x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-4785427
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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416 South Bell Avenue, Ames, Iowa
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50010
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(Address of principal executive offices)
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(Zip Code)
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Title of each class:
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Name of each exchange on which registered:
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Common Stock, par value $.0001 per share
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NASDAQ Global Market
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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ITEM 16.
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•
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our financial performance, including revenues, cost of revenues and operating expenses;
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•
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government programs, policymaking and requirements relating to renewable fuels;
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•
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the availability, future price and volatility of feedstocks;
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•
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the future price and volatility of petroleum;
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•
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our liquidity and working capital requirements;
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•
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anticipated trends and challenges in our business and competition in the markets in which we operate;
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•
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our ability to successfully implement our acquisition strategy and integration strategy;
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•
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our plan to sell the REG Life Sciences business;
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•
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our ability to protect proprietary technology and trade secrets;
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•
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our risk management activities;
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•
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product performance, in cold weather or otherwise;
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•
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seasonal fluctuations in our business;
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•
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our current products as well as products we are developing;
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•
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critical accounting policies and estimates, the impact or anticipated impact of recent accounting pronouncements, guidance or changes in accounting principles and future recognition of impairments for the fair value of assets, including goodwill, financial instruments, intangible assets and other assets acquired; and
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•
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assumptions underlying or relating to any of the foregoing.
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ITEM 1.
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Business
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Property
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Nameplate1
Production
Capacity (mmgy)
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|
Effective Capacity 2 (mmgy)
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REG
Operations
Commenced
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Feedstock Capability
|
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Ralston, Iowa
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30
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39.9
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2002
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Refined Oils and Fats
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Albert Lea, Minnesota
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30
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45.6
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2005
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Crude, High FFA and Refined Oils and Fats
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Newton, Iowa
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30
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34.7
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2007
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Crude, High FFA and Refined
Oils and Fats
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Seabrook, Texas
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35
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47.8
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2008
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Refined Oils and Fats
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Danville, Illinois
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45
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46.5
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2009
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Crude, High FFA and Refined
Oils and Fats
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Seneca, Illinois
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60
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73.4
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2010
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Crude, High FFA and Refined
Oils and Fats
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New Boston, Texas
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15
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17.3
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2013
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Crude, High FFA and Refined
Oils and Fats
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Mason City, Iowa
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30
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38.5
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2013
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Crude, High FFA and Refined
Oils and Fats
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Geismar, Louisiana
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75
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90.3
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2014
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Crude, High FFA and Refined
Oils and Fats
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Okeechobee, Florida 3
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n/a
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n/a
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2014
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N/A
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Grays Harbor, Washington
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100
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106.7
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2015
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Refined Oils and Fats
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Madison, Wisconsin
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20
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27.2
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2016
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Crude, High FFA and Refined
Oils and Fats
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1
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The nameplate capacity listed above is based on original plant design.
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2
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Effective capacity represents the maximum average throughput that satisfies certain defined technical constraints.
|
3
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Okeechobee is a demo-scale fermentation facility associated with our Life Sciences business.
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Property
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Nameplate
Production
Capacity1
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Effective Capacity 2
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REG
Operations
Commenced
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|
Feedstock Capability
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Emden, Germany
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27
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29.7
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2016
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Crude, High FFA and Refined
Oils and Fats
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Oeding, Germany
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23
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23.9
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2016
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Crude, High FFA and Refined
Oils and Fats
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1
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The nameplate capacity listed above is based on the output of the original plant design. In Germany, nameplate capacity can be based on input, which is 30 mmgy for Emden and 26 mmgy for Oeding or 185,000 metric tons for these two locations.
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2
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Effective capacity represents the maximum average throughput that satisfies certain defined technical constraints.
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2015
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2016
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2017
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2018
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2019
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2020
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Biomass-based diesel
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1.73 billion gallons
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1.90 billion gallons
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2.00 billion gallons
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2.10 billion gallons
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2.10 billion gallons
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2.43 billion gallons
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Total Advanced biofuels
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2.88 billion RINs*
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3.61 billion RINs*
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4.28 billion RINs*
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4.29 billion RINs*
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4.92 billion RINs*
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N/A
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Government
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Program description
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Illinois
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Illinois offers an exemption from the generally applicable 6.25% sales tax on fuel for biomass-based diesel blends that incentivizes blending at 11% biomass-based diesel, or B11, through December 31, 2023. Illinois’ program has made that state one of the largest biomass-based diesel markets in the country
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Iowa
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Iowa has a retailer’s incentive for blended fuel which has been modified over time. For 2018 through 2024, retailers earn $0.035 per gallon of B5 - B10 and $0.055 per gallons for B11 and above. Iowa also has a biomass-based diesel production incentive that provides $0.02 per gallon of production capped after the first 25 million gallons per production plant. Iowa recently enacted an increase in its excise tax on fuel, which is three cents per gallon less for B11 or higher blends than the diesel fuel tax.
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Texas
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The biomass-based diesel portion of biomass-based diesel blends are exempt from Texas state excise tax, which results in a $0.20 per gallon incentive for B100.
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Minnesota
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Minnesota law requires a B5 biodiesel blend except during the summer months when a B20 blend is required.
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Pennsylvania and Washington
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These states have all adopted legislation requiring biomass-based diesel blends beginning at B2 with incremental increases, provided certain feedstock or production minimums are met. In addition, Washington State is in the process of developing legislation on a low carbon fuel programs.
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Oregon
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The Oregon Clean Fuel Program requires a 10% reduction of the average carbon intensity of Oregon’s transportation fuels from 2015 levels by 2025. The baseline year for the program is 2015 and represents 10 percent ethanol blended with gasoline and 5 percent biodiesel blended with diesel. The Oregon Renewable Fuels Standard requires all gasoline sold in the state to be blended with 10 percent ethanol (E10). In addition, all diesel fuel sold in the state must be blended with at least 5 percent biodiesel (B5).
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City of New York, Connecticut and Vermont
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In October 2016, the City of New York adopted legislation requiring biomass-based diesel blends at a 5% rate for heating oil starting on October 1, 2017 and the blend level then moves to 10% in 2025, 15% in 2030 and 20% in 2034. Several northeast states, including Connecticut and Vermont, have adopted legislation requiring biomass-based diesel blends in home heating oil.
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Canada
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|
While a number of provinces in Canada have biofuel programs (British Columbia has an LCFS, Alberta has a usage requirement, and Ontario has a usage requirement), the federal government is currently engaged in the rulemaking process on a nationwide Clean Fuel Standard, which may incorporate a number of carbon reducing policies.
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ITEM 1A.
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Risk Factors
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•
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difficulty in integrating the operations and personnel of the acquired company;
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•
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difficulty in effectively integrating the acquired technologies, products or services with our current technologies, products or services;
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•
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demands on management related to the increase in our size after the acquisition;
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•
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the diversion of management’s attention from daily operations to the integration of acquired businesses and personnel;
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•
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failure to achieve expected synergies and costs savings;
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•
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difficulties in the assimilation and retention of employees;
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•
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difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations;
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•
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difficulties in the integration of departments, systems, including accounting systems, technologies, books and records and procedures, as well as in maintaining uniform standards and controls, including internal control over financial reporting, and related procedures and policies;
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•
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incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;
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•
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the need to fund significant working capital requirements of any acquired production facilities;
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•
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potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company or technology, including but not limited to, issues with the acquired company’s intellectual property, product quality, environmental liabilities, data back-up and security, revenue recognition or other accounting practices, employee, customer or partner issues or legal and financial contingencies;
|
•
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exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or other third parties; and
|
•
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incurring significant exit charges if products or services acquired in business combinations are unsuccessful.
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•
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recruiting and retaining talented and capable management and employees in foreign countries;
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•
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challenges caused by distance, language and cultural differences;
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•
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protecting and enforcing our intellectual property rights;
|
•
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difficulties in the assimilation and retention of employees;
|
•
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the inability to extend proprietary rights in our technology into new jurisdictions;
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•
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currency exchange rate fluctuations;
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•
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general economic and political conditions in foreign jurisdictions;
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•
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foreign tax consequences;
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•
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foreign exchange controls or U.S. tax laws in respect of repatriating income earned in countries outside the United States;
|
•
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compliance with the U.S.'s Foreign Corrupt Practices Act and other similar anti-bribery and anti-corruption regulations;
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•
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political, economic and social instability;
|
•
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higher costs associated with doing business internationally; and
|
•
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export or import regulations as well as trade and tariff restrictions.
|
•
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require us to dedicate a substantial portion of our cash flow from operations to payments of principal, interest on, and other fees related to such indebtedness, thereby reducing the availability of our cash flow to fund working capital and capital expenditures, and for other general corporate purposes;
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•
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increase our vulnerability to general adverse economic and biomass-based diesel industry conditions, including interest rate fluctuations, because a portion of our revolving credit facilities are and will continue to be at variable rates of interest;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the biomass-based diesel industry, which may place us at a competitive disadvantage compared to our competitors that have less debt; and
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•
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limit among other things, our ability to borrow additional funds.
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•
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actual or anticipated fluctuations in our financial condition and operating results;
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•
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changes in the performance or market valuations of other companies engaged in our industry;
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•
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issuance of new or updated research reports by securities or industry analysts;
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•
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changes in financial estimates by us or of securities or industry analysts;
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•
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investors’ general perception of us and the industry in which we operate;
|
•
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changes in the political climate in the industry in which we operate, existing laws, regulations and policies applicable to our business and products, including RFS2, and the continuation or adoption or failure to continue or adopt renewable energy requirements and incentives, including the BTC;
|
•
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other regulatory developments in our industry affecting us, our customers or our competitors;
|
•
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announcements of technological innovations by us or our competitors;
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•
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announcement or expectation of additional financing efforts, including sales or expected sales of additional common stock;
|
•
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additions or departures of key management or other personnel;
|
•
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litigation;
|
•
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inadequate trading volume;
|
•
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general market conditions in our industry;
|
•
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whether our shares are included in stock market indexes such as the S&P SmallCap 600 index; and
|
•
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general economic and market conditions, including continued dislocations and downward pressure in the capital markets.
|
•
|
the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;
|
•
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the requirement for advance notice for nominations for election to the board of directors or for proposing matters that can be acted upon at a stockholders’ meeting;
|
•
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the ability of the board of directors to alter our bylaws without obtaining stockholder approval;
|
•
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the ability of the board of directors to issue, without stockholder approval, up to 10,000,000 shares of preferred stock with rights set by the board of directors, which rights could be senior to those of common stock;
|
•
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a classified board;
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•
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the required approval of holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or amend or repeal the provisions of our amended and restated certificate of incorporation regarding the classified board, the election and removal of directors and the ability of stockholders to take action by written consent; and
|
•
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the elimination of the right of stockholders to call a special meeting of stockholders and to take action by written consent.
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
|
Location
|
|
Use
|
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Nameplate
Production
Capacity
(mmgy)
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Ralston, Iowa
|
|
Biodiesel production
|
|
30
|
Seabrook, Texas
|
|
Biodiesel production
|
|
35
|
Danville, Illinois
|
|
Biodiesel production
|
|
45
|
Newton, Iowa
|
|
Biodiesel production
|
|
30
|
Seneca, Illinois
|
|
Biodiesel production
|
|
60
|
Albert Lea, Minnesota
|
|
Biodiesel production
|
|
30
|
New Boston, Texas
|
|
Biodiesel production
|
|
15
|
Mason City, Iowa
|
|
Biodiesel production
|
|
30
|
Geismar, Louisiana*
|
|
Renewable diesel production
|
|
75
|
Grays Harbor, Washington
|
|
Biodiesel production
|
|
100
|
DeForest, Wisconsin
|
|
Biodiesel production
|
|
20
|
Okeechobee, Florida
|
|
Fermentation facility
|
|
N/A
|
Location
|
|
Use
|
|
Nameplate
Production
Capacity
(mmgy)
|
Emden, Germany
|
|
Biodiesel production
|
|
27
|
Oeding, Germany
|
|
Biodiesel production
|
|
23
|
ITEM 3.
|
Legal Proceedings
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
01/19/2012
|
|
|
12/31/2014
|
|
|
12/31/2015
|
|
|
12/31/2016
|
|
|
12/31/2017
|
|
|
12/31/2018
|
|
||||||
REGI
|
$
|
100.00
|
|
|
$
|
97.10
|
|
|
$
|
92.50
|
|
|
$
|
97.00
|
|
|
$
|
118.00
|
|
|
$
|
257.00
|
|
Elements MLCX Biofuels ETN
|
100.00
|
|
|
84.57
|
|
|
72.32
|
|
|
73.77
|
|
|
67.50
|
|
|
60.37
|
|
||||||
Russell 3000
|
100.00
|
|
|
157.50
|
|
|
155.58
|
|
|
171.77
|
|
|
204.16
|
|
|
189.89
|
|
||||||
S&P SmallCap 600
|
100.00
|
|
|
158.93
|
|
|
153.59
|
|
|
191.60
|
|
|
214.07
|
|
|
193.19
|
|
ITEM 6.
|
Selected Financial Data
|
|
Year Ended December 31,
|
||||||||||||||||||
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2018 (1)
|
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2017 (2)
|
|
2016 (3)
|
|
2015 (4)
|
|
2014 (5)
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues from continuing operations
|
$
|
2,382,987
|
|
|
$
|
2,154,655
|
|
|
$
|
2,039,232
|
|
|
$
|
1,387,344
|
|
|
$
|
1,273,831
|
|
Net income (loss) from continuing operations attributable to the company's common stockholders
|
295,804
|
|
|
(66,279
|
)
|
|
62,204
|
|
|
(105,088
|
)
|
|
82,400
|
|
|||||
Net loss from discontinued operations attributable to the company's common stockholders
|
(11,312
|
)
|
|
(12,800
|
)
|
|
(19,128
|
)
|
|
(46,303
|
)
|
|
(806
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per share from continuing operations attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
7.85
|
|
|
$
|
(1.71
|
)
|
|
$
|
1.52
|
|
|
$
|
(2.39
|
)
|
|
$
|
2.02
|
|
Diluted
|
$
|
6.78
|
|
|
$
|
(1.71
|
)
|
|
$
|
1.52
|
|
|
$
|
(2.39
|
)
|
|
$
|
2.01
|
|
Net loss per share from discontinued operations attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.30
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(0.02
|
)
|
Diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,107,096
|
|
|
$
|
1,005,596
|
|
|
$
|
1,136,603
|
|
|
$
|
1,223,620
|
|
|
$
|
1,367,736
|
|
Long-term debt
|
33,421
|
|
|
208,536
|
|
|
196,203
|
|
|
247,251
|
|
|
242,031
|
|
(1)
|
In the first quarter of 2018, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). The implementation of the new standard did not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added as further described in Note 2 of Item 8 - Financial Statements and Supplementary Data. The long-term debt at December 31, 2018 does not include the 2019 Convertible Senior Notes of $66,361 that becomes due in June 2019 and the 2036 Convertible Senior Notes of $75,477 that was reclassified to current as the early conversion event was met based on our stock price. In the fourth quarter of 2018, our Board of Directors authorized us to pursue a plan to sell the REG Life Sciences' core assets and business, which represents a strategic shift in our business. As a result, REG Life Sciences business, valued at selling price less estimated costs to sell, are classified as discontinued operations in 2018. All prior period disclosures below have been recast to present results on a comparable basis.
|
(2)
|
Includes the impact of the impairment of our New Orleans facility and the “H.R. 1”, formerly known as the “Tax Cuts and Jobs Act” signed into law on December 22, 2017 as further described in Note 2 and Note 13, respectively, of Item 8 - Financial Statements and Supplementary Data.
|
(3)
|
Includes issuance of the convertible senior notes on June 2, 2016 and impact of the impairment of our Emporia facility as further described in Note 12 and Note 2, respectively, of Item 8 - Financial Statements and Supplementary Data.
|
(4)
|
Includes the impact of a full write-off of goodwill in the Biomass-based Diesel and Renewable Chemicals reporting units.
|
(5)
|
Includes the issuance of the 2019 Convertible Senior Notes on June 3, 2014.
