Alto Ingredients Inc (ALTO) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen. Welcome to Pacific Ethanol Incorporated's fourth quarter and year end 2016 financial results conference all. At this time, all participants' lines are in a listen-only mode to reduce background noise; but later, we will be holding a question-and-answer session after the prepared remarks and instructions will follow at that time. (Operator Instructions). As a reminder, today's this conference call is being recorded.

女士們，先生們，美好的一天。歡迎參加太平洋乙醇公司 2016 年第四季度和年終財務業績會議。此時，所有與會者的線路都處於只聽模式，以減少背景噪音；但稍後，我們將在準備好的評論和說明之後進行問答環節。 （操作員說明）。提醒一下，今天的電話會議正在錄製中。

I would now like to introduce your first speaker for today, Becky Herrick of LHA. You have the floor, ma'am.

我現在想介紹您今天的第一位演講者，LHA 的 Becky Herrick。請發言，女士。

Thank you, Andrew, and thank you all for joining us today for Pacific Ethanol's fourth quarter and year end 2016 results conference call. On the call today are Neil Koehler, President and CEO; and Bryon McGregor, CFO.

謝謝你，安德魯，感謝大家今天參加太平洋乙醇公司 2016 年第四季度和年終業績電話會議。今天的電話會議是總裁兼首席執行官 Neil Koehler；和首席財務官布賴恩·麥格雷戈。

Pacific Ethanol issued a press release yesterday, providing details of the Company's quarterly and 12-month results. The Company also prepared a presentation for today's call that is available on the Company's website at pacificethanol.com. If you have any questions, please call LHA at 415-433-3777.

Pacific Ethanol 昨天發布了一份新聞稿，提供了公司季度和 12 個月業績的詳細信息。公司還為今天的電話會議準備了一份演示文稿，可在公司網站 pacificethanol.com 上查閱。如果您有任何問題，請致電 415-433-3777 聯繫 LHA。

A telephone replay of today's call will be available through March 9, the details of which are included in yesterday's press release. A webcast replay will also be available at Pacific Ethanol's website. Please note that information in this call speaks only as of today, March 2. And, therefore, you are advised that information may no longer be accurate at the time of any replay.

今天的電話重播將持續到 3 月 9 日，詳細信息包含在昨天的新聞稿中。 Pacific Ethanol 的網站也將提供網絡重播。請注意，本次電話會議中的信息僅在今天（3 月 2 日）時發表。因此，建議您在任何重播時信息可能不再準確。

Please refer to the Company's Safe Harbor statement on slide two of the presentation available online, which says that some of the comments in this presentation constitute forward-looking statements and considerations that involve the number of risks and uncertainties. The actual future results of Pacific Ethanol could differ materially from those statements. Factors that could cause or contribute to such differences include, but are not limited to, events, risks, and other factors previously and from time to time disclosed in Pacific Ethanol's filings with the SEC. Except as required by applicable law, the Company assumes no obligation to update any forward-looking statements.

請參閱在線演示文稿第二張幻燈片上公司的安全港聲明，該演示文稿中的一些評論構成涉及風險和不確定性數量的前瞻性陳述和考慮因素。 Pacific Ethanol 的實際未來結果可能與這些陳述存在重大差異。可能導致或促成此類差異的因素包括但不限於太平洋乙醇公司向 SEC 提交的文件中先前和不時披露的事件、風險和其他因素。除適用法律要求外，本公司不承擔更新任何前瞻性陳述的義務。

In management's prepared remarks, non-GAAP measures will be referenced. Management uses these non-GAAP measures to monitor the financial performance of operations and believe these measures will assist investors in assessing the Company's performance for the periods being reported. The Company defines adjusted EBITDA as unaudited net income or loss attributed to Pacific Ethanol before interest expense, benefit for income taxes, asset impairment, purchase accounting adjustments, fair value adjustments and depreciation and amortization expense. To support the Company's review of non-GAAP information later in this call, a reconciling table is included in yesterday's press release.

在管理層準備好的評論中，將引用非公認會計原則措施。管理層使用這些非公認會計原則措施來監控運營的財務業績，並相信這些措施將有助於投資者評估公司在報告期間的業績。公司將調整後的 EBITDA 定義為在利息費用、所得稅福利、資產減值、採購會計調整、公允價值調整以及折舊和攤銷費用之前歸屬於 Pacific Ethanol 的未經審計的淨收入或損失。為了支持公司稍後在本次電話會議中對非公認會計原則信息的審查，昨天的新聞稿中包含了一個核對錶。

Now, I will turn the call over to President and CEO, Neil Koehler. Please go ahead.

現在，我將把電話轉給總裁兼首席執行官 Neil Koehler。請繼續。

Thank you, Becky, and thank you all for joining us today.

謝謝你，貝基，也感謝大家今天加入我們。

We ended 2016 on a high note, as reflected in our financial performance. For the fourth quarter, we reported net sales of $441.7 million, a 17% increase over the fourth quarter last year. Total gallons sold were $240.9 million, up 13% from last year. We also reported significant year-over-year growth in gross margins, operating income, net income, and adjusted EBITDA. In addition, we successfully refinanced our $155 million term debt, significantly lowering our cost of capital and accomplishing a major milestone for the Company. Bryon will review this accomplishment more in a moment.

