The Andersons, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Anderson's 2019 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, then 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Director of Investor Relations, John Krause.

Thanks, Andrew. Good morning, everyone, and thank you for joining us for the Anderson's third quarter 2019 earnings call. We've provided a slide presentation that will enhance today's discussion. If you're viewing this presentation via our webcast, the slides and commentary will be in sync. This webcast is being recorded, and the recording and the supporting slides will be made available on the investors' page of our website at andersonsinc.com shortly. 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 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 adjusted pre-tax income, and others, allowing an evaluation of underlying operating performance and better period-to-period comparability. Adjusted pre-tax income, EBITDA, and adjusted EBITDA do not and should not be considered as alternatives to 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. After our prepared remarks, Pat, Brian, and I will be happy to take your questions. 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 third quarter 2019 results. I'll start by providing some thoughts on each of our four business groups. After Brian presents a business review, I'll conclude our prepared remarks with some comments about our outlook for the remainder of the year and give you a brief look into what we're beginning to see for 2020. Our adjusted third quarter results were roughly 3 million lower than our adjusted third quarter 2018 results. But given the challenging ag markets and weather conditions that three of our business groups have faced, we're encouraged by the outcome. I'm very proud of our team and what they have accomplished over the past year. Our ability to manage through those difficult conditions reinforced the strategy to acquire Lansing Trade Group. as many of the business lines we acquired helped offset a lack of opportunity for our eastern corn belt assets caused by late and reduced planting. The ethanol group continued to remain profitable during the third quarter despite a difficult margin environment when many in the industry incurred significant losses and reduced production or shut down entirely. Results for plant nutrient group were somewhat improved. and the rail group's lower results were primarily due to less car sales during the period. The trade group was profitable on an adjusted basis, improving significantly on the large loss it incurred in the third quarter of 2018. The poor planting weather in our core eastern footprint and the resulting limited farmer engagement during the quarter hurt the performance of those assets, even as our western assets performed very well. Market conditions in the spring caused an acceleration of income recognition into the second quarter, which contributed to the lower third quarter results. In fact, we're very pleased with the performance of the group over the second and third quarters combined. The Lantian acquisition integration continues to go very well, and we've now identified and are implementing more than $10 million in expense synergies. The ethanol group achieved several notable successes during the quarter. Production began at the Element Biorefinery in Kansas in August. In addition, we announced in early October that the group has merged four plants we previously ran in separate entities with different ownership structures with Marathon Petroleum Corporation. This action will provide many positive outcomes, including more effective use of cash and debt and increased financial transparency for the investing public. The plant nutrient group performed better than it did in the third quarter last year in what is typically a quiet quarter. In general, the group recovered some volume from earlier in the year that was delayed by protracted spring rains, but margins were lower due to product mix. The rail car market is weak today. with more cars in storage year over year and year-to-date rail car loadings down 3%, with further weakness in some specific markets such as grain, frac sand, and ethanol. Renewal lease rates for rail cars that carry these commodities continue to be lower. Other lease rates are generally flat despite the decrease in rail car loadings. Our utilization rate decreased during the quarter primarily due to the purchase of 1,000 idle cars that we are preparing for service. Brian will now walk you through a more detailed review of our financial results.