Q4 2022 Delek US Holdings Inc Earnings Call
For refining and midstream.
And we were able to capture opportunities and long dated.
Full year, adjusted EBITDA was $1 $2 billion.
During the fourth quarter total results were strong.
Adjusted EBITDA was $221 million, despite unplanned downtime, mainly at the big spring refinery.
We give more color around the operation and the action, we are taking to ensure safe and reliable operation.
As I said in the past shareholder returns is to keep Iot for us.
During the year, we returned $236 million to shareholders.
With $172 million in the second half of 2022.
10% of decay market company.
We reinstate the regular dividend this year and we are pleased to announce an additional 5% increase in the quarterly dividend to <unk> 22 cents betcha.
Looking forward, we are very excited about our future.
On the corporate structure.
Actively evaluating strategic alternatives for logistics and lead them to achieve the sum of the parts objectives.
On the operations side, we launched a zero.
<unk> budget to improve our competitive position on cost structure.
We are proud of the Tyler refinery team.
The team finished it down at all on time on budget and we are on a process of starting the plant.
This is mark an important milestone for Dell extended multistory.
We spent we do not have any significant planned downtime scheduled until late 2024.
So we are well positioned to capture market opportunities doing that time, and now I will hand, it over to Todd to speak about operations.
Thanks Abigail.
Fourth quarter crude throughput across the system was approximately 258000 barrels per day.
The reduced rate was primarily driven by unplanned downtime at the big spring refinery during the fourth quarter.
Unplanned incidents make us regroup and reassess.
Take steps to improve when and where we see opportunities and focus on the areas of the business that we can control.
This is a priority for us not only for the wellbeing of our employees contractors and communities in which we operate.
But because we know that a safe and reliable operation leads for financial stability and protects the environment.
A good example is our Krotz springs refinery, where our employees and contractors recently achieved a safety milestone of over 5 million man hours worked without a lost time injury.
As <unk> mentioned we.
We have just finished a significant turnaround at our Tyler refinery.
The refinery successfully completed the turnaround with zero processing safety incidents on time and on budget and difficult weather.
This is a fantastic achievement for Delek and I would like to thank our employees for their hard work and our contractors for their partnership.
Our logistics segment ran extremely well this quarter.
Our record earnings reflect this and a big driver was the successful integration of the three bear Delaware assets.
While <unk> benefits from its base business.
We see continued growth opportunities in the Permian and Delaware footprints Delek.
Delek logistics is well positioned to continue its strong track record of growth and to be a long term sustainable midstream player.
That I will turn the call over to Ruben to go through the quarterly results.
For the fourth quarter of 2022, <unk> recognize the adjusted net income of $61 million or <unk> 88 per share net.
Net loss for the period was $119 million or $1 73 loss per share.
During the quarter, we only we also returned $104 million to shareholders in the form of share repurchases.
Yes.
On slide four we highlight that we got the adjustments. This quarter was 243 million the largest investable accumulating cycling inventory indexes, which will begin adjusting for this one.
We believe presenting this adjustment better aligns our EBITDA results with our views.
Adjusted EBITDA was $221 million after factoring in these adjustments.
On slide five we grew.
But a waterfall of our adjusted EBITDA by segment from the fourth quarter of 2021 for the fourth quarter of 2020.
Specific significant improvement period over period was primarily by higher results in refining.
Third to the fourth quarter of 2021, the Gulf Coast market cracks were 76% higher than 2014, which primarily.
The lodging.
On slide six we present additional wonderful we drew $313 million in.
In cash during the quarter largely driven by two events that occurred late in the quarter.
First we had $180 million unfavorable timing effects associated with the closing of the transition of inventory intermediation agreement with Citibank. This full amount was resulted in a favorable cash flow in the first quarter.
The second item was an unfavorable working capital and cash flow associated with unplanned downtime at the big Spring refinery.
