UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20202021
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-35397

RENEWABLE ENERGY GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware   26-4785427
(State of other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)
      
416 South Bell AvenueAmesIowa50010
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code: (515) 239-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.0001 per shareREGIThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)

    Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨
    Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerx   Accelerated filer☐
Non-accelerated filer☐   Smaller reporting company☐
Emerging growth company☐
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of
the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐  No x

As of June 30, 2020,2021, the aggregate market value of Common Stock held by non-affiliates was $790,373,860.$2,309,771,496.
As of January 31, 2021, 39,334,8392022, 50,318,773 shares of Common Stock of the registrant were issued and outstanding.

Documents Incorporated By Reference
All or a portion of Items 10 through 14 in Part III of this Form 10-K are incorporated by reference to the Registrant’s definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if the Registrant’s Schedule 14A is not filed within such period, will be included in an amendment to this Report on Form 10-K which will be filed within such 120 day period.


TABLE OF CONTENTS
Page
PART I
ITEM 1.
1
ITEM 1A.
1113
ITEM 1B.
2630
ITEM 2.
2630
ITEM 3.
2730
ITEM 4.
2731
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
2731
ITEM 6.
2832
ITEM 7.
2832
ITEM 7A.
4751
ITEM 8.
4953
ITEM 9.
8592
ITEM 9A.
8592
ITEM 9B.
8793
ITEM 9C.
93
PART III
ITEM 10.
8894
ITEM 11.
8894
ITEM 12.
8894
ITEM 13.
8894
ITEM 14.
8894
PART IV
ITEM 15.
8995
ITEM 16.
8995


Cautionary Statement Regarding Forward-Looking Information
This annual report on Form 10-K contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “would,” “might,” “could,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “plan,” “seek,” “potential,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. Forward-looking statements include, but are not limited to, statements about:
•our business plans and strategies, including, but not limited to, our downstream objectives and undertakings, and
the proposed capacity expansion of our Geismar, Louisiana biorefinery, including financing such expansion;
•our financial performance, including expectations regarding revenues, cost of revenues and operating expenses;
•changes in governmental programs, policymaking and requirements or encouraged use of biofuels, including
RFS2Biodiesel Mixture Excise Tax Credit, Renewable Fuels Standard 2 ("RFS2") in the United States, renewable fuel policies in Canada and Europe, and state level programs such as
California's Low Carbon Fuel Standard;
•our security repurchase programs and our marketable securities;
•the availability, future price and volatility of feedstocks and other inputs;
•the expansion of our distribution network and transportation costs;
•the future price and volatility of petroleum;
•our liquidity and working capital requirements;
•our leasing practices;
•anticipated trends and challenges in our business and competition in the markets in which we operate;
•our ability to successfully implement our acquisition strategy and integration strategy;
•our ability to protect proprietary technology and trade secrets;
•our risk management activities;
•the industry's capacity, production and imports;
•product performance, in cold weather or otherwise;
•seasonal fluctuations in our business;
•our current products as well as products we are developing;
•our ability to retain and recruit key personnel;
•our current and future indebtedness and our compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements;
•our marketable securities;
•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;
•operating risks and the impact of disruptions to our business including, but not limited to, closures at our plant
located in Geismar, Louisiana and the COVID-19 pandemic;pandemic, including any potential resurgence of COVID-19 such as from the Delta and Omicron variant; and
•assumptions underlying or relating to any of the foregoing.
These statements reflect current views with respect to future events and are based on assumptions and subject to risks and uncertainties. We note that a variety of factors, including but not limited to those Risk Factors discussed in Item 1A, could cause actual results and experience to differ materially from the anticipated results or expectations expressed in our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.


Forward-looking statements contained in this report present management’s views only as of the date of this report. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or


otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our 10-Q and 8-K reports filed with the Securities and Exchange Commission after the date hereof.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A. of this report, "Risk Factors," before deciding whether to invest in our company.

•The Renewable Fuel Standard Program, a federal law requiring the consumption of qualifying biofuels, could be repealed, curtailed or otherwise changed, which would have a material adverse effect on our revenues, operating margins and financial condition.
•Loss of or reductions in federal and state government tax incentives for biomass-basedbio-based diesel production or consumption may have a material adverse effect on our revenues and operating margins.
•We derive a significant portion of our revenues from sales of our renewable fuel in the State of California primarily as a result of California's Low Carbon Fuel Standard, or LCFS;("LCFS"); adverse changes in this law or reductions in the value of LCFS credits would harm our revenues and profits.
•We derive a significant portion of our revenues from sales of our renewable fuel in Canada and Europe; adverse changes in the programs requiring the use of renewable and lower carbon fuels or reductions in the value of credits would harm our revenues and profits.
•The COVID-19 pandemic may adversely impact our business.
•We derive a substantial portion of our profitability from the production of renewable diesel ("RD") at our plant in Geismar, Louisiana and any interruption in our operations would have a material adverse effect on operations and financial conditions.
•Our planned capacity expansion at our Geismar, Louisiana facility will require significant capital expenditures and there is no guarantee that the project will be completed on time or on budget, which could have a negative effect on revenues and operations.
•Increased industry-wide production of biodiesel due to potential utilization of existing excess production capacity, announced renewable diesel plant expansions of RD and potential co-processing of renewable dieselRD by petroleum refiners, could reduce prices for our fuel and increase costs of feedstocks, which would seriously harm our revenues and operations.
•Our gross margins are dependent on the spread between biomass-basedbio-based diesel prices and feedstock costs, each of which are volatile and can cause our results of operations to fluctuate substantially,substantially.
•Risk management transactions could significantly increase our operating costs and may not be effective.
•One customer accounted for a meaningful percentage of revenues and a loss of this customer could have an adverse impact on our total revenues.
•Our facilities and our business, and our customers' facilities, are subject to risks associated with fire, explosions, leaks, and natural disasters, including climate change, and political turmoil, which may disrupt our business and increase costs and liabilities.
•Cyberattacks targeting our process control networks or other digital infrastructure could have a material adverse impact on our business and results of operations.
•In addition to biodiesel and renewable diesel,RD, we store and transport petroleum-based motor fuels. The dangers inherent in the storage and transportation of fuels could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.
•Our insurance may not protect us against our business and operating risks.
•We operate in a highly competitive industry and expect that competition in our industry will increase.
•We are dependent upon one supplier to provide hydrogen necessary to execute our renewable dieselRD production process and the loss of this supplier could disrupt our production process.
•Technological advances and changes in production methods in the biomass-basedbio-based diesel industry could render our plants obsolete and adversely affect our ability to compete.
•Our intellectual property is integral to our business. If we are unable to protect our intellectual property, or others assert that our operations violate their intellectual property, our business could be adversely affected.
•Increases in transportation costs or disruptions in transportation services could have a material adverse effect on our business.
•We are dependent upon our key management personnel and other personnel, and the loss of these personnel could adversely affect our business and results of operations.


•We may encounter difficulties in integrating the businesses we acquire, including our international businesses where we have limited operating history.
•We incur significant expenses to maintain and upgrade our operating equipment and plants, and any interruption in the operatingoperation of our facilities may harm our operating performance.


•Growth in the use, sale and distribution of biodiesel is dependent on the expansion of related infrastructure which may not occur on a timely basis, if at all, and our operations could be adversely affected by infrastructure limitations or disruptions.
•Our business is subject to seasonal changes based on regulatory factors and weather conditions and this seasonality could cause our revenues and operating results to fluctuate.
•Failure to comply with governmental and state regulations, including EPA requirements relating to RFS2, BTC, LCFS and other programs or new laws designed to deal with climate change, could result in the imposition of higher costs, penalties, fines, or restrictions on our operations and remedial liabilities.
•Renewable dieselRD fuel is superior to biodiesel in certain respects and if renewable dieselRD production capacity increases to a sufficient extent, it could largely supplant biodiesel; we may not be successful in expanding our renewable dieselRD production capacity.
•Nitrogen oxide emissions from biodiesel may harm its appeal as a renewable fuel and increase costs.
•We and certain subsidiaries have indebtedness, which subjects us to potential defaults, that could adversely affect our ability to raise additional capital to fund our operations and limits our ability to react to changes in the economy or the biomass-basedbio-based diesel industry.
•We may still incur significant additional indebtedness that could increase the risks associated with our indebtedness.
•We may not have the ability to raise the funds necessary to settle conversion of our convertible notes in cash or to repurchase the convertible notes for cash upon a fundamental change or on a repurchase date, and our future debt may contain limitations on our ability to repurchase the convertible notes.
•Certain provisions in the indenture governing the 2036 Convertible Senior Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.
•We are a holding company and there are limitations on our ability to receive dividends and distributions from our subsidiaries.
•Our debt agreements impose significant operating and financial restrictions on our subsidiaries, which may prevent us from capitalizing on business opportunities.
•We may still incur significant additional indebtedness that could increase the risks associated with our indebtedness.
•Certain provisions in the indenture governing our Senior Secured Green Notes (the "Green Notes") could delay or prevent an otherwise beneficial takeover or takeover attempt of us.
•The market price for our common stock may be volatile.
•We have never paid dividends on our capital stock and we do not anticipate paying dividends in the foreseeable future.
•We may issue additional common stock as consideration for future investments or acquisitions.
•If we fail to maintain effective internal control over our financial reporting and financial forecasting, we may not be able to report our financial results accurately, provide accurate financial guidance or prevent fraud, and if we fail to maintain effective internal governance and conduct policies, such as our Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers and Trading by Insiders Policy, or if our employees fail to adhere to such policies, we may be unable to maintain a proper control environment. If any of these failures occur, our business could be harmed, our stockholders could lose confidence in our financial reporting and financial guidance or our business integrity and we could suffer negative regulatory scrutiny or media attention, which could negatively impact the value of our stock.
•Delaware law and our certificate of incorporation and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
•The proposed merger is subject to approval of our stockholders as well as the satisfaction of other closing conditions, including government consents and approvals, some or all of which may not be satisfied or completed within the expected timeframe, if at all.
•We may not complete the proposed merger within the time frame we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations.
•We will be subject to various uncertainties while the merger is pending that may cause disruption and may make it more difficult to maintain relationships with customers and other third-party business partners.
•In certain instances, the merger agreement requires us to pay a termination fee to parent, which could affect the decisions of a third party considering making an alternative acquisition proposal.
•We have incurred, and will continue to incur, direct and indirect costs as a result of the merger.
•Litigation challenging the Merger Agreement may prevent the Merger from being consummated within the expected timeframe or at all.



PART I

ITEM 1.    Business
General
We focusare one of North America's largest producers of advanced biofuels focused on providing cleaner, lower carbon transportation fuels. We are North America's largest producer of advanced biofuels. We utilize a nationwide production, distribution and logistics system as part of an integrated value chain model designed to convert natural fats, oils and greases into advanced biofuels. During 2020,2021, we sold 651621 million total gallons of fuel (including biofuel and petroleum fuel purchased from third parties for resale) and generated revenues of $2over $3 billion. We believe our fully integrated approach, which includes acquiring feedstock, operating biorefineries, distributing fuel through a network of terminals, and managing biorefinery facility construction and upgrades, positions us to serve the growing market for cleaner transportation fuels.
In addition to our acquisition of Keck Energy in September 2018, we opened our first REG branded fueling station in July 2019 adjacent to our biorefinery in Seneca, Illinois to serve a variety of customers from trucking fleets to local diesel vehicle owners. In June 2020, we entered into an agreement with a third party pursuant to which it agreed to exclusively sell REG branded fuels at certain of its cardlock locations. In October 2021, we entered into a long-term agreement with GoodFuels, a leading supplier of sustainable marine biofuels and global producer and supplier of renewable fuels, for the supply and development of sustainable marine biofuel solutions for the global shipping industry. In November 2021, we entered into a partnership with Canadian Northern Railway to test bio and RD blends for their locomotive fleet. In December 2021, we acquired Amber Resources, a California-based distributor of bio-based diesel, petroleum diesel and lubricants. This acquisition enables us to access a larger network of end customers. These are the initial partspart of our downstream strategy, which is focused on three important objectives: margin expansion across the value chain, including by directing production to the most profitable geographies; realization of higher biodiesel values through blends of biodiesel into petroleum and renewable diesel;RD; and increased demand for our biodiesel via sales of B100 to end consumers.customers.
In October 2020, we announced that, following an internal review and site selection process, weour plan to expand the effective capacity of our Geismar, Louisiana biorefinery by 250biorefinery. The Geismar project involves both an improvement project for the existing operating at the site, as well as the capacity expansion. The Geismar project is expected to take total annual site production from 90 million gallons annually to approximately 340 million gallons, per year.enhance existing operations and improve operational reliability and logistics. The expansion is expected to be mechanically complete in 2023 with full operations in early 2024. We currently expecthave received all required permits to proceed with construction and officially broke ground to beginstart the construction process in midthe fourth quarter of 2021. The capital cost for the Geismar project is estimated to late 2021 with a target mechanical completion date in late 2023. We currently estimate our capital expenditures in connection with the expansion project will be at least $825 million. We currently expect to fund these capital expenditures$950 million and is funded with a combination of cash on hand, marketable securities, borrowings under our credit facilities, offeringsand proceeds from our public offering of equitycommon stock that closed March 19, 2021 and debt, orproceeds from other sources.our issuance of Green Notes that closed on May 20, 2021, as discussed below. In addition, in connection with the expansion we have entered into a long-term marine terminal lease for terminal and logistics services that will require a separate capital outlay. We have also agreed to construction contracts for large parts of the work associated with the improvements and expansion. There can be no guarantee that we will be able to obtain the necessary capitalcomplete this project in a timely manner or on terms acceptable to us or increase the capacity of our biorefinery at Geismar, Louisiana on time, at our estimated budget, or at all. The improvements and expansion isare subject to a number of conditions and risks.
On March 19, 2021, we completed an equity offering pursuant to which we sold 5,750,000 shares of common stock to various underwriters at a price of $67.00 per share before underwriting discounts and commissions. The net proceeds from the offering were $365.3 million. We currently intend to use the net proceeds from this offering for working capital and other general corporate purposes, which may include the repayment of our existing indebtedness and the funding of capital expenditures, including capital expenditures related to the Geismar project.
On May 20, 2021, we completed the sale and issuance of $550.0 million aggregate principal amount of our 5.875% Senior Secured Green Note due 2028. We recorded $14.6 million in legal, professional and underwriting fees related to the issuance of the Green Notes. We currently intend to use the net proceeds from this offering for capital expenditures related to the Geismar project.
We believe that the execution of these strategies will enable us to expand our margins, diversify sources of profitability, manage our business through varying market conditions, and increase shareholder value. To help promote these strategies in an environmentally and socially responsible manner, we have integrated environmental, social and governance ("ESG") practices into our business objectives. The process of implementing these ESG practices into our business was collaborative and involved our employees in an effort to maintain our values of safety, integrity, humanity, and driving results the REG way, which seeks to allow us to create a cleaner world and reduce our carbon footprint now and for the future.
Plant Network and Products
1

In September 2021, we announced the closure of the Houston, Texas biorefinery. Production at this facility ceased in November 2021. We currently own and operate a network of 1211 biorefineries. TenNine biorefineries are located in the United States and two in Germany. ElevenTen biorefineries produce biodiesel and one produces renewable diesel.RD. Our twelve biomass-basedeleven bio-based diesel production facilities have an aggregate nameplate production capacity of 505470 million gallons per year ("mmgy"). In August 2019, we closed our New Boston, Texas biorefinery, which had a nameplate capacity of 15 mmgy.
We own and operate the following facilities in North America and internationally:
1

Property
Nameplate1
Production
Capacity (mmgy)
Effective Capacity 2 (mmgy)
REG
Operations
Commenced		Feedstock Capability
Ralston, Iowa30492002Refined Oils and Fats
Albert Lea, Minnesota30462005Crude, High FFA and Refined Oils and Fats
Newton, Iowa30382007Crude, High FFA and Refined
Oils and Fats
Seabrook, Texas35532008Refined Oils and Fats
Danville, Illinois45502009Crude, High FFA and Refined
Oils and Fats
Seneca, Illinois60762010Crude, High FFA and Refined
Oils and Fats
Mason City, Iowa30392013Crude, High FFA and Refined
Oils and Fats
Geismar, Louisiana 3
751012014Crude, High FFA and Refined
Oils and Fats
Grays Harbor, Washington1001072015Refined Oils and Fats
Madison, Wisconsin20282016Crude, High FFA and Refined
Oils and Fats
Emden, Germany27312016Crude, High FFA and Refined Oils and Fats
Oeding, Germany23252016Crude, High FFA and Refined Oils and Fats
Total505643

Property
Nameplate1
Production
Capacity (mmgy)
Effective Capacity 2 (mmgy)
REG
Operations
Commenced		Feedstock CapabilityUse
Ralston, Iowa 3
30492002Refined Oils and FatsBiodiesel production
Albert Lea, Minnesota 3
30462005Crude, High FFA and Refined Oils and FatsBiodiesel production
Newton, Iowa 3
30402007Crude, High FFA and Refined
Oils and Fats		Biodiesel production
Houston, Texas 5
35532008Refined Oils and FatsBiodiesel production
Danville, Illinois 3
45502009Crude, High FFA and Refined
Oils and Fats		Biodiesel production
Seneca, Illinois 3
60802010Crude, High FFA and Refined
Oils and Fats		Biodiesel production
Mason City, Iowa 3
30392013Crude, High FFA and Refined
Oils and Fats		Biodiesel production
Geismar, Louisiana 3,4
751002014Crude, High FFA and Refined
Oils and Fats		RD production
Grays Harbor, Washington 3
1001092015Refined Oils and FatsBiodiesel production
Madison, Wisconsin 3
20282016Crude, High FFA and Refined
Oils and Fats		Biodiesel production
Emden, Germany 3
27332016Crude, High FFA and Refined Oils and FatsBiodiesel production
Oeding, Germany 3
23252016Crude, High FFA and Refined Oils and FatsBiodiesel production
Total505652
1The nameplate capacity listed above is based on original plant design.
2Effective capacity represents the maximum average throughput that satisfies certain defined technical constraints.
3REG owns this plant and related property and equipment.
4This facility produces renewable diesel,RD, naphtha, and liquid petroleum gas.
5We announced the closure of this facility in September 2021 and production ceased in November 2021.

We maintain a testing laboratory at our corporate headquarters in Ames, Iowa, for testing various feedstocks for conversion into biomass-basedbio-based diesel and various new manufacturing processes to produce biomass-basedbio-based diesel. We also have a regional office in Tulsa, Oklahoma, focused on maintaining and developing advanced biofuel technologies. In 2021, we partnered with Iowa State University to create a hydrotreater pilot plant to understand how various biomass feedstocks can play a role in the production of renewable fuels with a specific focus on RD. The plant's research will support our Geismar RD plant by helping to evaluate new low-carbon feedstocks and optimize production of RD and sustainable aviation fuel. In December 2021, we acquired Amber Resources, one of the leading fuel distributors in Southern California. This acquisition does not include real property, but includes leased locations to deliver fuel to end customers, further advancing our downstream strategy.

We produce renewable dieselRD at our Geismar, Louisiana facility. Renewable dieselRD generally carries a premium price compared to biodiesel as a result of a variety of factors including the ability to blend it with petroleum diesel seamlessly, better cold weather performance, and because it generates more RINsRenewable Identification Numbers ("RINs") on a per gallon basis. We announced in October 2020 our intendedimprovement and expansion of our Geismar, Louisiana facility which is expected to expand the effective capacity of our Geismar, Louisianathe facility to 340 million gallons annually. We intend to continue to evaluate opportunities to further our ability to leverage our renewable dieselRD technology and expand renewable dieselRD production to meet the growing demand for cleaner transportation fuels.
2


Our products include biodiesel and renewable dieselRD produced at our facilities or from third parties, including RINs and LCFS credits, transportation, storage and insurance costs to the extent paid for by our customers; petroleum-based heating oil and ultra-low sulfur diesel, or ULSD, acquired from third parties, along with these petroleum-based products further blended with biomass-basedbio-based diesel; glycerin, and other co-products of the biomass-basedbio-based diesel production process. Renewable diesel carries a premium price comparedWe believe our biodiesel and RD products further our ESG mission to biodiesel as a result of a variety of factors including the ability to blend it with petroleum diesel, better cold weather performance,create sustainable, clean energy, and it generates more RINs on a per gallon basis.creating value for society, ecosystem, employees, customers, and shareholders. In addition, our products include operations management services that we provide for biomass-basedbio-based diesel production facilities, typically based on production rates and profitability of the managed facility; and services performed by us in our role as general contractor and construction manager for upgrades and repairs to our biomass-basedbio-based diesel production facilities.

Our Feedstocks and Other Inputs
We are a lower carbon biomass-basedbio-based diesel producer. We primarily produce our biomass-basedbio-based diesel from a wide variety of low carbon feedstocks, including distillers corn oil, used cooking oil and inedible animal fat. We also produce biomass-basedbio-based diesel from virgin vegetable oils, such as soybean oil or canola oil, which tend to be higher in price. We believe our ability to
2

process a wide variety of feedstocks in most of our facilities provides us with a cost advantage over many biomass-basedbio-based diesel producers, particularly those relying primarily on higher cost virgin vegetable oils.
We can adjust our processing in most of our facilities to accommodate different feedstocks and feedstock mixes. Our ability to use a wide range of feedstocks gives us a feedstock cost advantage over many other producers because we have the flexibility to respond to changes in feedstock pricing. In 2020,2021, approximately 65%78% of our total feedstock usage was distillers corn oil, used cooking oil or rendered animal fat feedstock. The remaining approximately 35%22% consisted of refined vegetable oils, such as soybean oil or canola oil.
We procuresource our feedstocks from numerous vendors both domestically and internationally in quantities ranging from truckload to railcar to marine vessel. There is no established futures market for the low carbon feedstocks that we utilize. Distillers corn oil is typically purchased on fixed priced contracts in forward positions of one to three months and occasionally longer. We generally purchase used cooking oil and rendered animal fats on one to four week forward positions using fixed pricing or an indexed price compared to a published index such as USDA reports or recognized industry price reports such as The Jacobsen or Informa.Jacobsen. Soybean and canola oils can be purchased on a spot or forward contract basis from several suppliers and pricing for these vegetable oils is compared to the broadly traded Soybean Oil Futures market on the Chicago Mercantile Exchange.
From time to time, we work with developers of next generation feedstocks, such as algae and camelina, to assist them in bringing these new feedstocks to market. We have converted several of these feedstocks, as well as other second generation feedstocks, into high quality biomass-basedbio-based diesel in our laboratory and production facilities. We believe we are well positioned to incorporate many new feedstocks into our production process as they become commercially available.
We procuresource methanol and chemical catalysts used in our production process such as sodium methylate and hydrochloric acid, under fixed-price contracts and formula-indexed contracts based upon competitive bidding. These procurementsourcing contracts typically last from three months to five year.years. The price of methanol is indexed to the monthly reported published price. We also enter into a long-term supply agreement with a supplier to procuresource hydrogen necessary for our renewable dieselRD production.
Risk Management
The prices for feedstocks and biomass-basedbio-based diesel, including the value associated with government incentives, can be volatile and are not always closely correlated. Low carbon feedstocks are particularly difficult to risk manage given that such feedstocks are not traded in any public futures market. To manage feedstock and biomass-basedbio-based diesel price risks, we utilize forward contracting, hedging and other risk management strategies, including the use of futures, swaps, options and over-the-counter products.
In establishing our risk management strategies, we draw from our own in-house risk management expertise and consult with industry experts. We utilize research conducted by outside firms to provide additional market information and risk management strategies. We believe combining these sources of knowledge, experience and expertise expands our view of the fluctuating commodity markets for raw materials and energy to improve our risk management strategies.
3

Distribution
We have established a national distribution system to supply biomass-basedbio-based diesel throughout the United States. Each of our biomass-basedbio-based diesel facilities is equipped with an on-site rail loading system, a truck loading system, or both. Our Seneca biorefinery near the Illinois River has direct barge access for supplying customers using the inland waterways system. Our Houston biorefinery has barge and deep-water ship loading capability. Our Grays Harbor biorefinery has deep-water capability for PANAMAX class vessels. We also manage some customers’ biomass-basedbio-based diesel storage tanks and replenishment process. Our distribution performance for 20202021 in North America is depicted below.

regi-20201231_g1.jpgregi-20211231_g1.jpg
Not pictured above are 8 fuel distribution locations including 3 cardlock locations, acquired as part of the Amber Resources acquisition, located in Southern California.
In addition to our U.S. operations noted above, we have established an international distribution system to supply biomass-basedbio-based diesel throughout Europe. Our products that are produced in Europe and in the United States are distributed to European customers using sea vessels, barges and trucks. Our Emden biorefinery has deep-water capabilities and can load vessels, barges and trucks. Our Oeding biorefinery can only load and unload trucks. We also have storage facilities in the Amsterdam-Rotterdam-Antwerp region, which allows us to distribute our products efficiently.
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As of December 31, 2020,2021, we leased over 1,0351,525 railcars for transportation and leased biomass-basedbio-based diesel storage tanks in 4247 terminals in North America and 2two terminals internationally. In general, the terminals in North America where we lease our biomass-basedbio-based diesel storage tanks are largely chemical product and petroleum fuel terminals so that fuel distributors and other biomass-basedbio-based diesel customers can create a biomass-basedbio-based diesel blend at the terminal before further distribution. Terminal contracts typically have one-to three-year terms and are generally renewable subject to certain terms and conditions. During 2020,2021, REG sold products in 4144 states and D.C. in the United States, sevensix Canadian Provinces, and fourteennineteen other countries around the world.
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We sell heating oil and ultra-low sulfur diesel ("ULSD") at terminals throughout the northeastern United States. We sell additional biofuel blends at terminal locations in the Midwest, West Coast and Texas. We continue to look for terminal expansion and optimization opportunities across North America.
Government Programs Favoring Biomass-BasedBio-Based Diesel Production and Use
The biomass-basedbio-based diesel industry benefits from numerous federal and state government programs.
Renewable Fuel Standard
Biomass-basedBio-based diesel has historically been more expensive to produce than petroleum-based diesel. The biomass-basedbio-based diesel industry's growth has largely been the result of federal and state programs that require or incentivize production and use of biomass-basedbio-based diesel, which allows biomass-basedbio-based diesel to be priced competitively with petroleum-based diesel.
The RFS2 biomass-basedbio-based diesel requirement became effective in 2010, requiring for the first time that a certain percentage of the gasoline and diesel fuel consumed in the United States be made from renewable sources. The biomass-basedbio-based diesel requirement can be satisfied by two primary fuels, biodiesel and renewable diesel.RD. Required volumes under the RFS2 program, referred to as the renewable volume obligation ("RVO"), are determined by the U.S. Environmental Protection Agency, or EPA. The final and proposed RVO targets for the biomass-basedbio-based diesel and advanced biofuels volumes for the years 20162018 to 20212022, respectively, as set by the EPA are as follows:
20162017201820192020202120182019202020212022
Biomass-based diesel1.90 billion gallons2.00 billion gallons2.10 billion gallons2.43 billion gallons2.43 billion gallons
Bio-based dieselBio-based diesel2.10 billion gallons2.43 billion gallons2.76 billion gallons**
Total advanced biofuelsTotal advanced biofuels3.61 billion RINs*4.28 billion RINs*4.29 billion RINs*4.92 billion RINs*5.04 billion RINs*N/ATotal advanced biofuels4.29 billion RINs*4.92 billion RINs*4.63 billion RINs*, **5.20 billion RINs*, **5.77 billion RINs*, **
*Ethanol equivalent gallons
** Proposed
The biomass-basedbio-based diesel requirement is one of four separate renewable fuel requirements under RFS2. The RFS2 requirements are based on two primary categories and two subcategories. The two primary categories are conventional renewable fuel, which is primarily satisfied by corn ethanol, and advanced biofuel, which is defined as a biofuel that reduces lifecycle greenhouse gas emissions by at least 50% compared to the petroleum-based fuel the biofuel is replacing. The advanced biofuel category has two subcategories, cellulosic biofuel, to be satisfied by newly developed cellulosic biofuels, such as ethanol made from woody biomass, and biomass-basedbio-based diesel, which is satisfied by biodiesel and renewable diesel.RD. RFS2’s total advanced biofuel requirement is larger than the combined cellulosic fuel and biomass-basedbio-based diesel requirements, thus requiring the use of additional volumes of advanced biofuels.
The RFS2 requirement for advanced biofuels can be satisfied by any advanced biofuel, including biodiesel, RD, renewable diesel,jet fuel or better known as sustainable aviation fuel ("SAF"), biogas used in transportation, biobutanol, cellulosic ethanol or sugarcane-based ethanol, so long as it meets the 50% greenhouse gas reduction requirement.
The advanced biofuel RVO is expressed in terms of ethanol equivalent volumes, or EEV, which is based on the fuel’s renewable content and energy content compared to ethanol. Biodiesel has an EEV of 1.5 and renewable dieselRD typically has an EEV of 1.7, compared to 1.0 for sugarcane-based ethanol. Accordingly, it requires less biomass-basedbio-based diesel than sugarcane-based ethanol to meet the required volumes as each gallon of biomass-basedbio-based diesel counts as more gallons for purposes of fulfilling the advanced biofuel RVO, providing an incentive for refiners and importers to purchase biomass-basedbio-based diesel to meet their advanced biofuel RVO.
The RFS2 volume requirements apply to petroleum refiners and petroleum fuel importers in the 48 contiguous states and Hawaii, who are defined as “Obligated Parties” in the RFS2 regulations. Obligated Parties are required to incorporate into their petroleum-based fuel a certain percentage of renewable fuel or purchase credits in the form of renewable identification numbersRINs from those who do.
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An Obligated Party’s RVO is based on the volume of petroleum-based gasoline and diesel fuel they produce or import. The largest U.S. petroleum refining companies, such as British Petroleum, Chevron, Citgo, ExxonMobil, Holly Frontier, Marathon, PBE,Motiva, PBF, Phillips 66, Shell, and Valero, represent the majority of the total RVO, with the remainder made up of smaller refiners and importers.
Renewable Identification Numbers
The EPA created the RIN system to track renewable fuel production and compliance with the renewable fuel standard. EPA registered producers of renewable fuel may generate RINs for each gallon of renewable fuel they produce. In the case of biomass-basedbio-based diesel, generally 1.5 to 1.7 biomass-basedbio-based diesel RINs may be generated for each gallon of biomass-basedbio-based diesel produced, based upon the fuel's renewable energy content. Renewable fuel, including biomass-basedbio-based diesel, can then be sold
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with associated RINs attached. RINs may also be separated from the gallons of renewable fuel they represent and once separated they may be sold as a separate commodity. RINs are ultimately used by Obligated Parties to demonstrate compliance with RFS2. Obligated Parties must obtain and retire the required number of RINs to satisfy their RVO during a particular compliance period. An Obligated Party can obtain RINs by buying renewable fuels with RINs attached, buying RINs that have been separated, or producing renewable fuels and generating RINs themselves. All RIN activity under RFS2 must be entered into the EPA’s moderated transaction system, which tracks RIN generation, transfer and retirement. RINs are retired when used for compliance with the RFS2 requirements.
The value of RINs can significantly impact to the price of biomass-basedbio-based diesel. In 2020,2021, RIN prices as a percentage contribution to the daily average 100% pure biodiesel (B100) spot price, as reported by the Oil Pricing Information System, or OPIS, fluctuated significantly throughout the year and ranged from a low of $0.37$1.40 per gallon, or 17%37% of the average B100 spot price per gallon, in January to a high of $1.03$3.07 per gallon, or 45%50% of the average spot price, in December.June.
Biodiesel Tax Credit
The federal biodiesel mixture excise tax credit, or BTC, provides a $1.00 refundable tax credit per gallon to the first blender of biomass-basedbio-based diesel with petroleum-based diesel fuel. The BTC can then be credited against federal excise tax liability or the blender can obtain a cash refund from the U.S. Treasury for the value of the credit. The BTC was first implemented on January 1, 2005 and has been allowed to lapse multiple times before being retroactively reinstated, as described in the following table:
regi-20211231_g2.jpg
The BTC is an incentive shared across the advanced biofuel production and distribution chain through routine, daily trading and negotiation. In December 2019, the BTC was retroactively reinstated for 2018 and 2019, and made effective from January 2020 through December 2022.
California Low Carbon Fuel Standard Credits
In 2006, California passed the Global Warming Solutions Act or AB 32. The legislation established the California Low Carbon Fuel Standard, or LCFS, regulation, which is a rule designed to reduce greenhouse gas emissions associated with transportation fuels used in California. The regulation quantifies lifecycle greenhouse gas emissions by assigning a “carbon intensity” ("CI") score to each transportation fuel based on that fuel’s lifecycle assessment. Each petroleum fuel provider (generally the fuel’s producer or importer, or “regulated party”) is required to ensure that the overall CI score for its fuel pool meets the annual carbon intensity target for a given year. A regulated party’s fuel pool can include gasoline, diesel, and their blendstocks and substitutes.
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We obtain carbon credits when we import and sell qualified biomass-basedbio-based diesel into California. During 2020,2021, California LCFS carbon credits ranged from $167.50$142.00 per metric ton to $218.00$201.00 per metric ton, as reported by OPIS.
Oregon Clean Fuel Program
The Oregon Clean Fuel Program was launched in 2016 and 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% ethanol blended with gasoline and 5% biodiesel blended with diesel. The Oregon Renewable Fuels Standard requires all gasoline sold in the state to be blended with 10% ethanol (E10). In addition, all diesel fuel sold in the state must be blended with at least 5% bio-based diesel. In March of 2020, the Oregon Governor issued an executive order to expand the Clean Fuel Program to achieve at least a 20% reduction from 2015 levels by 2030 and a 25% reduction by 2035. The executive order is currently in a rule making process, with a targeted effective date of January 1, 2023.
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We obtain carbon credits when we import and sell qualified biomass-basedbio-based diesel in Oregon. During 2020,2021, Oregon OCF carbon credits ranged from $105.00$121.50 per metric ton to $155.00$131.00 per metric ton, as reported by OPIS.
Other Government Programs
According to the U.S. Department of Energy, more than 40 states have implemented various programs that encourage the use of biomass-basedbio-based diesel through blending requirements as well as various tax incentives. The chart below summarizes some of the most significant programs.
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GovernmentProgram description
CanadaThe federal government has a nationwide requirement of 2% nationwide requirement.bio-based content in diesel. In addition a number of provinces in Canada have biofuel programs (British Columbia has an LCFS, Alberta, Saskatchewan, Manitoba and Ontario have usage requirements that exceed the federal standard). 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.
New YorkIn 2019 New York passed the Community Leadership and Climate Protection Act (similar to California's AB 32) which establishes firm carbon reduction goals of 40% reductions by 2030 and 85% reductions in 2050. The state is currently undertaking a rulemaking which will establish an LCFS program for mobile source emissions and fixed source emissions.

In 2016, the City of New York adopted legislation requiring 5% biomass-basedbio-based diesel blends 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. Regional oil heat dealers have pledged to support 50% biomass-based diesel blends by 2030 to meetIn 2021, the state legislature passed a state-wide biodiesel requirement for home heating requirements.oil starting with B5 in the fall of 2022 and ramping up to B10 in 2025 and B20 in 2030. Connecticut and Rhode Island have also passed requirements to use bio-based diesel in heating oil ramping up to B50 in 2035 and B50 in 2030, respectively.
IllinoisIllinois offers a tax exemption from the generally applicable 6.25% sales tax on fuel for biomass-basedbio-based diesel blends that incentivizes blending at 11% biomass-basedbio-based diesel, or B11, through December 31, 2023. Illinois’ program has made that state one of the largest biomass-basedbio-based diesel markets in the country.
IowaIowa 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 5%-10% biodiesel blends and $0.055 per gallons for 11% and above biodiesel blends. Iowa also has a biomass-basedbio-based diesel production incentive that provides $0.02 per gallon of production capped after the first 25 million gallons per production plant. Iowa also reduces the excise tax on fuel, by $0.024 per gallon for biodiesel blends of 11% and above. Legislation in Iowa has been introduced in the 2022 Iowa Legislature to increase the incentives in a number of areas.
MinnesotaMinnesota law requires a 5% biodiesel blend except during the summer months (April - September) when a 20% blend is required. There is a two week step up from B5 to B10 in the first two weeks of April prior to the B20 requirement.
North DakotaNorth Dakota offers a $0.05 per gallon sales tax incentive for retailers who sell 5% and above biodiesel blends.
PennsylvaniaPennsylvania has adopted legislation requiring biomass-basedbio-based diesel blends beginning at 2% biodiesel blends with incremental increases, provided certain feedstock or production minimums are met.
TexasThe biomass-basedbio-based diesel portion of biomass-basedbio-based diesel blends are exempt from Texas state excise tax, which results in a $0.20 per gallon incentive for 100% pure biodiesel.
WashingtonIn 2021, the state legislature has passed and the governor signed a Clean Fuel Standard. That law sets targets similar to Oregon and California in carbon reduction. The state is currently engaged in a lengthy rulemaking with a goal of implementation in 2023. The City of Seattle has a heating oil tax exemption for the portion of the heating oil that is biodiesel. Washington legislature is also in the process of developing legislation on a low carbon fuel program.
U.S. MunicipalitiesMany cities across the United States have set targets to reduce greenhouse gas emissions. New York, Chicago, Atlanta and 34 other cities have set emissions reduction goals of 80 percent or higher by 2050.
We believe that other government requirements for the use of biofuels increase demand for our biomass-basedbio-based diesel within such regions and they may help increase the overall demand in addition to the RFS2 requirements. We observe that existing demand for our biofuel from Obligated Parties in connection with federal requirements may shift to regions that have use requirements or tax incentive programs.
RED Program
In the European Union, or EU, the Renewable Energy Directive established a 10% target by 2020 for the use of renewable energy in the transport sector in EU member states. Given the existing limited market presence of alternative fuels or electromobility, the majority of the target has been realized through biofuels. In 2018, a revised Renewable Energy Directive, RED II, was established. RED II set a target of 14% renewables in transport and a 32% reduction of greenhouse gases, to be progressively achieved from 2021 until 2030. Biofuels produced from certain types of waste feedstocks, such as used cooking oil, benefit from extra incentives and so-called advanced feedstocks even get a specific sub-mandate. Additionally, RED II opens up new outlets such as marine fuels or renewable aviation fuels. In 2021, each of the EU Member States is in the process
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of ratifyingratified RED II into national legislation. Since the adoption of RED II, the EU has introduced the “European Green Deal”, a package of new measures that are intended to align the EU's environmental goals with the Paris Accord objectives and, according,objectives. This resulted in the European Commissionproposal of a legislative package called "Fit for 55" (meaning 55% GHG reduction by 2030) increasing the target for overall renewables to 40%; the relevant legislative process is exploring whetherexpected to update RED II.be finalized in 2023.
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Trends in Market Demand and Competitive Conditions
We face competition from producers and suppliers of petroleum-based diesel fuel, other biomass-basedbio-based diesel producers, marketers, traders and distributors. The size of the biomass-basedbio-based diesel industry is small compared to the size of the petroleum-based diesel fuel industry and large petroleum companies have greater resources than we do. Our principal competitive differentiators are biomass-basedbio-based diesel and RIN quality, supply reliability and price. In the United States, and Canadian biomass-basedbio-based diesel markets, we compete with independent biomass-basedbio-based diesel producers as well as large, multi-product companies that have greater resources than we do. Ag Processing Inc., Archer Daniels Midland Company, Cargill Incorporated, and Louis Dreyfus Commodities Group are major international agribusiness corporations and biodiesel producers with the financial, feedstock sourcing and marketing resources to be formidable competitors in the biodiesel industry. These agribusiness competitors tend to make biodiesel from virgin vegetable oils such as soybean or canola oil, which they produce as part of their integrated agribusinesses.
We also compete with several large and well capitalized producers of renewable diesel.RD. Neste Corporation has approximately 882 million gallons of renewable dieselRD production capacity in Asia and Europe, a significant portion of which is imported into the United States. Neste has announced that it is in the process of expanding its renewable dieselRD production capacity in Singapore. Diamond Green Diesel, LLC, a joint venture between Valero Energy Corporation and Darling Ingredients Inc., operates a 275 mmgy capacity renewable dieselRD facility and ittheir additional 400 mmgy plant is in the processonline as of expanding capacity to 675 mmgy byDecember 2021. In January 2021, Valero Energy Corporation has announced that it will build a 470-million-gal/year renewable dieselRD plant in Texas with joint venture partner Darling Ingredients. We also face the prospect that petroleum refiners will be increasingly competitive with us, either by converting oil refineries to produce renewable dieselRD or by co-processing renewable feedstock with crude oil. Several petroleum refiners in the United States have effected conversions of their facilities from crude oil to renewables in the past year including Sinclair, Phillips 66, Holly Frontier, Marathon, Exxon, and Exxon.Shell. Some of the largest refiners have started co-processing renewable feedstocks or have announced plans to do so. If refinery conversions accelerate or if co-processing expands significantly, the competition we face could increase significantly.
We also face competition in the biomass-basedbio-based diesel RIN compliance market from producers of renewable dieselRD and in the advanced biofuel RIN compliance market from producers of other advanced biofuels, such as Brazilian sugarcane ethanol producers and producers of biogas used in transportation. Competition from imported biodiesel changed significantly in 2018, when the International Trade Commission and U.S. Department of Commerce imposed countervailing duties against unfairly subsidized biodiesel exports to the United States from Argentina and Indonesia. According to the U.S. Energy Information Administration data, renewable dieselRD imports from Singapore to the United States have maintained a steady rate. Imports from Singapore totaled 173 million gallons in 2018, 252 million gallons in 2019, and 280 million gallons in in 2020.2020 and 371 million gallons through November 30, 2021.
In our marketing and distribution operations, besides the integrated producers, we are also faced with competition from biomass-basedbio-based diesel traders such as BP, Lincoln Energy, NGL, Shell, Vitol and others. The integrated producers and traders at times may have advantages because of logistics, feedstock accessibility and price, geographical location to customers, blending infrastructure, financial resources, and risk appetite. These same trading companies may have greater financial resources than we do and are able to take significant biomass-basedbio-based diesel positions in the marketplace. These competitors are often customers and/or suppliers of ours as well.
Seasonality
Our operating results and working capital needs are influenced by seasonal fluctuations in the price of and demand for biodiesel. Seasonal fluctuations may be based on both the weather and the status of both the BTC and RVO.
Demand may be higher in the quarters leading up to the expiration of the BTC as customers seek to purchase biomass-basedbio-based diesel when they can benefit from the agreed upon value sharing of the BTC with producers. This higher demand prompted by an expiring BTC has often resulted in reduced demand for biodiesel in the following quarter. In addition, RIN prices may also be subject to seasonal fluctuations. The RIN is dated for the calendar year in which it is generated. Since 20% of an Obligated     Party's annual RVO can be satisfied by prior year RINs, most RINs must come from biofuel produced or imported during the RVO year. As a result, RIN prices can be expected to increase as the calendar year progresses if the RIN market is undersupplied compared to that year's RVO and decrease if it is oversupplied.
Seasonal fluctuation in our business also occurs in the colder months when historically there has been reduced demand for biodiesel in northern and eastern U.S. markets, which are some of the primary markets in which we operate. Biodiesel typically has a higher cloud point than petroleum-based diesel or renewable diesel.RD. The cloud point is the temperature below which a fuel
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exhibits a noticeable cloudiness and eventually gels, leading to fuel handling and performance problems for customers and suppliers. Reduced demand in the winter for our higher cloud point biodiesel may result in excess supply of such higher cloud point biodiesel and lower prices for such higher cloud point biodiesel. To mitigate some of these seasonal fluctuations in demand, we have upgraded our Newton and Danville biorefineries to produce distilled biodiesel which improves cold-weather performance.
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Government Regulations

Our manufacturing facilities, like other fuel and chemical production facilities, are subject to various federal, state and local environmental laws and regulations, including those relating to the discharge of materials into the air, water and ground; the generation, storage, handling, use, transportation and disposal of hazardous materials; ecological and natural resources; and the health and safety of our employees, contractors and the public. These laws and regulations require us to obtain and comply with numerous environmental and other regulatory permits to construct and operate each facility. They can require expensive pollution control equipment or operational changes to limit actual or potential impacts to human health and the environment. A violation of these laws, regulations or permit conditions could result in substantial fines, natural resource damage, criminal sanctions, permit revocations and or facility shutdowns. We do not currently have any environmental proceedings either pending or threatened against our facilities that would materially affect our business or financial condition. Furthermore, we do not anticipate a material adverse effect on our business or financial condition as a result of our efforts to comply with these requirements as presently in effect.
Human Capital
As of December 31, 2020,2021, we had 7931,093 employees located in the United States and 102103 employees located internationally. None of our U.S. employees are represented by a labor organization or under any collective bargaining agreements.

We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, development programs that enable continued learning and growth and an employment package intended to promote well-being across all aspects of their lives, including health care, retirement planning and paid time off. In addition, we regularly conduct an employee survey to gauge employee engagement and identify areas of focus. Since the onset of the COVID-19 pandemic, we have taken an integrated approach to helping our employees manage their work and personal responsibilities, with a strong focus on employee well-being, health and safety.

