Ethanol Plant Financial Management Governors’ Ethanol Coalition October 2006 Kansas City, Kansas

Economic Impact National –Reduces dependence on foreign oil (President’s AEI calls for 75% replacement by 2025) Rural Communities –Jobs –Infrastructure –Crop prices A 50 mgpy plant = $46 million annual expenditure locally –Uses 18.2 million bushels of corn –Creates 836 jobs across the economy

Risk Management Commodity Based –Double/Triple-sided commodity Grain input Natural gas usage Ethanol output Capital Intensive –50M gallon plant requires $75M to $100M in capital and debt

State Incentives Why give incentives –Cash incentives –Tax credits –Mandates? What are the benefits –Encourage value-added/diversify ag sector –The value of the tax incentives are shared among different groups including blenders, ethanol producers and farmers

GEC Support Who Needs It? –Producing Plants –Plants Under Construction –Proposed Plants –Important role of policy leadership –State emphasis/highlights

Questions? Donna Funk Kennedy and Coe, LLC 250 N. Rock Road, Suite 270 Wichita, Kansas Phone: