Macquarie Infrastructure Holdings, LLC
Q2 2019 Earnings Call Transcript

Published: 1 Aug 2019

[Operator:]

Good day, ladies and gentlemen, and welcome to the Macquarie Infrastructure Corporation Second Quarter 2019 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 be given at that time. [Operator Instructions]. As a reminder, today conference is being recorded.I would now like to turn the call over to Jay Davis, Managing Director. Sir, you may begin.

[Jay Davis:]

Thank you and welcome to Macquarie Infrastructure Corporation's earnings conference call, this covering the second quarter of 2019.Our call today is being webcast and is open to the media. In addition to discussing our quarterly financial performance on this call, we have published a press release summarizing the results and filed a financial report on Form 10-Q with the Securities and Exchange Commission. These materials were released last evening and copies may be downloaded from our website at www.macquarie.com/mic.Before turning the proceedings over to Macquarie Infrastructure Corporation's Chief Executive Officer, Christopher Frost, let me remind you that this presentation is proprietary and all rights are reserved. Any recording, rebroadcast or other use of this presentation in whole or in part without the prior written consent of Macquarie Infrastructure Corporation is prohibited.This presentation is based on information generally available to the public and does not contain any material non-public information. The presentation has been prepared solely for information purposes and is not a solicitation of an offer to buy or sell any security or instrument.This presentation contains forward-looking statements. We may, in some cases, use words that convey uncertainty of future events or outcomes to identify these forward-looking statements.Forward-looking statements in this presentation are subject to a number of risks and uncertainties. A description of known risks that could cause our actual results to differ appears under the caption Risk Factors in our Form 10-K.Our actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which we are not currently aware could also cause our actual results to differ. The forward-looking events in this presentation may not occur.These forward-looking statements are made as of the date of this presentation. We undertake no obligation to publicly update or revise any forward-looking statements after the completion of this presentation, whether as a result of new information, future events or otherwise, except as required by law.During today's call, we will at various times make reference to the non-GAAP measures, earnings before interest, taxes, depreciation, and amortization, or EBITDA, and free cash flow as defined by us. A reconciliation of these non-GAAP measures to the most comparable GAAP measures can be found in the tables attached to our earnings press release published last evening.In addition to Christopher Frost, participating in today's call is Macquarie Infrastructure Corporation's Chief Financial Officer, Liam Stewart.At this time, it is my pleasure to introduce Macquarie Infrastructure Corporation's Chief Executive Officer, Christopher Frost.

[Christopher Frost:]