We believe that an equitable and inclusive environment with diverse teams is crucial to our efforts to attract and retain key talent and produces more creative solutions and innovative products and services. In 2020,2021, we launchedcontinued to implement and expand certain programs aimed at building an equitable and inclusive culture through a variety of diversity and inclusion initiatives.
Intellectual Property
We own a significant number of U.S. and international patents and expect to file additional patent applications as we continue to pursue technological innovations. We have also developed trade secrets to protect our know-how, and other proprietary information, including for example the sourcing and processing of low-cost feedstocks and production know-how, particularly in the field of processing low-cost feedstocks.renewable fuel products.
Executive Officers of the Registrant
Cynthia J. Warner, age 62,63, has served as our President and Chief Executive Officer since January 2019. Ms. Warner was Executive Vice President, Operations for Andeavor (formerly known as Tesoro Corporation) from August 2016 until Andeavor's acquisition by Marathon Petroleum Corporation in October 2018. Prior to that, Ms. Warner served as Andeavor's Executive Vice President, Strategy and Business Development, since October 2014. From 2012 to August 2014, Ms. Warner was Chairman and Chief Executive Officer of Sapphire Energy, Inc. and she continued to serve as Chairman through February 2015. From 2009 to 2011, Ms. Warner was President of Sapphire Energy. From 2007 to 2009, she was Group Vice President, Global Refining, at BP plc. Ms. Warner has served as a member of the Board of Directors of IDEX Corporation (NYSE: IEX) since February 2013 and of Sempra Energy since June 2019. She is also a member of the National Petroleum Council. Ms. Warner has a Bachelor of Engineering degree in Chemical Engineering from Vanderbilt University and an MBA from Illinois Institute of Technology.
Todd RobinsonR. Craig Bealmear, age 55, has served as our Interim Chief Financial Officer since December 2020. Mr. Robinson has served as our Treasurer since April 2016, and served as Director, Investor Relations of the Company since February 2014.2021. Prior to joining REG, Mr. Robinson spent more than 25 yearsBealmear served as a Principal at RCB Consulting, LLC since January 2021. Prior to that, Mr. Bealmear held several positions at BP plc (NYSE: BP) ("BP") since 2001. From March 2015 to December 2020, Mr. Bealmear served as Chief Financial Officer - North America Downstream at BP and from January 2013 to February 2015, Mr. Bealmear served as Deputy Chief Financial Officer; Refining and Marketing Segment at BP. Prior to that, Mr. Bealmear held numerous Finance, Strategy and Commercial roles with BP and Atlantic Richfield Corporation over a 30-year career in banking, investment, financeboth the United States and treasury operationsUnited Kingdom. Mr. Bealmear received an M.B.A. from the Wharton School at companies including Wells Fargo, Deloitte, Pioneer Hi-Bred International, Pella Corporation,the University of Pennsylvania and HSBC Securities (USA), Inc. Mr. Robinson holds a bachelor’s degreeB.A. in Business Administration from Iowa State University - College of Business.Bellarmine University.
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Brad AlbinChad Stone, age 58,52, has served as our Senior Vice President, ManufacturingCommercial Performance, since February 2008. Mr. Albin joined REG in 2006. From 2002 to 2006, Mr. AlbinDecember 2020, and served as Chief Financial Officer from August 2009 until December 2020. Prior to joining REG, from October 2007 to May 2009, he was a Director at Protiviti Inc., a global business consulting and internal audit firm. From August 1997 to September 2007, Mr. Stone served as Director with PricewaterhouseCoopers and he worked at Arthur Andersen from July 1992 to August 1997, departing as a manager. Mr. Stone was elected to the governing Board of the National Biodiesel Board in 2015 and has served as Chairman since November 2019. Previously, Mr. Stone served as Vice-Chairman from November 2018 to November 2019 and as Secretary from November 2016 to November 2018. Mr. Stone served on the Executive DirectorBoard of Operations for Material Sciences Corporation, where he directed multi-plant operations for automotive and global appliance industries. From 1996the Iowa Biodiesel Board from September 2010 to 2002,September 2016, serving as Vice Chairman from 2014-2015. Since October 2015, Mr. Albin wasStone has served on the Vice PresidentUniversity of Operations for Griffin Industries.Iowa School of Management's Advisory Committee. Mr. AlbinStone has over 2520 years of experience in executive operations positionsleading financing reporting, strategy, policy and compliance. Mr. Stone holds an M.B.A. with concentrations in multi-feedstock biomass-based diesel, chemical, foodfinance, economics and automotive supplier companies, such as The Monsanto Company, The NutraSweet Company and Griffin Industries. Mr. Albin was a charter member of the National Biodiesel Accreditation Committee. Mr. Albin is a current director on two boards where REG has investments and was previously on the Board of Managers for Petrotec GmbH before REG acquired full ownership in 2017.  Mr. Albin was previously the President and Vice President of the Iowa Renewable Fuels Association from 2011-2013. In November 2014, Mr. Albin completed the Advanced Management Programaccounting from the University of Chicago, BoothGraduate School of Business and he holds a B.S.B.B.A. in ChemistryAccounting from Eastern Illinois University.the University of Iowa. He is also a Certified Public Accountant.
Eric M. Bowen, age 49,50, has served as our General Counsel and Corporate Secretary since April 2020. His title has recently changed to General Counsel, Corporate Secretary and Head of Strategy. Prior to becoming our General Counsel, Eric served as our Vice President, Corporate Business Development & Legal Affairs from January 2013 to April 2020, and led the REG Life Sciences business unit since January 2014 until the sale of the business unit in May of 2019. From June 2010 to January 2013, Mr. Bowen served as our Executive Director, Corporate Business Development and Legal Affairs. From 2005 to June 2010, Mr. Bowen was Founder, President and CEO of Tellurian Biodiesel, Inc., which was acquired by the Company. Prior to entering the biodiesel industry, Mr. Bowen practiced corporate and securities law in Silicon Valley. For 15 years, Mr. Bowen has been at the forefront of the development of the biodiesel and renewable dieselRD industries. Mr. Bowen was a founding member of the California Advanced Biofuels Alliance and served as the founding Chairman from 2007 to 2012. He also served as Chairman of the San Francisco Biodiesel Taskforce and as a member of the California LCFS Advisory Panel. Mr. Bowen has served as a member of the Board of Directors of a company in which REG has invested since November 2013. Mr. Bowen holds a J.D. from the University of California, Berkeley and a B.A. from the University of Oregon Honors College.

Recent Developments

Proposed Merger

On February 27, 2022, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Chevron Corporation (“Parent”) and Cyclone Merger Sub Inc., a wholly owned subsidiary of Parent (“Merger Subsidiary” and together with Parent, “Buyer”). Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will merge with and into REG (the “Merger”) with REG continuing as the surviving corporation of the Merger and as a wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each share of our common stock that is issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled pursuant to the Merger Agreement or shares of common stock held by holders who have made a valid demand for appraisal in accordance with Section 262 of the Delaware General Corporation Law), will be automatically converted into the right to receive $61.50 in cash, without interest (the “Merger Consideration”).

At the Effective Time, and as a result of the Merger:
•Each outstanding stock appreciation right with respect to a share of common stock (each, a “Company SAR”) will vest and be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price applicable to such Company SAR multiplied by (y) the number of shares of common stock subject to such Company SAR.
•Each outstanding restricted stock unit award that vests solely on the passage of time held by a Company non-employee director (each, a “Company Director RSU”) will vest and be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of shares of common stock subject to such Company Director RSU.
•Each outstanding restricted stock unit award that vests solely on the passage of time and is not a Company Director RSU (each, a “Company Employee RSU”) to the extent vested immediately prior to the Effective Time will be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of vested shares of common stock subject to such Company Employee RSU.
•Each outstanding Company Employee RSU Award to the extent unvested immediately prior to the Effective Time (each, an “Unvested Company Employee RSU Award”) and certain performance-based restricted stock unit awards set forth on a schedule to the Merger Agreement (the “Scheduled PSU Awards”) will be cancelled and converted into the
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right to receive an amount in cash, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of shares of common stock subject to such Unvested Company Employee RSU Award or Scheduled PSU Award, as applicable (such converted award, an “Assumed RSU Award”). Each Assumed RSU Award will be subject to the vesting schedule applicable to the corresponding Unvested Company Employee RSU Award immediately prior to the Effective Time (including, with respect to the Scheduled PSU Awards, the performance vesting conditions).
•Except with respect to the Scheduled PSU Awards, each outstanding restricted stock unit award that corresponds to shares of common stock granted under any Company Benefit Plan and vests based on the achievement of performance goals (each, a “Company PSU Award”) will be cancelled and converted into the right to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of (A) the Merger Consideration multiplied by (B) the number of shares of common stock subject to such Company PSU Award (assuming that any performance based vesting conditions applicable to such Company PSU Award for any performance period that has not been completed as of the Effective Time are achieved at (x) with respect to Company PSU Awards granted in 2020 and 2021, the greater of the target performance levels and the levels based on actual achievement of pro-rated performance goals through the Effective Time or (y) with respect to Company PSU Awards granted in 2022, the target performance levels) (each such converted award, an “Assumed PSU Award”). Each Assumed PSU Award will be subject to the vesting schedule applicable to the corresponding Company PSU Award immediately prior to the Effective Time (other than any performance based vesting conditions).
The closing of the Merger is subject to various conditions, including (i) the adoption of the Merger Agreement by holders of a majority of the issued and outstanding shares of our common stock; (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and clearance by the European Commission or expiration of any applicable waiting period, in each case under EU Regulation 139/2004 (the "EU Clearance"); (iii) the absence of any order or law prohibiting the consummation of the Merger, except if such order or law is immaterial to Parent and (iv) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and as of the closing of the Merger, and compliance in all material respects with the covenants and agreements contained in the Merger Agreement. In addition, the obligation of Parent and Merger Subsidiary to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement). The closing of the Merger is not subject to a financing condition. Under the terms of the Merger Agreement, consummation of the Merger will occur on the second business day following the fulfillment or waiver of the conditions to closing of the Merger or at such other time as REG and Parent agree.

Our Board of Directors and the board of directors of Merger Subsidiary have each approved the Merger and the Merger Agreement. If approved by our stockholders, we currently expect the Merger to close in the second half of 2022. Until the closing, we will continue to operate as an independent company.

The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, which has been filed as Exhibit 2.1 to the Current Report on Form 8-K that we filed with the SEC on February 28, 2022.
Available Information
Our internet address is http://www.regi.com. Through that address, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge as soon as reasonably practicable after they are filed with the U.S. Securities and Exchange Commission. The information contained on our website is not included in, or incorporated by reference into, this annual report on Form 10-K.
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ITEM 1A.    Risk Factors
Our business, financial condition, results of operations and liquidity are subject to various risks and uncertainties, including those described below. As a result, the trading price of our common stock could decline.

RISKS RELATED TO RENEWABLE FUEL AND LOW CARBON FUEL INCENTIVES
The Renewable Fuel Standard Program, a federal law requiring the consumption of qualifying biofuels, could be repealed, curtailed or otherwise changed, which would have a material adverse effect on our revenues, operating margins and financial condition.
We and other participants in the biomass-basedbio-based diesel industry rely on governmental programs requiring or incentivizing the consumption of biofuels. Biomass-basedBio-based diesel has historically been more expensive to produce than petroleum-based diesel fuel and these governmental programs support a market for biomass-basedbio-based diesel that might not otherwise exist.
One of the most important of these programs is the RFS2, a federal law that requires that transportation fuels in the United States contain a minimum amount of renewable fuel. This program is administered by the U.S. Environmental Protection Agency ("EPA"). The EPA's authority includes setting annual minimum aggregate levels of consumption in four renewable fuel categories, including the two primary categories in which our fuel competes biomass-basedbio-based diesel and advanced biofuel. The parties obligated to comply with this RVO are petroleum refiners and petroleum fuel importers.
The petroleum industry is strongly opposed to the RFS2 and can be expected to continue to press for changes both in the RFS2 itself and in the way that it is administered by the EPA. One key point of contention is the rate of growth in the annual RVO. The RVO for biomass-basedbio-based diesel was set at steadily rising levels beginning at 1.00 billion gallons in 2012 and increasing to 2.00 billion gallons in 2017. However, growth in the RVO for biomass-basedbio-based diesel was constrained fromin years 2017 through 2019, as the biomass-basedbio-based diesel RVO increased by only 100,000 gallons from 2.00 billion to 2.10 billion gallons while the advanced biofuel RVO increased from 4.28 billion gallons to 4.92 billion gallons. For 2020 and 2021, the EPA set the biomass-basedbio-based diesel RVO at 2.43 billion gallons. The 2020 advanced biofuel RVO has beenwas set at 5.044.63 billion gallons which represents zero growth in the advanced biofuels category after taking into account the increase in the cellulosic volumes. We believe that growth in the annual RVOs strongly influences our ability to grow our business and supports the price of our fuel through the RINs. The EPA's future decisions regarding the RVO will significantly influence our revenues and profit margins.
The RFS2 also grants to the EPA authority to waive a qualifying refiner's obligation to comply with RFS2, through a small refinery exemption ("SRE"), based on a determination that the program is causing severe economic harm to that refinery. SREs can significantly harm demand for biomass-basedbio-based diesel and the value of RINs. In December 2019, the EPA issued a ruling on the reallocation of the required volumes under RFS2 in an attempt to offset the effect of the SREs. The ruling detailed the intent to redistribute the exempt volumes granted through the SRE to non-exempt obligated parties. This redistribution will be calculated on a three-year rolling average, based on the U.S. Department of Energy ("DoE") recommended relief. The EPA has consistently granted more relief through small refinery waivers than recommended by the DoE.
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The table below summarizes the small refinery waiver petitions requested, granted, denied or pending and the impacted volumes as of February 18, 2020,17, 2022, according to the EPA's website:
202020192018201720162015202120202019201820172016
Petitions receivedPetitions received16 32 44 37 29 28 Petitions received5 30 32 44 37 29 
Petitions grantedPetitions granted— 2 32 35 19 7 Petitions granted— — — 31 35 19 
Petitions denied or withdrawnPetitions denied or withdrawn— — 9 1 8 18 Petitions denied or withdrawn— — 3 10 1 9 
Petitions pendingPetitions pending16 30 3 1 2 3 Petitions pending5 30 29 3 1 1 
Estimated volume of fuel exempted (million gallons)Estimated volume of fuel exempted (million gallons)— — 13,420 17,050 7,841 3,070 Estimated volume of fuel exempted (million gallons)— — — 13,420 17,050 7,841 
Estimated Advanced Biofuel RVO Exempted (million RINs)Estimated Advanced Biofuel RVO Exempted (million RINs)— — 318 404 157 49 Estimated Advanced Biofuel RVO Exempted (million RINs)— — — 1,430 1,820 790 
Estimated Advanced Biofuel RVO Exempted (% of Advanced biofuels RVOs)Estimated Advanced Biofuel RVO Exempted (% of Advanced biofuels RVOs)— %— %7.4 %9.4 %4.3 %1.7 %Estimated Advanced Biofuel RVO Exempted (% of Advanced biofuels RVOs)— %— %— %7.4 %9.4 %4.3 %

We believe that the increase in small refinery waivers granted in 2018 for the 2016 and 2017 RVO years and in 2019 for the 2018 RVO year significantly affected the demand and price of RINs as the average price of D4 (Biomass-based diesel classification) RINs fell from $0.57 to $0.40 during 2019 according to OPIS data. If the EPA continues this practice, it will harm demand and price of RINs and thus our profitability.
Subsequent to the EPA's December 2019 ruling, in January 2020, the 10th Circuit Court of Appeals issued a ruling invalidating the process the EPA had been using to grant SREs. The EPA also denied 54 retroactive waivers filed for periods 2011-2018. There are 14 remaining waivers that are still to be decided on by the EPA. We believe these actions have increased RIN values. In January 2021, theU.S. Supreme Court overturned this ruling in June 2021. This ruling invalidated the requirement to have a continuous trend of the United States agreed to review the 10th Circuit Court's ruling on the SRE matter. There is no certainty of the outcome of the review at this time.applications for SREs. The EPA could change their procedures to permit more SREs and that has the potential to cause further harm to RIN values.

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The COVID-19 pandemicEPA released its proposed RVO for 2021 and measures2022 with increases in bio-based diesel and advanced categories. The EPA also proposed to address the pandemic have severely affected demand for gasoline and diesel, reducing demand for 2020 RINs for RFS compliance. RVO compliance obligations are based on the volume of sales of gasoline and diesel of a party that is subject to RFS2's volume requirements, or obligated party. As those volumes decrease, there is a corresponding decrease in the volume of RINs required for RFS compliance. As such, if the effects of COVID-19 on fuel demand continue throughout 2021, we expect that demand for the RINs we produce will decrease and for those RINs to have lower values, which would harm our profitability.
Several Governors have petitioned the EPA to use its general waiver authority toretroactively reduce the 2020 RVO in response to COVID-19 economic disruptions. Should the EPA use its general wavier authority to reduce RVO requirements, we expect that this would harm demand for and the value of biomass-based diesel and RINs, which would harm our revenues and earnings.
Asas part of the dateannouncement. In addition, EPA sought comments on denying more than 60 pending SRE's between 2016 and 2021. If finalized, these developments will provide more certainty to the industry to know what the requirement of this report, the EPA has not issued the 2021 RVO. This was toobligated parties will be issued in 2020 and it is uncertain when the EPA will issue the RVO and at what level the 2021 RVO will be.2022.
The U.S. Congress could repeal, curtail or otherwise change the RFS2 program in a manner adverse to us. Similarly, the EPA could curtail or otherwise change its administration of the RFS2 program in a manner adverse to us, including by not increasing or even decreasing the RVO, by waiving compliance with the RVO or otherwise. In addition, while Congress specified RFS2 volume requirements through 2022 (subject to adjustment in the rulemaking process), beginning in 2023 required volumes of renewable fuel will be largely at the discretion of the EPA (in coordination with the Secretary of Energy and Secretary of Agriculture). We cannot predict what changes, if any, will be institutedoccur, or the impact of any changes on our business, although adverse changes could seriously harm our revenues, earnings and financial condition.


Loss of or reductions in federal and state government tax incentives for biomass-basedbio-based diesel production or consumption may have a material adverse effect on our revenues and operating margins.
Federal and state tax incentives have assisted the biomass-basedbio-based diesel industry by making the price of biomass-basedbio-based diesel more cost competitive with the price of petroleum-based diesel fuel to the end user.fuel.
Federal Tax Incentives
The most significant tax incentive program has been the federal biodiesel mixture excise tax credit, referred to as the Biodiesel Tax Credit ("BTC"). Under the BTC, the first person to blend pure biomass-basedbio-based diesel with petroleum-based diesel fuel receives a $1.00-per-gallon refundable tax credit.
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The BTC was established on January 1, 2005 and has lapsed and been reinstated retroactively and prospectively several times. Most recently in December 2019, the BTC was retroactively reinstated for 2018 and 2019 and is in effect from January 2020 through December 2022. Unlike the RFS2 program, the BTC has a direct effect on federal government spending and changes in federal budget policy could result in its elimination or in changes to its terms that are less beneficial to us. We cannot predict what action, if any, Congress may take with respect to the BTC after 2022. There is no assurance that the BTC will be reinstated, that it will be reinstated on the same terms or, if reinstated, that its application will be retroactive, prospective or both. Any adverse changes in the BTC can be expected to harm our results of operations and financial condition.
State Tax Incentives
Several states have enacted tax incentives for the use of biodiesel. For example, Illinois has a generally applicable 6.25% sales tax, but offers an exemption from this tax for a blend of fuel that consists of greater than 10% biodiesel.biodiesel that is set to expire at the end of 2022. In Iowa, for 2018 through 2024,2025, retailers earn $0.035 per gallon for 5%-10% biodiesel blends and $0.055 per gallon for 11% and above blends. Iowa also has a biomass-basedbio-based diesel production incentive that provides $0.02 per gallon of production capped at the first 25 million gallons per production plant. The biodiesel and renewable diesel ("RD")RD portion of fuel blends are exempt from Texas state excise tax, which results in a $0.20 per gallon incentive. Minnesota law requires a 5% biodiesel blend except during the summer months when a 20% biodiesel blend is required. State budget or other considerations could cause the modification or elimination of tax incentive programs. Both Illinois and Iowa have pending legislation that proposes modifying existing incentives and adding usage requirements. The curtailment or elimination of such incentives could materially and adversely affect our revenues and profitability.
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We derive a significant portion of our revenues from sales of our renewable fuel in the State of California primarily as a result of California’s Low Carbon Fuel Standard ("LCFS"); adverse changes in this law or reductions in the value of LCFS credits would harm our revenues and profits.
We estimate that our revenues from the sale of renewable fuel in California and from sales of credits received under LCFS were approximately $380.8$593 million in 2020.2021. The LCFS is designed to reduce greenhouse gas ("GHG") emissions associated with transportation fuels used in California by ensuring that the total amount of fuel consumed meets declining targets for such emissions. The regulation quantifies lifecycle GHG emissions by assigning a “carbon intensity” ("CI") score to each transportation fuel based on that fuel’s lifecycle assessment. Each petroleum fuel provider, generally the fuel’s producer or importer is required to ensure that the overall CI score for its fuel pool meets the annual carbon intensity target for a given year. This obligation is tracked through credits and deficits and credits can be traded. We receive LCFS credits when we sell qualified fuels in California. As a result of the trading price of LCFS credits, California has become a desirable market in which to sell our biomass-basedbio-based diesel and an increasing percentage of our revenue and profit is related to sales to California and LCFS credit values. In 2020,2021, LCFS credit prices ranged from a high of $218$201 per credit in FebruaryJanuary to a low of $168$142 per credit in March.November. If the value of LCFS credits were to materially decrease as a result of over-supply asor a resultlack of demand, our revenues and profits would be seriously harmed. Furthermore, if we experienced reduced demand for our fuels or LCFS credits in California, either as a result of oversupply, competitive pressure, lack of market liquidity, or regulatory change, or for other reasons including the continued impact of the COVID-19 pandemic, our revenues and profits would be seriously harmed. In addition, if the fuel we produced is deemed not to qualify for LCFS credits;credits, or if the LCFS or the manner in which it is administered or applied were otherwise changed in a manner adverse to us, our revenues and profits couldwould be seriously harmed.

We derive a significant portion of our revenues from sales of our renewable fuel in Canada and Europe; adverse changes in the programs requiring the use of renewable and lower carbon fuels or reductions in the value of credits would harm our revenues and profits.
We estimate that our revenues from the sale of renewable fuels in Canada and Europe were approximately $461.5$544 million in 2020.2021. Canadian provinces and certain European countries have policies designed to increase the level of renewable content in transportation fuels and/or reduce GHG emissions associated with such fuels. As a result of these policies, these markets have become increasingly important markets into which we sellfor our biomass-basedbio-based diesel and an increasing percentage of our revenue and profit is related to sales into these markets. If the value of biomass-basedbio-based diesel in these markets were to materially decrease, as a result of reduced demand or increased supply by competitors, or for other reasons including the impact of the COVID-19 pandemic, if the fuel we produce is deemed not to qualify for compliance in those markets, or those policies are otherwise changed in a manner adverse to us, our revenues and profits could be seriously harmed.

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RISKS RELATED TO OUR BUSINESS OPERATIONS AND THE MARKETS IN WHICH WE OPERATE

The COVID-19 pandemic may adversely impact our business.
The COVID-19 pandemic has negatively impacted the global economy. While we did not incur significant, unmanageable operational or financial disruptions during the year ended December 31, 2020 or 2021 from the COVID-19 pandemic and its variants as well as those measures to address the pandemic, the extent to which the COVID-19 pandemic may adversely impact our business depends on future developments, which are highly unpredictable.
We cannot predict the degree to, or the time period over, which our sales and operations will be affected by this outbreak, and the effects could be material. The impacts include, but are not limited to:
•a significant decline in demand for our products due to market disruptions, resulting in a decline in sales and prices;
•limitations of feedstocks, price volatility, or disruptions to our suppliers’ operations;
•the complete or partial closure of one or more of our manufacturing facilities;
•the interruption of our distribution system, or temporary or long-term disruption in our supply chains, or delays in the delivery of our product;
•suspension of renewable fuel and/or low carbon fuel policies;
•limitations on our ability to operate our business as a result of federal, state or local regulations, including any changes to the designation of our business as “essential” by the US Department of Homeland Security;
•decreases in the demand for and price of RINs and LCFS credits as a result of reduced demand for petroleum-based gasoline and diesel fuel; and
•Our management of the impact of COVID-19 has and will continue to require significant investment of time and may cause the Company to divert or delay the application of its resources toward other or new initiatives or investments, which may cause a material adverse impact on the results of operations.
The extent of the impact of the COVID-19 pandemic and its variants on our business, including our planned site improvement and capacity expansion at our Geismar, Louisiana facility, is highly uncertain, as information is evolving with respect to the duration and severity of the pandemic. We cannot reasonably estimate the duration and severity of the COVID-19 pandemic, or its impact, which may be significantly harmful to our operations and profitability.

We derive a substantial portion of our profitability from the production of RD at our plant in Geismar, Louisiana and any interruption in our operations would have a material adverse effect on operations and financial conditions.
RD carries a premium price compared to biodiesel as a result of a variety of factors including its ability to be blended with petroleum diesel, better cold weather performance, and generation of more RINs on a per gallon basis. We estimate that our RD production in Geismar, Louisiana generated a significant portion of our net income from continuing operations and our non-GAAP adjusted earnings before interest, taxes, depreciation and amortization, ("EBITDA") for 20202021 and 2019.2020. We experienced two fires at this facility in 2015 that each resulted in the plant being shut down for a lengthy period. If production at this facility were interrupted again due to any reason, such as due to natural disasters, it would have a disproportionately significant and material adverse impact on our operations and financial conditions.
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Our planned capacity expansion at our Geismar, Louisiana facility will require significant capital expenditures and there is no guarantee that the project will be completed on time or on budget, which could have a negative effect on revenues and operations.
In October 2020, we announced aour plan to expand the effective capacity of our Geismar, Louisiana biorefinery by 250biorefinery. The Geismar project involves both an improvement project for the existing operations at site with the capacity expansion. The Geismar project is expected to take total annual site production capacity from 90 million to 340 million gallons, annuallyenhance existing operations and improve operational reliability and logistics. The improvement and expansion is expected to approximately 340 million gallons.be mechanically complete in 2023 with full operations in early 2024. We currently expecthave received all required permits to proceed with construction and officially broke ground to beginstart the construction process in midthe fourth quarter of 2021. The capital cost for the Geismar project is estimated to late 2021 with a target mechanical completion date in late 2023. We currently estimate our capital expenditures will be at least $825$950 million. We currently expecthave obtained funding to fund these capital expendituresfinance the project with a combination of cash on hand, marketable securities, borrowings under our credit facilities, offerings of equity and debt orproceeds from other sources. The sale of equity or debt securities in the future may be dilutive to our stockholders, and may provide for rights, preferences or privileges senior to those of our holderspublic offering of common stock. Debt financing arrangements maystock that closed in March 2021 and proceeds from our issuance of Green Notes that closed in May 2021. In addition, in connection with the expansion, we have entered into an agreement for a long-term marine terminal lease for terminal and logistics services that will require us to pledge certain assets or enter into covenants that could restrict operations or ability to incur further indebtedness.a separate capital outlay. There is no guarantee that we will obtain the funds necessary to complete this project in a timely manner or on terms acceptable to us or that the project will be completed timely or within budget. If we are unable to obtain such funds in a timely manner or at all, if the cost of such funds is higher than we anticipate, if there are cost overruns or construction delays, delays due to natural disaster or other reasons, or if we are not able to obtain the governmental permits and third party easements required or necessary to initiate or complete the project, there could be a negative effect on our revenues and operations.

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Increased industry-wide production of biodiesel due to potential utilization of existing excess production capacity, announced plant expansions of RD and potential co-processing of RD by petroleum refiners, could reduce prices for our fuel and increase costs of feedstocks, which would seriously harm our revenues and operations.
If additional volumes of advanced biofuel RIN production comes online and the EPA does not increase the RVO in accordance with the increased production, the volume of advanced biofuel RINs generated could exceed the volume required under the RFS2. In the event this occurs, biomass-basedbio-based diesel and advanced biofuel RIN prices would be expected to decrease, potentially significantly, harming demand for our products and our profitability.
According to the EPA, in 2018, 4.1 billion gallons per year of biomass-based diesel production capacity in the United States were registered under the RFS2 program. This amount far exceeds both historic consumption of biomass-based diesel in the United States and required consumption under the RFS2.
Additionally, severalSeveral leading biomass-basedbio-based diesel companies have announced their intention to expand production of RD for the U.S. market. World Energy has announced that it will expand capacity at its Los Angeles area biorefinery from 45 mmgy to over 300 mmgy. Diamond Green Diesel, the largest U.S. producer of RD, is expandinghas expanded its 275 mmgy capacity by 400 mmgy as well as planningconstructing an additional 470 mmgy biorefinery in Texas. Neste, the largest global producer of RD, has announced that it is expanding its Singapore facility which exports a significant portion of its production to the U.S. West Coast. Traditional petroleum refiners are also planning to enterentering the RD market with CVR, Holly Frontier, Marathon Petroleum and Philips 66 announcing new biorefineries or the conversion ofconverting existing refineries to RD production facilities.
Further, due to economic incentives available, several petroleum refiners have started or may soon start to produce co-processed RD, or CPRD. CPRD uses the same feedstocks to produce biomass-basedbio-based diesel and it generates an advanced biofuel RIN. CPRD may be more cost-effective to produce than biomass-basedbio-based diesel, particularly biodiesel.
If production of competitive advanced biofuels increases significantly as a result of utilization of existing excess production capacity or new capacity as described above, competition for feedstocks would increase significantly, harming margins. Furthermore, if supply of advanced biofuels exceeds demand, prices for RD and for RINs and other credits may decrease significantly, harming profitability and potentially forcing us to idle, reduce capacity, or shut down facilities.

Our gross margins are dependent on the spread between biomass-basedbio-based diesel prices and feedstock costs, each of which are volatile and can cause our results of operations to fluctuate substantially.
Biomass-basedBio-based diesel has traditionally been marketed primarily as an additive or alternative to petroleum-based diesel fuel, and, as a result, biomass-basedbio-based diesel prices have been heavily influenced by the price of petroleum-based diesel fuel, adjusted for government incentives supporting renewable fuels, more so than biomass-basedbio-based diesel production costs. The absence of a close correlation between production costs and biomass-basedbio-based diesel prices means that we may be unable to pass increased production costs on to our customers in the form of higher prices. If there is a decrease in the spread between biomass-basedbio-based diesel prices and feedstock costs, whether as a result of an increase in feedstock prices, availability of feedstocks, or as a result of a reduction in biomass-basedbio-based diesel and credit prices, gross margins, cash flow and operations would be adversely affected.
Energy prices, particularly the market price for crude oil, are volatile. The NYMEX ULSD prices decreased signficantly in 2020increased throughout 2021 as a result of slow economic recover from the COVID-19 pandemic and continued increases in commodity prices, ranging from a high of $2.06$2.59 per gallon to a historic low of $0.61$1.46 per gallon.
In addition, an element of the price of biomass-basedbio-based diesel that we produce is the value of the associated credits, including RINs. RIN prices in the biomass-basedbio-based diesel category, as reported by the Oil Pricing Information System ("OPIS"),OPIS, have been sharply trending higher in 2021, ranging
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from $0.94 to $2.05 per RIN, while in 2020, RIN prices were highly volatile in 2020, ranging from $0.37 to $1.03 per RIN, while in 2019, RIN prices ranged from $0.32 to $0.65 per RIN. For the past several years, there has been significant volatility in RIN prices. Reductions in RIN values, such as those experienced in prior years, may have a material adverse effect on our revenues and profits as they directly reduce the value that we are able to capture for our biomass-basedbio-based diesel.
A decrease in the availability or an increase in the price of feedstocks may have a material adverse effect on our financial condition and operating results. The price and availability of feedstocks and other raw materials may be influenced by general economic, market, environmental, and regulatory factors. During periods when the BTC has lapsed, biomass-basedbio-based diesel producers may elect to continue purchasing feedstock and producing biomass-basedbio-based diesel at negative margins under the assumption the BTC will be retroactively reinstated, and consequently, the price of feedstocks may not decrease to a level proportionate to current operating margins. Increasing production of biomass-basedbio-based diesel puts pressure on feedstock supply and availability to the biomass-basedbio-based diesel industry. The biomass-basedbio-based diesel industry may have difficulty in procuring feedstocks at economical prices if competition for biomass-basedbio-based diesel feedstocks increases due to newly added capacity.
Historically, the spread between biomass-basedbio-based diesel prices and feedstock costs has varied significantly. Although actual yields vary depending on the feedstock quality, the average monthly spread between the price per gallon of B100 as reported by OPIS, and the price per gallon for the amount of choice white grease necessary to produce one gallon of B100 was $1.37 in 2018, $0.97 in 2019, and $1.12 in 2020 and $1.34 in 2021, assuming eight pounds of choice white grease yields one gallon of biomass-basedbio-based diesel.
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The average monthly spread for the amount of crude soybean oil required to produce one gallon of B100, based on the nearby futures contract as reported on the Chicago Board of Trade, was $0.74 in 2018, $0.59 in 2019, and $0.70 in 2020 and $0.89 in 2021, assuming 7.5 pounds of soybean oil yields one gallon of biomass-basedbio-based diesel. For each year 2018, 2019, 2020 and 2020,2021, approximately 77%71%, 71%65% and 65%78%, respectively, of our annual total feedstock usage was distillers corn oil, used cooking oil or inedible animal fat, and approximately 23%29%, 29%35% and 35%22%, respectively, was virgin vegetable oils. When the spread between biomass-basedbio-based diesel prices and feedstock prices narrows, our profitability will be harmed.

Risk management transactions could significantly increase our operating costs and may not be effective.
In an attempt to partially offset the effects of volatile feedstock costs and biomass-basedbio-based diesel fuel prices, we enter into contracts that establish market positions in feedstocks, such as distillers corn oil, used cooking oil, inedible animal fats and soybean oil, along with related commodities, such as heating oil and ULSD. The financial impact of such market positions depends on commodity prices at the time that we are required to perform our obligations under these contracts as well as the cumulative sum of the obligations we assume under these contracts.
Risk management activities can themselves result in losses when a position is purchased in a declining market or a position is sold in a rising market. Risk management arrangements expose us to the risk of financial loss where the counterparty defaults on its contract or, in the case of exchange-traded or over-the-counter futures or options contracts, where there is a change in the expected differential between the underlying price in the contract and the actual prices paid or received by us. Changes in the value of these futures instruments are recognized in current income and may result in margin calls. We had risk management gains of $36.9$2.4 million from our derivative financial instrument trading activity for the year ended December 31, 2020,2021, compared to risk management lossesgains of $28.9$36.9 million for the year ended December 31, 2019.2020. At December 31, 2020,2021, the net notional volumes of NY Harbor ULSD, CBOT Soybean Oil and NYMEX Natural Gas covered under our open risk management contracts were approximately 50.462.7 million gallons, 27.0133.7 million pounds and 3.2 million million British thermal units, respectively. A 10% positive change in the prices of NYMEX NY Harbor ULSD would have a negative effect of $7.5$14.6 million on the fair value of these instruments at December 31, 2020.2021. A 10% positive change in the price of CBOT Soybean Oil would have had a negativepositive effect of $1.1$7.6 million on the fair value of these instruments at December 31, 2020.2021. A 10% positive change in the price of NYMEX Natural gas would not have a material impact on the fair value of these instruments. If these adverse changes in derivative instrument fair value were to occur in larger magnitude or simultaneously, a significant amount of liquidity would be needed to fund margin calls. In addition, we may also vary the amount of risk management strategies we undertake, or we may choose not to engage in risk management transactions at all. Our results of operation may be negatively impacted if we are not able to manage our risk management strategy effectively.

One customer accounted for a meaningful percentage of revenues and a loss of this customer could have an adverse impact on our total revenues.
One customer, Pilot Travel Centers LLC ("Pilot"), the largest operator of travel centers in North America, accounted for 19%15%, 17%19% and 18%17% of our total biodiesel gallons sold in each of 2021, 2020 2019 and 2018,2019, respectively. In the event we lose Pilot as a customer or Pilot significantly reduces the volume of biomass-basedbio-based diesel purchased from us, it could be difficult to replace the lost revenues, and our profitability and cash flow could be materially harmed. We do not have a long-term contract with Pilot that ensures a continuing level of business from Pilot.

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Our facilities and our business, and our customers' facilities, are subject to risks associated with fire, explosions, leaks, and natural disasters, including climate change, and political turmoil, which may disrupt our business and increase costs and liabilities.
Because biomass-basedbio-based diesel and some of its inputs and outputs are combustible and/or flammable, a leak, fire or explosion may occur at a plant or customer’s, supplier's or vendor's facility which could result in damage to the plant and nearby properties, injury or death to employees and others, cause environmental contamination, and interruption of operations. For example, we experienced fires at our Geismar facility in April 2015 and again in September 2015 and there was a fire at our Madison facility in June 2017. As a result of these fires, people were injured, and the affected facilities were shut down for lengthy periods while repairs and upgrades were completed.
The operations at our facilities are also subject to the risk of natural disasters. Our Houston and Geismar facilities,facility, due to theirits Gulf Coast locations, arelocation, is vulnerable to hurricanes, tropical storms and flooding, which may cause plant damage, injury or death to employees and others and interruption of operations. For example, in August 2021, Hurricane Ida hit Louisiana causing reduced operating days at our Geismar facility as a result of the damaging winds and flooding that created necessary safety checks for our employees and the facility before it was deemed safe to restart operations. As another example, in August 2016 we experienced reduced operating days at our Geismar facility as a result of local area flooding and reduced operating days at our former Houston facility as a result of Hurricane Harvey in August 2017. A majority of our facilities are located in the Midwest and are subject to tornadotornadic activity. In addition, California has become one of our largest markets, serviced by our Geismar and Midwest facilities. An earthquake, fires, or other natural disaster could disrupt our ability to transport, store and deliver products to California. Changing weather patterns and climatic conditions, such as global warming, have added to the unpredictability and frequency of natural disasters and have created additional uncertainty. The Company's operations could be exposed to a number of physical risks from climate change, such as changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures, fire and other extreme weather
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events. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.
If we experience a fire or other serious incident at our facilities or if any of our facilities is affected by a natural disaster, we may incur significant additional costs, including, loss of profits due to unplanned temporary or permanent shutdowns of our facilities, loss of the ability to transport products or increased costs to do so, cleanup costs, liability for damages or injuries, legal and reconstruction expenses. The incurrence of significant additional costs would harm our results of operations and financial condition.
Our operations are reliant on a number of consumables and other components as well as services that are provided by third party suppliers that are critical to our manufacturing processes and overall supply chain. The loss of one of these suppliers may have a significant impact on our business and result in production delays while we seek alternative sources for supply. For
example, our European operations rely on the availability of a particular catalyst. In 2021, the supplier of the catalyst experienced a large explosion at its facility resulting in the interruption of supply of the catalyst. The resulting disruption resulted in the suspension of operations at our facilities in Germany for a period of time while replacement solutions and other suppliers were located.
Political and economic instability (such as the recent events in Ukraine), as well as other impactful events and circumstances in the countries in which we or our suppliers are located, the availability of feedstocks, disruption or delay in the transportation of our products, currency exchange rates, transport availability and cost, transport security, inflation and other factors relating to the suppliers and the countries in which they are located are beyond our control. In addition, the U.S. foreign trade policies, tariffs and other impositions on imported goods, trade sanctions imposed on certain countries, the limitation on the importation of certain types of goods and other factors relating to foreign trade are beyond our control. These and other factors affecting us or our suppliers could adversely affect our financial performance.

Cyberattacks targeting our process control networks or other digital infrastructure could have a material adverse impact on our business and results of operations.
There are numerous and evolving risks to our cybersecurity and privacy from cyber threat actors, including criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance. These cyber threat actors, whether internal or external to us, are becoming more sophisticated and coordinated in their attempts to access our information technology (IT) systems and data, including the IT systems of cloud providers and other third parties with whom we conduct business. Although we devote resources to prevent unwanted intrusions and to protect our systems and data, whether such data is housed internally or by external third parties, it is possible we may experience cyber incidents of varying degrees in the conduct of our business. Cyber threat actors could compromise our process control networks or other critical systems and infrastructure, resulting in disruptions to our business operations, injury to people, harm to the environment or our assets, disruptions in access to our financial reporting systems, or loss, misuse or corruption of our critical data and proprietary information, including our intellectual property and business information and that of our employees, customers, partners, suppliers, and other third parties. Any of the foregoing can be exacerbated by a delay or failure to detect a cyber incident or the full extent of such incident.
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Further, we have exposure to cyber incidents and the negative impacts of such incidents related to our critical data and proprietary information housed on third-party IT systems, including the cloud. Additionally, authorized third-party IT systems or software and open source platforms used by third parties can be compromised and used to gain access or introduce malware to our IT systems that can materially impact our business. Regardless of the precise method or form, cyber events could result in significant financial losses, legal or regulatory violations, reputational harm, and legal liability and could ultimately have a material adverse effect on our business and results of operations.

In addition to biodiesel and RD, we store and transport petroleum-based fuels.  The dangers inherent in the storage and transportation of fuels could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.
We store fuel in above ground storage tanks, underground storage tanks and transport fuel in our own trucks and rail cars as well as with third-party truck and rail carriers. Our operations are subject to significant hazards and risks inherent in transporting and storing fuel. These hazards and risks include, but are not limited to, accidents, fires, explosions, spills, leaks, discharges, and other releases, any of which could result in distribution difficulties and disruptions, environmental pollution, governmentally-imposed fines or clean-up obligations, personal injury or wrongful death claims, and other damage to property. Any such event not covered by our insurance could have a material adverse effect on our business, financial condition and results of operations.

Our insurance may not protect us against our business and operating risks.
We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. For some risks, we may not obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance policies may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Although we intend to maintain insurance at levels that we believe are appropriate for our business and consistent with industry practice, we will not be fully insured against all risks. In addition, pollution, environmental risks and the risk of natural disasters generally are not fully insurable. Losses and liabilities from uninsured and underinsured events and the delay in the payment of insurance proceeds could have a material adverse effect on our financial condition and results of operations.

We operate in a highly competitive industry and expect that competition in our industry will increase.
The biomass-basedbio-based diesel industry has historically been primarily comprisescomprised of smaller entities that engage exclusively in biodiesel production, large integrated agribusiness companies that produce biodiesel along with their soybean and other crop crush businesses and increasingly,businesses. More recently, integrated petroleum companies producing renewable diesel.have announced construction of RD facilities. We face competition for capital, labor, feedstocks and other resources from these companies. In the United States, we compete with soybean processors, and refiners, including Archer-Daniels-Midland Company, Cargill, and Louis Dreyfus Commodities. In Europe, we compete directly with Greenergy, KFS, Mercuria, Neste and Sunoil. Our indirect competitors in the European market are British Petroleum, Cargill, Shell and Vitol.
In addition, petroleum refiners across the globe are increasingly entering into the biomass-basedbio-based diesel or advanced biofuels business, and many petroleum refiners are converting their existing plants to produce biofuels. Such petroleum refiners include Neste Corporation with RD production capacity in both Asia and Europe, and Valero Energy Corporation through its Diamond Green Diesel joint venture in the United States. In addition, petroleum refiners such as British Petroleum, Eni SPA, Holly Frontier, Philips 66, Marathon Petroleum, Repsol, Saras SRS, Sinclair,Shell, and Total SE, have announced that they have begun or have plans to begin producing renewable dieselRD at a new facility or at a current refinery and/or co-processing biomass-basedbio-based diesel or advanced biofuels at certain of their refineries. All of these namedexisting competitors and potential competitors may have greatermore significant financial resources than we do and may be able to produce biomass-basedbio-based diesel at a lower cost than we door be more resilient due to their integrated operations, orprocurement organizations, greater refining capacity.capacity and greater financial resources.
According to EIA's Short Term Energy Outlook projections, production of biomass-basedbio-based diesel and advanced biofuels business is expected to increase by 19% in 2021 as compared to 2020. The increased production of biomass-basedbio-based diesel or advanced biofuels may increase the demand and prices for feedstocks and other inputs which may materially adversely affect our profitability and results of operations. For example, the combination of increasing margin pressure, driven by higher feedstock costs, and a high fixed cost lease structure made the operation of our Houston, Texas biodiesel facility economically unattractive, and as such we have shutdown of the facility.
Petroleum companies and diesel retailers form the primary distribution networks for marketing biomass-basedbio-based diesel through blended petroleum-based diesel. If these companies increase their direct or indirect biomass-basedbio-based diesel production, including in the
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form of co-processing, there will be less need to purchase biomass-basedbio-based diesel and credits from independent biomass-basedbio-based diesel producers like us. Such a shift in the market would materially harm our operations, cash flows and profitability.
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We are dependent upon one supplier to provide hydrogen necessary to execute our RD production process and the loss of this supplier could disrupt our production process.
Our Geismar facility relies on one supplier to provide hydrogen necessary to execute the production process. Any disruptions to the hydrogen supply during production from this supplier will result in the shutdown of our Geismar plant operations.

Technological advances and changes in production methods in the biomass-basedbio-based diesel industry could render our plants obsolete and adversely affect our ability to compete.
Advances in the process of converting oils and fats into biodiesel and RD, including CPRD, could allow our competitors to produce biomass-basedbio-based diesel faster and more efficiently and at a substantially lower cost. In addition, we currently produce biomass-basedbio-based diesel to conform to or exceed standards established by the American Society for Testing and Materials ("ASTM"), whose standards for biomass-basedbio-based diesel and biomass-basedbio-based diesel blends may be modified in response to new technologies from the industries involved with diesel fuel.
New standards or production technologies may require us to make additional capital investments in, change equipment and processes, or otherwise modify plant operations to meet these standards. If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less competitive or obsolete. Further, it may be necessary for us to make significant expenditures to acquire any new technology, acquire licenses or other rights to technology and retrofit our plants in order to remain competitive. There is no assurance that we will be able to obtain such technologies, licenses or rights on favorable terms. If we are unable to obtain, implement or finance new technologies, our production facilities could be less efficient, and our ability to produce biomass-basedbio-based diesel on a competitive level may be harmed, negatively impactingaffecting our revenues and profitability.

Our intellectual property is integral to our business. If we are unable to protect our intellectual property, or others assert that our operations violate their intellectual property, our business could be adversely affected.
We rely on a combination of intellectual property rights, including patents, copyrights, trademarks and trade secrets in the United States and in select foreign countries to protect our intellectual property. Effective patent, copyright, trademark and trade secret protection may be unavailable, limited, subject to challenge or not obtained in some countries.
We rely in part on trade secret protection to protect our knowhow, confidential and proprietary information and processes. However, trade secrets are difficult to protect. We have taken measures to protect our trade secrets and proprietary information, but these measures may not be effective. For example, we require new employees and consultants to execute confidentiality agreements upon the commencement of their employment or consulting arrangement with us. These agreements generally require that all confidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties. These agreements also generally provide that knowhow and inventions conceived by the individual in the course of rendering services to us or during the course of employment are our exclusive property. Nevertheless, these agreements may be breached, expire, or may not be enforceable, and our proprietary information may be disclosed. Despite the existence of these agreements, third parties may independently develop or acquire from others equivalent proprietary information and techniques.
It may be difficult to protect and enforce our intellectual property and litigation initiated to enforce and determine the scope of our proprietary rights can be costly and time-consuming. Adverse judicial decision(s) in any legal action could limit our ability to assert our intellectual property rights, limit our ability to develop new products, limit the value of our technology, reduce the scope of coverage of our rights, or otherwise negatively impact our business, financial condition and results of operations.
A competitor could seek to enforce intellectual property claims against us. Defending intellectual property claims asserted against us, regardless of merit, could be time-consuming, expensive to litigate or settle, divert management resources and attention and force us to acquire intellectual property rights and licenses, which may involve substantial royalty payments.payments or settlement fees. Further, a third party claim, if successful, could secure a judgment that requires us to pay substantialsignificant damages, limitslimit our operations.operations or obtain injunctive relief requiring a design around or other solutions and options to be developed.

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Increases in transportation costs or disruptions in transportation services could have a material adverse effect on our business.
Our business depends on transportation services. The costs of these transportation services are affected by the volatility in fuel prices or other factors. Prices per Platts Group 3 (Midwest) increased moderately throughout 2019 with the prices approaching two dollars at the end of the year. Prices decreased steadily in the first two months of 2020 and then plummeted to its low point in late April 2020 of $0.62 and prices slowly increased through mid-November 2020 and then increased more rapidly ending 2020 at $1.46. In 2021, the price of diesel continued to climb from $1.46 at the start of the year to $2.31 at $1.46.
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December 31, 2021.
Our transportation costs are also affected by U.S. oil production in the Bakkens, which has had a significant impact on tank car availability and prices. If oil production from this area increases, the demand for rail cars will rise and will significantly increase rail car prices. We have not been able in the past, and may not be able in the future, to pass along part or all of any of these price increases to customers.
If we continue to be unable to increase our prices as a result of increased fuel costs charged to us by transportation providers, or transportation services are unable to provide trucks due to labor shortages, work stoppages or strikes, our gross margins may be materially adversely affected. If any transportation providers fail to deliver raw materials to us in a timely manner, we may be unable to manufacture products on a timely basis. Shipments of products and raw materials may be delayed and any such delay or failure could harm our reputation, negatively affect our customer relationships and have a material adverse effect on our business, financial condition and results of operations.

