CVR Partners LP (NYSE:UAN)
Q4 2012 Earnings Call
February 28, 2013 11:00 AM ET
Wes Harris – VP, IR
Byron Kelley – CEO and President
Susan Ball – CFO and Treasurer
Stan Riemann – COO
Ted Drangula – Morgan Stanley
Matthew Korn – Barclays
Kenneth Cramer – Citigroup
Greetings, and welcome to the CVR Partners Fourth Quarter 2012 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Mr. Wes Harris, Vice President of Investor Relations for CVR Partners. Thank you, Mr. Harris. You may begin
Good morning, Manny. Good morning, everyone. We appreciate your participation in today’s call. With me today are our CEO, Byron Kelley; our Chief Operating Officer, Stan Riemann; and our CFO, Susan Ball. Before we start to discuss our 2012 fourth quarter and full year results, I’d like to make the following Safe Harbor statements. In accordance with federal security laws, statements in this earnings call relating to matters that are not historical facts are considered forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions using currently available information and expectations as of this date.
These forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, including those noted in our filings with the SEC. In addition, today’s presentation includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliations to the most directly comparable GAAP financial measures are included in our 2012 fourth quarter and full year results press release that we filed yesterday after the market closed.
So with that, I’ll turn the call over to Byron Kelley, our CEO. Byron?
Thank you, Wes, and good morning to everyone, thank you for joining us today. This morning I’m going to begin with a high level review of our 2012 fourth quarter and full year results. Susan will follow with the discussion of the detailed financials after that discussion. I will conclude later with comments regarding our business and some industry trends as well as provide our outlook and formal guidance for 2013. Then after that we’ll be happy to answer questions that you may have related to the business.
The 2012 fourth quarter closing marked another successful year for us for both our CVR Partners and for our unitholders. We began the fourth quarter with our scheduled plant turnaround during which we perform maintenance activities designed to maximize our operating efficiency of the plant. As a result of that turnaround just as we expected we saw ammonia production rates increase significantly somewhere in the neighborhood of 8% or 9% once we finish turnaround. During the turnaround we also installed some critical assets and tie-ins that related to our urea ammonium nitrate plant expansion which I’ll touch more on as we go through the presentation.
As expected with the turnaround, our 2000 fourth quarter results were impacted due to the downtime and the incremental repair and maintenance expenses associated with the time we were down. During the 2012 fourth quarter we did post a net income of $15.3 million on $67.6 million of net sales. This is compared to net income or $41.2 million on net sales of $87.6 million in the fourth quarter of 2011. Our 2012 fourth quarter adjusted EBITDA which represents net income adjusted for depreciation, amortization, interest expense and income, income tax expense, share-based compensation and turnaround expenses was $27.1 million as compared to $48.4 million in the prior year. As a reminder, our plant turnarounds are scheduled every two years therefore our next turnaround is not slated to occur until the fourth quarter of 2014.
In the 2012 fourth quarter we produced 87,700 tons of ammonia. Of this amount, we converted 52,400 tons into 127,300 tons of UAN, leaving a balance of 35,300 net tons of ammonia available for sale. During the period we also elected to sell a net of 400 ammonia equivalent tons of hydrogen to CVR Energy’s adjacent refinery pursuant to our feedstock agreement.
With no turnaround during the fourth quarter of 2011, we produced 100,800 tons of ammonia of which 73,400 tons were converted in to 178,300 tons of UAN. This left a balance of 27,500 net tons of available for ammonia sales. And during that period we elected to sell a net of 3,500 ammonia equivalent tons of hydrogen to the refinery.
During the 2012 fourth quarter we realized an average net back price of ammonia for $676 per ton as compared to $606 per ton net back in prior year period. For UAN, the average net back price for 2012 fourth quarter was $274 per ton versus $334 per ton net back recorded in the fourth quarter of 2011. However, as I will discuss later the UAN average price for the full year 2012 was actually up over 2011.
We were pleased with our achievements on multiple fronts that are in 2012. In addition to our successful plant turnaround, we’ve made significant progress on our UAN plant expansion this past year. I’m happy to report that the construction of the expansion project is complete and commissioning was concluded last week. We have been increasing production rates to the new facilities on an incremental basis over the past week and we expect to reach full production of 3,000 UAN tons per day around mid-March. The approximate $130 million expansion project provides us the ability to convert all of our ammonia production into more highly valued UAN. This increases – this expansion increases our capacity to more than one million tons of UAN annually which is approximately 50% higher than previous levels.
