Q2 2022 DCP Midstream LP Earnings Call
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Good day, ladies and gentlemen, thank you for standing by and welcome to the DCP Midstream second quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. Just a question during the <unk>.
You will need to press star one one.
I would now like to turn the conference over to you speak of host for today, Mike Feldman director of Investor Relations.
Thank you Vivian and welcome everyone to the DCP Midstream second quarter 2022 earnings call.
Today's call is being webcast and I encourage those listening on the phone to view the supporting slides, which are available on our website at DCP midstream Dot com.
Before we begin I'd like to point out that our discussion today includes forward looking statements actual results may differ due to certain risk factors that affect our business. Please review the second part in the deck that describes our use of forward looking statements and for a complete listing of risk factors. Please refer to the partnership's latest SEC filings.
We will also use various non-GAAP financial measures, which are reconciled to the most comparable GAAP financial measure and schedules in the appendix section of the slide.
Wouter van Kempen, CEO , and Sean O'brien, CFO will be our speakers today and after their remarks, we will take your questions with that I'll turn the call over to better.
Thank you Mike. We appreciate you all joining us on today's call. We'll look at our Q2 financial performance and highlight the benefits and value being created through the hard work and execution of the DCP team.
A little over two years ago at the start of the COVID-19, pandemic DCP faced a rapidly changing external environment with unprecedented demand destruction extreme commodity pricing volatility.
Our response, we focused our efforts in strengthening our balance sheet and prioritizing debt reduction we set out to build a business that delivers reliable earnings during our long cycle, and then <unk> outperforms through to high cycles.
I'm proud to announce that we delivered another record quarter for adjusted EBITDA.
CF and excess free cash flow.
For the quarter, we realized adjusted EBITDA of $477 million and DCF of $369 million and our excess free cash flow, which we define as free cash flow after paying our distributions and funding our growth capital program of $254 million.
This quarter's result, coupled with our strong Q1 performance have generated a record start to the year as our year to date adjusted EBITDA is over $900 million.
Our DCF is over 700 million at our excess free cash flow is already at the midpoint of our full year guidance range only six months into the year.
This performance has enabled us to reduce our absolute debt by over $300 million Delevering at a rapid pace going from four two times to two nine times over the last 12 months and our efforts have resulted in upgrades from Fitch to investment grade and from S&P to positive outlook.
Our investment grade balance sheet that the earnings power of the DCP portfolio have created financial flexibility and allowed us to expand our Permian G&P business with the James Lake acquisition announced a 10% distribution increase to return incremental capital to our unitholders.
The DCP team has accomplished a lot over the last six months as our performance has surpassed our original expectations and we have great momentum going into the second half of the year.
The strong start and our outlook for the rest of 2022 will result in a significantly exceeding the high end of our full year guidance for adjusted EBITDA and DCF.
Before we dive into detailed financial results I will review, our second half outlook I'd like to take some time to discuss our third annual sustainability report and the progress that we've made on our ESG efforts.
On Monday, we released our annual sustainability report titled fundamentally sustainable and on slide four Youll see some of the highlights from that report.
As a reminder, at this time last year, we announced a number of environmental and social goals aimed at proactively meeting the needs of our employees our customers our investors and our communities.
We're proud to announce significant progress towards these goals with an 8% reduction in scope one scope two emissions in 2021, bringing us to a total of 23% reduction in 2018.
<unk> on the environmental front, we've accomplished an 80% reduction in volume of hydrocarbon spills and we continued to be recognized as a leader among our peers with our sixth Environmental Excellence Award from a GPA Midstream Association.
The report also details of progress on inclusion and diversity outcomes, including improvements in our employee satisfaction currently belonging scores, which increased in the last year by four points and six points respectively.
Our goal here is to maintain scores above the industry benchmark and not only have we continued to meet this golf, but we've seen significant improvement reporting and happily satisfaction score of 80%, 7% above benchmark limply belonging score of 81%, 8% above the industry benchmark.
