Q1 2024 Global Partners LP Earnings Call

Operator: Good day everyone, and welcome to the Global Partners first quarter 2024 financial results conference call. Today's call is being recorded. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Good day, everyone and welcome to the Global Partners first quarter 2024 financial results Conference call.

Operator: Today's call is being recorded.

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

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

Operator: Chief Financial Officer, Mr. Gregory Hanson.

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

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

Operator: At this time I would like to turn the call over to Mr. Gary for opening remarks. Please go ahead Sir.

Sean T. Geary: Good morning, everyone. Thank you for joining us.

Sean T. Geary: Good morning to everyone and thank you for joining US today's call will include forward looking statements within the meaning of the federal securities laws, including projections and expectations concerning the future financial and operational performance of global partners. No assurances can be given that these projections will be attained or that these expectations will be.

Sean T. Geary: Today's call will include forward-looking statements within the meaning of federal securities laws, 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. 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 statement. Now, it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Sean T. Geary: Matt.

Eric S. Slifka: 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.

Sean T. Geary: Chief Executive Officer, Eric Slifka.

Eric S. Slifka: Thank you, Sean, and good morning, everyone. Over the last five months, we've acquired 29 terminals, more than doubling our terminal network and total storage capacity from 9.9 million barrels to 21.3 million barrels. These strategic acquisitions strengthen our terminal operations, expand our growth opportunities, and enhance our earning power. In April, we completed the purchase of four liquid energy terminals from Gulf Oil for approximately $212 million, their location: Massachusetts, Connecticut, and New

Eric S. Slifka: Thank you, Sean and good morning, everyone.

Eric S. Slifka: These assets are a perfect geographic and operational fit in our existing northern terminal network. Linden and Woodbury, New Jersey each represent new markets for our business. The New Haven Terminal adds gasoline and distillate capabilities to our Connecticut portfolio, allowing us to serve our wholesale customers as well as our extensive retail network. The Chelsea, Massachusetts terminal allows us to continue to serve the Boston market, replacing the capabilities of the nearby Revere terminal, which we strategically divested for $150 million in 2022 to link the logistics of Blackstone Company.

Eric S. Slifka: Over the last five months, we've acquired 29 terminals more than doubling our terminal network and total storage capacity from $9 9 million barrels to 21 3 million barrels.

Eric S. Slifka: These strategic acquisitions strengthen our terminal operations expand our growth opportunities.

Eric S. Slifka: Enhance our earning power.

Eric S. Slifka: In April we completed the purchase of four liquid energy terminals from Gulf oil, so approximately $212 million.

Eric S. Slifka: And their locations.

Eric S. Slifka: <unk>, Connecticut, and New Jersey.

Eric S. Slifka: These assets are perfect geographic and operational fit in our.

Eric S. Slifka: Existing northern terminal network.

Eric S. Slifka: Lindon and Woodbury, New Jersey, each represent new markets for our business.

Eric S. Slifka: The new Haven terminal as gasoline and distillate capabilities to our Connecticut portfolio, allowing us to serve our wholesale customers as well as our extensive retail network.

Eric S. Slifka: The Chelsea, Massachusetts terminal allows us to continue to serve the Boston market.

Eric S. Slifka: Placing the capability there.

Eric S. Slifka: Nearby Revere terminal, which we strategically divested for $150 million in 2020, Q2 week logistics of Blackstone Company.

Eric S. Slifka: With the divestment of our Revere Terminal, this acquisition will allow us to continue to service our Boston-area gasoline and distillate customers without disruption. As you may know, we now operate two terminals in Chelsea, allowing us to offer a full slate of products, including biofuel, bunker fuels, commercial and industrial fuels, heating oil, and diesel.

Eric S. Slifka: With the divestment of our Revere terminal. This acquisition will allow us to continue to service, our Boston area of gasoline and distillate customers without disruption.

Eric S. Slifka: As you May know.

Eric S. Slifka: We now operate two terminals in Chelsea, allowing us to offer a full slate of products, including bio fuel bunker fuels commercial and industrial fuels heating oil and diesel.