$60 million of this amount was the cash timing event and resulted in a favorable cash flow in the first quarter of 2000.
On slide seven capital expenditures for 2022 were $343 million on a consolidated basis.
2023, we have a capital program of 360 million.
The Diamond refinery turnaround is the single largest capital expense and makes up a large portion of the 80% of capex dedicated toward maintaining and sustaining the performance.
The remaining 20% is dedicated to growth projects, primarily in New Jersey.
The last slide covers outlook items for the first quarter of 2014.
Before we move to Q&A I wanted to give you an update on our cost reduction and process improvement district.
We are executing changes in the organization and expect about $30 million to $40 million of P&L improvement in 2023, and an additional $50 million to $60 million in 2000.
We.
We expect the run rate to be approximately 90 to 100.
These improvements may be lower cost or improve margins I will now open the line for questions.
Ladies and gentlemen at this time, we'll begin the question and answer session.
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And our first question today comes from John Royall from Jpmorgan. Please go ahead with your question.
Hey, guys. Good afternoon, Thanks for taking my question.
So maybe we can just start with an update on.
Just a little more detail on how youre thinking about the sum of the parts work.
You kind of thread the needle between meeting to meeting steady streams of cash flows to pair with the refining business, but potentially.
Meeting to separate out some portion of.
Logistics indoor retail in order to realize that that valuation uplift.
John .
Good afternoon, and thank you Paul.
Joining our call.
Although the number one consideration obviously.
To be a friendly investor company and share.
We demonstrate that doing the second update was returning just over $170 million of cash.
To invest of which is the epicenter of the market The Cup.
Some of the policy is a subset of that.
As we said on the press release, we are evaluating both.
Opportunities in the retail and.
In the logistics side.
Each one of those opportunities.
The big difference or should they stay completely different so we cannot go too much into details, but we obviously looking how to be able to.
Managed assets, we need and to maintain.
<unk> maintained the Ami that we need and to maintain the kestrel, we need we said high eights.
The opportunity for me too.
The new colleague important colleague here.
On the table EVP of corporate development, Mr. Mark hopes maybe you can say if you want to sure up agal. Thanks, John That's a good question. We've obviously been very vocal about focusing on some of the parts.
I joined <unk>.
Tomer accompany my focus has been solely on.
<unk> are looking at options and opportunities across all of our business segments to unlock the value inherent in our business in South Africa I'll mentioned Mitch.
Midstream and retail but.
What I would say is worth because we're thinking about this one.
One of the things that we want to make sure that we.
We saw four is doing something that's going.
It goes without question, that's additive across our businesses and possessions or our businesses across all the segments for our future growth.
To drive additional value for our shareholders, that's really probably just I'll focus here. So you make a good point about.
Cash flow and those types of things, we really want to position all of our segments for our additional growth and anything that we do will be focused on an accretive process questions.
Leave it there at this point, we don't have anything to announce but.
Obviously, when we do we'll be very transparent with everybody.
Understood. Thank you and then maybe just switching to capital allocation.
Good to see there is a bump in the dividend, but I don't think we saw a quarter ahead guide on the buyback should.
Should we read into that that you wont be guiding going forward or should we think that maybe there may not be one in <unk>, how should we read into that.
So we will elaborate on that just little bits of lava intended by conditions stay where it.
Is.
The balance between.
Debt reduction and buyback our goal for the remainder of 2020, please be on the buyback between $75 billion to $100 billion.
We will we demonstrate in the second half of days that we could be prudent around that and we did that with the buyback that we guide for the total return I'll forget over $170 million.
Our intent is to keep.
Two Inc.
To be a friendly investor.
Sure.
The benchmark that we put in front of ourselves.
Thank you.
Our next question comes from Neil Mehta from Goldman Sachs. Please go ahead with your question.
Yes, Thanks, guys I appreciate it appreciate the time, we'd just love some perspective on where you feel you are from a refining operational perspective, and maybe you can go through each of the assets Tyler or El Dorado Krotz in Big Spring, where do you think.
