Good day, ladies and gentlemen and welcome to the Second Quarter 2012 The Andersons Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode later we will facilitate a question-and-answer session (Operator Instructions) As a reminder the conference is being recorded for replay purposes. I would now like to turn the call over to Nick Conrad, Vice President of Finance and Treasurer. You may proceed.

Good morning everyone and thank you for joining us for the Anderson Inc’s 2012 second quarter conference call. We have included a slide presentation that will enhance our target points this morning, if you’re listening or watching this presentation via our website, the slides and audio aren’t sync, for those listening via telephone or watching the webcast you will need to follow directions set to you to seek the slides and the audio. This webcast is available through the investor section of our website www.andersonsinc.com. The webcast is being recorded and will be available on our website. As you know certain information that I will be discussed today constitutes forward-looking statements. The actual results could differ materially from those presented in the forward-looking statements as a result of many factors, including general economic conditions, weather and competitive conditions, conditions in the company’s industries both in the US and internationally. And additional factors that is described in the company’s publicly filed documents including its ‘34 Act filings and the prospectuses prepared in connection with the company’s offerings. It also includes financial information of which as of the date of this call the company’s independent auditors have not completed their review, although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are useful, they can give no assurance that these assumptions will prove to be. On the call with me today are Mike Anderson, Chairman and Chief Executive Officer, Harold Reed, Chief Operating Officer and John Granato, Chief Financial Officer. Mike, Hal, John and myself will answer the questions at the end of the prepared remarks. And I’ll now turn the floor over to Mike Anderson, CEO for opening comment.

Thank you, Nick. The company had a strong quarter and I’m proud of that the Rail Group had record quarterly earnings for the second quarter in a row it’s gratifying to see this group produce these results nor that the rail industry is improved. Plant Nutrient Group had a very strong quarter due to increased volume and margins that were higher than anticipated. Grain Group also did well including record earnings from our investment in Lansing Trade Group. Company paid at 63 consecutive quarterly dividend on July 23 of $0.15 per share. During the first quarter conference call I indicated a very promising outlook for the year due to the early in record corn plantings that are taken place. However, the drought the country is experiencing will have a significant impact on the Grain & Ethanol business. I’ll provide an updated outlook in my concluding remarks. Company is continued to expand the capacity of its core assets over the last five years. The geographic diversification in the Florida, Wisconsin, Nebraska, and I will provide just with many benefits. One of these benefits is that our territory is more diverse, so the possibility that the localized drought would severely impact all the crops in the areas in which we do business is greatly reduced. In the macro sense the growth in the world’s population coupled with an improvement and I continues to create good long-term demand for the grains we handle and in turn a nutrients and other inputs we sell and the transportation we provide, our diversified locations in growing capacities position us well to meet the future demand. I’d like to specifically highlight some accomplishments in 2012 that demonstrate the company’s continued commitment to grow. In January the Plant Nutrient Group acquired New Eezy Gro an Ohio based, this group also completed a major capital build this year at its Maumee, Ohio location and improved both its formulation capability and efficiency. The grain – million bushel elevator unit train capable facility in Nebraska and that is expected to open in September. In May, the new ethanol investment affiliate, the Andersons Ethanol LLC acquired an existing 55 million gallon ethanol plant in Iowa that also included a 2.7 million bushel grain elevator. The Rail Group expanded its fleet in its rail repair business by adding two satellite locations in Ohio and North Carolina. Additional expansion and acquisition opportunities for 2012 are being explored. I will now turn this over to John, our CFO, who will provide details of the total company results.

Thanks, Mike and good morning everyone. The Company generated net income of $29.2 million in the second quarter or $1.56 per diluted share on revenues of $1.3 billion. In 2012 record net income of $45.2 million was reported or $2.42 per diluted share on similar revenues. For the first six months, total net income stands at $47.6 million or $2.54 per diluted share. In 2011, first half net income was $62.5 million or $3.34 per diluted share. Total revenues of $2.5 billion for the first half of the year or $113 million higher than the prior year. Earnings before interest, taxes, depreciation and amortization EBITDA for this quarter were $63.9 million, after adjustments for non-controlling interest which was down $24.9 million from the same period in 2011. The second quarter’s pre-tax earnings included $5.1 million in equity and earnings in affiliate a decrease of $7.4 million from the same period last year. This was a result of a $9.5 million decrease in income from the company’s investment in its Ethanol LLC, which was offset by an increase in the investment income from Lansing Trade Group of $1.9 million. Through June, the company’s EBITDA totaled $108.4 million, a decrease of approximately $24.7 million in the same period of 2011. Equity in earnings in affiliates through June totaled $9.4 million compared to $19.8 million for the first six months of 2011. Interest expense for the second quarter 2012 totaled $5.4 million down $2.2 million from the same period of 2011. Through June, the company’s interest expense totaled $10.7 million down $4.2 million from last year. Interest expense has declined due to lower borrowing levels in interest rates. Average short-term borrowings from the quarter were $344.4 million down $126.8 million and average short-term borrowing rates were 2%, a decrease of approximately 1%, average short-term borrowings for the first six months were $323.6 million compared to $469 million for the first six months of 2011. During the second quarter, the company was also an investor of excess funds with short-term investments averaging $21 million. The company’s effective tax rate for the second quarter was 37.9% up 1.8% from the prior year rate of 36.1%. The company is projecting a 36.5% tax rate for 2012. The company’s actual 2011 effective tax rate was 34.5%. The bridge in this next graph demonstrates, which group’s income is up or down this quarter in comparison to the prior year. The specifics behind these differences will be detailed as each group’s operating performance as discussed. Therefore to better understand the total companies results, Hal, our COO will walk you through each of the six business groups. Hal?

