| Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following accounting policies should be read in conjunction with a summary of the significant accounting policies the Company has disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020. 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 March 31, 2021 and 2020, current restricted cash was $3,746 and $3,000, respectively, representing pledges for outstanding letters of credit issued to support our operations. See the table below for reconciliation of "Cash, Cash Equivalents and Restricted Cash" in the Condensed Consolidated Statements of Cash Flows: March 31, 2021 March 31, 2020 Cash and cash equivalents $ 335,789 $ 188,550 Restricted cash 3,746 3,000 Total cash, cash equivalents and restricted cash in the Condensed Statements of Cash Flows $ 339,535 $ 191,550 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 accumulated 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 other income, 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 allocated 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 March 31, 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 cost based on amounts paid, including direct costs such as commissions to acquire the security, using the specific identification method. Renewable Identification Numbers ("RINs") When the Company produces and sells a gallon of bio-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 Renewable Fuel Standard ("RFS2"), using the EPA moderated transaction system. RFS2 allows the Company to attach between zero and 2.5 RINs to any gallon of bio-based diesel. As a result, a portion of the selling price for a gallon of bio-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 bio-based diesel production. Therefore, no cost is allocated to the RIN when it is generated, regardless of whether the RIN is transferred with the bio-based diesel produced or held by the Company pending attachment to other 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 bio-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 Condensed 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 the Oil Price Information Service ("OPIS"). Low Carbon Fuel Standard The Company generates Low Carbon Fuel Standard ("LCFS") credits for its low carbon fuels or blendstocks when its qualified low carbon fuels are transported into an LCFS 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 bio-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 bio-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 bio-based diesel produced or held by the Company. In addition, the Company also obtains LCFS credits from third-party trading activities. From time to time, the Company holds varying amounts of these third-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 Condensed Consolidated Balance 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 March 31, 2021 and December 31, 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. 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 7 - Debt and Subsequent Events" for a further description of the 2036 Convertible Senior Notes and information regarding our April 2021 notice of redemption of all such notes. During the three months ended March 31, 2021, the Company received notices of conversion related to the 2036 Convertible Senior Notes in total principal amount of $27,075. The Company elected to settle the principal balance of $27,075 in cash and settle the conversion premium by issuing 2,195,836 of common shares from treasury stock, resulting in a loss on debt extinguishment, of $1,922. During the three months ended March 31, 2020, the Company used $25,949 to repurchase $11,008 principal amount of the 2036 Convertible Senior Notes, reflecting conversion premium, after tax impact, of $17,829 as a reduction of Additional Paid-in Capital and gains on debt extinguishment of $1,172 as reflected in the Condensed Consolidated Statements of Operations. Security Repurchase Programs In January 2019 and February 2020, the Company's Board of Directors approved repurchase programs of up to $75,000 and $100,000, respectively, of the Company's convertible notes and/or shares of common stock (the "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, convertible note price, legal requirements and other factors. The table below sets out the information regarding the activities under the 2019 and 2020 Programs during the three months ended March 31, 2020: Three months ended March 31, 2020 Principal amount in 000's January 2019 Program 2036 Convertible Senior Notes Repurchases $ 11,008 $ 25,949 The 2019 Program was fully utilized as of September 30, 2020. The remaining amount of the 2020 Program was $91,914 as of March 31, 2021. Equity Offering On March 19, 2021, the Company completed an equity offering pursuant to which it 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. 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. • sales of biodiesel and renewable diesel produced at our facilities, including RINs and LCFS credits; • resale of biodiesel, renewable diesel and petroleum acquired from third parties, along with the sale of renewable diesel 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 bio-based diesel production process; • other revenue, including bio-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 Bio-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 Three months ended March 31, 2021 Bio-based Services Corporate Intersegment Consolidated Bio-based diesel sales $ 348,974 $ — $ — $ (1,027) $ 347,947 Petroleum diesel sales — — 40,509 — 40,509 LCFS credit sales 38,311 — — — 38,311 Separated RIN sales 29,601 — — — 29,601 Co-product sales 11,684 — — — 11,684 Raw material sales 1,679 — — — 1,679 Other bio-based diesel revenue 9,764 — — — 9,764 Other revenues — 17,352 — (17,352) — Total revenues from contracts with customers $ 440,013 $ 17,352 $ 40,509 $ (18,379) $ 479,495 Bio-based diesel government incentives 60,249 — — — 60,249 Total revenues $ 500,262 $ 17,352 $ 40,509 $ (18,379) $ 539,744 Three months ended March 31, 2020 Bio-based Diesel Services Corporate and other Intersegment Revenues Consolidated Total Bio-based diesel sales $ 306,552 $ — $ — $ (25,680) $ 280,872 Petroleum diesel sales — — 44,336 — 44,336 LCFS credit sales 34,034 — — — 34,034 Separated RIN sales 15,520 — — — 15,520 Co-product sales 12,044 — — — 12,044 Raw material sales 10,954 — — — 10,954 Other bio-based diesel revenue 8,638 — — — 8,638 Other revenues — 19,533 — (19,421) 112 Total revenues from contracts with customers $ 387,742 $ 19,533 $ 44,336 $ (45,101) $ 406,510 Bio-based diesel government incentives 66,447 — — — 66,447 Total revenues $ 454,189 $ 19,533 $ 44,336 $ (45,101) $ 472,957 Contract balances: The following table provides information about receivables and contract liabilities from contracts with customers: March 31, 2021 December 31, 2020 Trade accounts receivable from customers $ 81,029 $ 74,774 Short-term contract liabilities (deferred revenue) $ (603) $ (946) Short-term contract liabilities (accounts payable) $ (699) $ (914) The Company receives payments from customers based upon contractual billing schedules; accounts receivable 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. Significant changes to the contract liabilities during the three months ended March 31, 2021 and 2020 are as follows: January 1, 2021 Cash receipts Less: Impact on March 31, 2021 Deferred revenue $ 946 $ 12,963 $ 13,306 $ 603 Payables to customers related to BTC 914 — 215 699 $ 1,860 $ 12,963 $ 13,521 $ 1,302 January 1, 2020 Cash receipts Less: Impact on March 31, 2020 Deferred revenue $ 631 $ 9,067 $ 9,333 $ 365 Payables to customers related to BTC 255,193 — — 255,193 $ 255,824 $ 9,067 $ 9,333 $ 255,558 New Accounting Standards 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 did not have a material impact on the Company's condensed consolidated financial statements. On January 16, 2020, the FASB issued ASU 2020-01, which clarifies the interaction 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 accounted 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 did not have a material impact on the Company's condensed 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 did not have a material impact on the Company's condensed 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. T he 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 condensed consolidated financial statements. |
