SunPower Corporation (SPWR) 2014 Q4 法說會逐字稿

Good morning and welcome to SunPower fourth-quarter year-end 2014 conference call.

Today's call is being recorded.

If you have any objections, please disconnect at this time.

I would like to turn the call over to Mr. Bob Okunski, Senior Director of Investor Relations of SunPower Corporation.

Thank you, sir.

You may begin.

Thank you, Candy.

I'd like to welcome everyone to our fourth-quarter 2014 earnings conference call.

On the call today we will start off with an operational review from Tom Werner, our CEO; followed by Chuck Boynton, our CFO, who will then review our fourth quarter and fiscal year 2014 financial results.

We will then discuss our first-quarter 2015 guidance before opening up the call to questions.

As a reminder, a replay of this call will be available later today on the Investor Relations page of our website.

During today's call we will make forward-looking statements that are subject to various risks and uncertainties that are described in the Safe Harbor slide of today's presentation, today earnings press release, our 2013 10-K, and our quarterly reports on Form 10-Q.

Please see these documents for additional information regarding those factors that may affect these forward-looking statements.

To enhance this call we have also posted a set of PowerPoint slides which we will reference during this call on the Events and Presentations page of our Investor Relations website.

In the same location we have posted a supplemental data sheet detailing some of our historical metrics.

Finally, we will not be taking any detailed questions related to last night's announcement of our intention to form a publicly-traded joint Yieldco vehicle with First Solar.

We expect to file a public F-1 by the end of the first quarter which will disclose additional details about the proposed transaction.

With that, I'd like to turn the call over to Tom Werner, CEO of SunPower, who will begin on slide 3. Tom?

Thanks, Bob.

And thank you for joining us today.

I'll start by providing some high level comments on our announcement last night related to our intention to form a joint Yieldco vehicle with First Solar.

Then I will provide an overview of the quarter before discussing our performance in greater detail.

Please turn to slide 4. Because we anticipate filing our S-1 by the end of the quarter, we cannot comment on the specifics related to the proposed Yieldco vehicle at this time.

However, I wanted to briefly discuss the rationale for this strategic decision and explain why this is the right transaction for our shareholders.

We chose to partner with First Solar because we are the two most respected companies in the solar space with more than 40 years of total experience, 16 gigawatts of installed capacity, and industry-leading balance sheets.

Additionally, SunPower and First Solar each bring a diversified set of project assets based on complementary proprietary technologies and business models.

We believe this vehicle will enhance both Company's ability to finance and construct projects and in turn will drive long-term, stable returns for our shareholders through the joint venture as adoption of renewable energy expands across the globe.

Finally, we expect this strategic decision will provide us with a sustainable competitive advantage through lower cost of capital, improved visibility, stronger balance sheets, and attractive financing options for existing and future project sales.

Moving on to our quarterly performance, please turn to slide 5. We exited the year with strong revenue and earnings as demand was solid across all geographies and end channels.

Consistent with the trend over the last few quarters, ASPs were stable.

Our balance sheet remains strong as we ended Q4 with $1.2 billion in total liquidity.

In our power plant business, both the Solar Star and Quinto projects, remain on track.

Internationally we are executing well on our projects in France, South Africa and Chile where our merchant plant was fully connected during the quarter.

In China, the world's largest solar market, we continue to see strong pipeline momentum through our two joint ventures.

In distributed generation we saw solid demand in Japan, as well as strength in the US residential market.

Bookings in our North American commercial business were strong where our relationships with legacy customers enabled several repeat wins and we increased our commercial pipeline to $1.4 billion.

Finally, in distributed generation we made significant investment in our Smart Energy strategy and we will provide more color on these investments later on in the call.

Upstream, we executed well on our technology road maps and achieved record yields for our Gen 3 solar cell technology during the quarter.

Operationally the ramp of Fab 4 is continuing with first silicon still expected mid-year and our 2015 volume target remains unchanged.

I would now like to provide more color on each segment of our business, starting with power plants.

Please turn to slide 6.

In the Americas we grid connected more than 100 megawatts of our 579 megawatt Solar Star project in the fourth quarter.

We expect substantial project completion by the end of next quarter.

Also, construction of the 135-megawatt Quinto project remains on plan with completion expected by the end of the year.

In Chile, we dedicated our 70-megawatt Salvador merchant power plant in the fourth quarter.

This project is now selling power into the wholesale market at spot pricing.