Eric S. Slifka: We anticipate opportunities to invest in and optimize around these properties. Turning to our December acquisition of 25 liquid energy terminals from Motiva, we're extremely pleased with the progress of the transition, which was completed ahead of schedule in March. These are extremely well-run, high-value assets backed by a 25-year take-or-pay commitment from Motiva. We're excited about the ability to drive additional investment, expansion, and operational efficiency as we optimize these facilities. Looking at our distribution, in April, the board declared a quarterly cash distribution on our common units of $0.71, or $2.84 on an annualized basis. This distribution represents an 8.4% increase over the prior year period and is payable on May 15th to unit holders of record as of the close of business on May 9th.

Eric S. Slifka: We anticipate opportunities to invest in and optimize around these properties.

Eric S. Slifka: Turning to our December acquisition of 25 liquid LNG terminals for Motiva, we're extremely pleased with the progress of the transition which was completed ahead of schedule in March.

Eric S. Slifka: These are extremely well run high value assets backed by a 25 year take or pay commitments some motiva.

Eric S. Slifka: We're excited about the ability to drive additional investments expand.

Eric S. Slifka: It shouldn't and operational efficiencies as we optimize these facilities.

Eric S. Slifka: Looking at our distribution in April the board declared a quarterly cash distributions on our common units of 71 cents or $2 84.

Eric S. Slifka: Annualized basis.

Eric S. Slifka: This distribution represents an eight 4% increase over the prior year period and is payable on may 15th to unitholders of record as of the close of business on May nine.

Eric S. Slifka: With that, now let me turn the

Eric S. Slifka: With that now let me turn the call over to Greg for his financial review Greg.

Gregory B. Hanson: Thanks, Eric. And good morning, everyone.

Speaker Change: Thanks, Eric and good morning, everyone. As we go through the numbers. Please note that all comparisons will be the first quarter of 2023, unless otherwise noted.

Gregory B. Hanson: As we go through the numbers, please note that all comparisons will be to the first quarter of 2023, unless otherwise noted. Adjusted EBITDA was $56 million in the first quarter of 2024, compared with $76 million in 2023. We reported a net loss of $5.6 million in the quarter, compared with a net income of $29 million in 2023. Distributable cash flow was $15.8 million in the first quarter of 24, compared with $46.3 million in 23.

Speaker Change: Adjusted EBITDA was $56 million in the first quarter of 2024, compared with $76 million in 'twenty three we reported a net loss of $5 6 million in the quarter compared with net income of 29 million in 2023.

Gregory B. Hanson: Distributable cash flow was $15 8 million in the first quarter 'twenty, four compared with $46 3 million and 23 and adjusted DCF of $16 million in Q1 versus $46 3 million in the same period in 2003.

Gregory B. Hanson: And adjusted DCF was $16 million in Q1 versus $46.3 million in the same period last year. LTM distribution coverage as of March 31st was 1.6 times or 1.5 times after factoring in distributions to our preferred unit.

Gregory B. Hanson: LTM distribution coverage as of March 31 was one six times from one five times after factoring in distributions to our preferred unitholders.

Gregory B. Hanson: Turning to our segment details, GDSO product margin increased $4.2 million in the quarter to $187.7 million. Product margin from gasoline distribution increased 0.8 million to $112.6 million, primarily reflecting higher fuel margins year over year. On a cents per gallon basis, fuel margins increased $0.01 to $0.33 in Q1'24 from $0.32 in Q1'23, illustrating the resilience of our fuel margins despite wholesale gasoline prices increasing $0.66 from year-end $0.23 to $3.31'24, compared with a $0.24 increase for the same period in 2023.

Gregory B. Hanson: Turning to our segment details GSO product margin increased $4 2 million in the quarter to $187 7 million.

Gregory B. Hanson: Product margin from gasoline distribution increased <unk> 8 million to $121 6 million, primarily reflecting higher fuel margins year over year.