Thanks, John. Let’s start with the Grain Group, with reported operating income of $15.3 million this quarter versus a record $36.5 million a year ago. This income differential was driven primarily by a return to a more normal level of space income. As we’ve mentioned before the space income recognized in the second quarter of 2011 due to strong basis gains in wheat was extraordinary and not likely repeatable. The group benefited this quarter from record earnings from its investment in Lansing Trade Group. Grain Group revenues for the quarter were $719 million, which is down from the $797 million reported in the prior year. This revenue decrease is due to a decrease in the average price per bushel as there was actually a slight increase in the number of bushel sold. The Grain Group’s operating income for the first six months of 2012 was $34.7 million and revenues were $1.4 billion. Comparatively, the group’s first half operating income in 2011 was $51.6 million on revenues of $1.4 billion. The year-to-date results are influenced by the same factors as noted before in the second quarter, which were primarily a return to more normal basis gains on wheat and a strong performance for Lansing Trade Group. Last quarter, we mention that corn planting progressed in our region and in the U.S. was well ahead of both the prior year and the five-year average. We also noted that we are hopeful that whether we would continue to cooperate through the growing season. Well it hasn’t. As I’m sure you are aware, many parts of the country are experiencing drought conditions this has led yield estimates to decrease from early projections of 160 or more bushels per acre for corn, now to estimates of 130 bushels per acre or lower. From comparative purposes,…

Thanks Hal. Turning to the balance sheet, net working capital at Q3 have – $256.3 million, a decrease of $96.4 million from last year’s second quarter. At June 30, current assets totaled $1 billion, an increase of $34 million from the 2011 second quarter ending balance. This change was driven primarily by an increase in Grain Group inventories and offset by decreases in commodity derivative assets current, accounts receivable and restricted cash was $65.4 million, $35.2 million, and $6.9 million respectively. Inventories at June 30th, totaled $597.1 million, a net increase of $127.5 million as compared to last year. The decrease in the restricted cash was due to draws for reimbursement of capital expenditures related to Anselmo Nebraska grain elevator project. Under current liabilities, borrowings under short-term line of credit at June 30th, was $309.6 million, compared to $194.2 million at the same time last year. Commodity derivative liabilities current ended the second quarter of 2012 at $29.8 million versus $24.3 million at the end of the second quarter 2011. The company’s June 30th total equity was $589.2 million, an increase of $64.7 million from last year’s second quarter. Total assets at June 30th were $1.8 billion, an increase of $250.9 million, from the 2011 second quarter ending balance. This increase is a result of equity method investments and other assets net, showing increases of $9.7 million and $23.4 million respectively. Also, property, plant and equipment along with railcar assets lease to others increased a total over 187 compared to last year, due to business acquisitions, expansion at existing locations and railcar investments. Commodity derivative assets noncurrent ended the second quarter of $4.8 million, a decrease of $3.7 million compared to the same period last year. Long-term debt totaled $317.6 million at the end of the second quarter, $1 million…

Thank you, Nick. As I noted in the press release, we had a strong quarter. Our expectations for the remainder of the year are being tempered by the drought conditions, which will certainly impact the result of our Grain and Ethanol Groups. I would like to expand on our expectations for the year. First, we currently expect our Grain Group to have a loss in the third quarter due to an anticipated decline in space income. As we move into the fourth quarter, we expect earnings for the Grain Group to be reasonably close to the prior year quarter. Further, we expect Lansing Trade Group’s results to remain strong in the second half. Due to the low margins currently being experienced in the ethanol market, we expect the Ethanol Group’s full year results to be considerably lower than the prior year. Last quarter, I told you that we can’t predict exactly what ethanol margins would do in the future, that is still true. However, I also told you that our outlook for margins later in the year was positive, in the drought conditions, there is no longer true. That being said, the Group continues to provide services for our fee and so co-products such as DDGS, corn oil, E-85, and CO2, which will help temper the impact of the current ethanol market. I continue to expect our Plant Nutrient Group, they have a very good year as the demand for nutrients remain high. Although, we anticipate the second half of this year to be lower than the prior year. As the Rail Group’s year-to-date results are more than double the prior year’s results, I foresee our Rail Group more than tripling their prior year income as they benefit from increases and lease rates and from highly effective management of their…

Thank you. (Operator Instructions) Our first question is from the line of Farha Aslam from Stephens Incorporated. You may proceed. Farha Aslam – Stephens Incorporated: Hi, good morning.

