Alto Ingredients Inc (ALTO) 2008 Q3 法說會逐字稿

Good day ladies and gentlemen, and welcome to the Pacific Ethanol, Incorporated third quarter call. My name is Michelle, and I will be your coordinator for today. (OPERATOR INSTRUCTIONS)

女士們，先生們，美好的一天，歡迎來到太平洋乙醇公司第三季度電話會議。我的名字是 Michelle，今天我將擔任您的協調員。 （操作員說明）

I would now like to turn the call over to your host for today, Mr. Gregory Pettit, with Hill & Knowlton. Please proceed.

我現在想將今天的電話轉給您的主持人，Gregory Pettit 先生，來自 Hill & Knowlton。請繼續。

Good morning, and welcome to the Pacific Ethanol third quarter conference call. Before we get started this morning, I'd like to point out that there are slides to accompany this call, available for download on the Company's home page, which is at pacificethanol.net. Also, this call will be available for replay both telephonically and in the audio webcast replay, within two hours after the conclusion of this call. Replays will be available for the next 15 days.

早上好，歡迎參加太平洋乙醇公司第三季度電話會議。在我們今天早上開始之前，我想指出本次電話會議附帶的幻燈片，可在公司主頁上下載，該主頁位於 pacificethanol.net。此外，在本次通話結束後的兩小時內，將可以通過電話和網絡音頻重播方式重播本次通話。重播將在接下來的 15 天內提供。

For some Safe Harbor language, with the exception of historical information, the matters discussed on this call are forward-looking statements that involved a number of risks and uncertainties. The actual future results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability of Pacific Ethanol to obtain additional debt or equity financing, including additional working capital financing or failing new sources of financing, the ability of Pacific Ethanol to restructure its indebtedness, the ability of Pacific Ethanol to successfully capitalize on its internal growth initiatives; the ability of Pacific Ethanol to operate its plants at their planned production capacities, the price of ethanol relative to the price of corn and other inputs, and the price of ethanol relative to the price of gasoline; and the factors contained in the Risk Factors section of Pacific Ethanol's Form 10-K, filed with the Securities and Exchange Commission on March 27, 2008, and the Risk Factors section of Pacific Ethanol's Form 10-Q for the quarterly period ending September 30th, 2008, to be filed with to Securities and Exchange Commission.

對於某些安全港語言，除歷史信息外，本次電話會議討論的事項是涉及許多風險和不確定性的前瞻性陳述。 Pacific Ethanol 的實際未來結果可能與這些陳述不同。可能導致或促成此類差異的因素包括但不限於 Pacific Ethanol 獲得額外債務或股權融資的能力，包括額外的營運資金融資或新的融資來源失敗，Pacific Ethanol 重組其債務，Pacific Ethanol 成功利用其內部增長計劃的能力； Pacific Ethanol 以計劃生產能力運營其工廠的能力，乙醇價格相對於玉米和其他投入的價格，以及乙醇價格相對於汽油的價格；以及太平洋乙醇公司於 2008 年 3 月 27 日向證券交易委員會提交的 10-K 表格的風險因素部分以及太平洋乙醇公司截至 9 月 30 日的季度期間的 10-Q 表格的風險因素部分中包含的因素， 2008 年，向證券交易委員會備案。

Now I'd like to turn the call over to President and CEO, Neil Koehler.

現在我想把電話轉給總裁兼首席執行官尼爾·科勒。

Thank you Gregory, and welcome everyone to Pacific Ethanol's investor call to discuss our financial results for the third quarter and year-to-date for the period, ending September 30th, 2008. I am joined today by Joe Hansen, our Chief Financial Officer. I will make a few remarks, followed by Joe, walking us through the numbers. After our closing comment or two on the market environment, Joe and I will be available for q and a.

謝謝 Gregory，並歡迎大家參加 Pacific Ethanol 的投資者電話會議，討論我們截至 2008 年 9 月 30 日的第三季度和年初至今的財務業績。今天，我們的首席財務官 Joe Hansen 加入了我的行列。我將發表一些評論，然後是喬，帶領我們瀏覽這些數字。在我們對市場環境發表一兩次結束評論後，喬和我將可以進行問答。

For the quarter, we achieved net sales of $184 million, an increase of 56%, compared to $118.1 million in the third quarter of 2007. In the third quarter of 2008, we sold 65 million gallons, a 30% increase compared to 50 million gallons in the third quarter of 2007. We reported a net loss available to common shareholders of $55.7 million or $0.98 cents per share. This amount includes a non-cash impairment charge of $26.6 million, associated with suspension of our Imperial Valley Project. Our operating results were negatively impacted by high corn prices, coupled with rapidly falling ethanol prices that resulted in negative gross margins in our business. We also incurred expenses related to the start-up of our Stocktown, California facility in the quarter.

本季度，我們實現了 1.84 億美元的淨銷售額，與 2007 年第三季度的 1.181 億美元相比增長了 56%。2008 年第三季度，我們售出了 6500 萬加侖，與 5000 萬加侖相比增長了 30% 2007 年第三季度的加侖數。我們報告普通股股東的淨虧損為 5570 萬美元或每股 0.98 美分。該金額包括與我們的帝王谷項目暫停相關的 2660 萬美元的非現金減值費用。我們的經營業績受到玉米價格高企的負面影響，加上乙醇價格迅速下跌導致我們業務的毛利率為負。我們還產生了與本季度加利福尼亞州斯托克敦工廠啟動相關的費用。

While we made the considered, and we believe prudent, decision not to take forward hedge positions in corn during the quarter, we were consistently grinding higher corn into both falling corn and ethanol commodity markets. Since we bring corn into our facilities in unit trains from the midwest, we have up to a month's volume of corn purchased, either at or in transit to our plants. Conversely, we hold relatively minimal ethanol inventories, since our ethanol is sold primarily in local markets around our plants. In a market like today where corn and ethanol prices are correlated, this further compresses margins in a falling corn market, but benefits us in a rising corn market, assuming minimal hedged positions.

