Good day, ladies and gentlemen, and welcome to the Pacific Ethanol Fourth Quarter and Year-End 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Becky Herrick. Ma'am, you may begin.

Thank you, Sam, and thank you, everyone, for joining us today for the Pacific Ethanol Fourth Quarter and Year-End 2012 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 and then Bryon will provide details on the company's financial and operating results. Neil will return to discuss Pacific Ethanol's outlook and open the call for questions. Before we get underway, let me first inform you that Pacific Ethanol issued a press release on March 27 that provides details of the company's quarterly results. The company also prepared a presentation for today's conference call that is available for download on the company's website at pacificethanol.net. If you have any questions, please call LHA at (415) 433-3777. A telephone replay of today's call will be available until 11:59 p.m. Eastern Time on April 9, the details of which are included in the press release issued on the 27th. A webcast replay will also be available at Pacific Ethanol's website. Please note that information in this call speaks only as of today, April 2, 2013, and therefore, you're advised that any 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 2 of the presentation available online, which says that some of the comments in this presentation constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Forward-looking statements are based on many assumptions and factors. Any changes in such assumptions or factors could produce significantly different results. Information about potential factors that could affect the company's financial results are available in the company's Risk Factor section as updated in the company's SEC filings. To the extent permitted under applicable law, the company assumes no obligation to update any forward-looking statements as a result of new information or future events. 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 operations. 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, 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 the press release the company issued on March 27. It is now my pleasure to introduce Neil Koehler, President and CEO. Neil?

Thank you, Becky, and thank you, all of us, for joining us this morning. The ethanol industry in 2012 suffered through historically low production margins as supply exceeded demand, several plants across the industry suspended operations, and corn prices were at historic highs due to drought conditions in the Midwest. These factors had a negative impact on Pacific Ethanol, as well as the rest of the industry. While we are disappointed with our financial results, we are proud of our accomplishments as we achieved significant financial and operational milestones, positioning the company well for 2013 and beyond. We refinanced nearly all the remaining plant debt at levels and terms that provide long-term stability for the operations of these assets and strengthen our corporate balance sheet to provide for growth in 2013. Since the beginning of 2012, we've increased our ownership interest in the plants from 34% to 83% at favorable valuations compared to both market and replacement values. We reduced operating costs, increased efficiencies at the plants and moderated production when necessary to offset unfavorable margins, while meeting our customer commitments in the fuel and feed markets and preserving the overall enterprise value of the company. In fact, with our integrated production and marketing platform, we sold a record number of gallons in 2012. By executing on these goals we established at the beginning of last year, we are a better, stronger and leaner company well positioned to return to profitability as the overall market conditions improve. During the first quarter, we have seen improvements in production margins as supply and demand in the industry are in better balance. Most recently, corn prices have fallen almost $1 per bushel or 15% since the USDA last Thursday reported larger-than-expected corn inventories and projected record production for this year's corn crop, which…

Thank you, Neil. For the fourth quarter of 2012, we reported net sales of $197 million compared to $242 million in the fourth quarter of 2011. Net sales were down due to a decline in both total gallons sold and average price per gallon of ethanol sold. The reduction in gallons sold is attributable to our efforts to moderate gallons produced so as to limit the negative impact of corn production in margins. Gross loss for the fourth quarter of 2012 was $4.7 million compared to gross profit of $7.4 million in the fourth quarter of 2011. SG&A expenses were $2.7 million in the fourth quarter of 2012 compared to $3.7 million in the fourth quarter of 2011. The year-over-year decrease in SG&A expenses was related to lower professional fees and lower overhead costs associated with New PE Holdco. Loss available to common stockholders for the fourth quarter of 2012 was $5.8 million or $0.04 per share compared to a loss of $2.4 million or $0.03 per share in the fourth quarter of 2011. Adjusted EBITDA, which excludes fair value adjustments, was negative $2.6 million in the fourth quarter of 2012 compared to a negative $300,000 in the fourth quarter of 2011. For the full year ended December 31, 2012, net sales were $816 million compared to $901 million for 2011. Although total gallons sold were up year-over-year, the decline in net sales is attributable to both lower ethanol prices and our efforts to moderate production to minimize negative margin impacts, while honoring our feed and fuel contractual obligations. For the full year 2012, loss available to common stockholders was $20.3 million compared to income available to common stockholders of $1.8 million in 2011. For the full year 2012, adjusted EBITDA was negative $7.5 million compared to adjusted EBITDA of…

Thanks, Bryon. The Renewable Fuel Standard or RFS provides long-term support for the sustained growth in biofuel demand. The RFS lessens our dependence on oil, lowers gasoline cost, diversifies our energy sources and reduces greenhouse gas emissions from transportation fuels. Since the passage of the RFS in 2007, refiners have been aware of the increasing requirements for renewable fuels inclusion. In 2009, the EPA was petitioned to allow for ethanol blends of 15% and granted this for vehicles with model years 2001 and newer, representing over 2/3 of the cars on the road today. While refiners have resisted blending the 15% levels, the fact is that E15 is the most tested fuel in motor vehicle history and all cars can run effectively on blends of 15% ethanol. Another fact is that for 30 years, Brazil has run cars on between 20% and 25% ethanol blends. Ethanol trade had a $0.50 to $0.70 discount to gasoline on a wholesale basis and provides valuable, clean volume and octane. We are confident that the RFS and market dynamics will successfully deliver higher inclusion rates of ethanol and other renewable fuels into our national fuel supply. It is time for consumers to be given true choice at the pump of the fuels they purchase. The RFS and the migration toward higher levels of ethanol blending is a right step in this direction. We are working proactively with our national trade organizations, state and local governments and our customers to facilitate the increased blending of low-carbon, low cost, clean burning fuels into gasoline. We are optimistic about 2013. With the financing transactions Bryon just reviewed, increased efficiencies at the plants, a strong marketing company with Kinergy and improving market conditions in general, we feel we are well positioned to return to profitability as overall market conditions improve. Looking ahead, our primary goals this year are to continue to improve operating efficiencies at the plants, diversify our revenue and feedstock, increase product values by further reducing the carbon intensity of our ethanol and return the company to profitability. We look forward to keeping you updated on our progress. With that, Sam, I'd like to open the call for any questions.