These increases are especially impressive as they were achieved achieved while facing headwinds such as COVID-19 and the great resignation.
And while we're proud of the work being done internally at DCP. We're also committed to sustainability transparency and standardization. This year's report includes initial alignment with the recommendations of the task force on climate related financial disclosures or <unk>. It provides enhanced description.
And our management practices around sustainability and climate related risks and opportunities.
And this alignment drives transparency for our investors and supports long term accountability.
I'm proud that our team continues to make progress on the three strategic horizons of our comprehensive energy transition plan.
We actively cleaning the core we also have resources dedicated to advancing adjacent to the core initiatives like carbon capture and electrification and we're looking beyond the core to ensure we're on track in meeting our long term ESG goals.
I encourage you to access the full report on our website and I look forward to a continued conversation.
With that I'll turn it over to Sean to give some further insight into our financial results. Thanks powder on slide five I'll walk you through the key drivers that led to our strong second quarter performance with DCF up nearly 10% versus last year, and 64% versus Q2, 'twenty, one and adjusted EBITDA up 9% versus last quarter end.
43% versus Q2, 'twenty, one our second quarter earnings were driven by the strength of our G&P business, which significantly outperformed Q1's margin by $93 million.
This increase was driven by excellent operating performance as our team utilized our integrated collaboration center to run assets extremely well and maximize the value of every molecule entering the system are balanced fee and hedge position allowed us to leverage the full earnings potential of our G&P assets and the strong commodity environment.
For the quarter. We also saw increased volumes in all regions as we recovered from the weather in Q1 and saw an uptick in activity throughout the portfolio and.
In the DJ Basin, we realized modest growth of 2%, which provided incremental supply to our downstream assets in the mid continent, we've been able to successfully offset base volume declines in realized 5% volume growth versus the first quarter.
This region is benefiting from smaller independent producers ramping up activity and reworking existing legacy wells.
In the South we saw a 26% uptick as we captured increasingly in gas from the Haynesville and Eagle Ford and saw growth in the Permian that was driven by accelerated activity from key Delaware basin customers are.
Our increased G&P volumes, along with increased third party ethane recovery and growth in the Permian drove higher volumes on southern Hills, and sand Hills, which partially offset the decline in earnings from our gas storage business.
During the quarter as previously guided we did realize an increase in cost and sustaining capital compared to our first quarter results. However, both were in line with expectations. In addition, we were able to continue our absolute debt reduction eliminating over $200 million during the quarter and over $300 million year to date. This left us exiting the <unk>.
With leverage at two nine times nearly a half turn improvement from the three three times, we reported exiting Q1.
As a result, our balance sheet was further reinforced by an investment grade rating from Fitch.
And S&P revised our outlook to positive.
On slide six looking ahead to the second half we're forecasting continued volume growth in the Permian and DJ keeping us on track to meet our growth targets for the year.
We've seen a recent uptick in permitting approvals in the DJ which will benefit.
Benefit us in the second half of the year and provide a good line of sight to 2023 volumes.
And we are confident we will see improved asset performance and volume growth in our West Texas business.
As we expand our Midland Basin gathering system and add the recently closed James Lake acquisition to the portfolio.
On the pipelines are southern hills outlook remains strong driven by our DJ and mid Con mid Con G&P business and on sand Hills. We are optimistic that we will continue to see some level of ethane recovery from third party customers and are positioned to participate in overall growth in the Permian.
During the second half cost and capital spend will increase as we ramp up planned maintenance and investments in our assets. However, our first half results have us on track to meet our full year commitments as we work to manage through the inflationary environment and supply chain constraints that we will expect to persist through the second half of this year and into 2000.
'twenty three.
With our record first half and our positive outlook for the second half we are on track to deliver earnings that will significantly exceed the high end of our adjusted EBITDA and DCF guidance ranges given the extreme volatility we've seen across all three commodities the pricing outlook for the second half of the year continues to ship daily year to date.
<unk> already baked.
