Green Plains Inc. (NASDAQ:GPRE) Q4 2022 Earnings Call Transcript

Green Plains Inc. (NASDAQ:GPRE) Q4 2022 Earnings Call Transcript February 8, 2023

Operator: Good morning, and welcome to the Green Plains Inc., and Green Plains Partners Fourth Quarter and Full Year 2022 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.

Phil Boggs: Thank you, and good morning. Welcome to Green Plains Inc., and Green Plains Partners fourth quarter and full year 2022 earnings call. Participants on today’s call are Todd Becker, President and Chief Executive Officer, Jim Stark, Chief Financial Officer; and Leslie Van Der Meulen, 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 could materially differ because of factors discussed in today’s press releases and 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 statements. Now I’d like to turn the call over to Todd Becker.

Todd Becker: Thanks Phil, and good morning, everyone. We have a lot to talk about, so let’s get started. The fourth quarter margins were improved off the lows we experienced during the prior quarter, but we are still faced with some challenging headwinds due to weakness in ethanol margins in the quarter, which happened very quickly over a few days. This industry has such great potential and we continue to have a small imbalance in production versus demand that weighs heavily on margins. In addition, the pricing structure, in our opinion, remains broken where very little margin there — excuse me — very little volume in the market each day on the close prices a million barrels a day of production. This pricing mechanism needs to be addressed in the future.

In the Western Corn Belt, the basis remains stubbornly high for this time of year, about $0.45 per bushel higher than the prior five-year average and $0.30 higher than the prior year. A severe cold snap in December caused outages across our platform, and when combined with rail embargoes, which hit Green Plains unusually hard, we had inventory backed up at some of our locations leading to plant slowdowns and some plants going offline for a period of time. We estimate the storm cost our platform around $0.02 per gallon for the quarter alone, just over those few weeks. In addition, we made an economic decision to temporarily idle 10% of our production capacity based on current market conditions and continue to evaluate the right time to bring capacity back online.

Despite these challenges, we ran at 93% utilization rate across our platform as we benefited from pulling our seasonal maintenance into the third quarter and continue to see increasing production rates at locations we invested technology into over the last few years. Overall, our results showed a consolidated cross margin of around $0.03 per gallon and EBITDA close to $6 million. What we’re also learning is our transformation is more important than ever and contributed to our positive margins, even with the headwinds from the traditional platform, which is why we continue to execute on our ambitious transformation of Green Plains that we laid out for you over the past few years. Our focus is on our four pillars of protein, oil, sugar, and carbon, all combined with a focus on lowering our cost of traditional operations.

During 2022, we’ve made great progress on the transformation, completing the construction of three additional MSC protein technology locations, which makes five total and breaking ground on our first clean sugar facility in Shenandoah at commercial scale. We continue to make progress on our overall decarbonization of our platform, positioning ourselves for the future of sustainable aviation fuel, with our exciting alcohol to jet announcements we’ve made recently. Our MSC projects at Central City Mount Vernon and Obion continued to come online during the quarter. The incremental yields from these new MSC systems during commissions — during commissioning contributed to another quarterly production record for our low carbon renewable corn oil.

I can now say that all five of our MSC facilities are now completed and operational and producing ultra high protein. In fact, during this week alone, we set daily production platform records. This is a huge accomplishment for our team to bring these facilities online in a continued challenging supply chain and labor market. On the last call, I indicated that we expect to make significant exciting progress on our commercial sales for 2023, and we have done just that, which I will discuss later in the call. Our carbon initiatives continue to progress. First starting with Osaka Gas and Tallgrass to utilize carbon from our Southeastern locations to produce a synthetic fuel and methane products. While still in development phase for now, we are optimistic about the potential of this project.

We also just announced a sustainable aviation fuel partnership with Tallgrass, PNNL and United Airlines to develop a new alcohol to jet technology. United’s offtake for this product demonstrates the urgency of developing pathways to decarbonize aviation fuel, and we believe the use of decarbonize ethanol as a low-carbon feedstock, which Green Plains has a supply agreement into the joint venture as well, could be transformational, not only for our company and our shareholders, but also for the whole industry. We are excited to continue to develop this novel technology from PNNL as Blue Blade Energy scales it up and works towards a pilot facility in the coming years. This gives us confidence in the long-term value of our biorefinery platform and the optionality around what we do and what we are coming.

Today, the fundamentals of our base ethanol business remain challenged, yet as we all have seen things move quickly on our margin structures. We remain open to the forward margin as there has not been real opportunities to hedge forward. There are times I feel like a broken record, which is why our technology transformation is more important than ever. The EPA recently proposed RFS volumes of 15.25 billion gallons per year. This administration has repeatedly demonstrated a commitment to higher level ethanol blends, including allowing for E15 to be sold during the summer for the fourth straight year. Our value proposition as the lowest cost octane enhancer remains both domestically and globally. We are capturing more corn oil from every kernel and are headed to 1.2 pounds mechanically, and regardless of the final RVO levels, we believe the rapid expansion of renewable diesel production will continue and our distillers corn oil will remain in demand.

As we always do, we are going to focus on the things within our control, executing on our transformation plan, bringing additional MSC and corn oil facilities online, completing our clean sugar build in Shenandoah and executing on our carbon plans. Jim will recap our efforts in just a moment and discuss our success during 2022 to strengthen our balance sheet as we ended the year with over $500 million in cash. As a result, we believe we are well-positioned to execute on our transformation strategy. Our partnership, Green Plains Partners delivered another consistent quarter and declared a distribution of $0.455 per unit while maintaining stable coverage ratios. And now I’ll hand the call over to Jim to provide an update on the overall financial results.

Jim?

Jim Stark: Thank you, Todd and good morning everyone. Green Plains consolidated revenues for the fourth quarter were $914 million, $112 million higher than the same period a year ago, driven by higher run rates. Our plant utilization rate improved year-over-year to a 93.4% run rate during the fourth quarter, comparing favorably to the 83% run rate reported in the same period last year. As Todd mentioned, we are monitoring the economic environment closely for when to restart the 10% of viable capacity we have, which is having a minor impact on our utilization rate in the near term. For the quarter, we reported net loss attributable to Green Plains of $38.6 million or $0.66 per diluted share compared to loss of $9.6 million or $0.18 per diluted share for the same period in 2021.