雖然我們做出了深思熟慮的決定，並且我們認為是謹慎的決定，在本季度不進行玉米對沖頭寸，但我們一直在向下跌的玉米和乙醇大宗商品市場研磨更高的玉米。由於我們通過單元列車從中西部將玉米帶入我們的設施，因此我們可以在工廠或運輸途中購買多達一個月的玉米量。相反，我們持有的乙醇庫存相對較少，因為我們的乙醇主要在我們工廠周圍的當地市場銷售。在像今天這樣一個玉米和乙醇價格相關的市場中，這進一步壓縮了玉米市場下跌的利潤，但在玉米市場上漲時使我們受益，假設對沖頭寸最少。

We sold slightly fewer gallons in the third quarter compared to the second quarter. Our produced gallon volumes were slightly higher, but we sold fewer third party gallons. While we continued to expand our customer base and increase business with existing customers and broadened our sales region, we also took the position of not renewing some business, where we concluded the pricing terms were not acceptable. We also operated our plants at approximately 10% below designed capacity. This was both in response to poor margins and an effort to conserve working capital.

與第二季度相比，我們在第三季度的銷量略少。我們生產的加侖量略高，但我們銷售的第三方加侖量較少。雖然我們繼續擴大我們的客戶群並增加與現有客戶的業務並擴大我們的銷售區域，但我們也採取了不更新某些業務的立場，我們認為定價條款是不可接受的。我們還以比設計產能低約 10% 的速度運營我們的工廠。這既是為了應對低利潤率，也是為了節省營運資金。

With the successful start-up of our Stockton plant in the quarter, we are proud to have achieved our long standing goal of owning 220 million gallons of annual ethanol operating capacity by the end of 2008. The plant successfully completed its [performance] test, confirming annual production capacity of 60 million gallons, which allowed us to complete the financing of the facility. Our Stockton plant is now providing ethanol and wet distiller's grains to local markets to meet the growing demand for both products in California.

隨著我們斯托克頓工廠在本季度的成功啟動，我們很自豪地實現了到 2008 年底擁有 2.2 億加侖乙醇年產能的長期目標。該工廠成功完成了 [性能] 測試，確認了 6000 萬加侖的年生產能力，這使我們能夠完成對該設施的融資。我們的斯托克頓工廠現在向當地市場提供乙醇和濕酒糟，以滿足加利福尼亞對這兩種產品不斷增長的需求。

As we have now completed this construction phase of our business, we will focusing on being an efficient operator. We are lowering our SG&A, as we focus on production and marketing, and eliminate costs related to construction. We continue to focus on better yields, lower energy use, new distribution facilities, and new technologies to position us for meeting the Advanced Biofuels requirements of the Renewable Fuel Standard.

由於我們現在已經完成了我們業務的這個建設階段，我們將專注於成為一個高效的運營商。我們正在降低 SG&A，因為我們專注於生產和營銷，並消除了與建設相關的成本。我們繼續專注於更高的產量、更低的能源使用、新的配送設施和新技術，以使我們能夠滿足可再生燃料標準的先進生物燃料要求。

With that I would now like to turn the call over to Joe to run through the financial details of our third quarter 2008 results.

有了這個，我現在想把電話轉給喬，讓他了解我們 2008 年第三季度業績的財務細節。

Thank you Neil, and good morning to everyone. Slide two has a list of the items we will cover. On slide three, we summarized the income statement. Our net sales increased to $184 million in Q3 2008, from $118.1 million in Q3, 2007, a 56% year-over-year increase. Year-to-date, our net sales increased to $543.5 million, from $331.1 million in the first nine months of 2007, or an increase of 64%.

謝謝尼爾，大家早上好。第二張幻燈片列出了我們將介紹的項目。在幻燈片三上，我們總結了損益表。我們的淨銷售額從 2007 年第三季度的 1.181 億美元增加到 2008 年第三季度的 1.84 億美元，同比增長 56%。年初至今，我們的淨銷售額從 2007 年前九個月的 3.311 億美元增加到 5.435 億美元，增幅為 64%。

Going to slide four, we show our net sales in gallons sold. We sold 65 million gallons of ethanol in Q3 2008, up 30% from 50 million gallons in Q3, 2007, but down 3% over the prior quarter. For the first nine months of the year, we sold 191 million gallons of ethanol, up 44% from 132.8 million gallons in the first nine months of 2007. Our third-party purchases and marketing activity represented 49% of our gallons sold in the third quarter, and 54% of our gallons sold on a year-to-date basis. Going forward, we expect that our marketing volume will continue to represent a significant portion of our total ethanol sales.

轉到第四張幻燈片，我們顯示了以加侖為單位的淨銷售額。我們在 2008 年第三季度銷售了 6500 萬加侖乙醇，比 2007 年第三季度的 5000 萬加侖增長了 30%，但比上一季度下降了 3%。今年前 9 個月，我們銷售了 1.91 億加侖乙醇，比 2007 年前 9 個月的 1.328 億加侖增長了 44%。我們的第三方採購和營銷活動占我們第三季度銷售的 49%季度，今年迄今已售出 54% 的加侖。展望未來，我們預計我們的營銷量將繼續占我們乙醇總銷售額的很大一部分。

Going to slide five, we recorded a gross loss of $20.3 million in the third quarter of 2008, compared to a gross profit of $4.8 million in the third quarter of 2007. In the third quarter, we experienced negative crush margins at our production facilities, non-cash charges, including an inventory valuation adjustment, and a relatively low co-product return. Our gross loss includes a lower of cost or market inventory valuation adjustment of $5.6 million, reflecting a mark-down in the value of our ending ethanol and corn inventories, as commodity prices continued to fall at the end of the quarter. In addition, our gross loss also includes a $1.7 million adjustment related to derivative positions, and $6.9 million of depreciation expense.

