Q1 2024 USA Compression Partners LP Earnings Call
Good morning, welcome to the USA compression partners first quarter 2020 for earnings Conference calls.
During today's call all parties will be in a listen only mode.
At the conclusion of managements prepared remarks, the call will be open for Q&A.
If you have any question during that time, Please press star one on your telephone keypad.
The conference is being recorded today may seven 2024.
I now would like to turn the call over to Kris border Vice President General Counsel and Secretary. Please go ahead.
Christopher W. Porter: Good morning, everyone and thank you for joining US. This morning, we released our operational and financial results for the quarter ending March 31, 2024, you can find a copy of our earnings release as well as a recording of this call in the Investor Relations section of our website at USA compression Dot com.
Christopher W. Porter: During this call our management will reference certain non-GAAP measures you will find definitions and reconciliations of these non-GAAP measures to the most comparable U S. GAAP measures in our earnings release as.
Christopher W. Porter: As a reminder, our conference call will include forward looking statements. These statements are based on management's current beliefs and include projections and expectations regarding our future performance and other forward looking matters.
Christopher W. Porter: Actual results may differ materially from these statements.
Christopher W. Porter: Please review the risk factors included in this morning's earnings release and other public filings. Please note that information provided on this call speaks only to manage views as of today may seven 2024 and may no longer be accurate at the time of a replay.
Now I'll turn the call over to Eric long, President and CEO of USA compression.
Eric D. Long: Thank you Chris Good morning, everyone and thanks for joining our call I am joined on the call by Eric Schoen, Our C O O.
Eric D. Long: Morning, We released our first quarter 2020 results, which reflected another quarter of record results.
Eric D. Long: Our first quarter results were driven by our strategy laid out during previous calls.
Eric A. Scheller: Focusing on prudent deployment of capital for return based decision, making and demand driven pricing with extended contract tenors.
Christopher W. Porter: By staying disciplined we have continued to drive financial and operational performance to record levels, which we believe enhances and sustains unitholder value.
Christopher W. Porter: Of note, we saw another quarter of record revenues adjusted gross margin adjusted EBITDA distributable cash flow.
Christopher W. Porter: Average revenue generating horsepower and average revenue per revenue generating horsepower.
Christopher W. Porter: Our utilization on both an average and period end basis were also at record highs.
Christopher W. Porter: Consistent with my commentary during our last call we address several important components of our capital stack during the first quarter.
Christopher W. Porter: In March 2024, the partnership Opportunistically issued $1 billion up seven and one 8% senior notes due 2029.
Christopher W. Porter: And redeemed all of our $725 million six and seven 8% senior notes due 2026, we.
Christopher W. Porter: We'll use the remaining net proceeds to reduce the revolving credit facility or.
Christopher W. Porter: Our timing in the high yield marketplace was virtually perfect with the spread to benchmark treasuries are 291 basis points close to the recent lows last seen in January 2022.
Christopher W. Porter: The issue was substantially oversubscribed and our notes have performed well even in light of the recent pressure on interest rates.
Christopher W. Porter: Additionally, this issuance received a credit rating upgrade from Moody's.
Christopher W. Porter: Further on April one 2020 for the holders of the partnerships series a preferred units elected to convert an aggregate of 280000 preferred units and the $13 million 991954 common units, which were issued effective as of April two.
Christopher W. Porter: 2024.
Christopher W. Porter: 2024 guidance for distributable cash flow has been updated to reflect the impact of this conversion.
Christopher W. Porter: The completion of these two activities sets us up well over the coming quarters to continue simplifying our capital structure.
Christopher W. Porter: Kris our public float of common units as well as Opportunistically work on the refinancing of our $750 million of senior notes due in 2027.
Christopher W. Porter: You may have noticed that our distributable cash flow coverage ratio, which was 141 times was slightly lower than our prior quarter's $1 four eight times coverage.
Christopher W. Porter: Additionally, our leverage ratio of four to seven times as calculated under our credit facility was slightly higher than our prior quarter's $4. One times. Both of these changes were due to one time events that we believe will potentially enhance unitholder returns over the long run.
Christopher W. Porter: Regarding our leverage ratio as we mentioned during our last call. We were expecting 52500 horsepower of new large horsepower units to be delivered during the first half of 2024.
Christopher W. Porter: These units represented the remainder of our late 2022 order. We're happy to report that 47550 2500 horsepower was delivered during the first quarter and the remaining 5000 horsepower was delivered in April.
