November 2008
Forward Looking Statements
This presentation contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. Generally, forwardlooking statements do not relate strictly to historical or current facts, including
statements concerning plans and objectives of management for future
operations, economic performance or related assumptions. Forward-looking
statements may include words or phrases such as management or the Company
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,”
“should,” “will,” “goals,” and other words and terms of similar meaning.
Statements regarding future events and developments and our future
performance, including statements regarding completion of facilities under
construction, closing pending acquisitions, expectations concerning our growth
plans, related financings, and future financial results are forward-looking
statements. The forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Reform Act of 1995. Although we
believe that our expectations regarding future events are based on reasonable
assumptions, any or all of the forward-looking statements in this presentation
may turn out to be wrong. Actual events or results may differ materially from
those indicated in such forward-looking statements. In addition, the Company
disclaims any obligation to update any forward-looking statements. Factors that
could cause actual results to differ materially from those expressed or implied in
the forward-looking statements include, but are not limited to, those discussed in
the “Risk Factors” sections of our most recent Quarterly Report on Form 10-Q
and Annual Report on Form 10-K.
2
Company Representatives
Todd Becker
President & Chief Operating Officer
Jerry Peters
Chief Financial Officer
Green Plains Renewable Energy, Inc.
9420 Underwood Ave., Ste. 100
Omaha, NE 68154
www.gpreinc.com
NASDAQ: GPRE
3
Who is Green Plains?
• A leader in ethanol production with 330 million gallons of
annual operating capacity
• Currently building a vertically integrated ethanol platform
from agronomy services and grain procurement through
ethanol production, blending and distribution
• Focus on operational excellence
• Risk management is a core competency
• Well capitalized balance sheet with committed long-term
investors
4
Overview of Recent Merger
• Green Plains closed its previously announced merger with
VBV on October 15th
• VBV shareholders invested $60 million of new equity
capital into Green Plains at $10 per share
• VBV’s majority shareholder is NTR plc (www.ntr.ie), a
$2.1Bn international renewable energy and sustainable
waste management company (and largest shareholder of
Green Plains)
• Green Plains stock upgraded to NASDAQ Global market
as of October 15th
5
Competitive Advantages
• Seasoned management team
• Operational excellence
• Risk management expertise
• Vertical integration throughout the ethanol value chain
• Well capitalized balance sheet with strong liquidity
• Committed long-term investors
6
Seasoned Management Team
Name
Title
Years in
Industry
Background
Wayne Hoovestol
Chairman and CEO
25+
Built Two National Truck Lines:
Major Transport and Hoovestol, Inc.
Todd Becker
President and COO
20+
CEO, VBV LLC; EVP Sales & Marketing, Global Ethanol;
Pres, ConAgra Grain Canada; VP of Int Marketing,
ConAgra Trade Group
Jerry Peters
CFO & Secretary
25+
Chief Financial Officer &
Chief Accounting Officer, ONEOK Partners LP; CPA,
KPMG
Steve Bleyl
Executive VP –
Ethanol Marketing
25+
CEO, Renewable Products Marketing Group; COO, AXXIS
Petroleum; VP for Refining Marketing, Koch Industries
Executive VP – Finance &
Treasurer
30+
CFO, VBV LLC; CFO, Renewable Products Marketing
Group; Various finance senior management positions at
ConAgra Trade Group
30+
Dir of Raw Materials Strategic Sourcing, Malt-O-Meal;
Agribusiness Investment Banker, McCarthy & Associates;
Various senior management positions at ConAgra Trade
Group
Ron Gillis
Michael Orgas
Executive VP – Commercial
Operations
Edgar Seward
Executive VP –
Plant Operations
20+
GM, Indiana Bio-Energy LLC;
Project Manager, ICM Inc; Various senior management
positions in ethanol plant operations and business
development in US and UK at ConAgra Trade Group
Ryan Armasu
Executive VP –
Plant Management
20+
Dir of Operations, AkzoNobel; VP for Operations, Orica
Inc.; VP for Operations, Quantumsphere
7
Risk Management Expertise
• Fundamental focus on EBITDA margin management
(corn – gas – ethanol – DDGs)
• Comprehensive risk management policy focused on
three main areas of control (all on rolling 12 month
positions): (1) tenor limits, (2) hedge percentages, and
(3) value at risk (VAR) limits
• Risk committee comprised of senior management and
outside parties dedicated to monitoring commodity risk
exposure on an ongoing basis
Risk management is a core competency at Green Plains
8
Corn and Ethanol Spot Prices
$3.50
Ethanol Price ($/Gal)
$3.00
Corn Cost ($/Gal)
(1)
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Note:
1. Corn cost per gallon equal to spot price per bushel of corn divided by 2.8 gallons per bushel
Mar-08
Jun-08
Sep-08
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Ethanol Crush Spread
$1.80
$1.60
Crush spread ($/Gal) (1)
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Risk management is critical
Note:
1. Crush spread equal to spot price per gallon of ethanol less spot price per bushel of corn divided by 2.8 gallons per bushel
10
Integrated Ethanol Value Chain
Strategy is to create a vertically integrated
platform touching all points of the ethanol
value chain
11
Effective Corn Procurement
• Ownership of grain storage in locations complementary to ethanol
plants is an effective strategy to secure long-term supply needs