滑到第五個，我們在 2008 年第三季度錄得 2030 萬美元的毛虧損，而 2007 年第三季度的毛利潤為 480 萬美元。第三季度，我們的生產設施出現負壓榨利潤率，非現金費用，包括庫存估值調整和相對較低的聯產品回報。我們的總虧損包括 560 萬美元的成本或市場庫存估值調整，反映了我們期末乙醇和玉米庫存價值的下調，因為商品價格在本季度末繼續下跌。此外，我們的總虧損還包括與衍生品頭寸相關的 170 萬美元調整和 690 萬美元的折舊費用。

Our commodity derivative loss of $1.7 million for the quarter is comprised of derivative gains of $1 million, related to hedge positions that were settled during the quarter, and $2.7 million of unrealized mark-to-market losses on open positions that will settle in future periods. For the first nine months of 2008, we had a gross loss of $4.2 million, or negative 0.8% as a percentage of sales, compared to gross profits of $13.2 million or 9.4% as a percentage of sales in the first nine months of 2007. Our year-to-date results include the $5.6 million inventory valuation adjustment just discussed, unrealized derivative losses of $4.5 million, and $17 million of depreciation expense.

我們本季度 170 萬美元的商品衍生品損失包括 100 萬美元的衍生品收益，與本季度結算的對沖頭寸相關，以及將在未來期間結算的未實現頭寸的 270 萬美元未實現市值損失. 2008 年前 9 個月，我們的毛虧損為 420 萬美元，佔銷售額的百分比為負 0.8%，而 2007 年前 9 個月的毛利潤為 1320 萬美元，佔銷售額的百分比為 9.4%。我們年初至今的業績包括剛剛討論的 560 萬美元的庫存估值調整、450 萬美元的未實現衍生品損失和 1700 萬美元的折舊費用。

Returning to slide three, our SG&A fell as a percentage of sales, but increased by $0.8 million in the third quarter of 2008 over the same period last year, primarily due to an increase in payroll, non-cash compensation, and bad debt reserves. Year-to-date, our SG&A was slightly higher in absolute dollars versus the first nine months of 2007, but also fell significantly as a percentage of sales. We expect our SG&A expenses to continue to decrease on a per-gallon and percentage basis relative to sales.

回到幻燈片三，我們的 SG&A 佔銷售額的百分比下降，但在 2008 年第三季度比去年同期增加了 80 萬美元，這主要是由於工資單、非現金補償和壞賬準備金的增加。年初至今，我們的 SG&A 絕對金額比 2007 年前九個月略高，但佔銷售額的百分比也顯著下降。我們預計我們的 SG&A 費用將繼續按每加侖和百分比計算相對於銷售額的減少。

In the third quarter, we recorded a non-cash impairment charge of $26.6 million, related to our Imperial Project to write down the value of capital previously invested in the Project. As you may recall, we suspended construction of our Imperial Project last year, due to unfavorable market conditions. Since the production margin environment has remained very challenging, we are recording an impairment charge related to these assets, as we do not intend to resume construction in the near term.

在第三季度，我們記錄了 2660 萬美元的非現金減值費用，與我們的帝國項目有關，以減記之前投資於該項目的資本價值。您可能還記得，由於不利的市場條件，我們去年暫停了帝國項目的建設。由於生產利潤率環境仍然非常具有挑戰性，我們記錄了與這些資產相關的減值費用，因為我們不打算在短期內恢復建設。

We recorded a net loss of $54.9 million in Q3 2008, compared to a net loss of $4.8 million in Q3 2007, primarily due to the swing in gross profit and non-cash impairment charge discussed earlier. Year-to-date, we have a net loss of $98.3 million, compared to net income of $0.3 million during the same period last year. Recall that our year-to-date results include non-cash charges totaling $65.2 million, including a $38.6 million goodwill impairment charge related to the value of Front Range Energy, and a $26.6 million impairment related to the suspended Imperial Project.

我們在 2008 年第三季度錄得 5490 萬美元的淨虧損，而 2007 年第三季度的淨虧損為 480 萬美元，主要是由於前面討論的毛利潤和非現金減值費用的波動。年初至今，我們的淨虧損為 9830 萬美元，而去年同期的淨收入為 30 萬美元。回想一下，我們年初至今的業績包括總計 6520 萬美元的非現金費用，其中包括與 Front Range Energy 價值相關的 3860 萬美元商譽減值費用，以及與暫停的帝國項目相關的 2660 萬美元減值費用。

After deducting preferred stock dividends of $0.8 million, our net loss available to common shareholders is $55.7 million for Q3 2008, or $0.98 per share. Year-to-date, our net loss available to common shareholders is $102.4 million, or $2.14 per share, of which $65.2 million or $1.36 per share, respectively is related to the goodwill and Imperial impairment adjustments.

扣除 80 萬美元的優先股股息後，我們在 2008 年第三季度可供普通股股東使用的淨虧損為 5570 萬美元，即每股 0.98 美元。年初至今，我們可供普通股股東使用的淨虧損為 1.024 億美元或每股 2.14 美元，其中 6520 萬美元或每股 1.36 美元分別與商譽和帝國減值調整有關。

Going to slide six, EBITDA was negative $18.5 million for the quarter, compared to a negative $1.4 million in Q3, 2007. For the first nine months of the year, EBITDA was negative $6.8 million, compared to a positive $6.9 million for the first nine months of 2007. The swing in EBITDA in both periods is due to significantly increased volatility in commodity markets, negative margins from ethanol production, and the $5.6 million inventory valuation adjustment.

