Earnings Call: Q4 2020

Feb 11, 2021

Good day, everyone, and welcome to the PBF Energy 4th Quarter 2020 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following management's prepared remarks. As a reminder, this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin. Thank you, Daryl. Good morning and welcome to today's call. With me today are Tom Nimbley, our CEO Matt Lucey, our President Eric Young, our CFO Tom O'Connor, our Senior Vice President of Commercial Paul Davis, our President of Western Region and several other members of our management team. A copy of today's earnings release, including supplemental information is available on our website. Before getting started, I'd like to direct your attention to the Safe Harbor statement contained in today's press release. In summary, it outlines that statements contained in the press release and on this call, which express the company's or management's expectations or predictions of the future, are forward looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we described in our filings with the SEC. Consistent with our prior periods, we will discuss our results today excluding special items. In today's press release, we provide a detailed list of the non cash special items included in our Q4 2020 results. The cumulative impact of the special items decreased the Q4 2020 net loss by an after tax benefit of $246,000,000 or $2.04 per share. Additionally, due to the significant losses in 2020, certain deferred tax assets were revalued and drove a significant reduction on our effective tax rate for the Q4 and full year 2020. Going forward, we continue to recommend using an effective tax rate of approximately 26% for modeling purposes. As noted in our press release, we'll be using certain non GAAP measures please refer to the supplemental tables provided in today's press release. I'll now turn the call over to Tom. Thanks, Colin. Good morning, everyone, and thank you for joining our call today. While we are starting to see some improvement overall, the pandemic continues to wreak havoc on families, communities and businesses globally. BBF was hit hard by the pandemic and our employees dealt with many hardships at home and at work. Our employees, contractors and business partners operated under enormous pressure during the year and their resilience allowed PBF to operate safely and reliably through what has hopefully been the worst of the pandemic. The demand destruction experienced by the industry is unprecedented in its severity and duration. Our immediate response was to ensure the safety and security of our people and our facilities. On top of the normal challenges presented by our 20 fourseven operations, the demand destruction for our products required PBF to operate our assets at lower rates than we had ever attempted over an extended period of time. Beyond our immediate response to the pandemic, PBF embarked on a strategic review focused on driving efficiency in all areas including our refineries, logistics assets, systems and corporate back office. We focused on reducing cost, eliminating redundancy, improving processes and determining the appropriate configuration and path forward for the company in order to create a stronger base business. The company was financially positioned to operate through the pandemic was a top priority. We raised approximately $1,800,000 to provide the company with the liquidity required to weather the pandemic and stabilize our financial footing. As a result of our strategic review, we reconfigured our East Coast refining assets to operate as a fully integrated system, allowing us to maintain the most profitable aspects of each business, while idling redundant capacity, which should result in $150,000,000 in annual operating and capital expense savings. We expect initial results of our ongoing cost reduction programs will generate an incremental $100,000,000 to $125,000,000 in operating expense savings for the rest of our refining system. In total, our cost reductions in 2020 resulted in over $700,000,000 of savings for the year. Our goal is to make our business more cost competitive, ensuring that all of our products improves. We do believe that market conditions are improving. Lower utilization rates in 2020, while operationally challenging, meant that supply and demand were reasonably well matched following the initial surge in inventories last spring. By the end of the year, inventory levels were relatively in line with the normal 5 year historical ranges. We are not out of the woods yet as the pandemic continues to dominate our lives and business, but we are seeing positive signs. The vaccine rollout is improving and more people have now received the vaccine that have tested positive for COVID. This is a good trend that needs to continue in order for demand for our products to recover as people are able to return to their normal routines. We will continue to solidify the savings and operational improvements we've made over the course of 2020. And we anticipate that the fruits of our label will show as the recovery gains momentum. Lastly, I would like to thank all of our employees for following our pandemic protocols, while continuing their tireless efforts in maintaining the safety and integrity of our operations. And with that, I'll turn the call over to Matt. Thanks, Tom. As Tom