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spk06: Quarter Earnings Conference Call. My name is Alan, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Later, we will facilitate a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. If you'd like to ask a question, please press star, then 1 on your touch-tone phone. I will now hand the presentation to your host for today, Mr. Mike Holter, Vice President, Corporate Controller, and Investor Relations. Please proceed.
spk05: Thanks, Alan. Good morning, everyone, and thank you for joining us for the Anderson Second Quarter Earnings Call. We have provided a slide presentation that will enhance today's discussion. If you are viewing this presentation from 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 andersonzinc.com shortly. Please direct your attention to the disclosure statement on slide two, as well as the disclaimers in the press release related to forward-looking statements. Certain information discussed today constitutes forward-looking statements that reflect the company's current views with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors which are described in the company's reports on file with the SEC. We encourage you to review these factors. This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP measures are included within the appendix of this presentation. On the call with me today are Pat Bowe, Chairman and Chief Executive Officer, Brian Valentine, Executive Vice President and Chief Financial Officer, and Bill Kruger, Chief Operating Officer. After our prepared remarks, we'll be happy to take your questions. I will now turn the call over to Pat.
spk02: Thanks, Mike, and good morning, everyone. Pardon the interruption, everyone.
spk06: We are having some technical issues with the phone. Please hold for just a moment.
spk02: Can we do a test now? Testing one, two, three. Yes, sir, I can hear you. Please proceed. Okay, I'll go back to my line of thought. This is Pat Hall. Can you introduce your comments?
spk05: Results in trade were up with improvements on wheat space income in our eastern assets and within our growing premium food and pet food and green foods. As expected, merchandising opportunities were lower year over year in these well-supplied markets. Farmers have been slow to sell grain at prices well below what they experienced in recent years, and a high percentage of last year's crop remains in on-farm storage. We expect much of this grain to move off-farm prior to harvest. Operating performance in the removal business was very good, with continued very strong performance at our ethanol plants. We had record second-core production in our current operations, benefiting from higher ethanol yields and well-managed costs. Ethanol margins were higher than last year on lower-core basis at our plants. The teams at our facilities executed very well, but overall results continue to be impacted by lower values of feed rates, which follow closely to the price of corn. Our renewable diesel feedstock merchandising business continues to grow in volumes, but has seen margin compression on industry fund amounts. Our seven-quarter nutrient industrial business was solid, but negatively impacted by lower fertilizer price volatility. and delayed application season that resulted in a decline in both volume and margin. When we look at the first half of 2024 compared to 23, our volumes are comparable, but at reduced margins in a lower fertilizer price environment this year. Brian will cover some key financial data. After that, I'll be back to discuss our outlook for the remainder of 2024. All right? Thanks, Pat, and good morning, everyone. We're now turning to our second quarter results on slide number five. In the second quarter of 2024, the company reported net income attributable to the Andersons of $36 million, or $1.05 per diluted share, and adjusted net income of $39 million, or $1.15 per diluted share. This compares to net income of $55 million, or $1.61 per diluted share, and adjusted net income of $52 million, or $1.52 per diluted share, in the second quarter of 2023. Adjusted pre-tax earnings were $45 million for the quarter, compared to $72 million in 2023, with trade showing improvement and the other businesses generating solid results, but were unable to match an outsized prior year. Adjusted EBITDA for the second quarter of 2024 was $98 million, compared to adjusted EBITDA of $144 million in 2023. Trailing 12 months adjusted EBITDA totaled $355 million. Our effective tax rate varies each quarter, based primarily on the amount of income or loss attributable to non-controlled interests. This quarter also was impacted by the reversal of uncertain tax positions relating to research and development and other tax credits. We recorded taxes for the quarter at a 90% effective tax rate. We now expect a full year adjusted effective tax rate between 14 and 18%. Next, we'll move to slide six to discuss cash, liquidity, and debt. We generated cash