Christopher W. Porter: <unk> also been deployed into the field under long term contracts. The Frontloaded purchase of these units led to the slightly higher leverage ratio for this quarter, but we believe our leverage ratio will begin to trend back towards 4.0 times.
Christopher W. Porter: Guarding our distributable cash flow coverage ratio as I mentioned, our series a preferred unit holders began converting their preferred units to common units in January.
Christopher W. Porter: Then in early April they converted another $280 million of preferred units to common units prior to our record date attributable to the first quarter results.
Christopher W. Porter: This resulted in approximately 14 million common units being issued at least half of which we believe they have been sold into the open market as of today.
Christopher W. Porter: While the conversion of the preferred units is a very small impact on our distributable cash flow coverage ratio be enhanced public float brought to our common units should be a positive. We believe that we will continue to increase our distributable cash flow coverage ratio and reduce our leverage ratio over time.
Christopher W. Porter: During the coming quarters, we will continue to focus on opportunistically, improving and simplifying our capital structure.
Christopher W. Porter: Through the first four months of the year $320 million out of $500 million of series a preferred units had been converted to common units. We have refinanced our 2026 senior notes at an attractive financing rate and firmed up the fixed interest rate for almost all of our debt through 2025.
Christopher W. Porter: As I mentioned, we used the proceeds from our March 2020 for issuance of $1 billion of seven and one 8% senior notes due 2029 to redeem all of our 2026 senior notes and used the remainder of the proceeds to pay down our credit facility, resulting in a 700.
Christopher W. Porter: $36 million borrowed under our credit facility at the end of the quarter.
Christopher W. Porter: If you recall the notional amount of our floating to fixed interest rate swap is $700 million.
Christopher W. Porter: And extends through December 2025 at about 125 basis points below their current sofa right.
Christopher W. Porter: As such we essentially locked in to four 5 billion of our $2 $49 billion of indebtedness as of March 31, 2024 at a weighted average interest rate of 686%.
Christopher W. Porter: We were extremely pleased with this offering and believe that our ability to refinance our existing indebtedness at attractive rates and the current market reflects investors' support for our underlying core business.
Christopher W. Porter: While we still have work to do we think we have made strong progress so far.
Christopher W. Porter: We will continue to be opportunistic in regards to maximizing our capital structure.
Christopher W. Porter: As a reminder, we believe focusing on our capital structure, including the eventual refinancing of our senior notes due 2027.
Christopher W. Porter: Renewing our credit facility and fully exiting our series a preferred units is the prudent course of action before we consider changes to our distribution policy.
Christopher W. Porter: As we look forward to the rest of the year, we still believe the approach we laid out a few months ago during our previous earnings call remains the prudent path.
Christopher W. Porter: We remain bullish on the long term prospects of the natural gas industry, but also see near term uncertainty, which has only grown since our last call inflation is turning out to be stickier than experts thought a mere three months ago. The Russia, Ukraine conflict is still ongoing and new tensions have risen in the middle East we also.
Christopher W. Porter: Have the upcoming election in interest rates that will be higher for longer including the potential for stagflation. According to the ever insightful Jamie Diamond.
Christopher W. Porter: As such we believe 2024 is a year that we focus internally with reduced growth, enabling us to produce stable cash flows reduce leverage and position USA compression for long term success, we will continue to improve internal operational efficiency.
Christopher W. Porter: Idle units to active status at attractive returns.
Christopher W. Porter: Pricing improvements and strive to maximize return on growth capital through opportunistic purchasing of equipment.
Christopher W. Porter: As we said last quarter. We believe this strategy will allow us to maintain operational and financial flexibility to weather any storms created by current geopolitical or economic headwinds.
Speaker Change: Before turning the call over to Eric <unk> to discuss first quarter results I would like to make a few comments regarding safety.
Eric: The most important thing we do is to ensure that our employees contractors and customers return home safely. Each day, we are extremely proud of our tireless focus on safety that has resulted in a total recordable incident rate of zero during the first quarter.
Eric: We are proud of this accomplishment and thank every USA compression employee for their commitment and strict adherence to our safety policies and procedures with that I will turn the call over to Eric <unk>, our COO to discuss our first quarter highlights.
Eric: Thanks, Eric and good morning, all.
Eric: As Eric noted we were pleased to deliver our unit holders another excellent quarter of strong results in.
Eric: In addition to the record results Eric mentioned, we deployed approximately 63000 additional horsepower during the quarter as we continued to deploy large horsepower units into the field.