Adjusted EBITDA for the quarter was $5.8 million compared to $32 million for the same period last year. Higher corn bases in the Western Corn Belt and weak ethanol demand contributed to the lower margin for Q4, 2022 compared to last year. We realized the $0.03 per gallon consolidated crush for Q4, 2022, which is $0.17 a gallon lower than last year due to the factors described above. On a sequential quarter-to-quarter basis, we saw the consolidated crush margin per gallon improved $0.12 when compared to the third quarter of 2022. Our Ag and Energy segment turned in a better performance versus 2021, recording a $9.6 million increase in EBITDA to $11.8 million for the fourth quarter. This increase was driven by market volatility in our merchant trading and distribution businesses in our fuel racks and natural gas storage.

For the fourth quarter, our SG&A costs for all segments was $28.9 million compared to $18.2 million for Q4 2021. This increase was driven by higher personnel costs related to higher headcount, as we described through most of last year on our quarterly costs, and we have fully staffed our company for our transformation plan. This increase is also related to higher insurance rents and other fees and expenses related to running the business. Interest expense of $6.5 million for the quarter, which includes the impact of dead amortization and capitalization — capitalized interest, was roughly in line with the $6.9 million reported in the prior year fourth quarter. For the year, interest expense was significantly lower by approximately $34.5 million from last year as a result of the convertible notes being exchanged in 2021 and 2022.

We anticipate interest expense for 2023 to be approximately $40 million given where interest rates are currently and that we are carrying in lower debt balances into 2023. Our income tax expense for the quarter was $4.9 million compared to a tax expense of $4.8 million for the same period of 2021. At the end of the quarter, the net loss carryforwards available to the company were $85.8 million, which may be carried forward indefinitely. We currently anticipate that our normalized tax rate for the year for Green Plains Inc., excluding minority interest should be around 21%. On slide nine of the earnings deck, we provide a summary of the company’s balance sheet. As shown, we ended the quarter with $464.4 million of cash and working capital — net of working capital financing compared to $698 million at the end of 2021.

Our liquidity position at the end of the quarter included $500.3 million cash, cash equivalents and restricted cash along with approximately $235 million available under our working capital revolver. Our balance sheet remains in a solid position as we continue our transformation to Green Plains 2.0. For the fourth quarter, we allocated about $29 million of capital to profit sustaining the growth projects, including $14 million to our MSC protein initiative, about $10 million to other growth initiatives and approximately $5 million towards maintenance, safety and regulatory capital. Total CapEx for 2022 was $212 million, which was about $38 million in the range we communicated to you back on our Q3 call. To date, we have invested approximately $330 million of our shareholders’ capital across our platform and the deployment of Fluid Quip Technologies MSC across the Green Plains biorefinery network, including our share of the Green Plains turnkey JV with Tharaldson Ethanol.

For 2023, we anticipate CapEx will be in the range of $150 million to $250 million, including our share to finish up the turnkey project with Tharaldson this year and the capital to complete our clean sugar building in Shenandoah in late Q4 of 2023. We should also begin construction on the MSC project Madison, along with capital for a couple of DCO tech installations throughout our platforms. For Green Plains Partners, we continue to realize consistent performance earnings and cash flow, realizing net income of $9.6 million and an adjusted EBITDA of $12.7 million for the quarter, slightly better than $12.2 million recorded for the same period a year ago. Plant utilization rates at Green Plains were higher, increasing the storage and throughput volumes for the partnership by 12.3% for the fourth quarter versus the same period a year ago.

For the year of 2022, storage and throughput volumes were approximately 16% higher than 2021, coming in at around 876 million gallons, and we anticipate a similar amount of volume for 2023 based on our current outlook. As a result, partnership continues to support steady returns to our unitholders, declaring a quarterly distribution of $0.455 per unit with just under a one times coverage ratio for the quarter. For the partnership, distributable cash flow was $10.7 million for the quarter in line with the $11 million for the same quarter 2021. Over the last 12 months, the partnership produced adjusted EBITDA of $51.2 million, distributable cash flow of $44.6 million and declared distributions of $42.8 million, resulting at a 1.04 times coverage ratio, excluding any adjustment for the principal payments made in the in the past year.

I would also add the partnership did pay down $1 million term debt for the year and also increased its cash unitholders by $23.6 million in 2022 versus 2021. Now, I’d like to turn the call back over to Todd.

Todd Becker: Thanks Jim. From a commercial standpoint, we’ve been pointing to 2023 for a while now, as we now have significant quantities of volume from our expanded MSC platform. Our team has been working with numerous customers for some time now and the impact is showing up in our sales efforts. For the year, we have contracted and sold nearly half of our anticipated production and when combined with what we believe will be repeat customers since we are in the ration and they expect us to keep volume available, we have approximately 250,000 tons or 75% of our capacity spoken for all intents and purposes. The engagement from our customers across species have been impressive and we appreciate each one as we know putting a new ingredient in, in mass is something that has never really happened in the span of my 35-year career.

A new plant-based high protein product in volume besides the traditional corn gluten meal, or high pro soybean meal or fish meal, has never really been available. In addition, when we embarked on this journey, we initially focused on the crude protein differences between our legacy distillers’ grains and these protein centric products. This helped to underpin both the nature of our transformation and the view that we needed to become part of feeding the world. We always knew that once we solidified ourselves with our new customer base by providing unmatched production volumes and redundancy to focus would shift to nutritional value and the impact on our customer’s bottom line. As we are successfully completing sales cycles initiated early to mid-2021, we are starting to see the customer’s acknowledgement of the nutritional benefits that our fermented ingredients have to offer over certain other plant-based and solvent extracted ingredients.

This embraced by our customers is also very much in line with our plans for product development, which is predicated on the view that our fermentation platform combined with our yeast and enzyme partnerships can develop amino acid and peptide solutions that will create an even stronger relationship with our customers, whether it’s an aquaculture pet food or young monogastric animal diets. All of this is important, but we do know what matters to our shareholders as well as we have been stewards of the capital you dedicated to Green Plains. With that said, I’ll give you a look under the hood a bit. Since the inception of the strategy, we indicated that our belief was the base product would sell for a premium of $200 over traditional distillers low protein products, and I’m happy and excited to report we have exceeded this target since inception over the average of the sales book.

