Q4 2023 Global Partners LP Earnings Call

Good day, everyone and welcome to the Global partners fourth quarter 2023 financial results Conference call.

Operator: Today's call is being recorded. There will be an opportunity for questions at the end of the call. If anyone should require operator assistance during the call, please press star zero on your telephone keypad.

Today's call is being recorded.

It'll be an opportunity for questions at the end of the call.

If anyone should require operator assistance during the call. Please press star zero on your telephone keypad.

With us from global partners are President and Chief Executive Officer, Mr. Eric Slifka.

Operator: With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hansen; Chief Operating Officer, Mr. Mark Romain, and Chief Legal Officer, Mr. Sean Geary. At this time, I'd like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

Chief Financial Officer, Mr. Gregory Hanson.

Chief operating officer, Mr. Mark Romaine, and Chief Legal Officer, Mr. Sean Gary.

At this time I'd like to turn the call over to Mr. Jerry for opening remarks. Please go ahead Sir.

Sean Geary: Good morning, everyone. Thank you for joining us. Today's call will include forward-looking statements within the meaning of federal securities law, including projections and expectations concerning the future financial and operational performance of Global Partners. However, no assurances can be given that these projections will be attained or that these expectations will be met.

Good morning, everyone. Thank you for joining US today's call will include forward looking statements within the meaning of federal Securities laws.

<unk> projections and expectations concerning the future financial and operational performance of global partners.

No assurances can be given that these projections will be obtained or that these expectations will be met.

Sean Geary: Our assumptions and future performance are subject to a wide range of business risks, uncertainties, and factors which could cause actual results to differ materially, as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements. Now, it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka. Thank you, Sean, and good morning, everyone.

Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which could cause actual results to differ materially.

Tribes in our filings with the Securities and Exchange Commission.

Global partners undertakes no obligation to revise or update any forward looking statements.

Pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Thank you, Sean and good morning, everyone I'll begin by recognizing the exceptional global partners team their hard work operational excellence and creativity enabled us to execute our acquisition strategy, while delivering solid fourth quarter and full year performance.

Eric S. Slifka: I'll begin by recognizing the exceptional Global Partners team. Their hard work, operational excellence, and creativity enabled us to execute our acquisition strategy while delivering solid fourth quarter and full year performance. 2023 was a transformative year for Global.

2022 where he was a transformative year for ball.

Eric S. Slifka: We closed on the Motiva terminals and the retail JV with ExxonMobil. These accretive deals position the company to drive new growth opportunities and increase our earnings power. In June, we invested $69.5 million in cash for a 49.99% ownership interest in our Spring Partners Retail Joint Venture with ExxonMobil, acquiring 64 convenience and fueling facilities. This transaction enables us to apply our extensive operational and management expertise in the growing Houston metro area. Second, in December, we acquired 25 liquid energy terminals from Motiva Enterprises for $313.2 million in cash. The MOTIVA transaction broadens and diversifies our footprint. We nearly doubled our storage capacity by adding terminals in seven new states. These terminals, with pipeline, rail, and waterborne capabilities, support the growth of our integrated supply, storage, wholesale, and retail network in rapidly growing areas of the country.

We closed on the Motiva terminal and the retail JV with Exxonmobil.

He is accretive deals position the company to drive new growth opportunities and increase our earnings power.

First in June we invested $69 5 million in cash for $49, 99% ownership interest in our spring partners retail joint venture with Exxonmobil acquired 64 convenience and fueling facilities.

This transaction enables us to apply our extensive operational and management expertise and the growing Houston Metro area.

Second in December we acquired 25 liquid LNG terminals for Motiva enterprises for $313 2 million in cash.

The transaction broadens and Diversifies our footprint.

Nearly doubled our storage capacity by adding terminals in seven new states.

These terminals with pipeline rail and waterborne capabilities support the growth of our integrated supply storage wholesale and retail network and rapidly growing areas of the country.

Eric S. Slifka: The acquisition is supported by a 25-year take-or-pay throughput agreement with Motiva, the anchor tenant at these facilities, and includes a minimum annual revenue commitment. Our integration of the Motiva assets is well underway, and we feel very good about being able to achieve our target acquisition multiple of below seven times in the second year of ownership. The Spring Partners Retail Joint Venture and the Motiva acquisition directly align with our strategy to acquire, invest in, and optimize synergistic high-quality assets that complement our operational capabilities.