Gregory B. Hanson: On a cents per gallon basis fuel margins increased one to three.

Gregory B. Hanson: <unk> 33 in Q1 'twenty four from 32 cents in Q1, 'twenty three illustrating the resilience of our fuel margins. Despite wholesale gasoline prices, increasing 66 from year end 'twenty three to 331 24.

Gregory B. Hanson: Paired with 24% increase from the same period in 2023.

Gregory B. Hanson: The first quarter of 2023 also benefited from a falloff in prices during the quarter as opposed to the first quarter of 2024, which had consistent increases in prices throughout the quarter.

Gregory B. Hanson: The first quarter of 2023 also benefited from a falloff in prices during the quarter as opposed to the first quarter of 2024, which had consistent increases in prices throughout the quarter. Stage and operation product margin, which includes convenience store, prepared food sales, sundries, and rental income, increased $3.4 million to $66.1 million in the first quarter as our team continues to execute well in our stores. At Corner End, we had a portfolio of 1,601 sites. In addition, we operated 64 sites under our Spring Partners Retail joint venture.

Gregory B. Hanson: Station operations product margin, which includes convenience store prepared food sales sundries and rental income increased $3 4 million to $66 1 million in the first quarter as our team continues to execute well in our stores.

Gregory B. Hanson: At quarter end, we had a portfolio of 1601 sites. In addition, we operated 64 sites under our spring partners retail joint venture.

Gregory B. Hanson: Looking at the wholesale segment, first quarter 2024 product margin decreased 3.7 million to 49.4. Product Margin from Gasoline and Gasoline Blend Stocks increased $9.3 million to $29.7 million, largely due to the acquisition of the Motiva terminal. This was partially offset by less favorable market conditions in gasoline in the first quarter of 24 compared to the same period in 23. The product market from distilled and other oils decreased $13 million to $19.7 million, primarily due to less favorable market conditions and residual.

Gregory B. Hanson: Looking at the wholesale segment first quarter 2020 for product margin decreased $3 7 million to $49 4 million product margin from gasoline and gasoline blend stocks increased $9 3 million to $29 7 million largely due to the acquisition of the Motiva terminals. This was partially offset by less favorable market conditions in gasoline in the first quarter.

Gregory B. Hanson: <unk> 24 compared to the same period in 2003.

Gregory B. Hanson: Product margin from distillate and other oils decreased $13 million to $19 7 million, primarily due to less favorable market conditions and residual oil.

Gregory B. Hanson: As we mentioned in our press release, certain products in our wholesale segment were negatively impacted by the timing of mark-to-mark evaluations, which we have seen largely recover quarter to date through April. Commercial segment product margin decreased $1.1 million to $7 million, primarily due to less favorable market conditions.

Gregory B. Hanson: As we mentioned in our press release certain products in our wholesale segment were negatively impacted by the timing of mark to market valuation, which we have seen largely recover our quarter to date through April.

Gregory B. Hanson: Commercial segment product margin decreased $1 1 million to $7 million, primarily due to less favorable market conditions.

Gregory B. Hanson: Looking at expenses, operating expenses increased $11.8 million to $120.1 million in the first quarter, primarily related to the acquisition of the terminals from Modena. SG&A expense increased $7.5 million in Q1 to $69.8 million, including acquisition costs related to the Motiva Terminals acquisition and increases in wages and benefits and other SG&A expenses. Interest expense was $29.7 million in the first quarter of 2024 compared with $22.1 million in 2023. The increase was primarily due to interest expense related to our eight and a quarter senior notes that we issued in January of 24, and to a $1.4 million write-off of deferred financing.

Gregory B. Hanson: Looking at expenses operating expenses increased $11 8 million to $120 1 million in the first quarter, primarily related to the acquisition of the terminals for Motiva.

Gregory B. Hanson: SG&A expense increased $7 5 million in Q1 to $69 8 million, excluding acquisition costs related to the Motiva terminals acquisition and increases in wages and benefits and other SG&A expenses.

