Martin Midstream Partners LP (MMLP) 2016 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

I would like now to turn the conference over to your Chief Financial Officer, Bob Bondurant. Sir, you may start.

Okay. Thank you Grace, and to let everyone know who is on the call today, we have Ruben Martin, our CEO; Joe McCreery, our Vice President of Finance and Head of Investor Relations; and Wes Martin, our VP of Corporate Development.

Before we get started with the financial and operational results for the third quarter, I need to make this disclaimer. Certain statements made during this conference call may be forward-looking statements relating to financial forecast, future performance, and our ability to make distributions to unit holders.

We report our financial results in accordance with Generally Accepted Accounting Principles, and use certain non-GAAP financial measures within the meanings of the SEC Regulation G, such as distributable cash flow or DCF and earnings before interest, tax, depreciation and amortization or EBITDA, and we also use adjusted EBITDA.

We use these measures because we believe it provides users of our financial information with meaningful comparisons between current results and prior reported results, and it can be a meaningful measure of the partnership's cash available to pay distributions. We also included in our press release issued yesterday, a reconciliation of EBITDA, adjusted EBITDA and distributable cash flow to the most comparable GAAP financial measure. Also included is our nine month adjusted EBITDA comparison to guidance. Our earnings press release is available at our website martinmidstream.com.

Now before I speak on our third quarter performance, I'm going to turn the discussion over to Joe who will speak on our recently announced Corpus Christi terminalling Asset sale and the corresponding right-sizing of our quarterly distribution.

Thanks, Bob, and good morning everyone. As we announced last week, we've executed a definitive agreement with NuStar Logistics LP to sell our terminalling assets located within the Port of Corpus Christi, Texas for $107 million, plus the reimbursement of certain capital expenditures and prepaid items. We're selling the assets we commonly called Corpus Christi Crude Terminal or CCCT and the assets we call the Corpus Christi Barge Terminal or CCBT. In total, the assets comprise over 1.15 million barrels of storage, including the 900,000 barrel crude oil storage at CCCT and its related dockage and trans-loading assets.

Upon closing, the partnership expects to receive net proceeds of $93 million after transaction fees and expenses. Reconciling to the full purchase price, we note that in conjunction with the Texas Department of Transportation's mandated dock relocation and subsequent construction of new dock assets, MMLP has already received $13.4 million in cash payments. Our transaction is subject to customary closing conditions including antitrust approval, but we expect the sale to close by the end of 2016.

As we announced, we view this asset sale as a necessary first step of our longer-term plan to ultimately returning MMLP to a growth trajectory. With our primary refinery-centric business profile, we believe this divestiture reduces our exposure to the wellhead and upstream activities. Additionally, as we've stated for multiple quarters, the partnership is committed to debt and leverage reduction and strengthening our balance sheet. Together with the approximate 39% reduction in our quarterly distribution announced last week, we believe the divestiture provides an important catalyst to reducing our cost of capital. With a stronger balance sheet and a more robust distribution coverage ratio we are better positioned for future growth.

I'll turn the call back to Bob.

Thanks, Joe. Now, I'd like to discuss our third quarter performance compared to the second quarter and also our nine month performance compared to the nine month guidance. For our seasonally weakest quarter, the third quarter, we had adjusted EBITDA of $33.3 million compared to $41.6 million in the second quarter.

Our distributable cash flow for the third quarter was $19.9 million. Based on our new annual distribution rate of $2, which includes no IDR payments at that distribution level, our new quarterly distribution payment will be $18.1 million, providing a distribution coverage of 1.1 times for our third quarter performance. As expected, our maintenance capital expenditures and turnaround costs dropped to $2 million for the third quarter and now total $14.4 million for the first nine months.

Our nine month actual adjusted EBITDA was $135.3 million, excluding unallocated cash SG&A cost of $11.1 million compared to guidance of $146.5 million; a miss from guidance of $11.2 million or 7.7%. The two main contributors to this shortfall on forecasted EBITDA continues to be our inland marine transportation business and the distributions that we receive from our investment in West Texas LPG. The combined shortfall of these two businesses compared to the first nine months guidance was $10.4 million. Later, I will discuss these two issues in greater detail.

