Good day, ladies and gentlemen. And welcome to the Pacific Ethanol Inc. First Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to your host for today Ms. Becky Herrick of LHA. Ma’am you may begin.

Thank you, Ben, and thank you all for joining us today for the Pacific Ethanol first quarter 2015 results conference call. On the call today are Neil Koehler, President and CEO, and Bryon McGregor, CFO. Neil will begin with a review of business highlights. Bryon will provide a summary of the financial and operating results. And then Neil will return to discuss Pacific Ethanol’s outlook and open the call for questions. Pacific Ethanol issued a press release yesterday providing details of the Company's quarterly 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. A telephone replay of today's call will be available through May 19, 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, May 12, therefore you're advised that time-sensitive information may no longer be accurate at the time of any replay. 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 a 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, risk, 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. Also, please note that the company uses financial measures not in accordance with Generally Accepted Accounting Principles, commonly known as GAAP to monitor the financial performance of operation. Non-GAAP financial measures should be viewed in addition to and not as an alternative for the reported financial results as determined in accordance with GAAP. The company defines adjusted EBITDA as unaudited earnings before interest, income taxes, depreciation and amortization, and fair value adjustments. To support the company's review of non-GAAP information later in this call, a reconciling table is included in yesterday's press release. It is now my pleasure to introduce Neil Koehler, President and CEO. Neil?

Thanks Becky. And thank you all for joining us this morning. For the first quarter of 2015 the company had a net loss of $4.7 million, which is attributable to supply and demand swings of the ethanol industry and volatility in the energy markets. During the first quarter, the industry was negatively impacted by higher ethanol inventory levels, seasonally lower transportation fuel demand, and resulting compressed production margins. Over the past few years, our efforts to diversify our revenue streams, improved plant efficiencies and strength in our balance sheet have helped mitigate the negative impacts from seasonal downturns. In 2014, we began producing corn oil in Magic Valley and Stockton, which contributed operating income of over $0.05 per gallon. We are now producing corn oil at our Madera facility and are close to initiating production at our Columbia plant, which will further diversify revenues and contribute to overall margins. On the efficiency front, we've been improving corn yield over time by investing a mechanical technology such as fine grinding and as well as by optimizing enzyme and chemical treatments. We have many additional projects in various phases of development and we believe there is still significant potential to reduce our production costs lower the carbon intensity of the ethanol we produce and generate additional revenue opportunities at each of our facilities, positioning the plants to be even more competitive. We're already seeing the markets improve over last quarter. So far in the second quarter, transportation fuel demand has increased sequentially and year-over-year. Ethanol coproduct exports remain strong and we're seeing improved production margins. Looking forward in 2015, we are optimistic about the financial performance of the company and the industry. We also remain on track to close the merger with Aventine late in the second quarter. Aventine is a Midwest…

Thank you, Neil. During the first quarter of 2015, we reported net sales of $206.2 million compared to $254.5 million in the first quarter of 2014. The decrease in net sales was attributable to a lower average sales price per gallon of ethanol, partially offset by an increase in total gallon sold. Gross loss was $1 million compared to a gross profit of $38.5 million in the first quarter of last year. This decline in gross profit was driven by significantly reduced production margins compared to the prior year. SG&A expenses were $4.9 million and included approximately $1 million in merger related costs. This compares to SG&A of $3.7 million in the first quarter of 2014. Operating loss was $5.9 million compared to operating income of $34.9 million in the first quarter of last year. Fair value adjustments were $200,000 compared to $35.8 million in the first quarter of 2014. Interest expense net was $1 million compared to $4.4 million for the first quarter of 2014. The lower interest expense is related to a reduction in our average outstanding debt balances. Provision for income taxes for the first quarter of 2015 was a tax benefit of $2.7 million compared to an expense of $3.3 million for the first quarter of 2014. Net loss available to common stockholders was $4.7 million compared to a net loss of $11.1 million in the first quarter of last year. Adjusted EBITDA was negative $2.7 million compared to a positive adjusted EBITDA of $35.4 million recorded in the first quarter of 2014. Turning to our balance sheet, cash and cash equivalents were $42.3 million at March 31, 2015 compared to $62.1 million at December 31, 2014. The reduction in cash reflects a debt payment of $17.5 million and in capital expenditures of $0.2 million, partially offset by cash flows from operations of $7.3 million. Going forward, we will continue to balance our debt and cash balances as we look to reduce our overall borrowing costs, while exploring options to consolidate and refinance our total debt position after closing Aventine merger. Our Form S-4 related to the Aventine merger has been declared effective with a shareholder meeting scheduled for June 11. Prior to closing, we need to complete certain closing conditions including obtaining approval from Pacific ethanol and Aventine shareholders. We’re excited to be nearing the close of this transformative merger. With that, I’d like to return the call to Neil.

