Good morning, ladies and gentlemen. Welcome to The Andersons 2024 Fourth Quarter Earnings Conference Call. My name is Rock Hill, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Later, we will facilitate a question and answer session. To ask a question, please press star then one on your telephone keypad. If you need any operator assistance, please press star zero to reach the operator. As a reminder, this conference call is being recorded for replay purposes. I will now have the presentation here. Who's for today? Mister Mike Hoelter, Vice President, Corporate Controller and Investor Relations. Please proceed. Thanks, Rocco.

Good morning, everyone, and thank you for joining us for The Andersons fourth quarter earnings call. We have provided a slide presentation that will enhance today's discussion. If you are viewing this presentation on our webcast, the slides and commentary will be in sync. This webcast is being recorded, and the supporting slides will be made available on our investors page at andersonsinc.com shortly. Please direct your attention to the disclosure statement on Slide two of the presentation, as well as the disclaimers in the press release related to forward-looking statements. Certain information discussed today constitutes forward-looking statements that reflect the company's current views with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors which are described in the company's reports on file with the SEC. We encourage you to review these factors. This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of the non-GAAP measures to the most directly comparable GAAP financial are included within the appendix of this presentation. On the call with me today are Bill Krueger, President and Chief Executive Officer, and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Bill.

Thanks, Mike. And good morning, everyone. Thank you for joining our call today to discuss our fourth quarter results and initial outlook for 2025. Record fourth quarter results in our trade group propelled us to another very solid year. Renewables also contributed significantly to the quarter, setting ethanol production records for the quarter and for the full year. Our nutrient and industrial results were also up slightly in the quarter compared to last year. We ended 2024 with adjusted pretax income of $147 million and adjusted EBITDA of $363 million. This solid return is notable given the oversupplied ag markets with relatively low prices and limited volatility. We are pleased with the team's tenacity and execution through the market shifts. Trade reported a strong fourth quarter, driven primarily by strong harvest execution in our eastern grain assets and stable elevation margins. Our premium ingredients business continued to show earnings growth during the quarter. The merchandising businesses had steady and improved results over last year. Our mid-fourth quarter investment in Skyland Grain also contributed positively to trade's bottom line. During the fourth quarter, our renewables business set a production record. Despite this, we could not match last year's record results but are still pleased with the strong performance driven by improved yields and lower controllable cost per gallon in a period where ethanol board crush was down sixteen cents per gallon. Additionally, renewables merchandising experienced another strong year bolstering the results within our renewables business. Nutrient and industrial results improved slightly over last year on higher manufactured products volume, and the agricultural businesses were lower on soft industry fundamentals, including limited growers' engagement. Financial performance confirms our portfolio's versatility and resilience in various market conditions. We continue to demonstrate strength in asset management and renewable fuels production combined with commodity merchandise. Our recent geographic expansion with Skyland will further solidify our presence in the North American ag supply chain connecting grain originations to production both domestically and in export markets. The company's performance and the efforts of the management team and employees have contributed to these outcomes. I'm now going to turn things over to Brian to cover some key financial data.