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
the operations of the following biomass-based diesel production refineries:
|
•
|
a 30 mmgy nameplate biodiesel production facility located in Ralston, Iowa;
|
•
|
a 35 mmgy nameplate biodiesel production facility located near Houston, Texas;
|
•
|
a 45 mmgy nameplate biodiesel production facility located in Danville, Illinois;
|
•
|
a 30 mmgy nameplate biodiesel production facility located in Newton, Iowa;
|
•
|
a 60 mmgy nameplate biodiesel production facility located in Seneca, Illinois;
|
•
|
a 30 mmgy nameplate biodiesel production facility located near Albert Lea, Minnesota;
|
•
|
a 15 mmgy nameplate biodiesel production facility located in New Boston, Texas;
|
•
|
a 30 mmgy nameplate biodiesel production facility located in Mason City, Iowa;
|
•
|
a 75 mmgy nameplate renewable diesel production facility located in Geismar, Louisiana;
|
•
|
a 27 mmgy nameplate biodiesel production facility located in Emden, Germany;
|
•
|
a 23 mmgy nameplate biodiesel production facility located in Oeding, Germany;
|
•
|
a 100 mmgy nameplate biodiesel production facility located in Grays Harbor, Washington; and
|
•
|
a 20 mmgy nameplate biodiesel production facility located in DeForest, Wisconsin.
|
•
|
purchases and resales of biomass-based diesel, petroleum-based diesel, RINs and LCFS credits, and raw material feedstocks acquired from third parties;
|
•
|
sales of biomass-based diesel produced under toll manufacturing arrangements with third party facilities using our feedstocks; and
|
•
|
incentives received from federal and state programs for renewable fuels.
|
•
|
biomass-based diesel facility management and operational services, whereby we provide day-to-day management and operational services to biomass-based diesel production facilities; and
|
•
|
construction management services, whereby we act as the construction management and general contractor for the construction of biomass-based diesel production facilities.
|
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
Biomass-based Diesel
|
1.73 billion gallons
|
1.90 billion gallons
|
2.00 billion gallons
|
2.10 billion gallons
|
2.10 billion gallons
|
2.43 billion gallons
|
Total Advanced Biofuels
|
2.88 billion RINs*
|
3.61 billion RINs*
|
4.28 billion RINs*
|
4.29 billion RINs*
|
4.92 billion RINs*
|
**
|
(1)
|
Used cooking oil prices ("UCO") are based on the monthly average of the daily low sales price of Missouri River yellow grease as reported by The Jacobsen (based on 8.5 pounds per gallon).
|
(2)
|
Inedible corn oil ("ICO") prices are reported as the monthly average of the daily distillers’ corn oil market values delivered to Illinois as reported by The Jacobsen (based on 8.2 pounds per gallon).
|
(3)
|
Choice white grease ("CWG") prices are based on the monthly average of the daily low prices of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).
|
(4)
|
Soybean oil (crude) ("SBO") prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.5 pounds per gallons).
|
(1)
|
Biodiesel prices are based on the monthly average of the midpoint of the high and low prices of B100 (Upper Midwest) as reported by The Jacobsen.
|
(2)
|
Soybean oil (crude) prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.5 pounds per gallon).
|
(3)
|
Choice white grease prices are based on the monthly average of the daily low price of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).
|
(4)
|
Spread between biodiesel price and choice white grease price.
|
(5)
|
Spread between biodiesel price and soybean oil (crude) price.
|
Year
|
|
RIN Generation (D4 Biomass-based Diesel)
|
|
Finalized RVO level for D4 Biomass-based Diesel
|
2016
|
|
2.60 billion gallons
|
|
1.90 billion gallons
|
2017
|
|
2.50 billion gallons
|
|
2.00 billion gallons
|
2018
|
|
2.50 billion gallons
|
|
2.10 billion gallons
|
•
|
sales of biodiesel and renewable diesel produced at our facilities, including RINs and LCFS credits, transportation, storage and insurance costs to the extent paid for by our customers;
|
•
|
revenues from our sale of biomass-based diesel and RINs produced by third parties through toll manufacturing arrangements with us;
|
•
|
resale of finished biomass-based diesel, RINs and LCFS credits acquired from third parties, and raw material feedstocks acquired from others;
|
•
|
revenues from our sale of petroleum-based heating oil and ultra-low sulfur diesel, or ULSD, acquired from third parties, along with the sale of these petroleum-based products further blended with biomass-based diesel;
|
•
|
sales of glycerin, other co-products of the biomass-based diesel production process; and
|
•
|
incentive payments from federal and state governments, including the BTC, and from the USDA Advanced Biofuel Program.
|
•
|
fees received from operations management services that we provide for biomass-based diesel production facilities, typically based on production rates and profitability of the managed facility; and
|
•
|
amounts received for services performed by us in our role as general contractor and construction manager for upgrades and repairs to our biomass-based diesel production facilities.
|
•
|
with respect to our production facilities, expenses incurred for feedstocks, catalysts and other chemicals used in the production process, leases, utilities, depreciation, salaries and other indirect expenses related to the production process, and, when required by our customers, transportation, storage and insurance;
|
•
|
with respect to biomass-based diesel acquired from third parties produced under toll manufacturing arrangements, expenses incurred for feedstocks, transportation, catalysts and other chemicals used in the production process and toll processing fees paid to the facility producing the biomass-based diesel;
|
•
|
with respect to fuel and RINs acquired from third parties, the purchase price of biomass-based diesel and RINs on the spot market or under contract, and related expenses for transportation, storage, insurance, labor and other indirect expenses;
|
•
|
adjustments made to reflect the lower of cost or market values of our finished goods inventory, including RINs acquired from third parties;
|
•
|
expenses from the purchase of petroleum-based heating oil and ULSD acquired from third parties; and
|
•
|
changes during the applicable accounting period in the market value of derivative and hedging instruments, such as exchange traded contracts, related to feedstocks and commodity fuel products.
|
•
|
with respect to our facility management and operations activities, primarily salary expenses for the services of management employees for each facility and others who provide procurement, marketing and various administrative functions; and
|
•
|
with respect to our construction management services activities, primarily our payments to subcontractors constructing the production facility and providing the biomass-based diesel processing equipment, and, to a much lesser extent, salaries and related expenses for our employees involved in the construction process.
|
|
Twelve Months Ended
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Gallons sold
|
649.2
|
|
|
586.7
|
|
||
Average biomass-based diesel price per gallon (BTC net benefit adjusted ASP of $3.03 for the year ended December 31, 2018)
|
$
|
3.43
|
|
|
$
|
3.06
|
|
|
|
|
|
||||
Revenues from continuing operations
|
$
|
2,382,987
|
|
|
$
|
2,154,655
|
|
Costs of goods sold from continuing operations
|
1,962,996
|
|
|
2,070,301
|
|
||
Gross profit from continuing operations
|
419,991
|
|
|
84,354
|
|
||
Selling, general and administrative expenses
|
104,702
|
|
|
93,425
|
|
||
Research and development expense
|
2,037
|
|
|
2,418
|
|
||
Impairment of property, plant and equipment
|
879
|
|
|
49,873
|
|
||
Income (loss) from operations
|
312,373
|
|
|
(61,362
|
)
|
||
Other expense, net
|
(2,874
|
)
|
|
(35,407
|
)
|
||
Income tax benefit (expense)
|
(5,871
|
)
|
|
30,490
|
|
||
Net income (loss) from continuing operations attributable to the Company
|
303,628
|
|
|
(66,279
|
)
|
||
Net loss from discontinued operations attributable to the Company
|
(11,312
|
)
|
|
(12,800
|
)
|
||
Net income (loss) to the Company
|
292,316
|
|
|
(79,079
|
)
|
||
|
|
|
|
||||
Effects of participating share-based awards on continuing operations
|
(7,824
|
)
|
|
—
|
|
||
Net income (loss) from continuing operations attributable to the Company’s common stockholders
|
$
|
295,804
|
|
|
$
|
(66,279
|
)
|
Net loss from discontinued operations attributable to the Company's common stockholders
|
$
|
(11,312
|
)
|
|
$
|
(12,800
|
)
|
|
Twelve Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Gallons sold
|
586.7
|
|
|
567.1
|
|
||
Average biomass-based diesel price per gallon
|
$
|
3.06
|
|
|
$
|
3.17
|
|
|
|
|
|
||||
Revenues from continuing operations
|
$
|
2,154,655
|
|
|
$
|
2,039,232
|
|
Costs of goods sold from continuing operations
|
2,070,301
|
|
|
1,867,847
|
|
||
Gross profit from continuing operations
|
84,354
|
|
|
171,385
|
|
||
Selling, general and administrative expenses
|
93,425
|
|
|
88,285
|
|
||
Research and development expense
|
2,418
|
|
|
4,890
|
|
||
Impairment of property, plant and equipment
|
49,873
|
|
|
17,893
|
|
||
Income (loss) from operations
|
(61,362
|
)
|
|
60,317
|
|
||
Other income (expense), net
|
(35,407
|
)
|
|
7,792
|
|
||
Income tax benefit (expense)
|
30,490
|
|
|
(4,268
|
)
|
||
Net income (loss) from continuing operations
|
(66,279
|
)
|
|
63,841
|
|
||
Less---Net income attributable to noncontrolling interest
|
—
|
|
|
386
|
|
||
Net income (loss) from continuing operations attributable to the Company
|
(66,279
|
)
|
|
63,455
|
|
||
Net loss from discontinued operations attributable to the Company
|
(12,800
|
)
|
|
(19,128
|
)
|
||
Net income (loss) to the Company
|
(79,079
|
)
|
|
44,327
|
|
||
|
|
|
|
||||
Effects of participating share-based awards on continuing operations
|
—
|
|
|
(1,251
|
)
|
||
Net income (loss) from continuing operations attributable to the Company’s common stockholders
|
$
|
(66,279
|
)
|
|
$
|
62,204
|
|
Net loss from discontinued operations attributable to the Company's common stockholders
|
$
|
(12,800
|
)
|
|
$
|
(19,128
|
)
|
(In thousands)
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||||||||||
|
1Q-2018
|
|
2Q-2018
|
|
3Q-2018
|
|
4Q-2018
|
|
2018
|
|
1Q-2017
|
|
2Q-2017
|
|
3Q-2017
|
|
4Q-2017
|
|
2017
|
||||||||||||||||||||
Net income (loss) attributable to the Company
|
$
|
214,389
|
|
|
$
|
33,850
|
|
|
$
|
25,003
|
|
|
$
|
19,074
|
|
|
$
|
292,316
|
|
|
$
|
(15,914
|
)
|
|
$
|
(34,809
|
)
|
|
$
|
(11,373
|
)
|
|
$
|
(16,983
|
)
|
|
$
|
(79,079
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest expense
|
4,651
|
|
|
4,925
|
|
|
4,003
|
|
|
3,955
|
|
|
17,534
|
|
|
4,536
|
|
|
4,479
|
|
|
4,725
|
|
|
5,015
|
|
|
18,755
|
|
||||||||||
Income tax (benefit) expense
|
(1,203
|
)
|
|
3,835
|
|
|
854
|
|
|
2,385
|
|
|
5,871
|
|
|
1,075
|
|
|
1,960
|
|
|
(115
|
)
|
|
(33,410
|
)
|
|
(30,490
|
)
|
||||||||||
Depreciation from continuing and discontinued operations
|
8,859
|
|
|
9,124
|
|
|
9,097
|
|
|
9,724
|
|
|
36,804
|
|
|
8,423
|
|
|
8,523
|
|
|
8,639
|
|
|
8,698
|
|
|
34,283
|
|
||||||||||
Amortization from continuing and discontinued operations
|
308
|
|
|
310
|
|
|
318
|
|
|
311
|
|
|
1,247
|
|
|
127
|
|
|
149
|
|
|
307
|
|
|
305
|
|
|
888
|
|
||||||||||
EBITDA
|
227,004
|
|
|
52,044
|
|
|
39,275
|
|
|
35,449
|
|
|
353,772
|
|
|
(1,753
|
)
|
|
(19,698
|
)
|
|
2,183
|
|
|
(36,375
|
)
|
|
(55,643
|
)
|
||||||||||
Gain on involuntary conversion
|
(4,000
|
)
|
|
(454
|
)
|
|
—
|
|
|
(3
|
)
|
|
(4,457
|
)
|
|
—
|
|
|
—
|
|
|
(942
|
)
|
|
(4,387
|
)
|
|
(5,329
|
)
|
||||||||||
Gain on sale of assets
|
(990
|
)
|
|
—
|
|
|
(13
|
)
|
|
(2
|
)
|
|
(1,005
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Change in fair value of convertible debt conversion liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|
32,546
|
|
|
(8,560
|
)
|
|
(5,325
|
)
|
|
18,833
|
|
||||||||||
Change in fair value of contingent consideration from continuing and discontinued operations
|
(1,540
|
)
|
|
(7,129
|
)
|
|
(4,566
|
)
|
|
444
|
|
|
(12,791
|
)
|
|
589
|
|
|
(24
|
)
|
|
1,433
|
|
|
486
|
|
|
2,484
|
|
||||||||||
Gain (loss) on debt extinguishment
|
232
|
|
|
(2,337
|
)
|
|
(788
|
)
|
|
(3,404
|
)
|
|
(6,297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Other income (expense), net
|
(222
|
)
|
|
(2,066
|
)
|
|
(486
|
)
|
|
(1,243
|
)
|
|
(4,017
|
)
|
|
320
|
|
|
(32
|
)
|
|
(12
|
)
|
|
742
|
|
|
1,018
|
|
||||||||||
Impairment of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
879
|
|
|
879
|
|
|
—
|
|
|
1,341
|
|
|
—
|
|
|
48,532
|
|
|
49,873
|
|
||||||||||
Impairment loss on assets classified as held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
11,226
|
|
|
11,226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Loss on the Geismar lease termination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,967
|
|
|
—
|
|
|
—
|
|
|
3,967
|
|
||||||||||
Straight-line lease expense
|
(33
|
)
|
|
(3
|
)
|
|
(61
|
)
|
|
(31
|
)
|
|
(128
|
)
|
|
(32
|
)
|
|
(85
|
)
|
|
(85
|
)
|
|
(35
|
)
|
|
(237
|
)
|
||||||||||
Executive severance
|
165
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|
—
|
|
|
—
|
|
|
2,420
|
|
|
991
|
|
|
3,411
|
|
||||||||||
Non-cash stock compensation
|
1,794
|
|
|
2,203
|
|
|
1,227
|
|
|
1,188
|
|
|
6,412
|
|
|
1,308
|
|
|
1,688
|
|
|
2,023
|
|
|
1,890
|
|
|
6,909
|
|
||||||||||
Adjusted EBITDA excluding 2017 BTC allocation
|
$
|
222,410
|
|
|
$
|
42,308
|
|
|
$
|
34,588
|
|
|
$
|
44,503
|
|
|
$
|
343,809
|
|
|
$
|
604
|
|
|
$
|
19,703
|
|
|
$
|
(1,540
|
)
|
|
$
|
6,519
|
|
|
$
|
25,286
|
|
Biodiesel tax credit (1)
|
(204,936
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(204,936
|
)
|
|
36,728
|
|
|
59,365
|
|
|
56,505
|
|
|
52,338
|
|
|
204,936
|
|
||||||||||
Adjusted EBITDA
|
$
|
17,474
|
|
|
$
|
42,308
|
|
|
$
|
34,588
|
|
|
$
|
44,503
|
|
|
$
|
138,873
|
|
|
$
|
37,332
|
|
|
$
|
79,068
|
|
|
$
|
54,965
|
|
|
$
|
58,857
|
|
|
$
|
230,222
|
|
•
|
Adjusted EBITDA does not reflect our cash expenditures or the impact of certain cash charges that we consider not to be an indication of our ongoing operations;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital requirements;
|
•
|
Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;
|
•
|
stock-based compensation expense is an important element of our long term incentive compensation program, although we have excluded it as an expense when evaluating our operating performance; and
|
•
|
other companies, including other companies in our industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
4.00% Convertible Senior Notes, $96,300 face amount, due in June 2036
|
$
|
75,477
|
|
|
$
|
116,255
|
|
2.75% Convertible Senior Notes, $67,527 face amount, due in June 2019
|
66,361
|
|
|
69,859
|
|
||
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in July 2022
|
8,964
|
|
|
11,460
|
|
||
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018
|
—
|
|
|
8,189
|
|
||
REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 2025
|
18,948
|
|
|
6,183
|
|
||
REG Grays Harbor term loan, variable interest of minimum 3.5% or Prime Rate plus 0.25%, due in May 2022
|
8,828
|
|
|
7,882
|
|
||
REG Capital term loan, fixed interest rate of 3.99%, due in January 2028
|
7,185
|
|
|
7,400
|
|
||
Other
|
54
|
|
|
1,332
|
|
||
Total debt before debt issuance costs
|
$
|
185,817
|
|
|
$
|
228,560
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Amount outstanding under lines of credit
|
$
|
14,250
|
|
|
$
|
65,525
|
|
Maximum available to be borrowed under lines of credit
|
$
|
114,889
|
|
|
$
|
60,839
|
|
|
Year Ended
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(in thousands)
|
|
|
||||||
Cash provided from operations
|
$
|
365,534
|
|
|
$
|
29,796
|
|
|
$
|
87,851
|
|
Cash used in investing activities
|
(97,197
|
)
|
|
(63,869
|
)
|
|
(65,723
|
)
|
|||
Cash provided from (used in) financing activities
|
(219,205
|
)
|
|
(10,158
|
)
|
|
45,624
|
|
|||
Net change in cash, cash equivalents and restricted cash
|
49,132
|
|
|
(44,231
|
)
|
|
67,752
|
|
|||
Cash, cash equivalents and restricted cash end of period
|
$
|
126,575
|
|
|
$
|
77,627
|
|
|
$
|
120,210
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
Years 1-3
|
|
Years
4-5
|
|
More Than
5 Years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Long-Term Debt (1)
|
$
|
210,871
|
|
|
$
|
152,678
|
|
|
$
|
26,837
|
|
|
$
|
5,823
|
|
|
$
|
25,533
|
|
Contingent Consideration (2)
|
9,861
|
|
|
9,861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating Lease Obligations (3)
|
64,336
|
|
|
20,326
|
|
|
27,868
|
|
|
4,351
|
|
|
11,791
|
|
|||||
Purchase Obligations (4)
|
16,837
|
|
|
3,748
|
|
|
6,274
|
|
|
5,952
|
|
|
863
|
|
|||||
|
$
|
301,905
|
|
|
$
|
186,613
|
|
|
$
|
60,979
|
|
|
$
|
16,126
|
|
|
$
|
38,187
|
|
(1)
|
See Note 12 of Item 8 for additional detail. Includes fixed interest associated with these obligations. The 2036 convertible senior notes, although not contractually mature in 2019 are convertible at the option of the holder and therefore represented as a contractual obligation in 2019.
