Business Update. August 6, Copyright 2018 Renewable Energy Group, Inc.

Transcription

1 Business Update August 6, 2018

2 Safe Harbor Statement This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding the possible retroactive reinstatement of the BTC for 2018, the estimated benefits to 2018 Adjusted net income and Adjusted EBITDA if the BTC is retroactively reinstated and our expectations regarding third quarter results. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, potential changes in governmental programs and policies requiring or encouraging the use of biofuels, including RFS2; availability of federal and state governmental tax incentives and incentives for biomass-based diesel production, including that the BTC may not be retroactively reinstated for 2018 or that it may be reinstated on less favorable terms; changes in the spread between biomass-based diesel prices and feedstock costs; the future price and volatility of feedstocks; the future price and volatility of petroleum and products derived from petroleum; risks associated with fire, explosions, leaks and other natural disasters at our facilities; the effect of excess capacity in the biomass-based diesel industry; unanticipated changes in the biomass-based diesel market from which we generate almost all of our revenues; seasonal fluctuations in our operating results; competition in the markets in which we operate; our dependence on sales to a single customer; technological advances or new methods of biomass-based diesel production or the development of energy alternatives to biomass-based diesel; our ability to successfully implement our acquisition strategy; our ability to generate revenue from the sale of renewable chemicals, fuels and other products on a commercial scale and at a competitive cost, and customer acceptance of the products produced; whether our Geismar biorefinery will be able to produce renewable diesel consistently or profitably; and other risks and uncertainties described in REG's annual report on Form 10-K for the year ended December 31, All forward-looking statements are made as of the date of this presentation and REG does not undertake to update any forward-looking statements based on new developments or changes in our expectations. 2

3 Business Model Reclaimed waste fats and oils Renewable feedstock 5.5X energy balance 1 Efficient conversion 50-90% lower emissions 2 Advanced biofuel North America s largest biomass-based diesel producer - serving a growing global diesel demand Source: 1. NBB. Energy balance defined as units of energy returned per unit of fossil used for production EPA Lifecycle Greenhouse Gas Emissions for Select Pathways, 2016

4 #1 in North America and Growing Internationally REG Performance in Million gallons of fuel sold 1 $2.2 Billion in revenue Note: 1. Includes all bio-mass based diesel and petroleum gallons sold: domestic, international and third party gallons Source: REG Analysis 4

5 $ Millions REG Annual Adjusted EBITDA $ Step change 150 $ $97 $108 5 Year Average $101 $ $ Note: 1. Adjusted EBITDA is a non-gaap measure. See REG Q earnings release for the definition of Adjusted EBITDA. 5

6 Trailing 12 month Adjusted EBITDA 1 300, , , , ,000 50,000 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Rolling 12 month Adjusted EBITDA with BTC Source: REG (1) Adjusted EBITDA is a non-gaap measure (in thousands). See slide 55 for the definition of Adjusted EBITDA and a detailed reconciliation to Net Income determined in accordance with GAAP (2) 2018 Q1 and Q2 trailing 12 month Adjusted EBITDA includes estimated net benefit of retroactive reinstatement BTC of $42.5 million and $108.7 million respectively. 6 Estimated Net Benefit of BTC reinstatement 2

7 REG Key Drivers of Performance Scale & Optimization Growing Demand World/IMO 2020 US LCFS programs Margin Improvement Industry-wide margin improvement Downstream margin capture Balanced Capital Allocation 7

8 Scale & Optimization

9 Large Scale International Presence 13 Biomass-Based 575 MMGY Effective Diesel Plants Capacity 1 Note: 1. Effective capacity for Represents the maximum average throughput that satisfies certain defined technical constraints Source: REG Analysis 9

10 Diversified Customer Base Travel Center/ Convenience Store REG 2017 Finished Product Sales by Segment 1 Petroleum Major Distributor/ Jobber Other 2 36% 34% 20% 10% Notes: 1. Includes only North America sales gallons 2. Includes sales to fleets, home heating, Co-ops and others Source: REG Analysis 10

11 Optimized Sales Through National Reach In 2017, 71% of sales were to states with market leading policy Legend States with market leading policy with REG sales Other states with REG sales Note: Delivered biodiesel and co-products to 48 states. Source: REG Analysis 11

12 ILLUSTRATIVE Multi-Feedstock Advantage Over Integrated Producers Maximizing profits in California 1 Lower cost feedstock provides advantage Ability to efficiently convert lower cost feedstock Lower CI scores result in increased value in LCFS markets $ = $ $0.88 Avg. Feedstock Cost Advantage ($/gal) 2 Refining Avg. Available Margin Advantage ($/gal) 3 Notes: 1. Representative of input, refining, and compliance values on an average sale to California 2. $/gal on yield adjusted basis in 1H 2018 using Jacobsen and CME pricing 3. Available Margin excluding transportation and logistics costs Source: REG Analysis 12

