Good morning. And welcome to the Green Plains Inc. and Green Plains Partners' Fourth Quarter and Full Year 2018 Results. Following the Company’s prepared remarks, instructions will be provided for Q&A. At this time, all participants are in listen-only mode. I will now turn the conference over to your host, Jim Stark.

Thank you, Carmen. Welcome to the Green Plains Inc. and Green Plains Partners Fourth Quarter and Full Year 2018 Earnings Call. Participants on today's call are Todd Becker, President and Chief Executive Officer, and John Neppl, our Chief Financial Officer. There is a slide presentation available and you can find this presentation on the Investor page under the Events and Presentations link on both corporate websites. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about the future. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in this morning's press releases and the comments made during this conference call and in the Risk Factor sections of our Form 10-K, Form 10-Q, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. Now, I would like to turn the call over to Todd Becker.

Thanks, Jim, and good morning and thanks for joining our call today. We reported net income of $53.5 million, or $1.13 per diluted share, and generated approximately $128 million of EBITDA for the fourth quarter. The fourth quarter and the year end results were positively impacted by the gain on the sale of the three ethanol plants and the vinegar company completed in November. We ended the quarter with $318 million in the bank after the company paid almost $500 million to eliminate our Term Loan B. All of our actions have put the company on a solid financial footing during a period of volatile earnings. While these steps were previously outlined as goals of the portfolio optimization plan, being able to execute the program during this period of time is a credit to our employees, who consistently deliver success and our shareholders, who have been stalwart supporters. There is still more to do, which I will outline during this call. We had several one time items that occurred during Q4. First, we had a $150 million gain on asset sales, $3.4 million of severance expenses that was a result of the reduction in the force done in December, and a $13.2 million write-off of deferred debt issuance costs resulting from the Term Loan B payoff. As we have done in the past and will be willing to do in the future, we will realize value in our portfolio when the market is not willing to look past next week's or next month's crush margin. The consolidated crush margin was a negative $0.08 per gallon for Q4, which is the lowest we have experienced in our 10 year history. Green Plains produced approximately 205 million gallons of ethanol in the quarter. Our production level was impacted by the ethanol plant…

Thank you, Todd. Green Plains Inc. consolidated revenues were $827.5 million in the fourth quarter, down $93.5 million or 10%, from the fourth quarter a year ago. The decrease in revenue was driven by a 20% reduction in the total ethanol gallons sold, coupled with a 13% lower price per gallon of ethanol in the fourth quarter of 2018 when compared to Q4 of 2017. This was offset by higher revenue in our cattle feeding operations, as we sold twice the number of cattle when compared to the fourth quarter of 2017. Consolidated net income for the quarter was $53.5 million versus net income of $46.6 million a year ago. As Todd mentioned, we recorded a pre-tax gain on the sale of assets of $150.3 million during the quarter. Additionally, we wrote off $13.2 million of deferred debt issuance cost as a result of the Term Loan B payoff and recorded $3.4 million of severance expense. In all, we had a $133.8 million positive pre-tax net impact from the actions taken as part of the portfolio optimization plan. Removing the gain and the tax effect of all the one-time items, we would have reported a net loss for the quarter of $47 million or $1.17 per share. As a result, we recognized a tax benefit – reminder, I am sorry, we recognized a tax benefit of $52.8 million in the fourth quarter of 2017 due to revaluation of the deferred tax liabilities under the new Tax Cuts and Jobs Act. EBITDA for the fourth quarter was $127.7 million compared to EBITDA of $36.1 million for the fourth quarter a year ago. For 2018, EBITDA totaled $224.7 million versus $154.4 million for 2017. For the quarter, SG&A increased $1 million over 2017, primarily due to a $3.4 million severance expense taken…