flows from operations before changes in working capital of $89 million in the second quarter of 2024, demonstrating our ability to generate consistent operating cash flows in a less volatile market. This strong cash flow generation, combined with lower commodity prices and delayed farmer engagement, resulted in a cash position of more than $500 million and negligible short-term borrowings at the end of the quarter. Next, we'll take a look at capital spending and long-term debt on slide seven. We continue to take a disciplined, responsible approach to capital spending and investments, which we expect to be in the range of $150 to $175 million for the year, roughly half of which is typically related to maintenance capital. Our long-term debt to EBITDA is approximately 1.6 times which is well below our stated target of less than two and a half times. We have a strong balance sheet with significant capacity to support growth investments that meet our strategic and financial criteria. We continue to evaluate growth projects in our pipeline, including several M&A opportunities at various stages of completion. This includes the recently announced intent to acquire an ownership interest in Skyline Grain LLC pending completion of diligence and negotiations. Our project pipeline remains very active, and we are excited about additional capital investment and M&A opportunities that align with our growth strategies. Now we'll move on to review each of our businesses, beginning with trade on slide eight. Creighton reported pre-tax income of $5 million and adjusted pre-tax income of $9 million, compared to adjusted pre-tax income of $7 million in the second quarter of 2023. We had a slight improvement in our operating results in our trade business portfolio when compared to last year. The financial results for our grain assets were up, driven by weak income opportunities, but domestic producers are still hesitant to forward sell due to lower commodity prices combined with limited basis appreciation to start. Our assets are well positioned to support the needs of our customers when the grains are brought to market. With the reduction in commodity prices and limited forward selling by producers, financing costs supporting inventory and forward contracts have also declined. Our premium food and pet food ingredients business has shown growth year over year, with recent acquisitions and internal growth projects providing positive impacts to these product lines. As Pat mentioned earlier, merchandising businesses are being impacted by an oversupply grain market with lower commodity prices and less volatility. As expected, we saw a decline in results of these businesses in the current quarter as compared to 2023. Trades adjusted EBITDA for the quarter was $24 million, compared to $27 million from the second quarter of 2023. Moving to slide nine, renewables had another solid quarter generating pre-tax income attributable to the company of $23 million compared to $39 million and $32 million on an adjusted basis in the second quarter of 2023. Ethanol prices remained favorable in the quarter, and our operating performance resulted in record production in our four plants. But overall, profitability was negatively impacted by the values of co-products, including feed and corn. Renewable diesel feedstock volumes continue to grow, but margins are down year over year due to overall industry fundamentals. Feed ingredient demand remains strong, but at lower values as prices are tied to the value of corn. Renewables had EBITDA of $52 million in the second quarter compared to $81 million and $74 million on an adjusted basis in the second quarter of last year. Turning to slide 10, the nutrient and industrial business reported pre-tax income of $23 million compared to an outsized $43 million in 2023. Overall, fertilizer prices declined in the quarter after several years of higher prices and market volatility. In addition, a late and wet spring planting season in much of the core geography that we served negatively impacted sales volume. This was offset in part by improvements in our manufactured products as we continued to streamline our operation. Nutrient and industrial had evens out $32 million from the quarter, compared to $52 million in 2023. And with that, I'll turn things back over to Pat for some comments about our outlook for the remainder of 2024. Thanks, Brian. Overall, we remain optimistic about our 2024 outlook. Our trade business outlook remains solid, with the expectation of sizable grain volume to handle in the upcoming harvest. We completed a smaller but good quality wheat harvest in July in the eastern absence and expect to continue to earn space income on the grain we've accumulated. We're also very pleased with the growth in our training and food and feeding green products and anticipate continued growth both organically and for acquisitions. Merchandising opportunities remain, and we expect that they will continue to be muted compared to results