We are also expanding our development efforts in the Americas and we see significant near-term opportunity in both Chile and Mexico.

In Europe, Middle East and Africa we saw solid progress in France and South Africa.

In France we are working closely with Total to expand our development pipeline, continue to see France as the top EU market for our high-efficiency products.

South Africa remains a key market for us in EMEA and our 86-megawatt Prieska project is on track.

Our 160-megawatt panel assembly factory provides us with a significant competitive advantage due to local content requirements and reduced supply chain costs.

We anticipate strong ongoing demand for solar power in this region.

In China, we continue to ramp our manufacturing and project joint ventures.

Our size, scale and experience is allowing us to further improve project performance and reduce installation costs.

We expect to install more than 250 megawatts in China this year.

And with a pipeline of more than 4 gigawatts we are well positioned to capitalize on the long-term growth potential in the world's largest solar market.

I'd now like to briefly discuss our DG business.

Please turn to slide 7. In the US, demand in our DG business remains strong.

We exited the year with increased bookings in both our residential cash and leased businesses.

We continue to see a strong preference from customers to own their systems, as cash and loan sales accounted for approximately two-thirds of our residential sales in Q4.

Customers choose SunPower not only for our industry-leading, high-efficiency solar solutions but also due to our ability to offer them a broad choice of financing options.

This also allows us to flexibly balance near-term cash flow generation while maintaining a longer-term retained value stream.

At the end of Q4 we had approximately 110,000 US residential customers, of which more than 27,000 were leases.

This large footprint shows that customers value our technology, our quality and our brand.

We are continuing to invest in customer-facing and back-end capabilities to drive reach, velocity and efficiency in both our channel and direct business.

We've launched Spectrum, which is our integrated customer management suite, and we have received favorable feedback from our dealer network to date.

We are also continuing to deliver on our digital platform initiatives including monitoring in our customer portal with record high levels of engagement with consumers both pre and post purchase.

As I mentioned earlier we see strong demand trends in our commercial business as evidenced by our 50-megawatt win at Southern California Edison in a recent competitive tender.

Q4 bookings from both new and repeat customers were solid.

With almost two-thirds of our 2015 revenue target already booked and a pipeline of $1.4 billion, we are well positioned in the US commercial market.

In Europe, we exceeded our revenue and margin targets during the fourth quarter.

Our recent restructuring program is close to completion and will drive better long-term profitability in this market.

Demand and pricing remain favorable and we are benefiting from our focused market approach, with Germany, France and Italy all showing sequential megawatt improvement.

In APAC, Japan remains a key DG market for SunPower, accounting for 27% of our overall megawatt shipments during the fourth quarter.

Our unique high-efficiency technology has allowed SunPower to maintain a leading share in the Japanese residential business.

Despite foreign exchange headwinds, we believe that Japan will remain a core DG market for us, and are excited about the opportunities that will be created as Japan deregulates their retail electricity market starting in 2016.

I would now like to update you on our Smart Energy strategy that we unveiled at our Analyst Day in November.

Please turn to slide 8.

As we discussed in November, we are positioning the Company for the next phase of DG market expansion, where solar power will become a mainstream energy technology.

We believe this transformation will be led by companies that can combine solar power with battery storage and energy management technologies into one integrated, collaborative and seamless ecosystem, enabling customers to exercise an unprecedented level of control over their energy consumption patterns.

We call this Smart Energy and our strategy is similar to how we have approached other parts of our business -- namely, to establish durable competitive advantage through better technology.

We made a number of technology investments in this area over the past year to position the Company to be a leader in this transition.

First, we worked together with Total Energy Ventures on an investment in an exclusive commercial agreement with Sunverge for integrated residential solar and battery storage systems.

Sunverge's technology uniquely leverages the combination of solar power and energy storage in a fashion that provides value for both customers and electric utilities.

Long-term, we see the integration of solar power and battery storage as a key element of Smart Energy, and our relationship with Sunverge accelerates the deployment of such solutions.

Second, we acquired SolarBridge, a leading micro-inverter company with you unique high reliability inverter technology.

This acquisition enables us to fully integrate the development of micro-inverter and other related module level electronics functionality directly with our high-efficiency panels.

Also, it allows us to create standardized system-in-a-box products that we believe will reduce installed costs, expand channels to market and improve system performance.

Our first integrated product release will be this quarter.