Thanks, Bryon. Over the past several quarters, we have established a strong foundation that has allowed us to pursue opportunities to significantly grow the business, as reflected by the planned Aventine merger. The combination of our two companies will expand our production and marketing capabilities, diversify our geographies and technologies, broaden our coproduct mix, and established Pacific Ethanol to fifth largest producer and marketer of ethanol in the United States. In addition, we are seeing ethanol supply and demand in better balance with transportation, fuel demand increasing, resulting in improving margins and enabling us to further benefit from the strong foundation we have established. For 2015 our goals are to close the Aventine merger and successfully integrate our businesses, and continue reinvesting in our production business through initiatives focused on improving efficiencies, lowering the carbon intensity of ethanol produced, creating new revenue streams and furthering our advanced biofuels initiatives. With that operator, I’d like to now open the call up for questions.

[Operator Instructions] Our first question comes from the line of Eric Stein with Craig Hallum. Your line is now open. Please go ahead.

Hi Neil, hi Bryon.

Hi Eric.

Maybe just, just starting on ethanol pricing, and I know it’s tough to predict, but just from a high level I know, RBOB’s increased since early April, ethanol prices have improved some, haven't completely followed suit, I'm just wondering I mean is it, do you think summer driving season is that, is that something that gets the market to more fully value the octane of ethanol or how do you see prices unfolding here? I know they’ve improved in the second quarter, but maybe going forward?

Sure. Directionally, the driving season helps and can help fairly significantly, I mean you do see almost 10% increase in demand on a gasoline basis, summer demand is expected to be up 3% to 4% year-over-year that puts it the summer run rate in that 142 billion, 143 billion gallons, that's 14.2 billion, 14.3 billion gallon rate annualized rate on the ethanol, plus the exports which will continue in the summer as well that would suggest that we will see a draw on inventory and an opportunity to incrementally even expand production to keep up with that demand. So the softness in ethanol pricing certainly there's been some impact on energy prices, but it's really been more a function of excess production levels late last year that carried over into the beginning of the year levels that were in excess of the seasonally lower demand even with strong exports. And we have seen the production moderate rather materially, and we’re starting to see some incremental decreases in the inventory levels. So we are seen a tighter supply demand balance, we’re seeing it in the production margins, which are solidly positive now and we are anticipating further improvements this summer.

Okay. Thanks for that. Maybe just turning to basis, I mean, that was probably, well that was one of the highlights of the quarter, I think that's the – that looks to be the best number since late 2012, curious you know what you're seeing here in Q2 and maybe you can talk to is that something that you can lock-in and if so for how long?

Sure. We can lock in basis, we do lock-in basis, we have not done a lot of that right now because what you see is there – there were opportunities to lock it late in the year and early this and we did some of that and that contributed to our lower overall basis. The spot corn basis is a bit higher than that, it’s a little over $1 bushel right now, it's interesting because there's a lot of corn out there and it looks to be a very good crop that has just been planted or is being finished in the planting now and very good weather conditions that we’re at this point anticipating another very good crop and you have a lot of corn in storage and you would expect to see the basis starting to break. It hasn't – the farmers don't really like these prices, they have been busy in the field planting and have not been terribly motivated to sell farmers different than a few years back control a lot more of the storage and right now they're taking a position of holding on to the crop, the old crop. Certainly when we get closer to new crop it will need to move. So we’re being fairly patient on basis because we actually believe that there's a good opportunity it could break pretty well in the June-July timeframe and we’re watching it very closely and it is something that we actively manage.

My phone maybe broke up there and I missed just a very first part, so it sounds like the second quarter maybe you think that your all-in basis number is a little bit higher than the $0.93, but that you would expect then, you know maybe some improvement back half of the year?

Yeah, fair. That's a fair assessment.

