Q4 2019 Earnings Call
Called webcast I would now like turn the meeting over to Mr. Jeremy Robert.
Vice President Finance and Investor Relations Interplay. Please go ahead Mr. little Robert.
Thank you Jesse and good morning, everyone on the call with me today, Chris Bill into place President and Chief Executive Officer, Brent <unk>, Chief Financial Officer, Jeff <unk> Senior Vice President of Transportation Chip Badger <unk> Senior Vice President NGL processing inquiries Bell Vice President NGL commercial.
Today's call, Chris will provide a business a major projects uptick in Britain will conclude with remarks on our financial performance.
Just started like to remind you that certain information on this conference call may contain forward looking information that involves risks uncertainties and assumptions.
Such information, although considered reasonable binder pipeline at this time mean leader prove incorrect and actual results may differ materially from go stated or implied by our comments today undue reliance should not be placed on such information discussion of the related risk factors uncertainties and assumptions is available in Mdna, which you can find in the web site Ward senior Dot com.
Please go ahead Chris.
Thanks, Jeremy and good morning, everybody.
In 2019, he was a very capital intensive year and an active construction your friend or pipeline focused on the development and execution of the Heartland petrochemical complex.
As well as the multi phase build out of our central Alberta pipeline system combined we invested 1.3 billion to advance. These projects totaled 1.5 billion fuel capital expenditures during 2019.
[music] I'm pleased to report the work continues to progress well in phases, one and two or central Hubbard expansion.
That's operations and 10000 barrels per day of additional truck Offloading capacity of the stepper station have been completed and the final component of Phase. One includes two new 130000 barrel storage tanks that are expected to be completed mid year.
The Viking connector, which includes 75 kilometers of pipeline, reaching into pipeline full river and Central Alberta pipeline systems is expected to be completed in April 2020.
And at approximately 10000 to 15000 barrels per day of throughput volumes once fully operational.
[music] during the first half in 2020.
So maybe 35 million will be invested to complete the first two phases of the central Alberta expansion plan.
Phases, three or four represent over 400 million in future development potential with commercial negotiations to underpin phase three ongoing.
Lets face if sanctioned would involve the construction of a pipeline lateral into the three hills region about British East Juvenate, where long term producer production forecasts are up to 100000 barrels per day.
Moving to the Heartland petrochemical complex I'm happy to report that the project is advancing as planned.
During 2019 inner pipeline invested approximately $1.2 billion on the hard when complex, bringing the total project spend two 2.2 billion since inception.
We're no more than halfway through the build and are making significant progress towards our scheduled late 2021 in service date.
2019 was it very busy here in this regard having successfully completed the majority of design work procurement and installation of major equipment.
Most recent recently maintenance administration buildings were substantially completed and work continues to progress on building a rail infrastructure.
The propane dehydrogenation facility remains ahead of schedule and is expected to be mechanically complete in and around the end of 2020.
The polypropylene facility is also within schedule targets and is expected to be mechanically complete in the third quarter of 2021.
[music] moving to Europe.
We remain very active in a process to explore the sale of our both the grid storage terminal our terminal business. There are no material updates at this time.
We expect to conclude the process within the first half of this year.
A successful sales should enable interpoint to sustain its dividend reinvestment plan earlier than expected reduce debt and finance our current capital expenditure program.
Finally, I would be remiss, if I didn't highlight enter pipelines recently published 2019 sustainability report.
We have made significant progress increasing transparency and reporting on key initiatives associated with the environmental social and governance topics and are key to sure performance with all stakeholders of inter pipeline.
We are particularly proud of our strong emphasis on employee mental health and commitment to sustainable practices and operational excellence.
For example, we recently announced a 10 year $10 million partnership with a northern Alberta Institute of technology called Plastics research and action, which will identify projects that advance the reuse and recycling plastics in Canada.
He will continue to expand our E.S.G. efforts to ensure a business operates in a long term sustainable manner.
Now I'll turn things over to Brent provides additional details on our financial results.
