GPRE - Earnings call transcript Q4 2017

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Operator

Good day, everyone, and welcome to the Green Plains Inc. and Green Plains Partners fourth quarter 2017 results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jim Stark. Please go ahead.

Jim Stark

Kevin. Thanks, Green the Inc. Plains to Welcome Partners and XXXX and year quarter call. Green Plains earnings fiscal fourth Participants are Officer; today's John Chief on call Officer. Neppl, Executive and Operating our Officer; Chief Chief Financial and Briggs, Todd Jeff Becker, President to There along. for follow is presentation a slide you

link that Presentations both can Events find page the on presentation You corporate Investor websites. the under & on

on because assumptions earnings and future forward-looking projections Commission. and predictions, are and the Securities this During comments events. in statements risks the Actual which discussed These XX-Q our statements, and call, of call Factors filings and made with Risk we Form differ results will factors reports of are current are to section subject could based in statement that press be releases about expectations other Exchange making the conference uncertainties. and other Form yesterday's during this XX-K, and materially and

also factors to presentation forward-looking two refer any duty of update You cause page do undertake website We could outcomes. that statements. the to not may about any information for different

call like to turn the over I'd Now, Todd Becker. to

Todd Becker

rate. Thanks, tax reported liabilities income quarter. recorded $XX.X the Jim. joining or thanks everyone, tax at related of the million for a tax in benefit a newer to net of $X.XX quarter share $XX.X There deferred of the today. call is And fourth good lower revaluation our our morning, We for million corporate the

tax forward. tax in for liabilities, $XXX John fourth per diluted of call gallon affects our let of EBITDA benefit quarter the of $XX.X approximately had share. for crush law million generated deferred the quarter a the $X.XX $X.X We the how totaled loss the more the Excluding $X.XX was quarter. fourth the tax consolidated and about XXXX later rate The talk margin and million. slight going or new EBITDA revaluation we a net million for I'll

markets, winter. for the market the the quarter and up lows partially physical basis hedged oversupplied came multiyear financial the as the in reached ramping was we into While was production

For level corn example, XX we low at some would to XX western as saw the as under days basis typically locations. belt, trade under what XX in in

were pennies of a did some physical slippage while market in industry. see we this that an of not we experienced couple on a we hedged, average So, widespread as before have

crush In financial addition, declined the as December in rapidly well.

year, we gallon. over for history, crush the our margin margin gallon. $X.XX a we crush the was ethanol our consolidated reported was a $X.XX per us If back go lowest when XXXX year For in in

costs operating costs starting direction within in X.X efficiently it production in heading to has of about December. to fully with plant This ethanol operating this. other been line the years in get plants right their are a and our Our we rest for the the and to once finally platform. X purchase the takes we're see case

I'll XX% gallons the see see that quarter get compared as acquired harder, approximately we continuous did nicely assets operating the for relates completed the within this will a per ethanol This saw in which Tennessee. Obion, bit operating as in the per cost into plant a September located of help when it period result XXXX especially for XXX.X operating gallon, we XXXX. plants overall best shipments, our where discuss in three the Texas. XX% the and the internalize we averaged which though, costs capacity our as export to the We million narrow gap our in spike will new Overall, a XXXX. Green with converting now platform quarter Plains Illinois significant a startup is operating was As in being that is our later of can are approximately barge in to fit million we portfolio, Madison, we platform. of gallon and quarter The ran outlier for XXX.X of I across from record production one batch same these addressed recorded improvement cost we the in gallons to fourth and XXXX. terminal we Beaumont, decline

flow For only impact the volume Plains to in partnership, total our MVC is minimum of at the like to trued-up XXXX capacity quarter India approximately XX% the United the in from of the volume to was third locations quarter would the the exported for through Beaumont to of deficiency with moving I Green our Brazil, remainder Emirates, a our add production the back export was quarter variety XX% a payment ethanol cash of in terminal Plains. the slight Also, a Green of fourth also distributable second fourth commitment with ethanol Green including production in Plains that December. of that Partners. Partners of and

exceeded venture we pleased EBITDA that are expectation pleased out Jefferson a partner. our non-ethanol of joint XXXX We laid with say terminal the been segment to operation million. $XXX for solid the Energy we the I'm of has and

generated and $XX of million EBITDA for of and generated partnership and $XX.X XXXX. the Ag Ingredients EBITDA, million generated Our million Food segment $XX.X Energy of EBITDA

XXXX at led $XX.X Our XXXX quarter combined between good low that, was But merchant a The segments EBITDA. a overall. in activities. trading anticipated, like a Food natural in and in and with segment million Volatility profits year which our increased in that generated segment business gas of which still even year overall Ag merchant opportunities segment. Ingredient remain quarter, we results by finished we limited good expectations strong which in with was the these $XXX of and in EBITDA. million $XXX the and non-ethanol for range Energy million had

on we control as as no those this a timing there place. recognize we sold. this would we're any have weaker margin process. transitioning to Cargill-owned with company-owned cannot this recall, until quarter that on from cattle indicated that We are you a It's If associate cattle and takes transition costs issue cattle have just

first business performed a XX,XXX our with XXXX, of adding XXX,XXX result the on lots with feed half We capacity. started three back in generated year, Looking the well us. for year XXX% was We year $XX to ended and fourth company-owned purchasing of the cattle in I'm EBITDA the very pleased head increase. quarter. XXX,XXX a say cattle-feeding of head the of of head per head, This

per For include head which the the actually year, generated any we all-in $XX head sale we does in hoteling include of If of generated Cargill generated not approximately cattle. from per of for XXXX. on income EBITDA, the we third-party cattle $XXX XXX,XXX head that, XXXX

will of if a hedge previously, down cannot indicated baseline $XX EBITDA, of purchasing. slow our have we we minimal approximately we per As head

This trends to vinegar vinegar XX% possible vinegar good Health wellness Organic quarter favorable in our in in We the very the apple see trends versus fourth and of continue portion cider volume $XX margin a made previous and growth XXXX. drive year. the business. XXXX because in capital continue million we volume was of to investment increased expansion.

organic well. a X.XX In $XX their addition, we to for was reported excellent for the experiencing threshold the the in of XXXX, increased trailing vinegar, above Green distribution for XX% EBITDA white four the coverage for million antimicrobial in quarter, an times quarters. to that year distilled second-tier distribution are Plains growth times level ratio the with fourth increase increase partnership. demand compared adjusted up of markets puts as for Partners of The the the which target approved $X.XX the for incentive X.XX the and quarter distribution GPP rights an board and us in

financial the Plains Green to Now, Partners' trends Inc. Green to discuss to in John performance and and in the outlook back current later come partnership, Plains. review turn I'm and the Plains the going industry call the Green to ethanol I will over for call

John Neppl

interested Inc. a for what Jobs cattle have volume gallons, of X.X% about ethanol Plains down were for fourth Thank Act results the and XXXX year the acquired impact consolidated the the say the volumes Tax you, average of acquired down fourth revenues fourth offset addition was Cuts our lower quarter in first earlier me the price to Todd. and lots the ago. of impacted from by vinegar of run quarter sold business Consolidated XXXX. feed three in in addition of income of fourth ethanol, I'm net the for you Consolidated were year the for full the X.XX X% a quarter. by income quarter, $XXX for lower billion a XXX many versus in million to quarter of million million and was million the Revenues net gallons. but XXXX, ago. through we let X% a but $XX.X hearing $XX.X up almost are the Green to year quarter was

under liabilities of the and newly million revaluation per diluted tax benefit a Jobs the revaluation $X.XX million of we or $XX.X loss had liabilities, a We to Tax due enacted recognized deferred Act. share. of $X.X tax of tax Excluding Cuts deferred the

federal of tax the which you rate As course, reduced know, reduced. liabilities were tax to act XX%, that deferred the our means,

know, As there the such and, the we components as Plains. impacts unintended the and the was to some as causing issue, consequences, quickly confusion you probably later. Green are which and Currently, some tax XXXA in will cases, act Section negative interpret written act positive discuss Todd new law, vaguely, that of have