Good. Then maybe last one for me. Just coproduct return that was also a nice number and I know that, you know a lot of that is just based on pricing and what's going on in China, but just, I mean is this is a – is mid-30s a level, and I know this is prior to Aventine, because Aventine it probably means it’s a higher number, but for your business mid-30s is that a good way to think about it?

That certainly has been the market and as you mentioned China can have a really very large impact on that and when they open their market backup last year and this it is really contributed to that. The fact remains that on a protein basis, distillers grain is the most competitively priced product in the market, so we feel very good about its value. The only other countervailing factor there would be that this is the time of year in summer, when you seasonally see a little bit of pressure on those coproduct values. So it's – there are lot of variables that go into that, certainly we saw strong coproduct values through most of last year, they softened when the Chinese pulled out of the market later in the year and that have come back. We do think that in and around that, that 30%, 35% is still a very fair value and we would hope to be able to maintain those values.

Okay. Thanks a lot guys.

Thank you, Eric.

Thank you. Our next question comes from the line of Craig Irwin of ROTH Capital Partners. Your line is open. Please go ahead.

Good morning gentlemen and congratulations on the progress towards closing the merger.

Thank you, Craig.

So first thing I wanted to ask about, on the existing platform can you update us on the debottlenecking activities, the progress we’ve made in the last quarter and the timeline for some of the incremental capacity to come online?

Sure. We’ve made a fair amount of progress on what could be debottlenecking capacity also in today's environment, we've viewed more as efficiency improvements. So we've not been – in the first quarter we ran the platform at about 90%, we’re slightly higher than that today, we’ve been focusing more on margin than volume, and a number of these projects that we've done bottlenecking, our evaporators putting in some additional chilling capacities, improving the grind. In a very good market where the demand is there to increase incremental capacity can be that, but today they've been more focused on improving – lowering our cost and improving margins. So progress is good and continues.

Great. Thank you for that. So one of the things you press released in the quarter was Madera, the corn oil production coming online. Obviously you’ve got your last plant to come there, but can you share with us one whether or not you’ve seen any improvements in the financial yield from corn oil, I didn't hear an exact number or see the number in the Q, if you might be able to share that with us?

Sure. We’re just starting up the corn oil Madera, so it hasn't made a contribution yet, just beginning in this quarter. But for each plant what we've guided is that, we see a minimum of a $0.05 per gallon increase in operating income at those plants that have the corn oil. It was actually higher than that last quarter of the two plants that had corn oil, our yields are good, pricing was good, we industrywide with the softer corn price we have seen softer oil prices, but its relative and it continues to be very strong contributor to our bottom line.

Great. And then last question if I may, there is a lot of interesting terminals these days given a competitor is doing something that I guess we don't have all the details on yet, but your location in Stockton is particularly interesting given the future anticipated demand out of Asia. Can you discuss with us whether or not you have the opportunity to maybe expand your terminal capacity there? And what your thoughts are about whether or not you want to own your terminals over the longer run, or if you would be willing to maybe roll them into some other potential market structure?

Sure. Taking that last part first, it is certainly – it's been interesting to see what Green Plains is up to and we’ll watch that, and that does create a potential opportunity nothing that we’re moving on at this time. We've always said that we see our own production assets as terminals in these destination markets, you mentioned Stockton that’s a very good example. We already terminal quite a bit of railed ethanol from the Midwest through that plant to supply the market in Northern California where we have a market share that is well in excess of the combined production of our plants and the two other plants in California that we market for. We have looked at projects and certainly have identified a project that would allow us to greatly expand that facility, add tankage and as you mentioned access the market, the Asian market, we do believe that when China opens up as an ethanol market that exports off the West Coast will be an important part of continuing to grow the exports of ethanol in the United States. Our own ethanol that we produce given its very low carbon intensity, we believe we’ll always have a higher value in that California and the West Coast market with that regional carbon market leading the world, but the opportunity to use our assets to distribute other ethanol off the West Coast we do see as a future opportunity.

Great. Thanks again for taking my questions.

Sure Craig.

Thank you. Our next question comes from the line of Katja Jancic of Sidoti and Company. Your line is open. Please go ahead.

Hello Katja?

How is everyone doing?

We’re doing great. How are you doing?

Very good. First question, going back to the corn-basis, you mentioned right now they’re slightly above $1 and going into the summer we could this come down, how low could they potentially go?