Now, I'd like to discuss our third quarter operating performance. In our terminalling segment, our third quarter adjusted EBITDA was $17.1 million compared to $18.5 million in the second quarter. We experienced a 4% decline in packaged lubricant volumes sold, as our packaging business adjusted EBITDA declined $0.5 million between periods. Our specialty terminals adjusted EBITDA declined by $0.4 million between periods due to increased repairs and maintenance expense across multiple terminals. And finally, our adjusted EBITDA at our Corpus Christi crude terminal fell $0.3 million, also due to increased maintenance costs.

In terms of our guidance for the first nine months, our terminalling segment had adjusted EBITDA of $52.7 million compared to our guidance of $53.1 million. Overall, we have outperformed in our specialty terminal segment by $2.2 million which has been offset by our packaged lubricant business that has underperformed by $2.4 million due to overall weaker lubricant demand than was forecasted at the beginning of the year.

In our natural gas services segment, our third quarter adjusted EBITDA was $14.6 million compared to $13.3 million in the second quarter. Included in our natural gas services segment was an adjustment of $0.7 million in unrealized mark-to-market gains in the third quarter, and $1.3 million in unrealized mark-to-market losses on derivative instruments in the second quarter. These derivative instruments hedge our NGL inventory.

Also, included in adjusted EBITDA was $1.8 million in distributions from West Texas LPG in both the second and third quarters. The increase in cash flow in this segment was primarily from our butane business as refineries began to increase their demand for butane as the winter gasoline blending season began in late September.

For the first nine months, our natural gas services' adjusted EBITDA guidance was $59.6 million while we only realized $50.5 million in adjusted EBITDA. Our butane business has missed its nine month forecast by $4.5 million as a result of not acquiring mix butane supply on the spot market from refineries that had been acquired in both the second and third quarters of previous years. This is because these refiners did not make available mixed butane volume as they had in previous years.

However, we believe we are well positioned with our refinery grade butane inventory and storage and its carrying cost at the end of the third quarter. Based on this knowledge, we believe we are well positioned for a strong fourth quarter cash flow in our butane business as refineries have begun their demand for butane for the gasoline blending and we believe there is a strong likelihood of ultimately achieving our full-year guidance in our butane business.

The other miss in our nine month natural gas services guidance was our cash distributions from West Texas LPG. When guidance was given, we had anticipated receiving distributions of $10.8 million for the first nine months and we have only received $6 million. As we outlined on our previous earnings call, the Railroad Commission of Texas issued an order in March of this year to have West Texas LPG revert back to tariff rates that were in place on June 30 of 2015. This issue was in response to complaints regarding new tariff rates from certain shippers on the West Texas LPG pipeline.

On October 25, 2016, this matter was referred to the administrative law judge for a hearing to be held on a date to be determined. Previously, this matter was to be heard on October 19, but the hearing was delayed, while the Commissioners decided whether it would be heard by the administrative law judge or by the Commission. Until a final ruling is made of West Texas LPG's tariff rates, Cash distributions from West Texas LPG will remain at levels of $6 million to $7 million below our original annual guidance.

In our sulfur services segment, as a result of the seasonal weakness in our fertilizer business, our third quarter adjusted EBITDA was $2.5 million compared to $13.1 million in the second quarter. Our fertilizer business had a decrease in adjusted EBITDA from $9.8 million in the second quarter to a negative $0.6 million in the third quarter, a decrease of $10.4 million.

Due to the lack of fertilizer demand and the seasonally weak third quarter, our volume sold fell 45%. We also took our ammonium sulfate plant down for the (inaudible) order for turnaround. And as a result, did not produce any inventory, which resulted in no fixed plant operating cost being capitalized into inventory production. This also negatively impacted fertilizers' third quarter financial results.

In the fourth quarter, our (inaudible) is operating as planned and producing inventory in anticipation of both late fourth quarter and first quarter sales. Therefore, we will see better cash flow from our fertilizer business in the fourth quarter. In terms of our guidance for the first nine months, our sulfur services segment had adjusted EBITDA of $26.5 million compared to guidance of $23.4 million, and increased over guidance of $3.1 million. We look for a rebound in our fertilizer business in the fourth quarter relative to the third quarter due to the increased production as well as increased sales. And as a result, we believe our sulfur services segment will exceed our annual guidance.