[Operator Instructions] Our first question comes from Paul Resnik of Uncommon Equities.

Corn prices have been pretty dramatic in the past few days and understanding 2 days of market action is not a guaranteed predictor of where corn is going to be on a sustained basis. Right now, given corn prices, given ethanol prices and where the crush spread is, how -- you talk about returning to profitability, but how close to profitability -- profitable ethanol operations are we with today's crush spreads?

Well, caveat anything I say with your own opening remark on the volatility and we expect to continue to see volatility in these commodity markets, corn and ethanol, this year as we clarify what the new corn crop looks like, how we resolve issues on E15, et cetera. But what we have seen directionally in -- even before the USDA report of last year quarter-over-quarter, an improvement in the board crush margins. This is all publicly available information, so I'm not offering any guidance. But what you can see is that your typical ethanol plants today at the current price of corn and the current value of ethanol is profitable.

That's incredibly good news. Relative to the cost of sorghum, which, just 2 weeks ago, looked a lot cheaper than corn, what is the relative cost of sorghum to corn at the current time?

Sorghum in a historical context and it's true today again with volatility that, from a short term basis, can amass this but it trades at a discount to corn. So when we buy sorghum, we actually buy it as we buy our corn as an index to the board. If we buy it out forward, which we have done on both corn and sorghum, we don't buy it at a fixed price, we buy it as an indexed basis relationship to the board. And sorghum continues to trade at a discount to corn on that basis.

Great. Okay. Given what's going on with the spread, any color on your current thinking regarding Madera?

Our thinking on Madera is the same, which has been is that when the market has fully clarified itself in terms of needing incremental product for the market and specifically in our context, the lower carbon ethanol that we can produce from that facility, that we will start it. What we've done from a balance sheet perspective in these recent transactions has given us the option and the working capital to be able to start Madera. I would say that, again, on your volatility point, these are fairly recent developments in terms of the improvement in the crush margin environment. There are still some work to understand exactly what today's corn crop looks like or next year's corn crop looks like, as well as the increase in market demand with E15 blending. The available production today is not sufficient to meet the mandated demand, so there is need for incremental ethanol to meet the demand in 2013. So we are optimistic about the future, starting at Madera, but at this point, it's too early to tell when that might be.

You did mention continued progress with the Low Carbon Fuel Standard implementation. So can you just add a little bit exactly what the requirements are and how they're being implemented?

Yes, the Low Carbon Fuel Standard requires the obligated parties, the blenders, refiners in the state of California, anyone who is selling gasoline or diesel, to reduce the carbon intensity of their fuel by 2020 by 10%. The compliance schedule, that is a real hockey stick, the first couple of years where fractions of a percent were up to 1%. And then in the out-years, really 2015 to 2020, most of those reductions kick into place. We are seeing with the -- now up to a little over 1%, which is a pretty material amount of carbon intensity reduction and the clarity. And I think the recognition in the market of Low Carbon Fuel Standard, it's not going to go away. There is more activity in the market to make sure the refiners have sufficient quantities of low-carbon fuel. Low-carbon ethanol has provided the lion's share of the compliance in this program and will continue to do so over the next couple of years. And so what that has resulted in, in 2013 over 2012 and 2012 over 2011 when the program began is a gradual increase in the value of the low-carbon ethanol, which is measured in metric tons. And what that means in the marketplace is that for the 80 scored ethanol that we produce compared to your Midwest average of 98 that we've seen in today's market close to $0.05 a gallon of premium value for the ethanol we produce. That's equivalent to $40 a metric ton, which is the value of the carbon credits traded in California, and we believe in 2013, that number will move higher.

Great. And lastly, moving up to Boardman. Is it still expected that the corn oil production could be introduced to Boardman by year end?

That is, in fact, our expectation, yes.

Okay. And then, just -- I noticed that ZeaChem started ramping up production on March 12 now. That's a very small marketing contract there. Their eventual target there -- immediate target is to add 250,000 gallons a year. But from the other standpoint, recognizing that they deal with nonfood biomass, is there any technology that might prove helpful to Pacific Ethanol coming out of ZeaChem, both as just the conventional small marketing client?

Well, certainly, it's a very valued partnership that we have with ZeaChem as we manage the operations at that facility. We think they have excellent technology. They are a -- one of a number of technology companies that we are working with to, in fact, diversify the technology and diversify the feedstocks we use to produce ethanol. So we look forward to future collaborations with ZeaChem in that regard. They have good technology.

[Operator Instructions] And at this time, I'm not showing any further questions. I would like to turn the call back to Mr. Koehler for any further remarks.

Thank you, Sam, and thank you all for joining us today. I'd point out that we are presenting at an online retail conference on Thursday of this week, 10:15 a.m. Pacific Time. The link is on the Investors section of our website and please feel free to tune in. Very much appreciate your interest and support in Pacific Ethanol and look forward to speaking with you again. Thank you, and have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day.