Thank you, Jay. And thanks to those of you joining our call this morning. MIC's financial and operational results for the second quarter of 2019 were largely consistent with our expectations. They reflect the continued good performance of Atlantic Aviation and year-over-year improvement at MIC Hawaii, consistent with the regulated rate increase last July and the sale of the non-core businesses in November 2018.IMTT's results in the quarter reflect the continuation of trends we have discussed previously, namely stabilizing utilization, partially offset by lower average storage rates. Importantly, IMTT is seeing an increase in the level of customer inquiries related to the implementation of IMO 2020.For the second quarter of 2019, MIC reported adjusted EBITDA excluding non-cash items and adjusted free cash flow from continuing operations of $134 million and $88 million respectively.On the back of these results, the MIC board has authorized the payment of a cash dividend of $1 per share for the quarter, consistent with our guidance for 2019. The dividend will be payable on August 15 to shareholders of record on August 12.Along with the dividend paid for the first quarter in May, we have paid out approximately 70% of the adjusted free cash flow generated year-to-date. We expect to make distributions of $1 per share per quarter for each of the third and fourth quarters of 2019, subject to market conditions.On this basis, we will pay out approximately 83.5% of our adjusted free cash flow as distributions at the midpoint of our guidance.As noted in our press release last evening, we have reaffirmed that 2019 EBITDA guidance for each of our operating businesses. We lowered guidance for our Corporate and Other segment by $10 million or 1.6% of total EBITDA. This is a result of, one, the reduction in fee income related to the successful conclusion of our relationship with a renewable developer; and two, higher-than-anticipated professional service fees.The professional services fees relate both to ongoing litigation and consulting services that we expect will increase efficiency across the platform. The vast majority of these incremental expenses are non-recurring.We now expect MIC to generate consolidated EBITDA from continuing operations in a range of $600 million to $625 million. We have made a corresponding adjustment to our free cash flow guidance and now expect to generate free cash flow in a range of $390 million to $435 million.We assume no material downturn in the economy over the remainder of the year.We are also forecasting a deferral of certain growth capital expenditures from 2019 into 2020. Liam will provide additional details in a few moments, but in general the deferral of growth capital deployment is related to the higher levels of the Mississippi River this year. The deferral is not expected to have any material impact on MIC's financial results in 2019.I'm especially pleased with the strength of MIC's balance sheet. It reflects the progress we have made relative to our strategic priority of increasing our financial flexibility.Consolidated leverage at the end of the second quarter was 4 times net debt to EBITDA and that is where we expect to be at the year-end. MIC's current pro forma 3.6 times leverage is a function of our success in relation to another of our strategic priority, simplifying our portfolio through the sale of smaller and non-core businesses.I'm pleased that we have successfully completed the sales of, one, our wind renewables portfolio; two, all but one of the facilities in our solar renewable portfolio; and three, our interest in the joint venture with Intersect Power. The sale of the remaining solar facility is expected to close in early August.Upon completion of these sales, we will have realized gross proceeds of approximately $276 million. Taxes and transaction fees are expected to reduce the proceeds to something closer to $210 million. These proceeds will be available to fund growth capital projects. We have now exited substantially all of the smaller and non-core businesses in our portfolio.Turning to the operational headlines across the portfolio in the second quarter, at IMTT, utilization was stable during the quarter and averaged 82.9%, down year-over-year as anticipated, but up slightly on a sequential basis. As of yesterday, utilization was approximately 83.5%.As we have discussed previously, the implementation of IMO 2020 on January 1 next year is expected to have a positive impact on demand for storage and handling services in the second half of this year.While we have benefited from some of this demand earlier than expected at St. Rose, it is being partially offset by the continued weakness in demand for storage in New York Harbor.As a result, we expect to see utilization in a slightly wider range of mid to high 80s percent at the end of this year, subject to market conditions. We can still see a path to a high 80s utilization level, but the widening underscores the difficulty in forecasting the outcome of the implementation of IMO 2020 with certainty.This also impacts our expectations around average utilization for the full year. That is now in the low to mid 80s percent range. MIC and IMTT continue to monitor the developments closely.On the project development or repositioning front, we continue to be pleased with the quantity and the quality of the projects being advanced by IMTT. In general, these projects will enhance the capability, capacity and connectivity of the business.In particular, we note that Methanex reached a final investment decision regarding construction of a third methanol plant in Geismar, Louisiana, adjacent to its existing facilities. Operations are targeted to commence in the second half of 2022.IMTT will proceed with the development of the full 714,000 barrels of additional storage in support of that project that we foreshadowed in February.Atlantic Aviation delivered a good result for the second quarter, even though FAA reported general aviation flight movements were flat with the prior comparable period. Based on the FAA data, flight activity at the airports on which Atlantic Aviation operates decreased by about 1%.We believe the lack of growth in flight activity reflected, in part, the cool wet weather late in the quarter and note that flight activity at Atlantic Aviation in July has improved.Notwithstanding the flight activity levels, Atlantic Aviation increased the amount of jet fuel sold and gross margins on those sales, consistent with its strategy of seeking to attract larger aircraft and higher margin business.The Atlantic Aviation team has done a very good job of executing on this strategy and the result was solid growth in gross profit.Higher expenses, SG&A, but also repairs and maintenance and certain nonrecurring items, offset a portion of the improvement and resulted in an increase in EBITDA of 3%. The increase in SG&A includes the non-cash expenses associated with the implementation of a new stock-based incentive compensation plan.It is worth noting the new incentive plan reduced net income, inflated the SG&A line at each of our operating businesses. Nevertheless, we believe the implementation of the incentive program that rewards operating company personnel with shares of MIC subject to exceeding certain performance hurdles creates an improved alignment of interests between those employees and the shareholders generally. The expenses [indiscernible 0

[Liam Stewart:]