The acquisition is supported by a 25 year take or pay throughput agreement with Motiva. The anchor tenants at these facilities and includes minimum annual revenue commitments.

Our integration of the Motiva assets is well underway and we feel very good about being able to achieve our target acquisition multiple of below seven times in the second year of ownership.

The spring partners retail joint venture and the Motiva acquisition directly aligns with our strategy to acquire invest in and optimize synergistic high quality assets that complement our operational capabilities.

Eric S. Slifka: As I noted in this morning's earnings release, with these two deals, along with the strength of our legacy assets and business execution, our market diversification and growth potential have never been stronger. Between acquisitions and expansion CapEx, over the past two years, we invested more than $745 million to buy strategic assets and grow organically while maintaining the strength of our balance sheet. In January, the board approved a quarterly cash distribution of $0.70, or $2.80 on an annualized basis, on all outstanding common units. The distribution was paid on February 14, 2024, to unit holders of record as of the close of business on February 8, 2024.

As I noted in this mornings earnings release with these two deals along with the strength of our legacy legacy asset and business execution, our market diversification and growth potential has never been stronger.

Between the acquisitions and expansion capex over the past two years, we invested more than $745 million.

To buy strategic assets and grow organically, while maintaining the strength of our balance sheet.

In January the board approved a quarterly cash distribution of <unk> 70 cents or $2 80 on an annualized basis on all outstanding common units.

The distribution was paid on February 14th 2024 to unitholders of record as of the close of business on February February eight 2024.

Eric S. Slifka: Before turning the call over to Gregg, I want to briefly update you on our pending acquisition of refined product terminals from Gulf Oil. This morning, we announced that, as part of an amended and restated purchase agreement, Gulf's Refined Products Terminal in Portland, Maine will be removed from the transaction and that the purchase price of the transaction will be reduced to $212.3 million from $273 million. We continue to work through the regulatory process for this transaction. With that, I will turn the call over to Gregg for the financial review. Thank you, Eric. And good morning, everyone.

Before turning the call over to Greg I want to briefly update you on our pending acquisition of refined product terminals from Gulf oil.

This morning, we announced that as part of an amended and restated purchase agreement Gulf's refined products terminal in Portland, Maine will be removed from the transaction and that the purchase price of the transaction will be reduced to $212 3 million from $273 million.

We continue to work through the regulatory process for this transaction.

With that let me turn the call over to Greg.

For the financial review I'm Greg.

Thank you Eric and good morning, everyone as we get into the numbers. Please note that all comparisons will be with the fourth quarter of 2022, unless otherwise noted.

Gregg Hansen: As we go through the numbers, please note that all comparisons will be with the fourth quarter of 2022 unless otherwise noted. Adjusted EBITDA for the fourth quarter of 2023 was $112.1 million, compared with $106.9 million in 2022. And net income for the fourth quarter was $55.3 million, versus $57.5 million. Distributable cash flow was $59.4 million for the fourth quarter, compared with $57.3 million in 2022. And adjusted DCF was $58.8 million versus $57.3 million. Adjusted EBITDA and adjusted DCF include our proportionate share of EBITDA and DCF related to our 49.9% interest in our Spring Retail Partners joint venture. Adjusted DCF is not used in our partnership agreement to determine our ability to make cash submissions and may be higher or lower than DCF as calculated under our partnership agreement.

Adjusted EBITDA for the fourth quarter of 2023 was $112 1 million compared with $106 9 million in 2022, and net income for the fourth quarter was $55 3 million versus 57 5 million.

Distributable cash flow was $59 4 million for the fourth quarter compared with $57 3 million in 2022, and adjusted DCF was $58 8 million versus $57 3 million to adjusted EBITDA and adjusted DCF in key our proportionate share of EBITDA and DCF related to our 49, 9%.

And our spring retail partners joint venture adjusted DCF is not used in our partnership agreement to determine our ability to make cash visitors and may be higher or lower the DCF as calculated under our partnership agreement. Adjusted DCF is presented solely to provide investors with enhanced perspective or financial performance.