There are opportunities to continue to improve capture and drive profitability.
As in the last quarter was a was a tougher one than I think people would have expected a couple of months ago.
Yeah, Hey, Neil it's Todd Thanks for the question.
Look.
We're on a journey here.
In terms of getting to the place that we ultimately want to be we know as I said in my prepared remarks that.
The key to success is being safe reliable and environmentally responsible and operating our assets I think we've done some good things during 'twenty two.
Thank you and the rest of the folks on the call we're able to see that.
Selected and the capture rate.
Movement throughout the year.
As we've talked about we've had a number of different initiatives across the fleet.
To make improvements we've seen.
<unk>.
At a number of the facilities.
Catalyst formulation at some of the others.
That's definitely bumped up yields even in Q4 and crops in particular.
So making that continuing to make that asset a sustainable long term viable asset.
In our mix.
Unfortunately, <unk>, we had a plan.
Semi planned outage at <unk>.
Honestly, we didn't do a great job coming out of that we've taken the lessons learned we've incorporated that into our operating structure and we won't make that mistake again so.
I'm not going to go into specifically around each asset because a lot of that stuff, obviously as proprietary but.
It's something we're very very highly focused on.
Looking at product mix every day, we're looking at crude slate every day.
And we're looking at.
The Tyler facility setting.
Setting the standard for turnarounds.
Again, we're just coming out of a major turnaround there in the first turnaround at that facility and in over eight years.
We've done it safely.
No safety events no process safety events.
Challenging weather conditions.
And the team has done a phenomenal job and I think that that plays.
Solid blueprint for what we're going to do on a go forward basis, and I think the other thing I'd mention is.
We don't have any real major planned work now until Q4 of 24, so that gives us a really long nice runway to be able to capture the strong macro environment that we see out there.
And thank you that's great perspective, and how much of the challenge around captures has been more operations driven as he talked about versus market conditions, because we think about the period where delek.
Finding profitability with outsized from 2011 to 2018, a lot of it was about the Midland differential which is now inverted and so I think the investment communities trying to figure out what the mid cycle refining environment looks like you're in an environment, where we're at the crude markets are less favorable so would love your perspective.
On.
The go forward crude markets and how.
How that environment.
Setup for your Europe . Thank you.
Yeah, no. Thanks, again, Neil I'll take kind of the first half of the question and then I'll, let Abbott go away and on a market to us.
<unk>.
I think we've demonstrated over the last year, where Midland traded at a premium relative to Ti the earnings power of the company right.
So I think that that's pretty well established at this point.
Again, we've obviously done things throughout the system.
To improve yields by our catalyst reformulation, we've done some things throughout the system looking at product mix changes.
It gives us better net backs and we will obviously continue to do that but again I think given the synergies between our logistics system.
The strength in the Permian Basin, just from a demand perspective and.
How well, albeit outside of Q4, we ran during the year.
<unk>.
We're in a good place as we come out of the Tyler turnaround I'll, let out of golf.
Comment on what our views are on the.
Midland differential on a go forward basis, yeah, So hey.
Daniel how are you.
Good out of the Gal. Thank you.
Yeah. So.
The Midland based on is obviously the one the prolific basin in the world not just in the U S. And then we have the.
The best data that demonstrate a lot of it.
And to that and I think for the long term debt.
The investment was able to prove itself and we'll be moving towards in the future.
So they've made landing zone. They started it was around $5 7 million barrels a day of production lights and please yeah.
The increase in our footprint of production and we forecast that that's going to go all the way to 400 to 600. This year. So it is going to put us at the seventh its close to 90% capacity of the pipe that we have all the payment overtime.
Hammond basin.
Going to reform and going to demonstrate the differential is going to fit to our configuration. We are obviously in there too.
Actually yeah.
