Altus Power, Inc. (NYSE:AMPS) Q2 2024 Earnings Call Transcript

Altus Power, Inc. (NYSE:AMPS) Q2 2024 Earnings Call Transcript August 8, 2024

Altus Power, Inc. beats earnings expectations. Reported EPS is $0.2301, expectations were $0.03.

Operator: Good afternoon. And welcome to the Altus Power Second Quarter 2024 Conference Call. As a reminder, today’s call is being recorded and participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. At this time, for opening remarks and introductions, I would like to turn the call over to Alison Sternberg, Head of Investor Relations.

Alison Sternberg: Good afternoon and welcome to our second quarter 2024 earnings call. Speaking on today’s call are Gregg Felton, Chief Executive Officer; and Dustin Weber, Chief Financial Officer. This afternoon, we issued a press release and a presentation related to matters to be discussed on this call. You can access both the press release and the presentation on our website, www.altuspower.com in the Investor section. This information is also available on the SEC’s website. As a reminder, our comments on this call may contain forward-looking statements. These forward-looking statements refer to future events, including Altus Power’s future operations and financial performance. When used on this call, the words expect, anticipate, believe, will, plan, forecast, estimate, outlook and similar expressions as they relate to Altus Power identify a forward-looking statement.

These statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those predicted in the forward-looking statements. Altus Power assumes no obligation to update these statements in the future or if circumstances change, except as required by law. For more information, we encourage you to review the risks, uncertainties and other factors discussed in our SEC filings that could impact these forward-looking statements, specifically our 10-K filed with the SEC on March 14, 2024. During this call, we also refer to adjusted EBITDA, adjusted EBITDA margin and ARR or annual recurring revenue, which are non-GAAP financial measures. ARR is an estimate that management uses to determine the expected annual revenue potential of our operating asset base at given points in time.

ARR assumes customary weather, production, expenses and other economic and market conditions, as well as seasonality. Our management team uses all of these non-GAAP financial measures to plan, monitor and evaluate our financial performance, and we believe this information may be useful to our investors. These non-GAAP financial measures exclude certain items and should not be considered as a substitute for comparable GAAP financial measures. Altus Power’s methods of computing these non-GAAP financial measures may differ from similar non-GAAP financial measures used by other companies. More detailed information about these measures and a reconciliation from GAAP to these non-GAAP financial measures is contained in both the press release and the presentation that we issued today.

And with that, I’m pleased to turn the call over to Gregg Felton, Chief Executive Officer of Altus Power.

Gregg Felton: Thanks, Alison, and welcome to all our investors and analysts joining our call today. This afternoon, we are excited to share some insights into our overall business, the findings from our pipeline review and the competitive moats that we believe will support our growth ambitions going forward, as well as our results for the most recent quarter. Since our last earnings call, in the context of my newly expanded role, I have taken the time to fully review our business and operations to identify areas of strength, as well as areas where we have the opportunity to improve and drive efficiencies that support our growth plans. This review has resulted in several demonstrable changes. One key area of focus has been the reprioritization of our resources with a particular focus on our technology and analytical teams.

More specifically, we are prioritizing activities designed to improve revenues and operating efficiency while deprioritizing certain non-core activities. One priority that is high on our list is our ability to synthesize and efficiently analyze the robust data set that we collect on our projects and customers. We collect an enormous amount of data and we are focused on ensuring that our field technicians are armed with the information that they need to optimize the revenues generated from our portfolio of solar projects. We are also focused on ensuring that we have the necessary customer data to support our growing portfolio of community solar projects. Before turning to the performance in the quarter, I’d like to discuss the results of our pipeline review and provide some background as to where and how we source our projects, our philosophy around underwriting standards and the cadence of deal flow in our business.

You will recall that back in May, I announced my plan to put our development pipeline under review with a focus on execution certainty and increasing the velocity at which these opportunities convert into revenue generating assets. Before elaborating on our findings, I want to provide some important context. Altus Power benefits from a diversity of origination channels. The agility of our platform allows us to onboard projects at any milestone in the project journey, from early-stage engagements with clients to fully developed but yet to be constructed projects, all the way to acquisitions of fully operating projects. We believe that this flexibility is one of our significant competitive advantages and has been an important driver of our market share gains to-date.