Thanks, Bill, and good morning, everyone. We're now turning to our fourth quarter results on Slide number five. In the fourth quarter of 2024, the company reported net income attributable to The Andersons of $45 million or $1.31 per diluted share and adjusted net income of $47 million or $1.36 per diluted share. This compares to adjusted net income of $55 million or $1.59 per diluted share in the fourth quarter of 2023. Overall, fourth quarter gross profit of $213 million was just below the $218 million of gross profit we recognized in 2023. Trade and nutrient in industrial showed increases offset by a $30 million reduction in renewables arising primarily from lower board crush margins. For the full year, gross profit of $694 million decreased 7% from $745 million in 2023, also primarily due to lower ethanol margins. Adjusted EBITDA for the fourth quarter was $117 million compared to $135 million in the fourth quarter of 2023. Full year adjusted EBITDA was $363 million compared to $405 million in 2023. We recorded taxes for the quarter at a 20% effective tax rate and for the full year at 15%. Our effective tax rate varies each quarter based primarily on the amount of income attributable to non-controlling interests. In addition, in 2024, we received the benefit of federal tax credits, a significant portion of which related to the production of cellulosic ethanol. Now we'll move to slide six to review our cash flows and liquidity. We generated fourth quarter cash flow from operations before changes in working capital of $100 million in 2024, compared to $122 million in 2023. Full year cash flow was $323 million compared to $330 million in 2023. This strong cash flow generation and our continued focus on working capital management combined with lower commodity prices resulted in a year-end cash position of $562 million. Our short-term debt reflects a modest increase due to the consolidation of Skyland Grain on our balance sheet. Next, let's turn to slide seven to review capital spending and long-term debt. We continue to take a disciplined and practical approach to capital spending and investments, which were in line with our expectations at $149 million for the year. Our long-term debt to EBITDA ratio is 1.8 times, still well below our stated target of less than 2.5 times. Even with the addition of long-term debt held by Skyland Grain, we continue to evaluate various opportunities. Now we'll move on to a review of each of our segments, beginning with trade on slide number eight. Trade reported record fourth quarter pretax income and adjusted pretax income of $54 million compared to adjusted pretax income of $47 million in 2023. Our Eastern Grain assets had a good fourth quarter with strong elevation margins and space income after an early and robust harvest. Because of the good quality of the grain we received, we weren't able to benefit as much from mixing and blending. The premium ingredients business where we have invested recently had a solid quarter with increased year over year performance. Our merchandising portfolio also delivered improved performance despite limited volatility in the grain markets. From a growth perspective, we completed the 65% investment in Skyland mid-quarter and integration activities are progressing well. Trades adjusted EBITDA for the quarter was $76 million compared to adjusted EBITDA of $62 million in the fourth quarter of 2023. Adjusted EBITDA for the full year was $161 million in 2024, compared to $155 million in 2023. Moving to slide nine. Renewables generated fourth quarter pretax income attributable to the company of $16 million compared to $33 million in 2023. Outstanding operating performance in our four ethanol plants resulted in another quarter of record ethanol production. However, the impact of lower market values of ethanol and co-products resulted in lower earnings. Volumes of co-products merchandised increased for both the quarter and full year but could not offset the lower values. Renewables had EBITDA of $40 million in the fourth quarter of 2024, compared to $73 million in the fourth quarter of 2023. For the full year, Renewables generated adjusted EBITDA of $189 million in 2024, compared to $230 million in 2023. Turning to Slide ten, the nutrient and industrial business reported fourth quarter adjusted pretax income of $3 million was a slight increase from the fourth quarter of 2023. Manufactured products volume and margin increased in the quarter while agricultural product sales volumes declined due to limited farmer engagement. Nutrient and industrials adjusted EBITDA was slightly above the fourth quarter of 2023. For the full year, Nutrient and Industrial recorded EBITDA of $57 million compared to adjusted EBITDA of $62 million in 2023. Next, we'll look at what our 2024 results would have been under our new segment reporting format that we will use beginning in 2025. In early December, we announced a change in the way we are organized and have shifted to two operating and reporting segments. This move was designed to streamline operational efficiency and enhance cross-functional collaboration. This structure will support the company's focus on unlocking value across the trade and nutrient businesses in a new agribusiness segment. The Renewables segment will continue to substantially operate as currently reported, with an enhanced focus on growth. We will begin reporting our results under this new structure starting in the first quarter of this year. As a preview to these changes, Slide eleven provides pro forma results as if that structure had been in place for the full year of 2024. And with that, I'll turn things back over to Bill for some comments about our early 2025 outlook.

