quarter. Adjusted EBITDA was $93.3 million, up from $71.5 million in the first quarter, reflecting improved operating performance and a growing contribution from 45Z. Gross margin for the quarter was $113 million compared with $41.6 million in the second quarter of 2025. During the second quarter, the carbon business generated $59 million of net EBITDA, which is the net contribution after discounts, incremental electrical expense at the plant and the transportation and sequestration of the CO2. As Chris noted, the improvement reflects the value of credits earned through our operations, supported by strong capture performance, lower carbon intensity and continued improvement across the platform.
Cash generation was a highlight. We generated nearly $87 million of operating cash flow and ended June with over $243 million of cash and cash equivalents. Our total debt for the quarter was approximately $484 million. We received the final cash payment related to our 2025 45Z credits during the second quarter, totaling $41 million. That relates to prior year credits and is separate from the 45Z EBITDA we recognized this quarter. As we continue to generate cash, our priorities remain straightforward. We will continue to invest in safe and reliable operations, maintain a strong balance sheet and allocate capital to the opportunities that create the greatest long-term value for shareholders. We're focused on generating increasingly predictable free cash flow and deploying that capital in a disciplined manner. Chris will discuss our capital allocation framework in more detail later on the call.
Turning to expenses. SG&A totaled around $21 million for the quarter, a reduction of 21% when compared to Q2 of 2025, and we remain on track to finish the year at approximately $90 million of SG&A expense. Interest expense was $8 million during the second quarter, and depreciation and amortization was $23 million. We continue to expect full year interest expense of approximately $35 million. Capital expenditures were around $11 million during the quarter. Given the opportunities we're seeing to enhance reliability and operational performance across the fleet, we expect sustaining CapEx near the top of our range, about $25 million for the year. With that, I'll turn it over to Imre for the commercial update.
Thank you, Ann. The commercial environment was strong in the second quarter with historically high crush margins and firm co-product prices. Q3 margins are only a touch below Q2 and the setup into the second half of the year is solid. Margins were supported by several factors working together. Energy prices moved higher during the quarter with geopolitical volatility in the Middle East contributing to strength across the broader energy complex. Favorable corn values helped reduce feedstock costs, while ethanol demand remains solid, both domestically and in export markets. Co-product values also contributed with corn oil benefiting from renewable diesel demand and protein markets remaining stable. Industry production remained elevated but demand kept up across both domestic blending and exports. The long-term outlook remains positive, particularly on the export front, driven by higher ethanol mandates overseas and expanding low carbon fuel programs.
U.S. ethanol will need to remain competitive with Brazil as production expands. However, global demand continues to grow and policy developments, both internationally and domestically remain supportive of long-term ethanol consumption. Corn prices fluctuated during the quarter, and that volatility has continued into Q3. Planting season was off to a good start and yield expectations were initially high enough to offset lower planted acres. Most recently, hot and dry weather has raised uncertainty around yield potential, bringing weather back into focus as the key variable. Current expectations continue to point to a favorable overall outlook. Corn oil prices increased during most of Q2, driven by high demand from the renewable diesel industry. Protein and distillers grains also remained stable contributors. High protein demand remains strong, while DDGs values are trending lower in Q3 due to normal seasonal factors.
On natural gas, prices have remained manageable, and our realized cost was down from the first quarter, providing an additional tailwind to margins. We continue to manage that exposure actively as part of our overall hedging program. Finally, from a risk management perspective, hedging costs were generally consistent with the first quarter. We recorded mark-to-market losses at quarter end as corn prices moved lower late in June. However, prices have since recovered. We continue to manage commodity exposure through a disciplined and consistent hedging approach. What encourages us the most is the forward setup. Demand fundamentals remain supportive. Feedstock economics continue to be favorable and co-product values remain healthy. While the markets will continue to move, we believe the overall commercial environment remains constructive as we move through the balance of the year. Our philosophy remains the same. We are protecting the margin while maintaining the flexibility to participate in improving market conditions. With that, I'll turn the call back to Chris.
Thanks, Imre. As you've heard this morning, we're seeing strength across the business. Operational performance remains solid. The carbon platform continues to perform well, and the market backdrop for our products remains constructive. The question for Green Plains today is no longer whether we can generate earnings and free cash flow. The question is how we allocate that free cash flow to create long-term shareholder value. We believe a clear capital allocation framework is important. So let me walk through how we're thinking about it. First, we'll continue to invest in a safe and reliable operation of our assets. Planned reliability is how we capture margin and sustaining capital will always be our highest priority. Based on what we're seeing across the fleet, we expect sustaining capital to be approximately $25 million annually. Second, we will continue to strengthen the balance sheet.
We have developed a debt reduction strategy designed to use carbon supported cash flow to increase financial flexibility and reduce the leverage ratio as we move beyond 2029. Third, we'll reinvest in the business. Through our operational excellence and benchmarking efforts, we continue to identify opportunities to improve yields, lower energy consumption, reduce carbon intensity and raise the earnings power of our existing assets. These are typically targeted investments with attractive returns and measurable operating benefits. They are the type of opportunities that compound value over time. And fourth, we will pursue larger growth opportunities when they meet our return thresholds. Even with our debt reduction initiative, we will have substantial cash flow over the coming years, and we will remain disciplined in evaluating both organic and inorganic opportunities. We will only deploy capital into projects that generate returns meaningfully above our cost of capital.