Thanks, John. Currently, spot margins remain negative but have come off the lows as of late. The biggest question and challenge we have sitting in front of us is when do ethanol margins get back into positive territory. The simple answer is when we get closer to 20 million barrels of inventory. The more difficult part of the answer is getting to 20 million barrels. We have said this time and time again: production needs to slow down and U.S. ethanol needs higher exports E-15 year-round and the small refinery exemption to subside. We have seen positives around all of these over the last few weeks. Production on a year-to-date basis versus 2017 is down 3%. Last week's EIA print of 967,000 barrels of production was the lowest we have seen since June of 2016, but we need this to continue for several weeks to start having an impact. We appear to be moving closer to a resolution on trade with China. We believe China could be a buyer of U.S. ethanol at a conservative estimate of a minimum of 300 million gallons per year. In addition, we are optimistic the rhetoric as of late, on both the EU and Brazilian tariff expiration this year, and the potential demand increases for both of those countries. All of these countries have significant tariff on our products and we believe trade negotiators are aware of the need for ethanol to be front and center in these negotiations. For E-15, we should have approximately 2,000 retail stations in 30 states selling E-15 when June 1st arrives. Acting EPA Administrator last Monday told suppliers to get the E-15 fuel supply ready for summer. Our estimate is the year-round E-15 will add at least 200 million to 300 million gallons of incremental ethanol demand this…

Thank you. [Operator Instructions] And our first question is from Adam Samuelson with Goldman Sachs. Please go ahead. Your line is open.

Yes. Thank you. Good morning, everyone.

Morning, Adam.

I was hoping to start on the portfolio optimization plan, Todd, and just go through kind of what's left. I think you just alluded to the potential for one to three more ethanol plant sales, potential opportunities to deconsolidate the cattle business. Just help us think through kind of is this something, really, that you can execute on in the first half of the year? I'm just trying to think about the timing likelihood. And especially on the cattle feedlot side, just expand a little bit on the opportunities that you're pursuing. I think the working capital intensity of that business just, optically, is something that investors struggle with, in terms of assessing kind of the whole portfolio?

Yeah. And we agree with that as well. So, let's talk first about the portfolio optimization plan, excluding cattle. Our goal was to sell four to six ethanol plants. We've sold three. We are now still in a process. We believe our portfolio still has people very interested in picking up a few assets. We are working with six different counterparties still on several different locations. We have similar ideas around what we executed already. We're not just going to sell all our best plants and we're not just going to sell all our lower than, I’d say, our mid plants. But what we're looking at right now is to still execute sometime in the next three to four months on one to three more plants and try to raise somewhere between another $100 million and $200 million in asset sales. That's the first step. The second step - and all of these plants are unencumbered. So, that cash goes right to the balance sheet. Obviously, we'll have to watch the tax situation. The second thing we are working on – as we're starting to work on and we mentioned this earlier is, obviously, optically, because of cattle and where it sits on the balance sheet, it does show a lot of debt to outside shareholders and stakeholders. And so what we've talked about, is there a structure to get cattle off-balance sheet. And there's really three ways to do that. I'll talk about two of them. The first one is to sell at least half of it in a off-balance sheet transaction and that will allow us to then grow the business off-balance sheet and not consolidate the debt. And then the other is, obviously, to look at a bigger piece of it as well. So, we think that…

Okay. I really appreciate that color. And then just my follow-up was going to be on your own production rates and leverage to an improving market, your operating rates in the quarter were in the 60s. And I know there's a lot of noise with the plant sales in 4Q, but just if key is critical getting the market balance needs lower production rates, and you're an important contributor of those lower production rates, how long do you - what's your outlook for your rates as you move forward and how long do we have to see Green Plains running at in the 60% to 70% range before you start to benefit from both a higher margin environment and operating rates more consistent with history in the low to high 90s?