Gregory B. Hanson: Interest expense was $29 7 million in the first quarter of 2024, compared with $22 1 million or 23.

Gregory B. Hanson: The increase was primarily due primarily due to the interest expense related to our eight and a quarter senior notes, we issued in January of 24 and to a $1 4 million write off of deferred financing fees.

Gregory B. Hanson: CapEx in the first quarter was $16.6 million, consisting of $11.7 million of maintenance CapEx and $4.9 million of expansion CapEx, primarily related to investments in our gas and oil stations. For the full year of 2024, we continue to 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 gas station and terminal business, these current estimates depend in part on the timing of completion of projects, the availability of equipment and workforce, weather, and unanticipated events or opportunities requiring additional maintenance or investment.

Gregory B. Hanson: Capex in the first quarter was $16 6 million consisting of $11 7 million of maintenance Capex and $4 9 million of expansion Capex, primarily related to investments in our gasoline station business.

Gregory B. Hanson: For the full year of 2024, we continue to expect maintenance capital expenditures in the range of $50 million to $60 million and expansion capital expenditures, excluding acquisitions in the range of $60 million to $70 million relating primarily to our gas station and Terminalling business.

Gregory B. Hanson: These current estimates dependent part on the timing of completion of projects availability of equipment and workforce, whether an unanticipated events or opportunities requiring additional maintenance of our investments.

Gregory B. Hanson: Our balance sheet remains strong at 331, with leverage as defined in our credit agreement as funded debt to EBITDA at 3.26 times, and we continue to have ample excess capacity in our credit facility. As of March 31st, total borrowings outstanding under our credit agreement were $226 million. All of which were under our Working Capital Revolver, with zero outstandings under our Equality Credits. I'd also like to highlight that on April 15th, we fully redeemed all the outstanding Series A Fixed Uploading Rate Cumulative Redeemable Perpetual Preferred Units. This transaction was immediately accretive to Distributable Cash Flow and, at current interest rates, is expected to be approximately $0.09 per unit on an annual basis.

Gregory B. Hanson: Our balance sheet remains strong at 331 with leverage as defined in our credit agreement as funded debt to EBITDA at three six times and we continue to have ample excess capacity of our credit facilities as of March 31, total borrowings outstanding under our credit agreements were $226 million.

Gregory B. Hanson: All of which were under our working capital revolver with zero outstanding under our revolving credit facility.

Gregory B. Hanson: I'd also like to highlight that on April 15th we fully redeemed all of the outstanding series, a fixed to floating rate cumulative redeemable perpetual preferred units.

Gregory B. Hanson: This transaction was immediately accretive to distributable cash flow at current interest rates is expected to be approximately nine creative per unit on an annual basis.

Gregory B. Hanson: Now, before I turn the call back to Eric for closing comments, let me review our upcoming investor relations calendar. This month, we'll be participating in the 21st Annual Energy Infrastructure Conference, and in June, we'll be participating in the Stiefel Cross-Sector Insight Conference and the BofA Energy Credit Conference. If you're attending one or more of these events, we look forward to meeting with you. Now, let me turn the call back to Eric for closing comments.

Speaker Change: Now before I turn the call back to Eric for closing comments, Let me review, our upcoming Investor Relations calendar. This months when you're participating in the 20 <unk> annual energy infrastructure conference and in June we participating in the Stifel Cross sector insight conference and the view of the energy credit conference.

Eric: If you're attending one or more of these events, we look forward to meeting with you.

Gregory B. Hanson: Now, let me turn the call back to Eric for closing comments.

Eric S. Slifka: Thanks Greg. In closing, I want to acknowledge our team for their outstanding work in completing two significant acquisitions and integrations over the past five months. We have a terrific business, well-positioned assets, and incredible people that I believe will continue to contribute in a meaningful way to shaping the future of the energy economy. Strategically, operationally, and financially, we are well-positioned for continued success. With that, Greg, Mark, and I will be happy to take your questions. Operator.

Eric: Thanks, Greg in closing I want to acknowledge our team for their outstanding work in completing two significant acquisitions and integrations over the past five months.