Good morning, Farha.

Hi, Farha Farha Aslam – Stephens Incorporated: Thanks for all the additional color regarding the outlook that’s very, very helpful.

You’re welcome.

Yeah, great. Farha Aslam – Stephens Incorporated: And just maybe going into that a little bit more detail particularly as it relates to ethanol, you had mentioned of course that ethanol earnings will likely be down year-over-year but kind of going forward, do you expect earnings in the second half of the year to be at roughly similar levels, that we experienced in the second quarter of this year or materially about?

Hi, Farha this is Hal. Thanks for the question. I think – I don’t at today’s crystal ball would suggest that margins for the second half of the year are relatively similar to the first half. We don’t see anything that’s obvious to make them dramatically different but we’ve got a lot of questions around the crop and a lot of other things going on. So it’s a pretty foggy picture right now. Farha Aslam – Stephens Incorporated: And then when you look at RFS, there is some questions whether Washington will change the requirements for either this year or next year. What is your view regarding that?

Again a crystal ball picture, but it’s hard to say what the federal government will do, we don’t anticipate them making change the RFS this year, the two things, I would note are this, one, it is a very complicated equation, it’s not just a simple statement that you, some people may have you believe of a simple change. And two, the oil and gas industry and the gasoline production capacity here in United States is set up to use ethanol and is deeply committed to it at this point of time. So any change in the RFS would not have a dramatic immediate impact on the ethanol demand or corn prices likely. So it’s a very intricate equation and so if anything should happen like that there is a lot of pieces, moving pieces, so again we’ll have to wait and see but I don’t see a dramatic change near term from that. Farha Aslam – Stephens Incorporated: And do you anticipate and have you heard of any one changing from their gasoline blends to – so that they have to use less ethanol, octane or do you think the octane value of ethanol is really going to drive the demand for ethanol rather than the RFS?

Yeah the octane demand is truly what’s driving it and we don’t see anybody changing that. Farha Aslam – Stephens Incorporated: Okay and then my final question would be regarding your Grain Group and in the September quarter you’re looking for that Anderson Grain Group to be negative excluding Lansing, is that correct and how I’m understanding that?

That’s correct, yes. Farha Aslam – Stephens Incorporated: And then when you said that you expect profitability to be in line with the year ago period in the December quarter, what do you expect will drive that better profitability in that quarter?

Well... Farha Aslam – Stephens Incorporated: And of course we have the harvest, but I am just trying to understand if there is no forward basis available in corn and being what do you anticipate driving profitability there?

Well, again I think clearly that that period of time it is the volume of harvest that drives a large portion of profitability. As Mike indicated, when that crop comes to market, there is a likelihood that it cannot all be taken into market without the need for storage, which could put some carry back in the market and the wheat market does have carry in it today. So the other indication that Mike made was that there are a number of different dislocations and local shortages and supply and demand situations that offer opportunity for arbitration for merchandizing and trading, so both from the Anderson’s perspective as well as Lansing, so it’s the opportunity of the fall harvest with a lot of different things added, I agree that the spreads are carry and corn and bean market are not there today, but there is a verity of things for us to work on in the fourth quarter that are positive. Farha Aslam – Stephens Incorporated: Perfect. And maybe one last housekeeping question, in terms of interest expense, what do you expect interest expense to be for this year?

Farha, are you referring to interest expense in total or... Farha Aslam – Stephens Incorporated: Yeah, just interest expenses go through your income statement?

Yeah, so we’ve not normally given projections in that regard I think you’ve got a sense from the end of the quarter short-term borrowings and as the end of the term, end of the quarter long-term numbers are ballpark we’re after the first half and I think that’s close as far as we normally would go. Farha Aslam – Stephens Incorporated: Okay, great.

I give you credit for asking the question though. Farha Aslam – Stephens Incorporated: Okay, thank you very much.

And your next question is from the line of Heather Jones from BB&T Capital Markets. You may proceed. Heather Jones – BB&T Capital Markets: Good morning.

Good morning.

Good morning, Heather.

