Ameresco, Inc. (AMRC) Q4 2019 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, thank you for standing by, and welcome to the Ameresco, Inc. Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Mrs. Leila Dillon, Vice President, Marketing and Communications. Mrs. Dillon, you may begin.

Thank you, Valerie, and good afternoon, everyone. We appreciate you joining us for today's call. Joining me here are George Sakellaris, Ameresco's Chairman, President and Chief Executive Officer; Doran Hole, Senior Vice President and Chief Financial Officer; and Mark Chiplock, Vice President and Chief Accounting Officer. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. This call contains forward-looking information regarding future events and the future financial performance of the company. We caution you that such statements are predictions based on management's current expectations or beliefs. Actual results may differ materially as a result of risks and uncertainties that pertain to our business. We refer you to the company's press release issued this afternoon and to our SEC filings. These documents discuss important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. We assume no obligation to revise any forward-looking statements based on today's call. In addition, we will be referring to non-GAAP financial measures during the call. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A GAAP to non-GAAP reconciliation as well as an explanation behind the use of non-GAAP financial measures is available in our press release and in the appendix of the slides, which can be downloaded from our website. I will now turn the call over to George. George?

Thank you, Leila, and good afternoon, everyone. Before we discuss our results, I would like to quickly address the recent rumors regarding a potential sale of Ameresco. While we do not typically comment on specific market rumors, we can only say that we are not currently engaged in any sale process and that we are aggressively pursuing our business plan as an independent company. And with that, now our results. Ameresco ended 2019 with record results across several key metrics. Importantly, we have started this year with a broad technical capabilities and the backlog to produce another year of strong performance. During the fourth quarter, our team did an outstanding job. We leveraged the strength of every business unit to deliver on all facets. We grew our total backlog by 15% to $2.3 billion and our assets in development by 80% to record levels. We converted a great number of major awards to contracts as expected, and we executed on our contracted backlog, which enabled us to realize record revenue. We now look forward with great visibility and excitement as we take advantage of the game-changing industry advancements. The economics of advanced technologies have dramatically improved and are now a key driver for renewable energy, energy efficiency, combined heat and power, microgrids and energy storage projects. Over the last decade, the cost of these advanced technologies have dropped significantly, making many installations and upgrades economical for our customers. We have the sharp decline in the price of solar power tends to get most of the attention, other technologies have also seen a significant drop in cost and increase in performance. For instance, prices for LED lighting has dropped by over 90% in the last decade, leading to tremendous cross-market adoption. Municipalities, in particular, have taken advantage of this technology to retrofit their street lighting. Ameresco recently replaced over 100,000 legacy streetlights with high-efficiency LEDs in the City of Phoenix. The city will save of over $3.5 million per year from lower electricity costs, in addition to substantial operation and maintenance savings. The cost of many of these advanced technologies, including LEDs, solar, battery storage, microgrids and CHP continue to fall, driving more and more attractive economics for our customers and for Ameresco. As we look to the future, it's clear that the trend is moving towards a low or carbon-free environment and away from fossil fuels. There is a report from Bloomberg showed that clean energy purchases by corporations through power purchase agreements are setting records. And these purchases increased by an impressive 44% in 2019. The report notes that corporations are facing increasing pressure from shareholders to decarbonize in energy consumption and diversify the energy sources, as exemplified by recent releases from Delta Air Lines, Microsoft and BlackRock. Ameresco is well positioned to take advantage of this trend as we work closely with our customers providing them with best-in-class advanced technology solutions that fits their unique needs. Furthermore, we are able to give them true financial flexibility. They can hold the solutions themselves or we can retain ownership. We support both models. Our product's independent and broad technical expertise combined with financial flexibility are important differentiators for Ameresco, it is increasingly complex marketplace. We are also seeing the growing demand for resiliency. The high-profile grid shutdowns experienced in California demonstrates the negative economic impact of grid instability and power supply interruptions. Increasingly, we are seeing utilities, municipalities, hospitals, higher education and corporations look to implement solutions that will enable them to rapidly rebound from these ever-increasing widespread interruptions. The military has proven to be an important early adopter of innovative technologies providing on-site power, energy storage and microgrid controls for added energy security and resiliency. There are many bases around the country that are incorporating the solutions into their infrastructure. A good example is our recently announced project at Portsmouth Naval Shipyard in Kittery, Maine. As part of this project, Ameresco will add a new 7.5-megawatt combined heat and power plant and install a 1-megawatt battery storage system to expand the microgrid system from the shipyard. Ameresco will also provide operation and maintenance services. We are currently delivering similar solutions to other federal customers across the country. In a recent report from Navigant Research estimates that the global market for microgrids is expected to grow at a 28% annual growth rate through the end of this decade. Our energy asset business was also very active this quarter, with a number of new awards, including 5 additional renewable natural gas opportunities, representing a total of approximately 25 megawatts. Our robust asset development pipeline will allow us to more than double our megawatts in operation in the coming years. This will significantly increase our base of recurring revenues, earnings and cash flows. While 2019 was impacted by lower RIN prices, we are pleased to see a sharp price rebound already in this first quarter. As such, we have taken advantage of the positive move and increase our hedging activity for our 2020 RIN production. Renewable natural gas continues to experience a significant increase in demand as organizations dependent on natural gas look at incorporating this green gas into their mix. Regarding the transportation sector has taken the lead in recent years, we are seeing particular interest from the natural gas utility industry and institutions with many already announced plans to increase purchases of renewable natural gas as part of their overall fuel supply. We believe this increased demand will allow us to find good off-take partners for our green gas under long-term contracts, thus giving us better long-term visibility into the cash flows from these projects. At the end of 2019, total assets in development reached 321 megawatts. We expect our assets in development to continue to grow at a healthy rate. In addition, our operation and maintenance backlog grew at an impressive 22% to $1.1 billion, further strengthening our future recurring revenue base. As a key enabler of the low-carbon future, we look forward to disclosing more ESG-related data for both our customers and our investors. We are proud to report that in 2019 alone, Ameresco's renewable energy assets and customer projects delivered a carbon offset equivalent to over 11 million metric tons of CO2. This is equivalent to the carbon absorbed by almost 15 million acres of forest in 1 year. We are entering 2020 with outstanding long-term visibility, exciting market opportunities and a great competitive position and platform with the internal resources in place to benefit from this fast-growing market. 2020 should again be a year of records for Ameresco. I will now turn the call over to Doran to review the financials. Doron?