正如我們的財務業績所反映的那樣，我們以高調結束了 2016 年。第四季度，我們報告的淨銷售額為 4.417 億美元，比去年第四季度增長 17%。總加侖銷量為 2.409 億美元，比去年增長 13%。我們還報告了毛利率、營業收入、淨收入和調整後 EBITDA 的顯著同比增長。此外，我們成功地為我們的 1.55 億美元定期債務再融資，顯著降低了我們的資本成本，並為公司實現了一個重要的里程碑。稍後，Bryon 將更詳細地回顧這一成就。

On an annual basis, compared to last year, net sales were $1.6 billion, up 36%. Gross profit increased to $51.8 million. Net income was a $148,000, up from a net loss of $20.1 million. And adjusted EBITDA increased to $58.9 million.

按年計算，與去年相比，淨銷售額為 16 億美元，增長 36%。毛利潤增至 5180 萬美元。淨收入為 148,000 美元，高於淨虧損 2,010 萬美元。調整後的 EBITDA 增加到 5890 萬美元。

These results reflect the benefits of acquisition and the successful integration of our Midwest assets well as boosting production efficiencies, lowering our carbon store and further strengthening our balance sheet. They also reflect a generally positive market environment, while 2016 started off on a weak note and strengthened towards the back half of the year, particularly in the fourth quarter. In addition, US. ethanol demand remained strong throughout the year, exports grew to higher levels year-over-year, and overall supply and demand remained relatively well-balanced, providing a stronger operating foundation in 2016 versus the prior year.

這些結果反映了收購和成功整合我們的中西部資產以及提高生產效率、降低碳儲存和進一步加強我們的資產負債表的好處。它們也反映了總體上積極的市場環境，而 2016 年開始時表現疲軟，並在下半年走強，尤其是在第四季度。此外，美國。乙醇需求全年保持旺盛，出口同比增長較高，整體供需保持相對平衡，2016年經營基礎較上年更加穩固。

Throughout 2016, we focused on implementing innovative initiatives designed to optimize our production, lower our carbon score, and generate near-term returns. We are in the process of analyzing data from the commercial operation of our industrial scale membrane system at Madera plant.

在整個 2016 年，我們專注於實施旨在優化生產、降低碳分數並產生短期回報的創新舉措。我們正在分析馬德拉工廠工業規模膜系統的商業運營數據。

By separating water from ethanol in the plant's dehydration setup, the membrane system is expected to increase operating efficiencies, lower production costs, and reduce the carbon intensity of ethanol produced at this facility. We are in the late stages of interconnecting our cogeneration system with Pacific Gas & Electric, and will begin full operations this spring at the Stockton plant. The cogeneration system delivers steam and electricity into the Stockton plant while lower emissions and will reduce our annual energy costs by up to $4 million.

通過在工廠的脫水裝置中將水與乙醇分離，膜系統有望提高運營效率、降低生產成本並降低該工廠生產的乙醇的碳強度。我們正處於將我們的熱電聯產系統與 Pacific Gas & Electric 互連的後期階段，並將於今年春天在斯托克頓工廠開始全面運營。熱電聯產系統為斯托克頓工廠提供蒸汽和電力，同時降低排放，並將我們的年度能源成本降低多達 400 萬美元。

At our Madera plant, we are continuing work toward installing a 5-megawatt solar power system with the goal of beginning full scale operations in early 2018. The solar system is expected to lower our utility costs by approximately $1 million annually and lower our carbon score. We also began generating high-value D3 RINs from the production of cellulosic ethanol at our Stockton plant. In the third quarter, we received the first approved registration from the EPA to produce cellulosic ethanol from corn fiber utilizing Edeniq's Pathway and Cellunator technologies. We are now on track to produce over 1 million gallons of cellulosic ethanol annually at Stockton. We continue to focus on fine tuning this technology to maximize yields and production efficiencies.

在我們的馬德拉工廠，我們正在繼續努力安裝一個 5 兆瓦的太陽能發電系統，目標是在 2018 年初開始全面運營。太陽能係統預計每年可將我們的公用事業成本降低約 100 萬美元，並降低我們的碳分數.我們還開始在斯托克頓工廠通過生產纖維素乙醇生產高價值的 D3 RIN。在第三季度，我們獲得了 EPA 的第一個批准註冊，可以利用 Edeniq 的 Pathway 和 Cellunator 技術從玉米纖維中生產纖維素乙醇。我們現在有望在斯托克頓每年生產超過 100 萬加侖的纖維素乙醇。我們將繼續專注於微調這項技術，以最大限度地提高產量和生產效率。

Based on the success of this initiative, we announced in February, we are introducing cellulosic ethanol production to our Madera plant. Again, utilizing Edeniq's Pathway and Cellunator technologies, we expect to produce up to 1 million gallons of cellulosic ethanol annually. Once commercial scale production has reached, we expect the technology will increase earnings by over $2 million per year. We are now working with EPA to qualify this production for D3 RINs and we expect that approval to be received near the time we begin commercial operations in the second half of the year. We are also working with the California Air Resources Board to qualify our cellulosic production at both our Stockton and Madera facilities for additional carbon credit under the California Low-Carbon Fuel Standard.