So, we think the carrying for daily production capacity of the industry today is 1.1 million barrels a day. And our average down last quarter, obviously with some noise around the asset sales, was about 35,000 barrels a day. And now we're running at 965,000 barrels last week. Now, that could go up and down this week, but we'll have to wait and see for Wednesday. So we are not the only ones doing the work anymore in this industry. Now, where we feel like we have a bit of an advantage is that we got on this early, we have a very strong balance sheet position, and any turn, quickly, we can flex production up and down as needed. So, I don't think we have to do all the work anymore. I think the industry has been experiencing weak margins now for more than a quarter or two. And balance sheets are certainly changing. The variable contribution margin is certainly something that people talk about but that doesn't replace EBITDA and that still causes cash burn. And as I had said publicly over the last 30 days, I thought last year, the industry burned - could have burned about $1 billion and I think they could do the same thing this year or more, unless something changes. And, hopefully, we have started to see that change over the last kind of six to ten trading sessions, where we kind of felt we would reach inflection in mid-February and we're starting to see that come due. And it's really structured around, I think, balance sheets weakening across the industry and really the industry getting a big fed up with these high production rates and low margins.

All right. I really appreciate that color. I'll pass it on. Thanks.

Thank you.

Thank you. And our next question is from Ken Zaslow with Bank of Montreal. Please go ahead. Your line is open.

Hey. Good morning, everyone.

Hey, Ken.

So, if you've got E-15 and the China deal, do you think there will be more consolidation of ethanol access by refiners? And do you think that there is a real place for publicly traded ethanol companies anymore?

Yeah, I think E-15 will be something that becomes very interesting, as I believe we can satisfy a larger piece of the fuel supply and we will satisfy a larger piece of the fuel supply. As we remain - even though we'd maybe narrow up on the front end of the curve, we still remain a good $0.25 to $0.30 discount to gasoline. There's still a rim [ph] in place. And when you look at all of that, wherever we have seen a station sell E-15, we have seen that as some of the best-selling fuel at the pump. And it's really 88 - unleaded 88 is really the branding of this fuel going forward. And so the consumer, as we continue to roll out more and more new cars, not only OEMs are putting it on their gas tank lids, but almost all of the car supply, the auto supply, in the United States today is approved for E-15, as it was for 2001 and newer vehicles and that represents about 95% of the autos on the road. I think when you couple all of that, you've seen some dabbling in our industry by refiners, but I think you will start to see more interest come in the industry, as long as there's a market that we can expand into, that we can grow into, and we're going to continue to take share of their volumes at the pump, and I think that could be a possibility.

So, you think there might be more consolidation from the refiners or no?

I can't really comment on that. I just know that, through our process, we've seen some that dabble into looking at the assets. They know the ethanol industry very well. And I think if some dramatic changes happen, I wouldn't hold it past others to start to get into the industry.

My second question is on free cash flow. Can you talk about - you had a lot of one-time costs in there. What do you think your ongoing free cash flow would have been ex some of the severance costs and things like that and how do you think of that going forward?

Yeah. Our free cash flow last quarter, ex all of the one-timers, we estimate would have been a negative $30 million to $40 million last quarter. Correct, John?

A little more.

Yeah, a little more than that. But not much. I mean, we had a bunch of one-timers that we had to pay off. And so, going forward, obviously, the margin structure is going to tell the story. Right now, we are just getting back into single digit negatives across the industry. And, on average, some of our plants are almost positive again and some are positive EBITDA. But on average, the industry is somewhere between probably $0.05 and $0.11 negative EBITDA and we averaged $0.08 negative last quarter. So, I think the next couple of weeks will tell the story on where this industry is going to go into the second quarter. We will start to see demand outpace supply, hopefully exports pick up, and we get back into positive territory. I'm very surprised we're not there now, where we are relative to last year and the spread, as we're really not that different than last year at this time. We're running lower on production and margins are $0.10 to $0.20 a gallon lower. And so we're finally starting to see that start to make a move and adjust for market conditions. We think it's taking too long, but we're optimistic that the turn is in based on current fundamentals.

Just making sure, going back to the other thing. Do you think you're going to actually sell the cattle business? What are you thinking about that?