mentioned, the demand destruction required us to take aggressive action to navigate 2020 and more importantly, to improve our competitive position for the long term. We aggressively targeted cost reductions and operational excellence in 2020. As part of that ongoing effort, it is now incumbent on us to cement that cost discipline as we continue to look for efficiencies across our system. On an apples to apples basis, assuming normalized throughput, we have permanently reduced our cost structure by $0.50 per barrel across our system. Of note, the $0.50 takes into account a reduced denominator as the result of the East Coast reconfiguration, which equates to an achieved expense reduction of over $200,000,000 In the Q4, we ran our refining system at just over 675,000 barrels a day in total. Until demand picks up, we will continue to operate at reduced rates. We believe that the global industry rationalization was necessary and will likely continue. PBF participated in this effort with our East Coast reconfiguration. As of twelvethirty one, the reconfiguration is complete. Obviously, any time there is a loss of jobs and shutdown of units, it becomes a very difficult working environment, but the people at Paulsboro distinguish themselves as the consummate professionals as everything was done safely and in line with our expectations. I would like to comment on the renewable fuel standards as we've seen RINs prices double since the Q3 and rise over 10 times since last January. The RFS remains a broken program, which brings specific harm to independent merchant refiners like PBF. The prior administration made attempts to level the playing field, but left the situation worse than when they started. While the new administration is still getting its feet on the ground, there are steps that can be taken in the immediate term to address the current crisis. PBF is actively engaged in addressing the immediate steps as well as long term solutions for the RFS program. We look forward to working with all the constituents on promoting a fair and balanced program that levels the playing field and does not disadvantage domestic merchant refiners. However, unless the administration and Congress address the program, the unfortunate trends of refinery closures and loss of jobs in the U. S. Are likely to accelerate, which will increase U. S. Reliance on import fuels, further impacting our energy independence. As I mentioned, there's a lot of work to be done by the EPA in taking comments on proposals in front of it, including proposed economic harm waivers, deciding on SREs, establishing the 21 required volume obligations. Additionally, there are cases in front of the courts in the next couple of months that will give us further clarity on the program going forward. Looking ahead, as we continue to focus on improving our core refining operations, we fully recognize that certain sustainable fuels. We certainly believe that cleaner fuels are going to be a part of the future and PBF will be a part of that evolutionary process. We are committed to producing clean fuels in an economically responsible manner. Today's fuels are the most affordable, abundant and economic sources of energy for transportation and literally make modern life possible. They are also critical to a strong economy, which is necessary to advance investments in a more diverse energy mix. Refining assets are well suited for supplying a variety of both conventional and renewable fuels. At PBF, we have 2 distinct pathways to participate in the fledgling renewable diesel market. Number 1, all renewable diesel produced in this country and most of them produced in the world for that matter has a market incentive to be sold in the state of California. As the owner and operator of 2 large California refineries along with proprietary logistics assets, PBF will look to play a significant role to third parties in the distribution of renewable diesel as it enters the state. Number 2, with our refining footprint, PBF has a competitive advantage to manufacture renewable diesel. While PBF has viable opportunities to enter the market on the West Coast and the East Coast, Chalmette has unique attributes that distinguish it above our other prospects. Chalmette is well positioned in the Gulf Coast with excellent access to water, rail and truck logistics. Additionally, Chalmette happens to have an idled hydrocracker with an ample supply of hydrogen that would allow for a 15,000 to 20,000 barrel a day project, which would be capable of processing any renewable feedstock to come on stream in half the time and at half the cost as other projects have been announced in the marketplace. Over the last 3 years, our Chalmette project team has returned 2 other idle process units to service. Those projects were delivered on time and on budget and provide insights and experiences that will be valuable in this exercise. Technical feasibility is ongoing and we are advancing discussions with potential feedstock suppliers and strategic partners. While we continue to advance this project, it is still in the development stage and as such, we have not yet gotten to our final investment decision, but are encouraged by the prospects. We continue to focus on items within our control, reducing costs, improving the competitiveness of our refining assets and business as whole and running