Thanks, Brian. As 2024 proved to be another strong year, we are strategically prepared for the potential challenges that 2025 may bring. We remain committed to safe and reliable operations, including enhancing operational efficiencies and seizing new opportunities by consolidating our farmer-facing entities into the new agribusiness segment. Furthermore, we intend to integrate the Skyland operations more thoroughly to optimize outcomes for all stakeholders. We will also continue to assess and refine businesses within our portfolio that have not aligned with our internal benchmarks. We remain dedicated to pursuing growth opportunities within our core agribusiness and renewables segments. Our agribusiness outlook remains optimistic but will continue to face challenges due to lower relative grain prices and reduced farmer engagement at these price levels. Finally, we anticipate an increase in US corn planted acres, which is the most significant crop that we merchandise. An increase in corn acreage is expected to benefit our nutrient and agronomy business as well as our extensive North American asset network and merchandising operations. Higher yields during the 2024 harvest are also anticipated to necessitate additional nutrient applications for the 2025 growing season. Our fertilizer and related product offerings are essential for maximizing production for farmers in the regions we serve, including the new area covered by the Skyland investment. We believe that we are well positioned to serve our customers when spring applications commence. We continue to assess various internal growth projects and acquisition opportunities that align with our growth strategy. One of our recently announced long-term growth projects, the expansion of our facility at the Port of Houston to support anticipated increased soybean meal exports, is progressing well. Although it will limit capacity through that facility for 2025. In renewables, seasonally weak demand has reduced ethanol crush margins as is typical during the first quarter. Industry maintenance shutdowns and spring driving miles could positively influence crush margins beginning in the second quarter. Co-product values were negatively impacted in 2024, but recent activity suggests some strengthening in 2025. Ethanol export demand is expected to remain strong, supporting ethanol values and board crush. We continue to invest in our plants and consider our assets to be among the best in the industry, both in operations and geographic location. Potential growth investments include improving efficiency and increasing both the quality and yield of distillers corn oil. We are actively pursuing investments aimed at reducing the carbon intensity of our ethanol production. Although we acknowledge there remains some uncertainty around the regulatory environment. These potential projects include carbon sequestration and utilization opportunities at our eastern plants where geological conditions are favorable, as well as implementing additional combined heat and power generation to enhance plant efficiency. Furthermore, we continue to assess opportunities to expand our renewable diesel feedstock merchandising through off-take and supply agreements. Lastly, we're diligently evaluating acquisitions of additional ethanol production facilities that align with our criteria. We continue to demonstrate our capacity to generate positive returns and cash flow, even during the lower range of the Ag cycle. Our balance sheet remains robust and is well positioned to support future growth. We will maintain responsible decision-making to benefit our customers and optimize shareholder value while implementing our growth strategy. And now we are happy to take your questions.

Thank you. If you're using a speakerphone, we ask you please pick up your handset before pressing the keys. Today's first question comes from Ben Klieve with Lake Street Capital Markets.

Alright. Thanks for taking my questions, and congratulations on a really nice quarter here to end a good year. Bill, I'd like to start with the comments you just made at the end of your prepared remarks regarding the renewable segment and investments into that space around lowering the carbon intensity of those locations. Can you elaborate a bit on how your thought process has evolved over the last several months on those investment opportunities, how the return profile of those potential investments is changing in your mind, and then also comment on the degree to which those types of investments are included within your CapEx environment? We're watching and trying to understand what those decisions are going to be. The one thing that we do feel comfortable with is the forty-five q has been around for a long time, and we believe that the forty-five q will remain intact. We also believe that there's progress being made to where we'll be able to see the forty-five c at least through twenty twenty-seven. And then in terms of our capex spending for twenty twenty-five, Brian will dive into this a little bit more later but we are continuing to deploy capital as we need it in order to get ourselves prepared to make final decisions once we have a little bit more clarity around the RN. Got it. Very good. Thank you. And regarding the consolidation of the NNI and Trade Group, those businesses seem to be operating relatively efficiently. So I wouldn't expect there's a lot of expense synergies that are going to come out of this. But can you just comment on a high level regarding the magnitude of synergies on the expense side or even on the revenue side as you see fit?

Yeah. Really, the decision to combine the PIN and trade group is twofold. The first is there are some upper opportunities to consolidate positions inside the company, providing opportunities for us to grow in both areas. And then probably the most important reason that we're looking at doing this is simply as we get the claimant smart portion tied into the farm bill and assuming that that will get or get tied into the inflation reduction act and the CSA program will tie into being able to reduce the carbon intensity of the ethanol that we produce. We feel like having one solution to the producer all the way through the ethanol plant makes a lot more sense for us. And then there's a number of other areas that we think the future may hold around being able to capitalize on controlling the crop inputs through the production cycle.

