FTAI Infrastructure Inc. (NASDAQ:FIP) Q4 2024 Earnings Call Transcript

FTAI Infrastructure Inc. (NASDAQ:FIP) Q4 2024 Earnings Call Transcript February 28, 2025

Operator: Good day, and thank you for standing by. Welcome to the FTAI Infrastructure Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Alan Andreini, Head of Investor Relations. Please go ahead.

Alan Andreini: Thank you, Shannon. I would like to welcome you all to the FTAI Infrastructure Earnings Call for Fourth Quarter and Full Year 2024. Joining me here today are Ken Nicholson, the CEO of FTAI Infrastructure; and Scott Christopher, the company’s CFO. We have posted an investor presentation and our press release on our website, which we encourage you to download if you have not already done so. Also, please note that this call is open to the public in a listen-only mode and is being webcast. In addition, we will be discussing some non-GAAP financial measures during the call today, including adjusted EBITDA. The reconciliations of those — of these — of those measures to the most directly comparable GAAP measures can be found in the earnings supplement.

Before I turn the call over to Ken, I would like to point out that certain statements made today will be forward-looking statements, including regarding future earnings. These statements, by their nature, are uncertain and may differ materially from actual results. We encourage you to review the disclaimers in our press release and investor presentation regarding non-GAAP financial measures and forward-looking statements and to review the risk factors contained in our quarterly report filed with the SEC. Now I would like to turn the call over to Ken.

Ken Nicholson: Okay. Thank you, Alan, and good morning, everyone. Welcome to our earnings call for our fourth quarter and full year of 2024. For the call today, I’ll be referring to the earnings supplement, which you can find posted on our website. I’m pleased to report that our Board has authorized a $0.03 per share quarterly dividend to be paid on March 26 to the holders of record on March 14. For the call this morning, I plan to review the reported results for the fiscal year and fourth quarter, but more importantly, I will also discuss our outlook for 2025 and the years ahead. On the 2024 results, adjusted EBITDA was $127.6 million, up from $107.5 million for 2023 and more than doubling over the past two years. EBITDA grew at each of our four core business units during the year.

All in, 2024 was a highly productive year during which we accomplished a number of initiatives that set the stage for 2025 to be transformational for our company and our financial results. As the bar chart on the right side of slide three illustrates, we now have line-of-sight across our portfolio on approximately $195 million of incremental locked-in annual EBITDA under executed contracts which when combined with our 2024 results, represents total company annual EBITDA of approximately $323 million. And the pipeline for new business is as strong as ever. Today, we are pursuing more new business opportunities than any time since the spin-off of our company. If we’re successful in converting these opportunities into contracted business, we estimate annual EBITDA potential in excess of $400 million, up materially from our target of just over $300 million that we mentioned on our last quarterly call.

Our $400 million target excludes the impact of any new investments or acquisitions we may act upon, such as acquisitions of Transtar or data center developments at Long Ridge. Focusing on the near-term, we expect 2025 to demonstrate substantial growth. It starts with Long Ridge. This month, we completed our planned debt refinancing and closed on the acquisition of our equity partners 49.9% stake. In connection with the refinancing, we repriced a number of our power sale contracts, which will have a significant positive impact on Long Ridge’s earnings and cash flow. Pro forma for the Long Ridge transactions, we expect to generate approximately $160 million of annual EBITDA with the bulk of that figure locked-in for the next seven years. Based upon current discussions, I’m confident that this year, we will announce an arrangement with a third-party customer at Long Ridge for the development of behind-the-meter data centers.

Depending upon the scale of demand for third-party customers, we estimate incremental EBITDA from this opportunity could be between $50 million and $75 million annually. At Repauno, we recently signed an additional contract for our Phase 2 NGL export system, bringing our contracted volumes to 40,000 barrels per day and representing a total of approximately $50 million of annual EBITDA. Revenue from Phase 2 will commence upon completion of construction expected in mid-2026. Early works have commenced and we plan to finance $300 million of the construction budget in the coming weeks. Importantly, early this week, we received the green light from the New Jersey Economic Development Authority for the issuance of the entire $300 million of tax-exempt debt, which provides us with access to low cost, long-term capital.

