Jim Stark - Vice President of Investor Relations Todd Becker - President and Chief Executive Officer Jerry Peters - Chief Financial Officer Steve Bleyl - Executive Vice President of Ethanol Marketing.

Adam Samuelson - Goldman Sachs Farha Aslam - Stephens Inc.

Jeffrey Schnell - Jefferies Craig Irwin - ROTH Capital Partners Ed Westlake - Credit Suisse Sandy Klugman - Vertical Research Partners Tyler Etten - Piper Jaffray David Rose - Wedbush Securities John Segrich - Lorem Majid Khan - Tourbillon Capital Eric Seeve - GoldenTree Asset Management David Driscoll - Citi.

Please standby we are about to begin. Good day, everyone and welcome to the Green Plains Second Quarter 2015 Financial Results Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Jim Stark. Please go ahead..

Thanks, Nova. Welcome to our second quarter 2015 earnings call. Participants on the today’s call are Todd Becker, our CEO; Jerry Peters, our CFO; Jeff Briggs, our Chief Operating Officer and Steve Bleyl, who is our Executive Vice President of Ethanol Marketing.

We have posted a slide presentation for you to follow along with and you could find that presentation on the investor page under the events and presentations link on our website. 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 earnings press release and the comments made during this conference call and the risk factors section of our Form 10-K and Form 10-Q and other reports and filings with the Securities and Exchange Commission.

You may also refer to page 2 of the website presentation for information about factors that could cause different outcomes. We do not undertake any duty to update any forward looking statements. And now, I would like to turn the call over to Todd Becker..

Thanks, Jim and good morning, everybody, and thanks for joining the call today. The second quarter was certainly better than the first as we experienced an improved margin environment for the quarter, while certainly not as strong as last year, we’re happy to see a nice expansion in the margin structure.

Along with our segments, the company’s EBITDA was close to $40 million including corporate costs historically a mid-cycle type number for us. More specifically for the second quarter, we report a net income of $7.8 million or $0.19 a share.

We generated $16.4 million of operating income from our Corn Oil, Marketing and Distribution and Agribusiness segments. And our ethanol segment generated $18.2 million or $0.13 EBITDA per gallon in the second quarter. Our daily average ethanol production rate was 93.9% of capacity producing 238.7 million gallons of ethanol in the quarter.

We continue to run for ethanol yield, while the second quarter was 2.84 gallons per bushel of corn compared to 2.81 for the second quarter of 2014. We see less variability as we slowdown a speedup than in the past as the investments we have made in yield improvement should stabilize higher yields in the future.

New crop corn is always most variable time for yield, other than that the long term yield trend remains intact. We also produced 631,000 tons of livestock feed or distiller's grains and 62.4 million pound of corn oil during the quarter. We achieved a record 0.74 pound of corn oil per bushel of corn for our platform.

We continue to make process improvements across our platform and extracting more oil out of the corn kernel is showing results.

We did experience some improvement in the storage grains market pricing in Q2 as China reentered the market in the quarter, but forward export sales has slowdown to them, DDGS pricing and after in the summer when herds are out in pasture.

Even with that said with the recent break in corn price, distillers values held in well as the industry starts to think about summer maintenance schedules and slowdowns. Export grade ethanol shipments accounted for 13.5% of our second quarter production, which was significantly higher than the 2.5% we sold in the same quarter of 2014.

We continue to see strong export interest for U.S. product both in the sport and forward markets. With industry-wide exports of 377 million gallons of U.S. ethanol through the end of May, we continue to believe that the U.S. ethanol industry will export between 800 million and 1 billion gallons a share.

To give you another example 18% of our July production and 21% of our August production is slated for export corridors. The Q4 2015 book is still developing but interest is very strong. In fact, we have over 8% of our February 2016 production sell tax for our customers.

So with all that said, the supplying demand balance for ethanol remains intact and when combined with the positive economics and a corn market that is tempering back to the lower end of the range, we are starting to see some improvements in the margin structure for the remainder of 2015.

So now I’ll turn the call over Jerry to review our second financial performance, then I’ll come back to further discuss our outlook for the remainder of the year..

Thanks Todd and good morning, everyone. The consolidate revenues were $744 million in the second quarter, which was down $93 million, or about 11% from a year ago. That was driven by lower commodity prices for both ethanol and distillers grain in 2015 versus 2014.

Volumes of ethanol sold for the quarter were down slightly about 1.3% to 300 million gallons, while the average realized price per gallon was 23% lower than last year’s second quarter.

Our consolidated operating income for the quarter was $24.4 million versus $58.9 million a year ago, primarily as a result of the weaker ethanol margin environment and lower prices for corn oil in the second quarter of 2015 compared to a year ago.

Revenue for pound of corn oil was off 22% as a large soybean harvest has put pressure on prices compared to last year. The ethanol production segment’s operating income was $18.2 for the second quarter compared with $30.1 million in operating income last year.

Before depreciation expense, ethanol margins were $31.7 million or $0.13 per gallon in the second quarter of 2015 compared to $43 million or $0.18 per gallon realized in the second quarter of 2014. As Todd said, we generated $16.4 million of non-ethanol operating income for the current quarter, which was flat for the second quarter of 2014.

Corn oil production volumes were higher generating nearly 62.4 million pounds in the quarter compared to 58 million pounds a year ago. Our corn oil yield improved to 0.74 pounds per bushel of corn, as we continue to maximize our corn oil extraction processes.

As I mentioned earlier, prices realized for corn oil were weaker than a year ago following other commodity prices overall. We experienced about a $1 million improvement in operating income in our Agribusiness segment, due to margins on higher volumes of grain storage in the quarter.

Interest expense was higher by $900,000 in the second quarter for 2015 compared with the same period in ‘14, due to higher average debt balances outstanding. Income tax expense was $5.2 million for the three months ended June 30, 2015 compared to an expense of $17.8 million for the same period in 2014.

EBITDA, which is earnings before interest income taxes depreciation and amortization, was $39.3 million for the second quarter of 2015 compared to $74.5 million for last year. We invested about $14 million in capital expenditures in the second quarter of 2015.

The majority of the capital spending continues to be on our 100 million gallon ethanol production expansion and our grain storage expansion projects. On the balance sheet, we had a couple of important developments that are highlighted in the press release.

First, we refinanced our term debt at the remaining six ethanol plants into our existing term loan B structure. We raised $120 million through an add-on to our existing six year notes in offering that was heavily oversubscribed. The proceeds eliminated the Ag bank debt we had at the separate ethanol subsidiaries.

This was something we had always planned to do to simplify our capital structure and reduce our mandatory amortization going forward. We closed the second quarter with $452.8 million of term debt down from $500.2 million a year ago. Net term debt was approximately $36 million at the end of the second quarter.