Now in our marine transportation segment, we had adjusted EBITDA in the third quarter of $2.4 million compared to $0.6 million in the second quarter. This increase came from our inland transportation business as its adjusted EBITDA increased $1.6 million as a result of an 8% increase in inland utilization. We have recently entered into some shorter-term contracts and as a result, have fewer tows operating in the spot market than in recent quarters.

At this time, we are uncertain whether or not this recent improvement in barge demand will be sustainable for the long term. For the first nine months, we missed guidance by $5.6 million in this segment. The primary reason for this under performance continues to be increased competition that had resulted from an oversupply of inland marine tank barges. As we have discussed before, we believe that the supply of inland tank barges grew from approximately 3,100 barges to approximately 3,900 barges between 2011 and today.

The growth in tank barge supply was primarily driven by the growth in crude oil production, which is now reversed. This excess supply of tank barges has exited the crude oil transportation market and has entered our primary market of transporting refined products. As a result of this increased competitive environment, refineries have generally shifted from longer-term contracts to shorter-term contracts and also spot market contracts.

Finally, our partnership's unallocated SG&A cost, excluding non-cash unit compensation expense was $4 million for both quarters, which met our expectations and should remain consistent for the rest of the year. We continue to hold a $15 million note receivable from Martin Energy Trading, an affiliate of our general partner. This investment generates $562,000 of interest income per quarter, which is netted against interest expense in our income statement, but is included in adjusted EBITDA for calculating our bank leverage covenants.

For the overall partnership, looking towards the fourth quarter, due to positive seasonal demand factors, we should see significant increase in cash flow from our butane business and also a return to profitability for our fertilizer business. As a result, we should have very strong DCF coverage in the fourth quarter. Also, as a result of our Corpus Christi terminal sale and the seasonal reduction of our butane inventory, we will also see an improved leverage ratio at the end of the fourth quarter when compared to the third quarter.

Now, I'll turn the call back over to Joe who will speak to our balance sheet and other financial metrics.

Thanks again, Bob. I'll start with our normal walk through of the debt component of our balance sheet and bank ratios, both on an actual and a pro forma basis for our announced Corpus asset divestiture. I would then give a brief update on our Hondo Asphalt Terminal project and capital spending year-to-date.

On September 30, 2016 the partnership's balance sheet reflected total long-term funded debt of approximately $914 million. Our balance sheet funded debt is shown before unamortized debt issuance and unamortized issuance premiums, as actual funded debt outstanding was $923 million.

Reconciling to this amount, at quarter-end, our revolving credit facility balance was $549 million and the notional amount of our senior unsecured notes was $374 million. Thus, the partnership's total available liquidity under our revolving credit facility on September 30 was $115 million based on our $664 million revolving credit facility.

For the quarter ended September 30, 2016, our bank compliant leverage ratios, defined as senior secured indebtedness to adjusted EBITDA and total indebtedness to adjusted EBITDA were 3.09 times and 5.20 times respectively. On an absolute basis, our total leverage increased by approximately 44 basis points from the June 30 level. Our leverage increase is typical given the seasonal working capital swings we experience.

Normally, during the year, our leverage peaks at the end of the third quarter, in large part to our butane business being at full or near storage capacity. High inventory levels, in fact, our largest inventory levels ever at approximately 2.2 million barrels of butane storage coupled with our typically weak third quarter cash flow from both butane and fertilizer are what drove the seasonal leverage peak we encountered.

Looking ahead to the fourth quarter, the realization of inventory depletion in our butane business should significantly improve our leverage ratio by both reducing debt and providing strong cash flow. On that basis, as Bob mentioned, we remain committed to our full-year guidance level butane cash flow of approximately $23 million. Our bank compliant interest coverage ratio, as defined by adjusted EBITDA to consolidated interest expense was 4.14 times.

Looking at the balance sheet, total debt to total capitalization on September 30 was about 74.8% or 300 basis points higher than the second quarter, again reflecting the working capital increases in our business. In all, on September 30, 2016, the partnership was in full compliance with all banking covenants, financial or otherwise.

Now, let's look at the bank ratios giving pro forma effect to the Corpus Christi terminal divestiture. At September 30, total debt would have been 5.03 times and senior leverage approximately 2.77 times, again both pro forma ratios at our seasonal working capital peaks. The partnership anticipates working capital reductions to be approximately $40 million during the fourth quarter 2016.

Next, I'd like to discuss growth initiatives and capital spending of the partnership. First, let me provide a brief update on our Hondo South Texas Asphalt Terminal, under construction and being developed at MRMC. We are on schedule to receive inbound winter fill asphalt volume before year-end. That said, we believe it is possible that the Terminal be dropped down into the partnership in early 2017 and we continue to believe that the asphalt storage represents an area of growth for MMLP, which we intend to pursue.

Now during the quarter, the partnership continued to lower its 2016 capital spending. With respect to organic capital growth expenditures, year-to-date we've spent approximately $14.5 million, including $2.9 million in the third quarter. Looking forward, we believe growth capital expenditures will be approximately $3.1 million during the fourth quarter for a full-year total of approximately $17.6 million. This level represents a reduction of approximately 39% from our growth CapEx guidance of $29 million.

Similarly, maintenance cap spending returned to normalized levels during the third quarter with spending at approximately $2 million. Looking forward, we anticipate maintenance CapEx spending to be approximately $3.2 million during the fourth quarter for a full year total of $17.6 million, in line with our guidance levels.

Grace, this concludes our prepared remarks. We'd now like to open the lines for questions and answers.

(Operator instructions) Charles Marshall, Capital One.

So going back to Sulfur, which I guess, the margins came in better than we expected. But in terms of the implied margin, if you look at it on a per ton basis and maybe some of the 3Q weakness that we saw, some of that obviously is seasonal, which we see every third quarter. But is some of that weakness related to the planned downtime as well or is there anything else in that number for the quarter more of in a -- big picture macro level by which we're thinking about it or is it just really this more of a one-time anomaly, given that the planned downtime in 3Q for some of that margin weakness that we saw?

It is basically because of the downtime. This is the first time we've ever had Ammonium Sulfate plant down for the entire quarter. So as I did mention in my comments that we continue to have a fixed cost system it employs et cetera that as you're running the plant, it normally get capitalized in the inventory, that didn't happen. Now what happens is, as time goes on, you catch up your inventory production and you capitalize those fixed manufacturing cost in the inventory and you catch up as you ramp up production. So to answer your question on a broad basis, the entire reduction in margin was driven by that fact.

And can you just remind me again, sorry if I missed this, but is that plant back online today?

Yeah. Correct.

With regard to the West Texas LPG pipeline, can you guys give us the volumes for 3Q on that one?

I have those numbers here. In Q3 there were 195,000 barrels a day, previous quarter was 202,000 and then I'll add too that currently they're running just under about 200,000 barrels a day.

Currently?

Right and that's been consistent really for the whole year, it's been that.

Okay. And then just, in terms of timing as it relates to the Texas Railroad Commission, how long do you think this process is going to take? I mean, I'm assuming now this is more of a 2017 event. How long do you think this will drag on until we get resolution from the Railroad Commission?

Just so you know, I asked our General Counsel, Chris Booth because I anticipated a question and since it is in a dispute situation I want him to address the question. So I'm going to turn it over to Chris.

Alright. Earlier this week, the Railroad commission decided to spin the matter back to the hearings examiner to have him hear it, rather than having an en banc hearing. And so as a result, we've been advised that we should expect the hearings to be concluded-- his work to be concluded in the first quarter of next year and then, he'll provide his findings to the full commission for either adoption or a review and we've been advised that early next year, we should have some sort of resolution to that matter.

And it's my understanding that the findings when presented to the full commission, they could accept or reject the ultimate findings from the examiner, correct?

That is correct. Yes, that is correct.

Okay. And if things don't go in favor, assuming that there would be further concession with regard to -- I'm assuming if the process wouldn't end at that point, you guys would further take this process along?

Yes, I would say we feel confident about our position and we intend to continue pushing it as far as we need.

Got it, and just one last one from me, with respect to our incremental growth and recognizing you guys have talked about the asphalt terminal being a dropdown candidate. But in the context of looking at your balance sheet on a go forward basis and thinking about maybe organic growth, what are you guys evaluating at this time above and beyond the Asphalt Terminal or is it really main focus right now on that and just strengthening the balance sheet?

Chuck, this is Joe. I think, sequentially we start with that one. But I think that one has lots of fingers and toes us if you will, with respect to potential add-ons and there is more there from [inland fees] involvement with asphalt. So I think that's a good entree and a good starter for us. As we think about the balance sheet and leverage, I think we've come up with a plan perhaps where we can actually drop that in, both accretive and delivering. So we'd love to execute on that. And as I mentioned, I think that time table has accelerated into early 2017. But I like that as a starting point because I think it gives us a lot of places to go with the asphalt molecule and I think we're committed to that.