基於這一舉措的成功，我們在 2 月宣布，我們將在馬德拉工廠引入纖維素乙醇生產。同樣，利用 Edeniq 的 Pathway 和 Cellunator 技術，我們預計每年可生產多達 100 萬加侖的纖維素乙醇。一旦達到商業規模生產，我們預計該技術每年將增加超過 200 萬美元的收入。我們現在正在與 EPA 合作，以使該產品符合 D3 RIN 的要求，我們預計將在下半年開始商業運營時獲得批准。我們還與加州空氣資源委員會合作，使我們在斯托克頓和馬德拉工廠的纖維素生產獲得加州低碳燃料標準下的額外碳信用額度。

As I mentioned earlier, late in the fourth quarter, we entered into a series of agreements to refinance our term debt and improve our liquidity. As part of that effort, we expanded our relationship with the Aurora Co-op; specifically, we agreed to contribute our Aurora plant assets into a newly created company, Pacific Aurora. And the Aurora Co-op simultaneously contributed to Aurora West Grain Elevator with 3.5 million bushels of grain storage capacity, loop track, related land and other assets. The Aurora Co-op also paid us $30 million in cash, and now owns 26% of the new entity.

正如我之前提到的，在第四季度末，我們簽訂了一系列協議，為我們的定期債務再融資並改善我們的流動性。作為這項工作的一部分，我們擴大了與 Aurora Co-op 的關係；具體而言，我們同意將我們的 Aurora 工廠資產貢獻給新成立的公司 Pacific Aurora。而Aurora Co-op同時為Aurora West Grain Elevator貢獻了350萬蒲式耳的儲糧能力、環形軌道、相關土地等資產。 Aurora Co-op 還向我們支付了 3000 萬美元現金，現在擁有新實體 26% 的股份。

Pacific Aurora a fully consolidated subsidiary of Pacific Ethanol. The transaction was immediately accretive to shareholders. And we expect the arrangement to reduce operating costs by over $5 million annually. In addition this expanded relationship fully integrates the property into one highly functional and well performing facility, enabling us to optimize grain procurement, more efficiently manage grain transfers, offer storage, drying and merchandizing to local farmers, and provides us with additional growth opportunities.

Pacific Aurora 是 Pacific Ethanol 的完全合併子公司。該交易立即增加了股東的利益。我們預計該安排每年可減少超過 500 萬美元的運營成本。此外，這種擴展的關係將物業完全整合到一個功能強大且性能良好的設施中，使我們能夠優化糧食採購，更有效地管理糧食轉運，為當地農民提供儲存、乾燥和商品銷售，並為我們提供額外的增長機會。

We are encouraged by the trends in the ethanol industry and as the fundamentals support continued long-term demand. Ethanol is a low-carbon, high- octane transportation fuel and is an integral component of gasoline for all refiners. So, far in the first quarter, a period known for seasonally low demand, we have seen better market conditions than we have the last two years of this time, although margins have been compressed.

我們對乙醇行業的趨勢感到鼓舞，並且基本面支持持續的長期需求。乙醇是一種低碳、高辛烷值的運輸燃料，是所有煉油廠汽油不可或缺的組成部分。因此，到目前為止，在以季節性低需求而聞名的第一季度，我們看到的市場狀況比過去兩年要好，儘管利潤率已經被壓縮。

Corn prices continue to be favorable in light of the record corn harvest, while ethanol prices remain firm and gasoline prices are on the rebound, all of which creates a positive backdrop for improved margins. Exports are expected to continue growing year-over-year in 2017, as ethanol is increasingly blended internationally to meet octane requirements and reduce immersions.

鑑於創紀錄的玉米收成，玉米價格繼續有利，而乙醇價格保持堅挺，汽油價格正在反彈，所有這些都為提高利潤率創造了積極的背景。預計 2017 年出口將繼續同比增長，因為乙醇在國際上越來越多地混合以滿足辛烷值要求並減少浸泡。

Overall, with the backdrop of strong ethanol demand and a record corn crop, we see a supportive environment for ethanol into 2017.

總體而言，在乙醇需求強勁和玉米收成創紀錄的背景下，我們認為 2017 年乙醇市場將受到支持。

On the regulatory front, we also see continued support for the ethanol industry. Thus far, we believe all indications are that the new administration will be supportive of policies such as renewable fuel standard, which prioritize domestic energy resources. 2016 was a year of growth for E15 sales and infrastructure development. At the end of 2016, there were over 600 stations and as expected to double by the end of 2017, offering E15 for sale. We are seeing increased momentum in the adoption of E15 infrastructure as the 15% ethanol blend becomes increasing reality in the US.

在監管方面，我們還看到對乙醇行業的持續支持。到目前為止，我們認為所有跡像都表明新政府將支持可再生燃料標準等政策，這些政策優先考慮國內能源資源。 2016 年是 E15 銷售和基礎設施發展增長的一年。 2016 年底，車站超過 600 個，預計到 2017 年底將翻一番，提供 E15 銷售。隨著 15% 乙醇混合物在美國日益成為現實，我們看到採用 E15 基礎設施的勢頭越來越大。

I would like now to turn the call over to Bryon for a review of the financials. Bryon?

