Andersons Inc Q2 2008 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Heather Jones - BB&T Capital Markets - Analyst : Good morning.

Question: Heather Jones - BB&T Capital Markets - Analyst : Excellent quarter.

Question: Heather Jones - BB&T Capital Markets - Analyst : You should be very pleased. I have several questions. First one that -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Heather Jones - BB&T Capital Markets - Analyst : I know, I'm normally so quiet. On the debt side, I was curious -- the reduction in the short-term level, was all of that pay down, or was some of that classified as long-term?

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. And then Lansing, do you have any plans to increase your -- you're so close to 50%; what are your plans with regards to taking that to over a majority share position?

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. Then as far as your ethanol fees more than doubling for the quarter, was that all due to Greenville or in the past, you've mentioned that you had additional clients signed, but didn't announce them until their plants opened. So was all of that Greenville or have you had some new clients brought online?

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. What about the new customers? How likely is it that they're going to open a plant or plants, and if it is likely, what's some timing of when those fees would start coming on? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. Now, given the break in corn prices and natural gas prices of late, have y'all begun to take on any coverage as far as for your ethanol production side for '09?

Question: Heather Jones - BB&T Capital Markets - Analyst : So basically -- because we've seen that, too, that spot margins have improved, but you're saying on a significantly deferred basis, they really haven't.

Question: Heather Jones - BB&T Capital Markets - Analyst : Yes. Wonder if you can speak to wheat basis? There's been a little improvement but not dramatically so, and we're hearing that there may actually be some regulatory action taken, or it's being debated, to sort of force convergence, including forced cash settlement of futures, etcetera. And I was just wondering if you could speak to that.

Question: Heather Jones - BB&T Capital Markets - Analyst : But for y'all at this point, you have some wheat, I guess you took on, I don't know, early in the year, late last year, that if you haven't sold it is being hurt by this basis spread. But generally, on a regular basis, you're bringing in new wheat inventories that are much cheaper. So this has become -- is it fair to say that this is becoming less of an issue, and given that you can deliver against the contracts, you stand to actually benefit from buying really cheap wheat and then being able to deliver against a much higher-priced contract?

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Heather Jones - BB&T Capital Markets - Analyst : Right.

Question: Heather Jones - BB&T Capital Markets - Analyst : Okay. All right, thank you and congratulations again.

Question: Farha Aslam - Stephens, Inc. - Analyst : Hi, good morning.

Question: Farha Aslam - Stephens, Inc. - Analyst : Just starting with the interest question, what is your average interest rate on your short-term and your long-term securities right now?

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay.

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay, thank you.

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. And for -- Mike, you'd highlighted 12 states that The Andersons is interested in expanding their presence in. Could you detail what those 12 states are?

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. Have to try. And then on the grain business, with the harvest being larger, do you see opportunities to make more space income this year versus last year, trading aside?

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. And then on your ethanol business, were all three of your plants profitable in the quarter?

Question: Farha Aslam - Stephens, Inc. - Analyst : So basically The Andersons and Mitsui were hedged on grain, and the Greenville plant wasn't.

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. Yes, a primer I think would be great.

Question: Farha Aslam - Stephens, Inc. - Analyst : And then finally, on your rail business, could you highlight for us the opportunities from the large portfolios that may potentially be available to you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay.

Question: Farha Aslam - Stephens, Inc. - Analyst : All right, and my final question is about rail car rates. Could you just highlight what the lease rates are this year versus last year and what your outlook is for lease rates?

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. And when do you anticipate rail car rates to recover?

Question: Farha Aslam - Stephens, Inc. - Analyst : Okay. That's very helpful, thank you.