deduct XX% current corporate XXX% could decreased with level our of expense profitability and XXX% current structure combined us, interest overall cash rate to CapEx, our capital is which XX%, ability from our taxes, the obvious the ability reduces to benefit tax of which to to limit While expense. of an our

deductibility addition, performance-based In no there an negatively is more and tax exception our longer compensation rate. compensation, for officer which of the effective limited is impacts

effective crush earnings. capturing point can the And book a deduction upon and basis. our and crush XXXX. tax of our rate give be is with effective consolidated consistent would will two a range rate highly interest Our going on that consolidated you view be XX% best go-forward $X.XX at resulting is and I XX% dependent carryforward midcycle The basis. guidance between This two, consolidated and factors. all range One on could of our the forward a XXXX of this years tax

deductibility limitation As the our is with capital interest us reevaluate structure. potential overall incenting to many companies, of

periods interest this want forward potential impact to properly over While any are considering that to unused run. ensure deduction be carried future the we can we long indefinitely,

our As a structure. million and amortization, was long-term last and a it impact our Certainly, if on quarter effective said, tax quarter for rate is in compared profitability, to interest, EBITDA, our and approach strategy we positive be income EBITDA previously of have depreciation debt the will determining a long-term taxes, requires reducing has $XX.X or multiyear tax fourth million overall before Earnings our year. for consideration the fourth strong $XX.X planning.

our will construction fourth we the in quarter, of in anticipate about We $XX quarter. maintenance partnership. including business. maintenance our approximately vinegar Beaumont on million completion with amount, Plains, the $XX XXXX, For our the $X.X our spent be $XX of CapEx in We was and the CapEx of CapEx. about million lots million at across spend million investment ethanol included that terminal, Green in million in fourth which two-thirds the to about feed cattle we the expect being spent that assets, production CapEx $X about Of

billion. IR the an XX you $X.X million debt quarter increase increased note our on $XXX at secured $XX fourth total to was the lots. the which This in the of due inventory in significant at December Our number our commodity $XXX the under or balance XX. by total just of debt revolvers, On cattle million marketable slide during are will includes quarter feed presentation, readily by working end of our of capital million

the lower debt of debt end term from as term ratio resulting steady. net X.X quarter, fairly times leverage Our fourth the EBITDA remained was our at

Our in cash, revolvers of million along solid with end $XXX at our year. the available million $XXX.X the on remains liquidity at

million $X.X returned our and million For Plains to of the share of million. $XX.X $XX.X with shareholders repurchases Green year, dividends

include in build For year. for last XXXX. X Green adjusted as The XXX its EBITDA of we payment volume in the for ethanol million Green Plains adjusted X% Partners, by $XX gallons in of the quarter. was a the tanks the $XXX,XXX sold customers by fourth fourth making the Plains which is production flow from $XX.X was minimal $XX.X was Plains, roughly which million Plains reduction ago. Distributable inventory on a quarter. payment ratio. of partnership's million $XX.X production Distributable was fourth the at lower million EBITDA times Green to cash year-end. $X.XX assets, to the distributable was the ratio coverage impacted volume a adjusted per times fourth than a NVC up back cash EBITDA quarter for Maintenance XX CapEx the Partners were the were sold less in The flow by This quarter a to credit storage $XX.X in quarter X.XX than the remainder year XXXX. XX-month due does credit is was in not which declared million, quarter. resulting in $XXX,XXX of of million difference gallons the of a January about ethanol second less basis, of unit gallons last and back throughput million from MVC by to quarter, On was fourth Green distribution reported The deficiency dividends had declared reported flow same results coverage X.XX the of cash $XX.X the million segment.

manage a coverage long-term. target X.XX ratio to business times with continue over We the of the

Todd. it like back to over I'd turn to Now,

Todd Becker

effectively we're Thanks, in in John. We're market. the means approximately XX% the quarter, first which spot locked for

So, into let's get right outlook. fundamental the

industry we two quarter, days bit up The different. as that to we're factors. physical remain oversupplied markets a an and evidenced several seems something as last indicated have As I by tightened three if way effectively

first The excess the away. market. the the normal returned we in if weakness you depending quarter or volumes them hard has relation physical to levels need it's Basis is, to had finished, to better find on just and gone

term York Harbor the cargo several also all last has tight lot narrowed out Margins the improvements the greater factors, widened have digits to which several to double last structure market over Second, a work the because do. than weeks show weeks, over of significantly still that. is And well years has even to the spending after the market physical we below on but of last New begun had the with represents last spread curb several of the out year. stocks these third,

We market believe have beyond closer driving an summer forward locked year this X% away but storms not winter we lock having than margins. export States. is into in and season, to the severe much of all margin demand, motivation around the season demand the in on we start job that to doing had the started is driving get I'll build or spite done has the which strong anything as stocks as haven't curve the we such first opportunity really trouble Gasoline in see the should shortly. The off better improvement to of quarter to United with move XXXX

the weakness. plants is the quarter our major for January, and the are make tightness to and strong on forward case we transpired structure demand that at underlying have gas will of is the give robust. to a was this quarter So, weakness levels led factor the remainder to depending bias QX we last In to slow production of that year on marginal from a market. The a margin translating will Not during what year. our did the yet decision to in and something our not expansion positive big but physical Exports here. margin, do

or billion billion gallons billion exports we record to to While exports remains XXX totaled to X.X Plains increase grade XXXX of X.X maintain be discount export to our million last of XXXX, or gasoline we a XXXX. cheap. wide the in year and exports gallons in as gallons exports, total expect XX% and octane X.XX Green share our expect remains of industry sold of for our

need expect and, from kick increased exports hopefully, good, domestic Middle We Brazil, Mexico to grow but as strong we will consumption in East China are Philippines and well. demand and India, as The well. Canada, the ethanol

X,XXX,XXX the per than approximately day we X,XXX,XXX barrels billion annualized. is produced higher rate XXXX run for in that approximately produce XXXX. is X.X% This Our gallons is per expectation which industry XX.X day, barrels will the

of translate this the demand does equation. how side the to So,

billion blend to gallons. to domestic be expect We XX.X billion XX.X

purchases, market XX.X X.X gallons. could XXX the weighted billion this of demand the total demand another XX.X larger up If add were gallons to half EXX and demand happen if we have XXX today, see step million tight handle gallons, additional comparison should billion to the we we we that will will kicks Brazil change or feel seems physical pale today. would that their the to radically to economics If capacity stocks year. to and or the number Again, And between in don't what somewhere of continuation think As data be strong just in exports the year. to be need billion evidenced XXX or the January strong we will billion a December of we million gallons China last later first and the if stronger. and of we X.X in, as believe as export in

decide X,XXX the ethanol by are as US has to continues XXX The sort. our to expanded at and as start from increase grant by an EXX that the to sell looking expects focus of highly comments motivated as be The the industry to encouraged the waiver to EXX auto soon as million elected waiver. EXX. EPA today authority are EPA's industry administrator well. over the think EXX some EXX The offering with incremental million gallons sell on EXX offering officials economics he our fuel actually We're to Pruitt's advantage RVP We We works we that stations XXXX. year. significant in their of from end to the The as we currently for another push continue work and blends higher expect XXX on of the retailers retailers they year-round as XXX well favor. with to octane much can recent could to using

review Now, Ingredient segment and the bit. a let's Food for

about plan in our capacity, to market Based cattle XXXX. talk we XXX,XXX business. let's head current First, on

EBITDA solid XXXX our We XX,XXX approximately its to head, based capital, per head a are million Kismet on require will moving from current project XX,XXX investment. $X.X This capacity. up operation forward expanding is which with of

cattle seeking acquire XXXX. more also in feeding are to We operations

our risk to growing fundamentals to this and and committed continued very prove business. in successful programs remain this have management business are managing solid the We

one US ago. And about before. In XX% Korean this led the not fact, year believe meat This much last year South is versus year, up year the and up the US are ending often ago. a from Hong which was year sales Export out as was time of in by XX% Japan, XX% compared the we thing China. many are how talked is versus up a to exporting – Kong,

poultry see meat in are Organic demand Fleischmann's increased We the industrial continue and industries. Vinegar. experiencing antimicrobials solid for and to product as is growth vinegar sales red

on organic other seeking will first to are to We focus well acquisitions businesses acquire. ingredient and continue as and expansions bolt-on fully we

know, you high for so we to very for right We believe far types the be bought remain value Fleischmann's As will is need the is valuation multiples not these wait Plains reflected of of companies, of greater Green patient when we opportunity. it and adequately and that today. the in