13 Growing Demand

14 Gallons in Millions Growing Global Distillate Market Supports REG s Long-term Opportunities Projected step change in demand due to IMO 2020 approximately 1-2 million barrels per day Historic Demand Expected Demand IMO Spec Increase For the World, 3% per year annual growth equals new sales opportunities for diesel of >12 billion gallons per year 1 Notes: 1. As measured against 2017 projections moving forward 2. IMO spec change from sulfur specification of marine bunker fuel from 3.5% to 0.5% in 2020, with predictions of 0.8 to 2.0 million bbl/day increase in distillate demand Source: LMC International, Stillwater Associates 14

15 Current RVO 1 in U.S. Market Biomass-based diesel (Bn gal) Advanced biofuel (Bn gal) n/a Cellulosic biofuel (MM gal) n/a Total renewable fuels (Bn gal) n/a 2020 Biomass-based diesel RVO increased 330 mmgal or 15.7% over Advanced biofuel RVO increased 590 mmgal or 13.8% over 2018 Notes: 1. RVO Renewable Volume Obligation 2. All volumes are ethanol-equivalent, except for biomass-based diesel which is actual Source: EPA 06/26/ RVOs are proposed as of 06/26/2018 for all categories except biomass-based diesel which is proposed for

16 MMGY 1,600 Top 10 States Demand 1.5 Billion Gallons 1,400 1,200 1, California Texas Illinois Iowa Minnesota Oregon New York Pennsylvania Washington Rhode Island Notes: Represents market demand for biodiesel and renewable diesel in each state 16 Source: REG and National Biodiesel Board Analysis

17 LCFS Overview

18 Fuel Volume (Million GGE 2 ) Credits (Million MT) What is LCFS? Low Carbon Fuel Standard (LCFS) policies target reduction in carbon intensity 1 (CI) in transportation fuels CI score based on lifecycle analysis Programs set ratable annual CI standards for the transportation sector Low CI fuels, such as biomass-based diesel, generate credits that can be purchased to offset high carbon deficit generating fuels, e.g. petroleum diesel and gasoline Market determines how to comply with CI requirements, allowing fuel and technology flexibility 2,500 California LCFS Program Historical Fulfillment , Notes: 1,500 1, Ethanol Biomass-based Diesel Fossil Natural Gas Biomethane Electricity 1. CI is measured as the mass of carbon dioxide equivalent per mega joule of fuel (gco 2 e/mj) 2. Gasoline gallon equivalent

19 LCFS Programs Jurisdictions with enacted LCFS programs California 2011 adoption: minimum 10% reduction by amended goal (under review) 1.25% annual reduction through % reduction by 2030 Oregon: 10% reduction of 1990 levels of GHG emissions by 2020 British Columbia: 10% reduction of 2010 of GHG emissions by 2020 Germany 40% reduction of 1990 levels GHG emissions by % reduction by 2050 Czech Republic & Romania Jurisdictions discussing LCFS program adoption: Washington, Canada, Brazil, and Sweden 19

20 CI Score (gco 2 e/mj) LCFS $/gal Biomass-based Diesel CI Scores Among the Lowest CI Scores and Credits in California $1.44 $1.48 $1.17 $1.22 Biodiesel and RD $1.17 $1.22 $1.11 Other Fuels $1.60 $1.40 $ $0.80 $0.84 $0.79 $0.80 $ $1.00 $ $ $0.26 $0.26 $0.60 $0.40 $ $- CI Score Notes: 1. CI scores based on current registration average by category, as of May Assumes $150/MT LCFS credit value Source: REG analysis of CARB Data 20 LCFS $/gal 1 2

21 Biomass-based Diesel LCFS Value 1 LCFS $/gal by Fuel 2 $2.00 $1.90 $1.80 $1.70 $1.60 $1.50 $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 UCO Biodiesel CI Canola Biodiesel CI $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200 LCFS $/MT Notes: 1. CI scores based on current registration average by category, as of May Calculated as [(2018 diesel standard-fuel type CI score)*fuel type energy/gallon]/1m*lcfs $/MT Source: REG analysis of CARB Data 21

