Q3 2023 Green Plains Partners LP Green Plains Inc Earnings Call

October 31, 2023

Good morning, and welcome to the Green Plains, Inc, and Green Plains Partners third quarter 2023 earnings Conference call.

Following the company's prepared remarks instructions will be provided for Q&A.

At this time all participants are in a listen only mode.

I will now turn the call over to your host Phil Boggs Executive Vice President of Investor Relations. Mr. Boggs. Please go ahead.

Thank you and good morning, everyone welcome to Green Plains, Inc, and Green Plains Partners third quarter 2023 earnings call participants on today's call are Todd Becker, President and Chief Executive Officer, and Jim Stark Chief Financial Officer.

There was a slide presentation available and you can find it on the investor page under the events and presentations link on both corporate websites.

During this call we will be making forward looking statements, which are predictions projections or other statements about future events.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Actual results could materially differ because of factors discussed in today's press releases and the comments made during this conference call and in the risk factors section of our Form 10-K Form 10-Q, and other reports and filings with the Securities and Exchange Commission, we do not undertake any duty to update any forward looking statement I would like to turn the call over to Todd Becker.

Thanks, Bill and good morning, everyone and thanks for joining our call. Today. This morning, we reported $52 million in EBITDA for the third quarter ended up ethanol operating rate of 93, 9% and very strong ultra high protein production and sales. These results begin to demonstrate our platform's capabilities and we believe we can and we will build.

These record rates moving forward and start to see the real benefits in Q4 and beyond.

The team was focused on bringing our platform back to consistent operations. After our first half headwinds some of which continued into July of this quarter, but we really started to gain positive momentum as the quarter progressed and that has continued into Q4, we executed on the market opportunities that we're in continue to be available as I. Just said we have continued the same focus.

In the fourth quarter and have positioned ourselves based on current market dynamics to perform better across every product. We produce we remain largely opened to the expanded margins in the fourth quarter. Although we were able to lock in our veg oil pricing is higher than the current market.

Now on our winter gas at or below market. In addition, corn basis, which has been a significant headwind for the past two years has moderated significantly on the forward look.

And while we still have some needs to buy in for the quarter were generally covered at or below market as well as on a physical corn basis.

Q3 for reference the corn basis in our areas was 44 cents higher than the five year average during Q3 as we finished upbringing and the last of the old crop in.

In addition, as ethanol remains inverted slightly on the curve and as we always try to reduce our inventories. This always has a slight negative when the market is and what set up like that against the end of the quarter during the quarter, we restarted our wood River MSC protein system.

Late in July and operated a consistent rates across the entire platform.

We achieved new record productions led.

As for Ultra high protein in the third quarter and are on pace to set new highs in the fourth quarter not only did our ethanol our entire platform operating more consistently.

Well, we continue to see higher average yield per bushel, we continue to refine our process and apply learnings across our five locations. For example last month in Shenandoah, we averaged over four pounds per bushel and you'll recall that our original investment thesis was based on three to three and a half pounds per bushel. So we can achieve our 2025 targeted volumes with fewer.

Locations, both investments that we and lower than we originally anticipated. Although we are continuing to roll this out through our platform, our JV with <unk>, which will be the largest MSC facility ever built slated to come online in Q1 of 2024 and later in the call I will dive more deeply into protein economics production 60 pro cut.

Our dynamics and some other exciting ingredient opportunities that are coming our way.

To update you on our de Carbonization Queen sugar launch in veg oil marketing our liquidity improved in the third quarter with our platform turning to free cash flow generation and also about benefiting from the sale of our Atkinson plant above that.

With strong margins on paper today, we expect even better free cash flow in the fourth quarter and to end the year stronger yet last month, we executed a definitive merger agreement with Green Plains partners. We are continuing to work through the process and anticipate completion before the end of the year. We expect that the proposed transaction will simplify our corporate structure and governments.

Our governance generate near term earnings and cash flow accretion reduce SG&A expense related to the partnership improve the credit quality of the combined enterprise and align the strategic interests between Green Plains shareholders and the partnership unit holders there will be some one time deal expenses that will hit in Q4 and Q1, but we will call those out for you after the <unk>.

Lowes and now I'll hand, the call over to Jim to provide an update on the overall financial results.

Thank you Todd and good morning, everyone Green.

Green Plains consolidated revenues for the third quarter were $892 $8 million, which was $62 2 million or approximately six 5% lower than the same period a year ago.

The lower revenue is attributable to lower prices for ethanol and dry distillers grains in Q3 of 23 as compared to the third quarter of 'twenty two.

As Todd stated earlier, our plant utilization rate was 93, 9% during the third quarter compared to the 99% run rate reported in the same period last year, but significantly improved from 81, 5% in the second quarter of this year.

We anticipate our plants to continue to perform targeting utilization rates in the mid 90% range of our stated capacity.

For the quarter, we reported net income attributable to green plains of $22 $3 million or <unk> 35 per diluted share that compares to a net loss of $73 $5 million or $8 27 loss per diluted share for the same period in 2022.

EBITDA for the quarter was $52 million that compares to a negative $35 6 million in the prior year period.

Our depreciation and amortization expense was slightly lower by $7 million versus a year ago at $23 9 million.

We realized 48 and a half million million in consolidated crush for Q3 of 23 compared to a negative $20 5 million in the prior year.

Our AG and energy segment performed well recording $12 2 million in EBITDA, which was about $5 6 million higher than the prior year.

This increase was driven by opportunities in our merchant businesses.

For the third quarter, our SG&A cost for all segments was 35, and a half million dollars compared to $29 1 million reported in Q3 of 2022. This increase was driven by legal fees associated with the GT GPP by an and other legal activities during the quarter.

<unk> excuse me interest expense was $9 6 million for the quarter, which includes the impact of debt amortization and capitalized interest. This was in line with the prior year's third quarter.

Our income tax benefit for the quarter was $7 $8 million compared to a tax benefit of $1 9 million for the same period in 2022.

The increase in the tax benefit year over year as a result of a decrease in our in our total deferred tax assets, which allowed us to reduce our valuation allowance against those deferred tax assets.

At the end of the quarter the net loss carryforwards available to the company were $128 9 million, which may be carried forward indefinitely. We continue to anticipate that our normalized tax rate for the year for Green Plains, Inc. Excluding minority interest should be around 23%.

Our liquidity position at the end of the quarter remains solid which included $366 2 million in cash cash equivalents and restricted cash along with approximately 200 million available under our working capital revolver.

Our financial strength is growing due to the strong execution of our platform and favorable industry fundamentals as we are well positioned to execute on the next steps of our transformation plan.

As a reminder, we have no debt maturities until 2026 and two thirds of our debt is locked in at a fixed rate leading to our overall cost of borrowing during the quarter being around seven 2%.

For the third quarter, we allocated $29 million of capital across the platform, including $15 million to our clean sugar building Shenandoah and other M S protein initiatives about.

About $8 million to other growth initiatives and approximately $6 million toward maintenance safety and regulatory capital.

For the remainder of 2023, we anticipate capex will be in the range of 25% to $45 million as we continue to work diligently on the timing of permitting for MSC technology deployment at a couple of our larger plants.

For Green Plains partners, we reported net income of $9 4 million and an adjusted EBITDA approximately $7 million for the quarter in line with the $13 million reported for the same period a year ago.

<unk> declared a quarterly distribution of $45.05 per unit with a <unk> 99 times coverage ratio for the quarter.

The partnership had distributable cash flow of $10 $7 million for the quarter slightly lower than the $11 3 million for the same quarter of 'twenty two.

Over the last 12 months the potent partnership has adjusted produced adjusted EBITDA of $50 6 million.

Distributable cash flow of $42 9 million and declared distributions of $43 2 million, resulting in a <unk> 99 times coverage ratio, excluding any adjustment for the principal payments made in the past year now I'd like to turn the call back over to Tom.

Jim So our path forward continues to be focused on maximizing what we can produce from a kernel of corn at each of our bio refineries and all of our initiatives tie back to one consistent.

Making low carbon ingredients that matter, we consistently pointed the need to operate our core business well to maximize the opportunity in protein and higher renewable corn oil yields and we are starting to achieve those higher run rates. Once again, our assets have aged and we needed to put a lot of caring for them and we hired a new operations executive leadership team that is fully focused.

<unk> on our modernization and automation and they know how to do it correctly.

Investing in technology and are making great progress towards our goal across the platform.

Today, we have five facilities operating our MSC ultra high protein technology construction at both Madison, Illinois, and Fairmont, Minnesota continues to be pending favorable outcomes from the permitting process in both states.

Each continues to take longer than we thought we are in a good path in Illinois is the permit will unlock the full potential of a plant in terms of total volume of all of our products. In addition to the MSC installation what.

What I'm really excited about because our MSC turnkey joint venture with <unk> is on track to be in commissioning and startup in the first quarter of 2024. This will be the largest plant ever bill with the fluid quip technology and will bring approximately 100000 tons of production to our sales platform. We remain on our path to have our total annual capacity with <unk>.

580000 tonnes at the base yield of three five pounds per bushel. Yet we are also starting to achieve higher yields at almost all of our locations with some consistently achieving over four pounds per bushel daily and believe that over the long run we can achieve improved yields across the entire platform. Our production was significant.

<unk> be higher than in the prior quarter and continues to grow our commercial team focused on protein successfully worked with our diverse customer base to sell all of the product. We produce this confirms what we have always believed that we have a great product that is in high demand and we have a solid customer base and we continue to have access to new business opportunities with <unk>.

Kris the number of customers by 25% to 30% during this quarter alone our.

And our protein product is also growing demand around the world and we are now selling our proteins in north and South America, Europe Middle East and Asia now, let's talk about 60% to 60% protein initiatives because that's one of the most important and exciting things that we're going to be doing over the next several years.

We executed a successful full scale, 60% protein production run during the third quarter at Wood River and began to deliver commercial quantities of 60% protein to end customers and are in position to begin delivering an additional 60% protein sales in the fourth quarter, we are continuing to debottleneck that.

<unk> process around this both mechanically and biologically as we learn how to transition. These MSC systems from 50% to 60% protein production at full scale. Once we lined out the system and wood River, we consistently produced our 60% protein product and have achieved as high as 62, 3% during the quarter the <unk>.

Overall at the plant as well as in our office here did a great job in a very difficult task, which is why we know we have something unique.

We now have our first repeat 60 pro business and the product is being utilized in several large scale commercial diet, along with additional trials in the U S and around the world.

We remain committed to achieving our goal of dedicating 20% to 30% of our portfolio to 60 pro during 2024, we can see the business in front of us and customers are starting to ask for it.

In addition to the high quality nutritional digestibility in taste profiles of our protein we are already getting value from our lower Ci from our ultra high protein relative to corn gluten meal from wet mills and received updated data during the quarter on the advantage we have.

Now that we've been running our platform for several months, we anticipate the fourth quarter Ultra high protein production will be higher than what we achieved in the third quarter and growing.

As we look at the EBITDA opportunity in 2024 based on the five facilities, we have operating plus a partial year impact from our turnkey JV EBIT contribution could be $80 million to $120 million during the 2020 for fiscal year.

In corn oil are renewable Cornell remains a feedstock of choice among renewable diesel producers and even in the face of new soybean crush capacity coming online our corn oil maintains a distinct advantage due to its lower carbon intensity.

I don't think we need to spend a lot of time on this for this call is being most most of you know everything you need to know about this great product.

Pricing was strong during Q3, and we sold most of our Q4 production at higher values in the current market.

So we're happy about that we believe are renewable corn oil platform is well positioned to take advantage of industry drivers towards advantaged feedstocks. The low carbon premium has developed and we believe renewable Cornell beginning in 2025 is even more advantaged in the IRA So don't ignore that positive factor as we get into next year and the year beyond.

Dr de carbonization continues to be a crucial strategy. We are pursuing the most significant step we can take his participation in carbon capture and sequestration opportunities four of our facilities, representing approximately 316 million gallons per year of committed to the summer carbon solutions projects product projects excuse me we are confident this project.

Gets completed all the assortment is now indicating looking at it 2026 startup they continue to make great progress of permitting and right away and we expect that many of the stranded navigator plants will end up on this project as noted over the past quarter three of our facilities are now in a separate Ccs project in Nebraska Central City Wood River and York represents about 200.

87 million gallons. This project appears to be on track for 2025 startup, we've expanded and diversified our partnerships for carbon capture and sequestration and believe that we will be in a significant advantage beginning in early 2025, when 45 Z goes into effect <unk>.

Carbonization through carbon capture and storage provides a critical milestone to not only lower the ci the fuel ethanol, we produce but also further drive delineation and all of our ingredient pathways.

Ultimately, having a decarbonize ethanol platform positions fuel ethanol to be a crucial low ci feedstocks for the development of sustainable aviation fuel, which as you know we are keeping a close eye on.