And two to two and a half of Hollywood finally waveform Optionality. So this is something we are always looking on that how we can improve and to flex our crude slate, but over time I think that the 20 year.
I'll do the second half of 'twenty three at the beginning of 2024 would it be equivalently Bowen basin.
Okay. Thank you Rob.
Our next question comes from Doug Leggate from Bank of America. Please go ahead with your question.
Hey, Good morning, guys. This is clay on for Doug. Thanks for taking the question. My first question is a follow up to John's question and I want to understand how you guys view the cash flow into free cash capacity for Dk refining when it's fully burdened for all the corporate costs.
If you if you're able to walk it through those assumptions I think it would help the street to understand whether it's the core business can stand by itself or not and whether a separation of retail <unk> logistics makes sense.
And thank you for the question in them.
So it really depends what's the outcome gonna be but we are not going to do any transaction that will put us in a risk for the total cost of the company. So let's make it clear we.
We are not going to make any transaction that would jeopardize the mothership, yeah, we're going to do some any transactions that we are going to perform going to be play a production well thought out and we think about the different scenario and we take into consideration.
Downtown.
And that business, which we always said and volatile business. So we're not going to make just transactions will check the box I'm sensitive to possibly going into the right one.
Luckily enough.
You guys talked with it.
Probably the one if not the best in the industry to perform those deals and we are confident we can get one to two can all be Paul.
Would you guys potentially look at this as a multi step process. So in this case, where D. K ill acquire something to get bigger through M&A would you consider selling some of the refining asset back to decay.
Dk corporate.
Yeah. This is Marc hubs. Thanks for the question Yeah look we wouldn't look at things as a as a multistep process, but anything we do in Dissolvable side and Theres a lot of different options on the table for US right now, but anything we do as I mentioned in my earlier remarks.
<unk> will be done in such a way that it shuts off all of the different businesses to be to continue to succeed.
Continue to have.
The ability to operate effectively through the cycles and so you know what.
And if that involves moving assets strategic assets between you know are a midstream company back to the refining company and we're going to evaluate all the different options.
Got it I appreciate it we'll keep our eyes open for that for my second question I think we depreciate. Some details on your cost cutting plans for example, how much from each bucket the buckets being gross margin opex incorporate and should we understand the cost cuts as being an EBITDA expansion or are there any offsets to revenues.
Got it.
Yes.
Let's talk about the zero based budget, we perform what did you want to take it no absolutely I just missed the last part of the question.
The.
Zero.
Sorry.
The second part of the question, but should we understand the cost cuts to be.
And EBITDA expansion. So for example, if you're talking about $100 million of cost cuts does that translate into $100 million of higher EBITDA or are there any offsets from lower revenues, because youre getting rent at certain cost centers that might be revenue generating.
No actually as we see the plan right now, even though that could be a one time restructuring.
Costs were going to see the 100 million I was supposed to be sustainable just want to make it clear that it is on a run rate basis. So we're going to recognize $30 million to $40 million this year.
Most likely 50 to 60 next year on the rock on on a run rate basis around 100 million, which will be a direct contribution to EBITDA.
Perfect. Thank you.
Neil.
I'm sorry.
Just to make sure it's not just purely cost.
It's going to come out.
I've mentioned on the preferred remarks that it's both margin improvement and closer with them. Yeah. That's right I just don't know that that's cool.
I just wanted to make sure Blake.
Yeah.
He he specifically at Cod, Michelle just to be clear it is not going to just purely coming out of it.
It could be added this morning.
Wow.
Got it I appreciate that and if I could sneak one last one in can you offer some color on the onetime items that hit cash flow this quarter, and which one of those items will reverse if they will or not.
Well on the G&A, we had $17 million of one time of which $13 million are already part of the restructuring cost that I've mentioned to a previous question.
That will allow us to be on track and our goals for the fourth quarter is for the G&A corporate G&A I mean.
Company DNA to be in the mid seventies.