我現在想將電話轉給布賴恩，以審查財務狀況。布賴恩？

Thank you, Neil.

謝謝你，尼爾。

Our consolidated financial results for the fourth quarter 2016 compared to the fourth quarter of 2015 were as follows. Net sales were $441.7 million compared to $376.8 million. This 17% growth rate reflects a year-over-year increase in production and third-party gallons sold as well as a higher average sells prices per gallon for ethanol. Cost of goods sold was $415 million compared to $367.2 million. Gross profit was $26.7 million compared to $9.5 million.

與 2015 年第四季度相比，我們 2016 年第四季度的合併財務業績如下。淨銷售額為 4.417 億美元，而淨銷售額為 3.768 億美元。這 17% 的增長率反映了產量和第三方銷售加侖數的同比增長，以及每加侖乙醇的平均銷售價格更高。商品銷售成本為 4.15 億美元，而 3.672 億美元。毛利潤為 2670 萬美元，而毛利潤為 950 萬美元。

SG&A expenses were $7.9 million and reflect an unamortized refinancing cost and typical yearend adjustments; this compares to $7.1. Income from operations was $18.8 million compared to $500,000. Interest expense was $5.8 million compared to $5.4 million. Net income available to common stockholders was $12.6 million or $0.30 per share compared to a loss of $1.1 million or $0.03 per share. Adjusted EBITDA was $27.4 million compared to $11 million.

SG&A 費用為 790 萬美元，反映了未攤銷的再融資成本和典型的年終調整；相比之下，7.1 美元。運營收入為 1880 萬美元，而 50 萬美元。與 540 萬美元相比，利息支出為 580 萬美元。普通股股東可獲得的淨收入為 1260 萬美元或每股 0.30 美元，而虧損為 110 萬美元或每股 0.03 美元。調整後的 EBITDA 為 2740 萬美元，而調整後的 EBITDA 為 1100 萬美元。

For the full year 2016 compared to 2015, net sales were $1.6 billion compared to $1.2 billion. Gross profit was $51.8 million compared to $7.4 million. SG&A was $28.3 million compared to $23.4 million. We expect SG&A in 2017 to be comparable to that of 2016. Operating income was $23.5 million compared to an operating loss of $18 million. Net income available to common stockholders was $148,000 or breakeven on a per share basis compared to a net loss of $20.1 million or $0.60 per share. And adjusted EBITDA was $58.9 million compared to $16.1 million.

與 2015 年相比，2016 年全年的淨銷售額分別為 16 億美元和 12 億美元。毛利潤為 5180 萬美元，而毛利潤為 740 萬美元。 SG&A 為 2830 萬美元，而 2340 萬美元。我們預計 2017 年的 SG&A 與 2016 年相當。營業收入為 2350 萬美元，而營業虧損為 1800 萬美元。普通股股東可獲得的淨收入為 148,000 美元或每股盈虧平衡，而淨虧損為 2010 萬美元或每股 0.60 美元。調整後的 EBITDA 為 5890 萬美元，而調整後的 EBITDA 為 1610 萬美元。

Now turning to our balance sheet. Cash and cash equivalents was $68.6 million at December 31, 2016 compared to $52.7 million at December 31, 2015. Working capital was $156 million at year-end compared to $125 million for the year prior. Our fourth quarter capital expenditures totaled $5.1 million, bringing our total CapEx for 2016 to just over $18 million.

現在轉向我們的資產負債表。截至 2016 年 12 月 31 日，現金和現金等價物為 6860 萬美元，而 2015 年 12 月 31 日為 5270 萬美元。年末營運資金為 1.56 億美元，而上年同期為 1.25 億美元。我們第四季度的資本支出總計 510 萬美元，使我們 2016 年的總資本支出略高於 1800 萬美元。

Our initial budget for capital projects in 2017 currently totals $45 million. This represents $15 million in previously announced projects, including completion of our Stockton cogeneration and the Madera site either in solar projects. The remaining $30 million represents projects that increase yield, capacity or revenues, improve operations, extend reliability, reduce costs or lower our carbon score. We will fund these projects through a combination of cash, cash flow or where appropriate, lower cost financing such as our PACE financing for our solar project.

我們 2017 年資本項目的初始預算目前總計 4500 萬美元。這代表先前宣布的項目中的 1500 萬美元，包括完成我們的斯托克頓熱電聯產和馬德拉站點的太陽能項目。剩餘的 3000 萬美元用於提高產量、產能或收入、改善運營、提高可靠性、降低成本或降低我們的碳分數的項目。我們將通過現金、現金流或在適當情況下以較低成本的融資方式為這些項目提供資金，例如我們為太陽能項目提供的 PACE 融資。

Consistent with our practice, we will adjust our capital budget based on prudent resource management, market conditions and evaluate and prioritize each new investment to optimize shareholder return.