As we’ve often cited, we like all commercial scale megawatts, but they do come in different shapes and sizes, and our investment discipline requires that each new site be financially accretive to our shareholders. Importantly, our rigor around the application of the same underwriting principles to any opportunity positions us to generate attractive returns irrespective of the source and stage of the project. This differentiated approach has allowed us to increase our revenues and adjusted EBITDA fourfold over the past five years and build a nationwide portfolio that is the largest in the segment, sitting at almost 1 gigawatt in size. More notable is that we have achieved this level of scale even as the proportion of incremental megawatts added to the portfolio from early-stage development has been relatively immaterial.

Accordingly, we see the optimization of that channel as incremental upside to our long-term plan. With that, let’s turn to the pipeline review. Over the past few months, we have enacted a three-pronged approach to analyzing our go-to-market strategy on early-stage engagements. First, we’ve spent a significant amount of time with the CBRE team digging into our current methodology and evaluating aspects of our strategy that we have seen successfully applied on the channel partner and acquisition side of our business. Secondly, we have enlisted feedback from a variety of other channel partners and real estate owners to cultivate a comprehensive picture of how best to drive speed around decision-making. And finally, we evaluated the timeline across each development deal currently in the pipeline to assess the factors that impact the timing of the project journey.

This analysis produced certain findings that will shape our go-to-market strategy moving forward. Specifically, despite some progress, there remains a strong need for education. We must continue to amplify the merits of commercial solar broadly to ensure that landlords, tenants and the general business community understand the value proposition and importantly, Altus Power’s unique ability to deliver a truly customized end-to-end solution. Given the localized nature of our projects, the top-down strategy that we implemented through our CBRE partnership to negotiate at an enterprise level was not the most efficient and effective path to client engagement. This approach created a significantly longer sell-in period for the landlord and tenant with a good deal of bureaucracy.

Site-specific projects were not often considered a top priority as they may not be needle-moving across a large enterprise. Solar sites are instead more typically a component of the enterprise customer’s overall strategy. Going forward, as CBRE builds its sustainability solution program for its clients, we expect Altus Power will be positioned as a key partner for clients that are looking to expand their use of renewables in locations where Altus has a strong presence. In partnership with Altus Board member and CBRE Chief Sustainability Officer, Rob Bernard, we will refine our focus to target the intersection of CBRE’s clients with Altus’ strength in several U.S. markets. Beyond repositioning our engagement with large enterprises, Altus will pursue a more targeted, market-specific approach to our broader client engagement, which has been our core operational philosophy since inception.

This approach allows for a direct pipeline to the ultimate decision-maker at the local level. This also aligns with our historical strategy of focusing on markets that offer attractive economics for landlords and tenants, as well as healthy project returns that meet our rigorous thresholds. In order to support these efforts, I’m pleased to announce that Brett Phillips, who joined us following our acquisition of Unico Solar, will lead our client engagement efforts associated with early-stage development. As we highlighted when we announced our acquisition last year, a key feature of the Unico acquisition was the deep experience that the Unico team brings with overcoming barriers to customer adoption and deepening customer relationships. So where does this leave us and what’s next?

We believe we have a clear roadmap, an engaged and growing list of channel partners, as well as efficient financing to scale our business. With a renewed focus on aligning our resources with the most successful parts of our track record, we are energized about our plan moving forward, which we believe positions us to expand our footprint, continue to deliver clean power to our customers through long-term contracts, and identify ways to grow those relationships over time. It’s also worth emphasizing that we have a robust and growing in-place portfolio of operating assets that are generating revenue every day nationwide. One important feature of our ownership position that we believe is not well understood is the captive opportunity that we possess to redevelop and further optimize all of our assets over time.

More specifically, our portfolio should be thought of as a collection of long-term infrastructure assets, each of which is strategically located and therefore conducive to ongoing investment. One example worth highlighting is our recent acquisition of an 8.5-megawatt solar array in Hamilton, New Jersey. We purchased this 11-year-old project along with the land on which it’s situated with the specific intention of repositioning the site over the next several years as we believe there’s additional value that Altus can extract to enhance long-term shareholder value. Now imagine similar opportunities across our portfolio of nearly 500 operating assets. This is the power of incumbency in this category. Before turning the call over to Dustin to walk through quarterly financial performance, I’d like to end by offering some perspective on how we’re thinking about shareholder value in the current environment.