Thank you, Chris. MIC's EBITDA for the second quarter of $134 million was in line with our expectations. Reduced earnings at IMTT were partially offset by improved results at each of Atlantic Aviation and MIC Hawaii.Adjusted free cash flow from continuing operations was $88 million, reflects lower EBITDA as well as an increase in interest expense and maintenance capital expenditures, partially offset by lower cash taxes.IMTT generated EBITDA of $64 million in the quarter and free cash flow of $45 million. The flow-through of EBITDA to free cash flow reflects lower cash taxes and lower interest expense and partially offset the year-over-year increase in maintenance capital expenditures.Maintenance capital expenditures are expected to be higher in the second half of the year, but consistent with the guidance we provided in February. The rate of spending has been slowed by both winter weather and the high water of the Mississippi River.The sequential decline in EBITDA and free cash flow reflects the absence of the approximately $40 million refinery related termination fee recorded in March. Versus the second quarter in 2018, EBITDA generated by IMTT declined by approximately 14%. The decline reflects the reduced level of utilization and the impact of lower storage rates, as Chris noted.We continue to expect that IMTT will generate EBITDA for the full year of between $287 million and $297 million or between $247 million and $257 million excluding the termination fee. Lower utilization is expected to be offset by better-than-anticipated throughput revenue and increased ancillary services fees.Atlantic Aviation produced $62 million of EBITDA in the quarter, up 3% versus the prior comparable period, in what is typically the slowest quarter of the year, the muddy season for the business.Atlantic Aviation's gross profit was up 5%, driven by an increase in the amount of jet fuel sold and stronger margins on those sales.Free cash flow at Atlantic Aviation was down versus the prior comparable period at $41 million, largely as a result of higher cash interest expense. Interest expense was higher as a result of the refinancing of Atlantic Aviation in December 2018 that increased both the amount and cost of Atlantic Aviation's debt. This was partially offset by a decrease in cash taxes in the period.We continue to expect that Atlantic Aviation will generate EBITDA of between $275 million and $285 million for the year.Additionally, we have assessed the recession resiliency of the business in a variety of scenarios. We believe that the impact of an economic downturn on Atlantic Aviation will be muted by the fact that Atlantic Aviation's balance sheet is in a very good position in terms of leverage, tenure and coverage.Results for the MIC Hawaii segment were consistent with our expectations. The 27% increase in EBITDA year-over-year to $14 million reflects the implementation of new utility rates in July of last year and the sale of a non-core business last November.Free cash flow produced by MIC Hawaii increased with the growth in earnings, save for a modest increase in maintenance capital expenditures.Our guidance for MIC Hawaii is unchanged, with EBITDA for the year expected to be between $60 million and $65 million.The second quarter results for our Corporate and Other segment reflects the absence of income from a second developer of renewable power projects. That relationship generated approximately $7 million of fee income in the prior comparable period that was minimal in the second quarter of this year.The reduction in fee income, along with transaction-related expenses, resulted in a generation of negative EBITDA of approximately $8 million for the quarter.Our relationship with the developer was successfully concluded in July, earlier than expected, but with the full repayment by the developer of all debt principal and interest.The absence of fee income going forward, together with the nonrecurring expenses we expect to incur this year, led us to revise our segment guidance to negative $22 million from negative $12 million.Together with the three sales mentioned previously, the end of the relationship with the renewables developer concludes our efforts to sell our smaller and non-core businesses.Turning to our consolidated balance sheet, MIC ended the second quarter with cash of slightly under $600 million. Gross debt totaled approximately $2.7 billion and leverage associated with continuing operations was 4.0 times net debt to EBITDA for the trailing 12-month period at quarter-end.Subsequent to the balance date, we, one, repaid $350 million of convertible notes at maturity on July 15; two, Havell [ph] will receive net proceeds of approximately $210 million from the sale of the renewables businesses; and three, Havell will deconsolidate $297 million of debt associated with the sale of the renewables businesses.Pro forma for the impact of the sales, leverage decreased to 3.6 times at the end of July. We anticipate leverage will be approximately 4.0 times at the end of 2019 and net interest expense will decrease over the second half of the year by approximately $5 million, all else being equal.Available liquidity consisting of both cash and undrawn balances on existing credit facilities totaled approximately $1.6 billion. We anticipate having a cash balance at year-end of approximately $250 million that will be available to support our dividend and fund a portion of our growth projects in 2020.The funding of growth capital projects is expected to utilize a portion of our current cash balance. Some of the cash will also fund the dividend for the second quarter that was announced last evening. Beyond that, cash will also be used to pay any taxes that may be due in relation to the sales of the remaining contracted power businesses this year.Regarding the reduction in growth capital deployment in 2019, the primary driver of the change in guidance has been the high levels of the Mississippi River this year. The water level has limited work on the projects at IMTT's facilities in Louisiana.We have continued to make good progress against our priorities, investing in the infrastructure of our businesses. In total, we deployed approximately $51 million in growth projects during the second quarter.Net of adjustments for delayed projects, we have revised our target for growth capital deployment in 2019, well off from between $275 million and $300 million to between $250 and $275 million. The reduction in growth capital deployment is not expected to have an impact on our 2019 result.Importantly, the teams at each of our operating companies continue to progress a significant number of growth projects in our pipeline. The pipeline remains full at approximately $1 billion of projects in various stages of evaluation and negotiation.With that, I'll hand the call back over to Chris for a few additional observations.