We expect to get some more clarity from the administration on Saf before the end of the year.

We are approaching completion of the world's first commercial clean sugar technology facility in Shenandoah, Iowa and as it is on track to be mechanically completed by the end of the year and we are still only waiting for final electrical gear. We believe we should have it in time to begin to begin commissioning in Q1 of 2024, the interest from potential customers.

<unk> exceeds anything we could have anticipated and we have been looking at plans to quickly expand the capacity at Shenandoah as well as completing additional installations elsewhere when.

When we can this is truly disruptive and game changing for Green Plains are clean sugar is up to a 40% lower ci that from a wet mill and that is before we have carbon capture deployed we look forward to demonstrating to the market. The true value of this technology are ongoing commercial sales discussions around our dextrose product reflects the valley.

<unk> of the lower carbon intensity of which we got brand new results during the quarter, which have basically showing that we're at least a 40% lower carbon intensity score than the incumbent products.

So where does that leave us with regard to our path to our 2025 EBITDA and transformation that we laid out to you a couple of years ago for 2024, starting with the five MSC facilities, plus a partial year for <unk> and JV to drive EBITDA contributions of $80 million to $120 million, excluding any uplift for 60% protein.

Our base Cornell renewal base renewable Cornell business, excluding the corn oil uplift from our MSC tracks, you're about 250 million pounds and depending on how veg oil pricing goes it could be $130 million to $160 million annual contribution as well we have recently seen veg oil prices drop so once again, we'll see what develops in 2025 as more renewable.

Diesel projects come online and then we'll see what the impact it has and if the government will continue to allow Chinese used cooking oil to really receive our tax credits.

Our AG and energy business consistently generates $20 million to $30 million in EBITDA annually in our corporate SG&A is approximately $65 million to $70 million just to be clear, we have pre invested both in protein marketing and technology as well as our sugar marketing and technology.

So that when we kick off these new products, we are fully ready to go I'll, let you put in your own assumption for ethanol margins, but we do believe fundamentals for the ethanol demand will remain strong for the foreseeable future notwithstanding those normal ups and downs, we see seasonally or from quarter to quarter. Yes. We are also focused on consistent operations for our core products as well.

As we move into 2025, we should see incremental value from additional MSC facilities, but most critically will be the startup of our de carbonization strategy with our platform, having a significant advantage in terms of timing to completion relative to other projects that are out there I am incredibly proud of our entire team for pulling together and delivering a solid quarter and positioning.

US for even greater success, that's possible in Q4 based of course, as we always say on current markets.

We have made are significant changes to our executive team throughout the organization over the past 12 months to 24 months, we assembled a new senior management team and leadership team in operations with hires from industry leaders in wet milling and value added production, who can also maximize the capabilities of our plants. This team has many many decades of operational expertise we built.

Operator: Good morning and welcome to the Green Plains Inc, and Green Plains Partners' third quarter, 2023 earnings conference call. Following the companies for better marks, instructions will be provided for Q&A. At this time, all participants are in of us in only mode.

A new commercial leadership Thats focused on building value added marketing and distribution that was needed for our new products yet have expertise in traditional commodity margin management. We also have new leadership in human resources as we are focusing on taking care of our team members needs and recruiting great talent and of course I can't leave this out Jim taken over as CFO.

Phil Boggs: I will now turn the call over to your host, Phil Boggs, Executive Vice President of the Vest Relations. Mr. Boggs, please go ahead. Thank you and good morning, everyone.

Phil Boggs: Welcome to Green Plains Inc, and Green Plains Partners' third quarter, 2023 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, and Jim Stark, Chief Financial Officer. There is a slide presentation available and you can find it on the investor page under the events and presentations link on both corporate websites. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risk and uncertainties. Actual results can materially differ because of that.

We also have a great bench of leaders and employees from sales to marketing to trade to production to nutrition to technology in our finance organization of course, our plant management to all help us continue to execute on our transformation and deliver results for many industry leaders, we compete with on many of our new products. We knew this would be a challenging process in it and.

Of course, I am humbled by the dedication and inspired by the passion of all of our team members across the organization and every position weekend and week out finally, our commitment to safety of our employees is first and foremost before anything else. We do we will never put profits before safety and I. Appreciate his continuously anytime I can and with that I'll leave it there thanks for joining our call.

Today, when we can start the Q&A session.

Thank you if you'd like to ask a question. Please press Star then one on your telephone keypad.

Todd Becker: [inaudible] Thanks, Bill.

Our first question is from Jordan Levy with Truest Securities. Your line is open.

Todd Becker: Good morning, everyone, and thanks for joining our call today. This morning, we reported 52 million in EBITDA for the third quarter in an up-and-all operating rate of 93.9%, and very strong ultra-high-proteam production in sales. These results begin to demonstrate our platforms' capabilities, and we believe we can and we will build on these records moving forward and start to see the real benefits in Q4 and beyond. The team was focused on bringing our platform back to consistent operations after our first half headwinds, some of which continued into July of this quarter, but we really started to gain positive momentum as a quarter progressed, and as continued into Q4.

Good morning nice quarter.

Maybe to start on the protein side of things. It seems like we're getting into that time of year. When you start to look at allocations.

If we just start looking back 12 months ourselves versus where we are now we could just talk to how those are shaping up what sort of.

The customer mix and how that's changed and how the economics look now versus maybe a year ago.

So let's talk first about the economics, what we've seen is with corn prices.

Todd Becker: We executed on the market opportunities that were and continued to be available. As I just said, we have continued the same focus in the fourth quarter and have positioned ourselves based on current market dynamics to perform better across every product we produce. We remain largely open to the expanded margins in the fourth quarter, although we were able to lock in our vegetable pricing higher than the current market, and now own our winter gas at or below market.

Hanging in there a little bit lower and protein prices increasing.

Against that the economics on paper have clearly gotten better.

Basically financial to financial now during the quarter last quarter, we saw weakness in in the soybean meal basis, which affects the overall margin structure, but that has come roaring back as well as the overall price for protein has come roaring back as well so.

Todd Becker: In addition, corn bases, which has been a significant headwind for the past two years, has moderated significantly on the forward look, and while we still have some needs to buy in for the quarter, we are generally covered at or below market as well as on a physical corn basis. In Q3 for reference, the corn bases in our areas was 44 cents higher than the five-year average during Q3 as we finished up bringing in the last to the old crop.

We are optimistic with in terms of our price competitiveness relative to incumbent products, we get a lot of calls around that but and the use of our product and we're seeing higher inclusion rates and.

And in general.

We've seen good good uplift in terms of new demand showing up for our product across all of the species were happy to report we renewed our pet food contract for 2024, we got a 100% of that business back and it is growing from there. The company that we're partnered with continues to grow their volumes every single year from when we started.

Todd Becker: In addition, as ethanol remains inverted slightly on the curve, and as we always try to reduce our inventory, this always is a slight negative when the market is and will settle like that against the end of the quarter. During the quarter, we restarted our Wood River MSC protein system, laid in July and operated at consistent rates across the entire platform. We achieved new record productions levels for ultra-high protein in the third quarter and are on pace to set new highs in the fourth quarter.

And Shenandoah Bye bye selling part of that plant out as well so relatively speaking from 12 months ago, we continue to see uplift in all of the species us.

And <unk> continued to see growing volumes across our whole customer base, even with more volumes coming into the market.

Todd Becker: Not only did our entire platform operate more consistently, but we continue to see higher average yields per bushel. We continue to refine our process and apply learning across our five locations. For example, last month in Shenandoah, we averaged over four pounds per bushel and we will recall that our original investment thesis was based on three to three and a half pounds per bushel. So we could achieve our 2025 targeted volume with fewer locations, both investments that we and lower than we originally anticipated, although we are continuing to roll this out through our platform.

Thanks, Todd and then maybe just moving on to the carbon side of things.

Appreciate the commentary you gave there and sort of the diversification strategy you all are kind of continuing to pursue maybe just with some of the recent headlines around some of the <unk>.

Plants some of the other plants in the market.

Other types of the market rather maybe if you could just talk to how you're thinking about that over the confidence you have over the next few years and being able to execute on the carbon strategy.

Yes, I think we start with our core pipeline strategies was departure to summit and.

Todd Becker: Our JV with Thierelson, which will be the largest MSC facility ever built, decided to come online in Q1 of 2024. And later in the call, I will dive more deeply into protein economics production, 60 pro current dynamics, and some other exciting ingredient opportunities that are coming our way. I will also update you on our decarbonization, clean sugar launch, and vegetable marketing. Our liquidity improved in the third quarter with our platform turning to free cash flow generation, and also benefiting from the sale of rackets and plants above that. With strong margins on paper today, we expect even better free cash flow in the fourth quarter and to end the year stronger yet.

What a great job they've done they've secured 75% to 80% of the write away nobody else has been able to nobody else is building a new pipeline has been able to do that while they certainly have seen some headwinds in terms of just overall permitting we believe strongly believe they'll get through that and kind of get their route established a lot of it is about the route.

And some of it's about <unk>.

Local community is making sure that they get what they need and I think some it's fully prepared.

To make those concessions and they continue to negotiate first come to Iowa permit we're confident in North Dakota, and we're also really confident that they will get through the South Dakota process as well with some some rerouting that's really what it takes is that line running from Iowa to North Dakota.

Todd Becker: Last month, we executed a definitive merger agreement with Green Plains partners. We are continuing to work through the process and anticipate completion before the end of the year.

Todd Becker: We expect that the proposed transaction will simplify our corporate structure and governments, and governance, generate near-term earnings and cash flow accretion, reduce SGNA expense related to the partnership, improve the credit quality of the combined enterprise, and align the strategic interest between Green Plains shareholders and the partnership unit holders. There will be some one time deal expenses that will hit Q4 and Q1, but we will call it out for you after the close.

It's strong from the standpoint of the early funding they raised obviously they need we're waiting for the final permits so they can raise the final funding.

We're confident in the team and their ability to execute and thats going to be a massive project that gives a massive uplift to our industry overall and then with obviously the.

The other pipeline that decided to cease their operations I think that's advantaged summit relative to where they are building.

Jim Stark: And now, I'll hand the call over to Jim to provide an update on the overall financial results. Thanks, Todd.

And to pick up other plants and increase their volume. So it just makes everything more economic in the end, it's absolutely the right thing to do.

Jim Stark: Good morning, everyone. Green Plains consolidated revenues for the third quarter were $892.8 million, which was $62.2 million, or approximately six and a half percent lower than the same period a year ago. The lower revenue is attributable to lower prices for ethanol and dry the stillers grains in Q3 of 23 as compared to the third quarter of 22. As Todd stated earlier, our plant utilization rate was 93.9% during the third quarter, compared to the 90.9% run rate reported in the same period last year, but significantly improved from the 81.5% in the second quarter of this year.

Now without any pipeline that has its normal challenges. We're confident that we made the right choice. We made an early investment so we're a shareholder.

We really liked our position out there and maybe it takes a little bit longer but overall, a really good execution. So far in terms of Nebraska, we had mentioned.

A different project there that we believe startup will be in 2025, and the <unk> are very favorable to green plains as well those will be <unk> early <unk>.

We outlined those during our earlier calls and discussions, but we really feel like we're in a really great advantaged position, especially for the early startup and then and then when <unk> comes online it really just drives our capability to earn.

Jim Stark: We anticipate our plants to continue to perform targeting utilization rates in the mid 90% range of our stated capacity. For the quarter, we reported net income attributable to Green Plains of $22.3 million, or 35 cents per diluted share. That compares to a net loss of $73.5 million, or a $1.27 loss per diluted share for the same period in 2022. Even though for the quarter was $52 million, that compares to a negative $35.6 million in the prior year period.

From the carbon initiative significantly for our shareholders.

Jim Stark: For the quarter, we reported net income attributable to Green Plains of $22.3 million, or 35 cents per diluted share. That compares to a net loss of $73.5 million, or a $1.27 loss per diluted share for the same period in 2022. Even though for the quarter was $52 million, that compares to a negative $35.6 million in the prior year period. Our depreciation and amortization expense was slightly lower by 0.7 million versus a year ago at 23.9 million.

Thanks, So much I appreciate the color I'll leave it there.

Thank you.

The next question is from Atlanta Gupta with UBS. Your line is open.

Hi, Phil.

I was wondering if you could help us.

I understand there can be when by when can we get more guidance from the treasury as it relates to 45 Z and I'm also trying to understand <unk> seen a little bit of a pullback in corn oil prices I think it's more of a function of before you have a lot of capacity coming on which would need that corn oil and then as Lcs as prices move up.