|
(2)
|
Largely represents contingent consideration relating to our acquisition of Syntroleum/Dynamic Fuels and Madison.
|
(3)
|
Operating lease obligations consist of leases of distribution terminals, biomass-based diesel storage facilities, railcars and vehicles.
|
(4)
|
Purchase obligations for our production facilities.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
2018
Volume (in millions) |
|
Units
|
|
Hypothetical
Adverse Change in Price |
|
Impact on Annual
Gross Profit (in millions) |
|
Percentage
Change in Gross Profit |
|||||
Total Biomass-based Diesel
|
649.2
|
|
|
gallons
|
|
10
|
%
|
|
$
|
(196.7
|
)
|
|
(46.8
|
)%
|
Total Lower-Cost Feedstocks
|
3,024.4
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(76.1
|
)
|
|
(18.1
|
)%
|
Total Canola Oil
|
525.2
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(18.4
|
)
|
|
(4.4
|
)%
|
Total Soy Oil
|
346.2
|
|
|
pounds
|
|
10
|
%
|
|
$
|
(10.8
|
)
|
|
(2.6
|
)%
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
123,575
|
|
|
$
|
77,627
|
|
Marketable securities
|
50,932
|
|
|
—
|
|
||
Accounts receivable (net of allowance for doubtful accounts of $673 and $1,235, respectively)
|
74,551
|
|
|
90,648
|
|
||
Inventories
|
168,900
|
|
|
135,547
|
|
||
Prepaid expenses and other assets
|
41,169
|
|
|
51,880
|
|
||
Restricted cash
|
3,000
|
|
|
—
|
|
||
Current assets held for sale
|
3,250
|
|
|
—
|
|
||
Total current assets
|
465,377
|
|
|
355,702
|
|
||
Property, plant and equipment, net
|
590,723
|
|
|
586,361
|
|
||
Goodwill
|
16,080
|
|
|
16,080
|
|
||
Intangible assets, net
|
13,646
|
|
|
12,412
|
|
||
Other assets
|
21,270
|
|
|
19,290
|
|
||
Non-current assets held for sale
|
—
|
|
|
15,751
|
|
||
TOTAL ASSETS
|
$
|
1,107,096
|
|
|
$
|
1,005,596
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Revolving lines of credit
|
$
|
14,250
|
|
|
$
|
65,525
|
|
Current maturities of long-term debt
|
149,006
|
|
|
13,397
|
|
||
Accounts payable
|
95,866
|
|
|
84,608
|
|
||
Accrued expenses and other liabilities
|
35,256
|
|
|
25,279
|
|
||
Deferred revenue
|
300
|
|
|
2,218
|
|
||
Current liabilities held for sale
|
—
|
|
|
13,908
|
|
||
Total current liabilities
|
294,678
|
|
|
204,935
|
|
||
Unfavorable lease obligation
|
2,259
|
|
|
3,388
|
|
||
Deferred income taxes
|
8,410
|
|
|
8,192
|
|
||
Long-term contingent consideration for acquisitions
|
—
|
|
|
8,849
|
|
||
Long-term debt (net of debt issuance costs of $3,390 and $6,627, respectively)
|
33,421
|
|
|
208,536
|
|
||
Other liabilities
|
3,075
|
|
|
4,114
|
|
||
Total liabilities
|
341,843
|
|
|
438,014
|
|
||
COMMITMENTS AND CONTINGENCIES (NOTE 20)
|
|
|
|
||||
EQUITY:
|
|
|
|
||||
Common stock ($.0001 par value; 300,000,000 shares authorized; 37,318,942 and 38,837,749 shares outstanding, respectively)
|
5
|
|
|
5
|
|
||
Common stock—additional paid-in-capital
|
451,427
|
|
|
515,452
|
|
||
Retained earnings
|
427,244
|
|
|
134,928
|
|
||
Accumulated other comprehensive income (loss)
|
(1,656
|
)
|
|
278
|
|
||
Treasury stock (11,524,975 and 9,363,166 shares, respectively)
|
(111,767
|
)
|
|
(83,081
|
)
|
||
Total equity attributable to the Company's shareholders
|
765,253
|
|
|
567,582
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
1,107,096
|
|
|
$
|
1,005,596
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Biomass-based diesel sales
|
$
|
1,875,316
|
|
|
$
|
1,787,308
|
|
|
$
|
1,417,595
|
|
Separated RIN sales
|
137,895
|
|
|
337,501
|
|
|
274,800
|
|
|||
Biomass-based diesel government incentives
|
367,490
|
|
|
28,728
|
|
|
346,672
|
|
|||
|
2,380,701
|
|
|
2,153,537
|
|
|
2,039,067
|
|
|||
Other revenues
|
2,286
|
|
|
1,118
|
|
|
165
|
|
|||
|
2,382,987
|
|
|
2,154,655
|
|
|
2,039,232
|
|
|||
COSTS OF GOODS SOLD:
|
|
|
|
|
|
||||||
Biomass-based diesel
|
1,887,292
|
|
|
1,805,408
|
|
|
1,616,989
|
|
|||
Separated RINs
|
75,704
|
|
|
264,765
|
|
|
250,809
|
|
|||
Other costs of goods sold
|
—
|
|
|
128
|
|
|
49
|
|
|||
|
1,962,996
|
|
|
2,070,301
|
|
|
1,867,847
|
|
|||
GROSS PROFIT
|
419,991
|
|
|
84,354
|
|
|
171,385
|
|
|||
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES
|
104,702
|
|
|
93,425
|
|
|
88,285
|
|
|||
RESEARCH AND DEVELOPMENT EXPENSE
|
2,037
|
|
|
2,418
|
|
|
4,890
|
|
|||
IMPAIRMENT OF PROPERTY, PLANT, AND EQUIPMENT
|
879
|
|
|
49,873
|
|
|
17,893
|
|
|||
INCOME (LOSS) FROM OPERATIONS
|
312,373
|
|
|
(61,362
|
)
|
|
60,317
|
|
|||
OTHER INCOME (EXPENSE), NET:
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
(1,117
|
)
|
|
(2,151
|
)
|
|
(1,919
|
)
|
|||
Change in fair value of convertible debt conversion liability
|
—
|
|
|
(18,833
|
)
|
|
13,045
|
|
|||
Gain on debt extinguishment
|
6,297
|
|
|
—
|
|
|
2,331
|
|
|||
Gain on involuntary conversion
|
4,457
|
|
|
5,329
|
|
|
9,894
|
|
|||
Other income (expense)
|
5,023
|
|
|
(997
|
)
|
|
428
|
|
|||
Interest expense
|
(17,534
|
)
|
|
(18,755
|
)
|
|
(15,987
|
)
|
|||
|
(2,874
|
)
|
|
(35,407
|
)
|
|
7,792
|
|
|||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
309,499
|
|
|
(96,769
|
)
|
|
68,109
|
|
|||
INCOME TAX BENEFIT (EXPENSE)
|
(5,871
|
)
|
|
30,490
|
|
|
(4,268
|
)
|
|||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE NONCONTROLLING INTEREST
|
303,628
|
|
|
(66,279
|
)
|
|
63,841
|
|
|||
LESS—NET INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
—
|
|
|
386
|
|
|||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
|
303,628
|
|
|
(66,279
|
)
|
|
63,455
|
|
|||
DISCONTINUED OPERATIONS (NOTE 7):
|
|
|
|
|
|
||||||
Loss on operations of discontinued operations
|
(86
|
)
|
|
(12,800
|
)
|
|
(19,128
|
)
|
|||
Impairment loss on assets classified as held for sale
|
(11,226
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
NET LOSS ON DISCONTINUED OPERATIONS
|
(11,312
|
)
|
|
(12,800
|
)
|
|
(19,128
|
)
|
|||
NET INCOME (LOSS) TO THE COMPANY
|
292,316
|
|
|
(79,079
|
)
|
|
44,327
|
|
|||
|
|
|
|
|
|
||||||
LESS—EFFECT OF PARTICIPATING SHARE-BASED AWARDS ON CONTINUING OPERATIONS
|
(7,824
|
)
|
|
—
|
|
|
(1,251
|
)
|
|||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE COMPANY’S COMMON STOCKHOLDERS
|
$
|
295,804
|
|
|
$
|
(66,279
|
)
|
|
$
|
62,204
|
|
NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO THE COMPANY’S COMMON STOCKHOLDERS
|
$
|
(11,312
|
)
|
|
$
|
(12,800
|
)
|
|
$
|
(19,128
|
)
|
Net income (loss) per share from continuing operations attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
7.85
|
|
|
$
|
(1.71
|
)
|
|
$
|
1.52
|
|
Diluted
|
$
|
6.78
|
|
|
$
|
(1.71
|
)
|
|
$
|
1.52
|
|
Net loss per share from discontinued operations attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.30
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.47
|
)
|
Diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.47
|
)
|
Weighted-average shares used to compute net income (loss) per share from continuing operations attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
37,687,552
|
|
|
38,731,015
|
|
|
40,897,549
|
|
|||
Diluted
|
43,653,720
|
|
|
38,731,015
|
|
|
40,902,860
|
|
|||
Weighted-average shares used to compute net loss per share from discontinued operations attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
37,687,552
|
|
|
38,731,015
|
|
|
40,897,549
|
|
|||
Diluted
|
37,687,552
|
|
|
38,731,015
|
|
|
40,897,549
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) before noncontrolling interest
|
$
|
292,316
|
|
|
$
|
(79,079
|
)
|
|
$
|
44,713
|
|
Unrealized losses on marketable securities, net of taxes of $0, $0 and $0, respectively
|
(28
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation adjustments
|
(1,906
|
)
|
|
6,029
|
|
|
(1,848
|
)
|
|||
Other comprehensive income (loss)
|
(1,934
|
)
|
|
6,029
|
|
|
(1,848
|
)
|
|||
Comprehensive income (loss)
|
290,382
|
|
|
(73,050
|
)
|
|
42,865
|
|
|||
Less—Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(106
|
)
|
|||
Comprehensive income (loss) attributable to the Company
|
$
|
290,382
|
|
|
$
|
(73,050
|
)
|
|
$
|
42,971
|
|
|
Company Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Common
Stock-
Additional
Paid-in Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Noncontrolling
Interest |
|
Total
|
|||||||||||||||
BALANCE, January 1, 2016
|
43,837,714
|
|
|
$
|
4
|
|
|
$
|
474,367
|
|
|
$
|
169,680
|
|
|
$
|
(4,009
|
)
|
|
$
|
(28,762
|
)
|
|
$
|
2,730
|
|
|
$
|
614,010
|
|
Issuance of common stock
|
33,973
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||||
Issuance of common stock in acquisitions
|
500,000
|
|
|
1
|
|
|
4,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,051
|
|
|||||||
Conversion of restricted stock units to common stock (net of 69,307 shares of treasury stock purchased)
|
180,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(767
|
)
|
|
—
|
|
|
(767
|
)
|
|||||||
Partial termination of capped call options (inclusive of tax impact of $116)
|
—
|
|
|
—
|
|
|
1,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,863
|
|
|||||||
Convertible debt extinguishment impact (net of tax impact of $2,144)
|
—
|
|
|
—
|
|
|
(5,560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,560
|
)
|
|||||||
Treasury stock activity
|
(5,998,323
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,295
|
)
|
|
—
|
|
|
(52,295
|
)
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
|
(179
|
)
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
5,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,896
|
|
|||||||
Foreign currency translation and other adjustment
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(1,742
|
)
|
|
—
|
|
|
(106
|
)
|
|
(1,874
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
44,327
|
|
|
—
|
|
|
—
|
|
|
386
|
|
|
44,713
|
|
|||||||
BALANCE, December 31, 2016
|
38,553,413
|
|
|
5
|
|
|
480,906
|
|
|
214,007
|
|
|
(5,751
|
)
|
|
(81,824
|
)
|
|
2,831
|
|
|
610,174
|
|
|||||||
Conversion of restricted stock units to common stock (net of 71,112 shares of treasury stock purchased)
|
210,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(872
|
)
|
|
—
|
|
|
(872
|
)
|
|||||||
Settlement of stock appreciation rights in common stock (net of 35,955 shares of treasury stock purchased)
|
73,725
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(385
|
)
|
|
—
|
|
|
(385
|
)
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,831
|
)
|
|
(3,102
|
)
|
|||||||
Impact of 2036 Senior Notes conversion liability reclassification (net of tax impact of $18,025)
|
—
|
|
|
—
|
|
|
27,908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,908
|
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