Well, thank you, Chris and good morning, everyone Inter pipeline generated full of 873 million during 29 team, which is down from an annual record of 1.1 billion in 2018.
Net income for the year was 539 million also representing a decrease from the record 593 million earned in 2018.
During the fourth quarter of 2019 enterprise wide, Jeff that whole was 217 million strong results in the oil sands transportation conventional pipelines in bulk liquid storage segment.
Results within the NGL processing segment were impacted by weak commodity pricing maintenance and turnaround activity.
Our all fast transportation franchise continues to be the foundation of our business generating 154 million UNEV Apple consistent with the comparable period in 2018.
To put volumes reached a new quarterly record on each of our three pipeline systems and totaled over 1.3 million barrels per day.
In general financial results and our NGL processing segment were impacted by lower Frac spreads with declines in NGL product pricing in an increase in equal natural gas.
Moving onto our strata plants Empress too and five performed in line with previous quarters, but Cochrane volumes were impacted by a planned parcel our age in October at Redwater in Latin production volumes were impacted by an extension of turnaround activities of pioneer one and pioneer to into the fourth quarter as well as maintenance.
Events at third party Upgraders.
Our conventional pipeline business generated quarterly F. old 45 million versus 25, and the comparable quarter in 2018.
Conventional results were positively impacted by higher volumes transported lower operating expenses and an improvement in midstream marketing contribution.
Midstream marketing activities generated 8 million, an adjusted EBITDA during Q4 2019 compared to a loss in Q4 2018, our midstream marketing operations continue to benefit from attractive terms butane pricing as well as favorable crude oil differentials.
For the full year 2019, midstream marketing generated 33 million of adjusted EBITDA after corporate cost allocations.
During 2020, we expect to generate between 30 million and 50 million and adjusted EBITDA, which is subject to pricing differentials volumes and corporate cost allocations.
Our bulk liquid storage business generated strong results during the quarter with ethanol was 31 million double what compared period to the comparable period in 2018, the 16 million increase reflects the additional cash flow from the Newstar acquisition as well as higher storage demand, particularly in Denmark as are primarily as a result to buy more 20.
Good morning.
Consolidated utilization rates have demonstrated a marked improvement since the beginning of the year, an average 93% in the fourth quarter of 2019 up from 68% in Q4 2018.
Corporate league in a in financing costs increased during the quarter end year ended December 31st 2019, when compared to the same periods in 2018. The increase in DNA was driven by a multitude of factors, including higher employee in HPC readiness expenses higher professional fees as well as costs associated with the addition of seven new terminals in Europe.
Financing costs were incurred as a result of interest associated with the issuance of the subordinated hybrid nodes.
Finally, we remain committed to operating in a financially prudent and flexible manner. In November we successfully issued 700 million of hybrid debt securities, bringing our total to 1.4 or 5 billion issued during 2019 with proceeds directed towards repaying amounts drawn under existing revolving credit facility.
As at December 31st 2019 are 1.5 billion revolving credit facility was essentially undrawn and we exited the year with consolidated net debt to total capitalization ratio of 41.3%, which is well below our bank covenant level of 65%.
So this concludes the formal portion of the conference call.
I'd now like to turn the meeting back to Jesse to open the floor for questions. Thank you.
Thank you as its Tom I'll, let me remind everyone ignore tacit question. Please press Star then one on your telephone keypad, we'll pause from someone with a couple of acuity roster.
Your first question comes from Jeremy Tonet with Jpmorgan. Your line is open.
Good morning.
I want to start off with the store, Jeff Oh process and.
Recognize that you might not be in a position to say much at this point, but just wondering if there was any color you could share now as far as the level then trust that you have been receiving.
In that process any color there and if the sale were to not come to fruition for any reason how would that impact I guess your your funding plans as far as debt versus equity or.
How do you think about funding H.P.A.H.B.C. in that scenario. Thank you.
Oh, Thanks for the question German it's Chris speaking I'll address the first part of the question Yeah, I'd say on the level of interest.
