Calumet, Inc. (CLMT) Earnings Call Transcript & Summary

Good afternoon, everybody. My name is Gregg Brody, for those of you who don't know me. And we are here to start the afternoon session off with Calumet Specialty Products. We have Steve Mawer, the CEO; and Todd Borgmann, CFO. And I'm going to start it off. I'm going to -- for those of you who aren't familiar with Calumet, they are a specialty chemicals product company that also happens to own some refineries and has been making forays into the Renewable Diesel business. I'm going to turn it over to Steve to sort of provide a -- just a brief sort of state of the company update and then we'll go from there. [Operator Instructions] Steve, the floor is yours.

Thanks, Gregg, and good afternoon, everybody. It's good to be with you. So just to kind of give you a brief overview, as Gregg said, the focus of Calumet over the years has been a specialty products business. We have a broad array of product solutions and almost 3,000 customers, which give us a very diversified base. And if we just kind of talk about where the specialty products business is right now, clearly, we have a strong economy. We're in a situation where we can sell everything that we can make. We'll probably -- I'm sure Gregg will get into questions about feedstock costs and supply chain, so we can circle back on that later. But we feel, generally speaking, our business is withstanding any supply chain challenges that we see and increasing feedstock costs as well. So we see this as a continuing good growth business with plenty of runway for growth, particularly on the Performance Brands side, which is where we sit -- where our brands sit right up next to the consumer. So that business is, we believe, going very well right now. And we're very happy with how it came through COVID. As Gregg said, we also have a position in refining. And we have one refinery separate from the rest of the specialties business, which is our facility in Great Falls, Montana. And we're really excited about the energy transition opportunities at this facility. So again, we can get into this later. But at the highest level, we believe that we have the most competitive renewable diesel conversion in North America. That's a function of the existing equipment we have there because of the existing equipment, how fast we can come to market to produce renewable diesel and also the exceptional geography, which is we're sitting right up there in the Pac Northwest, which is the biggest growth market right now for renewable diesel. So we're really excited about what we can get done here in Montana. And clearly, it can create a tremendous amount of shareholder value. And some of that creation of value is going to be funneled back into deleveraging. So Calumet's intention here is to use this Montana opportunity to deleverage our business and then also to kind of separate out the renewable and the specialties brands to make the business clearer and better understood. So I'm sure in the rest of Q&A, we'll have a chance to maybe get into some of that more. But thanks for the opportunity, Gregg.

Great. And I think you -- from what I'm understanding, there's a new slide deck out that's a little different. But I think the main update is a couple of pages on the renewable diesel facility. Could you explain to us what you're updating today? And then we'll -- I'll come on to some more questions about that -- about what's going on there.

You bet. Todd, do you want to take this one?

Yes. Sure. Sure. Thanks. So I think you're right. In the deck, let's see here on page -- just for the moderator so we can all kind of follow along, maybe it's Page 16, we can flip -- flash up. We are posting a pretty meaningful update to our forecast and outlook with the renewable diesel project. I think as we update, let's also look back to kind of the last update we provided at the last quarterly call. There, we kind of announced that we have 3 modules to this project. First is the simple catalyst change that we expect to do in kind of the second quarter of next year to get online with, at the time, 5,000 barrels a day of renewable diesel. Second was the hydrogen plant construction in the second half of next year, which would allow us to go to 10,000 barrels a day of renewable diesel. And last was the kind of the pretreat, the feed pretreater that would potentially double adjusted EBITDA kind of the cast back that we've used to forecast and provide a lot of flexibility. And we kind of said at the time that we're not quite ready to go forward on that yet because as we continue with partner discussions, we want to make sure that everyone's lined out and agreeing on kind of the next step of feed evolution. So what's new? We still expect to start up the first module in the second quarter of next year, but the team's found a way to produce 20% more renewable diesel than we originally expected. And we'll also be running both technical tallow and RBD veg oils upon start-up. So those are both new compared to the previous 10,000 barrels a day soy-only Phase 1 startup. And these increases -- these changes, we expect to increase EBITDA by $60 million, $70 million a year. So pretty meaningful change there from the last forecast. And then the last bit of news is we're moving up our third module. So the ability to pretreat feed and add that flexibility to the slate and double the EBITDA backcast. Now we're saying around $350 million, if you take an average over the last 4 years, by adding kind of feed flexibility to the process is kind of a step that we want to take. And we want to do that sooner rather than later. So the potential -- or any of the discussions we've had around potential partnership. We've got a lot of alignment, a lot of confidence that this is the right path. And extremely excited to kind of move that up and make that part of the core kind of start-up.

