The Andersons (ANDE) Q3 2026 Earnings Call Transcript

DATE

Wed, Nov. 4, 2026

CALL PARTICIPANTS

• Vice President, Corporate Controller and Investor Relations - Michael T. Hoelter
• President and Chief Executive Officer - William E. Krueger
• Executive Vice President and Chief Financial Officer - Brian A. Valentine
• Executive Vice President, Renewables - Mark Simmons

TAKEAWAYS

• Adjusted Net Income -- $47 million or $1.38 per diluted share, increasing from $29 million or $0.84 per diluted share in the prior year.
• Adjusted EBITDA -- $101 million, representing an increase from $78 million in the third quarter of 2025.
• Renewables Pretax Income -- $63 million, compared to adjusted pretax income of $46 million in the prior year, driven by efficient plant operations and higher co-product values.
• Agribusiness Adjusted Pretax Income -- $9 million, compared to $2 million in the prior year, reflecting increased market volatility and merchandising opportunities.
• 45Z Tax Credits -- $27 million, recognized during the quarter as a result of low-carbon strategies.
• HLCP Acquisition Price -- $915 million, to be financed through a $300 million existing revolver credit facility and $615 million in new committed long-term debt.
• HLCP Production Capacity -- 200 million gallons, produced annually across three ethanol plants located in North Dakota and Indiana.
• Expected HLCP EBITDA -- $225 million to $250 million, projected annually for each of the next three years.
• Clymers Debottlenecking Project -- 30 million gallons, representing the targeted run rate increase in production by the third quarter of 2027.
• Trailing 12-Month Adjusted EPS -- $6.67, rising from $2.56 in the third quarter of 2025 toward a target of $7 by 2028.
• Long-Term Debt-to-EBITDA -- 1.3x, currently remaining below the company target of less than 2.5x.
• Acquisition Leverage -- 2x, representing the expected long-term debt-to-EBITDA ratio at the closing of the HLCP transaction.
• Cash Flow from Operations -- $83 million, before changes in working capital compared to $68 million in 2025.
• Capital Expenditures -- $60 million, compared to $67 million in the prior year.
• Full-Year Capital Expenditure Guidance -- $225 million, excluding acquisitions, focused on growth projects and maintenance.
• Share Repurchases -- $15 million, completed during the third quarter.
• Annual Ethanol Production Target -- 730 million gallons, expected upon closing of the HLCP acquisition, with plans to reach 760 million gallons by the third quarter of 2027.
• Sales and Merchandising Revenue -- $2.83 billion, compared to $2.68 billion in the third quarter of 2025.
• Effective Tax Rate -- 13%, with a full-year adjusted effective tax rate expected between 14% to 18%.
• Board Crush Margin -- 10 cents per gallon, representing a year-over-year decrease in the board crush.
• Net Income Attributable to Company -- $46 million, or $1.36 per diluted share, representing record third-quarter performance.

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RISKS

• CEO Krueger warned that drought conditions and reduced grain volumes in the Western Corn Belt could have a material negative impact on the performance of the company's Western assets.
• CEO Krueger stated that "post harvest market dynamics could impact timing of income over the next 2 quarters," potentially deferring profits from the current year into early 2027.

SUMMARY

The Andersons, Inc. (NASDAQ:ANDE) reported record third-quarter earnings and announced a definitive agreement to acquire Harvest Own Low Carbon Partners for a total purchase price of $915 million. Management reported that the acquisition includes three ethanol facilities in North Dakota and Indiana, which are expected to be immediately accretive to earnings per share upon closing. The company noted improved performance in its Renewables and Agribusiness segments, attributed to higher co-product values and increased market volatility despite lower board crush margins. The Port of Houston soybean meal export project has reached operational status, and management indicated that the Clymers, Indiana debottlenecking initiative remains on schedule for completion. The company expects to maintain a conservative leverage profile while integrating the new assets into its vertically integrated merchandising and production footprint.

• Management reported that approximately half of the $915 million acquisition price for HLCP is attributed to projected cash flows from 45Z and 45Q tax credits.
• CEO Krueger stated, "Blue Flint and Dakota Spirit will be 2 of the limited number of plants able to sequester carbon on-site in 2027," noting this as a competitive advantage over pipeline-dependent competitors.
• CFO Valentine indicated that the company signed an agreement to sell the majority of its 2026 45Z tax credits, with the majority of the cash expected to be received before the end of the calendar year.
• Management expects to repay most of the debt associated with the HLCP acquisition within five years based on projected cash flows from the combined enterprise.
• The company indicated that the North Dakota plants provide strategic access to both U.S. and Canadian low-carbon fuel markets via existing rail service.
• CEO Krueger stated, "we expect to see our harvest volumes for corn and soybeans exceed initial expectations," reflecting record soybean yields in the Eastern Corn Belt.

INDUSTRY GLOSSARY

• 45Q: A federal tax credit for carbon sequestration and the disposal or use of carbon oxides.
• 45Z: The Clean Fuel Production Tax Credit under the Inflation Reduction Act, which rewards the production of low-carbon fuels.
• Board Crush: The margin between the cost of corn and the combined sales value of ethanol and its co-products such as distillers grains.
• CI Score: Carbon Intensity score, a measure of the greenhouse gas emissions associated with the production and life cycle of a fuel.
• RINs: Renewable Identification Numbers, which are credits used to track and enforce compliance with federal renewable fuel mandates.
• RVO: Renewable Volume Obligation, the specific volume of renewable fuels that refineries are required to blend into the transportation fuel supply.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen. And welcome to the Andersons 26 Third Quarter Earnings Conference Call. My name is Joe, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question and answer session. To ask a question at that time, you may press *1 on your telephone keypad to join the queue. And to withdraw yourself from the queue, please press *2. As a reminder, this conference is being recorded for replay purposes. I will now hand the presentation to your host for today, mister Michael Hoelter. Vice president, corporate controller and investor relations. Please proceed.

Michael T. Hoelter: Good morning, everyone, and thank you for joining us for The Anderson's third Quarter Earnings Call. We have provided a slide presentation that will enhance today's discussion. If you are viewing this presentation via the webcast, the slides and commentary will be in sync. This webcast is being recorded and the recording and the supporting slides will be made available on the Investors page of our website shortly. Please direct your attention to the disclosure statement on Slide 2. As well as the disclaimers in the press release related to forward looking statements. Certain information discussed today constitutes forward looking statements that reflect the company's current views with respect to future events, financial performance and industry conditions.

These forward looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors, which are in the company's reports on file with the SEC. Encourage you to review these factors. This presentation and today's prepared remarks contain non GAAP financial measures. Reconciliations of the GAAP to non GAAP measures are included within the appendix of this presentation. On the call with me today are Bill Krueger, President and Chief Executive Officer Brian Valentine, Executive Vice President and Chief Financial Officer and Mark Simmons, executive vice president, renewables. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Bill.

William E. Krueger: Thanks, Mike. Good morning, everyone. And thanks for joining the call to discuss our third quarter results and outlook. I would like to start by thanking all of our team members as they work safely through the busy harvest season across our plants, and elevators. We are making considerable progress in accomplishing our 1 Andy mindset and culture. Our third quarter results are just 1 example as we delivered record third quarter EPS for our shareholders. Our year over year trailing 12-month adjusted EPS has grown from $2.56 in the third quarter of 25 to $6.67 today. Putting us well on our way to achieve our stated target of $7 EPS exiting 2028. Starting with renewables.

While successfully performing all our fall shutdowns we were able to generate year over year improvements on our base ethanol production due to improved co product values, lower corn basis, and focused plant operations. These results are even more impressive when you consider that board crush was down 10¢ per gallon year over year. With volatility back in the grain markets, our agribusiness segment delivered improved results in our merchandising businesses. Our grain assets were impacted by less space income on wheat, and reduced grain volume due to lower yields and weak demand in the Western Corn Belt. The Port of Houston project is now complete.

