Clearway Energy, Inc. Q2 FY2022 Earnings Call

Thank you for joining us for the Clearway Energy, Inc. Q2 2022 Earnings Call. I will now hand the call over to Chris Sotos, President and CEO, to start.

Good morning. First, thank you for taking the time to join today's call. Joining me this morning is Akil Marsh, Director of Investor Relations; and Craig Cornelius, President and CEO of Clearway Energy Group. The group will be available for the Q&A portion of our presentation. Before we begin, I'd like to quickly note that today's discussions contain forward-looking statements which are based on assumptions we believe to be reasonable as of this date. Actual results may differ materially. Please review the Safe Harbor in today's presentation, as well as the risk factors in our SEC filings. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation. I would be remiss in not recognizing this is the first call where our CFO, Chad Plotkin is not participating. I want to thank Chad for all his contributions over the quarters and for ensuring an orderly transition of the responsibilities prior to his departure. We recently launched a search for his replacement and will take a deliberate and careful approach to ensure our executive leadership team has appropriate skills and experience to continue to lead Clearway forward. Turning to Page 3. The first half of 2022 performed sensitivity ranges with Clearway's diversified portfolio, producing $176 million of CAFD in the second quarter of 2022 to $174 million in the first half, where we increased our dividend by 2%, to $2.3604 per share, or $1.442 on an annual basis. This keeps us on target to achieve the upper range of our dividend growth objectives for the year. Clearway continues to solidify its pro forma CAFD outlook through strong execution. We have now contracted the remaining 20% of capacity at the Marsh Landing project, which had previously been open. This project is now fully contracted on a weighted average basis approximately until the end of 2026. We are also currently in the procurement process regarding the open position at El Segundo, and I expect to provide an update on this in the third-quarter earnings call. Additionally, we should close in the near-term on the Capistrano acquisition, which, based on our current expectations for new project-level financing, will result in long-term corporate capital of approximately $110 million to $130 million, allowing us to increase our pro forma CAFD outlook from approximately $400 million up to $385 million, as a result of CAFD per share increasing from $90 to $98. The prior committed growth investments remain on track for their CODs in 2022 and 2023. Longer-term, our Clearway Energy Group colleagues continue to work on development projects that underpin our $300 million capital commitment over the next 12 months, as well as growing their development pipelines. Currently, we have about 6.7 gigawatts of late-stage projects. The first batch of milestones underpinning our $300 million capital commitment goal is targeted for completion in late Q3 and early Q4 2022. As solar and storage projects plan for completion next year and reach financial closure, we expect that the capital commitments opportunity for us across the project Clearway Energy Group is planning to place in service through 2024 exceeds the $300 million bill that we set at the beginning of the year. That commercial profile and capital structure of those projects will finalize resolution during the coming months, including potential changes to their tax credit qualifications arising from the Inflation Reduction Act, which is being considered by Congress. We will provide an updated outlook on the capital commitments which estimate the project investment opportunities offered by Clearway Energy Group over the near-term. Additionally, the sale of 30% of Clearway Energy Group's solar energy is still on track with closing expected in the second half of 2022. With the outcome of Clearway Energy having an even stronger sponsor, with leading capabilities, as well as robust renewable generation goals, we expect to see significant collaboration across several dimensions that will make us a more productive participant in the clean energy markets as they grow and diversify into an asset class. In line with the continued progress around executing our growth plan, we've allocated approximately $420 million of the $750 million of excess sale proceeds for Thermal, supporting $2.10 of CAFD per share, with the full allocation of the remaining $330 million of Thermal proceeds providing visibility to over $2.15 of CAFD per share. Given this solid outlook, I continue to have great confidence in our ability to grow the dividend at the upper range of our 5% to 8% EPS growth target through 2026. In summary, Clearway aims to reduce its distance portfolio by expanding new contracts on natural gas and investing in new assets to drive growth in line with long-term objectives. Turning to Slide 4 to provide more color on the quarter and where we stand overall from a financial perspective. For the first half of the year, our total portfolio performance was very close to the midpoint of our sensitivity ranges, with adjusted EBITDA of $626 million and CAFD of $174 million. Contributing to this is today's reporting of second quarter adjusted EBITDA of $366 million and $176 million in cash. During the quarter, the company's Renewable segment delivered strong results, driven by above-average production from our wind portfolio and Clearway’s scale. The performance of Renewables was somewhat offset by weaker-than-expected results in the Conventional segment, primarily due to the El Segundo facility as we managed an extended spring outage, as well as a forced outage in June that ended in early July related to damaged boring equipment. This event was managed expeditiously, and the facility is currently running under normal conditions. Overall, with the company's results for the first half of the year in line with our sensitivity ranges, we continue to maintain 2022 CAFD guidance of $365 million. As a reminder, our 2022 CAFD guidance does include contributions from the Thermal segment through April, given the timing of when the transaction closed, and it continues to assume the achievement of the full year of guidance. However, as we factor in the full contribution of our existing commitment growth investments and the Capricorn acquisition, this informs our updated pro forma CAFD outlook of $400 million, which I'll speak to on the next slide. From a balance sheet perspective, the company continues to have impressive flexibility. In addition to the $750 million from the Thermal sale, of which approximately $330 million remains to be allocated, our revolver is completely undrawn and we are insulated from interest rate volatility with 99% of our debt fixed. Simply put, we are in a phenomenal position to move our company forward during a challenging macroeconomic environment. Let's turn to the next slide to discuss our latest transaction, Capistrano, and the value accretion that comes from this allocation of capital. Page 5 provides an overview of the Capistrano acquisition. After accounting for project-level debt capital formation, Capistrano shall require approximately $110 million to $130 million of long-term corporate capital, producing $12 million to $14 million of five-year levered average CAFD, or a significant 10.8% CAFD yield. We expect this transition to close in the second half of 2022. The project sells energy under power purchase agreements with a weighted average tenor of 10 years and provides further diversification into Texas, Nebraska, and Wyoming. As part of the acquisition, Clearway Energy Group will fund $10 million worth of purchase price in exchange for an exclusive right to develop any refining projects in this portfolio. In the event that a project were repowered, Clearway would remain the long-term owner of the asset. Overall, this acquisition provides an excellent stepping stone for our continued execution on accretive growth, utilizing the cash from the Thermal sale. Page 6 provides an update as we reinvest Thermal sale proceeds to generate $2.15 or greater on CAFD per share. With the addition of Capistrano to our pro forma CAFD outlook, we now see $1.98 of CAFD per share. As discussed last quarter, the investment in the next drop-down portfolio is set to generate approximately $26 million of average asset allocation, thereby providing Clearway Energy's investors with visibility to $2.10 per CAFD per share. With $330 million of proceeds remaining to be allocated as we continue to reinvest those proceeds and assume CAFD yield at 8.5%, we should be able to achieve CAFD per share of $2.15 or greater, reaffirming our ability to deliver at the upper end of the range of 5% to 8% EPS growth through 2026. Finally, I want to remind our investors that these numbers merely account for the deployment of the $750 million of Thermal proceeds and assume no additional capital deployment between now and 2026, which is not our intent. Turning to Page 7, our goals continue to focus on execution, closing the sale of Thermal, and achieving our 2022 guidance with an increase in our dividend per share at the upper range of growth. We have signed a binding agreement to acquire the Capistrano portfolio which, in addition to its captive generation as a strong yield, also provides for repowering opportunities at sites well-known to Clearway Energy Group due to their historical roles with the assets. Clearway continues to pursue acquisitions of appropriate assets at suitable returns. We will be patient and adhere to our underwriting standards. We continue to work with Clearway Energy Group around the latest potential drop-down assets, as well as the prospects for the enactment of the energy security and climate provisions of the Inflation Reduction Act, which is our conclusion. We will provide additional details in due course on how the terms of these assets would accrue capital, as opportunities may be impacted. And finally, we are always focused on enhancing the value of our California natural gas portfolio by signing the remaining 20% open capacity position at Marsh Landing through 2026 and also winning the outcome in those procurement processes. In summary, Clearway Energy Inc. is in an excellent position to grow its portfolio in an accretive manner and achieve strong risk-adjusted returns.