The second development related to our capital structure was the completion of the IPO Green Plains’ partners on July 1, 2015. We dropped our downstream ethanol transportation and storage assets into a partnership it is now publically traded on the NASDAQ.

In the IPO, we sold 11.5 million common units that represent limited partner interest at a price to the public of $15 per common unit. The partnership received net proceeds of approximately $158 million from the offering of which $155 million was distributed to Green Plains Inc.

So after the offering, Green Plains owns a 62.5% limited partner interest and a 2% general partner interest in the partnership and the public owns the remaining 35.5% limited partner interest. As I said, the IPO closed on July, so the proceeds are not included in our June 30 balance sheet.

You will begin to see the impacts of the IPO in our numbers next quarter. Since we continue to control the partnership, partner’s results will be reported on a consolidated basis in our financials with the partnership unit holder share of the investment and earnings reported as a minority in our consolidate operations.

Todd will discuss our strategy with regard to Green Plains in more detail, as I now turn the back over to him..

Thanks Jerry. A major accomplishment for company and its shareholders this quarter was the IPO of Green Plains partners as Jerry mentioned. We basically spun our terminal asset to both BlendStar and the plants along with our railcar fleet into a new entity that qualifies as an MLP.

We view this transaction as strategic and critical to the growth of our downstream business. The MLP equity market will allow us to finance our downstream ethanol storage and transportation more efficiently through this favorable and well tested market. We firmly believe this structure will benefit both the partnership in Green Plains.

The one business unit that has had the slowest growth over the last seven years was our downstream business. While we are certainly happy with the downstream assets we built and acquired, it was hard to complete for acquisitions with other MLPs. This new entity will allow us to accelerate our growth plans in that segment of our business.

As we have told many of our new investors, we are the base hold volumes in many terminals with many products which will allows us to view these assets in a distinctly different way from an acquisition standpoint than many of our MLP competitors.

In addition by carving out a base level of stable cash flows from the ethanol value chain, the MLP concerningly be used to revalue a part of the ethanol facility.

We believe this is a good start to revaluing our assets overtime and as a first MLP based primarily on ethanol cash flows, we are very proud of this accomplishment and to push the company in a very strong position for growth and financial flexibility.

Post IPO total cash is approximately $575 million and our ethanol plant debt and debt service is low as it has been in our history. Finally, we believe that we can acquire and compete for additional ethanol plants using this improved cost of capital structure even at the current market for the assets.

We continued to make progress in our 100 million gallon ethanol expansion project. As we look out into the future, we see global ethanol demand outpacing ethanol supply by mid-2017, which is the main reason for this project for another 100 million gallons of expansion capacity to follow in late 2016, early 2017.

Investing $65 million or $0.65 a gallon for the initial 100 million is accretive to Green Plains’ shareholders and to Green Plains’ partners, unit holders.

You’ve heard we talk about the cyclical nature of the industry that we participate in, while the current environment may not need more production gallons today building out these projects take time and want to ready to meet the continue demand growth in the marketplace.

In our Agribusiness segment, we are well prepared for big harvest push this year as all of our storage expansion projects will be complete and ready to receive grain. Since we announced this initiative, we have added over 20 million bushels of additional storage located adjacent to our ethanol plants in the last few years.

Our 5 million bushel building in Obion will be taking grain this harvest which is very exciting for the business. Stay tuned for more expansions around this strategy. While we had slow start to the Marketing and Distribution segment, we expect a stronger finish overall in our merchant and trading platform in the last half of the year.

We now have 22 distinct merchant businesses operating on the platform today and expect to continue to grow from here. Now let’s talk a bit about margins, ethanol margins. The curve has expanded over the last eight days for the remainder of the year and we continue to have a positive view from of here based on run rates, stocks and demand.

For that reason, we have not hedged very much for the remainder of the year yet, although we’re able to hedge most of the second quarter early, third and fourth quarter was a bit allusive. Historically through, as we get to this point during the year, the margin visibilities often developing for the remainder of the year.

We do believe that ethanol demand will continue to be strong as we finish our 2015 and the margin expansion will continue as evidenced by a continued move today. We will adjust our run rate accordingly based on profitability and we have done that over the last 20 days or so.

We also have a full side of maintenance and shutdowns scheduled for this quarter as well. While the industry is producing more, overall stocks are not growing as demand domestically and globally remained strong, we are in a state of equilibrium and it seems to be teetering in our favor.

We continue to make great progress on E15 initiatives that major retailers are moving in this direction.

From an export perspective even with the move in the Brazilian currency, our product remains the cheapest deliver to most markets we compete in, yet Brazil’s exportable surplus continues to be used internally as their demand has been off the charge. In closing, revenue and income stream diversification remains as important to us today as ever.

We are embarking our new area of growth with Green Plains’ partners being a large driver of that strategy. Now withstanding this, we are also very focused on expanding our agricultural processing and distribution platform as well, we spend the same if not more time working on these initiatives.

So far 2015 has been upon par with recent years, our diversification strategy and the value of the asset bases just aren’t to realize and we expect this will drive our ability to grow earnings in the future. Our five main lags of capital allocation remain the same, acquisitive growth, organic growth, debt pay down, dividend growth and share buybacks.

For the strong balance sheet, we believe all of these are in our future plans. I like to thank you for joining the call today and now I’ll ask Nova to start the question-and-answer session..

Thank you. [Operator Instructions] And we’ll take our first question from Adam Samuelson with Goldman Sachs..

Yes, thanks. Good morning, everyone..

Good morning..

So Todd, maybe some of the comments you made at the end there about the hedge book and really not having much in place for the second half, is that really just the volatility in corn in the last tall at 45 days that’s really up end of the margin this for a short period of time or any other though process there that is hindered the ability to ahead forward?.

Yeah, I mean that was a main driver for rigged for that corn rally that happened all the way into the mid-$4 range, now we’re back into the mid-high $3 range. You know that really drove the margin structure narrow.

In the last eight, nine days from low to high, we’ve seen a $0.15 expansion in margin overall in the margin structure and we continue to see more of that happen within EIA data as well. So well ten days ago, the margins were certainly negative on an EBITDA basis, while they have come back nicely and are starting to develop in Q4 as well.

So we’re looking at that, we think the fundamentals are in our favor. We think production rates will drop from here throughout the rest of the summer based on shutdowns and some slowdowns we’re seeing across the industry. And by that we think the demand will continue to be in place.

So overall we’ve seen the margins expand nicely over the last ten days or so and if we continue to grow this crop how we think we’re growing it. I think we’ll continue to see corn trade at the lower end of the range. Obviously, Eastern Corn Belt had some issues but the Western Corn Belt is certainly growing nicely..