We are dependent upon our key management personnel and other personnel, and the loss of these personnel could adversely affect our business and results of operations.
Our success depends on the abilities, expertise, judgment, discretion, integrity and good faith of our management and employees. We are highly dependent upon key members of our relatively small management team and employee base that possess unique technical skills for the operation of our facilities and the execution of our business plan. The inability to retain our management team and employee base or attract suitably qualified replacements and additional staff could adversely affect our business. The loss of management and employees could delay or prevent the achievement of our business objectives and have a material adverse effect upon our results of operations and financial position.

We may encounter difficulties in integrating the businesses we acquire, including our international businesses where we have limited operating history.
We may face significant challenges in integrating entities and businesses that we acquire, and we may not realize the benefits anticipated from such acquisitions. Our integration of acquired businesses involves a number of risks, including:
•difficulty in integrating the operations and retaining of personnel, customers and suppliers of the acquired company;
•difficulty in effectively integrating the acquired technologies, products or services with our current technologies, products or services;
•demands on management related to the increase in our size after an acquisition and integration of the acquired business and personnel;
•failure to achieve expected synergies and costs savings;
•difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations;
•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;
•the incurrence of acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;
•the need to fund significant working capital requirements of any acquired production or other facilities;
•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;
•exposureexposure 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, suppliers, or other third parties;
•the incurrence of significant exit charges if products or services acquired in business combinations are unsuccessful;
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•challenges caused by distance, language, cultural differences, political economic and social instability;
•difficulties in protecting and enforcing our intellectual property rights;
•the inability to extend proprietary rights in our technology into new jurisdictions;
•currency exchange rate fluctuations and foreign tax consequences;
•general economic and political conditions in foreign jurisdictions;
•foreign exchange controls or U.S. tax laws in respect of repatriating income earned outside the United States;
•compliance with the U.S.'s Foreign Corrupt Practices Act and other similar anti-bribery and anti-corruption regulations, and
•higher costs associated with doing business internationally, such as those associated with complying with export, import regulations and trade and tariff restrictions.
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Our failure to successfully manage and integrate our acquisitions could have an adverse effect on our operating results, ability to recognize international revenue, and our overall financial condition.

We incur significant expenses to maintain and upgrade our operating equipment and plants, and any interruption in the operation of our facilities may harm our operating performance.
The facilities, processes, machines and equipment that we use to produce our products are complex, have many parts and some operate on a continuous basis. We must perform routine maintenance on our equipment and will have to periodically replace a variety of parts, consumables and components. In addition, our facilities require periodic shutdowns to perform major maintenance, consumable replacement and upgrades. Other equipment may have a long lead time requirement if equipment is damaged and needs to be replaced or may otherwise be unavailable to continue operations. These scheduled shutdowns of facilities result in decreased sales and increased costs in the periods in which a shutdown occurs and could result in unexpected operational issues as a result of changes to equipment, operational and mechanical processes made during the shutdown.

Growth in the use, sale and distribution of biodiesel is dependent on the expansion of related infrastructure which may not occur on a timely basis, if at all, and our operations could be adversely affected by infrastructure limitations or disruptions.
While RD has the samea similar chemical composition as petroleum diesel and can utilize the same distribution infrastructure, biodiesel has a different chemical composition and may require separate or additional infrastructure. Growth in the biodiesel market depends on continued development and expansion of infrastructure for the distribution of biodiesel, which may or may not occur and which is outside of our control. Also, we compete with other biofuel companies for access to some of the key infrastructure components, and the increased production of biodiesel will increase the demand and competition for necessary infrastructure. Any delay or failure in expanding distribution infrastructure could hurt the demand for or prices of biodiesel, impede delivery of our biodiesel, and impose additional costs, each of which would have a material adverse effect on our results of operations and financial condition.

Our business is subject to seasonal changes based on regulatory factors and weather conditions and this seasonality could cause our revenues and operating results to fluctuate.
Our operating results are influenced by seasonal fluctuations in the price of and demand for biomass-basedbio-based diesel. Seasonal fluctuations may be based on both the weather and the status of both the BTC and RVO.
Demand for our biomass-basedbio-based diesel may be higher in the quarters leading up to the expiration of the BTC as customers seek to purchase biomass-basedbio-based diesel when they can benefit from the agreed upon value sharing of the BTC with producers. This higher demand prompted by an expiring BTC has often resulted in reduced demand for biodiesel in the following quarter. In addition, RIN prices may also be subject to seasonal fluctuations. The RIN is dated for the calendar year in which it is generated. Since 20% of an obligated party's annual RVO can be satisfied by prior year RINs, most RINs must come from biofuel produced or imported during the RVO year. As a result, RIN prices can be expected to increase as the calendar year progresses if the RIN market is undersupplied compared to that year's RVO and decrease if it is oversupplied.
Weather also impacts our business because biodiesel typically has a higher cloud point than petroleum-based or renewable diesel.RD. The cloud point is the temperature below which a fuel exhibits a noticeable cloudiness and eventually gels, leading to fuel handling and performance problems for customers and suppliers. Reduced demand in the winter for our higher cloud point biodiesel may result in excess supply of such higher cloud point biodiesel and lower prices for such higher cloud point biodiesel. Most of our production facilities are located in colder Midwestern states and our costs of shipping biodiesel to warmer climates generally increase in cold weather months.
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The tendency of biodiesel to gel in colder weather may also result in long-term storage problems. In cold climates, fuel may need to be stored in a heated building or heated storage tanks, which results in higher storage costs. Higher cloud point biodiesel may have other performance problems, including the possibility of particulate formation above the cloud point which may result in increased expenses as we try to remedy these performance problems, including the costs of extra cold weather treatment additives. Remedying these performance problems may result in decreased yields, lower process throughput or both, as well as substantial capital costs. Any reduction in the demand for our biodiesel product, or the production capacity of our facilities will reduce our revenues and have an adverse effect on our cash flows and results of operations.

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Failure to comply with governmental and state regulations, including EPA requirements relating to RFS2, BTC, LCFS and other programs or new laws designed to deal with climate change, could result in the imposition of higher costs, penalties, fines, or restrictions on our operations and remedial liabilities.
The biomass-basedbio-based diesel industry is subject to extensive federal, state and local laws and regulations, and we could be held strictly liable for the removal or remediation of previously released materials or property contamination regardless of whether we were responsible for the release or contamination, and regardless of whether current or prior operations were conducted consistent with the accepted standards of practice. Many of our assets and plants were acquired from third parties and we may incur costs to remediate property contamination caused by previous owners. In addition, we are subject to similar laws and regulations in Europe and Canada for the renewable fuels we sell there. Compliance with these laws, regulations and obligations could require substantial capital expenditures.
Changes in environmental laws and regulations occur frequently, and changes resulting in more stringent or costly waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance. In January 2021, the Biden Administration issued an executive order directing all federal agencies to review and take action to address any federal regulations, orders, guidance documents, policies and any similar agency actions promulgated during the prior administration that may be inconsistent with the current administration's policies. As a result, it is unclear the degree to which certain recent regulatory developments may be modified, extended, or rescinded.
Climate change continues to attract considerable attention globally. Numerous proposals have been made and could continue to be made at the international, national, regional, state and local levels of government to monitor and limit existing emissions of GHGs as well as to restrict or eliminate future emissions. In January 2021, the Biden Administration issued another executive order focused on addressing climate change. Among other things, the 2021 climate change executive order directed the federal government to identify "fossil fuel subsidies" to take steps to ensure that, to the extent consistent with applicable law, federal funding is not directly subsidizing fossil fuels. As a result, our operations are subject to a series of regulatory, litigation and financial risks associated with the production and transportation of biofuel products and emission of GHGs. The potential effects of GHG emission limits on our business are subject to significant uncertainties based on, among other things, the timing of the implementation of any new requirements, the required levels of emission reductions, and the nature of any market-based or tax-based mechanisms adopted to facilitate reductions. Compliance with changes in laws and regulations relating to climate change could increase our costs of operating and could require us to make significant financial expenditures that cannot be predicted with certainty at this time. We are subject to various laws and regulations including RFS2, BTC, LCFS, and other jurisdictions. These regulations are highly complex and continuously evolving, requiring us to periodically update our systems to maintain compliance, which could require significant expenditures. In 2014, the EPA issued a final rule to establish a quality assurance program and the EPA also implemented regulations related to the generation and sale of biomass-basedbio-based diesel RINs. Any violation of these regulations by us, could result in significant fines and harm our customers’ confidence in the RINs we issue, either of which could have a material adverse effect on our business.

RD fuel is superior to biodiesel in certain respects and if RD production capacity increases to a sufficient extent, it could largely supplant biodiesel; we may not be successful in expanding our RD production capacity.
RD is not as widely available as biodiesel, but it has certain characteristics that favorably distinguish it from biodiesel and as a result renewable dieselRD carries a price premium compared to biodiesel. For example, RD has very similar chemical properties to petroleum-based diesel, which permits 100% RD (unlike 100% biodiesel) to flow through the same fuel storage and distribution network as petroleum diesel. RD can be used in its pure form in modern engines rather than as a blend with petroleum diesel and has similar cold weather performance as petroleum diesel. RD and CPRD may receive 1.6 or 1.7 RINs per gallon, whereas biodiesel receives 1.5 RINs per gallon. As the value of RINs increases, this RIN advantage makes RD more cost-effective, both as a petroleum-based diesel substitute and for meeting RFS2 requirements.valuable. If RD proves to have superior performance characteristics and is more cost-effective thanbe preferred over biodiesel by market participants, revenues from our biodiesel plants and our results of operations would be adversely impacted.

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Nitrogen oxide emissions from biodiesel may harm its appeal as a renewable fuel and increase costs.
In some instances, biodiesel may increase emissions of nitrogen oxide as compared to petroleum-based diesel fuel, which could harm air quality. Nitrogen oxide is a contributor to ozone and smog. While newer diesel engines are believed to eliminate any such increase, emissions from older vehicles may decrease the appeal of biodiesel to environmental groups and agencies who have been historic supporters of the biodiesel industry, potentially harming our ability to market biodiesel.
In addition, several states may act to regulate potential nitrogen oxide emissions from biodiesel. California adopted regulations that limit the volume of biodiesel that can be used or requires an additive to reduce potential emissions. In states where such an additive is required to sell biodiesel, an additive may not be available or if available, the additional cost of the additive may make biodiesel less profitable or make biodiesel less cost competitive against petroleum-based diesel or RD, which in each case would negatively impact our ability to sell biodiesel in such states and therefore have an adverse effect on our revenues and profitability.
Effective August 1, 2021, under California's Alternative Diesel Fuel regulation, existing additives used to mitigate biodiesel NOX emissions above B5 will no longer be available. This change may negatively impact demand for biodiesel in California and reduce our revenue and profit.
In addition, there may also be other requirements of fleet and retail fueling station owners to reduce nitrogen oxide emissions. The requirements relate to the type of vehicle and age of the vehicle. These requirements could result in additional costs for the operators and therefore may make the use of biodiesel less attractive, which could negatively impactaffect our ability to sell biodiesel in such states and therefore have an adverse effect on our revenues and profitability.


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RISKS RELATED TO OUR INDEBTEDNESS

We and certain subsidiaries have indebtedness, which subjects us to potential defaults, that could adversely affect our ability to raise additional capital to fund our operations and limits our ability to react to changes in the economy or the biomass-basedbio-based diesel industry.
At December 31, 2020,2021, our total term debt before debt issuance costs was $67.0 million. This includes $47.1$550.0 million, representing the aggregate carrying value on our $59.6$550.0 million face amount, 4.00% convertible senior notes5.875% Senior Secured Green Note due in June 2036,2028, which we refer to as the "2036 Convertible Senior Notes"“Green Notes”. At December 31, 2020, our total term debt also includes borrowings at our Ralston facility2021, we had $249.7 million of $13.2 million and at REG Capital LLC. of $6.7 million. At December 31, 2020, we also had undrawn availabilityunused revolving commitments under our linesline of credit, as discussed below.subject to borrowing base limitations.
Our indebtedness could:
•◦make it difficult for us to satisfy our obligations under the Green Notes, the M&L and Services Revolver and any other future indebtedness and contractual and commercial commitments;
◦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;
•◦limit our ability to borrow, or increase our cost of borrowing, additional funds;
◦prevent us from raising the funds necessary to repurchase Green Notes tendered to us if there is a change of control; a change of control which would also constitute a default under the M&L and Services Revolver under the Indenture, dated as of May 20, 2021, pursuant to which the Green Notes were issued (the "Indenture");
◦increase our vulnerability to general adverse economic and biomass-basedbio-based diesel industry conditions, including interest rate fluctuations, because a portion of our revolving credit facilities are and will continue to be at variable interest rates, and
•◦limit our flexibility in planning for, or reacting to, changes in our business and the biomass-basedbio-based diesel industry, which may place us at a competitive disadvantage compared to our competitors that have less debt.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness including the 2036 Convertible Senior Notes, depends on our future financial performance, which is subject to several factors including economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to satisfy our obligations under our indebtedness or any future indebtedness we may incur as well as our ability to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional capital on terms that may be onerous or highly dilutive. Our ability to refinance our existing or future indebtedness will depend on the conditions in the capital markets and our financial condition prior to maturity of the indebtedness.

We may still incur significant additional indebtedness that could increase the risks associated with our indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. As of December 31, 2020, we had $149.7 million of undrawn availability under our lines of credit, subject to borrowing base limitations. In addition, the indenture governing the 2036 Convertible Senior Notes does not prevent us from incurring additional indebtedness or other liabilities that constitute indebtedness. We currently expect to fund the estimated $825 million of capital expenditures in connection with the expansion of our Geismar, Louisiana facility with a combination of cash on hand, marketable securities, borrowings under our credit facilities, offerings of equity and debt or from other sources. If we are unable to complete the expansion within the estimated budget, we will require additional funds to do so. If new debt or other liabilities are added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.

We may not have the ability to raise the funds necessary to settle conversions of our convertible notes in cash or to repurchase the convertible notes for cash upon a fundamental change or on a repurchase date, and our future debt may contain limitations on our ability to repurchase the convertible notes.
We may settle conversion of the 2036 Convertible Senior Notes in cash, shares of our common stock, or a combination of cash and stock. If we choose to use our common stock to settle conversions, dilution to existing stockholders can result. If we choose to use cash to settle conversion, we will need to use available cash, which will result in our inability to use that cash for other purposes such as our capital expenditures.
Holders of the 2036 convertible Senior Notes have the right to require us to repurchase their notes upon the occurrence of a fundamental change, as defined in the indenture governing the notes, at a repurchase price generally equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, if any. In addition, holders of the 2036 Convertible Senior Notes have the right to require us to repurchase their notes on each of June 15, 2021, June 15, 2026 and June 15, 2031 at a repurchase price generally equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, if any. We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2036 Convertible Senior Notes.
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In addition, our ability to repurchase the 2036 Convertible Senior Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase 2036 Convertible Senior Notes at a time when the repurchase is required by the indenture would constitute a default under the indenture governing the 2036 Convertible Senior Notes. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the convertible notes.

Certain provisions in the indenture governing the 2036 Convertible Senior Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.
Certain provisions in the 2036 Convertible Senior Notes and the indenture could make it more difficult or more expensive for a third party to acquire us. For example, if a takeover would constitute a fundamental change, holders of the 2036 Convertible Senior Notes will have the right to require us to repurchase their 2036 Convertible Senior Notes in cash. In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their 2036 Convertible Senior Notes in connection with such takeover. In either case, and in other cases, our obligations under the 2036 Convertible Senior Notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management.

We are a holding company and there are limitations on our ability to receive dividends and distributions from our subsidiaries.
All of our principal assets, including our biomass-based diesel production facilities, are owned by subsidiaries and some of these subsidiaries are subject to loan covenants that generally restrict them from paying dividends, making distributions or making loans to us or to any other subsidiary. These limitations will restrict our ability to repay indebtedness, finance capital projects or pay dividends to stockholders from our subsidiaries' cash flows from operations.

Our debt agreements impose significant operating and financial restrictions on our subsidiaries, which may prevent us from capitalizing on business opportunities.
Certain of our revolving and term credit agreements, including our
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The M&L and Services Revolver and the Indenture impose significant operating and financial restrictions on certain of our subsidiaries. These restrictions limit certain of our subsidiaries’ ability, among other things, to:
•incur additional indebtedness or issue certain disqualified stock and preferred stock;
•place restrictions on the ability of certain of our subsidiaries to pay dividends or make other payments to us;
•grant certain additional liens on our assets or permit them to exist;
•redeem or repurchase equity securities;
•make certain investments, including acquisitions of substantially all or a portion of another entity’s business assets;
•engage in transactions with affiliates;
•sell certain assets or merge with or into other companies;
•guarantee indebtedness; and
•create liens.
When
Subject to the terms of the intercreditor agreement entered into in connection with the issuance of the Green Notes, when (and for as long as) the availability under the M&L and Services Revolver is less than a specified amount for a certain period of time, funds deposited into certain deposit accounts used for collections will be transferred on a daily basis into a blocked account with the administrative agent and applied to prepay loans under the M&L and Services Revolver.

As a result of these covenants and restrictions, we may be limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants.covenants, including on us and/or our subsidiaries that are not obligors under the M&L and Services Revolver. There is no assurance that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

There are limitations on our ability to incurutilize the full amount of revolving commitments under the M&L and Services Revolver. Currently, the maximum aggregate principal amount of revolving commitments that we may borrow under the M&L and Services Revolver is $150.0$250.0 million. In addition, these revolvingthe commitments areof the lenders under the M&L and Services Revolver is further limited by a specified borrowing base consisting of a percentage of eligible accounts receivable and inventory, less customary reserves. In addition, under the M&L and Services Revolver, a monthly fixed charge coverage ratio would become applicablebe triggered if excess availability under the M&L and Services Revolver is less than 10% of the then current revolving loan commitments which equates to $15$25 million. As ofAt December 31, 2020,2021, the M&L and Services Revolver had approximately $249.7 million of unused revolving commitments, after the effect of borrowing base limitations. However, it is possible that availability under the M&L and Services Revolver was approximately $149.7 million. However, it is possible that excess availability under the Revolving Credit could fall below the applicable threshold in a future period. If the covenant trigger were to occur,testing period is triggered, our subsidiaries who are the borrowers under the M&L and Services Revolver would be required
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to satisfy and maintain on the last day of each month a fixed charge coverage ratio of at least 1.0x1.0 to 1.0 for the preceding twelve monthtwelve-month period.

As of December 31, 2020,2021, the fixed charge coverage ratio for ourthe M&L and Services Revolver was approximately 0.368,above 1.0, which was less thanis the minimum amount required for compliance with this ratio. However, asAs noted above, we are not required to comply with the minimum fixed charge covenant of 1.0 unless availability under the M&L and Services Revolver drops below the agreed threshold. Our ability to meet the required fixed charge coverage ratio can be affected by events beyond our control, and we cannot assure you that we will meet this ratio. A breach of any of these covenants would result in a default under the M&L and Services Revolver.

We may still incur significant additional indebtedness that could increase the risks associated with our indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. As of December 31, 2021, we had $249.7 million of unused revolving commitments under the M&L and Services Revolver, subject to borrowing base limitations. We currently expect to fund the estimated $950 million of capital expenditures in connection with the improvement and expansion of our Geismar, Louisiana facility with a combination of cash on hand, marketable securities, borrowings under our credit facilities, offerings of equity and debt (including the equity offering completed in March 2021 and the offering of the Green Notes completed in May 2021) or from other sources. If we are unable to complete the improvement and expansion within the estimated budget, we will require additional funds to do so. If new debt or other liabilities are added to our current debt levels, the related risks that we and our subsidiaries now face could intensify. Additionally, debt financing arrangements may also be rated by credit rating agencies. Any potential future negative change in our credit ratings may make it more expensive for us to raise long term permanent financing or additional capital on terms that are acceptable to us, if at all; negatively impact the price of our common stock; increase our overall cost of capital; and have other negative implications on our business, many of which are beyond our control.

Certain provisions in the Indenture governing our Senior Secured Green Notes (the "Green Notes") could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain provisions in the Indenture could make it more difficult or more expensive for a third party to acquire us. If a takeover triggers a “Change of Control” as defined under the Indenture, each holder of the Green Notes will have the right to
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require us to repurchase their Green Notes in cash, at a price equal to 101.0% of the aggregate principal amount to be repurchased, plus accrued and unpaid interest, if any, thereon to, but not including the date of repurchase, which could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management. If we are unable to comply with the restrictions and covenants in our debt agreements, there could be a default under the terms of such agreements, which could result in an acceleration of repayment.

RISKS RELATED TO OUR COMMON STOCK

The market price for our common stock may be volatile.
The market price for our common stock is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:
•actual or anticipated fluctuations in our financial condition and operating results;
•changes in the performance or market valuations of other companies engaged in our industry;
•issuance of new or updated research reports by securities or industry analysts;
•changes in financial estimates by us or of securities or industry analysts;
•investors’ general perception of us and the industry in which we operate;
•investors' reactions to our press releases, other public announcements and filings with the SEC;
•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;
•other regulatory developments in our industry affecting us, our customers or our competitors;
•announcements of technological innovations by us or our competitors;
•announcement or expectation of additional financing efforts, including sales or expected sales of additional common stock;
•additions or departures of key management or other personnel;
•litigation;litigation involving us or our industry, or both, or investigations by regulators into our operations or those of our competitors;
•inadequate trading volume;
•general market conditions in our industry;
•the effects of the COVID-19 pandemic and measures to address the pandemic;
•whether our shares are included in stock market indexes such as the S&P SmallCap 600 index; and
•general economic and market conditions, including continued dislocations and downward pressure in the capital markets.
In addition, stock markets experience significant price and volume fluctuations from time to time that are not related to the operating performance of particular companies. These market fluctuations may have material adverse effect on the market price of our common stock. In the past, following periods of volatility in the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. Any securities litigation that may be instituted against us in the future could result in substantial costs, regardless of the outcome of the litigation, and divert resources and our management's attention to our business. In addition, the occurrence of any of the factors listed above, among others, may cause our stock price to decline significantly, and there can be no assurance that our stock price would recover. As such, you may not be able to sell your shares at or above the price you paid, and you may lose some or all of your investment.

We have never paid dividends on our capital stock and we do not anticipate paying dividends in the foreseeable future.
We have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the development and growth of our business. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant. As a result, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur. Investors seeking cash dividends should not invest in our common stock. Furthermore, we may in the future become subject to contractual restrictions on, or prohibitions against, the payment of dividends.

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We may issue additional common stock as consideration for future investments or acquisitions.
We have issued in the past, and may issue in the future, our securities in connection with investments and acquisitions. Our stockholders could suffer significant dilution, from our issuances of equity or convertible debt securities. Any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. The amount of our common stock or securities convertible into or exchangeable for our common stock issued in connection with an investment or acquisition could constitute a material portion of our then outstanding common stock.

If we fail to maintain effective internal control over our financial reporting and financial forecasting, we may not be able to report our financial results accurately, provide accurate financial guidance or prevent fraud, and if we fail to maintain effective internal governance and conduct policies, such as our Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers and Trading by Insiders Policy, or if our employees fail to adhere to such policies, we may be unable to maintain a proper control environment. If any of these failures occur, our business could be harmed, our stockholders could lose confidence in our financial reporting and financial guidance or our business integrity and we could suffer negative regulatory scrutiny or media attention, which could negatively impact the value of our stock.
Effective internal controls over our financial reporting and adherence to our internal governance and conduct policies are necessary for us to provide reliable financial reports and to prevent fraud. The process of maintaining our internal controls may be expensive and time consuming and may require significant attention from management. The failure to do so may harm our business or our reputation and could negatively impact the value of our stock. Even if our management concludes that, as of the
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end of a fiscal quarter or fiscal year, our internal control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.

In addition, failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm discover a material weakness in our internal control over financial reporting, the disclosure of that weakness could harm the value of our stock and our business.

As a result of the matters discussed in the explanatory note to the Form 10-K/A filed by us on February 25, 2021, we concluded that our previously issued audited consolidated financial statements for fiscal years ended December 31, 2019 and 2018, each of our unaudited condensed consolidated financial statements for the quarterly and year-to-date periods during such years, and related disclosures, as well as our unaudited condensed consolidated financial statements and related disclosures for the quarterly periods ended March 31, June 30 and September 30, 2020, should be restated. Two class action lawsuits were filed against us and certain of our current and former executive officers following the restatements. As a result of these restatements and the errors that resulted in these restatements, we are subject to additional risks and uncertainties, including potential additional litigation and loss of investor confidence.
On July 27, 2021, a stockholder derivative complaint was filed in the United States District Court for the District of Delaware based on allegations substantially similar to those in the class action, and purporting to assert claims on the Company's behalf against current and former officers and directors for alleged violation of Sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets. On January 20, 2022, the court granted defendants' motion to dismiss with prejudice and entered a judgment dismissing the case. On February 18, 2022, plaintiff filed a notice of appeal of the order granting the motion to dismiss and the entry of judgement.
In connection with this restatement of our historical consolidated financial statements, we identified a material weakness in our internal control over financial reporting, and management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of December 31, 2020. For further discussion2020, which has been remediated as of the material weakness, please see Item 9A of this report, “Controls and Procedures.”December 31, 2021.
We have undertaken remediation efforts designed to address the material weakness. If we are unsuccessful in remediating our existing or any future material weaknesses or other deficiencies in our internal control over financial reporting or disclosure controls and procedures, investors may lose confidence in our financial reporting and the accuracy and timing of our financial reporting and disclosures and our business, reputation, results of operations, liquidity, financial condition, ability to access the capital markets, perceptions of our creditworthiness, and ability to complete acquisitions could be adversely affected. In addition, we may be unable to maintain or regain compliance with applicable securities laws, stock market listing requirements, and the covenants under our debt instruments regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; we may suffer defaults or accelerations under our debt instruments to the extent we are unable to obtain waivers from the required creditors or counterparties or are unable to cure any breaches; and our stock price may decline.
Further, effective financial forecasting is necessary for us to provide reliable financial guidance. The process of providing accurate financial guidance may be expensive and time consuming, may require significant attention from management, and is inherently uncertain. Nevertheless, the failure to do so accurately may harm our business or our reputation and could negatively
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impact the value of our stock. For example, in the second quarter of 2020, we identified errors in our financial guidance model that led to our June 23, 2020 announcement of a revised outlook for the second quarter of 2020, which announcement was followed by a drop in the price of our stock.
It is also necessary for our employees, and in particular our senior officers, to adhere to all of our internal governance and conduct policies, including our Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers and Trading by Insiders Policy. Failure to adhere to our policies could result in negative regulatory scrutiny or media attention or otherwise harm our reputation and cause stockholders to lose confidence in our business integrity or management. For example, in connection with an internal investigation into the series of events that led to our June 23, 2020 announcement of a revised outlook for the second quarter of 2020, we uncovered certain violations of our policies by senior officers, which resulted in disciplinary actions and remediations for the officers involved. The investigation also prompted a review of all of our internal policies and codes of ethics, which is resulting in a number of revisions intended to further strengthen them and their associated assurance processes. Any failure to maintain these policies or failure by our employees, and in particular our senior officers, to adhere to these policies could still result in harm to our reputation and could negatively impact the value of our stock.

Delaware law and our certificate of incorporation and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:
•the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;
•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;
•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;
•a classified board;
•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
•the elimination of the right of stockholders to call a special meeting of stockholders and to take action by written consent.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law ("DGCL"). These provisions may prohibit or restrict large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us. These provisions in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors might be willing to pay for shares of our common stock in the future and result in our market price being lower than it would without these provisions.

RISKS RELATED TO THE PROPOSED MERGER

The proposed Merger is subject to approval of our stockholders as well as the satisfaction of other closing conditions, including government consents and approvals, some or all of which may not be satisfied or completed within the expected timeframe, if at all.

Completion of the Merger is subject to a number of closing conditions, including obtaining the approval of our stockholders, the expiration or termination of any waiting period (and any extension thereof) applicable to the consummation of the Merger under the HSR Act and the EU Clearance. We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicable). Any adverse consequence of the pending Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and
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agreements contained in the Merger Agreement as of the closing of the Merger, including, with respect to us, covenants to conduct our business in the ordinary course and to not engage in certain kinds of material transactions prior to closing. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, in connection with a change in the recommendation of our Board of Directors to enter into an agreement for a Superior Proposal (as defined in the Merger Agreement). As a result, we cannot assure you that the Merger will be completed, even if our stockholders approve the Merger, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected time frame.

We may not complete the proposed Merger within the time frame we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations.

The proposed Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. If the Merger is not completed for any reason, including as a result of our stockholders failing to adopt the Merger Agreement, our stockholders will not receive any payment for their shares of our common stock in connection with the Merger. Instead, we will remain a public company, our common stock will continue to be listed and traded on The Nasdaq Global Select Market and registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and we will be required to continue to file periodic reports with the SEC. Moreover, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following:
•we may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of the shares would return to the prices at which the shares currently trade;
•we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees, customers, partners, suppliers and others with whom we do business;
•we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisory, printing and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger;
•we may be required to pay a cash termination fee to Parent of $91.0 million, as required under the Merger Agreement under certain circumstances;
•while the Merger Agreement is in effect, we are subject to restrictions on our business activities, including, among other things, restrictions on our ability to engage in certain kinds of material transactions, which could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may as a result materially adversely affect our business, results of operations and financial condition;
•matters relating to the Merger require substantial commitments of time and resources by our management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and
•we may commit significant time and resources to defending against litigation related to the Merger.

If the Merger is not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results and stock price, particularly to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed.

We will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with customers and other third-party business partners.

Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operation and our business. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following the Merger. As mentioned above, a substantial amount of our management’s and employees’ attention is being directed toward the completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to our future could adversely affect our business and our relationship with customers and potential customers. For example, customers, suppliers and other third parties may defer decisions concerning working with us, or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our revenue, earnings and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

In certain instances, the Merger Agreement requires us to pay a termination fee to Parent, which could affect the decisions of a third party considering making an alternative acquisition proposal.

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Under the terms of the Merger Agreement, we may be required to pay Parent a termination fee of $91.0 million under specified conditions, including in the event Parent terminates the Merger Agreement before receipt of our stockholders’ approval due to a change in recommendation by our Board of Directors, in the event we terminate the Merger Agreement to enter into a Superior Proposal, or in the event we enter into an alternative transaction within twelve months of termination of the Merger Agreement in certain circumstances and the alternative transaction is consummated. This payment could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with us and could discourage a third party from making a competing acquisition proposal, including a proposal that would be more favorable to our stockholders than the Merger.

We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.

We have incurred, and will continue to incur, significant costs and expenses, including regulatory costs, fees for professional services and other transaction costs in connection with the Merger, for which we will have received little or no benefit if the Merger is not completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses. Many of these fees and costs will be payable by us even if the Merger is not completed and may relate to activities that we would not have undertaken other than to complete the Merger.

Litigation challenging the Merger Agreement may prevent the Merger from being consummated within the expected timeframe or at all.

Lawsuits may be filed against us, our Board of Directors or other parties to the Merger Agreement, challenging our acquisition by Parent making other claims in connection therewith. Such lawsuits may be brought by our purported stockholders and may seek, among other things, to enjoin consummation of the Merger. One of the conditions to the consummation of the Merger is that the consummation of the Merger is not restrained, made illegal, enjoined or prohibited by any order or legal or regulatory restraint or prohibition of a court of competent jurisdiction or any governmental entity. As such, if the plaintiffs in such potential lawsuits are successful in obtaining an injunction prohibiting the defendants from completing the Merger on the agreed upon terms, then such injunction may prevent the Merger from becoming effective, or from becoming effective within the expected timeframe.
ITEM 1B.    Unresolved Staff Comments
None.
ITEM 2.    Properties
We own our corporate headquarters located at 416 South Bell Avenue, Ames, Iowa 50010, comprised of 60,480 square feet of office and laboratory space; as well as two other buildings located at 300 South Bell Avenue, Ames, Iowa 50010 and at 215 Alexander Avenue, Ames, Iowa 50010, which have a combined 26,837 square feet of office space.
The following tables listtable in Item 1. Business, "Plant Network and Products" lists each of our owned North American and European production facilities, and their location, use,nameplate capacity, effective capacity, REG operations commencement, feedstock capabilities and nameplate production capacity.products produced. Each facility listed below is used by our Biomass-basedBio-based diesel Segment.
PRODUCTION FACILITIES - NORTH AMERICA
LocationUseNameplate
Production
Capacity
(mmgy)
Ralston, IowaBiodiesel production30
Seabrook, TexasBiodiesel production35
Danville, IllinoisBiodiesel production45
Newton, IowaBiodiesel production30
Seneca, IllinoisBiodiesel production60
Albert Lea, MinnesotaBiodiesel production30
Mason City, IowaBiodiesel production30
Geismar, Louisiana*Renewable diesel production75
Grays Harbor, WashingtonBiodiesel production100
DeForest, WisconsinBiodiesel production20

* This facility produces renewable diesel, naphtha, and liquid petroleum gas.
PRODUCTION FACILITIES - EUROPE
LocationUseNameplate
Production
Capacity
(mmgy)
Emden, GermanyBiodiesel production27
Oeding, GermanyBiodiesel production23
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ITEM 3.    Legal Proceedings
NeitherOn March 2, 2021, a putative class action lawsuit was filed against the Company nor any subsidiaryand certain of its current and former executive officers in the United States District Court for the Southern District of New York. On March 12, 2021, a putative class action lawsuit against the same defendants was filed in the United States District Court for the Central District of California. On June 24, 2021, the two cases were consolidated in the Southern District of New York under the caption In re Renewable Energy Group Securities Litigation, No. 21-cv-1832, and a consolidated amended complaint was filed on July 9, 2021.
The complaint purports to be brought on behalf of shareholders who purchased the Company's common stock between March 8, 2018 and February 25, 2021, the date on which the Company is a partyannounced its restatement related to any material pending legal or governmental proceeding, nor is any of the Company's property the subject of any material pending legal proceeding, except ordinary routine legal or governmental proceedings arising in the ordinary course ofBTC. Plaintiffs allege that defendants made false and misleading statements about the Company's business, financial results and incidentalprospects in violation of Sections 10(b) and 20(1) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint seeks unspecified damages, attorneys' fees, and other costs. On January 20, 2022, the court granted defendants' motion to dismiss with prejudice and entered a judgment dismissing the case. On February 18, 2022, plaintiff filed a notice of appeal of the order granting the motion to dismiss and the entry of judgement.The Company denies any and all allegations of wrongdoing and intends to vigorously defend against the litigation.
On July 27, 2021, a stockholder derivative complaint was filed in the United States District Court for the District of Delaware based on allegations substantially similar to those in the class action, and purporting assert claims on the Company's business, none
30

behalf against current and former officers and directors for alleged violation of whichSections 14 (a) and 20 (a) of the Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets. On August 2, 2021, a second stockholder derivative complaint purportedly arising out of the same events and purporting to assert similar claims, was filed in the Supreme Court for the state of New York. Both of these derivative actions have been stayed.
In addition, the Securities and Exchange Commission ("SEC") requested information about the restatement, and the Company cooperated with the SEC. On October 1, 2021, the SEC Staff notified the Company that the Staff terminated its investigation with no enforcement action recommended against the Company, in accordance with SEC guidelines.
The Company is expected toalso involved in various other legal proceedings in the normal course of business. The Company currently believes that any ultimate liability arising out of such proceedings will not have a material adverse impact uponeffect on the Company's business,Company’s financial position, or results of operations.operations or cash flows.
ITEM 4.    Mine Safety Disclosures
None.