根據我們的慣例，我們將根據審慎的資源管理、市場狀況調整我們的資本預算，並對每項新投資進行評估和優先排序，以優化股東回報。

In December, we announced a refinancing of our $155 million principal term debt through a series of transactions. In doing so, we reduced interest cost by more than $8 million annually; we lower our total debt outstanding by more than $12 million; and we increased cash, working capital and liquidity resources by approximately $55 million. This represents a major achievement for the Company as we significantly strengthen our balance sheet and establish more flexible financial structure upon which to continue to grow our business.

12 月，我們宣布通過一系列交易為我們 1.55 億美元的本金定期債務再融資。通過這樣做，我們每年減少了超過 800 萬美元的利息成本；我們將未償債務總額減少了 1200 萬美元以上；我們增加了大約 5500 萬美元的現金、營運資金和流動資金。這是公司的一項重大成就，因為我們顯著加強了我們的資產負債表並建立了更靈活的財務結構，以繼續發展我們的業務。

With that, I will turn the call back to Neil.

有了這個，我會把電話轉回給尼爾。

Thanks, Bryon.

謝謝，布賴恩。

We are proud of our accomplishments in 2016. We successfully integrated our Midwest assets, made enhancements at all of our plant assets and strengthened our balance sheet. In 2017, we remain committed to evaluating and investing in plant improvements to enhance efficiencies, implementing solutions to improve our carbon score, and increase profitability, continuing to strengthen our balance sheet to maintain strong cash flows and liquidity, and leveraging our diverse based of production and marking assets to expand our share of the renewable fuel and co-product markets.

我們為 2016 年取得的成就感到自豪。我們成功整合了中西部資產，改進了所有工廠資產並強化了資產負債表。 2017 年，我們將繼續致力於評估和投資工廠改進以提高效率，實施解決方案以提高我們的碳得分並提高盈利能力，繼續加強我們的資產負債表以保持強勁的現金流和流動性，並利用我們多樣化的生產基礎並標記資產以擴大我們在可再生燃料和副產品市場中的份額。

We are encouraged by the continued global demand for ethanol, particularly the growing demand for the low-carbon fuel we produce. With our successful strategy and strong balance sheet, we anticipate 2017 will be a year of solid financial performance for Pacific Ethanol.

我們對全球對乙醇的持續需求感到鼓舞，特別是對我們生產的低碳燃料的需求不斷增長。憑藉我們成功的戰略和強勁的資產負債表，我們預計 2017 年將是 Pacific Ethanol 財務業績穩健的一年。

And with that, I would like to turn the call, operator, over to questions.

有了這個，我想把電話轉給接線員來提問。

Ladies and gentlemen, the question-and-answer queue is now open. (Operator Instructions). We will be taking our first question from the line of Eric Stine from Craig-Hallum. Your line is open.

女士們，先生們，問答隊列現已開放。 （操作員說明）。我們將從 Craig-Hallum 的 Eric Stine 中提出我們的第一個問題。你的線路是開放的。

Hi, Neil. Hi, Bryon. Congrats on the quarter. Maybe we could just start on the regulatory front. I mean, there has obviously been a lot of noise there and seems to be positive, but just thoughts on, number one, I guess the 2017 RVO, thoughts on does that in fact get entered into the public record here at the end of March. And then, just point of obligation, I believe that is something that you are pretty agnostic to, but maybe if that were to change, how do you see that impacting the industry?

嗨，尼爾。嗨，布賴恩。祝賀本季度。也許我們可以從監管方面開始。我的意思是，那裡顯然有很多噪音，而且似乎是積極的，但只是想一想，第一，我猜是 2017 年的 RVO，想一想這是否真的在 3 月底進入了公共記錄.然後，只是義務點，我相信這是你非常不可知的事情，但也許如果這種情況發生變化，你如何看待這對行業的影響？

Sure, Eric. On the first point, the 2017 RVO, we will expect it to be fully implemented at the end of that freeze period that all regulations EPA went through, I believe it is March 21. So, no indication other than that will be full implementation of the 2017 RVOs. I think what will be interesting is that we stay on schedule with the EPA and we get to the spring, early summer and see what the 2018 RVOs will be. But we expect to see continued and full implementation of the RFS and increasing amounts of renewable fuels into the mix.

當然，埃里克。關於第一點，2017 RVO，我們預計它將在 EPA 所經歷的所有規定的凍結期結束時全面實施，我相信是 3 月 21 日。因此，除此之外沒有任何跡象表明將全面實施2017 RVO。我認為有趣的是，我們與 EPA 保持一致，我們將進入春季、初夏，看看 2018 年的 RVO 會是什麼。但我們希望看到 RFS 的持續和全面實施以及越來越多的可再生燃料進入組合。

As it relates to the point of obligation, all of the trade associations for ethanol, agnostic to some degree for non-obligated party. But since we care so much about the RFS and its integrity, we have all opposed moving the point of obligation for fear that it would be disruptive to the underlying integrity of that policy. That being said and what you have seen in the news is that there was an effort on the part of the administration to see some value in moving the RVO to reach out to the ethanol industry and say if we were to move the RVO and to include some opportunities to further increase the market penetration of E15 is that is something that could work. And while we remain opposed moving the point of obligation, certainly if there is RVP parity for E15, that would be very significant.