Jim Stark: Our depreciation and amortization expense was slightly lower by 0.7 million versus a year ago at 23.9 million. We realized 48.5 million in consolidated crushed Q3 of 23 compared to a negative 20.5 million in the prior year. Our ag and energy segment performed well, recording 12.2 million in EBITDA, which was about 5.6 million higher than the prior year. This increase was driven by opportunities in our merchant businesses. For the third quarter, our SG and A it cost for all segments was $35.5 million compared to $29.1 million reported in Q3 of 2022.

Jim Stark: We realized 48.5 million in consolidated crushed Q3 of 23 compared to a negative 20.5 million in the prior year. Our ag and energy segment performed well, recording 12.2 million in EBITDA, which was about 5.6 million higher than the prior year. This increase was driven by opportunities in our merchant businesses. For the third quarter, our SG and A it cost for all segments was $35.5 million compared to $29.1 million reported in Q3 of 2022.

The demand for corn I should be higher so trying to understand some more.

The guidance you can provide on 45 Z and then how do you see near to medium term corn oil pricing.

Yes. Thanks.

Devin here with me, who led our IRI call. So I'll, let I'll, let him comment on where we're at on that.

Manav. The government has said they're going to come out with 40 be SaaS guidance by September 15th obviously, that's in the rearview mirror by 45 days were still expecting that by the end of the year and that the lifecycle modeling they put out there for SaaS will likely inform their thinking on 45 Z as.

Jim Stark: This increase was driven by legal fees associated with the GPP buy-in and other legal activities during the quarter. Entrance expense was $9.6 million for the quarter, which includes the impact of debt amortization and capitalized interest. This was in line with the prior year's third quarter. Our income tax benefit for the quarter was $7.8 million compared to a tax benefit of $1.9 million for the same period in 2022. The increase in the tax benefit year over year is a result of a decrease in our total deferred tax assets, which allowed us to reduce our valuation allowance against those deferred tax assets.

As far as the model they are using and how farm carbon and carbon capture can play in that.

We're still optimistic that we will see 45 guidance by the end of the year, but that could slip into early next year.

Yeah, so from that perspective, and as we move to your second and third question on corn oil and <unk>. We have seen a drop I think there was that was due a little bit to overall market dynamics of the unwind between meal and oil we saw meal rally in an oil and oil retreat from the highs. Although we got most of our corn oil sold at higher values for the fourth quarter.

So we're happy about the position we have on at this point that was the one thing we wanted to make sure that we locked in to a lease get.

Jim Stark: At the end of the quarter, the net loss carry forage available to the company were $128.9 million, which may be carried forward indefinitely. We continue to anticipate that our normalized tax rate for the year for Green Plains Inc., excluding minority interest should be around 23%. Our liquidity position at the end of the quarter remains solid, which included $366.2 million in cash, cash equivalence, and restricted cash along with approximately $200 million available under our working capital revolver.

Get that locked away as we saw some downtime and renewable diesel and maybe some delays in startup.

We're all I think another big impact and I mentioned in the script.

As Chinese used cooking oil, which to US is disgraceful that is has the ability to come in the United States and earn our tax credits, it's sitting down at the Gulf I think get pressured overall.

Our veg oil prices as well and we'll see where that transpires I think I think it was pre loaded against them. Some startups of some of the newer plants as well, but we're going to watch that closely and make sure that.

Jim Stark: Our financial strength is growing due to the strong execution of our platform and favorable industry fundamentals, as we are well positioned to execute on the next steps of our transformation plan. As a reminder, we have no debt maturities until 2026, and two thirds of our debt is locked in at a fixed rate leading to our overall cost of borrowing during the quarter being around 7.2%. For the third quarter, we allocated $29 million of capital across the platform, including $15 million to our Clean Sugar Building, Shandidoa, and other MSC protein initiatives, about 8 million to other growth initiatives, and approximately $6 million toward maintenance, safety, and regulatory capital.

We defend our position as a U S made product.

Against a foreign made product getting our tax credits and we're very focused on that but overall I think we've seen oil prices stabilize here down in the in the mid <unk> and we're still trading at a premium to that.

On any given day. So overall, we're still not happy about the values.

And then lastly, you've seen these these the great equalization of the <unk> five and <unk> and <unk> are just just.

Significantly higher than that and that's really what the goal I think of the.

The last round of EPA rule, making was to kind of equalize, although as let let let <unk> be a little more agnostic and then and then see what wins, but overall, it's still runs are.

Jim Stark: For the remainder of 2023, we anticipate CAPX will be in the range of $25 to $45 million, as we continue to work diligently on the timing of permitting for MSC technology deployment at a couple of our larger plans.

In the high 80% nineties and.

Jim Stark: For Green Plains Partners, we reported net income of $9.4 million and a adjusted EBITDA of $0.7 million for the quarter, in line with a $13 million reported for the same period a year ago.

And overall those economics are pretty well and then lastly, <unk> I think California is committed to making sure that that program is successful.

So between Rins between <unk> and obviously, the biodiesel tax credit and then moving into 45 Z into into the program into 2025.

Jim Stark: The partnership declared a quarterly distribution of $45.5 per unit with a .99 times coverage ratio for the quarter. The partnership had distributed cash low of $10.7 million for the quarter, slightly lower than the $11.3 million for the same quarter of 22. Over the last 12 months, the partnership has produced a adjusted EBITDA of $50.6 million.

Look I mean, we think we're in an advantaged position as an industry not just green plains, but as an industry overall to make what we think is the second largest lowest carbon feedstock available and we think that will continue over time and it's just really a lot of it continues to be rebalancing all the time between kind of the protein and the oil contribution.

Doug.

Jim Stark: Distribute cash low of $42.9 million, and declared distribution of $43.2 million resulting in a .99 times coverage ratio, excluding any adjustment for the principal payments made in the past year.

Quickly the fundamentals ethanol or even better in <unk> and I am hoping somewhere you would say that you would not trading hedge ballpark you. So you can get the full benefit of this market rally if you could clarify.

Todd Becker: Now, I'd like to turn the call back over to Todd. Hey, thanks, Jim. So our path forward continues to be focused on maximizing what we can produce from a kernel of corn at each of our bio refineries and all of our initiatives tie back to one consistent making low carbon ingredients that matter. We consistently pointed the need to operate our core business well, to maximize the opportunity in protein and higher renewable corn oil yields, and we are starting to achieve those higher run rights once again.

Yeah, I mean, we've seen overall better margin structures that have been available during Q4, it's been volatile though in the last couple of weeks I think if you watched it you've seen it come off the highs. So there are days I wish I would have hedged some of that volume, but we remain open on a daily basis other than small positions, we have as we mentioned.

But generally speaking.

Crushes is the margin structure is better than what we have seen but it has come off its highs and we'll see what transpires everyone's days an adventure as we say.

Todd Becker: Our assets have aged, and we need to put a lot of care into them, and we hired a new operations executive leadership team that is fully focused on the modernization and automation, and they know how to do it correctly. We've been investing in technology and are making great progress towards the goal across the platform. Today, we have five facilities operating our MSV ultra-high protein technology, construction of both Madison, Illinois, and Fairmont, Minnesota continues to be pending favorable outcomes from the permitting process in both states, which continues to take longer than we thought.

But overall driving demand has remained solid we have seen it a little bit below 9 million a day.

Is good for ethanol, we've seen good export demand.

Coming out of our for our products about 100, 100, or 1 million a day or 100000 barrels a day sorry.

And overall, we just got to watch production there is definitely some noise or more plants trying to start back up we got to watch that but our industry is aging.

Todd Becker: We are in a good path in Illinois as the permit will unlock the full potential of the plant in terms of total volume of all of our products in addition to the MSV installation. What I am really excited about is our MSV turnkey joint venture with Therylson is on track to be in commissioning and start up in the first quarter of 2024. This will be the largest plant ever built with the flu equipped technology and will bring approximately 100,000 tons of production to our sales platform.

<unk> that over the last several quarters call. It in that kind of what some of the headwinds we faced over the last 12 to 18 months as our assets have aged I had to.

At a higher new operational team to address those issues prior to the old operational team and and management at the plants as well. So just harder to run these plants I think youre seeing that on a weekly basis and EIA data, but generally we're stabilized.

Thank you so much and congrats on a good quarter.

Todd Becker: We remain on our path to have our total annual capacity with 580,000 tons at the base yield of 3.5 pounds per bushel. Yet, we are also starting to achieve higher yield at almost all of our locations with some consistently achieving over 4 pounds per bushel daily and believe that over the long run we get achieved improved yields across the entire platform. Our production was significantly higher than in the prior quarter and continues to grow.

Thank you.

The next question is from Craig Irwin with Roth <unk>. Your line is open.

Hi, good morning, Thanks for taking my questions.

Todd I wanted to ask you about 60 Pro you said, 25% and 24 thats up from that from last quarter.

Can we maybe read that to be.

The majority of hydro production being 60 pro in the back end of the year or maybe even most can you maybe just give us color on how you see this potentially progressing over the year.

Todd Becker: Our commercial team focused on protein successfully work with our diverse customer base to sell all of the product we produce. This confirms what we have always believed that we have a great product that is in high demand. We have a solid customer base and we continue to have access to new business opportunities. We increase the number of customers by 25 to 30% during this quarter alone. Our protein product is also growing demand around the world, and we are now selling our protein to North and South America, Europe, Middle East, and Asia.

Yes, I think what we learned and what we're seeing in terms of the demand for the product is because of the quality of the product not only from a protein standpoint bump digestibility feed conversion ratios those type of things that are coming out of these long trials that we've been in.

And we're seeing really good interest in the product for us when.

When we think about what's the biggest thing we can do.

Relative to nongovernment related programs non carbon programs those type of things in the short term is move as fast as we can to make as much 60 pro as we can starting in 2024, and then into 'twenty five Luke if I could wave my magic wand and make 100% today, but it takes time for the market to uptick these new products and there's never been a new product like.

Todd Becker: Now, let's talk about 60 to 60% protein initiative because that's one of the most important and exciting things that we're going to be doing over the next several years. In addition, to begin delivering an additional 60% protein sale in the fourth quarter, we are continuing to debattle the production process around this both mechanically and biologically as we learn how to transition these MSV systems from 50 to 60% protein production at full scale.

This in a very very long time, so all roads are going to lead to 60 pro for US we have initiatives to look at what we need to do to bring a second plant on next year and then look at basically initiative around 100% of our plants moving to 60 pro with some of it what we're learning is some of its biological but some of it is mechanical.

Todd Becker: Once we light out the system and would river, we consistently produced our 60% protein product and have achieved as high as 62.3% during the quarter. The team overall at the plant as well as in our office here did a great job in a very difficult task which is why we know we have something unique. We now have our first repeat 60 pro business and the product has been utilized in several large scale commercial diets along with additional trials in the US and around the world.

There are some things that the traditional 50 pro systems, just can't do in 60 pro and so we're making some of those changes will keep those private at this point, but I think I think that our clear path.

Is to ultimately make as much 60% protein as we can and even start to go higher from there, but the great success, we had at wood River during the quarter, we learned a lot going to full commercial scale. We scaled up we spent a lot of time in the 58 range before we solve that last that last problem and then we spent a lot.

Todd Becker: We remain committed to achieving our goal of dedicating 20 to 30% of our portfolio to 60 pro during 2024. We can see the business in front of us and customers are starting to ask for it. In addition to the high quality nutritional digestibility and taste profiles of our protein, we are already getting value from our lower C.I, from our ultra high protein relative to corn and milk from wet mills and receive updated data during the quarter on the advantage we have.

Time above 61, so we're very happy about that which is what you really need to do when you start averaging into these products, so, but what we're really more excited about us.

We're getting calls in for the product now now it's going to take time for larger volumes, but the margin structures there.

The demand is there the need for this high quality low carbon high digestibility feed conversion ratio product is there and is there not just from the United States, but we sold now 60 pro in smaller quantities commercial quantities, though into middle East.

Todd Becker: Now that we've been running our platform for several months, we anticipate the fourth quarter ultra high protein production will be higher than what we achieved in the third quarter and growing. As we look at the EBITDA opportunity in 2024 based on the five facilities we have operating plus a partial year impact from our turn key J.V., EBITDA contributions could be 80 to 120 million during the 2024 fiscal year. In corn oil, our renewable corn oil remains a feedstock of choice among renewable diesel producers and even in the face of new soybean crushed capacity coming online, our corn oil maintains a distinct advantage due to its lower carbon intensity.

Southeast Asia, South America and growing.

Really excited about that and then we're really focused on some U S business as well.

Thank you for that my follow up question I mean, maybe this maybe this one's for Devin but.

Last week I was in DC meeting with lobbyists from the oil and renewable fuels industry.

<unk>.

A couple of people suggested that the delay of the.

Todd Becker: I don't think we need to spend a lot of time on this for this college. Most of you know everything and you need to know about this great product. Pricing was strong during Q3 and we sold most of our Q4 production at higher values in the current markets, so we're happy about that. We believe our renewable corn oil platform as well positions take advantage of industry drivers towards advantage feedstocks. The low carbon premium has developed and we believe renewable corn oil beginning in 2025 is even more advantaged in the IRA.