PART II
ITEM 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market For Our Common Equity
Our common stock trades on The Nasdaq Global Select Market under the ticker symbol "REGI".
Holders
As of January 31, 2021,2022, there were approximately 1,4921,379 holders of record of our common stock.
Dividends
Our Board of Directors currently intends to retain any future earnings to support operations and to finance the growth and development of our business, and therefore does not intend to pay cash dividends on our common stock for the foreseeable future.
Performance Graph
The following performance graph is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, respectively.
On May 15, 2018, we were added to the S&P SmallCap 600 index. The following graph shows a comparison of the cumulative total returns for the last 5 years to December 31, 20202021 for us, the Elements MLCX Biofuels ETN Index, the Russell 3000 Index and the S&P SmallCap 600. The graph assumes that $100 was invested on December 31, 20152016 in our common stock, the Elements MLCX Biofuels ETN Index, the Russell 3000 Index and the S&P SmallCap 600 assuming all dividends were reinvested.
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regi-20201231_g3.jpgregi-20211231_g3.jpg
12/31/201512/31/201612/31/201712/31/201812/31/201912/31/202012/31/201612/31/201712/31/201812/31/201912/31/202012/31/2021
REGIREGI$100.00 $104.41 $127.02 $276.64 $290.10 $762.33 REGI$100.00 $121.65 $264.95 $277.84 $730.10 $437.53 
Elements MLCX Biofuels ETNElements MLCX Biofuels ETN100.00 102.00 93.33 83.47 82.00 88.00 Elements MLCX Biofuels ETN100.00 91.50 81.83 80.39 86.27 132.16 
Russell 3000Russell 3000100.00 110.42 131.23 122.06 156.89 186.42 Russell 3000100.00 118.85 110.54 142.09 168.84 209.36 
S&P SmallCap 600S&P SmallCap 600100.00 124.74 139.38 125.78 152.02 166.57 S&P SmallCap 600100.00 111.73 100.83 121.87 133.53 167.28 
Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
In June 2018, January 2019 and February 2020, the Company's board of directors approved repurchase programs of up to $75.0 million $75.0 million, and $100.0 million, respectively, of the Company's convertible notes and/or shares of common stock and/or previously outstanding convertible notes (the "2018 Program", "2019 Program" and "2020 Program"). Under these programs, the Company may repurchase convertible notes or shares from time to time in open market transactions, privately negotiated transactions or by other means. The timing and amount of repurchase transactions under each program are determined by the Company's management based on its evaluation of market conditions, share price, bond price, legal requirements and other factors.
The Company made no share repurchases during the quarter ended December 31, 2021. The 2019 Program was fully utilized as of September 30, 2020. At December 31, 2021, the Company has $91.9 million remaining under the 2020 Program.
ITEM 6.    Selected Financial Data
The Securities and Exchange Commission enacted amendments, effective February 10, 2021, to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K. The amendments are effective for fiscal years ending on or after August 31, 2021 and early adoption is permitted. Specifically, the requirement for Item 6, Selected Financial Data, has been eliminated. We have evaluated the impact of the final rule and early adopted the amendment. As a result, selected consolidated financial data disclosures have been removed.Reserved.
ITEM 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto that appear elsewhere in this report. This discussion contains forward-looking statements reflecting our current
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expectations that involve risks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, including those set forth in the section entitled “Risk Factors” and elsewhere in this report.
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Objective
We focusare one of North America's largest producers of advanced biofuels focused on providing cleaner, lower carbon transportation fuels. We are North America's largest producer of advanced biofuels. We utilize a nationwide production, distribution and logistics system as part of an integrated value chain model designed to convert natural fats, oils and greases into advanced biofuels. We believe our fully integrated approach, which includes acquiring feedstock, operating biorefineries, distributing fuel through a network of terminals, and managing biorefinery facility construction and upgrades, positions us to serve the market for cleaner transportation fuels.
In addition to our acquisition of Keck Energy in September 2018, we opened our first REG branded fueling station in July 2019 adjacent to our biorefinery in Seneca, Illinois to serve a variety of customers from trucking fleets and local diesel vehicle owners. In June 2020, we entered into an agreement with a third party pursuant to which it agreed to exclusively sell REG branded fuels at certain of its cardlock locations. In October 2021, we entered into a long-term agreement with GoodFuels, a leading supplier of sustainable marine biofuels and global producer and supplier of renewable fuels, for the supply and development of sustainable marine biofuel solutions for the global shipping industry. In November 2021, we entered into a partnership with Canadian Northern Railway to test bio and RD blends for their locomotive fleet. In December 2021, we acquired Amber Resources, a California-based distributor of biobased diesel, petroleum diesel and lubricants. This acquisition will help enable us to access a larger network of end customers. These are the initial partspart of our downstream strategy, which is focused on three important objectives: margin expansion across the value chain, including by directing production to the most profitable geographies; realization of higher biodiesel values through blends of biodiesel into petroleum and renewable diesel;RD; and increased demand for our biodiesel via sales of 100% pure biodiesel, or B100, to end consumers.
In October 2020, we announced that, following an internal review and site selection process, weour plan to expand the effective capacity of our Geismar, Louisiana biorefinerybiorefinery. The Geismar project involves both an improvement project for the existing operations at the site as well as the capacity expansion. The Geismar project is expected to approximatelytake total annual site production from 90 million to 340 million gallons, per year.enhance existing operations and improve operational reliability and logistics. The expansion is expected to be mechanically complete in 2023 with full operations in early 2024. We currently expecthave received all required permits to proceed with construction and officially broke ground to beginstart the construction process in midthe fourth quarter of 2021. The capital cost for the Geismar project is estimated to late 2021 with a target mechanical completion date in late 2023. We currently estimate our capital expenditures in connection with the expansion project will be at least $825 million. We currently expect to fund these capital expenditures$950 million and is funded with a combination of cash on hand, marketable securities, borrowingborrowings under our credit facilities, offerings of equity and debt orproceeds from other sources. The sale of equity or debt securities in the future may be dilutive to our stockholders, and may provide for rights, preferences or privileges senior to those of our holderspublic offering of common stock. Debt financing arrangements maystock that closed in March 2021 and proceeds from our issuance of Green Notes that closed on May 20, 2021, as discussed below. In addition, in connection with the expansion we have entered into a long-term marine terminal lease for terminal and logistics services that will require usa separate capital outlay. We have also agreed to pledge certain assets or enter into covenants that could restrict our operations or our ability to incur further indebtedness.construction contracts for large parts of the work associated with the improvements and expansion. There can be no guarantee that we will be able to obtain the funds necessary to complete this project in a timely manner or on terms acceptable to us or increase the capacity of our biorefinery at Geismar, Louisiana on time, at our estimated budget, or at all. The improvements and expansion isare subject to a number of conditions and risks.
On March 19, 2021, we completed an equity offering pursuant to which we sold 5,750,000 shares of common stock to various underwriters at a price of $67.00 per share before underwriting discounts and commissions. The net proceeds from the offering were $365.3 million. We currently intend to use the net proceeds from this offering for working capital and other general corporate purposes, which may include the repayment of our existing indebtedness and the funding of capital expenditures, including capital expenditures related to the improvements and expansion of our Geismar, Louisiana biorefinery.
On May 20, 2021, we completed the sale and issuance of $550.0 million aggregate principal amount of our Green Notes. We recorded $14.6 million in legal, professional and underwriting fees related to the issuance of the Green Notes. We currently intend to use the net proceeds from this offering for capital expenditures related to the improvements and expansion of its Geismar, Louisiana biorefinery.
We believe that the execution of these strategies will enable us to expand our margins, diversify sources of profitability, manage our business through varying market conditions, and increase shareholder value.
WeIn September 2021, we announced the closure of the Houston, Texas biorefinery. Production at this facility ceased in November 2021. The Houston plant's nameplate capacity was 35 mmgy. As a result, we now own and operate a network of 1211 biorefineries. TenNine biorefineries are located in the United States and two in Germany. ElevenTen biorefineries produce biodiesel and one produces renewable diesel (“RD”).RD. Our twelve biomass-basedeleven bio-based diesel production facilities have an aggregate nameplate production capacity of 505470 million gallons per year (“mmgy”). In August 2019, we closed our New Boston, Texas biorefinery, which had a nameplate capacity of 15 mmgy.
We are a lower carbon biomass-basedbio-based diesel producer. We primarily produce our biomass-basedbio-based diesel from a wide variety of low carbon feedstocks, including distillers corn oil, used cooking oil and inedible animal fat. We also produce biomass-basedbio-based diesel from virgin vegetable oils, such as soybean oil or canola oil, which tend to be higher in price. We believe our ability to process a wide variety of feedstocks at most of our facilities provides us with a cost advantage over many biomass-basedbio-based diesel producers, particularly those that rely primarily on higher cost virgin vegetable oils.
We also sell petroleum-based heating oil and diesel fuel, which enables us to offer a variety of fuel products to a broader customer base. We sell heating oil and ultra-low sulfur diesel, or ULSD, at terminals throughout the northeastern United States, as well as BioHeat® blended heating fuel at one of these terminal locations. In 2018, we expanded our sales of biofuel blends to
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Midwest and West Coast terminal locations and look to potentially expand in other areas across North America and internationally.
In May 2019, we sold the core assets of REG Life Sciences that comprised our Renewable Chemicals segment. As a result, the former Renewable Chemicals segment and the operations of the Renewable Chemicals segment have been classified as discontinued operations for all periods covered by this report.
The table below reflects our gallons sold during the years ended 20202021 and 20192020 (totals may not foot due to rounding).
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Gallons sold (millions)Gallons sold (millions)
Year ended December 31, 2020Year ended December 31, 2019Year ended December 31, 2021Year ended December 31, 2020
REG-produced biomass-based diesel:
REG-produced bio-based diesel:REG-produced bio-based diesel:
Biodiesel - United States375.2 365.3 Biodiesel - United States348.0 375.2 
Biodiesel - International50.1 45.5 Biodiesel - International41.0 50.1 
Renewable diesel76.4 77.5 RD74.0 76.4 
501.7 488.3 463.0 501.7 
Third party biomass-based diesel:
Third party bio-based diesel:Third party bio-based diesel:
Biodiesel20.9 36.0 Biodiesel22.5 20.9 
Renewable diesel39.8 39.2 RD57.6 39.8 
60.7 75.2 80.1 60.7 
Petroleum-based dieselPetroleum-based diesel88.1 136.9 Petroleum-based diesel78.2 88.1 
TotalTotal650.5 700.3 Total621.3 650.5 
Our businesses are organized into three reportable segments - the Biomass-basedBio-based Diesel segment, the Services segment and Corporate and Other.
Biomass-basedBio-based Diesel Segment
Our Biomass-basedBio-based Diesel segment includes:
•the operations of the biomass-basedbio-based diesel production refineries as included in Item 2 of Part I of this document;
•purchases and resales of biomass-basedbio-based diesel, the renewable portion of sales of biodiesel and renewable dieselRD blended with petroleum-based diesel, RINs and LCFS credits (each as defined herein), 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.
We derive a small portion of our revenues from the sale of co-products of the biomass-basedbio-based diesel production process. In 20202021 and 2019,2020, our revenues from the sale of co-products were less than five percent of our total Biomass-basedBio-based diesel segment revenues. During 20202021 and 2019,2020, revenues from the sale of petroleum-based heating oil and diesel fuel acquired from third parties, along with the sale of these items further blended with biodiesel produced by our facilities or purchased from third parties, were approximately 5% and 10% of our total revenues respectively.for both periods.
In accordance with EPA regulations, we generate 1.5 to 1.7 RINS, for each gallon of biomass-basedbio-based diesel we produce. RINs are used to track compliance with the RFS2, using the EPA moderated transaction system, or EMTS. RFS2 allows us to attach between zero and 2.5 RINs to any gallon of biomass-basedbio-based diesel we sell. When we attach RINs to a sale of biomass-basedbio-based diesel gallons, a portion of our selling price for a gallon of biomass-basedbio-based diesel is generally attributable to RFS2 compliance, but no cost is allocated to the RINs generated by our biomass-basedbio-based diesel production because RINs are a form of government incentive and not a result of the physical attributes of the biomass-basedbio-based diesel production. In addition, RINs, once obtained through the production and sale of gallons of biomass-basedbio-based diesel, may be separated by the acquirer and sold separately. We regularly obtain RINs from third parties for resale, and the value of these RINs is reflected in “Prepaid expenses and other assets” on our Consolidated Balance Sheet. At each balance sheet date, this RIN inventory is valued at the lower of cost or net realizable value and resulting adjustments are reflected in our cost of goods sold for the period. The cost of RINs obtained from third parties is determined using the average cost method. Because we do not allocate costs to RINs generated by our biomass-basedbio-based diesel production, fluctuations in the value of our RIN inventory represent fluctuations in the value of RINs we have obtained from third parties.
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The value of RINs significantly decreased during the first quarter of 2019 and remained relatively low through the first half of 2020, which we believe was influenced by record level of Small Refiner Exemptions ("SREs") from RIN compliance requirements for 2016, 2017, and 2018.2020. The prices of RINs started to move up in the second half of 2020 in part due to the 10th Circuit Court of Appeals ruling invalidating the process the EPA had been using to grant SREs.
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In 2021, RIN prices increased rapidly due to continued support to not issue more SREs and the significant increase in feedstock and ULSD prices.
The table below summarizes our RINs balances available to be sold and the median closing price per RIN at December 31, 20202021 and 20192020 according to OPIS:
QuantityOPIS Median Closing Price per RINQuantityOPIS Median Closing Price per RIN
December 31, 2020December 31, 2019December 31, 2020December 31, 2019December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Biomass-based diesel RINs3,962,710 7,196,022 $1.02 $0.40 
Bio-based diesel RINsBio-based diesel RINs31,702,718 3,962,710 $1.51 $1.02 
Advanced biofuels RINsAdvanced biofuels RINs817,464 2,008,689 $1.02 $0.40 Advanced biofuels RINs684,773 817,464 $1.51 $1.02 
We generate LCFS credits for our low carbon fuels when our qualified low carbon fuels are imported into states that have adopted an LCFS program and sold for qualifying purposes. As a result, a portion of the selling price for a gallon of biomass-basedbio-based diesel sold into an LCFS market is also attributable to LCFS compliance. Like RINs, LCFS credits that we generate are a form of government incentive and not a result of the physical attributes of the biomass-basedbio-based diesel production. Therefore, no cost is allocated to an LCFS credit when it is generated, regardless of whether the LCFS credit is transferred with the biomass-basedbio-based diesel produced or held by us. LCFS prices increased throughout 2019 andin 2020 were near all time high prices at the end of 2019. In 2020 prices remained high relative to historic prices throughout the year, only declining for short periods of time. We believe these high prices were largely attributable to growing demand for LCFS credits. During 2021, prices began to decline for California LCFS credits as the supply of these type of LCFS credits began to match the demand for the credits resulting in a market correction of prices, while Oregon LCFS credit prices remained relatively consistent.
The below table summarizes the approximate amounts of our LCFS credits available to be sold and the median closing price per LCFS credit at December 31, 20202021 and 20192020 according to OPIS:
QuantityOPIS Median Closing Price per LCFS CreditQuantityOPIS Median Closing Price per LCFS Credit
December 31, 2020December 31, 2019December 31, 2020December 31, 2019December 31, 2021December 31, 2020December 31, 2021December 31, 2020
California LCFSCalifornia LCFS2,618 2,366 $199.00 $205.50 California LCFS18,690 2,618 $149.75 $199.00 
Oregon LCFSOregon LCFS8,967 4,073 $123.00 $152.50 Oregon LCFS797 8,967 $124.00 $123.00 
Services Segment
Our Services segment, which primarily provides services to our Biomass-basedBio-based Diesel Segment, includes:
•biomass-basedbio-based diesel facility management and operational services, whereby we provide day-to-day management and operational services to biomass-basedbio-based diesel production facilities; and
•construction management services, whereby we act as the construction management and general contractor for the upgrade or construction of biomass-basedbio-based diesel production facilities.
Corporate and Other Segment
Our Corporate and Other segment includes:
•trading activities related to petroleum-based heating oil and diesel fuel;fuel, including the petroleum portion of sales of biodiesel and RD blended with petroleum-based diesel;
•corporate activities, which consist of corporate office expenses such as compensation, benefits, occupancy and other administrative costs, including management service expenses; and
•income/(expense) activities not associated with the reportable segments, such as corporate general and administrative expenses and shared service expense.
Impact of COVID-19 on Our Business
In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The COVID-19 pandemic has negatively impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets.
In response to the outbreak and business disruption, we have prioritized the health and safety of our employees. We have established a COVID-19 Emergency Response Team ("ERT") to monitor the health of our employees and mitigate the infection risk of our employees. Based on input from the ERT, we have implemented several initiatives in response to the COVID-19
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pandemic, such as a remote workplace requirementrequirements for all office and administrative employees, social distancing protocols for our production employees and any visitors to our facilities, and additional paid time off for employees as needed in order to deal with health or family issues related to COVID-19, and a temporary ban on discretionary business travel.
To date, biodiesel and renewable diesel have been confirmed as essential businesses and have continued to operate throughout the pandemic.COVID-19. As more states, counties and schools have been re-opening and with the continued successful distribution of COVID-19 vaccines, we do not anticipate having to curtail or cease our operations due to COVID-19 in the foreseeable future.
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TheMarket demand for fuels has beenwas significantly impacted by COVID-19 but is expectedin 2020, with significant signs of recovery in 2021. There continues to recover in 2021.
Based on information availablebe economic activity and loosening of restrictions as more of the date of this report, we expectU.S. population gets vaccinated. We are optimistic that the U.S. economy is rebounding from the COVID-19 pandemic to have the following impacts on our revenues and margins in 2021:
•Although more states and counties continue to re-open and distribute vaccinations for COVID-19, the significant decline in demand for fuels is expected to continue;
•the supply-side shock from oil production increases coupled with the demand-side impact of the COVID-19 pandemic drove oil prices to historic lows and raised uncertainty for the direction of energy prices in the near-future;
•we expect a significant reduction in the supply of low carbon feedstocks and corresponding higher prices,
particularly corn oil and used cooking oil, due to significant market disruptions related to COVID-19; and
•we anticipate the price of RINs and the value of LCFS credits to experience pressure and volatility as the demand for fuel continues to decrease during the imposition of containment measures.
pandemic. The extent of the impact of the COVID-19 pandemic on our business is highlyremains uncertain and difficult to predict, as the duration and severity of the global pandemic evolves. At this point, weevolves and variant strains of COVID-19 arise. We cannot reasonably estimate the duration and severity of the COVID-19 pandemic, or its overall impact on our business. We continue to monitor the impact of the COVID-19 pandemic and will adjust our operations, as necessary. We believe ourwe have sufficient cash on hand, our investments in short-term marketable securities and the cash available to us under our lines of credit will allow us to manage the anticipated impact of COVID-19 on our business operations for the foreseeable future. We do not currently plan or anticipate any changes to our workforce due to COVID-19.
For a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, see Part I, Item 1A. "Risk Factors."
Factors Influencing Our Results of Operations
The principal factors affecting our results of operations and financial conditions are the market prices for biomass-basedbio-based diesel and the feedstocks used to produce biomass-based diesel,bio-diesel, as well as governmental programs designed to create incentives for the production and use of cleaner renewable fuels.
Governmental programs favoring biomass-basedbio-based diesel production and use
Biomass-basedBio-based diesel has historically been more expensive to produce than petroleum-based diesel. The biomass-basedbio-based diesel industry’s growth has largely been the result of federal and state programs that require or incentivize the production and use of biomass-basedbio-based diesel, which allows biomass-basedbio-based diesel to be price-competitive with petroleum-based diesel.
The RFS2 biomass-basedbio-based diesel requirement was implemented in 2010, stipulating volume requirements for the amount of biomass-basedbio-based diesel and other advanced biofuels that must be utilized in the United States each year. Under RFS2, Obligated Parties, including petroleum refiners and fuel importers, must show compliance with these standards. Currently, biodiesel and renewable dieselRD satisfy three categories of an Obligated Party’s annual renewable fuel required volume obligation, or RVO—biomass-basedbio-based diesel, advanced biofuel and renewable fuel. The final or proposed RVO targets for the biomass-basedbio-based diesel and advanced biofuels volumes for the years 20162017 to 20212022 as set by the EPA are as follows:
201620172018201920202021201720182019202020212022**
Biomass-based Diesel1.90 billion gallons2.00 billion gallons2.10 billion gallons2.43 billion gallons
Bio-based DieselBio-based Diesel2.00 billion gallons2.10 billion gallons2.43 billion gallons2.76 billion gallons
Total Advanced BiofuelsTotal Advanced Biofuels3.61 billion RINs*4.28 billion RINs*4.29 billion RINs*4.92 billion RINs*5.04 billion RINs*N/ATotal Advanced Biofuels4.28 billion RINs*4.29 billion RINs*4.92 billion RINs*4.63 billion RINs*, **5.20 billion RINs*, **5.77 billion RINs*
*Ethanol equivalent gallons
As of the date of this report, the EPA has not issued the 2021 RVO. This was to be issued in 2020 and it is uncertain when the EPA will issue the**Proposed RVO and at what level the 2021 RVO will be.
The federal biodiesel mixture excise tax credit, or the BTC, has historically provided a $1.00 refundable tax credit per gallon to the first blender of biomass-basedbio-based diesel with petroleum-based diesel fuel. The BTC became effective January 1, 2005, but since January 1, 2010 it has been allowed to lapse and then been reinstated a number of times. The BTC was retroactively reinstated on December 20, 2019 for the fiscal years 2018 and 2019. The BTC was also extended through December 31, 2022.
As a result of this history of retroactive reinstatement of the BTC, we and many other biomass-basedbio-based diesel industry producers have adopted contractual arrangements with customers and vendors specifying the allocation and sharing of any retroactively reinstated incentive. The reinstatement of the 2018 and 2019 BTC resulted in an $483 million net benefit to our net income for the year ended December 31, 2019. The BTC net benefit was allocated to the corresponding quarterly non-GAAP adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") when the business giving rise to
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the retroactive credit was conducted. For the years ended December 31, 2019 and 2018, the reinstatement of the 2018 and 2019 BTC resulted in a net benefit to our Adjusted EBITDA of $254 million and $229 million, respectively.
Biomass-basedBio-based diesel and feedstock price fluctuations
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Our operating results generally reflect the relationship between the price of biomass-basedbio-based diesel, including credits and incentives and the price of feedstocks used to produce biomass-basedbio-based diesel.
Biomass-basedBio-based diesel is a cleaner low carbon, renewable alternative to petroleum-based diesel fuel and is primarily sold to the end user after it has been blended with petroleum-based diesel fuel. Biomass-basedBio-based diesel prices have historically been heavily influenced by petroleum-based diesel fuel prices. Accordingly, biomass-basedbio-based diesel prices have generally been impacted by the same factors that affect petroleum prices, such as crude oil supply and demand balance, worldwide economic conditions, wars and other political events, OPEC production quotas, changes in refining capacity and natural disasters.
Regulatory and legislative factors also influence the price of biomass-basedbio-based diesel. LCFS credits, established by the California Low Carbon Fuel Standard regulation, which is a rule designed to reduce greenhouse gas emissions associated with transportation fuels used in California and the Oregon Clean Fuel Program, which requires a 10% reduction of the average carbon intensity of Oregon’s transportation fuels from 2015 levels by 2025, has had an increasing impact on our biomass-basedbio-based diesel pricing. In addition, biomass-basedbio-based diesel RIN pricing, a value component that was introduced via RFS2 in July 2010, has had a significant impact on our biomass-basedbio-based diesel pricing. The following table shows for 2018, 2019, 2020 and 20202021 the high and low average monthly contributory value of RINs, as reported by OPIS, to the average B100 spot price of a gallon of biodiesel, as reported by OPIS in terms of dollars per gallon.
regi-20201231_g4.jpgregi-20211231_g4.jpg
At the beginning of 2020,2021, the value of RINs, as reported by OPIS, to the average B100 spot price of a gallon of biodiesel was $0.60$1.48 per gallon. The value of RINs to the average B100 spot price of a gallon of biodiesel grew to $1.53$2.26 per gallon at the end of December 2020.2021. It reached a high of $1.55$3.07 per gallon of biodiesel in December 2020June 2021 and a low of $0.56$1.40 per gallon in January 2020. In2021. D4 RIN values trended higher throughout 2021, supported by D6 RIN values in which the first half ofD4 category can be used to satisfy an Obligated Party's D6 RIN obligation along with an increase in feedstock pricing relative to ULSD as seen in the heating oil to soybean oil ("HOBO") spread. During 2020, the value of RINs waswere negatively impacted by the overall decrease in demand for refinedtransportation fuels and hence RVO due to COVID-19, which translated into reduced volume obligations for Obligated Parties under the COVID-19 pandemic, but recovered in the second half of 2020. We believe that the increase of RIN values toward the end of 2020 was influenced by the 10th circuit ruling on restricting SRE waiver grants by the EPA, as well as the denial of 54 retroactive waivers for SREs that were filed in 2020 for periods 2011 through 2018. The Supreme Court of the United States agreed in January 2021 to review the ruling. The decision of the Supreme Court could cause volatility in the price of RINs in 2021. In addition, prices for soybean oil and other feedstocks increased in 2020, as a result, increasing RIN values. During 2019, we believe that the value of RINs was heavily influenced by record levels of SREs from RIN compliance
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requirements for 2016, 2017, and 2018.RFS. We enter into forward contracts to sell RINs and we use risk management position limits that are intended to manage RIN exposure.
During 20202021 and 2019,2020, feedstock expense accounted for 80%87% and 79%80% of our direct production cost, respectively. Methanol and chemical catalysts expense accounted for 3% and 4%3%, respectively, and chemical catalysts for 2% and 3% and 3%, respectively of our costs of goods sold, respectively.sold.
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Feedstocks for biomass-basedbio-based diesel production, such as distillers corn oil, used cooking oil, inedible animal fat, canola oil and soybean oil are commodities and market prices for them will be affected by a wide range of factors unrelated to the price of biomass-basedbio-based diesel and petroleum-based diesel. There are a number of factors that influence the supply and price of our feedstocks, such as the following: biomass-basedbio-based diesel demand; export demand; government policies and subsidies; weather conditions; ethanol production; cooking habits and eating habits; number of restaurants near collection facilities; hog/beef/poultry supply and demand; palm oil supply; soybean meal demand and/or production, and crop production both in the U.SU.S. and South America. Increasing production of biomass-basedbio-based diesel and, particularly recent and prospective expansion of RD capacity, and the development of alternative fuels and renewable chemicals also put pressure on feedstock supply and availability to the biomass-basedbio-based diesel industry. The biomass-basedbio-based diesel industry may have difficulty procuring feedstocks at economical prices if competition for biomass-basedbio-based diesel feedstocks increases due to newly added production capacity.
During 2021 and 2020, 78% and 2019, 65% and 71% of the feedstocks used in our operations, respectively, were comprised of distillers corn oil, used cooking oil and inedible animal fats with the remainder coming from virgin vegetable oils.
The recent increase in CME Soyoil Futures price has correlated with an increase in price for all of our feedstocks. This has increased the cost of producing biobasedbio-based diesel at our refineries.
The graph below illustrates the spread between the cost of producing one gallon of biodiesel made from soybean oil to the cost of producing one gallon of biodiesel made from the specified low carbon feedstock for the period January 20182019 to December 2020.2021. The results were derived using assumed conversion factors for the yield of each feedstock and subtracting the cost of producing one gallon of biodiesel made from each respective low carbon feedstock from the cost of producing one gallon of biodiesel made from soybean oil.
regi-20201231_g5.jpgregi-20211231_g5.jpg

(1)Used cooking oil prices ("UCO") are based on the monthly average of the daily low sales price of C.I. adjusted Gulf of Mexico yellow grease as reported by The Jacobsen for the period of January 1, 20182019 through June 30, 2019. The prices from July 1, 2019 through December 31, 20202021 are based on the monthly average of the daily low sales price of Gulf of Mexico used cooking oil (based on 8.5 pounds per gallon).
(2)Distillers corn oil ("DCO") 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).
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Our results of operations generally will benefit when the spread between biomass-basedbio-based diesel prices and feedstock prices widens and will be harmed when this spread narrows. The following graph shows feedstock cost data for choice white grease and soybean oil on a per gallon basis compared to the per gallon sale price data for biodiesel, and the spread between biodiesel and each of soybean oil and choice white grease from January 20182019 to December 2020.2021.
regi-20201231_g6.jpg
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regi-20211231_g6.jpg
(1)Biodiesel prices are based on the monthly average of the midpoint of the high and low prices of B100 (Chicago SME) as reported by OPIS.
(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)Distiller corn oil prices are based on the monthly average of the daily low price of Illinois distillers corn oil as reported by the Jacobsen (based on 8.2 pounds per gallon)
(5)Spread between biodiesel price and choice white grease price.
(6)Spread between biodiesel price and soybean oil (crude) price.
(7)Spread between biodiesel price and distillers corn oil price.

During 2020,2021, NY Harbor ULSD prices ranged from a low of $0.61$1.46 per gallon in early Aprilat the start of January to a high of $2.06$2.59 per gallon in JanuaryOctober with an average price for the year of $1.25$2.07 per gallon. The COVID-19 pandemic created an unprecedented collapseCOVID Omicron variant severely shocked the market in worldwide mobility. DemandNovember into mid-December, but by late December demand destruction concerns abated and employment numbers continued to improve. Despite these indications, OPEC+ has remained at its set re-supply level rather than increase supply, and U.S. shale producers continue to slowly add new oil well rigs. Commodity prices have broadly rallied and relatively higher levels of inflation have supported the broader commodity asset class. In November, the EPA released proposed RVO with a 2022 increase in biomass based diesel demand providing support for oil dropped by 20% in 2020 with March and April demand dropping much below 20% from the prior year. ULSD prices were pressured further by refiners' practice of blending jet fuel into diesel, which created unprecedented oversupply and required creative storage solutions such as the use of ocean vessels. OPEC cut production by a record amount in May, June and July.2022 D4 RIN values.
The U.S. biodiesel prices based onincreased significantly during 2021. The average U.S. biodiesel price, as indicated by the Chicago SME B100 price reported by OPIS, was $5.23 per gallon for 2021. During 2021, B100 prices traded in a range reachingreached a high of $3.68$6.15 in DecemberJune and a low of $2.59$3.72 in April.January.
Soybean oil production reached record levels during several months in 2020; whereas, animal fat production was mixed with hog slaughter up 1.5% and cattle slaughter down 3%, contributing to feedstock price volatility during the year. CBOT soybean oil prices ranged from a highlow of $0.43$0.42 per pound in DecemberJanuary to a lowhigh of $0.25$0.72 per pound in AprilJune with an average price for the year of $0.31$0.58 per pound. Soybean oil plummeted in MarchThe soybean complex rebounded from the November Omicron variant scare and April in response toended the year higher as South American dry weather raised concerns about production and the United States faced a lysine shortage for animal feed, creating demand destruction from COVID-19 lockdowns. SBO price ramped up June through September when foreignfor soybean demand became strong as China swine population surged in recovery from Asian Swine Flu epidemic. A second price surge occurred October through November when tight supply of palm oil became clear, resulting from labor shortages and poor growing weather brought on by La Nina; meanwhile, soybean orders from China did not slow down.meal. Choice white grease prices ranged from a low of $0.18$0.30 in JulyJanuary to a high of $0.30$0.64 per pound in DecemberAugust with an average price for the year of $0.24$0.49 per pound. Relatively strong demand for pork and beef has continued to lead to expansions in those industries. Choice White Grease and tallow prices were volatile due to production disruptions from COVID-19 and SBO price trend.
3539

Risk Management
The profitability of producing biomass-basedbio-based diesel largely depends on the spread between prices for feedstocks and biomass-basedbio-based diesel, including incentives, each of which is subject to fluctuations due to market factors and each of which is not significantly correlated. Adverse price movements for these commodities directly affect our operating results. We attempt to protect cash margins for our own production and our third-party trading activity by entering into risk management contracts that mitigate the impact on our margins from price volatility in feedstocks and biomass-basedbio-based diesel. We create offsetting positions by using a combination of forward fixed-price physical purchases and sales contracts on feedstock and biomass-basedbio-based diesel and risk management futures contracts, swaps and options primarily on the New York Mercantile Exchange NY Harbor ULSD and CBOT Soybean Oil; however, the extent to which we engage in risk management activities varies substantially from time to time, and from feedstock to feedstock, depending on market conditions and other factors. In making risk management decisions, we utilize research conducted by outside firms to provide additional market information in addition to our internal research and analysis.
Distillers corn oil, used cooking oil, inedible animal fat, canola oil and soybean oil are the primary feedstocks we used to produce biomass-basedbio-based diesel in 2018, 2019, 2020 and 2020.2021. We utilize several varieties of inedible animal fat, such as beef tallow, choice white grease and poultry fat derived from livestock. There is no established futures market for these low carbon feedstocks. The purchase prices for low carbon feedstocks are generally set on a negotiated flat price basis or spread to a prevailing market price reported by the USDA price sheet or The Jacobsen. Our efforts to risk manage against changing prices for distillers corn oil, used cooking oil and inedible animal fat have involved entering into futures contracts, swaps or options on other commodity products, such as CBOT soybean oil and New York Mercantile Exchange NY Harbor ULSD. However, these products do not always experience the same price movements as low carbon feedstocks, making risk management for these feedstocks challenging. We manage feedstock supply risks related to biomass-basedbio-based diesel production in a number of ways, including, where available, through long-term supply contracts. The purchase price for soybean oil under these contracts may be indexed to prevailing CBOT soybean oil market prices with a negotiated market basis. We utilize futures contracts, swaps and options to risk manage, or lock in, the cost of portions of our future feedstock requirements generally for varying periods up to one year.
Our ability to mitigate our risk of falling biomass-basedbio-based diesel prices is limited. We have entered into forward contracts to supply biomass-basedbio-based diesel. However, pricing under these forward sales contracts generally has been indexed to prevailing market prices, as fixed price contracts for long periods on acceptable terms have generally not been available. There is no established derivative market for biomass-basedbio-based diesel in the United States. Our efforts to hedge against falling biomass-basedbio-based diesel prices generally involve entering into futures contracts, swaps and options on other commodity products, such as diesel fuel and New York Mercantile Exchange NY Harbor ULSD. However, price movements on these products are not highly correlated to price movements of biomass-basedbio-based diesel.
We generate 1.5 to 1.7 biomass-basedbio-based diesel RINs for each gallon of biomass-basedbio-based diesel we produce and sell. We also obtain RINs from third party transactions which we hold for resale. There is no effective established futures market for biomass-basedbio-based diesel RINs, which severely limits the ability to risk manage the price of RINs. We enter into forward contracts to sell RINs, and we use risk management position limits to manage RIN exposure, however, pricing under those forward contracts generally has been indexed to prevailing market prices as fixed price contracts for long periods have generally not been available.
As a result of our strategy, we frequently have gains or losses on derivative financial instruments that are conversely offset by losses or gains on forward fixed-price physical contracts on feedstocks and biomass-basedbio-based diesel or inventories. Gains and losses on derivative financial instruments are recognized each period in operating results while corresponding gains and losses on physical contracts are generally not recognized until quantities are delivered or title transfers which may be in the same or later periods. Our results of operations are impacted when there is a period mismatch of recognized gains or losses associated with the change in fair value of derivative instruments used for risk management purposes at the end of the reporting period but the purchase or sale of feedstocks or biomass-basedbio-based diesel has not yet occurred and thus the offsetting gain or loss will be recognized in a later accounting period.
We had risk management gains of $36.9$2.4 million from our derivative financial instrument trading activity for the year ended December 31, 2020,2021, compared to risk management lossesgains of $28.9$36.9 million for the year ended December 31, 2019.2020. Changes in the value of these futures or swap instruments are reflected in current income or loss, generally within our cost of goods sold. In general, risk management gains and losses resulting from fluctuations in feedstock and energy prices are largely offset by an inverse gain or loss on physical product purchases and sales.
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Increasing importance of renewable dieselRD
Renewable dieselRD is made from the same renewable resources as biodiesel but uses a different production process. The result is a renewable fuel that is chemically identical, and a drop-in replacement, to petroleum diesel. Renewable dieselRD is a relatively new fuel but has
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quickly become popular because it reduces emissions and delivers strong performance. Renewable dieselRD can also be blended with biodiesel. Our proprietary blend of renewable dieselRD and biodiesel which we call REG Ultra Clean® captures the best properties of the two fuels.
Renewable dieselRD has become an increasingly significant part of our business. Renewable dieselRD carries a premium price to biodiesel as a result of a variety of factors including the ability to blend it with petroleum diesel seamlessly, better cold weather performance, and because it generates more RINs on a per gallon basis. Our renewable dieselRD production facility in Geismar, Louisiana generated a significant portion of our adjusted EBITDA in 20192020 and in 2020.2021. We experienced two fires at this facility in 2015 that each resulted in the plant being shut down for a certain period of time. If production at this facility were interrupted again due to a fire or a global pandemic such as COVID-19, it would have a disproportionately significant and material adverse impact on our results of operations and financial condition.
Seasonality
Our operating results are influenced by seasonal fluctuations in the demand for biomass-basedbio-based diesel. Our biodiesel sales tend to decrease during the winter season due to reduced blending concentrations to adjust for performance during colder weather. Colder seasonal temperatures can cause the higher cloud point biodiesel we make from inedible animal fats to become cloudy and eventually gel at a higher temperature than petroleum-based diesel, renewable diesel,RD, or lower cloud point biodiesel made from soybean oil, canola oil or distillers corn oil. Such gelling can lead to plugged fuel filters and other fuel handling and performance problems for customers and suppliers. Reduced demand in the winter for our higher cloud point biodiesel can result in excess supply of such higher cloud point biodiesel and lower prices for such biodiesel. In addition, most of our biodiesel production facilities are located in colder Midwestern states in proximity to feedstock origination, and our costs of shipping can increase as more biodiesel is transported to warmer climate geographies during winter. To mitigate some of these seasonal fluctuations, we have upgraded our Newton and Danville biorefineries to produce distilled biodiesel from low-cost feedstocks, which has improved cold-weather performance.
RIN prices may also be subject to seasonal fluctuations. The RIN is dated for the calendar year in which it is generated, commonly referred to as the RIN vintage. Since 20% of the annual RVO of an Obligated Party can be satisfied by prior year RINs, most RINs must come from biofuel produced or imported during the RVO year. As a result, RIN prices can be expected to decrease as the calendar year progresses if the RIN market is oversupplied compared to that year's RVO and increase if the market is undersupplied. See chart below for comparison between actual RIN generation and RVO level for advanced biofuel as set by the EPA.
YearRIN Generation (Advanced Biofuel)Finalized RVO level for Advanced BiofuelEstimated Advanced Biofuel RVO Exempted due to SREs
20174.23 billion RINs4.28 billion RINs*0.40 billion RINs
20184.34 billion RINs4.29 billion RINs*0.32 billion RINs
20194.87 billion RINs4.92 billion RINs***
20205.28 billion RINS5.044.63 billion RINs*, *****
20215.67 billion RINS5.20 billion RINs*****
* Ethanol equivalent gallons
** Not yet determined
*** Proposed amount
Industry capacity, production and imports
Our operating results are influenced by our industry's capacity and production, including in relation to RFS2 production requirements. Biomass-basedBio-based diesel production and/or imports, as reported by EMTS, were 2.50 billion gallons in 2018, 2.65 billion gallons in 2019, and 2.88 billion gallons in 2020.2020, and 3.09 billion gallons in 2021.
According to the U.S. Energy Information Administration, the amount of imported biodiesel gallons qualifying under RFS2 increased from 333.4 million gallons in 2018 to approximately 423.7 million gallons in 2019.2019 to approximately 476.4 million gallons in 2020. The amount of imported biodiesel was at approximately 476.4552.6 million gallons in 2020, slightly higher than 2019 according to the EIA.through November 30, 2021.
Components of Revenues and Expenses
Continuing Operations:
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We derive revenues in our Biomass-basedBio-based Diesel segment from the following sources:
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•sales of biodiesel and renewable dieselRD produced at our facilities, including RINs and LCFS credits, transportation, storage and insurance costs to the extent paid for by our customers;
•resale of finished biomass-basedbio-based diesel, renewable diesel,RD, 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-basedbio-based diesel;
•sales of glycerin, other co-products of the biomass-basedbio-based diesel production process; and
•incentive payments from federal and state governments, including the BTC, and from the USDA Advanced Biofuel Program.
We derive revenues in our Services segment from the following sources - primarily internal:
•fees received from operations management services that we provide for biomass-basedbio-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-basedbio-based diesel production facilities.
Cost of goods sold for our Biomass-basedBio-based Diesel segment includes:
•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 fuel and RINs acquired from third parties, the purchase price of biomass-basedbio-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.
Cost of goods sold for our Services segment includes:
•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,sourcing, 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-basedbio-based diesel processing equipment, and, to a much lesser extent, salaries and related expenses for our employees involved in the construction process.
Selling, general and administrative expense consists of expenses generally involving corporate overhead functions at our domestic and international offices, and research and development activities.
Impairment of property, plant and equipment represents non-cash impairment charges of certain property, plant and equipment items.
Other income (expense), net is primarily comprised of the gain (loss) on debt extinguishment, gain on lease termination, interest expense, interest income and other non-operating items.
Discontinued Operations:
There was no activity classified as discontinued operations for the fiscal year ended December 31, 2021 or 2020. Net loss from discontinued operations for the fiscal year ended December 31, 2019 was attributable to costs that primarily relate to certain pre-existing contractual agreements and legal and professional fees related to the disposition and wind-down of our Life Sciences operations.
Critical Accounting Policies
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Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of
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these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, equities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for judgments we make about the carrying values of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from the estimates.
We believe the following critical accounting policies affect our more significant judgments used in the preparation of our consolidated financial statements:
Income Taxes
Our income tax provision, deferred income tax assets and liabilities, and liabilities for unrecognized tax benefits represent the Company’s best estimate of current and future income taxes to be paid. We are subject to income taxes in the U.S. and several non-U.S. jurisdictions. Our annual effective tax rate is based on income tax laws, statutory tax rates, taxable income levels and tax planning opportunities available in various jurisdictions where we operate. These tax laws are complex and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, statutory tax rates, and estimates of our future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements.
Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. TheseWe assess deferred tax assets on an individual jurisdiction basis, and are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities and tax planning strategies. To the extent we determine that it is more likely than not a deferred income tax asset will not be realized based on an assessment of positive and negative evidence including historical earnings, future taxable income that incorporates prudent and feasible tax planning strategies, and the scheduled reversals of deferred tax assets and liabilities, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates. Changes in tax statutes, the timing of deductibility of expenses or expectations for future performance could result in material adjustments to our valuation allowances, which would increase or decrease tax expense.
The indefinite reinvestment in the earnings of non-US subsidiaries assertion is determined by management’s judgment about and intentions concerning future investment in operations. Management’s judgment is that we are not indefinitely reinvested in the undistributed earnings of our non-US subsidiaries at December 31, 2020.2021. The assertion regarding undistributed non-US earnings does not have a material impact on our consolidated financial statements.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. We have generally a single performance obligation in our arrangements with customers. We believe for most of our contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When we perform shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. We generally expense sales commissions when incurred. We record these costs within selling, general and administrative expenses.
Revenues associated with governmental incentive programs are recognized when the amount to be received is determinable, collectability is reasonably assured and the sale of product giving rise to the incentive has been recognized. Our revenue from governmental incentive programs is generally comprised of amounts received from the USDA Advanced Biofuel Program, or the USDA Program, and the biodiesel tax credit. In connection with the biodiesel tax credit, we file a claim with the Internal Revenue Service for a refund of excise taxes each week for gallons we have blended to B99.9 and sold. The biodiesel tax credit provided a $1.00 refundable tax credit per gallon.

3943

Results of Operations
Fiscal years ended December 31, 2021 and December 31, 2020
Set forth below is a summary of certain financial information (dollars in thousands and gallons in millions except per gallon data) for the periods indicated:
Twelve Months Ended
December 31,
20212020
Gallons sold621.3 650.5 
Average bio-based diesel price per gallon$4.46 $2.91 
Revenues$3,244,050 $2,137,148 
Costs of goods sold2,874,157 1,868,794 
Gross profit369,893 268,354 
Selling, general and administrative expenses140,511 119,302 
Gain on disposal of property, plant and equipment(1,462)(205)
Impairment of property, plant and equipment7,359 22,404 
Income from operations223,485 126,853 
Other income (expense), net(24,145)1,889 
Income tax benefit (expense)14,479 (5,929)
Net income213,819 122,813 
Effects of participating share-based awards(2,128)(2,398)
Net income available to common stockholders$211,691 $120,415 
Results of Operations:
Revenues. Our total revenues increased $1.1 billion, or 52%, to $3.2 billion for the year ended December 31, 2021, from $2.1 billion for the year ended December 31, 2020. The significant increase in revenue was primarily attributable to a substantial increase in the average bio-based diesel price per gallon. In 2021, ULSD prices averaged $2.07 per gallon, compared to $1.25 per gallon in 2020. The significant increase in ULSD prices resulted from general market optimism and improving demand stemming from the easing of lockdown measures in the United States and internationally, particularly when compared to 2020 where prices hit historical lows due to the onset of the COVID-19 pandemic and strict lockdowns and only slowly recovered. RIN values trended higher throughout 2021 along with an increase in feedstock pricing relative to ULSD values as seen in the heating oil to soybean oil spread. As a result of these factors, our average selling price significantly increased by $1.55, or 53%, in 2021 compared to 2020. Sales of LCFS credits and separated RINs were $158.9 million and $355.5 million for the year ended December 31, 2021 compared to $131.3 million and $129.7 million for the year ended December 31, 2020. The increase in total revenues was partially offset by a decrease in total gallons sold of 29.2 million gallons, or 4%, from 2021 compared to 2020, as a result of our focus on product mix and optimization of gallons sold.
The increase in the average sales price contributed to a $1.0 billion increase in revenues for the year ended December 31, 2021, when applied to the number of gallons sold in 2020. The increase in RIN prices also positively affected separated RIN sales resulting in a revenue increase of $225.8 million, or an increase of 174% for the year ended December 31, 2021, compared to 2020. The decrease in gallons sold for the year ended December 31, 2021, accounted for a revenue decrease of $130.2 million, using the average selling price for bio-based diesel for the current period. Also negatively affecting revenues was the $14.5 million decrease in government incentives revenue in 2021, caused by lower BTC revenues due to lower gallons sold.
Costs of goods sold. Our costs of goods sold increased $1.0 billion, or 54%, to $2.9 billion for the year ended December 31, 2021, from $1.9 billion for the year ended December 31, 2020. Costs of goods sold as a percentage of revenues were 89% and 87% for the years ended December 31, 2021 and 2020, respectively. The increase in costs of goods sold was primarily driven by significantly higher feedstock costs in the year ended December 31, 2021 compared to 2020, as described below. The increase was also driven by lower risk management gains of $2.4 million for the year ended December 31, 2021, compared to gains of $36.9 million in 2020.
We experienced significantly higher costs across all of our feedstocks in the year ended December 31, 2021. Average prices for low carbon feedstocks used in our production process for the years ended December 31, 2021 and December 31, 2020, were $0.52 and $0.29 per pound, respectively. Average soybean oil costs for the years ended December 31, 2021 and December 31, 2020 were $0.60 and $0.32 per pound, respectively. Average canola oil costs for the years ended December 31,
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2021 and December 31, 2020 were $0.62 and $0.32 per pound, respectively. Average distillers corn oil costs were $0.52 and $0.27 per pound, respectively, for the years ended December 31, 2021 and December 31, 2020.
Selling, general and administrative expenses. Our selling, general and administrative, or SG&A, expenses increased $21.2 million, or 18%, to $140.5 million for the year ended December 31, 2021, compared to $119.3 million for the year ended December 31, 2020. As a percentage of revenues, our SG&A expenses were 4.3% and 5.6% for 2021 and 2020, respectively. The $21.2 million increase year over year resulted primarily from higher employee related compensation and benefits and legal and professional expenses.
Impairment of property, plant and equipment. In 2021,we recorded a property, plant and equipment impairment of approximately $7.4 million, related to certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' deteriorating physical conditions identified during the period. During 2020 we recorded $22.4 million, of which $19.0 million relates to certain equipment that we determined will not be used in future RD production expansions. The remaining impairment was related to impairment charges against certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' economic obsolescence identified during the period.
Other income (expense), net. Other expense was $24.1 million for the year ended December 31, 2021, compared to other income of $1.9 million for the year ended December 31, 2020. Other income (expense) is primarily comprised of interest expense, interest income, gain (loss) on debt extinguishment, gain on termination, and other non-operating items. In 2021, we had interest expense of $21.9 million primarily due to the issuance of our Green Notes, compared to interest expense of $7.9 million for the same period in 2020. We also had a $4.4 million loss on debt extinguishment and in 2021 compared to a $1.8 million gain on debt extinguishment in the same period in 2020. We had a gain on lease termination for the year ended of December 31, 2020 of $4.5 million.
Income tax benefit (expense). Income tax benefit recorded during the year ended December 31, 2021 was $14.5 million, compared to an income tax expense of $5.9 million for the year ended December 31, 2020, the change for which is primarily resulting from the $6.1 million release of a valuation allowance in a non-US jurisdiction due to a change in judgement about our ability to realize the benefit of deferred tax assets, and the $13.1 million release of a valuation allowance in the US due to the recording of deferred tax liabilities in the acquisition of Amber Resources that will offset future deferred tax assets. At December 31, 2021 and December 31, 2020, we had net deferred income tax assets of approximately $394.4 million and $381.2 million, respectively, with a valuation allowance of $392.9 million and $387.8 million, respectively. As a result, our effective tax rate was (7.3)% and 4.6% for the years ended December 31, 2021 and 2020, respectively.
Effects of participating share-based awards. Effects of participating restricted stock units was $2.1 million and $2.4 million for the years ended December 31, 2021 and 2020, respectively.
Fiscal years ended December 31, 2020 and December 31, 2019
Set forth below is a summary of certain financial information (dollars in thousands and gallons in millions except per gallon data) for the periods indicated:
Twelve Months Ended
December 31,
20202019
Gallons sold650.5 700.3 
Average biomass-based diesel price per gallon (ASP with BTC net benefit allocated to the corresponding period of $3.21 for the year ended December 31, 2019)$2.91 $3.62 
Revenues from continuing operations$2,137,148 $2,625,216 
Costs of goods sold from continuing operations1,868,794 2,111,324 
Gross profit from continuing operations268,354 513,892 
Selling, general and administrative expenses119,302 118,209 
Gain on disposal of property, plant and equipment(205)— 
Impairment of property, plant and equipment22,404 12,208 
Income from operations126,853 383,475 
Other income (expense), net1,889 (11,550)
Income tax benefit (expense)(5,929)570 
Net income from continuing operations122,813 372,495 
Net loss from discontinued operations— (9,667)
Net income122,813 362,828 
Effects of participating share-based awards on continuing operations(2,398)(8,238)
Net income from continuing operations available to common stockholders$120,415 $364,257 
Net loss from discontinued operations attributable to common stockholders$— $(9,667)
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Twelve Months Ended
December 31,
20202019
Gallons sold650.5 700.3 
Average bio-based diesel price per gallon (ASP with BTC net benefit allocated to the corresponding period of $3.21 for the year ended December 31, 2019)$2.91 $3.62 
Revenues from continuing operations$2,137,148 $2,625,216 
Costs of goods sold from continuing operations1,868,794 2,111,324 
Gross profit from continuing operations268,354 513,892 
Selling, general and administrative expenses119,302 118,209 
Gain on disposal of property, plant and equipment(205)— 
Impairment of property, plant and equipment22,404 12,208 
Income from operations126,853 383,475 
Other income (expense), net1,889 (11,550)
Income tax benefit (expense)(5,929)570 
Net income from continuing operations122,813 372,495 
Net loss from discontinued operations— (9,667)
Net income122,813 362,828 
Effects of participating share-based awards on continuing operations(2,398)(8,238)
Net income from continuing operations available to common stockholders$120,415 $364,257 
Net loss from discontinued operations available to common stockholders$— $(9,667)
Continuing Operations:
Revenues. Our total revenues decreased $488.1 million, or 19%, to $2,137.1 million$2.1 billion for the year ended December 31, 2020, from $2,625.2 million$2.6 billion for the year ended December 31, 2019. Due to the retroactive reinstatement of the BTC in December 2019 for the 2018-2019 periods, in the fourth quarter of 2019, we recognized $490.6 million of BTC government incentives revenue net of sharing with customers, $227.9 million of which was attributable to sales in 2018 and $262.7 million of which was attributable to sales in 2019. In contrast, 2020 total revenues only included the 2020 BTC. The decrease in total revenues was also driven by a decrease in total gallons sold of 49.8 million gallons, or 7%, and a decrease in average selling price including the BTC allocation to the period in which the gallons were sold of $0.30. Sales of LCFS and separated RINs were $131.3 million and $129.7 million for the year ended December 31, 2020 as compared to $106.5 million and $98.3 million for the year ended December 31, 2019 offset the overall decrease in biomass-based diesel revenues in 2020.
Biomass-based diesel revenues including government incentives decreased $487.8 million, or 19%, to $2,135.7 million$2.1 billion during the year ended December 31, 2020, from $2,623.6 million$2.6 billion for the year ended December 31, 2019. The decrease in revenues was largely attributable to the recognition in the fourth quarter of 2019 of BTC revenue relating to operations in both 2019 and 2018, while 2020 only included BTC revenue related to 2020 operations. Gallons sold decreased 49.8 million, or 7%, to 650.5 million during the year ended December 31, 2020, compared to 700.3 million during the year ended December 31, 2019. The decrease in gallons sold for the year ended December 31, 2020 accounted for a revenue decrease of $144.9 million using 2020 average sales pricing. Our average biomass-based diesel sales price per gallon including the BTC net benefits decreased $0.71, or 20%, to $2.91 during the year ended December 31, 2020 compared to $3.62 during the year ended December 31, 2019. When allocating the BTC net benefits to the period in which the associated gallons were sold, our average biomass-based diesel sales price decreased $0.30, or 9%, compared to $3.23 for 2019. This decrease was mainly due to the lower energy prices in 2020 as a result of the COVID-19 pandemic and OPEC production policies. The decrease in average sales price with allocated BTC net benefits from 2020 to 2019 contributed to a $210.1 million revenue decrease when applied to the number of gallons sold during 2019.
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Costs of goods sold. Our costs of goods sold decreased $242.5 million, or 11%, to $1,868.8 million$1.9 billion for the year ended December 31, 2020, from $2,111.3 million$2.1 billion for the year ended December 31, 2019. Costs of goods sold as a percentage of revenues were 87% and 80% for the years ended December 31, 2020 and 2019, respectively.
Biomass-based diesel costs of goods sold as a percentage of revenues increased in 2020 mainly due to a 7% decrease in gallons sold as well as an increase in average costs for feedstocks. Average low carbon feedstocks prices for the years ended
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December 31, 2020 and December 31, 2019, were $0.29 and $0.26 per pound, respectively. Average soybean oil costs for the years ended December 31, 2020 and December 31, 2019 were $0.32 and $0.31 per pound. We recorded risk management gains of $36.9 million from our derivative financial instrument activity in 2020, compared to risk management losses of $28.9 million for 2019, contributing to a reduction in the overall costs of goods sold. Our risk management gains and losses are directly impacted by any volatility in the energy and commodities market.
Selling, general and administrative expenses. Our selling, general and administrative, or SG&A, expenses increased $1.1 million, or 1%, to $119.3 million for the year ended December 31, 2020, compared to $118.2 million for the year ended December 31, 2019. As a percentage of revenues, our SG&A expenses were 5.6% and 4.5% for 2020 and 2019, respectively. The increase year over year was driven largely by lower total revenues in 2020.
Impairment of property, plant and equipment. We recorded a property, plant and equipment impairment in 2020 of approximately $22.4 million, of which $19.0 million relates to certain equipment that we determined will not be used in future renewable dieselRD production expansions. In addition, we recorded impairment charges against certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' economic obsolescence identified during the period. During 2019, we recorded a $12.2 million impairment charge mainly due to the closure of the New Boston refinery.
Other income (expense), net. Other income was $1.9 million for the year ended December 31, 2020, compared to other expense of $11.6 million for the year ended December 31, 2019. Other income (expense) is primarily comprised of interest expense, gain on debt extinguishment, gain on lease termination, and other non-operating items. In 2020, we had a gain on lease termination of $4.5 million related to the termination of a terminal lease at our non-operational New Orleans facility compared to the absence of lease terminations in 2019. We also had a $1.8 million gain on debt extinguishment and in 2020 compared to a $0.5 million gain on debt extinguishment, a difference of $1.3 million. The $14.3 million net increase in other income (expense) in 2020 was primarily due to the items noted above as well as lower interest expense of $5.3 million between the periods.
Income tax benefit (expense). Income tax expense recorded during the year ended December 31, 2020 was $5.9 million, compared to income tax benefit of $0.6 million for the year ended December 31, 2019, with the increase in expense primarily resulting from additional tax expense incurred in connection with the repurchase of a greater amount of our 2016 convertible debt in 2020 compared to repurchases in 2019, and taxable profits in our foreign operations. At December 31, 2020 and 2019, we had net deferred income tax assets of approximately $381.2 million and $343.9 million, respectively, with a valuation allowance of $387.8 million and $350.9 million, respectively. As a result, our effective tax rate was 4.6% and 0.2% for the years ended December 31, 2020 and 2019, respectively.
Effects of participating share-based awards. Effects of participating restricted stock units was $2.4 million and $8.2 million for the years ended December 31, 2020 and 2019, respectively.
Discontinued Operations:
For the year ended December 31, 2020, there was no activity classified as discontinued operations. Net loss from discontinued operations for the year ended December 31, 2019 of $9.7 million was attributable to the research and development activities at the REG Life Sciences business and costs to sell the business.
Fiscal years ended December 31, 2019 and December 31, 2018
Set forth below is a summary of certain financial information (dollars in thousands and gallons in millions except per gallon data) for the periods indicated:
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Twelve Months Ended
December 31,
20192018
Gallons sold700.3 649.2 
Average biomass-based diesel price per gallon (ASP excluding BTC net benefit of $2.75 and $3.03 for the years ended December 31, 2019 and 2018, respectively)$3.62 $3.40 
Revenues from continuing operations$2,625,216 $2,368,478 
Costs of goods sold from continuing operations2,111,324 1,962,996 
Gross profit from continuing operations513,892 405,482 
Selling, general and administrative expenses118,209 106,739 
Impairment of property, plant and equipment12,208 879 
Income (loss) from operations383,475 297,864 
Other income (expense), net(11,550)(3,523)
Income tax benefit (expense)570 (5,871)
Net income (loss) from continuing operations372,495 288,470 
Net loss from discontinued operations(9,667)(11,312)
Net income (loss)362,828 277,158 
Effects of participating share-based awards on continuing operations(8,238)(7,434)
Net income (loss) from continuing operations available to common stockholders$364,257 $281,036 
Net loss from discontinued operations available to common stockholders$(9,667)$(11,312)
Continuing Operations:
Revenues. Our total revenues increased $256.7 million, or 11%, to $2,625.2 million for the year ended December 31, 2019, from $2,368.5 million for the year ended December 31, 2018. Due to the retroactive reinstatement of the BTC in December 2019 for the 2018-2019 periods, we recognized in the fourth quarter of 2019 $490.6 million of BTC net revenue, $227.9 million of which was attributable to sales in 2018 and $262.7 million of which was attributable to sales in 2019. Due to the retroactive reinstatement of the BTC in February 2018 for the 2017 periods, we recognized in the first quarter of 2018 $205.7 million of BTC revenue, $205.7 million of which was attributable to sales in 2017. The recognition of BTC revenue attributable to operations from prior periods resulted in increased revenue for the period. The increase in total revenues was also driven by an increase in total gallons sold of 51.1 million gallons, or 8%, offset by a decrease in average selling price excluding the BTC of $0.28, as well as a decrease in Separated RIN sales of $39.6 million.
Biomass-based diesel revenues including government incentives increased $257.4 million, or 11%, to $2,623.6 million during the year ended December 31, 2019, from $2,366.2 million for the year ended December 31, 2018. The increase in revenues was mostly attributable to the recognition in the fourth quarter of 2019 of BTC revenue relating to operations in the 2018 period, which exceed the BTC net revenue recognized in the 2018 period relating to our 2017 operations by $284.8 million. Gallons sold increased 51.1 million, or 8%, to 700.3 million during the year ended December 31, 2019, compared to 649.2 million during the year ended December 31, 2018. The increase in gallons sold for the year ended December 31, 2019 accounted for a revenue increase of $140.5 million using 2019 average sales pricing. Our average biomass-based diesel sales price per gallon including the BTC net benefits increased $0.22, or 6%, to $3.62 during the year ended December 31, 2019 compared to $3.40 during the year ended December 31, 2018. Excluding the BTC net benefits, our average biomass-based diesel sales price decreased $0.28, or 9%, compared to $3.03 for 2018. This decrease was mainly due to the lower energy prices in 2019. The decrease in average sales price excluding the BTC net benefits from 2019 to 2018 contributed to a $181.8 million revenue decrease when applied to the number of gallons sold during 2018. Sales of separated RIN inventory were $98.3 million and $137.9 million for the years ended December 31, 2019 and 2018, respectively, reducing the overall increase in biomass-based diesel revenues in 2019. RIN prices, which we believe have been inversely correlated to the HOBO spread, decreased significantly in 2018 and declined almost 60% during the 2018-2019 period, with low prices persisting throughout 2019.
Costs of goods sold. Our costs of goods sold increased $148.3 million, or 8%, to $2,111.3 million for the year ended December 31, 2019, from $1,963.0 million for the year ended December 31, 2018. Costs of goods sold as a percentage of revenues were 80% and 83% for the years ended December 31, 2019 and 2018, respectively.
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Biomass-based diesel costs of goods sold increased in 2019 mainly due to an 8% increase in gallons sold. Average low carbon feedstocks prices for the years ended December 31, 2019 and December 31, 2018, were $0.26 per pound. Average soybean oil costs for the years ended December 31, 2019 and December 31, 2018 were $0.31 per pound. We recorded risk management losses of $28.9 million from our derivative financial instrument activity in 2019, compared to risk management gains of $18.4 million for 2018. Our risk management gains and losses are directly impacted by any volatility in the energy and commodities market. Costs of goods sold for separated RIN inventory sales were $39.2 million and $75.7 million for the years ending December 31, 2019 and 2018, respectively.
Selling, general and administrative expenses. Our selling, general and administrative, or SG&A, expenses increased $11.5 million, or 11%, to $118.2 million for the year ended December 31, 2019, compared to $106.7 million for the year ended December 31, 2018. As a percentage of revenues, our SG&A expenses were 4.5% for both 2019 and 2018, respectively. The increase in 2019 year over year was driven largely by higher employee related compensation, arising from the Company's strong financial performance in 2019.
Impairment of property, plant and equipment. We recorded a property, plant and equipment impairment in 2019 of approximately $12.2 million mainly due to the closure of the New Boston refinery. During 2018, we recorded a $0.9 million property, plant and equipment impairment after we determined that the carrying amounts of certain assets were deemed not recoverable.
Other income (expense), net. Other expense was $11.6 million for the year ended December 31, 2019, compared to other expense of $3.5 million for the year ended December 31, 2018. Other income (expense) is primarily comprised of change in fair value of contingent consideration, gain on debt extinguishment, gain on involuntary conversion, change in fair value of convertible debt conversion liability, interest expense, interest income and other non-operating items. In 2019, we had a $0.5 million gain on debt extinguishment and in 2018 we had a $6.3 million gain on debt extinguishment, a difference of $5.8 million. The $6.3 million net increase in other expense in 2019 was primarily due to this difference in gain on debt extinguishment between the periods. In addition, in 2018 we recorded gain from involuntary conversion related to a fire at our Madison facility that offset higher interest expense for the year, resulting in lower total other expense compared to 2019.
Income tax benefit (expense). Income tax benefit recorded during the year ended December 31, 2019 was $0.6 million, compared to income tax expense of $5.9 million for the year ended December 31, 2018, with the decrease primarily resulting from additional tax expense incurred in connection with the repurchase of a significantly greater amount of our 2016 convertible debt in 2018 compared to repurchases in 2019. At December 31, 2019 and 2018, we had net deferred income tax assets of approximately $343.9 million and $275.4 million, respectively, with a valuation allowance of $350.9 million and $283.8 million, respectively. As a result, our effective tax rate was 0.2% and (2.0%) for the years ended December 31, 2019 and 2018, respectively.
Effects of participating share-based awards. Effects of participating restricted stock units was $8.2 million and $7.4 million for the years ended December 31, 2019 and 2018, respectively.
Discontinued Operations:
Net loss from discontinued operations for the year ended December 31, 2019 was $9.7 million, primarily related to the research and development activities of REG Life Sciences and expenses incurred related to the sale of the business. In 2019, REG Life Sciences continued to incur costs that primarily relate to certain pre-existing contractual agreements and legal and professional fees related to the disposition and wind-down of operations. We do not expect future costs to be material. For the year ended December 31, 2018, the net loss was $11.3 million. This loss included an impairment loss, net of tax, of $11.2 million reflecting the fair value of the estimated proceeds from a sale, net of costs to sell. Net loss from discontinued operations for the year ended December 31, 2018 also included a loss of $14.0 million primarily related to the research and development activities of REG Life Sciences, which was offset by a change in value of contingent consideration of $13.9 million.
Non - GAAP Financial Measures
Adjusted EBITDA
Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA are not measures of financial performance under GAAP. We use EBITDA and EBITDA adjusted for certain additional items, identified in the table below, or Adjusted EBITDA, as a supplemental performance measure. We present EBITDA and Adjusted EBITDA because we believe they assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA to evaluate, assess and benchmark our financial performance on a consistent and a comparable basis and as a factor in determining incentive compensation for our executives.
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We discovered a blending discrepancy in connection with our preparation for a standard IRS audit of our BTC filings as a result of us not being the proper claimant for certain BTC payments on biodiesel we sold in the first three quarters of 2020. Refer to Item 8 - NOTE 19—SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)for further detail. The Adjusted EBITDA for the three months ended September 30, June 30 and March 31, 2020 has been revised for the effects of the matter.
(In thousands)Year ended December 31,Year ended December 31,
1Q-2020
(As Restated)		2Q-2020 (As Restated)3Q-2020 (As Restated)4Q-202020201Q-20192Q-20193Q-20194Q-20192019
Net income (loss) from continuing operations$74,667 $(1,685)$22,663 $27,168 $122,813 $(41,652)$(57,900)$(14,018)$486,065 $372,495 
Adjustments:
Interest expense2,946 1,664 1,544 1,757 7,911 4,484 4,002 3,131 1,618 13,235 
Income tax (benefit) expense1,331 1,630 1,046 1,922 5,929 (430)(90)(629)579 (570)
Depreciation8,934 9,103 9,388 9,890 37,315 9,099 9,142 9,107 8,950 36,298 
Amortization of intangible and other assets353 318 591 510 1,772 334 510 397 391 1,632 
EBITDA88,231 11,030 35,232 41,247 175,740 (28,165)(44,336)(2,012)497,603 423,090 
Gain on sale of assets— (187)— (18)(205)— — — — — 
Change in fair value of contingent consideration— — — — — 304 398 (136)— 566 
(Gain) loss on debt extinguishment(1,172)(619)(18)— (1,809)2 — — (490)(488)
Gain on lease termination— (4,459)— — (4,459)— — — — — 
Other (income) expense, net304 (2,215)(1,594)(28)(3,533)(854)(691)(179)(39)(1,763)
Impairment of assets— — 19,256 3,148 22,404 — 468 11,145 595 12,208 
Stock compensation expense1,367 2,611 1,811 1,909 7,698 1,353 1,824 1,804 1,726 6,707 
Adjusted EBITDA excluding BTC allocation$88,730 $6,161 $54,687 $46,258 $195,836 $(27,360)$(42,337)$10,622 $499,395 $440,320 
 Biodiesel tax credit 2018(1)
— — — — — — — — (229,041)(229,041)
 Biodiesel tax credit 2019(1)
— — — — — 55,315 76,148 75,349 (206,812)— 
Adjusted EBITDA$88,730 $6,161 $54,687 $46,258 $195,836 $27,955 $33,811 $85,971 $63,542 $211,279 
(1) On December 20, 2019, the BTC was retroactively reinstated for the 2018 and 2019 calendar years. The retroactive credit for 2018 and 2019 resulted in a net benefit to us that was recognized in our GAAP financial statements for the quarter ending December 31, 2019. However, because a portion of this credit relates to the 2018 operating performance, our presentation of Adjusted EBITDA reflects the allocation of the net benefit to each of the four quarters of 2018 based upon the portion of the BTC benefit that related to that quarter. The portion of the credit related to 2019 was allocated to each of the four quarters based upon the portion of the BTC benefit that related to that quarter.
(In thousands)Year ended December 31,Year ended December 31,
1Q-20212Q-20213Q-20214Q-202120211Q-20202Q-20203Q-20204Q-20202020
Net income (loss)$39,222 $79,516 $42,467 $52,614 $213,819 $74,667 $(1,685)$22,663 $27,168 $122,813 
Adjustments:
Interest expense1,117 4,271 8,619 7,942 21,949 2,946 1,664 1,544 1,757 7,911 
Income tax (benefit) expense1,633 2,250 652 (19,014)(14,479)1,331 1,630 1,046 1,922 5,929 
Depreciation10,915 11,088 11,098 10,329 43,430 8,934 9,103 9,388 9,890 37,315 
Amortization of intangible and other assets671 918 876 1,010 3,475 353 318 591 510 1,772 
EBITDA53,558 98,043 63,712 52,881 268,194 88,231 11,030 35,232 41,247 175,740 
Gain on sale of assets— (39)— (1,423)(1,462)— (187)— (18)(205)
(Gain) loss on debt extinguishment1,922 2,527 — — 4,449 (1,172)(619)(18)— (1,809)
Gain on lease termination— — — — — — (4,459)— — (4,459)
Interest income(652)(399)(424)(592)(2,067)— (550)(777)(898)(2,225)
Other (income) expense, net(1,440)(543)(258)2,055 (186)304 (1,665)(817)870 (1,308)
Impairment of assets822 916 3,498 2,123 7,359 — — 19,256 3,148 22,404 
Executive severance— 663 — — 663 — — — — — 
Stock compensation expense1,844 1,962 1,964 2,227 7,997 1,367 2,611 1,811 1,909 7,698 
Adjusted EBITDA$56,054 $103,130 $68,492 $57,271 $284,947 $88,730 $6,161 $54,687 $46,258 $195,836 
Adjusted EBITDA is a supplemental performance measure that is not required by, or presented in accordance with, generally accepted accounting principles, or GAAP. Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as alternatives to cash flows from operating activities or a measure of our liquidity or profitability. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for any of our results as reported under GAAP. Some of these limitations are:
•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;
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•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.
Liquidity and Capital Resources
Our principal sources of liquidity are existing cash balances, marketable securities, cash generated by our operations and our ability to borrow under our revolving credit facilities, or such other credit facilities as we may be able to obtain from time to time. Our principal uses of liquidity are paying the costs and expenses associated with our operations, servicing outstanding indebtedness and making capital expenditures. We have also authorized programs to repurchase our convertible notes and common stock, as described in Note 2 of notes to our consolidated financial statements. Our cash requirements will also depend on capital expenditures in connection with future facility projects, such as our announced capacity expansion of our Geismar, Louisiana biorefinery and expenditures in connection with future acquisitions of assets or businesses that are complementary to our operations or part of our growth strategies. To
On March 19, 2021, we completed an equity offering pursuant to which we sold 5,750,000 shares of common stock to various underwriters at a price of $67.00 per share before underwriting discounts and commissions. The net proceeds from the extent we seekoffering were $365.3 million. We currently intend to augmentuse the net proceeds from this offering for working capital and other general corporate purposes, which may include the repayment of our existing cash resources, generated by our operationsindebtedness and our abilitythe funding of capital expenditures, including capital expenditures related to borrow under our credit facilities that we may have in effect from time to time, we expect that additional funding can be obtained through equity or debt financings or from other sources. The sale of equity or equity-linked securities in the future may be dilutive to our stockholders,improvements and along with debt instruments we may issue or obtain, may also provide for rights, preferences or privileges senior to thoseexpansion of our holdersGeismar, Louisiana biorefinery.
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On May 20, 2021, we completed the sale and issuance of common stock. Debt financing arrangements would likely increase$550.0 million aggregate principal amount of our debt serviceGreen Notes. We recorded $14.6 million in legal, professional and could reduceunderwriting fees related to the issuance of the Green Notes. We currently intend to use the net proceeds from the Green Notes for capital expenditures related to the improvements and expansion of our liquidity and may require us to pledge certain assets or enter into covenants that could restrict our operations or our ability to incur further indebtedness.Geismar, Louisiana biorefinery.
Sources of liquidity. At December 31, 20202021 and 2019,2020, the total of our cash and cash equivalents and marketable securities was $354.0$956.2 million and $50.4$354.0 million, respectively. At December 31, 2020,2021, we had total assets of $1,461.4$2,558.9 million, compared to $1,785.3$1,461.4 million at December 31, 2019.2020. At December 31, 2020,2021, we had term debt before debt issuance costs of $67.0$550.0 million, compared to term debt before debt issuance costs of $106.0$67.0 million at December 31, 2019.2020. Our debt ishas terms which may subject us to various financial covenants. We were in compliance with all financial covenants associated with the borrowings as of December 31, 2020.2021.
Our term debt (in thousands) is as follows:
December 31,
20202019
4.00% Convertible Senior Notes, $59,619 face amount at December 31, 2020, due in June 2036$47,057 $69,668 
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in July 2022— 6,468 
REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 202513,241 15,980 
REG Grays Harbor term loan, variable interest of minimum 3.5% or Prime Rate plus 0.25%, due in May 2022— 6,966 
REG Capital term loan, fixed interest rate of 3.99%, due in January 20286,665 6,929 
Other14 33 
Total debt before debt issuance costs$66,977 $106,044 
In addition, we had revolving debt (in thousands) as follows:
December 31,
20202019
Amount outstanding under lines of credit$— $76,990 
Maximum available to be borrowed under lines of credit$149,666 $101,485 
December 31,
20212020
5.875% Senior Secured Green Notes, due 2028$550,000 $— 
4.00% Convertible Senior Notes, $59,619 face amount at December 31, 2020, due in June 2036— 47,057 
REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 2025— 13,241 
REG Capital term loan, fixed interest rate of 3.99%, due in January 2028— 6,665 
Other— 14 
Total debt before debt issuance costs$550,000 $66,977 

