REX American Resources Corp (REX) 2024 Q2 法說會逐字稿

Good morning, and welcome to the REX American Resources Second Quarter 2024 Conference Call. As a reminder, today's call is being recorded. (Operator Instructions)

早安，歡迎參加 REX 美國資源 2024 年第二季電話會議。提醒一下，今天的通話正在錄音。 （操作員說明）

I would now like to turn the call over to Mr. Doug Bruggeman, Chief Financial Officer of REX American. Please go ahead.

我現在想將電話轉給 REX American 財務長 Doug Bruggeman 先生。請繼續。

Good morning and thank you for joining REX American Resources Q2 2024 Conference Call. We'll get to our presentation and comments momentarily as well as your questions, but first, I will review the safe harbor disclosure.

早安，感謝您參加 REX American Resources 2024 年第二季電話會議。我們將立即進行演示和評論以及您的問題，但首先，我將回顧安全港披露。

In addition to historical facts or statements of current conditions, today's conference call contain forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. REX American Resources assumes no obligation to publicly update or revise any forward-looking statements.

除了歷史事實或當前情況的陳述外，今天的電話會議還包含前瞻性陳述，這些陳述涉及1995 年《私人證券訴訟改革法案》含義內的風險和不確定性。的預期和信念，但不是未來表現的保證。因此，實際結果可能與預期有重大差異。與前瞻性陳述相關的風險和不確定性已在今天的新聞公告中描述，該公告載於該公司向美國證券交易委員會提交的文件中，包括該公司的10-K 表格和10-Q 表格報告。 REX American Resources 不承擔公開更新或修改任何前瞻性陳述的義務。

I'd now like to turn the call over to our Executive Chairman, Stuart Rose.

我現在想將電話轉給我們的執行主席 Stuart Rose。

Good morning, and thank you again to everyone for joining us. During the second quarter, REX American Resources made excellent progress in the three goals for the remainder of the year that I laid out in our last call. As a reminder, these were to continue profitable operations, to complete the construction phase of our One Earth carbon capture compression facility, and to complete the capacity expansion of our One Earth Energy ethanol production facility to 175 million gallons per year and move toward the planned further permitting of the facility to 200 million gallons.

早安，再次感謝大家加入我們。在第二季度，REX American Resources 在實現我在上次電話會議中製定的今年剩餘時間的三個目標方面取得了巨大進展。提醒一下，這些目標是繼續盈利運營，完成 One Earth 碳捕獲壓縮設施的建設階段，並完成 One Earth Energy 乙醇生產設施的產能擴張至每年 1.75 億加侖，並朝著計劃的目標邁進。生產2億加侖。

To the first goal, we were entirely successful. REX had very profitable operations relative to the prior year's comparable quarter. Our team produced strong gross margin in the second quarter improved by 37% over the first quarter and by nearly 8% over second quarter 2023.

對於第一個目標，我們完全成功了。與去年同期相比，REX 的營運利潤非常豐厚。我們的團隊在第二季創造了強勁的毛利率，比第一季提高了 37%，比 2023 年第二季提高了近 8%。

Net income per share also improved more than 20% over the first quarter of 2024 and more than 35% over second quarter 2023, where we have our eyes on the future, we continue to emphasize our core business of ethanol production, which has allowed us to accomplish three goals as well produce consistent industry-leading results for our shareholders.

每股淨利潤也比 2024 年第一季成長超過 20%，比 2023 年第二季成長超過 35%，我們著眼於未來，繼續強調乙醇生產的核心業務，這使我們能夠實現三個目標，並為我們的股東創造一致的產業領先成果。

The success of this core business has allowed us to grow without burdening the company with any debt. Our team executes at a high level every day, and I want to say thank you to them for their efforts this quarter.

這項核心業務的成功使我們能夠在不給公司帶來任何債務負擔的情況下實現發展。我們的團隊每天都以高水準執行，我想對他們本季的努力表示感謝。

And the second goal to complete construction, the capture, and compression of our One Earth Energy CCS project in Gibson City, Illinois. We continue to make progress. Zafar will discuss this project in detail later in the call.

第二個目標是完成位於伊利諾州吉布森市的 One Earth Energy CCS 專案的建造、捕獲和壓縮。我們不斷進步。紮法爾將在稍後的電話會議中詳細討論該項目。

Our third goal to complete construction of the One Earth ethanol production capacity expansion to 175 million gallons per year to prepare for further permitting production levels of 200 million gallons per year is on track for the first quarter of 2025. This expansion will further improve our ability to realize strong returns. We are very excited for the expansion and what it means for our business. We are making progress on all of our goals and in preparing REX American to have success both now and over the long term.

