The Andersons, Inc.

Good day, ladies and gentlemen, and welcome to the Anderson Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require operator assistance during the conference, please press the star, then the zero key on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce our host for today's conference, Mr. John Krause, Director of Investor Relations. You may begin.

Thanks, Catherine. Good morning, everyone, and thank you for joining us for the Anderson's second quarter 2019 earnings call. We've provided a slide presentation that will enhance our talking points. If you're viewing this presentation via our webcast, the slides and audio will be in sync. The webcast is being recorded, and it and the supporting slides will be made available shortly on the investors' page of our website at andersonsinc.com. Certain information discussed today constitutes forward-looking statements, and actual results could differ materially from those presented in the forward-looking statements as a result of many factors, including general economic conditions, weather, competitive conditions, conditions in the company's industries, both in the United States and internationally, and additional factors that are described in the company's publicly filed documents, including its 34 Act filings, and the prospectuses prepared in connection with the company's offerings. Today's call includes financial information which the company's independent auditors have not completely reviewed. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be accurate. This presentation and today's prepared remarks contain non-GAAP financial measures. The company believes and many more. adjusted net income per share, EBITDA, and adjusted EBITDA do not and should not be considered as alternatives to net income or income before income taxes as determined by generally accepted accounting principles. On the call with me today are Pat Bowe, President and Chief Executive Officer, and Brian Valentine, Senior Vice President and Chief Financial Officer. We will answer your questions after our prepared remarks. Now I'll turn the floor over to Pat for his opening comments.

Thank you, John, and good morning, everyone. Thank you for joining our call this morning to review our second quarter 2019 performance. I'll begin by providing some color on each of our four operating units. After Brian provides a business review, I will conclude our prepared remarks with some comments about our outlook for the balance of 2019, and then we'll be happy to address your questions. Our second quarter adjusted results were considerably better than our reported second quarter 2018 results, even in the face of unprecedented bad weather in much of our eastern ag footprint. Given those difficult conditions, we are very pleased with our results. The trade group posted much stronger numbers than the grain group did last year, but did not have the full benefit of the addition of Lansing Trade Group. These results show why our conviction is as strong as ever in our acquisition and integration of Lansing with our legacy grain business. The group's merchandising and physical handling margins were excellent, as was execution, as market inputs created basis and futures volatility. Our new, larger trading and merchandising team did a very good job capturing opportunities in that move in a more volatile environment. The ethanol group's results were lower year over year, but the group remained profitable despite challenging low margin conditions. The group focused on reducing costs, improving yields, maximizing coproduct sales, and selectively limiting production. The plant nutrient group performed better than it did last year, even though persistent rain hurt nutrient volume significantly for the second consecutive quarter. The group was able to More than offset that shortfall with improved product margins that resulted from containing production costs, operating efficiently, and maintaining a pricing discipline. The rail group's leasing income remained steady while car sale income was negligible as planned. Fleet utilization and the number of cars on lease were both significantly higher year over year. The group's repair business results were lower. I'll speak later in the call about our outlook for the remainder of 2019. Now, Brian, we'll walk you through a more detailed review of our financial results.