Income from operations increased to $22,155,000 in the first six months of 2012 from $15,874,000 in the fist six months of 2011. FutureFuel does not report income from operations by segment, but does report segment gross profit. The chemicals segment gross profit increased 54% to $22,918,000 in the first six months of 2012 from $14,842,000 in the first six months of 2011. Biofuels segment gross profit decreased to $4,283,000 in the six months ended June 30, 2012 from $5,585,000 in the six months ended June 30, 2011. This decrease primarily was the result of the expiration of the $1.00 per gallon federal blenders tax credit which, prior to 2012, generally resulted in a reduction to our cost of goods sold. Additionally, we do not allocate production costs to internally generated RINs and the benefit derived from the sale of RINs is not reflected in our results of operations until such time as the RIN sale has been completed. This may lead to variability in our reported operating results. At June 30, 2012 we had RINs available for sale which we did not have at June 30, 2011.
Chemicals segment gross profit increased primarily as a result of two factors. First, FutureFuel incurred certain expenditures that it was unable to pass along to customers in the first six months of 2011. Such expenditures decreased in the first six months of 2012. Second, we experienced certain reductions in our operating costs due to an ongoing effort to minimize such expenditures.
FutureFuel reported net income of $15,586,000, or $0.38 per diluted share, for the first six months of 2012, compared with net income of $11,153,000, or $0.28 per diluted share, for the first six months of 2011. Adjusted EBITDA for the first six months of 2012 was $22,524,000, up from $22,053,000 in the first six months of 2011.
Capital ExpendituresCapital expenditures were $3.8 million for the first half of 2012, compared with $4.9 million for the first half of 2011. This decrease was attributable to the completion of certain capital projects undertaken on behalf of certain of our customers. FutureFuel is reimbursed for a portion of these expenditures by certain customers and grants as summarized in the following table.
|(Dollars in thousands)|
|First Half, 2012||First Half, 2011|
|Capital expenditures||$ 4,068||$ 15,325|
|Cash received from customers and grants as reimbursement of capital expenditures||(289)||(10,456)|
|Net cash paid for capital expenditures||$ 3,779||$ 4,869|
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