Thank you, George, and good afternoon, everyone. As I review the company's fourth quarter and full year 2019 financial highlights, I ask that you please refer to our press release and supplemental slides for more complete financial information. The investments we have made to build our advanced technology capabilities are beginning to pay off. We had record growth in project and O&M backlog as well as another solid quarter of increasing our assets in development. Our Smart Energy Solutions project backlog at quarter end was $2.3 billion, comprised of $1.1 billion in contracted backlog and $1.2 billion in awarded projects, with $290 million of new awards won during the quarter. Notably, our contracted backlog of $1.1 billion grew 52% year-over-year to a new record high, adding to our clear visibility for 2020 and beyond. Our assets in development reached a record 321 megawatts at the end of the year, representing 80% year-over-year growth. We added a net 34 megawatts in Q4, including a number of new RNG opportunities and a large comprehensive microgrid project in the C&I sector, which we look forward to talking about more in the future. These new additions reflect our ability to capture market share in the growing green gas and microgrid markets through Ameresco asset ownership. Fourth quarter revenue of $307 million, reflected very strong growth, as we converted the large federal government contracts in our awarded backlog into contract backlog. Full year revenues increased 10% to $866.9 million from $787.1 million last year, driven by strength in the projects business. Our annual results were negatively impacted by a decline in RIN prices, reducing gross profit, net income and EBITDA by approximately $7 million, $4.3 million of which directly impacted Q4. However, since year-end, we have proactively taken advantage of the recent rebound in RIN prices by hedging more of our expected production. We believe this strategy will decrease the impact of RIN volatility on our 2020 results. Offsetting the RIN pricing impact was the retroactive extension of the 179D tax deduction that increased fourth quarter and full year net income. This benefit was recognized fully in Q4 2019 and included $4.2 million or $0.09 a share for projects completed in 2018 and $3.3 million or $0.07 per share for projects completed in 2019. The 179 D benefit will continue through the end of 2020. Now let me provide some color on our financial expectations. 2020 should be another year of solid revenue and earnings growth. Supported by our strong backlog, Ameresco expects 2020 total revenue to be in the range of $910 million to $980 million, representing 9% year-on-year growth at the midpoint. We are forecasting adjusted EBITDA to be between $102 million to $112 million, representing 17.5% growth at the midpoint. Non-GAAP EPS is expected to be in the range of $0.86 to $0.96. We anticipate gross margin will be in the range of 18.5% to 19.5%, due to a greater mix of lower-margin projects in our contracted backlog that will be executed during the year. Interest and other expense will grow to approximately $17 million to $19 million as we continue to finance additional company-owned assets. We expect an effective tax rate of approximately 8% to 12% for the year, as the company continues to benefit from the extension of the 179D tax deduction. This guidance excludes the impact of any noncontrolling interest activity and any additional charges relating to the company's restructuring activities as well as any related tax impact. Now I'd like to turn the call back over to George for closing comments.

