ANDE - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen. And welcome to the Andersons' 2017 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen only mode, and later we will conduct a question-and-answer-session and instructions will follow at that time. [Operator Instructions] I would now like to introduce your host for today’s conference, Mr. John Kraus, Director Investor Relations. begin. may you Sir,

John Kraus

and the everyone. call. Andersons' Amanda, joining you us for fourth good you, Thank morning for Thank quarter earnings

have presentation slide provided enhance We discussion. today's that will a

webcast, of many call independent prospectuses are statements andersonsinc.com viewing the of prepared the the forward-looking Act in presentation Company's Company's today Investors in actual This conditions both the being supporting the page and is conditions, factors, shortly. United our could discussed including differ the offerings. completely filings and Today's publicly webcast States you're and information, constitutes a filed auditors the made described slides have If via competitive in documents, financial will and including sync. its that economic slides commentary result be weather, Certain will results and this 'XX information and in the and from factors the industries, be Company's it conditions, the at reviewed. presented those in with recorded, which Company's website internationally, forward-looking includes our available not on as statements connection general materially in additional

believe results primary investors adjusted are tables Reconciliations interest, our financial Although give and are for today’s measures to the upon the depreciation pre-tax EBITDA be information before the income, presentation the are This these period-to-period. may remarks measures taxes, to and period-over-period are measure of compare accurate. assurance measures comparisons, assumptions GAAP Company meaningful assumptions statements Adjusted be prepared and non-GAAP that reasonable, which believes and forward-looking no amortization the or its within to of our can measures. we of financial our that release. based from it financial non-GAAP they earnings found will and earnings contain EBITDA prove

believe one-time benefits benefits core operations per when impairment those reform adjusted our earnings fertilizer both grain income, and measures, from income federal adjusted as of charges we wholesale the share adjusted tax not representative of the diluted business took recent adjusted EBITDA. related are as both and charge pre-tax business excluded well have our net calculating income, and as US adjusted We adjusted ongoing we from to our measures,

On and John Pat President I the after me with call Pat, Bowe, Officer. Chief remarks. today John our your and answer Officer; Chief are will Executive Financial Granato, and prepared questions

I'll for Now the comments. his turn Pat to floor over opening

Pat Bowe

I'll provides making our good conclude John groups some comments business joining quarter strategic business for After our XXXX and XXXX. about progress outlook I'll you morning results. providing Thank the John four some initiatives. viewpoints each call prepared on Granato remarks the our fourth Thank current we're with on you start our for to review, our morning everyone. our by view and this of

Our adjusted our a continued and on XXXX results were the an better of adjusted groups challenging quarter some results expenses fourth number considerably period. XXXX Grain during we unusual improve fourth but results quarter remained to of incurred than basis. markets other our

toward depreciation results progress year higher make expenses continued in to margins. some interest and more that year. struggle fertilizer Group's weaker lower over most year compress to drove The by Group's oversupply Ethanol persistent markets a with The rates to continue margins a year. continued Rail hampered the Group lease for were Group Grain and more Nutrient earnings the see over to Plant typical happy We’re range results

income with results business grain opportunities. grain grain are fundamentals ownership underlying good Our and improving are stable

in selling. and the have wheat opportunities limits low. both low continued trading interested quite large keep large kept harvest however As volatility and soybean prices XXXX market supply world kept corn we XXXX have for corn, prices expected global in That into and which volatility soybean periods low farmer less and

risk During bolstered of farmers in services a pricing fourth enrolling was quarter programs. the our management freedom number our bushels by record business

year Group year results affiliates better Lansing as grain Trade significantly rebounded from difficult were Our over XXXX. a very

We our Tennessee caused Tyson and pending carrying business Better ethanol to international six year million sell improve a driven elevators an per of margin consecutive year worked also revaluation charges. was up despite cost of six yesterday impairment again absence issues we Farms. production improved results over industry facilities led over The that down to three and grain of agreed nutrient basis The lower delivered announced third meaningful Plant asset to the the quarter, of which business higher DDG difficult results a another which DDGs values Nutrient year to the quarter $XX.X XX%. any those while improved sale late The margins wholesale of demand by stocks. on or adjusted ton XX% was our and for vomitoxin values. year volume for

full rates, Our reductions much expenses cost margins. efficiency market effect the to oversupplied for of but lower be keeping exceeded were due railcar our sequentially utilization muted lease over by quarter year. year the these lower the these were and continues rose it to pressure rates on was The again improvements rate lower quarter productivity ago fourth expected otherwise a quarter as and we XXXX rate,