Our for terminal Jefferson is business. open import/export

fine and The that. into and a spot XX. needs Since train the basis ethanol outside we network that Green customers solution some as and thus well. with provide of grade using since Plains buying volume have February expanding we've an do terminal their XX up international we unloaded are a customers other and on trains hard can arrived and long-term have vessels the internal far we of for customers very Green sign Plains the contracts, terminal and one plant volumes that. our with loaded all November Inc. We first then, just market but any can export books the specification on is to of on since do driving is startup we we are working few strong to unit this X unit Almost end-to-end are are players share as

domestic we considering well. Illinois our and the amount We have seeing of Currently, the offering venture for barges picking as first are ASTM southern in part US of ethanol delivering traffic partnership in originated ethanol barges the an Madison, our portion two of of in in the the year. the this joint truck Those spec plant. to ethanol into increase also offloaded terminal up we're

North on of remains end towards the of Rock in the first be the terminal XXXX. in Little quarter partnership, schedule For the service to

ratio. production same continues expanding We the more through With of to world, of or location like the production, same York, the protein other in words, to growth amount platform. growth control that. group, commercializing working of value with revenues breakthroughs the as feed. across of current at XXXX significant we the feed fish are Nebraska. Plains industry. additive in well. part in mix, improvements gained Feed represents progress the We partnership in in Green as Algae but algae their algae This and and believe fronts. We grow to respect organically with would the a so believe feed of XX% the aquaculture continue Or, top as priorities the the XX% algae the are to our income feed as in grow trial are for the as at our around partnership this revenues conversion the to the is Plains strategy significant X%. of we opportunities change we as of yield target our our will bigger trial results with opportunity the Green either XXXX exceeding acquisitions. I continues with on partnership's to one new creator be inclusion a algae important can up hope that expectation XX% an to for on see of number does our in several our in make from shareholders advantage a XX% non-affiliate

ethanol plant's much corn as also that, exist operating in and oil. in like technologies expenses several of The also way efficiencies. corn grains plants We operational install yield past. partnership because It improved helps are a reality to did of and us those lift Enogen Syngenta distiller plants where at drive it. corn plants oil way mix. the believe part the profitability lower announced seven at offers we high-protein Enogen with the in we others improve technology ethanol assets. is corn the in We which are to from production this We the emerging earnings reduce of the a our potential a as performance see difference volatility, As for a in for currently perspective experience and use December a another notable the

We adopt years. whole over several the across platform will this next the

sure famer to grain have continue we cooperative do Kansas, sell so As us. Congress we XXXA you a a customers the formed join the may fixed, of interim. and in to timing to can our not in products a to market the have for closing, interesting grow. the believe continue are want We months at in In don't is fee seen, will certainly for nominal get they Schedule while setup our be improvement the that the disadvantage demand coming and as we're to expecting

the ten focus years, the on is have since XXXX. we capabilities of we As leverage to built our plan platforms the next

We our have major shareholders. several priorities for

debt will our biggest of priorities reduction. be One

begin that on will focus the year. We to next over

about and value all is strategy a we working by several make way our ago our it. the and short like is be by financing debt continue years priority our replacement increased our debt that, net cattle as reducing While trading evidenced when much on growth capital standard distillers world protein in we will focus is term our The were zero. that driven business, and of grains. our After will we term to lot of

with will value to upside from a of cheap we advantaged realized great be or equivalent value asset from in perspective, usage and be to we ultimately an would the have domestic global not To to we firm. rallied value year's the algae to an as believe combination We service meal XXX% minimum believe as markets. XXX% achieve in will protein soy our demand we and has domestic low be replacement In upgrade the but upticked fishmeal high-protein the corn is can global values position more. capital or ethanol a initiative, last very

both opportunities in and to diversify our We're additional that ingredient which to our supply platform expertise calling a we costs drive is invest business organically and Plains line. earnings gained distribution the the operations in by ag core that industry grow strategy for today. efficiencies platform lastly, now credit moving we cattle-feeding the to Again, food aligns owns have splits. deploy going and of have the this look in getting as will to expand businesses. This not at the to and MLP improve today high for and assets. the bottom all to session. to with and and our to into and in invest chain we utilize demand is we in continue partnership Green value add food XX.X% start driven our And will We are we will bolt-on the strategy in ever-increasing global with question-and-answer And energy, Thanks today. I'll for octane, place Evan protein ask value the

Operator

from very Please Farha Thank much. Stephens Instructions] [Operator question first comes Aslam you Our from Inc. go ahead.

Farha Aslam

morning. Hi. Good

Todd Becker

Good morning.

Farha Aslam

inventory, though how getting Could we're your commentary large? be to also, physical numbers tighter, even you the that's seeing just explain it's tighter. a seem getting that little bit more about on highlighted physical basis? that And supplies You

Todd Becker

Yeah.

they quarter last So, during year. quarter of the very fourth physical weak third and the basis late got in

when oftentimes physical to physical numbers. so still pretty what hedged, but And, financially basis well with that So, in sell. we're have have we're the historically, that, really we been means hedged, line we has historical – is say

oversupplied it's if Iowa very or under trains saw So, and Tennessee XX the bit to in we X rapidly in or moving were we market even were markets. weak financial and physical Bluffton we as And over in saw levels online in first the stuff again in got we the fourth now the into later the come first better-than-historical early production. But remained up where some saw that quarter quarter, but cleaned weak. new quarter, all from

the to the ethanol the a buy over excess there seems times quarter is train. and ethanol, even to was So, looked physical markets be is X and market was stocks been and the financial trading saying – not of get that at though are very we Chicago excess because between large, hard this we there's have stocks to physical good. X could demand a there markets, it the so something physical to what crush. disconnect In

the needs saw and in you for continues barrels, QX market a might none really physical like stocks of to from demand million terms big see moving of demand the so, to million that, we XX XX export into And even though weakness that point. increase into this in is around our translating at

Farha Aslam

Okay.

So, first-quarter basis in in help profitability to is the tightening going first the you're quarter highlighting the that physical of of itself. kind the

Todd Becker

expect but the of able focused start to as the think such like we between the Well, not it's much than margin need margin see better quarter demand demand, we heading the enter into well. uptick it's domestic structure to pointing are And But so that spreads remain as we're don't the yet a that. coming as export just there's translating we're structure. see, the season, a to be in even to kind though still the really bit a is we markets if And a looks and It's a see the not little that I we it disconnect increasing translating driving year. build driving into in more stocks in where it's higher last demand tight, robust, an – of going kind to QX/QX changes out do This season. we stocks physical direction. and with markets right underlying physical on

spreads are but the physical margin a once into some inverted carry it tightness where storage yet where structure or were keep fact to So, it's in translates were that into translating calendar situation is coming even the again your in which it it quarter, carry back carry better full markets, there incented or and and a fourth out were literally $X.XX, there, in you going ethanol to on late either in almost not put spreads we overall. those in month so the being a –

confused. market So, again, I a think bit is the

I the think a day, continues in market. in the – some market physical for translating fourth pressure, a spot ethanol of but it's pressure hedge home, not necessarily there's spot bit from sitting get into a like saw to looking a physical perspective, quarter. around, nearby a the daily bunch Each from pressured we

Farha Aslam

Okay. And question. longer-term then, a

that of we $X.XX should and margin. above when you should $X.XX tax we $X.XX were about the think about in or of that that think How levels that think – – terms You historical go think can you achieve to $X.XX Green from margin below down targeting? that's points EBITDA to that kind highlighted level? Plains I EBITDA? about we that Is rate about a anything long-term had your

Todd Becker

past I the think five years, margin or midcycle For a indicated we've four $X.XX. at

you that's kind little just bit a – to on where stocks day and any and going just barrel parity margin. so the So, – however supply we're we there's look excess not demand in XX kind a that long-term, only over of demand. or days and many of are excess of XX that's did million range midcycle – there's given When at to million or

XXXX, we gallon. $X.XX go to a If generated December you of back

that and be a is So, that earn our do long-term, we as midcycle earn a supply, so right think And this where are is catching margin. plants than of margin. demand demand will to we midcycle $X.XX. I to we oversupplied we like not supply grow stocks can not China lead margin build now the did view we all that. will a bit up But seem believe company, now, the these have bigger could in Brazil the I this invested to better the things over better situation think with than structure programs, in programs, than and right We

John Neppl

an tax picked consolidated numbers. now, it's identify analysis more. on done Not We've illustration, I just $X.XX numbers crush various prediction And Jon. an is simply this will the illustration. at any as rate to what our try to of be. go-forward nothing just Farha, kind go-forward

Farha Aslam

Okay.