Yes. If I could -- can I just add for a second? That was really good, Todd. I mean, just 2 comments to people. I mean, the first one would be, we've talked a lot about this facility being best-in-class from a cost and speed to market. We also believe and believed all along, but we're trying to work out how we would blanch the feed pretreatment. Given the metallurgy we have in the hydrocracker, we also believe we were going to be best-in-class in terms of being able to go to this multi-feed pretreatment. And I know on the call here, we probably got some people who are very familiar with renewable diesel and some who are not and a number of renewable diesel projects coming out. But given the acidity of these triglycerides, metallurgy is really important. And through pure luck, we have best-in-class metallurgy. So that really gives us a lot of flexibility. And then just one more thing for those people who are not familiar with Calumet, the project. Part of this is -- alongside this renewable project, we will maintain 50% of the fossil fuel processing that we have right now. And so we'll keep 60% of the EBITDA of this, which is a good cash-generating facility as well. So we think it's a win-win from that perspective.

And that's a pretty substantive update that's -- congrats on that. Can I ask -- you mentioned that you said you kind of want to produce 20% more in the first phase, and then you said you could also run tallow and I think you said some vegetable oils. Is that -- are you completely done with soy? Or is there -- or do you need to run some soy?

No. Soy can be part of the mix. So we could run all technical tallow, all RBD vegetable oils, which soy is one of, or a mix of the 2. And then I would expect that some sort of mix of the 2 to start up. And then as you progress and you bring on the feed pretreats, you don't have to have as much preprocessing of those materials that you can introduce a lot of other kind of local feedstocks as well.

And what's the mix there that you think you'd be able to run it up before you put the pretreatment in?

Like I said, we could run at 100% one way or the other, technical tallow or RBD soy. So where we end up on there is kind of just going to be where the partnership kind of commercial conversation falls out. But the bookends are 100% of one or the other. I think our typical fashion will probably be managing risk and have some sort of mix, maybe like a 70-30 or 50-50 type of split early on. But that's pretty speculative at this point.

Got it. And so your enhancement capability, how long -- does that mean you're far along in partner discussions? Or did you just learn something about the metallurgy of the facility that you can do that?

Well, so the -- don't want to go too far into the partnership discussion. So we said we'll keep that one a bit close, and I don't think that will change here. But I have to say a little bit of both, right? Part of the reason that we hadn't gone fully down the pretreat path was it was a little bit less clear to us before of what a partner may want. And now it's becoming a lot more clear that regardless of which path we ultimately choose, we're pretty aligned that pretreat is positive to this site. So the other one is just continued development. We've got a full team of internal and external engineers that have -- are going through the very detailed planning and kind of chemical engineering process right now. So we kind of expected them to make improvements as they get into the weeds. So this is just typical kind of project development and process improvement as we learn more and kind of work with the catalyst providers and the technical providers.

And I see Page 17, you're showing a new slide there that shows what appears to be your feed sourcing opportunity as well as destinations. So you're basically pointing out that you could source anywhere from Montana and East. Is that correct, that's how we should think about it?

Well, yes, I think we could source from anywhere given our location. Really, what we're showing here is like we're right in the middle, Montana, like Steve said, by pure luck, but sometimes better lucky than good, happens to be right in the middle of the feed supply and the market. So there are more feed sourcing opportunities kind of regionally that we'll be able to take advantage of now with the feed pretreater. So we don't need to tallow it to be technical grade in the future. So we can build out gathering operations around Montana, kind of beef rendering plants. So we can work on potential kind of processing partnerships to convert local Camelina oil. As canola pathways get developed, we can truck canola from kind of Canada and local markets down into the site. So I think it's really just -- optimal flexibility is really what this site provides. And when you look at some of the competition and some of the other announced projects, we've talked a lot about speed to market. We've talked a lot about geography. We've talked a lot about metallurgy and costs. And when you look at this map, you'll see that the markets are up here on kind of the top left, Vancouver and California. And the competition is in kind of the southern half of the country here. So again, it's just a highlight of the advantage that we have and the flexibility we have due to our geography.

