Annual Members Meeting Forward Looking Statement A word from our - - PowerPoint PPT Presentation

▶
annual member s meeting forward looking statement
SMART_READER_LITE
LIVE PREVIEW

Annual Members Meeting Forward Looking Statement A word from our - - PowerPoint PPT Presentation

Feb 07, 2023 578 likes •928 views

Annual Members Meeting Forward Looking Statement A word from our Counsel This presentation contains forward-looking statements involving future events, future business and other conditions, future performance, and expected operations. These

slide-1
SLIDE 1

Annual Member’s Meeting

slide-2
SLIDE 2

Conestoga Energy Holdings www.ConestogaEnergy.com

Forward Looking Statement

2

This presentation contains forward-looking statements involving future events, future business and

  • ther conditions, future performance, and expected operations. These statements are based on

management’s belief and expectations and on information currently available to management. Forward-looking statements may include statements which contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “should,” “could,” “may,” “future,” “will,” “potential,” or the negatives of these words and all similar expressions. Forward-looking statements involve numerous assumptions, risks, and uncertainties. The actual results or actual business or other conditions experienced by Conestoga Energy Holdings, LLC, and its subsidiaries (Companies) may differ materially from those contemplated by any forward- looking statements, and the Companies are not under any duty to update the forward-looking statements contained in this presentation. The Companies cannot and do not guarantee any future results or performance or what future business conditions will be like. Conestoga Energy Holdings cautions you not to put undue reliance on forward-looking statements, which speak only as of May 5th 2015, the date of this presentation.

A word from our Counsel

slide-3
SLIDE 3

Conestoga Energy Holdings www.ConestogaEnergy.com

Who are we?

3

Conestoga Energy is a boutique supplier of renewable fuel, maintaining flexibility to stay responsive to the market. Combined, Conestoga Energy’s plants have a production capacity of over 218 million gallons per year. Conestoga Energy can respond to market conditions with wet or dry distiller grains. We are always looking to reduce our carbon footprint through innovative technology and disciplined processes. We manage and

  • perate three

ethanol production facilities located in Kansas and Texas. Our flexibility positions us to leverage our core competencies allowing for strategic and/or tactical growth.

slide-4
SLIDE 4

What we do

Produce and manage within the ethanol supply chain, taking advantage of synergistic opportunities throughout.

CO2 Insurance Corn Oil Distiller’s Grain Ethanol Logistics

slide-5
SLIDE 5

By the Numbers

LOCATIONS Liberal, KS (owned) Garden City, KS (owned) Levelland, TX (managed) 218 Million 180 Domestic 38 Global Exports

GALLONS SOLD

164 Employees 127 in Kansas 37 in Texas EMPLOYEES

1 Texas 2 Kansas

slide-6
SLIDE 6

Conestoga Energy Holdings www.ConestogaEnergy.com

Board of Directors

6

Nick Hatcher

Chairman

Rock Ormiston

Secretary

Cecil O’Brate

Board Member

Mark Zorensky

Board Member

Greg Stone

Board Member

Perry Bacon

Board Member

Ed Condon

Board Member

Gary Harshberger

Board Member

Larry Leis

Vice Chairman

Andy Bulloch

Board Member

slide-7
SLIDE 7

Conestoga Energy Holdings www.ConestogaEnergy.com

Management Team

7

Matt Presley

Chief Technology Officer

Paula Haley

VP Finance & Accounting

Mike Varnes

VP Logistics

Tom Willis

CEO

Fred Rayner

CFO

Dusty Turner

COO

Jason Dale

VP Risk Management

Dean Alling

Manager CIP

Matt Durler

VP Marketing

slide-8
SLIDE 8

STATE OF THE COMPANY

slide-9
SLIDE 9

Conestoga Energy Holdings www.ConestogaEnergy.com

Strategic Approach

9

Our goal is to maximize our unit holders’ investment. Cash & Risk Management

Maintain a fortress balance sheet and a disciplined risk management approach to build value and protect investment.

Partnerships and Opportunities

Explore and execute strategic alliances and integration throughout the supply chain.