No. What we're looking at is off-balance sheet transactions. That would mean bring a partner in for something, over 50% of it, and then we could go off-balance sheet and then start to make a move to maybe double the business off-balance sheet. The situation is that, when you look at our balance sheet, our debt situation is still reflective of a high cattle working capital revolver. Almost $400 million of our debt is a cattle revolver. And so our debt is not reflective of the current financial strength that we have. And so if we can get that off-balance sheet and grow the business off-balance sheet. We like the business a lot. It's high return on equity, high return on investor capital, but we think that it makes the investor confused when they look at our debt balance every day on the balance sheet.

Great. Thank you.

Thank you.

Thank you. Our next question comes from Eric Stine with Craig-Hallum. Please go ahead. Your line is now open.

Good morning, everyone.

Good morning.

So, I just wanted to come back to a previous question on production industrywide, and maybe this is tough to answer but I'll give it a shot anyway. I mean, do you feel like the industry right now - I mean, clearly, you're not the only ones bringing production off. But is it more rational? I guess my question is do you think that, as margins do improve that production comes back on and you are in this same boat again? Or do you think the industry is kind of finally taking a little bit of a long-term view in terms of production levels and utilization?

So, our view right now is that there is almost 2 billion gallons on any given day offline. So if the industry can produce at 1.1 million barrels a day, about 16.8 billion gallons, right now, our view is that there's almost 2 billion gallons offline. And I think that's a broad cross-section of the industry that has started to reduce volumes. The industry - I think margins have to improve for people to get any real enthusiasm about bringing these production levels back online, as we've just experienced a pretty weak couple of quarters. And so will it bring more discipline? Hard to say. I think the balance sheet stress could bring more discipline. While a lot of companies have been debt-free for quite a while, the industry is in a cash burn situation. And so while you can certainly get through it if you have a lot of cash, if you don't run large cash balances, the first thing you do is you draw on your revolver. Once you get through your revolvers, then you have to term out your debt at that point. And I think that's where, actually, some of the industry is as well, if I just have to look from the outside in. So, I think we will be more rational, although we haven't proven that we can do that in the past. But, at this point, if we stay down like this for any extended period of time and to these levels and we see demand catch up, it would be a while before, if we went back to 1.05 to 1.1 million barrels a day that we would grow stock. I think the view of the market this quarter is we would grow stocks aggressively and we really haven't done that coming into driving season. And if we could stay down at these production levels, the industry could right this ship pretty quick, especially with E-15 and higher exports.

Got it. Okay. Thanks for that. And then my follow-up. Just coming back to the investments you talked about to reduce OpEx at your non-ICM plants, I mean, what type of timeframe do you see that playing out? Is that something that's dependent on further portfolio optimization steps? Just how should we think about that?

Yeah, we're going to go after the low-hanging fruit first. In our view, its not really - we're not going to get more volume out of our plants. We're going to use less corn, lower our energy costs, lower our operational costs, and we'll go to the low-hanging fruit first and not the big investments at some of the other plants. At $0.10 a gallon at almost a one-year payback, we will start to make those investments. Obviously, we want to get the portfolio optimization plan complete. We want to have the capital on the balance sheet. We want to continue with all the five steps that we talked about, including share buybacks. And we want to look at where we make the best investments for the best returns. If our best investment for the best return is protein, we will go after that, if it's OpEx equalization, we'll go after that. I think we're really excited about it. When we take a plant like Wood River, it typically performs at about a $0.08 disadvantage to a plant like Obion or Shenandoah. And we believe the investment we can make there is about $0.10 a gallon and we could equalize that OpEx between those two plants and then we have a Delta T, 113 million gallon plant, operating at the same OpEx rate as a 120 million gallon ICM. And so we know that – we feel strongly that what we engineered will work. Obviously, we want to try one and make sure it does work. But it's not a very hard fix that we have figured out where the bottlenecks are and our key is we will add - we will lower OpEx partially by the reduction of our input costs but also by less energy and less operational costs overall. If that works, then we will look to roll that out throughout all our plants, where we can then get all of our plants operating like Shenandoah and Obion do.