We have initiated both our originations and marketing programs kicking off our combined domestic and export soybean meal strategy. We have made substantial progress on our Clymers, Indiana debottlenecking project, with a targeted run rate increase in production of 30 million gallons by Q3 27. We announced this morning the signing of a material acquisition which we will speak to at the end of our prepared remarks. With that overview, I will turn the call over to Brian to discuss our financial results. I will be back after his update to discuss the outlook for the fourth quarter and early 27.

Brian A. Valentine: Thanks, Bill, and good morning, everyone. We are now turning to our third quarter results on slide number 5. In the third quarter of 26, the company reported net income attributable to The Andersons of $46 million or $1.36 per diluted share and adjusted net income of $47 million or $1.38 per diluted share. This compares to adjusted net income of $29 million or $0.84 per diluted share in the third quarter of 25. Gross profit increased for both business groups as fundamentals were improved over the prior year. Adjusted pretax earnings were $54 million compared to $31 million in 2025 with both segments contributing to the increase.

Adjusted EBITDA for the third quarter was $101 million compared to $78 million in 2025. Our effective tax rate varies each quarter based primarily on tax credits earned and the amount of income or loss attributable to non controlling interests. We recorded taxes at an effective rate of 13% for the third quarter and expect our full year adjusted effective tax rate to remain in the range of 14% to 18%. Next, we will move to slide 6 to discuss cash, liquidity and debt.

We generated cash flow from operations before changes in working capital of $83 million in the third quarter of 26 compared to $68 million in 2025 with the increase being driven from the stronger year over year earnings. In addition, we recently signed an agreement to sell the majority of the 45Z tax credits that we are generating in 2026 and expect that most of the cash should be received later this year. Our short term borrowings are up as we have seen increased market volatility in 2026. However, our readily marketable grain inventories remain well in excess of our short term debt which is consistently the case throughout the ag cycle.

Next, we will take a look at capital spending in long term debt on slide number 7. Third quarter capital spending was $60 million compared to $67 million in 2025. This includes the funding of previously announced long term growth projects as well as normal maintenance capital. We continue to take a disciplined, responsible approach to capital spending which we expect will be approximately $225 million for the year, excluding acquisitions. We also completed share repurchases of approximately $15 million this quarter. Our long term debt to EBITDA is 1.3x which remains well below our stated target of less than 2.5x.

We continue to evaluate various acquisitions and organic growth projects and have a strong balance sheet that will support investments that meet our strategic and financial criteria. Now we will move on to a review of each of our business segments beginning with Agribusiness on Slide 8. The Agribusiness segment reported adjusted pretax income attributable of $9 million compared to $2 million in the third quarter of 25. Agribusiness saw good improvement this quarter and on a year to date basis remains well ahead of the prior year. Strong execution and volatility during much of the quarter provided more opportunities for our merchandising businesses.

However, with a late start to harvest, our asset footprint saw less space income in the quarter. Our fertilizer results were similar to 2025, in this seasonally quiet quarter. We also remain pleased with our continued focus on optimizing our business portfolio which has resulted in ongoing benefits year over year. Agribusiness had adjusted EBITDA of $40 million in the third quarter, compared to $29 million last year. Moving to Slide 9, renewables had another strong quarter generating pretax income of $63 million compared to adjusted pretax income attributable of $46 million in the third quarter of 25. Our ethanol plants continue to perform well with efficient.

Plant profitability was up year over year on lower eastern corn basis and higher co product values, despite lower ethanol board crush margins. While we have benefited from improved corn oil prices and higher renewable feedstock volumes, our merchandising results were lower year over year on competition from foreign feedstocks and lower demand from bio based diesel plants. Renewables had EBITDA of $78 million in the third quarter, compared to adjusted EBITDA of $67 million last year.