This is fully consistent with our initial outlook and guidance. This premium ebbs and flows depending on customer requirements for different protein levels and other requirements around quality control and quality assurance in addition to geographic locations. Keep in mind this is before much effort to move up the J curve as we are now beginning to focus on that in 2023. On our species focus for 2023, we expect based on sales we have made and in customer process advancements that approximately one-third of our production will go into global aqua and pet food customers and we are even starting some of those negotiations at over 58% protein levels, which we are confident we can now make on demand at our facilities. The remaining production is spread across all species for different uses at different feeding cycles from young to old.

When you look at the average premium to date, which is trending, combined with the moving corn oil pricing, we anticipate to a fully achieved projected rate of returns on the MSC systems we have in running. This was not easy, as the bottlenecking starters were harder than we expected, but once we had real volume available to our large customer, they knew this product was real. Our great customers have demonstrated their confidence in our product and our journey. We are proud to offer a solution that helps keep — helps meet their needs. The MSC technology is also contributing to higher renewable corn oil yields and with new pricing levels it helps cement long-term project returns. Rest assured, while we are seeing strong acceptance of our 50% protein product, we will continue to focus on developing and commercializing higher proteins at 60% and above.

So, where does that leave us for the rest of our platform and timing? We have outlined supply chain issues, especially with our electrical gear and also permitting on the last several calls. Our turnkey partnership with Tharaldson a 175 million gallon plant where we own half of their MSC production is under construction. Our Madison, Illinois location is next up for us for our MSC technology development and pending receipt of the required permits from the state, which are in process now should be under construction this summer for a 2024 startup. Our Fairmont location in Minnesota is also in the planning stage, but the permitting situation there could take longer than Madison as we have outlined on the last several calls. At superior at Otter Tail due to the size of the plants and our focus on capital efficiencies, we are first focused on maximizing the renewable corn yields and are reviewing, deploying a full MSC system at a later date.

But right now we’re looking to deploy Fluid Quip DCO extraction technology from mechanical means to extract more oil in the meantime. This will give us approximately 885 million gallons of capacity, including of our half of Tharaldson that Green Plains will have MSD fully installed once completed. When you add into DCO enhancements, we will be relatively close to the original plan laid out, and even more important, the strategy we laid out as a three to five-year journey to move up the price and protein curve and I feel like we are right where we want to be. So, now let’s pivot to our sugar business. We are deploying a truly game changing technology from Fluid Quip where we own and control the IP and are on the path to be truly disruptive to an industry that hasn’t seen a new entrant in a long time.

Our exercise and protein has set us up well for dextrose as we can apply those learnings to an even smoother execution of this strategy. Our ability to convert the starch component from a kernel of corn at a dry mill ethanol plant into a lower carbon dextrose product is opening door — opening the door to a new source of supply in an industry dominated by an oligopoly. We’ve had potential customers calling us up because they were ration product from the big four dextrose producers, but unfortunately, our commercial facility isn’t completed yet. Our commercial scale CST system is under construction in Shenandoah, Iowa, where we are building a revolutionary biocampus on a path to complete our first true biorefinery of the future that can separate the high value protein feed ingredients as well as the optionality to convert starts to dextrose.

The great thing is once the CST facility begins, we will still produce protein oils and other animal feeds from each bushel of corn, just less ethanol. This is a game changing technology that demonstrates why we invested it and only a significant majority of Fluid Quip two years ago, and their efforts to design and engineer this technology to this scale is a testament to their IP suite they developed, the engineers and scientists have Fluid Quip that are there now and are dedication to disruptive ag technologies. Shenandoah is on track to build a facility capable of producing 200 million pounds, expanding to 500 million pounds of dextrose annually. And we believe in the coming year that investment opportunity will continue to expand this technology at Shenandoah or deploy it at additional locations.

How do I know we’re on the right track? The talent we are attracting from traditional corn wet milling industry is nothing short of extraordinary and they keep coming our way as they know this is a quote unquote change the world kind of opportunity. The economics remain compelling, and we are anxious to stand up our first system. Our carbon initiatives continue to gain traction as well. As I outlined earlier, the partnership on synfuels from biogenic carbon, we went into the IRA impacts and quite a bit of detail on the last call, and we continue to work towards maximizing our opportunities, reviewing such options as combined heat and power systems and many others. Summit Carbon Solutions continues to make progress on schedule with right away at over 60% of the mileage completed across the entire 2000 mile footprint, which has been acquired with over two-thirds acquired in critical states like Iowa.

Important to Green Plains is that Summit has already put down payments on critical long lead equipment, like compression equipment that will go into our plants. Their progress means we are remain on track to start capturing the benefits of IRA in 2025. Certainty of carbon sequestration remains the most critical aspect for us as we believe in sustainable aviation of fuel and Summit’s access to permitted class six wells right now and pore space can give us a competitive advantage quicker and better than the market in our low carbon strategies. Looking ahead, we remain optimistic about the potential of the Inflation Reduction Act to provide a meaningful uplift to our margins in 2025 and beyond. As I mentioned before, I told you — if I told you the potential forward EBITDA estimates from this program alone, you wouldn’t believe me.

But the math is easy and I’ll let you use your imagination. As you know, I’m adamant that all roads lead to alcohol to jet sustainable aviation fuel, which is the future of this industry. Recently, we saw the state of Illinois pass a new $1.50 per gallon, SAF blender’s credit on top of the IRA. The aviation sector needs to decarbonize and we are their readymade solution from both our low carbon alcohol and also our waste oils we produce for the renewable diesel industry as they convert to SAF in the future as well. For scale, alcohol is a much bigger solution, but both vegetable oil-based and alcohol-based sustainable aviation fuel are important to give aviation the ability to reduce their Scope 1 and 2 emissions from jet fuel. We have — with the opportunities in front of us from our MSE technology for protein and corn oil expansions, deployment of Clean Sugar Technology and carbon capture and utilization, we continue to have confidence in our strategy to hit our 2024 and beyond projections.

The IRA impact and potential to move higher — to higher protein pricing levels and upgraded nutritional outcomes over the coming years could even add to these totals. We have set this company up to be aligned with macro drivers that underpin our initiatives around protein and vegetable oil demand, decarbonization, and the emerging bioeconomy, and we are just getting started. Our employees are exciting every day to drive value, and our customers are excited as well, all which we believe will create significant shareholder value in the future. We appreciate your continued support at Green Plains transformation. Thanks for joining our call today. We can start the question-and-answer session.