2036 Convertible Senior Notes
In June 2016,the first half of 2021, we issued $152.0 million aggregate principal amountreceived notices of 4.00%conversions related to the 2036 Convertible Senior Notes due 2036 (the “2036 Convertible Senior Notes”)Note in a private offeringtotal principal amounts of $59.6 million. We elected to qualified institutional buyers.settle the respective principal balance of $59.6 million in cash and settle the conversion premium by issuing 4,684,263 shares of common stock from treasury stock. The 2036 Convertible Senior Notes bear interest at a rate of 4.00% per year payable semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2016. The notes will mature on June 15, 2036, unless repurchased, redeemed orwere fully converted in accordance with
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their terms prior to such date. The initial conversion rate is 92.8074 common shares per $1,000 principal amount of 2036 Convertible Senior Notes (equivalent to an initial conversion price of approximately $10.78 per common share).
We may not redeem the 2036 Convertible Senior Notes prior to June 15, 2021. Holders of the 2036 Convertible Senior Notes will have the right to require us to repurchase for cash all or some of their notes at 100% of their principal, plus any accrued and unpaid interest on eachas of June 15, 2021 June 15, 2026 and June 15, 2031. Holders of the 2036 Convertible Senior Notes will have the right to require us to repurchase for cash all or some of their notes at 100% of their principal, plus any accrued and unpaid interest upon the occurrence of certain fundamental changes.
The 2036 Convertible Senior Notes will become convertible in the subsequent quarter if the closing price of our common stock exceeds $14.01, 130% of the Convertible Senior Notes' initial conversion price, for at least 20 trading days during the 30 consecutive trading days prior to each quarter-end date. Should the holders elect to convert, our current intent and policy is to settle the principal amount the 2036 Convertible Senior Notes in cash, with the remaining value satisfied at our option in cash, stock or a combination of cash and stock. As of December 31, 2020 and December 31, 2019, the early conversion event was met based on our stock price and as a result, the 2036 Convertible Senior Notesobligations thereto have been classified as a current liability on our Consolidated Balance Sheets at December 31, 2020satisfied and December 31, 2019.
During 2019, we used $7.4 million under our 2018 Program to repurchase $3.9 million of principal amount and approximately $7.2 million under our 2019 Program to repurchase $2.8 million principal amount of the 2036 Convertible Senior Notes, reflecting the conversion premium, after tax impact, of $9.7 million and gains on debt extinguishment of $0.5 million.discharged.
During 2020, we used the remaining $67.8 million under our 2019 Program to repurchase $27.8 million principal amount and approximately $8.1 million under our 2020 Program to repurchase $2.2 million principal amount of the 2036 Convertible Senior Notes, reflecting the conversion premium, after tax impact, of $52.7 million and gains on debt extinguishment of $1.8 million.
In addition, we had revolving debt (in thousands) as follows:
December 31,
20212020
Amount outstanding under lines of credit$— $— 
Maximum available to be borrowed under lines of credit$249,666 $149,666 

On September 30, 2021, the Company amended the M&L and Services Revolver in order to increase the maximum commitment under the M&L and Services Revolver from $150.0 million to $250.0 million subject to an accordion feature which allows the subsidiary borrowers to request commitments for additional revolving loans in an aggregate amount not to exceed $50.0 million (prior to September 30, 2021) and $100.0 million (on and after September 30, 2021). Availability under this credit agreement is subject to a borrowing base and if availability is less than 10% of the maximum commitment, ($15.0 million prior to giving effect to the amendment and $25.0 million after giving effect to the amendment), then the subsidiary borrowers are required to maintain a fixed charge coverage ratio of at least 1.0 to 1.0. Prior to giving effect to this amendment, as of December 31, 2020, the subsidiary borrowers would not have been able to satisfy that fixed charge coverage ratio if availability was less than 10% of the maximum commitment.
Cash flow. The following table presents information regarding our cash flows and cash, cash equivalents and restricted cash for the years ended December 31, 2021, 2020 2019 and 2018:2019:
Year Ended
December 31,
202020192018
(in thousands)
Cash provided from (used in) operations$543,430 $(46,708)$365,534 
Cash (used in) provided from investing activities(333,910)5,670 (97,197)
Cash used in financing activities(175,114)(32,052)(219,205)
Net change in cash, cash equivalents and restricted cash34,406 (73,090)49,132 
Cash, cash equivalents and restricted cash end of period$88,218 $53,436 $126,575 
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Year Ended
December 31,
202120202019
(in thousands)
Cash provided from (used in) operations$(16,241)$543,430 $(46,708)
Cash provided from (used in) investing activities(369,309)(333,910)5,670 
Cash provided from (used in) financing activities799,626 (175,114)(32,052)
Net change in cash, cash equivalents and restricted cash414,076 34,406 (73,090)
Cash, cash equivalents and restricted cash end of period$501,871 $88,218 $53,436 
In 2020,2021, we had $543.4used $16.2 million of cash for operations, compared to $543.4 million provided from operations compared toin 2020 and $46.7 million used in operations in 20192019. Cash used in operations for 2021 was primarily driven by a $235.5 million build in inventory, compared to a build of $47.9 million in 2020, and $365.5a draw of inventory of $7.2 million provided fromin 2019. The cash used in operations in 2018. Cash provided2021 was partially offset by net income from continuing operations for 2020 was mainly dueof $213.8 million, compared to net income of $122.8 million in 2020, and the$372.5 million in 2019. In 2020, cash provided from operating activities was impacted by a reduction of accounts receivables of $715.7 million largely due to the receipt of cash related to the 2018 and 2019 BTC, compared to the large accounts receivable build of $786.2 million in 2019, primarily due to the receivables related to the 2018 and 2019 BTC. In 2020, the cash provided from operations was partially offset by cash used for a $274.1 million reduction inof accounts payable primarilyof $266.7 million, also largely related to the payment of thepayments to vendors and customers for BTC sharing with customers and vendors. In 2019, we used $46.7 million of cash in operating activities, a significant decrease from 2018, mainly dueagreements. This was compared to the builduplarge build of accounts receivablespayable of $786.2$279.4 million largely due to the recognition of two years of BTC benefit in the fourth quarter of the year, offset by a significant increase in accounts payable2019 related to the reinstatement ofsharing agreements for the BTC of $255.2 million due to customers and vendor.BTC.
The increase in netWe had cash flows used in investing activityactivities of $369.3 million, $333.9 million and cash provided from investing activities of $5.7 million for 2021, 2020 and 2019, respectively. In 2021, the cash used was due primarily impacted byto the net investments in marketable securities purchases of $193.3 million, compared to net purchases of $270.5 million compared to thein 2020 and net maturities in marketable securities in 2019 of $51.0 million and net investments in 2018 of $50.7$51.1 million. This increase was also partially driven by an increase in cashCash paid for property plant and equipment of $99.5 million in 2021 compared to $63.6 million in 2020, and $42.5 million in 2019. Contributed to the cash used in 2021 was the cash paid for the acquisition of Amber Resources of $76.5 million, compared to $42.5 million and $46.5no cash paid for acquisitions for 2020 or 2019.
We had net cash flows provided from financing activities of $799.6 million in 2019 and 2018, respectively.
The net2021, cash flows used in financing activities duringof $175.1 million and $32.1 million for 2020 wereand 2019, respectively. Cash provided from financing activities in 2021 was primarily due to cash paid on debtreceived from the net proceeds of $92.3$535.4 million which included repurchases of our 2036 Convertible Seniorfrom the Green Notes issuance in May 2021 and $365.3 million from the prepaymentequity offering in full of term debt incurred to finance our Grays Harbor and Danville biorefineries. Also impactingMarch 2021. Partially offsetting the cash flows provided from financing activities in 2021 and the primary driver for the cash used in financing activities for 2020 wereand 2019 was repayments on debt of $78.0 million in 2021, $92.3 million in 2020 and $80.4 million in 2019. In 2020, cash used in financing activities was also driven by the net repayments on revolving lines of credit of $77.0 million. In 2019, the net cash flows used in financing activities were due primarilymillion compared to cash paid on debt of $80.4 million, which included the payment of $67.4 million upon maturity of the 2019 Convertible Senior Notes and payments made for contingent consideration settlements, and net borrowings of $70.1 million on the lines of credits. In 2018, cash usedcredit in financing activities included $25.0 million used to buy back shares2019 of our common stock, $6.7 million used to buy back
46

$6.3 million principal amount of the 2019 Convertible Senior Notes and $110.8 million used to buy back $55.7 million principal amount of the 2036 Convertible Senior Notes, partially offset by net repayments of $51.0 million in from lines of credits.$62.9 million.
Capital expenditures: During 2021, our capital expenditures were $99.5 million involving various plant optimization projects and the Geismar improvement and expansion. During 2020, our total capital expenditures were $63.6 million involving various projects,project, the majority of which were at the Emden (Germany), Seneca, and Geismar facilities. During 2019, our capital expenditures were $42.5 million involving various projects, the majority of which were at the Houston, Seneca, and Geismar facilities. During 2018, our capital expenditures were $46.5 million involving various projects, the majority of which were at the Madison, Ralston, Grays Harbor and Geismar facilities.
In October 2020, we announced that following an internal review and site selection process, we plan to expand the effective capacity of our Geismar, Louisiana biorefinery by 250biorefinery. The Geismar project involves both an improvement project for the existing operations at the site and capacity expansion. The Geismar project is expected to take total annual site production capacity from 90 million gallons annually to approximately 340 million gallons, per year. We currently expect construction to begin in mid to late 2021 with a target mechanical completion date in late 2023. We currently estimate our capital expenditures in connection with theenhance existing operations and improve operational reliability and logistics. The improvement and expansion project willis expected to be at least $825.0 million.mechanically complete in 2023 with full operations in early 2024. We currently expecthave received all required permits to fund theseproceed with construction and officially broke ground to start the construction process in the fourth quarter of 2021. The capital expenditures withcost for the Geismar project is estimated to be $950 million, which is financed through a combination of cash on hand and marketable securities resulting from our offerings of common stock that closed in March 2021 and proceeds from our issuance of Green Notes that closed in May 2021 or from borrowings under our credit facilities, offeringfacilities. In connection with the planned improvements and expansion, we have entered into construction and marine terminal lease agreements with total commitments as of equityDecember 31, 2021 of $500.9 million. There can be no guarantee that we will be able to increase the capacity of our biorefinery at Geismar, Louisiana on time, at our estimated budget, or at all. The improvements and debt or from other sources.expansion are subject to a number of conditions and risks.
We estimate that the capital spending for the project will be approximately 15% in 2021, 45% in 2022, with the remainder of spend slated for 2023. At the end of December 2021, almost all of the long lead equipment for the project had been purchased.
In addition, our budgeted capital expenditures for non-majorall other projects for 20212022 are approximately $80.0$90.0 million, which includes investments in low cost, high return projects, environmental, health and safety projects and growth projects.
50

Contractual Obligations:
We early adopted the amendments enacted by the Securities and Exchange Commission to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K. Specifically, the requirement for tabular disclosure of contractual obligations has been eliminated. See Notes 9, 12,10, 11, 13, and 1718 of Item 8 for additional detail related to our contractual obligations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Recent Accounting Pronouncements
For a discussion of new accounting pronouncements affecting us, refer to “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements.
ITEM 7A.    Quantitative and Qualitative Disclosures about Market Risk
The primary objectives of our investment activity are to preserve principal, provide liquidity and maximize income without significantly increasing risk. Some of the securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain a portfolio of cash equivalents in short-term investments in money market funds.
Commodity Price Risk
Over the period from January 20182019 through December 2020,2021, average diesel prices based on Platts reported pricing for Group 3 (Midwest) have ranged from a high of approximately $2.47$2.52 per gallon reported in October 20182021 to a low of approximately $0.61$0.62 per gallon in April 2020, with prices averaging $1.74$1.73 per gallon during this period. Over the period January 20182019 to December 2020,2021, soybean oil prices (based on daily closing nearby futures prices on the Chicago Board Of Trade for crude soybean oil) have ranged from a high of $0.43$0.72 per pound, or $3.25$5.41 per gallon of biodiesel, in December 2020June 2021 to a low of $0.25 per pound, or $1.87 per gallon of biodiesel, in April 2020 assuming 7.5 pounds of soybean oil yields one gallon of biodiesel with closing sales prices averaging $0.30$0.39 per pound, or $2.26$2.96 per gallon. Over the period from January 20182019 through December 2020,2021, animal fat prices (based on prices from The Jacobsen Missouri River, for choice white grease) have ranged from a high of $0.30$0.64 per pound in December 2020August 2021 to a low of $0.16$0.18 per pound in March 2018,July 2020, with sales prices averaging $0.22$0.32 per pound during this period. Over the period from January 20182019 through December 2020,2021, RIN prices (based on prices from OPIS) have ranged from a high of $1.03$2.05 in December 2020June 2021 to a low of $0.31$0.32 in October 2018,May 2019, with sales prices averaging $0.55$0.87 during this period.
Adverse fluctuations in feedstock prices as compared to biomass-basedbio-based diesel prices result in lower profit margins and, therefore, represent unfavorable market conditions. The availability and price of feedstocks are subject to wide fluctuations due
47

to unpredictable factors such as weather conditions during the growing season, rendering volumes, carry-over from the previous crop year and current crop year yield, governmental policies with respect to agriculture and supply and demand.
We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to our sales contracts, low carbon feedstock requirements, soybean oil requirements and the related exchange-traded contracts for 2020.2021. Market risk is estimated as the potential loss in fair value, resulting from a hypothetical 10% adverse change in the fair value of our low carbon feedstock and soybean oil requirements and biomass-basedbio-based diesel sales. The results of this analysis, which may differ from actual results, are as follows:
2020
Volume
(in millions)		UnitsHypothetical
Adverse
Change in
Price		Impact on Annual
Gross
Profit (in
millions)		Percentage
Change in
Gross
Profit		2021
Volume
(in millions)		UnitsHypothetical
Adverse
Change in
Price		Impact on Annual
Gross
Profit (in
millions)		Percentage
Change in
Gross
Profit
Total Biomass-based Diesel651.8 gallons10%$(191.0)(71.3)%
Total Bio-based DieselTotal Bio-based Diesel543.1 gallons10%$(242.2)(65.5)%
Total Low Carbon FeedstocksTotal Low Carbon Feedstocks2,694.7 pounds10%$(78.1)(29.1)%Total Low Carbon Feedstocks2,984.1 pounds10%$(155.2)(41.9)%
Total Canola OilTotal Canola Oil540.3 pounds10%$(17.3)(6.5)%Total Canola Oil530.6 pounds10%$(32.9)(8.9)%
Total Soy OilTotal Soy Oil886.5 pounds10%$(28.4)(10.6)%Total Soy Oil343.4 pounds10%$(20.6)(5.6)%
We attempt to protect operating margins by entering into risk management contracts that reduce the risk of price volatility related to anticipated purchases of feedstocks and energy prices. We create offsetting positions by using a combination of forward physical purchases and sales contracts on feedstock and biomass-basedbio-based diesel, including risk management futures contracts, swaps and options primarily on NYMEX NY Harbor ULSD and CBOT Soybean Oil. The extent to which we engage in risk management activities depends on market conditions and other factors and varies substantially from time to time and from
51

feedstock to feedstock. A 10% adverse change in the prices of NYMEX NY Harbor ULSD would have a positive effect of $7.5$14.6 million on the fair value of these instruments at December 31, 2020.2021. A 10% adverse change in the price of CBOT Soybean Oil would have had a positivenegative effect of $1.1$7.6 million on the fair value of these instruments December 31, 2020.2021. A 10% adverse change in the price of NYMEX Natural Gas would have had an immaterial impactnegative effect of $1.2 million on our gross margin at December 31, 2020.2021.
Interest Rate Risk
Our weighted averageWe have minimal exposure to interest rate on variable rate debt balances during 2020 was 2.41%risk and a hypothetical increaseas such any material changes in interest rate of 10%rates would not have a material effect on our annual interest expenses or consolidated financial statements.position.
Renewable Identification Numbers
We are exposed to market risks related to the volatility in the price of credits needed to comply with governmental programs. For the past several years there has been significant volatility in RIN prices. Reductions in RIN values, such as those experienced in prior years, may have a material adverse effect on our revenues and profits as they directly reduce the value that we are able to capture for our biomass-basedbio-based diesel.
Foreign Currency Risk
We have minimal exposure to foreign currency risk and as such the cost of hedging this risk is viewed to be in excess of the benefit of further reductions in our exposure to foreign currency exchange rate fluctuations.

4852

ITEM 8.    Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Renewable Energy Group, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Renewable Energy Group, Inc. and subsidiaries (the "Company") as of December 31, 20202021 and 2019,2020, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2020,2021, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020,2021, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the acquired entities and assets of Amber Resources LLC, M.O. Dion & Sons, Inc., and Amber Petroleum Products, Inc. (collectively “Amber Resources”), which was acquired in December 2021 and whose financial statements constitute 6 percent of total assets and less than 1 percent of total revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2021. Accordingly, our audit did not include the internal control over financial reporting at Amber Resources.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

49

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

53
Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management's assessment:

The Company’s controls failed to detect an error in the recognition of revenue from biomass-based diesel government incentives. The error resulted from the failure to blend petroleum diesel with biodiesel, a necessary step for the Company to comply with the requirements of the federal biodiesel mixture excise tax credit (the “BTC”), and to identify the failure prior to recognizing BTC revenue. This material weakness has not been remediated as of December 31, 2020, and due to this, the Company concluded that its internal control over financial reporting was not effective as of December 31, 2020.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2020, of the Company, and this report does not affect our report on such financial statements.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements of the Company that was communicated or required to be communicated to the audit committee and that (1) relatedrelates to the accounts or disclosures that are material to the financial statements and (2) involved orour especially involved,challenging, subjective, or complex judgements.judgments. The communication of critical audit mattersmatter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinionopinions on the critical audit matter or on the accounts or disclosures to which it relates.

Property, Plant and Equipment, Net - Determination of Impairment Indicators – Refer to Notes 2 and 56 to the financial statements

Critical Audit Matter Description

The Company tests its long-lived assets for recoverability when events or circumstances indicate that theirits carrying amount may not be recoverable. Possible indications of impairment may include events or changes in circumstances affecting availability or amount of government incentives, technological advances, and expansions to existing facilities that make assets obsolete. When events or circumstances exist, the Company evaluates its long-lived assets for impairment by comparing undiscounted future cash flows expected to be generated over the life of each asset to the respective carrying amount. If the carrying amount of an asset exceeds the undiscounted future cash flows, an analysis is performed to determine the fair value of the asset. The property, plant and equipment, net balance was $594.8$677.4 million as of December 31, 2020. The2021. During 2021 the Company recorded impairment charges of $22.4$7.4 million related to property, plant and equipment for the year ended December 31, 2020 as the carrying amounts of these assets were deemed not recoverable.

We identified the determination of impairment indicators for property, plant and equipment as a critical audit matter because of the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of property, plant and equipment may not be recoverable. This required a high degree of auditor judgment when performing audit procedures to evaluate whether management appropriately identified impairment indicators.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the assessment of long-lived assets for possible indications of impairment included the following, among others:

•◦We tested the effectiveness of controls over management’s identification of possible circumstances that may indicate the carrying amounts of long-lived assets may not be recoverable.
50


•We evaluated management’s analysis of impairment indicators by:

◦Assessing whether property, plant and equipment having indicators of impairment were appropriately identified and further tested for impairment.

◦Reading industry and analysts reports and considering the impact of macroeconomic factors, such as future biodiesel prices, or adverse changes in regulatory, legislation or other legal factors that may represent impairment indicators.

◦We evaluated management’s analysis of impairment indicators not previously contemplated in management’s analysis.by:

•Assessing whether property, plant and equipment having indicators of impairment were appropriately identified and further tested for impairment.

◦We inquired of management and facility personnel whether property, plant and equipment may be sold or otherwise disposed of significantly before the end of the assets’ previously estimated useful life.

•◦We inspected minutes of the board of directors to understand if there were factors that would represent potential impairment indicators for property, plant and equipment.

•◦We compared current facility production levels to facility production capacity and historical production levels to identify if potentially previously unidentified impairment indicators exist.

•◦We selected property, plant and equipment classified as construction in process and inspected when the long-lived assets were acquired and obtained evidence regarding management’s intentions for future use.

/s/ Deloitte & Touche LLP

Des Moines, Iowa
54

March 1, 20212022

We have served as the Company's auditor since 2006.


5155

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 20202021 AND 20192020
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
2020201920212020
ASSETSASSETSASSETS
CURRENT ASSETS:CURRENT ASSETS:CURRENT ASSETS:
Cash and cash equivalentsCash and cash equivalents$84,441 $50,436 Cash and cash equivalents$497,653 $84,441 
Marketable securitiesMarketable securities149,521 0 Marketable securities290,818 149,521 
Accounts receivable (net of allowance for doubtful accounts of $1,631 and $1,001, respectively)143,475 858,922 
Accounts receivable (net of allowance for doubtful accounts of $1,814 and $1,631, respectively)Accounts receivable (net of allowance for doubtful accounts of $1,814 and $1,631, respectively)158,187 143,475 
InventoriesInventories209,361 161,429 Inventories453,592 209,361 
Prepaid expenses and other assetsPrepaid expenses and other assets67,657 35,473 Prepaid expenses and other assets93,443 67,657 
Restricted cashRestricted cash3,777 3,000 Restricted cash4,218 3,777 
Total current assetsTotal current assets658,232 1,109,260 Total current assets1,497,911 658,232 
Long-term marketable securitiesLong-term marketable securities120,022 0 Long-term marketable securities167,767 120,022 
Property, plant and equipment, netProperty, plant and equipment, net594,796 584,577 Property, plant and equipment, net677,444 594,796 
Right of use assetsRight of use assets28,840 36,899 Right of use assets51,730 28,840 
GoodwillGoodwill16,080 16,080 Goodwill43,864 16,080 
Intangible assets, netIntangible assets, net10,708 12,018 Intangible assets, net53,175 10,708 
Deferred income taxesDeferred income taxes6,171 — 
Other assetsOther assets32,720 26,515 Other assets60,882 32,720 
TOTAL ASSETSTOTAL ASSETS$1,461,398 $1,785,349 TOTAL ASSETS$2,558,944 $1,461,398 
LIABILITIES AND EQUITYLIABILITIES AND EQUITYLIABILITIES AND EQUITY
CURRENT LIABILITIES:CURRENT LIABILITIES:CURRENT LIABILITIES:
Revolving lines of credit$0 $76,990 
Current maturities of long-term debtCurrent maturities of long-term debt50,088 77,131 Current maturities of long-term debt$— $50,088 
Current maturities of operating lease obligationsCurrent maturities of operating lease obligations14,581 15,690 Current maturities of operating lease obligations13,026 14,581 
Accounts payableAccounts payable132,938 399,899 Accounts payable162,847 132,938 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities34,875 42,484 Accrued expenses and other liabilities53,884 34,875 
Deferred revenueDeferred revenue13,488 8,620 Deferred revenue16,856 13,488 
Total current liabilitiesTotal current liabilities245,970 620,814 Total current liabilities246,613 245,970 
Deferred income taxesDeferred income taxes6,607 6,975 Deferred income taxes4,659 6,607 
Long-term debt (net of debt issuance costs of $1,731 and $2,783, respectively)15,158 26,130 
Long-term debt (net of debt issuance costs of $13,243 and $1,731, respectively)Long-term debt (net of debt issuance costs of $13,243 and $1,731, respectively)536,757 15,158 
Long-term operating lease obligationsLong-term operating lease obligations15,223 30,413 Long-term operating lease obligations38,989 15,223 
Other liabilitiesOther liabilities4,485 1,505 Other liabilities4,100 4,485 
Total liabilitiesTotal liabilities287,443 685,837 Total liabilities831,118 287,443 
COMMITMENTS AND CONTINGENCIES (NOTE 17)00
COMMITMENTS AND CONTINGENCIES (NOTE 18)COMMITMENTS AND CONTINGENCIES (NOTE 18)00
EQUITY:EQUITY:EQUITY:
Common stock ($0.0001 par value; 300,000,000 shares authorized; 39,334,839 and 38,967,079 shares outstanding, respectively)5 5 
Common stock ($0.0001 par value; 300,000,000 shares authorized; 50,294,505 and 39,334,839 shares outstanding, respectively)Common stock ($0.0001 par value; 300,000,000 shares authorized; 50,294,505 and 39,334,839 shares outstanding, respectively)6 5 
Common stock—additional paid-in-capitalCommon stock—additional paid-in-capital392,247 438,591 Common stock—additional paid-in-capital709,186 392,247 
Retained earningsRetained earnings891,211 768,398 Retained earnings1,105,030 891,211 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)1,160 (1,994)Accumulated other comprehensive income (loss)(2,111)1,160 
Treasury stock (10,591,074 and 11,524,975 shares, respectively)(110,668)(105,488)
Treasury stock (6,240,907 and 10,591,074 shares, respectively)Treasury stock (6,240,907 and 10,591,074 shares, respectively)(84,285)(110,668)
Total equityTotal equity1,173,955 1,099,512 Total equity1,727,826 1,173,955 
TOTAL LIABILITIES AND EQUITYTOTAL LIABILITIES AND EQUITY$1,461,398 $1,785,349 TOTAL LIABILITIES AND EQUITY$2,558,944 $1,461,398 
See notes to consolidated financial statements.
5256


RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 2019 AND 20182019
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
202020192018202120202019
REVENUES:REVENUES:REVENUES:
Biomass-based diesel sales$1,830,439 $1,973,361 $2,013,211 
Biomass-based diesel government incentives305,302 650,215 352,981 
Bio-based diesel salesBio-based diesel sales$2,597,731 $1,700,724 $1,875,076 
Separated RIN salesSeparated RIN sales355,541 129,715 98,285 
Bio-based diesel government incentivesBio-based diesel government incentives290,778 305,302 650,215 
2,135,741 2,623,576 2,366,192 3,244,050 2,135,741 2,623,576 
Other revenuesOther revenues1,407 1,640 2,286 Other revenues— 1,407 1,640 
2,137,148 2,625,216 2,368,478 3,244,050 2,137,148 2,625,216 
COSTS OF GOODS SOLDCOSTS OF GOODS SOLD1,868,794 2,111,324 1,962,996 COSTS OF GOODS SOLD2,874,157 1,868,794 2,111,324 
GROSS PROFITGROSS PROFIT268,354 513,892 405,482 GROSS PROFIT369,893 268,354 513,892 
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSESSELLING, GENERAL, AND ADMINISTRATIVE EXPENSES119,302 118,209 106,739 SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES140,511 119,302 118,209 
GAIN ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENTGAIN ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT(205)0 0 GAIN ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT(1,462)(205)— 
IMPAIRMENT OF PROPERTY, PLANT, AND EQUIPMENTIMPAIRMENT OF PROPERTY, PLANT, AND EQUIPMENT22,404 12,208 879 IMPAIRMENT OF PROPERTY, PLANT, AND EQUIPMENT7,359 22,404 12,208 
INCOME FROM OPERATIONSINCOME FROM OPERATIONS126,853 383,475 297,864 INCOME FROM OPERATIONS223,485 126,853 383,475 
OTHER INCOME (EXPENSE), NET:OTHER INCOME (EXPENSE), NET:OTHER INCOME (EXPENSE), NET:
Change in fair value of contingent considerationChange in fair value of contingent consideration0 (566)(1,117)Change in fair value of contingent consideration— — (566)
Gain on debt extinguishment1,809 488 6,297 
Gain on involuntary conversion0 0 4,457 
Gain (loss) on debt extinguishmentGain (loss) on debt extinguishment(4,449)1,809 488 
Gain on lease terminationGain on lease termination4,459 0 0 Gain on lease termination— 4,459 — 
Other income3,532 1,763 5,023 
Interest incomeInterest income2,067 2,225 1,069 
Other income (expense)Other income (expense)186 1,307 694 
Interest expenseInterest expense(7,911)(13,235)(18,183)Interest expense(21,949)(7,911)(13,235)
1,889 (11,550)(3,523)(24,145)1,889 (11,550)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXESINCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES128,742 371,925 294,341 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES199,340 128,742 371,925 
INCOME TAX BENEFIT (EXPENSE)INCOME TAX BENEFIT (EXPENSE)(5,929)570 (5,871)INCOME TAX BENEFIT (EXPENSE)14,479 (5,929)570 
NET INCOME FROM CONTINUING OPERATIONSNET INCOME FROM CONTINUING OPERATIONS122,813 372,495 288,470 NET INCOME FROM CONTINUING OPERATIONS213,819 122,813 372,495 
DISCONTINUED OPERATIONS (NOTE 6):
DISCONTINUED OPERATIONS:DISCONTINUED OPERATIONS:
NET LOSS ON DISCONTINUED OPERATIONSNET LOSS ON DISCONTINUED OPERATIONS0 (9,667)(11,312)NET LOSS ON DISCONTINUED OPERATIONS— — (9,667)
NET INCOMENET INCOME$122,813 $362,828 $277,158 NET INCOME$213,819 $122,813 $362,828 
LESS—EFFECT OF PARTICIPATING SHARE-BASED AWARDS ON CONTINUING OPERATIONSLESS—EFFECT OF PARTICIPATING SHARE-BASED AWARDS ON CONTINUING OPERATIONS(2,398)(8,238)(7,434)LESS—EFFECT OF PARTICIPATING SHARE-BASED AWARDS ON CONTINUING OPERATIONS(2,128)(2,398)(8,238)
NET INCOME FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERSNET INCOME FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS$120,415 $364,257 $281,036 NET INCOME FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS$211,691 $120,415 $364,257 
NET LOSS FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERSNET LOSS FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS$0 $(9,667)$(11,312)NET LOSS FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS$— $— $(9,667)
Basic net income (loss) per share available to common stockholdersBasic net income (loss) per share available to common stockholdersBasic net income (loss) per share available to common stockholders
Continuing operationsContinuing operations$3.07 $9.51 $7.46 Continuing operations$4.48 $3.07 $9.51 
Discontinued operationsDiscontinued operations$0 $(0.25)$(0.30)Discontinued operations$— $— $(0.25)
Net income per shareNet income per share$3.07 $9.27 $7.16 Net income per share$4.48 $3.07 $9.27 
Diluted net income (loss) per share available to common stockholdersDiluted net income (loss) per share available to common stockholdersDiluted net income (loss) per share available to common stockholders
Continuing operationsContinuing operations$2.76 $8.61 $6.44 Continuing operations$4.44 $2.76 $8.61 
Discontinued operationsDiscontinued operations$0 $(0.25)$(0.30)Discontinued operations$— $— $(0.25)
Net income per shareNet income per share$2.76 $8.38 $6.19 Net income per share$4.44 $2.76 $8.38 
Weighted-average shares used to compute basic net income (loss) per share available to common stockholders:Weighted-average shares used to compute basic net income (loss) per share available to common stockholders:Weighted-average shares used to compute basic net income (loss) per share available to common stockholders:
BasicBasic39,199,687 38,288,610 37,687,552 Basic47,302,924 39,199,687 38,288,610 
Weighted-average shares used to compute diluted net income (loss) per share available to common stockholders:Weighted-average shares used to compute diluted net income (loss) per share available to common stockholders:Weighted-average shares used to compute diluted net income (loss) per share available to common stockholders:
Continuing operationsContinuing operations43,686,989 42,320,980 43,653,720 Continuing operations47,718,228 43,686,989 42,320,980 
Discontinued operationsDiscontinued operations43,686,989 38,288,610 37,687,552 Discontinued operations47,718,228 43,686,989 38,288,610 
Net incomeNet income43,686,989 42,320,980 43,653,720 Net income47,718,228 43,686,989 42,320,980 
See notes to consolidated financial statements.
5357

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 2019 AND 20182019
(IN THOUSANDS)
202020192018202120202019
Net incomeNet income$122,813 $362,828 $277,158 Net income$213,819 $122,813 $362,828 
Unrealized gains (losses) on marketable securities, net of taxes of $10, $0 and $0, respectively42 0 (28)
Unrealized gains (losses) on marketable securities, net of taxes of $0, $10 and $0, respectivelyUnrealized gains (losses) on marketable securities, net of taxes of $0, $10 and $0, respectively(729)42 — 
Foreign currency translation adjustmentsForeign currency translation adjustments3,112 (338)(1,906)Foreign currency translation adjustments(2,542)3,112 (338)
Other comprehensive income (loss)Other comprehensive income (loss)3,154 (338)(1,934)Other comprehensive income (loss)(3,271)3,154 (338)
Comprehensive incomeComprehensive income$125,967 $362,490 $275,224 Comprehensive income$210,548 $125,967 $362,490 
See notes to consolidated financial statements.