我們的第三個目標是在 2025 年第一季完成 One Earth 乙醇產能擴張至每年 1.75 億加侖的建設，為進一步允許每年 2 億加侖的生產水平做好準備。實現豐厚的回報。我們對此次擴張及其對我們業務的意義感到非常興奮。我們正在所有目標上取得進展，並為 REX American 在當前和長期取得成功做好準備。

I'd now like to turn things over to our CEO, Zafar Rizvi, to give further updates on our One Earth Energy CCS and ethanol production capacity expansion projects.

現在我想將此事轉交給我們的執行長紮法爾·裡茲維 (Zafar Rizvi)，以提供有關我們 One Earth Energy CCS 和乙醇產能擴張項目的進一步最新情況。

Thanks, Stuart. Our carbon capture and sequestration project in Gibson City, Illinois continue to progress. You can see updated picture of the carbon capture and compression portion of the facility in our second quarter investor presentation which was posted to our website this morning. Due to regulatory action by the state of Illinois, which is in July imposed a moratorium on the construction of CO2 pipeline. We have adjusted our construction schedule for the initial portion of the project. We believe this is the most prudent path, from both on operational and financial prospects.

謝謝，斯圖爾特。我們在伊利諾伊州吉布森市的碳捕獲和封存計畫繼續取得進展。您可以在今天早上發佈到我們網站上的第二季度投資者簡報中看到該設施碳捕獲和壓縮部分的更新圖片。由於伊利諾伊州的監管行動，該州於 7 月暫停了二氧化碳管道的建設。我們已經調整了該專案初始部分的施工進度。我們認為，從營運和財務前景來看，這是最審慎的路徑。

Operationally, completing the capture and compression facility later in the year will mean a shorter period between completion of the construction and testing of the portion of the facility, which will require utility interconnection that is planned to be completed by the end of the first quarter of 2025. From a budgetary perspective, taking a more measured to construction allow us to more closely monitor our spending without incurring potential extra cost to meet the accelerated deadline.

從操作上來說，在今年稍後完成捕獲和壓縮設施將意味著該設施部分的施工完成和測試之間的時間會更短，這將需要計劃在今年第一季末完成的公用事業互連。

Given the new permitting reality, we are confident that pursuing the several ongoing portion of this project in this way is the right path. While pipeline permitting in Illinois is being worked out, our Class 6 injection well permit application with US EPA is still in process. And we anticipate a drop permit being issued by 2024 to under year-end. On the timeline currently estimated by the EPA itself, we would then anticipate final approval of the project in the second quarter of 2025.

鑑於新的允許的現實，我們相信以這種方式推進該項目的幾個正在進行的部分是正確的道路。雖然伊利諾伊州的管道許可正在製定中，但我們向美國 EPA 提交的 6 級注入井許可申請仍在進行中。我們預計將於 2024 年底前頒發下降許可證。根據 EPA 目前估計的時間表，我們預計該項目將在 2025 年第二季獲得最終批准。

As a reminder, as of last quarter, REX had squared easement for enough of the subsurface area to allow us the capacity to sequester all of our carbon emission on the One Earth Energy plant for the next 15 years, and also squared easement from our neighbor farmers for well number 1 and 2, which will allow us to completely avoid the use of eminent domain in eventual construction of our carbon delivery pipeline.

提醒一下，截至上個季度，REX 已經對足夠的地下區域進行了平方地役權，使我們有能力在未來15 年內將One Earth Energy 工廠的所有碳排放封存，並且還對我們鄰居的地役權進行了平方1 號和 2 號井的農民，這將使我們能夠在最終建造碳輸送管道時完全避免使用徵用權。

The expansion of our One Earth Energy ethanol facility, 175 million gallons per year of production is on track for completion in the first quarter of 2025. Final testing and commissioning depends on the completion of the electric interconnection from our local utility.

我們的 One Earth Energy 乙醇工廠的擴建預計將於 2025 年第一季完成，年產量為 1.75 億加侖。

After necessary emission predication from the increased production levels, we then expect to begin the planned further permitting of the One Earth ethanol facility to allow it to produce 200 million gallons per year. This additional permitting is the only step necessary to allow for the expanded capacity to 200 million gallons and no additional construction or capital spending is expected. This 25- and eventual 50-million-gallon-per-year expansion in production capacity added on to our current highly efficient and profitable facility we expect will enable us to expand our already and our profitability in our core ethanol business line.