Understood. And is that, in part, included in the CapEx numbers you gave, in terms of 2019?

No. No, it's not. I mean, our first one would probably be about $10 million, and that would be the one that tells us where we go from there. To do all of them is going to be somewhere between $80 million and $90 million but we're not prepared to roll that out yet, obviously. Where margins are, we'd have to wait for better times. We want to get some of the further portfolio optimization programs done. Then we can make a decision at that point But, right now, we'll do one small one, which will give us a huge impact. When you actually look at $0.08 across the whole platform, across one big plant, it's almost $0.01 to $0.02 across the whole platform of better margin structure overall. So, we'll go after the low-hanging fruit first and then make the determination, based on where the margin structure is and where the forward curve is, how quickly we move after that. We know we can do it. It's just really timing at this point.

Okay. Thanks a lot.

Thank you.

Thank you. Our next question comes from Craig Irwin with Roth Capital Partners. Please go ahead. Your line is open.

Good morning and thanks for taking my questions. So, Todd, I wanted to ask about the export environment we're looking at right now. Can you maybe comment for us what you see as a reasonable outlook for this year? And what are you hearing as far as interest for specific cargos? Is the Beaumont terminal getting interest in cargos potentially going to China or are there new geographies that could be coming on that could end up being material in 2019?

Yeah. We think 2019, right now is tracking to around the same as last year without China. And so that means we've had growth in other markets as well, and we continue to see those markets continue to accelerate. So, in 2019, obviously, Brazil is an important market. Canada continues to grow and India continues to grow. We also have - when you put all of those together along with the normal suspects, that should get us close to 1.7 billion gallons. Last year, we had China in for - we did about 50 million gallons to China and the year before that we did 300 and - let's see, the year before that was about 25 million gallons to China. But we are on path to do 200 million to 300 million gallons, we think, once this window opens up. And so I think what's key here is we haven't really seen the interest yet. I mean, people are nosing around on prices. We know the arb works if you take away the tariff. We know the European arb works as well if you take away the tariff. And, in fact, it works without the tariff sometimes. And we know that the trade draft or what's going on with the Brazilian tariff needs to come off and we've made our case to the trade rep as well on that. So, open up all of those and we could have a pretty robust export market in 2019. We continue to execute well through Beaumont. We are, obviously, wishing we had a better market environment and so we're waiting to sell the terminal out to drop that into the MLP. We think that could happen kind of in the next 6 to 12 months, as we see the export market improve. We have a lot of interest from counterparties that want to enter into long-term contracts. And we are a big supporter of the terminal as well. And so that's something to help us drive our growth in our own export sales last year.

Okay. My next question is a bigger picture question. So, once you're done with the streamlining initiative, you're buying back your stock, you have feed lots off-balance sheet or in some other structure, the assets will look a lot more like Aventine, many years ago, did when Valero scooped them up. Does it concern you that you could be a target for future acquisitions from the refinery base, is that something that you think would be reasonable? Are there any other consequences of that much more pure play structure that you think would significantly impact your business?

So, when we look at post the optimization plan, we will have very little debt left on the balance sheet, a strong cash position, about 1 billion gallons of assets, all of which we believe will be operating easily in the top quartile of the industry. We would have a terminal business that is doing well between Beaumont, Birmingham, and other locations. We will have an off-balance sheet cattle business that should be able to still bring free cash flow into the company. And working on other initiatives around high-protein, which is the game changer for all of it. And when you look at the future of this industry, the future of this industry is not going to be, in our opinion, making more ethanol. It's maximizing the value of the co-product, which we're finally starting to see several technologies being able to do that. We're not going to choose just one technology to increase the value of our co-product. The determination is you can choose between 20% of a plant making 50 protein to 100% of a plant making 40 protein, it's all higher value and the world is protein short. Right now, these technologies add, as we said, right off the bat, $0.10 to $0.20 a gallon of EBITDA margin with paybacks ranging from one to three years. And so we have to get through that. And at that point, I would view us much different than the reference you put in place. Much more like a high quality, value-added feed company that has recurring margins because of the value of protein in the world and less of a cyclical ethanol company that - you're seeing what that does for you in a market like this. As we've always said, the stable grain processing industry is a soy crush industry and that's because protein drives a lot of that because of the consistent demand growth. And when we can make 40 and 50 protein ourselves, we will have the benefit of enjoying a much more stable margin structure over time and it will look much more like soy processing than it does look like ethanol of the old days. That's our viewpoint on the forward going ethanol industry at this point.