in times of higher commodity prices and market volatility. Our renewable segment continues to expect strong ethanol prices on good demand from the growing export market. We expect values of our feed-ready coproducts to remain soft as they follow lower corn prices. Our production lines have remained very strong, and we believe this should continue. We remain focused on improving and maintaining our floor production facilities for optimal efficiency. Third carbon merchandising of ethanol, feed ingredients, and renewable diesel feedstock will also continue to be an important component of the business, and we expect continued volume growth in renewable diesel feedstocks. Renewables business is an important part of our longer-term growth strategy. and we continue to make progress on plans to lower the carbon intensity of our ethanol. This includes enhancements at our production facilities, as well as developing supportive pharma programs that should position us to acquire lower-CI corn as a feedstock in the future. The outlook for this business remains strong. The nutrient industrial business-nearby outlook is mixed, with continued growth in the low grain prices and reduced farmer income. The time of harvest and market fundamentals will influence post-harvest fertilizer applications. We're also focused on continued operational enhancements in our manufactured products facilities. With our strong balance sheet position and a desire for continued growth, we're excited about the significant opportunities in each of our three segments. I already mentioned renewables opportunities that are longer-term and even-intentioned. We continue to work on the Skyland Grain LLC opportunity, which can significantly expand the geographic reach of our grain business and increase the size of our farm center fertilizer business within Nutrient and Industrial. We're also evaluating a number of organic boat initiatives, and the pipeline remains robust. We're focusing on organic and opposition opportunities within forward businesses of commodities, premium ingredients, ethanol, renewable diesel feedstocks, and nutrients. We'll continue to make responsible decisions that benefit our customers and maximize shareholder value as we execute on growth opportunities within our stated strategy. With that, I'll turn it back over to our operator, where we can take your questions.
spk06: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then two. We will pause momentarily to assemble our roster. Our first question comes from Ben Cleavey of Lake Street Capital Markets. Please go ahead.
spk04: All right, thanks for taking my questions, and congratulations, nice quarter here in the face of some suboptimal conditions in the market. So congratulations on the quarter here. A handful of questions, first on this dynamic you all discussed on the elevated level of inventories throughout the grain complex. I'm wondering if, first of all, if you have an expectation that this is going to work its way through truly by harvest time or if there's a risk of elevated inventory levels and old crops staying in bins even after the new harvest comes in. And then second, as that unwinds, do you guys expect to see some kind of an increase in volatility or is this kind of stale state something that you're expecting for the foreseeable future?
spk05: I'll get started then and turn it over to Bill. I think the shift in the markets has done some good things for us, and mainly in the East. We had not as big a soft-fried meat harvest as we had in past years, but a very good quality one. So we were able to purchase a lot of soft-fried meat share me now including one vsr tip so that's a good thing and as parents have moved into the corn market that that's a good thing for elevator operators like ourselves we think the farmer will need to come to market because we have very high on farm storage right now and as they see their current crops which by the way look really good these midwest rains of late have been a really nice boost to the crop this year i think we're going to see a big harvest this year of us Farmers will be needing to move grain to market here before we get to full harvest. Yeah, morning, Ben. I would agree with Pat. We have a near record on-farm stocks for corn, and we're looking at potentially a record-breaking corn yield. So I think it would be very hard to make the assumption that the producer's not going to move their corn that's on farm before harvest.
spk04: Got it. Okay. That's very helpful from you both. And then I guess as a follow-up to this, in the last quarter call, you guys noted an expectation that the trade group is going to see some seasonality shift to later in the year. I guess, has this shift been slower than you maybe anticipated a few weeks, excuse me, a few months ago? And then on a full year basis, can you kind of comment on your expectations for the trade group, especially in the merchandising side of the business for 24 versus 23? Yeah, I'll take that one.