22 Credits Generated, MT Biofuel Generation of Total Credits Biofuels Generate Majority of LCFS Credits California Credits 2,500,000 96% 94% 2,000,000 92% 90% 1,500,000 88% 86% 1,000,000 84% 82% 500,000 80% 78% - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q % Biofuel Credits Biofuel Credits/Total Credits Source: REG analysis of CARB Data 22

23 Millions of Gallons Implied Blend Rate % California Demands Growing Amount of BBD BBD Consumption Toward California LCFS 1, % 1,400 1,200 1, CARB estimates that biodiesel volumes will need to grow from 190MMG in 2017 to 500MMG by This represents 290% growth. Renewable diesel usage is expected to grow from 335MMG in 2017 to a high of 1,000MMG by This represents nearly 300% growth. 50.0% 40.0% 30.0% % 10.0% E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 0.0% 1 1 Renewable Diesel Biodiesel CARB RD Projections CARB Bio Projections Implied Blend Rate % Notes: 1. Projections based on base case from CARB LCFS Illustrative Compliance Scenario Calculator as of 3/6/18 Source: CARB LCFS Data, REG Analysis 23

24 Margin Improvement

25 Gallons in thousands Imports of Biodiesel from Argentina and Indonesia to USA 90,000 Increasing imports caused unbalanced market and compressed margins 80,000 70,000 60,000 Countervailing Duties Imposed by ITC, Subsidized Imports Ceased 50,000 40,000 30,000 20,000 10,000 - ARGENTINA INDONESIA Source: EIA 25

26 HOBO Spread 1 $ $1.00 $0.80 $ $0.40 $ $- $(0.20) $(0.40) $(0.60) Jan Feb Mar Apr May Jul Aug Sep Oct Nov Dec 2016 HOBO Spread 2017 HOBO Spread 2018 HOBO Spread Note: 1. For all years HOBO Spread includes $1 of BTC: HOBO = HO NYMEX + 1 (CBOT SBO/100*7.5) Source: OPIS and Jacobsen 26

27 $/RIN 2018 D4 RIN Prices $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Source: REG Analysis, OPIS 27

28 $/gallon Monthly Average RIN Value and HOBO Spread History $1.80 $1.60 $1.40 $1.20 $1.00 $ Correlation Jan 17 Jul 18 $0.60 $0.40 $0.20 $0.00 D4 RIN x 1.5 HOBO spread Note: HOBO = HO NYMEX + 1 (CBOT SBO/100*7.5) Source: OPIS 28

29 $/gallon Biodiesel spread to feedstock $2.50 SME Chicago - CWG/100 x 8.0 SME Chicago - SBO/100 x 7.5 SME Chicago - TT/100 x 7.6 $2.00 SME Chicago - ICO/100 x 8.5 $1.50 $1.00 $0.50 $0.00 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Source: OPIS and Jacobsen 29

30 Terminal Expansion Strategy Future Terminal Growth Opportunities Attractive existing state incentives or usage standards Operational Facility Terminal Blended Fuel Terminal Petroleum Terminal Biodiesel Future terminal growth based on REG assessment of locations providing optimal profit and throughput Note: As of August 1, 2018 Source: REG Analysis 30

31 ILLUSTRATIVE Downstream Outlets of Interest Oil refineries process crude oil and refine it into products such as petroleum naphtha, gasoline, and diesel fuel Oil Refining BBD Refining Biomass-based diesel plants produce biodiesel, renewable diesel, and various co-products. Fuel Blending Terminal blenders are businesses who purchase fuel from petroleum refineries and biodiesel plants to be stored, blended, Terminal Blending and sold to fuel distributors Transportation Wet hose operators transport fuel and act as the retail mechanism Transportation Transportation from terminals to fuel retailers Fuel Retailing Mechanism Wet Hose Provide mobile fueling services to fleet customers. Operators typically purchase from a terminal and deliver to the tanks of fleet customers Fleet-owned Fuel Tank Selling a blended biodiesel product to a fleet customer who has tank storage on site that it uses to fuel its vehicles Card-Lock Unattended, immobile retail fuel pumps that sell fuel to commercial and consumer customers C-store Fueling cites that also sell food, drinks and other merchandise to both commercial and noncommercial consumers Travel Center Large facilities that provide similar offerings to c-stores with additional amenities tailored for commercial customers Consumer Fleet Fleet Non-commercial Commercial 31

32 Downstream Strategy Success Terminal Expansion 2 new terminal agreements completed YTD 3 agreements pending 8-10 expected to be completed by year end Fleet Customer Development 5 new fleet customers contracted YTD Large year on year growth from 2017 fleet customers Actively participating in several national and regional RFP s Future terminal growth based on REG assessment of locations providing optimal profit and throughput Source: REG Analysis 32