And maybe kind of following-up on that, I mean looking at some of the charts you have in here and just you look at on the curve out into the fourth quarter, the discount for ethanol for gasoline is quite narrow and certainly crude has been on downward trend of lay, gasoline has followed that.

How confident there you’ve been in the margin structure if you do see another lag lower in crude from here? I just - can I say teetering on equilibrium balance and I think was you code.

And I wonder given where we are in the energy markets, is that something that those concerns you are looking at the fall?.

Yeah, we look at crude under $50 and we are watching closely. But I think you’re really talking about seasonally the discount narrows because of the winter gas versus summer gas prices, because I think ones you get passed out March of next year, the spread wide is back out.

We have never seen or we have not seen very often in the past seven or eight years, anytime were the spread narrows to a nickel over or a nickel under gas, there we’ve seen any slowdown in blending it all. And we don’t believe today, we will see any slowdown in blending it all, add even money to gas, so the small premium or a slight discount.

The long term strategy is still on track. You can’t just pick out ethanol out of the blend for one quarter when you are going to see April, May, June already return to more historical discounts. And so the retailer goes in really fast too much with those narrow spreads if crude continues to fall and we see our RBOB continue to fall.

Obviously we’ll watch that closely but corn has linked to that well and as long as we have a big corn crop, I think we’ll continue to compete for the gas tank with the molecule pricing..

Okay and then maybe just a quick follow-up on capital allocation. At the end there, you talked about dividend and then share repurchases being kind of out of the five legs of capital return, I mean given some of the weakness in the stock.

Can you - help me think about cash return and how that view changes where the stock is right now?.

Yeah, so we take a look at dividends ones a year and typically in this upcoming board meeting, so stay for that and we’ll see what, what we come out of there and obviously for the last couple of years, we’ve raised our dividend and we still have a very positive disposition to the business and so we’ll certainly discuss that at the board meeting.

In addition, we do have a $100 million share buyback authorized. We’ve been - as we’ve mentioned, we said we want to make sure that understanding the underlying volatility of the security that we trade that we have and trade, I want to make we take a very opportunistic view of that.

And again what we mentioned in the last time is as the stock traded at these lower levels, we were certainly positively incline to start the program, but we were locked out because of the MLP this last time. So we have an upcoming board meeting and we’ll make those decision accordingly based on what the best use of capital is.

And I would just say that we do have the buyback authorized and we will not afraid to use it on a significant weakness from here in the stock..

Okay, that’s very helpful. Thanks..

We’ll take our next question from Farha Aslam with Stephens Inc..

Hi good morning..

Good morning..

You had highlighted that margins had improved kind of what are the current margins that you are seeing and what’s your outlook for margin progression for the fourth quarter?.

Yes, so on nearby markets across our whole platform which we think is a good subset of the whole industry because where we operate with Nebraska being the weakest in our platform and the Eastern Corn Belt being the strongest, we are seeing starting and then we finally got back in the double digit margin this morning for August and September.

And so we’re starting to see those expand into that level from the lows. Our some of our eastern plants are actually in given over $0.20 and lower mid-20s for August and September as well. But overall the platform is just got into double digit positive EBITDA margins.

We’re not quite there across the whole platform yet for Q4, but I think that’s just driven by that over curve that Adam had asked about as well and people are willing to step out and put coverage on. Yes, we do believe as we get into that quarter, we’ll see stock draw and production lower coming into the quarter.

And then hopefully corn will help us out a little well. But again, it’s all driven by eastern plants have the best margin structure in the quarter and so it got a mid-teens, low-20s and the western plants have some of the worst margin structures across our platform.

So typically that is the opposite in many years, but this year it’s just - this year and part of the last year that’s a way we’re shaping up just because of the corn base of spread. So overall Q4 right now is high single digits and Q3 right now as we mentioned was just got into low double digits.

But that’s a big expansion from the last eight days - in last nine days that we’ve see mostly driven by we think what is now represented an EIA is showed down in the production across many part of the industry..

Helpful, and then in terms of farmer selling but all its volatility, have you been able to secure that corn, kind of what kind of basis values are they asking for?.

Yeah, so it’s really interesting and this last rally the famer really engaged on selling old crop and new crop corn. On the last rally, we were able to buy a big chunk of basis corn for the nearby and Q4 and even start to fill up and get commitments to fill up the stores that we had built.

So we saw a pretty good interest from the farmer, he engaged well, we were able to buy over a one week, one or two week rally period almost a month and a half worth of corn basis equivalent. I mean obviously, it’s spread over a big period of time, but the U.S. farmer did engage, we’re having that across commercial segments.

Other commercial customers had the same experience. So - but the farmer has disengage now on this last break. So - but more so, the basis is firming a bit but it’s firming out the lows that we saw. So I mean in a lot of places in Nebraska and Iowa, we are pushing back towards historical base of levels, mid-teens, low-20s below.

And then in East is really this spa will have to watch, we think Boston will very tight on the corn basis and the Indiana market but Tennessee is shaping up well for crop.

So it’s really Indiana and Ohio, the farmer didn’t engage in either those markets and we’ll probably wait to see what happens, but overall with this 1.8 billion bushel or so carryout from this year going into next year. We think they got a very stable crop for next year now, the farmer the penny to sell us too [ph]..

Thank you.

And my last question is just on acquisition, what you are seeing, what plant values are out there?.

Yeah, I mean plant acquisitions are continuing to - we’re continuing to look at plat acquisitions. They are expensive. The last couple of plants I traded were in the $2.60 per gallon. We think it takes that to purchase plants these days.

And with the industry the very healthy and yield level even this dropping margin structure, there is no longer going to be distressed assets in this industry. Those have been pretty well cleaned over the last five years.

Industry is lever, the industry is very healthy, tighter margin structure is that at even zero EBITDAs, but then you got above that, there is not enough distress for anybody to even consider dropping prices of assets. So they are harder to buy. I would say in the $1.60 range would be the low end of the range to acquire assets now.

And yet the MLP structure should allow us to compete if we want to look at assets in that range..

Thank you very much..

Thank you..

We’ll take our next question from Jeffrey Schnell with Jefferies..

Hi Todd, you mentioned plant assets, but I was wondering if you could update us on any downstream assets not in the MLP but you know what you might do with cash if does got $1.60 a gallon to purchase plants right now?.

Well, look, I mean $1.60 a gallon, we could still compete from an MLP perspective now and a partner - on a GPRE Inc. perspective and a combination to buy the plants, dropdown the terminal assets and continue to operate. And so GPRE Inc.

would take the risk of cash flows which would be very good in operating and GPP would have the non-risky cash flow and the stable cash flows which is what we aligned in our IPO offering and road show. So from that perspective, we can still compete.

