rtk-10k_20161231.htm

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐. 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 ☒.

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2016, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $55.0 million (based upon the closing price of the common stock on June 30, 2016, as reported by the NASDAQ Stock Market).

The number of shares of the registrant’s common stock outstanding as of February 28, 2017 was 23,200,996.

Certain information included in this report contains, and other reports or materials filed or to be filed by us with the Securities and Exchange Commission, or SEC (as well as information included in oral statements or other written statements made or to be made by us or our management), contain or will contain, “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, Section 27A of the Securities Act of 1933, as amended, and pursuant to the Private Securities Litigation Reform Act of 1995. The forward-looking statements may relate to financial results and plans for future business activities, and are thus prospective. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. They can be identified by the use of terminology such as “may,” “will,” “expect,” “believe,” “intend,” “plan,” “estimate,” “anticipate,” “should” and other comparable terms or the negative of them. You are cautioned that, while forward-looking statements reflect management’s good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties. Factors that could affect our results include the risk factors detailed in Part I—Item 1A “Risk Factors” and from time to time in our periodic reports and registration statements filed with the SEC. You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs, forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

As used in this report, the terms “we,” “our,” “us,” “the Company” and “Rentech” mean Rentech, Inc., a Colorado corporation and its consolidated subsidiaries, unless the context indicates otherwise. References to “RNHI” refer to Rentech Nitrogen Holdings, Inc., a Delaware corporation and one of our indirect wholly owned subsidiaries. References to “RNP” refer to Rentech Nitrogen Partners, L.P., a former majority-owned subsidiary of the Company. References to “the General Partner” refer to Rentech Nitrogen GP, LLC, a Delaware limited liability company and RNP’s general partner. References to “Fulghum” refer to Fulghum Fibres, Inc., a Georgia corporation and one of our indirectly wholly owned subsidiaries. References to “NEWP” refer to New England Wood Pellet, LLC, a Delaware limited liability company and one of our indirect wholly owned subsidiaries.

In this report, the Company has restated its consolidated financial statements for the three and six months ended June 30, 2016, and the three months and nine months ended September 30, 2016. These restatements and the material weakness reported herein are due to an incorrect calculation of the Company’s income tax provisions and affected non-cash deferred taxes and the allocation of tax benefit and tax expense between continuing operations and discontinued operations.

The Company recorded adjustments to deferred tax assets and liabilities related to the merger of RNP and Rentech Nitrogen GP, LLC with affiliates of CVR Partners, L.P., or CVR, (as discussed in Note 7 to our consolidated financial statements included in this report) during the three months ended June 30, 2016. Based upon further review of the accounting for the transaction in connection with the preparation of its financial statements for the year ended December 31, 2016, the Company determined that a book and tax basis difference existed of approximately $60 million related to the investment in CVR immediately following the transaction. The Company has therefore concluded that it should have recorded a non-cash deferred tax liability, which would have resulted in approximately $21.3 million of additional income tax expense in the three and six months ended June 30, 2016 and approximately $19.9 million of additional income tax expense for the nine months ended September 30, 2016 (due to a reduction of approximately $1.4 million in income tax expense for the three months ended September 30, 2016).

The Company has also determined that the allocation of tax benefit and expense between continuing operations and discontinued operations for the affected periods should be amended due to the release of a valuation allowance that was improperly classified. The change in allocation of this item does not impact consolidated net income. The income tax benefit from continuing operations and income tax expense from discontinued operations should be reduced by approximately $100 million and $80 million, respectively, for the three and six months ended June 30, 2016, as well as the nine months ended September 30, 2016 due to the classification error of the valuation allowance release and need to record the deferred tax liability for the CVR units received in the Merger. As a result, income from continuing operations was overstated, income from discontinued operations, net of tax was understated, net income was overstated, except for the three months ended September 30, 2016 when it was understated, and deferred income taxes (liabilities) was understated.

The Company has not amended its Quarterly Reports on Form 10-Q for prior periods affected by the restatement adjustments. Accordingly the financial statements and related financial information contained in such reports should no longer be relied upon. For further information regarding the impact of the restatement to the balance sheets, statements of operations and net income (loss) per common share attributable to Rentech, see Note 24 to our consolidated financial statements included in this report.

We are a pure play wood fibre processing company with three core businesses: contract wood handling and chipping services, the manufacture and sale of wood pellets for the U.S. heating market and the manufacture, aggregation and sale of wood pellets for the utility and industrial power generation market.

Our wood handling and chipping services business includes Fulghum, which operates 31 wood chipping mills in the United States and South America. Fulghum provides wood yard operations services and wood fibre processing services, and sells wood chips to the pulp, paper and packaging industry. Fulghum’s South American subsidiaries own and manage forestland and sell bark to industrial consumers.

Our U.S. wood pellet business consists of NEWP, which is one of the largest producers of wood pellets for the United States residential and commercial heating markets. NEWP operates four wood pellet facilities in the Northeast. The facilities are located in Jaffrey, New Hampshire; Deposit, New York; Schuyler, New York; and Youngsville, Pennsylvania.

Our Canadian wood pellet business consists of our wood pellet production facilities located in Atikokan, Ontario, or the Atikokan Facility, and in Wawa, Ontario, or the Wawa Facility, the latter of which we idled in 2017. Wood pellets produced at the Atikokan Facility are being used primarily for utility power generation in Canada and wood pellets produced at the Wawa Facility were used primarily for utility power generation in the United Kingdom.

In February 2017, we announced that we have (i) decided to idle the Wawa Facility and (ii) reduced production at the Atikokan Facility, to levels necessary to only fulfill the delivery requirements under the ten-year take-or-pay contract, or the OPG Contract, with Ontario Power Generation, or OPG. These decisions result from many factors, including without limitation, continued difficulty with ramping up production and additional capital required to increase production to levels near the Wawa Facility’s design capacity, projected operating costs that exceed our original expectations and uncertainty around future profitability. Due to the challenges, we recorded net asset impairment charges for the Wawa Facility and the Atikokan Facility totaling $116.2 million for the year ended December 31, 2016.

In addition, we initiated a formal process to explore a variety of strategic alternatives for the Wawa Facility and the Company as a whole. In conjunction with this process and to address potential future liquidity needs, we are considering strategic alternatives that may include, but are not limited to, a sale of us, a merger or other business combination, a sale of all or a material portion of our assets or a recapitalization.

We have retained Wells Fargo Securities, LLC to assist in the strategic alternatives review process. There is no assurance that the strategic review process will result in a transaction. If an appropriate strategic alternative is not achieved on a timely basis, and if we were otherwise unable to secure additional sources of funds to address potential future liquidity needs, there could be a material adverse effect on our business, results of operations, and financial condition.

Over the past 18 months, we have been reorganizing our businesses to lower our cost structure. We now expect to achieve total consolidated annual selling, general and administrative, or SG&A, expense savings of approximately $20 million, up from the $12 to $15 million we previously expected. We have completed restructuring actions that have resulted in approximately $13.6 million of consolidated SG&A expense savings in 2016, excluding approximately $2.6 million of reorganization and transaction costs. We expect to achieve the additional savings of approximately $6.5 million in 2017, excluding reorganization and transaction costs.

These savings were achieved primarily by reducing corporate staff by approximately 30%, reducing compensation, and moving corporate headquarters and several back office positions from Los Angeles, California to lower-cost locations on the East Coast. We are continuing to identify further actions to reduce SG&A expenses in response to our financial position or changes to our corporate structure resulting from the strategic alternatives review process.

December 31, 2015 to $27.8 million for the year ended December 31, 2016. NEWP’s gross profit decreased from $12.1 million for the year ended December 31, 2015 to $4.5 million for the year ended December 31, 2016. In response to market conditions, NEWP began scaling back production in February 2016. NEWP produced at approximately 65% of capacity during 2016 and is currently monitoring market demand and inventory levels and will adjust production accordingly.

Fulghum’s revenue was $97.4 million for the year ended December 31, 2016, compared to $94.2 million for the year ended December 31, 2015. Fulghum’s gross profit was $14.2 million for the year ended December 31, 2016, compared to $18.3 million for the year ended December 31, 2015. In February 2017, Fulghum was notified by a customer of its intent to exercise its purchase option on two of Fulghum’s mills. Fulghum expects the loss of these mills to negatively impact operating income and cash flow in the second half of 2017 and going forward. In 2016, these mills contributed approximately $3 million of operating income. Fulghum incurred capital expenditures of approximately $0.5 million for these two mills in 2016. If the sale of the mills is consummated, we expect to receive a one-time cash payment of approximately $5.5 million. While this was a subsequent event, the delays and extended negotiations during the three months ended December 31, 2016 and leading up to the customer’s final decision were considered a triggering event to perform a two-step goodwill impairment test for Fulghum U.S. as of December 31, 2016. The analysis of goodwill indicated an impairment to goodwill of $11.7 million, which was recorded for the year ended December 31, 2016.

On March 14, 2016, RNP, a majority owned subsidiary of which we previously owned approximately 60%, completed the sale of Rentech Nitrogen Pasadena Holdings, LLC, or Pasadena Holdings, the owner of a fertilizer facility in Pasadena, Texas, or the Pasadena Facility, to Interoceanic Corporation, or IOC. The transaction, referred to herein as the Pasadena Sale, included an initial cash payment of $5.0 million and a post-closing cash working capital adjustment of $5.4 million. The total of these payments along with insurance refunds put the total distribution to RNP unitholders at approximately $10.7 million of which we received $6.0 million. The Pasadena Sale also includes a milestone payment which would be paid to former RNP unitholders equal to 50% of the facility’s EBITDA, as defined in the purchase agreement, in excess of $8.0 million cumulatively earned over two years.

On April 1, 2016, RNP completed the transactions contemplated by the Agreement and Plan of Merger, dated as of August 9, 2015, or the Merger Agreement, under which RNP and the General Partner merged with affiliates of CVR, and RNP ceased to be a publicly traded company and became a wholly-owned subsidiary of CVR, or the Merger. Pursuant to the Merger Agreement, each outstanding unit of RNP was exchanged for 1.04 common units of CVR, or CVR Common Units, and $2.57 of cash. We received merger consideration of $59.8 million of cash and 24.2 million CVR Common Units. We used 17.0 million CVR Common Units received in the Merger and $10.0 million of cash to: (i) repurchase and retire all $100 million of our Series E Convertible Preferred Stock, par value $10.00 per share, or the Preferred Stock, held by certain funds managed by or affiliated with GSO Capital Partners LP, or the GSO Funds, and (ii) repay approximately $41.7 million of debt under our credit agreement with the GSO Funds (such agreement as amended and amended and restated from time to time, the “GSO Credit Agreement”).

Our wood fibre processing business primarily consists of wood chipping services to the pulp, paper and packaging industry and wood pellet production for the utility and industrial power generation market and the residential and commercial heating markets.

Fulghum provides wood yard operations services and high-quality wood chipping services, and produces and sells wood chips to the pulp, paper and packaging industry. In South America, Fulghum manufactures and sells wood chips, processes and sells biomass fuel to industrial heat and utility customers, owns and manages forestland, and buys and trades wood chips. Fulghum provides services and sells to customers in the United States, South America and Asia. Fulghum and its subsidiaries operate 31 wood chipping mills, of which 26 are located in the United States, four are located in Chile and one is located in Uruguay. Fulghum owns 86% of the equity interest in the subsidiaries located in Chile and Uruguay.

During the year ended December 31, 2016, our mills in the United States processed 11.4 million green metric tons, or GMT, of logs into wood chips and residual fuels; our mills in South America processed 2.8 million GMT of logs. During the year ended December 31, 2015, our mills in the United States processed 12.5 million GMT of logs into wood chips and residual fuels; our mills in South America processed 2.6 million GMT of logs.

In February 2017, Fulghum received notice from one of its customers that it intends to exercise its contractual right, under their processing agreement, to purchase two of Fulghum’s mills. We expect the loss of the Fulghum contract to negatively impact Fulghum’s operating income in the second half of 2017 and going forward. If the purchase option is indeed exercised, Fulghum

expects to receive a one-time cash payment of approximately $5.5 million in connection with the purchase. Fulghum continues to focus on efficiently operating its remaining 24 mills in the U.S. and 5 mills in South America and explore opportunities to generate additional cash flow.

From time to time, we evaluate and pursue opportunities to increase our profitability by expanding our chip mills’ production capacities and product offerings. During the year ended December 31, 2016, we had no such expansion projects.

Service revenues represent revenues earned under agreements for wood fibre processing services and wood yard operations. Product revenues represent revenues earned by our Chilean operations from the sale of wood chips and bark. Our operations include: managing industrial scale wood yards; debarking and chipping of logs; and screening and storing of chips and bark.

The majority of Fulghum’s customers are large pulp, paper and packaging manufacturers who use wood chips from our mills to manufacture products such as: boxboard, containerboard, fluff, kraftliner, dissolving pulp, paper and medium density fiberboard for building products.

Fulghum generates revenue primarily from fees under exclusive processing agreements. Each of our United States mills typically operates under an exclusive processing agreement with a single customer. At these mills, Fulghum is paid a processing fee based on tons processed, with minimum volume base rates and a reduced fee rate for higher volumes. In most cases, if the customer fails to deliver the minimum contracted log volume for processing, it must pay a shortage fee to Fulghum, which is typically lower than the base rate. Under our processing agreements, the customer generally has the opportunity to make up for any shortfall below minimum volume requirements with additional volumes in subsequent months before it is required to pay a shortfall fee. Shortfall fees are typically settled quarterly. Fulghum’s Chilean operations include chipping services that earn fees based on a per ton processing fee structure similar to that described above. Fulghum’s Chilean operations also involve the sale of wood chips for export and the local sale of bark for industrial heat and utility applications. In Chile, we purchase raw material and sell products through two subsidiaries. Forestal Los Andes S.A., or FLA, purchases logs from the market to fulfill an order from a customer that is typically for a specific vessel of wood chips. Forestal Pacifico S.A., or FP, provides de-barking services for FLA and several of our customers. FP processes bark into a biomass fuel that is sold to local power utilities and industrial customers for heat and electricity applications. We also operate one mill in Uruguay under a chipping services-for-fee contract.

Most of our mills operate under multi-year contracts with the majority of total processing volume contracted through 2018 with some continuing beyond 2018 until 2028. Six mills in the United States representing over 40% of our United States volume and three mills in Chile representing over 70% of our South American volume are under contract through 2018 and beyond. Seven of our mills located in the United States and two of our mills located in South America have contracts that are currently renegotiated annually. One of our mills located in the United States provides wood chips to its customer on an as-needed basis on the spot market. We own 19 of the 31 mills we operate in the United States and South America. For certain of the mills that we own, the customer has an option to purchase the mill for a pre-determined price. In each scenario, the purchase price for the mill exceeds any debt remaining on the facility. For each of the mills that we do not own but operate under an agreement with the customer, the customer can terminate the agreement with prior written notice (in most cases, the processing agreements require 90 days’ prior written notice).