6,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,909
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,029
|
|
|
—
|
|
|
—
|
|
|
6,029
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,079
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,079
|
)
|
|||||||
BALANCE, December 31, 2017
|
38,837,749
|
|
|
5
|
|
|
515,452
|
|
|
134,928
|
|
|
278
|
|
|
(83,081
|
)
|
|
—
|
|
|
567,582
|
|
|||||||
Conversion of restricted stock units to common stock (net of 146,999 shares of treasury stock purchased)
|
293,717
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,280
|
)
|
|
—
|
|
|
(2,280
|
)
|
|||||||
Settlement of stock appreciation rights in common stock (net of 62,866 shares of treasury stock purchased)
|
140,332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,191
|
)
|
|
—
|
|
|
(1,191
|
)
|
|||||||
Convertible debt extinguishment impact (net of tax of $5,498)
|
—
|
|
|
—
|
|
|
(70,689
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,689
|
)
|
|||||||
Treasury stock activity
|
(1,937,844
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,048
|
)
|
|
—
|
|
|
(25,048
|
)
|
|||||||
Partial termination of capped call options
|
(15,012
|
)
|
|
—
|
|
|
252
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
85
|
|
|||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
6,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,412
|
|
|||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,906
|
)
|
|
—
|
|
|
—
|
|
|
(1,906
|
)
|
|||||||
Net change in unrealized losses on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
292,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292,316
|
|
|||||||
BALANCE, December 31, 2018
|
37,318,942
|
|
|
$
|
5
|
|
|
$
|
451,427
|
|
|
$
|
427,244
|
|
|
$
|
(1,656
|
)
|
|
$
|
(111,767
|
)
|
|
$
|
—
|
|
|
$
|
765,253
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income (loss) including noncontrolling interest
|
$
|
292,316
|
|
|
$
|
(79,079
|
)
|
|
$
|
44,713
|
|
Net loss from discontinuing operations
|
(11,312
|
)
|
|
(12,800
|
)
|
|
(19,128
|
)
|
|||
Net income (loss) from continuing operations
|
303,628
|
|
|
(66,279
|
)
|
|
63,841
|
|
|||
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
36,246
|
|
|
33,779
|
|
|
31,363
|
|
|||
Amortization expense of assets and liabilities, net
|
996
|
|
|
1,589
|
|
|
875
|
|
|||
Accretion of asset retirement obligations
|
47
|
|
|
62
|
|
|
78
|
|
|||
Accretion of convertible note discount
|
5,014
|
|
|
5,413
|
|
|
5,147
|
|
|||
Accretion of marketable securities
|
(215
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of property, plant and equipment, net
|
879
|
|
|
49,873
|
|
|
17,893
|
|
|||
Provision (benefit) for doubtful accounts
|
(273
|
)
|
|
139
|
|
|
630
|
|
|||
Stock compensation expense
|
6,412
|
|
|
6,909
|
|
|
5,896
|
|
|||
Deferred tax expense (benefits)
|
4,850
|
|
|
(30,088
|
)
|
|
3,009
|
|
|||
Change in fair value of contingent consideration
|
1,117
|
|
|
2,151
|
|
|
1,919
|
|
|||
Gain on involuntary conversion
|
(4,457
|
)
|
|
(5,329
|
)
|
|
(9,894
|
)
|
|||
Gain on sales of assets
|
(974
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of convertible debt conversion liability
|
—
|
|
|
18,833
|
|
|
(13,045
|
)
|
|||
Gain on debt extinguishment
|
(6,297
|
)
|
|
—
|
|
|
(2,331
|
)
|
|||
Other
|
593
|
|
|
246
|
|
|
(71
|
)
|
|||
Changes in asset and liabilities, net of effects from mergers and acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
19,662
|
|
|
74,974
|
|
|
145,235
|
|
|||
Inventories
|
(34,066
|
)
|
|
12,029
|
|
|
(58,551
|
)
|
|||
Prepaid expenses and other assets
|
41,250
|
|
|
2,491
|
|
|
7,392
|
|
|||
Accounts payable
|
14,221
|
|
|
(20,220
|
)
|
|
(133,461
|
)
|
|||
Accrued expenses and other liabilities
|
(7,259
|
)
|
|
(18,802
|
)
|
|
6,985
|
|
|||
Deferred revenue
|
(1,918
|
)
|
|
(25,028
|
)
|
|
26,913
|
|
|||
Net cash flows provided from operating activities - continuing operations
|
379,456
|
|
|
42,742
|
|
|
99,823
|
|
|||
Net cash flows used in operating activities - discontinued operations
|
(13,922
|
)
|
|
(12,946
|
)
|
|
(11,972
|
)
|
|||
Cash provided from operations
|
365,534
|
|
|
29,796
|
|
|
87,851
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Cash paid for marketable securities
|
(70,745
|
)
|
|
—
|
|
|
—
|
|
|||
Maturities of marketable securities
|
20,000
|
|
|
—
|
|
|
—
|
|
|||
Cash paid for purchase of property, plant and equipment
|
(46,453
|
)
|
|
(67,557
|
)
|
|
(60,384
|
)
|
|||
Insurance proceeds for asset impairments
|
4,464
|
|
|
8,000
|
|
|
10,949
|
|
|||
Cash receipts from disposal of fixed assets
|
1,647
|
|
|
—
|
|
|
—
|
|
|||
Cash paid for investments
|
(974
|
)
|
|
(816
|
)
|
|
(3,249
|
)
|
|||
Cash paid for acquisitions and additional interests, net of cash acquired
|
(4,801
|
)
|
|
(3,482
|
)
|
|
(12,720
|
)
|
|||
Net cash flows used in investing activities - continuing operations
|
(96,862
|
)
|
|
(63,855
|
)
|
|
(65,404
|
)
|
|||
Net cash flows used in investing activities - discontinued operations
|
(335
|
)
|
|
(14
|
)
|
|
(319
|
)
|
|||
Cash used in investing activities
|
(97,197
|
)
|
|
(63,869
|
)
|
|
(65,723
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net (repayments) borrowings on line of credit
|
(48,187
|
)
|
|
8,025
|
|
|
26,445
|
|
|||
Borrowing on other lines of credit
|
2,014
|
|
|
8,812
|
|
|
10,185
|
|
|||
Repayments on other lines of credits
|
(2,196
|
)
|
|
(4,442
|
)
|
|
(2,437
|
)
|
|||
Cash received for issuance of debt
|
14,034
|
|
|
23,575
|
|
|
11,775
|
|
|||
Cash received on convertible debt
|
—
|
|
|
—
|
|
|
152,000
|
|
|||
Cash paid on debt
|
(143,516
|
)
|
|
(14,659
|
)
|
|
(87,112
|
)
|
|||
Cash paid for debt issuance costs
|
(697
|
)
|
|
(1,062
|
)
|
|
(6,369
|
)
|
|||
Cash received on partial termination of capped call options
|
85
|
|
|
—
|
|
|
159
|
|
|||
Cash paid for treasury stock
|
(25,048
|
)
|
|
—
|
|
|
(51,474
|
)
|
|||
Cash paid for contingent consideration
|
(12,223
|
)
|
|
(29,150
|
)
|
|
(7,548
|
)
|
|||
Cash paid for conversion of restricted stock units and stock appreciation rights
|
(3,471
|
)
|
|
(1,257
|
)
|
|
—
|
|
|||
Net cash flows provided from (used in) financing activities - continuing operations
|
(219,205
|
)
|
|
(10,158
|
)
|
|
45,624
|
|
|||
Net cash flows provided from financing activities - discontinuing operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash provided from (used in) financing activities
|
(219,205
|
)
|
|
(10,158
|
)
|
|
45,624
|
|
|||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
49,132
|
|
|
(44,231
|
)
|
|
67,752
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH at Beginning of period
|
77,627
|
|
|
120,210
|
|
|
53,041
|
|
|||
Effect of exchange rate changes on cash
|
(184
|
)
|
|
1,648
|
|
|
$
|
(583
|
)
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH at End of period
|
$
|
126,575
|
|
|
$
|
77,627
|
|
|
$
|
120,210
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
910
|
|
|
$
|
252
|
|
|
$
|
410
|
|
Cash paid for interest
|
$
|
11,453
|
|
|
$
|
11,637
|
|
|
$
|
9,920
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Amounts included in period-end accounts payable for:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
$
|
3,459
|
|
|
$
|
7,688
|
|
|
$
|
3,833
|
|
Issuance costs
|
$
|
37
|
|
|
$
|
29
|
|
|
$
|
250
|
|
Issuance of common stock for acquisitions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,050
|
|
Contingent consideration for acquisitions
|
$
|
482
|
|
|
$
|
—
|
|
|
$
|
4,500
|
|
Release of restricted cash to pay off the GOZone Bonds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101,315
|
|
Repayment of GOZone Bonds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,000
|
|
Non-cash transfer of line of credit to long-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,498
|
|
Non-cash allocation of proceeds from the 2036 Convertible Notes issuance to convertible debt conversion liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,145
|
|
Non-cash allocation of purchase price between debt and equity related to the repurchase of the 2019 Convertible Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,387
|
|
Non-cash reclassification of the 2036 Convertible Notes conversion liability to additional paid in capital, net of tax impact
|
$
|
—
|
|
|
$
|
27,908
|
|
|
$
|
—
|
|
Non-cash share repurchases from partial capped call termination
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,588
|
|
Accruals of insurance proceeds related to impairment of property, plant and equipment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313
|
|
See "Note 4 - Acquisitions" for noncash items related to the acquisition transactions.
|
|||||||||||
|
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Cash and cash equivalents
|
$
|
123,575
|
|
|
$
|
77,627
|
|
|
$
|
116,210
|
|
Restricted cash
|
3,000
|
|
|
—
|
|
|
4,000
|
|
|||
Total cash, cash equivalents and restricted cash shown in the statement of cash flow
|
$
|
126,575
|
|
|
$
|
77,627
|
|
|
$
|
120,210
|
|
Automobiles and trucks
|
5 years
|
Computers and office equipment
|
5 years
|
Office furniture and fixtures
|
7 years
|
Machinery and equipment
|
5-30 years
|
Leasehold improvements
|
the lesser of the lease term or 30 years
|
Buildings and improvements
|
30-40 years
|
|
For the year ended December 31, 2018
|
||||||||||||||
|
Number of shares/Principal amount in $'000
|
|
December 2017 Program
|
|
June 2018 Program
|
|
Both Programs
|
||||||||
Repurchases of shares of common stock
|
1,937,844
|
|
|
$
|
25,048
|
|
|
$
|
—
|
|
|
$
|
25,048
|
|
|
2019 Convertible Senior Notes Repurchases
|
$
|
6,311
|
|
|
$
|
6,689
|
|
|
$
|
—
|
|
|
$
|
6,689
|
|
2036 Convertible Senior Notes Repurchases
|
$
|
55,700
|
|
|
$
|
43,263
|
|
|
$
|
67,565
|
|
|
$
|
110,828
|
|
•
|
sales of biodiesel and renewable diesel produced at our facilities, including RINs and LCFS credits;
|
•
|
resale of finished biomass-based diesel, RINs and LCFS credits acquired from third parties, and raw material feedstocks acquired from others;
|
•
|
revenues from our sale of petroleum-based heating oil and ultra-low sulfur diesel, or ULSD, acquired from third parties, along with the sale of these petroleum-based products further blended with biodiesel produced at our wholly owned facilities;
|
•
|
sales of glycerin, other co-products of the biomass-based diesel production process;
|
•
|
incentive payments from federal and state governments, including the BTC, and from the USDA Advanced Biofuel Program; and
|
•
|
other revenue:
|
◦
|
sales of chemical products and lab services.