Q&A Session

Operator: Thank you. Our first question comes from Craig Irwin from Roth Capital Partners. Please go ahead. Your line is open.

Craig Irwin: Good morning and thanks for taking my questions. So, Todd, talking to some of the other players out there, the private guys, it sounds like there’s something really funky going on again with asset values that they’re particularly strong. We haven’t seen something like this in almost 10 years. Can you maybe share with us what you’re seeing point to data points that we can see publicly? And I kind of have an intuition and this might be related to operators confidence in SAF and the demand for those plants to serve the opportunity for the IRA and what President Biden’s laid out. Can you maybe just unpack that for us and talk about whether or not this could put us into a capacity deficit for fuel ethanol in the future?

Todd Becker: Yeah. Thanks. Great question. What we’re seeing out there, at least at the scale plants, the big plants that we — that are have been built over a 100 million gallons is strong interest that we’ve seen on processes that are happening in the market today. We’re hearing that some people aren’t even making the second rounds of some of these asset sales because they’re bidding what were traditional values that we were able to buy in the past, and they’re not making it to the second round. So, we’re hearing very strong values almost towards original replacement values. Even though today, it would cost a lot more to rebuild a platform like ours. So that’s very enthusiastic for us. When we look at our asset values today, obviously you’re going to have to watch whether you’re subscale or not, but when we look at that today, our view is that the people that are showing up in some of these data rooms from what we understand are really taking the view of sustainable aviation fuel and decarbonization and looking at the IRA and thinking to themselves the optionality that’s available in this industry has never been stronger based on all of the different aspects that this industry is heading down.

Whether what we are doing on protein, oils and sugars, whether what others are doing around other technologies that they’re deploying, whether we’re going to do combined heat and power systems on co-generation to reduce our — not only our carbon, but our energy costs all the way through this sustainable aviation fuel initiative, the optionality in getting a hold of these systems seems to be something that many new players and many other entrants are looking at the U.S. ethanol industry that traditionally they may have looked past it. So yeah, we certainly have headwinds in our traditional fuel economics and we’ve had them. How are we make a little more than we need every single day, but I think that’s going to — as we see every year, we sat last year at this time, literally on this call, not knowing what Q2 was going to look like and thinking to ourselves, it’s going to just going to continue.

And all of a sudden we saw a very, very strong change in the margin structure. Hard to predict that will happen or not this year, but we do know that the ethanol margin moves very quickly.

Craig Irwin: Excellent. Thank you. My second question is about protein pricing. So, it seems like every few months, there’s some controversy that whips around people speculating about your pricing for the MSC product. You were pretty clear in your commentary, but I was hoping you might be able to kind of put some boundaries around pricing. In the past you pointed to soy meal versus soy concentrate things to consider. Are we looking at potential pricing closer to that of soy concentrate, particularly as we look at the 58% product that you’ll be selling into aquaculture. How should we really think about pricing today? And how this rolls out this year?

Todd Becker: Yeah. We hear a lot of rumors around our pricing, which is always very interesting. But obviously there’s lots of things that go into consideration of whether it’s geographics, freight spreads, where we’re relative — where we’re at relative to production. What we wanted to make sure is the — our investor shareholders understood first and foremost, what we laid out originally with that what we believed was a initial $200 value over our traditional products we are achieving and actually exceeding on average over the whole platform. Yes, certainly there’s times when Nebraska distillers’ grains rally very, very hard against protein, but maybe Indiana isn’t. So, depending on where you have locations, some of your plants, you have higher and lower margin structures depending on the time of the year.

But overall, what we — and what — and we wouldn’t say it unless it was true by the way. So — but overall, we’ve achieved greater than the $200 a ton on average across since inception, by the way. And we can go all the way back, but since inception. On top of that, what we’ve seen is the contribution from corn oil, which we put into our margin structure on this part of the house that has been strong because of values have gone up significantly since the start of the project as well. So, look, overall, we are bringing systems up still. We had two — we had — or we had record days of production this week again, across our platform, and we’re still not at full rate. And so, we’re very excited about it, but it does tell us that the production that we’ve outlined across these five facilities are on track.

Our sales program is on track. We are having great conversations with what we believe will be our next strategy, which is to replace corn gluten meal to start in rations, both domestically and globally. We can make a 58.5% to 60% pro product right now. It has a better nutritional outcome because it’s a — because of the amino acid profile and the fact that it’s fermented and there’s yeast in it. So, this is just a step-by-step process. And as we bring these plants on, we are spreading our costs over more and more volume, which is going to help our margin structures as well. So, while we’ve seen some limited contributions so far now that we are have these five plants running, 2023 is really our inflection. But a lot of people think they know what’s going on in protein pricing because they hear A, B, or C.

But we’re here to tell you right now, we are effectively sold out for the first — almost the first half of this year. It is a wide range of species with what we have — as I said earlier in the call, because we’re in a ration, our customer expects us to have that product available. They may not want to price it all today for the whole year today, they have different views on price as well, but they expect us to keep volume available because we just can’t go into a ration and say, oh, no, so sorry, we don’t have any for you. So, we know what we have committed for the year as well. But at this point we have almost 50% priced and sold. So, it gives us great confidence on where we have from a pricing perspective.

Craig Irwin: Great. Well, congratulations on the progress with MSC. And we look forward to more news from SAF. Thank you.

Todd Becker: Thank you.

Operator: Our next question comes from Jordan Levy from Truist Securities. Please go ahead. Your line is open.

Jordan Levy: Morning Todd, Jim.

Todd Becker: Morning.

Jordan Levy: Maybe we could just start off on CST. I wanted to get a sense for how you are all approaching the commercial process there as you get ready later this year to bring that first facility online. Is there learnings to be had from the work you’ve done building up the protein sales side of things, and how should we think about that, whether it’s a co-location or sort of an off take arrangement?

Todd Becker: Yeah. I think first and foremost, our learnings from protein will absolutely apply into our CST business. How we ramped up our sales process, our quality control process, the things that we did, how we brought plants online. We — traditionally, it was pretty simple. You build an ethanol planet, it runs, now you have adding component technologies that you’ve seen in your visits as well. These are not part of the plant. These are actually separate and distinct functional assets. And so, we just — we got great education on how to do this correctly as we think about our CST. Most of this first plant will ship to customers around the United States. We won’t have a co-location set up there for several years, but we are working with partners on that as well.

