Energy Transfer LP
Q3 2020 Earnings Call Transcript

Published: 4 Nov 2020

[Operator:]

Greetings, and welcome to Energy Transfer Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Tom Long, Chief Financial Officer. Thank you, Mr. Long. You may begin.

[Tom Long:]

Thank you, operator, good afternoon, everyone, and welcome to the Energy Transfer third quarter 2020 earnings call. We really appreciate you joining us today. I’m also joined today by Kelcy Warren, Mackie McCrea, and other members of the senior management team, who are here to help answer your questions after our prepared remarks.

[Operator:]

Thank you. Our first question comes from Yves Siegel with Siegel Asset Management Partners. Please proceed with your question.

[Yves Siegel:]

Thank you. Good afternoon, everybody. And also congratulations to Tom, Mackie and Dylan for the nice recognition and promotion. I have two quick questions. One is kind of obvious with Biden looking like he's going to win how do you think that may impact the company and maybe if you could tie that into talking about the export market in China. So that’s the first question. And then the second question if I could is how do you think upstream consolidation may impact the business going forward. And when do you think we could see consolidation in the midstream space? What do you think the catalyst would be for that? Thanks very much.

[Mackie McCrea:]

This is Mackie. Thank you for the compliment. We appreciate it. We look forward to it. But Kelsey won't go far, he'll be around. I'll start out first question and Tom will finish up the second one. So I guess kind of from our standpoint as far as the election goes, I'm not sure we're in the same boat that it's already been decided certainly that that could happen. We think it's probably still a tossup for a whole number of reasons, but we certainly know in the next two or three days, but just assuming your question that Biden were to win and we've said in the past, we -- there's some uncertainty about his positions over the years. You know one point at time he is kind of pro pipeline. He was kind of always pro fracking and he backed off on that and now he is kind of -- supposedly going to ban some types fracking mainly around federal lands. But the positives are in a Democrat controlled government is that the regulations will no doubt increase. So it will be much more difficult to build pipelines to construct pipelines to get pipelines permitted to be very time consuming and so companies like ourselves we kind of standalone with our footprint throughout the country. We go into every major basin. We feel pretty good about that aspect of them winning. From the standpoint of drilling and how it might impact federal lands that it'll have very little to no impact on Energy Transfer as far as the exposure we have to federal lands and potential reduction or removal of fracking from those lands. So I'll reiterate we're not sure we are on board that Biden is going to be a winner. But if he does we'll kind of listen to his policies and we'll make the best of it. But we feel like we're pretty, pretty well-positioned.

[Yves Siegel:]

And what about the export market -- I’m sorry, I was going to ask about the export market in China. Do you think that might improve the outlook there or maybe not?

[Mackie McCrea:]

Yeah, we -- we've been actively selling and very excited about bringing on our next LPG project. At the end of this year first part of next year, we're more than doubling our capacity and a lot of the customers that we've already signed up for a year or two, out of five or six at least customer from China, so it really hasn’t prohibited LPG side of the business, we also still load crude every month to a certain Chinese company, so we really don't want to anticipate that would be an impact to us. But it certainly goes without saying that, that Trump hasn't been a friend of China in the aspect of -- he feels like China's taking advantage of the US over the years and he's trying to kind of equal the playing field. So who knows, a lot of -- a lot of info, a lot of data out there around Biden China and so it remains to be seen how that will play out if Biden’s President.

[Yves Siegel:]

Okay. Thank you.

[Kelcy Warren:]

And Yves as far as the upstream consolidation portion of your question, we actually feel good about that in the long-term. We felt like it's going to create stronger upstream companies, stronger balance sheet more opportunities for drilling. So all in all we're very supportive of the consolidation that we're seeing occur in the upstream companies.

[Yves Siegel:]

And did you have any insight into the second half of what may push the midstream to consolidate? Any catalysts that you may see or not?

[Kelcy Warren:]

Well, I think the -- yes and answer your question as far as catalyst and there's probably a couple of things there. One of them is what I just mentioned on the upstream side of it as far as being able to create stronger balance sheets a little more financial flexibility, but the second part of it is, is the more of the commercial side of it meaning better utilization of available capacity across several of the products line, be the crude, NGLs, gas etcetera. So we actually see that that is that is a positive for the midstream space and it's something that we do anticipate will start occurring.