Operator, please open the lines for questions. Our first question comes from Julien Dumoulin-Smith with Bank of America.

This is Anya stepping in for Julien today. So actually, the first question, I was just kind of curious, how are you thinking of strategic options for the California natural gas portfolio in light of just the changes made recently, for instance, the GIP Total agreement and just the potential strategic optionality there? I guess how are you thinking about them long-term and outlet valuation? Would you consider potentially selling those assets or monetizing them?

Sure. A couple of different questions, Anya. Hopefully, I can unpack it. So I think the one question really, Total's involvement doesn't change our view of the underlying value of the assets, our desire to hold them, and the like. I believe we view the diversification that we have on those assets as valuable. As we've talked over the past several years, the value of those assets is tending to increase versus decrease overall. In terms of valuation and where we'd want to sell those, I wouldn't provide exact valuation numbers, but in terms of if somebody wanted to buy any or all of those assets, we're open to that just as we are with any asset of Clearway Energy. If we think we can sell it for a value above where we currently hold, we'd be interested in monetizing but it doesn't really go beyond that.

And then I am curious about the IRA, if I could ask a question on that. How are you thinking about your strategy if that does pass? And then what are your thoughts on expanding further into storage versus your overall portfolio? Where are you seeing opportunities today? And I guess where are returns today as well?

Sure. I think I'll answer the first part and then hand over to Craig for the second part. But in terms of strategy, as we talked a little bit in my prepared remarks, obviously, the details are critical in terms of exactly how it unfolds. I think long-term, obviously, it's a pretty significant positive for Renewables. From our perspective, it allows us more flexibility in our approach regarding PTCs and different applications around tax. But Craig, I don't know if you want to answer the other two parts of the question.