But we’re basically looking for — we’ve had a lot of discussions. We’ve had product in customer’s hands. We are making product in York, we’re first focusing on 95 DE which is a familiar term in wet milling. We’re focused on refined and unrefined, which is unique. We are also in the process of increasing our capabilities to 43 DE, dextrose equivalent and making sure that our color matches what comes out of a traditional wet mill, which is why we’re attracting wet millers to our company right now who would’ve never worked in the ethanol industry before, by the way. They all — they looked at this and they — it was child’s play to make ethanol for these guys. When you look at what happens at a wet mill, it’s much more complicated. So, when we look at not only the talent we’re attracting, but the customers that are calling, we’ve had customers call across the United States that have basically been rationed and they’re short supply and they need more dextrose.

And you saw an announcement out of the one of the big four that they’re going to expand some of their dextrose capacity. But in general, we believe that we’re going to be the next big player and it’s just a matter of time now. Yeah, we got to get the first ones started. We got to get make sure we debottleneck it. But we are anticipating, and we are thinking about really this is the game changing technology for Green Plains that could truly revolutionize our long-term margin structure above all else, above protein, above oil, even above carbon long-term. We believe that this product is — the margin structure is just so robust and it has been for many, many years in this — in the wet million industry. So, we’re on track., We like what the position we’re in.

If I could go faster and wave my magic wand, I would. But today we just have to be a bit patient on this. But absolutely what we learned in protein is critical to starting up our CST systems and executing even better in the future.

Jordan Levy: No, that’s great color. Maybe just on a follow up. I don’t know how much you can say here. But maybe from a more general level, I’m just curious how you’re thinking about how the industry might go about pricing or structuring ethanol in an ethanol to jet situation, given it’s — it’ll be kind of a low carbon feed stock situation. I’m just curious if you have any thoughts there.

Todd Becker: We can move quickly from access to a deficit as ATJ progresses. Obviously not today, but in the future. And so that really, I think, gives the industry back some pricing power. Now, first and foremost, you have to have decarbonized alcohol. You have to meet the standards that are set in the IRA. We’re still focusing on the measurement of that carbon. When you start in your carbon scoring under GRE , which is somewhere between kind of 50 and 60 from most of the industry, you drop 30 off as soon as you sequester the carbon, whether it’s going to be direct and jacked on a pipeline or other areas. And then from there, another five to 10 points just on combined heat and power alone, before you even start to think about the aspects of what happens on the farm and even the seed that you plant.

So, when we look at that, our low carbon alcohol relative to everything else should be higher in value than fuel. But I think it’s going to be interesting to see how this plays out. I mean, today we’re $0.50 under fuel, because we have a little bit of an excess in the market where there are times we’re at fuel price as well. So, I think we move structurally from an excess to a deficit, and I believe we’ll have some pricing power, but I believe the margins will be big across the whole supply chain. And I know people say, well, who’s going to buy it? United Airlines is certainly committed in our joint venture. And remember, this is not just a off take agreement. Those are dime a dozen quite frankly. This is a very important structural partnership that we have with Tallgrass and infrastructure player who moves molecules every day.

PNNL who brought forth this, what we believe is a efficient technology and United Airlines, which is saying, we don’t just want to buy the fuel, we want to own the process and invest in the technology and have a real stake in the ground on this one. So that’s the importance of this — of this partnership. Just think about what we’re hearing ethanol to jet. I mean, those are words uttered out of airlines today that weren’t uttered three, four years ago, but it’s the only real true volumetric path. Yes, absolutely. RD to jet is going to be very important. Veg oils to jet extremely important and it’s going to happen as well. So, combined between veg oils and alcohol, we are going to make real impact, I believe, on sustainable aviation fuel in the future, but also really refine the margin structure of this industry significantly.

Jordan Levy: That’s great. And definitely and really encouraging announcement. Appreciate the color.

Todd Becker: Thank you.

Operator: Our next question comes from Manav Gupta from UBS. Please go ahead. Your line is open.

Manav Gupta: Hey, guys. Congratulations on the ultra pro update or routine update you were all looking forward to it. My question is, now that this is locked and we can all see the price of what corn oil is doing, can you or Jim talk a little bit about what kind of EBITDA could we be looking in 2023? If you could just walk us through the various components of the EBITDA guidance for the current year.

Todd Becker: Yeah. I mean, the EBITDA range we’ve given you on what we control is still intact. It’s really just comes down to what is ethanol going to do this year. And today, obviously, there’s some headwinds, so we have to watch that closely. But as we know, and as I said, it moves very, very fast. We’ve seen margin structure improve a little bit on the curve, but it’s just going from low to less low. And so we’re going to have to continue to move that margin structure forward. And I think this, we’re going to — there’s going to be some discipline and rationalization across the industry. I think the industry is getting a little bit tired of giving their fuel away too cheap and not earning the return that we should be earning on our asset base.

And so, it was a pretty tough quarter in Q4 for ethanol and Q1s are always tougher quarter. But like I said, we’re optimistic throughout the year that, that we will have times again to potentially earn some real returns against just ethanol. On top of that, with what we’re achieving today on protein and the fact that even with this recent reduction in veg oil prices, we still — we’re still going to generate a significant EBITDA from our corn oil program. But even more exciting for corn oil demand this year is look at the sheer volume of the potential — up renewable diesel production coming online this year. We’re not talking like just a small amount. This is their big year where they don’t just add a little bit. They potentially double this year in what they’ve been producing in the past, which means the demand for veg oils into that space doubles as well.

And when you put it all into play relative to even with soy crushing to coming online, the real question is we will hit again where the market will crush for oil, even though the oil meal spread has widened out a little bit and people have sold the oil and bought the meal, but we will bring that oil shear back into play, in my opinion, back in 2023, which is very beneficial to our corn oil pricing potentially. So, we’re looking forward to it and we’re really in that same range of the guidance that we issued earlier. We just have to watch ethanol closely.

Jim Stark: I would add onto, Manav, is as you are seeing more and more of these renewable diesel plants want to add sustain aviation fuel technology, the low CI score of the renewable corn oil we make, we’ll keep it in a preferred spot for demand as we move forward.

Manav Gupta: No. thanks. A very quick follow up. As you also hinted, everybody is looking for corn oil. You have corn oil. We have seen and ADM do some deals. Wouldn’t this be a good time to lock up a very good price on corn oil with some of this new facilities that are coming on, which could give you like a hedge against some of the volatility if there is any in the corn oil pricing?