As a management team, we remain focused on making savvy, long-term investment decisions with the attention to risk management consistent with being a financial steward of our investors’ capital. This necessarily means that we will not make hasty decisions more likely to ensure short-term volume targets are achieved. Given our long-term orientation, the pace of our asset growth has proven to be somewhat lumpy over short-term periods. While we remain confident in our three-year guidance communicated on our Investor Day, we anticipate that the cadence of our activity will have an impact on the remainder of 2024, which Dustin will expand upon. With that, let me now turn the call over to our CFO, Dustin Weber, for additional financial highlights.

Dustin Weber: Thank you, Gregg, and thanks to everyone joining the call. During the second quarter, we generated 364 million kilowatt hours of clean electricity from our nearly 1-gigawatt portfolio of operating assets. This power was sold to our customers at long-term contracted rates that resulted in $52.5 million of revenue, compared to $46.5 million in the second quarter of 2023, an increase of 13% driven by the growth of our portfolio and increased sales of clean electricity to our customers. GAAP net income for the quarter was $33.1 million, compared to net income of $3.4 million during the second quarter of 2023. The primary drivers for the change relative to last year were a non-cash gain from the re-measurement of our alignment shares and an income tax benefit for the second quarter of this year.

Moving to adjusted EBITDA, a non-GAAP financial measure, we reported $31.2 million, compared to $30.6 million in the second quarter of 2023, amounting to growth of 2%. This increase was driven by the growth of our portfolio and partially offset by increased levels of operating and general and administrative expenses. I’d like to quickly touch on an operational note that puts some downward pressure on recognized revenue during the quarter. Due to the increased production of our assets in the spring and summer months, we have accumulated community solar credits in excess of our current customer subscription levels. These credits are banked, meaning that while we have generated the production, the revenue is currently deferred and expected to be recognized during the second half of 2024 with the seasonally adjusted production in Q4 and increased community solar subscription levels.

We are pleased to see the ongoing expansion of our community solar business and we continue to strategically invest in resources to support this segment of our portfolio. Turning to incremental megawatt growth, for the quarter, the cadence of the incremental megawatt additions has been slightly slower than anticipated. Additionally, while we have previously cited that the second half of the year is generally more favorable to megawatt additions, we now anticipate a slightly slower ramp-up than previously expected. Accordingly, we are revising our previously stated 2024 guidance range of $200 million to $222 million of revenue and $115 million to $135 million of adjusted EBITDA to $196 million to $201 million of revenue and $111 million to $115 million of adjusted EBITDA.

While this outlook reflects a slower-than-expected growth to be realized in 2024, we are pleased to reaffirm our previously stated three-year guidance of 20% to 30% CAGR on megawatt growth. Turning to our financing plan, we finished the second quarter with a total cash balance of $92.3 million. During the quarter, we fully repaid borrowings under a corporate revolver for balance sheet efficiency. Additionally, we continue to expand CapEx to support our megawatt growth. Looking ahead, we believe we remain well positioned to finance our growth with the combination of cash from operations, our committed construction facility, tax equity partnerships and our long-term financing access. With that, I’d like to turn the call back to Gregg for some final remarks.

Gregg Felton: Thanks, Dustin. During our Investor Day in May, I asserted our view is this is a great time to be a clean power company. As the market leader in this rapidly growing segment, we believe we are uniquely positioned to continue to grow our market share through several competitive moats. First, as we continue to expand our significant footprint, we expect we will be able to drive increasing operational and maintenance efficiencies. Second, we believe our vertically integrated platform gives us flexibility as it relates to customer engagement, including the ability to deliver a customized and localized end-to-end solution. Third, we believe our nationwide footprint of operating assets and enviable network of partners drives equity in the Altus Power brand, bolstering our ability to scale our enterprise and community solar customer base.

Finally, our scale and diversified portfolio ensures ongoing access to a competitive cost of capital, allowing us to efficiently expand our footprint. Altus Power has assembled a diversified portfolio of assets, which we believe will produce long-term value for our investors. We further believe that our platform is positioned to scale, to seize on the long-term growth opportunity in this sector. Over the past six months, several transactions with private and public companies, both nationally and internationally, have been executed at levels which we believe support the intrinsic value of our asset base and platform. I remain committed to delivering value for our shareholders and I’m confident that the business and operational analysis that we’ve performed over the past 90 days will put us on a path to expand our leadership position within the commercial scale solar market.