在對增加的生產水準進行必要的排放預測後，我們預計將開始按計劃進一步批准 One Earth 乙醇工廠，使其每年生產 2 億加侖。這項額外的許可是將產能擴大到 2 億加侖所需的唯一步驟，預計不會有額外的建設或資本支出。我們預計，每年 25 加侖（最終將達到 5000 萬加侖）的產能擴張將增加我們目前高效且盈利的設施，這將使我們能夠擴大我們核心乙醇業務線的現有盈利能力。

As of quarter end, we have invested approximately $91 million into the One Earth carbon capture project and associated ethanol production capacity expansion. Spending for the carbon capture and sequestration projects stood at $49.1 million as of second quarter end. While expenditure on the ethanol expansion stood at $41.7 million as of the same date. This compared to total combined budget amount of $165 million to $175 million for both the CCS project and ethanol production expansion at Gibson City.

截至季末，我們已向 One Earth 碳捕獲計畫和相關乙醇產能擴張投資約 9,100 萬美元。截至第二季末，碳捕獲和封存項目的支出為 4,910 萬美元。截至同日，乙醇擴建支出為 4,170 萬美元。相較之下，吉布森市 CCS 項目和乙醇生產擴張的總預算總額為 1.65 億至 1.75 億美元。

I would now like to hand the call to our CFO, Doug Bruggeman, to discuss our operational and financial results. Doug?

我現在想將電話轉給我們的財務長 Doug Bruggeman，討論我們的營運和財務表現。道格？

Thanks, Zafar. I'll begin with our operational results. REX ethanol sales volume during the second quarter 2024 were 65.1 million gallons, a reduction of approximately 6% versus second quarter 2023 sales volume of 69.1 million gallons. Average selling price for our consolidated ethanol volumes was $1.79 per gallon for the second quarter compared to $2.42 per gallon in the second quarter of 2023.

謝謝，紮法爾。我將從我們的營運結果開始。 2024 年第二季的 REX 乙醇銷量為 6,510 萬加侖，較 2023 年第二季的 6,910 萬加侖減少約 6%。第二季我們綜合乙醇產量的平均售價為每加侖 1.79 美元，而 2023 年第二季為每加侖 2.42 美元。

Dry distillers grain sales volume during the second quarter of 2024 totaled 132,850 tons, a 6% decrease over second quarter 2023 volumes. Average selling price for DDGs were $164.45 per ton for the second quarter 2024 compared to $226.48 per ton in the second quarter of 2023.

2024年第二季乾餾糧銷售量總計132,850噸，較2023年第二季下降6%。 2024 年第二季 DDG 的平均售價為每噸 164.45 美元，而 2023 年第二季為每噸 226.48 美元。

Modified distillers grain sales volumes were 17,650 tons in the second quarter 2024 compared with approximately 10,600 tons in the second quarter of 2023. Average selling price for modified distiller grain was $63.61 per ton for the second quarter. The average selling price for the modified distillers grain in the second quarter of 2023 was approximately $103.

2024 年第二季改質酒糟銷售量為 17,650 噸，而 2023 年第二季約為 10,600 噸。 2023 年第二季改良酒糟的平均售價約為 103 美元。

Corn oil sales volumes in the second quarter 2024 were approximately 20.2 million pounds compared to 20.7 million pounds sold in the second quarter of 2023. The average selling price for REX's corn oil product was $0.43 per pound for the second quarter 2024 compared to $0.55 per pound in the second quarter of 2023.

2024 年第二季玉米油銷售量約為2,020 萬磅，而2023 年第二季銷售量為2,070 萬磅。季度為每磅0.55 美元2023 年第二季。

Gross profit for the second quarter 2024 was $19.8 million versus gross profit of approximately $18.4 million for the second quarter of 2023. The 8% increase in gross profit was achieved despite lower average selling prices for all products, which was more than offset by lower corn and natural gas input prices.

2024 年第二季的毛利為1,980 萬美元，而2023 年第二季的毛利約為1,840 萬美元。被玉米價格下降所抵銷。

Our selling, general and administrative expenses decreased to $6.4 million for the second quarter of 2024 versus $8.6 million in the second quarter of 2023. The decrease was partly due to the expensing of executive stock grants in the prior year, which did not recur this year.

我們的銷售、一般和管理費用從2023 年第二季的860 萬美元減少到2024 年第二季的640 萬美元。這種情況。

Interest and other income totaled $4.4 million in the second quarter of 2024 compared with approximately $3.3 million for the second quarter of 2023. This reflects higher balances and better earnings on our cash and short-term investments. Income before taxes and noncontrolling interest for the second quarter of 2024 was approximately $19.5 million, an increase of more than 21% over the second quarter of 2023.

2024 年第二季的利息和其他收入總計 440 萬美元，而 2023 年第二季約為 330 萬美元。 2024年第二季稅前及非控股權益前收入約1,950萬美元，較2023年第二季成長超過21%。

Net income attributable to REX shareholders for the second quarter was $12.4 million compared to $9.1 million in the second quarter of 2023. On a per share diluted basis for the second quarter 2024, this amounts to $0.70 per share of net income compared to $0.52 per share in the second quarter of 2023.

第二季歸屬於REX 股東的淨利為1,240 萬美元，而2023 年第二季為910 萬美元。第二季為每股0.52 美元2023 年第二季。

We ended the second quarter with total cash, cash equivalents and short-term investments of $346 million compared with $378.7 million as of January 31, 2024. The uses of cash during the first half were primarily related to our ongoing construction projects at the One Earth Energy facility. REX American also entered the quarter without any bank debt.

截至第二季末，我們的現金、現金等價物和短期投資總額為 3.46 億美元，而截至 2024 年 1 月 31 日為 3.787 億美元。能源設施。 REX American 進入本季時也沒有任何銀行債務。

I'd now like to turn the call back to Zafar.

我現在想把電話轉回札法爾。

Thank you, Doug. I would now like to give some color how we see market progressing through the remainder of the year. For the third quarter, we are off to a strong start, and we expect to see the same corn market drivers that was sporting to this point in the year continue to play out. With this, we expect to see the result of the third quarter exceeds those of the second quarter of this year. Additionally, we believe increasing ethanol for export, which on a volume basis were 36.5% higher through June than at the same point last year regarding to the USDA have had a positive impact across the industry.

謝謝你，道格。現在我想介紹一下我們對今年剩餘時間市場進展的看法。第三季度，我們迎來了一個強勁的開局，我們預計今年迄今為止玉米市場的驅動因素將繼續發揮作用。如此一來，我們預計今年第三季的業績將超過第二季。此外，我們認為，美國農業部乙醇出口量的增加（截至 6 月的出口量比去年同期高出 36.5%）對整個產業產生了正面影響。

As for our own inputs at the current time, we are looking toward harvest and what is expected to be a bumper crop, our corn in the Midwest, crop conditions near our two consolidated plants are expected to be strong, we are anticipating the robust harvest, coupled with the current corn in the farm inventories, will lead to a continued favorable corn input pricing.

至於我們目前的投入，我們正在期待收穫，預計會有豐收，我們中西部的玉米，我們兩個合併工廠附近的作物狀況預計會很好，我們預計會有豐收加上目前農場的玉米庫存，將導致玉米投入品定價持續有利。

Above all, we are focused on profitability over product pricing or production numbers as evidenced by our improved gross margin performance this quarter despite lower ethanol pricing and volumes sold. It is this focus and the people in our plants who live it every day that continue to make us a successful profitable company we are. Now I would like to open things up to the questions. Operator?

最重要的是，我們關注的是產品定價或產量的獲利能力，本季毛利率表現的改善證明了這一點，儘管乙醇定價和銷售量較低。正是這種專注以及我們工廠中每天都以此為生的人們使我們繼續成為一家成功的盈利公司。現在我想就問題展開討論。操作員？

(Operator Instructions) Jordan Levy, Truist Securities.

（操作員指示）Jordan Levy，Truist 證券公司。

I just wanted to talk first on the carbon capture sequestration side of things. You guys did a good job calling out in the press release kind of the various external forces that you have to think through when you're going through this process.

我只想先談談碳捕獲封存方面的問題。你們在新聞稿中做得很好，指出了在經歷這個過程時必須考慮的各種外部力量。

But maybe just help us think about in the event in the time frame that assuming you do get the permit approval that you need, can you just talk to the timeline around the build out of the pipeline and then any remaining necessary equipment at that point.