下滑六，本季度 EBITDA 為負 1850 萬美元，而 2007 年第三季度為負 140 萬美元。今年前九個月，EBITDA 為負 680 萬美元，而前九個月為正 690 萬美元2007 年的幾個月。這兩個時期的 EBITDA 波動是由於商品市場的波動性顯著增加、乙醇生產的負利潤以及 560 萬美元的庫存估值調整。

On slide seven, we summarize our commodity price performance. Our production gallons increased significantly in Q3 2008, versus the same period last year, due to the addition of production from our Magic Valley and Stockton plants, while third-party sales were down slightly. Our average selling price of ethanol was $2.45 a gallon during the quarter, up 16% from $2.11 in the same quarter a year ago, but down 4% from $2.55 in Q2, 2008. Year-to-date, our average sales price was $2.43 per gallon, up 9% from $2.22 per gallon in the same period last year.

在幻燈片七上，我們總結了我們的商品價格表現。由於我們的魔術谷和斯托克頓工廠的產量增加，我們的加侖產量在 2008 年第三季度與去年同期相比顯著增加，而第三方銷售略有下降。本季度我們的乙醇平均售價為每加侖 2.45 美元，比去年同期的 2.11 美元上漲 16%，但比 2008 年第二季度的 2.55 美元下降 4%。年初至今，我們的平均售價為 2.43 美元每加侖，比去年同期的每加侖 2.22 美元增長 9%。

During the third quarter, our delivered cost of corn was $6.99 per bushel, up 54% from $4.54 per bushel in Q3 2007, and also up 4% from our Q2 2008 delivered cost of $6.73. Our corn basis average $0.71, up $0.04 from a year ago, due to higher freight costs, but down slightly from $0.75 in the prior quarter, due to falling fuel surcharges. In the third quarter, our CBOT equivalent corn cost was $6.28 per bushel, compared to the average CBOT market price of $5.78 during the quarter.

第三季度，我們的玉米交付成本為每蒲式耳 6.99 美元，比 2007 年第三季度的每蒲式耳 4.54 美元上漲 54%，也比我們 2008 年第二季度的 6.73 美元的交付成本上漲 4%。由於運費上漲，我們的玉米基差平均為 0.71 美元，比一年前上漲 0.04 美元，但由於燃油附加費下降，比上一季度的 0.75 美元略有下降。第三季度，我們的 CBOT 等價玉米成本為每蒲式耳 6.28 美元，而該季度 CBOT 市場平均價格為 5.78 美元。

Though we did not have any material commodity hedge positions going into the third quarter, our CBOT equivalent corn price was $0.50 per bushel higher than the market, due to corn inventory positions at our plants, and the normal timing lag from when unit trains of corn were priced upon shipment to the arrival and processing of corn into ethanol. Due to these factors, our ethanol pricing lagged our corn pricing by approximately one month, which significantly hurt production margins in the third quarter, given the unprecedented volatility and rapid decline in the market prices of both corn and ethanol.

儘管進入第三季度我們沒有任何重要的商品對沖頭寸，但由於我們工廠的玉米庫存頭寸以及單位玉米的正常時間滯後，我們的 CBOT 等價玉米價格比市場高 0.50 美元/蒲式耳價格在裝運到到達和加工成乙醇的玉米。由於這些因素，我們的乙醇定價比我們的玉米定價滯後約一個月，鑑於玉米和乙醇市場價格前所未有的波動和快速下跌，這嚴重損害了第三季度的生產利潤率。

Year-to-date, our delivered corn cost has averaged $6.48 per bushel, up 55% from $4.19 per bushel in the same period a year ago. Our basis averaged $0.73 in the first nine months of the year, versus $0.64 last year. Our co-product return was a disappointing 21.6% in the third quarter. This metric continued to be pressured by significantly higher corn prices during the quarter, and as we indicated in our prior call, a relatively high ratio of fixed priced sales contract that were in place through the third quarter of this year. Our co-product return in Q3 2008, is down from 25.3% in Q3 2007, and in line with the 21.7% realized in the previous quarter. Year-to-date, we realized the co-product return of 22.6%, down from 25.6% in the same period last year.

年初至今，我們交付的玉米成本平均為每蒲式耳 6.48 美元，比去年同期的每蒲式耳 4.19 美元上漲 55%。今年前九個月，我們的基差平均為 0.73 美元，而去年為 0.64 美元。第三季度，我們的聯產品回報率為 21.6%，令人失望。該指標繼續受到本季度玉米價格大幅上漲的壓力，正如我們在之前的電話會議中指出的那樣，截至今年第三季度，固定價格銷售合同的比例相對較高。我們在 2008 年第三季度的聯產品回報率低於 2007 年第三季度的 25.3%，與上一季度實現的 21.7% 持平。年初至今，我們實現了 22.6% 的聯產品回報率，低於去年同期的 25.6%。

The net impact of the corn, ethanol, and co-product metrics resulted in a weak production commodity product margin of $0.35 per gallon for the quarter. The production margin is down significantly, from $0.99 per gallon in Q3 2007, and $0.49 per gallon in the prior quarter. Year-to-date, our production commodity margin averaged $0.54 per gallon, versus $1.18 per gallon in the same period last year.

玉米、乙醇和副產品指標的淨影響導致本季度生產商品產品利潤率為每加侖 0.35 美元。生產利潤率從 2007 年第三季度的每加侖 0.99 美元和上一季度的每加侖 0.49 美元大幅下降。年初至今，我們的生產商品利潤率平均為每加侖 0.54 美元，而去年同期為每加侖 1.18 美元。

At quarter end, we had forward fixed priced ethanol sales contracts with a dollar value of $27.3 million, as well as 81.5 million gallons of forward index-based ethanol sales. Our forward corn purchased commitments consists of $18.5 million of fixed price contracts, as well as 6.4 million bushels of forward index-based purchase contracts. Additional details of our purchase and sales commitments are available in the 10-Q in the Commitments footnote to the Financial Statements.