Good morning. Heather Jones – BB&T Capital Markets: Really quick on the fertilizer business, given the dryness in the Midwest, do you think that may affect wheat planting?

Yes, there is a possibility that it will. Obviously on one side, the crop will come off earlier, because if it is dry, we won’t be in the field as long; that should allow more time for planting or if conditions are overly dry in that point of time that again could have a negative impact on planting. So the weather from this point forward does matter for the wheat planting adjust. Heather Jones – BB&T Capital Markets: Okay, and do you know the crop insurance you guys do as a service for your farmers, I mean do you do any of the underwriting like do you have any exposure there or is it more just a service you offer?

No exposure, we do not do any underwriting, so no exposure from that perspective. Heather Jones – BB&T Capital Markets: Okay. And then there has been some concerns about acid toxin levels, do you have any insight at this time as to whether that’s going to be a real risk or is it just, is it too early to tell?

Mike, I would tell you it’s a little too early to tell although there are a lot of test going on and at this point in time, we don’t see anything that’s very dramatic or very informative, good and bad test, but nothing outside of the norm at this point. So we’re hopeful still if there wouldn’t be a substantial issue. Heather Jones – BB&T Capital Markets: Okay. And I know it’s incredibly difficult to say exactly what’s going to happen in 2013, but looking at the projections out there for the size of the crop colored anywhere from $10.5 billion to $11.5 billion bushel crops. So last time, we saw crop at a size was 2006, 2007 crop year and so then I go and look at what you earned in your grain business ex-Lansing that year. But now you have call it a third more capacity but there are more ethanol plants on the ground that have their own stores has been more grain storage built in the industry. And in addition some of the worst hit areas are in your footprint, especially Indiana. So I’m just wondering, do you believe your business has changed enough since the 2006, 2007 crop that would cause you believe if your grain business should be able to generate earnings well in excess for that year or just if you could help us to put some parameters about around what this could look like?

Yeah, I mean there were more than one or two questions in there, however I will do my best. First of all I did want to let you know that informer just came out with its update on production and it put the crop, corn crop at 10.338 and just under 121 bushel yield. So it put the beans just under $2.8 billion. So those are pretty small members and so – your question is a good one. I think that if you look at our business today versus that you identified it pretty well, we’re about a third large in space and there is more competition on the ground, we also have a lot more human resource assets dedicated to our services business and our risk management business. So we’ve done our in addition just growing our grain volume in grain space, we have added some other service income and service opportunities as well, you asked about Lansing’s business at the same time, Lansing’s business is notably different from what it was back then and I will say all though they do have a few more assets to back then it happen to have assets this year and areas where they’ve had tremendous crops, so they’ve been blessed with that in the Lansing side and their businesses much more involved in merchandizing and arbitrage opportunity, so this location is good for them. It’s hard for me to compare 2006 and 2007 from an absolute numerical perspective, it’s – there are two different notably different businesses and this drought makes it, it’s not just the size of the crop, it’s a vastly different perspective then having the same crop size, because it’s a different, much different demand market. Heather Jones – BB&T Capital Markets: Okay, so I understand it’s difficult to put hard numbers on it but the way I’m looking at it, I’m not out let’s feel somewhere in my and let’s feel somewhere.

I think it’s hard I hate to adapt that but we gave kind of a first half, the second half there is so much to occur yet and you brought up, we plan as well, how much we get to plan but you got next year I think the second half of the year is going to greatly depend on, what we get planted how much we get planted, what the growing conditions are, and that at this stage with the coverage bare, we need to recharge. So we have a big crop, or we will able to drill back up, we have a challenging crop next year. Now we’re into another situation but how did describe some of the fundamental differences on, that we have today and how we generate income. Heather Jones – BB&T Capital Markets: Okay. And then my final question is on ethanol? I mean the challenges there pretty straight forward, you guys always been very adapted mitigating your risk, and just is there at some point if this situation gets much worse, is it fair for us to assume that you will reduce your throughput et cetera to lend that losses, is that a fair assumption for us to make?

We analyze our throughput in our margins and our contributions on a very regular and ethical basis. And of course, we’re going to make the best financial decisions that we can make. And there is no question about that. We – as you suggested, we like to kind of mitigate it ahead of that, these by, what we do in the marketplace, and how we generate our income in the ethanol businesses from our services and our merchandizing et cetera. So, we like to mitigate it ahead. But we’re analyzing everything on a constant basis, so we are very aware of the details of the marketplace, we just have to react to them, as dictated by the market. Heather Jones – BB&T Capital Markets: Okay, thank you very much.

Your next question is from the line of Ken Zaslow from BMO Capital Markets. You may proceed. Ken Zaslow – BMO Capital Markets: Hi, everybody, how are you doing?

Hi, Ken.