Gregg Hansen: Adjusted GCF is presented solely to provide investors with an enhanced perspective on financial performance. Trailing 12-month distribution coverage as of December 31st was 1.9 times, or 1.85 times after factoring in distributions to our preferred unit holders. Turning to our segment details, GDSO product margin increased $22.2 million in the quarter to $245.4 million. Product mark from gasoline distribution increased 21.8 to 177.8, primarily reflecting higher fuel margins year-over-year. On a cent-per-gallon basis, fuel margins increased $0.07 to $0.44 from $0.37 in Q4 2022, as wholesale gasoline prices declined $0.34 from $9.3023 to $12.31, versus declining prices of $0.01 in Q4 2022. Station operations product margin, which includes convenience store and prepared food sales, sundries, and rental income, increased $0.4 million to $67.6 million in the fourth quarter of 2023

Trailing 12 month distribution coverage as of December 31 was one nine times for 185 times after factoring in distributions to our preferred unit holders.

Turning to our segment details GSO product margin increased $22 2 million in the quarter to $245 4 million product margin from gasoline distribution increased 21, eight to $177 8 million, primarily reflecting higher fuel margins year over year on a cents per gallon basis fuel margins increased 7%.

44.

From 37 in Q4 2022.

Wholesale gasoline prices declined 34 from 930 23 to 12 31 factory versus declining prices in one set in Q4 2022.

Station operations product margin, which includes convenience store prepared food sales sundries and rental income increased <unk> 4 million to $67 6 million in the fourth quarter of 2023.

Gregg Hansen: At Quarter End, our GDSO portfolio consists of 1,627 sites, comprised of 341 company-operated sites, 302 commission agents, 182 leasee-dealers, and 802 contractors. In addition, we operate 64 sites under that name, Spring Partners Retail Joint. Looking at the wholesale segment, fourth quarter 2023 product margin decreased $18.8 million to $51.9 million. Product margin from distillates and other oils decreased $30.2 million to $26.5 million, primarily due to less favorable market conditions and lower distillate sales in the quarter.

At quarter end, our GSO portfolio consisted of 1006 hundred 27 sites comprised of 341 company operated sites 302 commissioned agents 180, Junichi dealers and 802 contract dealers. In addition, we operates 64 sites under that frame partners retail joint venture.

Looking at the wholesale segment fourth quarter 2023 product margin decreased $18 8 million to $51 9 million product margin in distillates and other oreos decreased $30 2 million to $26 five primarily due to less favorable market conditions and just this quarter.

Gregg Hansen: Product margin from gasoline and gasoline-blown stocks increased $11.4 million to $25.3 million, primarily due to more favorable marketing conditions in gasoline here over here. Commercial Segment Product Margin decreased $1.5 million to $8.4 million, primarily due to less favorable margins in our bunker. Looking at expenses, operating expenses decreased $2 million to $116 million in the fourth quarter of 2020. SG&A expenses increased $0.5 million in the quarter to $81.3 million.

Product margin from gasoline and gasoline blend stocks increased $11 4 million to $25 4 million, primarily due to more favorable market conditions in gasoline year over year.

Commercial segment product margin decreased one 5 million to $8 4 million, primarily due to less favorable margins in our bunkering business.

Looking at expenses operating expenses decreased $2 million.

There were $116 million in the fourth quarter of 2023, SG&A expenses increased <unk> 5 million each quarter to 81.3.

Gregg Hansen: Interest expense was $20.7 million in the quarter compared with $19.7 million in 2020, and CapEx in the fourth quarter was $34.1 million, consisting of $25.4 million of maintenance CapEx and $8.7 million of expansion CapEx, primarily related to investments in our gasoline station. For the full year of 2023, we had $60.8 million in maintenance capex and $28 million in expansion capex. For the full year of 2024, we expect maintenance capital expenditures in the range of $50 to $60 million and expansion capital expenditures, excluding acquisitions, in the range of $60 to $70 million, relating primarily to our gasoline station and terminal. These current estimates depend in part on the timing of completion of projects, availability of equipment and workforce, weather, and unanticipated events or opportunities requiring additional maintenance or investment.

Interest expense was $20 $7 million, a quarter compared with $19 7 million in 2022.

Capex in the fourth quarter was $34 1 million consisting of $25 4 million of maintenance Capex and $8 7 million of expansion Capex, primarily related to investments in our gasoline station business.

For full year 2023, we had $68 million of maintenance Capex and 28 million in expansion Capex.

The full year of 2024, we expect maintenance capital expenditures in the range of 50 to $69 and expansion capital expenditures, excluding acquisitions in the range of 60 to 70 million relating primarily to our gasoline station and terminal businesses.

