The Andersons, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Andersons 2019 Fourth 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 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference to your speaker today, John Krause, Director of Investor Relations. Please go ahead, sir.

Thanks, Joelle. Good morning, everyone, and thank you for joining us for the Anderson's Fourth Quarter 2019 Earnings Call. We have 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. Thank you for joining us. Thank you for joining us. 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 that adjusted pre-tax income attributable to the company, EBITDA, and adjusted EBITDA provide additional information to investors and others about its operations, 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 net income or income before income taxes as determined by generally accepted accounting principles. On the call with me today are Pat Bowe, Chief Executive Officer, and Brian Valentine, Chief Financial Officer. After our prepared remarks, Pat, Brian, and I will be happy to take your questions. Before Pat makes his opening comments, I want to remind everyone that we will be holding an investor day beginning at 8.30 a.m. on Wednesday, April 1st. The presentation will also be webcast live on our website. We invite you to listen in. With that, Pat, the floor is yours.

Thank you, John, and good morning, everyone. Thank you for joining our call this morning to review our fourth quarter and full year 2019 results. I'll start by providing some high-level thoughts on our overall results and those of each of our four business groups. Brian will then present a brief business review, and I'll finish our prepared remarks with some comments about our current views on 2020. While our adjusted fourth quarter pre-tax earnings fell short of those of the fourth quarter of 2018, we drove our adjusted EBITDA higher by more than 20%. Most of the quarterly earnings shortfall came from the trade group. Many of its newly acquired product lines performed very well, but the trade group's low results were caused in a large part by a small, late, and wet harvest in much of its historical eastern corn belt footprint. The ethanol group remained profitable, and the plant nutrient group's results were slightly improved. The REL group's results were somewhat lower. We sold some assets during the quarter. We sold the Thompson's Ontario Agronomy Assets, a Michigan Farm Center, and a Tennessee Grain Elevator. Most of the proceeds from these sales were used to pay down debt. For the full year, it's very clear that our Lansing Trade Group acquisition has been and is expected to be a very good one. Trade Group adjusted pre-tax income nearly doubled year over year. and its adjusted EBITDA was over 150% higher. However, while the ethanol group was consistently profitable, a tough margin environment drove the group's year-over-year results significantly lower. The plant nutrient group was impacted by an extremely wet and shortened planting season in its core geographies that together with an expected decrease in contract manufacturing sales resulted in lower pre-tax income than in 2018. Rail income was marginally lower as a slight improvement in leasing income was more than offset by lower income from both car sales and rail car repair business. The trade group's number one priority for 2019 was to integrate Lansing into the former grain group, and the integration is largely complete. We achieved our goal to identify and implement at least $10 million in run rate expense savings by the end of 2020. have exceeded this goal a year early with our total run rate expense savings to date of approximately $11 million. The ethanol group's Element Biorefinery came online in the third quarter. While the pace of production ramp up has been slower than planned, we began producing ethanol using our new cellulosic technology in the fourth quarter. Also in October, The ethanol group merged four separate entities with our partner, Marathon Petroleum Corporation. When the merger was closed, we were able to reduce long-term debt associated with the ethanol business by nearly $50 million, and the group's financial results are now consolidated. Brian will now walk you through a more detailed review of our financial results.