Portland General Electric Co (POR) 2017 Q3 法說會逐字稿

Good morning, everyone, and welcome to the Portland General Electric Company's Third Quarter 2017 Earnings Results Conference Call. Today is Friday, October 27, 2017. This call is being recorded. (Operator Instructions)

For opening remarks, I will turn the conference over to Portland General Electric's Manager of Investor Relations and Corporate Finance, Chris Liddle. Please go ahead, sir.

Thank you, Ayeia. Good morning, everyone. I'm pleased that you're able to join us today. Before we begin our discussion this morning, I'd like to remind you that we have prepared a presentation to supplement our discussion, which we'll be referencing throughout the call. The slides are available on our website at investors.portlandgeneral.com.

Referring to Slide 2, I'd like to make our customary statements regarding Portland General Electric's written and oral disclosures. There will be statements in this call that are not based on historical fact and, as such, constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from forward-looking statements made today.

For a description of some of the factors that may occur that could cause such differences, the company requests that you read our most recent Form 10-K and Form 10-Q. Portland General Electric's third quarter earnings were released via our earnings press release and Form 10-Q before the market opened today, both of which are available at investors.portlandgeneral.com.

The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. This safe harbor statement should be incorporated as part of any transcript of this call.

Leading our discussion today are Jim Piro, CEO; Maria Pope, President and incoming CEO; and Jim Lobdell, Senior Vice President of Finance, CFO and Treasurer. Following their prepared remarks, we will open the lines for your questions.

Now it's my pleasure to turn the call over to Jim Piro.

Thanks, Chris. Good morning, everyone, and thank you for joining us. Welcome to Portland General Electric's third quarter earnings call and my final call as PGE's CEO. It's been an honor to serve all our stakeholders in this capacity. It's my great privilege to hand the reins over to Maria, who will take over for me as CEO and join our Board of Directors on January 1.

Maria brings to this role a broad range of experiences in competitive fields, including banking, forest products, apparel manufacturing and high tech, that has prepared her to take on the challenges and opportunities inherent in today's fast-changing energy marketplace. I am pleased to have a leader with Maria's capabilities, who will continue to champion interest of our customers, community and shareholders and ensure that we will continue to deliver safe, reliable and affordable energy to our customers. You will hear from Maria later in the call.

Now let's turn to Slide 4 to review our financial performance. We reported net income of $40 million or $0.44 per diluted share in the third quarter of 2017 compared with net income of $34 million or $0.38 per diluted share in the third quarter of 2016. Our strong earnings were the result of an increase in energy deliveries across all customer groups related to increased customer count and usage as well as favorable weather conditions. These results were partially offset by higher power costs, an increase in depreciation and amortization, a decoupling adjustment and higher taxes. We remain pleased with the strength of our local economy and the growth of our customer base, and we are reaffirming our full year 2017 earnings guidance of $2.20 to $2.35 per diluted share.

Now onto Slide 5 for an operational update. Our employees and system performed exceptionally well during the August heat wave, demonstrating reliability and resilience during the stress of sustained high temperatures of more than 100 degrees over several days, setting an all-time summer peak of 3,976 megawatts on August 3. Overall, our generating plant availability for the quarter was excellent at 96%. Additionally, we continue to be ranked in the top quartile for customer satisfaction for residential, business and key customers, according to Market Strategies International and TQS Research.

On to Slide 6 for an update on the economy and our customers. This week, Portland took the top spot on Forbes' annual ranking of the best places for business and careers based on its strong economic outlook and surge of talent. While employment growth has slowed compared to the last 2 years as the economy reaches full employment, unemployment in our service area remained low at 3.9% and lower than the U.S. rate of 4.2% for September.

Recently released data shows growth of 8.7% in Portland's median household income for 2016. This was the fourth largest annual percentage change in the nation. The continued strength of Oregon's economy contributes in our total customer count of approximately 1.3% compared to the third quarter of 2016. And building permit trends suggest continued growth, with an increase in year-to-date building permits of 6.4% in our service area compared to 5.7% nationally.