A very fact that the the process remains very active I think is a great signal at the level of interest we've had enough in the sales process.
Hi, Good just reconfirm my statement that we do expect that will be in a position to conclude this sale process, one way or the other in the coming months. So that will come to an end here in the in the short term and on the funding side I'll turn it over to Brent.
Yes, hi, Jeremy its brand.
So let me set things in context, a bit here I think it's important to remember that the objective.
Of the full or let's say if it does turn out to be a partial sale.
Bulk liquid storage you know really is to fund our equity needs for the HPC project.
Now once the sale just concluded or not you know we will update the market on our plans and the implication on on the P. Drip. So you know it's too early for me to be saying in speculating. What this will all looked like and we're certainly focused on.
On the sale of bulk liquid storage and certainly as Chris mentioned, we hope to bring that to conclusion by the the end of Q2, and then we will update the market to our funding plans and and the implication on the fee grip.
That's helpful. Thanks, and maybe just trying to HPC per second here and we've seen commodity prices are quite a bit here in polypropylene prices as well come down just wondering.
Is this having any impact on your conversations with potential customers and trying to hit the kind of <unk>.
<unk> the targeted contracted levels that you're seeking here.
You know the the nice thing about HPC is that.
Theres two fundamental principles on why people contract with it it's it's because we're taking a long term view.
On not what is the ultimate price for polypropylene, it's the spread between polypropylene, Alberta propane. So it's the spread that matters not the discrete price for one of those products.
And short term fluctuations in the spread.
My belief are relatively irrelevant and if if you take a look in our investor deck actually updated one of our one of our key slides on that topic, which shows.
From both the polypropylene producers side, and Alberta propane producers side.
The indicative uplift that somebody would have gotten.
In any given year. If this plant was an operation and.
Even with softer polypropylene prices in 2019, our math shows that upper to propane producer for example, what I've got a 75% higher netback for their propane.
Through our plan.
That's a great number.
That's helpful. Thanks, and maybe just one last one if I could as far as the NGL processing facilities I'm. Just wondering how you see them running this year are there any kind of a expected turnarounds that we should be factoring into our model at this point.
Hey, Jeremy its Jim Badger and gesture question, we briefly no. We don't have anything plan for the first half of 2020.
Great I'll stop there thanks for taking my questions.
Your next question comes from Linda Ezergailis with TD Securities. Your line is open.
Thank you I'm wondering if you could give us a sense of what sort of impact some of the changes in rail.
Transport in Canada are having on your business as it relates to decrease the maybe.
Disruptions in service.
We see it as a headwind in your Q1 results or can you be a bit more specific as to the nature and degree of the impact some of these real changes might have on your business.
Hi, Linda it's Jim matter here again and.
To answer your question to date, we've actually seen no impact or operations at Redwater. However, I think as everybody knows it's pretty dynamic situation between the blockades the speakers restrictions the derailments and everything that's going on we're actually getting multiple updates Dave from from the railroads and how things are changing so.
Don't really know.
That may impact things into the future, but today, we're not seeing any any impact.
That said, we know we do have an excellent transportation logistics team that are over the situation then very successful and keeping our products moving through the most recent situation as well as a strike that occurred late last year.
We.
Experienced minimal impact our operations at that time as well.
All right that's a that's helpful context.
And.
In terms of volumes that you're seeing beyond just planned outages I'm not happening the first half of this year I'm, assuming Cochrane volumes are strong and utilization has generally been strong in your across your NGL business, so far year to date.
Yes, thats rates.
Cochrane is running well as is our I redwater fractionator in that part of your plans.
Yes, I think Jim's understating, a cochran's actually running great.
However, we're processing.
Very high levels of liquids right now, which is certainly helps enough depressed commodity environment.
Okay. That's helpful can you maybe give us a bit more sense of the actual EBITDA impact on the pioneer one and two in Cochrane outages in Q4. So we can just kind of help.
Refine our forecast going forward.