33 Downstream Strategy New Initiatives Launch of REG Ultra Clean Diesel further expands REG s downstream capabilities Made from a proprietary blend of renewable diesel and biodiesel. Among the cleanest diesel fuels. Superior performance versus both California and federal diesel-compliant fuels Achieves 15-50% emission reduction compared to California CARB diesel and federal ULSD. REG to power New York City Fleet The New York City Department of Citywide Administrative Services (DCAS) will use REG renewable diesel to power over 1,000 City government vehicles. DCAS will procure 900,000 gallons of renewable diesel over about six months. 33

34 Balanced Capital Allocation 34

35 Balanced Approach to Capital Allocation Required Investments in Safety & Maintenance Repurchase Programs High ROIC Projects Business Profit 35

36 Repurchase Program YTD Share repurchase program: Number of shares Net amount March 641,601 $ 7.8 million April 1,026,401 $13.6 million May 269,842 $3.6 million Total 1,937,844 $25.0 million Repurchased $24.5 million in principal of our 2036 Convertible Senior Notes in the second quarter of 2018 In June 2018, the Company's board of directors approved a new repurchase program of up to $75 million 36

37 Return from Growth Strategies Illustrative & Estimated Capital Projects Under Consideration Biodiesel Plant Improvements Estimate as of July 2018 Geismar Upgrade & Expansion Estimate as of July Rep. RD Facility Estimate as of July 2018 CAPEX (MM) $60-$65 $150-$170 $450 ± $30 Incremental Plant Volume (MMGY) Adjusted EBITDA Opportunity 2 (MM) $30-$35 $40-$45 $125-$135 ROIC 3 TBD 20-30% 20-30% Projects Combined Notes: 1. Project includes capacity increase, rail expansion, and catalyst upgrade 2. Calculated as a projected adjusted EBITDA range for each project represents estimates for steady-state, post completion production rates 3. ROIC measured by pretax operating income divided by total project capital Source: REG Analysis 37

38 gallons (millions) Investment in Production Capacity 60 Fleet Effective Capacity 1,2,3 Improvement versus Nameplate since Jan-2015 Jan-2016 Jan-2017 Jan (21) Effective Capacity (421 MGY) Nameplate (365MGY) 77 million gallons of increased effective Production Capacity since 2015 Approximately $40mm invested, or $0.52 per gallon of increased effective production capacity Notes: 1. Effective capacity represents the maximum average annualized throughput that satisfies certain defined technical constraints. 2. Includes estimated effective capacity increase data for REG Grays Harbor and REG Madison prior to acquisition. Months with unavailable data were interpolated from months with available data. 3. Excludes: REG Ralston, recently upgraded from 12 to 30 million gallons per year; REG Geismar renewable diesel plant operating above nameplate; REG Germany. Source: REG Analysis 38

39 Earnings Performance & Financial Strength

40 REG Performance in Q ADJUSTED EBITDA 1 $42.3 million in adjusted EBITDA 1 REVENUE $580.2 million in revenue GALLONS SOLD 172 million gallons sold Approximately $66.2 million estimated net benefit to Net Income, Adjusted Net Income and Adjusted EBITDA for business conducted in Q if the BTC is retroactively reinstated on same terms as prior years Approximately $108.5 million estimated Adjusted EBITDA 1 for Q if the BTC is retroactively reinstated for 2018 on the same terms Note: 1. Adjusted EBITDA is a non-gaap measure. See slide 55 for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP 40 Source: REG Analysis

41 Historical Quarterly Financial Performance Gallons Sold Quarterly Historical (mm gal) Adjusted EBITDA Quarterly Historical ($mm) $2 $8 $32 $60 $37 $79 $55 $59 $17 $42 1Q '16 2Q '16 3Q '16 4Q '16 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 Biofuels Volume Petroleum Volume Revenue Quarterly Historical ($mm) 1Q '16 2Q '16 3Q '16 4Q '16 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 Net Book Value Per Share Quarterly end Historical $298 $558 $625 $560 $419 $535 $627 $577 $689 $580 $14.1 $14.8 $15.3 $15.8 $15.4 $14.5 $14.3 $14.6 $20.2 $20.6 1Q '16 2Q '16 3Q '16 4Q '16 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18 Notes: 1. See slide 55 for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP Source: REG Analysis 41 1Q '16 2Q '16 3Q '16 4Q '16 1Q '17 2Q '17 3Q '17 4Q '17 1Q '18 2Q '18