5458

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 2019 AND 20182019 (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Company Stockholders’ EquityCompany Stockholders’ Equity
Common
Stock
Shares		Common
Stock		Common
Stock-
Additional
Paid-in Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
Stock		TotalCommon
Stock
Shares		Common
Stock		Common
Stock-
Additional
Paid-in Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
Stock		Total
BALANCE, January 1, 201838,837,749 $5 $515,452 $134,928 $278 $(83,081)$567,582 
BALANCE, January 1, 2019BALANCE, January 1, 201937,318,942 $5 $451,427 $412,086 $(1,656)$(111,767)$750,095 
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 impact of $5,498)— — (70,689)— — — (70,689)
Treasury stock repurchases(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 
Other comprehensive loss— — — — (1,934)— (1,934)
Net income— — — 277,158 — — 277,158 
BALANCE, December 31, 201837,318,942 5 451,427 412,086 (1,656)(111,767)750,095 
Conversion of restricted stock units to common stock (net of 140,592 shares of treasury stock purchased)Conversion of restricted stock units to common stock (net of 140,592 shares of treasury stock purchased)345,655 — — — — (3,317)(3,317)Conversion of restricted stock units to common stock (net of 140,592 shares of treasury stock purchased)345,655 — — — — (3,317)(3,317)
Settlement of stock appreciation rights in common stock (net of 14,367 shares of treasury stock purchased)Settlement of stock appreciation rights in common stock (net of 14,367 shares of treasury stock purchased)26,346 — (31)— — (201)(232)Settlement of stock appreciation rights in common stock (net of 14,367 shares of treasury stock purchased)26,346 — (31)— — (201)(232)
Convertible debt extinguishment impact (net of tax of $564)Convertible debt extinguishment impact (net of tax of $564)— — (9,715)— — — (9,715)Convertible debt extinguishment impact (net of tax of $564)— — (9,715)— — — (9,715)
Settlement of 2019 Convertible Debt in common stock, net of 1,902,781 shares of treasury stockSettlement of 2019 Convertible Debt in common stock, net of 1,902,781 shares of treasury stock1,902,781 — (18,779)— — 18,779 0 Settlement of 2019 Convertible Debt in common stock, net of 1,902,781 shares of treasury stock1,902,781 — (18,779)— — 18,779 — 
Unwind of capped call optionsUnwind of capped call options(626,645)— 8,982 — — (8,982)0 Unwind of capped call options(626,645)— 8,982 — — (8,982)— 
Stock compensation expenseStock compensation expense— — 6,707 — — — 6,707 Stock compensation expense— — 6,707 — — — 6,707 
Other comprehensive lossOther comprehensive loss— — — — (338)— (338)Other comprehensive loss— — — — (338)— (338)
Adoption of ASC Topic 842, Leases
Adoption of ASC Topic 842, Leases
— — — (6,516)— — (6,516)
Adoption of ASC Topic 842, Leases
— — — (6,516)— — (6,516)
Net incomeNet income— — — 362,828 — — 362,828 Net income— — — 362,828 — — 362,828 
BALANCE, December 31, 2019BALANCE, December 31, 201938,967,079 5 438,591 768,398 (1,994)(105,488)1,099,512 BALANCE, December 31, 201938,967,079 5 438,591 768,398 (1,994)(105,488)1,099,512 
Conversion of restricted stock units to common stock (net of 143,949 shares of treasury stock purchased)Conversion of restricted stock units to common stock (net of 143,949 shares of treasury stock purchased)294,734 — — — — (3,917)(3,917)Conversion of restricted stock units to common stock (net of 143,949 shares of treasury stock purchased)294,734 — — — — (3,917)(3,917)
Settlement of stock appreciation rights in common stock (net of 43,327 shares of treasury stock purchased)Settlement of stock appreciation rights in common stock (net of 43,327 shares of treasury stock purchased)73,026 — (598)— — (1,263)(1,861)Settlement of stock appreciation rights in common stock (net of 43,327 shares of treasury stock purchased)73,026 — (598)— — (1,263)(1,861)
Convertible debt extinguishment impact (net of tax of $2,386)Convertible debt extinguishment impact (net of tax of $2,386)— — (52,688)— — — (52,688)Convertible debt extinguishment impact (net of tax of $2,386)— — (52,688)— — — (52,688)
Stock compensation expenseStock compensation expense— — 6,942 — — — 6,942 
Other comprehensive incomeOther comprehensive income— — — — 3,154 — 3,154 
Net incomeNet income— — — 122,813 — — 122,813 
BALANCE, December 31, 2020BALANCE, December 31, 202039,334,839 5 392,247 891,211 1,160 (110,668)1,173,955 
Conversion of restricted stock units to common stock (net of 206,302 shares of treasury stock purchased)Conversion of restricted stock units to common stock (net of 206,302 shares of treasury stock purchased)376,010 — — — — (13,495)(13,495)
Settlement of stock appreciation rights in common stock (net of 127,794 shares of treasury stock purchased)Settlement of stock appreciation rights in common stock (net of 127,794 shares of treasury stock purchased)149,393 — (782)— — (8,748)(9,530)
Equity issuance (net of issuance costs of $19,970)Equity issuance (net of issuance costs of $19,970)5,750,000 1 365,279 — — — 365,280 
Settlement of 2036 convertible senior notes conversions (net of tax impact of $2,437)Settlement of 2036 convertible senior notes conversions (net of tax impact of $2,437)4,684,263 — (55,555)— — 48,626 (6,929)
Stock compensation expenseStock compensation expense— — 6,942 — — — 6,942 Stock compensation expense— — 7,997 — — — 7,997 
Other comprehensive income— — — — 3,154 — 3,154 
Other comprehensive lossOther comprehensive loss— — — — (3,271)— (3,271)
Net incomeNet income— — — 122,813 — — 122,813 Net income— — — 213,819 — — 213,819 
BALANCE, December 31, 202039,334,839 $5 $392,247 $891,211 $1,160 $(110,668)$1,173,955 
BALANCE, December 31, 2021BALANCE, December 31, 202150,294,505 $6 $709,186 $1,105,030 $(2,111)$(84,285)$1,727,826 
See notes to consolidated financial statements.
5559

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 2019 AND 20182019
202020192018202120202019
CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:
Net incomeNet income$122,813 $362,828 $277,158 Net income$213,819 $122,813 $362,828 
Net loss from discontinuing operationsNet loss from discontinuing operations0 (9,667)(11,312)Net loss from discontinuing operations— — (9,667)
Net income from continuing operationsNet income from continuing operations122,813 372,495 288,470 Net income from continuing operations213,819 122,813 372,495 
Adjustments to reconcile net income to net cash flows from operating activities:Adjustments to reconcile net income to net cash flows from operating activities:Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation expenseDepreciation expense37,315 36,298 36,246 Depreciation expense43,430 37,315 36,298 
Amortization expense of assets and liabilities, netAmortization expense of assets and liabilities, net16,628 22,457 996 Amortization expense of assets and liabilities, net26,054 16,628 22,457 
Accretion of asset retirement obligationsAccretion of asset retirement obligations55 51 47 Accretion of asset retirement obligations2,226 55 51 
Accretion of convertible note discountAccretion of convertible note discount832 539 5,014 Accretion of convertible note discount247 832 539 
Accretion of marketable securitiesAccretion of marketable securities981 (146)(215)Accretion of marketable securities3,493 981 (146)
Impairment of property, plant and equipment, netImpairment of property, plant and equipment, net22,404 12,208 879 Impairment of property, plant and equipment, net7,359 22,404 12,208 
Provision (benefit) for doubtful accounts734 447 (273)
Provision for doubtful accountsProvision for doubtful accounts6,013 734 447 
Stock compensation expenseStock compensation expense6,942 6,707 6,412 Stock compensation expense7,997 6,942 6,707 
Deferred tax expense (benefits)Deferred tax expense (benefits)2,012 (591)4,850 Deferred tax expense (benefits)(12,195)2,012 (591)
Change in fair value of contingent considerationChange in fair value of contingent consideration0 566 1,117 Change in fair value of contingent consideration— — 566 
Gain on involuntary conversion0 0 (4,457)
Gain on sales of assetsGain on sales of assets(205)0 (974)Gain on sales of assets(1,462)(205)— 
Gain on debt extinguishment(1,809)(488)(6,297)
(Gain) loss on debt extinguishment(Gain) loss on debt extinguishment4,449 (1,809)(488)
Gain on lease terminationGain on lease termination(4,459)0 0 Gain on lease termination— (4,459)— 
OtherOther(33)11 593 Other83 (33)11 
Changes in asset and liabilities:Changes in asset and liabilities:Changes in asset and liabilities:
Accounts receivableAccounts receivable715,685 (786,178)19,662 Accounts receivable1,835 715,685 (786,178)
InventoriesInventories(47,904)7,151 (34,066)Inventories(235,536)(47,904)7,151 
Prepaid expenses and other assetsPrepaid expenses and other assets(46,171)11,089 41,250 Prepaid expenses and other assets(60,387)(46,171)11,089 
Accounts payableAccounts payable(266,702)279,385 28,730 Accounts payable(9,167)(266,702)279,385 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities(5,009)17,564 (6,610)Accrued expenses and other liabilities2,701 (5,009)17,564 
Operating lease obligationsOperating lease obligations(15,546)(20,913)0 Operating lease obligations(20,569)(15,546)(20,913)
Deferred revenueDeferred revenue4,867 8,321 (1,918)Deferred revenue3,369 4,867 8,321 
Net cash flows provided from (used in) operating activities - continuing operationsNet cash flows provided from (used in) operating activities - continuing operations543,430 (33,027)379,456 Net cash flows provided from (used in) operating activities - continuing operations(16,241)543,430 (33,027)
Net cash flows used in operating activities - discontinued operationsNet cash flows used in operating activities - discontinued operations0 (13,681)(13,922)Net cash flows used in operating activities - discontinued operations— — (13,681)
Cash provided from (used in) operationsCash provided from (used in) operations543,430 (46,708)365,534 Cash provided from (used in) operations(16,241)543,430 (46,708)
CASH FLOWS FROM INVESTING ACTIVITIES:CASH FLOWS FROM INVESTING ACTIVITIES:CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for marketable securitiesCash paid for marketable securities(354,079)(3,478)(70,745)Cash paid for marketable securities(472,082)(354,079)(3,478)
Maturities of marketable securitiesMaturities of marketable securities83,606 54,584 20,000 Maturities of marketable securities278,821 83,606 54,584 
Cash paid for purchase of property, plant and equipmentCash paid for purchase of property, plant and equipment(63,642)(42,518)(46,453)Cash paid for purchase of property, plant and equipment(99,549)(63,642)(42,518)
Insurance proceeds for asset impairments0 0 4,464 
Cash receipts from disposal of fixed assets0 0 1,647 
Cash paid for investmentsCash paid for investments0 (6,018)(974)Cash paid for investments(1,500)— (6,018)
Cash paid for acquisitions and additional interests, net of cash acquired0 0 (4,801)
Cash paid for acquisition net of cash acquiredCash paid for acquisition net of cash acquired(76,461)— — 
Other investing activitiesOther investing activities205 0 0 Other investing activities1,462 205 — 
Net cash flows (used in) provided by investing activities - continuing operationsNet cash flows (used in) provided by investing activities - continuing operations(333,910)2,570 (96,862)Net cash flows (used in) provided by investing activities - continuing operations(369,309)(333,910)2,570 
Net cash flows (used in) provided by investing activities - discontinued operations0 3,100 (335)
Net cash flows provided by investing activities - discontinued operationsNet cash flows provided by investing activities - discontinued operations— — 3,100 
Cash (used in) provided from investing activitiesCash (used in) provided from investing activities(333,910)5,670 (97,197)Cash (used in) provided from investing activities(369,309)(333,910)5,670 
CASH FLOWS FROM FINANCING ACTIVITIES:CASH FLOWS FROM FINANCING ACTIVITIES:CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings on line of creditNet (repayments) borrowings on line of credit(76,990)70,091 (50,967)Net (repayments) borrowings on line of credit— (76,990)70,091 
Borrowing on other lines of creditBorrowing on other lines of credit0 113,459 71,865 Borrowing on other lines of credit— — 113,459 
Repayments on other lines of creditsRepayments on other lines of credits0 (120,644)(69,267)Repayments on other lines of credits— — (120,644)
Cash received for issuance of debtCash received for issuance of debt0 0 14,034 Cash received for issuance of debt550,000 — — 
Cash paid on debtCash paid on debt(92,346)(80,365)(143,516)Cash paid on debt(78,044)(92,346)(80,365)
Cash paid for debt issuance costsCash paid for debt issuance costs0 (116)(697)Cash paid for debt issuance costs(14,585)— (116)
Cash received on partial termination of capped call options0 0 85 
Cash paid for treasury stock0 0 (25,048)
Cash received from equity offeringCash received from equity offering385,250 — — 
Cash paid for equity offering costsCash paid for equity offering costs(19,970)— — 
Cash paid for contingent considerationCash paid for contingent consideration0 (10,427)(12,223)Cash paid for contingent consideration— — (10,427)
Cash paid for conversion of restricted stock units and stock appreciation rightsCash paid for conversion of restricted stock units and stock appreciation rights(5,778)(3,550)(3,471)Cash paid for conversion of restricted stock units and stock appreciation rights(23,025)(5,778)(3,550)
Other financing activitiesOther financing activities0 (500)0 Other financing activities— — (500)
Net cash flows used in financing activities - continuing operations(175,114)(32,052)(219,205)
Net cash flows provided by (used in) financing activities - continuing operationsNet cash flows provided by (used in) financing activities - continuing operations799,626 (175,114)(32,052)
Net cash flows provided from financing activities - discontinuing operationsNet cash flows provided from financing activities - discontinuing operations0 0 0 Net cash flows provided from financing activities - discontinuing operations— — — 
Cash used in financing activities(175,114)(32,052)(219,205)
Cash from (used in) financing activitiesCash from (used in) financing activities799,626 (175,114)(32,052)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASHNET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH34,406 (73,090)49,132 NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH414,076 34,406 (73,090)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH at Beginning of periodCASH, CASH EQUIVALENTS AND RESTRICTED CASH at Beginning of period53,436 126,575 77,627 CASH, CASH EQUIVALENTS AND RESTRICTED CASH at Beginning of period88,218 53,436 126,575 
Effect of exchange rate changes on cashEffect of exchange rate changes on cash376 (49)(184)Effect of exchange rate changes on cash(423)376 (49)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH at End of periodCASH, CASH EQUIVALENTS AND RESTRICTED CASH at End of period$88,218 $53,436 $126,575 CASH, CASH EQUIVALENTS AND RESTRICTED CASH at End of period$501,871 $88,218 $53,436 

(continued)
5660

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 2019 AND 20182019
(IN THOUSANDS)
202020192018202120202019
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash paid for income taxesCash paid for income taxes$22 $740 $910 Cash paid for income taxes$4,826 $22 $740 
Cash paid for interestCash paid for interest$6,050 $9,054 $11,453 Cash paid for interest$19,742 $6,050 $9,054 
Leased assets obtained in exchange for new operating lease liabilitiesLeased assets obtained in exchange for new operating lease liabilities$7,018 $11,581 $0 Leased assets obtained in exchange for new operating lease liabilities$27,634 $7,018 $11,581 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Amounts included in period-end accounts payable for:Amounts included in period-end accounts payable for:Amounts included in period-end accounts payable for:
Purchases of property, plant and equipmentPurchases of property, plant and equipment$3,215 $3,641 $3,459 Purchases of property, plant and equipment$22,091 $3,215 $3,641 
Issuance costs$0 $— $37 
2036 Convertible Senior Notes settlement2036 Convertible Senior Notes settlement$0 $9,402 $0 2036 Convertible Senior Notes settlement$— $— $9,402 
Contingent consideration for acquisitions$0 $0 $482 
Issuance of treasury stock to settle 2019 Convertible Senior Notes conversion premiumIssuance of treasury stock to settle 2019 Convertible Senior Notes conversion premium$0 $(18,779)$0 Issuance of treasury stock to settle 2019 Convertible Senior Notes conversion premium$— $— $(18,779)
Receipt in treasury stock for settlement of capped call optionReceipt in treasury stock for settlement of capped call option$0 $8,952 $0 Receipt in treasury stock for settlement of capped call option$— $— $8,952 
See notes to consolidated financial statements.
(concluded)
5761

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For The Three Years Ended December 31, 2021, 2020 2019 and 20182019
(In Thousands, Except Share and Per Share Amounts)
NOTE 1—ORGANIZATION, PRESENTATION, AND NATURE OF THE BUSINESS
Renewable Energy Group, Inc. (the "Company" or "REG") is a company focused on providing cleaner, lower carbon transportation fuels. Today, the Company principally generates revenue as the leading North American advanced biofuels producer with a nationwide distribution and logistics system. The Company participates in each aspect of biomass-basedbio-based diesel production, from acquiring feedstock, managing construction and operating biomass-basedbio-based diesel production facilities, to marketing, selling and distributing biomass-basedbio-based diesel and its co-products. To do this, REG utilizes its nationwide production, distribution and logistics system as part of an integrated value chain model to focus on converting natural fats, oils and greases into advanced biofuels.
As of December 31, 2020,2021, the Company owns and operates 1211 biorefineries, with 109 locations in North America and 2 locations in Europe, which includes 1211 operating biomass-basedbio-based diesel production facilities with aggregate nameplate production capacity of 505470 million gallons per year ("mmgy"). NaN of these plants are “multi-feedstock capable” which allows them to use a broad range of low carbon feedstocks, such as distillers corn oil, used cooking oil and inedible animal fats in addition to vegetable oils, such as soybean oil and canola oil. In August 2019,September 2021, the Company closedannounced the New Boston,closure of the Houston, Texas biorefinery, which had abiorefinery. Production at this facility ceased in November 2021. The Houston plant's nameplate capacity was 1535 mmgy.
On December 30, 2021, the Company acquired Amber Resources LLC, M.O. Dion & Sons, Inc., and Amber Petroleum Products, Inc., (collectively "Amber Resources"). This acquisition allows the Company to continue to advance its downstream strategy. The biomass-basedAmber Resources acquisition provides the Company with the facilities to deliver its products to end customers at 8 fuel distribution locations including 3 cardlock locations. For more information on Amber Resources and the acquisition, see "Note 3 - Acquisitions".
The bio-based diesel industry and the Company’s business have benefited from certain federal and state incentives. The federal biodiesel mixture excise tax credit (the "BTC") was retroactively reinstated on February 9, 2018 for the year 2017 and on December 20, 2019 for the years 2018 and 2019. The BTC has also been extended through December 31, 2022.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and entities which it controls. All intercompany balances and transactions have been eliminated for consolidated reporting purposes.
Accounting for Business Combinations
The Company accounts for business combinations under the acquisition method of accounting. This method requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, royalty rates and asset lives, among other items.
Cash and Cash Equivalents
Cash and cash equivalents consist of money market funds and demand deposits with financial institutions. The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Restricted Cash
The Company segregates certain cash balances as restricted cash that represent those funds required to be set aside by a contractual agreement. The Company classifies restricted cash between current and non-current assets based on the length of time of the restricted use.
As of December 31, 2020, 2019 and 2018, current restricted cash amounted to $3,777, $3,000 and $3,000, respectively. The restricted cash was held as pledges for letters of credit issued to support our operations. See the
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table below for reconciliation of Cash and cash equivalents and restricted cash in regard to the Consolidated Statements of Cash Flows:
December 31, 2020December 31, 2019December 31, 2018
Cash and cash equivalents$84,441 $50,436 $123,575 
Restricted cash3,777 3,000 3,000 
Total cash, cash equivalents and restricted cash shown in the statement of cash flow$88,218 $53,436 $126,575 
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December 31, 2021December 31, 2020December 31, 2019
Cash and cash equivalents$497,653 $84,441 $50,436 
Restricted cash4,218 3,777 3,000 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows$501,871 $88,218 $53,436 
Accounts Receivable
Accounts receivable are carried at invoiced amount less allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of customers and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after reasonable collection attempts have been exhausted.
December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Trade accounts receivable from customers (net of allowance for doubtful accounts of $1,631 and $1,001, respectively)$74,774 $185,156 
Trade accounts receivable from customers (net of allowance for doubtful accounts of $1,814 and $1,631, respectively)Trade accounts receivable from customers (net of allowance for doubtful accounts of $1,814 and $1,631, respectively)$106,628 $74,774 
BTC receivables from the governmentBTC receivables from the government68,125 672,627 BTC receivables from the government49,626 68,125 
Other trade receivablesOther trade receivables576 1,139 Other trade receivables1,933 576 
TotalTotal$143,475 $858,922 Total$158,187 $143,475 
Marketable Securities
The Company's marketable securities are classified as available-for-sale and are reported at fair value, with unrealized gains and losses, net of tax, recorded in "Accumulatedaccumulated other comprehensive income (loss)". The Company classifies its marketable securities as either current or long-term based on each instrument's underlying contractual maturity date. Realized gains or losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are reported in "Otherother income, (expense), net".net. The Company evaluates such investments periodically for possible other-than-temporary impairment. A decline of fair value below amortized costs of debt securities is considered an other-than-temporary impairment if the Company has the intent to sell the security or if it is more likely than not that the Company will be required to sell the security before recovery of the entire amortized cost basis. In those instances, an impairment charge equal to the difference between the fair value and the amortized cost basis is recognized in earnings. Regardless of the Company's intent or requirement to sell a debt security, an impairment is considered other-than-temporary if the Company does not expect to recover the entire amortized cost basis; in those instances, a credit loss equal to the difference between the present value of the cash flows expected to be collectedallocated based on credit risk and the amortized cost basis of the debt security is recognized in earnings. The Company has no current requirement or intent to sell a material portion of marketable securities as of December 31, 2020.2021. The Company expects to recover up to (or beyond) the initial cost of investment for securities held. In computing realized gains and losses on available-for-sale securities, the Company determines the cost based on amounts paid, including direct costs such as commissions to acquire the security, using the specific identification method.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost is determined based on the first-in, first-out method. There were no lower of cost or market adjustments made to the inventory values reported as of December 31, 20202021 and 2019.2020.
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Renewable Identification Numbers (RINs)
When the Company produces and sells a gallon of biomass-basedbio-based diesel for use in the United States, 1.5 to 1.7 RINs per gallon are generated. RINs are used to track compliance with the RFS2.Renewable Fuel Standard, using the EPA moderated transaction system. RFS2 allows the Company to attach between 0zero and 2.5 RINs to aany gallon of biomass-basedbio-based diesel. As a result, a portion of the selling price for a gallon of biomass-basedbio-based diesel sold in the U.S. is generally attributable to RFS2 compliance. However, RINs that the Company generates are a form of government incentive and not a result of the physical attributes of the biomass-basedbio-based diesel production. Therefore, no cost is allocated to the RIN when it is generated, regardless of whether the RIN is transferred with the biomass-basedbio-based diesel produced or held by the Company pending attachment to other biomass-based diesel.bio-based diesel production sales. Additionally, RINs, once obtained through the production and sale of gallons of bio-based diesel, may be separated by the acquirer and sold separately.
In addition, the Company also obtains RINs from third parties who have separated the RINs from gallons of biomass-basedbio-based diesel. From time to time, the Company holds varying amounts of these separated RINs for resale. RINs obtained from third parties are initially recorded at their cost and are subsequently revalued at the lower of cost or net realizable value as of the last day of each accounting period. The resulting adjustments are reflected in costs of goods sold for the period. The value of these RINs is reflected in “Prepaid expenses and other assets” on the Consolidated Balance Sheets. The cost of goods sold related to the sale of these RINs is determined using the average cost method, while market prices are determined by RIN values, as reported by OPIS.
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the Oil Price Information Service ("OPIS").
Low Carbon Fuel Standard
The Company generates Low Carbon Fuel Standard ("LCFS")LCFS credits for its low carbon fuels or blendstocks when its qualified low carbon fuels are transported into an LCFS market.market and sold for qualifying purposes. LCFS credits are used to track compliance with the LCFS. As a result, a portion of the selling price for a gallon of biomass-basedbio-based diesel sold into an LCFS market is also attributable to LCFS compliance. However, LCFS credits that the Company generates are a form of government incentive and not a result of the physical attributes of the biomass-basedbio-based diesel production. Therefore, no cost is allocated to the LCFS credit when it is generated, regardless of whether the LCFS credit is transferred with the biomass-basedbio-based diesel produced or held by the Company.
In addition, the Company also obtains LCFS credits from third partythird-party trading activities. From time to time, the Company holds varying amounts of these third partythird-party LCFS credits for resale. LCFS credits obtained from third parties are initially recorded at their cost and are subsequently revalued at the lower of cost or net realizable value as of the last day of each accounting period, and the resulting adjustments are reflected in costs of goods sold for the period. The value of LCFS credits obtained from third parties is reflected in “Prepaid expenses and other assets” on the Consolidated Balance Sheets.Sheet. The cost of goods sold related to the sale of these LCFS credits is determined using the average cost method, while market prices are determined by LCFS values, as reported by the OPIS.  At December 31, 20202021 and 2019,2020, the Company held no LCFS credits purchased from third parties. 
The Company records assets acquired and liabilities assumed through the exchange of non-monetary assets based on the fair value of the assets and liabilities acquired or the fair value of the consideration exchanged, whichever is more readily determinable.
Derivative Instruments
The Company offsets the fair value amounts recognized for its commodity contract derivatives with cash collateral with the same counterparty under a master netting agreement. The net position for Derivatives are recorded net on the balance sheet in Prepaid Expenses and Other Assets at fair value with changes in fair value recognized in current period earnings.account and Accounts Payable within the Accounts Payable account. The Company did not elect to use hedge accounting during the periods presented.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Depreciation expense is computed on a straight-line method based upon estimated useful lives of the assets. Estimated useful lives are as follows:
 
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Automobiles and trucks5 years
Computers and office equipment5 years
Office furniture and fixtures7 years
Machinery and equipment5-30 years
Leasehold improvementslease term
Buildings and improvements30-40 years
During the years ended December 31, 2021, 2020 2019 and 2018,2019, the Company capitalized interest incurred on debt during the construction of assets of $1,111, $193 $0 and $360,$0, respectively.
Goodwill
Goodwill is tested for impairment annually on July 31 or when impairment indicators exist. Goodwill is allocated and tested for impairment by reporting units. At December 31, 20202021 and 2019,2020, the Company had goodwill amounting to $16,080 in the Services reporting unit.unit and $27,784 in the Bio-based Diesel Segment as a result of the Amber Resources acquisition, respectively. As a result of the annual impairment test performed as of July 31, 2020,2021, the Company determined that there were no indications of impairment related to the Services segment's goodwill. NaNNo impairment of goodwill was recorded during the years ended December 31, 20202021 and 2019.
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2020.
Impairment of Long-lived Assets
The Company tests its long-lived assets for recoverability when events or circumstances indicate that theits carrying amount may not be recoverable. Possible indications of impairment may include events or changes in circumstances affecting availability or amount of government incentives, technological advances, and expansions to existing facilities that leave previous assets used obsolete. Significant assumptions used in the undiscounted cash flow analysis, when it is required, include the projected demand for biomass-basedbio-based diesel based on annual renewable fuel volume obligations under the RFS2,Renewable Fuel Standards ("RFS2"), the Company's capacity to meet that demand, the market price of biomass-basedbio-based diesel and the cost of feedstock used in the manufacturing process. For facilities under construction, estimates also include
During 2021, the capital expenditures necessaryCompany recorded impairment charges of $7,359, related to complete construction of thecertain biodiesel property, plant and equipment as the projected costscarrying amounts of financing.these assets were deemed not recoverable given the assets' deteriorating physical conditions identified during the period.
During 2020, the Company recorded impairment charges of $18,984 related to certain equipment where it was determinedno longer probable that the assets will no longer be utilized in future renewable dieselRD production expansions and their carrying amount was deemed not recoverable.expansions. In addition, the Company recorded impairment charges of $3,420 against certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' economic obsolescencedeteriorating physical conditions identified during the period. During 2019, the Company recorded impairment charges of $12,208, of which $11,145 was related to its New Boston facility's property, plant and equipment resulting from the closing of the plant and the unlikelihood that the plant will be reopened in the near future due to the deteriorating economic conditions uniquely facing the plant. In 2018, impairment charges on continuing operations of $879 were recorded related to certain identified plant property, plant and equipment at our current facilities as the carrying amounts of those assets were deemed not recoverable.
The impairment charges reflected the difference between the carrying amount and the estimated fair value. The fair value was determined based on a cost approach. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence. The method of assigning fair value to each asset type and aggregating those values represents a Level 3 asset measurement in determining the fair value on a nonrecurring basis subsequent to its original recognition.

Convertible Debt
In June 2016, the Company issued $152,000 aggregate principal amount of 4% convertible senior notes due in 2036 (the "2036 Convertible Senior Notes"). See "Note 910 - Debt" for a further description of the 2036 Convertible Senior Notes. Notes and information regarding our April 2021 notice of redemption of all such notes. During the first half of 2021, the Company received notices of conversions related to the 2036 Convertible Senior Notes in total principal amount of $59,619. The Company elected to settle the principal balance in cash and the conversion premium by issuing 4,684,263 of common shares from treasury stock, resulting in a loss on debt extinguishment $4,449. The 2036 Convertible Senior Notes were fully converted as of June 2021 and all obligations thereto have been satisfied and discharged.
During the year ended December 31, 2020, the Company used $75,890 to repurchase $30,008 principal amount of the 2036 Convertible Senior Notes, reflecting conversion premium, after tax impact of $52,681 as a reduction of Additional Paid-in Capital and gains on debt extinguishment of $1,809 in the Consolidated Statements of Operations. During the year ended December 31, 2019,

Green Notes
On May 20, 2021, the Company used $14,638,completed the sale and issuance of which $9,402 was settled after year end, to repurchase $6,673$550,000 aggregate principal amount of 5.875% Senior Secured Notes due in 2028 (the "Green Notes"). The Company recorded $14,619 in legal, professional and underwriting fees related to the 2036 Convertible Senior Notes, reflecting conversion premium, after tax impactissuance of $9,715 asthe Green Notes. The Company currently intends to use the net proceeds from this offering for capital expenditures related to the improvement and expansion of its Geismar, Louisiana biorefinery. See "Note 10 - Debt" for a reductionfurther description of Additional Paid-in Capital and gains on debt extinguishment of $488 in the Consolidated Statements of Operations.Green Notes.
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Security Repurchase Programs
In June 2018, January 2019 and February 2020, the Company's Board of Directors approved a repurchase program of up to $75,000 $75,000, and $100,000, respectively, of the Company's convertible notes and/or shares of common stock (the "2018 Program", "2019 Program", and "2020 Program", respectively). Under these programs, the Company may repurchase convertible notes or shares from time to time in open market transactions, privately negotiated transactions or by other means. The timing and amount of repurchase transactions under each program are determined by the Company's management based on its evaluation of market conditions, share price, bond price, legal requirements and other factors. There were no repurchases for the year ended December 31, 2021. The table below sets out the information regarding the activities under the 2018 Program, the 2019 Program and 2020 Program during 2019 and 2020:
For the year ended December 31, 2020For the year ended December 31, 2019
Number of shares/Principal amount in $'000January 2019 ProgramFebruary 2020 ProgramBoth ProgramsNumber of shares/Principal amount in $'000June 2018 ProgramJanuary 2019 ProgramBoth Programs
2036 Convertible Senior Notes Repurchases$30,008 $67,804 $8,086 $75,890 $6,673 $7,435 $7,203 $14,638 
For the year ended December 31, 2020
Number of shares/Principal amount in $'000January 2019 ProgramFebruary 2020 ProgramBoth Programs
2036 Convertible Senior Notes Repurchases$30,008 $67,804 $8,086 $75,890 
The 2019 Program was fully utilized as of September 30, 2020. At December 31, 2020,2021, the Company has $91,914 remaining under the 2020 Program.
61Equity Offering

On March 19, 2021, the Company completed an equity offering pursuant to which we sold 5,750,000 shares of common stock to various underwriters at a price of $67.00 per share before underwriting discounts and commissions. The proceeds that the Company received from the financing activity were $385,250 before underwriting discounts and commissions, fees, and other out-of-pocket costs of $19,970. The net proceeds from the transaction were $365,280.
Foreign Currency Transactions and Translation
The Company’s reporting and functional currency is U.S. dollars. Monetary assets and liabilities denominated in currencies other than U.S. dollars are remeasured into their respective functional currencies at exchange rates in effect at the balance sheet date. The resulting exchange gain or loss is included in the Company’s Consolidated Statements of Operations as foreign exchange gain (loss) unless the remeasurement gain or loss relates to an intercompany transaction that is of a long-term investment nature and for which settlement is not planned or anticipated in the foreseeable future. Gains or losses arising from translation of such transactions are reported as a component of accumulated other comprehensive income (loss) in the Company’s Consolidated Balance Sheets.
The Company translates the assets and liabilities of its foreign subsidiaries from their respective functional currencies to U.S. dollars at the appropriate spot rates as of the balance sheet date. Generally, the Company's foreign subsidiaries use the local currency as their functional currency. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) in the Company’s Consolidated Balance Sheets.
The other comprehensive income (loss) amounts presented in the Company's Consolidated Statements of Comprehensive Income and Consolidated Statements of Stockholders' Equity mainly include the foreign currency translation adjustment resulting from translating the financial statements of certain subsidiaries from Euros to US Dollars, the Company's functional currency.
Revenue Recognition
The Company generally has a single performance obligation in its arrangements with customers. The Company believes for most of its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The Company generally expenses sales commissions when incurred because the amortization period would have been less than one year. The Company records these costs within selling, general and administrative expenses.
The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.:
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•sales of biodiesel and renewable dieselRD produced at our facilities, including RINs and LCFS credits;
•resale of biodiesel, RD and petroleum acquired from third parties, along with the sale of RD and petroleum-based products further blended with biodiesel produced at our wholly owned facilities or acquired from third parties;
•sales of separated RINs and LCFS credits;
•sales of raw materials, glycerin and other co-products of the biomass-basedbio-based diesel production process;
•other revenue, including biomass-basedbio-based diesel facility management and operational services; and
•incentive payments from federal and state governments, including the BTC, and from the USDA Advanced Biofuel Program.
Disaggregation of revenue:
    All revenue recognized in the income statement, except for Biomass-basedBio-based diesel Government Incentives, is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line and segment:
Reportable Segments
Year ended December 31, 2021Bio-based
Diesel		ServicesCorporate
and other		Intersegment
Revenues		Consolidated
Total
Bio-based diesel sales$2,143,832 $— $— $(4,897)$2,138,935 
Petroleum diesel sales— — 158,587 — 158,587 
LCFS credit sales158,926 — — — 158,926 
Separated RIN sales355,541 — — — 355,541 
Co-product sales81,510 — — — 81,510 
Raw material sales20,974 — — — 20,974 
Other bio-based diesel revenue38,799 — — — 38,799 
Other revenues— 203,690 — (203,690)— 
Total revenues from contracts with customers$2,799,582 $203,690 $158,587 $(208,587)$2,953,272 
Bio-based diesel government incentives290,778 — — — 290,778 
Total revenues$3,090,360 $203,690 $158,587 $(208,587)$3,244,050 
Reportable Segments
Year ended December 31, 2020Bio-based
Diesel		ServicesCorporate
and other		Intersegment
Revenues		Consolidated
Total
Bio-based diesel sales, net of BTC related amount due to customers of $1,082$1,342,944 $— $— $(9,099)$1,333,845 
Petroleum diesel sales— — 116,318 — 116,318 
LCFS credit sales131,329 — — — 131,329 
Separated RIN sales129,715 — — — 129,715 
Co-product sales48,046 — — — 48,046 
Raw material sales30,199 — — — 30,199 
Other bio-based diesel revenue40,987 — — — 40,987 
Other revenues— 87,282 — (85,875)1,407 
Total revenues from contracts with customers$1,723,220 $87,282 $116,318 $(94,974)$1,831,846 
Bio-based diesel government incentives305,302 — — — 305,302 
Total revenues$2,028,522 $87,282 $116,318 $(94,974)$2,137,148 

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Reportable Segments
Year ended December 31, 2020Biomass-based
Diesel		ServicesCorporate
and other		Intersegment
Revenues		Consolidated
Total
Biomass-based diesel sales, net of BTC related amount due to customers of $1,082$1,342,944 $0 $0 $(9,099)$1,333,845 
Petroleum diesel sales0 0 116,318 0 116,318 
LCFS credit sales131,329 0 0 0 131,329 
Separated RIN sales129,715 0 0 0 129,715 
Co-product sales48,046 0 0 0 48,046 
Raw material sales30,199 0 0 0 30,199 
Other biomass-based diesel revenue40,987 0 0 0 40,987 
Other revenues0 87,282 0 (85,875)1,407 
Total revenues from contracts with customers$1,723,220 $87,282 $116,318 $(94,974)$1,831,846 
Biomass-based diesel government incentives305,302 0 0 0 305,302 
Total revenues$2,028,522 $87,282 $116,318 $(94,974)$2,137,148 
Reportable Segments
Year ended December 31, 2019Biomass-based
Diesel		ServicesCorporate
and other		Intersegment
Revenues		Consolidated
Total
Biomass-based diesel sales, net of BTC related amount due to customers of $157,896$1,399,509 $0 $0 $(11,309)$1,388,200 
Petroleum diesel sales0 0 270,326 0 270,326 
LCFS credit sales106,524 0 0 0 106,524 
Separated RIN sales98,285 0 0 0 98,285 
Co-product sales38,777 0 0 0 38,777 
Raw material sales26,456 0 0 0 26,456 
Other biomass-based diesel revenue44,793 0 0 0 44,793 
Other revenues0 99,086 0 (97,446)1,640 
Total revenues from contracts with customers$1,714,344 $99,086 $270,326 $(108,755)$1,975,001 
Biomass-based diesel government incentives650,215 0 0 0 650,215 
Total revenues$2,364,559 $99,086 $270,326 $(108,755)$2,625,216 

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Reportable SegmentReportable Segment
Year ended December 31, 2018Biomass-based DieselServicesCorporate and otherIntersegment RevenuesConsolidated Total
Biomass-based diesel sales, net of BTC related amount due to customers of $144,944$1,474,459 $0 $9,682 $(26,348)$1,457,793 
Year ended December 31, 2019Year ended December 31, 2019Bio-based DieselServicesCorporate and otherIntersegment RevenuesConsolidated Total
Bio-based diesel sales, net of BTC related amount due to customers of $157,896Bio-based diesel sales, net of BTC related amount due to customers of $157,896$1,399,509 $— $— $(11,309)$1,388,200 
Petroleum diesel salesPetroleum diesel sales0 0 239,470 0 239,470 Petroleum diesel sales— — 270,326 — 270,326 
LCFS credit salesLCFS credit sales61,540 0 0 0 61,540 LCFS credit sales106,524 — — — 106,524 
Separated RIN salesSeparated RIN sales137,895 0 0 0 137,895 Separated RIN sales98,285 — — — 98,285 
Co-product salesCo-product sales42,344 0 0 0 42,344 Co-product sales38,777 — — — 38,777 
Raw material salesRaw material sales39,245 0 0 0 39,245 Raw material sales26,456 — — — 26,456 
Other biomass-based diesel revenue34,924 0 0 0 34,924 
Other bio-based diesel revenueOther bio-based diesel revenue44,793 — — — 44,793 
Other revenuesOther revenues0 93,347 0 (91,061)2,286 Other revenues— 99,086 — (97,446)1,640 
Total revenues from contracts with customersTotal revenues from contracts with customers$1,790,407 $93,347 $249,152 $(117,409)$2,015,497 Total revenues from contracts with customers$1,714,344 $99,086 $270,326 $(108,755)$1,975,001 
Biomass-based diesel government incentives352,981 0 0 0 352,981 
Bio-based diesel government incentivesBio-based diesel government incentives650,215 — — — 650,215 
Total revenuesTotal revenues$2,143,388 $93,347 $249,152 $(117,409)$2,368,478 Total revenues$2,364,559 $99,086 $270,326 $(108,755)$2,625,216 

Contract balances
    The following table provides information about receivables and contract liabilities from contracts with customers:
December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Trade accounts receivable$74,774 $185,156 
Trade accounts receivable, grossTrade accounts receivable, gross$108,443 $74,774 
Short-term contract liabilities (deferred revenue)Short-term contract liabilities (deferred revenue)$(946)$(631)Short-term contract liabilities (deferred revenue)$(1,822)$(946)
Short-term contract liabilities (accounts payable)Short-term contract liabilities (accounts payable)$(914)$(255,193)Short-term contract liabilities (accounts payable)$(699)$(914)

The Company receives payments from customers based upon contractual billing schedules; accounts receivablesreceivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. While in general the Company has not historically offered sales incentives to customers, the uncertainty around the reinstatement of the federal biodiesel tax credit led to the Company and other market participants acting as if the federal biodiesel tax credit would be reinstated throughout the year and entering into agreements with both customers and vendors throughout the year to capture the credit when, or if, reinstated. Due to the federal biodiesel tax credit reinstatement, the impacts of the agreements with customers are recorded as contract liabilities in accounts payable and as adjustments to Biomass-based diesel sales, whereas agreements with vendors are recorded net as adjustments to Biomass-based diesel costs of goods sold on the Consolidated Statements of Operations.
Significant changes to the contract liabilities during the year2021 and 2020 are as follows:
January 1, 2020Cash receipts
(Payments)		Less: Impact on
Revenue		OtherDecember 31, 2020January 1, 2021Cash receipts
(Payments)		Less: Impact on
Revenue		OtherDecember 31, 2021
Deferred revenueDeferred revenue$631 $20,357 $20,042 $0 $946 Deferred revenue$946 $41,797 $40,921 $— $1,822 
Payables to customers related to BTCPayables to customers related to BTC255,193 (257,235)(1,082)1,874 914 Payables to customers related to BTC914 (215)— — 699 
$255,824 $(236,878)$18,960 $1,874 $1,860 $1,860 $41,582 $40,921 $— $2,521 
January 1, 2019Cash receipts
(Payments)		Less: Impact on
Revenue		OtherDecember 31, 2019
Deferred revenue$300 $55,477 $55,146 $0 $631 
Payables to customers related to BTC0 0 (255,193)0 255,193 
$300 $55,477 $(200,047)$0 $255,824 
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January 1, 2020Cash receipts
(Payments)		Less: Impact on
Revenue		OtherDecember 31, 2020
Deferred revenue$631 $20,357 $20,042 $— $946 
Payables to customers related to BTC255,193 (257,235)(1,082)1,874 914 
$255,824 $(236,878)$18,960 $1,874 $1,860 
Freight
Amounts billed to customers for freight are included in biomass-basedbio-based diesel sales. Costs incurred for freight are included in costs of goods sold.
Advertising Costs
Advertising costs are charged to expense as they are incurred. Advertising and promotional expenses were $3,193, $2,302 $2,795 and $1,989$2,795 for the years ended December 31, 2021, 2020 and 2019, and 2018, respectively.
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Employee Benefits Plan
The Company sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code. The Company makes matching contributions equal to 50% of the participant’s pre-tax contribution up to a maximum of 6% of the participant’s eligible earnings. Total expense related to the Company’s defined contribution plan was $2,079, $1,830 $1,815 and $1,588$1,815 for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively.
Stock-Based Compensation
Stock-based compensation expense is measured at the grant-date fair value of the awards and recognized as compensation expense over the vesting period.
Income Taxes
The Company’s income tax provision, deferred income tax assets and liabilities, and liabilities for unrecognized tax benefits represent the Company’s best estimate of current and future income taxes to be paid. The annual effective tax rate is based on income tax laws, statutory tax rates, taxable income levels and tax planning opportunities available in various jurisdictions where the Company operates. These
Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or liabilities of events that have been, or will be, reported in different years for financial statement purposes. Deferred tax assets and liabilities are calculated based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse. We review our deferred tax assets to determine if it is more-likely-than-not that they will be realized. If we determine it is not more likely than not that a deferred tax asset will be realized, we record a valuation allowance to reverse the previously recognized tax benefit. The tax laws used to record current and deferred taxes are complex and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, statutory tax rates and estimates of the Company’s future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements. We recognize tax benefits related to uncertain tax positions if we believe it is more likely than not the benefit will be realized.
The indefinite reinvestment in the earnings of non-US subsidiaries assertion is determined by management’s judgment about and intentions concerning future investment in operations. As of December 31, 2020,2021, the Company is not indefinitely reinvested in the earnings of non-US subsidiaries.
Discontinued Operations
Loss from discontinued operations was mainly related to the research and development activities of REG Life Sciences, the Company's industrial biotechnology business, which had been classified as assets held for sale following the Company's decision to pursue a sale of this business in the fourth quarter of 2018. In May 2019, the sale of REG Life Sciences core assets and business was closed. The wind-down of operations of REG Life Sciences was completed in the fourth quarter of 2019.
Concentrations
The Company maintains cash balances at financial institutions, which may at times exceed the $250 coverage by the U.S. Federal Deposit Insurance Company. The Company has experienced no losses in such accounts.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These estimates are based on information that is currently available to management and on various assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
New Accounting Pronouncements
On June 16, 2016, the FASB issued ASU 2016-13, which amends the Board’s guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its
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estimate of expected credit losses. For public companies, the ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company's adoption of ASU 2016-12 effective January 1, 2020 did not have a material impact on its consolidated financial statements.
On August 28, 2018, the FASB issued ASU 2018-13, which changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 eliminates or modifies certain disclosure requirements of ASC 820 and requires new disclosures relating to changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the applicable reporting period. ASU 2018-13 also explicitly requires entities to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. The Company's adoption of ASU 2016-13 effective January 1, 2020 did not have a material impact on its consolidated financial statements.
On December 18, 2019, the FASB issued ASU 2019-12, which affects general principles within ASC 740, Income Taxes. The ASU removes the following exceptions: (1) incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items, (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary, and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The ASU also will make changes to franchise tax recognition, consideration of the tax basis recognition of goodwill related to acquisitions, specify tax allocation to subsidiaries, reflecting a change in tax law in the interim period annual effective tax rate computation in the period of enactment, and changes to the employee stock ownership plans and investments. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of ASU 2019-12 willdid not have a material impact on the Company's consolidated financial statements.
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On January 16, 2020, the FASB issued ASU 2020-01, which clarifies the interctioninteraction between Topic 321 (Equity Securities), Topic 323 (Equity Method Investments) and Topic 815 (Derivatives and Hedging). This amendment clarifies that an entity should not consider whether the settlement of a forward contract or exercise of an option is accountaccounted for under Topic 323 or whether the fair value option is in accordance with Topic 825. For public business entities, the amendments in ASU 2020-01 are effective for fiscal years beginning December 15, 2020, and interim periods within those fiscal years. The adoption of ASU 2020-01 willdid not have a material impact on the Company's consolidated financial statements.
On March 9, 2020, the FASB issued ASU 2020-03, which clarifies and updates various topics specific to the Company such as: (1) Amending Topic 820 to explicitly apply to non-financial items accounted for as derivatives under Topic 815. (2) Improve the understanding of Topic 470 and the alignment of Line-of-Credit arrangements and Revolving-Debt arrangements. (3) Clarification on the determination of a contractual term in a net investment in a lease determined in accordance with Topic 842 and Topic 326. For public business entities, the amendments in ASU 2020-03 are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. The adoption of ASU 2020-03 willdid not have a material impact on the Company's consolidated financial statements.
On March 12, 2020, the FASB issued ASU 2020-04, which provides a relief that is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Optional expedients are provided for contract modification accounting under the following Codification topics and subtopics: ASC 310, Receivables; ASC 470, Debt; ASC 840 or ASC 842, Leases; and ASC 815-15, Derivatives and Hedging: Embedded Derivatives. The ASU also establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020, through December 31, 2022. The Company is still evaluating the impact of the guidance on its consolidated financial statements.
On August 5, 2020, the FASB issued ASU 2020-06, which reduces the complexity of the accounting for convertible debt instruments and its effect on earnings per share calculation. The guidance reduces the number of accounting models used for convertible debt instruments, which will result in fewer embedded conversion features being recognized separately from the original contract. This will also affect the guidance associated with convertible debt for earnings-per-share by requiring the if-converted method rather than the treasury stock method, requiring that potential share settlement be included in the calculation of diluted earnings per share and clarifying that an entity should use the weighted averageweighted-average share count from each quarter when calculating the year-to-date weighted-average share count. For public business entities, the amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2021, including interim periods within those years, and early adoption is permitted for fiscal yearyears beginning after December 15, 2020, including interim periods within those years. The Company is evaluating the impact of the guidance on its consolidated financial statements, but does not expect the impact to be material.
On October 28, 2021, the FASB issued ASU 2021-08, which updates the guidance related to the acquisition of revenue contracts in a business combination. The new guidance requires that the acquiring entity recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date the acquirer should recognize the contract assets and liabilities under Topic 606 as they would have been recognized at contract origination rather than at fair value at the time of the acquisition. The intent is to create more comparability of recognition and measurement of the acquired contracts in business combinations. For public business entities, the amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of the guidance on its consolidated finance statements.
On November 17, 2021, the FASB issued ASU 2021-10, which requires business entities to provide certain disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance. The guidance will require business entities to disclose the nature of the transactions, accounting policies used to account for the transactions, and state which line items on the balance sheet and income statement are affected by these transactions and the amount applicable to each financial statement line. Business entities will also have to disclose significant terms and conditions of transactions with a government such as the duration of the agreement, any commitments made by either side, provisions, and contingencies. The guidance in ASU 2021-10 is effective for all entities for fiscal years beginning after December 15, 2021. Entities may apply the provision either (1) prospectively to all transactions within the scope of ASC 832 that are reflected in the financial statements as of the adoption date and all new transactions entered into after the date of adoption or (2) retrospectively. Early adoption is permitted. The Company is still evaluating the impact of the guidance on its consolidated financial statements.