Hey, Ken. Ken Zaslow – BMO Capital Markets: So it’s just couple of question most of the questions have been asked, but in terms of capital spending? Can you talk about if there is any change to how you are thinking about I know you have an efficiency program, you have the SAP implementation is there anything that needs to change because of the drought or in response to it?

Thanks Ken. I think we continue to move forward with our normal maintenance programs looking at all our facilities and we are continuing to look at opportunities out there, particularly in the Rail space, which we have been fairly active this year. And we believe that candidly that the current situation could provide some opportunities for us looking forward. Ken Zaslow – BMO Capital Markets: So that was my next question is in terms of opportunities would you think about given the ethanol shutdowns is there potential for you to continue to actually build and take this opportunity to go the other way and can you talk about your ability to do that, what – how much more debt would you take on and how available do you have to deal with, you are ignoring that to consolidate the ethanol industry level?

Well, I mean great question. I think, our approach to investments has always been pretty discipline Ken, and we have a portfolio allocation model that we like to look at. So to get into specifics around ethanol, I’m not really comfortable doing that here. But as I said, we’re out there, looking for opportunities, and as Nick pointed out, we believe we have good access to capital. So I wouldn’t say, we’re out there looking, but we are constantly looking for opportunities. Ken Zaslow – BMO Capital Markets: Okay. So just make that in the other way, your distinction between you and some other agro business companies out there. You don’t need to change any of your behavior because of the – they drop anyway and the rise in working capital, that’s not going to compete any of your ability to, CapEx funding acquisitions, or anything like that?

Ken, I mean I think, we’re constantly looking at the situation and looking for opportunities. So when you say, we don’t need to, I think, what I am trying to say is, we’re out there, looking, we’re going to be prudent and conservative as we always have been, and we’ll react accordingly as and when needed. Ken Zaslow – BMO Capital Markets: Great. And then in terms of utilization rate at the end of the quarter, I mean, here if you said that at the end of the quarter railcars utilization rates were and I think a tick down from 85%, 70% to 85% and a small tick down, but is there anything to read into that, or is that just noise?

I think, we reported 85.2% at the end of the June, so it’s fairly close, like you said that in small down tick. Ken Zaslow – BMO Capital Markets: So, there is nothing to read into that.

All the quarters right. I have talked on the previous quarter, that’s up slightly from the previous quarter nominal amounts. Ken Zaslow – BMO Capital Markets: Okay. And then my last question is, if the (inaudible) crop actually there was read in normally you can get a better crop out of the soybeans, if that changed materially how you laid out the outcome for the next – for the three quarters?

It certainly does changes and beans are the one crop that could still react as some good range here and do much better. So that is a possible upside for us there is no question. Obviously, we don’t handle nearly as much soybeans as we do corn. So it wouldn’t be the same as making a dramatic improvement in the corn crop. But it would be a plus for us. Ken Zaslow – BMO Capital Markets: Do you operate sort of negative?

No. Ken Zaslow – BMO Capital Markets: Okay.

Thanks. Ken Zaslow – BMO Capital Markets: Great, thanks, take care guys.

Yeah, thanks Ken.

Thanks, Ken.

Your next question is form the line of Christine Healy from Scotia. You may proceed. Christine Healy – Scotia: Thanks, hi guys.

Hi, Christine.

Hey, Christine. Christine Healy – Scotia: Hi, just a few questions for you, I guess first on ethanol, you mentioned that 10%, 15% of industry capacity has been chartered. Can you tell us what your ethanol plants are currently running at?

We’re at full production as efficient as we’ve been running at any point in time. So Christine Healy – Scotia: Okay and I guess is there anything that you’re doing or looking to do to mitigate the impact of the negative industry margins are you looking to reduce your capacity run rate, are you looking to switch the feedstock to wheat anything that you’re thinking of doing there?

Well I think as I indicated, we are monitored and constantly we don’t have any plans to switch to wheat, wheat is a dollar higher priced than corn these days, so that’s not likely an option anytime soon and we are in a continuous improvement mode at the plant and looking to cut some expenses and costs but we are just fine tuning as best we can and that’s our normal mode. So nothing right now and other than kind of more of the same and we – decent first half of the year given, where the industry is in, we slightly keep turn it dials little bit better. Christine Healy – Scotia: Okay, and then on Lansing its sounds like, that I’ll look for Lansing is pretty good for the next years or so just curious about this JV that you guys recently formed a Olam. Western Canada is probably one of the only regions in the world that looks like it’s going to have a great crop this year. Can you talk about that, Lansing Olam JV I mean just provide us a little bit more detail on that, and then what your expectations are in the next year or so.