Matt Schmid, Stephens.

Kind of piggybacking on Chuck's question for CapEx for next year obviously, potentially have the South Texas asphalt plant coming in. Beyond that, how should we think about the rate of just organic growth spending, just kind of similar to this year or what should we assume for that?

They Matt, this is Wes. I'll take that. I think just so everybody on the call knows, right now, we are going through the 2017 budgeting process which will evolve really over the next couple of months. So we'll have a little bit more clarity as it relates to specifics towards the end of this year-first part of next year. But I would just generally say, I think we're talking about a $20 million CapEx spent plus or minus this year. I would say, excluding any dropdown from the Hondo terminal, that seems to be a fair run rate as we sit here today, maybe something less than that.

We do have potentially some opportunities at Cardinal to spend small amounts of capital to improve our position with some potential new customers at some of those gas storage facilities. I know that that's on the table as well. So there are little small CapEx items. I think the biggest one is, again as what Joe mentioned and what we're focused on now, is the development of the Asphalt Terminal. But as we sit here today, I would say that 2016 level looks appropriate for 2017 as well.

And on maintenance CapEx, what typically was associated with the Corpus Christi?

It ramped up here. Most recently, we had some issues with some of the tanks. Historically, it was minimal given that it was such a new facility. I would say in the last six months to a year, I think on a maintenance CapEx basis, we probably spent plus or minus $1million. There was also some additional expenses that we were incurring that were hitting our P&L that could be repair related. So I'd say, on a combined basis, that was probably about $1million to $1.5 million in the last 12 months.

Okay. Well, thanks for the color. That's all I had.

Robert Balsamo, FBR.

Just a clarification on the planned downtime in the sulfur business, just could you elaborate on it. It sounds like that was unplanned because it was driving it below guidance. Could you talk a little bit about the timing of that. Was it just that it took longer than expected or was it completely unplanned?

No it was planned. We had planned to be down two months and then we had some issues, I think, in our sulfuric acid plant and the sulfuric acid feeds the ammonium sulfate, so, since that's the beginning of the process that took a little longer. So it was planned but it wasn't planned to be that long.

Got it. And then just real quick, in the butane business, so it sounds like this issue was -- in the last two quarters was capturing in a spot volumes and my understanding it's partly driven off of producer volumes. That's something you were able to capture in previous years, but now you're going to catch up in the fourth quarter. Could you talk a little bit about that dynamic moving forward? So if I take a $4.9 million or $5 million out of a run rate EBITDA for that kind of sub segment or (inaudible) thinking capture moving forward or do we need like volumes to improve to capture those spot volumes?

No, this is Ruben. Historically every year the timing of the refinery excess can either hit second quarter or third -- I mean third quarter or fourth quarter sometimes is still coming in, but then it starts back in, in the third quarter.

And as crude changes in the refineries, all of them are different each year as they run different slates of crude and so you may see them excessing more one year and less the next. And where the difference is made up is if they excess less, then they've still got to have a certain amount coming back when the gasoline vapor pressure rises. So we end up having to go out purchase butanes to make up the difference and resell them.

And so the volumes are pretty consistent when you look at them on an annual basis, but they can move from quarters to quarters due to different requirements, crude slates and vapor pressure requirements. So it's usually consistent year around, but it does change quarter-to-quarter and that's what happened this year and we've seen it before.

And I would like to add that the mix butane spot volume that we did not get in the second and third quarter, which was additive in the previous years and we didn't have this year, that we missed and now it's gone, but we are positioned with how much volume we have in inventory and our cost base is in that inventory, so basically offset what we missed in the forecast. That's why we think, by the end of the year, we'll get back to original guidance.

Yes, so that's (multiple speaker) dynamic that you could capture in future years?

I think it's a jump ball and I think that's where we get the miss on guidance, from the standpoint of -- we did include it this year because we had it the last two years, but we didn't get the volume. It was in the guidance numbers we produced at the beginning of the year.

Alright, great. Thanks guys. That's it from me.

Mike Gyure, Janney Capital Markets.