During 2016, approximately 71% of the log volume we processed in the United States was for four customers at 19 mills, as listed below.

Our wood chipping mills typically operate throughout the year; however, there may be quarter-to-quarter fluctuations in processing revenue at individual mills. These fluctuations are usually due to variations in customer-controlled deliveries of logs,

production levels at customers’ mills, maintenance requirements, and/or weather-related events. Our customer contracts typically stipulate minimum volume requirements and shortfall fees. Such fees partially mitigate volatility in revenues of our United States mills. When seasonal precipitation is expected to prevent deliveries or make deliveries of logs to the mills difficult, our customers frequently coordinate delivery schedules to build log inventories in advance of such conditions. Building sufficient inventory of logs at our mills enables Fulghum to process logs with few interruptions during the rainy season. Based on our customers’ expected relatively continuous wood chip requirements, the terms of our processing agreements and our customers’ focus on maintaining proper log inventories, we do not expect to experience material seasonality in Fulghum’s United States or Uruguayan operations. However, one of our mills in Chile typically ceases wood chip processing operations for one to two months during its winter season due to the customer’s inability to harvest and deliver logs to the facility. Since a significant portion of the revenue in Fulghum’s South American operations is derived from the sale of wood chips, primarily for export from Chile, an interruption in the supply of logs could adversely affect revenue and profitability. The export portion of Fulghum’s revenues, and the associated profits, may be more variable than the revenue and profits derived from processing fees pursuant to long-term contracts.

The customers of our 26 mills located in the United States and the customers of most of our five mills in Chile and Uruguay are responsible for the procurement and delivery of wood to our mills. As a result, these mills are not directly exposed to logistics or delivery risks or to market risk associated with potential changes in wood supply or pricing, although they may be indirectly impacted if a customer is adversely impacted by these risks. For service revenue generated under our processing contracts where the customer is responsible for providing the logs, title to the wood remains with the customer throughout our receipt and processing of the wood fibre. In Chile, in addition to providing wood processing services, we sell wood chips primarily for export to Asian markets. We primarily purchase logs only to fulfill obligations under contracts with established prices for the delivery of wood chips, thereby minimizing our exposure to market fluctuations in prices for wood chips and logs. We also own approximately 1,400 acres of forestland in South America that can be harvested in cases of high log prices, which can help reduce market exposure in the short-term. However, if prices of wood remain at high levels for a prolonged period of time, revenue and profitability of our Chilean operations, which sell wood chips, could be adversely affected.

In the United States, Fulghum’s customers are responsible for delivering logs to the respective Fulghum chipping facility and arranging transportation of the processed wood chips from the mill to the final destination, except at those mills which are within or adjacent to customers’ premises, where wood chips are delivered by conveyor. Our Uruguayan and certain of our Chilean operations are similar to the United States business model in that the customer is responsible for delivering logs to the wood chipping facility and either takes receipt of the wood chips from the mill (domestic customers) or requires Fulghum to load the wood chips into a ship for export at the customer’s expense (foreign customers).

While a significant portion of the wood chipping mills in the United States are integrated facilities (i.e. owned and operated by pulp and paper companies that produce wood chips for internal consumption), the number of contract wood chipping mills in the United States has grown over the last decade. We estimate that Fulghum has a significant market share of the contract wood chipping market in the United States. We continue to explore opportunities to expand our business. We believe that most of the other contract wood chip processors in the United States that compete with Fulghum are smaller and less experienced and recognized than Fulghum. We believe that Fulghum’s 27 years of operating experience in the wood handling and chip processing industry, level of expertise and efficiency, scale, brand recognition and quality of services have enabled us, and will continue to enable us, to favorably distinguish ourselves from these competitors.

Our board of directors, or Board, decided to idle the Wawa Facility in February 2017 due to equipment and operational issues that would require additional unbudgeted capital investment. Its decision is also the consequence of the continued uncertainty around the profitability on pellets produced at the facility and sold under the ten-year take-or-pay contract, or the Drax Contract, with Drax Power Limited, or Drax, making any additional investment in the facility uneconomic for us. Idling the facility will allow us to conserve cash to preserve our liquidity as we formally explore strategic alternatives for the Wawa Facility, including ongoing discussions with third parties.

Our Wawa Facility had experienced equipment and operating challenges subsequent to the replacement of problematic conveyors that was completed last fall. These issues have persisted. Our Board’s decision was based in part on our review of the work by a third-party engineering firm to identify additional necessary capital improvements. While we believe that the issues we have been

experiencing at the facility can be resolved with additional capital investments, we have concluded that it is not economical for Rentech to pursue those investments or to continue to operate the facility at this time given the Drax Contract.

As a result of this decision, the Wawa Facility operations team completed a safe and orderly idling of the facility. While the facility is idled, a small workforce remains in place to maintain the facility so that it can resume operations with minimal cost and time if there is interest from a third party to invest in or purchase the facility. The remainder of the workforce has been placed on a temporary layoff while options for the facility are explored.

During the year ended December 31, 2016, we shipped four vessels to Drax containing approximately 134,000 metric tons of wood pellets. During 2017, we shipped one vessel to Drax containing approximately 45,800 metric tons of wood pellets. At the time the Wawa Facility was idled, there were approximately 12,000 metric tons of wood pellets in storage. We are currently looking at various options for this inventory.

Our Atikokan Facility was designed to produce approximately 110,000 metric tons of wood pellets annually at full capacity, and has successfully operated at rates of approximately 90% of production capacity. We plan to reduce production at the Atikokan Facility to a rate of approximately 45,000 metric tons of wood pellets on an annualized basis to fulfill the delivery requirements under the OPG Contract. The Atikokan Facility shipped approximately 50,000 metric tons of wood pellets to OPG, during the year ended December 31, 2016. At this time, we no longer expect to produce additional pellets to send to the Port of Quebec to fulfill the Drax Contract. We continue to explore additional opportunities to increase sales volumes at the Atikokan Facility that would enable the facility to increase both production and profitability. We are currently holding back approximately $3.5 million of capital expenditures budgeted for conveyance modifications at the Atikokan Facility. These expenditures along with any additional investments deemed necessary to help the facility reach full capacity will continue to be considered and evaluated for economic justification.

Our industrial wood pellets are used in larger scale power generation facilities. Our wood pellets are subject to specific product quality standards, which include energy density, ash content, durability index, fines content, chemical content and grindability as both electric utilities and government regulators have established standards for wood pellets used in renewable energy. Proof of biomass sustainability and independent verification of feedstock supply are also requirements to sell wood pellets to European utilities.

In 2013, our subsidiary that owns the Wawa Facility (the “Wawa Company”) entered into the Drax Contract, which originally called for annual wood pellet deliveries of 400,000 metric tons from the Wawa Facility beginning in 2016. Due to the issues we experienced in ramp-up and commissioning of the facility, the Wawa Company amended the Drax Contract to adjust the required delivery quantities to reflect expected delays in production at the Wawa Facility. The amendments resulted in contract adjustments for reduced volumes in 2014 through 2017, including penalty payments from the Wawa Company to Drax for delivery shortfalls in 2014 and 2015.

The Wawa Company delivered approximately 134,000 metric tons of pellets to Drax in 2016. The Wawa Facility did not incur penalties in 2016 for the shortfall in delivered pellets from the originally contracted volumes because the spot market prices for wood pellets were less than the contracted price with Drax. The Wawa Facility has not made any additional shipments to Drax since January 2017, and its remaining inventory of approximately 12,000 metric tons of pellets is not sufficient to fill a vessel to ship to Drax in the near term.

Prior to our decision to idle the facility, the Wawa Company agreed to deliver approximately 336,000 metric tons to Drax in 2017. In January 2017 we shipped 48,000 metric tons of pellets to Drax and in March 2017, Drax and the Wawa Company agreed to cancel the next two shipments of 2017 without any penalties, leaving the Wawa Company with an obligation to deliver approximately 193,000 metric tons to Drax later in the year. Further amendments to the delivery schedule under the Drax Contract may occur based on the Wawa Company’s determination to idle the facility. At this time we cannot make a determination if any penalties will be associated with future changes to the contract; under the Drax Contract, any potential penalties would depend upon whether Drax incurs additional fees and expenses in connection with finding replacement pellets. Such penalties could include, without limit, an inability of Drax to fulfill its replacement pellet needs at an equal or lesser price than the Drax Contract price. Rentech, Inc. has guaranteed the payment obligations of the Wawa Company under the terms of the Drax Contract up to a maximum amount of CAD$20 million, including potential penalty payments.

Our subsidiary that owns the Atikokan Facility (the “Atikokan Company”) entered into the OPG Contract in June 2013 under which it is required to deliver 45,000 metric tons of wood pellets annually. OPG has the option to increase required delivery of wood

pellets from the Atikokan Facility up to 90,000 metric tons annually. During 2016, we delivered an additional 5,000 metric tons at OPG’s request for a total of 50,000 metric tons of wood pellets.

We do not expect significant seasonality in our revenue from our Atikokan Facility. We have entered into a long-term off-take contract with OPG, which is a power utility company that operates throughout the year subject to maintenance shutdowns. We have been producing wood pellets from this facility year-round to meet the contractual requirements. Ground conditions during the wet season referred to as “spring break-up” or “snow melt”, may prevent or curtail the harvesting of wood limiting the supply of fibre for wood pellet production. We expect that our wood pellet mills will build sufficient wood inventory on site through the autumn and winter months to mitigate this potential interruption of wood supply. This inventory build-up may increase our working capital requirements.

We intend to utilize Crown Fibre as the primary feedstock at our industrial wood pellet facilities. We believe that using Crown Fibre is desirable due to Ontario’s long-term forest management regime, which supports the availability and supply of wood fibre, and its industry-leading sustainability practices. In addition, we believe that the mixed hardwood trees in Northern Ontario, which have a long maturity period before they can be harvested, have a natural chemical composition that allows for the production of high quality wood pellets for thermal applications. We also use sawmill wood residuals and other sources of biomass, from time to time, as part of the feedstock for the Atikokan Facility.

We have a contract with Canadian National Railway Company, or the Canadian National Contract, for all rail transportation of wood pellets from the Atikokan Facility to the Port of Quebec. The Atikokan Facility is located 1,300 track miles from the Port of Quebec. The contract requires we transport a minimum of 3,600 rail carloads each year. If these minimums are not met, the Wawa Company could be subject to penalties in the amount of CAD$1,000 per rail car. Under the Canadian National Contract, Rentech, Inc. has provided a parent guarantee which is capped at CAD$1.5 million. During 2015 and 2016 we incurred and either paid or accrued for penalties of $3.3 million and $1.0 million, respectively.

The Wawa Company has entered into a contract with Quebec Stevedoring Company Limited, or QSL, for our exclusive use of railcar unloading services, pellet storage domes and ship loading services at the Port of Quebec. The contract has a capital lease section which stipulates a fixed monthly payment to cover QSL for a portion of their cost to build the facility and a service section which includes rates for services and a pass-through of some cost actually incurred at the port. Under the contract, Rentech, Inc. has provided a parent guarantee for the monthly capital lease payments under the agreement. The remaining amount due under the capital lease is approximately $13.5 million at December 31, 2016.

In connection with our acquisition of Fulghum, or the Fulghum Acquisition, we entered into a joint venture with Graanul Invest AS, or Graanul, a European producer of wood pellets, for the potential development and construction of, and investment in, wood pellet plants in the United States and Canada. We and Graanul each own 50% equity interests in the joint venture, or the Rentech/Graanul JV, which is accounted for under the equity method. The Rentech/Graanul JV owns neither our Atikokan Facility nor our Wawa Facility. The joint venture has the right to develop certain wood pellet-related projects and has certain rights as exercised by either member to participate in future wood pellet projects or acquisitions in North America sourced by the other member. The joint venture currently does not own any tangible assets and its impact on our financial statements is immaterial.

NEWP operates four wood pellet processing facilities with a combined annual production capacity of approximately 300,000 short tons. The facilities are located in Jaffrey, New Hampshire; Deposit, New York; Schuyler, New York; and Youngsville, Pennsylvania.

NEWP’s wood pellets, which are designed to have low moisture and ash content, are used in commercial and residential heating applications.

NEWP’s facilities and customers are located in the Northeastern United States. NEWP sells its wood pellets to big-box retailers and specialty retailers, including lawn and garden centers, heating supply stores, hardware stores, markets and convenience stores. It also sells pellets in bulk to large institutions, including schools, universities and governmental agencies to heat buildings. In the aggregate, NEWP’s top two big-box retailers, Lowe’s Home Improvement and Tractor Supply Company, represented approximately 25% of NEWP’s total sales for the year ended December 31, 2016. As is typical in the retail wood pellet industry, NEWP’s sales to its customers are primarily made on a purchase order basis, and NEWP generally does not have long-term orders or commitments.

Since NEWP’s wood pellets are used for heating, its sales are seasonal. We typically ship the highest volume of wood pellets from our NEWP facilities during the third and fourth quarters of each year. During fiscal years 2015 and 2016, approximately 56% and 75%, respectively, of NEWP’s total annual volumes were shipped in the second half of the year. As a result of the seasonality of shipments and sales, we expect to experience significant fluctuations in NEWP’s revenues, income and net working capital levels from quarter to quarter. Weather conditions can significantly impact quarterly results by affecting the timing and amount of product demand and deliveries. To accommodate NEWP’s seasonal sales, we build up NEWP’s finished goods inventory from March through August of each year. This inventory build-up typically increases our working capital requirements.

The abnormally warm temperatures during the winter a year ago have disrupted seasonal buying patterns of the last couple of years resulting in unusually low sales volumes during the year ended December 31, 2016. Customers who have historically bought wood pellets earlier in the spring, summer and fall in preparation for the upcoming winter season are now waiting to make their purchases on an as-needed basis. As a result, we expect incremental seasonality in our revenue. While the consumer buying patterns may continue in 2017, we believe that these patterns are temporary, and we expect consumer buying patterns and sales to return to historical trends and levels, respectively. In response to market conditions, NEWP began scaling back production in February 2016. NEWP produced at approximately 65% of capacity during 2016 and is currently monitoring market demand and inventory levels and will adjust production accordingly.

Wood feedstock (wood chips and sawdust) represents the largest component of NEWP’s wood pellet product cost. Competition for wood feedstock supply from pulp, paper and packaging manufacturing, and commercial and institutional wood boiler heating systems may affect our cost of wood feedstock. Our Jaffrey, New Hampshire production facility is affected the most by this competition, followed by our Schuyler, New York production facility, with our Deposit, New York production facility and our wood pellet processing facility located in Youngsville, Pennsylvania, or the Allegheny Facility, least affected. We have approximately 184 wood suppliers, of which approximately 74 provide 80% of our wood feedstock needs. We have developed relationships with our suppliers such that our wood costs have remained relatively flat with minimal variability over the last several years.

