Fuel Forward: The Digest’s 2019 Enhanced Multi-Slide Guide to Renewable Energy Group

Chad Stone, REG CFO: Thank you, CJ, and good afternoon, everyone. Before I get into my comments on the quarter, I want to align everyone on the comparable results for the first quarter of 2018. Our first quarter 2018 results included the full-year retroactive BTC reinstatement for volumes associated with 2017 business which is not related to first quarter activities. Accordingly, we will be comparing our first quarter 2019 results to the first quarter 2018 adjusted results, as you can see on Slide 10.

Cost of goods sold for the first quarter of 2019 included $23 million of risk management loss compared to a $2 million risk management loss in 2018. Recall our usual reminder that some of the risk management gains and losses recognized in the quarter are offset by the final realized pricing when the gallons are delivered in a subsequent period. And this is particularly relevant in the first quarter, when we are opportunistically building inventory in advance of peak demand quarters where we expect improved economics.