Eastern estimates dependent part on the timing of completion of projects availability of equipment and workforce, whether an unanticipated events for opportunities requiring additional maintenance for investments.

Gregg Hansen: Our balance sheet remains strong at $1231, with leverage, which is defined in our credit agreement as funded debt-to-EBIT debt, of approximately 2.86 times. We continue to have ample access to and capacity in our credit facilities. As of December 31st, total borrowings outstanding under our credit agreement were $396.8 million. This consisted of $16.8 million of borrowings under our working capital revolver and $380 million outstanding under our revolving

Our balance sheet remains strong at 12, 31 with leverage which is defined in our credit agreement as funded debt to EBITDA.

2.86 times, we continue to have ample excess capacity in our credit facilities as of December 31, total borrowings outstanding in our credit agreement were $396 8 million. This consisted of $16 8 million of borrowings under our working capital revolver and $380 million outstanding under our revolver credit revolving credit facility.

Eric S. Slifka: In January, we completed a private offering of $450 million in aggregate principal amounts of eight and a quarter senior unsecured notes due 2032. We used the proceeds from the offering to repay a portion of the borrowing to outstanding under our current credit agreement, primarily related to the Motiva acquisition, and for general corporate purposes. Now, let me turn the call back to Eric for closing comments. Thank you, Gregg. We will begin 2024 with a strong balance sheet and cash flows that position us to execute on our strategic priorities and the growth opportunities ahead. Operator, please open the call for questions. Thank you.

In January we completed a private offering of $450 million aggregate principal amount of eight and a quarter senior answer secured notes due 2032.

We used the proceeds from the offering to repay a portion of the borrowings outstanding under our credit card credit agreement, primarily related to the Nokia acquisition and for general corporate purposes.

Now, let me turn the call back for closing comments.

Thank you Greg we began in 2024 with a strong balance sheet and cash flows that position us to execute on our strategic priorities and the growth opportunities ahead.

Operator, please open the call for questions.

Thank you we will now be conducting a question and answer session.

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Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. The first question comes from the line of Selman Achill with Steeple.

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One moment, please while we poll for questions.

Thank you. Our first question comes from the line of Selman <unk> with Stifel. Please proceed with your question.

Selman Achill: Please proceed with your question. Good morning. Maybe just starting off with... The Gulf Oil... Amendment. Does that now? Presumably you Xed that out, and that was the big thing that was holding up HSR. So do you have a timeline for closing? Yeah, so sorry. Hey, Simon, how are you doing? It's Gregg Hansen.

Good morning.

Maybe just starting off with.

The Gulf oil.

The amendment.

Is that now I, presumably you you ex that out and that was the big thing that was holding up HSR. So do you have a timeline for closing.

Yes.

Oh, sorry, Hey, Tom how are you doing Greg Hanson.

Gregg Hansen: So we're not going to talk much about the GELP transaction other than what we put in the AK. You know, we are still working with the FTC to get to move that forward. And so that's all we're going to talk about at the moment. OK, um, then can you, as you enter 2024, what's your outlook for your JV with XLM? Yeah, I mean, I can speak to that, Eric and Mark, feel free to add. I mean, I think, you know, I think we're very excited about the JV. We closed on it in June of last year.

So we're not going to talk much about the the golf transaction other than what we put in the 8-K, we are still working with the FTC to get move that forward and so that's all we're going to talk about at the moment.

Okay.

And then he.

As you enter 2020 for what's your outlook for your JV.

With excellent.

Yeah, I mean, I can speak to and Eric and Mark feel free to add I mean, I think I think we were very excited about the JV. We closed on it in June of last year.

Gregg Hansen: You know, we've been spending a lot of time on it, getting it up to the standards of how we operate sites. And we're excited about that marketplace in Houston. We do think it's a potential good growth opportunity for us in Texas. It's a growing market. It's a long way; it's the largest C-store market in the US. There's still a lot of fragmentation down there and consolidation that needs to happen. And it's a white space for you, for us, as you guys know, in the C-store space for us. So it has room for growth.

You know we've been we've spent a lot of time on it getting it up to the standards that we operate sites and we're excited about that marketplace in Houston.

We do think it's a potential good growth opportunity for us in Texas, It's a growing market. So long as the largest C store market in the U S. There's still a lot of fragmentation down there in consolidation that needs to happen.