在季度末，我們擁有價值 2730 萬美元的遠期固定價格乙醇銷售合同，以及 8150 萬加侖基於指數的遠期乙醇銷售。我們的遠期玉米採購承諾包括 1850 萬美元的固定價格合同，以及 640 萬蒲式耳的基於指數的遠期採購合同。我們的採購和銷售承諾的更多細節可在財務報表承諾腳註的 10-Q 中找到。

Referring to the balance sheet on slide eight, our consolidated cash balance of $33.6 million, including restricted cash, was down slightly from total cash of $35 million at the end of the second quarter. We used cash during the quarter primarily to support operating losses and working capital needs at our production facilities, and to fund construction of the Stockton Project. At the end of the quarter, approximately $13.4 million was remaining to be spent on the Stockton Project to pay final construction invoices. Of this amount, approximately $10 million came from availability under our construction loan facility and restricted cash on hand for construction, and the balance of $3.4 million was additional equity that was contributed from our unrestricted cash.

參考幻燈片八的資產負債表，我們的合併現金餘額為 3360 萬美元，包括受限制的現金，比第二季度末的總現金 3500 萬美元略有下降。我們在本季度主要使用現金來支持我們生產設施的運營虧損和營運資金需求，並為斯托克頓項目的建設提供資金。在本季度末，斯托克頓項目還有大約 1,340 萬美元用於支付最終建設發票。其中，大約 1000 萬美元來自我們的建築貸款設施和有限的手頭建設現金，餘額 340 萬美元是我們的非限制性現金貢獻的額外股權。

In the third quarter, we completed our construction program and achieved our goal of 220 million gallons of installed production capacity. Our Stockton facility successfully completed performance testing at the end of the quarter, and in October, we made a final $24.2 million draw from our debt facility that was a return of our previously invested equity of the project. After funding required debt service reserves and the payment of final construction invoices, $15.7 million became available to the [parent] for working capital.

第三季度，我們完成了建設計劃，實現了 2.2 億加侖裝機產能的目標。我們的斯托克頓工廠在本季度末成功完成了性能測試，並且在 10 月，我們從我們的債務工具中提取了 2420 萬美元，這是我們之前投資的項目股權的回報。在為所需的償債準備金和支付最終建設發票提供資金後，[母公司]可以使用 1570 萬美元作為營運資金。

Going to slide nine, we show our operating facilities, consisting of Madera, Colombia, Magic Valley, Stockton and our 42% ownership interest in Front Range Energy. In the third quarter, we reduced our operating rate at some of our production facilities below their designed capacity. As we have previously stated, we will continue to adjust our production levels according to market conditions. That concludes the summary the financial results for Q3. I would like to turn it back to Neil for further comments and the Q&A.

轉到幻燈片九，我們展示了我們的運營設施，包括馬德拉、哥倫比亞、魔術谷、斯托克頓以及我們在 Front Range Energy 中 42% 的所有權權益。在第三季度，我們將一些生產設施的開工率降低到低於設計產能。正如我們之前所說，我們將繼續根據市場情況調整我們的生產水平。第三季度的財務結果總結到此結束。我想把它轉回給 Neil 以獲得進一步的評論和問答。

Thank you Joe. The market environment in the ethanol business continues to be very challenging. While demand continues to grow, ethanol supply has increased approximately 50% year-over-year. While the physical market is actually reasonably well balanced, with total US inventory holding constant at around 22 days, the supply has grown faster than minimum levels of blending required by the Renewal Fuel Standard, which has resulted in pricing power favoring the buyers.

謝謝喬。乙醇業務的市場環境仍然非常具有挑戰性。在需求持續增長的同時，乙醇供應量同比增長約 50%。雖然實物市場實際上相當平衡，美國總庫存保持在 22 天左右，但供應增長速度超過了更新燃料標準要求的最低混合水平，這導致定價權有利於買家。

In 2009, we believe there will be a shift in this dynamic, as 1.5 billion gallons of new minimum demand will be required, and new capacity coming online will be one billion gallons or less. With the strains on ethanol margins resulting in some existing capacity, currently being off line in new capacity, and the industry being delayed, we expect supply-demand balances to tighten considerably over the next 12 months. We will certainly need new capacity to be built to meet the Renewable Fuels Requirements in 2011, if not before. Margins will have to improve to not only provide a better business environment for existing capacity to operate, but also to attract investment and needed new production.

2009 年，我們相信這種動態將會發生轉變，因為將需要 15 億加侖的新最低需求，而新上線的產能將是 10 億加侖或更少。由於乙醇利潤率的壓力導致一些現有產能、目前新產能下線以及該行業被推遲，我們預計未來 12 個月供需平衡將大幅收緊。我們肯定需要在 2011 年（如果不是更早的話）建造新的產能以滿足可再生燃料的要求。利潤率必須提高，不僅要為現有的運營能力提供更好的商業環境，還要吸引投資和所需的新生產。

The new Obama administration, we believe, will continue to support the rapid growth of the biofuels industry. In fact, in his campaign platform, President-elect Obama called for an increase of the Renewable Fuel Standard to 60 billion gallons by 2030, from the 36 billion gallons currently required by 2022. Combining continued policy support for the rapid growth of the ethanol industry with a significant value that ethanol delivers to the transportation fuel supply, should result in a much healthier ethanol industry as we move through 2009.

我們相信，新的奧巴馬政府將繼續支持生物燃料行業的快速發展。事實上，當選總統奧巴馬在競選綱領中呼籲將可再生燃料標準從目前到 2022 年所需的 360 億加侖增加到 2030 年的 600 億加侖。結合對乙醇行業快速增長的持續政策支持乙醇對運輸燃料供應具有重要價值，隨著我們進入 2009 年，乙醇行業應該會更加健康。

Low Carbon Fuel Standards will be the next wave of policy support interaction for the growth of our industry. California is pioneering this effort, and will be finalizing the rules early next year to implement Governor Schwarzenegger's Executive Order calling for a 10% reduction in the carbon intensity of fuels by 2020. We believe California's program will be the model for the national Low Carbon Fuel Standard, which was also a policy goal in President-elect Obama's campaign platform.