Eric: As we mentioned last quarter, we are securing contracts with extended tenor and enhanced pricing that we think generates strong stable base load cash flows, while providing opportunistic upside as market conditions evolve.
Eric: Our revenue growth trend continued and was driven primarily by increasing utilization exiting the quarter at an all time high of 95% and pricing improvement also at an all time high averaging $19 96.
Eric: For the first quarter are.
Eric: Our revenue increased 2% sequential quarters, and 16% compared to the year ago period. The first quarter also saw our sector, leading margins over 67% in line with historical averages since our initial public offering reflecting the stability of our steady determination to offset increase.
Eric: Inflationary costs through both productivity improvements and then contractual pass through pricing adjustments, which we expect to continue supporting our margins in line with our current levels should inflation remained high or increase in the near term.
Eric: Regarding financial results, our first quarter 2024, net income was $23 6 million.
Eric: Operating income was $66 9 million.
Eric: Net cash provided by operating activities was $65 $9 million and cash interest expense net was $44 $7 million.
Eric: Cash interest expense increased by approximately $1 7 million on a sequential quarter basis, primarily due to higher average outstanding borrowings. However, higher cash interest expense was mitigated by $2 $4 million of cash payments received under our $700 million.
Eric: <unk> principal fixed rate interest rate swap, which locks in 30 days so far until December 2025 at 397, 5% compared to current 30 days, so far that exceed 5.25%.
Eric: Under our current leverage ratio. This results in an interest rate of 647% on $700 million of our credit facility borrowings.
Eric: Turning to operational results, our total fleet horsepower at the end of the quarter increased by 2% to approximately $3 8 million horsepower as we accepted delivery of 47500 horsepower of new large horsepower units during the quarter.
Eric: Our revenue generating horsepower increased by 2% on a sequential quarter basis, primarily due to the addition of these new large horsepower units as we had secured customer contracts prior to the delivery of the new units.
Eric: First quarter 2024 expansion capital expenditures were $104 8 million and our maintenance capital expenditures were $5 8 million.
Eric: Expansion capital spending continues to consist of reconfiguration and make ready of idle units along with the aforementioned delivery of 47500 horsepower of new large horsepower units and the opportunistic acquisition of other large horsepower units in the market.
Eric: We accepted delivery of an additional 5000 horsepower of new large horsepower units during April which completed the remainder of our late 2020 to order.
Eric: We also expect additional an ongoing conversion of current fleet idle units to active status and throughout the remainder of 2024, we anticipate the deployment of between 85000, and 115000 horsepower of existing and contracted fleet assets at capital cost substantially below those of.
Eric: New organic growth equipment builds.
Eric: Finally, I am pleased to share that on May 3rd we made our 45th consecutive quarterly distribution payment to $52.05 per unit distribution was flat the previous quarter's distribution and with that I'll turn the call back to Eric long for concluding remarks.
Eric: Thank you Eric we are extremely proud of our first quarter results and the progress we have made in a mere four months on the optimization of our capital structure.
Eric: We remain bullish on the long term prospects of the natural gas industry. We are all facing some general economic and political uncertainty in the near term we.
Eric: We believe we are well positioned to weather. This uncertainty continue improving our financial metrics and Opportunistically address our capital structure over time.
Eric: Once we have addressed our capital structure. We will then be in a better position to consider future potential distribution policy changes to conclude we are extremely pleased with our first quarter 2024 results highlighted again by record quarterly revenues adjusted EBITDA distributable cash flow.
Eric: And utilization.
Eric: We expect to file our Form 10-Q with the SEC as early as this afternoon and with that we will open the call to questions.
Speaker Change: We will now begin the question and answer session. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.
Eric: If you would like to withdraw your question simply press Star one again.
Eric: Called upon to ask your question and listening via loud speaker on your device. Please speak up your handset and ensure that your phone is not on mute when asking your question.
Eric: Again, Please press star one to join the queue.
Eric: Your first question comes from the line of.
Eric: Jim Rollyson of Raymond James Please go ahead.
James Michael Rollyson: Hey, good morning, Eric and Eric.
James Michael Rollyson: Good morning, Jim how are you today.
James Michael Rollyson: I'm doing alright, Eric if you kind of take a step back from the kind of short term caution you provided it seems like the outlook as we go into next year and frankly, the next few years on the gas side driven by LNG that we've all read about in some of the data center growth.
James Michael Rollyson: From AI and impact there on electric demand in gas.
James Michael Rollyson: Bodes well for this cycle to play out over a period of time and I'm curious given the planning cycles that you all need with lead times and all of that.