[Yves Siegel:]

Thanks guys and really nice quarter. Well done on the execution.

[Mackie McCrea:]

Thanks, Yves.

[Operator:]

Thank you. Our next question comes from Shneur Gershuni with UBS. Please proceed with your question.

[Shneur Gershuni:]

Hi. Good afternoon, everyone. I wanted to echo Yves. Congratulations to both of you. Just maybe to start off a little bit, you talked about in your prepared remarks today Pennsylvania Access Project. Just wanted to understand or clarify a little bit here if I have the understanding correct is are you effectively utilizing the Mariner East 2 system and basically partitioning to be able to move refined product on it and all of that capital is sort of contemplated within your budgets and so forth or is this kind of a brand new project?

[Mackie McCrea:]

This is Mackie, Shneur. We ask all of our business development team to look for the best utilization of our pipelines and of course we're doing that in Texas on our crude pipelines today. We've got some great ideas and excited about those. But some of our team came up with the idea a while back that from time to time especially during the winter months, we see kind of a blowout between Chicago and the New York markets and for refined products and we saw the opportunity. So yeah, we're in the process and we will be converting the really the 8-inch the Mariner one line a portion of it into refined product service. And we're very excited to bring that on hopefully here by the end of the year and that should provide significant upside revenue for an asset that doesn't limit us for what we can do with the remaining portions of the mineral system to remove to be able to transport all of the LPG and ethylene that we have contracted and we're in the process of contracting additional volumes.

[Shneur Gershuni:]

Okay. So basically you’re just moving the NGLs on to 2 and 2X and you are using the original instead. Okay. That makes perfect sense.

[Mackie McCrea:]

That's correct.

[Shneur Gershuni:]

Okay. And then has a follow-up question, I’m sure you're probably prepared for this but I was wondering if we could talk about the inside baseball around the distribution . You know obviously you've mentioned at a high level, it's about pivoting towards accelerated leverage reduction which I think we all get. But I was just wondering if you can sort of share with us the Board discussions around what scenarios you were thinking about, was there a thought to cut it deeper and de-lever faster, did you preview with the rating agencies before, and is there some, is there an expectation that some of the negative outlooks will be removed at some point. Just wondering if you can give us the broad inside baseball discussion around here.

[Mackie McCrea:]

Okay. Well, Shneur that was that was a mouthful there. You got through it. Got through it well. Listen, we -- it really is the deleveraging. We had -- we were on a path for deleveraging to that 4 to 4.5 even when we had the original guidance back at the 11% to 11.4%, it's an important for us to stay on that same trajectory for deleveraging and getting to that. And as far as the dialogue with the agencies that's what we continue to show them, our objective of moving forward. We feel like that we -- the conversations that we have with them are very constructive. They know that we're focused on the deleveraging and in increasing our financial flexibility. And I think that they're obviously very, very pleased with it. As far as the amount, once again it keeps us at the same pace that we were already headed to. We've pulled all the other levers. We've completing some fantastic projects on the CapEx side. And so CapEx was already coming down just naturally. We’ve looked at cost savings and we think we've been doing very, very good job on that like talking about on this in the prepared remarks of hitting $500 million maybe over $500 million for this year. So we're pulling all the levers and those are the type of discussions that we have internally when we sat down to make the decision is to continue on the same schedule we've got on deleveraging the company.

[Shneur Gershuni:]

That makes perfect sense. And just one clarification pretty impressive to hit a $500 million cost reduction exercise in one year, just wanted to clarify that that is fully achieved this year or is that kind of the run rate you're at now and so as we sort of think about next year cost trend a little bit down as you sort of squeeze in a round trip those cost cuts?

[Mackie McCrea:]

Well, when you combine it with all the great projects that we have that we've talked about they were completing this year just like naturally you're going to see OpEx come up, I'm referring to Mariner East, Orbit and other smaller type projects. I think the normal run rate would probably be closer to probably $350 million, but don't think that we're not continually trying to look to achieve a higher number than that. But if I was to guide you for going forward, I would probably say at least the $350 million. Remember you also are going to have inflation just some of the normal increases that occur when you're a company of our scale and size but $350 million should be a good number you can use.

