)

SEGMENT INFORMATION

FutureFuel has

two

reportable segments organized along similar product groups – chemicals and biofuels.

Chemicals

FutureFuel’s chemical segment manufactures diversified chemical products that are sold externally to

third

party customers. This segment is comprised of

two

components: “custom manufacturing” (manufacturing chemicals for specific customers) and “performance chemicals” (multi-customer specialty chemicals).

Biofuels

FutureFuel’s biofuels segment primarily manufactures and markets biodiesel. Biodiesel revenues are generated through the sale of biodiesel to customers through FutureFuel’s distribution network at the Batesville Plant, through distribution facilities available at leased oil storage facilities, and through a network of remotely located tanks. Biofuels revenues also include the sale of biodiesel blends with petrodiesel; petrodiesel with

biodiesel added; internally generated, separated Renewable Identification Numbers (“RINs”); biodiesel production byproducts; and the purchase and sale of other petroleum products on common carrier pipelines. Biodiesel selling prices and profitability can at times fluctuate based on the timing of unsold, internally generated RINs. FutureFuel does

not

allocate production costs to internally generated RINs, and, from time to time, can enter into sales of biodiesel on a “RINs-free” basis, resulting in FutureFuel maintaining possession of the applicable RINs from the sale. The benefit derived from the eventual sale of the RINs is

not

reflected in results of operations until such time as the RINs sale has been completed, which

may

lead to variability in reported operating results.

Summary

of long-lived

assets

and

revenues

geographic area

All of FutureFuel’s long-lived assets are located in the United States.

Most of FutureFuel’s sales are transacted with control and title passing at the time of shipment from the Batesville Plant, although some sales are transacted with control and title passing at the delivery point. While many of FutureFuel’s chemicals are utilized to manufacture products that are shipped, further processed, and/or consumed throughout the world, the chemical products, with limited exceptions, generally leave the United States only after ownership has transferred from FutureFuel to the customer. FutureFuel is rarely the exporter of record, never the importer of record into foreign countries, and is

not

always aware of the exact quantities of its products that are moved into foreign markets by its customers. FutureFuel does track the addresses of its customers for invoicing purposes and uses this address to determine whether a particular sale is within or outside the United States. FutureFuel’s revenues attributable to the United States and foreign countries (based upon the billing addresses of its customers) were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
United States	$	65,340	$	81,152	$	183,606	$	223,943
All Foreign Countries		344		270		1,443		1,562
Total	$	65,684	$	81,422	$	185,049	$	225,505

Revenues from a single foreign country during the

three

- and

nine

-months ended

September 30, 2019

and

2018

did

not

exceed

of total revenues.

Summary of

business

segment

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue
Custom chemicals	$	25,270		$	23,973		$	70,935		$	74,465
Performance chemicals		3,376			4,049			10,922			14,165
Chemicals revenue		28,646			28,022			81,857			88,630
Biofuels revenue		37,038			53,400			103,192			136,875
Total Revenue	$	65,684		$	81,422		$	185,049		$	225,505

Segment gross profit (loss)
Chemicals	$	8,488		$	8,898		$	22,978		$	24,470
Biofuels		(3,026	)		3,755			(10,984	)		33,961
Total gross profit		5,462			12,653			11,994			58,431
Corporate expenses		(2,187	)		(2,424	)		(6,323	)		(7,795	)
Income before interest and taxes		3,275			10,229			5,671			50,636
Interest and other income		4,404			3,358			13,156			6,688
Interest and other expense		(43	)		(130	)		(130	)		(3,666	)
Income tax provision		(1,014	)		(4,012	)		(2,889	)		(2,336	)
Net income	$	6,622		$	9,445		$	15,808		$	51,322

Depreciation is allocated to segment costs of goods sold based on plant usage. The total assets and capital expenditures of FutureFuel have

not

been allocated to individual segments as large portions of these assets are shared to varying degrees by each segment, causing such an allocation to be of little value.