|
|
Reportable Segments
|
||||||||||||||||||
Year ended December 31, 2018
|
Biomass-based
Diesel |
|
Services
|
|
Corporate
and other |
|
Intersegment
Revenues |
|
Consolidated
Total |
||||||||||
Biomass-based diesel sales, net of BTC related amount due to customers of $144,944
|
$
|
1,474,459
|
|
|
$
|
—
|
|
|
$
|
9,682
|
|
|
$
|
(26,348
|
)
|
|
$
|
1,457,793
|
|
Petroleum and blended petroleum diesel sales
|
—
|
|
|
—
|
|
|
239,470
|
|
|
—
|
|
|
239,470
|
|
|||||
Other biomass-based diesel revenue
|
178,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
178,053
|
|
|||||
Separated RIN sales
|
137,895
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137,895
|
|
|||||
Other revenues
|
—
|
|
|
93,347
|
|
|
—
|
|
|
(91,061
|
)
|
|
2,286
|
|
|||||
Total revenues from contracts with customers
|
$
|
1,790,407
|
|
|
$
|
93,347
|
|
|
$
|
249,152
|
|
|
$
|
(117,409
|
)
|
|
$
|
2,015,497
|
|
Biomass-based diesel government incentives
|
367,490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
367,490
|
|
|||||
Total revenues
|
$
|
2,157,897
|
|
|
$
|
93,347
|
|
|
$
|
249,152
|
|
|
$
|
(117,409
|
)
|
|
$
|
2,382,987
|
|
|
December 31, 2018
|
||
Accounts receivable
|
$
|
74,551
|
|
Short-term contract liabilities (deferred revenue)
|
$
|
(300
|
)
|
|
January 1, 2018
|
|
Cash receipts
(Payments) |
|
Less: Impact on
Revenue |
|
Other
|
|
December 31, 2018
|
||||||||||
Deferred revenue
|
$
|
2,218
|
|
|
$
|
27,264
|
|
|
$
|
29,179
|
|
|
$
|
(3
|
)
|
|
$
|
300
|
|
Payables to customers related to BTC
|
—
|
|
|
(150,776
|
)
|
|
(144,944
|
)
|
|
5,832
|
|
|
—
|
|
|||||
|
$
|
2,218
|
|
|
$
|
(123,512
|
)
|
|
$
|
(115,765
|
)
|
|
$
|
5,829
|
|
|
$
|
300
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Customer A
|
$
|
219,202
|
|
|
$
|
182,236
|
|
|
$
|
144,849
|
|
|
March 15, 2016
|
||
Consideration at fair value for acquisition from Sanimax:
|
|
||
Cash
|
$
|
12,541
|
|
Common stock
|
4,050
|
|
|
Contingent consideration
|
4,500
|
|
|
Total
|
$
|
21,091
|
|
|
December 31, 2018
|
||||||||||||||||
|
Maturity
|
|
Gross Amortized Cost
|
|
Total Unrealized Gains
|
|
Total Unrealized Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
Within one year
|
|
$
|
22,886
|
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
22,872
|
|
Corporate bonds
|
Within one year
|
|
28,074
|
|
|
—
|
|
|
(14
|
)
|
|
28,060
|
|
||||
Total
|
|
|
$
|
50,960
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
50,932
|
|
|
2018
|
|
2017
|
||||
Raw materials
|
$
|
40,348
|
|
|
$
|
39,975
|
|
Work in process
|
3,840
|
|
|
3,523
|
|
||
Finished goods
|
124,712
|
|
|
92,049
|
|
||
Total
|
$
|
168,900
|
|
|
$
|
135,547
|
|
Discontinued Operations
|
|||||||||||
|
For the years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Other revenues
|
$
|
5,856
|
|
|
$
|
3,588
|
|
|
$
|
2,000
|
|
Other costs of goods sold
|
(4,697
|
)
|
|
(4,360
|
)
|
|
(1,870
|
)
|
|||
Research and development expense
|
(15,152
|
)
|
|
(11,673
|
)
|
|
(13,273
|
)
|
|||
Other income (expense), net
|
13,907
|
|
|
(355
|
)
|
|
(5,985
|
)
|
|||
Pre-tax loss from discontinued operations
|
(86
|
)
|
|
(12,800
|
)
|
|
(19,128
|
)
|
|||
Pre-tax impairment loss on assets classified as held for sale
|
(11,226
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Loss on discontinued operations
|
$
|
(11,312
|
)
|
|
$
|
(12,800
|
)
|
|
$
|
(19,128
|
)
|
|
2018
|
|
2017
|
||||
Machinery and equipment, net
|
$
|
824
|
|
|
$
|
1,036
|
|
In-process research and development
|
13,652
|
|
|
14,715
|
|
||
Impairment loss recognized on assets classified as held for sale
|
(11,226
|
)
|
|
—
|
|
||
Total assets classified as held for sale
|
$
|
3,250
|
|
|
$
|
15,751
|
|
|
|
|
|
||||
Contingent consideration
|
—
|
|
|
13,908
|
|
||
Current liabilities classified as held for sale
|
$
|
—
|
|
|
$
|
13,908
|
|
|
2018
|
|
2017
|
||||
Land
|
$
|
10,649
|
|
|
$
|
10,480
|
|
Building and improvements
|
148,055
|
|
|
140,261
|
|
||
Leasehold improvements
|
11,364
|
|
|
10,806
|
|
||
Machinery and equipment
|
584,490
|
|
|
532,592
|
|
||
|
754,558
|
|
|
694,139
|
|
||
Accumulated depreciation
|
(205,537
|
)
|
|
(173,971
|
)
|
||
|
549,021
|
|
|
520,168
|
|
||
Construction in process
|
41,702
|
|
|
66,193
|
|
||
Total
|
$
|
590,723
|
|
|
$
|
586,361
|
|
|
December 31, 2018
|
||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Raw material supply agreement
|
$
|
6,230
|
|
|
$
|
(2,866
|
)
|
|
$
|
3,364
|
|
Renewable diesel technology
|
8,300
|
|
|
(2,536
|
)
|
|
5,764
|
|
|||
Acquired customer relationships
|
4,747
|
|
|
(976
|
)
|
|
3,771
|
|
|||
Trademarks
|
704
|
|
|
—
|
|
|
704
|
|
|||
Ground lease
|
200
|
|
|
(157
|
)
|
|
43
|
|
|||
Total intangible assets
|
$
|
20,181
|
|
|
$
|
(6,535
|
)
|
|
$
|
13,646
|
|
|
December 31, 2017
|
||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Raw material supply agreement
|
$
|
6,230
|
|
|
$
|
(2,408
|
)
|
|
$
|
3,822
|
|
Renewable diesel technology
|
8,300
|
|
|
(1,983
|
)
|
|
6,317
|
|
|||
Acquired customer relationships
|
2,900
|
|
|
(686
|
)
|
|
2,214
|
|
|||
Ground lease
|
200
|
|
|
(141
|
)
|
|
59
|
|
|||
Total intangible assets
|
$
|
17,630
|
|
|
$
|
(5,218
|
)
|
|
$
|
12,412
|
|
2019
|
$
|
1,682
|
|
2020
|
1,689
|
|
|
2021
|
1,695
|
|
|
2022
|
1,688
|
|
|
2023
|
1,695
|
|
|
Thereafter
|
5,197
|
|
|
Total
|
$
|
13,646
|
|
|
2018
|
|
2017
|
||||
Commodity derivatives and related collateral, net
|
$
|
13,799
|
|
|
$
|
1,610
|
|
Prepaid expenses
|
17,187
|
|
|
11,733
|
|
||
Deposits
|
2,123
|
|
|
2,899
|
|
||
RIN inventory
|
2,000
|
|
|
27,028
|
|
||
Taxes receivable
|
2,991
|
|
|
6,356
|
|
||
Other
|
3,069
|
|
|
2,254
|
|
||
Total
|
$
|
41,169
|
|
|
$
|
51,880
|
|
|
2018
|
|
2017
|
||||
Investments
|
$
|
13,053
|
|
|
$
|
12,250
|
|
Spare parts inventory
|
2,680
|
|
|
2,764
|
|
||
Catalysts
|
1,989
|
|
|
2,962
|
|
||
Deposits
|
381
|
|
|
381
|
|
||
Other
|
3,167
|
|
|
933
|
|
||
Total
|
$
|
21,270
|
|
|
$
|
19,290
|
|
|
2018
|
|
2017
|
||||
Accrued property taxes
|
$
|
1,534
|
|
|
$
|
1,353
|
|
Accrued employee compensation
|
17,226
|
|
|
8,172
|
|
||
Accrued interest
|
383
|
|
|
590
|
|
||
Contingent consideration, current portion
|
9,861
|
|
|
11,637
|
|
||
Unfavorable lease obligation, current portion
|
1,129
|
|
|
1,129
|
|
||
Tax payable
|
4,473
|
|
|
1,501
|
|
||
Other
|
650
|
|
|
897
|
|
||
Total
|
$
|
35,256
|
|
|
$
|
25,279
|
|
|
2018
|
|
2017
|
||||
Severance payable
|
$
|
—
|
|
|
$
|
603
|
|
Straight-line lease liability
|
1,439
|
|
|
1,801
|
|
||
Asset retirement obligations
|
640
|
|
|
593
|
|
||
Other
|
996
|
|
|
1,117
|
|
||
Total
|
$
|
3,075
|
|
|
$
|
4,114
|
|
|
2018
|
|
2017
|
||||
4.00% Convertible Senior Notes, $96,300 face amount, due in June 2036
|
$
|
75,477
|
|
|
$
|
116,255
|
|
2.75% Convertible Senior Notes, $67,527 face amount, due in June 2019
|
66,361
|
|
|
69,859
|
|
||
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in July 2022
|
8,964
|
|
|
11,460
|
|
||
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018
|
—
|
|
|
8,189
|
|
||
REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 2025
|
18,948
|
|
|
6,183
|
|
||
REG Grays Harbor term loan, variable interest of minimum 3.5% or Prime Rate plus 0.25%, due in May 2022
|
8,828
|
|
|
7,882
|
|
||
REG Capital term loan, fixed interest rate of 3.99%, due in January 2028
|
7,185
|
|
|
7,400
|
|
||
Other
|
54
|
|
|
1,332
|
|
||
Total debt before debt issuance costs
|
185,817
|
|
|
228,560
|
|
||
Less: Current portion of long-term debt
|
149,006
|
|
|
13,397
|
|
||
Less: Debt issuance costs (net of accumulated amortization of $3,873 and $3,510, respectively)
|
3,390
|
|
|
6,627
|
|
||
Total long-term debt
|
$
|
33,421
|
|
|
$
|
208,536
|
|
|
2018
|
|
2017
|
||||
Total revolving loans (current)
|
$
|
14,250
|
|
|
$
|
65,525
|
|
Maximum remaining available to be borrowed under revolving lines of credit
|
$
|
114,889
|
|
|
$
|
60,839
|
|
2019
|
$
|
149,006
|
|
2020
|
7,477
|
|
|
2021
|
7,545
|
|
|
2022
|
6,198
|
|
|
2023
|
4,545
|
|
|
Thereafter
|
11,046
|
|
|
Total term debt
|
185,817
|
|
|
Less: current portion
|
149,006
|
|
|
Total long-term debt before debt issuance costs
|
$
|
36,811
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current income tax benefit (expense)
|
|
|
|
|
|
||||||
State
|
$
|
(118
|
)
|
|
$
|
(45
|
)
|
|
$
|
94
|
|
Foreign
|
(292
|
)
|
|
421
|
|
|
(1,036
|
)
|
|||
|
(410
|
)
|
|
376
|
|
|
(942
|
)
|
|||
Deferred income tax benefit (expense)
|
|
|
|
|
|
||||||
Federal
|
(12,878
|
)
|
|
22,619
|
|
|
2,113
|
|
|||
State
|
(2,851
|
)
|
|
10,282
|
|
|
6,936
|
|
|||
Foreign
|
2,914
|
|
|
2,674
|
|
|
(2,560
|
)
|
|||
Change in enacted tax rates
|
—
|
|
|
(123,289
|
)
|
|
—
|
|
|||
Net operating loss carryforwards created
|
26,058
|
|
|
17,466
|
|
|
105,165
|
|
|||
|
13,243
|
|
|
(70,248
|
)
|
|
111,654
|
|
|||
Income tax benefit (expense) before valuation allowances
|
12,833
|
|
|
(69,872
|
)
|
|
110,712
|
|
|||
Deferred tax valuation allowances
|
(18,704
|
)
|
|
100,362
|
|
|
(114,980
|
)
|
|||
Income tax benefit (expense)
|
$
|
(5,871
|
)
|
|
$
|
30,490
|
|
|
$
|
(4,268
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. Federal income tax expense at statutory rates of 21, 35 and 35 percents, respectively
|
$
|
(62,619
|
)
|
|
$
|
38,349
|
|
|
$
|
(17,143
|
)
|
State taxes, net of federal income tax benefit
|
1,618
|
|
|
8,160
|
|
|
11,442
|
|
|||
Tax position on government incentives
|
72,244
|
|
|
9,402
|
|
|
117,630
|
|
|||
Change in enacted tax rates
|
—
|
|
|
(123,289
|
)
|
|
—
|
|
|||
Goodwill impairment tax impact
|
—
|
|
|
—
|
|
|
2,876
|
|
|||
Foreign net operating loss expiration
|
—
|
|
|
—
|
|
|
(2,383
|
)
|
|||
Unrecognized tax benefits
|
(272
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
1,862
|
|
|
(2,494
|
)
|
|
(1,710
|
)
|
|||
Total benefit (expense) for income taxes before valuation allowances
|
12,833
|
|
|
(69,872
|
)
|
|
110,712
|
|
|||
Valuation allowances
|
(18,704
|
)
|
|
100,362
|
|
|
(114,980
|
)
|
|||
Total benefit (expense) for income taxes
|
$
|
(5,871
|
)
|
|
$
|
30,490
|
|
|
$
|
(4,268
|
)
|
|
2018
|
|
2017
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
278,867
|
|
|
$
|
249,371
|
|
Goodwill
|
20,067
|
|
|
26,448
|
|
||
Capitalized research and development
|
8,650
|
|
|
9,788
|
|
||
Stock-based compensation
|
3,447
|
|
|
3,924
|
|
||
Risk management unrealized gain (loss)
|
2,940
|
|
|
1,879
|
|
||
Tax credit carryforwards
|
1,597
|
|
|
1,597
|
|
||
Accrued compensation
|
3,318
|
|
|
1,062
|
|
||
Inventory capitalization
|
1,921
|
|
|
1,491
|
|
||
Other
|
3,133
|
|
|
2,945
|
|
||
Deferred tax assets
|
323,940
|
|
|
298,505
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Property, plant and equipment
|
(38,324
|
)
|
|
(27,314
|
)
|
||
Convertible debt
|
(5,648
|
)
|
|
(9,889
|
)
|
||
Risk management unrealized loss
|
(2,649
|
)
|
|
—
|
|
||
Intangibles
|
949
|
|
|
(2,195
|
)
|
||
Prepaid expenses
|
(1,688
|
)
|
|
(1,393
|
)
|
||
Deferred revenue
|
(583
|
)
|
|
—
|
|
||
|
|
|
|
||||
Other
|
(773
|
)
|
|
(544
|
)
|
||
Deferred tax liabilities
|
(48,716
|
)
|
|
(41,335
|
)
|
||
Net deferred tax assets
|
275,224
|
|
|
257,170
|
|
||
Valuation allowance
|
(283,634
|
)
|
|
(265,362
|
)
|
||
Net deferred tax liabilities
|
$
|
(8,410
|
)
|
|
$
|
(8,192
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning of year balance
|
$
|
265,362
|
|
|
$
|
365,035
|
|
|
$
|
250,164
|
|
Changes in valuation allowance charged to income
|
18,704
|
|
|
36,639
|
|
|
114,980
|
|
|||
Change in enacted tax rates
|
—
|
|
|
(137,001
|
)
|
|
—
|
|
|||
Foreign currency translation
|
(440
|
)
|
|
689
|
|
|
(109
|
)
|
|||
Change in valuation allowance charged to OCI
|
8
|
|
|
—
|
|
|
—
|
|
|||
End of year balance
|
$
|
283,634
|
|
|
$
|
265,362
|
|
|
$
|
365,035
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning of year balance
|
$
|
1,771
|
|
|
$
|
1,900
|
|
|
$
|
1,900
|
|
Increases to tax positions taken during prior years
|
272
|
|
|
—
|
|
|
—
|
|
|||
Decreases to tax positions taken during prior years
|
—
|
|
|
(129
|
)
|
|
—
|
|
|||
Foreign currency translation
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
End of year balance
|
$
|
2,028
|
|
|
$
|
1,771
|
|
|
$
|
1,900
|
|
|
Number of Awards
|
|
Weighted Average Issue Price
|
|||
Awards outstanding -January 1, 2016
|
59,623
|
|
|
$
|
9.40
|
|
Issued
|
175,217
|
|
|
$
|
9.06
|
|
Vested and restriction lapsed
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Awards outstanding - December 31, 2016
|
234,840
|
|
|
$
|
9.15
|
|
Issued
|
270,765
|
|
|
$
|
11.79
|
|
Vested and restriction lapsed
|
(87,622
|
)
|
|
$
|
11.75
|
|
Forfeited
|
(62,865
|
)
|
|
$
|
9.48
|
|
Awards outstanding - December 31, 2017
|
355,118
|
|
|
$
|
10.46
|
|
Issued
|
171,580
|
|
|
$
|
9.63
|
|
Vested and restriction lapsed
|
(292,963
|
)
|
|
$
|
8.45
|
|
Forfeited
|
(25,650
|
)
|
|
$
|
9.83
|
|
Awards outstanding - December 31, 2018
|
208,085
|
|
|
$
|
12.68
|
|
|
Number of
SAR’s
|
|
Weighted Average
Exercise
Price
|
|
Weighted
Average
Contractual
Term
|
|||
SAR's outstanding - January 1, 2016
|
2,396,126
|
|
|
$
|
10.33
|
|
|
|
Granted
|
176,824
|
|
|
$
|
8.80
|
|
|
|
Exercised
|
(8,003
|
)
|
|
$
|
8.57
|
|
|
|
Forfeited
|
(56,932
|
)
|
|
$
|
10.75
|
|
|
|
SAR's outstanding - December 31, 2016
|
2,508,015
|
|
|
$
|
10.22
|
|
|
6.7 years
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
Exercised
|
(700,765
|
)
|
|
$
|
10.36
|
|
|
|
Forfeited
|
(105,981
|
)
|
|
$
|
9.66
|
|
|
|
SAR's outstanding - December 31, 2017
|
1,701,269
|
|
|
$
|
10.20
|
|
|
5.7 years
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
Exercised
|
(610,541
|
)
|
|
$
|
10.13
|
|
|
|
Forfeited
|
(54,051
|
)
|
|
$
|
11.08
|
|
|
|
SAR's outstanding - December 31, 2018
|
1,036,677
|
|
|
$
|
10.19
|
|
|
4.7 years
|
SAR's exercisable - December 31, 2018
|
824,685
|
|
|
$
|
10.44
|
|
|
4.7 years
|
SAR's expected to vest - December 31, 2018
|
211,992
|
|
|
$
|
9.24
|
|
|
4.7 years
|
|
2018
|
|
2017
|
|
2016
|
The weighted average fair value of stock appreciation rights issued (per unit)
|
$2.79 - $3.74
|
|
$2.79 - $3.74
|
|
$2.79 - $3.74
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Weighted average risk-free interest rate
|
1.1% - 1.4%
|
|
1.1% - 1.4%
|
|
1.1% - 1.4%
|
Weighted average expected volatility
|
40%
|
|
40%
|
|
40%
|
Expected life in years
|
6.25
|
|
6.25
|
|
6.25
|
|
Total
Payments
|
||
2019
|
$
|
20,326
|
|
2020
|
14,063
|
|
|
2021
|
10,643
|
|
|
2022
|
3,162
|
|
|
2023
|
2,406
|
|
|
Thereafter
|
13,736
|
|
|
Total minimum payments
|
$
|
64,336
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Gross amounts of commodity derivative contracts recognized at fair value
|
$
|
11,843
|
|
|
$
|
1,799
|
|
|
$
|
812
|
|
|
$
|
8,001
|
|
Cash collateral
|
3,755
|
|
|
—
|
|
|
8,799
|
|
|
—
|
|
||||
Total gross amount recognized
|
15,598
|
|
|
1,799
|
|
|
9,611
|
|
|
8,001
|
|
||||
Gross amounts offset
|
(1,799
|
)
|
|
(1,799
|
)
|
|
(8,001
|
)
|
|
(8,001
|
)
|
||||
Net amount reported in the Consolidated Balance Sheets
|
$
|
13,799
|
|
|
$
|
—
|
|
|
$
|
1,610
|
|
|
$
|
—
|
|
|
Location of Gain (Loss)
Recognized in income |
|
2018
|
|
2017
|
|
2016
|
||||||
Commodity derivatives
|
Cost of goods sold – Biomass-based diesel
|
|
$
|
18,399
|
|
|
$
|
(23,437
|
)
|
|
$
|
(35,386
|
)
|
•
|
Level 1—Quoted prices for identical instruments in active markets.