[Shneur Gershuni:]

But when you’re talking about inflation because you're adding new assets and new costs come with those assets on a like-for-like basis you're still down about $5 million.

[Mackie McCrea:]

Yes. I think that's probably a fair statement.

[Shneur Gershuni:]

Perfect. Guys, thank you very much. Really appreciate the color today and have a safe day

[Operator:]

Thank you. Our next question comes from Jeremy Tonet with JPMorgan. Please proceed with your question.

[Jeremy Tonet:]

I just want to you know look a little bit forward here and based on your guidance and your commentary, it seems like there were some favorable items in 3Q that won't necessarily repeat in 4Q here and so just wondering is the guidance imply with more 4Q EBITDA kind of a fair run rate of what the business can do on a recurring basis and then when you lay around kind of a slew of new projects that are coming into service I'm just trying to think through how much could EBITDA really step up here and how do you feel about the pace of deleveraging to get ET off negative watch at the agencies, just want to see how comfortable we should be feeling on that?

[Mackie McCrea:]

Well you're right. We want to make sure when we talked about the quarter that we highlighted some of the optimization activities as well as in the midstream on the some of the revenue recognition that we saw around that one contract. If you really look forward I think it's fair to say that we have, I want to emphasize once again we have a great commercial team that will always be looking for opportunities for optimization. It's not necessarily something we bake in at the high end, we don't make it in the low end either. So in fairness I would - I'd say that our guidance that we've left out there, we set at the upper end of that I think you can really run with that, from a standpoint even as you start looking out into next year. I'd like to -- I'd like to at least hold off until we do the fourth quarter analysis, fourth quarter earnings call to discuss further with you as to 2021.

[Jeremy Tonet:]

Got it. And maybe just come back to the last part with the agencies here, I guess how comfortable are you that ET is on the right trajectory here to be taken off negative watch, are there really incremental actions that are needed to ensure that you everything goes smoothly there?

[Kelcy Warren:]

Let me just answer that, we're very comfortable. I think the conversations we have with them are very constructive and I'd like to say that we are very, very comfortable that the outlook coming back up.

[Jeremy Tonet:]

Great. Thanks. Just one last one if I could. Pivoting over to renewables, I appreciate all the disclosure there. And just want to get a sense appreciate CapEx is really kind of diving down here, but as you look further out and you will get opportunities across your footprint be it compressors converting to electric and adding solar, just what type of opportunity set, how big could that be for you guys and how does hydrogen fit into that?

[Mackie McCrea:]

Yeah. This is Mackie. Let me start out with saying it's interesting this is such a big topic now and I guess it's kind of our time to share that. We've kind of been doing this for a while now and I’ll elaborate on that. But if we made a press release about 25 megawatts and it wasn't a project that made sense for us as far as a rate return project, it went something we were going to participate in. However, the power purchase agreement that we did to get the project off the ground made a lot of sense for us under very inexpensive long term electricity. So we will look for those opportunities every day. There's probably at least another 100 megawatts to 200 megawatts both in the south part of the country and the Northeast that we’ll be looking for similar type power purchases once again unless the economics change dramatically from what we're seeing we won't participate. We certainly will support it with buying cheap electricity. And we've mentioned the other things on the opening remarks that we're looking at doing around renewable diesel and carbon capture and all that. But one thing you mentioned electric compression. We have patented this dual drop compression system where you -- if you run by a electric motor or a gas engine and gosh, I think of 2012 or so we've been running for that long. And just to give an example in 2019, we emitted one billion less or reduced our emissions by one billion pounds of CO2 just through our dual drop technology, the compressors that we have throughout many parts of our system in Texas. And we would love a lot of our competitors to buy or to participate in these because they - they are excellent opportunities to optimize our system where you run on electricity or it’s much more efficient, it’s much better for emissions. But also if there's any issues electricity switch over you run on gas, you don't have any downtime. So we'll continue to look to apply that technology as well as straight up electric compressors where it makes sense. But I'll wrap all that up with the way in or chance we will look at renewables is that we will - we will look at it. We will chase it, when it makes sense and meets our hurdles. We will participate, if not we'll be a purchaser, if it makes sense for from a purchasing standpoint. Around hydrogen, we've looked at hydrogen and honestly the team, our engineering team that talked to and we've kind of dug in the last several months and I’ll just hit a couple of them. For example we've looked at green energy. So you look at a taken wind and solar through electrolysis process in producing hydrogen. Our estimates are it's about 8 times per MMBtu as the value of methane. And then you look at great hydrogen where you take natural gas introduce water and you produce hydrogen. That's still about 3 times the cost or value of methane. So we can scratch our heads around hydrogen. We know Europe is set in the billions of dollars of subsidies and we know there's a lot of companies here talking about it and doing it and of course air products as big time with their plants and pipelines. But at this point, we don't see anything closing the horizon around hydrogen. It's very corrosive to pipelines. So we've got to kind of fit corrosive to compression and so that's something that that we'll continue to look at if customers comes up with ideas or the things change or if the government provides more subsidies where it makes sense we'll certainly look at that. But right now we are -- that's a head scratcher.