Thank you, Doran. Here are 4 points I would like to leave with you. First, market continues -- conditions are strong, and Ameresco continues to gain recognition for our flexible and great value propositions. Second, we expect to have a strong 2020, thanks to our substantial contracted project backlog and our fast-growing asset development pipeline. Third, the investment that we have made in technology, people and platforms should benefit Ameresco and its shareholders in 2020 and beyond. And fourth, we believe that we are in the early stages of this industry's growth as we continue to drive towards our mission, a sustainable, low-carbon future. We look forward to seeing many of you at our upcoming investor conferences. And with that now, Valeri, we would now like to open the call to questions. Thank you.

[Operator Instructions]. Our first question comes from Chris Van Horn of B. Riley FBR.

So I just wanted to talk about the guidance for a minute. Could you give us a sense of the puts and takes on that -- on the revenue range? Is it mainly due to timing of awards? Or are there other macro factors that you might be thinking about there?

Yes. I think my take -- it's Doran, is it's probably more about timing of converting awards to contracts than it is about actually getting awards when I look at that range.

And we have very good position regardless to how much revenue we expect to come from executed contracts and how much it comes from awarded contracts that we plan to convert. But we felt pretty good with the range that we have given. I don't know if you want to add anything?

Okay. Got it. And then you mentioned in your comment around the outlook that gross profit will grow at a higher rate, but that margin might be somewhat affected by mix. Anything specific to call out there on the mix side?

Yes. That is a good point. What is happening, the business is shifting a little bit, and we get more, what I would call, the design-build projects. And a good example might be couple customers where we were designing the plant's assets that which we will own and operate at the end of -- during the process, they say, no, we will own those assets, so you will design, develop them and build them for us. And the margin on those particular projects, of course, the risks are substantially lower, not similar to the margins that we get on the performance contracts. And we have several, what I'd call, legacy, some of the streetlights jobs that we have and some of the design-build jobs that we have for the federal government that they are considerably lower margins. And some of them, they have 2-year time horizon to get implemented. But one of the good [indiscernible] whether it's we built an asset for a particular customer or a street lighting job for particular municipality. We have a pretty good trailing operation and maintenance contracts associated with those particular clients and -- that give us pretty good margin on the O&M contract. In addition to that, many of these clients, they are our customers. There will be many repeat business associated with them. So even though that on the top line, we might see that the gross profit margin dropping a little bit. But what is accretive or the profit point of view, they're contributing considerably. So it's a good thing at the end of the day.

Yes. Okay. Got it. Last for me. SG&A was flat from a dollar perspective on really good, strong growth in revenues. Are there -- is that just based on the operational controls you have in place? Or is there anything else that we should be thinking about there?

No. It's the operational control that we have in place. We're always cognizant of the fact, one of the things in a growing company, and especially based on the fact that last year, we had to invest about $5 million in OpEx in, what I call, peoples and platform in order to be able to compete with this competitive market, the advanced technology market. But on the other hand that we have done a good job or may be fine tuning the organization a little bit and make the additions where we need them and the substractions where they are not as effective.

Okay. Got it. And congrats on the quarter.

Thank you.

Thanks, Chris.

Our next question comes from Noah Kaye of Oppenheimer.

A couple questions to run through here. First, what were the megawatt equivalent placed in service in 2019?

Placed in...