Another highlight of 2012 was the completion of a $2 million storage distribution tank facility in Phillipsburg, Kansas. As we’ve discussed in the past, this strategically located facility allows us the optionality to store product and take advantage of historical – of the historical arbitrage between higher price planning season and the lower price fill season.
Supporting our strategy to expand our sales mix into higher margin products, in 2012 we began to ramp up our production in sale of diesel exhaust fluid or DEF. As you may recall DEF is injected in the catalytic converters of certain diesel engine to meet NOx standards that were introduced in 2010. With the expansion complete, we plan to increase our DEF production – to be clear there with the expansion complete on the UAN plant, we plan to increase our DEF production capacity over the next 6 to 12 months from approximately 7,300 tons per year to more than 84,000 tons per year.
We believe the market growth for DEF should absorb all of this capacity over the next few years. As a reminder on a nitrogen content basis, UAN historically prices at a premium to ammonia thus the expansion to the UAN plan and DEF typically prices at a premium to UAN, thus the expansion of our DEF market as that market grows.
Looking at our financial results for 2012, we recorded $302.3 million of net sales which was essentially flat with 2011. Offsetting the lower production related to sales – offsetting lower production in related sales in 2012 due to the turnaround was an approximate 6% increase in net back pricing for both ammonia and UAN.
For the 2012 full year, we recorded average net back prices for ammonia of $613 per ton and $303 per ton for UAN. This is compared to 2011 where our average ammonia price was $579 a ton and the average UAN price was $284 per ton. Our adjusted EBITDA for the 2012 full year was $148.2 million and net income was $112.2 million. During 2011, we recorded adjusted EBITDA of $162.6 million and $132.4 million of net income. Again, I remind you that has really been the turnaround in the fourth quarter.
The result of our many efforts and related strong financial performance was a distribution of $1.81 to our unitholders for 2012. This was higher than our most recent guidance of $1.70 to $1.80 and significantly better than our initial guidance for 2012 of $1.50 to $1.75. And as I’ll discuss in my closing comments, we entered into 2013 in a strong position to materially grow our business and our cash available for distribution, and I look forward to what’s expected to be a record year for the partnership.
I’ll now turn the presentation over to Susan Ball, our Chief Financial Officer to discuss our financials in more detail. Susan?
Thank you, Byron, and good morning everyone. Echoing Byron’s comments, we are pleased to report another quarter and full year solid financial results for the benefit of our unitholders. As previously mentioned, fourth quarter 2012 net sales were $67.6 million compared to $87.6 million in 2011. Again this decrease was primarily attributable to the lower UAN sales volumes due to the turnaround as well as lower prices for UAN during the 2012 fourth quarter. Partially offsetting the overall decrease was higher sales volumes of ammonia due to a UAN plant compressor issue in December. As a result we did not convert as much ammonia to UAN on a relative basis. In addition, we did not sell as much hydrogen to the adjacent refinery of Coffeyville in the 2012 fourth quarter as in the prior year period.
Cost of product sold for the 2012 fourth quarter was $11.5 million compared to $14.4 million in the fourth quarter of 2011. Contributing to the decrease was lower consumption of pet coke tons and freight and distribution costs due to the turnaround. Also contributing to the quarter-over-quarter decrease, was a lower blended price for the pet coke consumed. As we have discussed in the past, we typically purchase over 70% of our pet coke from the adjacent refinery, the remaining 30% of our pet coke requirements are purchased from a third-party supplier under a contract that begin in March of 2012 and runs through the end of 2013.
During the 2012 fourth quarter, our average cost for consumed pet coke, including third-party purchases, shipping, and handling was $30 per ton. This is compared to $40 per ton for the fourth quarter of 2011. Direct operating expenses excluding depreciation and amortization was $29.2 million for the fourth quarter of 2012 as compared to $21.1 million in the prior year period. The increase was primarily due to turnaround expenses of $4.6 million in the 2012 fourth quarter and higher repair and maintenance expense.
Selling, general, and administrative expenses were $6 million for the 2012 fourth quarter as compared to $4.6 million in the fourth quarter of 2011. Contributing to the increase was higher non-cash share-based compensation expense as well as increased cost for outside services.
