Superior Plus Corp. (SPB) Earnings Call Transcript

After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Lichtenheld, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning everyone and welcome to Superior Plus' conference call and webcast to review our 2026 third quarter results. On the call today we have Alan McDonald, President and CEO, Greer Coulter, Executive Vice President and Chief Financial Officer, and Dale Winger, President of Soteris. For this morning's call, Alan and Greer will begin with their prepared remarks and then we'll open the call for questions. Listeners are reminded that some of the comments made today may be forward-looking in nature and information provided may refer to non-GAAP measures. Please refer to our continuous disclosure documents available on CDAR Plus and our website.

Also, the dollar amounts discussed on today's call are expressed in US dollars unless otherwise noted. I'll now turn the call over to Al. Thanks, Chris. Good morning, everyone. Thanks for joining us today. Before we begin, I want to recognize that today is Remembrance Day in Canada and Veterans Day in the United States. We here at Superior want to extend our sincere thanks to all those who have served and continue to serve in our armed forces. We're grateful for their service and their sacrifice. I also want to recognize our teams across North America. Their dedication to working safely and serving customers and keeping operations running reliably is what makes our success possible. In propane, we're preparing for the upcoming heating season. as the tariffs were supporting a growing customer base, our employees across both businesses continued to step up and deliver. That dedication was reflected in our performance this quarter. In Q3, Superior generated EBITDA of $8.8 million, compared with $7.6 million in the prior year period, representing a year-over-year increase of 16%. Adjusted EBITDA per share was negative 4 cents compared with negative 5 cents last year. Soteris delivered record third quarter EBITDA on record volumes in both well site and industrial applications. Propane results were again muted during the seasonally slower period as we continue to advance winter readiness efforts. Greer will take us through the financials here shortly. Now, as to Soteris, our strategy is to defend our leadership position in the well site and be a market leader by making CNG, taking CNG, sorry, into new geographies and verticals. at Propane, Superior Delivers has been central to our progress. We've made meaningful changes to how we manage supply, plan and execute deliveries, and serve our customers. We're well prepared, and our attention is now on disciplined execution. I'll walk through our progress in both businesses here, beginning with Soteris. As the mobile gas solutions leader, the value proposition of Soteris is simple. We safely deliver reliable, mobile natural gas where and when our customers need it. We have built a platform that combines supply, compression, transportation, storage, and onsite solutions. use that same platform across oil and gas, industrial, data centers, and transportation. scale and flexibility allows us to enter new markets quickly as CNG demand grows. Now starting with WellSight, our business remains strong following record volumes in the first half of the year. Q3 well site volumes were 6.8 million MMBTUs, up 21% year over year. Pricing also remains stable for a fifth consecutive quarter. Margins and returns continue to be robust, and the outlook is favorable as oil and gas operators are as motivated as ever to displace diesel with the attractive economics of natural gas in both drilling rigs and completion operations. safety, reliability, and cost leadership underpin our competitive position. Our year-to-date recordable incident rate is lower than each of the three previous years. These strengths continue to differentiate Sateris and support long-term customer relationships with leading operators. In our industrial business, Q3 volumes increased 62% year-over-year. by new projects coming online, increased activity from existing customers, and project extensions. There's an important part of the story that we don't often talk about just enough here. And that's our industrial base, our industrial business base has become increasingly stable and predictable. We're building a larger base of contracted revenue with greater visibility. And looking ahead, we expect industrial and data center applications to represent approximately 60% of our CNG business within the next 24 months. The progress we've made in Q3 reinforces our confidence in that mix shift and the stability of our base business. business. Now data centers remain an important part of that growth as well. We continue to believe behind the meter power is one of the most compelling growth opportunities in North American energy. Forecast suggests nearly 30 gigawatts of behind the meter natural gas generation will be deployed by 2030, primarily supporting high return AI data center projects. The investment case is AI is driving the demand for compute. Compute requires reliable power. North America possesses an abundant, low-cost natural gas