NEWP’s customers take delivery of the wood pellets at the applicable facility.

Our business is subject to extensive and frequently changing federal, provincial, state and local, environmental, health and safety regulations governing a wide range of matters, including the emission of air pollutants, the release of hazardous substances into the environment, occupational health and safety, handling, use and transportation of our products, wood fibre feedstock, and other substances that are part of our operations. These laws, their underlying regulatory requirements and the enforcement thereof may impact us by imposing:

These laws also affect our operating activities as well as the level of our operating costs and capital expenditures. Failure to comply with environmental laws, including the permits issued to us thereunder, generally could result in substantial fines, penalties or other sanctions, court orders to install pollution-control equipment, permit revocations and facility shutdowns.

Our operations require numerous permits and authorizations. A decision by a governmental regulator to revoke or substantially modify an existing permit or authorization could have a material adverse effect on our ability to continue operations at the impacted facility.

In addition, environmental, health and safety laws may impose joint and several liability, without regard to fault, for cleanup of a contaminated site on current owners and operators of the site, former owners and operators of the site at the time of the disposal of the hazardous substances, any person who arranges for the transportation, disposal or treatment of the hazardous substances, and the transporters who select the disposal and treatment facilities, regardless of the care exercised by such persons. Private parties, including the owners of properties adjacent to other facilities where our wastes are taken for disposal, also may have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property or natural resource damages. Under environmental laws such as the federal Comprehensive Environmental Response, Compensation, and Liability Act and state analogs, former owners and operators of facilities can be held responsible for investigating and remediating environmental contamination.

The laws and regulations to which we are subject are complex, change frequently and have tended to become more stringent over time. The ultimate impact on our business of complying with existing laws and regulations is not always clearly known or determinable due in part to the fact that our operations may change over time and certain implementing regulations for laws, such as the CAA, have not yet been finalized, are under governmental or judicial review or are being revised. These laws and regulations could result in increased capital, operating and compliance costs.

Our facilities have experienced some level of regulatory scrutiny in the past, and we may be subject to further regulatory inspections, future requests for investigation or assertions of liability relating to environmental issues or accidental spills or releases. In the future, we could incur material liabilities or costs related to environmental matters, and these environmental liabilities or costs (including fines or other sanctions) could have a material adverse effect on our results of operations and financial condition.

Certain environmental regulations and risks associated with our business are outlined below. We strive to maintain compliance with these regulations; however, they are complex and varied, and our operations are heavily regulated, and we may, from time to time, fall out of compliance, which may have a material adverse impact on our capital expenditures, results of operations or financial position.

The Federal Clean Air Act, or the CAA. The CAA and its implementing regulations, as well as the corresponding state laws and regulations that regulate emissions of pollutants into the air, impose permitting and emission control requirements relating to specific air pollutants, as well as the requirement to maintain a risk management program to help prevent accidental releases of certain substances. Standards promulgated pursuant to the CAA may require that we install controls at or make other changes to our facilities. If new controls or changes to operations are needed, the costs could be significant. In addition, failure to comply with the requirements of the CAA and its implementing regulations could result in substantial fines, civil or criminal penalties, or other sanctions.

The regulation of air emissions under the CAA requires that we obtain various construction and operating permits, including in some cases, Title V air permits and incur capital expenditures for the installation of certain air pollution control devices at our facilities. Measures have been taken to comply with various regulations specific to our operations, such as National Emission Standard for Hazardous Air Pollutants, New Source Performance Standards and New Source Review. We have incurred, and expect to continue to incur, substantial administrative and capital expenditures to maintain compliance with these and other air emission regulations that have been promulgated or may be promulgated or revised in the future.

Release Reporting. The release of hazardous substances or extremely hazardous substances into the environment is subject to release reporting requirements under federal and state environmental laws, including the Emergency Planning and Community Right-to-Know Act. We occasionally experience releases of hazardous or extremely hazardous substances from our operations or properties. If we fail to properly report a release, or if the release violates the law or our permits, it could cause us to become the subject of a governmental enforcement action or third-party claims. Government enforcement or third-party claims relating to releases of hazardous or extremely hazardous substances could result in significant expenditures and liability.

Clean Water Act. The Clean Water Act and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The Clean Water Act and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including wetlands, unless authorized by an appropriately issued permit. In addition, the Clean Water Act and

analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Spill prevention, control and countermeasure requirements of federal laws require appropriate containment berms and similar structures to help prevent the contamination of navigable waters by a petroleum hydrocarbon tank spill, rupture or leak. Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the Clean Water Act and analogous state laws and regulations.

Greenhouse Gas Emissions. Legislative and regulatory measures to address greenhouse gas, or GHG, emissions (including CO2, methane and N₂O) are in various phases of discussion or implementation. At the federal legislative level, Congress has previously considered legislation requiring a mandatory reduction of GHG emissions. Although Congressional passage of such legislation does not appear imminent at this time, it could be adopted at a future date. It is also possible that Congress may pass alternative climate change bills that do not mandate a nationwide cap-and-trade program and instead focus on promoting renewable energy and energy efficiency or impose a carbon fee.

Management of Hazardous Substances and Contamination. Under CERCLA and related state laws, certain persons may be liable at sites where or from release or threatened release of hazardous substances has occurred or is threatened. These persons can include the current owner or operator of property where a release or threatened release occurred, any persons who owned or operated the property when the release occurred, and any persons who disposed of, or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under CERCLA is strict, retroactive and, under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances. RCRA regulates the generation, treatment, storage, handling, transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste. Under RCRA, persons may be liable at sites where the past or present storage, handling, treatment, transportation, or disposal of any solid or hazardous waste may present an imminent and substantial endangerment to health or the environment. These persons can include the current owner or operator of property where disposal occurred, any persons who owned or operated the property when the disposal occurred, and any persons who disposed of, or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under RCRA is strict and, under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances. As is the case with all companies engaged in similar industries, depending on the underlying facts and circumstances we face potential exposure from future claims and lawsuits involving environmental matters, including soil and water contamination, personal injury or property damage allegedly caused by hazardous substances that we manufactured, handled, used, stored, transported, spilled, disposed of or released. We cannot assure you that we will not become involved in future proceedings related to our release of hazardous or extremely hazardous substances or that, if we were held responsible for damages in any existing or future proceedings, such costs would be covered by insurance or would not be material. These damages can relate to our current operating sites, as well as business and operating sites that we have divested, including without limitation the fertilizer plants that our former subsidiaries own in East Dubuque, Illinois and Pasadena, Texas. For a discussion of continuing environmental liabilities, that could have a material adverse effect on our business and cash flow see the risk factors captioned “Our wood fibre processing business is subject to environmental laws and regulations.” and “We may incur costs to investigate and remediate known or suspected contamination at the Pasadena Facility, or to close the phosphogypsum stacks located at the Pasadena Facility in compliance with environmental laws”.

Environmental Insurance. We have a premises pollution liability insurance policy which covers third party bodily injury and property damages claims, remediation costs and associated legal defense expenses for pollution conditions at or migrating from our facilities and the transportation risks associated with moving waste from our facilities to offsite locations for unloading or depositing waste. The policy also covers business interruptions and non-owned disposal sites. Our policy is subject to a limit and self-insured retention and contains other terms, exclusions, conditions and limitations that could apply to a particular pollution condition claim, and we cannot guarantee that a claim will be adequately insured for all potential damages.

We are subject to a number of federal, provincial and state laws and regulations in the United States and Canada related to safety, including the federal Occupational Safety and Health Act, or OSHA, the Occupational Health and Safety Regulations, the Ontario Occupational Health and Safety Act, and comparable Canadian, provincial and state statutes and regulations, the purpose of which are to protect the health and safety of workers. Various OSHA standards may apply to our operations, including standards concerning notices of hazards, safety in excavation and demolition work, the handling of asbestos and asbestos-containing materials, installation and operations of electrical equipment in a wood dust environment, and worker training and emergency response programs. We also are subject to OSHA Process Safety Management regulations, which are designed to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. These regulations apply to any process that involves a chemical at or above the specified thresholds or any process that involves flammable liquid or gas, pressurized tanks, caverns and wells in excess of 10,000 pounds at various locations. We have an internal safety, health and security program designed to monitor and enforce compliance with worker safety requirements. We also are subject to EPA Chemical Accident Prevention Provisions, known as the Risk Management Plan requirements, which are designed to prevent the accidental release of toxic, reactive,

flammable or explosive materials, and the United States Coast Guard’s Maritime Security Standards for Facilities, which are designed to regulate the security of high-risk maritime facilities.

Financial information about our business segments is provided in Note 22 of our Consolidated Financial Statements in “Part II — Item 8. Financial Statements and Supplementary Data.”

As of December 31, 2016, we had 606 non-unionized and salaried employees, and 19 unionized employees. Of these employees, 421 were employed by Fulghum, 87 were employed in Canada by Rentech subsidiaries, and 86 were employed by NEWP. We believe that we have good relations with our employees. Fulghum has a collective bargaining agreement in place covering unionized employees at one of its mills. The collective bargaining agreement covering unionized employees at one of our Fulghum mills expires on October 31, 2018. We have not experienced labor disruptions in the recent past.

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 practical after they are filed or furnished to the SEC, at the “Investor Relations” portion of our website, www.rentechinc.com. Materials we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding us that we file electronically with the SEC. The information contained on our website does not constitute part of this report.

Set forth below are certain risk factors related to our business. Actual results could differ materially from those anticipated as a result of these and various other factors, including those set forth in our other periodic and current reports filed with the SEC, from time to time. If any risks or uncertainties develop into an actual event, our business, financial condition, cash flow or results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related to Our Consolidated Business, Liquidity, Financial Condition, Results of Operations and Cash Flows

We may need additional liquidity in the event that our current and expected sources of funding are insufficient to fund working capital and to continue our operations. If we require additional capital and are unable to obtain it, there would be a material adverse effect on our business, financial condition and results of operations.

We have a history of operating losses and an accumulated deficit of $362.7 million as of December 31, 2016. We believe we have sufficient liquidity from cash on hand and expected working capital to fund operations and corporate activities through calendar year 2017, but we may have costs associated with idling the Wawa Facility and other events could arise that could increase our liquidity needs in 2017. We may also need additional liquidity to fund corporate activities through the first quarter of 2018. As a result of the above, there exists substantial doubt about our ability to continue as a going concern for one year from the date of the issuance of our financial statements for the fiscal year ended December 31, 2016. Management’s plans to address these concerns are discussed in Note 1 to our consolidated financial statements. The Report of the Independent Registered Public Accounting Firm for these consolidated financial statements for the fiscal year ended December 31, 2016 includes an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern.

Vendors and other key contract counterparties of the Company and its subsidiaries may be reluctant to enter into contracts with us if they believe we may not be able to satisfy our obligations. Our inability to enter into such contracts could adversely affect our business, liquidity, financial condition, results of operations and cash flows.

We have implemented plans to address our liquidity needs through a combination of cost reductions and pursuing strategic alternatives. However, there is no assurance that the strategic review process will result in a transaction, that we will achieve the cost savings we expect or that we will not require an additional source of funds. If we are required to obtain additional funds, there is no assurance we will be able to do so. Because our stock price has recently significantly declined, it may not be possible to obtain equity financing on acceptable terms or at all. The agreements governing our indebtedness limit our ability to obtain debt financing. The GSO Credit Agreement generally does not allow us to obtain debt financing without the consent of the lenders. Further, to the extent

we are able to incur additional indebtedness with the consent of the lenders, it may not be possible to obtain debt financing on acceptable terms or at all. If we require additional capital and are unable to obtain it, there would be a material adverse effect on our business, financial condition and results of operations.

We have never operated at a profit. If we do not become profitable on an ongoing basis, we may be unable to continue our operations.

We have a history of operating losses and, excluding the gain on sale of RNP, have never operated at a profit. From our inception on December 18, 1981 through December 31, 2016, we have an accumulated deficit of $362.7 million. If we do not become profitable on an ongoing basis, we may be unable to continue our operations. Ultimately, our ability to remain in business will depend upon earning a profit from our wood fibre processing business. Failure to do so would have a material adverse effect on our financial position, results of operations, cash flows and prospects.

If our cash flow and capital resources are insufficient to fund our debt service and other obligations, we may be forced to reduce or delay capital expenditures, acquisitions, investments or other business activities, reduce or eliminate future borrowings, sell assets, seek additional capital or restructure or refinance our indebtedness and other obligations. These alternative measures may not be successful and may not permit us to meet our scheduled debt service and other obligations. Failure to satisfy our indebtedness and other obligations on time would give rise to remedies against us by our creditors.

We are subject to covenants contained in the agreements governing our indebtedness, which impose restrictions on us.

We are subject to covenants contained in the agreements governing our indebtedness. These covenants restrict our ability to, among other things, incur, assume or permit to exist additional indebtedness, guarantees and other contingent obligations, incur liens, make negative pledges, pay dividends or make other distributions, make payments to our subsidiaries, make certain loans and investments, consolidate, merge or sell all or substantially all of our assets, enter into sale-leaseback transactions and enter into transactions with affiliates. Any failure to comply with these covenants could result in a default under the agreements governing our indebtedness.

We expect that NEWP will need to renew its $6 million revolving credit facility in May of 2017. However, there can be no assurance the revolving credit facility will be renewed or refinanced on acceptable terms. If the revolving credit facility is not renewed or refinanced, NEWP may not be able to meet its working capital needs and this likely would have a material adverse effect on our financial position, results of operations, cash flows and prospects.

Under the GSO Credit Agreement we are required to maintain at least $5 million of cash on hand, including cash available for distribution from our subsidiaries. The GSO Credit Agreement also contains a change of control covenant that may be impacted in the event a transaction results from the process we have initiated to explore a variety of strategic alternatives for the Wawa Facility and the Company as a whole. Under NEWP’s revolving credit facility, NEWP must receive the lender’s prior approval before making any cash distributions to Rentech. NEWP must also comply with its financial performance covenants in its debt agreements. These covenants include maintaining: (i) a minimum debt service coverage ratio of at least 1.4 to 1.0 on a trailing four quarter basis, (ii) a senior debt coverage ratio of less than 3.0 to 1.0 on a trailing four quarter basis and (iii) a fixed charge coverage ratio of at least 1.2 to 1.0 calculated at the end of each calendar year. NEWP’s ability to comply with its financial performance covenants depends on many factors, including reduced sales from warmer than normal winters and increased production costs resulting from required production process modifications.