Again it’s going to come down the right assets, right location you know for us to compete at that level and we think there is some out there that we’re still look to get gain liquidity for their investors.

Beyond that we’re in active pursuit of downstream assets that we can - we think that we can acquire and utilize our base full of volumes to dive and even more volumes through those acquisitions. We think that we’re well setup to compete for those downstream assets.

As we said there is well over a 1,000 individually on terminals in the Unites States today and many terminals we are a base full volume or we can go in and compete at MLP values even reduce it on a turn or two from an EBITDA evaluation perspective because we can drive more volume. So we are in pursuit of assets, we are in processes looking at assets.

And I think you’ll see GPP look to start to utilize their cheaper cost of capital to expand our downstream business and again not anything now today but we’re definitely looking at making acquisitions in that entity..

Thanks and you mentioned some maintenance in the third quarter and the industry is going to producing at pretty high levels, do you expect as where they get some warmer that others will take maintenance and ethanol price will come under pressure from production?.

Well I think this is the quarter were August up, we start the city industries slowdown because of maintenance, Jeff I think we are going to do all of our turnaround in August and Sep for all of our plants. Yeah, most of our plants will a turnaround in August and Sep and so you’ll see those go down for three to five days on average.

Other producers are planning the same thing. That has been somewhat of a driver of this expansion and margin structure but also demand has been very, very good and we continue to see demand through the rest of the summer.

And if you look at historical demand raise through September at least this is a contracting demand time period all with back-to-school as well as at the end of the summer driving season.

So if we say any reduction in production rates with demand being the same and the export program we have, we think we could start to see drive as well through the rest of the summer.

We saw a little bit production slowdown today, but I think the numbers would tell you from just date that we see that we just continue to see a slower rate than we’ve seen and we may ramp up towards the end of the year.

So - but overall I think production rates are going to from here to the steadily lower throughout the rest of the summer and we’ll make this happens from there..

Great, thank you..

Thank you..

We’ll take our next question from Craig Irwin with ROTH Capital Partners..

Good morning. Thank you for taking my question. Todd, I wanted to get your thoughts about the renewable fuel standard, there’s been a lot of conversation out there about the authority of EPA to adjust was really based on the ability of the industry to produce to meet the production targets not based on the ability of the obligated parties to deliver.

And I guess if you look at the way wins traded just before and after the announcement we saw some pretty significant reset in win value seems to point that obligated parties themselves believe that we’re going to get bigger RVO for ethanol this year.

I mean what are your updated thoughts on RFS and the potential for EPA to face litigation or tightening of their ability to adjust the standards way they have?.

Yeah, so I think there is a couple of thing in terms of law, the law is very clear on what the numbers were. So the question is, do they have the authority based of the law and the provisions in the law to reduce if there is not really a good reason to reduce the standard. And the answer to that is probably no.

And question whether they face litigation of the industry is still yet to be seen. So we’ll have to wait and see. We know that they will probably face litigation, no matter what number they put out from the energy complex for the oil guys, but that’s something that will watch closely.

When you kind of extract thought all that and you look at what the headline was and what reality was for first gen corn based ethanol, the headline was negative and we’ve seen articles right written about that to say all a big drop in the RFS on ethanol finally oil wins.

But if you kind of dissect the numbers and you look at the 2016, 14 billion gallon mandate, you know that is very consistent with a close to a 10% if not and with some expanded blends as a base volume with kind of what the industry can produce and what the users are going to have from a demand perspective on the gas.

So when you look at the base, the base number - the headline number certainly had negative tones, but if you look at it underneath, it had actually - in our view, it was slightly positive because we had an expanding mandate versus demand that we’ve seen in the last couple of years. Now gas demand is better.

We’re pushing towards some weakly numbers that are 150 gallons of gas demand and blending is keeping steady at some of those rates. But overall when we look at the RFS as a company, we were actually, we’re positively incline to view those numbers.

Beyond that the reset of the RIN market was obviously people taking a view of is there enough friends, isn’t there enough friends, what the D5, D6 spread, D4, D6 spread and where is this all going to play out in the end. And we - I think that more so is the advanced numbers and the bio numbers are probably be more challenged than the ethanol numbers.

So overall from our perspective, when we look at a 14 billion gallon base market for domestic demand in the United States, we’ve got a billion export market is be very, very or 800 to a billion gallon of export demand which we think is solid for 2016 as well. I don’t think we can produce every day at a 15 billion gallon rate.

So that’s a base equilibrium. Beyond those numbers though - and it’s a long answer - but beyond those numbers, E15 initiatives are well underway. We’ve got major retailers that have made announcements. We’ve got more retailers going to make announcements.

We have changes that are taking 100 and 200 and 300 stores at the time and we are going to start switching them the E15. And Steven, I don’t know if you want to make a quick comment on that all on what you are seeing, but I think it’s very important for people understand that E15 and our investors understand the E15 initiative is well underway..

You know lot of its jumps in with the USDA grand program. So there were lot of people they came onboard that they grand, so there was in excess of 100 million requested from it. So there will be an excess of 1.7 billion gallons of retail demand that will be switching over to E15..

Retail gasoline..

Yeah, right, retail gasoline demand..

Right, so if you just take that another 5% that’s in the close to 100 million gallons of new ethanol demand just on that program not inclusive with the other programs that were on place today.

So doing at a couple of 100 million gallons over the next couple of years of E15 as a base number, we know that we can never really get much than a billion anyway is based on the ability to produce without exports. Your 20% other way there and it just start to eat in to the overall equilibrium in our favor.

Hello?.

And it looks like he is disconnected from the call..

Okay, I was too long. My answer was too long..

We’ll take our next question from Ed Westlake with Credit Suisse..

Very long, but very helpful. Good morning, Todd..

Thank you, Ed..

So, just you know I mean we’re obviously a little bit further away from corn and I mean obviously we see the problems that you’ve identified in part of the corn crop this year.

But I mean what are you hearing on the ground as it where?.

Yeah, at the - in the last couple of weeks from the conditions report, good excellent conditions have improved. We’ve seen a drop now in the yield overall in nationally based on those conditions in that 165 to 166 range.

Obviously a long to go, whether we achieve those yield or not but based on all the models and a good excellent ratings, the crop has fully stabilized. The west is some of the best crops we’ve even seen in Nebraska, Iowa, Minnesota, South Dakota. And then the east, we’re going to wait to see what develops.

North Illinois is a key stop that we’ll have to watch closely. But I think now the weather is in our favor and the end of the crop producing time is in our favor as well and we think we have a nice strong finish based on the other night’s conditions, so overall nothing very bullish..