Yes. I mean, if I could just add, I mean, so if you look at from a supply standpoint, Gregg, really not much of the United States or agricultural Canada, kind of anything north of the soy belt right now is really participating in renewable feedstock production. But there's a lot of really interesting opportunities. So longer term, we think that our geographical location in terms of purchasing feedstocks is unique as well in that we can tap a huge ag market that really hasn't been taxed effectively before. So we've already had a lot of discussions in Montana community, and I know the community is really excited about it from a broader level. There's a real desire to create more value-added ag in Montana, and we can play a role in that and then drive it. So that's more like 2 years out or whatever, but we really think this just strengthens the competitive position. And like Todd said, we're the closest thing to a last-mile supplier for renewable diesel in the Pac Northwest, and not just the Pac Northwest but also all of Canada because all of Canada should be going low carbon, I think, in '22, as I remember. It's still under development. And obviously, we're very close to the Alberta markets, too. So we really think we've got this unique strategic position. The RD supply chains are very, very long. They're either coming out of Singapore and Southeast Asia or they're coming -- it's going through the Panama Canal from the U.S. Gulf, maybe on the Jones Act vessel. And I don't know how many of you have tried to charter Jones Act ships. But when you want one, they're never there. And they're very expensive. So everyone else has got a really long supply chain or a lot of people have got a really long supply chain. The marginal supplier is on a very long supply chain, and we're right at the top of the supply chain. We're on the Burlington Northern highline, which takes us all the way straight right into Portland and makes logistical distribution easy into Washington State and BC. So we really like the position.

All right. Well, that's really interesting. I think -- and the logical question, this is actually -- someone's asking this question online. They had it logged in before the call started. So it just leads me to the next one. The question is, is there any possibility you would go it alone at this facility rather than bringing in a partner?

You want me to take that, Todd? Or...

Yes. Go ahead, Steve.

I don't think so. I mean, the reality of everything is we always evaluate all options, Gregg. I think in all these things, you got to have 3 or 4 angles of attack. That's cool and not our primary or secondary angle of attack. I mean, there's compelling value here, no doubt about it. But at the same time, I think we have to integrate it with the fact that this is a company that we want to deleverage and we want to focus. So from that perspective, that's definitely not the opening plan at all. But I think it would be remiss from a shareholder value standpoint to not have at least rerun those cases, of course.

Got it. And then you've talked about producing renewable diesel. Sustainable aviation fuel, is that another potential update that can come along as to what this facility can do there? Is there the flexibility to do it?

So there is. We could -- just in a steady state, about 10% of our material will be qualified to go into the sustainable aviation market. So as it stands kind of day 1, that market, we can play in that space, and we've had conversations about -- with folks in that space. We do have the option or I think that we have the ability to convert as much as 70% of the facility to renewable aviation. That's not our plan day 1 because, obviously, in that space, you don't generate the RINs and some of the other credits, although there are pretty large numbers being tossed around there that may be coming down the path to incent renewable diesel or renewable aviation production. So we're aware of it. We could shift and play in that space in a large way. Remains an option, but it's not day 1 plan right now.

And this will be my last question on this part of the business. So as you think about -- obviously, you've talked about being able to process tallow. Your -- seems like you're working to bring on a partner that can help you with sourcing of feedstocks. Is it -- is there a feedstock available today, tallow feedstock that you could source on your own, if you tried? Or...

Yes. Yes. So absolutely and there are. Whether it's RBD soy or technical tallow, we're having those discussions. We could source those feeds. And we just want to continue to have those discussions in parallel with the long-term partnership discussions and now in context of the pretreater. You wouldn't want to go out and lock in, I'll make us something up, a 2-year, 3-year technical tallow or soy deal, when you could turn around and buy a feed at half the price and utilize the pretreat capacity. So it's a discussion we have. We certainly have the capability. I mean, I'll be honest, we've had offers to supply the entire facility. So our ability to get physical material, we feel very comfortable with. Our ability to optimize the facility is something that we're focused on right now with the feed pretreat and with the partnership discussions.

Got it. So it's -- just from what I'm hearing from you, it seems like you're in the driver's seat with potentially finding a partner. [indiscernible].

Yes. I don't know if I'd say -- we feel comfortable and we're very comfortable with the level of risk and the amount of excitement that we're having and the level of discussions with more than kind of one participant. So yes, we feel pretty good about it. We're on track, I guess, is the way we see it.