The credit so we're looking for the language like Treasury is related to changes that remain in the greet modeler or potentially made in the Greek model the disadvantaged green gas in particular.

And theyre, suggesting that there is an open dialogue about the greet model, whether or not it needs to be revised the original model is right.

Can you maybe just give us color on why why you're confident that.

Todd Becker: So don't ignore that positive factor as we get into next year in the year we are. Decarbonization continues to be a crucial strategy we are pursuing. The most significant step we can take is participation in carbon capture and sequestration opportunities. Four of our facilities representing approximately 316 million gallons per year committed to some of carbon solutions projects. We are confident this project gets completed although someone is now indicating looking at a 2026 startup.

This is likely to be finalized by the end of the year.

Is there is there anything in the potential changes that may have happened that would impact that.

Carbon credits the way you look at it or SaaS or anything related to ethanol.

Go ahead, Devin real quick so yes, Craig so we've heard the exact same thing they're looking at the.

The renewable natural gas at tweaking the remodel for that ultimately we think they will arrive at something that we can plan. We've heard all the indications from the administration is that they want ethanol and soy based feedstocks to be able to play in sustainable aviation fuel we've heard that from the president he is actually going to be in Minnesota Tomorrow. He may comment on the topic there.

Todd Becker: They continue to make great progress or permitting and right away and we expect that many of the stranded navigator plants will end up on this project. As noted over the past quarter, three of our facilities are now on a separate CCS project. In Nebraska Central City would River and York represent about 287 million gallons. This project appears to be on track for a 2025 startup. We have expanded and diversified our partnerships for carbon capture and sequestration and believe that we will be in a significant advantage beginning in early 2025 when 45 Z goes into effect.

So while the timing does slip and they are still looking at updating the greet model. We are confident that there will be a place for us to play there.

Perfect. Thank you. Thanks again for taking my question.

I appreciate it thanks.

Yes.

The next question is from Ben Bienvenu with Stephens. Your line is open.

Todd Becker: Decarbonization through carbon capture and storage provides a critical milestone to not only lower the C.I, the fuel ethanol we produce but also further drive delineation in all of our ingredient pathways. Ultimately, having a decarbonized ethanol platform positions fuel ethanol to be a crucial low C.I, feedstock for the development of sustainable aviation fuel, which as you know we are keeping it close eye out. We expect to get some more clarity from the administration on F.A.F, before the end of the year.

Hey, Thanks, good morning.

Good morning, Todd I wanted to.

I wanted to pick up on your commentary that you offered around the contribution from <unk> and then the five MSC facilities, you've talked about the $80 million to $120 million.

Next year's EBITDA can you help us think about kind of what.

What determines the range there is the ramping and scaling of production or something else.

Todd Becker: We are approaching completion of the world's first commercial clean sugar technology facility in Shenandoah, Iowa, as it is on track to be mechanically completed by the end of the year, and we are still only waiting for final electrical gear. This is truly disruptive and game-changing for Green Plains. Our clean sugar has up to a 40% lower C.I, than from a wet mill, and that is before we have carbon captured deployed. We look forward to demonstrating to the market the true value of this technology.

Yes, I mean, it's a little bit of timing, it's a little bit of just watching the spreads between corn and soy and what will happen there.

Think about.

560 million gallons converted plus <unk> gets us too.

640 million gallons.

And we look at.

This call at <unk> a.

What we kind of guided early at 15 cents a gallon that gets you right in the middle of the range. So just kind of we're watching the ratio of corn against soy meal. While we are doing is is look.

At that and saying what markets, we get the values for export, sometimes theyre better than domestic novartis domestic or sometimes better than export but some of it is also this volatility we've seen in the soybean meal basis as of late it's come back Roaring back.

Todd Becker: Our ongoing commercial sales discussions are rather an extras product, reflective value of the lower carbon intensity of which we got brand new results during the quarter, which have basically shown that we are at least a 40% lower carbon intensity score than the incumbent products.

64 was not even included in that at this point. So we just put in a range around it but in the middle of the range is kind of that 15 cents per gallon that we kind of outlined as a contribution and then we go from there.

Okay, Great Super helpful.

Second question is on the Queen Sugar technology, and you're talking about commissioning of Shenandoah and the overwhelming demand that youre seeing there, which is really encouraging as you think about potentially expanding that production.

Todd Becker: So where does that leave us with regard to our path to our 2025 EBITDA and transformation that we laid out to you a couple years ago? For 2024, starting with the five MSC facilities, plus a parcel year for the Seryles and J.B., to drive EBITDA contributions of $80 to $120 million, excluding any uplift for 60% protein. Our base corn oil, our base renewable corn oil business, excluding the corn oil uplift from our MSC, tracks you about 250 million pounds, and depending on how a vegetable pricing goes, could be 130 to 160 million annual contribution as well.

Can you talk a little bit about your appetite for the pace of doing that and do you think you'll be in a place to self fund that.

Some of your other capex projects start to wind down as we head into 2024 and your cash flow picks up from some of the investments you've made already.

Yes, I think where we look first is obviously Shenandoah, which is the easiest expansion and we're working with customers to look at that we've got to make sure that relatively speaking of what we need resources locally are there from electricity through gas work.

Todd Becker: We have recently seen vegetable prices drop, so once again we'll see what develops in 2025 as more renewable diesel projects come online, and we'll see what the impact it has, and if the government will continue to allow Chinese use cooking oil to really receive our tax credits. Our agon energy business consistently generates 20 to 30 million in EBITDA annually, and our corporate SGNA is approximately 65 to 70 million. Again, just to be clear, we have pre-invested both in protein marketing and technology, as well as our sugar marketing and technology, so that when we kick off these new products, we are fully ready to go.

All those type of things, but where will look after that so that's an easy one to fund where we will look after that is what's the next best plan to build and is it a nebraska plant on a pipeline or is it going to be one of our plants that really arent on don't have a carbon solution, maybe like Madison or <unk> at this point.

So we will look at that when we look at cash generation.

What we've learned this quarter now and then going into the fourth quarter is is we're really set up well for free cash flow generation to start to help self fund. Although we are we still have a lot of cash on the balance sheet and we're generating more but we see our how we set our balance sheet up with low debt low debt levels relatively speaking.

Todd Becker: I'll let you put in your own assumption for ethanol margins, but we do believe fundamentals for the ethanol demand will remain strong for the foreseeable future, notwithstanding those normal ups and downs we see seasonally or from quarter to quarter. We are also focused on consistent operations for our core products as well. As we move into 2025, we should see incremental value from additional MSC facilities, but most critically will be the startup of our decarbonization strategy, with our platform having a significant advantage in terms of timing to completion relative to other projects that are out there.

Our high cash levels, you saw our rate is still sitting around 7% in a high rate environment, New capital is much more expensive. So we would start to say what can we find out the balance sheet.

What assets do we have if we needed to to finance anything but.

Todd Becker: I'm incredibly proud of our entire team for pulling together and delivering a solid quarter and positioning us for even greater success. That's possible in Q4 based, of course, as we always say on current markets. We have made our significant changes to our executive team throughout the organization over the past 12 to 24 months. We assembled a new senior management team and leadership team in operations with hires from industry leaders in wet milling, and value at a production who can also maximize the capabilities of our plants.

But beyond that free cash flow generation should.

Should take care of I would say plant number two very easily over the next 12 months to 18 months as we start to look at where that should be.

Okay, great very good thanks best of luck. Thank you.

The next question is from Adam Samuelson with Goldman Sachs. Your line is open.

Yes, Hello. Good morning, this is actually Stephanie.

Todd Becker: This team has many, many decades of operational expertise. We built a new commercial leadership that's focused on building value at a marketing and distribution that was needed for our new products yet have expertise and traditional commodity margin management. We also have new leadership and human resources as we are focusing on taking care of our team members needs and recruiting great talent. And of course, can't leave this out Jim taking over at CFO.

Alright, I was wondering if you could provide some color on the corn basis.

That impacted your margins this quarter, what would be your expectation going forward.

With us today, we have grand Caterpillar, he's our EVP of commercial operations I'll, let him give a quick comment on the corn basis, and what and what he has seen I want to introduce everybody to grant there'll be fewer.

Future calls as well and we'll get them introduced to all of you, but granted now runs all of our marketing and all of our proteins.

Todd Becker: We also have a great bench of leaders and employees from sales, to marketing, to trade, to production, to nutrition, to technology, and our finance organization, of course, our plant management to all help us continue to execute on our transformation and deliver results from many industry leaders we compete with on many of our new products. We knew this would be a challenging process in the end. Of course, I'm humbled in by the dedication inspired by the passion of all of our team members across the organization and every position weekend and week out.

If anything anytime anything commercialize it'll move under him and he runs our commercial operations across the platform. So grant real quick on the corn basis sure. Good morning. Thanks for the question during the third quarter, we did see the transition from old crop new crop. So we did see a material decrease in the in the overall corn basis heading.

Heading into the fourth quarter into the new crop season, I would say, we've seen more of a normalization of corn basis during harvest and then.

Todd Becker: Finally, our commitment to safety of our employees is first and foremost. Before anything else we do, we will never put profits before safety, and I preach this continuously anytime I can. And with that, I'll leave it there.

The potential for a for a more normalized scenario through the balance of the year.

Todd Becker: And with that, I'll leave it there. Thanks for joining our call today.

That's super helpful and as a follow up if I could ask.

Todd Becker: Thanks for joining our call today.

Operator: We can start the Q&A session. Thank you. If you'd like to ask a question, please press star then one on your telephone keypad.

Our outlook for ethanol exports level.

Expectations going forward.

Jordan Levy: Our first question is from Jordan Levy with Truist Securities. Your line is open. Morning, all. Nice quarter. Maybe to start on the protein side of things seems like we're getting into that time of year when you start to look at allocations. Maybe if we just start looking back 12 months or so versus where we are now, we could just talk to how those are shaping up what sort of the customer mix and how that's changed. How the economics look now versus how they just maybe a year ago.

Jordan Levy: Our first question is from Jordan Levy with Truist Securities. Your line is open. Morning, all.

As we said we've seen.

100000 barrels a day or so of export capacity some days a little bit higher Sundays, a little less I think obviously the world an interesting place today, and we got to watch where we ship our products too, but again no lower.

Todd Becker: Nice quarter. Maybe to start on the protein side of things seems like we're getting into that time of year when you start to look at allocations. Maybe if we just start looking back 12 months or so versus where we are now, we could just talk to how those are shaping up what sort of the customer mix and how that's changed. How the economics look now versus how they just maybe a year ago.

Price for octane on the planet still.

Advantage advantage, what we produce globally.

But generally Canada continues to have a really strong low carbon fuel program and we see good uptake from there and then randomly around the world we feel some going to the EU again that market is opened up for us.

Todd Becker: So let's talk first about the economics. What we've seen is with corn prices kind of hanging in here a little bit lower and protein prices increasing against that. The economics on paper have clearly gotten better. It's basically financial to financial. Now, during the quarter last quarter, we saw weakness in the soybean meal basis, which affects the overall market structure, but that has come roaring back as well as the overall price for protein has come roaring back as well.

And generally a strong we started to see volumes again, starting out of the middle east, but with what's going on there that may drop a little bit of overall, we have strong.

Strong exports out of the U S and we will watch the.

The Brazilian because when your Brazilian sugar prices, where they're at.

We also have high Brazilian ethanol prices at this time, so we're able to at least get some other business coming our way. So I think we'll remain at those levels really throughout the year.

That's super helpful. Thank you.

Todd Becker: So we're optimistic with in terms of our price competitiveness relative to incumbent products. We get a lot of calls around that and the use of our product and we're seeing higher inclusion rates. And in general, we've seen good up uplift in terms of a new demand showing up for our product across all the species. We're happy to report.

Andrew.

As we have seen the divergence between Dts prices female.

How has that impacted April pricing.

Okay.

Yes.

Well I think what we saw is Samuel as we quite weak earlier in the quarter and then you've seen it come Roaring back.

Todd Becker: We renewed our pet food contract for 2024. We got 100% of that business back and it's growing from there. The company that we're partnered with continues to grow their volumes every single year from when we started in Shenandoah by selling part of that plant out as well. So, relatively speaking, from 12 months ago, we continue to see uplift in all the species and continue to see growing volumes across our whole customer base, even with more volumes coming into the market. Thanks, Todd.

I think that that's kind of what the viewpoint is that while it narrowed up during during the quarter.

Todd Becker: The company that we're partnered with continues to grow their volumes every single year from when we started in Shenandoah by selling part of that plant out as well. So, relatively speaking, from 12 months ago, we continue to see uplift in all the species and continue to see growing volumes across our whole customer base, even with more volumes coming into the market. Thanks, Todd.

