So Port Arthur has not had the economics that it will have next year again. And then that’s Port Arthur pre-SAF. So I think the advantage is very sustainable and widens out over time. Like I said, I don’t want to be somebody that doesn’t say there’s going to be less volatility due to timing here but I think the margins are very achievable.
Brad Phillips: And on top of that advantage there’s the value of our integration with our Feed business. And we’re producing even the local fat supplies in the US and Canada that a large percentage of that ends up in DGD. And then again one of the other things back to DGD is the producer’s tax credit going forward. We think that DGD is again one more time more advantaged than the others. And when that calculation comes into place. So again we like our position.
Andrew Strelzik: Okay. That was really helpful color. I appreciate that. And my second question, following up on some of your commentary around some integration benefits that remain opportunities that remain. We know I think that there’s some Valley contracts that go into affect Jan 1. Is that really what you’re talking about? And is there any way to quantify that? Or more broadly, are you seeing given kind of the bigger asset footprint with all the acquisitions et cetera that there’s even more opportunity broadly beyond Valley to continue to optimize. Thanks.
Randall C. Stuewe: Yes. And I think those comments were in the script. I mean clearly, the US operations and procurement teams have made great strides at Valley and then our international team down in Brazil. Taking a private company to public is no small task on either continent here and then if you will making them Darling, and we tend to be conservative. We tend to risk manage and we have a margin expectation in our core ingredient business that’s very well known and our return standards are etched and metal there for us. And so at the end of the day we’ve made the success of the Valley integration, as we said has been the ability to improve the raw material procurement contracts and all the little terms and conditions in there.
And then ultimately, as I said earlier, we’re still short massive capacity on the Eastern seaboard that’s ready to come online but as we’ve shared with others, we’re waiting on motor control gear that’s due to be delivered here this winter. Otherwise, we’d have that plant back up. But the supply chain we’re still moving stuff inefficiently to plants just to support our supply base out there that once world comes up next winter or next spring. I mean in the Q1 we should be back in good shape there. And then we’ve got capacity expansions going on down in Brazil right now that are just in the commissioning stages that should be accretive to us next year. So I mean the world looks pretty darn good next year. It doesn’t look like we’ll have 3% to 5% growth of raw material tonnage as we’ve seen over the last several years, there’s a little bit of contraction of animal numbers out there, whether it’s disease or whether it was just margin and feeding people.
But at the end of the day you’re setting up pretty nice for next year.
Operator: The next question comes from Sam Margolin of Wolfe Research. Please go ahead.
Sam Margolin: Thanks. Good morning. Thanks for taking the question. My first question is on just that environment. You’ve talked a little bit about the relationship to the vegetable oil complex. But is there a scenario where fats prices next year decouple from veg oils, just because, if the whole — if the pressure in the system is originating from RINs oversupply, you solve that with lower biodiesel production which would disproportionately impact soybean oil supply demand versus fats and then, if there’s a corresponding LCFS rally that might further benefit tallow and yellow grease prices relative to veg oils. Is that a scenario that you think is possible?
Randall C. Stuewe: I really don’t think so. Number one, I think as we’ve said all along, clearly the Gen one technology of classic biodiesel would be the one that would become challenged. But the reason it would become challenged would be because there will be RD capacity that then would take that supply. You just kind of have to do the numbers. If Martin [ph] is really going to run 730 million gallons, that’s three million tons of raw material. If P66 can do half of what they think they can, that’s another 1.5 million, two million. And then you still got the PBF and you got the Vertexes, you got RAG, Geismar, all these guys that seem to be new demand out there I mean you can see the scenario quickly change. Now the question is what is D4 RIN’s do? Bob, do you want to take a shot at that?
Bob Day: Well, I think you’re right on Randy. I think the only way that we would decouple is if RD production were to plummet because of challenges in and running and operating, but if that were to happen, RIN values should go higher and that would significantly benefit our broader network. But we don’t really see that happening. What we see is overall RD production having some challenges, but continuing to have a significant demand pull and keeping prices — relative prices in line between fats and oils.
Sam Margolin: Got it. Okay. And then just a follow-up, but it’s also on the fats outlook with the LCFS proposal, I mean obviously, a lot of people are looking at that through the lens of RD margins, but it seems like it would impact the fat market too over time because CI would become more important to values, to intrinsic value of different feedstocks. And so — but of course it’s very regional specific. It’s only California. So I was wondering what your thoughts on that are if you think maybe the LCFS proposal is actually a bigger deal for tallows than it is for underlying RD margins?
Randall C. Stuewe: I think we would believe that, we would think it clearly favors low CI as does SAF. I mean clearly, I think if we done the whole conversation today down to one thing, it’s about timing. RD is a good business. It’s got growing demand globally. SAF is going to be a great business. It’s got incredible growing demand. We got maritime fuels. And by the way they all favor low CI feedstocks. And we’re stuck in this route of saying well, what are margins going to be? Where is D4? Where is LCFS? And at the long-term, as we’ve always said the competitive advantage of the Gulf Coast real estate whether you’re shipping SAF by pipeline both to Europe or to California, it’s just going to really work out pretty nice. Matt, I don’t know…
Matt Jansen : The only other thing to keep in mind is that obviously the LCFS is specific to California. But as we’re doing business in other markets, the LCFS is a reference in our valuation when we’re using to determine whether a product is sold to another market or to California. So one way or another that LCFS valuation is built into all of the RD sales regardless of whether it goes to California or not. So that’s an important component not to overlook.
Operator: The next question comes from Ben Bienvenu of Stephens. Please go ahead.
Ben Bienvenu : Hi. Thanks. Good morning. I want to — if we could talk about 2024 Randy, you talked about $1.7 billion to $1.8 billion of EBITDA. What do you think that translates to for free cash flow? And then what are your priorities for free cash flow as we start to see CapEx budgets potentially come off of peak at DGD notwithstanding the SAF expansion that you want to engage in.
Randall C. Stuewe : Yes. And I think we had this discussion with our Board. I mean, as you guys look to valuing the company here, ultimately, we can talk about combined adjusted EBITDA, but it’s actually what is the dividend plus the core ingredient business and then how much CapEx are we going to spend and what’s in the M&A pipeline. And so when we look to DGD, and we say above nameplate $1.10 a gallon, you can come up with an easy $500 million of dividends there. And then you look at our core ingredient business and if we’re at $1 billion $1.1 billion there’s your number right there $500 million CapEx. If we — that’s got probably $100 million of growth projects of the new plants we’ve talked about building. And then you look at it and you say you got the — an interest bill of around $230 million and cash taxes $160 million and then some limited buybacks in there that could be higher if we’re doing a little better or whatever.