William E. Krueger: With that, I will turn things back over to Bill for some comments about our outlook and to introduce Harvest Own Low Carbon Partners. Thanks, Brian. In agribusiness, we have discussed the Western drought conditions and reduction of volumes in that region. Although these conditions may have a negative impact on our Western assets, it provides an opportunity for our merchandising teams to creatively meet the customer's needs. This is a strength of our complementary asset and merchandising portfolio. The unusually high rainfall across much of The US in August appears to have improved soybean yields to above average nationally.

The rainfall will replenish subsoil moisture and combined with market prices should drive increased planted acres of both hard and soft wheat, which should benefit agribusiness. Our Eastern assets are finishing up what has turned into a great harvest. We are seeing record soybean yields with strong receipts. The corn crop has shown higher than normal variability in yields, but in total, we expect to see our harvest volumes for corn and soybeans exceed initial expectations. This should provide opportunities for improved elevation margins and space income. This further supports the value of our vertical integration of originating lower cost and higher quality corn into our ethanol plants.

While we are optimistic about the fundamentals in agribusiness, post harvest market dynamics could impact timing of income over the next 2 quarters. The tailwinds in biofuels should continue to drive solid domestic corn and soybean demand, which is critical for The US farmer. With the favorable October weather, our fall applications and fertilizer sales are off to a good start. Farmers are maintaining application rates in volumes in the East are solid. As mentioned earlier, the Port Of Houston project is operational expanding our domestic and export soybean meal capabilities We believe that this location will be an outlet for Midwestern origins and a competitive alternative for global buyers.

We feel that our history of working with CPG companies on sustainability goals will provide us with a competitive advantage. As we roll out our regenerative ag programs for corn originations into our ethanol plants. These programs are built on leveraging traceability back to the farm gate, agronomic practices, and compatibility with lower carbon objectives. Our goal is to reward the farmers who participate in these programs to reduce the carbon intensity of the corn they produce. This will benefit both our agribusiness and renewable segments. Again, demonstrating our 1 Andy approach. In the renewables segment, we expect to see increased production of ethanol as we move into 2027.

US ethanol exports are expected to remain strong elevated global fossil fuel prices and the RVO continue to support ethanol demand and favorable blending economics. The passing of year round E15 would drive even more blending. Reducing the cost of gasoline to the American consumer. We are evaluating additional projects to reduce the carbon intensity of the ethanol we produce. As we believe this will be accretive to long term shareholder value. Our renewable diesel feedstock merchandising business expects to see increased production in bio based diesel in Q4 and 2027 to meet the RVO requirements and this should provide additional growth opportunities for our feedstock merchandising business.

Next, I would like to share some information about the acquisition we announced this morning. As you know, increasing our ethanol production through capital projects and acquisitions has been part of our stated strategy. We have evaluated several plants with a focus on location, efficiency, proximity to feedstock, and access to North American LCFS markets. We are now pleased to announce the signing of an agreement to acquire Harvest Own Low Carbon Partners, HLCP, the owner and operator of 3 ethanol plants that produce approximately 200 million gallons of ethanol annually. These 3 plants include blue flint ethanol, and Dakota Spirit located in North Dakota. And Iroquois Bio-Energy (IBEC) located in Indiana.

HLCP has a key position in the production of low carbon ethanol. Blue Flint has been sequestering carbon on-site for approximately 3 years and uses waste steam generated by a nearby power plant to attain 1 of the lowest carbon intensity scores in the industry. Dakota Spirit is expected to begin sequestering carbon in early 27 and uses waste steam generation in its process. Both North Dakota plants are well-located to reach US and Canadian low carbon ethanol markets. The IBEC plant in Indiana has filed their class 6 well permit with the EPA and is in technical review. Much like our Clymers, Indiana plant.