[Christopher Frost:]

Thanks, Liam. At a high level, we have largely achieved our key strategic priorities related to streamlining the MIC portfolio and improving our financial flexibility. We are very well placed to take advantage of opportunities in our core businesses as and when they arise.Our third priority, investing in infrastructure of our businesses to make them more resilient, is ongoing. Key initiatives at IMTT in support of this priority involve driving projects currently under evaluation to signing and those currently underway to completion.We remain confident in our ability to further diversify the product and customer mix of the business, as well as enhance IMTT's overall position in the market, particularly in St. Rose and Bayonne.The lead times on some of these projects are longer that historically normal. However, they position the business well over the medium to long term.With respect to IMTT's existing business, the focus is on leasing available storage capacity and providing ancillary services. Importantly, the level of customer inquiries with respect to IMO 2020 related storage has increased.As I noted last quarter, in the New York market, the IMO 2020 inquiries are typically in relation to storage of finished product or blend stock for marine fuels. Recall that the New York Harbor market is one of the largest bunker markets in the world.On the Lower Mississippi River, the inquires have tended to be in relation to storage and handling of the full range of fuel oil specs and distillate feedstocks in support of the refineries in that region.We continue to believe that IMO 2020 will be a structural positive for the storage business given the increased production of middle distillates underneath the segregated storage of various grades of marine fuel.This demand, coupled with solid marketing efforts, is expected to drive improved utilization at IMTT in the back half of the year.Not surprisingly, we have fielded questions concerning the impact on the New York market of the recent fire and subsequent shutdown of the PES refinery in Philadelphia.The precise impact remains to be seen, but it has the potential to create additional demand for storage over the short to medium term. Refined products that used to be produced by PES and transported to Upstate New York and Western Pennsylvania may be replaced by waterborne shipments coming in via New York Harbor. IMTT's Bayonne facility is well positioned to support that market shift.I am also pleased to report that IMTT was able to complete the purchase of the St. Rose refinery within the past 24 hours. The refinery was idled over a year ago after it was deemed non-strategic for the Shell US bitumen business.The acquisition preserves IMTT's ability to resell the refinery to a third party [indiscernible 0

[Operator:]

Thank you. [Operator Instructions]. And our first question comes from Jeremy Tonet with J.P. Morgan. Your line is open.

[Jeremy Tonet:]

Hi. Good morning. Just want to pick up on the last point there. Just want to confirm, did you buy – you bought the Shell refinery. And if you did, how much did that cost, if I got that straight?

[Christopher Frost:]

Yeah. Sure. Look, we're pleased with the – that we're able to acquire the assets related to the refinery. Important to note that IMTT already owned the land on which the refinery was based. For commercial reasons, we are not disclosing the cost of the refinery, but I can assure you it was immaterial to IMTT and, therefore, immaterial to MIC. Worth noting, we have no intention to operate the refinery. We see it as fundamentally enhancing or preserving the option that IMTT has to re-lease the 1.6 million barrels that are associated with the refinery. And recall that we currently have 400,000 of those currently under contract to a third party.I think, as I said in the prepared remarks, that we are currently refining the strategy to bring the refinery to market and expect to launch that process in the coming weeks. And I think you will appreciate the fact that, with IMTT owning both the refinery assets as well as the storage, it should hopefully make for a more streamlined sale process than previously.

[Jeremy Tonet:]

That's helpful. Thanks. And just want to be clear, were there any environmental liabilities that we should be thinking about picking up the refinery here?

[Christopher Frost:]

As I've sort of said, IMTT owns the land on which the refinery was based. IMTT undertook a thorough environmental due diligence. I think you'd appreciate, given the previous owner of the refinery, they take those matters very, very seriously. So, we were comfortable with the additional environmental exposure we were taking on.