New Products

Continue to research and add new technologies which give us a tactical/strategic advantage.

slide-10
SLIDE 10

Conestoga Energy Holdings www.ConestogaEnergy.com

Year in Review - 2014

10

Record Setting Year

$86 million net income $107 million EBITDA

Distributions

$36.5 million $651 per unit

Fortress Balance Sheet

$115 million Working Capital .28 Total Debt/Equity

slide-11
SLIDE 11

Conestoga Energy Holdings www.ConestogaEnergy.com

2015 Challenges and Opportunities

11

Lower oil prices

$45 drop in Brent Crude $ .70 drop in RBOB

Supply & Demand

Domestic Production outpaces Domestic demand

Loss of Competitive Advantage

Grain cost basis Protein vs. Energy values Sorghum exports

Challenges

Innovation

$1.5MM revenue from Corn Oil Q1

Opportunistic Growth

Opportunities Unknowns

Changes to RFS s

slide-12
SLIDE 12

AUDITED FINANCIAL STATEMENTS

slide-13
SLIDE 13

Conestoga Energy Holdings, LLC

  • Consolidated audit was performed as of December 31,

2014; Conestoga Energy Holdings, LLC and subsidiaries include: – Arkalon Ethanol, LLC, and subsidiaries – Bonanza BioEnergy, LLC – Conestoga Energy Partners, LLC, and subsidiaries

13

slide-14
SLIDE 14

Conestoga Energy Holdings, LLC

14

ASSETS December 31, 2014 2013 Current Assets $ 144,956,471 $ 94,796,878 Property, Plant and Equipment, net 151,998,724 157,563,077 Other Assets 4,392,350 4,402,392 Total Assets $ 301,347,545 $ 256,762,347 LIABILITIES AND MEMBERS' EQUITY Current Liabilities $ 29,846,352 $ 42,927,248 Long-Term Debt, less current maturities 55,268,281 63,617,529 Other Noncurrent Liabilities 596,689 662,988 Members' Equity 215,636,223 149,554,582 Total Liabilities and Members' Equity $ 301,347,545 $ 256,762,347

Condensed Balance Sheets

slide-15
SLIDE 15

Conestoga Energy Holdings, LLC

15

Items of Significant Change – Balance Sheets

12/31/2014 12/31/2013 Change Cash $106.7M $59.4M Increased $47.3M Accounts Receivable $11.4M $15.8M Decreased $4.4M Inventories $16.6M $12.2M Increased $4.4M Working Capital $115.1M $51.9M Increased $63.2M Overall Debt $61.8M $85.0M Decreased $23.2M

slide-16
SLIDE 16

Conestoga Energy Holdings, LLC

(Pro Forma) Change Year Ended December 31 2014 2013 Increase (Decrease) Net Sales $ 501,252,856 $ 554,074,428 $ (52,821,572) Cost of Sales 392,092,951 503,657,055 (111,564,104) Gross Profit (Loss) on Sales 109,159,905 50,417,373 58,742,532 Operating Expenses 22,847,198 15,472,723 7,374,475 Operating Income (Loss) 86,312,707 34,944,650 51,368,057 Other Income (Expense), net (630,016) (7,768,661) 7,138,645 Net Income (Loss) $ 85,682,691 $ 27,175,989 $ 58,506,702

16

Condensed Statements of Operations

slide-17
SLIDE 17

Conestoga Energy Holdings, LLC

17

Summary of Statement of Cash Flows

2014 2013 Cash Provided by Operations 98,500,000 55,600,000 Purchase of PPE 10,325,000 1,317,000 Debt Repayment 21,320,000 13,600,000 Distributions Paid in 2014 19,601,050

  • Subsequent Distributions

36,446,000 * - * Subsequent distributions were distributions paid in the first quarter of 2015 for the 2014 income tax liability

slide-18
SLIDE 18

Conestoga Energy Holdings, LLC

18

Total Taxable Income 91,800,412 Ordinary Income 84,123,629 IC DISC Income 7,676,783 Tax on Ordinary Income (Assuming 39.6% Rate) 33,312,957 Tax on IC DISC Income (23.8% Rate) 1,827,074 Total Tax on Earnings 35,140,031 Total Units 56,003 Total Tax per Unit 627 Total Distributions in 2015 for 2014 Tax 36,446,663 Distribution Per Unit 651

Distributions for Tax Liability

slide-19
SLIDE 19

5 YEAR DEPRECIATION PROJECTION

slide-20
SLIDE 20

Conestoga Energy Holdings, LLC

20

Book Tax Difference 2015 17,017,667.72 2,391,760.51 14,625,907.21 2016 16,971,932.55 1,978,878.06 14,993,054.49 2017 16,947,945.05 1,633,721.47 15,314,223.58 2018 16,931,949.07 1,369,803.24 15,562,145.83 2019 16,901,958.94 1,216,018.28 15,685,940.66

5 Year Depreciation Schedule

slide-21
SLIDE 21

BENEFIT OF ARKALON ICD, INC

slide-22
SLIDE 22

Conestoga Energy Holdings, LLC

  • Arkalon ICD, Inc. is an Interest Charge Domestic

International Sales Corporation (IC-DISC).