但也許只是幫助我們考慮一下，如果在時間範圍內，假設您確實獲得了所需的許可批准，您是否可以只討論管道建設的時間表，然後討論當時剩餘的必要設備。

Zafar?

紮法爾？

Yes. I think if you look at that information which we provided, the EPA permit is expected to be in some time in second quarter of 2025. But in the meantime, our construction is in full swing. We are already taking care of it, carbon sequestration facility, which will be ready by the end of this year, depending on the utility connection, interconnection to provide that utility to the CFS and also to ethanol facility. So once we have this utility received and then construction of the One Earth Energy, ethanol facility is completed, we're going to concentrate on ethanol facility to be start as soon as possible.

是的。我想，如果你看一下我們提供的信息，EPA 許可證預計將在 2025 年第二季度的某個時間獲得。我們已經在處理碳封存設施，該設施將於今年年底準備就緒，具體取決於公用設施連接、互連，以便為 CFS 和乙醇設施提供公用設施。因此，一旦我們收到了這項公用事業，然後同一個地球能源、乙醇設施的建設完成，我們將專注於盡快啟動乙醇設施。

As you know, One Earth Energy has produced over the last 15 years, I can say with confidence. No -- not a single year, they lost that money. And that ethanol location is very important to us, and that facility will produce much better profit moving forward once we complete that facility.

如你所知，One Earth Energy 在過去 15 年裡已經產生了成果，我可以充滿信心地說。不——沒有一年，他們就損失了這筆錢。乙醇的位置對我們來說非常重要，一旦我們完成該設施，該設施將產生更好的利潤。

And the second, we will certainly continue to do construction work and try to reach as soon as possible when we'll receive all these permits and then ICC permit and other permits as we received and construction will be completed. And once the electric connection is connected, we will start the testing.

第二，我們肯定會繼續進行建設工作，並努力盡快達到要求，屆時我們將收到所有這些許可證，然後收到國際會議中心許可證和其他許可證，施工將完成。一旦電氣連接連接好，我們就開始測試。

So I will say sometime, probably, once we receive the permit from EPA, we will start the construction of the well. So we will say probably sometime August or September next year, we should be in operation. But that's just expected to -- depending on all of those permits we receive, otherwise, we are waiting for all those permits. So -- but it depends on the permits. But facilities --

所以我會說，也許，一旦我們收到美國環保署的許可，我們就會開始建造這口井。所以我們可能會說明年八月或九月的某個時候，我們應該投入營運。但這只是預期 - 取決於我們收到的所有許可證，否則，我們正在等待所有這些許可證。所以——但這取決於許可證。但設施——

Jordan to further answer your question, the biggest delay is in receiving permits. We call it a pipeline, but it's really just a 3-, 4-mile connector, the pipe itself. But we have to wait for Illinois to give us a permit on that, which is not -- which is not easy. And -- but building the pipeline and building the hole itself are not nearly as time consuming as waiting for these permits. And that's -- I think was your question is once we get the permit, how long will it take. That will not be nearly as long as waiting for the permits, and Zafar gave you a pretty good time schedule of that.

喬丹進一步回答你的問題，最大的延誤是獲得許可。我們稱之為管道，但它實際上只是一個 3、4 英里的連接器，即管道本身。但我們必須等待伊利諾伊州給我們許可，這並不容易。而且——但是建造管道和建造洞本身並不像等待這些許可證那麼耗時。我想你的問題是，一旦我們獲得許可，需要多長時間。這不會像等待許可證那麼長，紮法爾給了你一個很好的時間表。

Absolutely. No. I appreciate all those details. And certainly, you all have been -- done an impressive job of how much you've been able to get done on your own. And now just waiting on the pipeline. And maybe just a clarifying question, once you -- on the --

絕對地。不，我很欣賞所有這些細節。當然，你們所有人都已經完成了令人印象深刻的工作，你們自己能夠完成多少工作。現在只是等待管道。也許只是一個澄清問題，一旦你——關於——

Pipeline may not be -- there's more than the pipeline, we're also waiting on the EPA, which is --

管道可能不會——不僅僅是管道，我們還在等待美國環保署，這是——

Yes, EPA permits -- exactly.

是的，EPA 確實允許。

And a lot of local permits too. There's lots of permit involved there.