resource base, and that creates significant CNG demand. Soteris is the market leader with unrivaled scale and geographic reach. Our hub network is five times larger than our nearest competitor. where permanent infrastructure is unavailable or cannot be built within the required time frame, speed and scale become critical, and our mobile platform is designed to address both. Our hub network is a key part of that advantage. Each new location expands the addressable market for our existing fleet with modest incremental capital and lowers the cost of entering the next geography or serving the next vertical. With the addition of Florida, Utah, Houston, and our newest hub announced in Bakersfield, California, we're now within approximately 250 miles of 50% of the North American population. At our current pace, we expect to be within approximately 80% of the population by the end of 2028. Our new California hub will be Soteras' first supply point in the state. It's expected to begin flowing gas in Q1 2027 and will allow us to serve customers from Southern California through the Bay Area. This hub is also an example of how we intend to build markets rather simply than simply waiting for them to develop. We're also seeing strong interest in the mobile CNG fleet fueling service we launched in the last quarter. We bring fuel directly to our customers' facilities, allowing fleets to refuel behind the fence without pipeline connectivity, permanent station construction, or upfront capital. We've built a funnel of opportunities and are engaged with some of the largest and most sophisticated fleet operators. Our first location in Houston is now operational, serving approximately 100 Class 8 natural gas trucks. And today we announced our next step in California. So Terra signed an MOU with Gazelle Transportation, California's largest crew hauler, to deploy mobile CNG fleet fueling at its facility. Stepping back and looking at the landscape, we believe compressed natural gas is better positioned today than ever before. While CNG has always been at a substantial economic advantage when compared with diesel, that advantage is even now more pronounced. Today's diesel price is more than $6 US in many markets, where our delivered price for CNG on a diesel equivalent often less than half that. Lower fuel costs, greater price stability, and a practical solution to refueling makes the long-term case for CNG very compelling. We've spent the last two years deliberately positioning Soteris for these opportunities. Today we have the scale, the network, and the market position to capitalize on them and we're confident in the growth ahead. Turning to propane, we're well prepared for the season ahead. Q3 is our seasonally quietest quarter, but it's an important operating period because much of the work that determines winter performance happens before the cold weather. Superior Delivers has been central to that work. We have strengthened forecasting and delivery planning, improved workforce readiness, and created better coordination between field operations, supply, and customer service. Our new delivery tracker gives our operations and customer experience teams a common view of upcoming and in-progress deliveries. That allows us to identify issues earlier, act quickly, and provide customers with clearer and more proactive information about their deliveries. already seeing encouraging results. Root adherence has improved over the summer, as have deliveries per roof. We're also entering the winter with a strong supply position. We continue to build our capabilities in the U.S., creating additional opportunities to optimize supply and procurement across North America. There's been a tremendous amount of work done to prepare, and our teams feel good about where we are heading into the winter. Our immediate priority is to serve customers safely and reliably, communicate clearly, and demonstrate that the changes we have made through Superior Delivers are helping us provide a more consistent customer experience that will ultimately drive retention, growth, and better operating performance. On capital allocation, we continue to invest in CNG growth, including mobile storage units and equipment supporting signed contracts funded entirely from cash the business generates. We're investing where we see durable returns, not simply where we see growth. Over time, we expect the growth generated by these investments will support deleveraging, which remains a key element of our strategy. In terms of our outlook for 2026, as you know, we were advising our adjusted EBITDA outlook from 2% growth to a 2% contraction. That reflects lower than previously expected propane EBITDA, partially offset by strong growth at Soteris. In propane, we've made a deliberate decision to invest in additional capacity this winter to ensure we can provide the highest level of service our customers expect. Consumer attrition was also tracking slightly above our prior estimates following last season. continue to expect adjusted EBITDA growth of 5% in 2027, driven primarily by growth in CNG. So thank you, and with that I'll turn the call over to Greer for some comments on our financial performance.