NOTE 3—MARKETABLE SECURITIESACQUISITIONS

On December 30, 2021, the Company acquired 100% of the stock of Amber Resources. Amber Resources is one of the leading full-service petroleum distributors and providers in Southern California, offering a broad product line of fuel, lubricants
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and diesel exhaust fluid ("DEF") solutions via highly differentiated, service-oriented model. Amber Resources is consolidated into REG in accordance with ASC 805, Business Combinations and is part of the Bio-based Diesel Reportable Segment. The Company completed its preliminary accounting of this business combination as the valuation of the acquired assets and assumed liabilities, including a tax reserve, was not finalized as of the date of this report. The consideration for the acquisition of Amber Resources was $82,104.

The Company used the income approach to value certain intangible assets. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The Company used the income approach known as the relief from royalty method to value the fair value of the trade names. The relief from royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenues. The determination of the fair value of other assets acquired and liabilities assumed involves assessing factors such as the expected future cash flows associated with individual assets and liabilities and appropriate discount rates at the date of the acquisition.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date.

December 30, 2021
Assets (liabilities) acquired of Amber Resources:
Cash$5,643 
Accounts receivable (net of allowance for doubtful accounts)17,360 
Inventory8,830 
Other current assets4,558 
Property, plant and equipment16,301 
Right of use assets15,773 
Intangibles44,900 
Goodwill27,784 
Other assets4,024 
Total assets acquired145,173 
Accounts payable20,467 
Accrued expenses and other liabilities11,353 
Current maturities of operating lease obligations1,528 
Other liabilities2,625 
Deferred income taxes12,682 
Long-term operating lease obligations14,414 
Total liabilities acquired$63,069 


NOTE 4—MARKETABLE SECURITIES

The Company's investments in marketable securities are stated at fair value and are available-for-sale. For the year ended December 31, 2019, the Company had 0 investments in marketable securities. The following table summarizes the Company's investments in marketable securities for the year ended December 31, 2021 and 2020:
December 31, 2020
MaturityGross Amortized CostTotal Unrealized GainsTotal Unrealized LossesFair Value
Short-term marketable securities
Commercial paperWithin one year$48,685 $31 $(2)$48,714 
Corporate bondsWithin one year78,282 45 (18)78,309 
U.S. Treasury billsWithin one year19,995 2 0 19,997 
Municipal bondsWithin one year2,500 1 0 2,501 
Total$149,462 $79 $(20)$149,521 
Long-term marketable securities
Corporate bondswithin one - five years$91,694 $35 $(40)$91,689 
U.S. Treasury billswithin one - five years25,000 1 (5)24,996 
Municipal bondswithin one - five years3,335 2 0 3,337 
Total$120,029 $38 $(45)$120,022 
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December 31, 2021
MaturityGross Amortized CostTotal Unrealized GainsTotal Unrealized LossesFair Value
Short-term marketable securities
Commercial paperWithin one year$116,937 $1 $(36)$116,902 
Corporate bondsWithin one year166,311 2 (170)166,143 
Municipal bondsWithin one year7,781 — (8)7,773 
Total$291,029 $3 $(214)$290,818 
Long-term marketable securities
Corporate bondswithin one - five years$164,071 $— $(437)$163,634 
Municipal bondswithin one - five years4,162 — (29)4,133 
Total$168,233 $— $(466)$167,767 

December 31, 2020
MaturityGross Amortized CostTotal Unrealized GainsTotal Unrealized LossesFair Value
Short-term marketable securities
Commercial paperWithin one year$48,685 $31 $(2)$48,714 
Corporate bondsWithin one year78,282 45 (18)78,309 
U.S. Treasury billsWithin one year19,995 2 — 19,997 
Municipal bondsWithin one year2,500 1 — 2,501 
Total$149,462 $79 $(20)$149,521 
Long-term marketable securities
Corporate bondswithin one - five years$91,694 $35 $(40)$91,689 
U.S. Treasury billswithin one - five years25,000 1 (5)24,996 
Municipal bondswithin one - five years3,335 2 — 3,337 
Total$120,029 $38 $(45)$120,022 

NOTE 4—5—INVENTORIES
Inventories consist of the following at December 31:
2020201920212020
Raw materialsRaw materials$65,969 $57,818 Raw materials$168,039 $65,969 
Work in processWork in process5,515 3,605 Work in process7,920 5,515 
Finished goodsFinished goods137,877 100,006 Finished goods277,633 137,877 
TotalTotal$209,361 $161,429 Total$453,592 $209,361 
NOTE 5—6—PROPERTY, PLANT AND EQUIPMENT
Company's owned property, plant and equipment consists of the following at December 31:
20202019
Land$10,094 $10,037 
Building and improvements157,488 152,336 
Leasehold improvements12,182 11,692 
Machinery and equipment636,269 586,327 
816,033 760,392 
Accumulated depreciation(273,003)(238,427)
543,030 521,965 
Construction in process51,766 62,612 
Total$594,796 $584,577 
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20212020
Land$9,756 $10,094 
Building and improvements175,252 157,488 
Leasehold improvements3,949 12,182 
Machinery and equipment641,919 636,269 
830,876 816,033 
Accumulated depreciation(292,759)(273,003)
538,117 543,030 
Construction in process139,327 51,766 
Total$677,444 $594,796 
During 2021, the Company recorded impairment charges of $7,359, related to certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' deteriorating physical conditions identified during the period.
During 2020, the Company recorded impairment charges of $18,984 related to certain equipment where it was determined that the assets will no longer be used in future renewable dieselRD production expansions and their carrying amount was deemed not recoverable. In addition, the Company recorded impairment charges of $3,420 against certain biodiesel property, plant and equipment as the carrying amounts of these assets were deemed not recoverable given the assets' economic obsolescence identified during the period. During 2019, the Company recorded impairment charges of $11,145 related to its New Boston biorefinery facility's property, plant and equipment assets. Refer to Note 2 for further details.
NOTE 6—7—INTANGIBLE ASSETS
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Amortizing intangible assets consist of the following at December 31:
December 31, 2020December 31, 2021
CostAccumulated AmortizationNetCostAccumulated AmortizationNet
Raw material supply agreementRaw material supply agreement$6,230 $(3,618)$2,612 Raw material supply agreement$6,230 $(4,296)$1,934 
Renewable diesel technology8,300 (3,643)4,657 
RD technologyRD technology8,300 (4,196)4,104 
Acquired customer relationshipsAcquired customer relationships4,747 (2,025)2,722 Acquired customer relationships44,947 (2,510)42,437 
Trade namesTrade names4,700 — 4,700 
Other intangible assetsOther intangible assets904 (187)717 Other intangible assets200 (200)— 
Total intangible assetsTotal intangible assets$20,181 $(9,473)$10,708 Total intangible assets$64,377 $(11,202)$53,175 
December 31, 2019December 31, 2020
CostAccumulated AmortizationNetCostAccumulated AmortizationNet
Raw material supply agreementRaw material supply agreement$6,230 $(3,368)$2,862 Raw material supply agreement$6,230 $(3,618)$2,612 
Renewable diesel technology8,300 (3,089)5,211 
RD technologyRD technology8,300 (3,643)4,657 
Acquired customer relationshipsAcquired customer relationships4,747 (1,535)3,212 Acquired customer relationships4,747 (2,025)2,722 
Other intangible assetsOther intangible assets904 (171)733 Other intangible assets904 (187)717 
Total intangible assetsTotal intangible assets$20,181 $(8,163)$12,018 Total intangible assets$20,181 $(9,473)$10,708 
The raw material supply agreement acquired is amortized over its 15 year term based on actual usage under the agreement and expires in 2025. The Company determined the estimated amount of raw materials to be purchased over the life of the agreement to calculate a per pound rate of consumption. The rate is then multiplied by the actual usage each period for expense reporting purposes.
The acquired customer relationships obtained through the acquisition of Amber Resources of $40,200 is amortized over a 15 year life, expiring in 2037. Acquired customer relationships are amortized on a straight-line basis over 10 years to 15 years. Trade names were acquired as part of the Amber Resources acquisition and are amortized on a straight-line basis over 5 years.
Amortization expense of $1,729, $1,310 $1,628 and $1,317$1,628 for intangible assets was recorded for the years ended December 31, 2021, 2020 and 2019, and 2018, respectively.
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Estimated amortization expense for fiscal years ended December 31 is as follows:
2021$1,567 
202220221,575 2022$5,239 
202320231,599 20235,249 
202420241,623 20245,260 
202520251,691 20254,988 
202620264,301 
ThereafterThereafter2,653 Thereafter28,138 
TotalTotal$10,708 Total$53,175 
NOTE 7—8—OTHER ASSETS
Prepaid expenses and other current assets consist of the following at December 31:
2020201920212020
Commodity derivatives and related collateral, netCommodity derivatives and related collateral, net$5,433 $6,140 Commodity derivatives and related collateral, net$9,651 $5,433 
Prepaid expensesPrepaid expenses27,933 16,082 Prepaid expenses25,537 27,933 
DepositsDeposits2,047 3,519 Deposits1,830 2,047 
RIN inventoryRIN inventory869 2,137 RIN inventory5,741 869 
Taxes receivableTaxes receivable29,621 5,115 Taxes receivable43,735 29,621 
OtherOther1,754 2,480 Other6,949 1,754 
TotalTotal$67,657 $35,473 Total$93,443 $67,657 
RIN inventory is valued at the lower of cost or net realizable value and consists of (i) RINs the Company generates in connection with its production of biomass-basedbio-based diesel and (ii) RINs acquired from third parties. RINs generated by the Company are recorded at no cost, as these RINs are government incentives and not a tangible output from its biomass-basedbio-based diesel production. The cost of RINs acquired from third parties is determined using the average cost method. RIN market value
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is based upon pricing as reported by the OPIS. Since RINs generated by the Company have zero cost associated to them, the lower of cost or market adjustment in RIN inventory reflects only the value of RINs obtained from third parties. There were no lower of cost or market adjustments made to RIN inventory values reported at December 31, 20202021 or 2019.2020.
Other noncurrent assets consist of the following at December 31:
2020201920212020
InvestmentsInvestments$13,005 $19,205 Investments$15,724 $13,005 
Spare parts inventorySpare parts inventory2,610 2,610 Spare parts inventory2,756 2,610 
CatalystsCatalysts7,408 1,274 Catalysts14,985 7,408 
DepositsDeposits451 552 Deposits357 451 
Long term notes receivableLong term notes receivable11,259 542 
OtherOther9,246 2,874 Other15,801 8,704 
TotalTotal$32,720 $26,515 Total$60,882 $32,720 
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NOTE 8—9—ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consist of the following at December 31:
2020201920212020
Accrued property taxesAccrued property taxes$1,807 $1,717 Accrued property taxes$1,684 $1,807 
Accrued employee compensationAccrued employee compensation19,640 21,315 Accrued employee compensation31,862 19,640 
Accrued interestAccrued interest4,049 3,416 Accrued interest2,752 4,049 
Tax payableTax payable5,569 15,240 Tax payable7,791 5,569 
Asset retirement obligationsAsset retirement obligations3,000 83 
OtherOther3,810 796 Other6,795 3,727 
TotalTotal$34,875 $42,484 Total$53,884 $34,875 
Other noncurrent liabilities consist of the following at December 31:
2020201920212020
Asset retirement obligationsAsset retirement obligations$747 $691 Asset retirement obligations$— $747 
OtherOther3,738 814 Other4,100 3,738 
TotalTotal$4,485 $1,505 Total$4,100 $4,485 

NOTE 9—10—DEBT
Term debt
The Company’s term debt at December 31 is as follows:
2020201920212020
5.875% Senior Secured Green Notes, due 20285.875% Senior Secured Green Notes, due 2028$550,000 $— 
4.00% Convertible Senior Notes, $59,619 face amount at December 31, 2020, due in June 20364.00% Convertible Senior Notes, $59,619 face amount at December 31, 2020, due in June 2036$47,057 $69,668 4.00% Convertible Senior Notes, $59,619 face amount at December 31, 2020, due in June 2036— 47,057 
REG Danville term loan, secured, variable interest rate of LIBOR plus 4%, due in July 20220 6,468 
REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 2025REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 202513,241 15,980 REG Ralston term loan, variable interest rate of LIBOR plus 2.25%, due in October 2025— 13,241 
REG Grays Harbor term loan, variable interest of minimum 3.5% or Prime Rate plus 0.25%, due in May 20220 6,966 
REG Capital term loan, fixed interest rate of 3.99%, due in January 2028REG Capital term loan, fixed interest rate of 3.99%, due in January 20286,665 6,929 REG Capital term loan, fixed interest rate of 3.99%, due in January 2028— 6,665 
OtherOther14 33 Other— 14 
Total debt before debt issuance costsTotal debt before debt issuance costs66,977 106,044 Total debt before debt issuance costs550,000 66,977 
Less: Current portion of long-term debtLess: Current portion of long-term debt50,088 77,131 Less: Current portion of long-term debt— 50,088 
Less: Debt issuance costs (net of accumulated amortization of $990 and $1,139, respectively)1,731 2,783 
Less: Debt issuance costs (net of accumulated amortization of $1,376 and $990, respectively)Less: Debt issuance costs (net of accumulated amortization of $1,376 and $990, respectively)13,243 1,731 
Total long-term debtTotal long-term debt$15,158 $26,130 Total long-term debt$536,757 $15,158 

Green Notes
On May 20, 2021, the Company completed the sale and issuance of $550,000 aggregate principal amount 5.875% Senior Secured Green Notes due 2028 pursuant to an indenture, dated as of May 20, 2021 (the "Indenture"), by and among the Company, certain of its subsidiaries, as guarantors, and UMB Bank, N.A., a national banking association, as trustee. The Green Notes bear interest at a rate of 5.875% per annum, payable semi-annually in arrears on June 1 and December 1, beginning on December 1, 2021. The Green Notes will mature on June 1, 2028, unless earlier repurchased or redeemed. The Company currently intends to use the net proceeds from this offering for capital expenditures related to the improvement and expansion of its Geismar, Louisiana RD biorefinery. The Company recorded $14,619 in legal, professional and underwriting fees related to the issuance of the Green Notes. These financing costs are being amortized using the effective interest method over the term of the debt. Prior to June 1, 2024, the Company may, at its option but subject to the conditions in the Indenture, (i) redeem up to 35% of the aggregate principal amount of the Green Notes at a redemption price equal to 105.875% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds received by the Company in one or more equity offerings; provided that at least 65% of the aggregate principal amount of the Green Notes issued under the Indenture (including any additional notes originally issued under the Indenture) remain outstanding after each such redemption or (ii) redeem all or part of the Green Notes at a price equal to 100% of the principal
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amount thereof, plus accrued and unpaid interest, if any, to , but not including, the applicable redemption date of the notes redeemed by us and a "make-whole" premium. On or after June 1, 2024, 2025 and 2026, respectively, the Company may, at its option, redeem some or all of the Green Notes at the redemption price of 102.938%, 101.469% and 100.000%, respectively, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date of the notes redeemed by us. Upon the occurrence of a "change in control" (as defined in the Indenture), each holder of their Green Notes may require the Company to repurchase all or a portion of the Green Notes in cash at a price equal to 101.0% of the aggregate principal amount to be repurchased, plus accrued and unpaid interest, if any, thereon to, but not including, the date of repurchase.
The Indenture contains covenants that, among other things, limit the Company's ability and the ability of its restricted subsidiaries to:
•incur additional indebtedness or issue certain disqualified stock or preferred stock;
•create liens;
•pay dividends or distributions, redeem or repurchase equity;
•prepay subordinated indebtedness or make certain investments;
•transfer or sell assets;
•engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of their assets; and
•enter into certain transactions with affiliates.
These covenants are subject to a number of exceptions and limitations as set forth in the Indenture. The Green Notes and related guarantees are secured by substantially all of the assets of the Company and its guarantor subsidiaries subject to certain exceptions and limitations; provided that the security interests granted by the Company and such guarantor subsidiaries that are obligors under the M&L and Services Revolver on (i) their working capital assets (including accounts receivable and inventory) will be contractually senior and (ii) all other assets will be contractually subordinated, in each case, to the security interests granted by them on such assets to secure the Green Notes and related guarantees pursuant to an intercreditor agreement.
The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of certain covenants, payment defaults or acceleration of other indebtedness, a failure to pay certain judgements and certain events of bankruptcy and insolvency. Generally, if an event of default occurs and is continuing, the trustee or holders of at least 25% in principal amount of the then outstanding Green Notes may declare the principal of, premium, if any, and accrued but unpaid interest on all the Green Notes to be due and payable. Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest will be due and payable immediately. Notwithstanding the foregoing, if certain events of bankruptcy or insolvency occur with respect to the Company, certain of its significant subsidiaries or any group of certain of its subsidiaries that taken as a whole would constitute a significant subsidiary, such principal, premium, if any, and accrued and unpaid interest will become due and payable immediately without further action or notice.
The Green Notes are due in full at maturity. The Green Notes mature in June 2028 at which time the Company will pay the principal amount of $550,000 and any outstanding interest.

2036 Convertible Senior Notes
On June 2, 2016, in a private offering to qualified institutional buyers, the Company issued $152,000 aggregate principal amount of the 2036 Convertible Senior Notes in a private offering to qualified institutional buyers. The 2036 Convertible Senior Notes bearbearing interest at a rate of 4.00% per year payable semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2016. The notes will mature on June 15, 2036, unless repurchased, redeemed or converted in accordance with their terms prior
On April 12, 2021, the Company issued a notice of redemption to such date.

Prior to December 15, 2035, theredeem all outstanding 2036 Convertible Senior Notes will be convertible only upon satisfactionon June 15, 2021 at a redemption price equal to 100% of certain conditions and during certain periods as stipulated in the indenture. On or after December 15, 2035 untilprincipal amount of the closenotes redeemed. Because the redemption date is the interest payment date relating to the regular record date of businessJune 1, 2021, the holders of the notes on June 1, 2021 were entitled to receive, on the second scheduled trading day immediately precedingredemption date, the maturity date, holdersunpaid interest that had accrued on such note. By June 11, 2021, the Company had received notices of conversion from all bondholders on the remaining 2036 Convertible Senior Notes may convert their notes at any time. The 2036 Convertible Senior Notes may be settled in cash, the Company’s common shares or a combination of cash and the Company’s common shares, at the Company’s election. The Company may not redeem the 2036 Convertible Senior Notes prior to June 15, 2021. Holders of the 2036 Convertible Senior Notes will have the right to require the Company to repurchase for cash all or some of their notes at 100% of their principal, plus any accrued and unpaid interest on eachas of June 15, 2021, June 15, 2026 and June 15, 2031. Holders of the 2036 Convertible Senior Notes will have the right to require the Company to repurchase for cash all or some of their notes at 100% of their principal, plus any accrued and unpaid interest upon the occurrence of certain fundamental changes. The initial conversion rate is 92.8074 common shares per $1,000 (one thousand) principal amount of 2036 Convertible Senior Notes (equivalent to an initial conversion price of approximately $10.78 per common share).

In addition, the 2036 Convertible Senior Notes will become convertible in the subsequent quarter if the closing price of the Company’s common stock exceeds $14.01, 130% of the Convertible Senior Notes’ initial conversion price, for at least 20 trading days during the 30 consecutive trading days prior to each quarter-end date. Should the holders elect to convert, the Company’s current intent and policy is to settle the principal amount the 2036 Convertible Senior Notes in cash, with the remaining value satisfied at the Company’s option in cash, stock or a combination of cash and stock. As of December 31, 2020 and 2019, the early conversion event was met based on the Company's stock price and as a result, the 2036 Convertible Senior Notes have been classified as a current liability on the Company's Consolidated Balance Sheets at December 31, 2020 and December 31, 2019.

The net proceeds from the offering of theoutstanding 2036 Convertible Senior Notes were approximately $147,118, after deducting feesfully redeemed and offering expensesall obligations thereto were satisfied and discharged. The Company elected to settle all conversions of $4,882, which was capitalized as debt issuance costseach $1,000 principal amount of such notes being converted, with $1,000 in cash and is being amortized through June 2036. The debt discount is to be amortized through June 2036. The effective interest rate onany conversion value in excess of that amount in shares of the debt liability component was 1.53%.Company's common stock.

REG RalstonOther term debt

InOn April 2017,22, 2021, REG Ralston, LLC ("REG Ralston") entered into a construction loan agreement ("Construction Loan Agreement") with First Midwest Bank. The Construction Loan Agreement allowed REG Ralston to borrow up to $20,000 during the construction period at REG Ralston. On October 19, 2018, REG Ralston entered into an amended loan agreement with First Midwest bank to convert the Construction Loan Agreement into a term loan ("Ralston Term Loan") for a principal amount of $19,177, due on October 19, 2025. The Ralston Term Loan will bear floating interest using a LIBOR rate plus 2.25% per annum. The loan agreement contains various loan covenants. At December 31, 2020, the effective interest rate on the amount borrowed under this Loan Agreement was 2.41% per annum.

REG Capital
In December 2017,and REG Capital, LLC ("REG Capital") entered into a mortgage refinancing loan agreement ("Mortgage Refinancing Loan Agreement") with First National Bank to refinance existing mortgages on our office buildings in Ames, IA. Thepaid off the outstanding principal underbalance of the Mortgage Refinancing Loan Agreement is $7.4 million with a maturity dateterm loans owed of January 3, 2028. The loan requires monthly principal payments$12,556 and bears a fixed interest rate of 3.99% per annum.$6,596, respectively.
Lines of Credit
The following table shows the Company's lines of credit:
20202019
Total revolving loans (current)$0 $76,990 
Maximum remaining available to be borrowed under revolving lines of credit$149,666 $101,485 
7076

The Company's wholly-owned subsidiaries,
20212020
Total revolving loans (current)$— $— 
Maximum remaining available to be borrowed under revolving lines of credit$249,666 $149,666 
On September 30, 2021, REG Services Group, LLC and REG Marketing & Logistics, Group, LLC, wholly-owned subsidiaries of the Company (which subsidiaries are borrowersreferred to as the "subsidiary borrowers" under athe following credit agreement), entered into Amendment No. 17 to Credit Agreement, which amends that certain Credit Agreement, dated as of December 23, 2011, withby and among the subsidiary borrowers, the lenders party thereto (“Lenders”(the “Lenders”), and Wells Fargo Capital Finance, LLC, as the agent (as amended, the “M&L and Services Revolver”). Prior to an amendment in November 2019,Effective from September 30, 2021, the maximum commitment of the Lenders under the M&L and Services Revolver to make revolving loans was $150,000. Following this amendment, the maximum commitment was increased from $150,000 to $200,000 through April 30, 2020,$250,000 subject to borrowing base limitations and further subject to an accordion feature, which allows the subsidiary borrowers to request commitments for additional revolving loans in an aggregate amount not to exceed $50,000 (prior to $50,000,September 30, 2021) and $100,000 (on and after September 30, 2021), the making of which areis subject to customary conditions, including the consent of Lenders providing such additional commitments. On April 30, 2020, the maximum commitment of the Lenders under the M&L Services Revolver automatically decreased to $150,000
The maturity date of the M&L and Services Revolver is September 30, 2021.2026. Loans advanced under the M&L and Services Revolver bear interest based on a one-month LIBOR rate (which shall not be less than 0)zero), plus a margin based on Quarterly Average Excess Availability (as defined in the Revolving Credit Agreement), which may range from 1.75%1.50% per annum to 2.25%2.00% per annum.
The M&L and Services Revolver contains various loan covenants that restrict each subsidiary borrower’s ability (and subject to certain exceptions, each Plant Loan Party's (as defined below) ability) to take certain actions, including restrictions on incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock, making certain investments, making distributions to the Company unless certain conditions are satisfied, entering into certain transactions with affiliates or changing the nature of the subsidiary’s business. In addition, the subsidiary borrowers are required to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 if excess availability under the M&L and Services Revolver is less than 10% of the total $150,000$250,000 of current revolving loan commitments, or $15,000$25,000 currently. The M&L and Services Revolver is secured by the subsidiary borrowers’ membership interests and substantially all of their assets. In addition, the M&L and Services Revolver is secured by the accounts receivable and inventory of REG Albert Lea, LLC, REG Houston, LLC, REG New Boston, LLC, REG Geismar, LLC, and REG Seneca, LLC (collectively, the "Plant Loan Parties") subject to a $40,000an overall dollar limitation with respect to each of the Plant Loan Parties.
Maturities ofParty, and the term debt, includingobligations under the convertible notes,M&L and Services Revolver are as follows forguaranteed by the years ending December 31:
2021$50,088 
20223,028 
20233,040 
20243,051 
20252,606 
Thereafter5,164 
Total term debt66,977 
Less: current portion50,088 
Total long-term debt before debt issuance costs$16,889 
Company.
NOTE 10—11—INCOME TAXES
Income tax benefit (expense) related to continuing operations for the years ended December 31 is as follows:
71

202020192018202120202019
Current income tax expenseCurrent income tax expenseCurrent income tax expense
StateState$(135)$(12)$(118)State$(178)$(135)$(12)
ForeignForeign(3,798)(33)(292)Foreign(3,300)(3,798)(33)
(3,933)(45)(410)(3,478)(3,933)(45)
Deferred income tax benefit (expense)Deferred income tax benefit (expense)Deferred income tax benefit (expense)
FederalFederal(24,746)(8,093)(15,127)Federal(3,248)(24,746)(8,093)
StateState(2,882)1,904 (2,741)State1,418 (2,882)1,904 
ForeignForeign(1,162)1,494 2,914 Foreign(395)(1,162)1,494 
Net operating loss carryforwards createdNet operating loss carryforwards created62,989 68,344 26,058 Net operating loss carryforwards created25,745 62,989 68,344 
34,199 63,649 11,104 23,520 34,199 63,649 
Income tax benefit before valuation allowancesIncome tax benefit before valuation allowances30,266 63,604 10,694 Income tax benefit before valuation allowances20,042 30,266 63,604 
Deferred tax valuation allowancesDeferred tax valuation allowances(36,195)(63,034)(16,565)Deferred tax valuation allowances(5,563)(36,195)(63,034)
Income tax benefit (expense)Income tax benefit (expense)$(5,929)$570 $(5,871)Income tax benefit (expense)$14,479 $(5,929)$570 
A reconciliation of the reported amount of income tax expense to the amount computed by applying the statutory federal income tax rate to earnings before income taxes from continuing operations is as follows:
202020192018
U.S. Federal income tax expense at statutory rates of 21 percent for all periods$(27,036)$(78,105)$(61,812)
State taxes, net of federal income tax benefit4,954 12,394 1,719 
Tax position on government incentives58,602 124,553 69,197 
Global intangible low tax income(5,188)0 0 
Equity compensation2,086 0 0 
Rate difference on foreign operations(1,576)0 0 
Research & development tax credit473 2,703 0 
Non-deductible expenses(1,245)0 0 
Unrecognized tax benefits(427)(24)(272)
Other(377)2,083 1,862 
Total benefit (expense) for income taxes before valuation allowances30,266 63,604 10,694 
Valuation allowances(36,195)(63,034)(16,565)
Total benefit (expense) for income taxes$(5,929)$570 $(5,871)
77

202120202019
U.S. Federal income tax expense at statutory rates of 21 percent for all periods$(41,862)$(27,036)$(78,105)
State taxes, net of federal income tax benefit3,573 4,954 12,394 
Tax position on government incentives52,223 58,602 124,553 
Global intangible low tax income(1,313)(5,188)— 
Equity and executive compensation9,447 2,086 — 
Foreign rate differential(1,473)(1,576)— 
Research & development tax credit— 473 2,703 
Non-deductible expenses(659)(1,245)— 
Unrecognized tax benefits(349)(427)(24)
Other455 (377)2,083 
Total benefit (expense) for income taxes before valuation allowances20,042 30,266 63,604 
Valuation allowances(5,563)(36,195)(63,034)
Total benefit (expense) for income taxes$14,479 $(5,929)$570 

The Company receives government incentive payments and excludes this revenue from federal and state taxable income. This tax position of excluding government incentives from taxable income has been accepted by the Internal Revenue Service for the audit cycle 2010-2011, the results of which were approved by the Joint Committee on Taxation. As a result of excluding these government incentive payments in the U.S., the Company currently has cumulative U.S. losses in recent years and initially established a valuation allowance to reduce its total deferred tax assets to the amount more-likely-than-not to be realized. After weighing the available positive and negative evidence, the Company changed its judgment and believes the realizability of deferred tax assets in a non-U.S. jurisdiction is more-likely-than-not, and recorded a tax benefit for the reversal of its valuation allowance.
7278

The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities at December 31 are as follows:
2020201920212020
Deferred Tax Assets:Deferred Tax Assets:Deferred Tax Assets:
Net operating loss carryforwardsNet operating loss carryforwards$411,726 $348,734 Net operating loss carryforwards$439,738 $411,726 
GoodwillGoodwill13,658 17,028 Goodwill7,981 13,658 
Stock-based compensationStock-based compensation3,550 3,805 Stock-based compensation2,040 3,550 
Interest expense carryforwardInterest expense carryforward5,391 4,877 Interest expense carryforward9,388 5,391 
Tax credit carryforwardsTax credit carryforwards6,521 4,330 Tax credit carryforwards4,233 6,521 
LeasesLeases7,818 11,364 Leases12,235 7,818 
IntangiblesIntangibles1,459 1,530 Intangibles— 1,459 
Risk management unrealized lossRisk management unrealized loss1,548 131 Risk management unrealized loss377 1,548 
Accrued compensationAccrued compensation4,336 4,285 Accrued compensation5,463 4,336 
Inventory capitalizationInventory capitalization3,226 2,442 Inventory capitalization9,648 3,226 
OtherOther5,235 5,034 Other5,141 5,235 
Deferred tax assetsDeferred tax assets464,468 403,560 Deferred tax assets496,244 464,468 
Deferred Tax Liabilities:Deferred Tax Liabilities:Deferred Tax Liabilities:
Property, plant and equipmentProperty, plant and equipment(68,948)(41,769)Property, plant and equipment(76,247)(68,948)
LeasesLeases(7,822)(9,459)Leases(12,163)(7,822)
Convertible debtConvertible debt(3,253)(5,213)Convertible debt— (3,253)
IntangiblesIntangibles(10,080)— 
Prepaid expensesPrepaid expenses(2,644)(2,106)Prepaid expenses(2,878)(2,644)
OtherOther(622)(1,086)Other(498)(622)
Deferred tax liabilitiesDeferred tax liabilities(83,289)(59,633)Deferred tax liabilities(101,866)(83,289)
Net deferred tax assetsNet deferred tax assets381,179 343,927 Net deferred tax assets394,378 381,179 
Valuation allowanceValuation allowance(387,786)(350,902)Valuation allowance(392,866)(387,786)
Net deferred tax liabilities$(6,607)$(6,975)
Net deferred tax assets (liabilities)Net deferred tax assets (liabilities)$1,512 $(6,607)
At December 31, 2020,2021, the Company has recorded a net deferred tax asset before valuation allowance of $411,726$439,738 related to the benefit of federal, state and foreign net operating loss carry-forwards. Federal net operating loss carry-forward totals $1,561,216$1,667,000 and will begin to expire in 2028, while the amount and expiration dates of state net operating losses vary by jurisdiction. Changes in ownership of the Company, as defined by Section 382 of the Internal Revenue Code of 1986, as amended, in any one year may limit the utilization of federal and state net operating losses and credit carry-forwards. The Company has performed an ownership change analysis during 20202021 to determine the impact of changes in ownership on utilization of carry-forward attributes, the results of which have been incorporated into our financial statements.
In evaluating available evidence around the recoverability of net deferred tax assets, the Company considers, among other factors, historical financial performance, expectation of future earnings, length of statutory carry-forward periods and ability to carry back losses to prior periods, experience with operating loss and tax credit carry-forwards expiring unused, tax planning strategies and timing for the of reversals of temporary differences. In evaluating losses, management considers the nature, frequency and severity of losses in light of the conditions giving rise to those losses. AsDuring the quarter ended December 31, 2021, the Company changed its judgement about the realizability of its deferred tax assets in a non-U.S. jurisdiction, resulting in the recognition of a tax benefit of $6,100 due to the reversal of the valuation allowance offsetting certain deferred tax assets. The primary drivers of this change in judgement resulted from changes in operating results in recent years, plus positive evidence due to Board approved capital investment which supports future earnings projections. Related to the U.S., as a result of the above described tax position of excluding government incentive payments from U.S. taxable income, the Company currently has cumulative U.S. losses in recent years and has established a valuation allowance to reduce its total deferred tax assets to the amount more-likely-than-not to be realized. In the acquisition accounting for Amber Resources the Company recorded deferred tax liabilities, which resulted in an income tax benefit of $12,683 from the partial reversal of the valuation allowance offsetting U.S. deferred tax assets outside of acquisition accounting. Activity regarding the valuation allowance for deferred tax assets was as follows:
202020192018
Beginning of year balance$350,902 $283,805 $265,362 
Changes in valuation allowance charged to income36,195 65,558 18,875 
Foreign currency translation689 (164)(440)
Change in valuation allowance charged to OCI0 (7)8 
Change in valuation allowance charged to equity0 1,710 0 
End of year balance$387,786 $350,902 $283,805 
7379

202120202019
Beginning of year balance$387,786 $350,902 $283,805 
Changes in valuation allowance charged to income(561)36,195 65,558 
Change in valuation allowance due to change in judgment6,124 — — 
Foreign currency translation(658)689 (164)
Change in valuation allowance charged to OCI175 — (7)
Change in valuation allowance charged to equity— — 1,710 
End of year balance$392,866 $387,786 $350,902 
The Company analyzes filing positions in all of the federal, state and foreign jurisdictions where it is required to file income tax returns, and all open tax years in these jurisdictions to determine if it has any uncertain tax positions on any of its income tax returns. An uncertain tax position represents a tax position taken to not file a tax return, and also tax positions in a filed tax return or planned to be taken in a tax return not yet filed, thatthe benefit of which has not been reflected in measuring income tax expense for financial reporting purposes. The Company does not recognize income tax benefits associated with uncertain tax positions where it is determined that it is not more-likely-than-not, based on the technical merits, that the position will be sustained upon examination.
A reconciliation of the total amounts of unrecognized tax benefits at December 31 is as follows:
202020192018202120202019
Beginning of year balanceBeginning of year balance$2,777 $2,028 $1,771 Beginning of year balance$3,232 $2,777 $2,028 
Increases to tax positions expected to be takenIncreases to tax positions expected to be taken0 732 0 Increases to tax positions expected to be taken2,708 — 732 
Increases to tax positions taken during prior yearsIncreases to tax positions taken during prior years427 24 272 Increases to tax positions taken during prior years288 427 24 
Foreign currency translationForeign currency translation28 (7)(15)Foreign currency translation(50)28 (7)
End of year balanceEnd of year balance$3,232 $2,777 $2,028 End of year balance$6,178 $3,232 $2,777 
The Company recordedcurrent year increase includes an unrecognized tax benefit liability in acquisition accounting associated with a filing position for a prior year foreignthe assumption of uncertain tax return.positions in the acquisition of Amber Resources. The amount of unrecognized tax benefits that would affect the effective tax rate if the tax benefits were recognized was $5,301 at December 31, 2021, $726 at December 31, 2020, and $274 at December 31, 2019, and $257 at December 31, 2018.2019. The remaining liability for unrecognized tax benefits is related to tax positions for which there is a related deferred tax asset. The Company does not believe it is reasonably possible that the amounts of unrecognized tax benefits existing as of December 31, 20202021 will significantly increase or decrease over the next twelve months. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. The Company has recorded interest on the foreign unrecognized tax benefit.
The Company is subject to tax in the United States and various state and foreign jurisdictions. The U.S. Internal Revenue Service has examined the Company's federal income tax returns through 2008, as well as 2010 and 2011. During the fourth quarter of 2020, the German tax authorities began an examination of the Company's corporate income tax returns for the years 2016 through 2018, and have previously examined such tax returns through 2014. All other years in the United States and Germany are subject to examination, while various state and other foreign income tax returns also remain subject to examination by taxing authorities.
Although not considered indefinitely reinvested, the Company has not made a provision for United States or additional foreign withholding taxes due to provisional accumulated tax deficits outside the United States. The Company has not recorded a deferred tax asset for the outside basis difference related to investments in its foreign subsidiaries as it is not expected that the investment is essentially permanentdifference will reverse in duration. the foreseeable future.
NOTE 11—12—STOCK-BASED COMPENSATION
On October 26, 2011, the stockholders approved the 2009 Stock Incentive Plan ("the 2009 Plan") which authorizes up to 4,160,000 shares of Company Common Stock to be issued for the award of restricted stock, restricted stock units ("RSUs"), performance restricted stock units ("PRSUs") and stock appreciation rights ("SARs") at the discretion of the Company Board as compensation to employees, consultants of the Company and to non-employee directors. Under the 2009 Plan, an additional 2,350,000 shares, or 6,510,000 shares in total, are reserved for issuance as approved by shareholders on May 15, 2014 and May 8, 2017. From May 18, 2021, no new shares will be granted under the 2009 Plan.
80

On May 18, 2021, the stockholders approved the 2021 Stock Incentive Plan ("the 2021 Plan") which authorizes up to 1,900,000 shares of Company Common Stock to be issued for the award of restricted stock, restricted stock units ("RSUs"), performance restricted stock units ("PRSUs") and stock appreciation rights ("SARs") at the direction of the Company Board as compensation to employees, consultants of the Company and to non-employee directors.
The expense for both plans is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. There was no cash flow impact resulting from the grants of these awards. The 2009 Plan isand 2021 Plans are generally protected from anti-dilution via adjustments for any stock dividends, stock split, combination or other recapitalization.
The Company recorded stock-based compensation expense of $7,997, $6,942 $6,707 and $6,412$6,707 for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively. The stock-based compensation costs were included as a component of selling, general and administrative expenses. At December 31, 2020,2021, there was $10,845$12,716 of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a period of approximately 3.02.7 years.
Restricted Stock Units
The following table summarizes information about the Company’s Common Stock RSU’s granted, vested, exercised and forfeited:
74

Number of
Awards		Weighted
Average Issue
Price		Number of
Awards		Weighted
Average Issue
Price
Awards outstanding - January 1, 2018888,391 $12.12 
Issued425,150 $13.23 
Vested and restriction lapsed(225,339)$10.52 
Forfeited(65,928)$10.52 
Awards outstanding - December 31, 20181,022,274 $13.04 
Awards outstanding - January 1, 2019Awards outstanding - January 1, 20191,022,274 $13.04 
IssuedIssued277,711 $21.76 Issued277,711 $21.76 
Vested and restriction lapsedVested and restriction lapsed(425,041)$9.79 Vested and restriction lapsed(425,041)$9.79 
ForfeitedForfeited(89,779)$11.85 Forfeited(89,779)$11.85 
Awards outstanding - December 31, 2019Awards outstanding - December 31, 2019785,165 $18.02 Awards outstanding - December 31, 2019785,165 $18.02 
IssuedIssued292,638 $24.06 Issued292,638 $24.06 
Vested and restriction lapsedVested and restriction lapsed(319,541)$14.66 Vested and restriction lapsed(319,541)$14.66 
ForfeitedForfeited(10,379)$14.82 Forfeited(10,379)$14.82 
Awards outstanding - December 31, 2020Awards outstanding - December 31, 2020747,883 $21.87 Awards outstanding - December 31, 2020747,883 $21.87 
IssuedIssued132,721 $60.84 
Vested and restriction lapsedVested and restriction lapsed(479,516)$17.38 
ForfeitedForfeited(21,178)$33.49 
Awards outstanding - December 31, 2021Awards outstanding - December 31, 2021379,910 $35.50 
The RSUs convert into 1 share of common stock upon vesting. RSU’s issued prior to 2019 cliff vest atThe majority of the earlier of expressly provided service or performance conditions. The RSU grants in 2019 and after vest one third on each of the three anniversary dates following the grant date. The service period for these RSU awards, excluding those issued to the Company’s Board of Directors (one year) and certain executive management (three to four years), is a three year period from the grant date. The performance conditions provide for accelerated vesting upon various conditions including a change in control or other common stock liquidity events.
Performance Restricted Stock Units
The following table summarizes information about the Company’s Common Stock PRSU’s granted, vested, exercised and forfeited:
Number of AwardsWeighted Average Issue Price
Awards outstanding -January 1, 2018355,118 $10.46 
Issued171,580 $9.63 
Vested and restriction lapsed(292,963)$8.45 
Forfeited(25,650)$9.83 
Awards outstanding - December 31, 2018208,085 $12.68 
Issued148,118 $19.31 
Vested and restriction lapsed(25,000)$9.17 
Forfeited(8,739)$12.90 
Awards outstanding - December 31, 2019322,464 $15.99 
Issued145,709 $22.30 
Vested and restriction lapsed(123,711)$15.40 
Forfeited(50,293)$10.17 
Awards outstanding - December 31, 2020294,169 $20.36 
81

Number of AwardsWeighted Average Issue Price
Awards outstanding -January 1, 2019208,085 $12.68 
Issued148,118 $19.31 
Vested and restriction lapsed(25,000)$9.17 
Forfeited(8,739)$12.90 
Awards outstanding - December 31, 2019322,464 $15.99 
Issued145,709 $22.30 
Vested and restriction lapsed(123,711)$15.40 
Forfeited(50,293)$10.17 
Awards outstanding - December 31, 2020294,169 $20.36 
Issued54,581 $69.84 
Vested and restriction lapsed(76,136)$11.10 
Forfeited(15,173)$31.25 
Awards outstanding - December 31, 2021257,441 $32.94 
The PRSUs convert into 1 share of common stock upon vesting. PRSUs vest in different tranches upon meeting certain performance conditions, which are generally based on the Company's stock price performance or return on invested capital and expressly provided service. These PRSUs are fair valued at grant date based on Monte Carlo simulations or at a percentage of the stock price at grant date. The derived service period for these PRSU awards as a result of the Monte Carlo simulation, is an approximately two to three year period from the grant date. The performance conditions provide for accelerated vesting upon various conditions including a change in control or other common stock liquidity events.
75