Yes. How many megawatt were placed in service...

Placed in service.

36 or 34?

34 plus.

Okay. And what are you assuming for 2020?

About 50. And what I'd like to point out that we were a little bit disappointed on our installations for what we placed in service for megawatts this year. And you might know, most of our assets that we will plan into place in service, they were in Massachusetts and Rhode Island, and some they were in New York. But especially in Massachusetts and Rhode Island, we had substantial delays because of the cluster studies that the utilities they have to do. And that set us back, I would say, 6 to 9 months of about 20 megawatts of installation. And actually, some other projects were impacted and shifted time to a later date.

Okay. And then you added 25 megawatts of the RNG pipeline in development. So can you tell us or remind us when do you see the 66 megawatts coming online? And when will those projects reach full ramp, just the general schedule for the next couple of years?

Yes. We have given some kind of color before. McCarty Road, it would be at the end of this year. Otherwise, it started somewhat late in the fourth quarter. Then we have two more, Keller and Forward, that they will be coming at close to the end of next year. Then right now, we plan -- we're hoping that we will have three for the year after that. That's the plan we've built in the organization to be able to get 1, 2 and then 3 of these plants in service. And what I'd like to point out on -- regarding on the green gas development, it's an area that we put a lot of emphasis because of what's happening in other markets besides the transportation sector. And we hope that by the end of this year, we'll be able in a position where we will have executed some long-term contracts with some of the good credit-worthy entities. And that will give us better visibility as far as the revenues, earnings and cash flows associated with this project.

Okay. And that -- thanks, George, for anticipating my next question. So you noted in the release that RINs were a $7 million drag in '19. What RIN price are you assuming in 2020 guidance?

We don't disclose that number, but I will say you that more than 50% we have hedged in the marketplace right now. I think it's 52% to 54%, and we're continuing to find opportunities. But pretty much, though, we put those hedges, the last couple of months, and it does not take a great scientist to figure out what those prices are. And I think that's -- you will find that we are around the neighborhood of what the numbers they are trading.

Or maybe the RIN prices because of the court rulings have doubled in the last couple of months. So you say your hedges on after price is doubled?

We put the hedges after the increase.

Yes. Okay. Very good, very good. So longer term here, if I listen to your previous answer, you're indicating that there's potential to get long-term offtakers for some of these projects. How close do you feel you are to signing some of those contracts? Is that a 2020-type announcement you expect?

I wouldn't comment on it, most likely towards the end of the year. We get going back and forth, and some of them, they are large institutions or some of the utilities they take time. But I will say this much, though, that we have a lot of, a lot of interest.

Okay. And then...

We got to get them to the prices as we like too for the long term. Many of them, they -- they're trying to get 20-year contracts.

Right. 20-year contracts you said?

Well, we had a couple of people that we are looking for. Yes, that doesn't mean we're going to give them.

Okay. Just one quick one on the project side. And congratulations on this massive increase in contracted backlog. I mean this is, obviously, by far and away, the biggest number you've had going into a year. Just want to understand, as you look at what's in that backlog as far as mix, do the mix headwinds that you are calling out for 2020, do those continue in 2021 based on the mix of what you booked in the contracted backlog? Or as you look out a little bit farther beyond 2020, is the margin profile look a little bit better? How should we think about that?

I will say this much. The headwinds that we forecasted in 2020, it has a lot to do, of course, with the mix of the project. And the fact that -- the other thing on these projects that people have to realize is that many of them, they are 2-, 3-year projects and is two, three year construction. However, having said that, in 2021 and further down the road, we're seeing that the margins gradually will start be coming up. And the other thing that 2020 that it [indiscernible] a little bit, let's say, you get 20 megawatts of solar plants that have got delayed, deferred by 6 to 9 months, if we get them completed this past year, they will contribute, if you go back to our analysis, $0.25 million EBITDA per megawatt, we would have another $5 million of EBITDA coming in this year. So...

Our next question comes from Craig Irwin of Roth Capital Partner.

So George, when we take the different disclosures over the course of the year for EBITDA by line of business, I know the math is not perfect, but it walks us into a number for the fourth quarter for the assets business, it's actually more than $20 million, more than 70% of the EBITDA in the quarter of the assets business and materially higher than any number you've had in history. Can you maybe describe for us things that were driving strength in the asset business in the fourth quarter? Were there any specific items that you were able to monetize? And how does this progress sequentially going into 2020? And should we expect to build incrementally on this in the fourth quarter of 2020 as we continue to commission new projects?