Eric: Realize this year, you've taken a step back from just new units and focusing on some of the internal fleet.
Eric: Upgrades and bringing back but I'm curious how your conversations with customers are going and why.
Eric: How far out are they planning and just maybe how you're thinking about visibility going out here over the next handful of years.
Speaker Change: Jim all great questions. Obviously appreciate.
Speaker Change: Youre digging into our industry, you've recently published some research, which by the way I think some of the best I've seen in a long time with the deep dive that you've done.
Eric: The fundamentals of the compression industry are probably the best they've been in the last two decades.
Eric: If you think about when we formed USA compression 25 years ago domestically, we produced and consumed little over 50 Bcf of gas a day and today, we're north of 100 Bcf with permitted and other construction LNG facilities.
Eric: We're going to see a substantial increase in the next two or three three or four years related to.
Eric: Demand increases for natural gas.
Eric: The electrification drive the de Carbonization drive.
Eric: Has legs.
Eric: I don't think people fully appreciate the magnitude of how far behind the electric grid is what has to happen to stabilize the grid and expand the grid as we all know when the wind doesn't blow and the Sun doesn't shine at night.
Eric: Renewable sources of electric generation don't make electricity.
Eric: Backup batteries are extremely expensive at the industrial and the utility scale.
Eric: We've had a meeting with the chairman of the public utility Commission recently in Texas, who indicated that looking at peaking gas plants versus looking at you.
Eric: Using battery backups for some of the renewables.
Eric: The renewables with batteries or 10 times, the cost of a conventional gas, peaking type of unit.
Eric: So when the light bulb comes on to the people of the state of Texas as an example, or other states across the U S.
Eric: This is going to be an extremely.
Eric: Costly effort to expand the grid stabilize the grid.
Eric: And now Youre at the point in time of starting to bring on AI data centers, which have massive more electrical requirements in a conventional file server type data center or even mid point mining or whatever it may be.
Eric: <unk> population growth.
Eric: Arming of the environment, meaning more air conditioning load at Cisco and on and on and on and on.
Eric: So natural gas compression will fit in the middle.
Eric: Feeding gas in the times to get into LNG facilities feeding gas into pipelines that will end up getting into well into facilities to provide.
Eric: And create electricity.
Speaker Change: We're getting a lot of legs.
Eric: The reason, we're a little on the conservative side right now cautious is more the uncertainty coming out of Washington right now.
Eric: We have two very very different approaches to.
Eric: How you deal with the electrification that's required in the grid.
Eric: We've got very different approaches between the two dominant parties in Congress right now relating environmental cleanup and environmental perspective going forward.
Eric: Sure.
Eric: The U S is a large provider of energy are we going to provide energy to our allies to help deal with geopolitical risks. There's a lot of things are going on.
Eric: So we want to be cautious and not commit hundreds of millions of dollars to equipment with the stroke of a pen could have significant regulatory risk, we'd rather let kind of index clear a little bit continue to focus on our internal efforts on long term modification of our fleet assets to dual <unk>.
Eric: Drive to looking at distributed generation opportunities utilizing our existing assets. So we're trying to optimize our as is the case.
Eric: Into the two vk's when we have regulatory certainty and we've got some clarity of the economy and the markets etc.
Eric: So simplistically jump back on your question I think the fundamentals of compression as I as I noted are probably the best I've seen them in two decades, there are ancillary activities that will come off of that.
Eric: As far as forward visibility with our customers, we're already talking about 2025 activities.
Eric: As we all know there is a lot of integration going on with major acquisitions and consolidations of the upstream industry. So people are starting to rationalize their acreage holdings rationalize their drilling and developmental plans over the coming year or two or three.
Eric: Exxon and pioneer just got their deal approved by the Doj last week.
Eric: So as these things are promulgated and processed people will start to get better clarity on until these things clear regulatory oversight, it's a little bit of a jump ball right now so a little bit of caution.
Eric: I'd say our industry has tailwind.
Eric: But we've always been believers that unless there's a very clear cut path and course of action.
Eric: Let's wait a quarter or two or three and just see what the marketplace holds in store for us. So I think right now we've got firm hand on the tiller and got a little bit of choppy seas, we're just trying to whether through a little bit of a storm that we see clearer see very clear sailing ahead of us.
Speaker Change: That's very helpful and thank you for the detailed commentary maybe circling back to the balance sheet.
Speaker Change: You said a lot of things obviously, you guys made the move on refining and congrats on that is certainly a good good print on the on.
Speaker Change: On the coupon.