I was thinking more about the items that affected cash flow here in the fourth quarter. It seems like there was about 400, some odd million dollars.
What looked like Jeff I'm impacts.
240 of them.
Or a timing issue and we received the 240 during the I mean actually in January .
The other 200 million of really the FIFO impact or the inventory impact. So if you compare all of that together would have put us in a positive number.
Got it I appreciate it thanks guys.
Thanks Blake.
Okay.
And our next question comes from Paul Cheng from Scotiabank. Please go ahead with your question.
Hey, guys good afternoon.
Hey, Paul and Paul Ken.
Ken.
Maybe it would go back into the earlier question I think when he would be possible without you can separate out the 100 million by different major.
But how much is on the head count reduction saving how much is from the margin improvement and then with the margin improvement you expect that kind of separation.
Yeah, Hey, Paul how are you. So I would just a ballpark number 30% to 40% of the G&A.
60, 50% to 60% fixed actually 6% to 70% in the Opex ballpark.
So G&A is about 30%, 40% and 60, 70% and.
I'll make some margin improvement.
And how long all of this that are you, reducing your head count and if you do you buy harmony.
But we are not going to get specific around that probably they understand that it is sensitive.
M discussions, but we want to have the most there.
Small efficient.
And obviously, a safe and reliable company. So we are not going to jeopardize safety and reliable on them, they're going to do.
With the right way and we.
Get advice from best in class.
Once we have a great company going forward.
Yes.
I have to apologize theres someone wanted to go back into the refinery reliability Tien part.
Looking at the way you all do you think the reliability issues, we've seen him on this it doesn't mean, it's not just two big spring, but also or is it all of it.
So it means that you need to spend capex or just a pause SaaS issue or a cultural issue or that you're just not having sufficient.
Oh pardon or the scale skill set with that you may need to get some help from I'm sorry.
Yeah, Paul look I think if you look at everybody in the industry right. We all struggle during COVID-19.
Obviously cost cuts.
Rationalization on staffing.
Across the industry.
We like everybody else are coming out of the back end of that now.
I think obviously, we've just conducted a major turnaround at Tyler.
We've done that successfully on time on budget and challenging conditions. So I think we really have the people in place and it's just really kind of playing catch up to some of the.
Some of the issues that were caused by Covid in terms of the poor margin environment. So you look at what we did throughout the majority of the year.
Other than the big spring.
Meant that we had and we ran the system very very well all time record high utilization above nameplate capacity.
So I think you should treat this more as a one off on.
On a go forward basis as opposed to something that's systemic in the.
In the company.
So basically that you believe.
We liability issue he was when he just because during the pandemic you guys may be.
Postpone thing and delaying some of the.
Maintenance that type of thing is such that now you're playing catch up on that.
I think everybody in the industry experienced Oh, that's not that's not unique to us and I think.
I'll leave it at that.
Okay.
And I think Thats the final short one disappointment property Paul Rubin.
Can you say what is the Oh on the balance sheet at the end of the year.
And also if there's any meaningful impact on the fourth quarter, we saw due to the mark to market on that liability.
Yes, Paul This is Robert Wright, Chief Accounting Officer.
As you know, we don't disclose that level of information within our within our financial statements.
Can you tell us that what does any meaningful impact on the fourth quarter P&L due to mark to market.
Alright that liability.
There was no impact to be on market price volatility.
Okay. Thank you.
Thank you Paul.
Good day.
Once again, if you would like to ask a question. Please press star and one to withdraw from the question queue, you May press star and two.
Our next question comes from Jason <unk> from Cowen. Please go ahead with your question.
Hey, everyone. Good afternoon, thanks for taking my questions.
I wanted to ask the first one on the.
The sum of the parts unlock.
That youre going through and the main question is I want to understand if the contours.
Of the kind of Florida the goals I should say are the same which is really the deconsolidation D D.
