Green Plains, Inc.

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 will 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.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Puran Sharma, with Stevens. Your line is open. Please go ahead.

Good morning and thanks for the question. 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, 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.

Good morning, Puran, and 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 develop, you know, 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 Strelczyk with BMO. Your line is open. Please go ahead.

Hey, good morning. Thanks for taking the question. 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, you know, 2027, 2028, do fundamentals in your view support You know, continued kind of chunky step ups in demand from an export perspective. You did bring up, you know, 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?

Yeah, this is Imre. I'll take that question. Exports have been strong. The forecast for this year, so it was 2.4 billion gallons last year, 2.5 is possible this year and next year. Usual suspects, Canada, Europe, and UK, some South American countries, and the Far East. I think, as Chris mentioned, and I alluded to it also in my prepared remarks, policy is one driver, so a lot of these countries are are mandating blending at between 5%, 10%, 20% level. So that will not go away. I think the backdrop is also energy security. There's more evidence around the world that there are some of these flashpoints that you can't just rely on. So I think biofuels will play a big role in that diversification. The second maybe longer term opportunity is maritime fuel and SAF. That's slower. That's developing. There is a seriousness behind that, but that's there. It's not going away. It's going to grow. The speed is somewhat questionable. And then I think Of course, we have to be competitive with Brazil. Brazil is adding corn ethanol capacity, but they also have that sugar variable where the sugar ethanol production can swing year on year. So Brazil, U.S. are the two exported countries to the rest of the world. Both countries have very solid domestic demand, so let's not forget that. So export complements those demand factors. But just to summarize it in general, we continue to see growth opportunities at least at a 1% to 2%, maybe 5% rate going forward annually. And then we have all those other opportunities. Where we see some volatility, maybe, or there are some destinations where, of course, Brazil can be more competitive than ourselves. And you will, you know, if you just look at the monthly export data, there will be some dips. But in general, the overall outlook is friendly and that of growth or growing demand.

Okay, great. That's

Your next question comes from the line of Matthew Blair with TPH. Your line is open. Please go ahead.

Great. Thank you, and good morning, and congrats on the solid results. I was hoping to ask a two-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 shared purchases. Do you expect any shared purchases in either the back half of 2026 or We're in 2027. Thank you. 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 and 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, you know, 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 plans to drive yield improvement through additional technologies that I would expect gets 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.

Yeah, and this is Anne. Good morning. You know, from your capital allocation question, you know, as we've kind of stated in the prepared remarks, you know, everything, we're looking at everything to determine what's the best return for the investors. So whether that be, you know, sustainable projects within our facilities or debt reduction or share purchases, all of those things we are looking at and we'll definitely consider as we're deciding where to allocate the cash that we have coming in. The short answer is yes, but something that we're looking at, but nothing's been announced as of yet.

Your next question comes from the line of Kristen Owen with Oppenheimer. Your line is open. Please go ahead.

Hi, good morning. Thank you for the question. So two ones here, one very short term, one a little bit longer. So I wanted to ask about your second half assumptions on the base ethanol business. You're obviously coming out of turnaround, so that should improve your utilization. The industry is operating at record production levels. Got some volatility in gas prices and coal products. So I'm just hoping you can help us understand how you're thinking about the cadence of the base ethanol business in the back half of the year. And then my second question relates to the monetization of the 2026 credits. Any sort of update that you can provide for us, you know, how terms, how you're seeing term sheets now that you've got a little bit more availability of those credits in the market. Thank you.

Yeah, good morning, Kirsten. Thanks for the question. This is Imre. I'll start with the first one just to set up for the second half of the year, of course. I'll start with just the basic. The fundamentals are solid, right? We're seeing high corn oil prices. The corn crop has stabilized after recent rains. We are expecting the current margin structure to carry into Q3 and potentially first part of Q4. Then, of course, we're going to be facing some seasonality. Seasonal factors lower driving demand. So I think that is normal every year that will play out. But I think our starting point, exiting Q2 into Q3, is a very solid setup. There is some volatility. Of course, you can look at just prices that has a strong correlation to corner prices. and many more. 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 the monetization. This is obviously something that's a priority for the company and we've been working diligently on this to make sure that we have a really good partner that we feel comfortable with and they feel comfortable with the tax credits on their end. I know we've talked a lot in the past around the There's a lot of compliance requirements, a lot of work, and a lot of verifications and audits and everything that go into providing a complete package that gets the buyer comfortable with the tax credits. And we're very pleased with how everything has gone. But it all takes time. And we want to make sure that we're in a good position to have sustainable, predictable cash flows for the long term. And so that's what we've been aiming for. So 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. Your line is open. Please go ahead.

Hi, thanks for taking our question. 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, it would be helpful. Thank you.

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 into 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 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.