Speaker Change: And from a going forward perspective.
Speaker Change: We think about obviously you mentioned at some point you tackled at the 2027, which I presume is this going to be Opportunistically driven based on the markets.
Speaker Change: But can you kind of bigger picture with where the balance sheet is today. The leverages today, maybe remind us just where you want leverage to go and kind of where does that need to be either leverage or distribution coverage or maybe a combination of both before you would actually think about doing something on distributions here down.
Speaker Change: The road.
Speaker Change: Again, great questions, Jim and these are things, we have discussions with our board with.
Speaker Change: Routinely.
Speaker Change: Keep in mind that USA never cut our distribution.
Speaker Change: You look at the now pushing $2 billion that we have distributed back to our unitholders since going public in 2013.
Speaker Change: One of the few who.
Eric: Chose not to cut the distribution.
Eric: Still believe that if youre going to be an MLP.
Eric: Distribution is one of them should be sacrosanct and before you cut a distribution you need to have exhausted.
Eric: Each and every other alternative that you had.
Eric: So before we induce than an increase in distribution, we want to make sure that.
Eric: Going forward, regardless of volatility in the cycle that we will be able to maintain.
Eric: And the increased level of distribution over time.
Eric: So you can see we are building our distribution coverage to the 1415 range coming up we think that that will continue to improve.
Eric: You look at our leverage which right now is running in the four extra or so range.
Eric: We do have a different somewhat different definition for our ABL purpose versus the way. Some other people look at your all in balance sheet and I think that this conversion of our preferred to common.
Eric: Units over time continues to simplify.
Eric: Get the convergence of kind of how people look at the balance sheet with or without the preface total leverage coming down.
Eric: So we're going to get the leverage down this conversion of the prep to common goes a long way to getting that accomplished.
Eric: Slowing the growth like we've been doing allows us to continue to.
Eric: Reduce our leverage ratio, yes, the absolute leverage has picked up a little bit but thank you again to what we pointed to on our cost of capital or debt capital blended basis. It was $684 686, something along that line.
Eric: We're constructing in deploying new assets or rebuilding.
Eric: Used assets at costs and returns that give us upper double digits low 20% Unlevered IRR.
Eric: So to the extent, we can borrow money for sub 7% and deploy it into returns in the 20% and makes 1300 basis point type of returns.
Eric: It seems like that is a pretty good way to create shareholder value.
Eric: It's the balancing act Jim between absolute level of leverage.
Eric: As a private company brand substantially higher levels of debt and leverage.
Eric: I am a believer that this industry and USA compression in particular.
Eric: Readily support leverage in that 4.0 times Zip code range.
Eric: Do we see ourselves wandering down a little bit below that potentially do we see a certain points of the cycle.
Eric: When things are a little bit tighter and utilization declines, particularly with <unk>.
Eric: Folks are industry, who focus on smaller wellhead equipment, it's a little more volatility a little bit higher beta your leverage ticks up so I think a good range long term is to look somewhere between 375 and four in a quarter or so.
Eric: Across different types of cycles, we're never going to be a <unk> Levered company, we're never going to be a onex Levered company, but we don't need to be because we are much more stable than the industries that have lower leverage like an oilfield service company or like an upstream company, who have different financial drivers and economic drivers that.
Eric: We do as a midstream company.
Eric: Take or pay demand type of contracts with de Minimis commodity risk.
Speaker Change: Got it that's helpful I'll get back in the queue appreciate it.
Speaker Change: Thank you much.
Speaker Change: Your next question comes from the line of Brian <unk> of Baird. Please go ahead.
Brian: Good morning.
Brian: Just was hoping it's a couple of follow up questions could you.
Brian: Let us know what you think capex spend is going to be this year unfolds.
Speaker Change: Yes, Sir.
Speaker Change: So.
Speaker Change: Capex being growth capex being growth and maintenance capex.
Speaker Change: Growth of maintenance.
Speaker Change: Growth in maintenance combined capex.
Speaker Change: Yes, I think we're going to see is somewhere that we're going to be around 115 to under $25 million in expansion capital and probably somewhere between call it 25% and $35 million in maintenance Capex.
Speaker Change: Okay.
Speaker Change: Got it.
Speaker Change: And just as we think about deploying some of the existing fleet back into the field as opposed to buying new equipment.
Speaker Change: Is that including the expansion or is that included in the maintenance Capex.
Speaker Change: So thats included in the expansion capital.
Speaker Change: Okay.