Third, we made a strategic investment in Tendril, an energy services and management company that provides a cloud-based infrastructure and analytics platform that will enable us to deliver personalized energy services to our solar customers.

Working with Tendril, we will be able to reduce customer acquisition costs and provide our customers with a powerful set of tools to reduce their overall energy bill.

Finally, to enable customers the access, control and freedom that Smart Energy provides, we continue to invest in our software infrastructure.

These improvements will drive increased effectiveness of our sales force, enhance our customer's experience, and provide improved monitoring functionality.

These investments in Solar Solutions, technology and data, combined with our customer-first approach to the market, opens up a significant opportunity for us to create significant customer value and expand our residential footprint globally.

With that, I would like to turn the call over to Chuck to review the financials.

Chuck?

Thanks, Tom.

Good morning and please turn to slide 9. For today's call I will focus my remarks on our Q4 performance.

Q4 was another great quarter for the Company, with $85 million of EBITDA and more than $120 million in cash flow from operations.

In summary, we executed well in all geographies and end market segments.

Again, our strong performance was led by our utility and power plant business, specifically Solar Star.

Additionally, we saw strong demand in our global residential and commercial businesses as North America bookings increased in both residential and cash.

Specifically on the P&L, non-GAAP revenue was in line with our forecasts as we executed well on our project commitments.

As Tom mentioned, we grid connected more than 100 megawatts of Solar Star in Q4, and expect substantial completion by the end of Q2, six months ahead of our original schedule.

Our non-GAAP gross margin for the quarter was 20.4%, as we benefited from stable ASPs and better mix in all three geographies.

Americas' margin was on plan, led by our large projects, but we also benefited from strong demand and margin contribution from residential.

EMEA margin rose significantly versus Q3, due to solid demand and good pricing.

As we had previously noted, APAC margins continue to be impacted by a legacy project from 2012 that we plan to complete by Q2.

In residential, our business was solid as we deployed 129 megawatts of residential products globally, including 54 in APAC, 26 in Europe, and 49 in North America.

In North America, 64% of our shipments were cash sales, while 36% were lease shipments.

Please note that cash sales to SunPower include sales to customers who choose loans from one of our financing partners.

Leased bookings were 20 megawatts in Q4 with total lease bookings of 222 megawatts, representing $840 million in net contracted payments excluding the residual value.

In our lease business, megawatts booked, recognized and installed were all up sequentially.

In addition, NCI for the quarter was $13 million.

Before moving on I'd like to discuss FX.

As you know, we have seen significant currency volatility.

We have a robust hedging practice in place for our contracted cash flows as well as our balance sheet.

Generally, a $0.01 move in the euro has a $400,000 impact to the P&L on an annual basis.

In addition, we have international supply agreements in US dollars and international projects in local currency that are not yet financed or sold and per our practice are not hedged.

These factors could impact our future margins until hedged.

Fourth-quarter non-GAAP OpEx rose $11 million sequentially, as we increased spending on our Smart Energy initiative, expanded our international development activities and costs associated with our proposed joint Yieldco vehicle with First Solar.

For the quarter, our factories ran at full utilization.

Additionally, we are continuing the construction of Fab 4 and are further implementing our new technology in Fab 2. We expect first quarter CapEx in the range of $40 million to $50 million, as we further build out Fab 4.

As we mentioned in our Analyst Day, we expect to formally change our segmentation reporting to customer segments from geographic segments starting in Q1.

We believe this change will provide better transparency as to how we are running our business and provide our investors with the historical data needed to do proper comparisons.

This change will be reflected in our first-quarter 2015 results.

Our GAAP results reflect a one-time charge of $57 million relating to a binding award in the [First Philip] case.

This charge impacted our GAAP results by $0.35 per share but had no impact on our non-GAAP results.

We expect to pay this award by the end of Q2.

However, this charge was more than offset by the GAAP benefit of Solar Star, as previously discussed.

We had a benefit of $429 million in revenue and $0.92 in earnings per share related to this change in the real estate accounting treatment to percent complete.

We also expect the cash benefit from collecting the $240 million Solar Star retention receivable in the middle of this year.

Moving on to the balance sheet on slide 10, at the end of the year we had approximately $1 billion in cash and $1.2 billion in total liquidity, giving us ample resources to pay down our $250 million convert that matures in March.

Inventory rose sequentially due to project commitments, primarily Quinto, though non-GAAP inventory turns remain strong at 9 times.