spk05: No, but I think that our expectations at the end of Q1 are playing out like we thought they would. You know, at that time, we weren't nearly as confident in the upcoming corn crop. So I do think that we are going to remain in these lower price environment. But I do believe that we should have an opportunity to handle even more of fall harvest crops as the crop does continue to look good in early August. The other thing is we have to really pay attention to the value of the wheat, of US wheat, compared to competitors around the globe. And I think that's going to provide some opportunity for us also. And to your last question, we do think that the last half of 2024 will be more challenging than the last half of 2023 was just because we're in a lower price environment and volatility is a little lower.
spk04: Got it. Okay, that's very helpful. Thanks, Bill. On the renewable side question on the renewable diesel initiative, you noted that volumes were up, margins were down. Can you comment on overall earnings from that initiative? Did the volume growth more than offset the margin declines or was the opposite true?
spk05: I would tell you that the volume growth was not offset and did not offset the reduction in overall margins produced on the renewable diesel feedstock.
spk04: Okay, very good. And then last, oh, sorry, go ahead, Pat.
spk05: But I was going to comment on that. As, you know, new R&D plans came online, we still continue to see the bus open for demand. We like the diversity of our portfolio, and we see this as a business opportunity to continue to be important for the internships. Like all commodity markets, it's going to have its own bounds and balances of supply and demand. And that plays right into our merchandise and capabilities. So it's a business we're committed to continue to grow in.
spk04: Got it. And last one for me, you guys talked about considering a few different M&A opportunities at kind of various stages of the diligence process. The Skyland Grain acquisition seems to be a sizable one, but I'm wondering if you can characterize these opportunities that you're in diligence for from the perspective of, you know, towards your 2025 EBITDA targets, or are the other things you're considering beyond Skyline, Tenmore, Token, and Nature?
spk05: Sure, Brian, I'll start, and then maybe Bill can add some color. I would say, yeah, our pipeline does remain pretty robust. more deal flow, probably in part due to the higher interest rate environment over the past year or two. And so I would say there are various stages of completion. And I would probably characterize more of them as, you know, we've talked about singles in the past. I would call more of these doubles, triples, as we think about some of the growth projects, both internal growth as well as some of the M&A growth. We're going to continue to be disciplined, and I know, you know, with regard to the $475 million run rate target that's out there, we've talked about in these sort of changing and dynamic ag markets over the past several quarters. It'll require, you know, it'll require more M&A to get there, but we're going to continue to be disciplined and responsible and make sure that we're going to generate appropriate returns for our shareholders.
spk04: And Bill, maybe you want to comment about some of the deal flows as well.
spk05: Yeah, I would say Brian's comment there around it will take maybe more M&A than we'd originally expected to achieve the 475, but we are seeing the opportunities that both tie directly into our core business. Skyrim's a very good example of that where geographically and product mix, it fits right at the center of our core. We're also taking a look at where the industry is going to be at in two to three years' time and trying to get in front of those opportunities, which would also be larger in size compared to what we've done the last three years.
spk04: Got it. Got it. Very good. All right. Well, I appreciate you guys taking my questions, and I'll get back in queue.
spk06: Our next question comes from Scott Fortune of Roth Capital Partners. Please go ahead.
spk07: Yeah, good morning, afternoon, and thanks for the questions. Just want to follow up a little bit on the scale and your focus, kind of the northern portion of the U.S., and just provide a little more color strategically on the footprint with the skyline, kind of more in the Midwest, just kind of a little more color on the focus of those assets and as they become integrated within your footprint from expanding footprint. Just kind of take us through that a little bit more. That'd be great.
spk05: Sure, Scott. This is Pat. I think, as you know, that Anderson's original footprint was an eastern grain belt footprint. You know, here in the headquarters of Maumee, Ohio, Michigan, Indiana, Indiana, Illinois, so eastern grain belt. And with the acquisition of Lansing in 19, we moved quite a bit sizably into the western corn belt as far out as Idaho. and down south into Louisiana. But we don't have a big physical presence with assets in Texas and southeast Kansas and those are the hard weak state model countries and into the panhandle. We have a big growing demand for dairy and feedlot demand for grain. So it's a very active part of the country. And for us to expand would be attractive. As Bill mentioned earlier, we think a perfect fit with our overall portfolio. We can't really comment more on it. We're a little due diligence. But strategically from our direction and company and geographically, it's a really nice fit for the energy.