Well, that's a good question, probably better asked to the farmers in the Midwest to see how motivated they are to sell the corn. You know basis can be very volatile as was pointed out earlier, it’s now in the first quarter, that’s the lowest we've seen since 2012, certainly reflective of a corn market that is very well supplied and we believe will continue to be not only well supplied, but even better supplied if the crop turns out the way it's starting to look with the planting and the very good weather conditions and soil moisture et cetera. So you typically in markets where were corn is plentiful will see basis levels the Midwest, which have been at or even above the board, drop well below the board. So – and if we have a – in freight $1.10, $1.20 a bushel and if you drop to 40, 50 [ph] under, which is we haven't seen in many years, but we could see then that would suggest the basis that’s well below $1. Back in I think 2011 it might've been, we were buying delivered basis that was in the ‘60s and ‘70s. I do think that you know given the demand for corn both here in the US and export given its very attractive value on a per bushel basis that, that will certainly put some floor on basis because we will see corn – find a home both here domestically and export. So we would not expect to see basis levels that get as low as they have been back in the 2011 timeframe that levels it, you know certainly below $1, we think are very achievable.

Now my second question, Neil can you talk a little bit about the California's low carbon fuel standard program? Because recently I think it was mentioned that there are plans to accelerate the program?

Yes. They are in the stages – final stages of reauthorizing the program. It’s always been a 10% reduction in carbon intensity by 2020. That program was basically frozen over the past two and half years due to lawsuits and that tied that up, it didn't stop the program, but it froze the compliance curve, which is a very aggressive curve that 10% today we’re at 1% and we’ve been frozen at that level for the last two years. What carb is doing is getting back on track and that will accelerate because rather than extend that compliance curve out beyond the 2020, which many anticipated they would they said no, we’re not going to do that, we’re going to get back on track and so that compliance curve becomes even steeper when the program takes off again in 2016 I believe it goes to 2%, which is a big, big jump and then accelerates from there to get to that 10% reduction by 2020. The other interesting fact is that the state is doubling down on its carbon policies. So there is a lot of talk now going beyond 2030 – beyond 2020 to 2030 and some additional reductions in that timeframe. There's been no specific rulemaking, but there's been a tremendous amount of messaging from the Governor's office, as well as the California Air Resources Board to suggest that program will be extended and that we would see a rulemaking occur over the next year or so to lay that out. So we continue to be very optimistic that, that the program will continue to provide a lot of value to Pacific Ethanol and its shareholders, in the process of the program being reauthorized and the uncertainty we’ve seen carbon values at relatively low levels, it’s about $0.02 a gallon premium for us, the price of the carbon per metric ton is $20 or so. We anticipate that as we get closer to 2016 and certainly beyond that, that carbon price is going to increase very significantly and provide additional value to us, which is why we’re working very hard and spending capital to even further reduce our carbon intensity from something that is the lowest commercially available ethanol in United States today something will be even lower than that.

So if this plan continues or accelerates, it will be very tough for the Midwestern producer to compete on the West Coast?

I would – it certainly is tough, it’s frankly tough for all of us to maintain relevance over the out years of this program. What we have seen is that there have been a number of producers in the Midwest that certainly the western facing where the California market being the largest ethanol market in the United States have also made investments and have lowered their carbon intensity. We have advantages by being able to sell a 100% of our distillers grain wet, the ability to implement some of these other technologies are very clean source of electricity, projects like cogeneration, methane digestion that we’re looking at. We have the ability being very close to this market and having some unique attributes and advantages to maintain a competitive advantage. But certainly we do expect that there will be an element of Midwest production that will continue to be important part of the California program.

Okay. Thank you so much.

Thank you. Our next question comes from the line of Moses Sutton of Cowen and Company. Your line is open. Please go ahead.

Hi, this is Moses Sutton on for Jeff Osborne. What was the cause of the decrease in the ethanol premium per gallon, is it expected to be variable with production or overall pricing trends or should the long run rate continue to be above $0.30.