Dk al from Dk I know on the last earnings call.
You management had suggested that was a driving force of why do you want to do the sum of the parts valuation unlock is that still the case and additionally.
On the prior call there wasn't any mention of the retail footprint.
Foot print being part of.
Yeah.
Potential options that you're exploring so did something change between that time and now we're now retail.
Is it is in play thanks.
Thank you Jason so.
Our end goal is to.
Yeah, sure and a good company for pistol.
And as I said in the past that it's more than one way to go about it obviously, we said in the previous call that we.
We believe that.
With some actions around Zika and we can get there and we still believe that that's the case.
Yeah, we did put in the press release.
Yeah.
About.
And our belief in retail is either you go.
Either you can go big underway, Oh, youre almost not relevant.
So obviously, we are always thinking ourselves what is the best asset base, we should hold and how to bring the best data to share with them.
So you need to be very happy that the everything's on the table.
We all hope and we're certain that you will be very proud and happy with the deal that we can end up game showing you.
Okay.
And then my follow up there's two quick ones I'll ask them together.
The cost cuts the 60% to 70%.
Opex reduction is any of that related to energy costs or is that all underlying and then separately last quarter, you guided to I think $100 million to $115 million in debt reduction it doesn't appear like that materialized. This quarter can you discuss.
Why that was and where you see gross debt levels going over the course of the year. Thanks.
Yeah sure so rigor.
Regarding to the energy if it's.
There is an energy component to them. So it's a it's the consumption not the price.
So we are not going to tell you that there were going to reduce the cost by one of them being able to pull out and based on the natural gas goes down. So that's not the plan. So that's not that's what the market gave us and that's what we can do all of them. So that's to answer the filter so we hope to be.
And do you, possibly can with the information we provide the split and if there is an energy component around it it's about the consumption and not about the natural gas price so let's put that aside.
The woman has a lot of fan speaking a penalty element at the local furniture around the.
Reduction in poly wants to give any more color around that.
Alright.
So actually until the end of November or you're on track to.
Execute both.
Debt reduction of $100 million and the buybacks of $100 million as a result of the unplanned events and the timing.
Events that I've mentioned, it kind of disrupted our plan, we did end up doing the buybacks, but we have to push the debt reduction we will go back and I think I've mentioned it before.
To focus on debt reduction and buyback as we go forward.
Yeah.
Okay. Thanks.
Yeah.
Our next question comes from Roger read from Wells Fargo. Please go ahead with your question.
Yes, good afternoon.
I'm going to beat the dead horse here restructuring, but I'm going to ask a question with a little more.
<unk> put into it so I'm just curious as you're looking at the overall process here and opening up value.
How do you see some other things such as the Biofuels business.
And.
Some of the equipment equipment, let's call it assets like Wink to Webster that are still inside of decay.
That were originally planned to be dropdown Dk al is that a complicating factor or an enhancement when do you think about <unk>.
Moving the overall value of the two entities.
So mark and stopping there.
Yeah sure sure Roger I. Appreciate the question. This is mark ops, you're EVP.
Maybe Pete corporate development.
As we said earlier in the call I mean, we're looking at all the all the options on the table.
I am specifically across all of our business segments.
Our ways to.
Unlock the value that's inherent in those businesses as well as to you know set all of our business lines to be successful going forward right and so when you when you think about other areas.
For us to consider whether that's.
On the biodiesel plants or whether that's decarbonization.
Our business you know, what we were evaluating as well around.
Our business just in general from a corporate development standpoint is looking for opportunities where we can.
Leverage our existing you know kind of assets are appropriately where we have competitive advantage from a location trauma product configuration et.
Et cetera to seek.
Seek opportunities, whether it's around decompensation or.
Low carbon fuels in the future and so that's something that we're constantly evaluating and looking at organic opportunities around that.
As we think about the midstream in particular I think about it.
Waiting to Webster and kind of how that fits in the overall scheme of things.