Fulghum is required to comply with the financial performance covenants in its debt agreements. These covenants include maintaining (i) a minimum cash flow coverage ratio of at least 1.1 to 1.0, measured on a consolidated basis for Fulghum and its domestic subsidiaries and collectively for selected projects and (ii) a minimum tangible net worth of no less than $11.28 million plus 50% of the net income of Fulghum from and after December 31, 2010. In the event that Fulghum does not comply with these covenants, the debt agreements do not permit it to make cash distributions to Rentech. Such a failure to comply would also constitute an event of default under the Fulghum debt agreements. Fulghum’s ability to maintain compliance with its financial performance covenants depends on many factors, including customer demand for processing of wood chips.

In the event that either NEWP or Fulghum ceases to comply with their financial performance covenants as a result of the factors described above or other factors, NEWP or Fulghum, as applicable, would need to obtain an amendment or waiver under its respective debt agreements, including its financial covenants, and there can be no assurance that we would obtain such an amendment or waiver on terms acceptable to us, or at all.

In the event that NEWP or Fulghum is not permitted to make cash distributions to Rentech, these restrictions would limit Rentech’s ability to use the cash to fund its corporate activities and operations. Further, an event of default under the NEWP or Fulghum indebtedness could constitute an event of default under the GSO Credit Agreement.

In the event of a default under the agreements governing our indebtedness, unless waived, the lenders would have all remedies available to a lender, including the ability to cause the outstanding amounts of such indebtedness to become due and payable in full, institute foreclosure proceedings against any assets securing the indebtedness, and force us into bankruptcy or liquidation.

We may not be able to achieve the cost savings we expect from our cost-savings and restructuring measures.

If we are not able to successfully execute and realize the expected financial benefits from our restructuring measures, our business could be adversely affected. We have implemented cost-savings and restructuring measures in our wood fibre processing business and corporate activities to focus on operations and execution, while significantly reducing corporate overhead. We expect these measures to result in annual SG&A expense reductions in the range of approximately $20 million, but these measures may not be successful or result in the level of cost savings that we had anticipated. Our ability to realize anticipated cost savings may be affected by a number of factors. Actual charges, costs and adjustments related to these operational changes may vary materially from our estimates, and these operational changes may require cash and non-cash costs or charges in excess of budgeted amounts, which could reduce anticipated cost savings.

After the completion of the Merger, the idling of the Wawa Facility and the reduction in production at the Atikokan Facility, we are a less diversified company dependent on the success of our continuing wood fibre processing business.

Upon the completion of the Merger, we are a less diversified company with a focus only in the wood fibre processing industry. Additionally, a large portion of our wood fibre processing business has been reduced by the idling of the Wawa Facility and a reduction in production at the Atikokan Facility. These actions have further concentrated our business within the wood processing and chipping industry through Fulghum and wood pelletizing for the U.S. home heating market through NEWP. As a result, our success is dependent on successful operation of our continuing wood fibre processing assets, and the risks related to our wood fibre processing business will have a more significant impact on us. If we are unable to successfully execute our strategy for our wood fibre processing business, or successfully mitigate the risks associated with this business, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Any operational disruption at our facilities, as a result of equipment failure, an accident, adverse weather, a natural disaster or another interruption, could result in a reduction of sales volumes and could cause us to incur substantial expenditures. A prolonged disruption could materially affect the cash flow we expect from our facilities, or lead to a default under our debt agreements or other material agreements.

The equipment at our facilities could fail and could be difficult to replace. Our facilities may be subject to significant interruption if they were to experience a major accident or equipment failure, including accidents or equipment failures caused during expansion projects, if they were damaged by severe weather or natural disaster or if there are unforeseen regulatory problems. Significant shutdowns at our facilities could significantly reduce the amount of product available for sale, which could reduce or eliminate profits and cash flow from our operations.

Repairs to our facilities could be expensive, and could be so extensive that our facilities could not economically be placed back into service. It has become increasingly difficult to obtain replacement parts for equipment and the unavailability of replacement parts could impede our ability to make repairs to our facilities when needed. We currently maintain property insurance, including business interruption insurance, but we may not have sufficient coverage, or may be unable in the future to obtain sufficient coverage at reasonable costs. A prolonged disruption at our facilities could materially affect the cash flow we expect from our facilities, or lead to a default under our debt agreements or other material agreements. As a result, operational disruptions at our facilities could materially adversely impact our business, financial condition and results of operations.

We have identified and disclosed material weaknesses in our internal control over financial reporting, one of which has resulted in a restatement of our financial statements. There is also the risk that additional control weaknesses could be discovered.

As we previously reported in 2015, there was a deficiency in effective internal controls over the review of the cash flow forecasts used in our accounting for long-lived asset impairment and recoverability. Specifically, there was a deficiency in effective internal controls related to documenting management’s review of assumptions used in our cash flow forecasts for long-lived asset impairment and recoverability. This control deficiency, if unremediated, could result in a material misstatement to the annual or

interim consolidated financial statements that would not be prevented or detected by the controls. Accordingly, our management has determined that this control deficiency constitutes a material weakness.

Additionally, as we previously reported in 2016, there was a deficiency in effective internal controls over the allocation of U.S. Generally Accepted Accounting Principles (“GAAP”) income tax expense between continuing and discontinued operations. Specifically, we did not perform certain procedures over the allocation of the GAAP tax provision between continuing and discontinued operations in the second quarter of 2016 in accordance with our designed controls. In our Quarterly Report on Form 10-Q for the six months ended June 30, 2016, this control deficiency resulted in a material adjustment prior to finalizing our presentation of GAAP income tax expense between continuing and discontinued operations in our recasted 2015 consolidated financial statements for the three-month and six-month periods ended June 30, 2015.

In preparing our year-end financial statements for 2016, we identified that the control deficiency related to income taxes, as described above, also affected our financial results for the three and six months ended June 30, 2016 and the three and nine months ended September 30, 2016. As a result, we determined that the allocation of tax benefit and expense between continuing operations and discontinued operations for the affected periods should be revised. We determined that the income tax benefit from continuing operations and income tax expense from discontinued operations should be reduced by approximately $100 million and $80 million, respectively, for the three and six months ended June 30, 2016, as well as the nine months ended September 30, 2016. In addition, we concluded that we should have recorded a non-cash deferred tax liability, which would have resulted in approximately $21.3 million of additional income tax expense in the three and six months ended June 30, 2016 and approximately $19.9 million of additional tax expense for the nine months ended September 30, 2016 (due to a reduction of approximately $1.4 million in income tax expense for the three months ended September 30, 2016). The control deficiency resulted in a restatement of our financial statements for the three and six months ended June 30, 2016 and the three and nine months ended September 30, 2016, as set forth in Note 24 of our Consolidated Financial Statements in “Part II — Item 8. Financial Statements and Supplementary Data.” in this report.

For a discussion of our internal control over financial reporting and a description of the identified material weaknesses, see “Part II—Item 9A. Controls and Procedures.”

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Although management has implemented, and is continuing to implement, certain procedures to strengthen our internal controls, material weaknesses in our internal control over financial reporting could adversely impact our ability to provide timely and accurate financial information. If we are unsuccessful in implementing or following our remediation plan, or if we discover additional control weaknesses, we may not be able to accurately report our financial condition, results of operations or cash flows or maintain effective internal control over financial reporting. If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC and NASDAQ Stock Market LLC, including a delisting from NASDAQ, securities litigation and a general loss of investor confidence, any one of which could adversely affect investor confidence, impair the value of our common stock and increase our cost of raising capital.

Obligations associated with being a small public company require significant company resources, management attention, and increased third party costs which may impose a disproportionate financial burden on us and have a material adverse effect on our financial condition and results of operations.

As a reporting company we are required, among other things, to file annual, quarterly and current reports with respect to our business and financial condition and to maintain effective disclosure controls and procedures and internal control over financial reporting. These are significant requirements for a small company with limited management and staff resources. The loss of services of any key executive or employee may exacerbate the challenges in complying with these reporting and other requirements. We may need to implement additional financial and management controls, reporting systems and procedures and increase our outsourcing of operating, tax, accounting, legal or finance services, which would require us to incur significant additional expenses. Because our resources are limited compared to many public companies, these requirements and additional expenses may impose a disproportionate financial burden on us and have a material adverse effect on our financial condition and results of operations.

Our investment in CVR Partners, L.P. (“CVR”) of approximately 7.2 million common units (the “CVR Common Units”) represents a significant portion of our assets. The value of our investment in CVR is highly volatile as the quarterly distributions paid with respect to the CVR Common Units could be as low as zero, and the proceeds from a future sale of such units could be materially less than our carrying value or the fair value for the CVR Common Units described herein. In subsequent periods, our investment in CVR Common Units could be impaired.

CVR is a publically traded master limited partnership that owns and operates two nitrogen fertilizer product manufacturing facilities. The ability of CVR to pay quarterly cash distributions and the market price of its common units varies significantly both quarterly and annually. This is due to both fluctuations in nitrogen fertilizer demand and the seasonality of fertilizer application within the agricultural industry. Nitrogen fertilizer products are commodities, the price of which can be highly volatile. The price of nitrogen fertilizer products depend on a number of factors, including general economic conditions, cyclical trends in end-user markets, supply and demand imbalances, governmental policies and weather conditions, which have a greater relevance because of the seasonal nature of fertilizer application.

Farmers tend to apply nitrogen fertilizer during two short application periods, one in the spring and the other in the fall, but nitrogen fertilizer producers generally produce products throughout the year. As a result, customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons. Variations in the proportion of product sold through prepaid sales contracts and variations in the terms of such contracts can increase the seasonal volatility of CVR’s cash flows and cause changes in the patterns of seasonal volatility from year-to-year.

Demand for nitrogen fertilizer products is also dependent on demand for crop nutrients from the global agricultural industry. The international market for nitrogen fertilizers is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing nitrogen fertilizers, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries and other regulatory policies of foreign governments, as well as the laws and policies of the United States affecting foreign trade and investment. Profitability of CVR is also impacted by operating rates and volatility of operating costs, which in the case of natural gas historically have fluctuated significantly.

Fluctuations in the aforementioned factors historically have had and could in the future have significant effects on prices across all nitrogen fertilizer products and, in turn, on CVR’s financial condition, its ability to pay quarterly distributions and the market price of its common units. Further, if there is a continuing or further decline in the value of the CVR Common Units that we believe is other than temporary, we could determine that it is necessary to impair the value of our investment in CVR.

We have recorded asset impairment charges with respect to our Wawa Facility and Atikokan Facility and goodwill impairment charges with respect to Fulghum, and we could be required to record additional material impairment charges and write-downs in the future.

In February 2017, we announced that we have (i) decided to idle the Wawa Facility and (ii) reduced production at the Atikokan Facility, to levels necessary to only fulfill the delivery requirements under the ten-year take-or-pay contract, or the OPG Contract, with Ontario Power Generation, or OPG. These decisions result from many factors, including without limitation, continued difficulty with ramping up production and additional capital required to increase to production to levels near the facilities design capacity, projected operating costs that exceed our original expectations and uncertainty around future profitability. Due to the challenges, we recorded net asset impairment charges for the Wawa Facility and the Atikokan Facility totaling $116.2 million in our consolidated financial statements for the fiscal year ended December 31, 2016.

In February 2017, Fulghum also was notified by a customer of its intent to exercise its purchase option on two of Fulghum’s mills. Fulghum expects the loss of these mills to negatively impact operating income and cash flow in the second half of 2017 and going forward. While this was a subsequent event, the delays and extended negotiations during the three months ended December 31, 2016 and leading up to the customer’s final decision were considered a triggering event to perform a two-step goodwill impairment test for Fulghum U.S. as of December 31, 2016. The analysis of goodwill indicated an impairment to goodwill of $11.7 million, which was recorded for the year ended December 31, 2016, and the loss of these mills could trigger additional impairments to Fulghum’s assets and goodwill in the first half of 2017.

It is possible that more adverse changes to one or more of our businesses could require us to further reduce our expectations for their value in the future. If this were to occur, we could be required to record additional material impairment charges, including with respect to impairment of long-lived assets, and additional write-downs, which could have a material adverse effect on our results of operations, the trading price of our common stock and our reputation.

We may incur costs to investigate and remediate known or suspected contamination at the Pasadena Facility, or to close the phosphogypsum stacks located at the Pasadena Facility in compliance with environmental laws.

Soil and groundwater at the Pasadena Facility is pervasively contaminated. The facility has produced fertilizer since as early as the 1940s, and a large number of spills and releases have occurred at the facility, many of which involved hazardous substances. Contamination at the Pasadena Facility has the potential to result in toxic tort, property damage, personal injury and natural resources damages claims or other lawsuits. Further, regulators may require investigation and remediation at the facility in the future at significant expense. ExxonMobil, a former owner of the Pasadena Facility, submitted Affected Property Assessment Reports, or APARs, under the Texas Risk Reduction Program to the Texas Commission on Environmental Quality, or the TCEQ, beginning in 2011 for the plant site and phosphogypsum stacks at the Pasadena Facility. The APARs identify instances in which various regulatory limits for numerous hazardous materials in both the soil and groundwater at the plant site and in the vicinity of the stacks have been exceeded. TCEQ may require ExxonMobil to perform additional investigative work as part of the APAR process. The TCEQ may also require further remediation of the contamination at the Pasadena Facility. The TCEQ or others could seek to hold us responsible for certain of the contamination at the Pasadena Facility, even though we no longer have an indirect ownership stake in the Pasadena Facility. Under environmental laws such as the federal Comprehensive Environmental Response, Compensation, and Liability Act and state analogs, former owners and operators of facilities can be held responsible for investigating and remediating environmental contamination.

The Pasadena Facility was used for phosphoric acid production until 2011, which resulted in the creation of a number of phosphogypsum stacks at the Pasadena Facility. Phosphogypsum stacks are composed of the mineral processing waste that is the byproduct of the extraction of phosphorous from mineral ores. The EPA reached an agreement with ExxonMobil in September 2010 making ExxonMobil responsible for closure of the stacks, proper disposal of process wastewater related to the stacks and other expenses. As of January 2016, ExxonMobil estimated that its total outstanding costs associated with the closures and long-term maintenance, monitoring and care of the stacks will be $51.2 million over the next 50 years. However, the actual amount of such costs could be in excess of this amount. Although ExxonMobil has expended significant funds and resources relating to the closures, we cannot assure you that ExxonMobil will remain able and willing to complete closure and post-closure care of the stacks in the future.

The costs of investigating and remediating soil and groundwater contamination and closing and performing post-closure case of the phosphogypsum stacks at the Pasadena Facility will be substantial. The purchaser of the Pasadena Facility assumed liabilities for any environmental claims that may arise with respect to the Pasadena Facility, including closure of the phosphogypsum stacks. If ExxonMobil does not resolve the Pasadena Facility environmental contamination and phosphogypsum stack matters, and if the purchaser of the Pasadena Facility is unable or unwilling to do so, we could become financially responsible for Pasadena Facility environmental liabilities. If we become financially responsible for Pasadena Facility environmental liabilities, this would have a material adverse effect on our business, liquidity, financial condition, results of operations and cash flows.