Yes. As we have said in the past, periodically because we want to -- we don't want to overleverage our balance sheet. And if you look at our backlog, and you'd say, "Oh, George, you guys have 321 megawatts of assets in development." A good chunk of that, we will be monetizing and especially, will we find the rates or the cap rates that people will underwrite, especially solar projects. So in the fourth quarter, we did monetize not one, some projects that we have in construction rather than take building it for our own balance sheet, we sold them. And you will see us continue to do that periodically. We did it in the past. And it will be part of our business. Even this year, we have in our plan. But most likely though, we will not wait till the last -- the fourth quarter to do that. And we plan to do it throughout the year.

Okay. Excellent...

But the EBITDA contribution from the assets, when you look at it from the whole company on a year, and that's why we're driving the recurring revenue, we are -- for the year up to 68% when you combine O&M and assets.

Very strong, very, very strong.

Craig, let me jump in one quick thing. If you're looking at the supplemental slides, just to note that we did make a slight adjustment the way we're allocating our corporate OpEx for...

That's another point.

Creating those doughnut charts this time. So just note the difference in the footnote on that slide. We kind of took a look back at that and decided that it would be more appropriate for us to allocate this on the full year based on the percentage contribution of revenue of those varying lines of business as opposed to where it was excluded, okay? As you're analyzing this, it's worthwhile taking a look at the comparison of those two footnotes, okay?

Okay. So then can we talk about the projects that are likely to start contributing in 2020? The new projects that you'll be building this year that you should commission before the end of the year. What are the specific geographies? And should we expect above or below trend start-up and then intermediate-term profitability on these projects based on geography or other operating parameters, like it's a landfill gas plant or a wastewater plant or maybe something else?

We have one plant that will be coming on this year, you're talking about the renewable natural gas plant. And that's the McCarty Road plant and that will not contribute any revenue or EBITDA this year. We plan to see that plant coming late in the fourth quarter. If I were a betting man, I would say Christmas holidays and so on and so forth in trying to develop this plant, you won't see much in the -- until the first quarter. And the other two plants now that will be coming in 2021, right now, they are scheduled for contributing late, I will say, the third and fourth quarter and primarily the fourth quarter of 2020.

Okay. And then given the geography as in California that you qualify for both RIN generation and the low-carbon fuel standard, would this be typical in profitability?

The plants, the two plants that are Forward and Keller, that they are in California, yes, the other one is the McCarty Road that's in Texas, we're trying to get it there. And we think we might be able to do it. But right now, I wouldn't plan on it. Do you want to add that?

No.

Okay. And then last question, if I may. Reading the details of the Canadian -- sorry, Doran, I think you want to say something?

No, go ahead, Craig.

No, go ahead.

Reading the details of the Canadian clean fuel standards and what's expected to come out this summer, many people are interpreting what's been said to say that basically, customers can start banking carbon credits for compliance in the future of green gas projects starting probably the end of June of this year. It seems like there's about to be a flood of green gas projects now in Canada, and we'll have 2 significant markets, not just California and the other LCFS markets, but the Canadian LCFS markets coming on as well. Can you maybe talk about the breadth of your capability to handle incremental projects. I know you mentioned your balance sheet as a constraining factor. But would you maybe take on another five projects, if you could find credible projects with really attractive economics that could generate attractive returns over the next few years?

Yes, yes, yes, we can. The only thing that -- and that's why in the past, I did not go very aggressively in this business, even though I think we have got -- have the capabilities, better capabilities than anybody else in the business because we hold the way we can develop our own projects, design them, build, operate them and maintain where many others, they buy other people's project. The thing that has helped me back in the past, exactly what happened to us this last quarter, being able to have, what I call, reasonable long-term contracts, 10-year contracts and so on. And even though we might sacrifice and take lower price than what we might get on the open market for RINs, it will give us better leverage of this project and better return -- better predictability and better return on equity at the end of the day because many of these projects that we have right now, we have 50% equity, 50% debt. So even though from [indiscernible] point of view, they look great, they put more strength on your balance sheet. So -- but we have the capabilities, and we are building up. I say we're going to go to 3 projects by 2022. And if we could get the projects, we could build that a little bit sooner. The other thing I want to caution you, Craig, and everybody else on the call, it's -- at the license, many -- and permitting various plants, the plants that we have in California, they are very, very difficult site, whether the transmission line that you have to interconnect into the main pipeline or the local permitting of this plant, that's the biggest bottleneck that we have right now. And that's why the timing of -- we are cautious on the timing of these projects. It's difficult to permit. I would say that much. But on the other hand, once you get them up and running, they are great assets to have.