Todd Becker: Yeah. I don’t think you’re going to find somebody doing multi-year off take with a high price today. I think the view is they — they’ll rather remain in the spot market or at least try to lock-in volumes of the low carbon. I think it’s a bit of like — we have been in negotiations and discussions with several parties on a potential partnership. The volume’s the easy side. It’s really how do we structure the pricing side of this and really what’s beneficial for our shareholders. What’s been beneficial for our shareholders is our patients to wait and let this industry get built out. And with this industry building out, this will be the year where I start to think locking in the ability to source the low CI waste oils, that’s going to be really, really valuable.

And we continue to try and unlock that last half pound per bushel of corn oil in the kernel. It’s still sitting there, and we believe that at $0.60 and $0.70 a pound, which is $1200 to $1400 a ton, that is very valuable that you could put some serious R&D behind, and I think others are as well, not just Green Plains. You could put some serious research and development behind trying to unlock that last half pound of oil in the kernel because it’s still going to be lower carbon than anything else out there other than one other type of waste written residues. So, I think we’re in a really great position. Can I control what’s going to happen in veg oil pricing globally? No, but I think you see that the U.S. remains an island over global palm and global other vegetable oils.

And I think we’ll remain that way for the coming years because the demand is just so robust that’s coming online for our products.

Manav Gupta: Thanks guys and thank you again for the update on the protein side. I think the investors really appreciate it. Thank you.

Todd Becker: Yeah. Thank you.

Operator: Our next question comes from Kristen Owen from Oppenheimer. Please go ahead. Your line is open.

Kristen Owen: Hi, good morning. Thank you for the question. Todd, you mentioned this in some of your other responses, but I was wondering if you could just say more about the Tallgrass and United Airlines agreement. And specifically I want to ask about the progression of that partnership, what happens as you develop that catalyst? And just help us understand why this pathway is so different from the other SAF announcements that we’ve seen.

Todd Becker: Yes. That’s why it’s really exciting actually, is that this was a competitive process with PNNL. This wasn’t like Green Plains and Tallgrass showed up and all of a sudden got a technology. There were other parties that you are very aware of their names, which we won’t comment on. They were trying to get this technology as well. And it’s unique — and again, I’m not a chemist or a biologist, but I can — I’ll give you the Todd Becker view and then, we can certainly do a teach-in later on, on this technology. But the traditional SAF, alcohol/jet adjust technologies is a four-step process to a five-step process. And it’s breaking the carbon chain, the double bond between carbon and carbon. And that’s the difference.

It’s ethanol, ethylene, and then ethylene through the traditional steps of alcohol that you have. What’s different about this technology, it’s a three-step process and it’s a doubled bond between carbon and oxygen, much easier to break. And that’s what the catalyst really sets us up for. So, first thing we have to do is we have to optimize the catalyst. We knew we had to do that. When we partnered first with Tallgrass to get control of the technology from with PNNL to develop it, we knew we had to optimize the catalyst. We quickly were approached by airlines and specifically United where we felt we wanted a partner. We knew we could sell the alcohol to jet. We weren’t worried about that. We knew there was — that was easy to do. But the vision of United to say we’re committed, we want to help optimize the catalyst.

We want to partner with you financially, we want to make sure we get the fuel in either say Denver or — and be efficient in Denver and/or Chicago. We want Tallgrass to move it for us. And we want Green Plains to supply us to low carbon alcohols through both what we’re doing on direct injects in the East versus carbon pipelines in the West. And when you put all that together, it’s a very, very valuable partnership. So, first and foremost this year, optimize catalyst, move as fast as we can. We’re working with global experts to do that. Secondly, while we’re doing that, start to think about what the pilot plant will look like and where it will be located close to a Green Plains plant or onsite with one of our plants in between what I would say Denver and Chicago.

So, you can use your imagination of where that will go. But — and then from there we engineer it. We put a pilot plant in place. We’ve each committed upon successful optimization to the catalyst that we would fund a pilot facility for our share. And we haven’t said what each of our shares are, but you could — basically just three partners. So — and then from there, we will then move quickly to look upon success of that to commercialize the technology. It’s a three-step process. You don’t make ethanol to ethylene. It’s a ketone process, so you can certainly do research on that as well. But we believe that this is a very interesting technology. Now that doesn’t mean it’s going to be the only technology. There’s several others out there. We hope they’re all successful.

We hope ours is successful. And I think there’ll be many choices for, not only industry, but also airlines to make, as well as, how we’re going to produce it as well. So, excited about it. I think most important is the fact that the recognition is, if you want to decarbonize jet fuel, you’re going to have to come through alcohol for volume, for share volume. And that could really be the most interesting part of the story, which is you go from excess to deficit very, very quickly. Because if you think about it, 16 billion gallons of production today really is only going to convert into 10 or 11 billion gallons of jet, which really isn’t that much globally. And so, it’s not just going to come down to jet a net credit, it’s not how this world’s going to work.

It’s going to come down to the fact that it will probably be more expensive than jet fuel. But in general, this is a pull through, not a push through.

Kristen Owen: No, that’s super helpful. And I think we’d all take you up on that key trend. If I could follow up on

Todd Becker: I’ll tell Phil that. So.

Kristen Owen: If I could follow up with a slightly less interesting question, more on the ethanol based business. Just how you’re thinking about the export outlook for 2023. How much demand do you see moving to places like Canada and just your ability to serve that market? Thank you.

Todd Becker: The Canada’s robust. I mean, they continue to really drive down our drive programs around low carbon fuels, and ethanol is a key component of that. We’re excited about the volumes that go there every day, but we need the other world. We need the other parts of the world to engage for sure. We’re very competitive as a molecule. If you look at our discount to gasoline and today, we remain at a discount, probably still right now, the cheapest molecule on the planet for octane. Our octane values still remain very, very intact. So, I think it’s engagement. As I said, the world needs to continue to open up, and I know it’s a broken record and I can’t even believe we’re still talking about it, but we still need China to open up post-COVID and bring demand back online.

And I think that’s going to be the real driver that probably puts a bid back into gasoline, but also puts a bid into molecules that can go into fuel tank as well. I think what’s also really interesting is not just exports, but when you look at — and I know these are easy states, Minnesota and Iowa — blend rates are up to over 12% now and up to — over 12% is because you can blend E15 pretty much year round in a lot of states at this point. And so, we think that will continue to increase as our value proposition remains. And ultimately this E15 just get one more percent blend on average across the whole industry or the whole gasoline supply in the United States. That pretty much cleans up our excess and really changes the view of where this ethanol industry can go.