還有很多當地的許可證。那裡涉及很多許可證。

But I think the main thing which I really wanted to emphasize is ethanol facility itself does not need any pipeline. And we are in a full swing on the construction of the ethanol facilities from 150 million to 175 million and then move towards 200 million-gallon facility. And that should be completed by the first quarter of 2025, depending on a utility providing the electric connections. So once that facility is completed, we will be able to produce ethanol at that kind of rate.

但我認為我真正想強調的主要事情是乙醇設施本身不需要任何管道。我們正在緊鑼密鼓地建造乙醇設施，從1.5億加侖到1.75億加侖，然後邁向2億加侖的設施。這應該在 2025 年第一季完成，具體取決於提供電力連接的公用事業公司。因此，一旦該設施建成，我們將能夠以這種速度生產乙醇。

And also -- as you know, our core business is very important to us, and we have produced great results on our core business. And One Earth Energy is the star student of our all of our facilities, and we hope that, that will continue to produce that profit as it's produced from the last 15 years.

而且，如您所知，我們的核心業務對我們來說非常重要，我們在核心業務上取得了巨大的成果。 One Earth Energy 是我們所有設施中的明星學生，我們希望它能夠像過去 15 年一樣繼續產生利潤。

One other thing that Zafar is not mentioning, Jordan is -- we hope that with -- and we are -- it's our hope and our plans that the construction to expand our plants will also lower our CI score. We have not been told to measure CI score exactly by the federal government. But we -- but depending on how they measure it, we hope that that in itself will lower our CI score in the construction.

紮法爾沒有提到的另一件事是，約旦——我們希望——而且我們確實——我們的希望和計劃是，擴建工廠的建設也會降低我們的 CI 分數。聯邦政府並沒有告訴我們要準確衡量 CI 分數。但我們 - 但取決於他們如何衡量它，我們希望這本身會降低我們在構建中的 CI 分數。

Yes. That's actually a good follow-up question, which is just going to be Stuart, Zafar. Your thoughts going into the election with some of the main guidance items still outstanding for -- as it relates to CCUS and ethanol. Just wanted to get your high-level thoughts there.

是的。這其實是一個很好的後續問題，由史都華、紮法爾提出。您對選舉的想法以及一些與 CCUS 和乙醇相關的主要指導項目仍然懸而未決。只是想了解您的高層次想法。

My opinion is that it’s a bipartisan -- CC, carbon capture was a bipartisan issue, and I don't think that one party or the other will do -- will affect the current law. What happens if there are some proposals out there to extend certain things. And that may be affected by one party or the other. I think it's a good thing.

我的觀點是，這是一個兩黨共同的問題——CC，碳捕獲是兩黨共同的問題，我不認為任何一方都會這樣做——會影響現行法律。如果有一些提議來擴展某些內容，會發生什麼事？這可能會受到一方或另一方的影響。我認為這是一件好事。

The Democrats nominated a Minnesota person for Vice President. He certainly is from a farm state, from an ethanol state, and understands the issue. But otherwise, I don't think that it really -- one party or the other has really taken a firm stand on expanding the CCS tax credit amounts that are out there.

民主黨提名明尼蘇達人為副總統。他當然來自農業州、乙醇州，並且理解這個問題。但除此之外，我認為一方或另一方並沒有真正對擴大現有的 CCS 稅收抵免金額採取堅定立場。

Pavel Molchanov, Raymond James.

帕維爾·莫爾恰諾夫，雷蒙德·詹姆斯。

So even with our, I suppose, particularly with the slowdown in carbon capture construction, you are going to be stockpiling, even more cash on the balance sheet beyond the sizable amount that you already have. What is the kind of allocation? What's the current priority for using the $350 million of cash that you already have and even more that you're going to be putting on?

因此，我想，即使我們，特別是碳捕集建設放緩，你也會在資產負債表上儲備更多的現金，超出你已經擁有的大量現金。是什麼樣的分配方式？目前您已經擁有的 3.5 億美元現金以及您將投入的更多現金的優先用途是什麼？

First priority is the carbon capture and expansion of the Gibson City plant. Second priority is possibly looking at expansion of our South Dakota plant. That's a possibility especially if we can lower our carbon capture score and get some tax credits that would be a possibility. We're always looking for acquisitions. We've looked at a couple this year. They weren't for us, but you never know whats going to come up. We would consider stuff in -- related to the tax credits and related to energy outside of ethanol, but nothing's come along that we think is better than ethanol. So we stuck to our field.