IBEC is expected to begin sequestering carbon in late 28, All 3 of the HLCP plants have potential debottlenecking opportunities and have been well-maintained. HLCP provides us with several competitive advantages. Location of the North Dakota plants gives us exposure to Western Corn Belt markets in a region that has exportable surplus of corn with acres forecasted to increase. These plants also have access to both US and Canadian low carbon fuel markets due to location, and their rail service. Blue Flint and Dakota Spirit will be 2 of the limited number of plants able to sequester carbon on-site in 2027. This is a competitive advantage compared to pipeline options.

Finally, we bring our vertically integrated approach to sourcing corn and merchandising ethanol and co products. With the larger production footprint, we will have more merchandising opportunities. We have agreed to a purchase price of $915 million. Inclusive of working capital. Approximately half of the purchase price is attributed to expected 45Z and 45Q tax credit cash flows. With the remainder of the underlying base ethanol operations, and additional low carbon opportunities. The acquisition will be financed entirely through debt with approximately $300 million from existing revolver credit facility and $615 million in additional committed long term debt. At transaction closing, we expect long term debt to EBITDA to be approximately 2x. Well below our target of less than 2.5x.

As a result of the significant cash flow that we are projecting from the combined enterprise, we expect to have most of the debt repaid within 5 years. We expect this transaction to be immediately accretive to EPS and generate EBITDA in a range of $225 million to $250 million each of the next 3 years. We are excited to welcome the HLCP employees to the Andy family and believe they will add strength to our ethanol team. We anticipate closing later in the fourth quarter or soon after the first of the year. In our 25 Investor Day, we identified several strategic and financial criteria for growth through M&A. This acquisition checks all the boxes.

And we are looking forward to the combination of these plants with the antiethanol footprint. We bring deep expertise in grant origination, commodity merchandising, logistics, ethanol, and coproduct marketing, that complement HLCP's existing capabilities and positions the combined team to unlock additional value. We anticipate that on closing of the transaction that our production volume will reach approximately 730 million gallons annually. Moving to 760 million gallons in Q3 27. Our team first started talking with HLCP in late 2024 about a potential transaction. We have been able to spend time with their leadership team and understand their plants very well. We believe that the leadership and operational integration will be seamless.

When we look at the commercial integration, we already have established teams that merchandise and market all the products. And this will provide us with the opportunity to handle 40% more volume. The strength of the combined teams should provide a solid foundation to ensure a successful integration. We are happy to answer your questions at this time.

Operator: We will now begin the question and answer session. Again, to ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw a question, please press *2. On today's call, we ask that you please limit yourself to 1 question and 1 follow-up. You may rejoin the queue if you have additional questions. At this time, we will pause just momentarily to assemble our roster. Our first question here will come from Benjamin Klieve with StoneX. Please go ahead.

Ben Klieve: Hi. Thanks for taking my questions, and congratulations on both a nice quarter and especially on the acquisition announcement. I would like to start, Bill, where you left off regarding the kind of the relationship and the history here. With the acquisition. You noted that conversation began at the end of 24. I am curious, if you can elaborate a bit on your relationship with them over the years. Is this have these been facilities that have been customers of yours from a, trading perspective? I am just wondering kinda how deep your relationship is, in the context of you now feeling comfortable enough to pull off the news of the acquisition?

William E. Krueger: Yeah. Morning, Ben. How they are markets work we would have very little transactional business with them. Their ethanol would tend to flow to different destinations. Than our 4 plants do, which is 1 of the reasons why we were very interested in them. They have ample corn demand right in their backyard. They have a solid feed business. And the DCO markets, we do interact with them in that area.

But that is kind of the beauty of this acquisition or potential acquisition, excuse me, is that there is a lot of synergistic value and just straight growth in the geographic regions that, quite honestly, if you look at North Dakota corn, it is 1 of the few areas, that are left where the Andersons does not have a strong presence in, and this will provide that. Very good. that is-- And then I my follow-up on this is that it seems like you are uniquely compelled by the opportunity provided by the carbon sequestration throughout the 3-facility footprint here.