So, if you kind of look in your crystal ball and you say to yourself, yeah, Canada’s really strong. We’re still doing business with the rest of the world. We’re still exporting some ethanol. We’re still exporting some B grade. Those type of things are still happening. But if you kind of take a look at little more percentage blend in the United States, a little more export demand moving to SAF, you can move very quickly on this margin structure. And I think that’s what we’re all looking forward to.

Kristen Owen: Lots to sink our teeth into. Thank you so much.

Todd Becker: Thank you.

Operator: Our next question comes from Laurence Alexander Jefferies. Please go ahead. Your line is open.

Unidentified Analyst: Hi, good morning. This is actually Kevin on for Lawrence. Thank you for taking my question. So, actually most of my questions have been asked, but just to hop back on the SAF JV that you guys announced recently. So just wondering, I don’t think you’ve shared how much you thought maybe this could contribute once it’s up and running on a run rate business — run rate basis to your earnings, but if you could share any thoughts around that, I’d appreciate it. And maybe just an adjacent question, I guess, how you guys think about IRS for the projects and JVs you get involved in. So any color around that would be helpful. Thank you.

Todd Becker: Yeah. I mean, first of all, I mean, when we look at the IRSs all the stuff that we do, whether it’s protein, which I think as we indicated, our long-term and short-term now projections, we still remain intact. As we spread — as we open up more of these MSCs every day, we’re achieving the projected rate of returns, will be what we believe is something that we can do because of even where we’re selling the first products. On top of that, with corn oil, finally spreading real volumes across these costs — cost of startups are high. And so, we have to always take that in consideration and it just takes time to scale up. But over the long-term, we absolutely are on track. And our corn oil systems, obviously, they return very well.

Our sugar system, when we look at the cost of construction and getting these scenes up and running versus the margin opportunity, if today we are up and running, it would be pretty close to — almost a one year payback, but we’re not up and running. So, we don’t really know where that’s going to be when we get there. But even in our initial thoughts, the base margin available was in the $0.60 a gallon range just for producing sugar at the traditional value of production and a traditional sales price and cost, we think is less than two times that, so less than a two-year payback on traditional pricing and potentially better than that on current pricing for dextrose. So, when we go — when we move to that, obviously rate returns are high. And then comes down to alcohol to jet.

Alcohol jet is a multi-step process for us on return. First return is the fact that we de decarbonize our alcohol and get opportunities to increase our margins just from that alone, from the IRA, from putting carbon in the ground and monetizing the alcohol all the way through. Then producing the jet at a full scale facility, which at this point, we’re still determining what the economic model would be for that and whether we need to really own a ATJ plant or whether our supply agreement will be adequate and we’ll just sell the technology or have somebody else build it with our technology. So, there’s obviously things we can look at there as well. What expertise do we have in house versus others. But I think the IRRs will be inconsistent with everything else that we’ve been doing.

Unidentified Analyst: Great. Thank you.

Operator: Our next question comes from Eric Stine from Craig-Hallum. Please go ahead. Your line is open.

Eric Stine: Hi, everyone. Thanks for taking the questions.

Todd Becker: Thank you.

Eric Stine: Hey, so just on high pro, I know you talked about 50% spoken for you expect repeat buys here as the year progresses. Maybe, first could you just talk about the nature of the contracts, the typical length of the contracts? And then, maybe from a high level, what do you think the right number is in terms of locking that in, just when you think about moving up the J curve and also given pricing dynamics in the margin?

Todd Becker: Yeah. That’s something we face it — we face a question daily, right? So, it’s not just spoken for by the way, let’s just make sure we’re clear. It’s sold, sold and priced. So, I think that’s important for our investors and our shareholders and our stakeholders to understand. In fact, almost sold out for the first half of the year. So, we did want to keep some volume back, because we do have new customers showing up every day. We’ve had to say our first nos to customers as well, which is good and bad, right? Because we do know that pricing then becomes more interesting. But we’ve had — we put a sales plan together before we reach 2023 and where we thought we would sell all of our production. And that’s ebbs and flows again depending on who shows up and when they show up.

And we’re already working on 2024 partnerships to replace corn gluten meal on certain rations around the world today. So, just to let you know, we’re already focused on 2024, looking past 2023 at higher protein levels. So, we have to keep some back because the last half of the year is really when our sales team is going to believe we’re going to hit in aqua as well, more globally than domestically because we are already shipping volumes into global aqua players and they are in the rations today. So, we’re holding some of those volumes back for the last half of the year. We also know that some of these large customers have put us in the ration and expect us to be there when they come back for the rest of the year. So, we understand how we price.

And I’ve indicated to you on that we also understand that we have made a commitment say that we will be there for you to buy supply from us. And we’ve had customers that. We had in for 3000 tons in our sales estimate. They came in for 30,000 tons. We had 5,000 tons, they came in for 50,000 thoughts. I mean, what we’re seeing is truly game changing from our perspective. And they are realizing there’s something very special about this product that’s very different than traditional proteins that they’ve fed before. The amino acid profile is very, very different. The fact that they get 20% to 25% yeast in their product, very, very different than buying just corn gluten meal or just soybean meal. And so, those will all get fed. There’s no worry.

We’re not displacing demand, we’re not our supply. I mean, the demand is growing so fast for all proteins that — it’ll all get fed. But what we’re finding is that we have a unique characteristic that the market liquid looking at and we continue to develop from there. This is a tailor — we can tailor this project to taste and nutritional profiles, and we believe that in the coming year, we will make breakthroughs on that as well. So, — and I gave you a little bit of a hint in the script on that. So, look, we don’t want to sell out for the year because if we do, we don’t have anything for even higher value customers when they show up. Understanding that we’re going to have everything from 50 pro customers at more of a soybean meal type pricing or a DDG plus pricing versus customers that we move up to higher protein levels where we can now start to get towards corn gluten meal pricing, soy concentrate pricing, and moving towards potentially somewhere towards fish meal pricing depending on the product.