At Jefferson, we have $25 million of long-term annual EBITDA commencing this year under three contracts, all with minimum volumes. We’re also in advanced negotiations on a number of projects involving volumes of both conventional and renewable products. These new business opportunities, if successfully contracted, will position our terminal to generate approximately $120 million of annual EBITDA. Finally, at Transtar, the M&A market is as active as we’ve seen. We are now in discussions with parties on a total of six opportunities, which in the aggregate represent well over $100 million of annual EBITDA. I’m going to spend a little bit more time reviewing the recent Long Ridge transactions on slide five. On February 19, we closed the debt refinancing and repricing of our largest power sale contracts.

On February 26, we closed on the purchase of the 49.9% interest in Long Ridge from our partner GCM Grosvenor for aggregate consideration of $189 million. As a result of the debt financing transaction and repricing of our power contracts, we will sell power at an average price of $43 per megawatt hour compared to $28 per megawatt-hour previously. The price increase of $15 per megawatt-hour results in approximately $50 million of annual incremental EBITDA at the Long Ridge asset level. On June 1st of this year, we will also start receiving higher capacity revenue stemming from the recent auction results. Higher capacity payments result in approximately $30 million of incremental annual EBITDA at the asset level. And finally, we will commence gas production in West Virginia in the coming months and we’ll be reducing gas well in excess of our power plant’s needs, resulting in approximately $10 million to $20 million of incremental annual EBITDA at current gas prices.

Adding it up, we forecast Long Ridge to generate approximately $160 million at the asset level on an annual basis. Previously, we would have reported half of that amount going forward for our 50% share of the company. Pro forma for our purchase, which closed earlier this week, we will now report all of the $160 million of EBITDA and Long Ridge will be consolidated onto our balance sheet as opposed to equity-method accounting. The $189 million purchase of the 49.9% stake is being funded with $160 million of convertible preferred stock issued at the FTAI infrastructure level, $9 million of cash and $20 million of long-term note also issued at Long Ridge. Altogether, Long Ridge transactions greatly enhance the earnings we’ll generate going forward and allows us to participate in 100% of the value-creation we expect to achieve in the coming months and years.

I’m going to walk through the balance sheet briefly before getting into our specific company-level results. We reported total debt of $1.6 billion at September 30th. As I mentioned, going forward, the Long Ridge transactions will result in our consolidating Long Ridge’s assets and debt onto our balance sheet. So in addition to the reported balance sheet, we’re showing the pro-forma debt balances on slide six. Debt at the corporate level is unchanged from last quarter at $567 million with the rest of our debt at our business units. Transtar continues to be completely debt-free, while approximately $974 million of debt was at Jefferson and $44 million was at Repauno. We’re planning to launch the Repauno financing in the coming weeks, expect to close that later here in the second quarter.

We’ll issue $300 million of the low-cost debt I recently described, and we’ll also issue a term loan to refinance the existing debt at Repauno. Upon completion of the Repauno financing, we plan to refinance our corporate bonds and existing preferred stock and another accretive financing, which will reduce fixed charges and increase cash flow after debt service for common shareholders. That refinancing is also planned for later in the second quarter of this year. I’ll now talk through the detailed quarterly results in each of our segments and then plan to turn it over to questions. Starting with Transtar on slide eight of the supplement, Transtar posted revenue of $43.3 million and adjusted EBITDA of $19.4 million in Q4 compared with revenue of $44.8 million and adjusted EBITDA of $21.1 million in Q3.

For the 2024 year, both revenue and EBITDA increased versus the prior 2023 fiscal year. While the fourth quarter saw slightly softer carloads and revenue versus Q3, we expect carloads and revenue to return to or exceed Q3 levels here in the first quarter of 2025, driven in part by the anticipated positive impact on domestic production at US steel as a result of the recently announced tariffs. Operating expenses also continue to be stable as fuel costs and other material cost items have been largely unchanged. Third-party customer activity continues to grow with our railcar repair facility in Pittsburgh and new transloading locations all ramping up. And all in, we are currently expecting 2025 EBITDA to experience a roughly 15% to 20% organic growth rate next year with incremental growth driven by M&A opportunities that continue to increase.