Eric S. Slifka: We have a terrific business well positioned assets and incredible people that I believe will continue to contribute in a meaningful way to shaping the future of the energy economy strategically operationally and financially we are well positioned for continued success.

Speaker Change: With that Greg Mark and I will be happy to take your questions.

Eric S. Slifka: Operator.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

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

Operator: If you would like to ask a question. Please press star one on your telephone keypad.

Operator: A confirmation tone will indicate your line is in the question queue you.

Operator: You May press Star two if you would like to remove your question from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before Christmas Darkies.

Operator: Once again, if you would like to ask a question, press star 1 on your telephone keypad. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Selman Akyol Stiefel. Please proceed with your question. Thank you.

Operator: Once again, if he would like to ask a question press star one on your telephone keypad.

Speaker Change: One moment, please while we poll for questions.

Operator: Yeah.

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

Selman Akyol: Thank you. Good morning.

Speaker Change: Thank you good morning.

Selman Akyol: Yes.

Selman Akyol: First, just starting off on the Motiva acquisition. Have you guys been able to add new customers down there? Are you seeing any increase in throughput since you acquired that?

Speaker Change: First just starting off on the Motiva acquisition have you guys been able to add new customers down there are you seeing.

Selman Akyol: Any increase in throughput since you guys have acquired that.

Selman Akyol: Okay.

Mark A. Romaine: Oh, yeah. Selman, good morning. It's Mark.

Selman Akyol: Oh, yes, good morning, it's mark.

Mark A. Romaine: Yeah, we're, you know, effectively four months into the ownership of those terminals and operating those terminals. We completed a full cutover, including all systems, roughly the end of March. So it's taken us some time to fully transition those terminals. That being said, we have actively been working on adding new volume to those terminals, understanding what opportunities exist for us to optimize those terminals, and what opportunities exist for us to invest in those terminals. And there are a lot of positives there.

Mark A. Romaine: Yeah.

Mark A. Romaine: Sure.

Mark A. Romaine: Effectively four months into into the ownership of those terminals and operating those terminals, we completed a full cutover, including all systems roughly the end of March. So it has taken us some time to.

Mark A. Romaine: Fully transition those terminals that being said we.

Mark A. Romaine: We have actively been working on adding new volume to the terminals understanding what opportunities exist for us to optimize those terminals what opportunities exist for us to invest in those terminals and theres a lot of positives. There. So our expectation is that as we move forward here, we will start to stream on new business.

Mark A. Romaine: So our expectation is that as we move forward here, we will start to stream in new business. We will get a little bit more dialed in around where the opportunities to invest are. So we're very encouraged by what we've seen so far. And I think we're, you know, we will, we are well on our way to starting to recognize those synergies. It'll just take a little bit of time. But I think, you know, by the end of the year, we will have, we will have quite a bit.

Mark A. Romaine: We will get a little bit more dialed in around where are the opportunities to invest so we're very encouraged by what we've seen so far.

Mark A. Romaine: And I think where we will we are well on our way just starting to recognize those synergies. It will just take a little bit of time, but I think by the end of the year. We will have we will have quite a bit of new business through those terminals.

Mark A. Romaine: Got it. And so, would you just say, sort of... Performing in line with your expectations? Are you seeing more opportunities there than maybe when you initially thought? Or yeah, they said, sort of in line.

Speaker Change: Got it and so would you just say sort of.

Mark A. Romaine: Performing in line with your expectations or are you seeing more opportunity there than maybe what you.

Speaker Change: Actually thought or you know as I said sort of in line.

Mark A. Romaine: You know, it's probably too early to get too far ahead of ourselves. I would say that, you know, what we're looking at today for the near term is going to be in line with our expectations. But I do think, longer term, with all the investment opportunities and the optimization we can do around these assets, our hope is that we will exceed those expectations. And that seems like a reasonable expectation.

Mark A. Romaine: It's probably it's probably too early to get you know I don't want to get too far ahead of ourselves I would say that you know where where what we're looking at today for the near term is going to be in line with our expectations.

