Andersons Inc Q3 2008 Earnings Conference Call Transcript

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

Question: Brett Hundley - BB&T Capital Markets - Analyst : Hey guys, this is Brett speaking on behalf of Heather. How are you doing?

Question: Brett Hundley - BB&T Capital Markets - Analyst : I wanted to delve back into Rail real quick. Mike, you had talked about the down turning economy affecting the business and possible acquisitions arising there. And I was wondering if you could kind of go through some of the trends you're seeing in your own operations thus far in the quarter and your expectations for the business going forward there?

Question: Brett Hundley - BB&T Capital Markets - Analyst : Right.

Question: Brett Hundley - BB&T Capital Markets - Analyst : That's right. That's about Rail.

Question: Brett Hundley - BB&T Capital Markets - Analyst : That's helpful guys. I appreciate the color there. The other thing I want to talk about, when we look at your ethanol production investments and looking at it for Q3 here, we're assuming that Albion and Clymers made money, so is there anything unusual during this quarter (technical difficulty) Greenville losing more on a cash basis. Can you kind of take us through the performance there?

Question: Brett Hundley - BB&T Capital Markets - Analyst : Gary, I'm--what else is in that minority interest line? 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: Brett Hundley - BB&T Capital Markets - Analyst : And what's the main hamper on that yield?

Question: Brett Hundley - BB&T Capital Markets - Analyst : Okay. And then just a real quick last question. I'll jump into queue. I appreciate you guys answering my questions. When we look at the core grain handling business, year-to-date we're estimating that it's lost around $3 million when you adjust for the ethanol fees, production and Lansing. And then we're comparing that to roughly $1 million in earnings for the first three quarters of '07 and $8 million in earnings for the first three quarters of '06. I think you pretty much answered my question in your prepared remarks but have you pretty much gotten back that hit that you saw earlier on basis this year? And what do you anticipate as far as next year's performance for core grain?

Question: Brett Hundley - 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: Brett Hundley - BB&T Capital Markets - Analyst : All right, well thank you much, guys.

Question: Farha Aslam - Stephens Inc - Analyst : Good morning.

Question: Farha Aslam - Stephens Inc - Analyst : Just starting off with Plant Nutrients, could you share with us how your purchased contracts are structured for Plant Nutrients?

Question: Farha Aslam - Stephens Inc - Analyst : So are you required to buy a certain amount every month and price it every month or do you have flexibility in that?

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

Question: Farha Aslam - Stephens Inc - Analyst : And that $13 million, that is the mark down as of September 30 and then pricing declined again in October and we'll take additional hits in the fourth quarter? How much is that factoring in?

Question: Farha Aslam - Stephens Inc - Analyst : And if you had to take a look at your holdings generally, are you a third, a third, a third for [gas], nitrogen and potash in your--?

Question: Farha Aslam - Stephens Inc - Analyst : Any thoughts on potash prices and do you think that once the strike in Canada is resolved, you're going to see potash prices decline? Is that factored in at all into your thoughts?

Question: Farha Aslam - Stephens Inc - Analyst : Okay. And then when you look at your ethanol business, your plants currently, you were saying albeit aside from the issues, production issues and Greenville are profitable, if you had to go and run those plants without the hedges you have, do you think they would be profitable today?

Question: Farha Aslam - Stephens Inc - Analyst : No. And kind of as you look out, are you still completely largely unhedged on your ethanol production for next year?

Question: Farha Aslam - Stephens Inc - Analyst : So if you had to guess on when capacity will catch up with demand, would you put that six months out? 12 months out?

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

Question: Farha Aslam - Stephens Inc - Analyst : Okay. And my final question is just, is the difficulties in the industry creating opportunities for you to look at plants by grain storage facilities or plants? 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 : You have the opportunities to pick up some ethanol plants at very, very good prices or have you been buying--looking at grain storage capacity at ethanol plants?

Question: Farha Aslam - Stephens Inc - Analyst : Okay. That's fair. Thanks for your answers.

Question: Michael Cox - Piper Jaffray - Analyst : Good morning. Thanks for taking my questions.

Question: Michael Cox - Piper Jaffray - Analyst : My first question is on the Plant Nutrient side. I was hoping you could comment on how long it will take to burn through the inventory position you have in fertilizer and as it gets replaced with lower cost fertilizer? 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: Michael Cox - Piper Jaffray - Analyst : That's very helpful. And as we look at the volumes here in the fourth quarter, given this extended planting--harvest season, do you anticipate volumes to decline in the fourth quarter?

Question: Michael Cox - Piper Jaffray - Analyst : Okay. That's helpful and then just from a theoretical standpoint, could you remind us what type of impact if any you would feel from a shift in plantings from corn to say soy or something like that, given the volatility that we've seen in corn prices?

Question: Michael Cox - Piper Jaffray - Analyst : Okay. That's helpful and then my last question is on the storage capacity on the grain side. Are you seeing additional opportunities to add capacity there given some of the financial constraints that some of these smaller players may be facing right now?

Question: Michael Cox - Piper Jaffray - Analyst : Okay. Sounds good. Thank you very much.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Good morning.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Both of my questions have been answered but I have just a couple of quick ones here. On the Railcar assets that have been for sale in the GE, the CIT, any sense further on what's going on in those sales? Are they getting closer to breaking that up or I was wondering if you could give us more detail there.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Right.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Okay. And one other one, kind of on the ethanol side, seeing that the recent news on Verisun and them going bankrupt but still operating their plants, does that put more pressure do you think on the ethanol industry itself or is it going to be more do you think of just the same?

Question: Joe Gromes - Oppenheimer & Co - Analyst : Right, right. Okay, thanks.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Right.

Question: Joe Gromes - Oppenheimer & Co - Analyst : Right.