[Jeremy Tonet:]

Got it. That's a helpful perspective. Thank you for that.

[Operator:]

Thank you. Our next question comes from Pearce Hammond with Simmons Energy. Please proceed with your question.

[Pearce Hammond:]

Yeah. Good afternoon. And let me extend my congrats to Tom and Mackie as well. My first question is are you seeing any improvements in the divestiture market and would you consider divestitures to help de-lever the company?

[Tom Long:]

No. As far as the first part of your question, we're not seeing improvements, still less capital out there chasing the projects and the multiples clearly have come down. So our guidance to you is there is really not anything material that we're looking at on the divestiture side as we sit here today.

[Pearce Hammond:]

Okay. Thank you, Tom. And then a follow up question just from a real high level, what is your outlook for US NGL supply next year and then as well what do you see kind of a high level outlook for LPG exports out of the US next year?

[Mackie McCrea:]

Well, I'll start with the second part. As everybody knows, we've got about 180,000 barrels of LPG export capacity from We’ve got about a 180,000 barrels of LPG export capacity from Nederland today. We’ve been diligently working to add to that and approach 500,000 barrels a day. We couldn’t be more excited as I mentioned a little bit earlier, we’ve actually now sold out for at least a year if not two years, every slot that we have the ability to sell out other than spot slots that are available each month depending on how the customers utilize their capacity. So we're incredibly excited about that. There is an enormous market that we could sit here and reel off 10 or 12 companies -- I’m sorry countries that we're dealing with that we have signed contracts with or negotiating with around the world. So you really don't see the impact like you are on crude and gasoline. There is a enormous market both domestically and around the world for petrochemicals. That's pretty much run our lives, in the thousands of products that we use every day. So we see that as a big plus. And that's going to be a huge growth area for us not just at Nederland but also Marcus Hook as we complete years and billions of dollars of projects to complete our pipelines and build out our infrastructure at Marcus Hook. So we're couldn't be more excited and anxious to kind of kick off this next phase to become a -- if not the largest exporter of LPG and ethane in the country pretty darn close by the end of this year early part of 2021. As far as NGL, we tied a lot to of course drilling in West Texas is kind of a core area for us for our growth and Eagle Ford to a certain degree. We actually are somewhat optimistic now that take into account WTI got to hang in there, it got to kind of hang around $40 or maybe start to grow to kind of keep this kind of optimism. But talking to our producers, looking at the just a lot of DUCs out in West Texas we do think that we'll be drilling around a lot of these areas we think we'll see 15% to maybe 20% growth by the end of next year kind of concertedly with a lot of our producers. So we're -- I wouldn't say we're overly bullish but we're certainly optimistic that we'll see volumes grow on our systems our rich gas ultimately producing NGLs to transport and frac and to explore ourselves into the domestic markets.

[Operator:]

Thank you. Our next question comes from Michael Lapides with Goldman Sachs. Please proceed with your question.

[Michael Lapides:]

Hey guys. Thank you for taking my question. And like the others, congrats on the various promotions Tom and Mackie, kudos. Real quickly can you talk a little bit about where you think you are in producer kind of bankruptcy cycle and when you look forward across the different businesses, where do you think the greatest risk may lie to either existing producers five or producers that that maybe in high distress right now.