As I described earlier, we’re seeing the most active M&A market in years and are currently evaluating a total of six opportunities. One of our core investment objectives at Transtar has been to leverage the company’s platform for strategic growth, and I’m confident we’ll be doing so this year. Now on to Jefferson. Jefferson generated $21.2 million of revenue and $11.1 million of adjusted EBITDA in Q4 versus $19.7 million of revenue and $11.8 million of EBITDA in Q3. It’s important to note in comparing the two most recent quarters that the third quarter of 2024 included a $2.7 million gain on the sale of assets that was not repeated in our fourth quarter results. So on an apples-to-apples basis, excluding gains on asset sales, EBITDA for Q4 was up approximately $2 million from Q3.

For the 2024 year, both revenue and EBITDA increased versus the prior 2023 fiscal year. But our focus at Jefferson is on the year ahead. As discussed as of this month, we now have three contracts representing a total of $25 million of incremental annual EBITDA commencing in the spring and summer of this year. In addition, we are in late-stage negotiations for additional contracts with multiple parties to handle conventional crude and refined products as well as renewables with some of these negotiations involving business that would commence this year in 2025. If we’re successful in converting these opportunities to business wins, we’ll be in a position to post annual EBITDA of approximately $120 million. Now on to Repauno, we signed our second contract for Phase 2, bringing our total committed volumes to 40,000 barrels per day or $50 million of annual EBITDA.

We continue to have capacity available for Phase 2 and expect to have the remainder signed up during this second quarter ahead. Assuming full utilization and rates consistent with those already executed, Phase 2 can contribute up to $70 million of annual EBITDA once complete. Total estimated construction cost of $300 million and those will be funded with the tax exempt debt I described earlier. In the current capital markets environment, we’re expecting interest rates in the range of 5% to 6%, making the Phase 2 project highly accretive to the equity value of Repauno. While Phase 2 remains our current priority, we’re excited about the advancement on the next phase of Repauno, including the development of additional underground storage for which we expect to complete permitting next month.

Closing out with Long Ridge, Long Ridge generated $9.9 million in EBITDA in Q4 versus $11.1 million in Q3. Power plant capacity factor was 88% for the quarter versus 91% in Q3, reflecting a multi-day planned maintenance outage at the power plant, while gas production increased to be more in line with the gas supply level required to run the power plant. We’ll be bringing our West Virginia gas production online this summer, resulting in a substantial increase in gas production and allowing us to generate incremental revenue and EBITDA from excess gas sales. With the debt refinancing and consolidation behind us, we’re focused on a number of growth opportunities that have the potential to significantly increase EBITDA and cash flow at Long Ridge.

We’ll start seeing the impact from the higher capacity revenues in June this year, representing $30 million in annual revenue and EBITDA. All indications are that capacity pricing will remain at higher levels for the years to come, driven by both the anticipated surge in demand for power by hyperscalers as well as mandated retirements of coal-fired power plants. We also continue to advance the upgrade of the power plant to 505 megawatts and expect our application to be fast-tracked as a result of the FERC’s recent mandate to accelerate new-generation projects in the PJM, including upgrades. And most importantly, we’re advancing multiple behind-the-meter projects, including most notably negotiations with data center developers. Based on the current state of discussions, we anticipate entering into one or more transactions for data centers at Long Ridge in the coming months.

To wrap-up, we’re very pleased with the quarter and extremely excited about the 2025 year ahead, and I’ll turn the call back over to Alan.

Alan Andreini: Thank you, Ken. Shannon, you may now open the call to Q&A.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Giuliano Bologna with Compass Point. Your line is now open.

Giuliano Bologna: Hi, good morning. Congratulations on the continued execution of getting contracts together and moving forward with all the different plans here. One thing I’m curious about looking at Jefferson, can you expand on the type of new deals you’re working on at Jefferson, what kind of products you’re looking to engage in and what the contribution could be over time?

Ken Nicholson: Yes, of course. Good morning, Giuliano. We’re looking at a little bit of everything, crude oil, natural gas liquids, renewables, including ammonia, all of these energy flows, primarily all exports are in some form of negotiation with counterparties at Jefferson. Crude oil is largely focused on waxy crudes coming out of Utah. Jefferson was the first terminal in the US to export waxy crudes to the European market. I think that sets the stage for a long-term contract with the counterparty we engaged with last year to do so. And so we’re advancing those discussions. Natural gas liquids, there’s a lot of natural gas liquids, butane, propane flowing out of the Permian and we don’t have enough domestic demand for those products.