Turning to capital expenditures, during the 2012 fourth quarter, we spent $24.7 million on capital projects, including $4.5 million for maintenance CapEx. For the full year 2012, we invested $82.2 million in capital projects including capitalized interest. This amount includes $7.7 million for maintenance CapEx and $74.5 million for growth projects which includes $67.7 million on the UAN expansion projects.
As Byron mentioned, we expect total capital spending for the expansion project to approximate $130 million, excluding capitalized interest. With $106 million invested through the end of 2012, we estimate an additional $24 million of spending on the project this year. As we have discussed in the past, all of this planned spending will be fully financed by cash on hand that originated from our IPO in April of 2011.
As of December 31, we had $128 million in cash and cash equivalent and $25 million available under our revolving credit facility. In addition, at the end of 2012 fourth quarter, our long-term debt was $125 million. As such we remain in a very strong position to quickly capitalize on available growth opportunities.
With that, I will turn the call back over to Byron.
Thank you, Susan. As we move forward into 2013, we certainly believe that we’re in an enviable position to materially grow our business throughout the year. Supporting our outlook for strong industry fundamentals including what is anticipated to be a robust planting of corn in the spring. Driving this expectation is really the damaging effects on last year’s crop due to the drought in the majority to the Midwest, and other key growing regions.
The USDA estimates last year’s yield was 122 bushels per acre and that the industry ended the year with the carryout of 647 million bushels, and this indicates a stocks-to-use ratio of only 5.8% which is the second lowest in the last 50 years.
Assuming normal weather, we expect that it will take several years to rebuild this inventory back to historical levels which bodes well for us fertilizer manufacturers. The USDA is estimating 96 million acres of corn will be planted this spring, and we agree with them on this level of planting. So now I’ll touch on that later.
But we certainly agreed that we expect 96 million of acres of corn to be planted this spring. Again, this bodes well for the fertilizer producers, to the nitrogen producers. And it’s driving a strong pricing environment for fertilizer prices throughout this year, we believe.
Ammonia prices actually over the past couple of months, they may have retreated a little bit from those abnormal highs we saw later last year. However, they were still very strong in January and February. And from a UAN, if you look at current spot prices, current spot prices tend to be higher than it were last year.
We have UAN orders booked substantially for all of our anticipated production for the first quarter in 2013, and more than half of our production for the second quarter. For ammonia, we have currently minimal tons in inventory, and we do anticipate taking orders against that inventory over the next several weeks. And with the completion of our UAN expansion plans, we really do not expect to have any material production of ammonia throughout the rest of the year.
Given the backdrop of solid industry fundamentals, our recently completed expansion project and the fact that we have no scheduled turnaround, we anticipate our cash available for distribution to our unitholders will significantly increase in 2013. We currently expect distributable cash flow to range between $2.15 and $2.45 per unit for the year. This indicates an increase somewhere between 19% and 35% over the full year 2012 distribution of $1.81. So any way you want to look at it, we expect this to be a very good year ahead for our unitholder regarding our cash distributions.
Included in that guidance is the positive financial impact associated with the announcement to, due on Tuesday that we have reached a partial settlement with Montgomery County, Kansas, regarding our property tax that we have basically been paying under protest since 2008 for our facilities.
Just as a quick reminder in 2008, a reassessment by the county basically reclassified the majority of our plants, properties from personal property to real property resulting in a significantly higher property tax appraisal. We’ve been protesting that classification ever since tax year 2008. Under the partial settlement agreement we just announced. The fertilizer plant will be appraised at a total value of $35 million for the tax years 2013 through 2016. This will lower our taxes that we’ve been paying by about $10.5 million per year based on current mill levy rates.
In addition, the county will not oppose our application for statutory 10-year property exception for the approximate $130 million UAN plant expansions. From a side of the county standpoint, what we agreed to do as part of this exchange, part of the settlement, is we will allow them to retain the higher level of taxes that we have already paid or for the tax – that we’ll be paying for the tax years 2009 through 2012.
So essentially, just looking at it, what the cash already out the door, they’re going to retain, and as we go through the forward years, our tax bill will be reduced $10.5 million per year, and that’s approximately $0.14 per unit of additional cash available for distribution that we will have for the next four years. Although we have settled the years 2009 through 2016, the case that started this in year 2008 remains on appeal with the Kansas Court of Appeals, and we’ll continue to aggressively pursue that appeal because quite frankly, the final decision on that is what will impact tax rates post – or tax appraisals post 2016.