首要任務是吉布森市工廠的碳捕獲和擴建。第二優先事項可能是考慮擴大我們的南達科他州工廠。這是有可能的，特別是如果我們能夠降低我們的碳捕獲分數並獲得一些稅收抵免，那就是可能的。我們一直在尋找收購。今年我們看了幾個。他們不適合我們，但你永遠不知道會發生什麼。我們會考慮與稅收抵免和乙醇以外的能源相關的東西，但我們認為沒有什麼比乙醇更好的了。所以我們堅持自己的領域。

And the last thing that we've been really good at over the years, and you never know where the stock market is. We didn't buy shares this quarter. But over the years, we're probably the buyback kings in percentage of shares bought back and we're really, really -- and we know what we're doing there.

多年來我們真正擅長的最後一件事是，你永遠不知道股市在哪裡。本季我們沒有買股票。但多年來，我們可能是回購股票百分比的回購之王，而且我們真的非常——而且我們知道我們在那裡做什麼。

And we buy our dips, which is important. We don't just buy because to lower the share count. We don't buy at the stock highs, we buy lows to protect our shareholders when the stock is down and that's been very, very success -- that's been a very successful strategy for us. And that's still there. We still have buyback authorization, but we have not used -- we did not use it in the last quarter.

我們逢低買入，這很重要。我們購買股票不僅僅是為了減少股票數量。我們不會在股票高點買入，而是在股票下跌時買入低點以保護我們的股東，這是非常非常成功的——這對我們來說是一個非常成功的策略。那仍然存在。我們仍然有回購授權，但我們沒有使用——我們在上個季度沒有使用它。

What's the latest on your thinking about sustainable aviation fuel?

您對永續航空燃料的最新看法是什麼？

Zafar?

紮法爾？

I think for that, we have to have low carbon at fuel produced. We believe that we certainly will need carbon sequestration for that location. And also, as you know, there's no clear guideline for 45Z at this time. So once the 45Z clearly guideline is issued, then we certainly can look into it. But at this time, we certainly believe that we need to further reduce our CI score so that we can qualify for 45Z tax credit and then move toward to SAF.

我認為為此，我們必須生產低碳燃料。我們相信，我們絕對需要在該地點進行碳封存。而且，如您所知，目前還沒有針對 45Z 的明確指導方針。所以一旦45Z明確的指導方針出台，我們當然可以研究一下。但此時，我們當然認為我們需要進一步降低 CI 分數，以便我們有資格獲得 45Z 稅收抵免，然後轉向 SAF。

Chris Sakai, Singular Research.

克里斯·酒井，奇異研究公司。

I had a question on capital expenditures. How are you doing compared to your budgeted amount for capital expenditures?

我有一個關於資本支出的問題。與您的資本支出預算金額相比，您的表現如何？

Zafar?

紮法爾？

I think we, at this time, we are right on track.

我認為我們目前正走在正軌上。

Are you seeing any possible need for more -- to spend more there?

您是否認為可能需要更多——在那裡花更多錢？

No, not at this time, but as you know, it depends on inflation factors in the future. But at this time, we do not see any major increase. The main things we have seen is delay in receiving a lot of equipment and components of electric components that is causing some delay of our completion of these facilities, we are overall on -- right on budget.

不，目前還不行，但如你所知，這取決於未來的通膨因素。但目前，我們沒有看到任何重大成長。我們看到的主要事情是延遲接收大量設備和電氣元件，這導致我們這些設施的完工有所延遲，我們總體上是在預算之內的。

Okay. And then have you seen any weather-related issues over the last quarter?

好的。那麼上個季度您是否發現任何與天氣相關的問題？

No, we have not seen any major weather-related issue. There was some issue in South Dakota area, where there was a heavy rain, and there was some railroad track were washed out for a few days, but not a major problem.

沒有，我們沒有看到任何與天氣相關的重大問題。南達科他州地區出現了一些問題，下了一場大雨，一些鐵軌被沖毀了幾天，但不是大問題。

We're expecting very good crops this year.

我們預計今年會有很好的收成。

Correct. Yes. The crop is a very expected very good, not only in Illinois. Illinois is expecting the bumper crops which will be record crops this year. And at the same time, South Dakota is 73% to excellent to good crops, which is also near record crops for that area.

正確的。是的。收成非常好，不僅在伊利諾州。伊利諾州預計今年將迎來豐收，創紀錄的收成。與此同時，南達科他州的農作物優良率達到了 73%，也接近該地區的農作物創紀錄水準。

Jordan Levy, Truist Securities.