由於涉及到義務點，所有乙醇行業協會在某種程度上對非義務方是不可知論者。但由於我們非常關心 RFS 及其完整性，我們都反對移動義務點，因為擔心它會破壞該政策的基本完整性。話雖如此，您在新聞中看到的是，政府方面正在努力看到移動 RVO 以接觸乙醇行業的一些價值，並說明我們是否要移動 RVO 並包括進一步增加 E15 市場滲透率的一些機會是可行的。雖然我們仍然反對移動義務點，但如果 E15 存在 RVP 平價，那將非常重要。

So, there is a scenario where the point of obligation could be moved because if the administration decides they want to move it, they have that discretionary ability. And it is encouraging to us that in that discussion, it is being portrayed in a way that would include additional help for increasing the market access for higher level ethanol blends. So, if you look at the markets, when that news came out, and again it is still all conjecture and how knows where it heads, but corn markets were up, RIN prices were down and ethanol equities were up. So, clearly the markets thought it was positive news in terms of increasing the market share for ethanol.

因此，有一種情況是可以移動義務點，因為如果政府決定要移動它，他們就有這種酌處權。令我們感到鼓舞的是，在那次討論中，它的描述方式包括額外幫助增加更高水平乙醇混合物的市場准入。所以，如果你看看市場，當那個消息出來時，它仍然是所有的猜測，怎麼知道它的走向，但玉米市場上漲，RIN 價格下跌，乙醇股票上漲。因此，顯然市場認為這是增加乙醇市場份額的利好消息。

And then, I am going to segue to E15. You mentioned the Reid vapor pressure looking for a waiver there. Do you see a path forward there, outside of potentially as part of this point of obligation negotiation? And then, as part of that, I mean, what kind of incremental volumes are you looking for, for the industry due to E15?

然後，我將繼續前往 E15。你提到了里德蒸氣壓在那裡尋找豁免。除了可能作為這一義務談判的一部分之外，您是否看到了前進的道路？然後，作為其中的一部分，我的意思是，由於 E15，您正在為該行業尋找什麼樣的增量？

If there were an executive order to move the point of obligation and directed the EPA to extend the RVP allowance to E15 in the summer months outside of our key areas, that would be the quickest way to get that and there is no question that that would be a real boost to the marketing E15. The other way to accomplish that would be through congress. It was the Clean Air Act that extended the RVP allowance to E10, and that was a congressional act. So, there has been discussions and bills that are being introduced to do that. Congressionally that is less certain, and certainly a longer process. So, administratively, would be the quickies way to do that and that still might happen. But, as you point out, there are other avenues. So, on the E15, I mentioned, there is over 600 stations; we expect that to double. The volumes are good. It prices right, people love the product. And we expect in 2017 to see in an around a 100 million gallons of incremental demand by way of E15. Some say it could be less; some say it could be more, but we are encouraged. When it is on the street, it prices well and performs exceptionally well. And you see some very nice volumes at the stations that are selling it. And we also expect to see further announcements in 2017 of new large retail chains introducing E15 to the mix.

如果有一項行政命令移動義務點並指示 EPA 在我們關鍵區域以外的夏季月份將 RVP 津貼擴大到 E15，那將是實現這一目標的最快方式，毫無疑問，這將真正推動 E15 的營銷。實現這一目標的另一種方法是通過國會。正是《清潔空氣法》將 RVP 津貼擴大到 E10，這是一項國會法案。因此，已經有討論和法案被引入來做到這一點。從國會來看，這不太確定，而且肯定是一個更長的過程。因此，從管理上講，這將是一種快速的方式，而且這種情況仍然可能發生。但是，正如您所指出的，還有其他途徑。所以，在 E15 上，我提到過，有 600 多個車站；我們預計這一數字會翻一番。卷很好。它的價格合適，人們喜歡這個產品。我們預計 2017 年將通過 E15 看到大約 1 億加侖的增量需求。有人說可能更少；有人說可能更多，但我們受到鼓舞。當它在街上時，它的價格和性能都非常好。你會在售賣它的車站看到一些非常不錯的書。我們還預計 2017 年新的大型零售連鎖店將進一步宣布將 E15 引入該組合。

Right. Okay. Thanks for that. Maybe just on the export side, would China effectively close? And you and others clearly looking for growth. So, maybe just some of the important markets that are going to make up the export piece of the equation, I mean Brazil the obvious one, but some of the other ones that are going to help the cost?

正確的。好的。感謝那。也許只是在出口方面，中國會有效地關閉嗎？而你和其他人顯然在尋找成長。所以，也許只是一些重要的市場將構成出口的一部分，我的意思是巴西是顯而易見的市場，但其他一些將有助於降低成本的市場？

Well, certainly, the two largest are Brazil and Canada, and we anticipate to see very strong exports to both those countries at or above current levels, definitely see some growth in Canada. Canada actually looking at expanding their renewal fuel standard and potentially implementing a low carbon fuel standard; they are less than 10% ethanol in the overall mix. And we think that that will move rapidly towards that. So, we do see continued growth in Canada. I think you will see year-over-year growth in India, certainly in the Middle East right now with the very attractive pricing of ethanol and octane enhancer, we are seeing some additional exports into the Persian Gulf for blending with gasoline.