spk07: Perfect. Thanks. And then just kind of switching to the opportunity kind of update on the ethanol business and kind of turn a little bit and crush margins there. But Outlook on ethanol as we head into the fall and inventory levels there and production across the industry versus demand. And then just to follow up, just kind of an update on ethanol jet fuel opportunity. Your sense of the farmers starting to kind of implement various initiatives towards the opportunity, just kind of sense of that timing overall as we focus on the ethanol side.
spk05: Before I let Bill get started with something else at all, before Bill correctly just said that this was a California kid talking about it, I said southeast Kansas, and I shouldn't have said southwest Kansas, and I apologize about that. It depends if they are in southwest Kansas. I want to get my geography correct. That's what I said a few minutes ago. At a high level, and I think I'm understanding your line of thought here, Scott, is we mentioned in our script our commitment to the future of a fluorescent plant. And it's not just only about carbon intensity, which is a big part of it, and looking at sequestration projects and the like. and worked with growers on renewable ag. But we haven't really worked on efficiency, both how we run our combined heat and power of our plants, how we get better yields and more productivity. And those investments that we've continued to make in those plants have put us in the top quartile and top deca of the industry. And I think if you look at our continued... production performance and yield performance and profitability. And that's one of the plans you can see where it may be one of the leaders in the industry here. We want to continue to do that, so we're going to continue to invest in those plants and make them as low CI as well as most modern, efficient, and large scale as we can. So that's a focus of both. Bill, comment a little bit more about the other parts of us and what you're bringing up. Thanks, Scott, for the question. First, I'd like to start with we believe Alcohol to Jet is a few years down the road And from the Anderson's perspective, I think we've demonstrated over the last several quarters that we're able to operate in the renewable space, specifically our ethanol plants, very efficiently and profitably. We're not going to wait until we have more clarity around staff from ethanol. We really want to grow in this space now. And so we're looking at opportunities from growing our current footprint to acquisitions and other opportunities to take advantage of an area that we feel is really core to our company. And that comes from not just running the ethanol plants. It's the understanding of originating corn, selling BCO, selling DDG, We see opportunities there before we get to a SAF product from ethanol and really want to take advantage of it sooner than that. This is Dr. Pat again here. I wanted to ask a comment. I think you were asking about our outlook for the ethanol margin outlook for the balance this year. And we're really in good shape as an industry this year. You know, we had some very high margins last year. The reduction of corn has impacted crop articles. But overall, ethanol demand has really been strong, and that's mostly been boosted by exports. Year-to-date, we're at 963 year-to-date exports. Last year, we finished a year at 1.43. Rage investments are 1719. For the year, we think it can be all of 1.9, and with that kind of a boost in exports, ethanol value in the global market is very inexpensive for U.S. ethanol. And so we see strong demand and thus a bullish upside to ethanol margins going into the balance of the year. So it's been a solid year for ethanol results, and we think that will continue for the year end.
spk07: I appreciate that color. And then one last one, if possible, just kind of along those lines, kind of update on the trade business and the carry in the market with the largest crops here. Just a little more color on the trade contribution as we see in the second half on pre-tax earnings, kind of into the second half, 24, just kind of more expectations there from your guys' sense.
spk02: Sure, I'll take that one.
spk05: As I mentioned earlier, we see a lot of opportunity coming out of our grain assets capturing elevation margins and space income going forward. All expectations are we're going to have a large crop, which will benefit us from our assets. And then when you look at the opportunities in the merchandising, you know, it's going to be a little slower than it has been historically. But, you know, the thing that we always consider is the fact that our end users want to buy grain from us. So we're going to have the opportunity. It's just how much... opportunity we create from the volatility, it will be the question in the last half. But I think elevation margins are going to be higher than we assumed and likely offset by some lower opportunities with our merchandise.