Got it. Got it. That makes plenty of sense. Very good. One more for me, and then I'll get back in queue. You know, within the quarter, in the ethanol space, you know, margin compression from kind of being a quarter through the end for, you know, several reasons that are entirely out of your control. But you guys posted still a really nice quarter. Can you just comment on what allowed you to still deliver really quite solid results in that back, you know, in the context of that macro backdrop and the efficacy of your hedging strategy throughout the quarter?

Yeah. You know, it's really been more of towards what we've been talking about for the last few years. For us, there's a lot more than just the four walls of the ethanol plant. I talk about our operations. We talk about reducing our controllable costs when board crush dropped sixteen cents quarter over year over year for the fourth quarter. But really the maximizing of our core originations, our co-product sales, and our ethanol marketing when we put those together, we feel like we can consistently have a strong performance even if board crush is not as strong as it had been the previous year. So I really think it's just the execution of our business model that we've been working on ever since we combined trade and ethanol a number of years ago, and that's really what we hope to see the outcome of bringing ANI and Trade together also is to repeat what we did with the ethanol business.

Very good. Well, clearly, worked in the period. Congratulations again to all for a great quarter. Thanks for taking my questions, and I'll get back in queue. Thank you.

And our next question comes from Pooran Sharma with Stephens. Please go ahead.

Thank you, and congrats on the quarter. I just wanted to get a sense of the potential outcomes that you're thinking about for trade tariffs. I think in the release, you mentioned you that you faced challenges and opportunities. So just from a trade tariff backdrop, I want to get a sense of maybe what are the top outcomes that you're planning for and how this would impact your business?

For The Andersons, we are not as susceptible to major swings in our results due to tariffs. Obviously, they will affect different pieces of our business. But being more of a domestic-focused company, we should be able to find some opportunities that tariffs may or may not deliver to the market. Obviously, we are very focused on any tariffs between the US and Canada, the US and Mexico, and it's really too early to say what tariffs on imported products from those two countries would entail. Thankfully, they were delayed for a while. But we feel like we have a really good feel on the different aspects of our business and what it could do to those businesses. And when we net everything together today, what we know, it doesn't feel like it's going to have a material result on our earnings for 2025.

Okay. Great. And I appreciate that color. Just wondering if maybe we could talk about Skyland a little bit more. I know you provided some color in the commentary. But just seeing if we could flush out any more details on the progress of integration, what's left, and, you know, how is this how's this been versus your expectations? Are you still on track to achieve the I believe it's thirty to forty million in EBITDA contribution?

I'll let Brian address the financial aspects of the transaction. But, I guess, we're hundred nineteen days into the transaction, and I will tell you that the commercial aspect of having The Andersons merchants work with the Skyland originators has gone better than expected. The team knew each other pretty well going into the transaction, so you're always kind of curious how that's going to turn out, and it's turned out great. On the commercial aspect. In terms of the accounting, the finance, and working through those aspects of it, I would tell you that we're on track. And, you know, we have a little bit of heavy lifting that needs to be completed. But with that, I'll let Brian address the finance and some of the other areas.

Yeah. I would say, Pooran, with regard to some color, I would say that thirty to forty million dollars range that we talked about previously remains intact. That would kind of be our expectation for the year in 2025. Just for orders of magnitude, for context, in November and December, it was, I would say, a contributor in the range of five million dollars to ten million dollars and that's before taking into account any synergies and things like that. So I would say off to a good start. The teams are working really well together and are energized and getting to know each other, and we're excited about it.

Yeah. It's Pooran. This is Bill again. One other item that has been really exciting for us to see is, and we talked about this in the October call, this is going to be the first time that we've really been able to test bringing our agronomy business and our grain business together at scale. We have a lot of projects or smaller investments where we're able to do this. But doubling the size of our farm centers and being able to do it inside a business where we have the opportunities for trade specifically in terms of the grain and feed ingredients is really something we're looking forward to over the next sixty days.

I appreciate the color there. And, no, it sounds like it's progressing well. I guess on that, if I could just squeeze one more in before I jump back in the queue. But just on the nutrient and industrial side of the business. I think you mentioned an increase in corn acres and how that could potentially result in increased volumes. Could you remind us which crop requires more inputs and if you can maybe just give us a sense either qualitatively or quantitatively the magnitude difference in input requirements between, let's say, like, corn and soybeans.