A white space for Us as you guys know in the C store space for US. So there is room for growth. So I think overall, we're excited about the opportunity and look to continue to grow in 'twenty four.

Gregg Hansen: So I think, you know, overall, we're excited about the opportunity and look to continue to grow. So we should expect to see growth out of that in 24. That's the goal. I would say we're going to be opportunistic like we always are, and we'll try to look at every potential deal and every transaction. And there's a lot going on at the company. Motiva has a few assets, Motiva assets that are in the Texas market, so the question is, can we find the right deals, the right assets to create higher returns by utilizing our app? Understandable. Any comments on the strength of your cents per gallon? Quarters.

So we should expect to see growth out of that in in 'twenty four.

That's the goal.

Yeah.

But I would say, we're gonna be opportunists opportunistic like we always are.

And you know we will try to look at every at every potential deal in every transaction you know and there's a lot going on at the company are there areas. You know Motiva has has a.

A few assets the motiva assets for that are in.

Texas market. So you know the question is is can we find the right deals the right assets to create higher returns by youth.

And our asset base.

Understood.

Any comments on the strengthened Ah you're your cents per gallon this quarter.

Gregg Hansen: Yeah, I mean, overall, you know, in a less volatile year, we continue to believe that margins are going to be higher than they have been historically, given a number of factors, including higher expenses for lower-tier operators and higher break-evens for lower-tier operators. I think the fourth quarter was very strong, much stronger than the previous nine months. And you got some of that just because of the fall off in prices to start the first quarter. You know, there was a big decline in wholesale revolving in October, and that sort of set the stage for the quarter. But I think overall, we continue to believe that, you know, margins may not be as strong as they were in the fourth quarter going forward, but they will continue to be stronger than they have been historically. And then the last one for me, and as you look back over 23, you have very consistently raised the distribution.

Yeah.

Overall, you know less.

Less volatile year.

We continue to believe that.

Margins are going to be higher than they have been historical historically.

A number of factors, including higher expenses for lower tier operators and higher breakeven for lower tier operators I think the fourth quarter was very strong.

Much longer than the previous nine months and you had some of that just because of the falloff in prices to start the first quarter. There was a big decline in wholesale are evolving in October and that sort of set the stage for the quarter, but I think overall, we continue to believe that margins may not be as strong as they were in the fourth quarter going forward, but yeah.

They will continue to be stronger than they had been historically.

Understood and then the last one for me and.

You know as you look back over 23, you you very consistently raise the distribution.

And I certainly don't expect you guys to opine on anything that the board may or may not do but when you think about running the business and your coverage ratio.

Gregg Hansen: And I certainly don't expect you guys to comment on anything that the board may or may not do. But when you think about running the business and your coverage ratio... Is this a comfortable coverage ratio for you? Would you be comfortable at lower levels?

Is this a comfortable coverage ratio for you would you be comfortable at lower levels do you think it needs to go up is there any way you could maybe frame up some thoughts around that.

Gregg Hansen: Do you think it needs to go up? Is there any way you could maybe frame up some thoughts around that? Sure, you know, I think we're at a comfortable level. We're very comfortable with the coverage ratio at 1.9x and 1.85x over the LCM basis for the year, partially reflected in the strength of the fourth quarter numbers.

Sure.

Yeah, I think we're at a comfortable level, we're very comfortable with the coverage ratio at one nine times and 185 times over the LTM basis for the year.

Partially that's reflected in the strength of the fourth quarter numbers you know if you look back since we've gone public in 2005.

Gregg Hansen: If you look back since we went public in 2005, our coverage ratio since 2005 has been 1.6x after the preferred distribution. So we've always maintained strong cash flows. I think we're definitely comfortable at a lower level than 1.9x, I would say.

Our coverage ratio since 2005, and one six times after the preferred preferred distributions. So we've always maintained strong cash flows I think you know we're comfortable definitely at a lower level than one nine times a day.

Gregg Hansen: Our goal is to make sure that we have the capital to execute on our expansion capital budget and also maintain the strength of our balance sheet to continue to look at it. We do think it'll continue to be a consolidating market both on the retail gasoline side and on the terminaling side. So we do expect there to be continued opportunities for acquisitions, and we need to make sure that we're keeping our balance sheet in a position to execute on those, and so retaining some excess cash flow is important for that piece. But I think it'll depend on what the opportunities are out there and how our board wants to capture those opportunities. But, you know, if there is a lack of opportunities, we may choose to distribute more than retain, but if there are more opportunities, we may need to retain a little bit more to keep our balance sheet strong.