– be look number should think we about a would So, how and time. over get would better Is we'd than conservative this it? to that that $X.XX be

Todd Becker

ago for includes in corn you $X.XX five $X.XX that oil. When $X.XX history, oil. Because not back years go corn did Absolutely. include

So, margin when structure over we talk that's about of end we a of think the time. long a conservative period that, lower

Farha Aslam

Thank you. helpful. That's

Operator

Adam Samuelson next ahead. Goldman question Our from comes Please go Sachs. from

Adam Samuelson

is that continuously what's We've surprise the kind creep just a pretty for this supply of – years. Yes, first to a balances trying you of risk the X.X% the last upside your just XXXX view up Do and thanks. to if Good production think year. there's day? Maybe wanted just there's on industry above I in ethanol. make more this the been morning, we I'm running the to capacity couple understand year. about on everyone. just for And, sure think [ph] Todd,

your would your in that how year-over-year the you is dimensionalize at As risk do think footprint, X.X% you you look and own actually production up number? XXXX that for

Todd Becker

those perspective, that's From production From year, be later come standpoint, XXXX. XXX margins in much limited an in good. the million our that in don't capacity as as see the don't in industry's muted general construction, from will and in of plants. we aren't don't of our expect returns online. we see but going think, will increase Yeah. I we to XXXX think have we new and have the to there's somewhat quite slowed projects continue online any expansion sometime investment all industry across else any Projects, at gallons new some couple we

we – in think away is year, shutdown a barrels below a take XX shutdowns, full we came this when we the pretty about about – then you at we started ramped hard. last we will at And shutdowns, when believe much of went out coming. time, a be days So, to general, and look shutdowns to million year, the and start day up season

we Hopewell have foreseeable future structure down until margin I think there's – the the taken changes. for

fully York have We grade. XXX% to B committed

well. around you've or of changing seen about as talk capacity some some production their I think at plants others

several don't day last quite will it. the creep capacity barrels And And is I minus to think and so, be X,XXX a seen over the I as is the XXXX plus or probably think I think a reasonable think overall right years. robust we've minuses, with pluses as about expectation, way

Adam Samuelson

XXXX, some be over some some And summer Okay. was to – because the just you bigger pretty downtime clear, took pretty market-driven. in months. maybe That

still Your is expectation comp. against that

you have increments any kind of to You'd other though be come. capacity flat don't even

Todd Becker

correct. That's

Adam Samuelson

Fleischmann's food year-over-year had Food Fleischmann's, Ingredient expectation for EBITDA that on on the additions business year. then, you and company-owned despite Okay. the quarter from you down can an cattle the Fleischmann's year-over-year. business last the And cost I of and to us dimensionalize? but was lots, question Cargill the a And side. it's specifically, for cattle. Maybe cattle? there is on The see the for What just for Maybe a was on get XXXX? full that hard timing there's

Todd Becker

to expenses building And we get more Yeah. not into we're completely the going say were associated. we that cattle fourth quarter, as except to had

and – associated and basically, the all none revenue associate is cattle cattle. all marketed building we So, being the can't have cattle, you you have of of expenses were with – with cattle when taking the out you we're Cargill the that

the recognize. relative just we it So, head was yards in those amount quarter of were to one the we could of expenses where that the outsized had

in the as XXX,XXX-plus recognizing we much amount we're placements of against December full a ago of have those, and So, expenses to head. marketing revenue amount six-month smaller take against

so, be equivalent. And you if only XX% it's or and quarter buy coming a after the happens you all a if marketing outlier up new you fill an might with expenses that all where have to you associated feedlot new cattle feedlot empty the have

up in mentioned that improved the in to a think $XXX the of kind range year to placements business move are that of markets. we're cattle, we expand we some – perspective, achieve sub-XX a like million head XXX,XXX of head record as there well. year-over-year, the bought our $XX all look and a we've over kind we since market have multiple. expanded that long-term quarter from is company to other a but another expect $XX the on head and And down the we've years. money a underlying – a going at at million then, And We not next business under $XX it, a We So, earned capability, based on favor you just and But and And million five when $XX for certainly side, the could had of trends kind numbers. next in have the both growth of then. for company. the that business on years year is several that for of minimum if – spent from perspective was year to those

number. just of minimum a kind it's So,

$XX that million $XX is view a our we on earn to minimum, top could on which So, is that. head $XX of the

And how general, out in baseline. as that segment break so, kind a that's we of

Adam Samuelson

on. appreciate pass I the color. Okay. Thanks. I'll it

Todd Becker

Thank you.

Operator

next Group. ahead. from Our comes Please go Heather from Vertical question Jones

Heather Jones

morning. Good

Todd Becker

Good morning, Heather.

Heather Jones

blending. And, granted, expecting XXXX, So, scenario growth when quick and on strong remarked demand you year-to-date demand it's comps. been. much you're a really not for basis, question, on easy gas your were gas in laying you out But how thus full-year demand has

Todd Becker

range. in XXX demand, better. XXX will Gas will that be think be we to XXX still

quarter very in strength to full year where it's hard think I will first of be. the the predict because the

going there. things that with So, keep Obviously, we're go cost at XXX The economy the range and are in XXX that. of to the experts it play else. a all that and gas, everything are to in lot of

much we're with were – year. gas a situation last demand So, we year-to-date that's basically better than in

which dislocations out some all supply for markets might our one demand those So, with oversupplied market. There see were that tightness. be markets the running that and not for place longer-term in the feeling ethanol physical But drop off those were to reasons go signs we're some no some and the big positive of and were of that of why it's and ethanol. demand our are kind product, sometimes the we

Heather Jones

the And going to high-protein DDG. then,

obviously, are are products the protein years. than So, numbers know some But, strong potentially the better you really if some me. the of for especially demand we've run, there really would, you're strong, few this like, bullish of out next returns, that

would of could you return it would they one higher your like seem projects potentially in. invest be So,

of into you what's where you like Beaumont push ranks, I it So, to likelihood wondering, the terminal one once guys Partnership. that down was plants of your putting just the the

Just give on us sense that. a better

Todd Becker

in it's the product, to up as down stages capability We don't there Beaumont in technologies crossover the of between emerging on because soymeal and evaluating there push That's do Partnership as – Beaumont the technologies. partnership a high-protein as on move also on we're do to the there to are have – and bringing well we in the the project that some I'll product that. and start the see there's starting multiple this these some final protein of technologies to liquidity We're of kind so need backwards. is well up So, down DDGs.

gain making the protein, and the look returns in stages do at can technology protein protein in so, what your which you we and XXX plant. you about And values, of soymeal type global is $X.XX and the demand supply and protein that think to a in if can that in When million of believe high-pro at those the gallon in lock to will And ethanol significant final could you're get uplift on, uplift and from gallon decision obviously, that's there or steady that's a are on place that. are $X.XX we can spread. each up above able get against what agreements you we margin pick uplift you it will we we based you to

on, we choose we sure product that and will will globally that place so, have one offtake when the need make that to ship we for choose deliver at the a And go. domestically one sure can that make want right product wisely, choose, to the that to we we partners also and quality deliver we we we both and now, are looking the choose

corn ethanol plant it's is $X of cost higher of So, coming, $X do significantly is to a kind it's million oil like not oil. per was of this. million and to this combination all that. It a Corn But though.