Bank pricing uplift of $150 million and using the midpoint of our guidance and the current forward curve. We would expect to have full year upside to adjusted EBITDA of about $300 million.
Help you with our outlook during this period of volatility for every 10% move up or down in the commodity there would be a $50 million impact over the second half of the year.
Our business is performing well and we're controlling what we can control, which allows us to fully maximize the earnings power of the DCP portfolio. During this high cycle now I'll pass it back to about or for an update on our capital allocation priorities. Thanks, Sean.
We exited Q2 our performance. This resulted in the generation of over $5 billion of excess free cash flow and I am proud to say DCP is once again, an investment grade company, we made the commitment to strengthen our balance sheet and our hard work and focus has paid off.
With leverage at two nine times, which is well below our 2020 to annual guidance. We've executed on several items within our capital allocation plan first we have reduced absolute debt by over $300 million.
Second we announced the distribution increase of 10% to immediately return incremental cash to investors and lastly, we have committed additional capital to expand our Permian basin G&P business by the James Lake acquisition.
Going forward, our expectation is to continue to pay down debt and used the strong commodity environment to fortify the balance sheet, but we're also in a position to shift priorities and commit incremental capital to strategically grow our business optimize our capital structure through targeted retirements of repurchases when.
When we talk about growing and investing in our business. The James Lake acquisition is a great example of the type of opportunity that fits within DCP strategy, which brings me to slide eight.
Previously I've outlined our vision to create a wellhead to water gas and NGL network and a key component to achieving that is aggregating incremental wellheads in NGL supply. So we were excited to announce our acquisition of the James like system.
This deal just closed on August 1st for $160 million and an attractive five five times 2023 EBITDA multiple.
Purchase includes 120 million a day processing facility, along with 230 miles of gathering pipeline and approximately 250000 dedicated acres from a diverse customer base that includes investment grade public companies and pure play Permian operators.
The geography of these assets is complementary to our existing footprint with connectivity to our sand Hills, NGL pipeline and our new plant sitting only three miles from our goldsmith facility.
This acquisition also enhances our gathering footprint by adding newer large diameter pipeline that provides strategic reach into the southern Delaware basin and greater connectivity in the Midland Basin.
In the near term, we secure a incremental NGL supply and added capacity in the Permian that will improve reliability, while benefiting our customers and positioning DCP for growth.
And in the long term he will elaborate on our DCP two point in our operating model to drive additional efficiencies and provides capital deployment optionality.
All of this sets up well for us to realize operational and commercial synergies, which we expect to improve earnings and ultimately drive down at five five times multiple.
Overall, we're excited to have expanded our portfolio through strategic growth acquisition more to come but for now we'd like to welcome to James late teens, DCP and look forward to successful operations together.
Moving to slide nine let me review some key takeaways.
<unk> been an impressive first half and I'm very proud what the team has accomplished.
Creating a strong balance sheet has been a priority for DCP and we now have one.
We've accomplished this by paying down over $300 million in absolute debt. So far this year because of exiting Q2 at two nine times leverage.
With this improved financial strength, we've been able to further execute on our capital allocation plan announcing a 10% distribution raise and investing in growing our Permian footprint through the acquisition of the James like system.
In the second half, we'll manage through continued inflationary pressures supply chain constraints and commodity volatility, but the outlook for our company remains very very strong with favorable supply forecast from our customers and commodity pricing benefiting us through the second half of the year.
We're confident in our ability to close the year strong and deliver record results.
<unk> exceed the high end of our adjusted EBITDA and DCF guidance ranges.
I look forward to taking your questions Olivia.
Thank you and as a reminder, ladies and gentlemen, I'd like to ask a question you will need to press star one one.
<unk> will be compile the Q&A roster.
And our first question coming from the line of Michael Blum with Wells Fargo. Your line is open.
Hi, Good morning, everyone. How are you.
Morning.
Wanted to.
Maybe just talk a little bit about M&A.