Great. Thanks again for taking my questions.

Thank you. And our next question comes from Laurence Alexander with Jefferies. Please go ahead. Your line is open.

Good morning. This is Nick Cecero on for Laurence. Maybe if you could just provide some detail on the Aquafeed JV, in terms of future capital deployment and maybe the timeline for it to be material.

Yeah. The optimal JV was first put in place for a couple of reasons. Obviously, one, because the growth in aquaculture around the world and the need for high-quality feed products that we will produce in the future as an industry. And so selling high-protein feed is a much different game than selling 30% protein distillers grains to one truck at a time, to everybody from cattle feeders to hog feeders to chicken feeders, and it's really just a substitute for corn. And so we needed a different skill set to go after higher value markets. Today, we believe our high-protein distillers will trade minimum on par with high-protein soybean meal, which, right off the bat, would add almost $0.10 a gallon to the crush. But we think, in some parts of the world, it will trade at a $50.00 to $100.00 premium, which could add another $0.06 to $0.08 a gallon to the crush. And when you take that over a 100 million gallon plant, the investment in making sure we can sell it better is worth it. The capital right now is very, very minimal. It's much more people-oriented than it is asset-oriented. Although we do have customers now, because of the partners that we partner with, that are looking for full, one-stop solutions for all of their feed needs in the aquaculture space. And we think we'll be able to provide that because we'll have the baseload around the protein that we will produce going forward. So at this point between looking at our investments that we’re going to make and the investments needed, right now, it's not a very capital intensive process, but we will look forward at saying what best services and maximizes the value of the co-product out of our ethanol plant and we'll determine capital needs from there.

Great. Thank you. And just maybe a follow-up. Given the volatility in the cash flow generation from the ethanol assets, going forward, how do you now think about the balance between the ethanol and the protein side of the business? Could you see a scenario where you shift to being net short ethanol relative to the protein businesses?

Our scenario going forward is really the reinvention - and we call it Green Plains 2.0. And Green Plains 2.0 will be much more focused on high-value product production with stable margin structures. But, obviously, it takes capital to do that. In a different margin structure environment, we'd be accelerating that investment. Obviously, because of that, we want to make sure we protect our balance sheet at all costs. We continue through the portfolio optimization plan. We execute like we said we’re going to execute and when the time is right, we go all in on protein. But at this point, what we want to do is continue to execute through this plan. This is a long game but I envision a day when Green Plains is going to talk more about EBITDA from protein than we'll ever talk about EBITDA from ethanol production. And at that point, I think that will be the completion of the full program. But, obviously, we have some market volatility we have to work through, which is why we set the company up to make sure we survive that market volatility and come out of that with a stronger company and set up very correctly to execute.

Great. Thank you very much.

Thank you. Our next question comes from Pavel Molchanov with Raymond James. Please go ahead. Your line is now open.

Thanks for taking my question. You've alluded to the upside opportunity for exports to China. And I realize none of us can predict the broader politics of it. But hypothetically, if let's say an agreement were to be reached between Washington and Beijing this month, how quickly could you envision the export window reopening in a practical sense?