And then on the - I don’t want to belay the last point you made, but your view this year sounds like the ethanol guys produced quite helpfully and that probably explains why we didn’t get some of the convergent between obtains in ethanol and gasoline, but overtime you think that there was a chance given demand, that could still happen, is that kind of the view or the hope?.

The convergence of - I missed that point..

Sorry, you know, the - the spreads between ethanol and gasoline which continue. In your slides you whispered that chart showing where ethanol price is against.

Are there other octanes in the market and whether we actually oversee that closer?.

No, I think against other octanes, obviously RBOB spread is narrow because the winter gas pricing, but again so other octanes, there is nothing at all that competes closely with ethanol today. Is there Steve? Now everything just $0.50 to a $1 higher for any replace any competing octanes right now in the marketplace..

Yeah, and then so my question is why do you think that’s so persistent?.

Well part of this is driven by the first part of your question with the corn competing as a molecule against gasoline, but also is just at a 113 octane, we have a lot.

So again at a 113 octane, we have got a lot of ethanol but as you say could that narrow, I think it can narrow to a point where we don’t go much over RBOB which you are seeing, so that we can stay in the fuel supply and still be competitive on the blend.

But I don’t think it’s going to go over RBOB to a competing octane price, just because there is still - you could still bring on more capacity if you even got such a large margin structure. There is always additional capacity.

So there is upside limits to kind of where will go, but I think yes, there will be times when we will compete very well with other octanes and there will be times where we narrow the spread as well, but sill competing just depending however the underlying RBOB prices are..

And then you mentioned the terminals that you could potentially rollup, you mentioned the price of ethanol capacity, but you think that any FCC concerns if couple of larger ethanol producers decided to merge, because obviously if you were to merge with another ethanol company, you could take whatever the just exhausters they have drop them into GPP, obviously your GP value would go off.

I am just wondering if you think there would be any constraint, so maybe let you do that obviously, still needs management to decide, so that is something what they want to do?.

I don’t think from a government perspective, there are enough deals in terms of size wise, right now they would get waited all. I think our goal lies as we said, we want to continue to try and double the size, if not bigger one try to get 2 billion gallons. And even at 2 billion there is other 2 billion type players out there.

I don’t even thing if you got the 3 billion gallons, if you were a company I was able to do that, you would even get on the radar screen of the government because it’s still left in 20% or greater on 20% of the industry.

So I don’t think today there are enough huge deals to do that you can get on the radar screen for any kind of concern on size or structure. So I think the industry well certainly right for consolidation, none of that will get on the radar of the government on size wise..

Okay. Thanks very much..

Thank you..

We’ll take our next question from Sandy Klugman with Vertical Research Partners..

Good morning. Thank you. Just a follow-up on the octane question, outside of the U.S.

could you discuss what kind of potential you are seeing for ethanol to replace MTBE as an octane enhancer?.

Yes, and so - that’s a great question. So what we see is there is still 6 million of MTBE has been used in the world today and we are getting enquiries from a lot of those countries to replace that with ethanol as the octane as well as from a cleaner perspective and a fuel extender perspective.

So one of the big markets that is on our radar screen is Mexico and we are starting and the discussions are in place then and we are having them as an industry and as a company to expand our sales down to Mexico and that is a - not just an octane discussion but also an MTBE replacement discussion.

A lot of other places in the world as well as seeing interest as well because the price competitive of ethanol relative to other products is there. So a lot of this growth is driven by the need for cube octane, they need to extend their fuel supply, they need for cleaner and cleaner burning fuels, but a lot of is driven by MTBE as well.

So that’s why our view as a company is mid-2017 global demand will exceed global supply and we haven’t seen that a quite a while and that’s driven by this point are on MTBE but also we’re on the octane and extending fuel supply. So yes, we believe that we will continue to replace this place, this demand for MTBE in the world..

Okay, thank you, that’s helpful.

And then to shift the storage, could you quantify some of the benefits you are seeing on your grain production costs or ethanol production costs from increasing your storage capabilities and you know I am curious to see, we’ve seen a pretty significant increase in farm storage capacity over the last several years, how does that impact your grain origination cost for ethanol production?.

Yeah, so the one thing that we wanted to make sure we did around expanding our agricultural asset base was a firsthand origination from the farmers. And as we mentioned on the last call, our - in some of our investor presentations, we - when we buy farmer grain, we buy somewhere between $0.07 and $0.10 a bushel cheaper than commercial grain.

And the way we’re able to compete with that is by offering the same programs as a commercial grain elevator does is rural areas around Iowa and Nebraska and wherever we have our plants. And by building additional storage, we now have 46 million bushels of storage across our whole company.

But that’s only about a month and a half of demand of our needs. And so we want to continue to build that out because we believe that more farmer origination direct will biting out our margin structure over the long term by an equivalent of $0.07 to $0.10 a bushel which is around $0.03 a gallon.

And so at every one of our ethanol plants, we now have more personal origination from the farmer, we’re starting to origination from the farmer. We’re starting to offer more programs.

We have a new CRM system that we’re implementing this year to get a better handle on our customer base and the 1,000s and 1,000s of farmers that we do business with, we think we could do everything that a commercial brand elevator does for them and we think we can offer them a sizable demand every day for their product and then use that to compete very, very well.

So with the onset of on farm stores as you mentioned, the farmers is much more control these crops. And so we needed to make sure that we opted and change to adapted that view as well and that’s why we’ve been doing as we expand our store.

So overall we believe over the next several years, we be able to use that to our advantage to start to widen up the margin structure long term for ourselves..

Okay, thanks.

And just a quick housekeeping question, you mentioned maintenance shutdowns during Q3, I apologize if you’ve given this already, but could you provide an estimate of what your Q3 or back half of the year operating reach might be?.

You know, I think you can - in a Q3 quarter and we’ll have to update you on that but at this point, we think the quarters could be similar to what you saw in Q2 because of operating shutdowns and also we are also viewing when we came off the lows, we definitely lowered our production rates at that time.

So in a combination of those two things, we’ll have to go and see what our final production rate is. And then in the fourth quarter right now we have pegged our normal quarterly production based on a billion gallon but those will be adjusted accordingly depending on the margin structure as well. So that kind where we are at for the rest of the year..

Great, thank you very much..

Thanks..

We’ll take our next question from Tyler Etten with Piper Jaffray..

Hey, good morning guys..

Good morning..

I was wondering I think I believe you said that the demand from Brazil was very good.

I was wondering the implications from the EPA proposal are and the arbitrates there both on conventional and advanced bio fuel?.

Steve?.

Are you taking about the recent pushback from API on the increase for …?.

On the ….

…for the bio diesel?.

I believe on the….

We’ll refer on that question, can you repeat that again?.