We have entered into various contracts relating to our Atikokan and Wawa Facilities, which will require us to pay penalties and could subject us to other damages and remedies to the extent that we do not comply with their terms.

In February 2017, we announced that we have (i) decided to idle the Wawa Facility and (ii) reduced production at the Atikokan Facility, to levels necessary to only fulfill the delivery requirements under the OPG Contract. Under the Drax Contract, we are required to sell to Drax the first 400,000 metric tons of wood pellets per year produced from our Wawa Facility and, under the OPG Contract, we are required to sell to OPG up to 90,000 metric tons of wood pellets per year from our Atikokan Facility.

If the Wawa Facility does not deliver wood pellets as required under the Drax Contract, the Wawa Company will be required to pay an amount equal to the difference between the contract price for the wood pellets and the price of any wood pellets purchased in replacement (if any). The Wawa Company also may be liable to Drax for other damages permitted to be recovered under the Drax Contract arising from the Wawa Company’s non-delivery of wood pellets. A future increase in the market price of wood pellets from current market pricing could increase the liabilities of the Wawa Company to Drax. Under the Drax Contract, Rentech, Inc. has guaranteed the Wawa Company’s obligations in an amount not to exceed CAD$20.0 million until May 1, 2018, and thereafter through the term of the Drax Contract for an amount not to exceed CAD$11.0 million.

Under the OPG Contract, OPG has the right to increase the delivery requirement of wood pellets from 45,000 metric tons to 90,000 metric tons after providing us specified advance notice. Although we expect to be able to meet our delivery requirements in a timely manner, we may be subject to penalties under the contract if we are not able to do so. Under the OPG Contract, Rentech, Inc. has guaranteed the Atikokan Company’s obligations in an amount not to exceed CAD$1.0 million.

Rentech, Inc. has guaranteed the Wawa Company’s monthly capital lease obligation payments under its agreement with QSL related to the pellet storage domes at the Port of Quebec. The remaining amount due under the capital lease is approximately $13.5 million at December 31, 2016. The Wawa Company has also entered into the Canadian National Contract for rail transportation of

wood pellets from our Atikokan and Wawa Facilities to the Port of Quebec for delivery to Drax. Under the Canadian National Contract, the Wawa Company committed to transport a minimum of 3,600 rail carloads annually for the duration of the contract. If the Wawa Company does not meet these commitments, the Wawa Company is required to pay a penalty equal to CAD$1,000 per rail car. On February 20, 2017, Canadian National Railway Company filed a claim in Superior Court of the Province of Quebec District of Montreal against the Wawa Company and Rentech, Inc. for unpaid invoices related to the Canadian National Contract in the amount of approximately CAD$2.39 million as described in Note 14 — Commitments and Contingencies to the consolidated financial statements included in “Part II—Item 8. Financial Statements and Supplementary Data” in this report. Under the Canadian National Contract, Rentech, Inc. has guaranteed the Wawa Company’s obligations in an amount not to exceed CAD$1.5 million.

To the extent that the commitments under the contracts described above have not been met, we may be required to pay additional penalties and other damages resulting from our failure to perform and the counterparties could seek other remedies, including termination of the contracts, which would adversely affect our financial condition, results of operations and cash flows.

We face competition from other wood fibre processing and wood pellet businesses.

We have a number of competitors in the wood fibre processing business in the United States and in other countries. Our wood chipping business’s principal competitors include major domestic and foreign biomass supply companies and paper and pulp manufacturers, our industrial wood pellet business’s principal competitors include major domestic and foreign biomass supply companies, and we have a number of competitors in our residential and commercial wood pellet business. Some competitors have greater total resources, or better name recognition, and are less dependent on earnings from those businesses, which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities. Our competitive position could suffer to the extent that we are not able to adapt or expand our own resources either through investments in new or existing operations or through acquisitions, joint ventures or partnerships or to the extent that potential customers view us an uncreditworthy contract counterparty. An inability to compete successfully in the wood fibre processing business could result in the loss of customers, which could adversely affect our sales and profitability. In addition, as a result of increased pricing pressures in the wood fibre processing business caused by competition, we may in the future experience reductions in our profit margins on sales, or may be unable to pass future input price increases on to our customers, which would reduce our cash flows.

We have experienced difficulties in constructing and ramping up production at our Canadian wood pellet facilities. We may face further difficulties in the future.

We have experienced difficulties in completing the construction of the Wawa Facility and Atikokan Facility, including significant cost overruns and delays. We have also experienced challenges increasing the production rate at both facilities toward their design capacities. As a result, we recently announced our decision to idle the Wawa Facility and to reduce production at the Atikokan Facility. In the event that we are unable to maintain consistent production rates at the Atikokan Facility, this would have a material adverse effect on our business, financial condition and results of operations.

Our wood chipping business depends, in significant part, on continued demand from the board, paper, pulp and packaging industry. Any decline in demand for our services from this industry could have a negative impact on us.

Our wood chipping business provides services to manufacturers of boxboard, container board, paper, pulp and similar products. Any decline in the industries in which these manufacturers participate could, in turn, have a negative impact on us. Some of the risks relating to this industry include:

In the event that our wood chipping business experiences a decline as a result of these factors or otherwise, this would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Termination of the OPG Contract would likely have an adverse effect on our business, financial condition, results of operations and cash flows.

We have entered into a ten year off take contract with OPG under which we are required to deliver 45,000 metric tons of wood pellets annually from our Atikokan Facility. Although we recently reduced our production at the Atikokan Facility to levels necessary

only to fulfill the delivery requirements under this contract, the OPG Contract constitutes a significant portion of our revenues. Under this contact, OPG has the right to terminate for specified reasons. For example, under the OPG Contract, OPG is permitted to terminate the contract in certain circumstances if the Atikokan Facility consistently fails to deliver pellets that are within required specifications or the required delivery schedule as agreed by the parties. Termination of the OPG Contract could materially adversely affect our business, financial condition, results of operations and cash flows.

We are incurring expenses in Canadian dollars, and have contracted to sell our industrial wood pellets pursuant to off-take contracts under which the purchases are priced in Canadian dollars. As a result, we are subject to the effects of changing rates of exchange for the relevant currencies. Both the expenses we incur outside the United States and the value to our shareholders of future profits earned in foreign currencies may be affected by such exchange rates.

For financial statement reporting purposes, we translate the assets and liabilities of our Canadian subsidiaries at the exchange rates in effect on the balance sheet date and translate their costs and expenses at the monthly average exchange rate during the period of the transaction. We include translation gains and losses in the stockholders’ equity section of our balance sheets. We include net gains and losses resulting from foreign exchange transactions in interest and other income in our statements of operations. Since we translate Canadian dollars into United States dollars for financial reporting purposes, currency fluctuations can have an impact on our financial results. Although the impact of currency fluctuations on our financial results has generally been immaterial in the past, there can be no guarantee that the impact of currency fluctuations will not be material in the future.

We will rely primarily on Crown Fibre from the Government of Ontario for our feedstock needs at the Atikokan Facility. In the event that we lose the right to Crown Fibre or we are otherwise unable to secure adequate supplies of wood fibre on acceptable terms, this would likely materially adversely affect operations at the Atikokan Facility.

We use primarily Crown Fibre for the Atikokan Facility. Generally, obtaining Crown Fibre is a two-step process. First, the Government of Ontario must agree to make fibre available to us. At our Atikokan Facility, we intend to enter into an Agreement for the Supply of Crown Forest Resources in the near term pursuant to which the Government of Ontario would make available to us 279,400 cubic meters of Crown Fibre annually for a 10 year term. In the near term, we may rely on private purchases of mill residuals to provide fibre for our Atikokan Facility. There is no guarantee that the Government of Ontario will enter into or renew forest resource licenses as they expire. Further, there is no guarantee in the forest resource licenses or the Agreement for the Supply of Crown Forest Resources that the volumes contemplated therein will actually be available and the Government of Ontario reserves broad rights to modify and terminate such licenses and agreements.

The second step of our process for obtaining Crown Fibre is to enter into agreements with private parties that have existing rights over the forests from which the Government of Ontario has agreed to make Crown Fibre available to us. We expect that these agreements will provide us with the right to access and harvest or purchase the Crown Fibre made available to us by the Government of Ontario. While the private parties are statutorily required to make fibre available to parties such as us, the terms on which they make the fibre available may not be economical to us. As a result, we cannot assure you that will enter into such agreements on satisfactory terms or at all.

If the Government of Ontario ceases to make fibre available to us or we are unable to obtain the right to access and harvest or purchase Crown Fibre from the private parties on acceptable terms, we may experience shortages in wood fibre, which would adversely affect our levels of production. For instance, we experienced supply shortages at the Atikokan Facility late in 2015 and early 2016 due to challenges managing wood harvesters given delays in ramping up the facility. We also experienced supply shortages at the Wawa Facility late in 2016. It is possible that the Atikokan Facility could continue to see similar challenges managing wood harvesters supplying feedstock and experience supply shortages. In the event of an inability to obtain sufficient wood fibre from our principal sources, we may attempt to make open market purchases of wood fibre to satisfy the feedstock needs for our Atikokan Facility. However, there is no guarantee that we would be able to secure a sufficient supply of wood fibre on acceptable terms or at all. If we are unable to secure adequate supplies of wood fibre on acceptable terms, this would likely have a material adverse effect on our business, financial condition, results of operations and cash flows.

We expect to depend on third parties to deliver and harvest the timber we process at, and to transport the finished wood pellets from, our wood pellet facility in Canada.

We expect to contract with independent harvesting companies to harvest and deliver timber to our Atikokan Facility. Under the contracts, we expect that the harvesting companies will be responsible for all elements of harvesting and transporting timber to our wood pellet facility in Canada, including but not limited to building haul roads, surveying and block layout. The harvesting companies’ ability to timely deliver timber to our facility could be adversely impacted by various factors, including but not limited to the inability to build necessary roads on time, employee strikes, weather conditions or traffic accidents. In the event that the harvesting

companies fail to deliver timber to our facility on a timely basis, this would hinder our ability to produce wood pellets and, in turn, would materially adversely affect our business, financial condition, results of operations and cash flows.

The energy industry is highly competitive. Our wood pellet businesses may not successfully compete with other forms of energy.

Our wood pellet businesses face intense competition from well-established, conventional forms of energy, including petroleum, coal and natural gas. These forms of energy are abundant and widely accepted by consumers, and we may not be able to successfully compete with them. If the price of these competing fuels declines as a result of the discovery of new deposits of oil, gas or coal or otherwise, this likely would weaken demand for our wood pellet products. Our wood pellet businesses also compete with other forms of renewable energy, many of which are developing and could attain greater market acceptance than electricity generated from wood pellets. Any failure of our wood pellet businesses to successfully compete with other forms of energy could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The demand for industrial wood pellets is dependent, in significant part, on government regulations over which we have no control.

The demand for industrial wood pellets for energy production is driven, in significant part, by governmental policies and incentives. For example, the European Union, or EU, has adopted legislation that includes certain climate and energy targets for the EU known as the “20-20-20 target.” This legislation aims to achieve the following targets by 2020: (i) a 20% reduction in EU greenhouse gas emissions from 1990 levels; (ii) an increase in the share of EU energy consumption produced from renewable resources to 20%; and (iii) a 20% improvement in the EU’s energy efficiency. The European Commission also has adopted the Communication “Energy Roadmap 2050” renewing its commitment to reduce greenhouse gas emissions to 80 to 95% below 1990 levels by 2050. As part of the Energy Roadmap 2050, the European Commission released the 2030 policy framework for climate and energy, which targets to reduce EU domestic greenhouse gas emissions by 40% below the 1990 level by 2030 and to increase the share of renewable energy consumption to at least 27% by 2030. The UK has been an early adopter of these policies. The UK has adopted legislation targeting a reduction in its greenhouse gas emissions by 80% of 1990 levels by 2050. Through the launch of the Renewable Heat Incentive, the UK has also introduced a new payment system for the generation of heat from renewable sources. Moreover, the “Renewables Obligation” imposed by the UK in 2002 requires all electricity suppliers licensed in the UK to source a specified and annually increasing proportion of electricity from eligible renewable resources, or such suppliers will face a penalty. Under current law, the Renewables Obligation will remain in place through 2037. Some electricity suppliers are transitioning from more traditional fuel such as coal, which cost less than wood pellets, to using wood pellets as a feedstock to comply with this legislation and to receive the related incentives. These transitions would not occur in the absence of such legislation and related incentives. In the event that any of these or other similar governmental policies and incentives are modified or withdrawn, the demand for wood pellets would likely decrease significantly. Any such change in government policies could have a material adverse effect on our business, financial condition, results of operations. and cash flows

Our wood fibre processing business is subject to environmental laws and regulations. We expect that the cost of compliance with these laws and regulations will increase over time, and we could become subject to material environmental liabilities.

Our wood fibre processing business is subject to federal, state and local environmental, health and safety regulations governing the emission and release of hazardous substances into the environment and the treatment and discharge of waste water and the storage, handling, use and transportation of hazardous substances. These laws may include, in the United States, the CAA, the Clean Water Act, RCRA, CERCLA, TSCA, and various other federal, state and local laws and regulations, and other laws in Canada and other jurisdictions. Violations of these laws and regulations could result in substantial penalties, injunctive orders compelling installation of additional controls, civil and criminal sanctions, permit revocations or facility shutdowns. In addition, new environmental laws and regulations, new interpretations of existing laws and regulations, increased governmental enforcement of laws and regulations or other developments could require us to make additional expenditures. These expenditures or costs for environmental compliance could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our operations require permits and authorizations. Failure to comply with these permits or environmental laws generally could result in substantial fines, penalties or other sanctions, court orders to install pollution-control equipment, permit revocations and facility shutdowns. We may experience delays in obtaining or be unable to obtain required permits, which may delay or interrupt our operations and limit our growth and revenue. From time to time, we may also need to seek modifications to our permits, and delays in obtaining modifications or an inability to obtain modifications could similarly delay or interrupt our operations and limit our growth and revenue. In addition, as our wood fibre processing facilities ramp-up, emissions testing is required to determine compliance with our permits and applicable law. If the results of this testing indicate that emissions levels exceed applicable thresholds, we could be required to curtail or reduce operations or install pollution control equipment.