Linda's Jeremy need on just call you offline on that one and we'll get back to your with sums we've gotten some numbers of well have to track some of that down not sure we have that rate here and each to discuss.
Thank you I'd appreciate that I'll jump back into queue.
Your next question comes from Rob Hope of Scotiabank. Your line is open.
Marni everyone.
Further questions on H.B.C.. So at the end of the area was 65% theorist I'm wondering if you have a break down between the PDH in the pp there and then secondly, as you move through 2020, how do you think that number increases and are there any large packages that we could see bid out in the near term.
Oh, that's good question, Rob I don't have the breakdown in front of me on the split between PDH NPP when it ties to that 65%, except a general comment that the majority of that would certainly be the PDH plant.
Given its advance state of completion.
Regarding.
Milestones for 2020, there are definitely ARPU.
You know, we're speaking to capital clearly that were.
Believed that we're going to be mechanically complete in and around the end of this year. We have a we're pretty comfortable we have a good line of sight on the final capital for that plan.
The polypropylene plant.
Where it was always been part of our plan in the first quarter first quarter two.
Four or five months I guess of 2020 to do a full bottom up refresh of the polypropylene capital estimate and that's because we're now heading into heavy construction of that facility. We're now starting to get actual construction packages, let out to the market versus just our internal estimates.
So we're doing that bottom up refresh right now and we expect that to be complete and we'll be able to speak to with in time for Q1 results in may.
And at the same time, we've also had a highly successful hiring season over the past I guess, it's really been a matter of many months here now and we've got the majority of our operation staff on board, including the entire operations leadership team.
And there are no doing.
Complete scrub of our commissioning and readiness plans for the facility and that's a huge effort for complex facility like that and start to be understated in terms of both capital investment as well as just level of activity for commissioning is flat.
We also expect that refresh to be done in time for me Q1 results.
So I'd look for that in May when we come back to the market on what we're seeing for final costs.
And then other follow <unk> is the work you've seen so far in the refresh according to plan.
Oh, you know the.
I really want people to do the work before I kind of opine on what my gut is now let me, but maybe I'll just do it anyway the.
You know it wouldn't surprise me if there weren't modest increases, particularly when it comes to the commissioning a readiness plans now that we have the team onboard that is actually going to be leading that effort.
So so there could be a modest increase there do I expect the number to materially impact. The overall economics for the project no. We don't see anything that would lead us to that conclusion.
Alright, Thanks for that and then just in terms of the funding and I realize that a the storage sales a question Mark and.
But if we look to just higher level, what equity needs do you think are required to finalize or finish up HPC.
Last Brent again.
Well I'll go back to buy my previous comments raw and that you know I'm not just can you give you a number but again I'll reiterate that Tom you know certainly one of the main objectives.
With the bulk liquid storage sale is to really take care of those equity needs for HPC. So that was really the plan here and also that depends on if we're going to have a successful sale or not and if we if we don't.
We'll update the market as to what our plans are going to be at that time and even the same thing you know if we do have a full or partial sale. You know, we'll see what those proceeds are and but certainly our objective is to be able to turn off the P. Drip through the sale of bulk liquid storage.
Alright, thank you.
Your next question comes from Robert Catellier with CNBC capital markets. Your line is open.
I just have a couple of quick follow ups. Your first of all just wanted to dig into the rail situation.
I think you addressed the current operational impacts will be minimal but.
I Trust, it's the same situation in terms of getting equipment and for the M. P. H polypropylene construction.
Impacts there.
Yeah, you know where it up a good situation there where we do have the vast majority of our major equipment is already on site.
There is obviously going to be bulk materials and things like that there will be required to be delivered some by rail a lot by truck, but right now we're not predicting any any hiccups related to rail.
Okay, and then in addressing the.
PDH costs. It seems like most your retention or your comments were focused on the.
Commissioning readiness plan, but are you seeing anything in terms of just generalized capex inflation in the Alberta.
Part of me that would impact the PDH.
No no. We're we're quite pleased with how the construction activities are per have had progressing continued depressed in that regard.