42 1H Historical Adjusted EBITDA 1 Adjusted EBITDA Net Benefit of reinstatement of retroactive BTC Adjusted EBTIDA with BTC 2014 $7,626 $31,328 $38, $(26,958) $38,628 $11, $10,249 - $10, $20,307 $96,093 $116, $59,782 $108,700 3 $168,482 3 (1) Adjusted EBITDA is a non-gaap measure. See slide 55 for the definition of Adjusted EBITDA and a detailed reconciliation to Net Income determined in accordance with GAAP. (2) In 2016 BTC was in place throughout the year. (3) Estimated amount assumes retroactive reinstatement of BTC for 2018 on same terms as

43 Historical Annual Financial Performance Gallons Sold Annual Historical (MM gal) Adjusted EBITDA Annual Historical ($MM) 1 $ Biofuels Volume Petroleum Volume Revenue Annual Historical ($MM) $148 $108 $102 $ Net Book Value Year end Historical ($MM) $1,498 $1,274 $1,387 $2,041 $2,158 $594 $779 $614 $610 $ Notes: 1. See slide 55 for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP Source: REG Analysis

44 Stabilizing Markets and Improving Asset Performance 35.0% Return on Invested Capital % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Rolling 12 months ROIC with BTC Estimated Net Benefit of BTC reinstatement 2 (1) Trailing 12 month ROIC (after-tax EBIT/invested capital). Invested capital= Current assets (excludes cash, restricted cash and marketable securities) Current liabilities + Net fixed asset + Goodwill + Intangible + Other assets excluding investments Long term liabilities. (2) 2018 Q1 and Q2 trailing 12 month ROIC includes estimated net benefit of retroactive reinstatement of BTC of $42.5 million and $66.2 million respectively. 44

45 Strong Financial Position ($ in millions) 12/31/ /31/ /31/2017 3/31/ /30/2018 Cash & Marketable Securities Net Working Capital $47.1 $116.2 $77.6 $69.3 $221.8 $181.6 $229.3 $150.8 $351.1 $ Total Assets $1,223.6 $1,136.6 $1,005.6 $1,407.1 $1,152.8 Term Debt 2 $256.6 $217.9 $228.6 $232.8 $212.3 Net Book Value $614.0 $610.2 $567.6 $775.5 $766.8 Common Shares (millions) As of 06/30/18 3 Common Outstanding RSU s 1.0 PRSU s 0.2 Notes: 1. Includes $98.7 million of 2036 Convertible Senior Notes and $65.1 million of 2019 Convertible Senior Notes classified as Current Liabilities at June 30, Term debt before netting of the debt issuance costs of $ 4.6 million, $5.5 million, $6.6 million, and $6.3 million at June 30, 2018, March 31, 2018, December 31, 2017, and 2016 respectively. 3. Stock appreciation rights outstanding as of 06/30/ million. SAR s are settled as equity or cash at the discretion of the board Insider ownership of outstanding common shares is 3.11% Source: REG Analysis 38.5

46 Liquidity and Capital Structure (in millions except for Book value per share) December 31, 2017 March 31, 2018 June 30, 2018 Term Debt $228.6 $232.8 $212.3 Term Debt/Total Capitalization 28.7% 23.1% 21.7% Net Book Value $567.6 $775.5 $766.8 Book value per share 1 $14.61 $20.23 $20.58 (1) Based on common shares outstanding at the end of each period. 46

47 Favorable Tax Position Estimated NOL net tax value as of 12/31/2017: $196MM 1 NOL optimization over time Certain situations may limit future utilization of NOLs 2 Low effective tax rate for the foreseeable future Notes: 1. NOL value reflects the change in the corporate income tax rate from 35% to 21%, enacted on December 22, 2017 by HR 1, also known as the Tax Cuts and Jobs Act. 2. Section 382 of the Internal Revenue Code generally limits the amount of net operating loss (NOL) carryforwards available to offset future taxable income when a corporation has undergone a greater than 50% change in ownership over a rolling three (3) year period Source: REG Analysis 47

48 Experienced Management Team Randy Howard President & Chief Executive Officer Doug Lenhart Vice President, Procurement & Logistics, North America Chad Stone Chief Financial Officer Natalie Merrill Vice President, Chief of Staff Brad Albin Vice President, Manufacturing Raymond Richie Vice President, SP&A Managing Director, European Operations Eric Bowen Vice President, Corporate Business Development & Legal Affairs Chad Baker Controller Gary Haer Vice President, Sales & Marketing Todd Robinson Treasurer Biographies available at 48