So you've done this James like acquisition, but just wanted to get your thoughts on do you have an appetite for continued either bolt ons or.
Look at the company now.
<unk> never been in a.
Better positioned better shape. The industry is ripe for consolidation is there is there any possibility of doing something more transformative right now.
Yeah, Michael it's Walter.
Thanks for that comment about the company being in probably a great position never better I do agree that the outlook is really good like the balance sheet looks good.
The company.
All the people within DCP did a tremendous job over the last couple of years to really set up the company well for an environment like this I think in general. Unlike M&A activity is clearly ramping up pretty significantly. If you just looked the last 18 months alone we've seen more deal activity in the.
For years prior to that combined I think multiples are getting in a little bit better about our place in like Youre seeing six to eight.
For us for James like five five times to eight times multiple so I think that will be definitely makes things a little bit more more interesting.
I think the privates are the BS are exiting.
Some motivated sellers, you've got people with better balance sheets like us so.
I think in general what we would say is yes. If there is an opportunity for us to do something that makes a lot of sense either via a smaller transaction or something that maybe a little bit larger we're definitely we're definitely looking at it we think there is an opportunity to.
Do things in this environment at the same time, we're going to be Super Super disciplined.
We have I think you know from us that we're fairly disciplined when it comes to new builds when it comes to M&A.
And from that point of view, we're going to stay very disciplined, but we'll take a look at anything that comes by and if it if it makes sense, we may or may not take a run at it.
Great Thanks for that.
Second question I had was maybe just a technical question, but just curious why youre not just raising the guidance outright is there something holding you back or you're less confident in the outlook as well I'm.
I'm just trying to understand that yeah, we're very confident about the outlook like I think we've used the word significantly multiple fabs correct. Unlike we give you give you some pretty detailed lane side I think it just <unk>.
Michael its a matter of it's a matter of style. Unlike people that there are some companies they like to raise headquarters or other stuff Mike weakest. We just don't do that we feel we lay out kind of one scenario at the beginning of the year.
We give you all of the ins and outs.
All the commodity scenarios volume scenarios at our staff and then we just say Hey. This is this is what we're seeing is how we are in this case, where are we where we set four four.
For the year, so far how much we for instance think about pricing what the upside is but our upsides are we give you. Some insights on hey, we believe cost is going to move this way inflation is going to move in different way.
And you know it.
I think it's definitely don't read anything into it I think what you should read into our comments today is that we're very very comfortable around how things are going on our balance sheet is going our debt reduction is going.
Capital allocation, you've seen us do a number of levers, but at the same time prices out of our control we just arent.
Type of people, who say every quarter, we're going to move move things up or down. So that's I think how you should think about it definitely don't read anything into it yes, Michael and maybe this is Sean to add a few things around the non pricing.
A portion of the business were performing very well I think even halfway through the year, obviously price has been very constructive, but we've seen really good results out of the G&P side of the business. We've seen great results out of some of our O&M business.
As I said in some of my remarks, we anticipate cost even though the more backend loaded because of a lot of the turnarounds and the maintenance work that's happening in the second half we expect to be right in line with what.
With what we would've thought coming into the year. So the company on the things that we control is doing very very well, we tried to give you a little bit of a roadmap in terms of.
Second half of the year that it could be really really strong.
But pricing has moved around so much. So there is a pretty big variable than the last eight weeks has gone up and down a couple of different times. We are trying to represent that but I think we are set up incredibly well.
As you heard router say, we're very confident we're going to have a revenue we are having a record year and we're going to close strong. So I would not read anything into that and I think the second half is going to be pretty strong.
Great. Thank you.
Thanks, Michael.
Thank you and one for our next question.
And our next question coming from the line of Mike <unk> with Barclays. Your line is open.
Hi, good morning.
So maybe just to start.
Maybe just to start on Guadalupe I was wondering if you could maybe update us on your unhedged or open capacity outlook for the remainder of this year and next.
And then also curious your extra to expectations for 100 basis over the next 12 months or so and whether that could.