|
•
|
Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
|
•
|
Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
As of December 31, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Commercial paper
|
$
|
22,872
|
|
|
$
|
—
|
|
|
$
|
22,872
|
|
|
$
|
—
|
|
Corporate bonds
|
$
|
28,060
|
|
|
—
|
|
|
28,060
|
|
|
—
|
|
|||
Commodity contract derivatives
|
$
|
10,044
|
|
|
499
|
|
|
9,545
|
|
|
—
|
|
|||
Contingent consideration for acquisitions
|
$
|
(9,861
|
)
|
|
—
|
|
|
—
|
|
|
(9,861
|
)
|
|||
|
$
|
51,115
|
|
|
$
|
499
|
|
|
$
|
60,477
|
|
|
$
|
(9,861
|
)
|
|
As of December 31, 2017
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Commodity contract derivatives
|
$
|
(7,189
|
)
|
|
$
|
(3,742
|
)
|
|
$
|
(3,447
|
)
|
|
$
|
—
|
|
Contingent consideration for acquisitions
|
$
|
(20,485
|
)
|
|
—
|
|
|
—
|
|
|
(20,485
|
)
|
|||
|
$
|
(27,674
|
)
|
|
$
|
(3,742
|
)
|
|
$
|
(3,447
|
)
|
|
$
|
(20,485
|
)
|
|
Contingent Consideration for Acquisitions
|
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period, January 1
|
$
|
20,485
|
|
|
$
|
32,993
|
|
Fair value of contingent consideration at measurement date
|
482
|
|
|
—
|
|
||
Change in estimates included in earnings
|
1,117
|
|
|
2,151
|
|
||
Settlements
|
(12,223
|
)
|
|
(14,659
|
)
|
||
Balance at end of period, December 31
|
$
|
9,861
|
|
|
$
|
20,485
|
|
|
2018
|
|
2017
|
||||||||||||
|
Asset (Liability)
Carrying Amount
|
|
Estimated Fair Value
|
|
Asset (Liability)
Carrying Amount
|
|
Estimated Fair Value
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Debt and lines of credit
|
$
|
(200,067
|
)
|
|
$
|
(410,564
|
)
|
|
$
|
(294,085
|
)
|
|
$
|
(273,983
|
)
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Options to purchase common stock
|
—
|
|
|
—
|
|
|
43,513
|
|
Stock appreciation rights
|
—
|
|
|
622,633
|
|
|
2,422,716
|
|
2019 Convertible Senior Notes
|
—
|
|
|
5,567,112
|
|
|
7,895,675
|
|
2036 Convertible Senior Notes
|
—
|
|
|
14,106,725
|
|
|
8,209,651
|
|
Total
|
—
|
|
|
20,296,470
|
|
|
18,571,555
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) from continuing operations attributable to the Company's common stockholders - Basic
|
$
|
295,804
|
|
|
$
|
(66,279
|
)
|
|
$
|
62,204
|
|
Plus (less): effect of participating securities
|
7,824
|
|
|
—
|
|
|
1,251
|
|
|||
Net income (loss) attributable to common stockholders
|
303,628
|
|
|
(66,279
|
)
|
|
63,455
|
|
|||
Less: effect of participating securities
|
(7,824
|
)
|
|
—
|
|
|
(1,251
|
)
|
|||
Net income (loss) from continuing operations attributable to the Company's common stockholders - Diluted
|
$
|
295,804
|
|
|
$
|
(66,279
|
)
|
|
$
|
62,204
|
|
Shares:
|
|
|
|
|
|
||||||
Weighted-average shares used to compute basic net income (loss) from continuing operations per share
|
37,687,552
|
|
|
38,731,015
|
|
|
40,897,549
|
|
|||
Adjustment to reflect conversion of convertible notes
|
5,416,043
|
|
|
—
|
|
|
—
|
|
|||
Adjustment to reflect stock appreciation right conversions
|
550,125
|
|
|
—
|
|
|
5,311
|
|
|||
Weighted-average shares used to compute diluted net income (loss) from continuing operations per share
|
43,653,720
|
|
|
38,731,015
|
|
|
40,902,860
|
|
|||
Net income (loss) from continuing operations per share attributable to common stockholders - Diluted
|
|
|
|
|
|
||||||
Diluted
|
$
|
6.78
|
|
|
$
|
(1.71
|
)
|
|
$
|
1.52
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales from continuing operations:
|
|
|
|
|
|
||||||
Biomass-based Diesel (includes REG Germany's net sales of $172,866, $171,175, and $171,358, respectively)
|
$
|
2,157,897
|
|
|
$
|
2,039,982
|
|
|
$
|
1,952,361
|
|
Services
|
93,347
|
|
|
103,215
|
|
|
87,014
|
|
|||
Corporate and other
|
249,152
|
|
|
213,500
|
|
|
106,637
|
|
|||
Intersegment revenues
|
(117,409
|
)
|
|
(202,042
|
)
|
|
(106,780
|
)
|
|||
|
$
|
2,382,987
|
|
|
$
|
2,154,655
|
|
|
$
|
2,039,232
|
|
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
||||||
Biomass-based diesel (includes REG Germany's income (loss) of ($7,110), ($7,544), and $5,007, respectively)
|
$
|
314,727
|
|
|
$
|
(63,925
|
)
|
|
$
|
64,814
|
|
Services
|
4,863
|
|
|
2,899
|
|
|
2,970
|
|
|||
Corporate and other
|
(10,091
|
)
|
|
(35,743
|
)
|
|
325
|
|
|||
|
$
|
309,499
|
|
|
$
|
(96,769
|
)
|
|
$
|
68,109
|
|
Depreciation and amortization expense, net:
|
|
|
|
|
|
||||||
Biomass-based diesel (includes REG Germany's amounts of $2,378, $2,990, and $2,849, respectively)
|
$
|
32,558
|
|
|
$
|
31,011
|
|
|
$
|
29,018
|
|
Services
|
1,658
|
|
|
1,092
|
|
|
613
|
|
|||
Corporate and other
|
3,026
|
|
|
3,265
|
|
|
2,607
|
|
|||
|
$
|
37,242
|
|
|
$
|
35,368
|
|
|
$
|
32,238
|
|
Cash paid for purchases of property, plant and equipment:
|
|
|
|
|
|
||||||
Biomass-based diesel (includes REG Germany's amounts of $2,611, $3,241, and $1,353, respectively)
|
$
|
41,906
|
|
|
$
|
60,734
|
|
|
$
|
52,952
|
|
Services
|
4,300
|
|
|
3,826
|
|
|
4,731
|
|
|||
Corporate and other
|
247
|
|
|
2,997
|
|
|
2,701
|
|
|||
|
$
|
46,453
|
|
|
$
|
67,557
|
|
|
$
|
60,384
|
|
|
2018
|
|
2017
|
||||
Goodwill:
|
|
|
|
||||
Services
|
$
|
16,080
|
|
|
$
|
16,080
|
|
|
|
|
|
||||
Assets:
|
|
|
|
||||
Biomass-based diesel (including REG Germany's assets of $52,119 and $55,761)
|
$
|
914,843
|
|
|
$
|
898,180
|
|
Services
|
63,720
|
|
|
55,581
|
|
||
Corporate and other
|
379,658
|
|
|
392,007
|
|
||
Intersegment eliminations
|
(254,375
|
)
|
|
(355,923
|
)
|
||
Assets held for sale
|
3,250
|
|
|
15,751
|
|
||
|
$
|
1,107,096
|
|
|
$
|
1,005,596
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
2,207,286
|
|
|
$
|
1,957,715
|
|
|
$
|
1,867,875
|
|
Germany
|
172,866
|
|
|
171,175
|
|
|
171,357
|
|
|||
Other Foreign
|
2,835
|
|
|
25,765
|
|
|
—
|
|
|||
Total Foreign
|
175,701
|
|
|
196,940
|
|
|
171,357
|
|
|||
|
$
|
2,382,987
|
|
|
$
|
2,154,655
|
|
|
$
|
2,039,232
|
|
|
2018
|
|
2017
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
571,045
|
|
|
$
|
564,992
|
|
Germany
|
18,972
|
|
|
20,689
|
|
||
Other Foreign
|
706
|
|
|
680
|
|
||
Total Foreign
|
19,678
|
|
|
21,369
|
|
||
|
$
|
590,723
|
|
|
$
|
586,361
|
|
2019
|
$
|
3,748
|
|
2020
|
3,298
|
|
|
2021
|
2,976
|
|
|
2022
|
2,976
|
|
|
2023
|
2,976
|
|
|
Thereafter
|
863
|
|
|
Total
|
$
|
16,837
|
|
|
Three Months
Ended March 31, 2018 |
|
Three Months
Ended June 30, 2018 |
|
Three Months
Ended September 30, 2018 |
|
Three Months
Ended December 31, 2018 |
||||||||
Revenues from continuing operations
|
$
|
688,002
|
|
|
$
|
578,900
|
|
|
$
|
596,324
|
|
|
$
|
519,761
|
|
Gross profit from continuing operations
|
249,455
|
|
|
57,514
|
|
|
51,159
|
|
|
61,863
|
|
||||
Selling, general, and administrative expenses including research and development expense
|
32,688
|
|
|
24,539
|
|
|
21,933
|
|
|
27,579
|
|
||||
Impairment of property, plant and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
879
|
|
||||
Income from operations
|
216,767
|
|
|
32,975
|
|
|
29,226
|
|
|
33,405
|
|
||||
Other income (expense), net
|
(128
|
)
|
|
(96
|
)
|
|
(2,900
|
)
|
|
250
|
|
||||
Net income from continuing operations attributable to the Company
|
217,844
|
|
|
29,042
|
|
|
25,472
|
|
|
31,270
|
|
||||
Net income (loss) from discontinued operations attributable to the Company
|
(3,455
|
)
|
|
4,808
|
|
|
(469
|
)
|
|
(12,196
|
)
|
||||
Net income attributable to the Company
|
214,389
|
|
|
33,850
|
|
|
25,003
|
|
|
19,074
|
|
||||
Net income from continuing operations attributable to common stockholders
|
212,608
|
|
|
28,277
|
|
|
24,799
|
|
|
30,448
|
|
||||
Net income (loss) from discontinued operations attributable to common stockholders
|
(3,455
|
)
|
|
4,681
|
|
|
(469
|
)
|
|
(12,197
|
)
|
||||
Net income per share from continuing operations attributable to common stockholders - basic
|
5.48
|
|
|
0.76
|
|
|
0.67
|
|
|
0.82
|
|
||||
Net income per share from continuing operations attributable to common stockholders - diluted
|
5.38
|
|
|
0.67
|
|
|
0.55
|
|
|
0.66
|
|
||||
Net income (loss) per share from discontinued operations attributable to common stockholders - basic
|
(0.09
|
)
|
|
0.13
|
|
|
(0.01
|
)
|
|
(0.33
|
)
|
||||
Net income (loss) per share from discontinued operations attributable to common stockholders - diluted
|
$
|
(0.09
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.33
|
)
|
|
Three Months
Ended March 31, 2017 |
|
Three Months
Ended June 30, 2017 |
|
Three Months
Ended September 30, 2017 |
|
Three Months
Ended December 31, 2017 |
||||||||
Revenues from continuing operations
|
$
|
418,361
|
|
|
$
|
534,602
|
|
|
$
|
625,732
|
|
|
$
|
575,960
|
|
Gross profit loss from continuing operations
|
17,833
|
|
|
31,956
|
|
|
14,681
|
|
|
19,884
|
|
||||
Selling, general, and administrative expenses including research and development expense
|
23,535
|
|
|
23,115
|
|
|
26,829
|
|
|
22,364
|
|
||||
Impairment of property, plant and equipment
|
—
|
|
|
1,341
|
|
|
—
|
|
|
48,532
|
|
||||
Net operating income (loss) from continuing operations
|
(5,702
|
)
|
|
7,500
|
|
|
(12,148
|
)
|
|
(51,012
|
)
|
||||
Other income (expense), net
|
(5,328
|
)
|
|
(37,425
|
)
|
|
3,618
|
|
|
3,728
|
|
||||
Net loss from continuing operations attributable to the Company
|
(12,106
|
)
|
|
(31,884
|
)
|
|
(8,413
|
)
|
|
(13,876
|
)
|
||||
Net loss from discontinued operations attributable to the Company
|
(3,808
|
)
|
|
(2,925
|
)
|
|
(2,960
|
)
|
|
(3,107
|
)
|
||||
Net loss attributable to the Company
|
(15,914
|
)
|
|
(34,809
|
)
|
|
(11,373
|
)
|
|
(16,983
|
)
|
||||
Net loss from continuing operations attributable to common stockholders
|
(12,106
|
)
|
|
(31,884
|
)
|
|
(8,413
|
)
|
|
(13,876
|
)
|
||||
Net loss from discontinued operations attributable to common stockholders
|
(3,808
|
)
|
|
(2,925
|
)
|
|
(2,960
|
)
|
|
(3,107
|
)
|
||||
Net loss per share from continuing operations attributable to common stockholders - basic
|
(0.31
|
)
|
|
(0.82
|
)
|
|
(0.22
|
)
|
|
(0.36
|
)
|
||||
Net loss per share from continuing operations attributable to common stockholders - diluted
|
(0.31
|
)
|
|
(0.82
|
)
|
|
(0.22
|
)
|
|
(0.36
|
)
|
||||
Net loss per share from discontinued operations attributable to common stockholders - basic
|
(0.09
|
)
|
|
(0.08
|
)
|
|
(0.08
|
)
|
|
(0.08
|
)
|
||||
Net loss per share from discontinued operations attributable to common stockholders - diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9A.
|
Controls and Procedures
|
ITEM 9B.
|
Other Information
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
ITEM 11.
|
Executive Compensation
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
PLAN CATEGORY
|
NUMBER OF
SECURITIES
TO BE ISSUED
UPON
EXERCISE OF
OUTSTANDING
OPTIONS,
WARRANTS
AND RIGHTS
|
|
|
WEIGHTED
AVERAGE
EXERCISE
PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS
AND RIGHTS
|
|
|
NUMBER OF
SECURITIES
REMAINING
AVAILABLE
FOR FUTURE
ISSUANCE
UNDER EQUITY
COMPENSATION
PLANS
|
||||
Equity compensation plans approved by stockholders
|
2,267,036
|
|
1
|
|
$
|
10.19
|
|
2
|
|
1,872,450
|
|
Equity compensation plans not approved by stockholders
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
2,267,036
|
|
|
|
$
|
10.19
|
|
|
|
1,872,450
|
|
1
|
Includes 1,022,274 shares underlying outstanding restricted stock units, 208,085 shares underlying outstanding performance restricted stock units, and 1,036,677 shares underlying outstanding stock appreciation rights.
|
2
|
Restricted stock units and performance restricted stock units do not have an exercise price and therefore have not been included in the calculation of weighted average exercise price.