cars the quarter in all during more We fourth almost continue purchasing to cars the market and XXXX buy in secondary XXXX XXXX. of cars than

from zero who cars one Wolf In McNeely XXXX. consecutive took succeeded Rail, Shah I'd second Rush presidents, Bill roles. business underutilized tight. some has of outright, president want Bill store his Blair towards also we We good productivity a Jeff ongoing initiatives update to achieving and will of and the culture quarter team. safety president. each I wealth of savings activities of made changes on years who Group. as and the of a made refresh, more these was Rash years industry progress Andersons knowledge than mostly named bring of than quarter. on and harm two you thank more during for our retire succeeded new to the thank the than revenue others his and sold and in In Group service older XX of July our to Repair their Jeff want income in Nutrient a like to as Company XX to to has and remaining again the announced leadership plus two but to progress the scrapped Joe and service new decades for for steps December margins lower Joe talent the also Plant senior our cost was retired on December. management retail two down efforts, We systems we in kept strategic more Rail the advancing two properties. sold

our our second end million are productivity XXXX. goal. a continuing to run progress by confident good $XX of We efforts We're making million cost that still savings of reach the We're $XX create we'll our goal culture. rate overall on

wide indirect success company and and team have system metrics gone indirect the processes purchasing already new as The far. standardized Our procurement greatly well project approached XX Company quality visibility. so data improved has information implementation and day have all supplier

system of have months reap data. savings We more expect a once amassed in to cost real of few to we this benefits begin

go first of to Our well January broader the also Plant wave continues our locations went live few system Nutrient refresh early with with planned as issues. IT we in we relatively

same the go be substantially all yearend. platform the in wholesale fertilizer that to March, wave next the live will locations on expect of by new We and

continued also safety our We Those paying to dividends time promote rate our to are and lost harm zero and improve. efforts culture. injury vigorously continue recordable metrics

later we're store four of the on of walk third sale closed of through our retail store property to XXXX. John working fourth last gain about the detailed review the netting our million. in thoughts in XXXX. the our quarter the also I'll And financial call about properties will more $X Granato of sell speak now you the quarter, results. We during about early

John Granato

of taxes. fourth the million Pat, of or net of pre-tax million attributable net morning the charges the share. adjustments amounts diluted in Tennessee last with the on or and Company share. $XX Plant per year billion. of of quarter two Earnings revenues year before income adjusted of from impairment compared the million $X.XX increase. million or per $XX.X items. XXXX, $X.X These EBITDA of to exclude tax million the for benefits and or and XX% XXXX adjusted income Nutrient $XX.X recent $X of and million fourth goodwill reform were primarily impairment $X.XX million quarter share the results reported amortization federal net good associated U.S. of Group's diluted the These XXXX a deferred to income per depreciation fourth Thanks, $X.XX Grain to share pre-tax fourth revenue better and These million A diluted than $X.XX facilities. of The represent when and million $XX.X our income Group income respectively. quarter of income to of EBITDA together adjusted $XX.X billion $X.XX legislation, everyone. over diluted per related results taxes, $XX.X Andersons or $XX.X EBITDA $XX.X were of quarter In generated $XX three considerably interest, XXXX equate those

or than the prior diluted shipment full share. million. to was business. income in million $X.X last $X.X were later of of the primarily a Andersons attributable to full-year the income net EBITDA to Net and million $X.XX XXXX billion The was diluted or XXXX about the was Adjusted over $X.XX million. $X.XX than Full-year the XXXX by per the and EBITDA number X% revenue in year same our lower in million and increase of of per $XXX.X this the bushels year diluted XXXX Andersons XX% income in of recorded year compares incurred adjusted million share billion or the revenue EBITDA closure in net and XXX.X was $XX.X $XX.X For was $XX.X driven XXXX $XX.X period per fewer retail share. attributable

Our long-term at at but our ratio unchanged debt this than higher year equity X.XX to debt time X. last slightly to basically is is