Offer upside to your third party ethane recovery assumptions are virtually if you think that maybe tempers the growth profile in the basin until additional takeaway comes on next year or second half of next year.
Just I appreciate any color there.
Yeah, Mark around Guadalupe, we are fairly well hedged this year I mean, the nice benefit of having that team in Houston that markets product, which I think sets us apart as they thought they obviously are optimizing but we are fairly hedged.
Some of the we typically go into that.
Guadalupe are our view is the current year, maybe two years out we try and stay keep the majority of it hedged and coming out of Uri, we layered on some physical contracts at what I think are very good rates, but leaves us a little bit of upside the team obviously is optimizing that around.
Around the basis spread there that's something we've done for but we have taken advantage over the last few years.
I have a really strong environment and try to lock in more of an annuity there.
In terms of upside on the on the spread I don't think we have a ton of that baked in I do think you are.
At the end of the day, there have been some periods, where we've seen some volatility there that we have been able to take advantage of but as far as our forecast is going through the rest of the year. We don't have that baked in it could be a potential upside for us to your point until additional infrastructure comes into play.
Got it I appreciate the color there.
And then just on capital allocation appreciate the updated commentary.
I wanted to clarify I think you referenced some sort of framework between like debt repayment and share repurchases.
Wondering if you could elaborate on that a bit in terms of how youre thinking about the balance between Baltimore and what that framework could look like.
Yes, maybe I kind of take it a little bit from a pulp mark unlike.
And talk about capital allocation in general and then Sean can jump in as well I think we've been very transparent with people since basically the startup startup Cove.
We want to do.
All of the above approach, but that the key focus is on the balance sheet. Obviously, you saw us come in with leverage at $2 nine and leverage is coming down very very rapidly. We were 12 months ago. We were at four two so I think a one three turn reduction in just 12 months, it's pretty amazing.
Now we like the fact that obviously fetch gave us a positive upgrades. Unlike we're eagerly awaiting S&P and Moody's to do the same.
And then you saw this quarter or last quarter. In July you saw a 10% distribution rate that is something that we're going to continue to look at on an annual basis. We will look at distribution you saw us use some of the excess free cash flow for strategic growth. That's James Lake acquisition. So now the question is okay. What are we doing.
Next.
We want to have an ironclad balance sheet. Mike. This is the time to fortify the balance sheet to get it right. We're in a high price environment. So we believe in a high price environment you need to be at two five ish. So that means we need to do probably about a half a turn or so off of that reduction.
Leverage reduction we think that is.
Happen here hopefully over the next couple of quarters and then we have after that Theres a lot of Optionality additional distribution continue to pay down debt strategic growth.
Do something around around a common order preferreds.
Yes, maybe a couple of things Mark to add we have obviously batter laid out very well the improvements in the balance sheet at some point.
Our goal is we know we're in the high cycle, you heard about or talk about trying to get to that two and a half.
Obviously, we've run we were.
Run various scenarios and the thing that I'm really proud of is the company you could cut commodity and have in the company is still going to be investment grade in terms of our metrics. So that makes me feel really good that also gives us a lot of that optionality. The only thing I would add is that we do have our prophage become callable at the end of this year in mid December .
<unk>.
And we're going to look at some high cost instruments and <unk>.
Strategically look in the future because the company is generating a significant amount of excess free cash flow, we will look at.
Things that make sense from a retirement in a buyback.
So we definitely have some of those in our forward modeling.
But it's just a really great place to be when Youre holding investment grade metrics, even in some really tough cases, so I'm excited and I think youll continue to see us optimize that cash and put it to work.
Great. That's very helpful. I appreciate the time.
Thanks.
Thank you and our next question coming from the line of James Carreker with U S Capital Advisors. Your line is open.
Hi, guys. Thanks for the question.
Thinking a little bit bigger picture.
I appreciate the comments about growing volumes in the back half of the year and the strong performance when I look at it.
Slide 14 in your presentation.
The utilization rates for a lot of your assets are kind of bumping up.