So we’re happy with this, we view the settlement as a step in the right direction, as it does established and with a reasonable property tax valuation for the next four years. And it certainly have some immediate positive impact on our unitholders.
Now, let’s turn our attention back to the base business. As I mentioned earlier, I am pleased with our businesses position for 2013. However, I want to assure you we also remain focused on growth beyond this year and as Susan mentioned we have a strong balance sheet that provides significant flexibility to quickly allow us to quickly capitalize on any opportunities that may present themselves.
As discussed previously the outside storage distribution facility at Phillipsburg was completed in 2012. We believe there are other key locations in the Corn Belt where the construction or the lease of distribution terminals could prove beneficial to our efforts to continue to optimize the prices we received for our products and thus increase future cash flows and we continue to pursue those and I think you will see some additional additions either through build or lease this year.
And just as we have increased and expect to continue to increase our growth presence in the DEF market, we’re also looking for additional opportunities to expand our sales mix into higher margin, additional higher margin products. Currently I’m not going to share a lot of details, I’ll tell you where I want potential project, and that falls into this category that is in very early stages of analysis and we’re going to continue to do work on that project throughout the year. We’re also evaluating several projects to increase the efficiency of our plant assets.
Preliminary reviews currently indicate the potential to obtain a nice increase in protection volume with some modest capital outlays and that’s two separate projects both of which we’re pretty excited about and we continue to do the full evaluation of those. Collectively all of these projects, potential projects I have mentioned could have a meaningful positive impact on distributable cash flow in future years should we elect to move forward once our analysis complete. And I will keep you further apprized as we go throughout the year and the progress that we make through this analytical stage on these three potential projects.
Complementing our announcement of pending initiatives, we continue to evaluate opportunities to expand our business through acquisitions or development of new assets as I have discussed in the past our senior management does have extensive experience in growing the businesses through these types of efforts.
Before I move into the question-and-answer section, I wanted to come back to some of the fundamentals and talk a little bit about WASDE report that has recently come out. I mentioned earlier in my presentation that in that report the government have forecasted the planning of 96 million acres this year of corn and that we agreed with that. We probably agree with projected harvest in the neighborhood of 92%.
The one place that we really have a disagreement with the WASDE is in terms of their projection on yields. In their report they’re projecting that the yields this year will be 163.5 million acres, quite frankly we just don’t know how you get there. An interesting fact I’ll share with you is a little history around yields. And I want to talk about the period beginning in 2003 through 2011, the reason I have excluding the period before 2003 is there seem to be a step change in yields in 2003 to push yields up than they were prior, so if I throw those numbers in the averages are going to even go down on what yields would look like.
So using sort of the period of 2003 through 2011 and by the way I am skipping 2012, because we all know that was anomaly at 122 bushels an acre with the drought. So 2003 through 2011 seems to represent what I would call normal weather, reasonably normal weather patterns and reasonably yields. In that period there were – and that’s a nine period, there were seven years in which we planted less than 90 million acres. During those seven years when we planted less than 90 million acres the yield was 153 bushels per acre. In the years that we planted more than 90 million acres that yield went down to 149 bushels per acre. And obviously we’re talking about planting 96 million bushels and the bottom line is as you increase the acreage you bring in land that has lower and lower yields, and so logic says, the yield rate goes down, history proves that’s the case.
If you were to take all of the forecast out of the WASDE report expect use that average for yields which when we have a less than 90 bushels which is a higher average instead of the government 16% stock-to-use ratio at the end of this year, which you will see is a stock-to-use ratio down to 8.7%. If on the other hand, you use the 149 bushels per acre, which has been the average every time we planted more than 90 million acres that number will come further down to 6%.
We see no way that we’re going to produce 163.5 bushels per acre as we plant 96 million bushels and as a result as I said earlier in my presentation we really think if you look at this from a practical standpoint it’s more likely going to take several years to rebuild inventory back into the low teens and we will not move into the level that the government is projecting next year.
So with that, I’ll tell you that we think that the market has reacted a little negatively to those higher numbers, the government put out about yield and that once the market and by the way we’re not going to believe this. Independent reports have been coming out recently that I also talk about yields really being down in the low 50s. So I think as that is absorbed in the market, people will get a little more practical about where the yields are going to be and recognize that we’ve set several years of very strong planning ahead of us before we even get back to normal stock-to-use ratios and year-end inventories.