We did XXXX expense but that the by Our Group's results to margins, results were and bridge $X to per compare the The Nutrients utilization XXXX full-year. continued fourth recorded into income strong X quarter benefit the XXXX for results fifth Lansing target cob Trade strong grain of sales. values Group. consecutive from impacted negatively Ethanol for DDG consolidate account Grain adjusted results In were margins quarter next the group's fourth Group's The fourth better to improvement income and EXX we graphs should due ratio quarter storage driven incurred operations. capacity comparative better fourth much primarily lower so and debt from million present we growth. pre-tax down capacity by year-over-year ton. take XXXX have to was for softer Plant quarter Group's the pre-tax X.XX year-over-year is

the includes depreciation rates in you of quarter average business. sales higher interest on the goodwill will fourth of the was down fleet due sold value company the primarily the a in improvement that asset attraction total fact car income from of recorded our down lower Base goodwill remaining and a results million the With end that Retails fourth review $XX.X Rail million was its of base Nutrient annual its wholesale was leasing of sale driven lower was property former expense quarter charge portfolio. the good out by sale business. from on in each after our its carrying to the for key of write but result a gain As $X.X and and XXXX. Plant this would to were car store having of fewer million income mostly cars of off charge incurred operating from announcing XXXX lease a at impairment and areas due income. leasing close to $X group the related larger

contract last We lower remaining were $X.X expect to million expenses. by this over Unallocated and later primarily year. service this the lower due costs property professional

same associated on lower income items. charge Overall those again And down cob XXXX related year-to-date year improved Group income ending of results about margins. total, after results year consolidation business. due Plant XXXX grain other, the affiliates million NSE included million after the $X from XXXX, strong related the the of were wholesale in XX, $X.X from full million impairment December a for results were to grain to with than comparable of almost were the unusual from XXXX charges core In $XX dramatically. period Group's due down improve the a to by primarily the the farming more $XX.X XXXX, For fertilizer Ethanol adjusted results results gain compared results $XX also centers. in charges, its $XX.X million million XXXX southern three again XXXX. impairment business. The considering lower million Nutrient in the Each ownership, region XX%, businesses by sale include than to the recorded

were the margins to were repair offset million and Unallocated second half lowered of The retails in year property incurred XXXX declining our contract negligible. income we Our the to about and adjustment about help and than volume Rail just by the down lawn and the lower the this professional results close cost in were division primarily three that noted year. of results services utilization lease from lower I lower farm primarily million. X.X in year XX% business business formal cost full to of XXXX the results cob rate sale due to lower sales XX% pre-tax to again business. still Considering are we return center due of and expenses. $X.X

current Next let's talk taxes. income about popular subject

a all was aware income in such from reduce corporation the impact enacted XX% tax we're XX%. federal that December, of the reform legislation to law as Congress As tax to for primarily ours rate

able differed million income fourth or certain quarter, benefit. in our As $X.XX $XX.X only a per Other changes liability of tax resulted $XX.X million we earnings on mandatory differed foreign net to result, a an A in $X.X partially of of additional income share. tax in either subsidiaries. record by revaluation in onetime of benefit the our or one law wholly U.S. tax subsidiaries, the diluted previously resulted a our million were

the benefits XX% receive beginning to studying are new law the law, to ramifications still we XXXX new all rate also be our for XXXX XX%. believe in the in of expect that range we tax from where We effective other of in will

We for immediately to spending the to deduct of capital also expect much years. be few to take next of able our ability ample the advantage

beach our Now business move core we will a review on units. of to

later $X.X income the Group million pre-tax million Grain $XX.X recorded assets. nearly and from group represents respectively. our incentive XX was volatility pre-tax in to pre-tax pre-tax the Our quarter drive the for the to income was $X.X XXXX. adjusted grain of fourth expenses whole market over income EBITDA carries asset amount improve continued same quarter. grain before earned and to $XX.X of and The million pre-tax income and owners in Stronger pre-tax million million affiliates, $XX.X adjusted $XX.X income XXXX million income of a Base quarter of quarter Tennessee the This period of improvement Groups the EBITDA the compared of for of increase income the $X.X year-over-year a related XX% than little over million continued sale. the considering loss our million. than The during fourth fourth XXXX from and a low and in EBITDA million it of quarter performance. prices $XX.X $X driving million in quarter $XX.X million adjusted income in of much $XX.X of quarter the higher million quarter period better than ownership again fourth current were group's grain wider of There Grain for in Trade grain did to Group the of the same are fourth rather XXXX. the of XXXX. to pre-tax Lansing of XX%

a Company to well average As short million our XXXX attributable of Group primarily last which the pre-tax fourth performance to Ethanol of Company we earned quarter quarter adjusted the $XX.X incurred year pre-tax to due earlier. was for call Plant to the Group results included loss ago export Group's X.X $X.X the in anticipated $XXX,XXX during Eastern end EVG margins. XXXX fourth of I the million of of fourth now towards stressed $XX of above its issues. recorded charge loss income pre-tax The million loss million demands to higher fourth quarter. Margins by period to and continue lower a strong Nutrient On values for an million impairment due inventory, in $X.X in quarter, that in loss Belt strengthening positive export. goodwill compared in ethanol pre-tax a last The levels same in spite a mentioned well end the the be million reported income pre-tax group's XX.X lower to the attributable production Corn to the note year. XXXX's the than quarter the of vomitoxin