Our business, and the real property on which it is operated, also is subject to spills, discharges or other releases of hazardous substances into the environment. We could be held liable for past or future releases at or migrating beneath the real property where we have operated, or the real property currently or formerly owned or leased by us, even if we did not cause the release or own, operate or lease the real property when the release occurred. Past or future spills related to our facilities or transportation of products or hazardous substances from our facilities may give rise to liability (including strict liability, or liability without fault, and potential clean-up responsibility) to governmental entities or private parties under federal, state or local environmental laws, as well as under common law. For example, we could be held strictly liable under CERCLA, for past or future spills without regard to fault or whether our actions were in compliance with the law at the time of the spills. Pursuant to CERCLA and similar state statutes, we could be held liable for contamination associated with our facilities, facilities we formerly owned or operated (if any) and facilities to which we transported or arranged for the transportation of wastes or by-products containing hazardous substances for treatment, storage or disposal. The potential penalties and clean-up costs for past or future releases or spills, liability to third parties for damage to their property or exposure to hazardous substances, or the need to address newly discovered information or conditions that may require response actions could be significant and could have a material adverse effect on our financial condition and results of operations.

Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions.

Our operations in non-United States jurisdictions are subject to the laws of the jurisdictions in which they operate. Laws in some jurisdictions differ in significant respects from those in the United States, and these differences can affect our ability to react to changes in our business and our rights or ability to enforce rights may be different than would be expected under United States law. Moreover, enforcement of laws in some overseas jurisdictions can be inconsistent and unpredictable, which can affect both our ability to enforce our rights and to undertake activities that we believe are beneficial to our business. As a result, our ability to generate revenue and our expenses in non-United States jurisdictions may differ from what would be expected if United States law governed these operations.

Our wood fibre processing and sales operations in Chile and Uruguay face additional risks.

Fulghum has four wood processing mills in Chile and one in Uruguay. We also sell wood chips and biomass fuel in Chile. Our operations in Chile and Uruguay expose us to the following risks:

If any of these risks materialize or worsen, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Weather conditions could adversely affect the results of operations and financial condition of our wood pellet business. In addition, NEWP’s business is seasonal, and events occurring during seasons in which revenues for this business are typically higher may disproportionately affect our results of operations and financial condition.

Adverse weather conditions have historically and in the future could continue to negatively impact sales of NEWP’s wood pellets and the processing of our industrial, residential and commercial wood pellets. Weather conditions generally have an impact on the demand for wood pellets. Because NEWP supplies distributors whose customers depend on heating fuel during the winter, warmer-than-normal temperatures during the first and fourth calendar quarters in one or more regions in which NEWP operates can decrease the total volume we sell and the gross margin realized on those sales. Warmer temperatures in the Northeast could have a

particularly adverse impact on sales, since almost all of NEWP’s wood pellets are consumed in that region. A reduction in the total volume we sell or in the gross margin we realize on such sales would negatively impact our business, financial condition and results of operations. To accommodate the seasonality in sales, NEWP typically builds inventory during the months of March through August, which increases its working capital requirements during those months of the year. As a result of the seasonality in its business, NEWP’s revenues, results of operations and net working capital will vary from quarter to quarter.

In addition, colder weather during the winter months could adversely impact our ability to process and pelletize wood for our industrial and residential wood pellet facilities. Weather and weather changes have an impact on our production efficiencies. Colder weather during winter months may adversely impact the processing of wood (particle sizing and drying) prior to pelletizing. Significant moisture from rain and snow may also adversely impact the drying of wood and increase the costs of drying wood fuel. Production process changes such as moisture content, particle sizing, and pelletizing die size may be needed when weather climate conditions change, all of which may adversely affect the processing and pelletizing of wood. A decrease in production efficiencies would increase our production costs. Further, the lower cost of competitive fuels that customers use in the winter months to heat their homes, such as heating oil, could negatively impact sales for NEWP. A reduction in the gross margin we realize on such sales would negatively impact our business, financial condition and results of operations.

Due to our dependence on significant customers, the loss of one or more of such significant customers could adversely affect our results of operations.

NEWP depends on significant customers, and the loss of one or several of such significant customers may have a material adverse effect on its results of operations and financial condition. In the aggregate, NEWP’s top two big-box retailers, Lowe’s Home Improvement and Tractor Supply Company, represented about 25% of NEWP’s total sales for the year ended December 31, 2016. As is typical in the wood pellet industry, NEWP’s sales to big-box retailers are primarily made on a purchase order basis, and NEWP generally does not have long-term orders or commitments from our big-box retailers. As a result, we are limited in our ability to predict the level of future sales or commitments from our current customers. If our sales to any of our significant customers were to decline, we may not be able to find other customers to purchase the excess supply of NEWP’s products. The loss of one or several of our significant customers of our wood pellet products, or a significant reduction in purchase volume by any of them, could have a material adverse effect on our financial condition and results of operations.

Fulghum also depends on significant customers, as certain of its customers own multiple mills for which Fulghum provides processing services. As a result, the loss of any one customer may result in the loss of multiple mills for which Fulghum is contracted to provide services. During 2016, approximately 71% of the log volume we processed in the United States was for four customers at 19 mills, and in early 2017 we lost contracts for two mills that were owned by a single customer representing 19% of the log volume processed in the United States in 2016. If Fulghum were to lose one or several customers that owned multiple mills there would be a material adverse effect on our financial condition and results of operations.

If we fail to continue to meet the listing standards of the NASDAQ Stock Market, our common stock may be delisted, which could have a material adverse effect on the liquidity of our common stock.

Our common stock is currently traded on the NASDAQ Stock Market. To remain listed on the NASDAQ Stock Market, we must maintain a minimum bid price of $1.00 per share of our common stock. If the closing bid price of our common stock were to fall below $1.00 per share for 30 consecutive trading days, the NASDAQ Stock Market LLC could notify us of our potential delisting. If we were to receive such a notification, we would be afforded a grace period of 180 calendar days to regain compliance with the minimum bid price requirement. In order to regain compliance, shares of our common stock would need to maintain a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. As of March 30, 2017, the bid price for shares of our common stock on the NASDAQ Stock Market was $0.50 per share. In addition, we may be unable to meet other applicable NASDAQ Stock Market listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, in which case our common stock could be delisted. If our common stock were to be delisted, the liquidity of our common stock would be adversely affected and the market price of our common stock could decrease.

We have a substantial overhang of common stock and future sales of our common stock or of securities linked to our common stock may cause substantial dilution and may negatively affect the market price of our shares.

As of December 31, 2016, there were approximately 23.2 million shares of our common stock outstanding. As of that date, an aggregate of approximately 1.9 million shares of common stock were issuable pursuant to outstanding restricted stock units, performance stock units, options and warrants. In the event that we acquire companies or assets, we may issue additional shares of stock to acquire those companies or assets.

The sale of common stock and common stock equivalents in material amounts may be necessary to finance the progress of our business plan and operations. Certain future holders of our securities may be granted rights to participate in or to require us to file registration statements with the SEC for resale of common stock.

We cannot predict the effect, if any, that future sales of shares of our common stock into the market, or the availability of shares of common stock for future sale, will have on the market price of our common stock. Sales of substantial amounts of common stock (including shares issued upon the exercise, conversion or exchange of other securities), or the perception that such sales could occur, may materially and adversely affect prevailing market prices for our common stock.

Locations - United States

Number of Properties

Land⁽¹⁾

Buildings/ Equipment ⁽¹⁾

Wood

Processing

Capacity

(GMT)

Alabama

1 Owned; 1 Operated

1,100,000

Arkansas

Leased

Owned

550,000

Florida

Owned

1,350,000

Georgia

(2)

4 Owned; 5 Leased; 2 Operated

7 Owned; 4 Operated

7,550,000

Louisiana

1 Owned; 1 Leased; 1 Operated

2 Owned; 1 Operated

3,100,000

Maine

Leased

Owned

1,250,000

Mississippi

2 Owned; 1 Leased

3 Owned

1,550,000

South Carolina

Leased

250,000

Virginia

(2)

2 Leased; 2 Operated

2 Owned; 2 Operated

850,000

The Atikokan Facility is located on about a 15 acre site that we own in Atikokan, Ontario, Canada. The Wawa Facility is located on a 248 acre site that we own in Wawa, Ontario, Canada.

Our executive offices are located in Washington, DC, and consist of approximately 600 square feet of leased office space. We also have leased offices in Los Angeles, California, which consist of approximately 900 square feet of office space. Both of the new corporate offices will be renewed as necessary, but only on a short-term monthly basis. These offices are used by all three of our segments. Our former executive offices are located in Los Angeles, California, and consist of 16,600 square feet of leased office space. The lease for our former office space expires in June 2020, but during 2016, we sublet the office space for the duration of the lease.

We also have leased offices located in Thunder Bay, Ontario, Canada, which consist of 1,800 square feet of leased office space. The lease expires in September 2018. These offices are used by our Wood Pellets: Industrial segment. Fulghum has leased offices located in Augusta, Georgia, which consist of 7,900 square feet of leased office space. The lease expires in January 2019. NEWP leases offices located in Jaffrey, New Hampshire, which consist of 5,200 square feet of office space.

As disclosed in Note 14 — Commitments and Contingencies to the consolidated financial statements included in “Part II—Item 8. Financial Statements and Supplementary Data” in this report, we are engaged in certain legal matters, and the disclosure set forth in Note 14 relating to such legal matters is incorporated herein by reference.

Our common stock is traded on the NASDAQ Stock Market, or NASDAQ, under the symbol “RTK.” On August 20, 2015, we effected a one-for-ten reverse stock split, or the Reverse Split, of our issued and outstanding shares of common stock. All closing prices listed below have been adjusted retrospectively for the effects of the Reverse Split. The following table sets forth the range of high and low closing prices for our common stock as reported by NASDAQ, for each quarterly period during the years ended December 31, 2016 and 2015:

Year Ended December 31, 2016	High		Low
First Quarter, ended March 31, 2016	$	3.51	$	1.61
Second Quarter, ended June 30, 2016	$	3.87	$	2.31
Third Quarter, ended September 30, 2016	$	3.91	$	2.38
Fourth Quarter, ended December 31, 2016	$	2.94	$	1.50

Year Ended December 31, 2015	High		Low
First Quarter, ended March 31, 2015	$	14.00	$	11.20
Second Quarter, ended June 30, 2015	$	12.40	$	10.50
Third Quarter, ended September 30, 2015	$	10.60	$	5.60
Fourth Quarter, ended December 31, 2015	$	6.54	$	2.46

The approximate number of shareholders of record of our common stock as of February 28, 2017 was 300. Based upon the securities position listings maintained for our common stock by registered clearing agencies, we estimate the number of beneficial owners is not less than 14,200.

Until we paid a special one-time distribution in 2012, we had never paid cash dividends on our common stock. We will continue to evaluate from time to time whether additional dividends or distributions are warranted. Any future determination relating to dividend policy will be made at the discretion of our Board and will depend on a number of factors, including our future earnings, capital requirements, investment opportunities, access to capital, financial condition, future prospects, and other factors as our Board may deem relevant.

The following graph and table compare the cumulative total shareholder return on our common stock to those of the Russell 2000 Index, or the Russell 2000, and two customized peer groups for the five years ended December 31, 2016. The first customized peer group of four companies includes: Agrium, CF Industries, CVR Partners, and Terra Nitrogen Company, L.P., or the Fertilizer Peer Group. The second customized peer group of nine companies includes: Astec Industries, Inc., Enviva Partners, LP, KapStone Paper and Packaging Corporation, Koppers Holdings Inc., Minerals Technologies Inc., Neenah Paper, Inc., PH Glatfelter Co., and Schweitzer-Mauduit International Inc., or the Wood Fibre Peer Group. The following graph and table assumes that a $100 investment was made at the close of trading on December 31, 2011 in our common stock and in the index and the peer groups, and that dividends, if any, were reinvested. The stock price performance shown on the graph below should not be considered indicative of future price performance.

Rentech has used the Fertilizer Peer Group in the past for comparison purposes because Rentech believed that the peer group was more comparable to Rentech’s nitrogen fertilizer business than other published indexes at the time. However, the Sale and Merger make this comparison no longer appropriate. For periods after December 31, 2016, Rentech will cease the use of the Fertilizer Peer Group.

	12/31/11		12/31/12		12/31/13		12/31/14		12/31/15		12/31/16
Rentech, Inc.		100.00		215.16		143.17		103.08		28.80	20.29
Russell 2000		100.00		116.35		161.52		169.43		161.95	196.45
Fertilizer Peer Group		100.00		142.50		140.15		151.62		134.14	135.94
Wood Fibre Peer Group		100.00		127.84		202.35		204.37		169.26	233.73

The following tables include selected summary financial data for each of our last five years.

The operations of Fulghum and NEWP are included in our historical results of operations only from the date of the closing of the acquisition of Fulghum, or the Fulghum Acquisition, which was May 1, 2013, and acquisition of NEWP, or the NEWP Acquisition, which was May 1, 2014. Results of the East Dubuque, Pasadena and the energy technologies segments are accounted for as discontinued operations for all periods presented. The data below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data.”

	For the Years Ended December 31,
	2016			2015			2014			2013			2012
	(in thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
Revenues	$	150,744		$	156,457		$	130,948		$	58,284		$	—
Cost of Sales	$	157,237		$	138,466		$	111,751		$	46,252		$	—
Gross Profit (Loss)	$	(6,493	)	$	17,991		$	19,197		$	12,032		$	—
Loss from Continuing Operations	$	(126,194	)	$	(60,930	)	$	(38,498	)	$	(1,025	)	$	(33,465	)
Income (Loss) from Discontinued Operations, net of tax	$	299,047		$	(92,101	)	$	5,994		$	1,063		$	61,152
Net Income (Loss)	$	172,853		$	(153,031	)	$	(32,504	)	$	38		$	27,687
Net (Income) Loss Attributable to Noncontrolling Interests	$	(3,578	)	$	38,422		$	494		$	(1,570	)	$	(41,687	)
Preferred Stock Dividends	$	(1,320	)	$	(5,280	)	$	(3,840	)	$	—		$	—
Net Income (Loss) Attributable to Rentech	$	156,906		$	(119,889	)	$	(35,850	)	$	(1,532	)	$	(14,000	)
Net Income (Loss) per Common Share Attributable to Rentech:
Basic:
Continuing Operations	$	(6.01	)	$	(2.89	)	$	(1.85	)	$	(0.04	)	$	(1.48	)
Discontinued Operations	$	12.47		$	(2.33	)	$	0.27		$	(0.03	)	$	0.82
Net Income (Loss)	$	6.61		$	(5.22	)	$	(1.57	)	$	(0.07	)	$	(0.63	)
Diluted:
Continuing Operations	$	(6.01	)	$	(2.89	)	$	(1.85	)	$	(0.04	)	$	(1.48	)
Discontinued Operations	$	12.47		$	(2.33	)	$	0.27		$	(0.03	)	$	0.82
Net Income (Loss)	$	6.61		$	(5.22	)	$	(1.57	)	$	(0.07	)	$	(0.63	)
Weighted-average shares used to compute net income (loss) per common share:
Basic		23,122			22,981			22,856			22,614			22,319
Diluted		23,122			22,981			22,856			22,614			22,319

	As of December 31,
	2016		2015			2014		2013		2012
	(in thousands)
CONSOLIDATED BALANCE SHEET DATA
Cash⁽¹⁾	$	28,319	$	33,119		$	16,167	$	72,309	$	85,838
Working Capital	$	28,379	$	23,760		$	1,310	$	68,682	$	106,293
Construction in Progress	$	905	$	4,240		$	131,665	$	26,605	$	470
Total Assets	$	312,717	$	650,291		$	816,649	$	693,129	$	471,978
Total Long-Term Liabilities	$	113,799	$	521,502		$	461,003	$	422,123	$	186,906
Total Rentech Stockholders' Equity (Deficit)	$	147,578	$	(15,221	)	$	120,733	$	158,073	$	157,987

In addition to the information provided here in Management’s Discussion and Analysis of Financial Condition and Results of Operations, we believe that in order to more fully understand our discussion in this section, you should read our consolidated financial statements and the notes thereto and the other disclosures herein, including the discussion of our business and the risk factors.

