Green Plains Partners LP

Good morning and welcome to the Green Plains Inc. and Green Plains Partners second quarter 2022 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 welcome to Green Plains Inc. and Green Plains Partners second quarter earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, Patrick Simpkins, Chief Financial Officer, and Leslie Vandermuelen, EVC 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 could materially differ because of factors discussed in today's press releases, in the comments made during this conference call, and in the risk factors section of our Form 10Q 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 second quarter financial and operating results further position the company to succeed in our transformation as we start to gain volumetric critical mass in the last few quarters of 2022 heading into 2023, where we believe we will hit critical inflection points that are proof we are executing on all phases of our plan that we've laid out to you and begin to demonstrate what is possible with our modernized and upgraded platform. Years of planning and execution on our modernization plan have enabled us to run at 97% of operating capacity in the quarter, the highest since Q4 of 2013, and we believe we could still go higher as we continue to optimize the plants that recently started back up in quarters where we don't have turnaround scheduled. During the second quarter, we achieved EBITDA above our indications on a prior call. Overall, EBITDA was $84.4 million, including $27.7 million of COVID relief from the USDA. Even without the payment, our EBITDA from operations was over $56 million as margins remained strong, and the team executed well to deliver the results we reported this morning. Our financial results also benefited from our natural gas hedging strategy, which we had been mentioning on the calls since late last year. On paper, consolidated margins continue to be positive into the third and fourth quarter, with risk mainly from the physical corn market's historically high basis, although we have seen some signs of weakness in some of the geographic areas where we operate. but we are closely watching that and the conditions of the U.S. corn crop. Driving demand remains volatile and could impact overall usage in the last half of the year, but margins have remained steady through July. On paper today, we are tracking mid-teens per gallon consolidated crush in Q3, and in Q4, we are currently tracking much stronger margins with new crop corn factored in, startup of additional MSC facilities, and continued strong contributions from corn oil pricings. Yet, still could be impacted by a smaller than expected corn crop or strong physical corn basis levels continuing through harvest. But overall, we should finish the year in a strong position both financially and strategically based on today's markets. As I indicated, contributions from low-carbon renewable corn oil remain strong as more renewable diesel plants come online over the next year. In addition, our production yields have also trended higher with our platform reaching a new high, led by our MSC locations averaging 1.2 pounds per bushel of oil yield for the month of June as we continue to seek ways to maximize our overall efficiencies and operating performance. We are constantly discovering new improvements from quality to quantity increases that set the company up and, quite frankly, the industry to be a beneficiary of this product contribution for a long time, especially with the latest federal clean energy tax legislation, if it passes, which I'll discuss later on the call. On the commercialization front, we continue to see strong interest in our 50% and 60% protein products from Latin America, Southeast Asia, as well as domestically and other locations worldwide. I will discuss some of our great progress later in the call when we dive a bit deeper. We also announced an exciting partnership during the quarter with the largest trout producer in America, Riverance, which led to other interest globally for our innovative products. Construction on our MSC facilities is moving ahead, and our central city location in Nebraska is currently undergoing commissioning and startup activities for its MSC system, which is very exciting. And commissioning will begin in late August at Mount Vernon and early October at Albion. Construction on these projects is nearing completion. Our team did a great job executing on the project, staying on budget, and delivering major projects within a few months of when we expected them to start up. We have begun engineering the MSC project at Superior, Iowa, and anticipate breaking ground in November. Madison, Illinois is next on the list, and we expect to break ground on that project early next year. These projects will take 7 to 10 months to complete in our estimation. We made some progress for permitting in Minnesota, which may lead to those plants being completed earlier than expected as well. We are planning to break ground on our first commercial clean sugar facility in Shenandoah this month. And equally exciting, construction has started at our MSC turnkey JV with Terrelson ethanol. During July, we converted the remaining $64 million of 2024 convertible notes to common stock, which continues to strengthen our balance sheet. With our new revolving credit facility with sustainability-linked targets completed early in the year, which further cleaned up our balance sheet, we have now reduced any material near-term maturities. When combined with the liquidity we have in our balance sheet with over $600 million of cash and a positive outlook for the balance of the year, we remain in strong financial condition to continue executing and deploying capital toward each of our exciting transformation initiatives. Green Plains Partners increased their distribution for the fourth quarter in a row to $0.45 per unit, and Patrick will dive deeper into the results. And with that said, I'll turn the call over to Patrick to review our financial performance.