Thank you, Alan, and good morning. Superior generated year-over-year EBITDA growth during a seasonally slow period driven by strong performance in CNG, partially offset by propane. I'll start by recapping our financial results for the third quarter. Consolidated adjusted EBITDA was 8.8 million in Q3, compared with 7.6 million in Q3, in the prior year quarter, representing a year-over-year increase of 16%. Adjusted EBTDA per share was a loss of $0.04 compared with a loss of $0.05 in Q3 2025. The improvement was driven by higher adjusted EBITDA, partially offset by the 3% reduction in weighted average shares outstanding as a result of our share repurchases over the past 12 months. Adjusted net loss per share was 37 cents compared with a loss of 41 cents in the prior year period. The improvement reflects a lower adjusted net loss partially offset by the lower share count. Free cash flow in Q3, a seasonally low cash flow quarter, was negative $100.4 million compared with negative $70.9 million in Q3 2025, reflecting higher growth capex at Soteris, which is expected to generate very strong returns in the coming years. We anticipate elevated capex through the middle of 2027, followed by a return to higher cash flow by Q4 2027 when the EBITDA associated with our CNG investments ramps up. Turning now to the businesses, U.S. Propane reported an adjusted EBITDA loss of 22.2 million in Q3 compared with the loss of 14 million a year ago, a decline of 8.2 million. The decline was driven in part by temporarily elevated attrition following last winter, higher operating costs. lower service activity. This was partly offset by higher wholesale volumes driven by continued growth in wholesale customers. Canadian propane generated adjusted EBITDA of 2.2 million compared with 2.5 million in Q3 2025. This was mainly due to weaker market differentials and a stronger US dollar, partially offset by procurement savings from Superior Deliverers initiatives. Superior Delivers, our propane transformation initiative, contributed approximately $3 million of incremental adjusted EBITDA in the quarter and $20 million year to date. The contribution in the quarter was largely from margin optimization in our customer growth pillar and from more sophisticated supply management in our wholesale advantage pillar. We now expect a full year contribution from Superior Delivers of approximately 30 million as we are investing in extra capacity to ensure an optimal customer experience over the upcoming heating season. Ser Terrace generated adjusted EBITDA of 36.5 million dollars in Q3 compared with 25.7 million dollars in the prior year quarter, which was an increase of 42%. The increase was driven by volume growth across our well site and industrial and data center segments partially offset by higher operating costs. Volumes increased 23% to 8.7 million MMBTUs and operating costs per MMBTU increased 9% as we temporarily rely more heavily on third-party drivers to keep up with the demand while we expand our internal driving capabilities. Corporate operating costs were 7.7 million in Q3 compared with 6.6 million in the prior year quarter. The increase is mostly due to the timing of expenses and higher incentive plan costs due to the fluctuations in the share price. Consolidated capital expenditures were 81.9 million in Q3 compared with 33 million in the prior year quarter, mainly due to increased investment in CNG to support contracted growth opportunities that will begin contributing EBITDA next year. Overall, CAPEX is tracking in line with our 2026 expectation of 230 million. Our leverage at the end of Q3 was 3.8 times, down one tenth from a year ago, driven by lower net debt levels and higher adjusted EBITDA. Sequentially, leverage was up two tenths of a turn from the second quarter, reflecting the normal seasonality of our propane business. Shares outstanding at September 30, 2026 were 214.6 million, which is down 4% from the prior year as a result of share repurchases made in the previous periods. We did not repurchase shares during the quarter as we continue to prioritize investment in CNG. As Alan mentioned, we are revising our 2026 adjusted EBITDA guidance from growth of approximately 2% to a decline of approximately 2%. We now expect Sorteris to grow approximately 5% in 2026, driven by strong performance across the business, particularly in our industrial and data center segment. We previously expected Soterios EBITDA to be down between 4 and 9% in 2026. However, the growth in CNG is expected to be more than offset by lower propane results. As Alan mentioned, we are investing in winter readiness, which is reducing the contribution for Superior Deliverers during 2026. We also experienced elevated customer attrition due to our delivery challenges last season. but expect that to return to normal levels with our additional investment in capacity this winter. Despite lower expected EBITDA in 2026, we expect to exit the year with leverage of approximately 3.9 times, as the lower EBITDA is expected to be offset by favorable working capital movements. Given the high degree of visibility we have on CNG EBITDA for 2027, we continue to expect EBITDA to grow by approximately 5% in 2027, albeit now off a lower 2026 EBITDA base compared with prior expectations. We'll update our 2027 CAPEX budget in February of next year. But at this point, we continue to expect capital expenditures to remain at levels similar to 2026. And with that, I'll turn the call back to the operator for Q&A. Thank you.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from the line of Ben Isaacson with Scotiabank. Your line is now open.