低碳燃料標準將是我們行業發展的下一波政策支持互動。加州正在率先開展這項工作，並將在明年初敲定規則，以實施施瓦辛格州長的行政命令，要求到 2020 年將燃料的碳強度降低 10%。我們相信加州的計劃將成為全國低碳燃料的典範標準，這也是當選總統奧巴馬競選綱領中的一項政策目標。

Expanded ethanol use remains the quickest, most cost effective way to achieve meaningful CO2 reductions from fuels. Our business strategy of building energy-efficient plants that use 30% less process energy than typical midwest plants, by avoiding [drawing] our co-product distiller screens, gives us a distinct, competitive advantage in the Low Carbon Fuel regulatory environment. While average US ethanol reduces the lifecycle CO2 emissions by roughly 25%, the ethanol that Pacific Ethanol produces reduces CO2 emissions by over 40%. We will be able to monetize this advantage as state and national Low Carbon Fuel regulations are implemented.

擴大乙醇的使用仍然是實現燃料中有意義的二氧化碳減排的最快、最具成本效益的方法。我們通過避免[繪製]我們的副產品蒸餾器篩網來建造比典型的中西部工廠使用的過程能源少 30% 的節能工廠的業務戰略，這為我們在低碳燃料監管環境中提供了獨特的競爭優勢。雖然美國乙醇平均可將生命週期內的二氧化碳排放量減少約 25%，但太平洋乙醇生產的乙醇可將二氧化碳排放量減少 40% 以上。隨著州和國家低碳燃料法規的實施，我們將能夠利用這一優勢獲利。

The Renewable Fuel Standard's requirement for advanced biofuels, combined with low carbon fuel standards, will also provide strong impetus for the rapid growth of cellulose ethanol. We continue to develop our strategy to be an industry leader in this area. Our geographical position and initiatives supported by our collaboration with BioGasol of Denmark and the Department of Energy, are moving us toward an integration of cellulose technology into our current corn ethanol production platform. Michelle, at this time, please open the lines for questions.

可再生燃料標準對先進生物燃料的要求，結合低碳燃料標準，也將為纖維素乙醇的快速發展提供強勁動力。我們將繼續發展我們的戰略，成為該領域的行業領導者。在我們與丹麥 BioGasol 和能源部合作的支持下，我們的地理位置和舉措正在推動我們將纖維素技術整合到我們當前的玉米乙醇生產平台中。米歇爾，此時，請打開線路提問。

(OPERATOR INSTRUCTIONS) And your first question comes from the line of Joe Gomes, of Oppenheimer. Please proceed.

（操作員說明）您的第一個問題來自 Oppenheimer 的 Joe Gomes。請繼續。

Good morning. Hey, I was wondering if you guys might be able to just give me the amount of DDG sales in the quarter, and what your average price was.

早上好。嘿，我想知道你們是否可以告訴我本季度 DDG 的銷售量，以及你們的平均價格是多少。

I'm sorry, could you repeat the question.

對不起，你能重複一下這個問題嗎？

Yeah, I'm just trying to get the ddg sales in the quarter and what the average price for those were?

是的，我只是想獲得該季度的 ddg 銷售額，平均價格是多少？

We don't actually break those out, Joe.

我們實際上並沒有打破這些，喬。

Okay.

好的。

But, you can you know certainly back into, if you look at our co-product return, from a modeling standpoint, you can probably look at work with the co-product return number based upon our corn, the typical amount of distillers grain versus the corn used.

但是，如果您從建模的角度查看我們的聯產品退貨，您可以肯定地知道，您可能會根據我們的玉米查看聯產品退貨數量，酒糟的典型數量與使用的玉米。

Right, I'll also ask my typical question on the pursued dynamics, anything new going on there?

對了，我也會問我關於追求動態的典型問題，那裡有什麼新東西嗎？

Yes, we're still working very diligently with the Pursued Dynamics, the status there, and we do believe that it is going to result in meaningful yield improvements. Some of the operating issues that we ran into when were putting it into commercial operations required us to work with Pursued Dynamics to really reconfigure and expand the equipment so that we can be having the units more integrated and be able to clean it off line while we continue to operate. So it's essentially putting in a new unit that is currently being constructed, so we hope by the end of the year, early next, to have that new equipment installed and continue with the testing regime.

是的，我們仍在非常努力地處理 Pursued Dynamics 以及那裡的狀態，我們確實相信它將帶來有意義的產量提高。我們在將其投入商業運營時遇到的一些操作問題要求我們與 Pursued Dynamics 合作，以真正重新配置和擴展設備，以便我們能夠使單元更加集成並能夠在我們離線時對其進行清理繼續經營。所以它本質上是在安裝一個目前正在建造的新裝置，所以我們希望在今年年底，明年年初，安裝新設備並繼續進行測試。

Okay, and I was just wondering on liquidity issue, if I was doing some quick back-of-the-envelop calculations hearing Joe correctly, with the money you got back, the final draw down on the debt facility, it sounded like in October you had roughly $36 million worth of cash left over for use of working capital purposes. Is that somewhat in the ballpark?

好的，我只是想知道流動性問題，如果我在做一些快速的粗略計算，聽到喬正確的話，用你拿回來的錢，最後提取債務工具，聽起來就像是在 10 月你有大約 3600 萬美元的現金用於營運資金用途。這有點在球場上嗎？

Well, we don't give forward guidance on exactly where we were, but you can see from the end of the quarter, the cash on the balance sheet was a bit over $30 million, and it was actually roughly the same as it had been the prior quarter. Subsequent to that, we did get the additional return of the equity that Joe talked about.

好吧，我們沒有就具體情況給出前瞻性指導，但你可以從本季度末看到，資產負債表上的現金略高於 3000 萬美元，實際上與過去大致相同上一季度。在那之後，我們確實得到了喬所說的額外股權回報。

Okay, and one last one on the SG&A. You mentioned about, it would be going down on a per gallon basis and on a percentage of revenue basis, when on an actual dollar basis, I know it has been coming down, is this level today, or in the third quarter, is that a good level to be modeling, or do you still think there is more to wring out in that?