49 Stock Information Symbol Exchange REGI NASDAQ 50 Day Avg Daily Volume (636,154 as of 8/6/18 per NASDAQ) Market Cap (8/6/18) Analyst Coverage $665.1 million, $17.85 per share Canaccord Genuity: Chip Moore Roth Capital Partners: Craig Irwin 49

50 Adjusted Net Income (Loss) and Adjusted EPS Reconciliation 1Q Q Q Q-2017 Year ended 12/31/17 1Q Q-2018 Net income (loss) attributable to the Company $ (15,914) $ (34,809) $ (11,373) $ (16,983) $ (79,079) $ 214,389 $ 33,850 Gain on involuntary conversion - - (942) (4,387) (5,329) (4,000) (454) Gain on sale of assets (990) - Change in fair value of convertible debt conversion liability ,546 (8,560) (5,325) 18, Change in fair value of contingent considerations 589 (24) 1, ,484 (1,540) (7,129) Loss on debt extinguishment 232 (2,337) Loss on the Geismar lease termination - 3, , Other (income) expense, net 320 (32) (12) 742 1,018 (222) (2,068) Impairment of assets - 1,341-48,532 49, Straight-line lease expense (32) (85) (85) (35) (237) (33) (3) Executive severance payment - - 2, , Non-cash stock compensation 1,308 1,688 2,023 1,890 6,909 1,794 2,203 Biodiesel tax credit 1 36,728 59,365 56,505 52, ,936 (204,936) - Adjusted net income (loss) attributable to the Company $ 23,171 $ 63,957 $ 41,409 $ 78,249 $ 206,786 $ 4,859 $ 24,114 Net income (loss) per share attributable to common stockholders Diluted $ (0.41) $ (0.90) $ (0.29) $ (0.44) $ (2.04) $ 5.30 $ 0.78 Adjusted net income (loss) per share attributable to common stockholders Diluted $ 0.59 $ 1.61 $ 1.04 $ 1.97 $ 5.21 $ 0.12 $ 0.56 Note: On February 9, 2018, the BTC was reinstated for the 2017 calendar year. The retroactive credit for 2017 resulted in a net benefit to us that was recognized in our GAAP financial statements for the quarter ended March 31, However, because this credit relates to 2017 operating performance, our presentation of Adjusted net income and Adjusted EBITDA reflects the allocation of the net benefit of the reinstatement to each of the four quarters of 2017 based upon gallons sold in the quarters. 50

51 Adjusted EBITDA Reconciliation (in thousands) 1Q Q Q Q Q Q-2018 Net income (loss): $ (15,914) $ (34,809) $ (11,373) $ (16,983) $ (79,079) $ 214,389 $ 33,850 Adjustments: Interest expense 4,536 4,479 4,725 5,015 18,755 4,651 4,925 Income tax expense (benefit) 1,075 1,960 (115) (33,410) (30,490) (1,203) 3,835 Depreciation 8,423 8,523 8,639 8,698 34,283 8,859 9,124 Amortization EBITDA $ (1,753) $ (19,698) $ 2,183 $ (36,375) $ (55,643) $227,004 $52,044 Gain on involuntary conversion - - (942) (4,387) (5,329) (4,000) (454) Gain on sale of assets (990) - Change in fair value of convertible debt conversion liability ,546 (8,560) (5,325) (18,833) - - Change in fair value of contingent liability 589 (24) 1, ,484 (1,540) (7,129) Loss on debt extinguishment (2,337) Other (income) expense, net 320 (32) (12) 742 1,018 (222) (2,066) Impairment of assets 1-1,341-48,532 49, Loss on the Geismar lease termination - 3, , Straight-line lease expense (32) (85) (85) (35) (237) (33) (3) Executive Severance - - 2, , Non-cash stock compensation 1,308 1,688 2,023 1,890 6,909 1,794 2, BTC (204,936) Adjusted EBITDA excluding 2017 BTC allocation $ 604 $ 19,703 $ (1,540) $ 6,519 $ 25,286 $ 17,474 $ 604 Biodiesel tax credit 2 36,728 59,365 56,505 52, , Adjusted EBITDA $ 37,332 $ 79,068 $ 54,965 $ 58,857 $ 230,222 $ 17, 474 $ 42,308 Total balance may not foot due to rounding 1. Represents the impairment charge to write down the carrying value of certain assets, mostly attributed to the Company's New Orleans and Emporia facilities for the years ended December 31, 2017 and 2016, respectively, to remaining salvage values On February 9, 2018, the BTC was reinstated for the 2017 calendar year. The retroactive credit for 2017 resulted in a net benefit to us that is recognized in our GAAP financial statements for the quarter ending March 31, However, because this credit relates to 2017 operating performance, our presentation of Adjusted net income and Adjusted EBITDA reflects the allocation of the net benefit of the reinstatement to each of the four quarters of 2017 based upon gallons sold in the quarter.

