Western Midstream Partners LP (WES) 2017 Q4 法說會逐字稿

Good morning, and welcome to the Western Gas Fourth Quarter and Full Year 2017 Earnings Conference Call. (Operator Instructions) Please note that today's event is being recorded.

I would now like to turn the conference over to Jon VandenBrand. Please go ahead.

Thank you. I'm glad you could join us today for Western Gas' Fourth Quarter and Full Year 2017 Conference Call. I'd like to remind you that today's presentation includes forward-looking statements and certain non-GAAP financial measures. The accompanying slide deck and last night's earnings release contain important disclosures on forward-looking statements as well as the non-GAAP reconciliations. Please see the WES and WGP 10-Ks and other public filings for description of the factors that could cause actual results to differ materially from what we discuss today. Those materials are all posted on the Western Gas website at www.westerngas.com. Finally, I'm pleased to inform you that the WES and WGP K-1s will be available online via our website beginning February 20 and March 2, respectively. Hard copies will be mailed out several days later.

I would now like to turn the call over to our CEO, Ben Fink; and CFO, Jamie Casas. And following their prepared remarks, we'll open up for Q&A. Ben?

Thanks, Jon, and thank you, everyone, for joining us today. I'm really pleased with our fourth quarter results, and I believe we're well positioned for a strong 2018. I'm going to have Jaime quickly review these results, and then, I'll talk some more about the 2018 guidance we issued in December.

Jamie?

Thanks, Ben. We delivered another year of solid performance as our full year 2017 adjusted EBITDA of $1.06 billion exceeded the midpoint of our guidance. Additionally, WES and WGP increased full year distributions by 7% and 19%, respectively, while WES generated a full year coverage ratio of 1.13x. Total capital expenditures of $792 million was slightly below the low end of our guidance, due primarily to timing issues.

Turning to our fourth quarter results. We reported adjusted EBITDA and distributable cash flow of $273.3 million and $233.4 million, respectively, and a coverage ratio of 1.08x.

Our quarter results were driven by strong natural gas throughput growth in the DJ and Delaware Basins. Volumes at our DBM Complex continue to ramp, and our Ramsey plant was nearing capacity when we brought Train VI online at the end of the quarter. While gathered volumes in our DBJV system continued to grow, the volumes declined on a reported basis due to a prior period adjustment. This adjustment had no impact on cash flow during the quarter and was the main driver of the sequential increase in adjusted gross margin per Mcf. Excluding this adjustment, our gross margin per Mcf was in line with last quarter and more indicative of what we expect going forward.

The growth in our crude, NGL and produced water throughput was driven by the continued growth of our DBM water services assets. The sequential increase in adjusted gross margin of our liquids assets of $0.18 to $2.21 per barrel was due to the receipt of a onetime payment associated with our DBM water services assets. Similar to our gas margin, this higher gross margin per barrel is also not indicative of our run rate going forward.

We continue to be excited about the prospects of our produced water gathering and disposal business and recently executed another third-party contract that will support the development of our third water system later this year.

As a reminder, we believe that produced water business is a great complement to our existing business lines, as we focus on executing long-term commercial contracts with fixed fees and volumetric commitments.

Additionally, due to our shared services model with Anadarko, we are able to utilize their subsurface and drilling expertise to gain a competitive advantage in providing these services. While this business is just getting started, we believe full-cycle returns for the water business will be higher than our portfolio average.

Before I turn it back to Ben, I would like to remind you that we adopted a new revenue recognition accounting standard on January 1, 2018. While there will be material changes in how we report revenue and cost of product expenses related to percent-of-proceeds contracts going forward, this new standard would not materially impact net income, adjusted gross margin, adjusted EBITDA or DCF.

Now I'll turn it back to Ben for some thoughts on our near-term outlook.

Thanks, Jaime. Hopefully, everyone listening today is familiar with the guidance we released in December. And I'd like to take a few minutes to discuss it in more detail.

Our key focus for 2018 is the execution of a capital budget of $1 billion to $1.1 billion. Over 90% of our budget will be directed towards our 2 core operating areas, the DJ and Delaware Basins, with over 50% allocated towards building out our gathering systems and approximately 30% earmarked for the construction of 4 additional processing trains.

Most of what we're doing is in sync with Anadarko's 2018 development plan. And if you haven't had the chance to listen to their outlook call that took place last week, I would strongly encourage you to do so.