Kind of against the 100% So I guess, what does it take to kind of gets you guys comfortable expanding some of these things that are potentially running out.
Additional running room and I'm thinking in particular may be about sand Hills Southern Hills.
Or some of the DJ basin capacity.
Yeah, James it's volatile ride ons, followed I think that one.
I think youre right.
Youre right Mike.
Robin high utilization and that is something we like that is something we're proud of you might remember.
We've been talking for a couple of years now about our strategy of being supply long in capacity short because there are still places in pockets in different areas of the country, where there is significant excess capacity. So we kind of like to use that if you think about the gathering and processing side of the house the <unk>.
Jay in the Permian and like we're Offloading.
In bulk so we're using some analysis plants we're.
We're doing that.
Bob.
Capital avoidance from our sites.
<unk> coupon over and above what we are sending to people from a G&P point of view and then on top of that we're making money on the Ngls because they come into sand hills, and we make it like for instance in the DJ Basin. The residue gas goes interest pipeline system stuff, we are owners owners off as well so we.
<unk> really like that strategy, where we can do it.
The most recent.
Offload that we did in the DJ basin.
<unk> pretty much maximize so that's pretty interesting we have spoken about both the DTA in the Permian at round take do you need to put new capacity in over time, we're looking at that we do have a permit here in <unk>.
Colorado in Colorado permits are really really important and they have some big strategic value because it's very difficult to get permits here. So if the producers continue to grow and we're going to grow with our producers and you will potentially see us do something here.
<unk> four for the Permian. The good thing is we acquired some open capacity with James Lake. So we hope to fill that up fairly quickly as well and then when you go to the marketing and logistics side of the house, you talked about sand Hills and Southern Hills.
Southern Hills, we run pretty high capacity to your point, we have an opportunity to expand that to kind of I think it's around 230000 barrels a day. So it's about 30% 35000 barrels from where we are today.
Relatively low cost expansion.
If we feel the need to do that we will we will absolutely absolutely do that and Thats an option that we have and then as it pertains to sand hills in the Permian basin running pretty high Dara as well a number of years. We spoke ago. We spoke about there is a potential to loop that system that system or that optionality.
<unk> is still there for us.
And if that is something that makes sense. We will we won't we will look at it but we will always.
Back to being we're not going to do a build it and they will come we will always be capital efficient.
And we like to be just in time, so hopefully that gives you a little bit a little bit of color James.
Yeah, that's all very helpful.
And then maybe as a segue.
Second question just around some of the cell.
Volumes in your G&P had been kind of up.
Up and down for the last year, So big increase this quarter just any additional color on what's going on there does it.
Does it move the margin is relatively low margin additions are.
Any other color will be great yeah. Thanks James.
A couple of things down we spoke of early in the year as some contracts rolled in.
We anticipated that and I think we tried to show you will be very transparent on that would.
What you're referring to and it's terrific as youre with the gas prices, we're seeing some pretty strong volume growth in areas like the Haynesville the Eagle Ford.
Things of that nature, having said that.
Those are lower margin those you heard wouter just talk about areas that are that have significant contracts.
Or overcapacity and Thats still in <unk> are still areas that have a fair amount of capacity, but they are what were volume lower margin type cost I mean.
Sure margin type contracts, but we'll take them, we like seeing the capacity utilization rates go up.
And it's a trend that.
Coming into the year, we talked about flat to slightly down in some of these areas and we're seeing really good growth. The thing I would add GNP had a terrific Q2 some of that.
Some of that was driven by this but to a larger degree with areas like the Permian and the DJ where our returns are very strong and we were able to optimize I mentioned some of that in my talking points.
Drove more of the increase but we will take areas that are showing that we didn't anticipate volume growth, even if it's relatively low margin.
Thank you.
Thanks.
Thank you and as a reminder, ladies and gentlemen to ask a question you will need to press star one line.
Our next question.
And our next question coming from the line of Kevin.
Align with Mizuho Your line is open.