Yeah, that’s, again that’s a Lansing venture with Olam, and that’s not really something that we can comment on. Christine Healy – Scotia: Okay, and then I guess just lastly on the Rail Group, our gross margins are really impressive at 36% and that’s the highest I’ve seen ever, I will give you that rate sustainable anything that was one time in this quarter on the margin side.

Reasonably sustainable.

Yeah, reasonably sustainable, I think, we’ve mentioned in the segment of that business and what comes from the ongoing operations versus the sales and transactions and reasonably sustainable. Christine Healy – Scotia: Okay, and then on the utilization rates for the 85%, and how do you see that trending for the remainder of the year and into next year as it stabilized?

Yeah, I think at this point in time, we see it’s potentially improving slightly, there has been a handful of things that have occurred, that maybe or negative obviously, the smaller grain harvest is a bit of a negative. So, there is a variety of pluses and minuses across the board. The U.S. economy maybe not coming up as strongly as we had hope the second half of the year. But in general, I think we’ll see a creep a little higher, we don’t have a big grain harvest until the next fall and we’ll get that improvement in the next year on that case so. Christine Healy – Scotia: Okay, that’s very helpful. Thank you so much guys.

Yep.

And the next question is from the line of Michael Cox from Piper Jaffray. You may proceed. Michael Cox – Piper Jaffray: Hi, guys good morning.

Hi, Mike

Hey, Michael. Michael Cox – Piper Jaffray: Hello. My first question is a follow-up I guess to the previous question on looking at ethanol acquisition opportunities and I guess it causes a similar question on grain elevator storage with the high pressure grain and the working capital required to finance those operations and I guess relative to challenging outlook by comparison where we had in the past few years, does that perhaps say could lose some opportunities for you in securing additional elevator space over the next six to 12 months?

Well, we are clearly out looking at those opportunities as Nick and John, allude to earlier we are in good shape from a balance sheet in excess to capital perspective and these are the kind of times that for people who are smaller or less well capitalize are difficult and we are clearly keeping our eyes open for anything in opportunity in that mode, we like to be in those business. Michael Cox – Piper Jaffray: And then on the fertilizer side, I was hoping if you could talk a little bit about your expectations for fall application levels, and given some of the uncertainty around absorption rates of, PNK in the drought and, but yet farmers will have all the time in the world to prep deals so, harvest so, so just kind of your thoughts on that, balancing that against this general uncertainty of?

Yeah, that’s a great question, and again there is kind of multiple size to the story; the producers will say well, we didn’t use all the P and K in the soil, so we don’t have to put quite as much on. Some of that may delay then from putting things down in this fall timeframe. On the other hand, they are looking at next year’s prices and that’s a great corn price and I don’t want to miss the chance to grow my best crop ever. So they have some incentive to do the best agronomic work they can. I think in general, over the course of the last few years, they have probably under applied on the P and K side, so they look at it from a long-term perspective, they probably don’t want to come in short this year with it, especially if they look at next year’s price or so it’s possible they could delay a little bit this fall, maybe more next spring in application, but there is different arguments from different people on both sides of that equation. So it will be interesting if we get a chance to put in 95 to 6 million acres or more next year, they are going to want to grow a really good crop at the kind of prices they were able to see, so. Michael Cox – Piper Jaffray: Sure, very good. Well, thanks a lot guys.

And your next question is from the line of Brent Rystrom from Feltl. You may proceed. Brent Rystrom – Feltl: Thanks guys for keeping it in Minneapolis. The comments you were just making about the P and K I would assume here what you’re seeing is that? Farmers are going to realize how big this crop is, so even if they push a little off this winter, they will kind of test in the spring and see where is that and odds are, they will circle back in, we will fairly normalize occasionally, is that kind what you are trying to say there?

Yeah, I would agree with that statement. Brent Rystrom – Feltl: All right. What level of yield if you go, just absolutely squeezing on – fortunately being at a flat year whether been going to a down year or a little bit flat year, is it a 120 bushels, or is it a 110 bushels.

No. Brent Rystrom – Feltl: Let’s crazy to talk about, but you know...

Yeah, no, I understand. I think, we’re pretty well priced in numbers like informal just came out with, that just over 120. And a lot of people with a lot of feet on the ground and those are the kind of numbers we are seeing. So that’s baked into commentary that Mike just gave you about first half of next year and that’s kind of what we are looking at.