As we forecasted at the beginning of the year, we continue to expect weather-adjusted energy deliveries in 2017 to decrease between 0 and 1% year-over-year, primarily driven by ongoing energy efficiency efforts, which are lowering the residential and commercial load growth rates. However, during the next few years, we expect to transition back to long-term positive annual energy delivery growth of approximately 1%, which is net of 1.5% reduction in deliveries due to energy efficiency. This outlook is based on the extension of growth in the high-tech sector, including several recent announcements of new data centers and the continuation of strong in-migration.

Turning to Slide 7. I'm pleased to share that this quarter, we reached agreement on all issues of our 2018 general rate case with the Oregon Public Utility Commission staff and the participating stakeholder groups. We expect a final order from the commission later this year. The primary driver of this case was support for investments we are making to keep our system safe and reliable. Specifically, this includes our efforts to strengthen the power grid with earthquake protection measures and improved cybersecurity, replace and upgrade aging transmission and distribution equipment in substations and entering into the Energy Imbalance Market, which we joined successfully on October 1. Jim will go into more details around the terms of our settlement shortly.

Now I'd like to turn the call over to Maria, who will share an update on our recent entry into the Energy Imbalance Market and the status of our 2016 Integrated Resource Plan.

Thank you, Jim. On behalf of all of us at PGE, we're enormously grateful for your leadership and your dedication to all PGE stakeholders. Your unwavering commitment to operational excellence has challenged us to embrace new technologies and constantly benchmark our operations against the very best, driving us (inaudible) operating performance.

Moving on to Slide 8. With our entrance into the Western Energy Imbalance Market, we are now buying and selling energy on a 5-minute interval, which helps us better integrate renewable energy and lowers the cost for customers.

Turning to Slide 9. In August, we received acknowledgment of the majority of our 2016 Integrated Resource Plan. In order to meet our capacity need of 350 to 450 megawatts, we remain engaged in bilateral discussions with owners of existing regional resources. Additionally, we requested a waiver from the OPUC competitive bidding guideline. If granted, we will work towards definitive agreements. We expect that this process will result in an outcome beneficial for all stakeholders, and as such, we plan to withdraw our air permit applications for thermal resource development at the Carty 2 and 3 sites.

In August, the OPUC passed on our proposed action on renewable resource and requested that we continue to work with parties on a revised plan. We presented our revised plan to the commission earlier this month, which reduces our request for renewable resources to 100 average megawatts from 175 average megawatts. The commission has asked us to file a formal IRP addendum, which we will file in mid-November and hope to receive a response from the commission in the first quarter of 2018. This is an important step as we continue to work towards Oregon's 50% 2040 renewable portfolio standard.

Additionally, we will be moving forward with an RFP process for renewable resources in parallel so as to ensure adequate time for bidders to capture 100% production tax credits, which means completion of construction by the end of 2020. We have identified a potential benchmark resource and are engaged in negotiations.

Pursuant to the OPUC acknowledgment of our IRP and in accordance with House Bill 2193, we will file an energy source proposal by mid-November. We propose about 39 megawatts of energy source to be developed over the next several years, which will include a number of projects at a variety of locations, including existing generation, distribution and customer sites. The capital cost of the projects is estimated to be between $50 million and $100 million, which is not included in the capital expenditure forecast.

And now I'm pleased to turn the call over to Jim Lobdell.

Thank you, Maria. Let's move to Slide 10 for an update on our 2017 general rate case. PGE, OPUC staff and parties reached a stipulated settlement that resolved all remaining aspects of the case. The 2 key -- the key items are a return on equity of 9.5%, a capital structure of 50% debt and 50% equity, a rate base of $4.5 billion and an increase in the cost recovery for major storms from $2 million to $2.6 million. The settlement reflects an estimated increase in customer prices of approximately 1.2% effective January 1. The change in prices will be updated for power costs in November and finalized in December, following a commission order.

Moving on to Slide 11. We have provided an update on the Carty Generating Station that went into service in July 2016. As previously noted, we are pursuing legal action against Liberty Mutual and Zurich North America, the 2 sureties who provided the performance bond in connection with the Carty construction agreement. On July 10, the Ninth Circuit Court of Appeals held that the International Chamber of Commerce tribunal will decide whether the lawsuit is arbitrable in the International Court of Arbitration. An evidentiary hearing on this issue is scheduled for April 9, 2018. For more details, please refer to our 10-Q.