[Mackie McCrea:]

Yeah. Let me start maybe Tom can add if you would like to and we say this a lot. We're pretty proud of our credit -- the credit of most of our customers we certainly have some that are out there that are a little concerning and of course there's been some bankruptcies already that we're kind of dealing with. But for the most part, we don't really see anything that can happen. It's just very material. And even those bankruptcies that do happen, there's things we can do and renegotiating agreements and we call it blend and extend with some other deals we may have with them in other areas. So I wouldn't sit here and say and Tom may elaborate on this but I would sit here and say There is anybody really out there that gives us a great deal of concern about bankruptcies at this point.

[Tom Long:]

And I just want to echo Mackie’s comment there really isn’t anyone, always like to complement our credit group, I think they do a very, very good job of monitoring all of our counterparty risk, they do a good job of mitigating the counterparty risk. And as we sit here today don't have any in any one or any concerns with any.

[Michael Lapides:]

Got it. And then one question on the Bakken expansion, can you just remind us you've got the Illinois Commerce Commission approval, how much incremental capacity you're adding? And I know you've got contracts, but does the market given lower production out of the -- out of the Bakken, does the market actually need that capacity right now or even in the next year or so?

[Mackie McCrea:]

Well, that remains to be seen. Certainly we need some more rigs to move back in for volume growth. Fortunately we know that when they do move back in we will be the pipeline of choice or the outlet of choice. So we're always very pleased to have that situation up there. We'll be expanding from 570,000 barrels a day to about 740,000 750,000 barrels a day and as you said a large portion of that not the walkup space, but the large portion of that is demand charge. And so, we’ll receive payments regardless of where the volumes are there or not. But we're somewhat optimistic that the volumes will be there that volume -- that the drilling will commence as long as crude kind of hangs in there or starts increasing in early part of 2021. Hopefully all these economies get back going again sooner than later. And so we are hopeful that production returns. But from a risk standpoint from energy transfer those are backed by demand charge agreements.

[Operator:]

Thank you. Our next question comes from Ujjwal Pradhan with Bank of America. Please proceed with your question.

[Ujjwal Pradhan:]

I would first begin on your 2021 CapEx outlook. Obviously you have a significant number of ongoing projects set for in-service by year end and next year it seems you have remaining spend on Mariner East 2 and the Ted Collins pipeline outside of those two, can you talk about what forms the bulk of your $1.2 billion budget?

[Kelcy Warren:]

Yeah I'll take off with this and then Mackie can -- Mackie can chime in. But I would say that it's still the NGL and refined products clearly carries the majority of it 70% to 75% percent of it midstream, brings up that the next piece of it and it's down to 10% to -- 10% to 15% of it. And we do have and you already highlighted this, but on the crude oil side like that Ted Collins link and some of the optimization that's brings up the last piece at 5% to 10%.

[Ujjwal Pradhan:]

Got it. Thanks. Thanks for that Tom. And second question on the Dakota Access Pipeline and some of the challenging that we have faced here. Appreciate the update from today's hearing. And we think a contingency plan around what you could do under an adverse outcome from the court cases might help address all the market concerns here. So for illustrative purpose under a potential adverse outcome do you believe you'll be able to operate sections of the pipe not impacted by the current permit issue or monetize sections that are not impacted? Thank you.

[Mackie McCrea:]

Yeah. I’ll start -- this is Mackie again. Yeah we really don't, we had a hearing today, and we'll continue to go through the process. But we really don't envision or see a scenario where we will take the pipeline out of service. We just don't think that's going to happen. We were highly confident that the DAPL will remain in service like it has safely and efficiently for the last three years. And so, the real issue is that -- we’ll -- EIS have to be completed or not, and that remains to be determined as time goes on. But we're highly confident that the pipeline will continue flowing and not shut in.

[Ujjwal Pradhan:]

Got it. Thank you. And if I can just squeeze in a quick one. So of the assets -- some of the CapEx reduction this year, it looks like that came from project cost savings. Can you talk about what sort of items led to that.

[Mackie McCrea:]

I'll start, this is Mackie. Yeah. Well one of them was we just completed our Lone Star Express and we came in significantly under budget and we kind of saw that yield was coming, but we actually realized it as we brought the pipeline online here recently, so that was some of it. We also a little bit of it has been deferred. And then some of it is just we put it on hold because some of the producers that we were contracted with have held up drilling and held up the need for some of the services that we were going to provide.

