Green Plains Partners LP

Good morning, and welcome to the Green Plains Inc. and Green Plains Partners' fourth quarter and four-year earnings conference call. Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in the listen-only mode. I will now turn the conference over to your host, Bill Boggs, Senior Vice President, Investor Relations and Treasurer. Mr. Boggs, please go ahead.

Thank you, and welcome to Green Plains, Inc. and Green Plains Partners' fourth quarter 2020 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, Patrick Simpkins, Chief Financial Officer, and Walter Cronin, Chief Commercial 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 risks and uncertainties. Actual results could materially differ because of factors discussed in yesterday's press releases, in 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. Now I'd like to turn the call over to Todd Becker.

Thanks, Phil, and good morning, everyone, and thanks for joining our call today. The fourth quarter and the opening weeks of 2021 have been exciting for our company. We have continued to optimize and rationalize our asset portfolio while pursuing strategic investments. What is most exciting for our shareholders is our partnership with Osprey and funds and accounts managed by BlackRock to acquire fluid-quipped technologies and expand the use of their technology on a global basis. The partnership not only validates our strategy but helps secure Green Plains' transformation and and creates a leading ag tech powerhouse team. We are continuing to execute on opportunities for expanding ultra-high protein and renewable corn oil production through deployment of Fluidquip's patented MSC system. In addition, we expanded our production of specialty alcohols by completing our 50 million gallon USP upgrade and are further expanding to GNS. And finally, we are beginning to install Fluidquip's clean sugar technology at our York Innovation Center campus. All of these initiatives are part of the pivot we are making to transform our business and our future earnings power, and I'll compete back to each of these initiatives later in the call. Turning to our financial results for the quarter, we reported and adjusted net loss of $18.3 million, or 53 cents negative a diluted share, when adjusting for $22.9 million of non-cash related to the sale of Hereford Ethanol Facility and an $8.4 million tax valuation allowance. While we're not happy with the bottom line results, driving demand due to COVID has still not recovered, so we can focus on what we can control and how we manage risk. We reported $9.4 million in adjusted EBITDA for the quarter, and our consolidated crush margin was $0.06 a gallon. Another quarter of positive margins, partly due to our risk management strategies and a slight benefit from our industrial alcohol and protein businesses. As in prior quarters, margins were impacted negatively by having some assets idled. Our liquidity position is strong and growing, and we are well positioned to execute on our transformation plan. We ended the year with $275 million in cash, as well as $45 million remaining on our delayed draw term loan with MetLife. The proceeds from the pending sale of Ord will also provide an estimated $37 million to Green Plains at its close, as well as an additional $27 million to Green Plains partners that will be used to reduce their debt. Additionally, we just completed a $125 million mezzanine note facility with funds and accounts managed by BlackRock, providing additional financing to accelerate implementation of ultra-high protein technology. While mezzanine debt is not our only or best choice, obviously the relationship we've cemented is an extremely important factor. Combined with other financings and available alternatives, our blended cost of capital remains very beneficial for our shareholders. The combination of these financing initiatives enable us to accelerate capital to our higher returning initiatives. More importantly, is our partnership resulting from this financing relationship as we look at other opportunities in the future to build, acquire, and grow the company. From an operational standpoint, we are nearing completion of the Mount Vernon Project 24 upgrade, which will start up during the first quarter. Our Madison location is expected to be completed during the third quarter. At this time, we have deferred the decision to continue Project 24 at Atkinson and York in order to pursue higher returning projects such as GNS Great Alcohol at York. Atkinson is under consideration to be our first clean sugar location, but a final decision has not been made yet. Our Project 24 plans have reduced energy and water usage, lowering operating costs, and more importantly, resulted in a better carbon footprint. Once Madison is completed, we anticipate we will achieve operating costs below $0.24 a gallon across our field-varied plants, even without Atkinson. During the quarter, we produced 214 million gallons of ethanol, which equates to a 76 percent utilization rate. Contributions from protein, distillers, grains, and renewable corn oil have benefited margins as we are seeing our thesis play out that the world is demanding additional protein and vegetable oils. The weekly EIA data continues to reflect an imbalance as production has remained above 930,000 barrels per day range while overall gas demand has remained suppressed, and inventory stocks have been consistently over 23 million barrels. With that said, 2020 exports were better than expected, and when the U.S. consumer returns to driving, we expect margins to recover nicely, especially if China truly returns to buying ethanol from us. The rest of the world recovery will be helpful as well. Green Plains partners continue to generate stable cash flows, protected by long-term minimum value commitments. As of December 31st, $30 million has been repaid on the debt since it was refinanced last June, including $10 million from the Hereford transaction. Now I'd like to turn the call over to Patrick to review both Green Plains, Inc. and Green Plains Partners' financial performance, and I'll come back on the call to talk more specifically about our ongoing initiatives and how FluidQuip fits into our transformation plan.