嗯，當然，最大的兩個是巴西和加拿大，我們預計對這兩個國家的出口將達到或高於當前水平，加拿大肯定會出現一些增長。加拿大實際上正在考慮擴大其更新燃料標準並可能實施低碳燃料標準；它們在整體組合中的乙醇含量低於 10%。我們認為這將迅速朝著那個方向發展。因此，我們確實看到了加拿大的持續增長。我認為你會看到印度的同比增長，當然在中東，現在乙醇和辛烷增強劑的價格非常有吸引力，我們看到一些額外的出口到波斯灣用於與汽油混合。

So, all-in-all, we and others expect that exports will be incrementally larger in 2017 than 2016. At our Ethanol Conference last week in San Diego informa was a third-party consultant on ag and energy issues, projected that the exports in 2017 will be 1.2 billion gallons, and that compares to just a bit over 1 billion gallons in 2016.

因此，總而言之，我們和其他人預計 2017 年的出口量將比 2016 年增加。上週在聖地亞哥舉行的乙醇會議上，一位農業和能源問題第三方顧問預計， 2017 年將達到 12 億加侖，而 2016 年僅略高於 10 億加侖。

Got it. Okay. Maybe just one last one for me, just on basis. I mean, that was a good number for you in the fourth quarter; it looks to me like you potentially locked some of that in. So, I mean, have you been able to lock that in to some extent going forward, and how should we think about that trending going forward?

知道了。好的。也許對我來說只是最後一個，只是在基礎上。我的意思是，這在第四季度對你來說是一個不錯的數字；在我看來，您可能會鎖定其中的一些內容。所以，我的意思是，您是否能夠在某種程度上將其鎖定在未來，我們應該如何考慮未來的趨勢？

We are always looking for opportunities to do that, and it is safe to say that we always have something in the portfolio on forward basis. And we pick our spots, and they are pretty easier take when the farmer wants to sell and the marketers want to move their products, we are able to improve upon our basis. So we do have some quarter basis out. It is been good because with some of the weather and logistics issues that the railroads have been extended, we have seen through transportation surcharges very high basis to the West Coast --

我們一直在尋找這樣做的機會，可以肯定地說，我們的投資組合中總是有一些前瞻性的東西。而且我們選擇我們的位置，當農民想要出售並且營銷人員想要移動他們的產品時，它們更容易獲得，我們能夠在我們的基礎上進行改進。所以我們確實有一些季度基礎。很好，因為鐵路延長了一些天氣和物流問題，我們通過運輸附加費看到西海岸的基礎非常高——

Yes.

是的。

And we have pretty much avoided that. We are seeing very good basis in the country. So, in Nebraska which not only feeds our Aurora plant but becomes the basis that establishes the pricing out to our western plants, we are seeing in that 20 to 30 under the board, closer to even in Illinois and more on the eastern corn basis. So, it is good. And obviously with record crop in the last four years being four record crops and carry outs projected to reach as high as 2.3 billion, 2.4 billion bushels, the highest in almost 30 years, very positive in terms of corn supply and projected pricing and basis.

我們幾乎避免了這種情況。我們在這個國家看到了非常好的基礎。因此，在內布拉斯加州，它不僅為我們的 Aurora 工廠提供飼料，而且成為我們西部工廠定價的基礎，我們看到董事會下有 20 到 30 個，甚至更接近伊利諾伊州和東部玉米的基礎。所以，這很好。很明顯，過去四年創紀錄的收成是四個創紀錄的作物，預計產量將高達 23 億、24 億蒲式耳，是近 30 年來的最高水平，這對玉米供應和預計的定價和基礎非常有利。

(Operator Instructions). We will be taking our next question from the line of Amit Dayal from Rodman & Renshaw. Your line is open.

（操作員說明）。我們將從 Rodman & Renshaw 的 Amit Dayal 中提出我們的下一個問題。你的線路是開放的。

In regards to CapEx increase we are going to see in 2017 that Bryon discussed, can you share how much of benefit on the margin side you might see or what time period?

關於我們將在 2017 年看到的 Bryon 所討論的資本支出增長，您能否分享一下您可能會看到的利潤率方面的多少收益或什麼時間段？

I think the question is in regards to CapEx budget, what sort of returns, and margins obviously depends on the projects. We have focused on projects that they have really one to at most three-year return. And depending on the project, can be a quarter of a cent, can be half a cent and can be in aggregate a penny. So, it all directionally is improving margins and improving the bottom-lines and all the projects that we have identify in 2017, all have a very good return profiles.

我認為問題在於資本支出預算、什麼樣的回報和利潤率顯然取決於項目。我們專注於他們真正有一年到最多三年回報的項目。根據項目的不同，可以是四分之一美分，可以是半美分，總共可以是一便士。因此，所有方向都是提高利潤率和改善底線，我們在 2017 年確定的所有項目都具有非常好的回報情況。

Amit, I might also add to that just, the 45 million represents projects that we see on the horizon within 2017 that makes sense. We haven't formally approved all of those, except for the ones that we already announced. And so we will give you greater clarity on those as those get announced, at least the major ones, and we will give you more color around those as we move forward.