Yes. And I would add -- the only thing I'd add about partnership as well, Gregg, would be that all the interaction that we've had, all the work we've done so far, it's nice to bring in other parties to take a look at the business because all the feedback we're getting is that the concepts of what we're trying to do here are correct. And the value proposition is what we think it is. So it's nice to have people smarter than ourselves help confirm that.

And I'll finish up with this. You are not prepared to provide a timing on a forming a partnership. Is that correct?

That's correct.

Fantastic. Can't blame the guy for asking. I'm not -- I didn't -- I just checked my Twitter feed just to see. But yes, it's not there. So maybe just the JV is sort of an opportunity to pay down debt. You've talked about potentially raising enough to pay down the '22s and part of the '23s. Have you contemplated of tapping the bond market or raising other capital?

Yes. Sure. We constantly want to be kind of up to speed around the options that we have. Of course, at the right price, we would take 100% of that risk off the table and roll '22s and '23s. And that's -- those ideas have been pitched, and those discussions have been had. Of course, the trade-off is, what do you do then with Great Falls proceeds? What's the cost of capital post the deal versus right now? How do you balance that with confidence in the overall deal timing and the like? So right now, we're pretty comfortable with our current path. But if markets improve from here and the hand plays out a certain way, then it's certainly something that we stay on top of and are constantly kind of evaluating.

And is there a possibility that this facility could qualify for a green bond deal?

Sure. Sure.

Okay. Maybe just turning to -- so as you put all that together, you talked about paying down '22s and '23s or paying down part of '23s. What is the leverage you're targeting? And is it based on the total quantum of debt? How are you thinking about it?

Yes. We try not to throw out just specific leverage ratios as a target just because I think it depends on how much of the business you're holding and what business you're in and what's the growth profile look like. But certainly, I mean, I think we've thrown around kind of -- we feel like we need to, as far as the quantum perspective, take out the majority of kind of the '23s, the $300 million-ish type of number, to deleverage. So we feel like the state of our current specialties business more than supports that level of debt where the -- with the current growth profile we see in Performance Brands and the SPS business as well as the ongoing cash generation from kind of the fossil side of Great Falls plus the renewables facility.

And just to turn to RIN. So as you -- I think you pointed out to me before the call that -- or maybe even on the call that the EBITDA numbers you have there are based on historical numbers. So it would not incorporate any of the rise -- the significant rise in RINs as of late in those numbers. When you think about the reliability, we've talked about this before, what's -- how are you thinking about it being addressed? We've talked about there's all these nuances. But when you -- as you look at it, how do you think that goes away?

Well, look, we continue to put out the base cases that we received the exemptions. And in any case, there's no cash event kind of in the near-term future, right? So a lot of people look at the Holly case and the Supreme Court. And it's our view that all that is, is kind of the first domino. And that case is either going back to Circuit Court or it's going to kind of ignite around in years of lawsuits, so none of which have kind of a current debt call or current cash call on Calumet. So I mean, we've received the exemptions. We think that we're still in a good spot to receive the exemptions. We're playing out the hand with the rest of the industry, and we'll see where we're at. I would say, obviously, with the Great Falls project, we're a year away from being 300% of our rent obligation at Great Falls. So one thing that Calumet has that a lot of the other folks out there don't is a kind of a ceiling on rent exposure that could be used in a number of different ways. But I think in the base case, we try to separate those concepts, and we really think about it as our exposure in SPS and our exposure at Montana. But the ceiling obviously exists and is meaningful.

All right. Let me turn towards the other parts of the business with the time I have left. So just as we think about -- so crude has traded off a fair amount over -- as of late. How have you been -- have you been able to pass through the price increase to your specialty products?

We have. We have. In fact, not just recently, but really ever since we saw negative crude last year, we've seen a growth in margins in the specialty side of the house. That's twofold. One, there's a significant amount of time and effort spent on pricing and understanding of what we're doing, commercial excellence internally. Two, the market's in a really good place for producers right now. Supply chains are hot. Our tight markets are hot because I think restocking is taking place slower than many expected, given supply chain disruptions, logistics problems and the like. So as Steve has said a number of times now, we could sell everything we make and more. And we have been able to pass through prices pretty rapidly and see margin continue to increase.