In the DJ Basin, strong producer economics continue to support high levels of activity by Anadarko and other producers that should push volumes to near system capacity by the end of the year. To support this anticipated growth, we're focusing on the further expansion of our gas gathering system to the areas of the basin that are less developed. We expect to commence construction of the Latham 1 and 2 processing trains by the third quarter, and they're scheduled to be in service during the first and third quarters of 2019. As a reminder, both trains are supported by long-term volume commitments from Anadarko. Furthermore, we continue to see opportunities to capture additional third-party business in the area, and any related capital will be incremental to our current plans.

It's also clear to us that there'll be a basin-wide need for incremental takeaway capacity for both NGLs and residue gas. We continue to believe that adding pump stations on the Front Range and Texas Express Pipelines is an efficient solution, and we reserved capital in our budget for these projects.

With respect to residue gas, we have previously announced that WES has secured an option to participate in the Cheyenne Connector pipeline, which will provide additional takeaway capacity.

We're very proud of our continued success in the DJ Basin, and our ability to sync up our development plans with our major customers has proven to be a competitive advantage in providing efficient, reliable service, as evidenced by the low line pressures we offer throughout the basin. As you've heard me say countless times, most of what we're doing in the Delaware Basin is replicating the plan that has been so successful in the DJ over the past 7 years. Speaking of the Delaware Basin, by the end of 2018, we'll have substantially completed the build-out of an extensive gas gathering trunk line system that will support years of production growth.

Our Mentone I and II processing trains remain on schedule to come online at the end of the third and fourth quarters. Both the gas gathering system and the processing additions are supported by long-term dedications and commitments from Anadarko that are designed to generate rates of return for WES that are well in excess of our weighted average cost of capital. We also believe that our significant footprint in the basin provides us with a competitive advantage in providing services to third parties, and we continue to have good success in this area.

Alongside the gas gathering and processing infrastructure that we're building in the basin, Anadarko is also investing approximately $500 million in 2018 to further develop the crude gathering system, the regional oil treating facilities, or ROTFs as we like to call them, and the produced water gathering and disposal infrastructure.

Although the Delaware Basin crude infrastructure remains in our drop-down inventory, it's actually a key driver behind our forecasted 2018 performance. We anticipate that Anadarko production growth in the basin will remain somewhat constrained throughout the first half of the year until the ROTFs come online. The Reeves ROTF remains on schedule to come online in the second quarter of 2018 and should unlock substantial production that has been waiting for treating capacity to come online. As we've discussed in the past, Anadarko's decision to build a tankless gathering system is supported by lower well facility cost and reduced emissions and is a great example of how we're replicating our successes and best practices from the DJ Basin in the Delaware.

The massive infrastructure buildout that I just described started at the beginning of 2017, and we anticipate that roughly 70% of our 2018 capital spend will be completed in the first half of the year. While the capital spend is front-half weighted, our adjusted EBITDA is forecasted to be back-half weighted. The improving performance throughout the year is also expected to lead to expanding distribution coverage with second half coverage expected to be 1.2x or higher.

In addition to our organic growth opportunities, the drop-down inventory at Anadarko continues to grow at a rapid pace and should generate in excess of $300 million of asset-level EBITDA in 2018. The healthy growth of this portfolio is well positioned to continue, and Anadarko plans to spend approximately $550 million of midstream capital in 2018 building out crude oil infrastructure in the Delaware and DJ Basins and produced water infrastructure in the Delaware Basin.

Turning to our 2018 outlook. Based on our guidance midpoint, we expect adjusted EBITDA to grow by over 13%. This gives us confidence in our targeted distribution growth of $0.015 per quarter through the end of 2019. As previously stated, our 2018 capital guidance range is $1 billion to $1.1 billion. Please note that this range does not include the exercise of any equity investment options and will be updated, if appropriate.

Capital spending on our existing assets should significantly decline in 2019 once the Delaware trunk line buildout is completed because we're sizing the lines today to avoid the additional capital of having to loop the lines in the future.