So that, I will tell you one thing that is our Fluid Quip team is absolutely focused on, not just on 60 pro, but higher than 60 pro. They believe that they will have products that will go all the way up. And that’s the thing we really need to start focusing on, is that, yeah, we wanted to make sure we put base volumes in place. We wanted base load on. We wanted to show the market number one. We could sell the product. We can achieve the returns. We can get inclusion rates. Yeah, I mean, it certainly hasn’t been easy, but once we have real volume, the customer showed up. I think that’s the most important thing.

Eric Stine: Okay. Thanks Todd.

Todd Becker: Thanks. Appreciate it.

Operator: Our next question comes from Salvator Tiano from Bank of America. Please go ahead. Your line is open.

Salvator Tiano: Yes. Thank you, Todd and Jim. So, my first question is on the , the partnership for CCNs. It’s going to be the — I guess the starting — the first project is going to be done in less than two years, and you said, 2025, you’re starting to have some income here. So, can you start quantifying a little bit what we should expect, because it’s very easy, obviously, to do the math of the carbon sequestration with IRA payments and some of your expenses? But this clearly a project where you’re putting on capital, but also you’re making only fraction of the benefits. So, can you help us size the benefits in 2025 personally? And secondly, given the IRA benefits and how staggering I guess they are for a low CCS projects for ethanol, why not take the path of doing a project by yourself, which could yield $40 million or $50 million in profit per year?

Todd Becker: Yeah. We’re going to have a wide variety across our platform of different things we could do with carbon. I — obviously — don’t forget the IRA, the big part of the IRA, the clean fuel production credit is 2025 to 2027. So, we do need that extended. And yes, you could certainly gain a large advantage in the early years, but it still takes time to get direct inject classics wells, and approved. And that’s something you have to weigh versus the time you have 2025 to 2027 on greenfield production versus having a partnership with Summit in the ground early and achieving some of those returns early. And so, Summit realizes as well that there’s a lot of dollars on the table, and I think they’ve already — they understand that the opportunity for the whole universe has become bigger and there’s no question in my mind that our opportunity is bigger.

But I think where we’re really at is, is speed, which is critical. If you look at the pipeline we’re on, they’re two-thirds done in Iowa. They have poor space done in the — in North Dakota. They’ve got storage, that’s ahead of everybody else at this point announced. Now, obviously, some people may not announce, but we haven’t heard much on right of ways from others. We haven’t heard much on poor space for others other than permits are being pulled — or projects got pulled in Illinois on these big storage spaces. But we like where we’re at. I mean, look, in Indiana, we’re focused on a direct inject project. In Illinois and in Tennessee we’re focused with Tallgrass and Osaka on converting that to syngas and/or methane fuels. In Iowa and Nebraska, we’re focused on sequestering our carbon.

And yeah, you can look at different economics. But at the end of the day, the IRA is going to be really, really important. It can make us a lot of money, everybody, and it’s going to, but more importantly is decarbonizing our products for the long-term. Having low protein dextrose or low carbon dextrose. Remember dextrose already before we even decarbonize, is 40% to 50% lower carbon intensity than what comes out of a wet mill today. We’ve gotten that analysis done, that’s before we even sequester carbon. So, the value of low carbon dextrose will be very, very high. And what you do with that in chemicals down the road will be very, very big opportunities. So, you got to kind of weigh capital efficiencies. We’re very capital efficient with what we’re doing on the pipeline, because there is no capital.

So, while maybe the return may be a little bit lower, we could still do things at each of those plants around combined heat and power systems. That’s five to 10 carbon points at $0.02 per point per carbon per CI score. That’s better capital efficiency than necessarily putting it, investing and making sure that we do direct inject. So, I think just pluses and minuses. It’s what we have to focus on is what’s the very, very best return for our shareholders. How do we allocate capital? Where do we get the capital from? So, when we look at co-generation on combined heat and power, we have plenty of tax equity interest in that. Plenty of partnership interests on people that do co-generation every day that look at it from a 20-year standpoint while we get the rest of it.

So, we’re focused on all of that, but I think there’s going to be many, many ways to play the IRA, many ways to play the clean fuel production credit. How long will it last? And what we want to focus on first and foremost at Green Plains is things that aren’t subject to government policy risks and pen stroke risk, protein, sugar, dextrose, that’s not a government policy risk. And then margins there are significant. So, we want to be set up for all opportunities, but this IRA certainly is something we didn’t anticipate and it’s going to bring significant value for our shareholders in many, many different areas.

Salvator Tiano: I guess, my comment was mostly on the IRA credits where there’s no need to hurry up and there’s no 2025 to 2027 need to be online. I guess that’s where I think most of the return will come. Just one

Todd Becker: No, actually if I could just — there is a — you want to be in as fast as you can to — those three years will be very robust. So, you want to go after all of that you can as fast as you can. And if you just go direct inject everywhere, you will not get all your classics wells done. So, you’re going to have to kind of make your bets depending on how fast you can be online. And want to go after some of that stuff very, very early in the process, because after 2027 it reverts back to the 45Q and whatever the programs are. Now, we believe, I will tell you this from our discussions, is that the CFPC will get extended, but today the program in place is you want to be as fast as you can, sequestering carbon as early as you can into 2025 to 2027 time area.

Salvator Tiano: Okay. Perfect. Thank you very much.

Todd Becker: Thank you very much.

Operator: We have no further questions. I would like to turn the call back over to Mr. Becker for closing remarks.

End of Q&A:

Todd Becker: Thanks everybody for being on the call. Little over an hour. I know it went a little long, but it was the end of the year, and we had a lot to update. As you can see, we’re making great progress on our four pillars. Protein, we gave you more of a look under the hood than we ever have before. And our confidence grows every single day that we’re going to move up the curve in higher values, in higher protein levels. Oil and renewable, low carbon oils, veg oils, opportunity is still there, or the values are still strong, yet a little off from the highs, but with a lot of demand coming on this year. And even more importantly, their transformation from just renewable diesel to sustainable aviation fuels, sugar business, our enthusiasm there, we are on track.

We want to be there. The margin is our robust best, best in anything we can do today. And lastly, decarbonization and our opportunities. And you can see the importance of decarbonized alcohol in all of these processes. Exciting about that. Got a deal with the headwinds. We get it. We’ll get past it. We have — we’re in a great position financially at this point, and we think we’re set up very well to start to achieve our 2024, 2025, 2026 guidance that we laid out with opportunities for upsides. So, thanks for supporting us and we’ll talk to you next quarter. Thanks.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.