Okay. Thank you just a final.
My question here.
Effectively paid minimal cash taxes, the last two years.
Kind of looks to be.
Hello.
In 2020 as well.
I'll comment on the cash tax outlook for 2020.
Yes, certainly Rob So you know really what we're expecting is cash taxes are going to be really quite minimal in 2020.
And I can actually give you an estimate of a number and it's pretty small so on the Canadian side, we think it's going to be around just a million dollars and then over in Europe and again, if that would be if we've retained the whole operation for the year I'd be around $4 million. So it's relatively minimal.
Okay fantastic. Thanks.
Your next question comes from better than with BMO. Your line is open.
Okay. Thanks.
I wanted to go back to us some of the funding questions.
We're asked and Oh, I imagine, but banquet sales largely meets the equity needs and I guess when you turn off to the drip you lose a bit of EBITDA from storage I got your there's a leverage downward impact from that.
So my question really is there is there room for you guys have your balance sheet too.
And more important that.
Right now as you get into is really hot phases.
Huge free cash generation and a few years, but you kind of how to manage it.
Over time.
Yes brand here again, I'll I'll take that one when you say is there room for more debt.
Yes, but you know there's always a practical limitation on that and then that would speak to you know the credit ratings and our commitment to that and so what I can say to that you know we are committed to investment grade credit ratings.
Continuing to work very very closely with the credit rating agencies and understanding how they view us. So it really goes without saying that we do expect that leverage is going to remain elevated throughout the HPC construction period.
And you know obviously when HPC comes on you know we've got a line of sight.
That those metrics are going to be improving by quite a bit when it comes in so we're in a constant dialogue with the rating agencies understanding their perspective on it and you know I can certainly tell you that to be little bit more specifics. We're committed to me a triple B credit rating and you know, we're keeping a close eye on that.
Okay.
And.
We're really.
Each year passes by you're getting close to that.
For 50 500 million have you.
I'm sure you've thought about it I do.
Well you can talk about just cap allocation.
Priorities and.
2022.
Okay.
Uh huh.
Probably not today I think first off we'd like to see some recognition of the 450 to 500 million EBITDA in our share price that would be first and foremost and then we'll make determinations on how to use the cash flow I think.
Overall, I wouldn't expect how we run our business to materially changed versus how we've done in the past and for example.
We were very fond of of steady ratable dividend increases, we think HPC could support.
That over the long term.
We're also very.
Very supportive of maintaining good strong credit metrics.
And what's left after that would be.
Funded back into the business in the form of capital for organic growth projects that materialize over the coming years.
Okay.
<unk>.
Yes.
Oil sands.
Yes, Yeah, you had a couple billion dollars of projects that can move forward I mean, we cater to years from now yet.
PDH and generate a lot of cash flow and you got.
LTR Trans Mountain Keystone also.
And the mix I mean are well positioned to expand it sounds pipes as well.
Absolutely.
We do believe that all.
We need to go back to a growth phase in our oil sands transportation business is export pipeline capacity.
And we think that will definitely spur somewhat of a Renaissance in development from particularly the established producers in the oil Sands Arena.
We think we have a extremely strong strategic position to capture.
Ill call it our our fair share of growth opportunities over the coming years.
Alright, alright.
Alright, thanks very much.
Your next question comes from Robert Kwan with RBC capital markets. Your line is open Greg good morning.
If I can start with heartland.
Yet a statement in the Mdna that you continue to progress your phase kind of contracting strategy and if that's a new statement. So I'm just wondering.
Where their contracts that were executed in the quarter.
We do.
I don't want to get into specifics of when contracts were signed but yes, we continue to sign.
New contracts, we're definitely making progress in that area.
I'm not I'm not sure Thats something a new statement leases so made up in a new statement in terms of our public.
Discussions on conference calls and in our IR deck, we do definitely continued to make progress in that area I was not intended to be some sort of new Steven and the mdna.
Okay. So there was there was no kind of material new.
Contractor contracts that kind of plaza.