Our non-GAAP cash conversion cycle was 35 days, though DSOs rose as the EPC retention receivable for Solar Star continues to reside in short-term AR, temporarily increasing our DSOs until we collect the cash later this year when the project is complete.

Before turning the call back to Tom for guidance, I'd like to provide a brief update on our Holdco assets.

Please turn to slide 11.

We have updated our Holdco assets to 660 megawatts, primarily driven by our lease signings in Q4.

In relation to our Quinto project, it remains on track for completion by the end of the year.

In closing, our Q4 performance was solid as we executed across all segments.

We believe that our strategic approach to the proposed Yieldco venture will enable us to maximize project economics, lower the cost of capital, and generate significant shareholder returns.

With that, I'll turn the call back to Tom.

Thanks, Chuck.

I would now like to discuss some of the highlights of our guidance for the first quarter.

Please turn to slide 12.

For Q1 non-GAAP guidance is as follows.

We expect revenue of $410 million to $460 million, gross margin of 18% to 20%, net income per diluted share of $0.05 to $0.15, and megawatts recognized in the range of 240 to 270 megawatts.

On a GAAP basis the Company expects revenue of $420 million to $470 million, gross margin of 18% to 20%, and net loss per diluted share of $0.10 to $0.20.

Please note that our Q1 guidance includes the impact of the retention of certain projects in our balance sheet related to our previously disclosed Holdco strategy.

Capital expenditures in the first quarter are expected to be in the range of $40 million to $50 million as we continue to ramp construction of Fab 4.

Finally, we believe that the underlying business fundamentals for 2015 remain strong.

However, as a result of last night's announcement of our intention to form a joint Yieldco vehicle with First Solar, we are withdrawing our previously disclosed fiscal year 2015 guidance until we can finalize the impact of the proposed Yieldco vehicle on our financial performance.

We will provide an update at a later date.

For questions, in addition to Chuck, we also have Howard Wenger, President Business Units; Bob Okunski, our Senior Director of Investor Relations.

We'll take questions now.

(Operator Instructions)

Our first question comes from Ben Kallo.

Your line is open and state your company name, please.

Robert W. Baird.

Congratulations, guys.

Congratulations on the partnership.

Just on the residential portion of the business, it seems like you increased the amount in your Holding Company.

Should we infer that that will be part of the Yieldco or will you remain some type of option optionality there?

Ben, thank you for the question.

We're not going to take detailed comments on the Yieldco model but we would refer you to the S-1 that we'll file later this quarter.

Okay.

Got it.

And then as far as Japan goes, we've heard lots of headlines, headline risks there about curtailment.

Could you guys just talk about -- you had a strong quarter here but going forward how you view that business?

Ben, this is Howard Wenger.

Japan historically has been a really strong country for the Company.

We expect that to continue.

We're mainly in distributed generation, residential and commercial so the curtailment issue doesn't really affect us very much at all.

And also we think it has been a little bit overblown.

We're not seeing a real impact in most of the areas that we're working.

So, we think it's going to continue to be a strong market for the Company.

Got it.

And then, Tom, could you just talk about the US market.

Specifically, we know the residential side is going good but on the utility side are there any developments there where we're seeing a pickup on utility bids?

Thanks and I'll jump back in queue.

Thanks, Ben.

Yes, the US utility business is in transition, but I think potentially in transition very favorably.

What we see is the completion of RPS-driven utility-scale projects in America over the next couple years -- in our case, finishing Solar Star this quarter or in the near term, starting Quinto, building Henrietta next year, and of course you know we have the Excel project in Colorado to build, as well.

And we announced what we would consider to be part of the transition of the mainstreaming of solar is a bid that we won in SoCal Edison of 50 megawatts.

I would also point to I think what will be an emerging trend, which is large companies, and typically multinational companies, that will choose to go renewables because it's in line with their company brand and beliefs, as well as it's economic.

And I think this will be an increasing trend.

So, I think the US utility market's going to be a very good market and it just won't be the large RPS-driven projects, which is actually good because it's really consistent with the mainstreaming of solar.

Let me end with, don't forget that California's likely going to increase their RPS to 50% and that will be a catalyst, as well.

I think we're seeing the mainstreaming of solar and a transition and business will be good.

Thanks, guys.

Thank you.

Next question is Patrick Jobin.

Your line is open and state your company, please.

Credit Suisse.

Thanks for taking the question and congrats on the partnership.