On to Slide 12, which shows our earnings drivers for the quarter. First, gross margin increased earnings by $0.13 due to the following: an $0.08 increase due to favorable deliveries in all customer sectors, reflecting an increase in customer count and average use in the residential sector, an increase in commercial irrigation and pumping loads and continued expansion in the high-tech sector; a $0.06 increase due to favorable weather; and a $0.01 increase for other miscellaneous items, partially offset by a $0.02 increase in the estimated refund from the decoupling mechanism. Second, a $0.03 decrease due to higher depreciation and amortization expense due to capital additions, followed by a $0.02 decrease related to an increase in our effective tax rate, primarily due to lower federal and state tax credits. And finally, a $0.02 decrease due to miscellaneous items.

On to Slide 13. We have provided a summary of the company's current capital expenditure forecasts from 2017 to 2021. We have changed the presentation of our capital forecast to include 5 years of expected investments to provide safer and more reliable service to our customers. This outlook reflects the results of our strategic asset management efforts, which take into account age, condition and other factors. Some examples of these efforts include: substation reliability upgrades; PCB transformer testing and replacement, underground cable replacement; third, a hydro repowering; system, seismic and cybersecurity hardening; and the West Side hydro structural and reliability upgrades.

Additionally, we are investing in a new customer information system and technology tools called Customer Touch Points, which is scheduled to go live in the second quarter of 2018; as well as the foundational work necessary to offer customers more flexibility in pricing and program options. This investment is one of the factors under consideration as we evaluate the need for our 2019 general rate case, which we will update on our plans at our next earnings call.

Finally, we have not included any capital expenditures on this slide related to potential projects pursuant to our 2016 Integrated Resource Plan.

On to Slide 14. We continue to maintain a solid balance sheet, including strong liquidity and investment-grade credit ratings. On July 20, S&P revised PGE's outlook to positive from stable, based on incremental improvements in the utility's business risk profile. For 2017, we are issuing $225 million of first mortgage bonds at an interest rate of 3.98%, $75 million funded in August, maturing in 2048; the remaining $150 million will be funded in November and maturing in 2047 and will be used to repay the remainder of our bank loan due next month. In addition, we do not expect to issue additional first mortgage bonds this year.

As shown on Slide 15, we are reaffirming our full year 2017 earnings guidance of $2.20 to $2.35 per diluted share. Currently, we expect to be towards the middle of the guidance based on the following assumptions: a decline in retail deliveries between 0 and 1%, weather adjusted; normal hydro conditions for the remainder of the year based on current hydro forecast; wind generation for the remainder of the year based on 5 years of historic levels or forecast studies when historical data is not available; normal thermal plant operations for the remainder of the year; depreciation and amortization expense between $340 million and $350 million; and operating and maintenance expense between $555 million and $575 million.

Back to you, Maria.

Thank you, Jim. Over the past year, the officer team has been working with our board on a corporate strategy to respond to market forces. Throughout the process, (inaudible) customers and stakeholders. And we'll be engaging with our regulators on strategy as we move forward.

We know that the world is changing, driven by rapidly evolving technology and new customer expectations. In addition to providing safe, reliable and affordable energy, our customers also want cleaner and more secure energy. We are working to incorporate more renewables, reduce carbon emissions, including within the transportation system, and identifying new, cost-effective technologies to help manage loads. For example, the city of Portland and Multnomah County have established a goal to meet 100% of their community-wide electricity needs with renewables by 2035 and 100% of their community-wide energy needs with renewable energy by 2050. And we expect more to follow.

To meet our customers' changing needs, we're exploring additional smart grid investments, including the reliability investments that Jim Lobdell outlined earlier. As you can see on Slide 16, at a very high level, these include: investments to implement and manage grid solutions that meet consumers' resiliency and sustainability needs, including new communication systems, distributed automation and data analytics; investments to seamlessly integrate our customers' energy resources such as distributing generation; and further investments in battery storage technology to provide grid stability, flexibility and the capability to integrate additional renewable energy.

These smart grid initiatives create an opportunity to engage our customers, optimize our assets and maintain high-reliable power service for our customers that they've come to depend upon. At the same time, we remain committed to meeting our operational and financial goals and maintaining our high level of customer satisfaction with continued emphasis on employee and public safety. As our plans continue to develop, I look forward to sharing more details with you.

And now we're ready and available for questions.