And if we can discuss more of that that if you got questions. Again as we, just before we go into question. I do want to – we’ve got a lot going on this year with our turnaround, with our expansion. I have to thank our employees for their hard work that they’ve done for us in 2012. If both the turnaround expansion requires some abnormally long hours for our operation team and I appreciate their extraordinary level of commitment to get all of our – to get us through this period.
And I have to thank our marketing, transportation, and our staff across our organization because I think we’ve had a great year when you get down to it. We’re only as good as our people. And so, I always have to take a chance to thank him. Also I want to thank you our shareholders, our unitholders for your faith that you have in us and for continuing to invest in us. We do appreciate that faith and we continue – we also appreciate some positive feedback that we’ve received recently from a number of shareholders, it’s been very much appreciated. And I want everybody to rest assure that we remain focused on capitalizing on all of the opportunities I’ve talked about for the benefits of our unitholders.
So, with that we will stop now and be entertain any questions that you got. Thank you.
(Operator Instruction) Our first question is from Ted Drangula of Morgan Stanley. Please go ahead.
Ted Drangula – Morgan Stanley
Hey, guys. It’s a very good year and pretty good outlook.
Yes. Thank you, Ted.
Ted Drangula – Morgan Stanley
I had a couple of questions on I guess the nitrogen market in general, it seems like the UAN prices have been really doing well here since the beginning of the year whereas urea is kind of been going the opposite direction, I know you guys don’t really sell any urea but do you see any in a relationships there between the two markets, or is there any concern that urea may drag UAN down or you think it might go the other way and I guess in the end what’s your outlook for UAN here as we move through the year?
Ted, I’d say generally for maybe as me showing up here, there was this long-term historical relationship between urea and UAN seemed like in beginning of last year we started seeing some disconnect at some things you couldn’t always explain, so it’s hard to know, just quite, I mean obviously there’s a tie there. But I think what you’re going to see right now, one reason you’re seen strong UAN. We have gotten some moisture in some of the drought regions, certainly enough to have a positive impact on spring wheat crop.
And so we expect that that’s driving a lot of the UAN. Where they’re now, they’re going to need to get fertilizer and herbicides into the ground pretty quick probably not ideal moisture content for putting ammonia into the ground but certainly UAN will work well for that. And we think that’s been driving some of the stronger prices you see on UAN and obviously UAN as a liquid has that advantage over urea. Gone through the year, I mean the real question mark for all of us and when you start talking about pricing is nobody ever at this time of the year has any idea what’s going to happen in spring season and the fill season. But I will say that we’ve had certainly good indications on a very good UAN market in the first two quarters of this year.
Ted Drangula – Morgan Stanley
Great. And I guess a follow up would be, on the pricing side some of the things I read out there show these really good prices in the Corn Belt. And I know you going to realize whatever it is like $30 to $40 below that often times. Are you able to in the business you’ve booked so far can you give us a little color on how you’re doing against that or is it really product trading, $390 in the Corn Belt, that’s – those are some pretty amazing prices?
Well I think a couple things concerning, first, obviously, I don’t want to release any prices of what we’ve been getting. I think there are things you have to think through when you see that price in terms of a lot of the product sales that we recognize in the first quarter and everybody else recognized in the first quarter or actually sales made last year in a different pricing environment but certainly the spot prices that you’re seeing for crop shipments are high and we’re glad to see that and then it’s good for our business. But I really not going to – until we finished the first quarter, I’m not going to talk about first quarter pricing in any detail.
Ted Drangula – Morgan Stanley
All right. Thanks.
Okay. Thank you, Ted.
Thank you. Our next question is form Matthew Korn of Barclays. Please go ahead.
Matthew Korn – Barclays
Hello, everyone. And again congratulations on a great 2012. I just – could you talk maybe a little bit about the current grower sentiment in your regions coming out of the USDA outlook, and seeing conditions in states like Nebraska where they’re still very challenging. Is there concern about lingering moisture issues that kind of we’re an outsider overlooking and is that adding any uncertainty about maybe what to plant and how much to plant?