Yes I mean, if I could just add, Gregg, because I think there's also -- and I'll refer to a slide because I think there's something we've added for investors here to help pick away in a second. But yes, I mean, we went back to last year -- in November, we kind of -- as a management team, we turned 2021 year with a price increase and really go focused on how we can make sure we didn't kind of end up running up and down an escalator on pricing. So far, so good. You saw it held up in Q1 where we had very significant price increases from a feedstock, from a crude oil standpoint. Continues to be good. As Todd talked, I'd say in the commodity side of the business, where -- in the bulk side, yes, things are going very well. I would say it's a little bit more challenging when you get closer to the consumer because you just can't move price quite as fast, but I'm really happy with our performance so far. But to give people a feel, I think one thing that Todd, myself and Marc Lawn, who runs the business, if you look at Slide 14, we tried to isolate that we did have some kind of onetime positive benefits from low cost of goods in 2020, whether this was packaging or this was feedstocks, because in these Performance Brands where we have packaging, packaging is a material part of the cost driver. So we tried to show that there was some benefit from 2020 when we had this helpful tailwind in a lower price environment. So if you want to think about where we might have some price increase effect, it's going to be in this business. And this is an attempt to help all you kind of reverse engineer what it might be. But this is an issue we remain focused on, but it's a battle we fight every day. So far, so good in 2021, but I don't know about anyone else on this, but we're in an inflationary environment. It certainly feels like that from our perspective.

So you mentioned the inflationary environment that we're in. Are you seeing pressures in your operating costs? And you mentioned -- I think you saw some supply shortages earlier in the year. Are you seeing that at all impacting your business?

Bits and pieces. I would say the impact isn't great as of now. But I think like everybody else who's involved in the North America supply chains, it's a hand-to-hand battle every day. I mean, truckers are tight. There's not that much trucking. Supply chains are really disrupted by COVID, the winter storm and so on and so forth. So it's all hands on deck, so far, so good. Happy with how the team have managed it. I don't know. Todd, do you want to add to that?

No. I'd say the -- trying to go forward again to just clearing the inflationary pressure because a lot of people just ask when, is this something that just is over in a month or 2? And I'd say what's been interesting from my view is, I think in the past, when we've had kind of a backlog of orders, meaningful backlog of orders and kind of a backed-up supply chain, it's something that usually clear in a month, a couple of months. But right now, the backlogs are pretty large out there on both us and other suppliers. So I think it speaks to potentially a pretty strong market here for not only just the next couple of months but for early to the next kind of quarter to 2.

I think [ Midland ] was sharing something today that some people are concerned maybe there's been overordering because of shortages. Have you thought through that at all in your backlog?

Yes. We have to watch it real close. We watch it real close and handle our allocations the right way, communicate with customers the right way. It's kind of a business by business. We manage it business by business. I know in some places, we have talked to customers and said, "Hey, you're allotted. You're able to order basically whatever you have historically but not significantly more." And some businesses, we've had allocation. But for the most part, we've been able to service our customers pretty well and kind of keep up. But it is certainly something that we have to watch because you will get plugged with new orders and new demand from folks that haven't typically been part of your past. And we want to make sure kind of the folks who have been with us for a long time continue to get benefit and served.

So when we spoke on your earnings call, I think you had said that you were hoping that May and June can make up for some downtime in April. I'm curious what you're seeing so far? And you've said you can sell as much as you can. But is it making up for it?

Yes. So -- no, it's a good question. The -- I think we still had $40 million of lost opportunity in Q1, but the markets were such that we thought that we could make up every bit of that throughout the rest of the year. And I think that we still believe that. We started coming back online, and we were producing full in April. April sales, everything we made didn't get sold in April because a lot of it was replenishing their bottom inventory, and railcars and supply chain had been pretty drawn down. So I think a lot of April was restocking, and we've seen really strong sales in May and June and expect that to continue forward. So yes, zoom out, we still feel pretty comfortable that despite the large loss from the freeze in Q1 that we're in a position to kind of make that up as we look at the position for the rest of the year.

Now did the Colonial Pipeline outage impact you at all?

Not really. There were a lot of -- it impacted everybody indirectly in some form or fashion, but we don't ship on that pipeline. Product didn't get so backed up that it's made its way up to Northern Louisiana or anything like that. So I'd say any impact was very indirect for us.