Ben Klieve: And I am wondering if you can talk about how your perspective on acquiring this business has evolved over the last couple of years as their investments into CCS have progressed. And especially as the kind of regulatory dynamic around carbon sequestration has evolved? Is this something that really became a catalyst for an acquisition here recently, or, you know, am I overthinking it?

William E. Krueger: No. I do not think you are overthinking it at all. You know, the Andersons is focused on having the capability to sequester carbon for a number of years. Going back to 1 of our plant in Ohio maybe 7, 8 years ago. So this has been on the forefront of our, strategy and 1 that we have talked about publicly. You know, we started talking, publicly about climbers 3 years ago, and we are still, we are very close, to having our well permit. Our classic well permit. But what we really like about this opportunity is we are in the carbon sequestration game on-site the day after closing.

And we have spent a lot of time analyzing and researching the long term value of low CI ethanol and the benefits that it will provide not only in North America, but globally. So I would not say this has been a shift it is been a strong focus. And 1 of the reasons why we have been committed to getting the CCS program going at climbers. Got it.

Ben Klieve: Very good. Well, I appreciate that. I-- that color. Congratulations again to you and the whole team on this. I will get back in queue. Thank you.

Operator: And our next question will come from Derrick Whitfield with Texas Capital. Please go ahead.

Derrick Whitfield: Good morning, guys, and also congrats on the quarter and acquisition. Wanted to start with Harvest first. The EBITDA generation from those facilities appears very strong. My quick search indicates their nameplate is in the 215 to 220 million gallon range on an aggregate basis. And, Bill, when I think about the efficiencies that you guys operate your plants at today, could you offer some perspective on the degree of debottlenecking you could achieve against that capacity? And then, also, just where does the CI sit on average today across those plants?

William E. Krueger: Morning, Derrick. Yeah. I can certainly take-- I will probably have, Mark Simmons, our EVP of renewables answer part of the question for you. The total capacity today, as we have stated, is 200 million gallons. We believe that all 3 plants have debottlenecking, opportunities that will be relatively low cost of capital. And as we have been able to do that at our plants, over the past couple years, we believe there is an opportunity to certainly surpass 250 million gallons across the 3 plants combined, and it will take probably 24 to 36 months to achieve. Maybe a little less than that.

So, yeah, that is, 1 of the, thoughts that we had and gave us a lot of, interest early in it. Now in terms of efficiencies in the 3 plants, this management team is excellent.

Analyst: At running plants. It was a lot of fun with our team and their team when we were on-site looking at them. They literally talk and think about successful operation of ethanol plants in the exact same way. The Dakota Spirit plant has a different technology, thermal kinetics, The other 2 are ICM, which we obviously know ICM very well. But we were impressed with that technology and the potential. So in terms of us bringing immediate improvement to their plant operations, I would tell you it is only gonna come through the economies of scale. Because the team they have in place today, is, really good. I will turn over the CI questions to Mark.

Mark Simmons: Yeah. Thanks, Bill. And, yeah, starting with the CI scores. BFE has 1 of the lowest CI scores in the industry. Today due to the efficiency of the plant. We talked earlier in the earnings call about the waste steam that provides energy to the plant. that is 1 component of it. And then also, the carbon capture and storage capabilities. And DSA, once sequestering, will have, you know, a very similar score. So lowest in the industry from a CI perspective.

Derrick Whitfield: Terrific. And. I guess yeah. Please go ahead.

William E. Krueger: Oh, I said thanks, Derrick.

Derrick Whitfield: And then just as my you guys are really excited. It seemed really excited about the downstream market exposure. You are gaining through this acquisition. I guess, you maybe-- offer some perspective on where the product is being sold today And if you think about your legacy. Your existing business today and ethanol markets you are selling into, does it fast track your ability to find higher value markets as you kind of think about piecing this together?