Let me add just one thing to that, Harl mentioned today we talk about potentially use. We – for ethanol as a dollar above Corn. If things would change such that the market says, we need to consume or takedown the surplus of wheat, because we needed for let’s say for feeding just or for usage. That could change the outlook around that we have around wheat. Today, the way things are looking, the market doesn’t want wheat to go on that direction. And on the corn side, we’re rationing in the term around that is already occurring. So what I don’t know is we take the yield down in another five bushels, it is still mostly a corn issue that where the ration occurs, or does it dip into this wheat situation. But certainly every 5% lower I think it takes a chunk out of income potential and it creates pain in the system. Brent Rystrom – Feltl: Great, thank you. From a little bit different twist, can you just spend a lot time down on Iowa, looking at lot of fields and sometimes unanimous. And they have a significant problem there with unabsorbed herbicides. And so there is going to residual herbicides unless we get a lot of rainfall in winter that will carry over into fields next year. And it kind of sets particularly you guys in the Eastern corn build up for a lot of corn and corn planting, because you are not going to able to rotate to the bean, because those herbicides will kill the beans. If you think you have unanimous a risk, but you run that as factor in your Eastern part of Corn Belt next year as a – costs will influence on the business?

Yeah, we’ve not, I mean that’s nice insight, but we’ve not put that into our thinking. And so that input, we will get it into our thinking, all right, and more ability to assess the impact. Brent Rystrom – Feltl: Out of curious when we were there last summer for your summer field day, we talked little bit about frac sand railcar leasing, I’m curious if you have any updates, if you’ve done anything that moved more into that area?

We do have more demand showing up and have supplied some of that demand here in the past quarter, and expect there to be, ongoing demand there. But it’s just another new market here in the last 12 months for us to keep an – keep our eyes on and it’s been a positive market. And so... Brent Rystrom – Feltl: Thanks. Well, thanks, guys. Good job in a tough environment.

Thanks.

Thanks, Brent.

Your next question is from the line of Eric Larson from CL King. You may proceed. Eric Larson – CL King: Yeah, hi, everyone. How are you?

Eric.

Hey, Eric. Eric Larson – CL King: Quick question, going back to more in a Mike’s comments, talking about sort of the basis, the potential for this fall. I mean obviously, really in the fourth quarter of last year, we’ve been trading at a premium basis for a long time. Fourth quarter was unusual, because I think of the ethanol blend credit disappearing and you just had a lot of ethanol being built up in store ahead of that credit. That absent this year, one would normally assume that you’d get – you have at least some relief on the basis, is there anything more to it than that to read into it than that relative to your comment, Mike?

No, that’s basically yet and we’ll see what actually develops but structure of the futures market around especially for corn and beans is such that it would tend to increase the flow of a lot of this crop to harvest in the fall and that probably gives some potential to accumulate corn and beans at reasonable basis levels, which then get some pop. Our futures hasn’t shown any carry, we’ll see how it plays out and for any reason this harvest would if we would get into a rainy situation, I mean if everything just stretches right out then there, then we have a different scenario. On the other hand, we’ll recharge the soil, so I don’t know if I will be happy or sad, that I think I’ll be not happy. Eric Larson – CL King: Yeah, I would tend to agree with that one, with that comment as well, yeah it’s really interesting situation in the futures market today. And particularly, what’s left what we see on what the demand factor is going to come into the fall, on top of that to see what the basis is I mean obviously we’re still going to harvest a lot of corn, it’s just going to be less than what we had expected. And so you would assume that basis to give you some opportunities and that’s really what I was trying to focus I mean. That obviously will be a driver of your income in the second half.

That’s correct. And frankly it’s reasonably easy, our Toledo business in particular are very easy to obtain and if you watch the movement of that during the harvest, it will be an indicator as to whether we are able to accumulate at decent levels, or whether it’s hard to accumulate it. Eric Larson – CL King: Right the follow-up question here to that is obviously the drought has hit the Eastern Corn Belt particularly hard, harder than the Western Corn Belt, although I would say there is arguably there is some areas in the Western Corn Belt that probably don’t look much different than Indiana. Does that mean that you’re going to have to try to secure corn from a wider geographic area this year, are there going to be areas of corn deficiencies and soybean deficiencies that, this equates some different logistic issues with you this year that might cost you some more money to get the – to put some grain in your build?

Good question. There will be a whole variety of dislocation of supply and demand because of spotty crops some good, some bad in similar geographic areas. So it will create those kind of issues, it also creates the opportunity to find those different supply and demand imbalances and move the crop around even though that are in our own inventory. So yes it creates some issues but it also creates some opportunities. Eric Larson – CL King: Okay, thank you everyone.

Thank you, Eric.

Your next question is from the line of Ian Horowitz from Topeka. You may proceed. Ian Horowitz – Topeka: Good morning everyone.

Hi Ian.

Hi Ian. Ian Horowitz – Topeka: Hal or may be Mike, do you guys, can you just walk me through kind of what’s going on in ethanol from kind of a macro level, we were looking like we’re heading in the right direction relative to margins in there continue to lower production volumes and to through inventory and then suddenly now we are seeing kind of an increase in production and we did a reduction in inventory but nothing significant. Can you just walk me through this, I guess the concern is this that capacity is so able to kind of turn back on at a moment’s notice to take advantage of any margin opportunity that there – that margins could be basically depressed until, I think through a significant period of time, until demand finished gasoline demand gets to the point where we can observe a high array?