Hey, good morning, everyone. Most of my questions have been asked but I wanted to ask a little bit on costs.
Just talk about maybe where youre seeing.
Pressures and I'm, just interested kind of what you think is maybe structural versus cyclical here.
In terms of kind of your cost outlook.
Yes, Gabe cost year to date and I alluded to it have been very been in line actually a little bit lower.
We're talking about a lot of the work happening in the second half of the year really what we're seeing is things like outside services contractors.
Rates are going up just like just like everyone else is seeing some of the commodities have been up and down things like lube oil and chemicals.
Correlate fairly well with high commodity prices, but we've done the team has done a pretty good job of managing our supply chain team of trying to get some of those rates locked in but.
In the second half I think what youre going to see it it's taken a while it's been an interesting thing to get work done and I think others are seeing this as well right. There as it's been harder to get people have a lot of work that needs to be done, but it's just taken a little while to get things up and going even on the growth capital front. So that's kind of kept costs in check.
Obviously, when you are doing work because of some of the things I mentioned youre seeing higher costs.
In terms of.
How long do these things stay with this are they cyclical.
I definitely think we're going to see it through the second half of the year. We do have a lot of work that needs to be done.
The assets that we planned again team doing what they can to make sure that they keep those costs in line and we're kind of keeping an eye on the second half of the year.
Obviously, we'll give you more color around 'twenty three next year, but right now our thought processes that some of this carries for sure into 'twenty three.
If I knew exactly when it was going to end that'd be terrific, but I don't but the key is that we have a very good track record of managing costs.
At DCP, and I think and I would expect that to continue and maybe maybe just a couple of small things to add there Mike in general Okay.
As you know unlike an inflation tends to not be not be terrible for a commodity based business like ours.
So there's definitely a lot of benefits that we get from overall inflation, yes, our items, where we have additional cost.
We do have an opportunity to make that up identifying a commodity or the other thing for instance, as we have.
Rate escalators in our logistics and marketing business and dose rate escalators are fairly significant and that is something that will kind of be with us for a long time. So that's those are a couple of good offsets on the other side.
Yes.
Thanks, Sean Thanks Roger.
Thanks, Dave.
Thank you and I'll now turn the call back over to Mike Goldman for closing remarks.
Thank you all for joining us today, and if you have any other questions. Please feel free to reach out. Thank you.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial down one one.
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Okay.
Yes.
Okay.
Yes.
Yes.
Okay.
Yes.
Okay.
Sure.
Sure.
Okay.
[music].
Okay.
Okay.
Yes.
Okay.
Yes.
Thank you.
Okay.
Yes.
Yes.
Yes.
Sure.
[music].
Yes.
[music].
Yes.
Yes.
<unk>.
Yes.
Sure.
Yes.
Sure.
Yes.
Yes.
Yes.
Yes.
Yes.
Thanks.
Okay.
<unk>.
[music].
Okay.
Okay.
Thanks.
Yes.
Sure.
Okay.
Okay.
Thank you.
Yes.
[music].
Okay.
Okay.
Sure.
[music].
Yes.
Sure.
Okay.
Okay.
Yes.
Okay.
Yes.
[music].
Yes.
Great.
Okay.
Yes.
Yes.
Okay.
Okay.
[music].
Okay.
Yes.
Yes.
Okay.
Okay.
Okay.
[music].
Okay.
Okay.
Yes.
Okay.
<unk>.
Okay.
Yes.
Yes.
Okay.
Okay.
Okay.
Yes.
[music].
Yeah.
Okay.
Okay.
[music].
Okay.
Thanks.
Yes.
Okay.
Yes.
Hi.
Yes.
Yes.
Okay.
Okay.
Sure.
[music].
Okay.
Okay.
Okay.
Yes.
Okay.
Yes.
Okay.
Yes.
Sure.
Okay.
[music].
Sure.
Okay.
Okay.
Yes.
[music].
Yes.
Okay.
Yes.
[music].