Thank you for your time and we’ll now take your questions.

Operator: Thank you. [Operator Instructions] Your first question comes from James West of Evercore ISI. Please go ahead.

James West: So, Gregg, clearly outlined a new enhanced vision for the company. One of the things I thought was interesting is your findings of, one, the educational side, which should be helping out with a lot of these recent events that have happened, like some of the power market auctions. And then, of course, when the Wall Street Journal gets a hold of these things, usually it gets pretty widespread. But I’m curious on that and the enterprise, how do you see yourself educating further? And then, secondarily, on enterprise, how do you develop those relationships that maybe you didn’t have before? Is that leveraging CBRE or is it some other past market?

Q&A Session

Gregg Felton: Yeah. Thanks for the question, James. So, you’re right that the backdrop as it relates to power demand is definitely in everybody’s focus and so there’s no doubt that that should help with respect to the message and the opportunity that commercial-scale solar can provide. As it relates to getting to and connecting with enterprise customers, as you heard from the prepared remarks, we are working closely with Robert Bernard, who is a Board member and also Head of Sustainability at CBRE, to really restructure the engagement with enterprises, reflecting the fact that many enterprises benefit from a long-term advisory relationship rather than a narrower solar specific engagement. And so the details of our approach are oriented to acknowledging the enterprise engagement and how that should be approached and we’re pleased that Altus is going to be featured prominently as an onsite solar solution within the context of CBRE’s broader sustainability relationship with enterprises.

But I do want to add that, as you heard, at the same time, we are very focused on a bottoms-up approach. That first being a top-down enterprise approach and the bottoms-up approach focuses on geographies where there’s a real and tangible opportunity. So dovetailing with your first comments, that would be markets where there are high power prices and a real need and opportunity to bring commercial scale solar. So, as you know, it’s not really something that we try to bring to every market, but we certainly are in 25 of 50 states, right? So, what we’re focused on is when there are existing opportunities, new programs or states where there’s a compelling opportunity, we’re working with our partners, including CBRE in a much more targeted fashion than we might have historically.

So that’s really the nature of the approach is a combination of top-down enterprise and bottoms-up market specific.

James West: Okay. Got it. If I could just throw in one follow up here as we watch rates go up, I know a good number of your contracts will adjust higher. Could you give us some help on what kind of percentage of your contract existing contract have that inflector in them?

Dustin Weber: Hey, James. It’s Dustin. Yeah. Our current portfolio has 54% of our PPAs at a floating rate. So as the…

James West: Okay.

Dustin Weber: … prevailing utility increases those rates, we stand to benefit and so that’s a that’s a tailwind to our operating portfolio for sure.

James West: Got it. Thanks, guys.

Gregg Felton: Thank you.

Operator: Your next question comes from Justin Clare of ROTH Capital Partners. Please go ahead.

Justin Clare: Hi. Good afternoon. So you…

Gregg Felton: Good afternoon.

Justin Clare: Good afternoon. So, following on the completion of the review process here, you talked about taking a more targeted market specific approach. So just wondering what markets may be targeted initially. What — where do you see the most attractive near-term opportunities? And then if you could just speak a little bit more about how you’re going to market, how you’re approaching the landlord of a building or the tenant, maybe just help us understand that process a little bit better?

Gregg Felton: Sure. So thank you for the question. I think the first thing we’d like to make sure comes through as it relates to the review is this is about Altus refocusing our resources on those areas where we’ve historically had the greatest success or we can accelerate our revenue growth with greater prioritization. So that’s the key objective that we’re focused on. And we have had historical success in that bottoms-up orientation where specific markets that have opened up and community solar is a big part of this expansion. So states like Maryland or Maine or Illinois, which are effectively introducing programs that expand the opportunity. Those are markets where we’re very focused on bringing the benefits of commercial scale solar.