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14.
|
Principal Accounting Fees and Services
|
ITEM 15.
|
Exhibits, Financial Statement Schedules
|
(a)
|
Financial Statements
|
(i)
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
(ii)
|
Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016
|
(iii)
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2018, 2017 and 2016
|
(iv)
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017 and 2016
|
(v)
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
(vi)
|
Notes to the Consolidated Financial Statements for the years ended December 31, 2018, 2017 and 2016
|
(c)
|
Financial Statement Schedules
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
21.1
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
+ Confidential treatment requested.
|
|
|
* Management contract or compensatory plan, contract or arrangement.
|
|
|
|
101.1
|
|
The following financial information of the Company and its subsidiaries for the fiscal year ended December 31, 2018, is formatted in XBRL interactive data files: (i)Consolidated Balance Sheets, (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Stockholders' Equity; (iii) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not otherwise subject to liability under those sections.
|
|
|
|
RENEWABLE ENERGY GROUP, INC.
|
|
|
|
By:
|
/s/ Cynthia J. Warner
|
|
Cynthia J. Warner
|
|
President and Chief Executive Officer
|
|
|
Date
|
/s/ Cynthia J. Warner
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
March 7, 2019
|
Cynthia J. Warner
|
|
|
|
|
|
/s/ Chad Stone
|
Chief Financial Officer
(Principal Financial Officer)
|
March 7, 2019
|
Chad Stone
|
|
|
|
|
|
/s/ Todd M. Samuels
|
Chief Accounting Officer
(Principal Accounting Officer)
|
March 7, 2019
|
Todd M. Samuels
|
|
|
|
|
|
/s/ Jeffrey Stroburg
|
Director (Chairman)
|
March 7, 2019
|
Jeffrey Stroburg
|
|
|
|
|
|
/s/ Randolph L. Howard
|
Director (Vice Chairman)
|
March 7, 2019
|
Randolph L. Howard
|
|
|
|
|
|
/s/ Delbert Christensen
|
Director
|
March 7, 2019
|
Delbert Christensen
|
|
|
|
|
|
/s/ Peter J.M.Harding
|
Director
|
March 7, 2019
|
Peter J. M. Harding
|
|
|
|
|
|
/s/ Debora M. Frodl
|
Director
|
March 7, 2019
|
Debora M. Frodl
|
|
|
|
|
|
/s/ Michael Scharf
|
Director
|
March 7, 2019
|
Michael Scharf
|
|
|
|
|
|
/s/ Christopher Sorrells
|
Director
|
March 7, 2019
|
Christopher Sorrells
|
|
|
|
|
|
/s/ James C. Borel
|
Director
|
March 7, 2019
|
James C. Borel
|
|
|
4.
|
Compensation.
|
(i)
|
As soon as practicable following January 14, 2019, the Company shall grant Executive a one-time award in the form of restricted stock units (“Sign-On RSUs”) covering shares of the Company’s common stock, par value $.0001 per share (“Common Stock”), having a total Fair Market Value (as defined in the Plan) on the date of grant of $1,000,000. The Sign-On RSUs shall fully vest on the third anniversary of the date of grant, subject to Executive’s continued employment with the Company or one of its affiliates through such date, except as set forth in the applicable award agreement for the Sign-On RSUs, which shall incorporate the provisions of Section 7.1(d), Section 7.3(a)(i)(G) and Section 7.4(b)(i)(F), below).
|
(ii)
|
For each fiscal year during the Term, the Company shall grant Executive annual long-term incentive compensation awards having a target value of 237.5% of Executive’s Annual Salary, based on the Fair Market Value (as defined in the Plan) of the target number of shares of Common Stock underlying such awards as of the date of grant. For fiscal year 2019, 25% of such annual awards shall be in the form of restricted stock units (the “Annual RSUs”), and 75% of such annual awards shall be in the form of performance-based restricted stock units (the “Annual PBRSUs”). For fiscal year 2020 and thereafter, the mix of Annual RSUs and Annual PBRSUs shall be determined by the Committee in its discretion. The Annual RSUs shall fully vest on the third anniversary of the date of grant subject to Executive’s continued employment with the Company or one of its affiliates through such date (except as set forth in the applicable award
|
7.2
|
Termination by the Company for Cause; Termination by Executive without
|
(a)
|
For purposes of this Agreement, “Cause” shall mean Executive’s:
|
(i)
|
willful failure to perform her material employment duties hereunder;
|
(ii)
|
having been convicted of, or entered a plea of nolo contendere to, a crime that constitutes a felony;
|
(iii)
|
commission of any crime (other than traffic or other petty offenses) relating to Executive’s employment with the Company or any of its subsidiaries or affiliates;
|
(iv)
|
material violation of any federal, state or local law or administrative
|
(v)
|
willful conduct that could result in unfavorable publicity about the Company or any of its subsidiaries or affiliates;
|
(vi)
|
willful failure to comply in any material respect with the material policies of the Company or any of its subsidiaries or affiliates; or
|
(vii)
|
material breach of the terms of this Agreement or the Non- Competition and Confidentiality Agreement;
|
(i)
|
a material reduction of Executive’s Annual Salary or Target Annual Bonus opportunity (except for an across-the-board annual base salary reduction of like proportion affecting all senior executives of the Company);
|
(ii)
|
a material breach of the terms of this Agreement by the Company;
|
(iii)
|
a material diminution of Executive’s title, duties or responsibilities (including reporting responsibilities);
|
(iv)
|
a relocation of Executive’s offices to more than 50 miles from the Company’s principal place of business in Ames, Iowa; or
|
(v)
|
any failure of the Company to assign this Agreement to any successor to the assets and business of the Company, or a failure of any such successor to assume the Company’s obligations under this Agreement.
|
7.3
|
Termination by the Company without Cause; Termination by Executive for Good Reason.
|
(a)
|
If the Company terminates Executive’s employment without Cause or if
|
(i)
|
Executive shall (subject, in the case of the following clauses (C), (D), (F), (G) and (H), to Executive’s delivery of a general release substantially in a form attached hereto as Exhibit A reasonably acceptable to the Company which shall have become irrevocable and Executive’s compliance with the covenants set forth in the Non- Competition and Confidentiality Agreement) be entitled to:
|
(A)
|
any accrued but unpaid Annual Salary and PTO due to Executive as of the termination of employment;
|
(B)
|
reimbursement under this Agreement for expenses incurred but unpaid prior to the termination of employment;
|
(C)
|
a cash payment equal to 150% of the sum of Executive’s Annual Salary plus her Target Annual Bonus, payable in equal installments over an 18-month period in accordance with the Company’s usual and customary payroll practices;
|
(D)
|
a lump sum cash payment equal to the Target Annual Bonus for the calendar year in which Executive’s employment hereunder terminates, prorated based on the number of days during the period beginning on January 1 and ending on the date on which Executive’s employment is terminated pursuant to this Section 7.3;
|
(E)
|
any unpaid Prior Year Bonus;
|
(F)
|
for a period of 18 months after termination, such health benefits under the Company’s health plans and programs applicable to senior executives of the Company generally (if and as in effect from time to time) as Executive would have received under this Agreement (and at such costs to Executive as would have applied in the absence of such termination); provided, however, that the Company shall in no event be required to provide any benefits otherwise required by this clause (F) after such time as Executive becomes entitled to receive benefits of the same type from another employer or recipient of Executive’s services (such entitlement being determined without regard to any individual waivers or
|
(G)
|
any unvested Sign-On RSUs shall become fully vested and settled promptly after such termination; and
|
(H)
|
any unvested Annual RSUs, Annual PBRSUs and other equity grants shall become immediately vested on the date of termination (and settled within 30 days thereafter) pro rata based on the ratio of (x) the number of days elapsed from the first day of the vesting period set forth in the grant agreement through the date on which Executive’s employment is terminated pursuant to this Section 7.3 to (y) the total number of days in the vesting period (and if such awards vest on an annual basis, then such proration shall be based on the ratio of (p) the total number of days from the vesting date immediately preceding the termination date (or, if none, from the first day of the vesting period set forth in the grant agreement) through the date on which Executive’s employment is terminated pursuant to this Section 7.3 to (q) the total number of days from such immediately preceding vesting date (or, if none, from the first day of the vesting period set forth in the grant agreement) to the next succeeding vesting date following the employment termination date; provided, any unvested Annual PBRSUs and other equity grants subject to performance-based vesting will remain subject to achievement of the applicable performance requirements and will be settled at the same time as Annual PBRSUs or and other equity grants subject to performance-based vesting are settled for other executive grantees after completion of the performance period.
|
(ii)
|
The timing of the payments provided under Section 7.3(a)(i) shall be as follows, except as provided in Section 7.6:
|
(A)
|
Amounts payable pursuant to clauses (A), (B) and (E) of Section 7.3(a)(i) shall be paid in the normal course or in accordance with applicable law and in no event later than 30 days following Executive’s separation from service;
|
(B)
|
Amounts payable pursuant to clauses (C) and (D) of Section 7.3(a)(i) shall commence or be paid, as applicable, on the 60th day following the separation from service, provided Executive has delivered the release referenced in Section 7.3(a)(i) to the Company and such release has become irrevocable; and
|
(C)
|
Amounts payable for the health benefits provided pursuant to clause (F) of Section 7.3(a)(i) shall commence at the date following Executive’s separation from service that is required under the relevant health plans and programs to provide such benefits.
|
(iii)
|
Executive shall have no further rights to any other compensation or benefits hereunder on or after the termination of employment, or any other rights
|
(i)
|
any person (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) but excluding (x) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a parent or subsidiary and (y) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company, par value
|
(ii)
|
the Incumbent Directors cease for any reason to constitute at least 60% of the Board;
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(iii)
|
the restructuring of the Company as a result of the consummation of a merger, reorganization, consolidation, or similar transaction which shall result in the Company’s stockholders immediately prior to such transaction not holding more than 50% of the voting power of each of (A) the Company (or its successor) and (B) any direct or indirect parent corporation of the Company (or its successor) (any of the foregoing, a “Reorganization Transaction”); or
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(iv)
|
the consummation of a plan or agreement that has been approved by the shareholders of the Company for the sale or other disposition of all or substantially all of the consolidated assets of the Company or a plan of liquidation of the Company.
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(i)
|
Executive shall (subject, in the case of the following clauses (C), (D), (F), and (G), to Executive’s delivery of a general release reasonably acceptable
|
(A)
|
any accrued but unpaid Annual Salary and PTO due to Executive as of the termination of employment;
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(B)
|
reimbursement under this Agreement for expenses incurred but unpaid prior to the termination of employment;
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(C)
|
a lump sum cash payment equal to 200% of the sum of Executive’s Annual Salary plus her Target Annual Bonus;
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(D)
|
a lump sum cash payment equal to the Target Annual Bonus for the calendar year in which Executive’s employment hereunder terminates, prorated based on the number of days during the period beginning on January 1 and ending on the date on which Executive’s employment is terminated pursuant to this Section 7.4;
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(E)
|
any unpaid Prior Year Bonus;
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(F)
|
(1) full acceleration of the vesting and settlement of any unvested Sign-On RSUs, Annual RSUs or other time-based equity awards in the Company, (2) for performance-based equity awards for which a target is not specified in the applicable award agreement, vesting of a number of shares of Common Stock equal to the number of shares of Common Stock set forth in the applicable award agreement and (3) for performance-based awards for which a target is set forth in the applicable award agreement, vesting of a number of shares of Common Stock determined using “target” level of performance; and
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(G)
|
for a period of 18 months after termination, such health benefits under the Company’s health plans and programs applicable to senior executives of the Company generally (if and as in effect from time to time) as Executive would have received under this Agreement (and at such costs to Executive as would have applied in the absence of such termination); provided, however, that the Company shall in no event be required to provide any benefits otherwise required by this clause (G) after such time as Executive becomes entitled to receive benefits of the same type from another employer or recipient of Executive’s services (such entitlement being determined without regard to any individual waivers or other similar arrangements).
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(ii)
|
The timing of the payments provided under Section 7.4(b)(i) shall be as follows, except as provided in Section 7.6:
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(A)
|
Amounts payable pursuant to clauses (A), (B) and (E) of Section 7.4(b)(i) shall be paid in the normal course or in accordance with applicable law and in no event later than 30 days following Executive’s separation from service;
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(B)
|
Amounts payable pursuant to clauses (C) and (D) of Section 7.4(b)(i) shall be paid on the 60th day following the separation from service, provided Executive has delivered the release referenced in Section 7.4(b)(i) to the Company and such release has become irrevocable; and
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(C)
|
Amounts payable for the health benefits provided pursuant to clause (G) of Section 7.4(b)(i) shall commence at the date following Executive’s separation from service that is required under the relevant health plans and programs to provide such benefits.