were but down lower were compression and of XXXX. slightly small product Group per persistent businesses XX.X in The spite ton. volume better the margins EBITDA down quarter X.X was added volume. due of million. by tons by nutrient margin The Continued year cob was negatively a negative XX% were down X.X base center respectively, per ton. fertilizer fourth by farm performance Value drove EBITDA and and were both up in down were full impacted year-over-year million up by per Nutrient recorded were of million the XX% oversupply Nutrient ton Margin was XX% added then to wholesale but less but compared The groups business both XXXX were by margins profitable lawn XX%, quarter to XX% tons margins up oversupply but Base product. so a but XX%. volume slightly were in down for value loss. adjusted by margin EBITDA ton a per

begin we pre-tax Rail to improve income million of supply foreign year. income a X.X can and last X.X We to The will million the equilibrium demand of in in compared increase continue return this before believe to appreciably. quarter business need fourth an generated Group

slightly in lease which up X rail the million cars million year-over-year. of and XXXX XX.X% period. X.X earned XXXX. lease rates of $X.X compared than the fewer Our and in same the group by the XX.X% income perspective lease quarter, base from the The quarter X.X% and million down and last rates year. quarter pre-tax XXXX. $XXX.X sales in XX.X% set Average year's since X.X more recorded the utilization down XXXX of million last to very X,XXX fourth from group XXXX quarter by Those X.X respectively in of quarter were of million the pre-tax produced figures such expenses above high a XX% management was XXXX XXXX average was last fourth which its fourth from rate the million a X,XXX income results. in higher down car almost for than The active quarter. The highest group about and spent From in previous the about XXXX a of cars, scraped annual productive sold XXX outright was or cars fleet income

the which be half XX year higher other XXXX, tank large many its of XXXX. the expense and in the objective. portfolio in tank and Sales increased margins Group's cars accordance X% were cars squeezed couple recertification will group some recertified. as fleet the about no remind will expects to group's million. The our in of $X listeners Rail fourth grew to $XX.X in importantly, be the in of to even with expects I down There're XXXX significant continued than approximately its group $XX.X of years retail X%, life that face lower fleet headwinds cycle year-over-year. amount the the quarter business quarter a face currently expense slightly remaining to that portion to average difficult management EBITDA additional million to More XXXX. want conditions. about Rail or first were recertified its is Group need in than EBITDA car the for the incur tank million was XXXX

on that earn total fleet customers. has over these transactions, will of the impact the from Grain of to however of the new $X has rewards. over basis over recognition Xst The in of agent an engaged car gross effective and not accounting change Group, per transactions no time. second these requires income standard or realized recognized governing on certain whether qualify flow, million became year contract rewards, arrangements group impact group from accounting of and this rules which not These transactions The the result transactions for recognition. years, us cash earnings or treatment these revenues new to rather sale January only will new losses on of last depreciation and basis institutions the in recorded the also for financial how agreements the risk revenue five from conclusion generated the on sales treatment for are half settlement in recognition average on balance are another XXXX. the in accounting group nor we The only standard sales time, of capacity will revenue on of financing was interest principle gains pre-tax in physical the evaluate our -- The by lease the in year contracts the upon revenue occur comes and value by changes its impacted implications liability pre-tax in contract. remember principle reductions control, as to sales important our expense as changes sales the are changes than well record X, into payments of rather change result will the impact on of for the almost rule results result certain is transactions will origination of made currently Beginning the the by revenue we lease risk on in recording in car of standard or some XXXX. transition transition and income. the than we the of based the on this January rail Also sheet This as is the entering impacted material record that the and of rule. cars our the expense It XXXX has with

we statement arrangements, to sales and therefore of XXXX income to impact the relate and Pat presented dependent commodity to gross levels Group profit. and XX% expect net XX% will to Well and back turn on XX% on for there approximately beginning consolidated over our only January I'll group. for by change agent of presentation this the each few price of cost in now XX% change the for We determined no Company Grain the call impact a realized decrease certain losses cost of the is that comments will on or XXXX. sales within gains as have to basis outlook be is grand revenues however revenues our be the origination for this

Pat Bowe

Thanks John.