Mark A. Romaine: I do think longer term with all the investment opportunities and the optimization. We can do around these assets. Our hope is that we will exceed those expectations and that seems that seems like that seems like a reasonable expectation, yes, selman et cetera.

Eric S. Slifka: Yeah, Selman, it's Eric. You know, these are extremely well-located assets with lots of ways into and out of the assets with products, and we think that there are some real opportunities here just within the assets as they exist, but not only that, we think that there are a lot of expansion opportunities, as Mark mentioned, that once we spend a little bit of time with them, we'll try to get permits and expand particular assets that we think have unique values.

Eric S. Slifka: You know these these are.

Eric S. Slifka: Extremely well located assets with lots.

Eric S. Slifka: Lots of ways into and out of.

Eric S. Slifka: The assets with products.

Eric S. Slifka: And we think that there are some real opportunities here just within the assets as they exist, but not only not only that we.

Eric S. Slifka: We think that there's a lot of expansion opportunities as Mark mentioned.

Eric S. Slifka: That said once we spend a little bit of time with them.

Eric S. Slifka: Try to go get permits in and expand our particular assets that we think have unique values.

Selman Akyol: Got it. Um, any update on the JV and how it's performing, and any growth expectations coming?

Speaker Change: Got it.

Eric S. Slifka: Any update on the JV and how it's performing in any growth expectations coming out of that.

Mark A. Romaine: Yeah, we're, you know, we continue to be excited about the JV and operating that area. I'd say the first quarter at the JV was a little lower than our expectations, really, really horrible weather in the Houston market in January. You had a couple days that froze, and you had no traffic in there. So weather definitely impacted the results down there in the first quarter.

Selman Akyol: Yeah.

Speaker Change: We continue to be excited about the JV and operate in that area. You know I'd say the first quarter at the JV was a little lower than our expectations really.

Mark A. Romaine: Really horrible weather in the Houston market in January you had a couple of days it froze and you had no traffic in there. So why there was it weather definitely impacted the results down there in the first quarter and then you also have a more competitive margin environment down there.

Mark A. Romaine: Some other areas of the country, but that said.

Mark A. Romaine: We've invested in those and those sites, we've now finished and rebranded those sites down there.

Mark A. Romaine: We're very excited about their operating very well, we've got a very strong partner down there and we continue to look for opportunities to grow that.

Mark A. Romaine: Business Yeah.

Mark A. Romaine: In term.

Mark A. Romaine: Eric in terms of growth.

Mark A. Romaine: We're continuing to look at opportunities that exists down there.

Mark A. Romaine: You know what I would say.

Mark A. Romaine: There seems to be a stream of potential assets that may be for sale. So we're trying to look at everything in the market and if we think there is something that will fit us down. There you know we will try to go after I do think.

Mark A. Romaine: That there is a potential for complementing those assets with our new terminals down there as well and so we think that that should hopefully give us.

Mark A. Romaine: A better position in terms of acquiring assets there.

Speaker Change: Understood and then you you sort of touched on M&A, but is there anything more.

Mark A. Romaine: If you look beyond other markets that you're seeing as well that you can comment on.

Mark A. Romaine: Yeah, I wouldn't say I wouldn't say there's.

Mark A. Romaine: There's a steady stream.

Mark A. Romaine: Of opportunities and we'll just make sure we're looking at them and trying to figure out which ones are really fit the company and the best way to drive the highest returns right. So so it is it's active.

Speaker Change: Understood and I realize dividend is always the board's prerogative and consideration.

Mark A. Romaine: And you'll never front run them that I get but that said you guys have said you've consistently has kind of been growing and as you've been growing cash flows and doing acquisitions et cetera. And then you also just highlighted that you redeemed the preferred day and that's nine cents accretive to earnings so would they consider that as well.

Mark A. Romaine: And then you also have a more competitive margin environment down there than some other areas of the country. But that said, you know, we've invested in those sites. And we've now finished a rebrand of those sites down there.