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(iii)
|
Executive shall have no further rights to any other compensation or benefits hereunder on or after the termination of employment, or any other rights hereunder.
|
(a)
|
Upon Retirement:
|
(i)
|
Executive shall (subject, in the case of the following clauses (D), and (E), to Executive’s delivery of a general release substantially in a form attached hereto as Exhibit A reasonably acceptable to the Company which shall have become irrevocable and Executive’s compliance with the covenants set forth in the Non-Competition and Confidentiality Agreement) be entitled to:
|
(A)
|
any accrued but unpaid Annual Salary and PTO due to Executive as of the termination of employment;
|
(B)
|
reimbursement under this Agreement for expenses incurred but unpaid prior to the termination of employment;
|
(C)
|
any unpaid Prior Year Bonus;
|
(D)
|
an Annual Bonus, for the year in which such termination occurs, prorated based on the number of days during the period beginning on January 1 and ending on the date on which Executive’s employment terminated pursuant to this Section 7.5, determined subject to attainment of applicable Company performance requirements (and any individual performance requirement shall be deemed fully satisfied); and
|
(E)
|
any unvested Annual RSUs, Annual PBRSUs and other equity grants shall become immediately vested on the date of termination (and settled within 30 days thereafter) pro rata based on the ratio of (x) the number of days elapsed from the first day of the vesting period set forth in the grant agreement through the date of employment termination to (y) the
|
(ii)
|
The timing of the payments provided under Section 7.5(a)(i) shall be as follows, except as provided in Section 7.6:
|
(A)
|
Amounts payable pursuant to clauses (A), (B) and (C) of Section 7.5(a)(i) shall be paid in the normal course or in accordance with applicable law and in no event later than 30 days following Executive’s separation from service; and
|
(B)
|
Amounts payable pursuant to clause (D) of Section 7.5(a)(i) shall be paid at the same time as annual bonuses of other senior executives of the Company, but in no event later than March 15 of the year following the year with respect to which such Annual Bonus is payable, provided Executive has delivered the release referenced in Section 7.5(a)(i) to the Company and such release has become irrevocable.
|
(i)
|
Within 15 days after written notice by one party to the other party of its demand for arbitration, which demand shall set forth the name and address of its designated arbitrator, the other party shall appoint its designated arbitrator and so notify the demanding party. Within 15 days thereafter, the two arbitrators so appointed shall appoint the third arbitrator. If the two appointed arbitrators cannot agree on the third arbitrator, then the AAA shall appoint an independent arbitrator as the third arbitrator. The dispute shall be heard by the arbitrators within 90 days after appointment of the third arbitrator. The decision of any two or all three of the arbitrators shall be binding upon the parties without any right of appeal. The decision of the arbitrators shall be final and binding upon the Company, its successors and assigns, and upon Executive, her heirs, personal representatives, and legal representatives.
|
(ii)
|
The arbitration proceedings shall take place in Des Moines, Iowa, and the judgment and determination of such proceedings shall be binding on all parties. Judgment upon any award rendered by the arbitrators may be
|
(iii)
|
The Company shall pay all expenses of the arbitration, and the expenses of the arbitrators and the arbitration proceeding. However, if in the opinion of a majority of the arbitrators, any claim or defense of Executive was unreasonable, the arbitrators may assess Executive, as part of any award to the Company, all or any part of expenses of the arbitrators and the arbitration proceeding otherwise payable by the Company.
|
(a)
|
If to the Company, to:
|
(b)
|
If to Executive, to:
|
(a)
|
The Corporation shall, with respect to any Proceeding (as hereinafter defined) associated with Indemnitee’s being an Agent of the Corporation, indemnify Indemnitee to the fullest extent permitted by applicable law or as such law may from time to time be amended (but, in the case of any such amendment, only to the extent such amendment permits the Corporation to provide broader indemnification rights than the law permitted the Corporation to provide before such amendment). The right to indemnification conferred herein shall be presumed to have been relied upon by Indemnitee in serving or continuing to serve the Corporation as an Agent and shall be enforceable as a contract right. Without in any way diminishing the scope of the indemnification provided by this Section 2(a), the rights of indemnification of Indemnitee shall include but shall not be limited to those rights hereinafter set forth.
|
(b)
|
The Corporation shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed Proceeding (other than an action by or in the right of the Corporation) by reason of the fact that Indemnitee is or was an Agent of the Corporation, or any subsidiary of the Corporation, or by reason of the fact that Indemnitee is or was serving at the request of the Corporation as an Agent of another corporation, partnership, joint venture, trust or other enterprise, against Expenses (as hereinafter defined) or Liabilities (as hereinafter defined), actually and reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.
|
(c)
|
The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed Proceeding by or in the right of the Corporation or any subsidiary of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was an Agent of the Corporation, or any subsidiary of the Corporation, or by reason of the fact that Indemnitee is or was serving at the request of the Corporation as an Agent of another corporation, partnership, joint venture, trust or other enterprise, against Expenses and, to the fullest extent permitted by law, Liabilities if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.
|
(a)
|
Whenever Indemnitee believes that Indemnitee is entitled to indemnification pursuant to this Agreement, Indemnitee shall submit a written request for indemnification to the Corporation. Any request for indemnification shall include sufficient documentation or information reasonably available to Indemnitee for the determination of entitlement to indemnification. In any event, Indemnitee shall submit Indemnitee’s claim for indemnification within a reasonable time, not to exceed five (5) years after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, or final determination, whichever is the later date for which Indemnitee requests indemnification. The Secretary or other appropriate officer shall, promptly upon receipt of Indemnitee’s request for indemnification, advise the Board of Directors in writing that Indemnitee has made such request. Determination of Indemnitee’s entitlement to indemnification shall be made not later than sixty (60) days after the Corporation’s receipt of Indemnitee’s written request for such indemnification, provided that any request for indemnification for Liabilities, other than amounts paid in settlement, shall have been made after a determination thereof in a Proceeding. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten (10) days after such determination.
|
(b)
|
The Corporation shall be entitled to select the forum in which Indemnitee’s entitlement to indemnification will be heard; provided, however, that if there is a Change in Control of the Corporation, Independent Legal Counsel (as hereinafter defined) shall determine whether Indemnitee is entitled to indemnification. The forum shall be any one of the following:
|
(i)
|
a majority vote of Disinterested Directors (as hereinafter defined), even though less than a quorum;
|
(ii)
|
by a committee of Disinterested Directors designated by majority vote of Disinterested Directors, even though less than a quorum;
|
(iii)
|
Independent Legal Counsel, whose determination shall be made in a written opinion; or
|
(iv)
|
The stockholders of the Corporation.
|
(a)
|
To the extent that payment is actually made to Indemnitee under any insurance policy, or is made to Indemnitee by the Corporation or an affiliate otherwise than pursuant to this Agreement. Notwithstanding the availability of such insurance, Indemnitee also may claim indemnification from the Corporation pursuant to this Agreement by assigning to the Corporation any claims under such insurance to the extent Indemnitee is paid by the Corporation;
|
(b)
|
Provided there has been no Change in Control, for Liabilities in connection with Proceedings settled without the Corporation’s consent, which consent, however, shall not be unreasonably withheld;
|
(c)
|
For an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or similar provisions of any state statutory or common law;
|
(d)
|
To the extent it would be otherwise prohibited by law, if so established by a judgment or other final adjudication adverse to Indemnitee; or
|
(e)
|
In connection with a Proceeding commenced by Indemnitee (other than a Proceeding commenced by Indemnitee to enforce Indemnitee’s rights under this Agreement) unless the commencement of such Proceeding was authorized by the Board of Directors.
|
(a)
|
In the event that (i) a determination pursuant to Section 5 hereof is made that Indemnitee is not entitled to indemnification, (ii) advances of Expenses are not made pursuant to this Agreement, (iii) payment has not been timely made following a determination of entitlement to indemnification pursuant to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of this Agreement, Indemnitee shall be entitled to a final adjudication in the Court of Chancery of the State of Delaware of the remedy sought. Alternatively, unless court approval is required by law for the indemnification sought by Indemnitee, Indemnitee at Indemnitee’s option may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial arbitration rules of the American Arbitration Association now in effect, which award is to be made within ninety (90) days following the filing of the demand for arbitration. The Corporation shall not oppose Indemnitee’s right to seek any such adjudication or arbitration award. In any such proceeding or
|
(b)
|
In the event that a determination that Indemnitee is not entitled to indemnification, in whole or in part, has been made pursuant to Section 5 hereof, the decision in the judicial proceeding or arbitration provided in paragraph (a) of this Section 8 shall be made de novo and Indemnitee shall not be prejudiced by reason of a determination that Indemnitee is not entitled to indemnification.
|
(c)
|
If a determination that Indemnitee is entitled to indemnification has been made pursuant to Section 5 hereof, or is deemed to have been made pursuant to Section 4 hereof or otherwise pursuant to the terms of this Agreement, the Corporation shall be bound by such determination.
|
(d)
|
The Corporation shall be precluded from asserting that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Corporation shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary.
|
(e)
|
Expenses reasonably incurred by Indemnitee in connection with Indemnitee’s request for indemnification under, seeking enforcement of or to recover damages for breach of this Agreement shall be borne by the Corporation when and as incurred by Indemnitee irrespective of any Final Adverse Determination that Indemnitee is not entitled to indemnification.
|
(a)
|
The premium cost of maintaining such insurance is substantially disproportionate to the amount of coverage provided thereunder; or
|
(b)
|
The protection provided by such insurance is so limited by exclusions, deductions or otherwise that there is insufficient benefit to warrant the cost of maintaining such insurance.
|
(a)
|
The Corporation will be entitled to participate therein at its own expense; and
|
(b)
|
The Corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; provided, however, that the Corporation shall not be entitled to assume the defense of any Proceeding if there has been a Change in Control or if Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnitee with respect to such Proceeding. After notice from the Corporation to Indemnitee of its election to assume the defense thereof, the Corporation will not be liable to Indemnitee under this Agreement for any Expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless:
|
(i)
|
the employment of counsel by Indemnitee has been authorized by the Corporation;
|
(ii)
|
Indemnitee shall have reasonably concluded that counsel engaged by the Corporation may not adequately represent Indemnitee due to, among other things, actual or potential differing interests; or
|
(iii)
|
The Corporation shall not in fact have employed counsel to assume the defense in such Proceeding or shall not in fact have assumed such defense and be acting in connection therewith with reasonable diligence; in each of which cases the fees and expenses of such counsel shall be at the expense of the Corporation.
|
(c)
|
The Corporation shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent; provided, however, that Indemnitee will not unreasonably withhold his or her consent to any proposed settlement.
|
(a)
|
If to Indemnitee, to:
|
(b)
|
If to the Corporation, to: Renewable Energy Group, Inc.
|
(a)
|
“Agent” shall mean any person who is or was, or who has consented to serve as, a director, officer, employee, agent, fiduciary, joint venturer, partner, manager or other official of the Corporation or a subsidiary or an affiliate of the Corporation, or any other entity (including without limitation, an employee benefit plan) either at the request of, for the convenience of, or otherwise to benefit the Corporation or a subsidiary of the Corporation. Any person who is or was serving as a manager, director, officer, employee or agent of a subsidiary of the Corporation shall be deemed to be serving, or have served, at the request of the Corporation.
|
(b)
|
“Change in Control” shall mean the occurrence, after the Corporation’s initial public offering, of any of the following:
|
(i)
|
Both (A) any “person” (as defined below) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing at least twenty percent (20%) of the total voting power represented by the Corporation’s then outstanding voting securities and (B) the beneficial ownership by such person of securities representing such percentage is not approved by a majority of the “continuing directors” (as defined below);
|
(ii)
|
Any “person” is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing at least fifty percent (50%) of the total voting power represented by the Corporation’s then outstanding voting securities;
|
(iii)
|
A change in the composition of the Board of Directors occurs, as a result of which fewer than two‑thirds of the incumbent directors are directors who either (A) had been directors of the Corporation on the “look-back date” (as defined below) (the “Original Directors”) or (B) were elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority in the aggregate of the Original Directors who were still in office at the time of the election or nomination and directors whose election or nomination was previously so approved (the “continuing directors”);
|
(iv)
|
The stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, if such merger or consolidation would result in the voting securities of the Corporation outstanding immediately prior thereto representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or less of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; or
|
(v)
|
The stockholders of the Corporation approve (A) a plan of complete liquidation of the Corporation or (B) an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets.
|
(c)
|
“Disinterested Director” shall mean a director of the Corporation who is not or was not a party to the Proceeding in respect of which indemnification is being sought by Indemnitee.
|
(d)
|
“Expenses” shall include all direct and indirect costs (including, without limitation, attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, all other disbursements or out-of-pocket expenses and reasonable compensation for time spent by Indemnitee for which Indemnitee is otherwise not compensated by the Corporation or any third party) actually and reasonably incurred in connection with either the investigation, defense, settlement or appeal of a Proceeding or establishing or enforcing a right to indemnification under this Agreement, applicable law or otherwise; provided, however, that “Expenses” shall not include any Liabilities.
|
(e)
|
“Final Adverse Determination” shall mean that a determination that Indemnitee is not entitled to indemnification shall have been made pursuant to Section 5 hereof and either (1) a final adjudication in the Court of Chancery of the State of Delaware or decision of an arbitrator pursuant to Section 8(a) hereof shall have denied Indemnitee’s right to indemnification hereunder, or (2) Indemnitee shall have failed to file a complaint in a Delaware court or seek an arbitrator’s award pursuant to Section 8(a) for a period of one hundred twenty (120) days after the determination made pursuant to Section 5 hereof.
|
(f)
|
“Independent Legal Counsel” shall mean a law firm or a member of a firm selected by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld) or, if there has been a Change in Control, selected by Indemnitee and approved by the Corporation (which approval shall not be unreasonably withheld), that neither is presently nor in the past five (5) years has been retained to represent: (i) the Corporation or any of its subsidiaries or affiliates, or Indemnitee or any corporation of which Indemnitee was or is a director, officer, employee or agent, or any subsidiary or affiliate of such a corporation, in any material matter, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s right to indemnification under this Agreement.
|
(g)
|
“Liabilities” shall mean liabilities of any type whatsoever including, but not limited to, any judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid in settlement (including all interest assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties or amounts paid in settlement) of any Proceeding.
|
(h)
|
“Proceeding” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative, that is associated with Indemnitee’s being an Agent of the Corporation.
|
(a)
|
the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby; and
|
(b)
|
to the fullest extent legally possible, the provisions of this Agreement shall be construed so as to give effect to the intent of any provision held invalid, illegal or unenforceable.
|
RENEWABLE ENERGY GROUP, INC. SUBSIDIARIES
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|
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REG Biofuels, LLC
|
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Iowa
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REG Marketing & Logistics Group, LLC
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Iowa
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REG Services Group, LLC
|
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Iowa
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REG Capital, LLC
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Iowa
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REG Synthetic Fuels, LLC
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Iowa
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REG Life Sciences, LLC
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Iowa
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REG Canada Holdings Inc.
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British Columbia
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REG Construction & Technology Group, LLC
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Iowa
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REG Ventures, LLC
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Iowa
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REG Ralston, LLC
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Iowa
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REG Houston, LLC
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Texas
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REG Danville, LLC
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Delaware
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REG Albert Lea, LLC
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Iowa
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REG Newton, LLC
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Iowa
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REG Seneca, LLC
|
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Iowa
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REG New Orleans, LLC
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Iowa
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REG New Boston, LLC
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Iowa
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REG Mason City, LLC
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Iowa
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REG Emporia, LLC
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Iowa
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REG Clovis, LLC
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Iowa
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REG Atlanta, LLC
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Iowa
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REG Okeechobee, LLC
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Iowa
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REG Geismar, LLC
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Delaware
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REG Grays Harbor, LLC
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Washington
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REG Madison, LLC
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Wisconsin
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REG Bioproducts, LLC
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Iowa
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REG Feedstock, LLC
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Iowa
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REG Overseas Holdings B.V.
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Netherlands
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REG International Trading & Commodities B.V.
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Netherlands
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REG Germany GmbH
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Germany
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/s/ Cynthia J. Warner
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Cynthia J. Warner
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Chief Executive Officer
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/s/ Chad Stone
|
Chad Stone
Chief Financial Officer
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/s/ Cynthia J. Warner
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Cynthia J. Warner
Chief Executive Officer
|
/s/ Chad Stone
|
Chad Stone
Chief Financial Officer
|