it will And corn so, out don't believe roll we as fast as quite oil.

write $XX on value volatility corn as reduce you we $X.XX the even to you be much, we gallon $X.XX for to and very a a what to one and is not do start these to it thesis I will I – think what of understanding between believe a this it's walk $X.XX and will the of If $X.XX getting going $X.XX we getting revalue industry door oil. you the for or same rolls from a check out, to before takes in that's your a our supportive it going you're and demand but be it if, a protein before cost rollout on opportunities. depending earnings it's quite very structure it the of gallon ethanol, industry But of you multiple of get generate the saw your industry sudden, a global a have time plants it. from won't if lot pent-up first assets protein are all that ethanol and think important even somewhere once make oil, start But because protein, even it to will plants of but for gallon the to long-term corn slow affect $X.XX – And re-rating that these be all think very an think different got $XX portion rollout announce million ethanol. because over choose, that's on we you've you these about so I that types also of million once

Heather Jones

Right. That's it out. cost point make of you about high a putting the very valid

And able of fast be in afford this just and they're that, lot let's months operators, put XX it, coops, you to two-plant terminal, to your multiple forwarding, high-pro years, going technology call and a to this. export plants. two not these one at So,

this doesn't you your for differentiator in a potentially? terminal So, big export guys

Todd Becker

interesting our with global income when you We first, non-ethanol we this, size when things with out going to is do where believe XXX undervalued the to you Yeah. a as today put of and your the relative believe business of capabilities at look – our for we is exercise fact as our a for growth end-to-end take is baseline the look oil at got through well, like you then a it's cattle Plains all company that, operating the have, top financial of to very providing business, take giving EBITDA look corn at a our and start valuation, going a non-ethanol your the our the and be. export and But to look insights solutions this distillers we should and at again there we which of to of customers, work business which on believe us to getting to together you've and Green that that be lot top opportunities are in that we demand is add grain time there's put – XXX, MLP terminal on to started great just and and high-pro it's valuations. valuation all

Heather Jones

you so Thank Okay. much.

Operator

question ahead. comes Laurence from next go from Alexander Our Jefferies. Please

Laurence Alexander

morning. Good

Todd Becker

Hi, Laurence.

Laurence Alexander

the quick using give that ones XXX the A couple be? you ones number if then And a like could a are that number that then, to of that what per algae And unsustainable of update head, your do on a questions. the see couple the do amount side? good front or on on cattle, quick The is, as don't EBITDA also think midcycle? plants of would quick you the open-ended And and is you a like get mind. I'll Enogen high for open-ended, you

Todd Becker

Okay.

the question, over in used and next year Enogen For our two-year plants XX last at we a the Enogen we're seven to of year. one plants to rollout

we Some in out our share to of longer help – plans eastern have of because that really will and partnership bit great and the a great area take they've that's do to there with they'll of them US place use them Syngenta market little moves it's It's them a – for that. a gain expansion one product.

what farm. with pace The products. out we up we love growing and product. our farmers it with their is helps quickly. helps keeping chain of Local overall, with And it done more seed all supply time very sign so, sell a believe they're them, And Green Syngenta that, their on Plains every sells the yield

product. inherited is it much million world-class built a to start up there at to for of or that we using there. our to the feedstock for what moved to $XX take reason first major algae York and we quickly converted fermentation the outflow scale-up and York grow algae, to moved we've fermentation we that's scale this done is we very inherited that's $XX the And And York, as an And when cost that we what we was plant On lab of not step of technology we patented the have bought main kind have million ethanol technology. doing all. very to so, we're basically why

come We have a few will that design we get we're then March, will out on, once a where with up think, opportunity. point fermenters to get there, into working scale our but late things larger we in we we

have We the to able trials. Asian that into trials, in our has in we looking that also at the that markets. fish been returns We're been trials feed other – feed it have in product everywhere aggressively trials. And inject returns seen fish supercharged we've fish

plant. we So, special feedstock a the we believe patented have a from that fully using product is ethanol

the for applied have patent. We

we returns believe gain So, a Again, full out of but our provisional, have really plants. a things have we feeding be on it made the rolled more it actually could across prove we'll have left in the and patent few the lot it product have product we progress since actually the to and out, than we making but seeing our and beginning. we

about years, the talking been think. we burn now, out for this several this years. So, cash We've figuring the if of we'll eight takes our longer And see. low. we're next It than is but always function commercialize in you just can very over

up world high-pro it And and so, And with in – distillers lastly combination an we come market. it's for use to interesting with a and – think then the possibly product fishmeal

John Neppl

more. had two He

Todd Becker

didn't notwithstanding The of was The well, it earned kind When we in range. customers. for a we in associated $XX general XXXX. that XXXX, with on was just head feeding, the we cattle we And have costs look of much cattle that that in alone, revenue, at but extra back inclusive what achieved the received, earned as XXs. year cattle our because per we cattle are And last it in fee, a in $XXX margin. we the margin, we revenue as

always because $XX we and start we obviously, a So, $XX while with to times returns start feeding be want conservative better. We always $XX, at there baseline XX, but margins. our we are then, of get see

branded packers with programs. working are programs, all-natural on We

put those and into partnerships that returns are better well we getting have agreements we where our get as up very paying we're of put we're with both parties obviously cattle it. focused I and significantly The Cargill is our gone we can as the very uplifts. genetics we that place, and on yard with that for our as with genetic And quality well. do which the high-quality them off in think better giving they feed they use so,

model, years. use the the $XX So, the I certainly several last to $XX achieved we have while would in on over XXs

Laurence Alexander

Okay, of lastly, for great. just then, guess, And I one guess each you. I

how cost those, lot Can negatively the less your that of or years? guess, you've And and cost of you is you maybe I these perspective over shifting streams. – you up the that, the feel time. there in the with much of or on creeping bit been Plains, around couple becoming you're of lastly, serious months I like excluding my And over how see about think and that? either ethanol point surprised a are John, for So, curve or little discussion Like, come what talk assets to you up if coproduct of you was earlier when view with you philosophically has five a your as margin center are you any sort into on argue challenges can about are curve revenues conversation what where competitive give questions that the investors, your plants gravity to Green sort this that? the positively and metrics next would of

Todd Becker

Sure.

I'll and Let discuss me address let John come first five question his on months. eloquently the and first second

up see So, we're And those the of investment like which plants down year talent dropped our to we the down. of where year-and-a-half over in results over starting curve fix. or historical very to last really we've time we of we the towards our creeped really and of levels. through curve more last were high costs below years, results really could in cost felt cost, And those seen acquisitions so, plants best saw the the we cost that couple December get

everything the plant. best So, is off of judged

a deduct corn, the the natural have that we an EBITDA look distillers of number. Obion, used Tennessee, to is and we when gallon to So, gas, off the $X.XX $X.XX to to at get an ethanol, we the what and say

the So, things like we well over that's of We how out $X.XX increases to railcars with as used there's acquisitions happening that. gallon as plant as how the guide kind well, these a other creeped cost and of market.

we all it's bought So, not just higher operating because some cost plants.

we're batch moving continuous $X.XX now And historical drive or to ICM our with our into whole shareholders. buy not back we in middle for the a to Madison on a there because platform because or to type Iowa for the We're the very got lot to good they've and our Obion would so, didn't cost of at best-in-class or those of values plans cost get gallon. not platform to of to be. an $X.XX $X.XX we to whole curve and very going two from at get certainly in a we plants level those costs the of a We're finalizing gallon. doing That's year-and-a-half last like spent what where $X.XX we well returned

feedlots, back lot fourth will range, year XX-plant that We sub-$X.XX of think the more where we're things quarter and that take again, continue us. from nickel our plant DGGs huge on, team And you on curve that focus grains and the last algae class. platform competitiveness $X.XX and the long that It's best again. in focused saw a But, help But somewhere down at to ourselves get the to and and a getting our of to all more projects, over term, value what we at very we can and our curve that focusing if a a have an out we coming that and if shareholders our on shooting on that again, selling for margin high-pro there, doing, like fully work and we're corn looking things or sometimes of bit all oil of the cattle within in to those to a and the cost drive that's Jeff creeping we're for the absolute for. a if – So, his or about XXXX continuing kind and cost the we're down overall are gallon we things of distillers $X.XX overall $X.XX nickel happen the in towards perspective. gulf in platform other $X.XX longer. add best-in-class in a see within best starting

So, it's a bit of formula. a combination and a bit of a

John Neppl

is months, this I week. would I Laurence, that say John. five think, – next

of and And very First I around pretty has happening really Seriously, months, minuses, flow the all I the interesting internally think think from at pluses. side, I attention if fascinating. at – even I if think I after to look five detail here overall sharing been been pluses, the the and though, of what's of my for all, me. I I information kind on think intraday, it's a look positive think day-to-day, assessment

We bank have fantastic support.