(Operator Instructions) Our first question is from Julien Dumoulin-Smith with Bank of America.

Congratulations, Jim, and a very formal warm welcome here to Maria. So perhaps just first, on the capital budget, good job there. Curious, how do you think about run rate on spending? Obviously, you all look every year around this time at your capital budget, so you've kind of seen a pretty material uptick here. How do you think about this relative to the sort of the ongoing rate? You discussed a certain cadence of substation investments, et cetera. Or actually, could we see a further acceleration in light of some of these other elements you've discussed, smart grid, et cetera? And again, I'm excluding, for the purpose of this conversation, the very discrete generation items we all know about.

Okay. Good question, Julien. So as I mentioned in my talking points, we've been looking at our distribution system very, very closely. We've got like 186 substations, and 69 of those have been identified as high risk. We've got a lot of aging cable that's out there that's from the 1960s through the 1980s. And then we've got some segments of our system that really presents some high risk to our customers. So we're continuing to focus on that.

The uplift in the CapEx table really reflects what we have in front of us as far as what we think we know for cadence for the next few years. We do see that it will carry beyond that, but I'm not, at this particular point in time, ready to put that in the CapEx tables. In addition, as Maria had pointed out, there is other work that we plan to do to the system beyond trying to maintain it and preserve it that she is alluding to, and we are working through those particular plans at this point in time. And as Maria had pointed out, we will provide you more detail about that in future calls.

Got it. And so just to be clear on that, we should not necessarily expect to wait until the next year's third quarter call for kind of an update on those other items you just alluded to.

I can't tell you that at this particular point in time. Like I said, we are still working through our plans.

Got it. Okay. All right. Fair enough. Then coming back to those discrete generation items, can you talk a little bit about how you think about the use of unbundled RECs as part of this new average 100 megawatts?

And then secondarily, with respect to the waiver, how are the -- if I'm stating this appropriately, how are the negotiations going with respect to potentially soliciting and acquiring other assets outside of the competitive process? Presumably, if you got this waiver, you would have some generation in hand already to file as an alternative, right?

Let me take the second part of your question first. With regards to the waiver, we expect to receive that in the beginning of December, and we are currently in discussions with parties that own existing resources in the region. And we'll have more to discuss probably in the first and second quarter calls with regards to how those materialize, but we would expect to be able to move forward with those. We have a very healthy list of interested parties.

With regards to your first question, with regards to RECs, the REC situation we have in Oregon is highly complex. We have unbundled RECs. We have -- and then we have different RECs with different lengths of time to be used, some of which we call golden RECs. And we look at all of these as we look at our REC balance. And as we move forward with a RFP for 100 average megawatts of renewable projects and the process with the OPUC, we will be managing our REC balance so that we do not build, given the earlier than -- or the excess RECs we currently have. So we will not be building our bank with this new renewable project that we are proposing.

Got it. Okay. So -- but just to be clear, there is still the potential here to move forward with a 100 average megawatt generation solution. It doesn't -- from your perspective, you don't necessarily need to be depending on RECs here, just to be clear.

No. We have a healthy REC balance that we currently have and existing. And when we -- part of our proposal to the OPUC was that we would not build in the next couple of years that REC balance with this new project.

Yes. And just to add...

We'll be divesting those RECs that would be generated from that project into the market.

Yes, just to be clear. This is a physical asset. This is not buying 100 megawatts of RECs. This is buying physical assets. We go short energy with the closure of Boardman at the end of 2020, and so this is to fill that -- some of that short position.

Right. Right. But your proposal would be to pursue the physical generation for the full 100 megawatts?

Yes. It's through pursuing of the physical generation that we're able to take advantage of the production tax credits and lower cost for customers quite substantially.

Our next question is from Christopher Turnure with JPMorgan.

Congratulations again, Jim. I wanted to just get a sense as to the regulatory strategy over the next several years. I understand you will update us on the fourth quarter call. But I guess a good way to frame the question would be, what prevents you from having to file next year and the year after? Is it better-than-expected load growth outlooks or high cost discipline? What would get you to that point of not having to file?

Chris, those are all the same things that we're evaluating at this particular point in time. So I'm not done with that evaluation. I haven't had conversations with all the stakeholders about the opportunity of filing an '18 -- or a '19 case yet.