William E. Krueger: Yeah. Good question. The IBEC plant will hit destinations very similar to climbers. And so, we understand those markets both for the co products and the ethanol very well. The North Dakota plants, obviously, with proximity to Canada, that is a, a market that we are focused on. there is also opportunities where we can go in The US to low carbon destinations. And so it really will give us the flexibility to find both new markets and then be able to leverage though. Those markets with our ethanol merchandising business. So I think you, you hit it exactly.

IBEC will fit right into our, current set of customers, Blue Flint and Dakota, will allow us to develop an even broader customer base. Perfect. Great update, guys. Congrats again.

Operator: And our next question will come from Benjamin Mayhew with BMO Capital Markets. Please go ahead.

Ben Mayhew: Hey. Good morning, everyone. First of all, congratulations on a fantastic deal. it is really, really great. So my first question is about the deal. In kinda segueing off what was asked before. I would like to dig into your anticipated EBITDA assumption. So you know, on the low end, it looks like, call it, a little over $1 of EBITDA per gallon is expected out of these 3 plants over the next 3 years. Is there any way to, like, dissect that even further and kind of parse out what is tax credit versus what is your assumption on ethanol margin? And how does. Like, how do these margin levels compare to your existing plant? So let's start there.

William E. Krueger: Thanks for the question. So let's start with how these margins compare to our current plans. If you take Denison, Iowa they are very similar in operational cost. Pretty close to the same size, same dynamics, same technology other than, Dakota Spirit, but very similar on operational cost. We. We have often talked about the efficiencies gained by larger plants. And that ranges, year to year. So, our larger 140, 150 million gallon plants are going to have a little bit of, scale of efficiencies. that is 1 reason why we are so excited about, really focusing on expansion at all 3 of them.

But the other question that you have is trying to break out the 45 z versus what we have now started to look at is base ethanol and additional low-CI opportunities. The 2 North Dakota plants are able to add to that second bucket at a rate that our current plants cannot. The ability to have CI scores very close to zero or below zero, really provide a lot more value. The 1 item that I would caution you on, and I can let Brian talk a little bit about the EBITDA numbers, is the traditional model of looking at ethanol plants and saying, well, this is their EBITDA.

And we are gonna strip the 45 z out discount that for the sale, and then this is what the plant operations make. that is really not the way you can look at plants that are sequestering carbon. There is a cost to compress the CO2, there is a cost to go downhole. there is a transportation cost for that. So I would caution anyone that says, well, they are making x on 45 z net EBITDA, and everything else is operational.

Because that formula simply will not work And as we get farther into, discussions down the road post closing, we will be able to talk more freely about that, but that would be my overarching comment to anyone who is trying to analyze this deal is make sure you are putting the right EBITDA in the right bucket. Because it is going to cost you more, operationally to generate a CI score in the single digits or even negative. If that makes sense.

Ben Mayhew: Yes. That certainly makes sense, and thank you for all that detail. Okay. I am going to transition to legacy business here. I mean, there is just so much to ask, but I am gonna go with legacy business. You mentioned on the agribusiness side, that there could be a little bit of timing to consider in terms of when the profits hit Can you just can you just elaborate on that a little further?

William E. Krueger: And does this mean, like, you know, fourth quarter. Some fourth quarter will get kind of deferred in the first quarter? Or like, how does that how do you how do you see that working? I knew that comment would raise a question exactly like you asked. What I what I can tell you is a little bit unlike last year when we talked at this call about the potential of pulling some profits, forward because of the large elevation margins at harvest that we were able to we will not pull any Q1 profits into Q4. We are in the middle of November right now, so it is hard to answer your question I do not wanna avoid it.

But if you think through we have had a delayed harvest in the Eastern Corn Belt and quite honestly, Iowa, Nebraska. So that delayed harvest can often generate the opportunities to generate more space income if you wait in the Q1 or Q2 of the following year. And I am not saying that today. I just want everyone to understand when you are, finishing up harvest in the middle of November, it is different than finishing it up the third week of October. So that dynamic, you can look at the, the carryout. You can look at the price of the corn board today.