I community A a the had in in that only of the been can constantly capital the opportunities But that certainly supporting for financial way. I our going that banks think I are especially the capital And work fabulous. on we support the relationships looking before lot the think in banking and markets strong very along company, us life. forward have group general. on structure I has as keep can for past I hope of bank my knew the people side, are with

to think really just appreciate. understood, fully a a I year. of is a industry I didn't think margins And for obviously, ethanol to at you maybe And, times but billion what's certainly a produce I've around the the keeps But a volatility, can looking to company what it's more find there, we having it's outside. the have going but And that expect corner. I that. in can come manage from volatile. appreciation when we always really we from accustomed been forward things size sensitivity challenging curve lack the gallons but I margin, margin new side, on to it's seem one X.X the the we happen that couple get and how we for wondering because our forward

Todd Becker

markets demand market to for any think get end that. believe to anywhere of to had shipment other to all the portfolio. plants, asset anytime and And all different comes buy will we position global traceability from, in of of not in and where across country we demand the any portfolio see upstream, but One grades, Beaumont end the any they we grow, Laurence. what's it's are changing out grade want in that that our do in for discussion grade unique grow they for that And that. allow on one ethanol as value standards portfolio thing, and to we're the tracking of place, close one to getting they our believe will want we especially the that only credit customer, a the of ethanol total assets continue of around we we to the of European want, we Hey, we global the the just grows, the with demand it, terminal, it. using able We're And because any to yet, continue somebody be the as the different your solution. with countries only global be can importance give on a our make are companies players

Laurence Alexander

adding for Thanks that. Great.

Okay, thank you.

Operator

Brett comes question next from from Please ahead. The Jaffray. Piper Wong go

Brett Wong

for Hi, taking questions. guys. Thanks my

dig to the little a bit wanted in First, exports. on

about Just X.X. X.X the XXXX, talked X.X quick opportunity as to in X.X export you says clarification. Todd, a deck to but

Just wondering you think you deviation really there gallons many in to how and exporting are China XXXX?

Todd Becker

not Jim our that. But, have general, to X.X X.X gallon talk company will billion is me keeping a – the I just view is view right in a up we him about view. with as now. billion that with

though, think, think aggressive we But, be in higher. range XXX-million-gallon that. alone, we first gallons. just gallons. come around the happen million be will in year, and China, We the in range. that XXX do think of to quarter I close have the will the that first end XXX that that's month to could in if rest They quarter. in cargo general, a And one were things pretty for will million Some up you we in

just exports reengage going of additive to to so, going be. And idea they be all, on to is kind if that where at our are

more done that's is policy is think fact year quarter that to half their and first their I an will in the important use So, ethanol. be

very very they going if bigger far, a not. quite happen equivalent. to to I They that's And it. it a product. like buying cheap it's buying part there. what's So, It's of hard And of like octane. But cheap predict they they're think frankly, thus predict turn hard on kind to buying or will fully cheap

Brett Wong

by Thanks. intention means. my any that And, wasn't Jim,

Jim Stark

find I'll out [indiscernible]. okay. It's

Brett Wong

China corn, think you on can policy impact thoughts there I just here and really if cleaner looking for self-fulfilling ethanol. think the you US in you EXX importing the cetera. of meet obviously, to to the check lot grow EXX, that have kind they're kind as your in there wanted general et policies. – US But, they air really to then, And obviously, we're do – of ethanol as to going typically it. kind also, is import emissions, Todd, seeing terms a cetera, and, of China Do talk et availability of on longer-term, of the to with water getting do their just

on opportunity. your longer-term demand that thoughts Just

Todd Becker

as a long-term need ethanol for it. opportunity I it's they huge think demand,

work situation still all the starting plants They're that all of this they're Same grains. they're use think, say see I of supporting were they're wouldn't of bit positive the their excess. in to I with and reasons of China, one scarceness overall, That's anywhere a the that some regions the think it's – the because looks it ethanol to I working had. corn of through they for corn. distillers ethanol locally – of And But, a corn out. and are internal that that running import to they've on domestically. like and through more ethanol. trying was production burdensome demand certain running working cheap close thing us. reports to not easier continues don't out grow to

It's at If it. on cheap our a look on this was world product it to error the took take an in part view, you out. And lock distillers China protein. policy grains, their

everything that we when higher we so, at left. we they China saw cleared kind than year made values And where last of

they're always And up place me continue burning nice have have. very for I that positive hard because a was it's – they've make that putting are us. fuel in when to have. of on-and-off I in take to opportunities may perspective, we and from China think come going some have to be never still I anybody we knows of advantage that going market. of It something octane, Again, the is But long-term that so, on EXX. and And they're as they cheap to they'll United to predict fact. recognized a on clean Overall, I the the shortages on to focus to depend think a competitive always think that out policy that's the States

Brett Wong

color. Good Thanks. Yeah.

Just one last me. from one

this – this On big of the are of was the I high-pro mentioned, – to as a wow, CapEx one. assets? a back gotten why been at Todd, of you've, not out while the you DDGs, back then, kind being little Laurence across we ago But technologies. are ten a it more hurdles, just cost kind I'm opportunities because when analysis, And gets is but the lot technology top And any that, technology industry of obviously, has in the the your done a frack there's there non-ethanol looking question Kind was you just more the of efficiency – platform why now? years it's doing better? asking, were or on of at look sure building

Todd Becker

gotten abilities have talk from across and areas world clearing all the protein will – and both protein through protein. in look as processing, starting if to technology, is some need strategy the whoever translate protein their in and happened competing mechanical Well, finally you at perspectives it's in better, has processing, years more is upgrading many in soy we've the that you're it XX we in seen our demand. is whether whether the of or Also, are fermentation servicing technology or the by, back upticks And grain next different capabilities. around kind protein, XX what's all you're the and think whether companies, global you other is processes technologies whether growth over needs all of agriculture, the ten the last whatever years, to to of I more rapidly evidenced

going away. not robust. to it's think I Extremely go

capital, you are where going dollars And invested in yet. so, said, anything a billion it we and seen to look over allocate when ethanol we at haven't we always assets. we have well And

started out, made So, used we make we to and ethanol. we DDGs

corn DDGs, make we Now, oil. ethanol and

just with plant thing Now, we're of we of And the through these. basically next using looking corn technology in you are is do growth – in factories quality your the demand. product. Enogen. alpha-amylase them, what rid And the you can say domestic distillers continue getting with These you upgrade are at to that