Well I mean I don’t think there’s any question that the fact that we know we started with some low moisture content in some of those regions has had people – some of the farmers holding back a little bit. Certainly with some of the moisture that we’ve seen in North Texas and in few areas of Kansas and some in Nebraska has gotten and as I mentioned earlier little more about wheat and we’re seeing movement there. I think we would still likes to see more moisture related to corn crop and it’s really going to be a little wait and see to see where that develops. Obviously, you’ve got some areas in the U.S where it’s not dry and you’re going to see a lot of corn. But as – this is something we’ve got to watch as we go through it. So I would say a little more optimism over the last few weeks than maybe the month of – first month of the year. But certainly more optimism on wheat but a little earlier to make a call on the corn as to how much impact it’s going to have in some of those regions.
Matthew Korn – Barclays
All right. And if I could maybe a follow-up, a small one, could you talk maybe a little bit more about the property tax situation that you’re looking at beyond 2016 and maybe what maybe the potential outcomes you’re looking at today for the 2008 case and to the extent you can what that would mean as far as your tax bill?
Well, I mean I think the case is filed and basically again it’s a determination of classification. If we win that case then on an appraisal value you would see appraisal pretty much what I talked about that we see in the settlement period for 2013 through 2016 essentially that would stay in place. If we don’t win that case then the appraisal would go back and we would not have the $10.5 million advantage or savings that we’re seeing now. Whether or not the court finds some way to split it in the middle, I don’t know.
So that effort will be ongoing and we’ll continue to pursue that and we think it’s important to win that. We’re also just so you know we’re also pursuing with other industries in Kansas a legislative effort to get some clarification around these how the assets are classified. This is the end result of this has ramifications far in excess of just us, it’s pretty much all of the industry in about – it’s in the industry in Kansas, so there’s a lot of concern about all the other industries that all of a sudden they start seeing some reclassifications. The general feeling is this is not what the legislative intended when they set up the original tax laws and so we’re hoping to get some help there and so we’re battling this basically on two fronts.
Matthew Korn – Barclays
Thank you very much.
Thank you. (Operator Instructions) The next question is from Kenneth Cramer of Citigroup. Please go ahead.
Kenneth Cramer – Citigroup
Do you see any increase in demand from overseas buyers?
I think the question was, have you seen any increase in demand from overseas buyers.
At this point, not really. I mean nothing abnormal. In regard to the – if you’re telling my buyers of corn, the answer not a lot, down at $7 corn, we’re utilizing essentially all of that corn – pretty much domestically. You can look at the levels of exports we’ve had in the last year or two. And that really isn’t going to change a lot at $7 corn and so our product though is also domestically all of our UAN product is sold for domestic utilization. The U.S. is a net importer of both nitrogen and UAN and so in general I don’t think you’re going to see any increases of exports of those products either. Their seasonal exports sometime not by us, we sell all of our product domestically.
Kenneth Cramer – Citigroup
Thank you. The next question is from (inaudible) of Morgan Stanley. Please go ahead.
You get 70% of your pet coke from the refinery next door and the refinery next door is 59% unionized and there are contracts coming due with the Metal Trades Unions and the United Steelworkers Union that expire March of this year which is in 30 days. If those negotiations are not settled could they stop production at CVR Partners because you don’t give any pet coke?
Byron, I can – let me handle this?
Yes, Stan, go ahead. Stan Riemann, he’s our Chief Operating Officer.
The answer to your question is no. We finished our labor contract in December. So our labor contract is not subject to what happens in March. So, there’s not going – there will be no shutdown of refinery over labor issues. And it’s a four year contract we signed in December.
Well, when you said we, don’t you mean CVR Partners? I’m talking about CVR Refining.
So am I. I’m the Chief Operating Officer of CVR Refining as well.
Because when CVR came public and I’m reading – I read – what I was discussing to you was reading the prospectus. And the prospectus, of course, is dated in January and you’re talking about the settlement in December.
I mean we’re confusing the two. There’s two labor agreements there’s one at Wynnewood and there’s one at Coffeyville.
And the one at Wynnewood was entered into last summer and the one at Coffeyville was entered into this winter. That was the actual sign day was December or not I don’t know but it is completed. And we do not have a union negotiation in March, it is behind us.
Okay, good. Thank you very much.
Thank you. We have no further questions in queue at this time. I would like to turn the floor back over to management for any additional remarks.
Well, we thank you again. We thank you for your participation today. Always glad to answer your questions. If you have follow up questions you can call either me or Wes Harris. And we’ll be glad to get you some answers. Again, we appreciate everybody’s support of our business. We are excited about 2013, I think it’s going to be a great year. And we’re glad to have you as our partners as we move through that year. So again thank you very much and have a good day.
Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
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