spk07: Thanks. I'll jump back in the queue. Appreciate the color.
spk06: Our next question comes from Ben Mayhew of BMO Capital Markets. Please go ahead.
spk01: Hey, good morning, guys. Thanks for taking the question. I was wondering if you could talk about the demand you are seeing from the animal feed side, and can you also talk about the shift between premium and value pet food channels? Just trying to get a sense of what you're seeing in terms of demand. Thanks.
spk05: Thank you, Ben. I will start with the animal numbers. Obviously, Pork industry has had a little bit of struggles. Beef industry is doing very well. And in our specific areas, let's talk about the western Corn Belt, we're seeing a definite pickup in demand from the beef cattle, dairy markets, and expect to see probably in the first half of 2025 on poor markets. And so I think we have a real good opportunity there. And what was the second part of your question? Sorry, Ben.
spk01: Yeah. So also just trying to get a sense of the demand between the premium and value pet food channels. Like, do we see a shift to premium or are we seeing a shift to value? And how does that translate to your business model?
spk05: Yeah, I apologize for that. Yeah, we are definitely seeing a shift from the premium, a continued shift from the premium to the value products, and that actually fits the Anderson's special ingredients model better than the premium. We're able to hit some of our key customers with the products that they need for those value products versus the premium ones. I think that this is Pat again. It kind of accentuates what we do as a company. We're, you know, merchandisers of domestic grains, and we've worked for, you know, decades with these succulents in the swine, beef, cattle, poultry, as well as ethanol. all flour milling or pet food ingredient customers. And whether the prices are high or low on the board margin level, we really focus on the domestic supply for those individual customers, and that kind of demand is very robust, and those relationships are very strong. So that's critical for us to continue to supply those customers what they need.
spk01: Great. And if I could just ask one more, and I believe it was sort of asked before, but I just want to return to it. So I'm just wondering the various ways that the ag market can sort of correct itself to higher prices. Like, does this just happen? Are we just waiting on an exogenous shock or can the industry, does the industry really have the wherewithal to correct oversupply? in corn, for instance.
spk05: You know, it's interesting, Ben. I've been a senior merchant here for over 40 years in this business. When I started, corn was under $2 in the 80s. And it always has interactions by demand globally. And we continue to increase demand on a global scale, and we continue to increase production on a global scale. And Mother Nature will always throw us a curveball in one part of the world or another. This last season, though, we've had good crops globally coming out of the shock of the Ukraine war and imbalance we saw in some parts of the world where prices skyrocketed. We had a three-year period with elevated prices and elevated farmer income. It was great for the U.S. farmer. Now we have abundant stocks and abundant crops, and so the market adjusts. And I think for people like us, our big focus is on merchandising and how we can manage that risk and work with our customers all the time, whether it's a high price or a low price. And I think the market will correct by itself. If no one can do anything to make the market change in that regard, It looks as though going into the fall, we're going to have a big corn crop in the Midwest. So it should keep very muted sense to especially corn prices going into 2025.
spk02: So that's the environment we're in right now, more softer overall commodity price.
spk01: Great. Thank you for the caller. I'm going to hop back in the queue.
spk06: The next question comes from Jason Miner of Bloomberg Intelligence. Please go ahead.
spk00: Thanks. Good morning, everybody. First, just on the renewable diesel feedstock trading, I know we were sort of on the path to 2 billion pounds. And I'm just wondering about the sort of the give and take here. I wonder if we're building up some pent up activity that could mean a pop later on or just your thoughts on the path to sort of 2 billion pounds.
spk02: Yeah, I'll take that. Thank you for the question.
spk05: We are as confident today as ever that we will get to 2 million pounds. The opportunities as we're getting closer to what I'm going to say is max capacity in renewable diesel, now is going to shift to better utilization and having run times increase at those plants. But we continue to see quarter over quarter volume increases that would indicate that we are going to be able to achieve that and likely even exceed it.