One last question I should ask on the live call. Your contracted backlog $1.1 billion, I think it was almost $290 million higher than your last record, I think, at just under $820 million. You did increase your guidance above sort of where we and the Street were looking for, for this year, but that magnitude of strength in the contracted backlog kind of suggest that you're looking at contracted backlog is maybe longer in duration than what you've seen in contracted backlog, looking back over the last many quarters?

You hit the nail on the head. Yes, you hit the nail on the head. They are longer durations. And the other thing that you have with some of these longer duration contracts, you don't have that much flexibility to accelerate revenues and so on. They are financed over the three year terms. The payment schedule is over three year terms or two whatever the case might be for 30 months. So you built according to the schedule that it's on those plan. But on the other hand, it's great, great visibility. And we lever the company by taking some of the design-build opportunities where they might be with existing client with the federal government. And you heard about the great post office job that we did in New York, but the post office is a great client of us. We're doing some assets that we will own about five of their facilities and so on. So it's a good opportunity.

Well, congratulations on the strong progress, again another great quarter.

Thank you very, very much. Thank you, Criag.

[Operator Instructions]. Our next question comes from Pavel Molchanov of Raymond James.

First about the quarterly progression. So this past year was unusually back-end loaded, more than 1/3 of your full year revenue came in Q4. Do you anticipate 2020 being equally back-end weighted?

I will say not as much, but it will be back-end weighted as far as the third and the fourth quarter. And Mark knows the schedule of this project as much better than I do.

No. I think that's just generally, that's typical. I mean, I think 2019 was a little bit more unusual just given some of the large federal projects that we contracted late in the year. But I think next year would be a little bit more normal compared to previous years. But generally, just given construction schedules and seasonality, it's generally heavier in the back half of the year.

Yes, it's a good point. And we had almost $35 million or close to it of what we call investments in development. But once all those contracts were executed, immediately that goes into revenue because we have that this year. And if you -- that backlog, it was developed for the last 2 or 3 years. And it was imperative that those contracts get executed by the end of the year because of the IDIQ expiration date, the sunset date here. And I'm glad to say that each and every one of those contracts did get executed.

Understood. Let me ask a more kind of high-level conceptual question. We're seeing more and more private sector companies, large Fortune 500 enterprises, setting these low carbon or even 0 carbon targets. And historically, your business has been more oriented towards the public or the nonprofit sector. Are you seeing actual uplift in business from these ESG driven corporate decarbonization initiatives?

Yes, very, very much so. I mean, we have talked before Kaiser Permanente. And actually, just about every major bank is talking about clients now. And we're doing design build. So we can pivot, we're doing a considerable amount of work right now what I would call for the C&I sector, primarily, solar plants or combined heat and power and microgrids resiliency issues that they have faced. But the ESG issue, that's why I mentioned it on my remarks, is becoming the driver. And it's a driver because the economics of all these advanced technologies have come down, and these projects, they pencil out for the particular customers. And Doran, do you want to say something?

No, Pavel, what I would say is that the C&I customers are starting to look at the cost of carbon as they evaluate these projects. And taking that into account when considering the cost, it's a different calculus than your traditional ESPC calculation, but they are moving forward with it. And I'd say that the ESG motivation is definitely there for all of these enterprise contracts that we've gotten on the solar side with nationwide coverage. We've got -- as I mentioned in the comments, we've got a microgrid coming in the C&I sector that's going to be an asset on the balance sheet, that's a very exciting move. So it's definitely happened.

I'm showing no further questions at this time. Ladies and gentlemen, this does conclude today's conference. Thank you for participating. You may all disconnect.

Thank you.

Thank you, everybody.