These priorities aren't either/or. The cash flow we're generating allows us to invest in the fleet, strengthen the balance sheet and pursue attractive growth opportunities at the same time. More importantly, it turns operational excellence into a measurable capital plan. Through our benchmarking work, we're able to identify performance gaps, quantify expected returns and prioritize the opportunities that create the most value. Over time, these incremental improvements compound, helping us build a higher and more durable earnings floor across the business. That benchmarking effort is already helping us shape our investment priorities. At Wood River, we continue to advance our grain storage expansion project, improving procurement flexibility, reducing basis exposure and supporting lower carbon grain sourcing. We are currently evaluating additional storage projects across the platform and expect to make investments in additional infrastructure over the next 12 months.
At York, we're continuing engineering work on a low energy distillation project, which is designed to reduce energy consumption, lower operating costs and further reduce carbon intensity. We're also advancing corn oil projects across the network to enhance yields. These are exactly the type of targeted investments that improve operating performance, strengthen returns and compound value over time. Looking ahead, we're encouraged by what we're seeing across the business. Demand remains healthy across ethanol markets, corn oil fundamentals are favorable and protein values remain stable. The carbon platform continues to generate increasing value and our improving operational performance gives us confidence in the business heading into the second half of the year. Beyond 2026, we continue to see additional opportunities through LCFS and other low CI ethanol markets as well as continued momentum in export demand, maritime fuels, sustainable aviation fuel, voluntary carbon credit programs and progress toward permanent year-round E15.
None of those opportunities are necessary for our current outlook, but each represents potential upside to an already improving foundation. The free cash flow we are generating gives us the ability to fund high-return growth opportunities while continuing to strengthen the balance sheet, with the goal of building a more durable and higher quality earnings stream over time. In summary, Green Plains is operating from a position of strength. Our assets are performing at a high level. Our carbon platform is delivering and market fundamentals remain supportive. We have a strong set of opportunities in front of us, and we'll continue to approach capital allocation with the same discipline we're applying across the rest of the business. Operator, we're now ready to take questions.
分析師問答
Your first question comes from the line of Pooran Sharma with Stephens.
I wanted to just kind of better understand utilization here and maybe how your spring maintenance season went. I think you alluded to it in your prepared commentary about the maintenance item. I think it was at Madison that occurs every 8 to 10 years. Just wondering if you could provide a little bit of color, a little bit more granularity on that. And then as my follow-up, I wanted to kind of understand if there's any other facilities in your network that you foresee having this type of maintenance in the coming years?
Pooran, thanks for the question. It's worth noting that coming out of winter operations, it's important that the ethanol plants take spring outages in order to maintain their equipment. And specifically, when it comes to growing 45Z tax credits and running low CI scores, we have to maintain process equipment through cleaning operations. So that's a normal course of business. Specifically, in Madison, we replaced the molecular sieve beads, which is a very technical operation as we're dealing with ethanol vapor, and we have process safety management procedures that need to be followed in order to execute that work, which takes some time. So a little bit more downtime than we normally expect or want, but it's a necessary action that occurs at the end of life of the sieve beads, which is normally 8 to 10 years. But in general, the industry uses this term called deferred maintenance to describe times where people skip necessary activities and let the health of their plants deteriorate. And that's not the kind of company that we're going to be. I tell the team, we're going to be a company that doesn't skip leg day. So we're going to take care of our assets, and we fully expect that utilization to be higher in Q3, back up to that 95% type target number.
Your next question comes from the line of Andrew Strelzik with BMO.
I was hoping maybe you could dig in a little more into your ethanol export outlook, which has obviously been a great story on the demand side for the industry. But as we think about 2027-2028, do fundamentals in your view, support continued kind of chunky step-ups in demand from an export perspective? You did bring up the need to remain competitive with Brazil? Or are we kind of at a level where those increases start to moderate or plateau? How are you guys thinking about the outlook beyond '26?
Yes, this is Imre. I'll take that question. Exports have been strong. The forecast was 2.4 billion gallons this year; last year was 2.5 billion, and 2.5 billion is possible this year and next year. Usual destinations include Canada, Europe and the U.K., some South American countries and the Far East. As Chris mentioned and I noted in my prepared remarks, policy is a driver: many countries are mandating blending at 5%, 10% or 20% levels, and that won't go away. The backdrop is also energy security; there is growing evidence of geopolitical flash points around the world, so you can't just rely on a single source of supply. Biofuels will play a big role in that diversification. A second, longer-term opportunity is maritime fuel and SAF. That's developing more slowly but has serious momentum. It's not going away and will grow, though the pace is uncertain. Of course we must remain competitive with Brazil.