Could you just go over, maybe in a little more detail or I think I didn't quite understand that the $40 million working capital reduction you were talking about in the fourth quarter. Is that specifically from the third to the fourth quarter or is that year-over-year fourth quarter versus fourth quarter. Can you go through that maybe a little more?

So to Ruben's point how we -- we buy butane inventory beginning in the second and third quarter and we build inventory over time. So the max peak of our working capital build, coincidently, has to be September 30 as we've built this inventory. And then, as we begin to sell that inventory back to refineries, obviously inventory volumes come down, we convert that to cash and pay down debt. So if you could think of a graph of a cycle, our peak is September 30. It ratably drops down into the first quarter and then it starts to build again and builds back up from March 31 back to September 30.

Great, thank you.

James Spitzer, Wells Fargo.

Hi, good morning. I don't know if you guys have talked about this previously, I think you have, I just probably don't remember. But can you remind me what the anticipated cash flow is from the Hondo asset and/or the size of that dropdown? And then also, if you would anticipate funding that dropdown solely with revolver or whether there will be an equity component there as well?

Hey James, this is Wes. I'll take the first question there. I think in terms of size of -- on a net basis of distributable cash flow, it's about a $4 million to $6 million addition to the partnership. In terms of value, I don't want to get into values yet. That will obviously go through the Conflicts Committee at MMLP, but reasonable multiples, I think you can assume on that stream of cash flow.

And James, this is Joe. I'll take the balance sheet or the funding components of your question. As I mentioned in my remarks, I think there is a solution here where we can make it both accretive and delevering, which is to say, it is biased to the equity side of the ledger. So, given our leverage profile and our continuing commitment to delever, we'll have to over-equitize these transactions. But I think, we'll figure out a way to do that.

Okay, that's very helpful. And then secondly, can you remind me what EBITDA is from the Corpus Christi terminalling assets that are being sold. I think you had $12.6 million as your full-year guidance, just wondering if that's still a good number and whether that would be a similar number for 2017?

Yes, that was the guidance number, $12.6 million, and we were tracking right through that level. We feel good about that number. I think the 2017 element of your question is interesting, because as you may know, the contract with the largest customer of that terminalling asset, that contract rolls off at the end of November 2017. So effectively we have -- 11/12th of the guidance would be the same for next year. So I think our number would have been close to $12 million plus or minus, maybe high 11s for 2017.

Gabe Moreen, Bank of America.

Hi, good morning. Most of my questions were asked and answered. Just had a question, two-fold question on the West Texas LPG outlook. Just to be clear, if the decision comes around your favor, you can catch-up payments in terms of what you're missing from that, just wanted to be clear on that.

And the second is, I guess relative to a couple quarter's ago, I would argue the case for expanding that pipeline is probably a lot stronger than it was. Can you just talk about whether there has been any discussions around that and I guess, how the tariff dispute may or may not play into that?

Well, this is Chris. I'll take the first part of that. With regard to the catch-up payments, that's certainly our position that we've been advocating at the Railroad Commission. There has been no ruling on that yet and so that is going to be an issue that is going to be -- yet to be resolved. Our position is we are entitled to it and we do intend to continue pursuing that catch-up payment. With regard to the second part of that, expansion opportunities, I'm going to turn over to Wes and let him answer that question.

Yes Gabe, I think if you look where we currently are on volumes, we're about 200,000 barrels a day. The capacity of the pipeline is -- depending upon where you look at on the system, it's 240,000 to 260,000 barrels a day. So there is still a pretty significant amount of running room there to go adding incremental volumes. I do agree with your -- what's going on within the Permian and some of the additional developments that have been announced out there.

But again, I think we still have some spare capacity on that line to take up significant amount of additional barrels. I can tell you that as it sits today we are not talking about expanding anything at this time, but we are also looking at adding some new customers across the system so -- and Ruben I don't know did you --

Well, we've had some inquiries and I think there is some ongoing talks because there is a lot of activity going on.

I'm showing no further questions at this moment.

Alright, well, this is Ruben. Last week, we announced step one. We feel like we're off to a good start reducing our cost of capital and returning to growth. So with that said, we know there is lot more work to be done. Subsequent steps are forthcoming and include our continued commitment to delever in the partnership and providing strongest distribution coverage in 2017. We appreciate your continued interest and support of our company, MMLP. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.