Thank you very much and good morning everyone. I have two questions. The first question is, can you talk about customer attrition in propane? And maybe there's three points to make on that. Can you talk about the industry versus superior, Canada versus the US, and what is controllable versus non-controllable for you?.

Hey, Ben, it's Alan. I'm just making notes about that controllable. Okay. Sure can. Thanks for your question. So let me give you a couple of tidbits here, and then you can guide me if I'm not answering questions. The industry is really, kind of all over the place because I mean you've got you know a couple 3,000 small independents and then the majors and We're competitive with the majors when it comes to attrition, but our aspiration obviously is to have a pretty substantial reduction over time. Canada versus the US. Or let me get to controllable versus uncontrollable. There's kind of different types of attrition, you have what we call change of ownership. That's where someone sells their house. So that becomes a sale opportunity. And that, you know, that's going to account for, you know, a percent maybe in some markets 2% of your annual attrition every year. This is just the normal normal course of of houses moving and and I'm talking on the residential side here, of course. I have Then you've got displacement where, you know, house is demolished and a new house is put in and a you know, different type of heating or or uh or energy is is put into place or you're displaced by uh you know heat pumps or whatever the case may be. And then the third part is controllable, where they're leaving us for another competitor. And we've got strategies for two of the three of those. Displacement is kind of not much you can do about that. And Canada versus the US is an interesting one. The maturity in Canada, of our brand and our process means that retention is a retention efforts took hold and we're really encouraged by their results. By the same token, building that maturity in the US means we had some more work to do and that's what we worked really hard at over the last three quarters to make sure we minimized any of the impact. And what I would say in general is, um, you know, we went through a really hard winter that's going to impact people's propensity to churn, obviously. And I think we responded incredibly well. It's always hard to forecast it to, you know, to with a degree of of specificity exactly what the churn number is going to be. We were close, but you don't see churn happening in an instant. It's not like a customer gets a delivery and then calls to terminate. They've got to work through the fuel that's in their tank. So it took us a couple of quarters to really quantify that, but it could have been a lot worse than it was, and I think the team did an incredible job with the response they had after the really difficult time. tough quarter we had. I don't know, Greer, if you had anything you wanted to add to that.

I mean, the only thing maybe is just the, you know, the attrition from year to year. It's not the same, obviously, and so, and weather patterns are not the same. Like, if I just look at last winter, you know, in the West, as an example, in Canada, it was easier to serve customers just given the weather patterns. They're a little less extreme out there. If you look at kind of what you would see in in terms of attrition in Western Canada, part of that is because of how you operate the business, but it's obviously inextricably linked to the weather patterns and on the east coast, like if you look at the US business, which as you know is largely residential, the Northeast, the weather was really tricky, right? And a lot of the changes that we were making from a transformation standpoint were kind of more directed at that business, and so a combination of those things probably last year drove a little bit more in that area, but it changes around, right? I mean, it's not like, hey, that's always a thing. the patterns as you know change around day-to-day and so that's what I'd say a little bit about about last year Great, thank you.

Sorry, yes, so the second question is, look, the stock has been under significant pressure since the midterms, and I guess the question is, in your minds, has the outlook for Satoris changed since then because of possible increases to NIMBYism as it relates to AI data center growth. Thank you.

Well, it's always hard to tell. especially when we're talking just the short term. Dale Winger is sitting to my left, to my right, sorry. Um, and Dale might have a comment about, uh, about the what we're seeing in data centers. But, you know, whenever you have these the short-term volatility, it's... It causes one to go back to your core thesis. And I'll talk about it strategically and then I'll hand the mic over to Dale, but for me, CDNG as an energy source is, we're seeing the adoption increase rapidly. I mean, you can see that in the numbers and the comments I made. We're really confident and we're excited about expanding across North America and bringing it to new markets. And as we do, I think you're going to see widespread adoption. For me, there's not a day that goes by that I have any doubt in terms of the direction we're heading in. Having a scalable operating model that allows you to really take advantage of scale and make it a strength, not a weakness, is absolutely paramount. And although transformation is difficult, the moves that we've made and the decisions we've made, while they may they may have cost us in the short term, are absolutely the right thing to do for the business. So despite the short-term volatility, we're sticking to our guns in terms of our strategy, but more specifically with regard to data centers, data on the programs and thoughts.

Yes, Ben, we have, thanks for the question. We've got a clear runway to continued earnings growth post-election. Of course, it's too early to know what all of the impacts were going to be, but generally view the impact of elections as secondary to the underlying infrastructure constraints driving demand. We know the direction of travel is towards more compute, and we know the vacancy rate for data centers is less than 1%, and so the growth of increased compute is creating demand for data centers and power. Projects that are under construction and in motion are continuing ahead. some changes in terms of the cost of projects or the timeline on projects that delay the build out. Sure, there could be. And some of that had already started even before the elections. There was an increasing bipartisan consensus on paying for your own power, which, by the way, helps us in terms of a behind the meter market opportunity to go after. So, you know, our solutions are really, the most important thing here is just the pace of compute demand is moving faster than permanent infrastructure can be built. The Sorteris has got a very unique platform to bridge that gap. Of course, we don't need every project the marketplace to move forward and a big part of our strategy has been increasing our qualification process to understand those projects that have tenants, those projects that have financing, those projects that have contracts awarded. And so, in many cases, a faster permitting environment, accelerated energy infrastructure You know, more investment in domestic energy supply could actually increase the number of projects over time. So we've got a clear runway and we do not have a diminished outlook.