safely and reliably. With that, I'll turn it over to Eric. Thank you, Matt. Today, PBF reported an adjusted loss of $4.53 per share for the 4th quarter and adjusted EBITDA of negative $364,000,000 Included in our results for the quarter was the previously disclosed severance expense included in G and A related to the East Coast refining reconfiguration. Additionally, as outlined on Page 6 of our press release, were a number of significant one time special items included in our GAAP results. As a result, our effective tax rate for the 4th quarter and full year 2020 differ from comparable prior periods. In 2020, we used the flexibility of our balance sheet to support the challenges of our business during the pandemic, which included a $250,000,000 tack on to our secured notes in December of last year. Our current liquidity is over $2,100,000,000 based on a cash balance of $1,250,000,000 and available borrowing capacity under our ABL. As we outlined in our last call, we expected working capital to be a tailwind in the Q4. We were successful in reducing overall inventory to meet certain year end targets, which when combined with the one time reduction in East Coast inventory associated with the reconfiguration and increased net payable terms for feedstocks resulted in a benefit of more than $300,000,000 The benefit was larger than we forecasted in November, primarily as a result of the rising hydrocarbon price environment. Prices have continued to climb since the 4th quarter, which will reverse a portion of the working capital benefit if the current price trajectory continues. Consolidated CapEx for the quarter was approximately 50,000,000 dollars which included $47,000,000 for refining and corporate CapEx and $3,000,000 for PBF Logistics. For the full year 2020, our consolidated CapEx excluding acquisitions was $394,000,000 that included $11,000,000 for corporate CapEx and $12,000,000 for PBF Logistics. Our 2021 capital program is designed with intended flexibility, which will allow us to adjust our plans depending on market conditions. For the first half of twenty twenty one, we expect to spend approximately $150,000,000 in refining capital. Importantly, we have no planned turnarounds or significant major maintenance activity scheduled for the first half of this year. As has been mentioned, we took aggressive action to provide the necessary liquidity for PBF to successfully emerge from the pandemic. Based on the forward curve, assuming a continuing demand recovery, we see a path to positive cash flow from operations during the Q2. Our top capital allocation priority upon generating cash, following the safety and reliability of our operations will be to focus on delevering and continuing to strengthen our balance sheet. Operator, we've completed our opening remarks and we'd be pleased to take Our first question has come from the line of Doug LeGotte of Bank of America. Please proceed with your question. And look, you guys are navigating a really, really tough environment. I think you need to be congratulated for the steps you've taken. So we realize it's tough, but we also recognize the steps you're taking. So good luck with the continued efforts there. I do have a couple of quick questions. So first of all, I wonder if you can speak to the cost competitiveness of the balance of the system. You've taken some pretty drastic steps already. But if we look, for example, at the external the external benchmarking like Solomon and things of that nature, where do you think the PBS systems sits today? And are you comfortable with the current configuration, the current portfolio is now viable or sustainable through the balance of the bottom of this cycle? Thanks, Doug, and thanks for the opening comments. We appreciate it. Let me take the last part of this and then between Matt and I, we can talk about I'm not a big believer in Solven by the way, I must go on the record. Although it does have a great utility, it's better on the operating cost side than it is on the margin side. The last part of the question, we are comfortable with the portfolio. We think we strengthened it significantly with the East Coast configuration. That was a make sense win win for both parts of the system. Basically what we did is we kept the strong attributes of Paulsboro with loose production, very high margin and asphalt much stronger than I would have envisioned last year and probably will be the case going forward with infrastructure investment. And we basically eliminated 85,000 barrels of lower performing fuels operation in Ballboro and moved some of that over to a stronger fuels operation in Delaware. We've obviously improved the operating cost structure there. Operating costs have been improved significantly in Chalmette and in Toledo, we have work to do still in the West Coast, but the real problem that we have today is utilization. And when you look and that is going to get solved only when the pandemic is solved and that is being done and we can get utilization up. Every barrel we bring up in throughput, we are effectively doing that on a variable cost basis. So our unit cost is going to come down rather significantly from where we are today. Today is unsustainable. But we are comfortable with the basis, the asset basis. We have the maybe 2 of the certainly 2 of the highest performing and strong in assets