Mark A. Romaine: In terms of potential on go forward basis.

Mark A. Romaine: Or should that just be looked at more in terms of seeing underlying growth in the business as opposed to finance it.

Mark A. Romaine: You know, we were very excited about them operating very well; we've got a very strong partner down there, and we continue to look for opportunities to grow that business. Yeah, Selman, in terms of growth, you know, we're, we're continuing to look at opportunities that exist down there. I would say there seems to be a stream of potential assets that may be for sale. So we're trying to look at everything on the market.

Mark A. Romaine: Yeah, I mean, I guess I guess, because it's Greg somehow you're doing.

Mark A. Romaine: No I think that.

Mark A. Romaine: The board.

Mark A. Romaine: Sort of issued a vote of confidence by increasing that.

Mark A. Romaine: The distribution of Patty Sharon and appreciation of were repositioned ourselves.

Mark A. Romaine: We've continued to grow that distribution our coverage now is at one five times on an LTM basis.

Mark A. Romaine: <unk> been able to fully cover our LTM expansion capex with excess cash and also reinvest some of that cash by lowering debt.

Mark A. Romaine: And what do you as a company. So we've been in a strong position from a distribution coverage standpoint, I think we're excited about the acquisitions. We do think that will continue to contribute to the bottom line for us and so you know I can't speak to what the board will do but I think we are excited about the acquisitions and that should allow us to continue to grow our bottom line.

Mark A. Romaine: And hopefully that that would that would lead to higher distributions at some point in the future.

Speaker Change: Okay. Thank you very much.

Mark A. Romaine: Thank you I'll now turn the call back to Mr. Slifka for closing comments.

Mark A. Romaine: And if we think there's something that will fit us down there, you know, we'll try to go after it. I do think that there is the potential for complementing those assets with our new terminals down there as well. And so we think that that should hopefully give us a better position in terms of acquiring assets.

Speaker Change: Thanks, everyone for joining us. This morning, we look forward to keeping you updated on our progress.

Selman Akyol: Understandable. And then you sort of touched on M&A, but is there anything else as you look beyond other markets that you're seeing as well that you can comment on?

Eric S. Slifka: Yeah, I wouldn't say, I wouldn't say there's a steady stream.

Selman Akyol: Understandable. And I realize dividend is always the board's prerogative and consideration, and you'll never front run them. That I understand.

Selman Akyol: But that said, you guys have said you consistently have kind of been growing it as you've been growing cash flows and doing acquisitions, etc. And then you also just highlighted that you redeemed the preferred shares, and that's nine cents accretive to earnings. So would they consider that as well in terms of potential on a go forward basis? Or should that just be looked at more in terms of seeing underlying growth in the business as opposed to financing?

Gregory B. Hanson: Yeah, I mean, I guess I can speak to that. It's Greg. Selman, how are you doing?

Gregory B. Hanson: You know, I think that the board, you know, sort of issued a vote of confidence by increasing the distribution of Patty this year and showing appreciation of where we positioned ourselves in the growth. We've continued to grow that distribution. Our coverage now is 1.5 times on an LTM basis. You know, we've been able to fully cover our LTM expansion CapEx with excess cash and also reinvest some of that cash by lowering debt and putting it in the company.

Speaker Change: Have a good day.

Gregory B. Hanson: So we've been in a strong position from a distribution coverage standpoint. I think, you know, we're excited about the acquisitions. We do think they will continue to contribute to the bottom line for us. And so, you know, I can't speak to what the board will do, but, you know, I think we are excited about the acquisitions, and they should allow us to continue to grow our bottom line, and hopefully, that will lead to higher distributions at some point in the future.

Operator: 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.

Selman Akyol: Okay, thank you very much.

Speaker Change: 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.

Eric S. Slifka: Thank you. I'll now turn the call back to Mr. Slifka for closing comments.

Eric S. Slifka: Thank you everyone for joining us this morning. We look forward to keeping you updated on our progress. Have a good day.

Eric S. Slifka: Yeah.