Spreads there's some areas that saw very strong distillers prices North Dakota has strong distillers prices, Nebraska as strong distillers prices as well, but generally the spread has has widened back out to the levels, where we're able to start to achieve our our margins when you have soy meal futures.

At 425, 26% or something like that and you've got.

Manav Gupta: And then maybe just moving on to the carbon side of things. Appreciate the commentary you gave there and sort of the diversification strategy. You all are kind of continuing to pursue maybe just with some of the recent headlines around some of the plants, some of the other plants in the market or the other pipes in the market rather.

Jordan Levy: And then maybe just moving on to the carbon side of things. Appreciate the commentary you gave there and sort of the diversification strategy. You all are kind of continuing to pursue maybe just with some of the recent headlines around some of the plants, some of the other plants in the market or the other pipes in the market rather.

Indiana sitting at 175 or Shenandoah sitting at 190, <unk> spreads now gone through historically wider levels, which then gives us a little bit more margin and the meal basis has rallied as well. So generally overall I think we're in a better position today.

Todd Becker: Maybe if you could just talk to how you're thinking about that over the end of confidence you have over the next few years and being able to execute on the carbon strategy. Yeah, I think we start with our core pipeline strategies was the part of the summit and what a great job they've done. They've secured 75 to 80% of the right away. Nobody else has been able to, nobody else building a new pipeline has been able to do that while they certainly have seen some headwinds in terms of just overall permitting we believe strongly believe they'll get through that and kind of get their route established.

Thank you.

Thank you congrats on the quarter.

Thanks.

The next question is from Eric Stine with Craig Hallum. Your line is open.

Good morning, everyone. Thanks for all the details.

So I know for EBIT for 'twenty, four I mean, it's roughly $200 million plus X ethanol somewhere in that range not sure. If you gave 25 I might have missed that I know previously you had talked about 400 to 600 million at a run rate in 'twenty five.

Todd Becker: You know it's a lot of it's about about the routing and some of it's about you know local communities making sure that that they get what they need and I think some it's fully prepared to make those concessions and they continue to negotiate. You know it first comes Iowa permit or confident in North Dakota and we're also really confident that they'll get through the South Dakota process as well with some some rerouting.

Yes, given the commentary around summit and the carbon capture opportunity.

I mean is it better to think of low end of that.

That range and that obviously.

Obviously upside as you get into 'twenty six.

Yes, I don't know that we gave 400 to 600, but I think what we're talking about in 2020 five as the previous guidance that we gave is still stands and and it's because it really it's at advantaged, Nebraska to start with some are coming on in 'twenty, six and so and when you take that when you take 60 pro when you take.

Todd Becker: That's really what it takes is that line running from Iowa to North Dakota you know strong from the standpoint of the early funding they raised obviously they need you know we're waiting for the final permits so they can raise the final funding. They've you know we're confident in the team and their ability to execute and it's going to be a massive project that gives a massive uplift to our industry overall. And then with obviously the The other pipeline that decided to cease their operations, I think that's that's advanced summit relative to where they're building and and to pick up other plants and increase their volumes which just makes everything more economic in the end.

Overall veg oil yields when you take expanded protein production as we get into 2025.

Staying in the previous guidance ranges.

And then on top of that.

Four do you put ethanol margin on top of that failure of any other comments on that.

Right.

We're selling those range that we built out previously.

At $4 2025, and completing the facility spring those new facilities online sometime sometime in 2020 finally medicine.

Todd Becker: It's absolutely the right thing to do. In Nebraska we had mentioned a different project there that we believe start-up will be in 2025 and Econ's are very favorable to Green Plains as well. Those will be early Econ, we outlined those during our earlier calls and discussions but we really feel like we're in a really great advantaged position, especially for the early start-up and then when something comes online it really just drives our capability to earn from the carbon initiative significantly for our shareholders.

Hi, Mark.

Okay. Thank you.

Thank you.

The next question is from Salvator Tiano with Bank of America. Your line is open.

Todd Becker: In Nebraska we had mentioned a different project there that we believe start-up will be in 2025 and Econ's are very favorable to Green Plains as well. Those will be early Econ, we outlined those during our earlier calls and discussions but we really feel like we're in a really great advantaged position, especially for the early start-up and then when something comes online it really just drives our capability to earn from the carbon initiative significantly for our shareholders.

Yes, thank you very much.

Firstly I wanted to understand you made these comments about kind of the.

The asset base staging and.

You guys are making some changes you are going to just.

Moderniser assets can you provide some details on what this entails in terms of Capex spend in the next few years and also whether we should do.

Should we expect any meaningful EBITDA contribution from this plan.

We will look at what we.

Produced this quarter at 94% was rounded up to <unk>, one, but when we produced this quarter at 94%, we still have a ways to go we can we can get.

Todd Becker: Thanks so much for hearing the call they're all with there.

Jordan Levy: Thanks so much for hearing the call they're all with there. Thank you.

Operator: Thank you.

Manav Gupta: The next question is from Manav Gupta with UBS, your line's open. Hi, so I was wondering if you could help us a little bit to understand where can we, when can we get more guidance from the Treasury as it relates to 45Z? And I'm also trying to understand, you know, we have seen a little bit of a pullback in Corn Oil prices. I think it's more of a function of D4. You have a lot of capacity coming on which would meet that Corn Oil and then as LCFS prices move up the demand for Corn Oil should be higher.

More out of these plants and we're just starting to unlock the capabilities of these plants from the last round of Capex and some of that is coming through automation. So that's a little bit lower.

Todd Becker: So trying to understand some more, you know, whatever guidance you can provide on 45Z and then how do you see near to medium-term Corn Oil pricing? Yeah, thanks.

<unk> to do that we are literally working around the clock to put as much automation as fast as we can in.

In these plants not because.

Our employees are labor, it's just because we got we can operate better when we're managing that through automation, whether it's how much enzyme go into fermenter, whether it is how much yeast is going to get applied and make sure. It gets applied consistently every day at the same at the same rate and what we wanted to be applied at and less room for human error.

Devin Mogler: I have Devon here with me who let our IRA call, so I'll let him comment on where we're at on that. Hey, Manav, the government had said they were going to come out with 40B Saf Guidance by September 15th. Obviously that's in the rearview mirror by 45 days. We're still expecting that by the end of the year and that the lifecycle modeling they put out there for Saf will likely inform their thinking on 45Z as far as the model they're using and how farm carbon and carbon capture can play in that. Hope we're still optimistic that we will see 45Z guidance by the end of the year, but that could slip into early next year.

We learned obviously was a bit of a headwind at times and so those are not high cost.

Relative capex relative to making our plants run better when there is still more to unlock we can ultimately makeover I believe over 100% of our stated capacity that's coming down the road I mean, we can we have more to unlock these assets Madison were held back on permit on how much ethanol, we can make and we're maximizing that every single day and we're not making.

The full capability of that plant, because we're waiting for Illinois, hopefully to expand our operating permit not just.

Todd Becker: Yeah, so from that perspective, then as we move to your second and third question on Corn Oil and LCFS, we have seen a drop. You know, I think there was that was due a little bit to overall market dynamics of the unwind between meal and oil. We saw meal rally and oil and oil retreat from the highs, although we got most of our corn oil sold at higher values for the fourth quarter.

For protein, but to give us more ethanol headway as well so we can make more ethanol and part of it and the second thing is that we have to invest smart and correct in all of these plants. That's why I brought in a new team in the.

The <unk> team could take us so far and the new team is really taking us to the next level.

It's a little bit uncomfortable for some people when we want to run these plants harder and it's a bit like the analogy you use when you have.

Todd Becker: So we're happy about the position we have on at this point. That was the one thing we wanted to make sure that we locked in to at least get get that locked away as we saw some down times in renewable diesel and maybe some delays and startups. Overall, I think another big impact and I mentioned it in the script is Chinese juice cooking oil, which to us is disgraceful as it has the ability to come in the United States and earn our tax credits.

I've heard this a few times when you have a Ferrari you don't run it in first gear you try to run it as hard as you can and we know theyre going to break a little bit, but then you get through that and you keep going and so while we say we're going to modernize our plants. We've done a lot already now we're going to maximize that investment and so I don't think our capex relative to our plants changes much past our previous guidance, Jim what is our normal.

Todd Becker: It's sitting down at the golf. I think it's pressured overall. And we'll see where that transpires. I think I think it was preloaded against some some startups of some of the newer plans as well. But we're going to watch that closely and make sure that we defend our position as a US made product against a foreign made product getting our tax credits and we're very focused on that. But overall, I think we've seen oil prices stabilized here down in the in the mid 50s and we're still trading at a premium to that and on any given day.

Capex range I would say.

The answer <unk> question. When you look at historically, we spend somewhere between 30% to 35 million in Capex maintenance Capex and another 30% to 35 other growth initiatives outside the big MSC or dextrose or sugar projects that we have so if you take those two together in that $60 million to $70 million range of.

<unk> kind of normal capital that we would spend so the the monetization and the upgrades we will spend on will be within contained within that on an annual basis. So it's not going to it might be a little bit more in maintenance, capex and little less and growth initiatives, but.

Todd Becker: So overall, we're still not unhappy about the values. And then lastly, you know, you've seen these the great equalization of the D45 and 6 Rins and D3s are just just significantly higher than that. And that's really what the goal I think of the the last round of EPA rulemaking was was to kind of equalize all those. Let let let Rins be a little more agnostic and then and then see what wins. But overall still Rins are, you know, in the high 80s and 90s.

I would tell you when you look at next year, we're still dialed in to be probably plus or minus around $150 million of capital next year.

<unk> one of the big Msce's to get really get built during the year.

But when you look historically, that's way down from certainly what we spent over the last few years. So feel very good about where we are from a managing the capital side will also tail remind you. Once the partnership completed there is an additional $25 million plus of free cash flow stays home that can help US fund these projects going forward.

Todd Becker: And and overall those economics are pretty well and and lastly LCFS. I think California is committed to making sure that that program is successful. You know, so between Rins between LCFS and obviously the biodiesel tax credit and then moving into 45 Z into into the program into 2025. You know, look, I mean, we think we're in a disadvantaged position as an industry, not just Green Plains, but as an industry overall to make what we think is the second-large, lowest carbon-feet stock available and we think that we'll continue over time. And it's just really a lot of it continues to be rebalancing all the time between kind of the protein and the oil contribution.

Perfect and I also wanted to clarify a little bit on the 60 pro side personally.

Getting the renewals so as we think about Q4.

Or is it going to comprise perhaps 5% of your high propane sales as I think was.

There were some targets regarding that and secondly.

Can you clarify a little bit.

The comments.

$80 million to $120 million will be the high pro contribution next year, but there is upside from high profit from 60% at <unk>. So.

Todd Becker: Todd, very quickly, the fundamental ethanol are even better in 4Q versus 3Q and I'm hoping somewhere you would say that you were not really hedged for 4Q so you can get the full benefit of this market rally if you could clarify. Yeah, I mean, we've seen overall better margin structures that have been available during Q4. It's been volatile though in the last couple of weeks. I think if you watched it, you've seen it come off the highs.

What does that mean essentially in terms of what what's assumed in your base case 80 to 120 million, what's how can we quantify the upside and what will be fine.

Whether you do give that upside or not.

Yes, so much.

Much like 50 pro.

Time to get full uplift and so that's where whether we can make 60 commercial quantities, we're proving that to the market. The market now starts to adapt to that I think when we look at 60 pro for 2024.

Todd Becker: So there are days I wish I would have hedged some of that volume, but we remain open on a daily basis other than small positions we have as we mentioned, but generally speaking, the crush is the margin structure is better than what we have seen, but it has come off at highs. We see what transpires every Wednesdays and adventure as we say, but overall, driving demand has remained solid. We've seen it a little bit below 9 million a day, which is good for ethanol.

And the goal of 20% to 30% of our platform shipping.

It's probably.

Well not probably it increases during the year as a percentage. So we have identified an outline enough demand for all of our 50 pro in all of our 60 <unk> produce and it's really about getting that executed into the market and that will just grow during 2020 for fiscal year.

Todd Becker: We've seen good export demand coming out of for our products about 100 or a million a day or 100,000 barrels a day, sorry. And, you know, overall, we just got to watch production. There's definitely some noise of more plants trying to start back up. Gotta watch that, but our industry is aging and I've preached that over the last several calls. That's kind of what some of the headwinds we faced over the last 12 to 18 months that our assets have aged.

When we gave you the outline guidance its 560 million gallons converted today half of the <unk> earnings, which is about 85 million gallons gets us to about 650 million gallons at 15 mid range margin.

It's about $100 million a year roughly of of guidance for 50 Pro now if we do better because of the if you look at the spread between meal.