on the West Coast. They are not being rewarded right now, but certainly we feel comfortable with those abilities. Pat, do you want to add? Yes. Doug, I would just say what we try to do is present it on a simple basis because when you talk about expenses and you have different throughputs, it can get very confusing and especially with fixed and variable costs. So what I try to do is say, okay, when you look pre pandemic with normalized throughput and post pandemic with normalized throughput, albeit lower throughput, because we've taken out, call it, 85,000 barrels a day on the East Coast. Across our system, we're going to achieve $0.50 a barrel. And that includes a pretty substantial increase for insurance expenses that had nothing to do with PBF. That's because the global insurance market and wildfires in California and all that goes into that. And so embedded in is a significant rise in insurance costs and those costs don't go in one direction. So on a going forward basis and in the out years, maybe we'll even see expenses come down in that market. That's clearly out of our control. But it's not an effort that we've put to bed. It's an effort that we continue every single day. I actually believe we have more while the reconfiguration is complete on the East Coast, we have more optimization to be done. As reconfiguration sort of commenced January 1. Every day, we'll learn better how we can optimize the newly reconfigured East Coast. The new administration brings on what we can expect next. I just wanted to look at a high level. I'll let someone else ask you about margin outlook and so on. But we're obviously facing a different outlook and uncertain outlook in terms of things like carbon tax in particular. So I'm just wondering what contingencies or what steps you can take, could it be through lobbying, negotiations, discussions, just highlighting the challenges? And maybe if you Doug, you're breaking up. But in regards to our efforts in Washington, it's an unfortunate reality that it just takes up a significant amount of time. And I will say on RINs, the RFS program is not a partisan issue. It's sort of ag with ag or with traditional energy sources. And so the constituents is not sort of your standard red states, blue states. And obviously, Mr. Biden likes to talk about his Claremont Union bona fides. And I think they gave a high hard one to the represented workforce with XL Pipeline. But look, we are actively, actively, actively engaged in Washington in regards to the RFS program and other programs. I will tell you in regards to carbon tax or other programs that are in place, PBF voice goes down a bit when there are programs that are administered fairly. The whole issue with RFS is it's not administered fairly. So if there's a gas tax or carbon tax that everyone's paying equally, that's really between the politicians and all of us as citizens to debate. Our issues specifically with RFS, it's broken. So you have merchant refiners, you have refiners that have retail, you have integrated oil companies and you have blenders that aren't obligated parties at all and all have a different economics because of the way the RFS program was developed and laid out. And so those conversations are very active. And like I said, there's I believe the EPA Minister actually got through the Senate yesterday. And so I'm sure he's going to hit the ground running. I do believe he, in particular, has a blank slate on this issue coming from the State of North Carolina. It's not something that he's been actively involved in. And so my understanding of him, he's a very reasonable and serious person. And so we look forward to having the discussion with him, but not only him, directly with the administration and with Congress and also with governors. So it's active and it's sort of rinse, wash, repeat regards to how the discussions go on because they've never addressed the program with a long term fix. Thank you. Our next question comes from the line of Neil Mehta of Goldman Sachs. Please proceed with your questions. Good morning, team. Thanks for taking the time. The first question is just around liquidity. Can you just remind us again where you are real time? It sounds like working capital unwinded a little bit at the beginning of the quarter. And just daily cash flow burn, if you have any back of the envelope around that or monthly cash flow burn, just so we can map out how the balance sheet is going to evolve if current conditions persist? Sure. Thanks, Neil. It's Derek. So ultimately, we did see a decent amount of working capital flow into the system significantly more than we expected in the Q4. Think the safe assumption is the vast bulk of that working capital probably end up leaving our system throughout the course of 2021. I think to help offset that based on where the forward curves are, we still are very firmly in the camp that over as we're entering 2021 here, we will see a cash burn of $50,000,000 to $75,000,000 a month that ultimately is going to transition to be a positive cash generator in conjunction with kind of timing of the second quarter. That assumes no material change to what we see in terms of the forward curve. So I think we lost a bit more money than we originally expected in the Q4 that was offset by working capital. But ultimately, the forward curve is starting to behave the way