In general, your commentary is right on, we did have a slight uptick here in this last week’s reporting, the week-to-week numbers tend to be not a 100% accurate. So the general trend as we have taken stocks down quite substantially in the last few weeks, but you’re right, if the demand is relatively low gasoline usage is not apparently going much higher in the near-term and corn price is, I mean from a macro perspective that’s been the – those are the two driving forces, we’ve rationed the industry down quite a bit to about a 12 billion galleon annualized level that we are producing it now and, even at that level there is no substantial margins to be made, so the weaker players will continue to be on the negative side of that and that’s why we, what we do as far as try to generate a income as everybody as we can from our plans that, to be one of the better producing, and better performing plans, but it’s going to be a tough environment. Ian Horowitz – Topeka: So a bit of a kind of an abstract question how much capacity would you think, you would need to see out of the system before we got back into a kind of type margin environment for a good margin environment?

We are...

Yeah, I think we’re right about where we are right now, based upon what the demand we see, we just dependant on gasoline demand in the few other things, but obviously it has to get lower than where we are at today, and we want to see good markets, but you know we’re kind of nearing that equilibrium point we just had to watch the stocks, in the demand from here.

Yeah, what Harl saying – we are, the last four as the six weeks of production, I mean result is in a drawdown of stocks, so to the extent that trend would continue or what would be helpful, and you make a point that plans can come back online, and as Harl said the huge escalation in corn prices is caused ethanol to get trade in the wholesale market, and the processing prices unleaded where should have been $0.80 below at early in the year is a reasonably big factor in this equation, so Chris

The U.S. gasoline refining industry is step up use the ethanol

Yeah

And so gasoline demand is a big deal. Ian Horowitz – Topeka: All right. Okay. And Mike, your business has changed fairly significantly and as well as, both from a footprint as well as from a product standpoint, but can you just give us a little bit of a history lesson on how the Anderson’s kind of went through the last – that the kind of the 1988 timeframe and what you saw in your local markets in terms of farmer behavior and?

Yeah, and I’ll try to be somewhat brief on this. 1988, we came into the year – into the harvest of 1988 with almost with the largest carryover ever of corn. Ian Horowitz – Topeka: Right.

Almost half of crop, which as a result of that the market in the end was able to sustain that 30 plus percent reduction in the harvest with some pain and dislocation, but we didn’t have to rash in the end, we didn’t have to rash in demand as much. At the farm level, a lot of those stocks carried over were owned by the government CCC some in loan stocks. A farmer at that point in time had been coming off of rough decade starting at around 1980, a really rough decade in which just starting to come out of it rough in the sense of prices that were low, a lot of – weak balance sheets, aggravated by a crash in land prices, because what we have done different than now, we have – still have a demand market. Back then, we had a supply market in land prices that really plummeted, our folks had increased substantially producers, their investment in land and high interest rates. We also didn’t have as robust of crop insurance program as we have now, so if the farm level – this is a generalization, because there is real drama with individual producers, farmers depending on their specific circumstances, both in production side of corn, wheat, and beans or in (inaudible) or in any of the feeding areas. But in general 80% to 85% of the acres our corn and bean acres have healthy crop insurance. So the farm side of the economy, I think (inaudible) without the back door is whether in crop is really in a much different position today. For us as a company, we’re in a position much different position today too. We have a much, much, much stronger balance sheet I can’t recall exactly, but we had I know we had significantly higher leverage situation, we are much more concentrated, we did not have a rail business, which is producing more our plant nutrient business was substantially smaller, grain was grained and it was grained in the Ohio, Michigan was kind of the guts of our business. So we had some like this happening and had a significantly more material impact on us. I think the big difference this year is below carry and stocks and having to fight with the demand destruction that we have. Of course, we’re on ethanol now we work in ethanol at that point in time. Ian Horowitz – Topeka: Right.

So there are similarities, but there are differences. Ian Horowitz – Topeka: Got it, great, that was very helpful. Thank you.

Yep.

And at this time we have no further questions. I’d like to turn the call over to Mr. Mike Anderson Chairman and Chief Executive Officer for your closing remarks.

Thank you, I want to thank you for joining us this morning. Well, I also want to mention for those that are interested that there are five appendix slides in this presentation available on the andersonsinc.com website at the investors tab under the second quarter earnings call replay. Our next conference call is scheduled for Tuesday, November 6 at 11 am Eastern Time to review our third quarter 2012 results. We hope you’re able to join us again at that time until then have a great day.

And ladies and gentlemen this concludes your presentation. You may now disconnect.