Speaker Change: And I know you are not looking to add more new equipment right now, but any thoughts on how long it would take if you're awarded new piece of equipment, how long that would take to get delivered particularly with the cat 36 series hundred engines.
Speaker Change: Or is brought in there.
Speaker Change: Their construction period.
Speaker Change: We are running as much as over a year.
Speaker Change: A quarter or two ago, its been reined back into I would say roughly nine months or so ago.
Speaker Change: And it's not just cat engines on a 3600 series you've got fabrication capacity limitations.
Speaker Change: Got other components that go into manufacturing a compressor package from compressor frames and compressor cylinders.
Speaker Change: One of the things I think people haven't quite picked up on yet is that caterpillar also uses these types of engines to supply backup generation equipment for data centers. So you can envision that if youre, Microsoft or Google or Facebook or Amazon.
Speaker Change: Let alone before you move into the AI expansions at some of these folks are getting into all of those data centers ended up with backup electric generation equipment, because they can ill afford to have any form of downtime.
Speaker Change: So as the number of data facilities are increased.
Speaker Change: Spending billions and billions and billions of dollars to increase new capacity. These places all have cat driven some diesel some natural gas type.
Speaker Change: Backup generation equipment.
Speaker Change: So I look at it as these facilities continue to be brought online there is going to be continued tension and pressure.
Speaker Change: And not just USA and our peers to access equipment, but we will be competing with <unk>.
Speaker Change: Sourcing this equipment from caterpillar with the likes of the Amazons, googles or Facebooks and Microsoft to backup their expansions into AI continued arrays.
Speaker Change: With data centers.
Speaker Change: Yes.
Speaker Change: Understood.
Speaker Change: That's helpful. There.
Speaker Change: As you think about the distribution policy post the simplification of the capital structure. How are you thinking about the distribution policy in context of the cycle.
Speaker Change: So again, that's something that our board makes that decision the management team will sit down and look at them say jets here. We are early stage of the cycle mid stage of cycle late stage of cycle.
Speaker Change: What's the outlook for interest rates, what's the outlook for demand for our equipment going forward whats the regulatory environment.
Speaker Change: All of these things go into our gone insulator so.
Speaker Change: I think it's fair to say that once we do get these 2020 sevens refinanced maturity extended.
Speaker Change: With our ABL facility were able on both of these we have several years of runway left but at the point in time, but we have some good clarity on just what our cost of capital is going to be our cost of interest is going to be what the regulatory environment is looking like what's going on geopolitically worldwide, what's going on with <unk>.
Speaker Change: Then we'll have a little bit better sense of what we need to recommend to the board as far as distribution policy. So I am not.
Speaker Change: Prepared today to commit to next quarter or two quarters or a year from now because theres a lot of stuff coming into an election year with basically two wars going on throughout the world.
Speaker Change: There's a lot of us to instability right now and I'm not prepared today to comment further on what the policies might look like in the future because today sitting here, it's pretty uncertain.
Speaker Change: Understood and then final question for me.
Speaker Change: Unless I missed this are you.
Speaker Change: Active CFO search at this point in time, it where does that stand.
Speaker Change: As we've indicated to multiple people multiple times.
Speaker Change: The CFO is come in two categories, those who raised capital I E. You're actively in the equity markets growing your balance sheet.
Speaker Change: Victor CFO has come in the form of more on the technical accounting compliance and support and optimization of running your day to day business.
Speaker Change: Tracy Owens, our Chief Accounting Officer comes from a long and stable background in the latter category. So we have made the conscious decision to not add a CFO at those stance.
Speaker Change: As you are aware our board is controlled by energy transfer.
Speaker Change: We do have our financials are consolidated underneath.
Speaker Change: And we do have adult supervision in the room.
Speaker Change: Tom Long my boss, who is the co CEO of energy transfer as a former CFO of ETP.
Speaker Change: Still on brand Hall, who is the current CFO of energy transfer sits on our board and to the extent.
Speaker Change: Tracy and his team need any further support or quote adult supervision there.
Speaker Change: More than willing enable to roll up their sleeves.
Speaker Change: It's needed at any point in the future. So now we do not intend to add a CFO currently we're not actively entertaining M&A, we're not actively growing.
Speaker Change: Our balance sheet with a form of equity capital, we havent raised any equity capital in over a decade, and we don't contemplating needing to anytime in the foreseeable future.
Speaker Change: Understood I appreciate all the color. Thank you. Thank you Sir.
Speaker Change: As there are no further questions at this time that concludes today's call. Thank.
Speaker Change: Thank you everyone for joining you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.