That's helpful. Thanks so much. Appreciate it. Thanks, Ben. Our next question comes from the line of Nelson Ng with RBC Capital Markets. Your line is now open.

Great, thanks and good morning everyone. My first question just relates to your propane guidance of it being about down 5% this year. Can you just comment on whether your expectation of El Nino had any anything to do with your guidance or whether you factored anything in into that negative 5% guidance?.

Well, Gary will give you the numbers. You know, weather is hard to predict, which is one of the reasons why, you know, we've done what we've done in terms of making sure that we have a strong contingent of staff going into the year. Had we gotten off to snow and frost all across North America in September and October, we probably would have a different outlook. we're using sort of five-year normalized weather, which all of this factors into your decision, but you've kind of raised the point that Forecasting a business a year in advance, not knowing the weather patterns, is always difficult and challenging. We're not anticipating, we're not forecasting a tremendously low winter, but had we seen signs of a really strong one, we probably would have made a different decision.

But Greer, you may have clarifying comments. Yes, hi, Nelson. Nothing much to add, really, I think. Alan said it like we for the fourth quarter in our revised number, we've assumed five year average weather for the fourth quarter. Yes, who knows? I mean, as Alan said, predicting weather is pretty tricky. Yes, we can read the same reports, and who knows whether there's going to be one of these patterns. But at this stage, it's pretty difficult. And as you know, like even what you see in October, as you get into November, December, obviously the intensity accelerates, and so making a call at this point would be premature. So, yes, we've just used, average weather. So to the extent that it's warmer or colder, obviously there'll be an impact.

Okay, got it. And then, you guys mentioned that you're making some winter readiness investments. Can you just give a bit more color on on those investments, whether it's more like operating costs or whether it's CapEx or or like just just a bit more color there?.

Yes, said real simply, we see capacity in in our model going into the winter that we've been hesitant to monetize. based on what we learned last year. What's my confidence going into the winter that we're ready? It's 100%. But we're going to take that capacity out after the model has been proven as opposed to in advance because the most precious thing we have as a company is our relationship with our customers and we're not going to jeopardize that. You know, it means that we're putting a little bit more investment in drivers and call center agents and service technicians and trucks going into the winter that in all circumstances. in all likelihood will adjust through the winter or coming out. But we're trying to be cautious and responsible here with our multi-precious asset.

Yeah, again, nothing much to add here. It's OpEx, Nelson, for sure.

Okay. And then last one on propane. So, um, Like with the negative 5% guidance, can you bridge some of the items relative to 2025? So like if we start with 2025 and we add, I think Superior delivers would be like on a standalone basis would be growing EBITDA by 4% relative to 2025. So is there a way to kind of highlight the main factors that's causing it to go from plus 4% if you include superior delivers to... negative 5%? Is it margins? Is it volumes? Is it... I think you mentioned higher op-ex that you're kind of factoring into this winter, but... How would you rank some of the key factors?.

Yes, Nelson, so just to make sure I understand the question, you're trying to bridge the propane abattoir from 2025 to.

our revised number for 2026. Correct. And first, I'm just taking 2025 adding the four percent from Superior Delivers. So you're kind of starting off at positive 4%, but your guidance is negative 5%.

Yes, yes. Okay. So if you, if you look at the, I'm probably going to get the numbers off a little bit, but I'll be directionally close. If I look at what the total propane business did in 2025, I think around the numbers around 345. If you look at how we've regarded, I think that the number comes in around 330. so we're talking about about a $15 million. dealt I think is what you're trying to bridge. And so the way I would look at the superior deliverers number and I can't remember exactly what we said coming out of last year, but the additional value added relative to our run rate kind of coming out of last year, I guess we would be looking at the the total year not the the run rate, but it's, you know, it's a pretty pretty small number on additional superior deliverers. I think the number is probably I can't remember the exact number that was in 2025, but I think it was between 15 and 20 million. And so let's say that's, 10 million and so on the other side of it, yes, it's probably like, call it circa 5 million, of expense increase and then the rest would be volume. So whatever that works out to be 10-15 million in volume or something like that, that's that's probably how I would bridge it if that makes any sense, Nelson.