[Jeremy Tonet:]

That's helpful. Thanks. And just one more on the storage if I could. I want to get a bit more on the IMO related customer conversations. When do you think that contracts could be signed at this point? Are your customers kind of feeling more certain about the needs that they will see with IMO 2020 coming here, and that could be in the near-term contracts? Or how do you think that progresses and have your IMO 2020 demand expectations going to change over the course the year? We saw that the expected average utilization for 2019 tick down slightly there?

[Christopher Frost:]

Yeah. I think as we said in the prepared remarks, the reason for widening the utilization guidance is really a function of the difficulty in being precise with respect to the forecasts, both in terms of the quantum and timing. And so, after a careful bottom-up review by MIC and IMTT, we decided to be prudent to widen the utilization range.As I said in the prepared remarks that we currently already have attracted a number of system player customers at St. Rose and Bayonne, who have taken storage for what we believe to be related to IMO 2020 under multiyear contracts. And there is significant customer discussions and contracts in front of customers currently.The widening of the utilization guidance, I think, reflects the fact that, while we remain confident that we will see a pick up in the second half of the year, I don't think we can be as precise as to whether that's going to be sort of third quarter or fourth quarter.But, certainly, the level of customer inquiries that we're saying, the fact that we've already attracted customers to St. Rose and Bayonne – and, as I mentioned, the demand is slightly different in each of those markets – I think it gives us comfort that we will see that pickup.And I think it's also worth noting as well that based on the bottom up analysis that we've done and when we review our current book and look at the customer inquires that we have, it is still feasible under certain circumstances that we get to the original guidance levels.

[Jeremy Tonet:]

That's very helpful. That's it for me. Thanks.

[Operator:]

Thank you. And our following question comes from the line of Tristan Richardson with SunTrust. Your line is open.

[Tristan Richardson:]

Hey. Good morning, guys. Just on the Methanex opportunity, can you talk about the scale of capital deployment of that project and maybe just some of the key dating items before you would potentially start work?

[Christopher Frost:]

Well, I think – Tristan, it's Chris. We haven't disclosed the capital costs associated with that project for commercial regions. I think it was as we said before, but the material event that needed to occur was Methanex reaching a final investment decision, which they did and announced to the market recently. And you'll recall that we have entered into an agreement with Methanex to construct 714,000 barrels that I'd previously announced that Methanex requested that we bring forward around 150,000 of those barrels which were underway in terms of constructing and that they'll be online post 2020.So, we're sort of feeling pretty good that once we receive the final investment decision, the agreement with IMTT is now on foot.

[Tristan Richardson:]

Helpful. Thanks. And then, just thinking about St. Rose and sort of how you're going to market with that asset, is it fair to say that everything is on the table in the sense that you would look to market the refinery and, ideally, you could lease the tankage that you own there, but could the tankage be part of a potential sale?

[Christopher Frost:]

I don't think there's any intention to actually sell IMTT's storage associated with the refinery. But the simple proposition would be to sell the refinery to a third party and at the same time enter into an agreement to utilize those tanks that are associated with it. And that's what we were looking at previously. But as I said, I think you can appreciate when IMTT owned both the refinery as well as also the storage tanks, it ought to make for a more streamlined process. So, there's no intention to actually sell the storage that IMTT owns that supports the refinery. Rather just sell the refinery and enter into ideally a long-term contract for the storage to support the refinery.

[Tristan Richardson:]

Understood. Thanks. And then, Chris, just last one from me. Just going back to your prepared comments, I think you mentioned sort of creating a cost structure at Atlantic or a balance sheet at Atlantic that could endure a general kind of economic softening. Could you kind of talk a little bit about that a little more and sort of is there opportunities to further advance that or just kind of potential there at Atlantic?

[Liam Stewart:]

Hi, Tristan. It's Liam. I'll take that question as well. I think if you turned back to when we did the Atlantic refinancing at the end of last year, one of the objectives was to have it financed really on a standalone basis, without any sort of parent company convertible debt supporting it. That was the first one.And then, the second one was really around making sure that we had enough coverage, tenure, liquidity and headroom relative to being able to withstand a variety of economic circumstances. And you would have seen, in the first half, that we're actually seeing very good economic circumstances in that business. So, from an overall leverage perspective, feel very good about that. But that really draws the decision making around that refinancing as well. We've got good coverage in terms of distribution, very good coverage in terms of covenants and the revolver there is undrawn as well.I would think that that's the bulk of the work that we can do from a balance sheet perspective and, obviously, we're mindful of watching performance in that business. But as I said, very good demand in the first half of the year as well.And then, from an operating cost perspective as well, I would say we're always thinking of way in which we can sort of be more efficient, both on the revenue side, but also on the cost side and that work will continue to be ongoing.