阿米特，我還可以補充一點，這 4500 萬個項目代表了我們在 2017 年看到的即將出現的項目，這是有道理的。除了我們已經宣布的那些，我們還沒有正式批准所有這些。因此，我們將在宣布這些內容時讓您更清楚地了解這些內容，至少是主要的內容，並且隨著我們的前進，我們將為您提供更多關於這些內容的色彩。

Understood, and just at a higher level, follow-up maybe to that. Should we be looking at revenue growth as perhaps strategic priority or are we going to continue focusing on these operational efficiency types of initiatives for the next one or two years?

理解了，只是在更高的層次上，可能會跟進。我們是否應該將收入增長視為戰略重點，還是在未來一兩年內繼續關注這些運營效率類型的舉措？

I think it is both. I mean, this is an industry that continues to grow. So, we continue see E15 accelerate in the marketplace, see that growing demand for octane as we move to higher efficient engines, which are going to require higher blends as well. At some point, we are going to incrementally need some more production. We are pretty balanced on supply and demand, and clearly don't have the ethanol in the system to supply a large E15 market.

我認為兩者兼而有之。我的意思是，這是一個不斷發展的行業。因此，我們繼續看到 E15 在市場上的加速發展，看到隨著我們轉向更高效的發動機而對辛烷的需求不斷增長，這也將需要更高的混合物。在某個時候，我們將逐漸需要更多的生產。我們的供需相當平衡，顯然系統中沒有乙醇來供應大型 E15 市場。

So, we are looking at incremental expansion; we continue to be open to acquisitions. You have six companies that control about 50% of the production, that is come a long way in terms of rationalize and consolidating the industry, but we think there is more of that ahead. So, it is definitely dependent upon those market conditions and how the growth and the demand for the product is playing out. We will continue to focus not only on the operating efficiencies and lowering our cost and lowering our carbon, and having those premium values, but looking at incremental expansion as well.

所以，我們正在考慮增量擴張；我們繼續對收購持開放態度。你有六家公司控制著大約 50% 的生產，這在合理化和整合行業方面已經走了很長一段路，但我們認為未來還有更多。因此，這絕對取決於這些市場條件以及產品的增長和需求如何發揮作用。我們將繼續不僅關注運營效率、降低成本和減少碳排放，以及擁有這些溢價價值，而且還將關注增量擴張。

Understood, and may be just one last one for me. The Stockton and Madera cellulosic efforts, can these be scaled beyond the 1 million gallon or are you just going to be, over the next few years, just focusing on optimizing at that level and then maybe looking to scale it?

明白了，對我來說可能只是最後一個。 Stockton 和 Madera 纖維素的努力，這些產品能否擴大到超過 100 萬加侖，或者在接下來的幾年中，您是否只是專注於優化該水平，然後可能尋求擴大規模？

We are always looking for opportunities. We talk to a lot of the technology providers with the technology that we implemented, which was relatively low entry point in terms of capital and could move quickly and deliver meaningful returns. There is an opportunity to tweak around the edges and potentially get beyond that roughly 2% uptake that we are getting in cellulosic ethanol. That being said, there is closer to 8% or 9% of fiber in the product. So, we are looking at other opportunities and technologies to extract more of that fiber and convert more of its cellulose ethanol. That again depends upon the efficacy of the technology, the capital costs and the continued incentives through the renewable fuel standard and low carbon fuel standards to see what kind of premiums we can get for that product.

我們一直在尋找機會。我們使用我們實施的技術與許多技術提供商進行了交談，這些技術在資本方面的切入點相對較低，並且可以快速移動並帶來可觀的回報。有機會在邊緣進行調整，並有可能超過我們在纖維素乙醇中獲得的大約 2% 的吸收。話雖如此，產品中的纖維含量接近 8% 或 9%。因此，我們正在尋找其他機會和技術來提取更多的這種纖維並轉化更多的纖維素乙醇。這又取決於技術的功效、資本成本以及通過可再生燃料標準和低碳燃料標準的持續激勵，以了解我們可以為該產品獲得什麼樣的溢價。

Understood. Thank you. I will take my other questions offline. Thank you so much.

明白了。謝謝你。我將離線處理我的其他問題。太感謝了。

Welcome.

歡迎。

(Operator Instructions). It looks like that we have no other questioners in the queue at this time. So, I would like to turn the call back over to Neil Koehler for closing remarks.

（操作員說明）。看起來我們目前隊列中沒有其他提問者。因此，我想將電話轉回給 Neil Koehler 進行結束髮言。

Thanks, operator. And thank you all for joining us today. I look forward to talking to you after the next quarter. Have a great day. I appreciate your support.

謝謝，接線員。感謝大家今天加入我們。我期待在下個季度之後與您交談。祝你有美好的一天。我感謝您的支持。

Ladies and gentlemen, thank you again for your participation in today's conference. This now concludes the program. And you may now disconnect at this time. Everyone have a great day.

女士們，先生們，再次感謝你們參加今天的會議。程序到此結束。你現在可以在這個時候斷開連接。每個人都有美好的一天。