好的，最後一個關於 SG&A。你提到過，它會在每加侖的基礎上和收入的百分比基礎上下降，當以實際美元為基礎時，我知道它一直在下降，是今天的這個水平，還是在第三季度，是一個很好的建模水平，還是你仍然認為還有更多的事情要做？

Well, there is probably a little bit more to wring out in that, Joe. The SG&A was impacted by our Stockton facility.

好吧，喬，這可能還有一點需要解決的問題。 SG&A 受到我們斯托克頓工廠的影響。

Right.

正確的。

Us bringing it on line, and plus we have got a number of initiatives currently in place to reduce SG&A. So, I think you're going to see a reduced SG&A number in the future, but I really can't comment on what that number would be.

我們將其上線，而且我們目前已經採取了一些舉措來減少 SG&A。所以，我認為你將來會看到 SG&A 數量減少，但我真的無法評論這個數字是多少。

Okay. Thanks guys.

好的。多謝你們。

Thank you, Joe.

謝謝你，喬。

Your next question comes from the line of Jinming Liu of Ardour Capital, please proceed.

您的下一個問題來自Ardor Capital的Jinming Liu，請繼續。

Hi, there is this is [Shaun Lockman] for Jinming, quick question just in terms of your marketing business, you talk as it being a more increased percentage of your total ethanol sales. Can you shed some light on that, are you anticipating buying more ethanol in the fourth quarter, or how are you finding the market in terms of getting a hold of it and reselling it?

嗨，這是 Jinming 的 [Shaun Lockman]，關於您的營銷業務的快速問題，您說的是它在您的乙醇總銷售額中所佔的百分比更大。您能否對此有所了解，您是否預計第四季度會購買更多乙醇，或者您如何找到市場以獲取並轉售它？

Well, it currently represents about 50%. That proportion was down slightly from the prior quarter, so we're very responsive to market dynamics and opportunities. We are seeing good growth in the demand for ethanol in our market, specifically as California moves from a 5.7% to a 10% blend over the next 12 months, so we will certainly evaluate opportunities to grow our marketing business along with our production.

嗯，它目前約佔 50%。這一比例比上一季度略有下降，因此我們對市場動態和機遇非常敏感。我們看到我們市場對乙醇的需求增長良好，特別是隨著加州在未來 12 個月內從 5.7% 變為 10%，因此我們肯定會評估與生產一起發展營銷業務的機會。

Great. One other quick question. Prices have continued to sort of pull back in fourth quarter. Is it fair to assume that we could see some more inventory write-downs in the coming quarter?

偉大的。另一個快速的問題。價格在第四季度繼續回落。假設我們可以在下一季度看到更多的庫存減記是否公平？

The inventory write-downs, we don't want to comment on the current quarter on the - - on the future quarters, but it is solely going to be dependent on where the commodity markets go. So it is highly uncertain, and you're just going to have to watch the commodity markets.

庫存減記，我們不想對當前季度和未來季度發表評論，但這完全取決於商品市場的走向。所以它是高度不確定的，你只需要關注商品市場。

It all depends on your assumption on where ethanol prices will be at the end of December, and that is awfully hard to call, given the current volatility of all commodity markets.

這完全取決於您對 12 月底乙醇價格將在哪裡的假設，鑑於當前所有商品市場的波動性，這很難確定。

Okay, thanks guys, that's it for me.

好的，謝謝各位，這就是我的。

Your next question comes from the line Pavel Molchanov of Raymond James, please proceed.

您的下一個問題來自 Raymond James 的 Pavel Molchanov，請繼續。

Good morning guys, two questions, first on your liquidity. Do you still have a $30 million loan payment that is due in the first half of '09?

大家早上好，有兩個問題，首先是關於你的流動性。您是否還有 09 年上半年到期的 3000 萬美元貸款？

Yes, that is true. And it's due to a strategic partner, Liles, and we are talking with Liles currently, and have been talking with them throughout both the third quarter and like I indicated currently, about a possible restructuring.

是的，這是真的。這要歸功於戰略合作夥伴 Liles，我們目前正在與 Liles 進行談判，並且在整個第三季度一直在與他們討論，就像我目前所指出的那樣，可能進行重組。

Understood, and if you do need to make the pre-payment, can you talk about some of the options for raising that cash?

明白了，如果你確實需要預付款，你能談談籌集現金的一些選擇嗎？

That would be conjecture on our part at this point, but obviously it would be dependent upon where the margins were and what kind of cash is being generated by operations. And we obviously have options and access to debt and equity markets as well.

在這一點上，這只是我們的猜測，但顯然這將取決於利潤率在哪里以及運營產生的現金類型。我們顯然也有選擇權和進入債務和股票市場的機會。

Great, and the second question is, in third quarter, seems like third party sales kind of dropped off a little bit. Can you just tell us what you're seeing in terms of production from some of the smaller private producers?

太好了，第二個問題是，在第三季度，第三方銷售似乎有點下降。您能告訴我們您在一些較小的私人生產商的生產方面看到了什麼嗎？

It would probably be inappropriate for us to comment on partners that we work with, but certainly you have seen generally industry reports on how some production has come off line and some has been reduced. So, certainly we're seeing that across the industry. Our own reduction on third party sales was also a function of not only our own production increasing, but really our taking a fairly disciplined approach to the market, and we were walking away from business that we thought was inappropriately priced. So it is part of what we're able to do with the marketing, the production business, is that we can calibrate our sales and how much we buy, versus how much we produce, depending upon our view of the market.

我們可能不適合對與我們合作的合作夥伴發表評論，但您肯定已經看到了關於一些生產如何下線和一些生產如何減少的普遍行業報告。所以，我們當然在整個行業都看到了這一點。我們自己減少第三方銷售的原因不僅是我們自己的產量增加，而且實際上我們對市場採取了相當有紀律的方法，我們正在放棄我們認為定價不當的業務。因此，我們能夠對營銷和生產業務做的一部分是，我們可以根據我們對市場的看法來校准我們的銷售量以及我們購買的數量與生產的數量。

Understood, and on that last point as a follow up, I know you haven't historically given marketing margins, but have you seen any noticeable change in marketing margins let's say, in the last two or three months?