spk00: Great. You know, I'll stick on that for just a second. There's a little bit of investigation, it looks like, underway on some possible counterfeit used cooking oil imports. I was wondering if there's some action taken against some of those. Would that create opportunities or maybe even hinder some of your feedstock trading or is it just unrelated?
spk05: I would say it's unrelated. The one net effect, if there is a restriction put into place on UCO, which is what I think you're referencing there, that should drive DCO prices higher, and that will benefit us not only with our RD feedstock business, but it'll also help us on our ethanol profitability at the plant level. So, yeah, we see whichever way that comes down, we don't think that affects the Anderson's RD feedstock business. And if it does come down against the Yuko, likely will increase our ethanol results. And Jason, this is Matt. We're not involved in any importation of any – I remember this alleged used cooking oil imports have come in. So, it's something we don't participate in at all. But we do support our domestic suppliers of UCO and other products that can feed the renewable diesel customers. So, having that get straightened out is probably a good thing overall for the market.
spk00: Got it. Thanks for that. Very clear. So, just one other one, kind of stepping back. I think you touched on a lot of this already. When you look at this result, you kind of look at the second half of this year. How do you feel about the path to the 2025 EBITDA targets? And it sounds like more M&A, I'm hearing you say, but what's moving around and how do the buckets that get us there look?
spk02: This is Brian.
spk05: I'll start, and then maybe Pat's going to add some color, Bill. I think, as mentioned before, yeah, we have, well, our early 12 months was about $355 million of EBITDA. So to get to that run rate target goal by the end of next year is going to require more M&A than we originally expected. You know, our pipeline remains active and robust, and so if, you know, if two or three of these things are able to come to fruition, we can make really good progress. But at the same time, we're going to continue to be disciplined and responsible. We have a state-of-the-art process that we use to review projects. We're going to make sure that they fit strategically and are close to our core, and also are going to generate appropriate shareholder returns. And we're actually in the process of doing some strategy refresh update work. You probably recall that three years ago we did a deeper dive that ultimately led to us divesting the rail segment. This is more a refresh update, but there's been a lot of market trends that have changed over the past two years when you think about all the trends in renewables and you think about EV penetration rates and the Inflation Reduction Act was not in place three years ago. So there's a lot of exciting opportunities in place, but then, you know, the timing and sequencing is going to be in a very disciplined, logical manner. So, I don't know, Pat or Bill, if you want to add anything. Yeah, just to add on to what Jason mentioned earlier, volatility came in our markets Correctly coming this year, you've heard that from other companies as well. There's no surprise to that. Our strategy and what we want to play goes very consistent. And we see opportunities in the ag supply chain for us to grow. And now, as Brian commented earlier, the thinking frame environment has maybe brought some things to market that can. fit for us well, and so we see this opportunity to deploy the cash that we've generated over the last three years into good investments to grow the company, as well as improve the assets we had. We talked about ethanol plants earlier. So we see the North American ag supply chain is a really good opportunity for health long-term, and we want to continue to invest in that and think that we can reach our even dollar target. our goal that we think we can achieve. We came up over 400 a year ago. It's dipped somewhat in this lower commodity price environment now, but we're optimistic about the long term as we're before. So we're pretty positive about how we can deploy capital and make good returns for that investment.
spk00: Great. Well, looking forward to seeing what materializes. Thanks very much. I'll hop back in queue.
spk06: This concludes our question and answer session. I would like to turn the call back over to Mike Holter for closing remarks.
spk05: Thanks, Alan. We want to thank you all for joining us this morning. Our next earnings conference call is scheduled for Tuesday, November 5th, 2024 at 11 a.m. Eastern Time, when we will review our third quarter results. As always, thank you for your interest in the Andersons, and we look forward to speaking with you again soon.
spk06: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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