Todd Becker: I had to read read the higher a new operational team to address those issues prior to the old operational team and and management at the plants as well. So just harder to run these plants. I think you're seeing that on a weekly basis in EIA data, but generally we're stabilized.

Protein and corn, that's wide right now so possibly that gives us the higher end of the range and if a narrows and it gives us the lower end of the range and then on top of that.

Todd Becker: I think you're seeing that on a weekly basis in EIA data, but generally we're stabilized.

We see and in Washington to Washington meal basis, obviously watching Argentina, what's going on there and then on top of that depending on.

Todd Becker: Thank you so much and congrats on a good quarter. Thank you.

Jordan Levy: Thank you so much and congrats on a good quarter. Thank you.

Craig Irwin: The next question is from Craig Irwin with Roth and GAM. Your line is open. Good morning. Thanks to take my questions. So Todd, I wanted to ask you about 60 pro. You said 25% in 24 that's up from last quarter. Can we maybe read that to be the majority of high-profile production being 60 pro in the back end of the year, maybe even most?

How much and how fast the 60 pro uptake happens as we said it probably grows during the year accelerates towards the last half.

And then into 'twenty, five that's where the upside is.

Okay perfect. Thank you very much.

Thank you.

The next question is from Andrew <unk> with BMO. Your line is open.

Todd Becker: Can you maybe just give us color on how you see this potentially progressing over the year? Yeah, I think what we learned in what we're seeing in terms of the demand for the product is because of the quality of the product, not only from a protein standpoint, but digestibility, feed, conversion ratios, those type of things that are coming out of these long trials that we've been in. We're seeing really good interest in the product.

Hey, good morning, Thanks for taking my questions My first signs of the weight.

No.

Not a problem I know, there's a lot a lot to ask.

So I guess the first question is on the corn oil side and the decision.

To lock some of the prices and at the higher levels, how much of that and how far out did you go and has anything changed in your thinking with respect to your willingness to do that on an ongoing basis.

Todd Becker: For us, you know, when we think about what's the biggest thing we can do relative to non-government related programs, non-carbon programs, those type of things in the short term is move as fast as we can to make as much 60 pro as we can starting in 2024 and then into 25. Look, if I could wave my magic wand, I'd make 100% today, but it takes time for the market to uptick the new products and there's never been a new product like this in a very, very long time. So, you know, all roads are going to lead to 60 pro for us.

I think Colorado is a different a different animal for sure right. I mean, we saw veg oil prices starting to weaken and we noticed that there was some downtime we're able to I mean look I wish we locked it in higher but we did it but I mean, we locked it in above market and we just put it out for the quarter, a little bit of Q1, but not very much and so the market doesn't extend coverage.

Much further than that anyway. So we were able to get most of our sales on I think we're fortunate to be able to do that but I mean, maybe five to seven cents upon above market today Theres nothing dramatic doesn't change our view at all our view in 'twenty four is steady and our view on 25 is strong because of the conversion to.

Todd Becker: So, you know, all roads are going to lead to 60 pro for us. We have initiatives to look at what we need to do to bring a second plant on next year and then look at basically initiative around 100% of our plants moving to 60 pro. So, the sum of it, what we're learning is some of its biological but some of it is mechanical. There are some things that the traditional 50 pro systems just can't do in 60 pro and so we're making some of those changes.

Todd Becker: We have initiatives to look at what we need to do to bring a second plant on next year and then look at basically initiative around 100% of our plants moving to 60 pro. So, the sum of it, what we're learning is some of its biological but some of it is mechanical. There are some things that the traditional 50 pro systems just can't do in 60 pro and so we're making some of those changes. We'll keep those private at this point, but I think that's our clear path, is to ultimately make as much 60% protein as we can and even start to go higher from there.

The IRA and 45, <unk> and all the credits available and the advantage for corn off once that starts to happen.

Overall, we're focused on quarter to quarter, and we will have to deal with some of the volatility, but I think generally we stabilized oil against the oil mill online.

Todd Becker: We'll keep those private at this point, but I think that's our clear path, is to ultimately make as much 60% protein as we can and even start to go higher from there. But it's a great success we had at Wood River during the quarter. We learned a lot, going to full commercial scale. We scaled up, we spent a lot of time in the 58 range before we solved that last problem and then we spent a lot of time above 61.

Got it okay that makes sense and then.

Obviously, theres been a lot of headlines and news around carbon sequestration.

Todd Becker: But it's a great success we had at Wood River during the quarter. We learned a lot, going to full commercial scale. We scaled up, we spent a lot of time in the 58 range before we solved that last problem and then we spent a lot of time above 61. So we're very happy about that, which is what you really need to do when you start averaging into these products. But what we're really more excited about is we're getting calls in for the product now.

From from what you guys are doing.

And the optimism that you have around the Nebraska plant. So I guess my question is.

Is there anything with those Nebraska plants that could get in the way of that optimism or I guess are there any hurdles left or how are you thinking about the line of sight to two.

Todd Becker: So we're very happy about that, which is what you really need to do when you start averaging into these products. But what we're really more excited about is we're getting calls in for the product now. Now it's going to take time for larger volumes, but the margin structure is there. The demand is there, the need for this high quality low carbon, high digestibility, feed conversion ratio product is there. And it's a there not just from the United States, but we've sold now 60 pro in smaller quantities, commercial quantities though into Middle East. Southeast Asia, South America, and growing. We're really excited about that and then we're really focused on some US business as well. Thank you for that.

The EBITDA potential from those plants, specifically within the carbon sequestration.

Todd Becker: Now it's going to take time for larger volumes, but the margin structure is there. The demand is there, the need for this high quality low carbon, high digestibility, feed conversion ratio product is there. And it's a there not just from the United States, but we've sold now 60 pro in smaller quantities, commercial quantities though into Middle East. Southeast Asia, South America, and growing. We're really excited about that and then we're really focused on some US business as well. Thank you for that.

Yes, I think our line of sight is very strong there the projects on track.

Most of what is needed it's funded as a no.

Funding needed for that project. So and then we've been able to secure what we need from a compression standpoint as well. So every day. We just we evaluated it is not a lot of not a lot of right of way that has to happen in overall, most of which are a lot of it.

So that part kind of Derisked already and it's really about converting whats happening there into transportable assets and in going into a state like Wyoming, which is has primacy.

Craig Irwin: So my follow up question. Maybe this maybe this one's for Devon, but last week I was in DC meeting with lobbyists from the oil and renewable fuels industry. And a couple of people suggested that the delay of the credits that we're looking for in the language is related to changes that remain in the Greek model or potentially made in the Greek model that disadvantaged green gas in particular. And they're suggesting that there's an open dialogue about the Greek model, whether or not it needs to be revised, the original model was right.

So you don't have an EPA permitting process I think that's key I think that's the key to the summit project as well, which is going on in North Dakota with privacy is a great choice to make.

Relative to having to go to the EPA for permitting which is like 70 or 80 or 90 permits that are still in backlog today, where I think when you are in those couple of states. Its advantage summit, which is why they are still persevering to advantaged, Nebraska, which is why they are still in a strong position. So look at the end of the day.

None of it happens is a different discussion, but we're confident at least from the standpoint of what we outlined and then.

Devin Mogler: Can you maybe just give us a color on why you why you're confident this this is likely to be finalized by the end of the year. Is there is there anything in the potential changes that may have happened that would impact the carbon credits the way you look at it or staff or anything related to ethanol. Go ahead Devon real quick. So yeah, correct. So we've heard the exact same thing. They're they're looking at the renewable natural gas that tweaking the green model for that.

Those numbers that we previously outlined in Nebraska.

Advantaged, Nebraska at our assets there, it's really advantaged Green plains shareholders quite frankly is we're one of the biggest <unk>.

Producers in the state.

Got it Okay, and then if I could just squeeze in one more clarification you mentioned.

We're basis was relative to the five year average in the third quarter. Obviously, it's gotten much better did you quantify or how can we think about the delta or the contribution there as we roll forward and the change in the corn basis. Thank you.

Devin Mogler: Ultimately, we think they will arrive at something that we can play in. We've heard all the indications from the administration is that they want ethanol and soy based speech stocks to be able to play in sustainable aviation fuel. We've heard that from the president. He's actually going to be in Minnesota tomorrow. He may comment on the topic there. So while the timing does slip and they are still looking at updating the Greek model, we are confident that there will be a place for us to play there.

I'll, let Graham talk to us a little bit about maybe Nebraska, and Iowa corn basis, what we've seen here recently from the highest to the lows and kind of where we're studying stabilizing but.

Craig Irwin: Perfect. Thank you. Thanks again for my question. Appreciate it.

Ben Vanu: Thanks.

I think what's key is that we're getting a little more towards traditional levels, but I don't think were.

Fully there yet, but kohei grant.

I think as Todd mentioned and specifically one of the major change that we saw was in Nebraska wherever coming off a crop year, where we had a lack of production in Nebraska. We have now seen that to be one of the areas, where we've had the greatest year over year change in production.

Craig Irwin: Perfect. Thank you. Thanks again for my question. Appreciate it. Thanks.

Ben Vanu: The next question is from Ben Vanu with Stevens. Your line is open. Hey, thanks. Good morning. Todd, I wanted to pick up on your commentary that you offered around the contribution from Theraldson and then the five MSC facilities. You talked about the 80 to 120 million to next year's EBITDA. Can you help us think about what determines the range there? Is it the ramping and scaling of production or something else? Yeah, I mean, it's a little bit of timing.

Todd Becker: The next question is from Ben Vanu with Stevens. Your line is open. Hey, thanks. Good morning. Todd, I wanted to pick up on your commentary that you offered around the contribution from Theraldson and then the five MSC facilities. You talked about the 80 to 120 million to next year's EBITDA. Can you help us think about what determines the range there? Is it the ramping and scaling of production or something else? Yeah, I mean, it's a little bit of timing.

And.

Production levels have improved dramatically if you look at where corn basis was as high as in last year in Nebraska basis levels were well in excess of $1 over the CME.

Basis levels have again, I say normalized quite a bit to where we've seen we've seen values come off close to close to $1. A bushel I think once you get post harvest farmer puts their crop away youre going to see traditional sort of ups and downs in slight movements in the market, but we don't expect that we're going to see basis levels return to the values that we saw in the last few years.

Ben Vanu: It's a little bit of just watching the spreads between corn and soy and what will happen there. You know what we think about? 560 million gallons converted plus Therrelson gets us to 640 million gallons and we look at, you know, if this call it 8, what we kind of guided early is 15 cents a gallon, they get you right in the middle of the range. So it's just kind of we're watching the ratio of corn against soy meal, what we are doing is looking at that and insane what markets, you know, we get the values for export sometimes are better than domestic and the values for domestic are sometimes better for export but some of it is also this volatility we've seen in the so have you meal basis as of late it's come back worrying back.

Todd Becker: It's a little bit of just watching the spreads between corn and soy and what will happen there. You know what we think about? 560 million gallons converted plus Therrelson gets us to 640 million gallons and we look at, you know, if this call it 8, what we kind of guided early is 15 cents a gallon, they get you right in the middle of the range. So it's just kind of we're watching the ratio of corn against soy meal, what we are doing is looking at that and insane what markets, you know, we get the values for export sometimes are better than domestic and the values for domestic are sometimes better for export but some of it is also this volatility we've seen in the so have you meal basis as of late it's come back worrying back.

Okay.

Great. Thank you very much.

Thank you.

The next question is from Christopher <unk> with Oppenheimer. Your line is open.

Okay.

Chris <unk> with Oppenheimer. Your line is open.

Hi, Thank you for taking the question.

Quick ones from me first on NSC protein.

Can you can speak a little bit to the spread over DDG is and then Todd you mentioned kind of looking out the soybean meal versus corn ratio. So.

Stock very tight corn not so much. So just wanted to ask how much pricing you are willing to lock in for 2024.

Ben Vanu: But in 60 pros not even included in that at this point. So, you know, we just put in a range around it, but the middle of the range is kind of that 15 cents a gallon that we kind of outlined as a contribution and then we go from there. Okay. Great. Super helpful.

Todd Becker: But in 60 pros not even included in that at this point. So, you know, we just put in a range around it, but the middle of the range is kind of that 15 cents a gallon that we kind of outlined as a contribution and then we go from there. Okay. Great. Super helpful. My second question is on the clean sugar technology and you talk about commissioning of Shenandoah and the overwhelming demand that you're seeing there, which is really encouraging.

Okay.

Well.

Most people are starting to move from.

Flat price to plenty of sales on basis, we don't see extended rather than a few of our longer term customers like the pet business that we redid.

Todd Becker: My second question is on the clean sugar technology and you talk about commissioning of Shenandoah and the overwhelming demand that you're seeing there, which is really encouraging. As you think about potentially expanding that production, can you talk a little bit about your appetite for the pace of doing that and do you think you would be in a place to self fund that. As some of your other CAPEX projects start to wind down as we head into 2024 and your cash flow picks up from some of the investments you've made already.