What I'm most proud of are the steps we've taken to deliver our 2018 plan without the need to issue equity or execute a drop-down. This is a direct result of the deliberate actions we took in 2017 to put us in this position. Our Delaware-for-Marcellus asset swap strengthened our portfolio with higher growth assets and better long-term prospects. Our early conversion of the preferred units removed a meaningful equity overhang and had a significant deleveraging effect. And our decision to defer additional drop-downs has allowed that inventory to become a more meaningful safety net. If we had not taken these steps, our distribution coverage would have been significantly higher in 2017, but we would not be in the enviable position we're in today in which we can execute a capital plan of over $1 billion without reliance on equity capital market access.

Finally, while numerous MLP restructuring transactions have been recently announced, we have nothing new to say on this topic. We remain confident in the strength of our business and our ability to deliver returns well above our current cost of capital. At the appropriate time, we'll proactively address the structure if we believe that our cost of capital could present an impediment to the fundamentals of our business. As always, we appreciate all your continued support.

With that, operator, I'd like to open up the line for questions.

(Operator Instructions) And our first question comes from Jeremy Tonet of JPMorgan.

Ben, I was hoping you might be able to talk a little bit more on the Ramsey Complex in-house running currently and the ramp there. Just if you could provide more color, that would be helpful.

Sure. I'm going to let Craig Collins, our COO, take that one.

As we noted in the opening comments, by the time we started up the Ramsey VI train in late November, early December, the plant was nearing capacity at that time. And since we brought Train VI on, throughput has continued to increase through the facility, and we expect that to continue to grow through the first half of this year until we get the Mentone plant online.

Okay, great. And turning to the Eagle Ford, some of your peers have indicated a stronger ramp there with the basin recovering. Could you just expand a bit more as far as what type of activity you're seeing and what you're expectations are going forward there?

Well, just to remind you the history lesson, we still feel like we're still playing with house money in the Eagle Ford because when we bought that asset in the beginning of 2016, we expected 3 years of decline curves. And then a year later, Anadarko sells to an Eagle Ford pure-play operator, and we get back to sequential growth in the basin. And so we really love what we're seeing there. And we do expect more growth in 2018. I don't think the slope of the curve has changed based on the guidance that we're seeing from the producers, but really happy to getting back to growth in that basin.

That's helpful. And I know I've asked this question before and don't want to beat a dead horse, but seems like the family is in a unique situation given APC's volumes growing rapidly in the Delaware and how that can be parleyed into takeaway solutions, be it on the crude oil, NGL side, natural gas side as well. And just wondering if there's anything new that you can share there as far as appetite or interest in the family participating in some of those takeaway solutions. And what that could mean for WES.

Yes. Nothing I can share, unfortunately. The appetite is there. The interest is there. And by the time everything is said and done, I think we'll have participation options in residue lines, in crude lines and potentially fractionation.

Our next question comes from Colton Bean of Tudor, Pickering, Holt & Co.

Ben, I just wanted to touch on the O&M step-up in Q4. So is that associated with the Eagle Ford field gas provision that you guys mentioned in the prior quarter?

Not very much. A tiny little bit, but not much. The key driver there is a line item called surface maintenance and repair. Think of that as the expense analogue to maintenance capital. So as maintenance capital steps up with increased activity, that line, which is an expense line, also steps up. So you saw a lot of activity in the fourth. You saw maintenance capital step up, that line steps up as well. That's the key driver in O&M.

Okay. And then just switching gears. So Red Bluff looks like it's still targeted for Q2 '18. Would you guys need to exercise your option by in-service? Or does that extend for a period beyond?

Period beyond in service.

Okay. And any clarity on how long beyond that?

6 months.

Got it. And then I guess is the final one for me. So looks like APC is adding some permitting activity in the Powder, but no immediate outlook on rigs there. Can you guys just remind us of the scale of that dedication and whether the existing asset base could handle an increase in activity?

Appreciate the question, Colton, but since the producer is not really talking about it, I'm not sure we should as well. Anything we do will probably be 2019 and beyond, and something we're looking at very closely.

Our next question comes from Shneur Gershuni of UBS.

Just a couple of questions, some short term, some longer term. Just starting with the near term. For 2018, I believe you sort of commented about your guidance for the year, but the shape of it is going to be more second-half weighted and you expect coverage to be closer to 1 for the first half. And if I sort of listened to your prepared remarks, clearly the tankless gathering system is kind of part of this. So if it comes down that hitting your numbers and your expectations, effectively it appears to come down on execution of your CapEx. Do you have kind of a percentage of completion number or some key signposts for us to track as we sort of think about this tankless gathering system?