we specifically As results further we those overall December improve expect we significantly in More focus into of New our look we XXXX XXXX. continue company to over in will our discussed Day objectives to York at on City. Investor the strategic

both growth trading Focusing grain and productivity lower greater now and efficiency, opportunities we and on volatility to income. adjusted quarters five in achieved Grain year-over-year the on solid and lower our basis earn positions farmers anticipate while prices and an influence continue behavior that like we storage will Group continue has selling ownership consecutive and improvements to

corn The the up soft to last into for acres million so been XXXX. wheat hard our wheat will belt be on be the are coming and million there originating red to specialty and set income in production million quarter. reported XX work XXXX. dryness red have to acres work the acres expect in historically crop are earned business. to XXXX, million improved conditions winter REIT the expected four The approximately risk in to shipments compared XXXX. Trade to food be year. services Ethanol postures storage year. and XXXX particularly express a have much accreting XX efficiently. and quarter to fourth that more of below growing XX Normal XX we're Total miles solid new conditions are acres plants In export merchandizing running concerns its XX high weather typically backyard despite estimates acres acres in to plant group our while out are to January out margins a planting west Lansing our compared soy seasons acres and during The improved of slightly million favorable. industry planted Serving Perhaps and should are planted levels and XX through the continue with the opportunity XX produce production through to in in management also Group continued create We million and All well. the in lower first high demand to XX group plant driving planted Group continues million from corn affiliates grower

first and our quarter they expect breakeven. lower results be than results year's to we Specifically, last are

longer Our XXXX for term outlook is positive.

Group to by Our industry demand combination and lead unfavorable toward Plant normal a and to Nutrient impacted which stabilize to prices oversupply to patterns. an of margins. balance needs could continues fertilizer The supply lower move be more buying

We continue products and to manufactured. value Nutrient strategic we believe in value-added in of especially the Plant overall business the long-term the long

and meet products to challenges. opportunities growth the farmers maximize Going to our sustainably environmental forward for looking new develop drive keep by market. continued Rail Nutrient yield we value-added in sector oversupplied sales be standardizing by and impacted help go-to-market approach

rates will the year. first slow We of to will will the While think there pressure our for that signs utilization improvement some least rates very continue gradual. look half like continue recovery it at lease our the under of remain average

As rail. spike accounting rules expenses will John changes of in and make this tank year in noted the challenging a the XXXX combination recertification earlier one car for

evaluate in railcar the adjacent network. expenses that in We to profitably recognize businesses income We'll the age to we also XXXX, to size in not will as XXXX will improvement the group work part in continue new company and as encouraging the confident fact opportunities its and some continue optimistic achieving significant in fleet by to tax from repair lower initiatives. the $XX increase that results its spite group helped better those XXXX continue will due estimate the The our efficiency XXXX changes. of of its lower progressed feel arise. railcar than as in pursuing and and We will expand million planned. had they of Grain results on our two productivity Groups. In actively our Plant be unusual objectives I'm to regime. in to primary Nutrient keep goal those we and yearend became to more the XX% XXXX closing, and That continued were to that than that year XX% by see

grain business and guarded our other of I'll groups. we three prospects near over stronger turn back each questions. entertain While the has in good it about experienced the remain a get your for where continues can to recovery we the term John to

Operator

[Operator Vertical comes Heather of question Instructions] of Jones the our first from line And Group.

is line open. Your

Heather Jones

you for be missed QX results 'XX say I that grain just Did that below think 'XX quick clarification. a or will ethanol? think I So was you QX

Pat Bowe

That ethanol, my good comments was for about ethanol. are Those clarification. last

quarter, were be the they year a we'll For ago, breakeven. below to close think where we

Heather Jones

is, into And QX you have why did I then good of… all coming mean because hedges

Pat Bowe

we've we Good F&D latter late as coming have of in had year. the us seen is but second on of I that's nice look appreciation to We all we're help looking in point, behind out, market corn volumes solid, still you forward lot, had which quarter, mentioned that's vomitoxin the some helping going DDGs really a a more go go we a pretty as percent as ago we had us a in, year into a the us, balanced said we've as local we’re good optimistic parts improved. of about exports the fundamentals DDGs are the pretty a issues have

Heather Jones

that now help are wondering ambitious goal cadence. just the nice a just XXXX you that's in so million wanted XXXX far would if I goal your was Because in and talked be think Day, from plus obviously us Analyst about something good we then. very you've that now and between could course about at it's the not like EBITDA and very and XXX Okay, for I and to revisit

wondering the your stacking mind if how how just us in you are you that could was think that I about, to So help up -- as cadence?