Well the ethanol premium I believe you're referring to Chicago versus the West Coast, which on a cash basis was $0.20 in the first quarter, if you look at cash, Chicago versus cash LA, it was less when you compare to Seabot, but that's it, that's more of the future market. So on a cash basis that was $0.20, $0.20 in and around, if not even a slight premium to what we would consider the balance spread between the Midwest and the West Coast last year, which was an extraordinary year for the industry and an extraordinary year for us, we saw that at closer to that $0.30, in fact over $0.30 a gallon. We believe that the trend is certainly more towards a higher premium, but we would not expect it to be $0.30 that was caused certainly by not only a very tight supply demand, but logistical constraints on getting ethanol to the West Coast. We've seen a lot of those constraints resolved although if you look at the new rail rules that will be phased in over the next number of years on new cars and retrofits things could tighten backup, plus the very immediate impact of having to slow the trains down, which happens this year, that we could see that have an impact. So the premium is good. If you look at it historically back before 2014 it was in the teens and every year it’s come up $0.20 is a good number, we’re very comfortable with that. It maintains our very strong competitive position and if anything we see opportunities for that to flex above.

Great. Thanks, it’s very helpful. And with regards to the Kinergy Marketing gallons, it seems like you reached a new high above 90 million this quarter. Is this due to new market expansion, is it new customers, repeat customers and sort how do you see this once post Aventine merger, like where do you see the hitting in 2016 and beyond?

Our incremental increase in sales has been largely in our Western market, so we do have the largest market share out west, it’s due to our very unique position of production and low carbon production and a very strong distribution system and very strong customer relationships. And we have been able to incrementally expand our sales in that market. We have also seen some incremental expansion in the Midwest. We have terminals in the Magellan System and in advance of the Aventine merger that has given us the opportunity to continue to toe into those markets. So we do anticipate that our third-party volumes will continue to expand and the access to Midwest Eastern and international markets that this merger will give us, will just further improve that opportunity.

Great. Do you see that sort of in the above 100 million gallon range eventually or is it, a much slower process?

We don't really offer any specific guidance on that, and I think that the way we’re looking at this merger and the new gallons that come with Aventine is that we would be placing those in new markets, existing markets for those gallons today, which tend not to be in our markets. So that's a lot of new gallons to swallow the 315 million gallons, and today if we maintain our current pace of third-party volume and with some small incremental growth, I think that would be a success.

Great. That’s very helpful. Thank you.

You’re welcome.

[Operator Instruction] Our next question comes from the line of Matt Farwell of Imperial Capital. Your line is open. Please go ahead.

Hey good morning guys.

Good morning.

Some information was published through to the SEC filings about Aventine in the financials, and with my calculations the SG&As after backing out the restricted stock units, it’s about $0.10 per gallon and that compares with your SG&A, which is roughly the similar. Have you been able to identify any synergies? Some of the competitors are in 3% to 4% per gallon range, I know you have other businesses, but do you think that your overall SG&A now that you've seen the numbers could head lower?

Sure. I mean, that’s something that we will address once the merger is complete, but certainly that is something that we have been looking at, we’ll continue to look at very closely and that's part of the advantages of increasing your scale, is that you should be able to find some cost efficiencies at all levels including SG&A.

When you – you talked about the potential refinancing that you would pursue assuming that the mergers closed, would you need to see a number of months or quarters of integration before you can go out to prospective lenders? What is your thinking on how to approach the integration and the refinancing plan?

Yeah Matt, it’s Bryon. I think, not necessarily I think that there is enough operating history and improvements and changes that you’ve seen both at Pacific Ethanol and Aventine that give you a foundation to be able to build on and establish credibility with the lending markets. At this point it’s really more just determining what would be the best fit for us and how we should approach that, the amount of leverage that we want to input on the company, certainly our inclination did not want to, and we will certainly not be overleveraging this company. There is an appropriate amount of leverage that makes sense, and it certainly makes sense to refinance the debt that is currently on the residual legacy debt that’s on our balance sheet and certainly the debt that’s on Aventine’s – the term debt that’s on Aventine’s balance sheet.

The primary focus would be, first with regards to our revolving lines of credit, and making sure that we have the necessary liquidity to help facilitate the financing receivables inventory and the like, and that would be if you were to prioritize that would be the first priority for us, and is the area of focus. But as well that would go hand in glove with as well how you would be financing the term debt. And there is more to come on that as we move closer and then post merger.

Could the prospect of working capital line provide some sort of credit support to that subsidiary?