And when you stack all that up, it is 1 thing that you need to be, thinking through overall. But as I said, that, should not be a net negative when you look at the size of the crop and the size of our harvest handle, which is exceeded, our expectations.

Ben Mayhew: Got it. That all makes sense. I am gonna join the queue again. So thank you.

Operator: And, again, if you have a question or a follow-up, you may press *1 to join the queue. Our next question will come from Pooran Sharma with Stephens. Please go ahead.

Pooran Sharma: Good morning, and Congrats on the quarter and the deal as well, the announcement of the transaction. I think that is been pretty well covered. So maybe I will just focus my questions on the core business and just maybe focusing on renewables. We have seen D6 RIN pricing trend down significantly kinda since this biofuel policy uncertainty has been kind of pushed into Q1 of next year. Wanted to kind of get your thoughts on what you have been hearing. Does this concern you? This on paper, seems like it makes blending economics a lot worse from maybe where they were in the summer.

But is it still kind of are refiners still incentivized to keep blend rates high Just wanted to get your thoughts there.

Mark Simmons: Yeah. This is Mark Simmons. Thanks for the question. Yeah. Certainly, the volatility in the RINs market has been quite volatile, I guess, over the last, you know, 60 days. But and that is, you know, primarily because of the, reallocation still being in the air and in common period, you know, it has affected the, blend margin, but the blend margin still high enough to incentive, domestic lending and increase in blends. So, although it has impacted it, I think that you know, the overall, effect has been minimal.

Pooran Sharma: Okay. Appreciate that, Mark. And I know you guys did not really cover it, but I think in the past, you have alluded to hedging in the weaker parts of year for renewables, and that is typically Q4, Q1. So just wanted to kind of ask with ethanol margins where they were you or did you lock in any of your Q4 production Just wanted to get your sense for hedging here as we look forward.

William E. Krueger: You know, as we always answer this question, We believe it is in the best interest to, disclose, what we have hedged post earnings reports. And, you know, as an organization, we, tend to focus on when it makes sense. To put on forward hedges and when we think the, cash market will, pay us to stay in the spot. So we will we will be able to address any Q4 hedges that we had on when we do the Q4 earnings release. Okay.

Pooran Sharma: No worries. Maybe just 1 quick 1. You kind of alluded to it to it on your prepared remarks, but maybe just want to get a sense of pace of farmer selling had some pretty big crop price rallies here in Q3 Wanted to get a sense of where the where the farmer stands in the pace of selling and in old crop and new crop.

William E. Krueger: As we sit here today. Yeah. So old crops, pretty much behind us, right, with the, percentage of corn harvested, for the 2026 crop. The producer did have, and it is a really good question. The producer had a great opportunity-- I am going to say 60 days ago, you know, when we got to 45 East corn. That was a really good opportunity to not only sell the balance of their old crop, and their 26 crop. We did see some producers take advantage of that. And, and as I mentioned, in the prepared remarks, we saw quite a bit of volatility Our merchandising businesses tend to perform better. When that happens.

You know, with the recent sell off, farmer selling is really slowed. And, and rightfully so. They were able to get the cash flow needs that they needed for Q4. They watched these futures drop 70¢ to 90¢. And so the farmer selling for, Q4 has slowed considerably. Now that will generally provide merchandising opportunities and space income and goes right back to the comment that I made that, it may make more sense for the Andersons to look at, Q4 versus Q1 on when to market the corn and beans that we dump at harvest.

Pooran Sharma: Got it. Appreciate the color, Bill.

Operator: And this concludes the question and answer session. I would like to turn the conference back over to Mike Holter for any closing remarks.

Michael T. Hoelter: Thanks, Joe. We want to thank you all for joining us this morning. Our next earnings conference call is scheduled for Wednesday, February 17, 2027 at 08:30 a.m. Eastern Time when we will review our fourth quarter results. As always, thank you for your interest in The Andersons, and we look forward to speaking with you again soon.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

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