喬丹·利維 (Jordan Levy)，Truist 證券公司。

Just a follow-up for me. Zafar, I think you mentioned or Stuart, maybe it was on Pavel's question, the potential for expansion at some point in the future. Maybe just talk to what you'd need to see whether it relates to Summit or something else there in order to kind of warrant that investment.

只是我的後續行動。紮法爾，我想你提到過斯圖爾特，也許是關於帕維爾的問題，未來某個時候擴張的潛力。也許只是談談你需要的東西，看看它是否與高峰會或其他東西有關，以便保證這項投資。

At this time, Summit, the investment would not be because of the Summit pipeline. It may be later, but at this time, South Dakota has -- in my opinion, this is my opinion, some eminent domain issues. And so if we were to invest in the next year, it probably -- it would not -- so being in the Summit pipeline will be an advantage we hope someday, but we would just do it because it would be more efficient to have a larger plant. And if the corn supports it, we would consider it. So that's the biggest issue. It's always corn whether a bigger plant would raise the corn prices. So we have to be very careful on that.

這時候，Summit，投資就不會因為Summit管道了。可能會晚一點，但在我看來，南達科他州現在有一些徵用權問題。因此，如果我們要在明年進行投資，它可能——也不會——所以，我們希望有一天，參加峰會將成為一個優勢，但我們會這麼做，因為擁有一個峰會會更有效率。的工廠。如果玉米支持的話，我們會考慮的。所以這是最大的問題。更大的工廠是否會提高玉米價格始終取決於玉米。所以我們對此必須非常小心。

The third thing is they have the 45Z regulations, but if we can lower our CI score below 50, there are some tax credits involved. So simultaneously, as we get in One Earth, we will -- if we do invest and make and expand that plant, we will make sure that we're doing it to bring our CI score or try our best to bring our CI score down.

第三件事是他們有45Z規定，但如果我們可以將CI分數降低到50以下，就會涉及一些稅收抵免。因此，同時，當我們進入同一個地球時，如果我們確實投資、建造和擴大該工廠，我們將確保我們這樣做是為了降低我們的 CI 分數，或盡力降低我們的 CI 分數。

At the same time, again, we don't know the regulations. They have not come out of what even defines your CI score. But that would be -- the bigger goal is just bring it down and maybe get it below 50 without the pipeline. And then when the pipeline comes in, we would probably qualify for -- and when it does start capturing our [seta 2], we will follow up -- we will qualify for 45Q or 45Z.

同時，我們又不了解這些規定。它們甚至還沒有來自於 CI 分數的定義。但那是——更大的目標只是將其降低，也許在沒有管道的情況下將其降至 50 以下。然後，當管道進入時，我們可能有資格獲得 - 當它開始捕獲我們的 [seta 2] 時，我們將跟進 - 我們將有資格獲得 45Q 或 45Z。

We have reached the end of the question-and-answer session. I'll now turn the call back over to Stuart Rose for closing remarks.

我們的問答環節已經結束。現在，我將把電話轉回給斯圖爾特·羅斯（Stuart Rose），讓其致閉幕詞。

All right. I'd like to thank everyone for listening in. Again, corn crops are good right now. As Zafar said, we're running at a rate currently better than the second quarter. Things seem to be going -- moving along with our carbon capture project. We have great plants, great locations, but the biggest thing that we have and the reason we're doing, we're ahead of most people in carbon capture and doing better than virtually everyone in ethanol as we feel we have the best people in the industry, and that includes our CEO, and it includes the people that work for them all the way down the line, and we have very, very good people, and that's really what separates us. Again, thank you for listening, and we'll talk to everyone next quarter. Bye.

好的。我要感謝大家的收聽。正如紮法爾所說，我們目前的運行速度比第二季好。事情似乎正在進展——與我們的碳捕獲項目一起進展。我們擁有出色的工廠，優越的地理位置，但我們擁有的最重要的事情以及我們所做的事情的原因是，我們在碳捕獲方面領先於大多數人，並且在乙醇方面幾乎比每個人都做得更好，因為我們認為我們擁有該領域最優秀的人才這個行業，包括我們的首席執行官，也包括一直為他們工作的人，我們擁有非常非常優秀的人才，這才是我們真正的與眾不同之處。再次感謝您的聆聽，我們將在下個季度與大家交談。再見。

Thank you. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路。我們感謝您的參與。