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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.I’d like to turn the call over to our CEO, Todd Becker. Todd Becker Thanks, Jim. And thanks for joining us this morning. Our focus has been and remains on the sustainability of our company. Over the last three years, we have acquired technologies, built in acquired businesses and expanded segments that added revenue and income, which has reduced our dependence on our Ethanol production segment. At the same time, we have repaid debt and build our liquidity. We believe that we are in a good position to continue to operate our business and weather the trope margin environment, we continue to experience in the ethanol industry. I’ll discuss the margin environment and get into the outlook for the industry a little later in the call. We did issue our second quarter earnings release yesterday after the market closed and while we were not happy with the overall results, we are pleased with the performance of our non-ethanol operating segment. Our revenues in the second quarter of 2012 were $870 million and we reported a net loss of $7.6 million or $0.25 a share. There is a $5 million improvement over the loss in the first quarter of the year, and we believe as we would navigate through a challenging third quarter, we should be profitable in the fourth quarter, which we will talk to in a little bit. We produced 172 million gallons and we sold 177 million gallons of ethanol in the second quarter. The 5 million gallon difference was production held over from the first quarter of the year.
Operating income before depreciation for the ethanol production segment was slightly positive in the ethanol segment for the second quarter. Our ethanol yield improved to a record 2.85 gallons of ethanol proportion of corn. On an ongoing basis, we have worked to refine the ethanol production process and get more out of the corn we grind. Whether it has been through our new enzymes or improving process loads, as the company and an industry, we continue to seek improvement in yield.We have deployed the technology, we refer to as fine-grind in our Shenandoah plant and we are trailing this technology, trailing this technology at another one of our facilities. The process goes after the last 7% of the starch for enzyme conversion to sugar, breaking larger starch particles into smaller ones and breaking starch away from the fiber protein or fat in the corn grind. We believe this technology could improve our ethanol yield 2% to 3%, and it could also increase corn oil recovery yield 10% to 15%, both having positive contributions to the bottom line over the long-term. We will keep you updated on the progress we make on this technology deployment. As we evaluate our operations daily, we consider a number of the factors as to whether to slowdown or shutdown each of our plants. These factors vary from plant to plant and region to region. And for Green Plains, improvements we have made from the bottle-necking production to implementing corn oil extraction and now are evaluating fine-grind technologies, all weigh in our decision process from production levels. In this decision, we also look at additional real corn repurposing. To date, besides the announced flowing over few plants the right plan financial decision for us was to keep running. We generated a record $14.6 million of non-ethanol operating income in the second quarter from our corn oil production, Agro business and marketing and distribution segments.
Corn oil production also achieved a record high production of 38.6 million pounds on a record conversion of 0.64 pounds per bushel of corn. Both our Agro business and marketing and distribution segments had improved quarterly performances well, versus the first quarter of the year, with $2.4 million and $2.9 million of operating income respectively.We believe our non-ethanol operating segments should produce approximately $60 million of operating income in 2012 The $10 million increase in projected non-ethanol operating income is partially related to our ability to increase the number of railcars deployed, crude oil transportation to over 500 cars for the rest of 2012. We have not experienced any significant effect on our ethanol plant operations as a result of this redeployment effort. In fact for third quarter, we’ll see almost a full benefit from this program, with better expected performance in our marketing and distribution segment. As we noted in our earnings release yesterday, we have locked in approximately 40% of our ethanol margins for the fourth quarter at profitable levels. This combined with positive results from our non-ethanol operating income segments gives us the confidence to say that we believe we’ll return to profitability in the fourth quarter. This estimate is based on the current Q4 curve combined with our lock volume. Obviously this change is daily, but at this point even with a weaker forward curve we are still projecting a good recovery in the fourth quarter helping neutralize to defensive third quarter. Read the rest of this transcript for free on seekingalpha.com