Sure. And I think what you're specifically referring to are the ROTFs. So I need to let Craig give you some color there.

Shneur, we continue to see progress out in the Delaware in completing both the pipes and the facilities. Those facilities and the corresponding pipe are still on track for second quarter completion. I think by the time that first ROTF comes online, we will have approximately 100 miles of pipe -- new pipe in service associated with that.

Okay. And so none of the weather issues have slowed things down. You're on schedule or ahead of schedule?

Yes, we feel really good about the second quarter delivery there.

Great. I appreciate that. And then with respect to margins going forward, with increasing water being a part of it, is there a scenario where the margin over time bleeds lower on the crude oil side just because of the difference in tariffs between the 2? Is that a fair way to be thinking about it from a long-term modeling perspective?

More than fair, Shneur. Water is a lower-margin business than long-haul transportation because it's a gathering business. And you'll see more overall volume, so it will trend lower. But remember, it's a higher return on investment business as well, right, because we see that slightly above gas gathering and processing.

No, absolutely. I just wanted -- because they're reported together, I was just -- I wanted to make sure that we got that right. Okay. And then finally, just on a longer-term basis, you're looking at a 13% to 14% growth year-over-year this year versus last year. And, obviously, that's part of the big capital spend last year and you're doing some capital spend this year, and so I assume you'll see some growth into next year as a result of the capital you're spending this year. But in a scenario where, let's say, you stopped spending CapEx and you didn't execute on any drop-downs, my understanding is -- and I think you sort of touched on this in your prepared remarks about how you've overbuilt this system. I was just wondering what kind of operating leverage this excess build is done? Could this be another 10% straight up earnings growth without any capital investment or drop-downs? I was wondering if you had some thoughts on sensitivity about the type of operating leverage you've created.

Okay. I'll do my best, Shneur. Keep in mind that in our business, you'll never go to 0 CapEx, not only because of maintenance, because you have to connect wells, right. If there is wells to connect, by definition, there is capital. What I'll say is a typical way that some other basins have been developed in the past is producer X works with third-party Y and tries to keep the capital spend low. And one way to keep capital spend low is by having very narrow diameter pipeline, which is fine. It keeps the initial spend low. But then when the production really gets going, those lines need to be looped to support that growth. And so while the early-stage capital may have been lower, you're seeing capital really on an annual basis throughout the production cycle. The beauty of being sponsor-led and really having unique visibility into your largest customer is that you can spend a little more capital on the front end, but then once it's built, it's built. And you won't have that back-end capital of needing to loop those lines. And so as long as you're confident that the drilling will take place and the production growth will show up, it is a much more efficient way over the long term to be able to handle that growth. All right? Now eventually, processing plants go up and you'll need new plants, but there's no way around that. Does that answer your question?

It does. And it effectively is my question. So it's like -- I guess what I'm trying to figure out -- and I realized that your -- there is never a period where you actually don't invest. And so it's a hypothetical question. But it's -- I guess what the capital avoidance related to, and I mean, is this something that your earnings can grow by without capital? Is that sort of the way to think about it? And it sort of drives kind of a 2020 organic number that doesn't require capital effectively?

Absolutely the right way to think about it, is that you can have a lot more growth in later years without the analogous CapEx spend, all right? So that improves your returns over time.

Our next question comes from Dennis Coleman of Bank of America Merrill Lynch.

I have just a question about the drop-downs that you talked about, the $300 million. On the APC call, there were some commentary about maturing those assets. And so I wonder if you might just talk a little bit about how you -- what the conversation is with the sponsor as to when they see that becoming more of a free cash flow asset that you might consider for drop-down.

Yes, I appreciate the question, Dennis. And I remember those comments. I was in the room when they were made. I think all I heard was a reiteration of the strategy that Anadarko had been executing for the last 10 years with Western Gas. In the early days, our growth was primarily through drop-down, and now it's primarily an organic growth story. Drop-downs historically are a decision of when WES would like to do them. And as you know, we've decided not to do any last year or this year because we have enough organic growth in the portfolio, and we wanted to let that inventory mature a little bit. So this point about maturity is just because of that decision, right, that, by definition, that inventory gets more mature, right? It was a very immature asset last year, and it's approaching free cash flow positivity. But WES is at a scale today where it can acquire an asset in the early stage, in a late stage. Capital maturity is not a prerequisite for dropping an asset to WES.