we expected it to. And we do expect incremental demand on a go forward basis. So I think we're still very much over this is over a long period of time here. I think we're comfortable saying $50,000,000 to $75,000,000 a month is a reasonable cash burn as we enter the Q2 and then ultimately again kind of midway through the Q2, we should see things start to flip. Right. Yes, that should get better as demand improves. The follow-up is around renewable diesel. You threw out a teaser there for us, Matt. So I wanted you to flush that out. And the related cost question is around RINs. And one of the ways, obviously, you can mitigate your RINs expenses is to build out a renewable diesel business. So first question is sort of how do you think about 20 21 RINs expenses if current prices hold? And then the follow-up is what is the strategy around renewable diesel? Can you flush out some of what you were saying in your prepared remarks? Well, I think it's hard to think about, well, FRNs are just static. I guess it's possible, but I think there's lots to be sort of discovered over the fight sort of recognize that the program is broken. And on top of that, obviously, the Supreme Court deciding to look at the 10th Circuit's decision speaks unto itself. We'll see what comes with that over the next couple of months. So in regards to managing our RIN program, we'll continue to manage it. Obviously, the program has flexibility in regards to compliance periods and such like things like that, which gives us the flexibility to manage it. The best way we see to do that and that's active and but that's no different than what we've done in the past. The renewable diesel opportunity does it obviously what comes with it is RINs, LCFS credits, lenders tax credits. The reality is all those things are needed to make it economic because you're turning a product that is more expensive because you need to buy a lot of this stuff to get to the BTU content. And so but that discussion is ongoing. So yes, it does provide some protection in regards to RINs, but the renewable diesel business has to be able to stand on its own. And in the current environment, it certainly does. And so we think we are uniquely positioned because, again, not only do we have an idled hydrocracker, but we've got all the infrastructure, tankage, logistics that if someone is going to brownfield their way into makes it much, much more expensive to build. And then also operating it, we operating synergies as well because it's you have marginal cost of steam and hydrogen as opposed to a standalone asset. But I think it's important, just as a caveat, you can't double count RINs. But yes, it certainly will provide RIN protection. And Neil, I think just to put some numbers around the RIN expense for 2020, we had RIN expense of just over $325,000,000 that flowed through the P and L. So obviously with the rising price that Matt mentioned in Q4, we expensed just shy of $145,000,000 of RINs and ultimately for 2021 as we've seen unfortunately coming out of DC, we do not know the RVO for 2021, but based on our current estimates, a safe assumption is probably PBF on a net basis should have a RIN liability in terms of number of RINs of around 5 50,000,000 to 600,000,000 RINs that will obviously move depending on what we do in terms of exports, other strategies that we may employ. And at this point, I think it's difficult to say exactly what this RIN price is going to be through the end of the year, but that's a pretty good parameter to use. Thanks guys. Thank you. Our next questions come from the line of Phil Gresh with JPMorgan. Please proceed with your questions. Hey, good morning. Eric, just a follow-up on the RINs. You mentioned the expense in the quarter and the year. Where does the balance sheet liability stand at the end of the year? And how do you anticipate the cash outflows associated with that? I presume that might be outside of the free cash flow or cash burn numbers you were talking about. So I just wanted to clarify. No, I think we're including the RIN expense that we will have through the course of this year along with the working capital from hydro carbons and other stuff that's going to roll through in that $50,000,000 to $75,000,000 So I think we've covered most of it there. Ultimately, what you will see when the 10 ks is published is, it's not just a RIN number and I don't think we're comfortable disclosing the composition of this because clearly we try to manage all of our environmental credits as much as we possibly can. There is some proprietary work that goes into that. So I don't think again, I'm going back to what Matt said in terms of RIN price that's increased tenfold in the course of the year, I think disclosing lots of different details about what our strategies are is probably not something that we're comfortable doing. But I think high level, you should see that accrued expense number circa $500,000,000 but that is not just RINs, that's going to be RINs, AB 32 credits, it's going to be other environmental credits that are kind of stuffed into that particular bucket. So I think the key message is we've got more than $2,000,000,000 of liquidity today. We feel very confident that is ample liquidity. And again, assuming the forward curve comes to fruition as we transition to positive cash flow, while we did generate a significant