Our goal is to make sure that we have the capital to execute on our expansion capital budget and also maintaining the strength of our balance sheet to continue to look at acquisitions. I mean, we do think it will continue to be a consolidated market. Both on the both on the retail gasoline side and on the Terminalling side. So we do expect there to be continued operate opportune.

It is for acquisitions, and we need to make sure that we're keeping our balance sheet and in a position to execute on those and so retaining some excess cash flow is important for that piece, but you know I think it all depends on what the opportunities are out there and how our board wants to capture those opportunities.

If there is a lack of opportunities and we may choose to distribute more than than retain but if there's more opportunities we may need to retain a little bit more to keep our balance sheet strength.

Gregg Hansen: All right, thank you very much. Our next question comes from Greg Brody with Bank of America. Please proceed with your question. Good morning, everybody. Just on the acquisition front, you touched on it, but maybe give us a better sense of what the opportunity sets out there. We still expect it to be busy this year; just some color there would be helpful. Hey Gregg, it's Eric.

Alright, Thank you very much.

Our next question comes from the line of Gregg Brody with Bank of America. Please proceed with your question.

Hi, everybody.

Yeah.

Just on the acquisition front you touched on it but maybe you can give us a better sense of what the opportunity set out there or is it is it.

Do we still expect it to be busy this year.

Just some color there would be helpful.

Hey, Greg its Eric.

Eric S. Slifka: You know, it's still busy. I would say there's going to be a lot of opportunity. The question is, do we think it will fit us?

You know it it still is busy.

I would say Ah theres going to be a lot of opportunity. The question is do we think it will fit us.

Eric S. Slifka: You know, we've got to be very well aware of any overlaps that may exist, too, and the problems that may arise. And so, you know, we'll try to look at everything like we always do, uh... and uh... and then if the right deals come up in the right locations with the right assets, we'll try hard to see if we can buy them. And I think that's, you know, that's the same thing that we've done. You know, since really the history of the company, right, is acquisitions.

You know, we've got to be very well aware of any overlaps and exits too and the problems that they create and so.

We'll try to look at everything like we always do.

And and then if the right deals come up in the right locations with the right asset.

You know, we will try hard to see if we can buy it.

And I think that's you know that's the same thing that we've done.

Since those are really the history of the company right is acquisitions are key to us it's key to our growth.

Eric S. Slifka: It's key to us, it's key to our growth, and there are plenty of markets that we're still not in. So, you know, there's lots of opportunity out there. Are there any markets that are particularly attractive to you that you're focused on getting into? Yeah, well, I would say our preference is we think the assets that have the most flexibility in terms of how they're accessed have the most value. And so if you have assets that are waterborne and have large docks and have ways to get in and out and have good tankage, I mean, I think it's the same story for every terminal operator. But, you know, access by rail is important, too. So scale in all these markets is critical to make sure that you really have the best assets that are positioned in the future to provide the most flexibility for their users.

And there are plenty of markets that we're still not in.

So there's lots of opportunity out there.

Are there any markets that are particularly attractive to you.

That you're focused on getting into.

Yeah, well I would say I would say or our preference we think the assets that have the most flexibility.

In terms of how their access I have the most value and so if you have assets.

That our waterborne that have large docks and have a ways to get in and out has the tanker Jeremy I think it's the same story for every terminal operator.

But you know also access in by rail is important so scale in all these markets is critical.

To make sure that you really have the best assets that are positioned in the future to provide the most flexibility for for their users.

Gregg William Brody: I appreciate the cover, guys. Thank you. Thanks, Craig. Thank you. We have no further questions at this time.

I appreciate the color guys. Thank you.

That's great.

Thank you we have no further questions at this time, Mr. Slifka, I would like to turn the floor back over to you for closing comments.

Eric S. Slifka: Mr. Slifka, I would like to turn the floor back over to you for closing comments. Thank you all for joining us this morning. We look forward to keeping you updated on our progress. Thanks, everyone. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Thank you all for joining us. This morning, we look forward to keeping you updated on our progress. Thanks, everyone. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.