Okay, that's helpful. Just those comments struck me as a little bit different, as you said, from what you've had in the past. And then just more of a detail point of interest. You did do some work on your credit facilities in the quarter and you reduced the WGP facility to almost nothing. But why even keep it, I guess, at $35 million?

Well, there was $28 million drawn on it. So why did you keep at least that? Give you a little historic context there. We put that in place in February of 2016 in conjunction with the Springfield drop-down, which, as you know, was a very challenging time in the energy markets. The purpose of that was twofold. One, we were working with private equity firms to give us private capital at that time, but we needed a plan B in case they changed their minds, and so really wanted to keep them honest, and that facility would have been a way to get that drop-down done. Then, we kept it in place as almost like an insurance policy for WES that, God forbid, the equity capital markets shut down again and WES absolutely needed equity, there would be a way through that facility to have WGP buy WES units. Since that time, we've put ourselves in a position to not need any equity. And so we don't really need that insurance policy anymore. So we reduced the size of that facility so that WGP unitholders don't have to bear the commitment fees of a larger facility, all right? And then when it expires, we'll deal with it then.

Our next question comes from Mirek Zak of Citigroup.

Regarding the first ROTF coming online in a few months, can you give us an idea of how much potentially pent-up Anadarko production that's being held back right now will be released at that point sort of, which I'd imagine will result in more of a step change in volumes at that point that you probably wouldn't expect to see when the second ROTF comes online?

Yes, Mirek, this is Craig. I would say that right now there are several wells that are waiting to flow. And as APC has guided, its near-term production volumes out of the Delaware until the ROTF comes on are going to remain relatively flat. And so we expect once that ROTF does start up, that, that capacity will be essentially fully utilized soon thereafter. So I think we're going to see a significant step-change in volumes once the initial ROTF comes online and then again once the second ROTF in north Loving comes online.

It sounds like you're asking about Anadarko volumes. I would guide you to both fourth quarter operations report as well as their guidance slides. I think you'll find some helpful info in there.

Okay. And on the NGL takeaway out of the DJ, you mentioned additional pumps should be adequate for now. How much additional capacity do you think you can get out of those pumps? And with the Latham plants coming online next year, how long do you think that takeaway capacity is going to be sufficient?

These are approximate numbers. And to be clear, the capital project of adding the pumps has not been sanctioned, all right? So that is not a live project, although we're public in saying we're in favor of it. On an approximate basis, nameplate capacity of 160-ish goes to about 230-ish when you add the pumps.

Okay. And would you -- if that does move forward, you think that would be sufficient even with Latham plants coming online next year?

For our barrels.

Excuse me?

For our barrels, yes.

Our next question comes from David Amoss of Heikkinen Energy.

I wanted to follow on, on NGL expansion that you talked about, and it sounded like you have reserved some CapEx amount, although the project hasn't been FID-ed. Can you disclose what the CapEx amount in the '18 budget is?

Yes, not until the partners sanction the project, unfortunately.

Okay. But it is in there, your share of that pump expansion?

It is.

Okay. And then, Ben, kind of more of a kind of big picture stepping back question on the Delaware. If you think about the non-APC business that it sounds like you're getting increasingly comfortable going after, can you just kind of characterize the difference in margin? Or maybe it's really the dynamic between return and cost of capital for that third-party business versus what you get from Anadarko. And then I guess, more importantly, just strategically, how do you position yourself to win that business in what is obviously a very competitive basin?

Yes. That was very diplomatic of you saying it's very competitive. It's probably an understatement. I'll say that our attitudes to risk versus return versus cost of capital are somewhat similar, Anadarko versus third party. Whether it's Anadarko or anyone else, anyone that's willing to enter into a longer-term contract with a high MVC component, you feel comfortable perhaps having a lower base case return because there is less risk associated with that contract. Now, obviously, the sponsor of a sponsor-led MLP might be more comfortable than a third party might, and so that would affect your returns there. But in terms of our kind of target mid-teens unlevered for any capital we deploy, that's true, no matter where we are, who we're serving. What we are finding in the Delaware is we have a competitive advantage in our ability to leverage our existing infrastructure. You've seen the map of the 600,000 gross acres, and you've seen the map of the gathering backbone that we're laying strictly for to -- financed by our sponsor, just to serve their needs. Just by virtue of doing that, we are on the doorstep of dozens of offset producers. And so our ability to serve them with relatively very little steel to lay to tie them in, I think, is a really healthy competitive advantage.