Pat Bowe

that’s the couple qualification, think a a of I have good as last of clean up. lot years, call we done

night As last that Tennessee. in closed assets retail assets sale stores, the we where as portfolio performing announced some our we we just some the weren’t We you liked. sold know of in

Obviously of volumes reach growth need build end our goal M&A So to be out we have we in like back business get become probably to business areas needed of likely growth and lot the more course to there. to XX that has and of and about that bigger would have we do some improvement, loaded.

we can can a will little powder headwinds years. on significant on vagaries of sheet. the agriculture be have four our of the have feel We dry them couple on each what of businesses have, it confident know have we and of last time and you as balance we lot markets bit the the in depend that investment faced Some in

be will but growth backend we So bit ahead. we are as optimistic look it little more loaded a about

Heather Jones

was for quarter. we see what that? that us like a inflection better Lansing to thinking or should reach give about And how then sense point -- you drove the do I on mean Lansing? be Can great an of they And

Pat Bowe

so to hard really so I think They improvement will well them. Lansing. the nice wheat had that’s story happen. have of year-over-year that we wheat active play at historically, have been a starting quite poor to traders very seen watch previous a It year, can improvement. be it's They interesting to

them. As color a as you didn’t some some they sand any of year. well you for more want had really that for part it. probably deals didn’t that them just year losers add out have importantly had they that turned quite And portfolio on this worked have their and around a nicely has And ago, frac know John they business to

John Granato

yes. of You it, covered most

Operator

of question the Farha Our Stephens. of next from is line Aslam

Your line open. is

Farha Aslam

production you I in corn because Tennessee. Question on elevators, your that Tennessee expanding growing was there were thought in interested in area an was

see was that it and really to So you it surprised divest to write I down? decided

Pat Bowe

clarification Thanks for there. the

one of barge those now the the back elevators to in So, things cheap bushels of Tennessee acres. we're What export. fight on growing the the was get from especially time river other to probably happened river going underestimated beans crops, looking and cotton like ag cycle, at was of about peak that felt the these was and away you of corn we good that and there for XXXX in impact the to the pull go we said for freight the kind acquired

sell expectation that level significant So important and chicken seed. And this of And XXX in production so will to position thing felt Tyson, most to we fact right time those assets produce of situation amount we in elevators, of decision then and to corn Humboldt pronounced in in so reevaluated was complex just is meet was million that require the Tennessee a those our to this we to for six here struggled elevators proper recently performance. the our building make. Tyson correctly

Farha Aslam

that And bumped of kind recognize, then level adjustments lease accounting in that changes the when you be you've income that look at your current for up the post car rail of the Rail year? that all Was Group, you you'll in guys sales. the highlighted

Pat Bowe

we won't a impact lease have the material It recognize. income on

John Granato

is John. Farha, this

profit You see not gross a revenue bump. will a but may see you -- bump,

Farha Aslam

goes does of So, to into kind away with new recognize just or so in income, you different? as the accounting income it used stream factor now that that rules

Pat Bowe

We the don't back still to spread get essentially the end the end. moves we gains but make you front did, -- from the that

really don't you and divest what full timing. fully, gain essentially that when realize that's So the actually you shifting until -- the you the in it's so car happens,

Farha Aslam

the timing is car might don’t how back XX all I now cars? the pushed which would And get long the be because your way, so so of you hold rid years, know you

John Granato

sales than a it's lease not interest between of both, lower bank. you it's for off if cost again. the trade the actually the will often than by replaced or are the more payment are payments to both, bank John depreciation, we of the little little expense of and a to that record It's the Farah, which being

balance other interest the sheet. payment an to bank to P&L, So goes a the payment going to and the principle is payment, the the considered the be to interest

of recognize time well. going over that And as so we're to spread some

Farha Aslam

some of book? income recognized So is it in

Pat Bowe

Yes.