52 Adjusted EBITDA Reconciliation (in thousands) 1Q Q Q Q Q Q Q Q Net income (loss): $ (6,888) $ 7,714 $ 23,505 $ 20,382 $ 44,713 $ (15,914) $ (34,809) $ (11,373) $ (16,983) $ (79,079) Adjustments: Interest expense 3,311 3,738 4,487 4,451 15,987 4,536 4,479 4,725 5,015 18,755 Income tax expense (benefit) 728 1,296 (1,203) 3,447 4,268 1,075 1,960 (115) (33,410) (30,490) Depreciation 7,674 7,824 7,949 8,378 31,825 8,423 8,523 8,639 8,698 34,283 Amortization (140) (134) (129) 46 (357) EBITDA $ 4,685 $ 20,438 $ 34,609 $ 36,704 $96,436 $ (1,753) $ (19,698) $ 2,183 $ (36,375) $ (55,643) Gain on involuntary conversion (3,543) (997) (3,470) (1,884) (9,894) - - (942) (4,387) (5,329) Change in fair value of convertible debt conversion liability - (13,432) (3,013) 3,400 (13,045) ,546 (8,560) (5,325) 18,833 Change in fair value of contingent liability (15) 3,571 1,124 3,224 7, (24) 1, ,484 Other (income) expense, net 88 (2,306) 314 (854) (2,758) 320 (32) (12) 742 1,018 Impairment of assets ,893 17,893-1,341-48,532 49,873 Loss on the Geismar lease termination , ,967 Straight-line lease expense (94) (80) (73) (38) (285) (32) (85) (85) (35) (237) Executive Severance , ,411 Non-cash stock compensation 1, ,133 1,829 5,896 1,308 1,688 2,023 1,890 6,909 Adjusted EBITDA excluding 2017 BTC allocation $ 604 $ 19,703 $ (1,540) $ 6,519 $ 25,286 Allocation of 2017 BTC ,728 59,365 56,505 52, ,936 Adjusted EBITDA $ 2,197 $ 8,052 $ 31,624 $ 60,274 $ 102,147 $ 37,332 $ 79,068 $ 54,965 $ 58,857 $ 230,222 Total balance may not foot due to rounding. (1) Represents the impairment charge to write down the carrying value of certain assets, mostly attributed to the Company's New Orleans and Emporia facilities for the years ended December 31, 2017 and 2016, respectively, to remaining salvage values. 52 (2) On February 9, 2018, the BTC was reinstated for the 2017 calendar year. The retroactive credit for 2017 resulted in a net benefit to us that was recognized in our GAAP financial statements for the quarter ended March 31, However, because this credit relates to 2017 operating performance, our presentation of Adjusted net income and Adjusted EBITDA reflects the allocation of the net benefit of the reinstatement to each of the four quarters of 2017 based upon gallons sold in the quarters.

53 Adjusted EBITDA Reconciliation 1Q Q Q Q Q Q Q Q (in thousands) Net income (loss): $ (2,359) $ 11,007 $ 4,572 $ 69,318 $ 82,538 $ (38,304) $ (2,163) $ (15,671) $ (95,572) $ (151,710) Adjustments: Income tax expense (benefit) (107) (11,919) (248) 15,846 3,572 (897) (707) (1,050) (6,047) (8,701) Interest expense 551 1,204 2,867 2,068 6,690 2,743 2,928 2,921 3,275 11,867 Depreciation 3,004 3,190 3,332 5,729 15,255 5,613 6,134 6,261 6,989 24,997 Amortization (185) (184) 303 (150) (216) (219) (206) (199) (91) (715) EBITDA $ 904 $ 3,298 $ 10,826 $ 92,811 $ 107,839 $ (31,064) $ 5,986 $ (7,738) $ (91,446) $ (124,262) Other (income) expense, net (48) (384) (124) (106) (662) (565) (1,779) 462 1,410 (472) Change in fair value of contingent liability - (384) (1,059) (5,188) (6,631) 293 (2,121) 1, (359) Gain on bargain purchase (5,358) - (5,358) Impairment of goodwill , ,028 Non-recurring lease cancellation - 1, , Straight-line lease expense (163) (150) (142) (184) (639) (158) (145) (19) (94) (416) Other (4) Non-cash stock compensation 1,235 1,414 1,392 1,842 5,883 1,080 1,156 1,191 1,734 5,161 Adjusted EBITDA excluding BTC allocation $ 1,928 $ 5,498 $ 10,893 $ 89,248 $ 107,767 $ 30,217 $ 3,259 $ (10,360) $ 87,481 $ 50,163 Blenders tax credit 12,778 18,550 23,887 (55,215) - 15,745 22,883 27,264 (65,892) - Adjusted EBITDA $ 14,706 $ 24,248 $ 34,780 $ 34,033 $ 107,767 $ (14,472) $ 26,142 $ 16,904 $ 21,589 $ 50,163 Total balance may not foot due to rounding. 53