Okay. And can you just kind of refresh our memory or my memory on the potential for regulatory lag in the near term?

It still is around 70 basis points.

Okay. And then just on the financing strategy, the capital plan has taken a pretty big step-up today, obviously, which is great to see. How much maybe debt capacity do you have on your balance sheet right now to be able to absorb that extra CapEx?

I think we have bonding capability of probably close to $1 billion. We do not see issuing any equity out there in the near term. I think the only time we get close to considering equity might be around a new large generating resource.

Okay. So we can kind of rely on that for the planning horizon of CapEx as it's laid out right now, excluding generation, no equity needs for that?

Currently, yes.

Our next question is from Paul Ridzon with KeyBanc.

Just wanted to reiterate that the CapEx forecast you laid out today does not include anything fossil or wins currently pending before the commission.

You're correct, Paul. It does not.

Okay. And then what was the wind capacity factor in the quarter? Or how much of a headwind was the wind? As I understand, it was below normal.

I should know that off the top of my head. Just give me a second, and I've got it here someplace. Do you have another question?

Yes. You've talked in the slide deck about Carty litigation being a 2- to 4-year process. Is that from today or from the original start of the litigation?

I think that is from today. Given where we are, the ICC process has to commence. It will not start until April 9, and that's just to determine the arbitrable-ness of the issues. And then we have to get past that to the evidentiary part of it. I think our case is still very, very strong, but it's just going to take time to get through that entire process.

And how should we think about the trajectory of the litigation costs and the financing costs? Are we going to have that for the next few years?

Yes. The appreciation and the return on the piece of capital that's not covered under that allowed incurring customer prices will continue to be a drag on earnings. And I think we said it's around $0.09 to $0.10. We see that continuing. Now legal costs will go up and down based on the activity of the cases, so we're trying to manage that as close as we can. We believe we have a strong argument to recover those litigation costs in addition to the capital costs, so...

That's $0.09 to $0.10, including litigation.

Yes.

And would that be recoverable from -- would that be damages you pursue from the demand -- the contractor? Or would you try to get that from ratepayers?

No. We believe that's part of the surety bond that allows us to recover those costs, and we will include that in our claims against the sureties, and then ultimately, the guarantee with Abengoa.

That's all my questions. If you haven't found it you can -- the capacity factor, you can just interject, I guess, later in the call.

No, Paul. It was in the mid-20s for the quarter. And it was actually 16% below quarter-over-quarter. So it's about 25% is what we're expecting.

Just a little more color on that. We had extremely hot weather in the quarter. And when we have that hot weather, at least the way the wind blows in the gorge, the wind doesn't show up when we have those hottest days. And so that's kind of consistent with the high loads that we saw, a lower wind capacity factor.

I correct myself. It was about 30%. It was down 25% from what we were expecting.

About 30%, down 25%?

About 30% was the capacity factor for the quarter.

For all 3?

Yes, for all units.

And how should we -- that weather phenomenon you talked about, when it's hot the wind doesn't blow, how does -- what does that do to earnings? Is it net neutral because you pick up higher load? Or there's no hard and fast rule, I guess, to think about?

There's no hard and fast rules. But I will tell you, on those hottest days or those coldest days, we just don't seem to see wind in the gorge because of the temperature inversion.

Our next question is from Michael Lapides with Goldman Sachs.

Congrats on a great quarter and, obviously, on the transition between you and Maria. How -- a couple just IRP questions and then one kind of housekeeping one. On the IRP, so you think you'll be able to start entering bilateral negotiations or discussions with people who own conventional generation. That include either just doing a PPA or a tolling agreement? Or does that also include potentially someone selling an asset to Portland General and putting in rate base?

The short list that we have includes both. And it would be predominantly existing -- it'll be -- it's all existing resources in the Pacific Northwest, which would be both hydro and thermal.

Hydro and thermal. So it's conceivable you could simply recontract, because part of what's driving this is, obviously, Boardman. But part of this is you have hydro contracts that are rolling off. There is a scenario where you could potentially recontract with existing hydro.

Yes, absolutely.

Great. I want to make sure I understand on the renewable side. You need 300 megawatts of -- or roughly 300 megawatts of roughly what would be nameplate or 100 megawatts of roughly megawatt equivalent generation. Am I thinking about that right? Or could that 300 be a significant...