Just a few quick ones.

First, withdrawing guidance, is it fair to assume that there's been no change in the underlying value assumptions, it's really just Yieldco, Holdco related timing?

Yes.

Okay.

And then I appreciate there is probably only so many details that can be shared, but from a high level, how do you approach partnering with an entity that is perhaps competing for the same underlying PPAs.

Is that a solvable challenge or how should we think about that?

Yes, I'll comment and then I'll let Chuck, who is architect of what we're doing, fill in.

I would say broadly that the way we'll construct the Yieldco, which we'll have in the S-1, of course, I think accomplishes what you said.

When we think of this, it's really beneficial to both of our shareholders in a significant way.

Just to reiterate a little bit, what you have is you have companies with 40 years of experience, 16 gigawatts of deployed solar, two very experienced solar development teams with complementary technology and complementary business models, resulting in a huge benefit to our shareholders because of the sustainable cost of capital advantage over the long term due to those factors.

Chuck, did you want to add anything?

No, I think, Tom, well said.

Thanks, guys.

And then just last housekeeping item, gross margin guidance, 18% to 20%, down 1 point at midpoint.

How should we think about that impact as that one Japan legacy project finishes up over the next quarter or so?

What's driving that slight decline in gross margins?

Yes, Patrick.

The Japan project is somewhat immaterial now for Q1 and Q2.

It's winding down.

We see a very strong margin year for the Company, north of 20% and Q1 is roughly in that range.

I would look at it as a mix issue between large projects.

And, again, we are developing and putting assets on our Holdco.

There's a significant amount of business that's not showing up in the P&L that we're developing that is strong margin and very good business in the Holdco.

Great.

Thanks and congratulations again.

Thank you.

Next question is Vishal Shah.

Your line is open and state your company name, please.

Yes, Deutsche Bank.

Thanks for taking my question.

Maybe Tom, can you talk about the bookings environment right now, where you see trends in terms of overall bookings, which regions?

And are you seeing any competition from other Yieldcos or developers for some of the products that you are looking at?

I'll do a little geographic overview and then I'll answer your question about new competition.

We see a really strong American market.

Clearly, the DG market in America is quite strong.

We expect that to be, if anything, turbo charged over the next, say, 20 months because of the potential lapse in the ITC.

We'll see what happens there, of course.

Just talked about US utility and I think we're going to see some really interesting developments that are sustainable for solar in America.

So, America's quite strong.

Japan remains quite strong, although a market in transition.

I think the dynamic there will change over the next few quarters, but it's still quite strong.

Japan is absolutely on fire.

It's the world's' largest market.

It's got nothing but upside.

I'm sorry, China is absolutely on fire.

It's the world's largest market.

And will continue to be so for many, many years.

Our position there is quite strong, but China is quite good.

Interestingly, we see South Africa as a market that's long-term sustainable and will grow, as well, because solar just makes sense in South Africa.

They need energy and it's economic.

Some of our best economics in the world are actually in South Africa.

Chile and Mexico -- more Mexico than Chile -- will be emerging markets.

You'll note, I didn't mention Europe.

I think Europe is stabilizing and is not an area that we look for substantial growth, although that will be an interesting market as it develops to more of a market with complementary or adjacent services.

So, very strong markets worldwide, which, of course, means other companies see that, which means there's a lot of emerging competition.

And, yes, we do see a lot of the Yieldcos interested in entering this market.

It's a little late to become a solar developer, so many of the Yieldcos are looking to partner with existing solar developers.

It's not too late but it's certainly late in the game.

We've been at it for, depending on how you count, between 5 and 10 years, and have deployed many, many, many projects around the world.

But, yes, we do see intensifying competition.

Lastly, Vishal I'd say that look to, we see the market morphing as time goes on here to being not only solar but solar plus adjacent services.

So, while the competition for selling pure solar intensifies, I think we're in another transition, one of many that we've seen over the last 10 years.

Appreciate it.

Thank you.

Thank you.

Next question is from Krish Sankar.

Your line is open and state your company, please.

Good morning, guys, it's Andrew Hughes on for Krish at Bank of America-Merrill Lynch.

Congrats on the announcement.

A high level Yieldco question -- one feature of these vehicles that is prevalent is certainly conflicts of interest, whether it's between the management of the two entities, between two shareholder groups, et cetera.

Just at a high level, as your thoughts on the structure have evolved, how have you thought towards addressing some of those issues?