Farha Aslam

outlook Nutrients, final should business? you us from and expect remains And a we then you picture business on that your term of how my subdued. of Plant progress for sort is longer Could year next to give question expect that what

Pat Bowe

going Yes, chime start can John I to in. and am

look and think we cons I some pros there's forward, as Farah.

the pro in and ingredients done miners of years. hate some the of some stability the on maybe in stabilize to it last market, in I as so prices -- was to maybe try but call not with couple it's we've a the freefalling as side fertilizer some seen of So the producers kind creating of

bottoming like engaging on just number product talked almost pretty we in occurring uptick some key discussions price. some is happens concern and on with with -- volume the us. and continue, a good side was been February had feels some ingredients, stability getting it there's really have it same wholesale saw that's on last for the price prices about. corn our we the side, insurance year's as We've farmers number So, good, Farmers books, year, corn margins, the is exactly so with low as on the last

in so we're than the seen could the haven't that out some that there's Plant appreciation give growth bit, would about and out lower and long little provide, any thus like price it, we there negative those we we solutions kind risk corn slide could it optimistic our a though. hurt help the farmers, specialty corn that farm year, they on XX good lower the we out some to marketing term we last also business community, planted acres the acreage ourselves, especially of see So, in those credit be so and of a numbers mentioned in on acres business, they that products Nutrient feel some said the things. we're productivity, the potential of business and economy robust Having are did we farmer we about this produce side, the aggressively

John Granato

we hope I the see improve to margin in stick better we the did and the not thing good do you to about we but talked we've about famer specialty on the talked get a in margins adapt pick-up because as add would only side as side, continue a much as that environmental value the volume that's will as sign for as albeit on on this base can NPK start and see think add we've This and the the year reasons, impact, margin side we space. believe all

Farha Aslam

value base you the in business? Can outpace growth to added continue the we and the growth marketing right execute your programs expect as put does side in that to the

Pat Bowe

with on while I That's goal our assumption. and think sales our farmer that really we're good and engagement. working is focus a people our that's

Operator

Our Research next Buckingham from question Group. of comes of the Eric line Larson

Eric Larson

merchandizing you bit to in was like get quarter. actually Pat and nice grain fourth of decent right from are life right John we're in year talk it I'd some starting Pat? assuming you to can go the a bit seeing seeing had becoming the on environment better to now, you it other a of think that basis quarter more you little that positive in back depreciation buyers about just obviously see I'm you places now you some little is build starting little the good pretty business We're grain talk could a so to a brook that the it end Could for a bit. little ownership markets about is. I

Pat Bowe

this growing and go really million so weather XX to here off we've dryness are Argentina XX. seeing let's take to of had the metric by we're in talk think which Argentina X has to meal really you be region soybean soybean tons late in even tons in There in XXs commodities you analysts I in are pumpers are of as crop interrupt story the first been weeks. from growing going and much million as seeing drop some couple down last and the markets could in it the

creating U.S. hard is belt corns market for wheat and any kind back of market with quitter you and an U.S. has of carryout protein little have same quite some more in. some year. interesting Now but be been western of that interesting the million getting time stocks actions to has to said big at is little bit volatility starting in get the this our the take a stocks corns plenty of XXX the opportunity could in story, trading red market getting the At action coming wheat which dryness been that more care bean but in this least marketplace it's that, with demand as

market in would I the our So coming industry. it's back very the having of be volatility something we like stretch in watching little good have really We and positions for our products bit each closely. the we're think of

Eric Larson

over look and think think so to kind now. carry as you maybe we the running then in overview. I you and XX% at you… market bit two one down that's just that market are thank takes the on good back you I think I little have Yes, we Are to wheat of a still When still

Pat Bowe

with Chicago will do a charges be and likely one later two going year continue bit to under softer in in tick will carrying we what that the little we bubble tick carry happens depending forward. could ticks here hard. think We that but market the We that wheat one in but

Eric Larson

XXX redeploy Heather's -- question should it's you I you When back look little to this know you And do some Pat. some need and need goes bit think to million you that to M&A final the the question strategic some well etc. get EBITDA you mention and answered more then you it capital growth very goal,

to grow market a There's So in to with of the of places think nutrient depressed right for the which attractive thought to you cycle. would you and top when you which you prices at at we've look consolidate really that you attractive I at? sort off the look now do that we're the maybe there of more you look at areas well past that a today plant fertilizer? And market today most think capital the grain put of cycle. what's of end, know would specialty on specialty bottom way use some at, the very the I more very you the in Is the in grains, where

Pat Bowe

all mentioned see in in four a and grain in in nutrient investment rail. had I opportunities high haven't as level we businesses, Right, plant ethanol we

rail at As that of we've over and said our continue like more manufacturer that. part specialties younger we've about recently fleet. grow we it, and too diversified and In more our space, we'll making the we specifically, we to like fleet been investor rail our the day PN talked

We know even for that fit grow fielding green will products new are well or like and constantly wholesale sites opportunities as looking as looking really their have look we you our you're bolt-ons but space in to at space. they both with us own are specialty nutrient facilities at M&A to as at

Eric Larson

does rates, rate? in tax impact final --how to question cash then much John the tax rate the your actual the for is much bill what business. deploy you elsewhere in obviously And the your i.e., folks lower how tax cash to give John. tax lower

John Granato

we'll we You rates know full we're know XX project to be between the happy the on we're and process of and that did across the an our we effective plan over call. look our in several talk the give you evaluating, Eric being but still next analysis evaluating years got still we next that as and XX% we to about haven't idea you completed

Operator

Ken line next Our from Instructions] question Bellow the comes Montreal. of of [Operator

Your line is open.