Right.

Okay. And your project, the one you kind of mentioned as kind of -- I don't want to use the word stalking horse, but your company-sponsored bid in...

Self-build option.

Yes, self-build option. Is that a project that can be scaled up or down? Meaning, is that a site where it would still be economic if, let's say, it was a 200-megawatt nameplate instead of a 300-megawatt? I'm just trying to think about the flexibility.

Yes. No, I appreciate the question. And at this point in time, all of those discussions are confidential.

Got it. And then one kind of -- 1 or 2 housekeeping items. So you've talked about weather in the quarter versus last year. What was the weather impact versus normal?

It was about $0.06.

Okay. And you said the costs that are not recoverable in rates are roughly 70 basis points. I'm just trying to put some back-of-the-envelope math around that. That's kind of roughly in the $15 million to $16 million range. Or am I off on that?

You're off from that. It's around a $25 million range pretax.

My apologies, I was doing after-tax. And that doesn't include Carty litigation.

Correct.

Got it. So the Carty litigation is incremental to that. Okay.

And our next question is from Richie Ciciarelli with Guggenheim Partners.

It's actually Shar here. Most of my questions were answered, but I just want to get a little bit of the sense on your updated capital program. How much of your strategy is around grid mod and sort of smart grid? Some of your data planning automation is embedded in that capital program versus what normal base spend would be. And then just counter to that, what's the right podium where you would come out with additional visibility on upside potential around sort of the grid mod investments you discussed today?

Sure. So thank you for the question. We're currently working with stakeholders and regulators on this, so we don't have a specific time, as Jim mentioned, for coming out with an announcement. The -- and we will be at the OPUC in early November talking about smart grid and what we're doing there and our expectations for the future. So we're working with parties diligently on this. None of those investments are currently in the capital table that is presented in the presentation or in the 10-Q.

Okay, got it. And then just to follow up on that. Is there an opportunity to accelerate that spend into that current capital program, just given the needs and where you're -- obviously, where you're heading as far as renewables? Or is this sort of thinking outside of the current program?

This would be in addition to the current program, and we're working through those issues with regulators and stakeholders currently.

Okay, got it. And then just lastly, on EIM, it's interesting that you highlighted that on an investor deck. Is there sort of any upside opportunities from a growth standpoint from EIM? And what I mean by that is moving the system away from just being an automated, realtime administrative sort of program to something that could lead to additional infrastructure needs?

First of all, I think there are a number of opportunities as it allows us to integrate additional renewables into our system more cost effectively and overall will allow us to reduce cost for customers, which is important in terms of our overall strategy as we go forward.

(Operator Instructions) Our next question is from Travis Miller with Morningstar.

Question on the capital budget. Wonder if you could characterize the project sizes within that. Are we talking about a program here that has a lot of small projects? Or a program that would have larger ticket but fewer projects?

Well, I think it depends on how you characterize the different buckets. And Jim talked with you a little bit about the size of our system. In general, you're probably looking at a number of smaller projects but that would amount to a significant investment over time if we really make the 186 substations we have in our grid system capable of handling bidirectional flows of electricity and handling increased amounts of distributed resources on the system.

Okay. And then does the extra CapEx impact your dividend growth outlook for the next, call it, 2 to 3 years before you get over this larger set of capital spending?

No, I would not expect it to.

And we have a follow-up question from Paul Ridzon with KeyBanc.

Was that down 25% capacity factor versus normal or versus last year?

That was versus what we had in our budget, which is based on a 5-year average as well as expected forecast.

And did you -- is that baked into the $0.06 of positive weather?

Yes, it's all reflected -- it's reflected in power costs, but it's reflected in our financials that we reported.

So does the $0.06 weather have any negative component? Was it actually higher than $0.06, but there was a winter baked in there?

Yes. The $0.06 for weather did have the winter in there.

The wind?

Oh, the wind?

He's asking about the wind impact.

Yes, it had the cost. It had the reduction of wind. Yes, replacement of power costs associated with it.

So temperature drove higher than $0.06, but it's partly offset by the weaker wind.

Yes.

Thank you very much for joining us today and for your interest in Portland General. We look forward to seeing you in Orlando at the EEI Annual Finance Conference. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect. Everyone, have a great day.