I think the way we’re thinking about it now Matt is, keeping it a fairly simple structure where we have the revolving and liquidity facilities at the – if you will, at the more of the corporate structure level, and that the term debt would be situated under the against the fixed assets, and that we wouldn’t need to, nor we want to have really any revolving capacity down at the – against the fixed asset level to avoid double leverage, and again, I don't think it's necessary, I think we have more than adequate liquidity and cash, and at least with regards to our capital plan it will be more than sufficient be able to address those needs through that kind of a structure.

Okay, and then just logistically or procedurally you're looking at a June 11 shareholder meeting or vote is that – are there any other steps that we should be thinking about?

Material staffs, I mean outside of those conditions that are required to be met and established under the – and outlined under the S-4, no. So we would expect that where we to receive a favorable approval from both sets of shareholders that we should be able to move quickly closing, any material changes or issues with regards to the remaining closing conditions.

Got it. And then just one last question on the market. Are there any issues with seasonality that may differ from some of the Midwest producers that you may experience this summer?

Actually the demand out in our market is a lot more stable than the Midwest, there is less seasonality certainly in California all season, our driving seasons in California. So the impacts on the market were more trends in the Midwest on that seasonality that you know it being a national and international market impacted us. So our demand continues to be strong. We did actually have a record amount of sales gallons in the quarter, but certainly with the overall supply demand challenges, we – the whole industry saw that margin compression, but it’s looking good, margins are very strong right now, and we are optimistic about the forward months and curve.

Yeah, it sounds good. Well good luck and thanks for taking my questions.

Thank you, Matt.

Thank you. Our next question is a follow-up from the line of Craig Irwin of ROTH Capital Partners. Your line is open.

So Neil, I wanted to ask a little bit about the potential for hedging post Aventine. So historically, you obviously set up your operations ideally for spot exposure where you could minimize your costs and maximize your profitability, but it looks like the structure that Aventine operations when you bring them in as is described in your SEC filings, that there could be a benefit from hedging out some of the volatility of those operations. Can you talk about any preparations you might be undertaking to facilitate that or if this is something that you’re seriously considering as an option to maximize return on those assets following the completion of the transaction?

Sure. We have hedging accounts at numbers of the brokerages, we manage our risk on a daily basis, as you pointed out, that has largely been managed into the spot. But with the Aventine merger, where more gallons are sold against Chicago, which has a much deeper derivative market where we can put some financial hedges in place that is something we are evaluating and expect that we will do more of that. And also point out that really the merger itself we see as a natural hedge, while last year we saw some great benefits from the large premium spread to the West Coast. There are times when than can contract, so the ability to have access to all markets both on the fuel and the feed, new feed products that help derisk the volatility on the ethanol export markets that help manage domestic exposure all of that gives us a much more natural hedge against the volatility of all these commodities. But certainly with the scale and with the new opportunities that the merger brings, we do anticipate that we will be looking very closely at the opportunity to put on some additional financial hedges as well.

Great. And then my next question I guess, I'm not certain you'll be able to answer it, but it's not specifically about Aventine, so it’s possible and this is the only forum. But historically there has been litigation between the Aurora Coop and your future assets, expecting the transaction to close. And it's been a pretty acrimonious situation where to Mark Beemer's credit, he's been able to find a workaround and find a way to bring those assets up and online. But in the current structure that he's developed, there would most likely be reasonable size CapEx over the next year or two, but that would render a large chunk of the assets owned by the Coop completely useless that have to basically mark them down to nothing, have you been able to engage in discussions with the Coop about their position on a potential future relationship with Pacific Ethanol? And have you found that to be an acrimonious relationship or a more constructive dialogue than has been publicly reported between the parties with the historic relationship?

Craig, unfortunately I really cannot comment on that lawsuit anything that we can say about it has been disclosed in the filings. And I need to leave it at that. We’re very comfortable with the position that Aventine has taken on those lawsuits, and as you mentioned what have been publicly recognized as well that they have created a workaround, in your words from that situation. And we are optimistic that we will be able to manage that situation and do it as in a positive fashion as possible.

Fantastic. We look forward to you closing the transaction.

Thank you, Craig.

Thank you. And that does conclude our question and answer period, I’d like to turn the conference back over to Mr. Neil Koehler for any closing remark.

We really appreciate everybody joining us on the call today and appreciate your interest in the company and your support. And we look forward to speaking with you again soon. Have a great day. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Have a great rest of your day.