In this report, the Company has restated its financial statements for the three and six months ended June 30, 2016, and the three months and nine months ended September 30, 2016. These restatements and the material weakness reported herein are due to an incorrect calculation of the Company’s income tax provisions and affected non-cash deferred taxes and the allocation of tax benefit and tax expense between continuing operations and discontinued operations. For further information regarding the impact of the restatement to the balance sheets, statements of operations and net income (loss) per common share attributable to Rentech, see Note 24 to our consolidated financial statements included in this report.

Our wood handling and chipping services business includes Fulghum, which operates 31 wood chipping mills in the United States and South America. Fulghum provides wood yard operations services and wood fibre processing services, and sells wood chips to the pulp, paper and packaging industry. Fulghum’s South American subsidiaries also own and manage forestland and sell bark to industrial consumers in South America.

Our Canadian wood pellet business consists of our Atikokan Facility and Wawa Facility, the latter of which we idled in 2017. Wood pellets produced at the Atikokan Facility are being used primarily for utility power generation in Canada and wood pellets produced at the Wawa Facility were used primarily for utility power generation in the United Kingdom.

On March 14, 2016, we completed the sale of the Pasadena Facility to IOC. The transaction included an initial cash payment of $5.0 million, and a post-closing cash working capital adjustment of $5.4 million. These payments along with insurance refunds put the total distribution to RNP unitholders at approximately $10.7 million of which we received $6.0 million. The purchase agreement also includes an earn-out which would be paid to former RNP unitholders as of the closing of the Merger equal to 50% of the facility’s EBITDA, as defined in the purchase agreement, in excess of $8.0 million cumulatively earned over the next two years.

On April 1, 2016, we completed the Merger. Pursuant to the Merger Agreement, each outstanding unit of RNP was exchanged for 1.04 CVR Common Units and $2.57 of cash. We received merger consideration of $59.8 million of cash and 24.2 million CVR Common Units. We used 17.0 million CVR Common Units received in the Merger and $10.0 million of cash to: (i) repurchase and retire all $100 million of Preferred Stock held by certain funds managed by the GSO Funds and (ii) repay approximately $41.7 million of debt under the GSO Credit Agreement.

In February 2017, we announced that we have (i) decided to idle our Wawa Facility and (ii) reduced production at our Atikokan Facility to levels necessary to only fulfill the delivery requirements under the OPG Contract with OPG. These decisions result from many factors, including without limitation, continued difficulty with ramping up production and additional capital required to increase production to levels near the facilities design capacity, projected operating costs which exceed our original expectations and uncertainty around future profitability. Due to the challenges, we recorded net asset impairment charges for the Wawa Facility and the Atikokan Facility totaling $116.2 million for the year ended December 31, 2016.

Our operating segments have been affected in different ways by various negative and positive factors in 2016. The results and outlook for our Wood Pellets: Industrial segment depend primarily on operating results from the Atikokan and Wawa Facilities. Due to the idling of our Wawa Facility and the reduction of production levels at our Atikokan Facility, during the year ended December 31, 2016, we recorded net asset impairment charges for the Wawa Facility and the Atikokan Facility totaling $116.2 million. During the year ended December 31, 2016, we shipped four vessels containing a combined approximately 134,000 metric tons of wood pellets. The Atikokan Facility shipped approximately 50,000 metric tons of wood pellets to OPG during the year ended December 31, 2016.

However, we have had inventory write-downs of $24.8 million during 2016 primarily as a result of a high level of fixed operating costs allocated to relatively low volumes produced at the Atikokan and Wawa Facilities during this period of ramp-up at both facilities.

Results at NEWP this year were negatively impacted by relatively warmer weather than in previous years, continuing depressed prices for competitor heating fuels such as heating oil and propane, and changes in consumer buying patterns. As a result, NEWP’s sales volumes were significantly lower than historical levels. NEWP’s revenue decreased from $54.3 million for the year ended December 31, 2015 to $27.8 million for the year ended December 31, 2016. NEWP’s gross profit decreased from $12.1 million for the year ended December 31, 2015 to $4.5 million for the year ended December 31, 2016. In response to market conditions, NEWP began scaling back production in February 2016. NEWP produced at approximately 65% of capacity during 2016 and is currently monitoring market demand and inventory levels and will adjust production accordingly.

Fulghum’s revenue was $97.4 million for the year ended December 31, 2016, compared to $94.2 million for the year ended December 31, 2015. Fulghum’s gross profit was $14.2 million for the year ended December 31, 2016, compared to $18.3 million for the year ended December 31, 2015. In February of 2017, Fulghum was notified by a customer of its intent to exercise its purchase option on two of Fulghum’s mills. Fulghum expects the loss of these mills to negatively impact operating income and cash flow in the second half of 2017 and beyond. While this was a subsequent event, the delays and extended negotiations during the three months ended December 31, 2016 and leading up to the customer’s final decision were considered a triggering event to perform a two-step goodwill impairment test for Fulghum U.S. as of December 31, 2016. The analysis of goodwill indicated an impairment to goodwill of $11.7 million, which was recorded for the year ended December 31, 2016.

The loss of this customer is a subsequent event that is not considered in the impairment test we undertook during the three months ended December 31, 2016. For the three months ending March 31, 2017, we plan to perform step one of the impairment analysis, which we believe will result in the carrying value of the reporting unit exceeding the reporting unit’s fair value, which would require that a step-two analysis be performed. The amount of goodwill relating to the Fulghum U.S. operations is $13.1 million as of December 31, 2016. Therefore, the potential goodwill impairment could be up to $13.1 million, which we would expect to record during the three months ended March 31, 2017. In addition, the purchase option price of the two mills is below their carrying value which would result in a potential write down of fixed assets, which we would expect to record during the three months ended March 31, 2017. We also expect a write-down of the processing agreement relating to the two mills.

We have known uncertainties that may have an impact on our financial statements including additional penalties under the Drax Contract, the OPG Contract and the Canadian National Contract, the volatility of the CVR investment, which could be impaired in subsequent periods, and environmental liabilities relating to the Pasadena Facility.

The Wawa Company has also entered into the Canadian National Contract for rail transportation of wood pellets from our Atikokan and Wawa Facilities to the Port of Quebec for delivery to Drax. Under the Canadian National Contract, the Wawa Company committed to transport a minimum of 3,600 rail carloads annually for the duration of the contract. If the Wawa Company does not meet these commitments, the Wawa Company is required to pay a penalty equal to CAD$1,000 per rail car. Under the Canadian National Contract, Rentech, Inc. has guaranteed the Wawa Company’s obligations in an amount not to exceed CAD$1.5 million.

If there is a continuing or further decline in the value of the CVR Common Units that we believe is other than temporary, we could determine that it is necessary to impair the value of our investment in CVR. As of March 31, 2017, the fair value of the Company’s investment in CVR Common Units was $33.4 million.

making ExxonMobil responsible for closure of the stacks, proper disposal of process wastewater related to the stacks and other expenses. As of January 2016, ExxonMobil estimated that its total outstanding costs associated with the closures and long-term maintenance, monitoring and care of the stacks will be $51.2 million over the next 50 years. However, the actual amount of such costs could be in excess of this amount. Although ExxonMobil has expended significant funds and resources relating to the closures, we cannot assure you that ExxonMobil will remain able and willing to complete closure and post-closure care of the stacks in the future.

Because of the Merger completed on April 1, 2016, we were able to pay down our debt to the GSO Funds and repurchase our Preferred Stock, reducing interest payments, eliminating dividend payments, and providing us with liquidity and a strengthened balance sheet.

Our historical results of operations for the periods presented may not be comparable with our results of operations for the subsequent periods for the reasons discussed below.

Wood feedstock represents the largest component of the Atikokan Facility’s wood pellet product cost. We experienced supply shortages at the Atikokan Facility late in 2015 and early this year due to challenges managing wood harvesters given delays in ramping up the facility. We also experienced supply shortages at the Wawa Facility late in 2016. It is possible that the Atikokan Facility could continue to see similar challenges managing wood harvesters supplying feedstock and experience supply shortages. Wood feedstock represents the largest component of NEWP’s wood pellet product cost. Competition for wood feedstock supply from pulp and paper manufacturing companies, other pellet manufacturers and wood feedstock used in commercial and institutional wood boiler heating systems, may affect our cost of wood feedstock for NEWP.

NEWP’s operations are included in our historical operating results from the closing date of the NEWP Acquisition, which was May 1, 2014. The results of operations from Allegheny Pellet Corporation, or Allegheny, are included in our historical operating results from the closing date of the acquisition of Allegheny’s assets, which was January 23, 2015. Through its acquisition of Allegheny, NEWP acquired the facility in Youngsville, Pennsylvania.

The NEWP and Allegheny Acquisitions broadened the geographic area into which our products are sold. For periods after the closing of each acquisition: (i) our general and administrative expenses as well as sales-related expenses have increased due to the addition of the acquired operations; (ii) our depreciation and amortization expenses have increased due to the increase in tangible and definite lived intangible assets, which were recorded at fair value on the date of the acquisition; and (iii) our interest expense has increased due to the debt assumed with the NEWP Acquisition that continues to be outstanding and, in the case of Allegheny Acquisition, the debt incurred to finance the purchase price. Due to these factors, our operating results for the periods prior to and after the closing dates of the NEWP Acquisition and Allegheny Acquisition may not be comparable.

Preparing our consolidated financial statements in conformity with generally accepted accounting principles in the United States of America, or GAAP, requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ based on the accuracy of the information utilized and subsequent events. Our accounting policies are described in the notes to our audited consolidated financial statements included elsewhere in this report. Our critical accounting policies, estimates and assumptions could materially affect the amounts recorded in our consolidated financial statements. The most significant estimates and assumptions relate to: revenue recognition, inventories, valuation of long-lived assets and finite-lived intangible assets, recoverability of goodwill, accounting for major maintenance and the acquisition method of accounting.

Revenue Recognition. We recognize revenue when the following elements are substantially satisfied: when the customer takes ownership from our facilities and assumes risk of loss; there are no uncertainties regarding customer acceptance; there is persuasive evidence that an agreement exists documenting the specific terms of the transaction; the sales price is fixed or determinable; and collectibility is reasonably assured. Management assesses the business environment, the customer’s financial condition, historical collection experience, accounts receivable aging and customer disputes to determine whether collectibility is reasonably assured. If collectability is not considered reasonably assured at the time of sale, we do not recognize revenue until collection occurs.

Inventories. Our inventory is stated at the lower of cost or estimated net realizable value. The cost of inventories is determined using the first-in first-out method. We perform an analysis of our inventory balances at least quarterly to determine if the carrying amount of inventories exceeds their net realizable value. The analysis of estimated net realizable value is based on customer orders, market trends and historical pricing. If the carrying amount exceeds the estimated net realizable value, the carrying amount is reduced to the estimated net realizable value.

Valuation of Long-Lived Assets and Finite-Lived Intangible Assets. We assess the realizable value of long-lived assets and finite-lived intangible assets for potential impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of our assets, we make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. As applicable, we make assumptions regarding the useful lives of the assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets.

Investment in CVR. The investment in CVR is accounted for under the equity method of accounting. We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. In applying the equity method, we recorded the investment at fair value and subsequently increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the investee. We record dividends or other equity distributions as reductions in the carrying value of the investment. The investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment charge would only be recognized in earnings for a decline in value that is determined to be other than temporary.

As of December 31, 2016, the carrying value and fair value of the Company’s investment in CVR Common Units were $53.3 million and $43.2 million, respectively. Given this differential, the Company is closely monitoring the performance of CVR to determine whether the investment is other-than-temporarily impaired. The Company considered a variety of factors in its impairment analysis, including the historical volatility in the price of CVR units, the seasonality of the fertilizer industry in which CVR operates and recent public statements made by CVR’s management regarding CVR’s results for the three and twelve months ended December 31, 2016 and their expectations for the upcoming Spring fertilizer season. The Company concluded that the decline in value of the CVR Common Units is not other than temporary and no other-than-temporary impairment is required as of December 31, 2016. Over the upcoming quarters, particularly the spring planting season, we will continue to monitor the fair value of the Company’s CVR Common Units as well as all publicly available information on CVR and the fertilizer industry to determine if an other-than-temporary impairment is necessary.

Recoverability of Goodwill. We determine fair values for each of the reporting units based on consideration of the income approach and the market comparable approach. For purposes of the income approach, fair value is determined based on the present value of estimated future after-tax cash flows, discounted at an appropriate risk adjusted rate. We use our internal forecasts to estimate future after-tax cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each reporting unit, which we believe are consistent with other market participants. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the weighted average cost of capital. We use discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our reporting unit valuations have ranged from 10.5% to 11.5%. For purposes of the market approach, we use a valuation technique in which values are derived based on market prices of comparable publicly traded companies and control premiums implied by recent industry transactions involving comparable businesses. We assess each valuation methodology based upon the relevance and availability of the data at the time we perform the valuation and weight the methodologies appropriately.

The carrying values of the reporting units are based on the actual assets and liabilities recorded on the balance sheets for each respective business. The goodwill on the balance sheet for each reporting unit is based upon the fair value of goodwill at the acquisition date of the business less any impairments taken since the acquisition. Certain corporate assets and liabilities that are not instrumental to the reporting units’ operations and would not be transferred to hypothetical purchasers of the reporting units were excluded from the reporting units’ carrying values.

Accounting for Major Maintenance. Expenditures for improving, replacing or adding to assets are capitalized. Major expenditures for the acquisition, construction or development of new assets to maintain operating capacity, or to comply with environmental, health, safety or other regulations, are also capitalized. Costs of general maintenance and repairs are expensed.

Examples of maintenance capital projects include the installation of additional components and projects that increase an asset’s useful life, increase the quantity or quality of the product manufactured or create efficiencies in the production process.