I think it would be almost immediate. They have demand for the product right now, the policy is in place, they are already buying soybeans. If you look at that, that didn't take very long, and they are doing it as a good faith gesture. And so I think these would be immediate purchases as soon as that tariff comes down. That tariff in China is the only thing restricting ethanol going there today. And if ethanol didn't have that tariff, 200 million to 300 million gallons would not even be close to what the Chinese could import from the U.S. We could see it going significantly higher from there. So, our view is that, if this trade deal gets worked, it's almost an immediate impact to our balance sheet and that's something we're watching closely. We're staying in front of the negotiators to make sure ethanol continues to say front and center. We're doing the best we can from that perspective. They know the importance of it to the agricultural economy in the United States and our trade group at Growth Energy is doing a great job staying in front of everybody that we can around the world to make sure they understand the importance of ethanol in all of these trade deals, whether EU, Brazil, or China. Open up those three markets and we've got a different discussion.

Thanks. One more about China. Can you imagine any scenario where China can successfully implement an average nationwide E-10 blend without reliance on imports from the U.S.?

No. Our view is no. I don't think - now, can they take care of some of the demand? Sure. They have ethanol plants that they can build and they are building. But their corn supply is obviously something that they need to make sure that they can achieve. I don't think they want to bring corn in to make ethanol. I think they'd much rather bring ethanol in than importing corn at this point. So, no, I don't think any time in the near future do I see them fulfilling the E-10 nationwide blend, and, obviously, we continue to show them the benefits of E-15 as well, just like the United States is. So, our view is that, as the world continues to increase blends and they are continuing to increase blends, what we're going to start to see is a growth in exports ex-China out of the United States and then when China comes in, obviously, it would not be hard for them to take 1 billion gallons very quickly. But our view is they would go after right about the same amount of volume that they've been taking in the past and then start to increase from there.

All right. Good to hear. Thanks very much.

Thanks.

Thank you. And, ladies and gentlemen, we have time for one more question. Our next question is from Selman Akyol with Stifel. Please go ahead.

Thank you. A couple of quick ones, if I could. On the deficiency payment, how long do you have to recoup that and do you have to run above the 85% level in order to recoup that?

The MVC, we have a 12-month period to recoup that. And we would need to operate above that over that timeframe. And the MVC is roughly 84% of capacity, the minimum MVC, so we need to run above 84% to eat back into the $3 million.

Got you. And then I know, Todd, longer term, you talked about the partnership, it's a growth partnership. Can you just talk about sort of what your plans are longer term for it?

Yeah. I mean, we still believe, with the volume that we produce and the demand that we have, we didn't focus on it because, obviously, we're focused on retooling the whole platform over the last couple of months, over the last six months. But, Number one, the growth of our facility in Beaumont, number two, the ability for us to manage assets and we are start going to - the liquidity available at GPP once we've done this restructure. We still believe that we can grow that through looking for acquisitions of terminals similar to businesses like Beaumont and Birmingham. And so we do have now a manager in charge of that internally that is working at looking at opportunities and we'll continue now to refocus our efforts to grow GPP. As we want to - from the beginning, what we've said is while the baseline would be Green Plains ethanol volumes through the tanks located at the ethanol plants. We still believe that we want to diversify income and revenue streams outside of that and now we're in a much better position to do that at the MLP once we've got that restructured. So, we'll continue to support the MLP and we'll continue to invest behind that as well.

All right. Thanks very much.

Thank you.

And thank you. And, ladies and gentlemen, this concludes our Q&A session for today. I would like to turn the call back to Todd Becker for his closing remarks.

Thanks, everybody, for joining us today. Obviously, we did a lot last quarter and we wanted to make sure we set the company up to be successful and make sure that we thrive in 2019 when some of these things come to fruition around demand and supply. The balance sheet remains strong, our cash position remains strong. We did write a $500 million check to pay off our term debt last year, and it's the first time in our company's history we do not have assets fully encumbered by long-term term debt. And so we're very excited about that. We think we've set you up in a good position to succeed. We need a little help from the market, but I think we are set up well for 2019 and beyond. So, thanks for coming on the call and we'll talk to you next quarter.

And with that, ladies and gentlemen, we thank you for participating in today's conference. This concludes the program and you may all disconnect. Have a wonderful day.