  • An IC-DISC allows companies to change the character of

income on foreign sales from ordinary income to capital gains income.

22

Arkalon ICD, Inc. (IC-DISC)

Commissions $ 7,676,783 Estimated Tax Rate % Saved 15% Tax Savings 1,151,517

slide-23
SLIDE 23

2015 Year to Date Results

slide-24
SLIDE 24

Conestoga Energy Holdings www.ConestogaEnergy.com

1st Quarter Operating Results

24

Q1 2014 Q1 2015 Trend Revenue 138,778,716 91,908,525 COGS 97,604,847 84,462,185 Gross Profit 41,173,869 7,446,341 Total Fixed Costs 12,451,421 12,513,845 Net Income 28,043,087 (3,665,369) EBITDA 33,046,128 1,295,864

Compressed margins in market $1.5MM timing on hedging

slide-25
SLIDE 25

Conestoga Energy Holdings www.ConestogaEnergy.com

1st Quarter 2015 Balance Sheet

25

Q1 2014 Q1 2015 Trend Cash 72,413,461 60,515,627 Total Current 120,127,115 100,782,120 Total Assets 278,255,795 251,847,305 Current Liabilities 39,523,279 21,188,458 LT Liabilities 60,039,357 53,780,684 Equity 178,693,158 176,878,163 Total Liabilities plus Equity 278,255,795 251,847,305

$36MM Distributions Refi & CY Debt Reduction

slide-26
SLIDE 26

Conestoga Energy Holdings www.ConestogaEnergy.com

Balance Sheet Metrics

26

  • 50,000,000

100,000,000 150,000,000 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

CEH Cash

Cash

  • 50,000,000

100,000,000 150,000,000 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Working Capital

Working Capital

  • 0.10

0.20 0.30 0.40 0.50 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Debt / Gallon

Debt / Gallon

  • 0.10

0.20 0.30 0.40 0.50 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Debt / Equity

Debt / Equity

Our balance sheet continues to remain strong. The major changes are the result of a combination

  • f distributions and debt reduction.
slide-27
SLIDE 27

Conestoga Energy Holdings www.ConestogaEnergy.com

2014 Unit Holder Metrics

27

YE 2013 YE 2014 Net Income per unit $490 $1,530 EBITDA per unit $931 $1,911 Term Debt per unit $1,381 $1,104

slide-28
SLIDE 28

Conestoga Energy Holdings www.ConestogaEnergy.com

2015 Unit Holder Metrics

28

Q1 2014 Q1 2015 Net Income per unit $500 $(65) EBITDA per unit $590 $23 Term Debt per unit $1,331 $1,075

slide-29
SLIDE 29

Conestoga Energy Holdings www.ConestogaEnergy.com

Market Trends

29

Brent Crude price trends mirror RBOB trends.

RBOB may be recovering in time for driving season.

slide-30
SLIDE 30

Conestoga Energy Holdings www.ConestogaEnergy.com

Plant Crush Margins

30

The compression of the crush margin correlates to decreased energy prices.

1 2 3 4 5 6 7

AET - Ethanol vs Grain (w/o hedging)

AET Ethanol (excluding hedging) AET Grain (excluding hedging) 1 2 3 4 5 6

BBE - Ethanol vs Grain (w/o hedging)

BBE Ethanol (excluding hedging) BBE Grain (excluding hedging)

Q1 Yields 2.86 Q1 Yields 2.86

slide-31
SLIDE 31

Conestoga Energy Holdings www.ConestogaEnergy.com

31

Questions and Answers

slide-32
SLIDE 32

Conestoga Energy Holdings www.ConestogaEnergy.com

Important Questions

32

Member Questions

Q Q

Any new information on the RFS?

Q

Will there be additional distributions this year?

Q

Will tax liabilities be higher than reported net income?

Q

How are the growth plans coming? What will the rest of 2015 look like??

Q

slide-33
SLIDE 33

Bryce Jones

bjones@growthenergy.org

Growth Energy

Bryce Jones joined Growth Energy in April 2010 as Director of Sales and Membership. Bryce is responsible for all membership related activities. He also assists in the management effort for the “American Ethanol” partnerships with NASCAR and the UFC. Jones grew up in Mitchell, South Dakota home of the “World’s Only Corn Palace”. He attended Augustana College in Sioux Falls, SD where he played football for the Vikings and earned his degree in Business Management. Bryce and his wife Kelsi reside in Brandon, SD and have four boys. When Jones is not chasing after his boys he spends his time hunting and playing golf.

slide-34
SLIDE 34

Thank You