[Kelcy Warren:]

Yeah. There's not a whole lot more to add to that. It really is the savings we lowered it by -- we set a little over a $100 million, and those are the primary drivers. There are some other what I would call smaller immaterial type projects but that clearly is the driver what Mackie just went over.

[Ujjwal Pradhan:]

Thanks, Tom and Mackie for the color here. Have a good day.

[Operator:]

Thank you. Our next question comes from Jean Ann Salisbury with Bernstein. Please proceed with your question.

[Jean Ann Salisbury:]

Hi. I had one more about Mariner East II and 2X. Is the right way to think about that that your substitute pipe is already moving the vast majority of the available NGLs? So, the upside on EBITDA will mostly be from the natural gasoline when that starts, but that's kind of the -- most of the upside that we should expect and not, got it, but more NGL volume and revenue.

[Mackie McCrea:]

No, this is Mackie. No, we'd be both. So as we complete Mariner II at the end of this year and 2x in later on in 2021, we have volumes that will be coming online both transport volumes and volumes that will need to be drilled and exported or sold in the local market. So, we will increase our NGL volumes and our throughput both for ethane to a certain degree a little bit and also for LPG. But the portion of the 8-inch line that we're converting that will be moving refined products that would be brand new revenue that we have never received new business where we'll be able to benefit from the arbitrage or the spread between the Chicago market and the New York market, really on a monthly basis wherever the highest price of gasoline is, we'll be able to buy directly and move either direction. So, we see that just almost as just another system.

[Jean Ann Salisbury:]

Okay. And that LPGs that you’re -- I guess is moving by rail now I guess.

[Mackie McCrea:]

Correct. By rail or some volume growth.

[Jean Ann Salisbury:]

Yes. That's super helpful. And then my second question is just on -- I think at the early Permian expresses like Permian Express 1 and 2 I think those are listed as mostly five and seven year contracts in 2013 and 2015. Can you comment if we should be expecting some roll-off from that next year, it seems like that would have from the original contracts coming off.

[Mackie McCrea:]

Yes we've actually had one of those roll-off this year and yes over the next couple of years, we will have several more rolling off. However we are working on a project moving it forward, it’s going to happen where we're working with another company to move barrels from cushing that will start filling in some of the Permian Express 1 capacity of the contracts they'll roll over. So if we're unable to roll them over at rates that work for us, we do have some volumes that we'll be filling in at least 60,000 or 65,000 barrels a day with the ability to double that as the market allow. So we are as I said earlier that that's our biggest focus in our partnership is to look at our crude capacity as a contract rollover and extend those contracts or chase new barrels and/or utilize some of some of those pipelines in a different service.

[Jean Ann Salisbury:]

That’s very helpful, thanks that’s all from me.

[Operator:]

Thank you. Our next question comes from Keith Stanley with Wolfe Research. Please proceed with your question.

[Keith Stanley:]

Hi thanks first one just want to confirm so you're going to have a lot of free cash flow next year after growth CapEx and distributions now so I think I know the answer but I just want to clarify you expect 100% of that free cash flow to go to debt repayment at this point or is there any flexibility at all on uses of the free cash flow.

[Kelcy Warren:]

There's always - there's always flexibility. But I will say we expect at this time 100% of that There's always flexibility, but I will say we expect at this time for 100% of that to go toward debt pay down. It's one of those that once we get into our target range of 4 times to 4.5 times, we will evaluate that that further. But right now we're focused on bringing the leverage now.

[Keith Stanley:]

Thanks. And one other quick one just any interest still in preferred equity market to further accelerate deleveraging after the distribution cut?

[Kelcy Warren:]

Yes. We will take advantage of that market when it makes economic sense. And we do feel like that's something that that does accelerate it. You're exactly right. And we will continue to monitor that market.

[Keith Stanley:]

Great. Thank you.

[Operator:]

Thank you. Ladies and gentlemen, that's all the time we have today for questions. I'd like to turn the floor back over to Tom Long for closing remarks.

[Tom Long:]

All right. Thank you and once again we really appreciate all of you for joining us today. And as we've mentioned today, we remain very excited about the performance of our existing asset base as well as all of the projects that we have coming online. Thank all of you for your support and we look forward to talking to you in the near future.

[Operator:]

Ladies and gentlemen, this concludes today's web conference. You may now disconnect your lines at this time. Thank you for your participation and have a great day.