54 Adjusted EBITDA Reconciliation (in thousands) 1Q Q Q Q Q Q Q Q Net income (loss): $ 14,017 $ 14,433 $ (6,040) $ (151) $ 22,259 $ 46,403 $ 23,130 $ 86,703 $ 30,130 $ 186,366 Adjustments: Income tax expense (benefit) 1,363 4,471 (2,165) (2,215) 1,454 30,189 15,314 (42,051) 1,483 4,935 Interest expense 1,053 1,059 1,150 1,417 4, ,397 Depreciation 2,026 2,069 2,097 1,832 8,024 2,080 2,296 2,598 2,731 9,705 Amortization (139) (206) (208) (200) (753) (199) (191) (181) (181) (752) EBITDA $ 18,320 $ 21,826 $ (5,166) $ 683 $ 35,663 $ 79,049 $ 41,153 $ 47,646 $ 34,803 $202,651 Other (income) expense, net (37) (28) (56) (46) (167) (117) (93) (66) (112) (388) Change in fair value of Seneca Holdco liability (349) (349) Change in fair value of preferred stock conversion feature embedded derivatives (11,975) (11,975) Non-reoccuring business interruption ,898 (863) (863) Stock issued for glycerin agreement termination 1, (288) Straight-line lease expense (102) (104) (31) (51) 863 (159) (162) (163) (162) (646) Non-cash stock compensation 4,964 4,758 2, ,119 1,356 1,029 1,484 1,547 5,416 Adjusted EBITDA excluding BTC allocation $ 12,719 $ 26,452 $ (2,288) $ 1,881 $ 38,764 $ 79,264 $ 41,927 $ 48,901 $ 36,076 $ 206,170 Blenders tax credit 10,448 16,625 18,912 11,760 57,745 (57,372) (373) - - (57,745) Adjusted EBITDA $ 23,167 $ 43,077 $ 16,624 $ 13,641 $ 96,509 $ 21,894 $ 41,554 $ 48,901 $ 36,076 $ 148,425 Total balance may not foot due to rounding. 54

55 Adjusted EBITDA Reconciliation - Annual ($mm) Net Income (Loss) (151.71) (79.08) (Income) Loss from Equity Investments Income Tax (Benefit) Expense (8.70) 4.27 (30.49) Interest Expense Other Income (0.38) (0.66) (0.47) (15.80) 1.02 Change in fair value of convertible debt conversion liability Change in fair value of contingent liability - (6.63) (0.36) Bargain purchase gain from acquisition - - (5.36) - - Gain on involuntary conversion (9.89) (5.33) Impairment of goodwill Impairment of asset Straight-line lease expense (0.65) (0.64) (0.42) (0.29) (0.24) Depreciation Amortization (0.75) (0.21) (0.72) (0.36) 0.89 Other Non-recurring lease cancellation Non-recurring business interruption (0.86) Executive Severance Non-cash Stock Compensation Adjusted EBITDA before 2012 BTC Biodiesel tax credit 1,4 (57.75) Adjusted EBITDA Notes: 1. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which reinstated a set of tax extender items including the reinstatement of the federal biodiesel blenders tax credit for 2013 and retroactively reinstated the credit for The retroactive credit for 2012 resulted in a net benefit to us that was recognized in first quarter 2013, but because this credit relates to the operating performance and results of 2012 it is excluded from 2013 Adjusted EBITDA and allocated to the 2012 periods based upon gallons sold. 2. Total balance may not foot due to rounding 3. Represents the impairment charge to write down the carrying value of certain assets, mostly attributed to the company s Emporia facility, to remaining salvage value. 4. On February 9, 2018, the BTC was reinstated for the 2017 calendar year. The retroactive credit for 2017 resulted in a net benefit to us that is recognized in our GAAP financial statements for the quarter ending March 31, However, because this credit relates to 2017 operating performance, our presentation of Adjusted net income and Adjusted EBITDA reflects the allocation of the net benefit of the reinstatement to 2017 based upon gallons sold in the year. 55