Major step change in the fourth quarter that you wanted to message.
No we weren't trying to suddenly message anything in particular them, we're making progress.
I think the words at face value.
Okay.
Just on on the cost and ahead of.
What sounds like an update and in the first quarter Im just wondering when you think about messaging a change in costs or as you just thinking about keeping the the within budget statement.
How much either under or over budget, maybe percentage wise would you need to be before you felt you need to message out where you are the public.
<unk>.
Yeah, I think it's just the it's a question about materiality to the overall project we.
I don't want to make an accord a specific range, but when we when we up I did this project.
Over two years ago, we had a few on the capital there were there wasn't tolerance around that original estimate that we thought was reasonable given where add on on the particularly in engineering side of the project.
And we were comfortable epidemico on that basis, we certainly didn't didn't believe better wells with $10 million over 3.5 billion that that was a boston the in the number.
So when you get the track record on large mega projects.
Around North America, we're quite comfortable that our project is tracking nicely.
Around our original budgetary targets and.
But we do think it's important no matter what the number is.
Come May we was always our plan to put into a number because this will be our final estimate for the overall project before it's complete.
And.
Well for that number shortly.
And when you hate to your final estimate is there going to be a change in.
Locking down the remaining costs to something more of a fixed price PPC and minimizing unit right.
Oh, no where our construction plan isn't going to change it's merely our it will be our final our highest class of estimate that you can actually accomplish when the in a project at this stage when you're at this stage of construction.
Well just discuss any variances to that final estimate for the project is done.
In terms of walking down costs for example.
A bit of a misnomer lumpsum contracts are great contracts, if you've completed a sufficient amount of and engineering actually walk down.
The call it the scope of construction firm.
But in many ways lump sum contracts, maybe give you a for price on what you're going to pay for work package and any changes to that our extras. So there is no easy way to de risk major projects like this.
If you haven't done.
All of your detailed design ahead of time.
That's a risk than anyone would always sticks.
Got it and maybe if I can just.
Finish with a capital allocation question.
As you think about what's in front me right now is the focus pretty much entirely.
Putting your head down in executing heartland as well as maybe smaller organic initiatives within your existing assets or is side is M&A or acquisitions, a potential on the relatively near term.
Yes.
M&A is not a big focus Robert we as you notice a long time, we've always just been opportunistic acquirers in any event so to the extent a package comes to the market, we would always look at it.
But I wouldn't say via particularly high priority unless it was a no brainer for inter pipeline.
Okay, great. Thank you.
Your next question comes from Dennis followed with Canaccord Genuity. Your line is open.
Hi, Good morning, guys and thanks for taking my question.
And there there's somewhat Paula.
Just maybe.
In the context.
Our logistics team and how you guys are dealing with.
And the rail interruptions and so forth.
You mentioned, mostly on the volume metric side.
Or should we bear in mind, some kind of incremental cost or longer path required to move some of your volumes to the directed market and how should we be thinking about your.
Your utilization of stores, especially as we're coming out of the winter consumption for propane.
And your ability to utilize that.
But for some of the near term.
<unk>.
Thanks.
Hey, guys Yester Metro here again.
I don't think were seen any nor destinations arent really changing and we're not seeing any material changes to our rail rates.
And what we're seeing at this point in time.
One of the means that I didn't mention is that and as you pointed out was yeah, we do have storage.
Assay for certain products, including butane and propane. So if we do get into issues. We can always go go into sword with those products are some or all set of products.
We do have moved one rail so it's a little more challenging from that perspective, but they got to date, we haven't seen seen a issues.
The team.
Making sure that things are moving.
Okay Perfect and then just the second question here is just around the entered into terminal.
Obviously with the context.
Later that you're going to be probably a bit more updates.
And understanding that.
I don't want they were.
Getting long enough.
But what are some of the we'll call it alternative forms of value.
And then you guys are currently.
In the context of the Street alternative.
Hello.
<unk>.
