Pavel Molchanov: Got it. Thanks very much.
John Berger: Thank you.
Operator: Our next question comes from the line of Sophie Karp with KeyBanc. Sophie, please go ahead. Your line is now open.
Sophie Karp: Hey, good morning, guys. A question on Green Bond. So what are your thoughts on using this type of financing going forward, given where the relative pricing of that turned out to be when you first time – when you’ve done first time?
John Berger: Yes, Sophie. I’ll answer that and then turn it over to Rob. This was a continuation in terms of our issuance of that bond which was very timely. I would add clearly and of a strategy we’ve had in place for over 2.5 years. And so having the ability to have your corporate your company rated is enjoyed only by us in the sector. And so it gives us, again, another weapon, another channel of liquidity that others don’t have. And so what that also means is we have other opportunities. We have other channels that other people have as well, such as the non-rated pieces in the ABS marketplace. So we are always going to do a combination of these. We like where we are right now. I think that the corporate capital forecast is very clear and it stands where it is.
And so, the rate that we paid is definitely lower than the unrated pieces in the ABS market. So again, it was a nice price. Would we want the fix [ph] that we issued the first time 2.5 years ago, obviously so. But there’s a lot of things that we wish and our pricing was not near as high as it is now as a result. So we operate on a spread basis. So it’s something that someday down the road, but right now we’re comfortable. We’d rather be reducing leverage rather than increasing it no matter whether it’s asset level or corporate level. And I think it’s a nice part of the strategy clearly but it’s something that we’re not going to be doing next year. Rob, anything you want to add to that?
Robert Lane: No. I think just to say or to reiterate what John said is that, it was a good and timely bond. And we’re very happy that we were able to execute as well as we did with some very strong and with a lot of longtime investors coming in into that moment. But we’re – that’s it, right – for right now. And so we’re looking to stay here within what we have created and the amount of corporate capital that we’re carrying. And we will look over time through the cash flows that we’re able to generate to be able to delever the corporate side of the balance sheet.
Sophie Karp: Got it. Got it. Thank you. My other question was with the virtual power plants, right? And the whole – as a whole distributed model kind of begins to take hold. Are you – do you – are you envisioning that utilities might want a piece of this business and we’ll try to compete with you in the kind of people’s homes and distributed generation and virtual power plants, et cetera? Is that a competitive threat?
John Berger: I’d love to compete against them. I think it’s a great idea to have consumers have choice in an open market like we do in Houston, Dallas, Australia, Japan, Europe, and UK. I think the rest of the country needs to get with it and update the regulations and let’s see the best company compete for the consumer’s business and see who wins. So I think it’s a great idea to blow open competition and provide consumers choices, and I support it.
Sophie Karp: All right. Great. Thank you.
Operator: Our next question comes from Brian Lee with Goldman Sachs. Brian, please go ahead. Your line is now open.
Unidentified Analyst: Hey, John. Hey, Rob. Thanks for taking the question. This is Grace on for Brian. I guess first question, just to follow up to the previous questions on the liquidity forecast or corporate capital need. You mentioned there are different levers that you can pull, such as like increasing prices improving working capital, reducing OpEx to help your 2024 corporate capital need down to zero from $500 million. Just wondering if you can quantify those major levers and help us bridge the gap here a bit more. Thanks. And I have a follow-up.
John Berger: Hey, Grace. This is John. I think we’ve been very clear and these are – we’ve been giving a guidance forecast as far as liquidity that’s far out than anybody else has. We’ve been very clear about the levers that we continue to pull. I would point to things like look at the inventory line on our balance sheet. It dropped by 23% quarter-over-quarter. So I think if you dig and just look at the numbers that we put out, which frankly are huge volumes of data metrics and numbers that nobody else puts out. I think you’ll be able to put all the pieces together and it all makes sense to you.
Unidentified Analyst: Okay. Fair. I guess the second question on the EBITDA guide, sorry if I missed that. How much of the ITC sales are embedded in your 2024 EBITDA number?
Robert Lane: We haven’t quantified that, but it – right now it looks like it’s about 15% to 20%. Now that number could rise depending on how we move forward on the mix. But – and how some of our tax equity partners want to move forward on the mix. But right now it’s a pretty modest part of the guide.
Unidentified Analyst: Thank you.
John Berger: Thanks.
Operator: Our next question comes from Praneeth Satish with Wells Fargo. Please go ahead. Your line is now open.
Praneeth Satish: Thanks. Good morning. I wanted to start by just clarifying one thing on the corporate capital. So recognizing it’s zero for 2024. I guess I’m just asking about the longer-term strategy there. Has there been kind of a shift in the strategy to basically minimize corporate capital, keep it close to zero focus on kind of higher margin customers? Or is this more just a near-term event tied to lower – tied to operating cost savings?
John Berger: Yes. I think I answered that question earlier. We have the ability to go issue corporate capital and issuing corporate capital doesn’t is an asset. And the ability to do it as an asset that no one else has. And when I’m speaking of the corporate capital, obviously everybody can issue equity, but I’m speaking of the corporate debt side. So it’s easy to criticize something or to make it into something when you don’t have the ability to do it. We have the ability to do it. We retain that ability to do it. We have this flexibility. We know that we laid out a plan. We know what the resources and the sources of capital that are at least cost where they are. And we’ve, again, increasing price, reducing the working capital and reducing operating expenses.
And we’re going to continue to do that. Our flexibility as far as what we can do in 2025 and beyond is pretty wide. We have a number of weapons both in the – in channels, but also in sources of capital and liquidity. And we’re going to continue to build more and more of those, case in point, the ITC sales that we did the industry’s first transaction on that’s another great point. The Hestia deal that Rob has done is another great point and example. So we’re going to continue to build those different channels and levers and opportunities to provide more and more liquidity and cheaper capital, and nobody does it better than us.