Sure, I was wondering, I believe that you guys said that the demand in ethanol was pretty good from Brazil or back spreads from are very good and I was wondering what the EPA proposal would have on arbitrates opportunity there?.

You know the exports from Brazil, they are still developing. My point about the Brazil was any exportable surplus they would typically have, you are starting that being used internally in the country because their demand rates are so high as Petrobras is starting to let the price of gas flow with the world market.

So, well the window maybe open or close on any given day, what some gallons may make it through the window and be exported to the U.S. Any gallons we believe that are coming this year will have gallons heading in their direction to set their loss volume internally in Brazil.

So overall minimal impact based on current wind spreads to the overall import export purities, while it maybe even some days getting off that volume to arbitrates between the two different RINs has been difficult for any kind of size. And anytime that happens, we see gallons heading that we see interest are providing back into Brazil.

So overall so far not a huge impact..

Okay, thanks. And then just a follow-up on where the exports are going, I believe last time you said that you were getting some interest out of the UAE and Philippians and other specific areas.

I was wondering if there is any new locations coming to market?.

If there were some Peru business gone, we saw some Tunisia business that got gone, so that was a new business and to a new area is what our customers that we sold to told us.

We’ve got Mexico still nosing around, we have China nosing around the market still we’ve had - we’re actually not that far from an interest into China from an industrial standpoint. I think they are looking at industrial alcohol is more than they are look at motor fuels today.

So overall I mean we see interests from many new areas as well as great interest from the older areas that we’ve talked about over the last couple of calls..

Alright, thank you very much..

Thank you..

And we’ll take our next question from David Rose with Wedbush Securities..

Hey, good morning and thank you for taking my call. I had a follow-up on the margins and maybe you can help me understand as a little bit better.

In order to see some profitability and then margin perform the ethanol, where are we or what are the assumptions for distillers grains and ethanol pricing because we are kind of where I am looking at from, it’s from my point of view, do you really challenged a current environment even going into next year.

So maybe you can provide a little bit commentary around some of the assumptions without providing EPS guidance for ‘16 but sort of maybe give me some perspective on what you are thinking about corn prices in distillers grains as well as ethanol price to kind of get you at a base level that would be equal to where you are today?.

Yeah, so if you had to look at - if you look at the curve and you look at the stores pricing, and so right now we are trading at 100% to 110% the price of corn. We are trading at historical basis levels in the west of and I would say an average 15 under across most of the Western Corn Belt and 15 over across most of the Eastern Corn Belt.

And then when you look at all of that, what - I think the biggest think you face when you look at that is the fact that you have a corn market at a carry, so you can’t just - the biggest driver of forward margins is a fact that corn market is at a carry when you look at today’s prices and then you look at next go over.

When you look at next summer’s price that you’ve got a carry from these corn at 3.80 as today to I count it for, so you got a $0.23 a bushel carry which you have a flat inverted ethanol market.

So the biggest driver of your forward margin structure is the fact that at $0.23 a bushel corn carry to July which is about $0.09 a gallon and then you’ve got a $0.04 a gallon inverse or relative force and a gallon inverse to there you are $0.13 as your impact to you ethanol margin curve just initially.

And then if you look at the overall margin structure from today to then that is mostly reflected in your structure.

So if you have a double digit - let’s just say you have a double digit margin structure in the spot of $0.10 or $0.11 which you’ve got $0.13 discount up in the forward curve based on the corn carry against the ethanol inverse, if all takes shape right there for you to look at next summer margins and it’s really meaningless to look at our on the curve to think that’s what’s going to happen because the corn carry or the corn margin will probably adjust to these lower levels overall as we go forward based on the current crop.

So that’s the almost one for one driver between the discounted. So corn carry at $0.23 a bushel which is $0.09 a gallon and the inverse in the ethanol market at $0.03 or $0.03 which is $0.13 all keeping all the other that is the same on corn bases and the storage range..

Okay. That’s helpful.

And so you are thinking around the improvement in the market gets you how much improvement in terms of where you are today versus Q4?.

I don’t understand the question, can you?.

So your commentary about margin improvement over the last eight days assumes what in the Q4 or seeing for in term of an EPS basis?.

As we mentioned Q4 right now is - well I don’t know on EPS basis right now, but Q4 right - and we don’t give EPS guidance. All we said is, if you look the Q4 today, you have return to kind of mid to high single digits off of a low that we saw eight or ten days ago.

So that’s all we’ve given in terms of just what a cross section of the industry with eastern plants performing much better than western plants..

Okay. Thank you..

Thank you..

And we’ll take our next from Farha Aslam with Stephens Inc..

Hey thanks very much for the follow-up. Just two quick modeling points.

With all your debt restructuring, what do you expect quarterly interest expense to run? And in terms of your tax rates, what you expect your tax rate to be?.

Yeah, our total - our current portfolio interest expense is right around 5% overall, you know that varies kind of depending on the mix of term debt versus our revolver debt. But I would plan on kind of an interest rate of about 5% overall. Tax rate is a little bit more complicated given the MLP in fact that the MLP will be consolidate with us.

We will report the income of the MLP or at least the minority ownership portion of the income of the MLP on a minority interest line, but the tax rate will reflect a different rate for our operations versus the MLPs operations.

So net-net, at least for right now, best advice I could give you would be to leave it about flat in the roughly 37% to 38% level, but it remains to be same just exactly what the total impact of the MLP is..

Okay, that’s what will do. Thank you very much..

Thank you..

We’ll take our next question from John Segrich with Lorem..

Hi guys. Just a quick question Todd, I know you had said that you were kind of in the blackout period with regard to buyback if that a $100 million facility available.

I guess I am just trying to understand you know as you think about the allocation of capital that you ran through, when I look at your stock here, you know you kind of trading one ten a gallon, if I strip out the GP, it’s obviously, the GPP’s stake it’s lower, here we’re kind of looking at acquisition opportunities in the public market at one six.

So I guess I am just not understanding why not buying back your own stock as the single best capital deployment you’ve got and why it actually shouldn’t get allocated even more of the balance sheet, now you’ve got excess cash coming in from the GPP deal?.

Yeah, I think we said that there was a great opportunity for us. I think what we said is obviously we have the allocation, we haven’t - as we made the decision to buy or not buyback out stock, obviously there will be something that we talk about as we do it.

We just reported earnings, we’re just coming out of a blackout and we’ll have to make the decision accordingly as I meet with the board over the next two weeks.

So you’re absolutely right from an allocation perspective if that’s the best thing to do with our capital, I think you’ve heard to say in the past we will not be afraid to use our balance sheet to buy the share back and allocate capital that way if that’s the best return that we have and that’s how we measure everything.

So overall, yes, it is the cheapest ethanol plants we can buy and then the question is how does it rate on the return spectrum. And if that’s the best allocation of capital, then we will not be afraid to use the buyback..

