Green Plains Partners LP

Good morning and welcome to the Green Plains Incorporated and Green Plains Partners Third Quarter Earnings Conference Call. Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode. I will now turn the call over to your host, Phil Boggs, Executive Vice President, Investor Relations. Mr. Boggs, please go ahead.

Thank you and good morning, everyone. Welcome to Green Plains Inc. and Green Plains Partners third quarter 2021 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, Patrick Simpkins, Chief Financial Officer, and Leslie Vandermuelen, EVP of Product Marketing and Innovation. 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 materially differ because of factors discussed in today's press releases and the comments made during this conference call and in the risk factor 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. Our overall transformation remains on track, as does our theme of focusing on execution, and during the third quarter, we have made significant progress towards our 2024 goals, and the fourth quarter is proving to be even more exciting. First, let's talk about the Q3 results. As indicated on our last call, we expected the third quarter to be challenging, as margins started out very weak. We had near-record corn basis levels throughout the platform, and as we discussed, timing reversals of Q2 mark-to-market as well. Additionally, given the anticipated weak margin environment during Q3, we made the decision to accelerate our remaining scheduled maintenance shutdowns into September, which impacted our margins by 3 to 5 cents a gallon based on reduced production volumes and increased repair and maintenance expenses in the quarter. While spot crush margins began to expand in September, we only saw a small benefit of that expansion as we had begun our fall shutdowns. However, as a result of shifting the timing of fall maintenance, We only had one maintenance turnaround at one of our smallest plants, Atkinson, in Q4. While operational timing did have some impact on the third quarter results, what I am happy about is year-to-date consolidated production margin averaging over 16 cents per gallon, which we believe to be generally above market because of our strong first-half results. The fourth quarter has returned to a positive margin environment, and based on the current market, we expect a return to profitability of Even as we hedge some of this early to protect our balance sheet, we are benefiting from the expansion in margins along with our higher run rates. I am pleased that we have secured our natural gas supply below the current market in physical, transport, and financial terms through the first quarter of 2022 and partially beyond that. We believe we are well positioned to be able to operate through any natural gas environment this winter. Operating expenses are seeing some inflationary pressures that are impacting the industry broadly today, particularly in the area of urea, denaturant, and sulfuric acid. Although with our Project 24 modernization program wrapping up, we will continue to see the benefits of reduced electricity, natural gas, and water usage at our Project 24 plants, and we expect to see additional benefits as we increase production levels at these plants rolling into 2022. The quarter was very exciting from a strategic standpoint as we announced a new turnkey initiative to expand our protein footprint without increasing our exposure to ethanol, raise additional capital providing greater assurance that our transformation can be carried out on schedule, broke ground on additional protein build-outs, and finished the construction of the Wood River FluidQuip MSC system. More exciting than the operational success are the commercial successes our team have been able to achieve and also the progress we have made in renewable corn oil, clean sugar technology, carbon capture, and sequestration initiatives, all of which I will address a little later on the call. Finally, our Board of Directors has continued its own refreshment initiative, significantly expanding shareholder rights while continuing to focus on good governance and adding diversity. Our Board recently appointed Jim Anderson into the newly created role of Lead Independent Director. Martin Salinas and Farah Aslam has also joined the Board, adding significant capital allocation, agribusiness, and financial expertise. Additionally, the Board amended its bylaws, updated its charters to the audit, nominating and governance, and compensation committees, and adopted a new Board qualifications, governance guidelines, and diversity policy. This has been in the works for some time as a result of shareholder input at our last annual meeting. Having sound Board oversight is critical to our ability to execute on our transformation plan and for the future benefit of all shareholders. As previously indicated, Green Plains Partners was able to increase their distribution this quarter to 43.5 cents per unit. This was something we are excited to be able to do for our unit holders. Now I'll turn the call over to Patrick to review both Green Plains Inc. and Green Plains Partners' financial performance. I will come back on the call to talk more specifically about our thoughts around 2022, our ongoing initiatives, and how each vertical fits into our transformation plan, all of which I think you will find very exciting. Patrick.