Yes, that makes sense. And then just one quick question on the CNG business for Sataris. So in terms of the improved outlook, was it mostly... due to the well site business, industrial or data center? What changed this year? And obviously oil prices are pretty high right now and I presume well site activity is strong. And I know that the MD&A industry indicates that volume growth is mainly due to the well site. So is that the, the driver for the change in outlook for this year.

Hi, Nelson. Thanks for the question. As you recall, we came out of the first quarter down 17 million, and we knew that based on some utility support work that wasn't part of the 2026 mix. But as we have gone through 2026, second quarter and third quarter are traditionally, lower, but as you've seen, we've shown a lot of strength in the business, and we've now kind of closed that $17 million gap that we started the year and we're even, and we continue to have momentum. In terms of where it's coming from, the growth we're experiencing is it's broad-based and durable. So it's data centers, but it's also other industrial markets such as mining and power generation. The well site business is doing really well right now. We've built an advantaged mobile energy infrastructure network that's very difficult to replicate, and as we've expanded our new hub strategy and created more exposure to more in markets, it's increased the value of the platform and delivered a lot of growth overall because we're in position with with new supply points and new end-use customers to meet their energy needs. So that's really the second and third quarter performance as well as the ongoing momentum and outlook is the driver there.

Great. Thanks. Thanks, Dale. I'll leave it there. Thanks, Jules. Our next question comes from the line of Gary Ho with Desjardins. Your line is now open.

Hey, good morning. Maybe the first question for Dale, sorry I jumped on the call late, but, Sorry, this was already asked. Can you maybe talk about the data center pipeline for potential new wins? What are you hearing from potential customers and expectations for the next six to 12 months? Yes, thank you for the question, Gary. We can healthy and growing opportunity pipeline. We can meet new people and make new friends. Behind the meter power was not really a significant part of data several years ago, and now it's an increasing part.

Yes, thank you for the question, Gary. We continue to see a healthy and growing opportunity pipeline. Many, we continue to meet new people and make new friends in this space as the, you know, behind the meter power was not really a significant part of, of data centers a couple of years ago, and now it's an increasing part. of the data center opportunity set. And so we continue to progress. We continue to make new friends, explain how our solutions work. One of our big pieces of the strategy when we started doing data center work was to deliver a great customer experience so that we could have reference cases with world-class hyperscalers and earn repeat business. And our team has done a fantastic job with that. Being very customer-centric, being very responsive and problem-solving in nature being being safety centric and just having the applications expertise in the scale to be able to mobilize and generate the to provide the solution at the speed the customer needs the energy and so we have a good outlook headed into fourth quarter and into 2027 when natural gas is the critical critical, you know, missing piece, we have exactly what they need. Sometimes projects are delayed for other reasons, whether it be permitting or financing or other constraints to be solved. But we are very focused on converting high-quality opportunities into attractive returns for the business and have a good outlook on that.

Great. Okay, thanks for that. And my second question, maybe a follow on to Nelson's question, just on your 2027 guidance. you've held your 5% growth for 27 on a lower 26 base, which by our math implies roughly US $477 million. of EBITDA or 19 million delta versus your old numbers. Is that all propane or could it be tariffs being more positive versus your prior outlook and propane even down more than 19 million. Just wondering if you can help us bridge that gap too.

Yes, hi Gary, it's Greer what I'll say so yes, you're right. I think that's implying a 477 nomination obviously, like, when we produce our Q4 results, we'll give you a bunch more detail on the guidance as we normally do. What I would say is the movement from a guide, which calculates roughly, 4503 say, that movement from 4503 to what the implied 5%, 477, most of that growth would come from CNG CNG growth, but there is also some propane growth in that. But if I'm trying to kind compose that Delta of $20 $23 million that will be made up slightly more of CNG growth, but there's a bit of propane growth in there. They're both positive numbers.

Okay, got it. That's helpful. Thanks. And Greer, while I have you just on the leverage target that's moved up for 27, can you, again, I think part of it is just the lower EBITDA perhaps, but... Maybe just talk through that a little bit more, and then how should we think about the PREFs that's due – potentially redeemable mid-27 order, you're thinking around that.