Great and just out of curiosity, how much cash do you think to need to leave on your balance sheet.

In other words, what’s the amount of excess cash you have today, is it $200 million or how should we think about what you could use for buybacks, dividends, acquisitions whatever?.

Yeah I think we’ll reassert that based on the size and scope of our company based on the 1.2 billion gallon that we’ll have going forward based on our hedging program needs and certainly again the line volatility of the commodity markets also make sure that we can have adequate liquidity to withstand any kind of cyclical volatility.

And then beyond that when we look at the MLP and investments there because I would argue that that would probably rank somewhat similar to purchasing back our own currency as well from a rate of return perspective.

But overall 200 million extra dollars right now is something that I think the balance sheet can withstand utilizing that for acquisition buybacks, dividends et cetera.

So don’t forget we have a $65 million capital program right now at our plants, we’ve got another $100 million coming in ‘16 and ‘17 for the next 100 million gallon expansion which is still cheaper or still the best use of capital from an accretive standpoint over the long term at a normalized margin structure.

So we do have capital allocation projects taking place. Obviously we will generate free cash flows to help finance that. But overall again, we’ll assess what the best use of capitals and we won’t be afraid to use our balance sheet for that..

Great, thanks, looking forward to it..

Thank you..

We’ll take our next question from Craig Irwin with ROTH Capital Partners..

Thank you for taking the follow-up question. So Todd, this year few bottlenecking has had a pretty significant impact on overall market conditions.

And just in your last question other points in the call, you discussed another 100 million gallons coming in from Green Plains, can you frame out for us how you think about the ability of the rest of the industry to debottleneck and whether or not the RIN ability of plants actually ends of being a factor that limits the capacity creep that we are seeing?.

Yeah, so I think that you are seeing the capacity creep in the numbers on a weekly basis pushing towards that 14.8 billion to 15 billion gallons on any given week and that is mostly through capacity creep whether a plant had 10 million, 20 million or 30 million gallons.

Some of our initial capacity that we are expanding headwinds available at those plants, so we don’t have any RIN issues and then we really only have three or four other plants that qualify under the EPA program to continue to be on that in terms of looking at the efficient producer program.

So far based on our analysis, 2.8 billion gallons of production has been approved under the Efficient Producer Program which will be qualifying as a RIM and all that production then that’s the total - and percentage of that production is what you’ll see that qualifies for the RIMs we estimate between 5% and 10% of that which you’ve seen in the capacity creep of 140 million to 250 million gallons.

Beyond that, there are definitely capacity coming on that we believe our RIN-less gallons that people are focused on exports whether on the river or something like that. And so I think we’ll continue to see capacity creep over the next several years but I think offsetting that we’ll see demand creep as well both from E15 as well as export market.

So again even with this capacity creep, we are not building stocks. We had 19.6 million gallons of stock this morning, we haven’t those stocks in several weeks and we’ve been running 960 to 980 over the last five weeks trailing. So I think the market can handle some of this creep and obviously it takes time and we hear more and more projects.

But overall of this is - a lot of - anything can be from a million to 10 million, 20 million to 30 million gallons but I don’t overall you are going to see another gallons of capacity come through that because I somewhat - there is somewhat limited by RIN capacity.

So and I think we see a lot of the creep come through already and I’ll wait and see what’s left after that..

Thanks and just as a point of clarification, the additional 100 million gallons that you announced on this call, is that related to possible expectations growing on qualifying for the alternative pathway EPA or is that existing renewable capacity of your plants?.

You know the first 100 is renewable capacity - renewable if that’s the word capacity. The next 100 is mostly qualifying through your permits and the Efficient Producer Program and that’s all we have. We don’t have any more capacity than that to qualify under the Efficient Producer Program.

So we’ll look to add that capacity in late ‘16 and ‘17 which we think is perfect timing for the forward ethanol demand occur..

Thanks again for taking my questions..

Thank you..

And we’ll take our next question from Majid Khan with Tourbillon Capital..

Hi guys, thank you for taking my question. Most of my questions have been asked and answered. I was just wondering, last quarter you had said that you were 10% hedged into Q3 and that was at the end of April.

I was wondering if there an update to that number?.

Yeah, well, I mean obviously third of it is done already because the July is done and then we are - we have based on what with our good current supplying demand fundamental we didn’t add to that.

Obviously the corn markets will loop into that with that recent rally, but now we’ve got most of that back to where we are back to levels of that, we had hedged the first - some of the first 10%, kind of 15%.

So now where the third of the quarter done and the market continuing to see expansion in the margin structure, it feels a little bit tight out there on stocks and product. We’ll just basically be making our decisions on a week-to-week basis for the rest of the quarter and I will look at Q4 and that strategy has worked very well so far off the lows..

Got it..

But there will plan where we will pull the trigger and walk away a large junk some point..

Understood. And Todd, I am just - I know a couple of people now on the call and I know you’ve mentioned that you are afraid to use the buyback.

Certainly this morning I think you’re getting your ethanol gallon is pretty cheap, but I am wondering what’s the disconnect between the private market valuations and the public market because I think someone on the call mentioned that it was buck a gallon like I think when you strip out your interest in Green Plains’ partners and your non-ethanol businesses, it’s probably significantly less than a buck a gallon? To what is it that you think the public market doesn’t give you credit for your assets the way that private markets are giving credit and what’s the - there seems to be an arbitrate opportunity, is there a way to collapse that arb?.

Well listen, I think the public market takes a quarter-by-quarter view of the margin structure and things that’s how it’s going to deliver the rest of our lives for the trinity through the - for the company and we don’t agree with that.

I think the private market takes a five to ten to 20 year view, they buy an asset and they believe overtime the asset will perform and generate above and it’s like a margin.

And so when you look at that I think that’s the key point which is the public market rates quarter-by-quarter and believes that the current margin structure will last forever and we know that never been the case in ethanol and I think this is sever disconnect between public and private valuations.

Now I will tell you the discount narrows upon a better margin structure, so as we see times like this and we have a lower margin structure to disconnect wide ins and as the margin structure goes towards the higher end of the range, the disconnect narrow last year to where GPRE was trading at even money to private valuations.

And I think that’s just a continued battle that will fight and but opportunistic for both our shareholder in the public markets as well as we said allocation of capital offer balancing another much stronger company.

So we believe that that disconnect is in place today as you do and or as you mentioned and that’s - we think it’s opportunities for both our shareholders and our balance sheet..

Thank you, Todd..

Thank you very much..

We’ll take our next question from Eric Seeve with GoldenTree..

Hi guys.