amount of cash from working capital during the Q4 of last year, most of that will ripple back through during the course of this year that will then be offset by positive cash from operations starting midway through the Q2, assuming there is no material change to the current forecast that we have today. That will allow us to essentially comply with all of the regulatory requirements that we need on a go forward basis. Okay, got it. And then just in terms of the improvement that you're seeing in the market today from a fundamental perspective, I'm frequently getting the question of how much the improvement in the crack is from the increased RINs. I think others have suggested it might be up to half of the improvement and the crack spread is coming from the RINs. But I'm just curious how are you thinking about the fundamental picture today kind of outside of your own kind of cash burn numbers that you provided? Phil, this is Tom. Actually, we feel cautiously optimistic about the direction we are headed here. All gets down to the containment of the virus and there has been significant improvement in that area. Obviously we referenced every state in the country now has had more people inoculated with the first dose than they have confirmed cases. And of course that's true for the country as a whole is almost 45,000,000 doses that have been jabbed into people's arms versus 27,000,000 people come down confirmed with the virus. That's an enormous statistic and we're inoculating 1,000,000 yesterday, 1,500,000 people, the 4 or 5 day average is about 1.35. So we're on a path. We've got additional we've got reasonable supply of the vaccines and with J and J coming on probably at the end of this month, I think they go before the panel on the last Thursday of February, we'll have another vaccine available. So what's happening now, you see the cases are below 100,000, the hospitalizations are below 80,000. The program is working. The more high risk people are getting taken care of. So that decreases ICU capacity and that gives the states as we said, every state has got lower cases, but Alaska believe it or not over the last 2 weeks and the states are starting to open up. Once the states open up and then you layer on top of that, the fact that you're going to have this very strong stimulus package and frankly, I believe there's going to be pent up demand that when the weather turns right, I wouldn't be surprised that we wouldn't be and I'm hopeful we might even get surprised on the upside. But we certainly believe that the prospects for demand recovery are real and that will allow us to force us to increase utilization. As I said in my remarks, that's every barrel that we bring and put in there comes on a variable cost basis, gets our cost structure down. And importantly, the incremental crude that is going to be needed to be run to meet that increased demand is going to be a medium heavy sour crude from OPEC, OPEC Plus maybe even by the end of the year from Iran and Venezuela. And as you all are aware, we have very sophisticated assets in PBF complex that had not been rewarded over the last several years because of market intervention, if you will, sanctions against Iran, sanctions against Venezuela, OPEC keeping their crude in the ground and even Canada curtailing WCS. That is going to reverse as demand recovers and the incremental barrel is going to be a heavier barrel, a more sour barrel and we believe that will widen the crude differentials and be a benefit for a system like us. Our next questions come from the line of Matthew Blair with Tudor, Pickering, Holt. Please proceed with your questions. Hey, good morning, everyone. So the EPA has proposed extending the compliance deadline for the 2020 RFS. I think they're talking about moving it to January 31, 2022. Currently, it's March 31, 2021. Does this have any impact on PBF? And if so, can you walk us through it? And also, would this affect your cash or liquidity balance if it was not extended? No. To answer the second part first, but to answer, will it have an impact on liquidity if it's not extended? No. Going to the first point, does it help? Yes, because it provides more flexibility in the way we want to manage the program and not only PBF, but the rest of the marketplace. And so by extending the deadline by 10 months, it just provides more time. And then there's other sort of levers that you can play with in regards to compliance periods as well. So yes, I mean, I think it was the one thing that the previous administration left behind that was directionally helpful. I think they obviously failed in that they left the program worse than when they found it, which is the ultimate test. But yes, the compliance period is directionally helpful and it provides more flexibility for all the participants. Sounds good. And then I had a couple of clarification questions on the renewable diesel proposal. First, would this impact the existing diesel production at Chalmette? And then second, I think there was a comment that you're looking to run any renewable feedstock. So I just want to confirm that, that means you envision building a pretreatment unit to run the lower CIO feedstock? Thanks. Yes. On the project contemplates a pretreatment facility. If we learn anything in the refining business, you need to have optionality on feedstocks. And so that's