And so the export markets are where a lot of producers are looking. We’ve got the capability at Jefferson to export substantial volumes of product, particularly through our Jefferson South terminal. And so I’m excited about the NGL project in particular. I think that’s got significant potential. It could be highly, highly accretive. Finally, ammonia, we have our one pneumonia contract in place that kicks off this summer. There is a second opportunity that we have been negotiating that would double the volumes of ammonia that we export through the terminal and that one continues to be in negotiation. So I like having multiple products with different counterparties out there. There are a handful of others as well, but those are the three big types of products and opportunities that we’re negotiating, currently.

Giuliano Bologna: That’s very helpful. And on a different topic, looking at Long Ridge, congrats on getting all the recent transactions done. So one thing I’m curious about is how soon you’ll see the $160 million EBITDA from Long Ridge start to show up in consolidated results.

Ken Nicholson: Yes. The third quarter of this year will reflect the entire $160 million. Obviously, the first quarter will reflect half of this recent transaction. We really just closed this transaction. We really just closed the transaction for the purchase of the minority equity sake this week. And so we’ll only see looking a little bit more than one month impact of that in Q1. We’ll see all of it in Q2. June 1st is when the $30 million of increased capacity revenue kicks in. And so we’ll only see one month of the incremental capacity revenue in Q2. So finally, I think when we get to Q3, we’ll be running at that $160 million of EBITDA. Look, there’s potential we exceed that number. We are going to bring online a significant amount of gas production.

I can’t tell you precisely, of course, what gas prices will be this summer, but we’ll certainly be in a position to sell into the market and depending upon where gas prices are, we could be running in the third quarter at a level higher than the $160 million. So third quarter is when you’ll see it all.

Giuliano Bologna: Sounds good. Very helpful. And then moving over to Transtar. Of all the options that you — for US steel with respect to potential new ownership, do you feel there’s anyone that’s best for you? And are there any that are concerning for — or have any potential negative impacts for Transtar?

Ken Nicholson: Yes, it’s a good question. There certainly continues to be a lot going on at US Steel in the media. I think the key takeaway is there is no outcome that I believe in any way is a negative outcome for Transtar. All outcomes are good, even the status quo. I guess if I had to pick one, as you may be aware, the drama between Nippon and US Steel is continuing. Nippon has made some significant commitments to investments in the Mon Valley and in other US Steel properties, that’s got to be a good thing for Transtar. But at the same time, I think all options are arguably good and so it’s something we’re obviously watching closely, but ultimately, I think we’re in a good place regardless of the outcome.

Giuliano Bologna: That sounds good. One last one. Thinking about the commentary on doing some sort of holding company refinancing, obviously your high yield notes are trading tighter. You’re obviously most likely looking to do something on the preferred as well. I’m just curious if you have any rough sense of the type of interest and dividend savings you think you could realize, realize that we don’t have active pricing for something that would happen in the future, but I’m just curious to see any outlook around that?

Ken Nicholson: Yes. I feel very confident it will be a highly accretive transaction. Our existing bonds, you’re right, they’re trading well. That’s great to see. They have a coupon at 10.5% and then the fixed preferred stock we have outstanding that’s pretty high cost about 14%. Both the existing debt and the preferred, those are put in-place at the moment we spun-off from FTAI. And so given the circumstances, those were relatively expensive. We definitely have an opportunity to reduce fixed charges. I think new debt today comes with an 8 handle, hopefully low 8s. Our goal would also be to maximize the amount of new debt that we issue, you know when we refinance the preferred stock. Obviously, 10.5 going to 8 is a good thing, 14 going to 8 is a great thing.

And so we’re going to hope to do that. I think this is a transaction that we’ll be in a position to launch. We’ll be in a position to launch in early April. And fingers crossed, Capital Markets stay with us and we have some good momentum going into that time period.

Giuliano Bologna: That is very helpful. I appreciate the time all the answers questions and I’ll jump back in the queue.

Operator: Thank you. Our next question comes from the line of Brian McKenna with Citizens. Your line is now open.