– Acquisition of Essex Elevator in September 2007 to support
Shenandoah plant (Storage capacity: 2.1MM bushels)
– Acquisition of Great Lakes Cooperative in April 2008 to support
Superior plant (Storage capacity: 16.8 MM bushels)
• Grain sourced from relationships with local farmers complements
existing supplies as needed
• Direct relationships with local farmers through full service agronomy
business helps secure corn supply
12
Overview of Facilities
Ethanol Production Facilities
ND
GPRE Shenandoah
Shenandoah, IA
55 MMgy Fagen/ICM
Started Production Aug. 2007
MN
WI
SD
MI
IA
NE
IL
KN
OH
IN
MO
KY
Legend
TN
Ethanol Production
Grain and Agronomy
Superior Ethanol
Superior, IA
55 MMgy Agra/Delta-T
Started Production Jul. 2008
Indiana Bio-Energy
Bluffton, IN
110 MMgy Fagen/ICM
Started Production Sep. 2008
Ethanol Grain Processors
Obion, TN
110 MMgy Fagen/ICM
Started Production Nov. 2008
Company Headquarters
13
Ethanol Marketing and Distribution
• Currently developing a fee based ethanol marketing and
distribution platform
• Management has extensive ethanol marketing expertise
• 250 MMgy of ethanol currently under exclusive third
party marketing arrangements
• Marketing directly to retailer and blenders
• Expect to “touch” 850 – 1,000 MMgy by 2009
14
Green Plains Capitalization
PRO FORMA CAPITALIZATION
$MM
Cash and Equivalents
Total Debt
Shareholder's Equity(2)
Total Capitalization
GPRE
as of
5/31/08
VBV
as of
6/30/08
(1)
Pro Forma
Transaction
Adjustments
Pro Forma
Consolidated
$7.3
$1.6
$60.0
$69.0
$144.2
114.7
258.9
$117.1
147.3
264.4
$0.0
23.5
23.5
$261.3
285.5
546.9
Notes:
1. Capitalization based on financial data for each entity as reported in S-4 filed on September 4, 2008
2. VBV Shareholder’s Equity includes minority interests which were purchased in exchange for Green Plains stock as part of the merger
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Green Plains Valuation
PRO FORMA VALUATION
Total GPRE Shares Outstanding
GPRE Stock Price (11/07/2008)
Equity Value ($MM)
(1)
(MM)
Total Debt ($MM)
(2)
Non-Ethanol Grain Financing
Total Cash ($MM)
(3)
Remaining Construction Costs ($MM)
Total Enterprise Value ($MM)
Corn Storage for Green Plains Grain (MM bushels)
Asset Value per Bushel
Asset Value of Green Plains Grain
Enterprise Value of Ethanol Business
Total Operating Gallons (MMgy)
Enterprise Value of Ethanol Business per Operating Gallon Valuation
24.7
$3.39
$83.7
$261.3
($39.7)
($69.0)
$105.7
$342.0
18.9
$0.75
$14.2
$327.8
330
$0.99
Notes:
1.Total shares equals 7,822,028 GPRE shares outstanding as of GPRE 8/31/08 10-Q filing plus 10,871,472 shares issued in exchange for IBE and EGP units in the
merger plus 6,000,000 shares issued to VBV in the primary investment; options are excluded
2.Green Plains had drawn $16MM on a corporate term loan and $23.743 MM on a Green Plains Grain revolving credit facility to finance its inventories
3.EGP had $51.8 MM of undrawn construction loan availability, IBE had $47.5 MM and Superior Ethanol had $6.4MM as of the reported financial statements in the S-4
16
Industry Dynamics
• Most players are still undercapitalized (public and private)
• Most players still do not effectively manage risk
• Consolidation will likely accelerate
• Well capitalized industry participants will benefit from attractive
growth opportunities through acquisitions at distressed valuations
• Profit potential exists across entire ethanol value chain
• Vertical integration and effective risk management will mitigate
margin volatility and enhance cash flows
• Movement to approve mid-level blends (E15)
17
Opportunities for Green Plains
• Leverage strong balance sheet and public currency to
pursue selective acquisitions at attractive valuation
levels
• Continue to diversify ethanol platform with upstream
grain assets and downstream blending / distribution
assets
• 2nd generation bolt-on technologies / Bio-Refinery
concept
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Ethanol Myths
MYTHS
TRUTHS
Ethanol is dependent
on direct federal
subsidies
Ethanol receives no direct federal subsidy. The primary
incentive is a reduction in federal excise taxes available to
blenders and gasoline marketers – not ethanol companies
Ethanol corn usage
leads to rising food
prices
Only 4% of increase in Consumer Price Index is directly
related to corn costs. The balance of cost of rising food
prices is due to marketing and transportation
Ethanol corn usage
displaces foodstuffs
There are two types of corn: field corn and sweet corn. 99%
of all US corn acres are field corn, a grain that humans
cannot digest (less than 10% of this is used in human food).
50% was used in animal feed and last year 24% was used to
produce ethanol. One third of corn used to produce ethanol
is returned as feed to the livestock market
Sources: Growth Energy, www.growthenergy.org, Citigroup research
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Algae Investment
•
In April 2008, Green Plains received preliminary approval for $2.3 million
grant from Iowa Power Fund for algae R&D (algae opportunities include
biofuel feedstock, feed product, and carbon sequestration)
•
Green Plains synergy - existing biofuel and feed marketing, utilization of
waste heat, water and carbon dioxide
•
Green Plains is participating in a joint venture, BioProcess Algae LLC, to
commercialize photobioreactor technology for continuous algae production
•
JV partners include: CLARCOR, Inc., a $1.5Bn NYSE listed company,
BioProcessH20 (a filtration company partially owned by CLARCOR), and
NTR plc (Green Plains’ largest shareholder)
•
Expect pilot project to be constructed at GPRE Shenandoah
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