I think -- yes, if I could add just -- I know we're short of time, but it's a fun fact and amusing. The main issues we had were that in the Atlanta area, in particular, where gas stations are, people turn to our TruFuel product as a way to keep their cars running. So we had to move -- we moved a lot of product to Lowes, Home Depot, et cetera, at very short notice on the full cycle. And our customer support line was inundated with people who wanted to know if you can use the TruFuel blended 2-cycle product in automobiles, which we recommend it was not a good idea. But we did get a little pickup, but -- so that was kind of the trivial effect from the Colonial outage for us.

All right. I know we have a minute left. So I'm going to go over just a little bit, if you don't mind. So you're tracking how good cracks are doing with this rise in RIN prices. It's a bit difficult, especially for us bond guys that don't stare at it every day. I'm curious if you look at your cracks and understand how you're performing relative to that? Or is it how much your cracks spend is tracking the RIN rise? Is there some differentiation you can point to that cracks have actually improved more than that?

You have to look at both and us, in particular, because, of course, historically, we haven't paid RINs, but at the same time, we account for them very conservatively. So we understand both. I would say our adjusted EBITDA obviously includes the negative impact of the RIN. So I always like to look back to 2019, and we look at the difference in crack, offset by the difference in RIN. You're kind of looking at like $50 million, $60 million in the SPS business, which kind of against that same time period, we've improved Performance Brands about $30 million and corporate overhead, about $20 million, $25 million. So kind of -- it's a natural balancing off with kind of a 2019 full year on a run rate. But yes, I think you do have to -- to your point, Gregg, you have to understand both the full -- just the crack impact but then the crack minus the RINs kind of net impact. And it's definitely better than last year. It's definitely not as strong as 2019 when you net those 2 things together.

Got it. And just my last question -- and I'm seeing one more pop up other than this. My last question, and then I'll ask one more at the end, you hinted at the fact that you're in a unique part of the country that might be able to take advantage of your positioning. Does that imply that you could potentially be an acquirer of refineries that might -- that would be in that region? And then also, what's your general thoughts about M&A outside of the sort of Renewable Diesel segment?

Yes. I think the sky is the limit. If you look at renewable diesel in the region, the sky is the limit on kind of angles of growth. But we've been very much focused on kind of plan A at this time. But there are vertical integration opportunities. There are additional facilities opportunities and the like that are pretty interesting on paper. And I think in reality, of course, our general M&A, just because of our balance sheet and cost of capital, hasn't been really front of mind to go out and do a bunch of large M&As. So we have looked to kind of small tactical additions to kind of improve the supply chain, fill out gaps, focus on areas where we want to grow like wax, for example, in the small Paralogics acquisition a year ago. So I think, generally speaking, that's where our focus has been on M&A. There is a meaningful opportunity to continue to grow regionally, vertically and kind of horizontally around renewable diesel. But that's probably something that will be taken up at a future time with a partner. And then I would say, obviously, as we look past Montana, and we look at a time when we think that we can use the capital markets as a currency and kind of be in a much better position than kind of the debt and equity markets, we'll resume looking at meaningful, strategic M&A.

All right. And then just last question for you as it came in, someone is asking, is there any update on your corporate -- on changing your corporate structure to a C-corp to attract a large investor base as well as reduce borrowing cost? And I'll just add to that, is there a potential tax implication for current unitholders if you sell the Montana refinery for a gain? Or is there anything we should -- is there something we should think about there that would be passed through to your unitholders?

Do you want me to take that up? I mean...

Sure.

So second first, I'll be -- what I would say is it depends on the transaction. But obviously, we're going to bear that in mind as to how we would structure a transaction in order to manage that. So that would be the kind of the quick answer to the second one. And on the first one, what I would say is it's really simple right now. If you look at the value unlock that's associated with doing the right renewable diesel transaction, you can argue it's multiples of the current unit price, right? So you can create scenarios where the unit price is valued in the high teens at some of these transactions. So in terms of creating value, we believe that's the next step. And so that's a much higher priority. In fact, I've actually had a couple of unitholders say, "I really hope you're not going to convert right now because if you're a C-corp, you'd probably get stolen in the market." So let's get the RD done. Let's get this business deleveraged, de-hybridized And then I think the path forward from that from a corporate structure standpoint will become obvious.

Okay. Look, we've gone over time here. And as always, I enjoy catching up with you guys. And hopefully, next year, we'll be doing this in person. Actually, I would say I know we'll be doing it in person. So I'm looking forward to shaking hands at some point. Operator, we can end it here.

Thanks, Gregg.

Thank you, Gregg.