And were awarded for 2020 for Oregon.

A lot of the business as dawn basis in a lot of it is done quarter by quarter more than it has done for the whole year.

Todd Becker: As you think about potentially expanding that production, can you talk a little bit about your appetite for the pace of doing that and do you think you would be in a place to self fund that. As some of your other CAPEX projects start to wind down as we head into 2024 and your cash flow picks up from some of the investments you've made already. Yeah, I think where we look first is obviously Shenandoah, which is the easiest expansion and we're working with customers to look at that.

When you look out forward even out forward the spread.

Between.

Our corn and meal continues to remain strong which means DDG against meal remains strong.

Can go all the way out to <unk>.

April or go out further than that and you're well over $200 a ton spread to walk away and see what corn does but its advantages advantage of our business that we've outlined I mean this is as we've indicated we had a thesis that the world's protein choices shorten the world was oil short and that was a long thesis that we've developed over time and as planned.

Todd Becker: Yeah, I think where we look first is obviously Shenandoah, which is the easiest expansion and we're working with customers to look at that. We got to make sure that, you know, relatively speaking, all of what we need resources locally are there from electricity through gas to water all those type of things. But where we'll look after that. That's an easy one to fund. Where we'll look after that is what's the next best plan to build in.

Todd Becker: We got to make sure that, you know, relatively speaking, all of what we need resources locally are there from electricity through gas to water all those type of things. But where we'll look after that. That's an easy one to fund. Where we'll look after that is what's the next best plan to build in. Is it a Nebraska plan on a pipeline or is it going to be one of our plans that really are not.

Kind of playing out that way.

With <unk>.

<unk> in corn acres and.

And yields relative to the tightness in soy so it's kind of.

Todd Becker: Is it a Nebraska plan on a pipeline or is it going to be one of our plans that really are not. Don't have a carbon solution, maybe like a Madison or an obi at this point. So we'll look at that when we look at cash generation, you know, what we've learned this quarter now and then going into the fourth quarter is, is we're really set up well for free cash flow generation to start to help self fund.

Playing out nicely, we went through some years, where it was the opposite so kind of remember as we're ramping up some of that was the opposite was happening and we even saw that as of late even in Alaska and a 120 days would finally, we've readjusted to the current USDA numbers and I think that our stay around for a while I'll wait and see I think next big thing, we will look at it as acreage for 2024 and what's the shift.

Todd Becker: Don't have a carbon solution, maybe like a Madison or an obi at this point. So we'll look at that when we look at cash generation, you know, what we've learned this quarter now and then going into the fourth quarter is, is we're really set up well for free cash flow generation to start to help self fund. Although we are, we still have a lot of cash on the balance sheet and we're generating more, but we see our, you know, how we set our balance sheet up with low debt, low debt levels, relatively speaking.

Todd Becker: Although we are, we still have a lot of cash on the balance sheet and we're generating more, but we see our, you know, how we set our balance sheet up with low debt, low debt levels, relatively speaking. High cash levels, you saw a rate is still sitting around 7% in a high rate environment. New capital is much more expensive, so we would start to say, what can we find out the balance sheet?

Whats advantage in any given state, but at this point it doesn't look like it's going to change much.

We're pretty happy about that position.

Okay, and then sort of a related question just given the advantage of corn talking about the sugar market.

Todd Becker: High cash levels, you saw a rate is still sitting around 7% in a high rate environment. New capital is much more expensive, so we would start to say, what can we find out the balance sheet? What assets do we have if we needed to to finance anything? But beyond that free cash flow generation should should take care of, I would say plan number two very easily over the next 12 to 18 months as we start to look at where that should be. Okay, great. Very good. Thanks. That's all. Thank you.

And the favorable backdrop for dextrose, no additional capacity coming online there except for you around I'm. Just wondering if you can talk a little bit about how quickly you can get Shenandoah scaled up in the first half of the year and apologies. If you did discuss this but just where you are in terms of an offtake discussion there.

Todd Becker: What assets do we have if we needed to to finance anything? But beyond that free cash flow generation should should take care of, I would say plan number two very easily over the next 12 to 18 months as we start to look at where that should be. Okay, great. Very good. Thanks. That's all. Thank you.

Yes so.

Relative to the lower corn prices are still relatively high port towards that $5. A bushel. So dextrose pricing has remained steady to strong we've seen customers who call us say they've been put on allocation from the traditional players.

Adam Samielson: The next question is from Adam Samielson with Golden Sachs. Your line is open. Yes. Hello. Good morning. This is actually the atmosphere for Adam. I was wondering if you could provide some color on the corn basis and how that impacted your margins in this quarter and what would be your expectation going forward? Yeah, with us today, we have Grant Kattabi. He's our EVP of commercial operations. All of him give a quick comment on the corn basis and what he's seen.

Adam Samielson: The next question is from Adam Samielson with Golden Sachs. Your line is open. Yes. Hello. Good morning. This is actually the atmosphere for Adam.

Todd Becker: I was wondering if you could provide some color on the corn basis and how that impacted your margins in this quarter and what would be your expectation going forward? Yeah, with us today, we have Grant Kattabi. He's our EVP of commercial operations. All of him give a quick comment on the corn basis and what he's seen. I want to introduce everybody to Grant. He'll be on future calls as well and we'll get him introduced to all of you, but Grant now runs all of our marketing and all of our proteins.

So theres definitely a demand and growing demand quite frankly from the all the way from beverage too.

Chemical use down into candy and confectionery and <unk>.

So ours is coming out next year, it's not going to be dramatically change the supply and demand balance sheet for <unk> in 2020 forward, where there is one other project that was announced a few years ago over in Fort Dodge, a 200 million pounds or something like that with.

Adam Samielson: I want to introduce everybody to Grant. He'll be on future calls as well and we'll get him introduced to all of you, but Grant now runs all of our marketing and all of our proteins. Any time anything commercializes, it'll move under him and he runs our commercial operations across the platform. So Grant, real quick on corn basis. Sure. Good morning. Thanks for the question. During the third quarter, we did see the transition from all crop to new crop.

Generally we think we're in a strong position offtake, we have we're negotiating at this point with several customers on what to make sure that we hit the window correctly, because as you are commissioning a brand new technology and we learned from MSC.

Todd Becker: Any time anything commercializes, it'll move under him and he runs our commercial operations across the platform. So Grant, real quick on corn basis. Sure. Good morning. Thanks for the question. During the third quarter, we did see the transition from all crop to new crop. So we did see a material decrease in the overall corn basis heading into the fourth quarter into the new crop season. I would say we've seen more of a normalization of corn basis during harvest and then, and the potential for a more normalized scenario through the balance of the year.

Take longer than we probably expected so we're going to be very careful but generally speaking we are trying to get most of our production that we're going to produce in 2024 spoken for and we have enough discussions going on for that for that to happen and it's a bit of a.

I think we'll get some of that done by the end of the year as we negotiate as we say.

Todd Becker: That's a helpful and I follow up if I could ask on your outlook for ethanol exports, where will be your expectations going forward? You know, as we said, we've seen 100,000 barrels a day or so of export capacity some days a little bit higher, some days a little less. You know, I think obviously there was a world in interesting place today and we got to watch where we have our products do but again, no lower price for octane on the planet still.

This is kind of our I would tell you a bit of a model of ours if you.

If we buy products from you.

And you use dextrose, then we're going to have a bilateral arrangement that youll be buying dextrose from us or else, we wont buy the product that we'll look elsewhere. So we feel like we buy a lot of product thats made using dextrose.

Into our operations and so.

That's our first but we have great partners. So that's not it's not a it's certainly not anything that is.

Todd Becker: It's advantage, it's advantage what we produce globally but generally Canada continues to have a really strong low carbon fuel program and we see good uptake from there and then randomly around the world we feel some going to the EU again that market has opened up for us and generally strong. We started to see volumes again starting out of the Middle East but with what's going on there that may drop a little bit.

<unk>. It's just the fact that we believe we're finally in a position to have some bilateral arrangements and that's really where our first sectors will go as we scale up and get food grade certified in the last half of the year and then we move more into the beverage and other markets as well so really happy about that as you can see it.

Positive new are lots of new technologies that are coming online as well that are going to take more and more dextrose over the next five to 10 years and we just think we're in a great position, we will show the world. What this platform can really do in the margin structure is extreme theres nothing stronger from a margin structure than there is to make extra Senate at our plant in the first of its kind in the world will happen next quarter.

Todd Becker: Overall we have strong strong exports out of the US and we'll watch the the Brazilian because when you have Brazilian sugar prices where they're at we also have high Brazilian ethanol prices at this time so you know we're able to at least get some other business coming our way so I think what remain at those levels really throughout the year.

<unk>.

Todd Becker: That's it for helpful. Thank you.

Thank you so much.

Todd Becker: As we've seen the divergence between DTGS prices and Swamil, how has that impacted Hypro pricing competitiveiveness? Well, I think what we saw is Swamil was weak quite weak earlier in the quarter and then you've seen it come roaring back. I think that's that's kind of what the viewpoint is that while it narrowed up during during the quarter you know the spread you know there's some areas that still have very strong distilled prices in North Dakota has strong distilled prices Nebraska has strong distilled prices as well but generally the spread has has widened back out to the levels where we're able to start to achieve our you know our margins.

Thank you.

No further questions at this time I will turn it to Todd Becker for any closing remarks.

Well, thanks for being patient with US a lot of a lot of questions with lot cover. We're on track we feel like we have more to unlock in our in our core business.

Todd Becker: You know when you have Swamil futures at at 425, 26 or something like that and you've got Indiana sitting at 175 or Shenandoah sitting at you know 190 that spreads now will gone to historically wider levels which then gives us a little bit more margin and the meal basis has rallied as well so generally overall I think we're in a better position today. Thank you.

Which I think thats, a renewed focus on that in terms of getting more oil getting more alcohol getting more distillers grains, but really starting to gain momentum in our new technologies, Yes, we wish we could go faster on building more we have the demand for it we have identified the demand for all of our products and and next up is clean sugar.

And Shenandoah.

In the first quarter, starting to commission that plant and that's really the game changer, and then we get into 'twenty five and we see great earnings start to transpire from some of our carbon initiatives. So overall on track feel like this was a good quarter to get a win on the board operations, returning back to normal but more to unlock there as well. So we appreciate all your support.

We'll see you next quarter. Thank you.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Sure.

[music].

Eric Stein: The next question is from Eric Stein with Craig Hallum your line is open. Good morning everyone thanks for all the details. You so I know for EBITDA for 24 I mean it's roughly 200 million plus XF and all summer in that range.

Jim Stark: Not sure if you gave 25 I might have missed that I know previously you talked about 400 to 600 million you know at a run rate in 25 I guess given the commentary around summit and the carbon capture opportunity I mean is it better to think of low end of that of that range and that you know that obviously upside as you get into 26. Yeah, I don't know that we gave 400 to 600, but I think what we're talking about in 2025 is the previous guidance that we gave is still stands and it's because really it's that advantage Nebraska to start with something coming on in 26.

Jim Stark: And so when you take that, when you take 60 pro, when you take overall Vege oil yields, when you take expanded protein production as we get into 2025, we're still staying in the previous guidance ranges. And, and then on top of that, you know, where do you, where do you put up and all margin on top of that? Phil, you have any other comments on that? No, I think that's right Todd. We're showing those ranges that we've billied out previously. The path forward to 2025 includes completing the facilities, bring those of new facilities online sometime in 2025 with medicine and term on.

Jim Stark: Okay, thank you.

Salvatore Tiano: Thank you.

Todd Becker: The next question is from Salvatore Tiano with Bank of America. Your line is open. Yes, thank you very much. So, personally, I want to understand you made these comments about kind of the asset base aging and, you know, you guys are making some changes. You're going to, I just modernize your assets.

Todd Becker: Can you provided some details on what these entails in terms of copy expand in the next few years and also whether we should expect any meaningful feedback contribution from this plan? Well, look, I, what we produced this quarter at 94% was rounded up to point one, but we produce this quarter of 94%. We saw the ways to go. We can, we can get more out of these plans. And we're just starting to unlock the capabilities of these plans from the last round of capex and some of that's coming through automation.

Todd Becker: So that's a little bit lower to cheaper to do that. We have literally working around the clock to put as much automation as fast as we can in these plans. Not because our employees are labor. It's just because we got, we can operate better when we're, we're managing that through automation, whether it's, it's how much ends I'm going to ferment or whether it's, it's how much yeast is going to get applied and, and make sure it gets applied consistently every day at the same, at the same rate and what we wanted to be applied at and, and less room for human error, which we learned obviously was was a bit of a headwind at times.

