Aventine Renewable Energy Holdings Inc
Aventine Renewable Energy — Merger or Acquisition (May 2015)
20 slides from Aventine Renewable Energy's merger presentation, May 28, 2015
Slide 1: Pacific Ethanol Corporate Overview: May 2015
1 Leading Producer and Marketer of Low - Carbon Renewable Fuels Strong Long - term Demand for Ethanol Pacific Ethanol Corporate Overview: May 2015 Differentiated Business Model & Diversified Revenue Streams
Slide 2: Forward-Looking Statements
2 2 Statements contained in this communication that refer to Pacific Ethanol’s estimated or anticipated future results or other non - historical expressions of fact are forward - looking statements that reflect Pacific Ethanol’s current perspective of existing trends and inf ormation as of the date
Slide 3: Additional Information
3 3 Additional Information This communication is being made partially in respect of the proposed merger between Pacific Ethanol, Inc. and Aventine Renewable Energy Holdings, Inc. In connection with the proposed merger, Pacific Ethanol has filed with the Securities and Exchange Commission a registrat
Slide 4: Founded in 2003: first pure play public ethanol company
Founded in 2003 First pure play public ethanol company – NASDAQ: PEIX Four strategically located bio - refineries in the Western US with combined operating capacity of 200 MGY With production and marketing selling over 500 MGY Current feedstock: corn, sugar, milo & waste beverage products Developing
Slide 5: Renewable Fuel Standard (RFS) vs. Installed Capacity
5 In billions of gallons (1) Source: PEIX Renewable Fuel Standard (RFS) vs. Installed Capacity (1) Renewable Fuel Standard Breaching the blend wall Only Federal fuels policy to reduce greenhouse gas (GHG) emissions Need regulatory certainty to secure development of cellulosic ethanol projects 0 5 10
Slide 6: California Low-Carbon Fuel Standard
6 California Low - Carbon Fuel Standard The world’s first greenhouse gas standard for transportation fuels California Air Resources Board (CARB) re - adopting the Low - Carbon Fuel Standard (LCFS) with a final decision expected in the summer of 2015 Regulation requires a 10% reduction in carbon inte
Slide 7: Growing Demand: Ethanol & Co-Products
7 Growing Demand: Ethanol & Co - Products Providing ongoing economic value Ethanol remains cheapest form of octane Provides consumers with important choice at the pump Ethanol in Demand in Export Markets Year - to - date exports through March totaled 234 million gallons Favorable co - product values
Slide 8: Aventine Merger Agreement Highlights
8 8 Aventine Merger Agreement Highlights On Dec. 31, 2014 Pacific Ethanol, Inc. and Aventine Renewable Energy Holdings, Inc. announced a definitive merger agreement under which Pacific Ethanol is to acquire all of the outstanding shares of Aventine in a stock - for - stock merger. Connects Destinati
Slide 9: Expanding Production & Marketing Advantage
9 9 Expanding Production & Marketing Advantage HQ Pacific Ethanol Plants Marketing Partner Plants Terminals Aventine Plants Situated to access markets in 48 states with ethanol production and marketing Increases marketing volume to over 800 million gallons per year Current Western US advantage Enabl
Slide 10: Adding Strategic Assets
10 10 Adding Strategic Assets Location Capacity ( MGY) Production Method Co - Products Pacific Ethanol Stockton, CA 60 Dry Mill Wet distillers grain, corn oil Madera, CA 40 Dry Mill Wet distillers grain, corn oil Burley, ID 60 Dry Mill Wet distillers grain, corn oil Columbia, OR 40 Dry Mill Wet dist
Slide 11: Connecting Destination & Origin Models
11 11 Connecting Destination & Origin Models Linking destination model & origin model provides several benefits Spreads commodity and basis price risks across diverse markets and products enabling optimization of margin management Gains deeper market insight and engagement in all major ethanol and f
Slide 12: Recent Industry Dynamics
12 12 Recent Industry Dynamics Growing transportation fuel demand Improving production margins Source: CME 1.00 1.50 2.00 2.50 3.00 3.50 4.00 RBOB Gasoline and Ethanol Prices (Nearby Futures) Ethanol Futures RBOB Futures
Slide 13: Focusing on Long-term Profitability
13 13 Focusing on Long - term Profitability Diversifying Revenue Installing corn oil separation technology Now producing at Madera Expect to begin production in Boardman during Q2 Increasing corn yield over time by investing in mechanical technology such as fine grinding & optimizing enzyme & chemic
Slide 14: Strategy for Advanced Biofuels
14 14 Evaluating wheat straw production at Magic Valley & implementing cogeneration in Stockton Strategy for Advanced Biofuels Running pilot program for anaerobic digestion Working to convert corn fiber into cellulosic ethanol – qualified by the EPA as a cellulosic feedstock under the RFS In develop
Slide 15: Quarterly Financial Results
15 15 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Net sales $ 254,543 $ 321,144 $ 275,573 $ 256,152 $ 206,176 Gross profit (loss) 38,545 33,576 17,986 18,378 (987) SG&A 3,670 4,315 4,392 4,731 4,905 Operating income (loss) 34,875 29,261 13,594 13,647 (5,892) Fair value adjustments (35,844) 485 (4,378) 2,205 (173)
Slide 16: Balance Sheet Highlights
16 16 March 31, 2015 December 31, 2014 Cash & cash equivalents $ 42,274 $ 62,084 Current assets $110,565 $139,551 Total assets $ 275,225 $ 299,502 Current liabilities $ 22,839 $ 25,447 Total liabilities $ 61,328 $ 81,520 Stockholders’ equity $213,897 $217,982 Total liabilities & stockholders’ equity
Slide 17: Growth Opportunities
17 17 Close Aventine Renewable Energy merger (expected Q2’2015) Improve efficiencies, lower the carbon intensity of ethanol produced, create new revenue streams & further advanced biofuels initiatives Growth Opportunities Integrate production & marketing supply chains
Slide 18: Appendix
18 Appendix Thank You
Slide 19: Use of Non-GAAP Measures
19 19 Use of Non - GAAP Measures Management believes that certain financial measures not in accordance with generally accepted accounting principles (“GAAP”) are useful measures of operations . The company defines Adjusted Net Earnings (Loss) as unaudited earnings (loss ) before fair value adjustmen
Slide 20: Non-GAAP Reconciliations
20 20 * Adjusted for non - controlling interests Non - GAAP Reconciliations Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Net Income (Loss) attributed to Pacific Ethanol $ (10,826) $ 15,572 $ 4,025 $ 12,518 $ (4,380) Adjustments: Interest expense* 4,044 2,551 928 967 921 Provision (benefit) for income taxes* 3,270
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