[Tristan Richardson:]

Helpful. Thanks guys very much.

[Operator:]

Thank you. And our next question comes from TJ Schultz with RBC Capital Markets. Your line is open.

[TJ Schultz:]

Great. Thanks. First, on the CapEx spend this year, particularly as we think about $150 million ballpark of CapEx to be spent potentially over the next six months, can you just provide any detail on timing for this to turn into cash flow? Are the projects expected to be immediately additive or what type of ramp period into your expected returns are assumed?

[Liam Stewart:]

Yeah. TJ, it's Liam. The bulk of the projects that are completed this year will stabilize throughout 2020. So, in terms of the adjustment to guidance, sort of revision from $275 million to $300 million to $250 million to $275 million has no impact on 2019 in terms of segment EBITDA guidance. Most of those projects, particularly the ones at IMTT, will ramp up over the course of 2020.

[TJ Schultz:]

Okay. Does the $250 million to $275 million include any CapEx for the longer dated Methanex project?

[Liam Stewart:]

It includes a portion of CapEx for the longer-dated Methanex project.

[TJ Schultz:]

Okay. And then, what's the expectation to pricing trends across IMTT, particularly as we look into 2020 just as you react to some of the supply/demand trends in the New York Harbor and then the opportunities as IMO?

[Christopher Frost:]

I think in terms of storage, we're tracking to plan. You recall in our guidance, we incorporated a step down in average storage revenue across IMTT of around 5%. And I would sort of say that we are tracking entirely consistently with that. In terms of the longer-term trend, I think you've heard us talk about before that we anticipate there to be a recovery in storage rates once excess supply is taken out of the market. And we've looked at when IMTT has enjoyed, if you like, sort of pricing power before, it's when utilization tracks over that 90% level. So, in terms of this year, we see storage rate stabilizing and tracking to plan and still believe the storage rates will continue to revert once utilization recovers.

[TJ Schultz:]

Okay. Great. Thank you, guys.

[Christopher Frost:]

Thanks TJ.

[Operator:]

Thank you. And our next question comes from the line of Christine Cho with Barclays. Your line is now open.

[Christine Cho:]

Thank you. Can you give some more color on how you ended up buying the refinery? Did Shell run a sale process? Or did it look like they were going to idle the facility and so you guys approached them?

[Christopher Frost:]

Yes. As I mentioned that Shell – the refinery is on land which IMTT owns. Shell idled the refinery over 12 months ago and sought to run a sale process at that time which IMTT was involved with in the sense that it was also then offering a storage-related contract to support the refinery. You'll appreciate that the refinery was deemed to be non-core to Shell and, therefore, the alternative may have meant that the option for IMTT to ever lease the tanks that support the refinery may potentially disappear. So, we felt that it was strategically helpful for IMTT to acquire the refinery and, therefore, preserve that option to resell it and then lease the associated storage.

[Christine Cho:]

I see. Okay. And then, on the aviation side, you guys gave color that the general aviation flight activity was flat year-over-year. Would you be able to give us some color on how your activity was?

[Christopher Frost:]

Christine, it's Liam. Our activity was broadly in line with the overall industry through the first half of the year. I think what we've seen with the FAA data for the first half of the year, I think what we've seen in terms of our performance is that demand has manifest itself in the first half of the year more on the volume side and we've enjoyed a good result driven in large part by that.

[Christine Cho:]

Okay. And then, just a housekeeping item. You guys talked about the Philadelphia refinery closure potentially providing some upside. But I just wanted to verify that the refinery was not a customer on your tanks at New York Harbor?

[Christopher Frost:]

No. It wasn't.

[Christine Cho:]

Okay. Thank you.

[Operator:]

Thank you. And I'm showing no further questions at this time. I would now like to turn the call back to Christopher Frost for further remarks.

[Christopher Frost:]

Thank you for participating in our conference call today. We will again be on the road meeting with investors and analysts at conferences and in one on one meetings in the weeks ahead. We look forward to speaking with many of you during that time. With that, we wish you a great day.

[Operator:]

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