Brazil is adding corn ethanol capacity, and their sugar-based ethanol production can swing year to year. The U.S. and Brazil are the two main exporters to the world, and both have strong domestic demand, so exports complement domestic demand. To summarize, we see growth opportunities generally in the range of 1% to 2%, maybe up to 5% annually, plus other opportunities. There will be volatility and some destinations where Brazil is more competitive. Monthly export data will show dips, but the overall outlook is positive with growing demand.
Your next question comes from the line of Matthew Blair with TPH.
Congrats on the solid results. I was hoping to ask a 2-parter here. So first, your corn oil yield seemed quite good in the quarter. I think it was about 7% above normal, which is quite a step up. Was that temporary because of the good corn oil prices or something more sustainable? And could you talk a little bit more about the corn oil investments that you're making? How many plants are you looking to upgrade? And what kind of timing? And then the second question is just on capital allocation. I don't believe we heard any mention of share repurchases. Do you expect any share repurchases in either the back half of 2026 or in 2027?
All right. Thanks for the question, Matthew. And I'll take the first half and then pass it over to Ann for the second part. With respect to corn oil yields, the operational excellence program we've got in place is driving process improvements throughout our network. And I think it's worth noting that we've probably made the most significant improvement in what has historically been some of our poor-performing oil yield locations through some specific small CapEx improvement projects, along with utilizing best-in-class technology, not only equipment, but also process chemistry to help improve oil yields. And going forward, this would probably be on the small scale in terms of total capital outlay, but we do see opportunities in all of our plants to drive yield improvement through additional technologies that I would expect to get rolled out over the next year. But so I would expect those type of oil yields to continue to improve on the go forward incrementally and look forward to showing the results.
Yes, this is Ann. Regarding your capital allocation question, as we stated in the prepared remarks, we are evaluating all options to determine the best return for investors. That includes sustainable projects within our facilities, debt reduction, and share repurchases. We'll definitely consider all of these as we decide how to allocate the cash coming in. So the short answer is yes. We are looking at that, but nothing has been announced yet.
Your next question comes from the line of Kristen Owen with Oppenheimer.
Two questions here. One is very short term, the other a bit longer. First, can you discuss your second-half assumptions for the base ethanol business? You’re coming out of a turnaround, which should improve utilization. The industry is operating at record production levels, and there’s volatility in gasoline prices and co-products. How are you thinking about the cadence of the base ethanol business in the back half of the year? Second, on monetization of the 2026 credits: any update on terms or how you’re seeing term sheets now that those credits are becoming more available in the market?
Yes, Kristen, thanks for the question. This is Imre. I'll start with the first one to set up the second half of the year. Of course, I'll start with the basics: the fundamentals are solid. We're seeing high corn oil prices, and the corn crop has stabilized after recent rains. We expect the current margin structure to carry into Q3 and potentially the first part of Q4. Then, of course, we'll face seasonal factors and lower driving demand, which is normal and will play out each year. But I think our starting point exiting Q2 into Q3 is a very solid setup. There is some volatility. You can look at bean oil prices, which have a strong correlation to corn oil prices, and see 700 to 800 point swings depending on the war in the Middle East and the prospects of a lasting peace, as well as other market factors like UCO entering from China and putting a lid on some of these values. In general, we're operating with a much higher margin structure, and that will carry into the next several months.
And Kristen, this is Ann. Thanks for the question on monetization. This is clearly a priority for the company, and we've been working diligently to ensure we have a partner we feel comfortable with and who feels comfortable with the tax credits on their end. I know we've talked a lot in the past about the many compliance requirements, the work, verifications, audits and everything that go into providing a complete package that gets the buyer comfortable with the tax credits. We're very pleased with how things have gone, but it all takes time. We want to make sure we're in a good position to have sustainable, predictable cash flows for the long term, and that's what we've been aiming for. While we're not ready to announce anything yet, things are going very well, and we're very pleased.
Your next question comes from the line of Richard DeDios with UBS.
I know during the last earnings call, it was mentioned that there will be some maintenance in the third quarter. Can you walk us through utilization on a quarterly basis? It's safe to assume like fourth quarter will be higher versus the third quarter. But if you can give us some guidelines on how we should model it would be helpful.
Sure. And thanks for the question, Richard. In general, our target for the organization is a 95% capacity utilization number on an annualized basis. So that means that number is going to be a little bit lower in the peak downtime time frames, that being primarily right in the spring coming out of winter operations and then right in front of the fall. So on the go forward, I would expect to be 90% plus with strong confidence.
There are no further questions at this time. I will now turn the call back over to Chris Osowski for closing remarks.
Thank you again for participating in this morning's call and your continued interest in Green Plains. We believe the last several quarters have demonstrated the strength and durability of this platform. We're executing well. Our carbon strategy is delivering value, and we're generating the cash flow necessary to strengthen the balance sheet, invest in the business and pursue future growth opportunities. Our focus remains simple: operate safely; execute consistently; and allocate capital thoughtfully. We appreciate your support and look forward to updating you on our progress next quarter. Thank you.
This concludes today's call. Thank you for attending. You may now disconnect.