And obviously we’re doing that in often cases on large industrial rooftops or other land based systems and putting them in locations where we can identify an attractive site and that landlord might be a — again, a building where that landlord could be land, real estate that is real property. So, in either case, the goal here is to identify and target these markets and then work with our partners. And we consider CBRE an important partner, but certainly they’re a partner along many other channel partners that we’ve talked about in the past that are local to these markets that are working directly with landlords. So we are both working at the early-stage level with landlords directly and that’s the announcement we made today around Brett Phillips and he’s going to lead that effort.

But we’re also working with many partners who are bringing us opportunities where that landlord has already been engaged. So it’s a combination of factors all intended to drive to drive market specific flow.

Justin Clare: Okay. Got it. Appreciate it. Maybe just shifting over to your guidance here, the reduction to the 2024 guide. You did mention the cadence of activity is maybe not what you had anticipated here. So just wondering, are you seeing newbuild projects move to the right or as part of the review process, have some projects been maybe moved out of your pipeline? Maybe they didn’t meet return expectations and then maybe you could comment on acquisitions as well. Was there anything maybe anticipated to close this year and maybe is moving out?

Dustin Weber: Yeah. Hey, Justin. I’ll start in with the newbuild. So, this is more of a timing issue than it is a number of megawatts. I think you hit it on the head where they’re pushed out to the right and that’s really the main culprit there has been utility and interconnection delays. Many on the call were at our Investor Day at a community solar site here in New York. And if you were there, what you saw was a completed solar array and that was in early May. And here in August, that solar array is still not interconnected by the utility. And I think you’ve probably heard others cite the same frustrations. But that’s an example of one particular project. But there are other examples like that in our portfolio where things are getting pushed out a little bit.

Gregg Felton: And I would just add, Justin, so in the context of that, taking a sober view, certainly in the context of my broader remit and focus from the development side of the business in particular, what we’re trying to do here is not necessarily suggest anything about the volume of opportunity. But there has been, as you know, a consistent challenge in predicting the timing of operationalizing these assets. So that’s the key feature that we’re talking about. On your question as it relates to operational assets that are in our focus to be acquired, there continues to be a very robust pipeline of opportunity. So there’s no shortage of deals there. I think that what we would also say is that, and hopefully those on the call would appreciate the fact that there are, as a steward of capital with the appropriate discipline that I articulated in the prepared remarks, it’s important for us to both demonstrate to you confidence with respect to the opportunity, which is significant, but also the fact that the opportunities that we see in our pipeline are — have a timing that will be later this year, early next year and so we’re kind of being, again, sober with respect to thinking about timing, not the scale of the opportunity.

The scale of the opportunity and the scale of the pipeline remains quite large. So we have a lot of confidence with respect to the opportunity. And I would further add on that point, I think, I may have mentioned on prior calls, a consolidation that’s happening in this space. There is a very real opportunity for Altus Power where our scale and frankly leadership position in this market has put us in a spot where we continue to see a robust set of opportunities. And we would say with the exiting of certain players, there continues to be a greater flow of opportunity coming our way.

Justin Clare: Okay. Good to hear. Just one more, if I may here, the community solar credits that were not recognized in this quarter, could you share what the expected value of those credits were and then do you anticipate realizing those in Q3 or Q4 of this year?

Gregg Felton: Yeah. I’m going to kick that off, Justin, just give a little bit of context for community solar to make sure that we frame this for Dustin to fill in the financials. So just as a reminder, what we’re talking about here in the case of community solar are commercial scale sites consistent with every other site that we own, where the consumption is not quite there proximate to the production. So think of a landfill or a carport or a rooftop where the building tenant consumption is insufficient relative to the scale of the project. These are all use cases for community solar. So we’re building on sites where instead of selling to the onsite consumer, we’re instead selling to the adjacent community specifically within that same utility zone.

And so what we’re talking about are building sites where the customers that are ultimately acquired by us or our partners have to come in the hundreds, let’s say, per site in order to satisfy the power that we’re generating. But Dustin, you want to take it from there?

Dustin Weber: Yeah. Yeah. So, the deferral in Q2 is really a function of how rapidly we’ve grown that segment of our business in terms of megawatts and customers, 500% in a two-year period. And so, what I would say is there’s sometimes a ramp up to onboard new customers. And so as a result in Q2, we had generation that we instead will monetize and book as revenue in Q3 and Q4, and I’d estimate that to be about $4 million of worth of revenue that was production was generated in Q2 and what we expect to monetize in the second half of the year.