Todd Becker: And so those are not high cost relative to making our plans run better with, there's still more to unlock, we can ultimately make over, I believe, over 100% of our stated capacity, that's coming down the road. I mean, we can, we have more to unlock in these assets, Madison, we're held back on permit on how much ethanol we can make and we're maximizing that every single day and we're not making the full capability of that plant because we're waiting for Illinois.

Todd Becker: Hopefully to expand our operating permit, not just for pro team, but to give us more ethanol headway as well, so we can make more ethanol. And part of that, the second thing is that, you know, we have to invest smart and correct in all these plans. That's why I brought a new team in. You know, the old team could take us so far and the new team was really taking us to the next level.

Todd Becker: It's, it's a little bit uncomfortable for some people when we want to run these plans harder. And it's a bit like the analogy you use when you have, I've heard this a few times, when you have a Ferrari, you don't run it in first gear. You try to run it as hard as you can. We know they're going to break a little bit, but then you get through that and you keep going.

Todd Becker: And so while we say we're going to modernize our plans, we've done a lot already, now we're going to maximize that investment. And so I don't think our CAPEX relative to our plans change as much past our previous guidance. Jim, what is our normal CAPEX range? I would say to answer Sal's question. When you look at historically, we spend somewhere between 30 to 35 million in CAPEX maintenance CAPEX and another 30 to 35 on other growth initiatives outside the big MSE or Dexterous or sugar projects that we have.

Todd Becker: So if you take those two together in the 60 to 70 million range of kind of normal capital that we would spend so the modernization, the upgrades we will spend on will be within, contained within that on an annual basis. So it's not going to, it might be a little bit more in maintenance CAPEX and a little less in growth initiatives, but I would tell you when you look at next year, we're still dialed in to be probably plus or minus around 150 million of capital next year, including one of the big MSEs.

Todd Becker: We used to really get filter in the year, but when you look historically, that's way down from certainly what we spent over the last few years. So feel very good about where we are from managing the capital side. Also tell, remind you once the partnership's completed, there's an additional 25 million plus of free cash flow that stays home that can help us fund these projects going forward. Perfect. And I also want to clarify a little bit on the 60-pro side.

Todd Becker: Personally, you're getting the renewals. So as we think about Q4, is it going to surprise perhaps 5-15% of your high protein sales, as I think was, there were some targets regarding that. And secondly, can you clarify a little bit the comments that 80 to 120 million will be the high pro contribution next year, but there's upside from high pro, from 60 percent pro. So what does that mean essentially in terms of what's assumed in your base case, 80 to 120 million, what's how can we quantify the upside and what will be found, whether you do get that upside or not.

Todd Becker: Yeah, so much like 50 pro, it takes time to get full uplift. And so that's why we can make 60 pro in commercial quantities, we're proving that to the market. The market now starts to adapt to that. You know, I think when we look at 60 pro for 2024 and the goal of 20 to 30 percent of our platform shipping, it's probably, it increases during the year as a percentage. So we have identified an outline, enough demand for all of our 50 pro and all of our 60 pro we produce, and it's really about getting that executed into the market, and that will just grow during 2024 fiscal year.

Todd Becker: When we gave you the outline guidance, it's 560 million gallons converted today, half of the Therylson earnings, which is about 85 million gallons, gets us to about 650 million gallons, that 15 cents mid-range margin, that's about 100 million a year roughly of guidance for 50 pro. Now if we do better, because of the, if you look at the spread between meal or protein and corn, it's wide right now, so you know, possibly that gives us the higher end of the range, and if you look at the top of that, you know, we see, and I'm watching the corn, we're watching the meal basis.

Todd Becker: Obviously, watching Argentina, what's going on there, and then on top of that, you know, depending on, you know, how much and how fast the ski pro uptake happens, as we said, it's probably grows during the year, accelerates towards the last half, and then into 25, you know, that's where the upside is. Okay, perfect, thank you very much. Thank you.

Kristen Owen: The next question is from Andrew Straussick with BMO, your line is over. Thank you, morning. Thanks for taking the questions. Thank you. My first five are the way. They're not a problem, I know there's a lot, a lot to ask.

Todd Becker: So I guess the first question is on the corner, the side and the decision to lock some of the prices in at the higher levels, how much of that and how far out did you go, and has anything changed in your thinking with respect to your willingness to be on an ongoing basis? I think corn is a different animal for sure, right? I mean, we saw vegetable prices starting to weaken. We noticed that there's some down times.

Todd Becker: We were able to, I mean, look, I wish we locked it in higher, but we didn't, but I mean, we locked it in above market, and we just put it up to the quarter, a little bit of Q1, but not very much. And so, I mean, the market doesn't extend coverage much further than that, anyways. So we were able to get most of our sales on, you know, I think we're fortunate to say we'll do that.

Todd Becker: But I mean, maybe five to seven cents a pound above market today. And it's nothing dramatic. It doesn't change our view at all. Our view in 24 is steady and our view in 25 is strong because of the conversion to the IRA and 45 Z's and all the credits available and the advantage for corn all once that starts to happen. No, it's overall we're, you know, we're focused on quarter to quarter and we'll have to deal with some of that volatility, but I think generally we stabilize oil against the oil meal online. Yeah. Got it. Okay. That makes sense.

Todd Becker: And then, you know, obviously there's been a lot of headlines and news around carbon sequestration away from what you guys are doing and the optimism that you have around the Nebraska plant. So I guess my question is, is there anything with those Nebraska plants that could get in the way of that optimism? Or I guess are there any hurdles left or how are you thinking about the line of sight to to to evict out potential from those plants specifically within the carbon sequestration?

Todd Becker: Thanks. Yeah, I think our line of sight is very strong there. You know, the projects on track. Most of what is needed is funded. There's no funding needed for that project. So and then we've been able to secure what we need from a compression standpoint as well. So every day we just we we evaluate it. It's not a lot of not a lot of right away that has to happen and and overall most which are a lot of it.

Todd Becker: That's that part kind of de-risked already and it's really about converting, you know, what's what's happening there into transportable assets and then going into a state like Wyoming which is has primacy so you don't have an EPA permitting process. I think that's key. I think that's a key to summit project as well which is going in North Dakota with primacy. It's a great choice to make relative to having to go to the EPA for permitting which is like 70 or 80 or 90 permits that are still in backlog today where I think when you're in those couple of states it's advantage summit which is why they're still persevering to manage Nebraska which is why they're still in a strong position.

Todd Becker: So look at the end of the day if if none of it happens is a different discussion but we're confident at least from the standpoint of what we outlined and then you know those numbers that we previously outlined in Nebraska and advantage Nebraska and at our assets there it's really advantage green plenty of shareholders quite frankly as we're one of the biggest producers in the state.

Grant Kadavy: Got it okay and then if I could just squeeze in one more clarification you mentioned where basis was relative to the five-year average in the third quarter obviously it's gotten much better did you quantify or how can we think about the Delta or the contribution there as we roll forward in the change in the corn basis. Thank you. I'll let Grant talk just a little bit about maybe Nebraska and Iowa corn basis what we've seen here recently from the highs to the lows and kind of where we're studying stabilizing but you know I think what the key is is that we're getting a little more towards traditional levels but I don't think we're fully there yet but go ahead Grant.

Grant Kadavy: Yeah I think as Todd's mentioning specifically one of the major changes that we saw was in Nebraska where ever coming off a crop year where we had a lack of production in Nebraska we've now seen that to be one of the areas where we've had the greatest year over year change in production and production levels have improved dramatically. If you look at where corn basis was that it's highs in last year in Nebraska and basic levels were well in excess of a dollar over the CME basis levels have again I say normalized quite a bit to where we've seen we've seen values come off close to a dollar of bush.

Grant Kadavy: I think once you get post-harvest you know farmer puts their crop away you're going to see traditional sort of ups and downs and slight movements in the market but we don't expect that we're going to see basic levels return to the values that we saw in the last few years. Great. Thank you very much. Thank you.

Kristen Owen: The next question is from Kristen Owen with Oppenheimer, your line is open. Kristen Owen with Oppenheimer, your line is open. Hi, thank you for taking the question.

Todd Becker: Two quick ones for me, first on MSc protein. If you can speak a little bit to the spread over DDGs, and then Todd, you mentioned sort of looking out the soybean meal versus corn ratio, soybean stocks very tight, corn not so much. So just wanted to ask how much pricing you're willing to lock in for 2024? Well, most people are starting to move from flat price to plenty of sales on basis.

Todd Becker: We don't see extended, rather than a few of our longer term customers, like the pet business that we redid, and we're awarded for 2024 again. A lot of the business is on basis, and a lot of it's done quarter by quarter more than it is done for the whole year. You know, kind of when you look out forward, even out forward, the spread between a corn and meal continues to remain strong, which means DDGs against meal remain strong.

Todd Becker: You know, you can go all the way out to April or go out further than that, and you're well over $200 a ton spread. So walk away and see what corn does, but it's advantage. It's short and the world was oil short. That was a long thesis that we've developed over time. And it's playing kind of playing out that way with genetics and corn and acres and yields relative to the tightness and soys.

Todd Becker: So it's kind of playing out nicely. We went through some years where it was the opposite. So kind of remember as we were ramping up, some of the opposite was happening. We even saw that as a blade, even in the last kind of 120 days, but finally, we've re-adjusted to the current USDA numbers. And I think that will stay around for a while. I'll always see. I think the next big thing we'll look at is acreage for 2024. And what's the shift and what's advantage in any given state. But at this point, you know, it doesn't look like it's going to change much. So we're pretty happy about that position.

Todd Becker: And then sort of a related question just given the advantage of corn talking about the sugar markets and the favorable backdrop for Dextrose. No additional capacity coming online there except for your own. I'm just wondering if you can talk a little bit about how quickly you can get Shenandoah's scaled up in the first half of the year. And apologies if you did discuss this, but just where you are in terms of an off-take discussion there.

Todd Becker: Yeah, so relative to the lower corn prices, they're still relatively high, towards that $5 bushels. So Dextrose pricing has remained steady to strong. We've seen customers who call us. They've been put on allocation from traditional players. So there's definitely a demand and growing demand, quite frankly, from the all the way from beverage to chemical use down into candy and confectionary. And then you know, so ours is coming on next year. It's not going to be dramatically change the supply and demand balance sheet for Dextrose in 2024.

Todd Becker: There's one other project that was I think announced a few years ago over in Fort Dodge of 200 million problems or something like that. Generally, we think we're in a strong position. Off-takes, we're negotiating at this point with several customers on, want to make sure that we hit the window correctly, because as you are commissioning a brand new technology and we learn from MSC, take longer than we have probably expected. So we're going to be very careful, but generally speaking, we are trying to get most of our production that we're going to produce in 2024, spoken for, and we have enough discussions going on for that to happen, and it's a bit of a, I think we'll get some of that done by the end of the year, as we negotiate.

Todd Becker: As we say, if you, this is kind of our, I will tell you, a bit of a motto of ours, if you, if we buy product from you, and you use Dextrose, then we're going to have a bilateral arrangement that you'll be buying Dextrose from us, or else we won't buy the product, it will look elsewhere. So we feel like we buy a lot of product that's made using Dextrose into our operations.

Todd Becker: And so, you know, that's our first, but we have great partners, so that's not, it's not a, it's certainly not anything that is antagonistic. It's just the fact that, you know, we believe we're finally in a position to have some bilateral arrangements, and that's really where our first Dextrose will go as we scale up and get food grades certified in the last half of the year, and then we move more into the beverage and other markets as well.

Todd Becker: So we're really happy about that. As you can see, there's tons of new, or lots of new technologies that are coming online as well, that are going to take more and more Dextrose over the next five to 10 years, and we just think we're in a great position. We will show the world what this platform can really do, and the Marta structure is extreme. There's nothing stronger from the Marta structure than there is to make Dextrose at our plants, and the first of it's kind in the world will happen next quarter. Thank you so much. Thank you.

Operator: Go further questions.

Todd Becker: At this time, we'll turn it to Todd Becker, and we'll close the remarks. Well, thanks for being patient with us. A lot of questions, with a lot to cover. We're on track. We feel like we have Morda on lock in our core business, which I think that's a renewed focus on that in terms of getting more oil, getting more alcohol, getting more distilled grains, but really starting to gain momentum in our new technologies.

Todd Becker: Yes. We wish we could go faster. I'm building more. We have the demand for it. We've identified the demand for all of our products, and next up is Clean Sugar in Shenandoah, in the first quarter, starting to commission that plant, and that's really the game changer, and then we get into 25, and we see great earnings start to transpire from some of our carbon initiatives. So, overall on track, I feel like this is a good quarter to get a win on the board. Operations returning back to normal, but more to unlock there as well. So, we appreciate all your support, and we'll see you next quarter. Thank you.

Operator: This concludes his conference call. Thank you for participating. You may now disconnect me.

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