了解，在最後一點作為跟進，我知道您在歷史上沒有給出營銷利潤，但是您是否看到營銷利潤有任何明顯的變化，比如說，在過去的兩三個月裡？

No, so many of our deals, we take a pretty low risk view, and we have marketing agreements that are based upon a fixed margin, so typically they don't change all that much. Certainly you can see it from our inventory write-down when you are purchasing product and selling into a falling market, we do end up taking a hit on inventory as the market goes down, and conversely pick that up on the way when the markets go up.

不，我們的許多交易都採取了相當低的風險觀點，並且我們有基於固定利潤的營銷協議，所以通常它們不會發生太大變化。當然，當您購買產品並在下跌的市場中銷售時，您可以從我們的庫存減記中看到這一點，我們最終會在市場下跌時對庫存造成打擊，反之，在市場下跌時會增加庫存向上。

Understood, thank you very much.

明白了，非常感謝。

(OPERATOR INSTRUCTIONS) And you do have a question from the line of Ian Horowitz. Please proceed.

（操作員說明）您確實有一個來自 Ian Horowitz 的問題。請繼續。

Joe I think you made a comment on the distiller grain side, that you had a high ratio of fixed priced contracts for the third quarter. Are those anniversaried, or (inaudible), or are we to expect another fourth quarter with a significant volume still remaining under these (inaudible question - microphone inaccessible)?

喬，我認為您在酒糟方面發表了評論，您在第三季度的固定價格合同比例很高。是那些週年紀念日，還是（聽不清），還是我們期待另一個第四季度仍有大量剩餘在這些（聽不清的問題 - 麥克風無法訪問）？

Well we normally don't comment on what is going to happen in the fourth quarter, but traditionally these fixed price contracts are renewed. They're called clock contracts; they're normally renewed in the late third quarter, early fourth quarter. I really don't want to comment on what we're going to be doing in 2009. And maybe I'll just leave my comments on that, unless Neil has got something further to add.

好吧，我們通常不會評論第四季度會發生什麼，但傳統上這些固定價格合同會續簽。它們被稱為時鐘合約；它們通常在第三季度末、第四季度初更新。我真的不想評論我們將在 2009 年做什麼。也許我會就此發表評論，除非 Neil 有進一步的補充。

Well the only thing I would add Joe is correct, and there is still some of that contracting we have done obviously that it's reset at different values of corn. But just as we have been fairly close in on our going out and taking forward positions on corn and ethanol, we have tended to try to match up our our distillers grain sales as well, and we also are seeing a response on the part of the feeders, the dairies and feed lots are taking a similar view. So there is less long-term contracting that's going on in that business as well. So it is more weighted to contracts are shorter term, and often indexed to corn prices.

好吧，我唯一要補充的是喬是正確的，而且我們顯然已經完成了一些合同，即它在不同的玉米價值下重新設置。但是，正如我們已經相當接近我們在玉米和乙醇方面的遠期頭寸一樣，我們也傾向於嘗試與我們的酒糟銷售量相匹配，我們也看到了部分反應飼養者、奶牛場和飼料場也持類似觀點。因此，該業務中正在進行的長期合同也較少。因此，它更側重於短期合約，並且通常與玉米價格掛鉤。

And still can you just run down the non-cash charges for the quarter again? You have an inventory adjustment of 5.6, a net derivative loss of 1.7. And I understand the Imperial ones as well, but were there any others that I missed?

您仍然可以再次降低本季度的非現金費用嗎？您的庫存調整為 5.6，淨衍生損失為 1.7。而且我也了解帝國的那些，但是我錯過了其他任何人嗎？

It is would be 0.7 of non-cash compensation. And I think - -

這將是 0.7 的非現金補償。而且我認為——

Depreciation. Yeah, you remember the depreciation was that we provided?

折舊。是的，你還記得我們提供的折舊嗎？

$7 million, $6.9 million of depreciation about, and there was also a GAAP reserve of about $300,000. I think that would catch all of it.

700 萬美元，折舊約 690 萬美元，還有約 300,000 美元的 GAAP 準備金。我認為這會抓住一切。

Right, and then you have the $26.6 million impairment.

對，然後你有 2660 萬美元的減值。

The reserve of 300 and then the depreciation. Okay great, thanks.

準備金300，然後折舊。好的太好了，謝謝。

And your next question is a follow up from the line of Joe Gomes. Please proceed.

您的下一個問題是 Joe Gomes 的後續問題。請繼續。

Just kind of following up on what Ian said on the co-product, you guys think you can get back to that mid-20 co-product return level?

只是跟進伊恩在聯產品上所說的話，你們認為你可以回到 20 年中期的聯產品退貨水平嗎？

It is our effort to increase the value of all of the products we sell. So Joe it is our effort to move that number up. Without offering guidance on that, we do see some indications in the market that we're going to be able to improve some value.

我們努力提高我們銷售的所有產品的價值。所以喬，我們努力提高這個數字。在沒有提供這方面的指導的情況下，我們確實在市場上看到了一些跡象表明我們將能夠提高一些價值。

Okay thanks.

好的謝謝。

And that does conclude the question and answer session. I'll now turn it back to management for closing remarks .

這確實結束了問答環節。我現在將其轉回管理層以結束髮言。

Thank you all for participating on the call. Appreciate your interest and support, and look forward to speaking to you next quarter.

感謝大家參與電話會議。感謝您的關注和支持，並期待在下個季度與您交談。

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation, you may now disconnect. Have a great day.

女士們，先生們，感謝你們參加今天的會議。演示到此結束，您現在可以斷開連接。祝你有美好的一天。