And then to the extent you can talk about the announcement, it would seem with this joint venture that those conflicts of interest might be rife.

So, how you would seek to address those.

We can't comment on the details.

I would just say that I think all Yieldco MLPs have a similar structure, whether it's a sponsor or of a conflicts committee.

We'll talk about that in great detail in the S-1 so would point you to that later this quarter.

All right.

And then just on Japan, the legacy project rolls off in the first half here.

Can we expect those margins to recover back to the more traditional levels?

Or does some of the feed-in tariff reductions potentially limit that opportunity in the back half of the year to get back to those high teens margins?

This is Howard.

We expect pricing and margins to hold relatively stable for the first half of 2015.

There is pressure, so it's a two sides of the coin.

It's still fundamentally a strong market, a market in transition, as Tom said, going to more of a deregulated energy market where there's more customer choice and there's very strong customer demand for solar, and our product plays well there.

So that's really good.

On the other side of the coin -- and really this impacts more the second half -- there will be expected a feed-in tariff reduction.

It's in our plan.

We don't expect it to be higher than what's planned.

We expect it could be a little bit better on the feed-in tariff reduction side.

So that's built in.

There is a foreign exchange.

Hasn't gone in our direction, although we deal in US currency and, as Chuck mentioned, we've managed foreign exchange quite well to date.

But that's still providing some resistance and downward pressure on pricing.

And then there's always evolving competition.

So, we think in the first half of 2015 strong, good market, pricing, margins in good shape, some pressure going into the second half.

And we'll manage accordingly because we can manage our allocation of our product geographically around the world to where it's best suited from a financial perspective.

So, we have mitigation measures.

All right.

Great.

Thanks, guys.

Thank you.

Next question is Brian Lee.

Your line is open and state your company, please.

Hi.

Goldman Sachs.

Thanks, guys, for taking the questions.

First one from me was just again high level on the Yieldco.

Thanks, Tom, for walking through some of the motivations.

One question I had was just on the partnership.

When I was thinking about your potential for doing the Yieldco against some of your peers, it seemed like you guys were in a better position to go stand alone, especially with the unique relationship you have with Total.

So, wondering if you can comment at all as to, as part of the motivation around doing the partnership here with First Solar, how much of it was about potentially accelerating the near-term timing of such a vehicle versus the tradeoff of longer-term sustainability of growth by having two, like you mentioned, very large developers working together on this project?

Brian, we're going to be really careful on how much we say here.

What I would point to is this is a very thoughtful, very deliberate process.

And we think this is an outstanding outcome for our shareholders.

And as I said in my comments previously, I think it gives us a sustainable cost of capital advantage that we plan on taking your question certainly and making sure that our S-1 is comprehensive enough that investors have the knowledge they need to have.

That's about as much as I can say.

And, again, we expect an S-1 by the end of the quarter.

Okay.

Fair enough.

Second question, and then I'll pass it on, was just more of a housekeeping one.

Chuck, you mentioned the Holdco update here, 660 megawatts.

In terms of the mix of resi, can you quantify what megawatts are ITC backed in that Holdco asset base versus cash grant backed?

Thank you.

The vast majority are ITC based.

Think of those as Quinto, Henrietta, Hooper.

On the residential side, only the earlier assets are cash grant based.

I'm going to estimate, I can't give an exact number, but out of 222 megawatts, less than half would be cash grant based.

Okay.

Thanks, guys.

Thank you.

Our next question is from Paul Coster.

Your line is open and state your company, please.

Good morning.

This is Mark Strauss on for Paul at JPMorgan.

Thanks for taking our questions.

Just one quick one for us.

You're filing an S-1 so it's obviously a US listed company.

Some of the other parent companies out there that have formed Yieldcos have formed US-listed companies with predominantly US assets but have stated intentions for international Yieldcos with the international assets.

To the extent that you're comfortable talking about it, would this partnership be a global Yieldco or would this be just for the two companies' US listed assets?

We can't provide that level of detail.

But in the prepared remarks we did talk about a diverse set of project assets and so I think you could infer from that that both companies are great global developers.

Okay.

Thank you.

Thank you all very much for joining the call.

And remember the plan is to have an S-1 filed by the end of the quarter.

And you know the restrictions post an S-1 filing.

And we'll look forward to talking to you at our next earnings call.

Thank you again.

Thank you for your participation.

That does conclude today's conference.

You may disconnect at this time.