Stock Appreciation Rights
The following table summarizes information about SARs granted, forfeited, vested and exercisable:
Number of
SAR’s		Weighted  Average
Exercise
Price		Weighted
Average
Contractual
Term		Number of
SAR’s		Weighted  Average
Exercise
Price		Weighted
Average
Contractual
Term
SAR's outstanding - January 1, 20181,701,269 $10.20 
Granted0 $0 
Exercised(610,541)$10.13 
Forfeited(54,051)$11.08 
SAR's outstanding - December 31, 20181,036,677 $10.19 4.7 years
SAR's outstanding - January 1, 2019SAR's outstanding - January 1, 20191,036,677 $10.19 
GrantedGranted0 $0 Granted— $— 
ExercisedExercised(85,652)$10.54 Exercised(85,652)$10.54 
ForfeitedForfeited(50,723)$10.82 Forfeited(50,723)$10.82 
SAR's outstanding - December 31, 2019SAR's outstanding - December 31, 2019900,302 $10.12 3.8 yearsSAR's outstanding - December 31, 2019900,302 $10.12 3.8 years
GrantedGranted0 $0 Granted— $— 
ExercisedExercised(218,760)$9.67 Exercised(218,760)$9.67 
ForfeitedForfeited(80)$9.26 Forfeited(80)$9.26 
SAR's outstanding - December 31, 2020SAR's outstanding - December 31, 2020681,462 $10.27 3.0 yearsSAR's outstanding - December 31, 2020681,462 $10.27 3.0 years
SAR's exercisable - December 31, 2020681,462 $10.27 3.0 years
SAR's expected to vest - December 31, 20200 $0 3.0 years
GrantedGranted— $— 
ExercisedExercised(348,084)$9.92 
ForfeitedForfeited(20,403)$10.54 
SAR's outstanding - December 31, 2021SAR's outstanding - December 31, 2021312,975 $10.64 2.3 years
SAR's exercisable - December 31, 2021SAR's exercisable - December 31, 2021312,975 $10.64 2.3 years
SAR's expected to vest - December 31, 2021SAR's expected to vest - December 31, 2021— $— 2.3 years
The SARs vest 25% annually on each of the four anniversary dates following the grant date and expire after ten years. The fair value of each SAR grant was estimated using the Black-Scholes option-pricing model. The Company no longer issues or grants new SARs.
NOTE 12—13—LEASES
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The Company leases land, property and equipment under certain operating leases. The Company's leases consist primarily of access to distribution terminals, biomass-basedbio-based diesel and feedstock storage tanks, railcars and vehicles. The Company determines at the inception of a lease whether an arrangement that provides the Company control over the use of an asset is a lease. The Company recognizes at lease commencement a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the lease term. As discussed in Note 2, theThe Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. At the end of the lease term the Company, generally, has the option to (a) return the leased equipment to the lessor, (b) purchase the property at its then fair value or (c) renew its lease at the fair rental value on a year-to-year basis or for an agreed upon term. When it is reasonably certain that the Company will exercise the option, the impact of the option is included in the lease term for purposes of determining total future lease payments. As most of its lease agreements do not explicitly state the discount rate implicit in the lease, the Company uses its incremental borrowing rate on the commencement date to calculate the present value of future payments.
The Company's leases commonly include payments that are based on the Consumer Price Index ("CPI") or other similar indices. If the indices are known at inception of the leases, they are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts or when the indices are not known at inception, are excluded from the ROU asset and lease liability, and are expensed as incurred.
In addition to the base rent, office equipment leases typically contain provisions for maintenance services, which are considered non-lease components for accounting purposes. For these leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. For all other types of leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability.
The following table summarizes information about the Company's lease expense for the years ended December 31, 20202021 and 2019:2020:
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December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Lease expense:Lease expense:Lease expense:
Operating lease expensesOperating lease expenses$18,022 $22,590 Operating lease expenses$19,348 $18,022 
Variable lease expensesVariable lease expenses1,682 2,255 Variable lease expenses1,885 1,682 
Short-term and other lease expensesShort-term and other lease expenses1,778 1,305 Short-term and other lease expenses974 1,778 
Total lease expenseTotal lease expense$21,482 $26,150 Total lease expense$22,207 $21,482 
The weighted-average remaining lease term for the Company's operating leases is 3.555.70 years as of December 31, 2020.2021. The weighted-average discount rate for the Company's operating leases is 4.36%3.24% as of December 31, 2020.2021.
For each of the next five calendar years and thereafter, future minimum lease payments and scheduled maturities under operating leases that have initial or remaining noncancelable lease terms in excess of one year are as follows:
Total paymentsLess: DiscountOperating lease obligationTotal paymentsLess: DiscountOperating lease obligation
2021$15,454 $873 $14,581 
202220226,320 459 5,861 2022$14,407 $1,381 $13,026 
202320233,634 290 3,344 202311,767 1,002 10,765 
202420242,062 195 1,867 20248,847 732 8,115 
202520251,505 139 1,366 20256,183 546 5,637 
2026 and thereafter2,996 211 2,785 
202620263,931 410 3,521 
2027 and thereafter2027 and thereafter11,764 813 10,951 
TotalTotal$31,971 $2,167 $29,804 Total$56,899 $4,884 $52,015 

In addition, the Company has additional minimum lease commitments related to the Geismar plant expansion project - refer to Note 18 - Commitments and Contingencies for more detail.
NOTE 1314 — DERIVATIVE INSTRUMENTS
The Company enters into New York Mercantile Exchange NY Harbor ULSD ("NY Harbor ULSD" or previously referred to as heating oil), CBOT Soybean Oil (previously referred to as soybean oil) and New York Mercantile Exchange ("NYMEX") Natural Gas futures, swaps and options ("commodity contract derivatives") to reduce the risk of price volatility related to
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anticipated purchases of feedstock raw materials and to protect cash margins from potentially adverse effects of price volatility on biomass-basedbio-based diesel sales where prices are set at a future date. All of the Company’s commodity contract derivatives are not hedge accounting designated derivatives and recorded at fair value on the Consolidated Balance Sheets. Unrealized gains and losses are recognized as a component of biomass-basedbio-based diesel costs of goods sold reflected in current results of operations. At December 31, 2020,2021, the net notional volumes of NY Harbor ULSD, CBOT Soybean Oil and NYMEX Natural Gas covered under the open commodity derivative contracts were approximately 50.462.7 million gallons and 27.0133.7 million pounds and 3.2 million million British thermal units, respectively.
The Company offsets the fair value amounts recognized for its commodity contract derivatives with cash collateral with the same counterparty under a master netting agreement. The net position is presented within Prepaid and other assets in the Consolidated Balance Sheets, see "Note 78 – Other Assets". As of December 31, 2021 and December 31, 2020, the net position included within prepaid and other assets was $9,651 and $5,433, respectively, and no amounts were included in accounts payable for either respective period. The Company posted $14,139$11,110 of collateral associated with its commodity-based derivatives with aan overall net liability position of $8,706.$1,459.
The following table sets forth the fair value of the Company's commodity contract derivatives and amounts that offset within the Consolidated Balance Sheets:
   December 31, 2020December 31, 2019
   AssetsLiabilitiesAssetsLiabilities
Gross amounts of commodity derivative contracts recognized at fair value$3,458 $12,164 $1,633 $4,749 
Cash collateral14,139 0 9,256 0 
Total gross amount recognized17,597 12,164 10,889 4,749 
Gross amounts offset(12,164)(12,164)(4,749)(4,749)
Net amount reported in the Consolidated Balance Sheets$5,433 $0 $6,140 $0 
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   December 31, 2021December 31, 2020
   AssetsLiabilitiesAssetsLiabilities
Gross amounts of commodity derivative contracts recognized at fair value$4,783 $6,242 $3,458 $12,164 
Cash collateral11,110 014,139 — 
Total gross amount recognized15,893 6,242 17,597 12,164 
Gross amounts offset(6,242)(6,242)(12,164)(12,164)
Net amount reported in the Consolidated Balance Sheets$9,651 $— $5,433 $— 
The following table sets forth the commodity contract derivatives gains and (losses) included in the Consolidated Statements of Operations:
   Location of Gain (Loss)
Recognized in income		202020192018
Commodity derivativesCost of goods sold – Biomass-based diesel$36,931 $(28,898)$18,399 
   Location of Gain (Loss)
Recognized in income		202120202019
Commodity derivativesCost of goods sold – Bio-based diesel$2,394 $36,931 $(28,898)
NOTE 14—15—FAIR VALUE MEASUREMENT
The fair value hierarchy prioritizes the inputs used in measuring fair value as follows:
•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.
A summary of assets (liabilities) measured at fair value is as follows:
As of December 31, 2020As of December 31, 2021
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Commercial paperCommercial paper$48,714 $0 $48,714 $0 Commercial paper$116,902 $— $116,902 $— 
Corporate bondsCorporate bonds$169,998 0 169,998 0 Corporate bonds$329,777 — 329,777 — 
U.S. Treasury bills$44,992 44,992 0 0 
Municipal bondsMunicipal bonds$5,839 0 5,839 0 Municipal bonds$11,906 — 11,906 — 
Commodity contract derivativesCommodity contract derivatives$(8,706)(3,069)(5,637)0 Commodity contract derivatives$(1,459)(366)(1,093)— 
$260,837 $41,923 $218,914 $0 $457,126 $(366)$457,492 $— 
As of December 31, 2019
TotalLevel 1Level 2Level 3
Commodity contract derivatives$(3,116)$(84)$(3,032)$0 
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As of December 31, 2020
TotalLevel 1Level 2Level 3
Commercial paper$48,714 $— $48,714 $— 
Corporate bonds$169,998 — 169,998 — 
U.S. Treasury bills$44,992 44,992 — — 
Municipal bonds$5,839 — 5,839 — 
Commodity contract derivatives$(8,706)(3,069)(5,637)— 
$260,837 $41,923 $218,914 $— 

The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values. Money market funds are included in cash and cash equivalents on the Consolidated Balance Sheets.
The Company used the following methods and assumptions to estimate fair value of its financial instruments:
Marketable securities: The fair value of marketable securities, which include commercial papers, corporate notes/bonds, U.S. Treasury bills and municipal notes/bonds, is obtained using quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active and inputs other than quoted prices, e.g., interest rates and yield curves.
Commodity derivatives: The instruments held by the Company consist primarily of futures contracts, swap agreements, purchased put options and written call options. The fair value of contracts based on quoted prices of identical assets in an active exchange-traded market is reflected in Level 1. Contract fair value is determined based on quoted prices of similar contracts in over-the-counter markets and are reflected in Level 2.
Debt and lines of credit: The fair value of long-term debt and lines of credit was established using discounted cash flow calculations and current market rates reflecting Level 2 inputs.
The estimated fair values of the Company’s financial instruments, which are not recorded at fair value are as follows as of December 31:
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2020201920212020
Asset (Liability)
Carrying Amount		Estimated Fair ValueAsset (Liability)
Carrying Amount		Estimated Fair ValueAsset (Liability)
Carrying Amount		Estimated Fair ValueAsset (Liability)
Carrying Amount		Estimated Fair Value
Financial Liabilities:Financial Liabilities:Financial Liabilities:
Debt and lines of creditDebt and lines of credit$(66,977)$(418,107)$(183,034)$(338,482)Debt and lines of credit$(550,000)$(552,877)$(66,977)$(418,107)
NOTE 15—16—NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is presented in conformity with the two-class method required for participating securities. Participating securities include restricted stock units.
Under the two-class method, net income is reduced for distributed and undistributed dividends earned in the current period. The remaining earnings are then allocated to Common Stock and the participating securities. The Company calculates the effects of participating securities on diluted earnings per share (EPS) using both the “if-converted or treasury stock” and "two-class" methods and discloses the method which results in a more dilutive effect. The effects of stock appreciation rights and convertible notes on diluted EPS are calculated using the treasury stock method unless the effects are anti-dilutive to EPS.
For the 2036 Convertible Senior Notes, the Company's current intent iswas to settle conversions using cash for the principal amount of convertible senior notes converted, with the remaining value satisfied at the Company's option in cash, stock or a combination of cash and stock. Therefore, the dilutive effect of the convertible senior notes iswas limited to the conversion premium. There were no anti-dilutive shares within the periods presented.
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The following table presents the calculation of diluted net income (loss) from continuing and discontinued operations per share:
202020192018202120202019
Net income from continuing operations available to common stockholders - BasicNet income from continuing operations available to common stockholders - Basic$120,415 $364,257 $281,036 Net income from continuing operations available to common stockholders - Basic$211,691 $120,415 $364,257 
Plus (less): effect of participating securitiesPlus (less): effect of participating securities2,398 8,238 7,434 Plus (less): effect of participating securities2,128 2,398 8,238 
Net income available to common stockholdersNet income available to common stockholders122,813 372,495 288,470 Net income available to common stockholders213,819 122,813 372,495 
Less: effect of participating securitiesLess: effect of participating securities(2,398)(8,238)(7,434)Less: effect of participating securities(2,128)(2,398)(8,238)
Net income from continuing operations available to common stockholders - DilutedNet income from continuing operations available to common stockholders - Diluted$120,415 $364,257 $281,036 Net income from continuing operations available to common stockholders - Diluted$211,691 $120,415 $364,257 
Net loss from discontinued operations available to common stockholders - BasicNet loss from discontinued operations available to common stockholders - Basic$0 $(9,667)$(11,312)Net loss from discontinued operations available to common stockholders - Basic$— $— $(9,667)
Plus (less): effect of participating securitiesPlus (less): effect of participating securities0 0 0 Plus (less): effect of participating securities— — — 
Net loss available to common stockholdersNet loss available to common stockholders0 (9,667)(11,312)Net loss available to common stockholders— — (9,667)
Less: effect of participating securitiesLess: effect of participating securities0 0 0 Less: effect of participating securities— — — 
Net loss from discontinued operations available to common stockholders - DilutedNet loss from discontinued operations available to common stockholders - Diluted$0 $(9,667)$(11,312)Net loss from discontinued operations available to common stockholders - Diluted$— $— $(9,667)
Net income available to common stockholders - BasicNet income available to common stockholders - Basic$120,415 $354,804 $270,016 Net income available to common stockholders - Basic$211,691 $120,415 $354,804 
Plus (less): effect of participating securitiesPlus (less): effect of participating securities2,398 8,024 7,142 Plus (less): effect of participating securities2,128 2,398 8,024 
Net income available to common stockholdersNet income available to common stockholders122,813 362,828 277,158 Net income available to common stockholders213,819 122,813 362,828 
Less: effect of participating securitiesLess: effect of participating securities(2,398)(8,024)(7,142)Less: effect of participating securities(2,128)(2,398)(8,024)
Net income available to common stockholders - DilutedNet income available to common stockholders - Diluted$120,415 $354,804 $270,016 Net income available to common stockholders - Diluted$211,691 $120,415 $354,804 
Net income available to common stockholders - DilutedNet income available to common stockholders - DilutedNet income available to common stockholders - Diluted
Weighted-average shares used to compute basic net income (loss) per shareWeighted-average shares used to compute basic net income (loss) per share39,199,687 38,288,610 37,687,552 Weighted-average shares used to compute basic net income (loss) per share47,302,924 39,199,687 38,288,610 
Adjustment to reflect conversion of convertible notesAdjustment to reflect conversion of convertible notes3,915,439 3,589,065 5,416,043 Adjustment to reflect conversion of convertible notes— 3,915,439 3,589,065 
Adjustment to reflect stock appreciation right conversionsAdjustment to reflect stock appreciation right conversions571,863 443,305 550,125 Adjustment to reflect stock appreciation right conversions415,304 571,863 443,305 
Weighted-average shares used to compute diluted net income (loss) per shareWeighted-average shares used to compute diluted net income (loss) per share43,686,989 42,320,980 43,653,720 Weighted-average shares used to compute diluted net income (loss) per share47,718,228 43,686,989 42,320,980 
Net income (loss) per share available to common stockholders - DilutedNet income (loss) per share available to common stockholders - DilutedNet income (loss) per share available to common stockholders - Diluted
Continuing operationsContinuing operations$2.76 $8.61 $6.44 Continuing operations$4.44 $2.76 $8.61 
Discontinued operationsDiscontinued operations$0 $(0.25)$(0.30)Discontinued operations$— $— $(0.25)
Diluted net incomeDiluted net income$2.76 $8.38 $6.19 Diluted net income$4.44 $2.76 $8.38 

NOTE 16—17—REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION
The Company reports its reportable segments based on products and services provided to customers. The Company re-assesses its reportable segmentsegments on an annual basis. The Company's reportable segments generally align the Company's external financial reporting segments with its internal operating segments, which are based on its internal organizational structure, operating decisions, and performance assessment. In the fourth quarter of 2018, the Company's Board of Directors authorized it to pursue a plan to sell REG Life Sciences, which primarily represented the Renewable Chemicals reportable segment. This has resulted in theThe Company's reportable segments beingat December 31, 2021 and for the year ended December 31, 2020 are composed of Bio-based Diesel (formerly known as the Biomass-based diesel,Diesel segment), Services and Corporate and other activities. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. All prior period disclosures below have been recast to present results on a comparable basis.
The Biomass-based dieselBio-based Diesel segment processes waste vegetable oils, animal fats, virgin vegetable oils and other feedstocks into biomass-basedbio-based diesel. The Biomass-basedBio-based Diesel segment also includes the Company’s purchases and resaleresales of biomass-basedbio-based diesel produced by third parties. Revenue is derived from the purchases and sales of biomass-basedbio-based diesel, the renewable portion of sales of biodiesel and RD blended with petroleum-based diesel, RINs and raw
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material feedstocks acquired from third parties, sales of
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processed biomass-basedbio-based diesel from Company facilities, related by-productsbyproducts and renewable energy government incentive payments, in the United StatesU.S. and internationally.
The Services segment offers services for managing the construction of biomass-basedbio-based diesel production facilities and managing ongoing operations of third-party plants and collects fees related to the services provided. The Company does not allocate items that are of a non-operating nature or corporate expenses to the business segments. Revenues from services provided to other segments are recorded by the Services segment at cost.
The Corporate and Other segment includes trading activities related to petroleum-based heating oil and diesel fuel, including the petroleum portion of sales of biodiesel and RD blended with petroleum-based diesel; as well as corporate activities, which consist of corporate office expenses such as compensation, benefits, occupancy, and other administrative costs, including management service expenses. Corporate and otherOther also includes income/(expense) not associated with the reportable segments, such as corporate general and administrative expenses, shared service expenses, interest expense and interest income, all reflected on an accrual basis of accounting. In addition, Corporate and Other includes cash and other assets not associated with the reportable segments, including investments. Intersegment revenues are reported by the Services and Corporate and Other segments.
The following table represents the significant items by reportable segment:
202020192018
Net sales from continuing operations:
Biomass-based Diesel$2,028,522 $2,364,559 $2,143,388 
Services87,282 99,086 93,347 
Corporate and other116,318 270,326 249,152 
Intersegment revenues(94,974)(108,755)(117,409)
$2,137,148 $2,625,216 $2,368,478 
Income (loss) from continuing operations before income taxes
Biomass-based diesel$138,358 $371,248 $299,569 
Services(4,498)6,092 4,863 
Corporate and other(5,118)(5,415)(10,091)
$128,742 $371,925 $294,341 
Depreciation and amortization expense, net:
Biomass-based diesel$49,038 $54,513 $32,558 
Services3,279 2,479 1,658 
Corporate and other1,626 1,763 3,026 
$53,943 $58,755 $37,242 
Cash paid for purchases of property, plant and equipment:
Biomass-based diesel$52,498 $40,567 $41,906 
Services4,775 1,840 4,300 
Corporate and other6,369 111 247 
$63,642 $42,518 $46,453 
20202019
Goodwill:
Services$16,080 $16,080 
Assets:
Biomass-based diesel$1,101,179 $1,711,870 
Services69,152 69,144 
Corporate and other784,829 425,602 
Intersegment eliminations(493,762)(421,267)
$1,461,398 $1,785,349 

202120202019
Net sales from continuing operations:
Bio-based Diesel$3,090,360 $2,028,522 $2,364,559 
Services203,690 87,282 99,086 
Corporate and other158,587 116,318 270,326 
Intersegment revenues(208,587)(94,974)(108,755)
$3,244,050 $2,137,148 $2,625,216 
Income (loss) from continuing operations before income taxes
Bio-based diesel$219,537 $138,358 $371,248 
Services11,429 (4,498)6,092 
Corporate and other(31,626)(5,118)(5,415)
$199,340 $128,742 $371,925 
Depreciation and amortization expense, net:
Bio-based diesel$62,800 $49,038 $54,513 
Services3,430 3,279 2,479 
Corporate and other3,254 1,626 1,763 
$69,484 $53,943 $58,755 
Cash paid for purchases of property, plant and equipment:
Bio-based diesel$92,592 $52,498 $40,567 
Services3,067 4,775 1,840 
Corporate and other3,890 6,369 111 
$99,549 $63,642 $42,518 
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20212020
Goodwill:
Bio-based diesel$27,784 $— 
Services16,080 16,080 
$43,864 $16,080 
Assets:
Bio-based diesel$1,668,801 $1,101,179 
Services122,843 69,152 
Corporate and other1,315,674 784,829 
Intersegment eliminations(548,374)(493,762)
$2,558,944 $1,461,398 

Geographic Information:
The following geographic data include net sales attributed to the countries based on the location of the subsidiaries making the sale and long-lived assets based on physical location. Long-lived assets represent the net book value of property, plant and equipment.
202020192018202120202019
Revenues:Revenues:Revenues:
United StatesUnited States$1,758,577 $2,366,724 $2,192,777 United States$2,813,760 $1,758,577 $2,366,724 
InternationalInternational378,571 258,492 175,701 International430,290 378,571 258,492 
$2,137,148 $2,625,216 $2,368,478 $3,244,050 $2,137,148 $2,625,216 
2020201920212020
Property, Plant and Equipment:Property, Plant and Equipment:Property, Plant and Equipment:
United StatesUnited States$565,657 $562,165 United States$642,204 $565,657 
InternationalInternational29,139 22,412 International35,240 29,139 
$594,796 $584,577 $677,444 $594,796 
NOTE 17—18—COMMITMENTS AND CONTINGENCIES
Commitments
In October 2020, the Company announced that it planned to expand the effective capacity of its Geismar, Louisiana biorefinery. The Geismar project brings together the planned improvement and expansion project for the existing site. The Geismar project is expected to take total site production capacity from 90 mmgy to 340 mmgy, enhance existing operations and improve operational reliability and logistics. The expansion is expected to be mechanically complete in 2023 with full operations in early 2024. The capital cost for the Geismar project is estimated to be $950,000. The Company has received all required permits to proceed with construction and officially broke ground to start the construction process in the fourth quarter of 2021. The Company has entered into construction, marine terminal lease, which is expected to commence in August 2023, and other long-lead time contracts for the project. Currently the estimated total future commitments under these contracts on an undiscounted basis amount to approximately $500,856.

The following table outlines the future contract commitments related to the executed contracts noted above as at December 31, 2021.

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Constructions CommitmentsMinimum Lease CommitmentsTotal Commitments
2022$121,716 $— $121,716 
202351,988 9,083 61,071 
2024156 21,800 21,956 
2025— 21,800 21,800 
2026— 21,800 21,800 
Thereafter— 252,513 252,513 
Total$173,860 $326,996 $500,856 

The Company has entered into various contracts for supplies of hydrogen, nitrogen, utilities and feedstocks for various REG production facilities. The following table outlines the minimum take or pay requirement related to the hydrogen, nitrogen, utilities and feedstocks at December 31, 2021.
2022$2,976 
20234,984 
202412,911 
202512,048 
202612,048 
Thereafter142,568 
Total$187,535 

Contingencies

In the last quarter of 2020, the Company discovered a blending discrepancy in connection with its preparation for a standard IRS audit of its BTC filings. The Company self-reported the findings to the IRS and initiated an investigation overseen by the Audit Committee of the Company's Board of Directors. In March 2021, the Company paid the IRS the $40,505 assessment, excluding interest which was paid in April 2021, to correct the REG Seneca BTC claims (hereafter "BTC Correction"). The Company is working with its customers on BTC re-filings on the relevant gallons to reduce further the BTC Correction, which may include recovering amounts from its customers. There can be no assurances that future reduction to the BTC Correction will occur.

On March 2, 2021, a putative class action lawsuit was filed against the Company and certain of its current and former executive officers in the United Stated District Court for the Southern District of New York. On March 12, 2021, a putative class action lawsuit against the same defendants was filed in the United States District Court for the Central District of California. On June 24, 2021, the 2 cases were consolidated in the Southern District of New York under the caption In re Renewable Energy Group Securities Litigation, No. 21-cv-1832, and a consolidated amended complaint was filed on July 9, 2021.

The complaint purports to be brought on behalf of shareholders who purchased the Company’s common stock between March 8, 2018 and February 25, 2021, the date on which the Company announced its restatement related to BTC. Plaintiffs allege that defendants made false and misleading statements about the Company’s business, financial results and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint seeks unspecified damages, attorneys’ fees, and other costs. On January 20, 2022, the court granted defendants' motion to dismiss with prejudice and entered a judgment dismissing the case. On February 18, 2022, plaintiff filed a notice of appeal of the order granting the motion to dismiss and the entry of judgement. The Company denies any and all allegations of wrongdoing and intends to vigorously defend against the litigation.

On July 27, 2021, a stockholder derivative complaint was filed in the United States District Court for the District of Delaware based on allegations substantially similar to those in the class action, and purporting to asset claims on the Company's behalf against current and former officers and directors for alleged violation of Sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets. On August 2, 2021, a second stockholder derivative complaint purportedly arising out of the same events and purporting to assert similar claims, was filed in the Supreme Court for the State of New York. Both of these derivative actions have been stayed.
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In addition, the Securities and Exchange Commission ("SEC") requested information about the restatement, and the Company cooperated with the SEC. On October 1, 2021, the SEC Staff notified the Company that the Staff terminated its investigation with no enforcement action recommended against the Company, in accordance with SEC guidelines.
The Company is also involved in various other legal proceedings in the normal course of business. The Company currently believes that any ultimate liability arising out of such proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
The Company has entered into contracts for supplies of hydrogen, nitrogen and utilities for the REG Geismar production facility. The following table outlines the minimum take or pay requirement related to the purchase of hydrogen, nitrogen, and utilities.
2021$2,976 
20222,976 
20232,976 
2024863 
20250 
Total$9,791 
As of December 31, 2020, REG Geismar relies on one supplier to provide hydrogen necessary to execute the production process. Any disruptions to the hydrogen supply during production from this supplier will result in the shutdown of the REG Geismar plant operations. The Company is currently seeking additional hydrogen suppliers for the REG Geismar facility.NOTE 19—SUBSEQUENT EVENTS

SubsequentProposed Merger
On February 27, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Chevron Corporation (''Parent'') and Cyclone Merger Sub Inc., a wholly owned subsidiary of Parent (“Merger Subsidiary” and together with Parent, “Buyer”). Pursuant to the issuanceterms and conditions set forth in the Merger Agreement, Merger Subsidiary will merge with and into REG (the ''Merger'') with REG continuing as the surviving corporation of the Company's 2018Merger and 2019 financial statements,as a wholly owned subsidiary of Parent. At the Company's management determinedEffective Time, each share of common stock that Biomass-based diesel government incentives revenue was improperly recognized on certain transactions. This wasis issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled pursuant to the Merger Agreement or shares of common stock held by holders who have made a valid demand for appraisal in accordance with Section 262 of the Delaware General Corporation Law), will be automatically converted into the right to receive the Merger Consideration.
At the Effective Time, and as a result of the Merger:
•Each Company SAR will vest and be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price applicable to such Company SAR multiplied by (y) the number of shares of common stock subject to such Company SAR.
•Each Company Director RSU will vest and be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of shares of common stock subject to such Company Director RSU.
•Each Company Employee RSU to the extent vested immediately prior to the Effective Time will be cancelled and converted into the right to receive a cash payment, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of vested shares of common stock subject to such Company Employee RSU.
•Each Unvested Company Employee RSU Award and the Scheduled PSU Awards will be cancelled and converted into the right to receive an amount in cash, less any applicable withholding taxes, equal to the product of (x) the Merger Consideration multiplied by (y) the number of shares of common stock subject to such Assumed RSU Award. Each Assumed RSU Award will be subject to the vesting schedule applicable to the corresponding Unvested Company Employee RSU Award immediately prior to the Effective Time (including, with respect to the Scheduled PSU Awards, the performance vesting conditions).
•Each Company PSU Award will be cancelled and converted into the right to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of (A) the Merger Consideration multiplied by (B) the number of shares of common stock subject to such Company PSU Award (assuming that any performance based vesting conditions applicable to such Company PSU Award for any performance period that has not beingbeen completed as of the proper claimant for certain BTC paymentsEffective Time are achieved at (x) with respect to Company PSU Awards granted in 2020 and 2021, the greater of the target performance levels and the levels based on biodiesel it sold between January 1, 2017actual achievement of pro-rated performance goals through the Effective Time or (y) with respect to Assumed PSU Awards, the target performance levels. Each Assumed PSU Award will be subject to the vesting schedule applicable to the corresponding Company PSU Award immediately prior to the Effective Time (other than any performance based vesting conditions).
The closing of the Merger is subject to various conditions, including (i) the adoption of the Merger Agreement by holders of a majority of the issued and September 30, 2020. REG qualifies foroutstanding shares of our common stock; (ii) the BTC when it blends petroleum diesel with biodiesel. Dueexpiration or termination of any applicable waiting period under the HSR Act and EU Clearance; (iii) the absence of any order or law prohibiting the consummation of the Merger, except if such order or law is immaterial to failuresParent and (iv) the accuracy of the representations and warranties contained in the petroleum diesel additive system atMerger Agreement, subject to customary materiality qualifications, as of the Company's facilitydate of the Merger Agreement and the closing of the Merger, and compliance in Seneca, Illinois, petroleum diesel was periodically not addedall material respects with the covenants and agreements contained in the Merger Agreement. In addition, the obligation of Parent and Merger Subsidiary to certain loads. As a result,consummate the Company's customers who received these loads and subsequently added petroleum diesel are the proper claimants on these biodiesel gallons rather than the Company's REG Seneca subsidiary.

The Company discovered a blending discrepancy in connection with its preparation for a standard IRS audit of its BTC filings. The Company self-reported the findingsMerger is subject to the IRS and initiated an investigation overseen byabsence, since the Audit Committeedate of the Company’s BoardMerger Agreement, of Directors.a Company Material Adverse Effect. The Company reached an agreement withclosing of the IRSMerger is not subject to a financing condition. Under the terms of the Merger Agreement, consummation of the Merger will occur on a $40,505 assessment, excluding interest, to correct the REG Seneca BTC claims (hereafter "BTC liability"). This reflects assessments of $14,821, $9,874, $7,633 and $8,177 for the tax years 2017, 2018, 2019, and the first three quarters of 2020, respectively. The Company expects to recover $2,353 because another REG subsidiary blended the biodiesel with petroleum diesel and was thus the proper claimant, and thus the recorded BTC Liability has been reduced to give effect to the expected recovery. The Company is working with its customers on BTC re-filings on these gallons to reduce further the BTC Liability, which may include recovering amounts from its customers. There can be no assurances that future reduction to the BTC Liability will occur.

second business
8290

day following the fulfillment or waiver of the conditions to closing of the Merger or at such other time as REG and Parent agree.
The following table representsCompany expects to incur certain significant costs relating to the BTC Liability includingMerger, such as legal, accounting, financial advisory, printing and other professional services fees, as well as other customary payments. In the related assessed interest expense included inevent that the IRS's tax assessment, which have been included onMerger is terminated, the consolidated financial statements forCompany may also be required to pay a cash termination fee to Parent of $91,000, as required under the years ended December 31, 2020 and 2019.
20202019
BTC liability included in Accounts payable$38,151 $30,686 
Accrued expenses and other liabilities3,603 1,708 
$41,754 $32,394 
Within the agreement with the IRS, the IRS has not elected to assess any additional penalty besides interest on the assessed amount.Merger Agreement under certain circumstances.
NOTE 18—SUBSEQUENT EVENTS
Subsequent to December 31, 2020, the Company received three notices of conversion related to the 2036 Convertible Senior Note in total principal amount of $28,250, to be settled in March and April 2021. In accordance with the indenture governing such Notes, the Company has elected to settle all conversions of each $1,000 principal amount of Notes being converted with $1,000 in cash and any conversion value in excess of that amount in shares of the Company's common stock.
NOTE 19—20—SUPPLEMENTAL QUARTERLY INFORMATION (UNAUDITED)
The following table represents the significant items for the results of operations on a quarterly basis for the years ended December 31, 20202021 and 2019:2020:
Three Months
Ended
March 31,
2020 (As Restated)		Three Months
Ended
June 30,
2020 (As Restated)		Three Months
Ended
September 30,
2020 (As Restated)		Three Months
Ended
December 31,
2020
Revenues from continuing operations$472,957 $543,905 $572,358 $547,928 
Gross profit from continuing operations105,561 22,556 73,956 66,281 
Selling, general, and administrative expenses including research and development expense27,485 28,427 31,059 32,331 
Gain on disposal of property, plant and equipment0 (187)0 (18)
Impairment of property, plant and equipment0 0 19,256 3,148 
Income (loss) from operations78,076 (5,684)23,641 30,820 
Other income (expense), net(2,078)5,628 68 (1,729)
Net income (loss) from continuing operations74,667 (1,685)22,663 27,168 
Net income (loss)$74,667 $(1,685)$22,663 $27,168 
Net income (loss) from continuing operations available to common stockholders$73,158 $(1,685)$22,223 $26,685 
Basic net income (loss) per share available to common stockholders:
Continuing operations$1.88 $(0.04)$0.57 $0.68 
Net income (loss) per share$1.88 $(0.04)$0.57 $0.68 
Diluted net income (loss) per share available to common stockholders:
Continuing operations$1.67 $(0.04)$0.51 $0.60 
Net income (loss) per share$1.67 $(0.04)$0.51 $0.60 
Three Months
Ended
March 31,
2021		Three Months
Ended
June 30,
2021		Three Months
Ended
September 30,
2021		Three Months
Ended
December 31,
2021
Revenues$539,744 $816,220 $1,006,342 $881,744 
Gross profit73,802 123,513 88,908 83,670 
Selling, general, and administrative expenses including research and development expense31,177 35,015 34,354 39,965 
Gain on disposal of property, plant and equipment— (39)— (1,423)
Impairment of property, plant and equipment822 916 3,498 2,123 
Income from operations41,803 87,621 51,056 43,005 
Other expense, net(948)(5,855)(7,937)(9,405)
Net income$39,222 $79,516 $42,467 $52,614 
Net income available to common stockholders$38,583 $78,787 $42,133 $52,212 
Basic net income per share available to common stockholders:
Net income per share$0.95 $1.64 $0.84 $1.04 
Diluted net income per share available to common stockholders:
Net income per share$0.88 $1.62 $0.83 $1.03 
Three Months
Ended
March 31,
2020		Three Months
Ended
June 30,
2020		Three Months
Ended
September 30,
2020		Three Months
Ended
December 31,
2020
Revenues$472,957 $543,905 $572,358 $547,928 
Gross profit105,561 22,556 73,956 66,281 
Selling, general, and administrative expenses including research and development expense27,485 28,427 31,059 32,331 
Gain on disposal of property, plant and equipment— (187)— (18)
Impairment of property, plant and equipment— — 19,256 3,148 
Income (loss) from operations78,076 (5,684)23,641 30,820 
Other income (expense), net(2,078)5,628 68 (1,729)
Net income (loss)$74,667 $(1,685)$22,663 $27,168 
Net income (loss) available to common stockholders$73,158 $(1,685)$22,223 $26,685 
Basic net income (loss) per share available to common stockholders:
Net income (loss) per share$1.88 $(0.04)$0.57 $0.68 
Diluted net income (loss) per share available to common stockholders:
Net income (loss) per share$1.67 $(0.04)$0.51 $0.60 
8391

Three Months
Ended
March 31,
2019		Three Months
Ended
June 30,
2019		Three Months
Ended
September 30,
2019		Three Months
Ended
December 31,
2019
Revenues from continuing operations$478,209 $560,643 $584,372 $1,001,992 
Gross profit (loss) from continuing operations(12,792)(26,772)24,076 529,380 
Selling, general, and administrative expenses including research and development expense25,354 27,041 24,762 41,052 
Impairment of property, plant and equipment0 468 11,145 595 
Income (loss) from operations(38,146)(54,281)(11,831)487,733 
Other expense, net(3,936)(3,709)(2,815)(1,090)
Net income (loss) from continuing operations(41,652)(57,900)(14,018)486,065 
Net loss from discontinued operations(2,017)(4,462)(2,193)(995)
Net income (loss)$(43,669)$(62,362)$(16,210)$485,069 
Net income (loss) from continuing operations available to common stockholders$(41,652)$(57,900)$(14,018)$476,439 
Net loss from discontinued operations available to common stockholders$(2,017)$(4,462)$(2,193)$(995)
Basic net income (loss) per share available to common stockholders:
Continuing operations$(1.12)$(1.53)$(0.36)$12.23 
Discontinued operations$(0.05)$(0.12)$(0.06)$(0.03)
Net income (loss) per share$(1.17)$(1.65)$(0.42)$12.20 
Diluted net income (loss) per share available to common stockholders:
Continuing operations$(1.12)$(1.53)$(0.36)$11.15 
Discontinued operations$(0.05)$(0.12)$(0.06)$(0.03)
Net income (loss) per share$(1.17)$(1.65)$(0.42)$11.12 

The results for the three months ended December 31, 2019 reflect the full recognition in revenue the effect of the retroactive reinstatement of the 2018 and 2019 BTC. The net benefit of the BTC was $254,194 and $229,042 related to the business conducted in 2019 and 2018, respectively. As discussed in Note 17 - COMMITMENTS AND CONTINGENCIES, the Company discovered a blending discrepancy in connection with its preparation for a standard IRS audit of its BTC filings. The Company reached agreement with the IRS on a $40,505 assessment, excluding interest, to correct the REG Seneca BTC claims. This reflects assessments of $14,821, $9,874, $7,633 and $8,177 for the tax years 2017, 2018, 2019, and the first three quarters of 2020, respectively. The Company is working with its customers on BTC re-filings on these gallons to reduce further the BTC Liability, which may include recovering amounts from its customers. There can be no assurances that future reduction to the BTC Liability will occur. The condensed consolidated financial statements for the three months ended September 30, June 30 and March 31, 2020 have been revised for the effects of the matter as presented in the table below.
Adjustments
Three Months
Ended
March 31,
2020		Three Months
Ended
June 30,
2020		Three Months
Ended
September 30,
2020
Reduction in Revenues, Gross profit, Income (loss) from continuing operations$1,712 $2,059 $3,694 
Reduction in Other income (expense), net$474 $474 $474 
Reduction in Net income (loss from continuing operations$2,186 $2,533 $4,168 
The tables below illustrate the effects on the condensed consolidated financial statements for each financial statement caption to which the adjustment was made.
84

Impact on Condensed Consolidated Balance SheetsMarch 31, 2020June 30, 2020September 30, 2020
Accounts payable, as reported$373,941 $182,370 $135,039 
Accounts payable, as restated$406,340 $216,828 $173,191 
Accrued expenses and other liabilities, as reported$18,676 $18,127 $23,107 
Accrued expenses and other liabilities, as restated$20,856 $20,781 $26,235 
Retained earnings, as reported$877,645 $878,493 $905,324 
Retained earnings, as restated$843,066 $841,380 $864,045 
Impact on Condensed Consolidated Statements of OperationsThree Months ended March 31, 2020Three Months ended June 30, 2020Three Months ended September 30, 2020
Biomass-based diesel government incentives, as reported$68,159 $94,134 $83,178 
Biomass-based diesel government incentives, as restated$66,447 $92,075 $79,484 
Interest expense, as reported$(2,472)$(1,190)$(1,070)
Interest expense, as restated$(2,946)$(1,664)$(1,544)
Impact on the Condensed Consolidated Statements of Cash FlowsThree Months ended
March 31, 2020		Six Months ended
June 30, 2020		Nine Months ended
September 30, 2020
Changes in asset and liabilities, net of effects from mergers and acquisitions:
Accounts payable, as reported$1,688 $(187,659)$(236,213)
Accounts payable, as restated$3,400 $(183,888)$(228,748)
Accrued expenses and other liabilities, as reported$(18,277)$(18,665)$(13,607)
Accrued expenses and other liabilities, as restated$(17,803)$(17,717)$(12,185)


ITEM 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company’s reports we file or submit under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, under the supervision of and with the participation of our CEO and our Interim CFO, has evaluatedperformed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in RulesRule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"))Act) as of the end of the period covered by this report, December 31, 2020. Based on that2021. In connection with our management's evaluation of our disclosure controls and procedures, our CEO and our Interim CFO have concluded that as of
85

December 31, 2020, due to the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective to provide reasonable assurance that the information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and Interim CFO, as appropriate, to allow timely decisions regarding required disclosure. of December 31, 2021.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in RulesRule 13a-15(f) and 15d-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness
As previously disclosed in Item 9A of our internal control over financial reporting basedAnnual Report on Form 10-K for the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment under the framework in Internal Control-Integrated Framework (2013),year ended December 31, 2020, management concluded that our internal control over financial reportingthere was not effective as of December 31, 2020.
Aa material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. We did not maintainrelated to effective preventive and review controls over the purchase and use of the petroleum diesel gallons when blending with biodiesel. This resulted in an overstatement of biomass-basedbio-based diesel government incentive revenue and an understatement of interest expense for the quarters ended September 30, 2020, June 30, 2020, and March 31, 2020 as well as the years ended December 31, 2019 and 2018 and a corresponding understatement of accounts payable and accrued expenses and other liabilities as of September 30, 2020, June 30, 2020, and March 31, 2020, and December 31, 2019 and 2018.
Additionally this material weakness could resulthave resulted in a misstatement of the aforementioned account balances or disclosures that would resulthave resulted in a material misstatement to the annual or interim consolidated financial statements that would not behave been prevented or detected. Because of this
Since identifying the material weakness management concluded that we did not maintain effective internal control over financial reporting as ofand during the year ended December 31, 2020.
Deloitte & Touche LLP has audited our internal control over financial reporting as of December 31, 2020 and has issued an attestation report regarding its assessment included herein.
Remediation Plan for Material Weakness in Internal Control over Financial Reporting
We have made and intend to continue to make improvements to our internal control over financial reporting. Management,2021, management, with oversight from ourthe Audit Committee has identifiedof our Board of Directors, took the following steps to address the underlying causes of the material weakness and has begun executing actions that we believe will remediate the material weakness described above once fully implemented and operating for a sufficient period of time and have established the following policies and controls in response to the matters giving rise to the material weakness.weakness:

◦For the Seneca facility:
▪Limiting the loading to modes where the existing system is known to be functional, until the system is redesigned to work in all operating modes; and
▪Implemented a control system calculation and readout tool that enables the loading operator to validate that the proper number of petroleum diesel gallons were added to each load;

◦Then, to further reinforce our system-wide controls and assurances:controls:
▪Performing additional local reconciliations weekly procedures at each biodiesel facility to validate that the amount of petroleum diesel used matches the amount of petroleum diesel required to be blended;
▪Performing monthly physical inventory procedures to ensure petroleum inventory levels reflected in the accounting system are within expected tolerances; and
▪We are now reviewingPerforming monthly reconciliations of petroleum inventory reconciliationsusage prior to filing forthe BTC to re-confirm that the required volume of petroleum diesel has been blended.
While
On December 30, 2021, we believe thatacquired Amber Resources. We are in the above actions will ultimately remediateprocess of integrating Amber Resources and our management is in the material weakness, we intendprocess of evaluating any related changes to continue to refine those controlsour internal control over financial reporting as a result of this integration. Amber Resources represented 6 percent of total assets and monitor their effectiveness for a sufficient periodless than 1 percent of time prior to reaching any determination as to whether the material weakness has been remediated.
Notwithstanding the identified material weakness, management believes thattotal revenues of the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations, and cash flowsstatement amounts as of and for the year ended December 31, 2021.
92

Management has been testing our enhanced controls to determine whether they operate effectively over time. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods presentedare subject to the risks that controls may become inadequate because of changes in accordanceconditions, or that the degree of compliance with U.S. GAAP.the policies or procedures may deteriorate.
Deloitte & Touche LLP has audited our internal control over financial reporting as of December 31, 2021 and has issued
an attestation report regarding its assessment included herein.
Changes in Internal Control over Financial Reporting
86

Other than as described in the third and fourth paragraphs above under "Remediation Plan for Material Weakness in"in Management's Report on Internal Control over Financial Reporting," there have been no changes in our internal control over financial reporting (as such term is defined in RulesRule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 20202021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    Other Information
None.

ITEM 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable.
87
93

PART III
ITEM 10.    Directors, Executive Officers and Corporate Governance
This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.
ITEM 11.    Executive Compensation
This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.
ITEM 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information as of December 31, 2020,2021, with respect to our equity compensation plans:
PLAN CATEGORYPLAN CATEGORYNUMBER 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		PLAN CATEGORYNUMBER 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 stockholdersEquity compensation plans approved by stockholders1,723,514 1$10.27 22,266,492 Equity compensation plans approved by stockholders950,326 1$10.64 21,876,358 
Equity compensation plans not approved by stockholdersEquity compensation plans not approved by stockholders— — — Equity compensation plans not approved by stockholders— — — 
TotalTotal1,723,514 $10.27 2,266,492 Total950,326 $10.64 1,876,358 
1Includes 747,883379,910 shares underlying outstanding restricted stock units, 294,169257,441 shares underlying outstanding performance restricted stock units, and 681,462312,975 shares underlying outstanding stock appreciation rights.
2Restricted 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.
The remainder of this Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.
ITEM 13.    Certain Relationships and Related Transactions, and Director Independence
This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.
ITEM 14.    Principal Accounting Fees and Services
ThisInformation for this Item regarding our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34) is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.
8894

PART IV

ITEM 15.    Exhibits, Financial Statement Schedules
(a)    Financial Statements
(i)Consolidated Balance Sheets as of December 31, 20202021 and 20192020
(ii)Consolidated Statements of Operations for the years ended December 31, 2021, 2020 2019 and 20182019
(iii)Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 2019 and 20182019
(iv)Consolidated Statements of Stockholders' Equity for the years ended December 31, 2021, 2020 2019 and 20182019
(v)Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 2019 and 20182019
(vi)Notes to the Consolidated Financial Statements for the years ended December 31, 2021, 2020 2019 and 20182019
(b) Exhibits
The Exhibits filed as part of this Annual Report on Form 10-K, or incorporated by reference, are listed on the Exhibit Index immediately preceding such Exhibits, which Exhibit Index is incorporated herein by reference.

(c)Financial Statement Schedules
All schedules are omitted because of the absence of the conditions under which they are required or because the information required is shown in the consolidated financial statements or the notes thereto.

ITEM 16. Form 10-K Summary
Not applicable.

EXHIBIT INDEX
Exhibit
Number
Description
2.1
3.1
3.2
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.510.4
10.6
10.7
89

Exhibit
Number
Description
10.8
10.910.5
95

10.10
Exhibit
Number
10.11Description
10.6
10.1210.7
10.1310.8
10.1410.9
10.1510.10
10.1610.11
10.1710.12
10.1810.13
10.19
10.20
10.21
10.22
10.23
10.24
90

Exhibit
Number
Description
10.25
10.26
10.27

10.28
10.29
Joinder and Amendment No. 11 to Credit Agreement, dated as of September 30, 2016, by and among the lenders identified on the signature pages thereto, Wells Fargo Capital Finance, LLC, Fifth Third Bank, REG Services Group, LLC and REG Marketing & Logistics Group, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2016).

10.30
10.31
10.32
10.33
10.3410.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
21.1**
23.1**
24.1
31.1**
31.2**
96

Exhibit
Number
Description
32.1**
32.2**
91

Exhibit
Number
Description
101.1The following financial information of the Company and its subsidiaries for the fiscal year ended December 31, 2020, is formatted in Inline 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 tagged as blocks of text and including detailed tags
104Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)
*Management contract or compensatory plan, contract or arrangement.
**Filed herewith.

The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RENEWABLE ENERGY GROUP, INC.
By:/s/    Cynthia J. Warner
Cynthia J. Warner
President and Chief Executive Officer
Date: March 1, 20212022
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Todd RobinsonCraig Bealmear and Todd Samuels, and each of them, his or her true and lawful attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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Date
/s/    Cynthia J. WarnerPresident, Chief Executive Officer and Director (Principal Executive Officer)March 1, 20212022
Cynthia J. Warner
/s/    Todd RobinsonR. Craig BealmearInterim Chief Financial Officer
(Principal Financial Officer)		March 1, 20212022
Todd RobinsonR. Craig Bealmear
/s/    Todd M. SamuelsChief Accounting Officer
(Principal Accounting Officer)		March 1, 20212022
Todd M. Samuels
/s/    Jeffrey StroburgDirector (Chairman)March 1, 20212022
Jeffrey Stroburg
/s/    Randolph L. HowardDirector (Vice Chairman)March 1, 20212022
Randolph L. Howard
/s/    Delbert ChristensenDirectorMarch 1, 20212022
Delbert Christensen
/s/    Peter J.M. HardingDirectorMarch 1, 20212022
Peter J. M. Harding
/s/    Debora M. FrodlDirectorMarch 1, 20212022
Debora M. Frodl
/s/    Michael ScharfDirectorMarch 1, 2021
Michael Scharf
/s/    Christopher SorrellsDirectorMarch 1, 20212022
Christopher Sorrells
/s/    James C. BorelDirectorMarch 1, 20212022
James C. Borel
/s/    Walter BergerDirectorMarch 1, 20212022
Walter Berger
/s/    Dylan GlennDirectorMarch 1, 2022
Dylan Glenn
/s/    Niharika T. RamdevDirectorMarch 1, 2022
Niharika T. Ramdev
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