That's obviously not a captive kind of Delek U S refining related asset so it's more of a traditional.
Midstream kind of third party asset so when we think about.
Whereas such and there should be longer term and where the best value proposition is for those assets. You know that's something that we're obviously thinking about as well.
Yeah, just to add on that so everything that we are looking obviously oh, Joe we are looking to make it accretive to the cost of capital.
And since we have we are not trying to make a deal there that the biodiesel.
Market suggest that the 12% breakdown or something like that there's something with just like it is off the table.
Everything that we are if we're exploring it should be accretive to love it.
Our shareholders. So that's the main area.
I appreciate that.
Hmm.
We've kind of thought of Wink to Webster is generating a roughly $50 million a year in EBITDA.
Don't know if you're willing to comment on that but is that a reasonable range at this point.
Yeah, Hey, Roger it's Todd.
For the question look as we've said in the past.
We don't speak for the consortium and therefore that type of information that is not something we can be at liberty to disclose I think suffice it to say that wink to Webster is running at planned rates.
We're obviously a part of that we get the benefit of distributions coming off of that.
But.
I think we'll leave it there.
Okay understood. Thank you.
Thanks Roger.
And our next question comes from Matthew Blair from Tudor Pickering Holt. Please go ahead with your question.
Hey, good afternoon, hopefully you can hear me Okay first question.
Do you have an update on the potential R&D projects in terms of timing and if theres been any sort of update on the EBIT contribution whether delek would be likely to invest in that project.
Yeah, Hey, Matt It's Todd.
Look again kind of much like my answer Roger.
Not yet invested in the project.
As you are aware, we've got a you know an option 13 little over $13 million of options for 33% interest in the actual physical plant.
As we said in previous earnings calls the company has filed a suit.
SEC documentation that lead us to believe that it's probably not online until the second half of this year.
I think it's safe to say that as Abigail laid out a minute ago, we will evaluate the benefit of us exercising our option vis vis our capital structure. When the time is appropriate and we'll obviously make sure that you guys are well informed when we make that decision.
Sounds good and then the.
The corporate segment negative 60 million EBITDA this quarter.
Was that was that pushed up probably like year end comp and if so what's a good run rate for corporate going forward.
Yes Lawrence.
A large percentage of that is a large amount of that is the one time costs that I mentioned earlier and a G&A response, we got about $13 million of restructuring charges that went through that segment and then there was other onetime costs as well.
Okay, but the one time costs are still in the adjusted EBITDA figure.
Yes that does.
Yeah.
Okay.
Talking about it Eric.
And.
Thank you.
That's great.
Okay.
Yeah.
Okay, maybe it's Mike.
Oh, sorry go ahead.
Cool.
So that's why.
I understand that.
Yeah.
Gary.
Third hand.
Okay.
We did the being the second in the fourth quarter, we did not do it every quarter right.
Changing that going forward, but that's the way we did it.
Okay, and so maybe like negative 40 to negative $50 million a quarter it would be reasonable going forward.
Yeah, I would say, yeah, probably closer to 40%.
Yeah look the way I did it in my head once you once you kind of the variance between the third quarter and the fourth quarter is largely attributable to that.
And obviously they have.
It's higher than what the split going forward. So.
Yeah, I would guess.
$30 million to $40 million.
So that's also a number that we come back.
Got it thank you very much.
Yeah.
And ladies and gentlemen, and showing no additional questions I'd like to turn the floor back over to the management team for any closing remarks.
So I want to thank the management team they are off the table.
First though.
Sell side buy side community.
Thank you for believing in us and the biggies as with all his thought Gee.
Thank you for the board of directors.
Please note that the company in the.
First and for most of our employees.
Okay I think that's it.
Day and night.
Randy and Sunny so thank you everyone that mitigated the next vehicle.
Anyone have any questions.
Thank you.
Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for joining you may now disconnect your lines.