Gregg Felton: And Justin, just again on the one last thing as it relates to the task that we’re talking about, just for anyone who’s a little less familiar, we’re talking about selling dollar credits at $0.90. So this is anybody living in New York who wants to, quote-unquote, sign up for an Altus Power community solar project can benefit from discounted power, literally a discount on their bill. It should not be a hard sale. But again, we have to go out and acquire customers who want to save money on their utility bill and that’s really the process. Now we’re talking about this multi-month sort of gap that Dustin referred to from pushing that out from one quarter to the next, contextualize that in the context of a 25-year contract. So this is really immaterial in a short-term sense, but it does affect recognition of revenue by the quarter.

Justin Clare: Got it. Makes sense. Okay. Thank you.

Operator: Your next question comes from Vikram Bagri of Citigroup. Please go ahead.

Vikram Bagri: Hi. Thanks for taking the question. Could you give us a little bit of insight into how we should be thinking about the mix of operating versus M&A assets, or construction assets, rather, over time, especially in the context of that three-year outlook? Does the opportunity for additional domestic content, does that change that mix outlook at all? Just curious on that.

Dustin Weber: Hey. Hi, Vikram. This is Dustin. On the mix piece, I would say, if you look back at the last couple of years, I think that’s going to be roughly 75% acquisition of operating projects, 25% of newbuilds. I think that that’s a decent proxy. Gregg spoke on the go forward, Gregg spoke about how there’s a lot of opportunity, very fragmented market, higher interest rates impacting certain market participants who maybe have never gotten to the scale that it makes a lot of sense for them to own and operate a handful of assets and so we do expect the acquisition side to be a key feature of our three-year growth plan.

Gregg Felton: And just to give you some additional texture around the development side, clearly the development channels, the channel partners that we engage in, as well as direct early-stage, which is us engaging directly with the landlord, all of those are areas of focus with, as you know, a different horizon with respect to the timeline from initial engagement. But there is a robust flow of those opportunities as well. And so, when I referred earlier to the consolidation in the market, that is impacting in a positive way, the opportunities we’re seeing from a variety of different developers in the market who are looking to partner with Altus.

Vikram Bagri: Got it. Thank you. And just one follow up on the income statement, the $21 million tax benefit, was that a one-time item or is that related at all to the NOLs that you have in the business?

Dustin Weber: Yeah. It’s not related to the NOLs, Vikram. It’s a one-time and it’s really driven by that non-cash fair value on the alignment shares.

Vikram Bagri: Got it. Thank you.

Gregg Felton: Thanks for the questions.

Operator: All right. [Operator Instructions] Your next question comes from Jeffrey Campbell of Seaport Research Partners. Please go ahead.

Jeffrey Campbell: Hi. Good afternoon. Gregg, I was thinking about the issue of utility connection that you highlighted. Does this potentially prioritize existing assets like the one that you noted recently acquired in New Jersey that provides opportunities for self-help once acquired? And if so, is that sort of selection available to us as you’re looking for the acquisitions that Dustin talked about? Thanks.

Gregg Felton: Yeah. It’s a great question and you’re highlighting one of the features of our business that we feel is maybe not as well understood as we’d like it to be. So, the way we think about that is, we own a portfolio of projects across the country that are strategically located in areas of high power consumption, and obviously, every asset we acquire just builds to that portfolio. And so, given the demand characteristics and pressure on the grid, we think there’s an opportunity to reposition these assets as you are alluding to. And clearly that redevelopment opportunity is most palpable later in the life. So, let’s say that’s a decade after that system was put in operation. So no doubt that should be thought of as a captive opportunity within our portfolio where that interconnection already exists and it’s effectively a permanent interconnection.

And so we have that opportunity when we acquire an asset or when we own an asset to effectively avail ourselves of that redevelopment opportunity. And that interconnection issue, of course, is mitigated to a great degree as a consequence of the fact that there’s an existing asset. So that doesn’t mean that we’re not focused on driving new assets forward from an interconnection perspective. So I don’t want to give the impression that it’s not critical in a focus of ours to drive those interconnection timelines shorter as we can. But your point is correct, which is those existing assets that we acquire sort of jump over that challenge that does exist on newbuilds.

Jeffrey Campbell: Great. Thank you.

Operator: There are no further questions at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.