Two questions, first is, you spoke very briefly in your comments regarding the outlook for the non-ethanol business, could you elaborate a little bit on what you expect to see in Q3 in the second half of the year just qualitatively speaking, first on the segments you haven’t spent much on today specifically agro business, marketing and distribution and corn oil?.

Yeah, so corn oil should be consistent throughout the year with the guidance that we had given previously in the basically $8.5 million to $10.5 million of operating income for quarter somewhere in that range depending run rates and the market. Market and Distribution segment for last half, we think we’ll perform better than the first half.

We don’t give the specific guidance, numbers around that, but we definitely had a slower Q1 and Q2 than we expected but Q3 is facing up well.

And again and then finally in the Agribusiness segment, the fourth quarter will be the quarter where we start to earn in the more normalized storage margins and carry margins we should get back to more normalized numbers there.

So - and we think the Agribusiness segment is a $8 million to $10 million operating income segment for the year and Marketing and Distribution will be improved in the last half or so the first half. But obviously work to do there but all the signs are very positive for that or positive for that. And so overall a better last half than the first half..

And in terms of Agribusiness, it’s been $4 million of operating income this quarter, the Q3 qualitatively feel similar to Q2 and what will drive the improvement in Q4?.

Q3 is typically a down quarter for us because of our - we’re waiting for harvest to come in. And then Q4 should be structurally similar better what we’ve seen previously depending on if we fill our storage and what we fill it out and what the margin is as well.

So but I don’t think that Agribusiness Q2 was $2.2 million of operating income not $4.5 million..

Okay, thank you. My second question is on, in response to a different question you answered earlier, you mentioned that you expect to see litigation against the RFS and that this is no surprise and they have seen this coming a long way away.

But my question is and this is a kind of a longer term hypothetical question and I appreciate it’s a remote possibility but except to the RFS was for whatever reason were pealed, what do you think the impact would be on the industry?.

Well, I mean, as we mentioned, we’re setting the company up to be kind of a post RFS company at some point in to be 20 years, I have no idea. So but at some point, the industry will have enough base demand that can compete that I think we are competing number one from molecule and price perspective already.

The RFS, we didn’t have an RFS last year or the year before year and we still plan to maximum level, I think that would be the same case. Post RFS, in a post RFS world, I don’t believe though that that’s really a reasonable expectation at this point that we will see any kind of massive repeal of the standard.

I think it’s the baseline agricultural program in the United States. It’s also the baseline program for continued investment in next Jan in advance. Like technologies of any within from crack to code [ph]. So I mean overall you have to compete for the future the gas, I think on a price perspective and there is a shortage of octane in the world.

So with that said, obviously the RFS so they nice to have. In our view, it will at some point have adjustments made in the future but I don’t think that future is anywhere in our line as today..

Great, thanks Todd..

Thank you..

And we’ll take our final question from David Driscoll with Citi..

Thanks for taking the question.

Just a couple of just small questions here, how many excess RINs do you estimate there will be by the end of 2015?.

Thanks for waiting so long to ask the question.

Steve, what do you think on that?.

You know it’s a number that’s been contested right now due to what was - one of the EPA factors was they think RIN were produced that were retired and we know after September 15th, the large volume we never ever produced. So it’s been contested right now. It’s a number we don’t have a good answer on..

Okay, well that’s make it complicated. And then just to clarify….

It just went to the EPA, the growth energy and few other people patricians that your accounting RINs that never had, that were never produced..

Okay, but the pre-argument number is something a way north of a billion range, is that fair and then there is an argument about whether or not some of those real?.

That’s correct, but it was north of a billion. Yes..

And then the efficient producer, you were making a comment earlier about how much capacity could be expanded and I believe you said 2.8 billion gallons was part of this efficient producer approval process and that 5% to 10% has come online.

So is that to be super clear here, if the industry wanted to or you saying that they could bring on 2.8 billion gallons of new capacity?.

I don’t know, it’d be 2.8 billion gallon of plants that are operating today have approved for expanding capacity.

So it’s like ourselves the - when we go and we take a 100 million gallon or 120 million gallon ethanol plant and then we try to ask for say 10 million more RINs, the - we’re part of the 2.8 billion and the percentage of that would be what’s expanded.

So what I said is basically, it’d like 2,800 million plants that are operating today after they could their capacity from 2.8 to let’s say 2.9.

So it’s the net number between what the plants are producing today and what the plants are asking to produce tomorrow, but it’s not a 2.8 billion gallon a capacity expansion, we take small percentage of that capacity..

Alright, very clear. Last question from me is what happens to your thoughts on the ethanol market if high RIN comes back into the oil market in a big way and we see another big drop in these oil prices.

Like just nowhere in the conversation has the price of oil and how it effects gasoline prices kind of come into this conversation and I feel like it should be, but I love to hear your opinion?.

Yes, so I mean the return of our RIN to the markets I mean I think we’re even seeing them it’s been an impact some of the work markers already….

Part of the closer….

Part of the closer as well I think on some of these spreads, but, listen, again there is a - from our perspective, we are still competing very well even at this lower gasoline prices, obviously the winter is narrow than the summer.

And - but overall even at $50 gap and our price is sitting where they are at, we still remain a discount and we are profitable at the discount. If oil continues to fall and lack, the crack spread ends up and where gasoline prices are and also where refinery runs go based on as well gas prices as well, I think we’ll still be able to complete.

Obviously one other things that really helped us out here was stabilization of the U.S. corn crop into this kind of mid-160s yield range as well as the good excellent rating going up last week and the corn market coming up on $0.70 or $0.80 of the highs. And we really don’t have any new demand for our product for U.S.

corn in the world today, nobody really wants out corn, everything is cheaper. And so overall we believe that taken into consideration that taken into consideration the demand for our protein, taken into consideration demand for our oils, its overall will still compete and we can still be profitable competing some $50 oil.

Now if it goes down $40 oil, we’ll have to reassess on where the corn price needs to be because has to broadcast to compete as a molecule as we’ve always said where corn crop is a molecule and has to compete with oil. And so after we’d see what happens there. But overall, I think we are competing very well at $50 oil..

But the key, the absolute key here is just as idea that as oil goes down, the corn markets got to adjust and that it will keep you in a scenario where you are expecting to be able to compete at a small profit level.

So it never gets to be draconian bad, it’s just the corn market must adjust and that’s how the model works?.

I think the corn market has to adjust or the gasoline market, crop price will have to adjust as well and that’s something we watch, it’s not based on oil. And where is crop price going to go as well and where the refinery runs go as well and I think there is other factors that take place..

Okay, thank you so much..

Thank you very much. And thanks everybody for coming on the call today. We’ll talk to you next question, obviously a lot of thing going on the company. We thank you for your support and thanks for coming on the call today..

And this does conclude today’s conference. Thank you for your participation..