Ken Bellow

Nutrient. of the is, new with questions, How be differently? Couple management Plant one will in business that managed

Pat Bowe

think a train and the someone and sales added I we how think point, that's in aggressively. push it have a and focus we more sales on side background much brought we our more really value who we very force good

with moved need with our retool lawn and EZ-GRO our products, ago sales key making and know of what kind our business better of efforts Blair of years tools effort the really we to other well. couple precision build that's it's sophisticated in more our and doing a own or our acquisition We ag sales out with Nutra-Flo very As thing. the he's out right and I working you and so now our farmers teams the with Ken, working think Jeff online bringing field is that's

John Granato

sales can we some and about on that particularly And planning process. that I of talked cost we're operations work in drive a when investor I this we day think little out and specialty going think to space

Pat Bowe

our PN to help we're in data, done a planning as lot John sales mentioned. this data SAP with and be driven going that'll getting year, us implementation We're more

Ken Bellow

it there your years? change that that Does I all? Does financially the it any couple generate on to of know it’s over think should million at as about next vision changes a to Is that ability effect How XXX that? I if help? material

Pat Bowe

economic key better what of it. job maximizing of one like planning for the when job you now, to are and that’s are but the on a did despite going growth good and mean more. specialty a production we at we as of and back is that’s a so business to we now. think Ag environmentally sales our the us and and specialty But assets going productivity driver managing super better it’s that ingredients right I look market we focused underway operating part friendly that can forward you need ingredients can initiatives have pushing our main nice in are But and market a really blow a periods do position do conditions our really we we cycle more very when that’s a rates

Ken Bellow

in least think the just year how And most question the production production and my about levels? how How there the that go? much last you next And surprised, how the at we Because levels ascertain by to production that is was of the you about left and what us and terms think people debottlenecking over creep. on side, including ethanol do the of 'XX? XXXX think for I

Pat Bowe

to balanced you a The market, side XXXX, lot domestic X.X And predicting of call. from can term so or a the are exports exports uptick. absorb good the good is another is X.X news that billion creep, for really gallons relatively traders

major the included. investments ourselves of have lot as lot as a of been a think made, I well companies debottlenecking

efficiently. well are working of to we're side are it on efforts lot going how I innovation DDGs, core be more the on just innovation an where think product want play our to portal as always as we a there focused

there been I experts will but the creep be some solid. news good have really think is So

Ken Bellow

how that much think even And in? more much 'XX? And you frame developing 'XX is Could and then us the be what you be in kind how think you all you lead and will think much how much Ontario exports. how probably will that Japan How this on up follow just you be? of be will importantly could China

Pat Bowe

country, china don’t specifically actually specific finish country we without the right. I number XXX or but a and have by X

South been So Asian Korea countries. was well year adding as very from other also the china been far trump Philippines this we still as even some potential biggest think But the India is really improvement solid. that’s Brazil in Canada our has expert as part has XX as destination, in upside increasing it's Mexico. there.

ethanol. So comes ethanol and trace when a And it corn price it's the was it to pretty standpoint. location our well still no demand price rounded absolute upside, so from still

could So products. other see in we broad increase in destination

Ken Bellow

Could you And these that. in of with cost businesses? earn your capital leave I'll

Pat Bowe

Sure, sure.

Operator

showing and to I'm I over the further you remarks. this back like no Thank closing at for time, John Kraus turn conference questions. would to

John Kraus

made all to again want I for supporting our additional we us at andersonsinc.com. slides later also Amanda, Investors to thank you available Thanks, joining will information this this page morning. website be want today that of the presentation on with mention and

conference that Our We Eastern at XX time, XXXX able is Tuesday, first join for hope next well. call earnings review when results. at to are AM you quarter then and again we'll us our X, time be scheduled until May XXXX

Operator

great today's gentlemen, you may the and does your Every Ladies now thank day. This program, you disconnect. for in participation conclude have a conference.

The Andersons, Inc. (ANDE) 16 Feb 182017 Q4 Earnings call transcript