Acquisition Method of Accounting. We account for business combinations using the acquisition method of accounting, which requires, among other things, that assets acquired, liabilities assumed and potential earn-out consideration be recognized at their respective fair values as of the acquisition date. The earn-out consideration will be measured at each reporting date with changes in its fair value recognized in the consolidated statements of operations.

We operate in three business segments, as described below. NEWP’s operations are included only from the closing date of the NEWP Acquisition, which was May 1, 2014. Allegheny’s operations are included only from the closing date of the Allegheny Acquisition, which was January 23, 2015. Results of our former East Dubuque, Pasadena and the energy technologies segments are accounted for as discontinued operations for all periods presented. Our three business segments are:

	For the Years Ended December 31,
	2016			2015			2014
	(in thousands)
Revenues
Fulghum Fibres	$	97,376		$	94,219		$	94,748
Wood Pellets: Industrial		25,592			7,933			4,086
Wood Pellets: NEWP		27,776			54,305			32,114
Total revenues	$	150,744		$	156,457		$	130,948
Gross profit (loss)
Fulghum Fibres	$	14,192		$	18,293		$	12,444
Wood Pellets: Industrial		(25,174	)		(12,388	)		703
Wood Pellets: NEWP		4,489			12,086			6,050
Total gross profit (loss)	$	(6,493	)	$	17,991		$	19,197
Operating income (loss)
Fulghum Fibres	$	(3,853	)	$	(1,324	)	$	3,919
Wood Pellets: Industrial		(151,142	)		(34,808	)		(11,954	)
Wood Pellets: NEWP		1,104			7,925			4,388
Total segment operating loss	$	(153,891	)	$	(28,207	)	$	(3,647	)
Net income (loss)
Fulghum Fibres	$	(4,386	)	$	(3,007	)	$	75
Wood Pellets: Industrial		(152,672	)		(36,542	)		(11,616	)
Wood Pellets: NEWP		801			7,664			4,342
Total segment net loss	$	(156,257	)	$	(31,885	)	$	(7,199	)
Reconciliation of segment net loss to consolidated net income (loss):
Segment net loss	$	(156,257	)	$	(31,885	)	$	(7,199	)
Corporate and unallocated expenses recorded as selling, general and administrative expenses		(17,736	)		(21,231	)		(31,735	)
Corporate and unallocated depreciation and amortization expense		(404	)		(549	)		(579	)
Corporate and unallocated expenses recorded as other income (expense)		(5,250	)		(730	)		(1,634	)
Corporate and unallocated interest expense		(6,473	)		(6,517	)		(380	)
Corporate income tax benefit (expense)		63,528			(18	)		3,029
Equity in loss of CVR⁽¹⁾		(3,602	)		—			—
Income (loss) from discontinued operations, net of tax⁽²⁾		299,047			(92,101	)		5,994
Consolidated net income (loss)	$	172,853		$	(153,031	)	$	(32,504	)

We generate revenues at Fulghum Fibres from providing wood yard operation services and wood fibre processing services, and selling wood chips to the pulp, paper and packaging industry. Fulghum also owns and manages forestland and sells bark to industrial consumers in South America. Service revenues are those earned under agreements for wood yard operations services and wood fibre processing services in the United States and South America. Product revenues are those earned by our Chilean operations from the sale of wood chips and bark.

Revenues for the year ended December 31, 2016 were $97.4 million, compared to $94.2 million for the year ended December 31, 2015. Revenues from operations in the United States were $51.1 million for the year ended December 31, 2016, as compared to $59.1 million in the prior year. Revenues from operations in the South America were $46.3 million for the year ended December 31, 2016, as compared to $35.1 million in the prior year. The decrease in revenues from the United States operations is primarily due to (i) the sale of a mill in April 2016; (ii) an unplanned prolonged outage at one of our customer’s paper mills; and (iii) regional flooding impacting two paper mill facilities of our customers, reducing demand for wood chips from Fulghum’s associated mills. The increase in revenues from South America operations was primarily due to higher biomass product sales in South America and chip sales to Asia in 2016 as compared to 2015. During the year ended December 31, 2016, our mills in the United States processed 11.4 million GMT of logs into wood chips and residual fuels; our mills in South America processed 2.8 million GMT of logs. During the year ended December 31, 2015, our mills in the United States processed 12.5 million GMT of logs into wood chips and residual fuels; our mills in South America processed 2.6 million GMT of logs.

In February 2017, we announced that we have received notice from one of Fulghum’s customers that it intends to exercise its contractual right, under its processing agreement, to purchase two of Fulghum’s mills. We expect the loss of the Fulghum contract to negatively impact Fulghum’s operating income and cash flow in the second half of 2017 and going forward. If the purchase option is indeed exercised, we expect to receive a one-time cash payment of approximately $5.5 million.

We generate revenues from sales of wood pellets to industrial customers, specifically electric utilities generating electricity. We began producing wood pellets at the Atikokan Facility in February 2015 and at the Wawa Facility in May 2015. Revenues were $25.6 million for the year ended December 31, 2016, earned by delivering approximately 184,000 metric tons of wood pellets. Revenues were $7.9 million for the year ended December 31, 2015, earned by delivering approximately 43,600 metric tons of wood pellets.

The Wawa Company delivered approximately 134,000 metric tons to Drax in 2016. The Wawa Facility did not incur penalties in 2016 for the shortfall in delivered pellets from the originally contracted volumes because the spot market prices for wood pellets were less than the contracted price with Drax. The Wawa Facility has not made any additional shipments to Drax since January 2017, and its remaining inventory of approximately 12,000 metric tons is not sufficient to fill a vessel to ship to Drax in the near term.

Prior to our decision to idle the facility, the Wawa Company agreed to deliver approximately 336,000 metric tons to Drax in 2017. In January 2017 we shipped 48,000 metric tons of pellets to Drax and in March 2017, Drax and the Wawa Company agreed to cancel the next two shipments of 2017 without any penalties, leaving the Wawa Company with an obligation to deliver approximately 193,000 metric tons to Drax later in the year. Further amendments to the delivery schedule under the Drax Contract may occur based on the Wawa Company’s determination to idle the facility. At this time we cannot make a determination if any penalties will be associated with future changes to the contract. Rentech, Inc. has guaranteed the payment obligations of the Wawa Company under the terms of the Drax Contract up to a maximum amount of CAD$20 million, including potential penalty payments.

Our Wawa Facility experienced equipment and operating challenges subsequent to the replacement of problematic conveyors last fall. These issues have persisted. Our Board’s decision to idle the Wawa Facility was based in part on our review of the work by a third-party engineering firm to identify necessary capital improvements. While we believe that the issues we have been experiencing

at the facility can be resolved with additional capital investments, we have concluded that it is not economical to pursue those investments or to continue to operate the facility at this time.

As a result of this decision, the Wawa Facility operations team has completed a safe and orderly idling of the facility. While the facility is idled, a small workforce will remain in place to maintain the facility so that it can resume operations with minimal cost and time if there is interest from a third party to invest in or purchase the facility. The remainder of the workforce has been placed on a temporary layoff while options for the facility are explored.

We reduced production at our Atikokan Facility to levels necessary to only fulfill the delivery requirements under the OPG Contract. We continue to monitor the Atikokan Facility under the new operating plan. At this time, we expect the Atikokan Facility to generate cash flow in the range of break-even to slightly positive under this plan. The Atikokan Facility will no longer ship wood pellets to the Port of Quebec. We will continue to explore alternatives for selling additional wood pellets produced from the Atikokan Facility to increase its utilization and profitability.

We generate revenues at NEWP from sales of wood pellets to the United States’ residential and commercial heating markets. Revenues were $27.8 million for the year ended December 31, 2016 on deliveries of 145,000 tons of wood pellets. Revenues were $54.3 million for the year ended December 31, 2015 on deliveries of 272,000 tons of wood pellets.

Results at NEWP this year were negatively impacted by relatively warmer weather than in previous years, continuing depressed prices for competitor heating fuels such as heating oil and propane, and changes in consumer buying patterns. NEWP began scaling back production in February 2016. NEWP produced at approximately 65% of capacity during 2016 and is currently monitoring market demand and inventory levels and will adjust production accordingly.

Costs of sales include (i) service costs for our wood chipping mill operations, which primarily consist of costs for labor, repairs and maintenance, depreciation and utilities, and (ii) product costs relating to our sale of wood chips and bark in South America, which consist of costs to purchase, process and export wood fibre products.

Cost of sales for the year ended December 31, 2016 was $83.2 million, compared to $75.9 million for the year ended December 31, 2015. The increase in cost of sales between 2015 and 2016 is primarily due to the increase in biomass and chip sales by our operations in South America between periods, which resulted in an increase in product costs for operations in South America, partially offset by the decrease in processing volumes at our mills in the United States, which resulted in a decrease in cost of sales for operations in the United States, and the decrease in depreciation expense due to the sale of a mill in April 2016. Wood fibre feedstock, labor, repairs and maintenance, and utilities comprised 84% of our cost of sales for the year ended December 31, 2016. Wood fibre feedstock, labor, repairs and maintenance, and utilities comprised 81% of our cost of sales for the year ended December 31, 2015. Depreciation expense included in cost of sales was $7.7 million during the year ended December 31, 2016 and $8.7 million for the same period in the prior year.

We began producing wood pellets at the Atikokan Facility in February 2015 and at the Wawa Facility in May 2015. Cost of sales primarily consists of wood fibre feedstock, labor, electricity, repair and maintenance, and depreciation.

Cost of sales for year ended December 31, 2016 was $50.8 million. During the year ended December 31, 2016, we wrote down our wood pellet inventory by $24.8 million primarily as a result of a high level of fixed operating costs and repairs and maintenance expenses incurred during the outages at the Atikokan and Wawa Facilities allocated to relatively low volumes produced during this period of ramp-up. Wood fibre feedstock, labor, repairs and maintenance, transportation and electricity comprised 72% of cost of sales for the year ended December 31, 2016. Depreciation expense included in the cost of sales was $9.0 million for year ended December 31, 2016, of which $4.1 million was included in the inventory write-downs. Cost of sales for year ended December 31, 2015 was $20.3 million. For the year ended December 31, 2015, we wrote down our wood pellet inventory by $11.3 million as a result of a high level of fixed operating costs allocated to relatively low volumes produced at the Atikokan and Wawa Facilities during this period of ramp-up. Wood fibre feedstock, labor, repairs and maintenance, transportation and electricity comprised 75% of cost of sales for the year ended December 31, 2015. Depreciation expense included in the cost of sales was $2.1 million for year ended December 31, 2015.

Cost of sales primarily consists of expenses for wood fibre feedstock, packaging, labor, electricity, freight and depreciation. Cost of sales for the year ended December 31, 2016 was $23.3 million, compared to $42.2 million for the year ended December 31, 2015.The decrease in cost of sales between 2015 and 2016 is primarily due to the decrease in sales volumes between periods. For the year ended December 31, 2016, wood fibre feedstock comprised 48%, packaging comprised 11%, labor comprised 8%, and electricity comprised 6% of cost of sales. For the year ended December 31, 2015, wood fibre feedstock comprised 51%, packaging comprised 12%, and labor and electricity each comprised 7% of cost of sales. Depreciation expense included in the cost of sales was $2.0 million for the year ended December 31, 2016. Depreciation expense included in the cost of sales was $3.0 million for the year ended December 31, 2015.

Gross profit was $14.2 million for the year ended December 31, 2016, compared to $18.3 million for the year ended December 31, 2015. Gross profit margin for the year ended December 31, 2016 was 15%, compared to 19% for the same period in the prior year. The decreases in gross profit and gross margin were due primarily to lower revenues as a result of the sale of a mill in the United States, partially offset by an increase in biomass product sales in South America and chip sales to Asia, as discussed above. In addition, the increase in product sales, which have lower gross profit margins than our wood fibre processing services, contributed to the decrease in gross margin.

Gross loss for the year ended December 31, 2016 was $25.2 million, compared to gross loss of $12.4 million for the prior year. Gross loss margin was 98% for the year ended December 31, 2016, compared to 156% for the prior year. The increased gross loss in 2016 was due to higher sales volumes at inventory costs that exceeded sales prices as the Atikokan and Wawa Facilities were ramping up, including the related write down of inventory by $24.8 million during the year ended December 31, 2016 and considerably higher depreciation expense in 2016 than in 2015. Further, certain expenses were recorded as operating expenses during 2015 before assets were placed into service. These expenses were capitalized to product inventory and included in cost of sales during the year ended December 31, 2016 as both the Atikokan and Wawa Facilities were in service during the entire year ended December 31, 2016. The improvement in gross loss margin between periods was due to improvements in inventory costs and increased revenues as a result of the higher volumes shipped and sales prices during the year ended December 31, 2016 as compared to the prior year.

Gross profit for the year ended December 31, 2016 was $4.5 million. Gross profit margin was 16% for the year ended December 31, 2016. Gross profit for the year ended December 31, 2015 was $12.1 million. Gross profit margin was 22% for the year

ended December 31, 2015. Gross profit and gross profit margin were lower because of lower sales volumes and sales prices during the year ended December 31, 2016.

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐


			Page
PART I
ITEM 1.	Business			4
ITEM 1A.	Risk Factors			13
ITEM 1B.	Unresolved Staff Comments			23
ITEM 2.	Properties			24
ITEM 3.	Legal Proceedings			25
ITEM 4.	Mine Safety Disclosures			25

PART II
ITEM 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		25
ITEM 6.		Selected Financial Data		27
ITEM 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
ITEM 7A.		Quantitative and Qualitative Disclosures About Market Risk		54
ITEM 8.		Financial Statements and Supplementary Data		56
ITEM 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		127
ITEM 9A.		Controls and Procedures		127
ITEM 9B.		Other Information		128

PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance			129
ITEM 11.	Executive Compensation			133
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			154
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence			156
ITEM 14.	Principal Accountant Fees and Services			156

PART IV
ITEM 15.	Exhibits and Financial Statement Schedules			157
ITEM 16.	Form 10-K Summary			161

Customer	Number of Mills		% of United States Volume
WestRock		8		20	%
Graphic Packaging		2		19	%
International Paper		8		17	%
Packaging Corp. of America		1		15	%

Locations	Production Capacity Tons (Short Tons)		Indoor Storage Capacity Tons (Short Tons)
New Hampshire - one facility ⁽¹⁾		84,000		3,000
New York - two facilities		165,000		33,000
Pennsylvania - one facility		60,000		2,000

	For the Years Ended December 31,
	2016		2015
	(in thousands)
Revenues:
Fulghum Fibres	$	97,376	$	94,219
Wood Pellets: Industrial		25,592		7,933
Wood Pellets: NEWP		27,776		54,305
Total revenues	$	150,744		156,457