Yeah, you look at I guess speaking to the public the length of the process because I've mentioned previously. This is this is to our knowledge the largest storage sale that's happened in Europe in.
Any color any sort of medium term memory.
It's also multi jurisdictional six countries 23 terminals almost 40 million barrels of stores, it's a huge package and it does take time. So I think it's frankly, taking exactly the amount of time it needs for us to work towards extracting the maximum value.
And we are committed to wrapping this thing up one way or the other and the first half of this year when it comes to other.
I'll call it potential levers that we can pull.
Certainly our other levers I definitely wouldn't be comfortable talking about it on the call today, let's let's get through this process will speak to what once Weve crystallize.
On a decision and then we'll update the market on our financing plans going forward.
Alright. Thanks.
Again, if you like to ask the question. Please press Star. One next question comes from Patrick Kennedy with National Fine National Bank Financial Your line is open.
Yeah, Hey, guys.
Maybe for brand to your just a if you do end up keeping the.
Bulk liquid storage business is there any more balance sheet capacity for additional hybrids going forward or you are you pretty much topped out at the 1.4 1.5 billion dollar level then also maybe.
Just an update on what the plan would be to re Fi. Both the 500 billion dollar term loan this august as well as the.
$500 million BMT ends in July.
Sure. So the first part on the hybrids and yet we basically used up our capacity at the current time.
So weve as you pointed out Weve made issued 1.4 or five you know we kind of calculated our cap to current time in about 1.5 billion.
When it comes to the refinancings.
No I can't give you any specifics, but I can tell you what I can tell you say whatever what are the dynamics here and obviously the very first one is if we do have a sale of bulk liquid storage that would determine.
Obviously have a big impact on on what our plans would be in terms of refinancing those MTN.
Other part that you do have to remember here too is we do have a substantial amount of.
Capacity or undrawn capacity on our revolver.
As we noted at the end of this year, it's basically on drawn so that would be the other option too and this is you know at all I think sort of goes to point out we've got some some flexibility around the refinancing of these MTN.
Okay, Great and then maybe for Chris you guys recently published a another solid sustainability report.
How do you think about framing your history story going forward or.
Taking your disclosure to that next level other through establishing GHG reduction targets on your base business or no perhaps.
To the market, how you're going to allocate more free cash flow towards greener energy.
Maybe while you're out it you can just touch on why polypropylene should be viewed as.
Yes, she accretive despite the the stigma around plastics and general right now.
Yes, no and thanks for asking that question I'm happy to address it nowhere.
We're trying to take a very.
I guess pragmatic approach to our sustainability efforts and reporting we we want to focus most on what can we actually due to lower our emissions profile too.
Increase our positive social footprint and just maintain our already but I believe is great governance profile.
So we are discussed discussing.
Setting how we can best set up internal targets one of our businesses.
And I'm part of the sustainable steered sustainability staring team that it has those.
Taking on that path.
Yes. Good question about Heartland, I think there's a lot to be proud off in terms of how we're executing harp and it's not only are we.
Have we pick the technology.
That is what we believe has one of the lowest emissions footprints for this type of facility.
We're also through the use of.
Of cogeneration facility to generate power for the facility in steam or going to be.
Burning what's waste hydrogen production from the PDH processes fuel gas as well, which as you would know would have zero emissions to it.
And based off an independent analysis of our plan, we believe that our plant will have 65% lower GHG emissions than the global average for for other facilities of this nature, which we think is really powerful statement. So once again I think it shows that if you want a valuable product like polypropylene that goes into.
Pretty much anything you want to make lighter whether its cars airplanes trains whatever you need polypropylene.
You needed in pretty much all high technology solutions to address climate change, it's a very necessary plastic and if you want to biased by from Canada.
All right that's going to leave there thanks guys.
That's all the time that we have her questions I turn the call back to presenter for any closing remarks.
Great. Thank you Jesse I. Thank you everyone on the call for participating today, and we look forward to discussing our first quarter 2020 results with you on may the eight.
Thank you.
This concludes today's conference call you may now disconnect.
[music].