how we envision the project. To go to the first question, the renewable diesel effort at Chalmette would have zero impact on the remaining refining operations at Chalmette. You'd be able to essentially ring fence the hydrocracker and run it as a standalone unit. And like I said, it simply wouldn't have any impact on refinery operations. Our next question comes from the line of Karl Blunden with Goldman Sachs. Please proceed with your questions. Hi, good morning guys. Thanks for the time. In terms of the cash control, quite impressive when you look at the CapEx that you reiterated here for the first half of 'twenty one. I was curious when you look at how the system is performing with lower investment, how long do you think you could maintain that level of investment before you need to enter a period of catch up CapEx, right? Just trying to compare the recovery and what that would mean for your cash from ops to a potential increase in CapEx spend as we go into 2022? Yes, as we we're in good shape for 2021 as I think Eric and Matt both referenced in that. Certainly in the first half we have no significant big turnarounds. We have some minor turnarounds in the second half of the year. The CapEx will go up beginning in 2022, but we have got an active program in place to even mitigate that from what we would have done if we hadn't taken the steps that we have. Specifically, what we have been doing, we have been taking advantage of the slack capacity we've got and in some cases, we're taking equipment down and doing what we would call a squat. If there's a particular issue that one unit might have that would take us down, we're going to go ahead and take it down for a short period of time, take care of that issue, bring that unit back up and that will allow us to extend the turnaround perhaps another year or even more than that in some cases. So we will see an increase in CapEx. We will see some turnaround start to come into the play in 2022 and over the ensuing couple of years. But we think we're very comfortable that we're going to be able to manage that. And Carl, I think we've laid out some numbers previously in kind of the $500,000,000 to $600,000,000 a year range. Obviously, those are all subject to timing of turnarounds. And think we've tried to outline for folks a lot of this spend can be rather lumpy depending on timing. If we go back to what we did essentially a year ago, we were able to move a lot of different pieces around. I think we're still very comfortable with kind of that LTM figure as of sixthirtytwenty twenty one being $300,000,000 on a trailing basis, but that's an unsustainable number simply because operating at 70% utilization is an unsustainable business model long term. I think what we've tried to outline for people today is that we are cautiously optimistic. Again, we're looking at a forward curve. Matt mentioned we're focused very much on the things that we can control. Forward curve is out of our control. But based on that forward curve and I think we're going to have more details for everyone at the end of our Q1 results when we report the end of April. At that point in time, again, we go back to we're starting to see a negative cash flow from operations, so excluding working capital, switch from negative to positive in conjunction with the Q2, again assuming nothing material changes from what we see today. In conjunction with that, we will then be making the final determination on what the second half of the year CapEx looks like. I will tell you today, it does feel again based on where the current forecast is, it does feel that we will work our way back into a regular way CapEx program. That's probably an interim step for the second half of the year, where we may see CapEx spend go up to $250,000,000 to $275,000,000 of CapEx for the second half of this year. But I don't think we're comfortable drawing a line in the sand right now simply because we are trying to take cues from the market for both the demand recovery side of things and then most importantly, what the recovery profile looks like and what the economics that we will benefit from when people get back to work and go back to school for the children and everyone gets on an airplane. That's very helpful. Just one follow-up on the CapEx side. With regard to investments like you mentioned at Chalmette, very early stage of course. But when you think about how these kind of projects would be funded, would that be from your balance sheet or external capital or are those options all available to you and kind of TBD based on the market environment? I would say it's too early to talk about pay fors for the program because there's literally a spectrum sort of that's on the board that potentially includes partners and different types of partners. And so getting into that specificity is just a bit too early at this point. Thanks very much. There are no further questions at this time. I'd like to turn the call back over to Tom Nimby for any closing remarks. Well, thank you very much for your interest and attendance today. We look forward to talking to you and hopefully delivering on the fact that we have turned positive cash flow in the Q2 in the next call. Thank you. Thank you. This does conclude today's call. You may disconnect your lines at this time. Thank you for your participation and have a great day.