Brian McKenna: Thanks. Good morning, everyone. So a question on Repauno to start. Is there an update on permits for the underground cavern and just the timing around it? And then can you remind us of the potential from Phase 3 longer-term and kind of when you get that into place and that path forward is clear. I mean, does that increase the probability of a sale of Repauno at some point? Just curious, your thoughts there.

Ken Nicholson: Yes, good morning, Brian. You know, it’s a marathon, not a sprint, but we’re approaching mile 26. We expect to have the cabin permits in-hand by the end of this first quarter. We have been working very closely with New Jersey DEP. We had a great dialogue and I think we’re finally in the — at the end of the process. It’s been a lengthy process, but I do think we’re very close to the end. Look, the economics on cavern development will depend upon precisely what we end up developing. At the end of the day, the economics are materially more attractive than above-ground storage. Caverns are less expensive to develop, generate, of course, the same amount of revenue and require little-to-no maintenance capital going-forward.

I’m really pleased with the result from the New Jersey Economic Development Authority and the support for Phase 2. I think it bodes well for potentially additional low-cost debt financing to support Phase 3. Big picture, I think Phase 3 could be transformational for Repauno, easily generate an incremental $100 million of EBITDA for the business. Yes, it would require some capital, but roughly $300 million of capital for $100 million of EBITDA. That’s a pretty good — a pretty good investment. I’m not sure we need to go through the whole process of building caverns and bringing them all online. Yes, I think as soon as we’re permitted and we’re underway, I think we’ve created a lot of value at Repauno. So yes, the idea of a monetization at that point in time is something we’re certainly evaluating.

Brian McKenna: Yes. Okay. That’s helpful. And then on Transtar, so if I look at adjusted EBITDA, it increased 7% year-over-year in 2024. I think you talked about 15% organic growth for this business over time. So I guess that 7% relative to the 15%, it’s a bit below. So what’s the thought there just in terms of the shortfall? And then, do you still feel good about kind of hitting that 15% organic growth target moving forward before any incremental M&A?

Ken Nicholson: Yes. No, very good question. We don’t have the crystal ball on volumes out of U.S. steel, but I do say we’re encouraged both in terms of just overall production levels. And I do think that the recently announced tariffs for U.S. steel and their specific facilities in the Mon Valley and Gary should be good things. We should see an uptick in volumes. Their volumes really do go to the domestic market with pressure on imports for purchases of steel products, that’s a good thing for these US steel facilities. So some of our estimate is informed by that assumption. But what we do have is we do have a bit of a crystal ball on things like rates and new business opportunities, things that commenced last year that we’ll see the full year impact of this year.

And so there are a number of variables coming into that forecast of 15% to 20% organic growth. But based on all the variables we have and some assumptions around production out of Gary and the Mon Valley, we feel pretty comfortable with that estimate.

Brian McKenna: Yes. Okay, great. And then if I can just another follow-up on Transtar. So, I know you stacked up on the corporate development front for some M&A and it sounds like the pipeline is still healthy. I mean, I guess I would have thought we would have seen at least one acquisition by now. So I mean, did any deals get pushed or did you end up taxing on some? And then just thinking through the timing of when we could see some of these acquisitions, is it the next quarter or two? And then obviously, there’s no leverage on the books there. So how should we think about just the financing of some of these transactions?

Ken Nicholson: Yes. You can’t force someone to sell you their company. So it’s a bit of a process. But look, the momentum is definitely growing. I would be very surprised if at some point in the next three months, we haven’t announced and closed on one acquisition. We have about a half-dozen opportunities we’re evaluating. Some are smaller real tuck-ins, but those would be great situations to diversify the Transtar base, both geographically and by commodity. And then we have a handful of larger situations that would be transformative. Financing would be in the debt markets. I think it’s definitely the most accretive way to finance any acquisition we make. You’re right, Transtar is unleveraged. The new corporate financing that we’re planning for the second quarter will allow for acquisition debt to be incurred.

And so we’ll have the ability to leverage in a disciplined way, leverage acquisitions that we make. So look, I’m actually really excited about it. The staffing up last year has definitely started to pay some dividends or at least we’re seeing that potential more and more. And again, I really hope we’re in a position to announce something here over the next few months.

Brian McKenna: Okay, great. I’ll leave it there. Thanks, Ken.