Corn requires substantially more nutrient input. And so we feel like our margin coming out of the corn is quite a bit higher than any of the other crops that we provide nutrients or other products to. So it can be pretty substantial. And in terms of what we see for the agronomy and Plant Nutrient Group, both wholesale and retail, with the number of corn acres that we're expecting to see, we still have a ways to go, but it's substantial.

Great. Well, I appreciate the color. And, again, congrats on the quarter.

Thank you. And our next question comes from Ben Mayhew of BMO Capital Markets. Please go ahead.

Hey, guys. Good morning. My first question is just around the momentum you're seeing in the renewable diesel feedstock trading since forty-five z guidelines were finalized. Do you think transacting is back to more normal levels, or is the market still cautious to transact with the Trump risk out there? Thank you.

That's an excellent question. I will tell you that it started with some hesitancy by the trade on where to head and what to go and what transactions to enter into. The market has freed up over the past few weeks, but there's still that concern. What are we going to be using the Blender's tax credit or are we going to be using the producer's tax credit? There were articles out as late as yesterday trying to decipher that. So there's still quite a bit of caution by the plants, especially the smaller plants that are more restricted by the need of the tax credit. Which, you know, we all know that the lender's tax credit is traditionally going to be better than the producer's tax credit. So, yeah, I think you're seeing a little bit more activity but not back to what it was three concerns after the election.

That makes sense. And my second question is around, I mean, also has to do with forty-five z, but it's around ethanol. And I'm just wondering, does the market environment for acquiring ethanol plants, has that become more attractive now that forty-five z guidelines are in place? And, like, what are some of the characteristics that would make certain ethanol plants more valuable than others? Thanks.

Good question. So the second part of that question is substantially easier to answer for us. On the and I'll take that first and then slide over into the forty-five c questions. The criteria for The Andersons likely is different than it is for other ethanol producers. We believe that larger scale plants with good technology in geographic locations where we have a competitive advantage in originating corn and selling the co-products is what we are looking for. And there have been opportunities to invest or buy plants outside of that criteria, and we've just committed to the discipline of staying with what we're good at. Now, you add Skyland into the equation. We've added a large geographic region where we have even stronger origination capabilities. So, hopefully, that answered your question, but we're very strict on the criteria that we're going to use to make investment in plants, especially to your point, the first point is the cost of plants has elevated for plants that have access to carbon sequestration or utilization.

Thank you. That's great. And then I'm just going to sneak one more in here. And this is more of just a general question about the US farmer and how they're approaching 2025. I mean, certainly, you know, there are a lot of unknowns out there. But it would seem like, you know, with just corn, the price appreciation is kind of lending to some optimism or some building optimism at least. So, like, how do you think about the merchandising environment for corn in twenty-five? Is the outlook generally better? I mean, that's my perception. And what are the farmers thinking? Like, put us in the mind of the farmer. And what is their kind of game plan for this year? And I'll leave it there. Thanks.

It's a pretty complex question, Ben. But you are correct. The rally, the recent rally that we've seen since mid-January has been very beneficial to the US farmer. Now the US farmer also has had a little bit of a snafu in selling earlier when they were expecting a much larger carryout. So I would tell you that not all farmers are created equal in their marketing capabilities. Quite honestly, some producers probably sold their current crop a little early into this rally. But if you think about the payments that were just distributed, you look at, for the most part, the US is in really good planting conditions. I know it's only February, but we've had a lot of moisture where it's been dry. So I think that the US farmer as a whole is pretty optimistic. And, you know, you start to think through what will the farm bill look like, how will climate smart agriculture tie in to the ability to reduce the carbon intensity scores of corn, the potential of other opportunities. Obviously, we've added a lot of crush capacity for the soybean farmer. And so, yeah, I think compared to where the farmer was a year ago, and I think any of the surveys that you read, optimism is quite a bit higher than it was a year.

Thanks, Rocco. We want to thank you all for joining us this morning. Our next earnings conference call is scheduled for Wednesday, May seventh, 2025, at eight thirty AM eastern time, when we will review our first quarter results. As always, thank you for your interest in The Andersons, and we look forward to speaking with you again soon.

Thank you. This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.