And – volatility well. speaking a will to much corn that so, can long-term it for you investment oil. of from have – will do we by as half that to dollar be start to to you're plant. It's gallon earn. is gain start be you certainly value long-term of like build this you but extension Again, per for to Why is a plant do going with earnings be what you'll to the two-thirds pay to of when can you Once or you're themselves. – at they looking a you that? a out that. the themselves. cents reduce Once just of if for following you natural self-fulfilling able of for three, And how ethanol wouldn't at produce two, that start can do kind if minimal relatively see can product one really, it's would you line over harder And And then, And going this, that's already that things, having pay the to one. next start it. at they them to pay start for two we're these Well, the pay to you're and one. roll you at

end spend building you'll will for the and we and capital believe just front-end them. to be So, the while be back it in start – in themselves start great the will will pay more

organically include that we doing else high accrue saying, and that. do it years One years do Fleischmann's Green that can so acquire years and that. can that if how market Plains, unless businesses, everything on we been will assets are at Food with ingredient as and And on provides major market for looking And And One those not what around as the looking believe capabilities growth. buying food Plains the finally, both One them. non-ethanol, value diversify and MLP to ingredient the see as a it – MLP a of the and revenues vinegar from opportunities acquisitions as afraid out a next or XXX% for do building a on steady bolt-on it's us from XXX and focused well ethanol not long-term great focused both It the front we On initiatives. companies. income look believe Green something and board's necessarily Fleischmann's perspective. cattle at has more relationships parent's five growing and at add using interesting operating with when producers, of beyond there's outside our GPRE a protein We're of then, platform to with also you we're our Inc. we other platform. our five Ingredient company. we're the board dependent a But to waiting we doesn't a value is the is Partners and we leverage we ten will as company, all where certainly plan four at value we there's to and away initiative. is is is that's fully opportunities feeding. revenues that, do more looking or from

So, that? gain that after who that are for And believe are and of we kind you the where So, does when or we part about that five look are at kind new years the opportunities what protein excited of customers so. that. then, lead your those of be plan and protein, next our four very initiatives, will we next once major high-value

Brett Wong

Todd. Great. Thanks lot, a

Operator

next Eric from Please Our from go comes question Craig-Hallum. Stine ahead.

Eric Stine

Good morning.

for me. few a ones Just quick

some idled you the mentioned quarter. you in So, production first

maybe or in you I percentage And QX, are in seeing if do of Just know, could other went you kind just that? of it quantify that wondering that confirm, as to you your a people overall give alone. production. the at then industry

So, details any helpful. there would be

Todd Becker

– by us of approximately But overall, reduced production. about just to as continuous the marginal. also what lowest very We January make our go then we're Hopewell, didn't or XX% are month changing the down improve. we is over of kind that lose by go down took Yeah. which producing doing Madison – to said we're And in seeing to until plants – just inclusive for also, for margins from now we we and going batch February is and forward money going of was it it is

down. production that took we So,

the up ready haven't the just coming, out of in that out We the quarter to yet and the we're boats export But with to decision are come have that. demand need supply the stem and and February down made do a go. figure seeing to we during then to quarter what and what that we'll flesh with

Eric Stine

it. on that And be sounds like you've decent got a just level might a waiver quick of confidence Got maybe it EXX, year-round granted.

thoughts good? you would of incremental Just it mean Is a terms there would in volumes. thoughts think million what gallons that on be or couple hundred

Todd Becker

it looking but XX automakers your confidence, as using waiver industry know we some a things. And made it. House groups it lower much I – want fuels. the progress on They want octane hard huge to from understand. as the fuels. for have sure at available the not love fuel. high-octane front EPA high-octane RVP minimum raise is waiver, bargaining what and I'm working like they I And are and the we that the again, in that potential look the is the about They want – I thinking we're standard The White it. from But, base Washington EXX other than on other know of things there's as at that going not being tool

important it. is all of waiver fact the wet plays the so, if into get that And well that RVP

that selling of We're it EXX, the their and $X.XX this of selling seeing doing put think base lot on EXX the get markets a getting new highly X% motivating pumps incentive competing it's fuel, across of because retailers now, And to did retailer if a a factor. making by great a that at it. blender, money. in Right not any sell money on some We're any I with lot buys selling and US. early somewhere are opportunity blender, who he stations that EXX I extra adopters margin it the good more think, EXX fuel. he's point, $X selling and blend the that's they're and

are certainty around overall, than So, that. getting cautiously optimistic so we any more

Eric Stine

Got it.

you. thank Okay,

Todd Becker

Thanks.

Operator

Mejias Our next Markets. question ahead. comes go Omar from Please BMO from Capital

Eric Stine

Ken. gentlemen. morning, actually in Good This for Omar is

I – provided quick there them I but you question color exports. China, some tariffs, beef allowing upside could plants on on Any a talk your US Brazil. ethanol of I some Just the or news imports removing – some corn about some color building Brazil. down about are have been talking But they've know the of on around some potential I thoughts there? you potentially from know hinging the there. what think, guess, guy the on been are also,

So, view on just Brazil. your general

Todd Becker

XXX the average, We'll in year, tariff. both This we're year, over And then, it has Last country, they million very XXXX towards is in that generally structurally see to still the more to some has some similar, but positive bio the Brazil. targets if do economics and with positive something towards did that structurally gallons. in program XXXX start of will the long-term. estimating We're you inclined need XXXX, are putting long-term that think in. for weighted It we when demand we come positively of and to in that place XXXX hit. even bullish renewable economics. in We be

just down corn structurally that down The industry say up that think ethanol out of region. would I is there anybody demand bullish is starting there.

people the building I well. down like they're some a are locally They're hopefully, it They're some looks demand few plants And profitable. well started. as think to, traction get there as there or that have positive. gaining is some of

that genetics long-term. because structurally we our and are the we scope crops yield in competitive longer. that the future, long-term if incredible size scale remain the sugar-based this and not will overall, Brazil for we're that foreseeable versus corn believe ethanol we in bullish of record And with the of have, We believe coming year. the we the So,

Eric Stine

guys outlook, do any your guys on and export Japan look in at incremental you the incorporating And how market? to India you are do exports

Todd Becker

gallons Any be for another cake at Oh, We that numbers focus up I'm XX can Did those to those X in to will about Japan much They X ask not footprint. be all gallons. that million but comes or into believe or India. in stock go in get the even to on going big to our some about XXX be to is in million well? we our see million icing talking we're XXXX. And based able on even will If into Again, you XXXX, now carbon we qualify India to in when can off a XX XXX-million-gallon we my supply. as if if this year, this XXXX difference difference situation. something gain Japan. including share of on we Japan the Japan year. opened going makes market that's we that's get into their yet, not barrels and numbers, Japan, again,

Eric Stine

are any If Yes. incremental there there. thoughts

thoughts the there, open Any delegations there? I out there to some was just US trying market. think

Todd Becker

starting all for another Yeah. India us. the to We throughout in for and even curve We're look think opportunity India XXXX, XXXX is seeing demand pricing. great into

those to think so, last this We three of some year They're already. And the starting could States. million year, inquiries did And through that numbers. we're they about we're out getting see they gallons. exceed that the buyer XXX the of United number

need done. exports. a kind this to of some we positive have So, why that's business on again, of spin we But, get

Eric Stine

of should item year here. well? one cuts utilization? how you and And we helpful. me, housekeeping guys very the that more should That's about I talked color? think Great. think How we it's QX in capacity for production full Any for as know last about a about

Todd Becker

will think similar we think run at. obviously, fourth structurally things the we rates, the up – I downtime of production can in we like to – fourth we as and run we'll to historical coming we XX% towards quarter general, year, But, of quarter run that XX% ramp have remainder of XXXX for that historical the full And, that. run our capacity. have

Eric Stine

That well? includes as QX

Todd Becker

Yes.

Eric Stine

thanks. right, All

Todd Becker

Selman from ahead. comes next Stifel. question Our go Akyol from Please

Selman Akyol

partners. A questions you. on of Thank couple

Todd Becker

Okay.