Okay. And then one last one. Just curious on a little bit more detail on the water business. If you could kind of break out where you are in terms of utilization of those first 2 water systems that you built out. And then how much of the third system with the third-party contracts is in the budget for '18 and when you would expect it to come online.

Yes, I'll let Craig give you that detail.

Yes, we're really excited about the early success that we've seen on the water side. As you've noted, we have 2 systems that we've put in. One of those systems has 2 wells in service, and that system is essentially full. The other system has one well in service, which is full. And the second well is going online here in the next couple of weeks. And so once that comes online, we expect there will be significant ramp in volume there as well. So whatever we're putting in right now is getting -- seeing really high utilization. And as we continue to build on the book of business that we've established so far -- as noted earlier, we have a new customer that we're building a system for later this year. And the intent there is that we'll have that infrastructure in place by the end of the year and have a very attractive contract associated with that.

Our next question is from Sharon Lui of Wells Fargo.

Ben, you mentioned, I guess, there is no update on the WES restructuring and IDRs due to the spread between your returns and your cost of capital. I was just wondering if you can maybe provide some color on, I guess, the expected value spread on your billion-dollar CapEx budget this year and how you see that may change going forward in terms of an improvement?

Sure. I mean -- and some of this is a reiteration of what we said in the past. But all capital we spend usually has a base case of mid-teens unlevered. Our WAC, which is around, we calculate around 11% today, is a little higher than our historic average, but that spread between those 2 are quite healthy. Now if you think about our contracts in which we are deploying the bulk of our capital, take Delaware Basin gathering, for example, that's a cost of service contract with a prescribed rate of return. The plants that we're building are underpinned by large MVCs to give us those mid-teens unlevered returns from investment-grade customers. And so we feel quite confident in our ability to deliver upon that. Now probably the premise to your question is that cost of capital goes up over time. We all know that. Everyone in the MLP space is aware of that. And that's something we're going to have to track on a real-time basis and address at the appropriate time.

Our next question comes from Chris Tillett of Barclays.

Just a quick one from me here. You mentioned at the top of the call that the unit margin on the gas side would have been in line with 3Q had it not been for some prior period volumetric adjustments. Just curious if that's sort of consistent with what we should expect going forward. And then whether or not we should think about that margin is changing at all further into the year as some of the capital you guys are putting to work comes into service.

Yes, I think it's a fair expectation of run rate going forward, right? I mean, you're always going to have changes in the throughput mix, right? So there's always going to be some variance. If you have growth in a higher-margin asset, the lower margin is on decline or vice versa. So there is always some movement in there, but in terms of a general run rate, I think that previous quarter is fair.

Our next question comes from Selman Akyol of Stifel.

This is Tim on for Selman. I want to follow Dave's question regarding third-party business in the Delaware. Is there anything we should look for or key infrastructure that needs to be in place for you to solicit this business? Do you guys have any, like, internal expectations of when maybe something would be sanctioned that you could release? Just I want to get a better feel for it for what you guys are expecting.

Well, we needed Ramsey VI to come online when it did. And then that was on time, on budget because those -- that third-party business had filled II through V. So that was key. And I think in terms of the ramp between Ramsey VI and Mentone I coming online, that's a mix between Anadarko and third-party growth.

Okay. I thought you guys were referring to like incremental or beyond what was already in Ramsey. Did I just hear that wrong?

We were -- when we were talking about critical infrastructure, really relates to Anadarko's volumes, right. Anadarko has volumes that is waiting for treating capacity to come online. That's an Anadarko-specific issue. And so when all of that treating capacity comes online, the oil growth and then all of the associated gas with that, which is why we're going to need Mentone I and II and why there is a pretty short gap between Mentone I and II.

Okay. I thought you were just saying that your assets are very close to third-party acreage that could kind of attract additional business. I guess I just heard wrong. But that's all I had. Okay. Got it.

That is correct. Our existing infrastructure is very close to third party, and we are factoring in that growth in the timing of our processing ends.

This concludes our question-and-answer session. I would like to turn the conference back over to Benjamin Fink, CEO, for any closing remarks.

Sure. We appreciate, everyone, joining us on the day before a long weekend. We hope you're able to enjoy that long weekend. I can assure you we will. And look forward to talking to you next quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.