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Please refer to page two of the website presentation and our 10-K and other periodic SEC filing for information about factors that could cause different outcomes. The information presented today is time sensitive and is accurate only at this time. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Green Plains will not be reviewing or updating this material.Now, I would like to turn the call over to Todd Becker. Todd Becker Thanks, Jim. And thanks for taking the time to join our call this morning. We issued earnings release yesterday after the market closed. We hope you all have had a chance to read it as to discuss our results this morning. Our revenues in the first quarter of 2012, were $775 million, we reported a net loss of $12.7 million or $0.39 a share, after 3 profitable years of operation one negative quarter does not change our long term outlook or view for the company’s prospects. We have one time charge of approximately $2.4 million after tax or $0.08 per share related to a legal settlement for litigation that was fully described in past filings. We felt it was in the best interest of our shareholders as the cause of a long protracted legal battle could have easily outweigh the settlement reached, which by the way was less than $0.10 on the dollar of the original claim, this charge was recorded in the ethanol production segment. The first quarter 2012 did prove to be challenging for the company following a period of peak ethanol margins in the fourth quarter of last year, margins compressed significantly and remained compressed throughout the quarter. As we indicated on year end conference call with you we did slowdown our ethanol production during the quarter. We produced a 176 million gallons, which was about 5% below our plants full capacity. We sold a $170 million gallons in the quarter and held a remainder as the market provided an opportunity to hold inventory and earn a return on storage.
Since the end of this quarter those returns have narrowed and we’ve begun to liquidate these higher inventory levels. Our plant has 16 million gallons or 380,000 of onsite storage and we took advantage of that holding inventories off the market.In addition, we also had several long term offsite storage agreements in place and use those as well. Our strong liquidity position allowed us to take advantage of this opportunity. Excluding the onetime settlement charge, which generated, we generated $1.1 million of operating income before depreciation or about $0.01 per gallon in the ethanol production segment, this is certainly the low mark for profitability in this segment for us. But considering, there were about 10 days during the quarter where margins were at or breakeven EBITDA, we feel that we took maximum advantage of what the market was offering. We saw some of the lowest spot margins in the industry had experienced in the recent history. We also came into the quarter with very little coverage for the margin. There is a reason for that and I’ll discuss that later in the call. We did experience a better yield in our Ethanol Production segment, reaching 2.84 gallons of ethanol per bushel of corn on average. Some of this was due to slowing down production and some was from recent capital projects. We are working on more projects to continue improving conversion rates and I will again comment more on this later in the call. The diversification was important for us again in this quarter as we generated $9 million of non-ethanol operating income from our corn oil production, Agribusiness, and marketing and distribution segments, all with a positive operating income in the quarter. While this $9 million contribution was lower than the fourth quarter of last year, I would like to remind you that our Agribusiness is somewhat seasonal and traditionally has a lower first quarter compared to the remaining three quarters of the year.
In addition, in the marketing and distribution segment had a lower than expected quarter, but we still remained and expect to be on track to equal or exceed last year with an excellent Q2 coming up, possibly a record quarter for that segment. We are very much on track to deliver $50 million of non-ethanol operating income in 2012. As we mentioned in our earnings release yesterday, we redeployed a portion of our rail car assets in the first quarter for other uses and we are increasing that redeployment to about 11% of our tank car of 180 rail cars or 180 rail cars.We currently run a fleet of over 2,200 rail cars between Tanks and Hoppers. Recently I’ve seen lease rates and tank cars increased due to increased demand for domestic oil production. While we certainly could have just leased cars to other counter parties, we saw the opportunity to use our strong financial position, expertise in trading and risk management and our advantaged position of rail assets to launch a new initiative to capture more value for our shareholders by injecting ourselves as a counterparty and the movement of the commodities. As we slowdown plans, we are able to repurpose some of our fleet for this initiative and should start to see greater financial contribution over the next several quarters in our marketing and distribution segment. In addition, because of our ownership in nine blending terminals, we are positioned well to refocus more cars for this initiative. We will continue deploy these rail cars in this manner as long as the opportunity is available. Returning to ethanol margins, we believe the weakness experienced in the first four months of 2012 is attributable to a couple of things. Significant blending of ethanol in the fourth quarter of 2011 as blenders and refiners took advantage of the expiring tax credit and number two lower overall gasoline demand. The combination of these two items and the ethanol industry producing at record rates, during the peak margin environment in the fourth quarter of last year and continuing that reduction into this year has created an overhang depressing the market for ethanol. Read the rest of this transcript for free on seekingalpha.com