Operator: Thank you. Our last question comes from the line of Greg Lewis with BTIG. Your line is now open.

Greg Lewis: Yes, hi. Thank you, and good morning. I was hoping to get a little bit more color around the HPC opportunity at Long Ridge and that it — like my question really is around the capacity demand response and you’re participating in that for this year and next year. And I guess my question is, as we look forward into the next capacity demand response, which I guess is coming up here in the next few months, how does participating in that going-forward impact your ability to kind of shift over to HPC customers?

Ken Nicholson: Yes. Well, I’ll say a couple of things. The auction results, of course, were tremendous for the year starting June 1st, and we’re excited about that and we don’t see any reason for those levels to be declining. It’s just an annual thing. And so in the event, there are multiple forms that a transaction could take. Well, one is buying power from our own power plant and that’s certainly interesting. We sell power today at $42 per megawatt and pricing for behind-the-meter transactions is $70 to $80 a megawatt. We would not, in that case, participating at the capacity auction, of course, but it would still be a highly accretive thing to do. But remember at Long Ridge, we have significant land holdings and we also have significant permits and access rights to the grid.

And so we’re in a region that is highly favorable. And frankly, there may be projects with data center developers that only required lease of land, access to the grid, and the building of backup power. And what I like is the conversations that we’re in right now have multiple flavors and that allows us to have lots of different opportunities, all of which are very good. So I can’t tell you precisely which direction we’re going. I don’t think the capacity auctions and participating in those capacity directions are going to be a real speed bump for us given we’re just committing on an annual basis. So for some reason, we wanted to do something completely behind the meter, including the power plant. By the time facilities are built, we’d be out of our obligations to provide power under the grid.

Greg Lewis: Okay, super helpful. And then you talked a little bit about M&A. I guess really it seems like the focus is around the rail business. Could you maybe highlight or talk about how you’re thinking about the short rail opportunity set in that and that I believe you were looking at a transaction maybe a little around a year-ago and there were — and I believe you were outbid. So just kind of trying to understand, yes, I guess what I’m wondering is, I’m assuming pricing for these deals is improving, not going the other way and like, yes, like how are we thinking about the ability — and really the ability to fund those transactions as well?

Ken Nicholson: Yes. So there are 500 short line railroads in North America. So we have a large addressable market of opportunities. Now about 100 of those are owned by one party, so that leaves 400 that are more fragmented. So there’s a very large addressable market. And this M&A — these M&A opportunities come in waves. There are two types of processes, of course, the ones where there’s more of an auction process and the ones where we’re just individually negotiating with a counterparty. The latter is definitely the preferred way to go about it. And half of our opportunities that we’re looking at right now are the latter, negotiated transactions. It’s one of the reasons I’m particularly excited about where we sit today. You’re absolutely right.

Pricing in this market is — it’s pretty high. Freight railroads are irreplaceable unique assets and they command pretty high multiples. And that said, I think we’re a great buyer. We have an existing platform. And so where others see they’re buying $10 million of EBITDA, we’re buying $12 million to $15 million of EBITDA because of the synergies and cost-savings associated with our platform value. So I do think we can be competitive. The one we lost last year was a bit of a special situation. We lost that to a Class 1 railroad that was just adding in the short-line as sort of an appendage and so it was a highly strategic transaction in that case for the winning bidder. We’re not — none of the opportunities we’re looking at right now have a similar flavor.

So look, I’m super optimistic. I think these things are very financeable. I was just talking to some investment bankers yesterday and they were telling me how in the transportation space, they are most aggressive at financing freight railroads. They’re just the best infrastructure assets in North America, just the sense of permanence, the operational upside, the limited competition, they are super assets to finance. And we’ve had a lot of success over the years with our various rail investments in financing these types of businesses. So I feel pretty confident we’ll be able to finance virtually all of the purchase price for these things in the debt markets. We’re obviously going to be disciplined and prudent and engage with the ratings agencies and do the right thing, but I do think there’s plenty of access to accretive debt capital to fund the acquisitions.

Greg Lewis: Thank you very much.

Operator: Thank you. I would now like to hand the call back over to Alan Andreini for closing remarks.

Alan Andreini: Thank you, Shannon, and thank you all for participating on today’s call. We look forward to updating you after Q1.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.