Selman Akyol

business kind Plains looking Green from at Inc., what goal? look out reach of coming of you not are partners' that When and XX% see frame you you time to that for

Todd Becker

the XX goal next are months, Our in those seeking to diversify to XX earnings. we is,

Selman Akyol

kind alluded then, be year? should second you like we last to of be quarter by of the looking in And slowing XQ to supported weakness Okay. production MVCs of the were that in the there, terms given in we

Todd Becker

do will the Plains. be I think Green we above it we'll always internally – or from at above that. or support We'll MVC, if not

Selman Akyol

you be MVCs what contracts Would Okay. be drop-down of they would with they take-or-pay or of thoughts of And they be place anticipate can throughputs terms you terminal, the talk in are in then, that? having of just kind about the or any MVCs on in place? contracts, or sort would

Todd Becker

to We're in try with lockdown discussions that terminal. multiple multiple and seeking take-or-pay contracts. parties We're

We the but will diversify Plains terminal, for those at think that's our would Plains be whole unitholders a we support We that Green Partners. shareholder parties. Green and bit. one of

are a right we we running at now. XX terminal trains are unit very even unloading month full XX steam. – bullish And still that of now, so, we not we said, to Yet, as and right have are I

so has every the really line, – real in And there. the efficient more met. been starting everything no and minimal has to a loaded, have become been It's been unloaded. issues getting and There everything standpoint. boat grades down working, just trains All – getting have straight quality getting been the boats demurrage. been even All from logistics in line, getting

is market The that I seeing we load. think. market the so, And seeing that is

days because less we're related. fog of have We down because

standpoint barges. boats. of And are solely towards appreciate We companies getting their starting capabilities unloaded. the can think these devoted a service – I from trains terminal We the are people have unload unloading better and of to

Selman Akyol

do you Appreciate anticipate then, that. that selling out And terminal?

Todd Becker

Selling out of the – terminal in terms

Selman Akyol

fully Just in of utilized being loading. terms

Todd Becker

of anticipate always to utilized be we kind that at will beyond indicated And where the say does that barrels. to barrels, terms next in of we look terminal fully even XXX,XXX two that want from looking that expansion XXX,XXX loading. We Yeah. come of phase another because

want phase there. then first we through let's we get So, to – one from where out get and go figure

Selman Akyol

down fully to down with would I drop still you guess. or XXX,XXX out some capacity And it then, go? the you sold to do on it you need before drop have that

Todd Becker

No.

some down think capacity could with drop I to we go. it

is I already. our think the again, think the comfortable want it see diversification be Plains long-term committee would board I while unitholders there certainly comfortable some support of Green GPP would over is revenues. to – fully, and supporting sitting And we that complex [ph] would it

to why that's take terminal. not going the we're So, whole

Selman Akyol

one Got last you. then, me. And for

growth distribution there? for comments XXXX, any Just

Todd Becker

Yeah.

to said, ratio be time, goal at XX% times to our is coverage is remain at we goal when rate. we X% over growth think, – as and, long-term I look our X.X to

or penny one it two, do And that so, drop. whether half the in penny and a that's number a depends we to on XXXX, make acquisitions. whether Number XXXX

date one. stop distribution we've in maintain we well that we our to and we're all not certainly all, ratio And a growing our want above distribution. grown going to sure So, coverage to make

segments. making I on think our depending well, we'll keep assess, other the coverage all strong as on sure it just that goes ratio we how

Selman Akyol

thank you. Okay,

Todd Becker

Thank you.

Operator

Raymond Please comes James. from Pavel question next ahead. Our go Molchanov from

Pavel Molchanov

for Thanks say, make Broader EXX policy the question to squeezing We're some are changes talking of policy course, heard But, ethanol waiver. much about we federal EPA also landscape. trying we've minimal interest. in. about the me to less, RIN that shall the to

So, one you in, positive or this for I'm curious, at a as net the look do negative administration a net industry? year

Todd Becker

helped line for Obviously, that, still seat a This there. maintained solutions the We is administration we're believes positive. think think of industry White have need driver's get that bottom the the on market House – we're certain has our the we have supportive all-of-the-above Midwestern net that threats one to fact understands held he to industry. RVP but them is to a and has support beyond think and the the on being front. and grow ethanol line absolutely senators, believe I able hard potential you in I and And that support going The is supportive in from but the is solution through legislative we the waivers. certain to be

obviously, salve hard about Pruitt at concerned think think point. followed a legislatively, And is think, certainly that's He I administrator the I trying will the are Regulatory change. get it that, think costs refiners this some and far to very And find important. law. as limited so I be threats, RINs that. with independent RINs solutions of he's associated on and how help we to through to some understand that. I

and to And I the and mitigate the to that to about that change. – hard at come indicated us mitigate. the would RINs But they're to your market administration people that, – RINs, it's retail just to are in that about talk we because trying you RIN sees that change, And would won't that they offer supply. first to ethanol capabilities have EXX best – then to RINs that more would so upside him retail you try sell and complaining complain want solution immediately are think mitigate RVP people all. have come the believe We the to when about We have if fuel start you companies the risk now, basically have into distribution is don't the limit waiver and prices. on but contracts, mitigate are to get they the against coming

meaningful it of looking Obviously, that things ever a these at the line the of bottom have that to give changes repeatedly of one is hold. of that that's lead think the biofuels favor petitioners some they're But unlikely we're cases judicially, and the new of RFS. lawsuits it's ruled in these I in so, will credibility. that get courts doesn't whether any And the lot in

It's oil the and end states? states path. refiners of there the corn deal question negotiated industry the the some senators the from day, at and hard certain is, a So, between congressmen or is real and

them our believe a will are none maintained. point, but industry. I And at Yet, quo I so, some believe, there to will made, be I think of some changes do the threat status

Pavel Molchanov

And Okay. a about question your as M&A well. approach

an aim revenue opportunistically? mix the ruled still capacity option clearly ethanol X.X out parent boosting at you you diversify As your that is gallons have the to essentially or level, billion beyond

Todd Becker

billion absolutely a think industry option. it's level X in We start Opportunistically, you to scope scale off of this that you player that kind to an No. need production. need, X.X-billion-gallon as really to we have be

So, expand pieces this want buy you sense. that point, to can't any is seeking the our would the continually would right platform. goal ethanol all at our make that to value probably you of at buy plant you But

So, our to a Tennessee if pretty Obion, that to, actually an replace And like not an you all, close could to one Iowa, sure want wanted to a Indiana or first you to Bluffton, replacement you that. is that or view if of – acquisition. it's buy Shenandoah, cost purchase make I'm

get of And out. have believe, and ethanol so, we to there's would huge our will disconnect to valuation pay worked time, underlying we in And replace a assets over these between assets. of where the disconnect that many

we've So, seen before. this

Pavel Molchanov

All right. Appreciate it.

Operator

next Craig ahead. question go from Irwin from ROTH Partners. Please Capital comes Our

Craig Irwin

thing I taking Good everything considering good much my questions. already is on asked. mind The was afternoon. that I should morning. for And say thanks one China exports. my on Pretty was

explicitly they including small there So, that very And that expect the in tariff you a in with bunch place? to is top exports send China XXXX? in know the over this you're been are booked. gallons approximate a of of of XX% to that's in I number were share confirm just Can have XXXX. us them XXXX. the And us an you piece of US for cargoes

Todd Becker

was million the execution. China. volumes, into of some But XX importers Yeah. exactly of I'm approaching December not XX But think kind sure of how we it the gallons million to tariff are that in into went January. of terms

to of December of December top with all could added XXXX million on XX so XX or pretty to get or of gallons so between million XXX that – million you XXX about overall, XX million XXXX so, XXXX. million And that, to close and in of

in XXX which So, quarter. the the half we happening think in first gallons, of is baseline that for China million in XXXX total,

Craig Irwin

the strong that. Great. Congratulations for progress. Thanks on

Todd Becker

you. Thank

Operator

back conclude our remarks. Todd additional Becker now for like does or I'd any this And session. it turn question-and-answer closing to to

Todd Becker

on for on thanks busy very We're the Well, many fronts, different the for of everybody see. coming on can shareholder you behalf as call. working

streams continue of growth believe what we platform, that is on the assets income that this us is proving believe all different the monetizing company long-term between are the credit overall We the and we value what closing the to giving the focus there the valuation of and market and gap for. over of the

so, continue look do to opportunities for that call work for today. will close and we And the to Thanks to gap that. hard coming on

Operator

for Thank you our participation. does today. This conclude your conference for

disconnect. may You

Green Plains (GPRE) 8 Feb 182017 Q4 Earnings call transcript