Yes, sure. Well, for the energy system and the customers that depend on it here, we really just couldn't be more pleased to see the form of the legislation that Senators have ultimately crafted. It's a truly elegant piece of legislation that should enable the transition in terms of carbon reduction but also enhancement of our systems' reliability and resiliency. So, we really could not be more pleased by the final form of it. As far as Clearway specifically goes, there are a number of provisions we're excited to implement in our context. The extension of the wind PTC is going to enable a better value proposition for our customers and should enable a greater velocity of our build program as we look into the mid-decade. That will be true across a significant portion of our country, but we're particularly optimistic about what it will mean for the development program we've had underway in PJM and West Virginia, in particular, where wind resources are in especially high demand, but really all over the country. The qualification of solar projects for the PTC will allow us to evolve the capital structure we use for those projects, meaning a greater fraction of the permanent capitalization of those projects can come from the project sponsor, which both makes for a better model for long-term management for all project stakeholders. In the context of CWEN, it means that the quantity of capital deployed for any given project can be meaningfully higher than it would be for a project electing the ITC as a tax credit. The stand-alone storage ITC is going to be transformative for the way we can make clean renewable assets dispatchable generally and enhance reliability in the system overall. We've increased our pipeline for stand-alone impaired storage assets to approximately 8 gigawatts over the past few years through hard work in anticipation of battery storage becoming an increasingly economically viable resource in a large part of the country. That momentum should be accelerated through the availability of the stand-alone storage ITC. We've approached the siting of that pipeline with the intent that the location and revenue model for the resources we are advancing would complement the operating portfolio within CWEN. So we're optimistic about what that pipeline will yield. Furthermore, as we look towards the end of the decade, I'd expect that we'll see an opportunity for the deployment of paired storage across a significant share of our operating fleet. Just a couple of additional points: the incentives created for domestic manufacturing and domestic content deployment are also incredibly useful for creating a more resilient economy. We've announced the formation of a U.S. Solar buyers consortium that we spearheaded and also, in our sole capacity, are pursuing procurement of wind and solar and battery components. We've driven plans to evolve the provenance of the component supply chains we employ, and the incentives contained in the legislation are a critical enabler of those ambitions, as some suppliers have indicated that it's essential for them to site factories here. Lastly, in terms of green hydrogen and offshore wind, the incentives within the legislation would enable the long-term growth initiatives we've been undertaking in those areas. We have been working in those for some time, focusing on regions where we have proprietary strength, specifically in the Western U.S. and Texas. We look forward to accelerating our work in those areas, both through the economic support these incentives provide and in collaboration with our new partners at Total. While it may take some time for those efforts to yield operating assets that are investable for CWEN, I'm optimistic that the legislation will ultimately render these asset classes attractive and viable in line with the investment mandate we have in CWEN. So in total, while we’ve been advancing our business in a manner that doesn’t depend on the enactment of new legislation, and that remains true today, the outlook for us generally and for CWEN specifically would be considerably brightened and accelerated through the legislation that's passed. I'm really hoping to see Congress finish its work in the next few weeks towards its enactment.

Our next question comes from Keith Stanley with Wolfe Research.

First, a bit of a follow-up to the last one. But I think you mentioned the drop-downs from CEG could be more than that planned $300 million now for that bucket of assets you show on the slide. Could it be, I guess, due to the bill, could it be materially more than $300 million because of the solar PTC and other dynamics? And then relatedly, just Chris, any comments on the overall level of visibility and confidence on fully redeploying the Thermal cash over the next 6 to 12 months or so?

Sure. I think not to minimize the question. The answer to the first question is yes. Obviously, as we talked about in the prepared remarks, we want to see exactly how this unfolds. I want to ensure everything is outlined before discussing the exact number, but could it potentially be materially different? Yes. To your second question about confidence, I think, again, we're being disciplined. Obviously, some of that cash would be used depending on the determination of how much the $300 million moves. But yes, we are working hard to ensure we deploy it appropriately. So I think our ability to deploy is pretty high, but you will know when we're done.

And then just in Texas, any comments you can give on how the assets performed during the heat wave last month and some of the power price spikes?

Sure. In July, once again, books are not closed. So this is kind of indicative. The portfolio seems to have held up well. We saw some price spikes, but in general, the portfolio performed well.

Our next question comes from Colton Bean with TPH.

On the conventional portfolio, you now have two of the three natural gas facilities recontracted. Any updates on how you’re approaching dispatch on the new RA agreements? Would that still be at the counterparty’s discretion? Or do you have interest in maintaining flexibility there to potentially capitalize on market volatility?

Sure. We sold the capacity portion forward at the energy margin. So to your question, that would kind of be for our book currently on an open basis. However, if a counterparty is interested in buying the energy piece, we'd be open to that as well. To your question, currently, the energy margin is open on those assets.

And then just on El Segundo, I know a more comprehensive update likely still to come. But with that being a CCGT, and I don’t think it was too many years ago that it was running close to base load, are there any differences in how you’re approaching recontracting there?

Not really. I think for ourselves, obviously, the energy margin should be higher on CCGT than on a Pico. But for us, really not a difference in terms of how we view it. We think it's well-positioned within the market.

Our next question comes from Michael Lapides with Goldman Sachs.

Can you talk about, with more large-cap utility holding companies, more international players, and more infrastructure funds developing utility-scale wind and solar, the landscape? What is it doing to returns? Is it impacting project centers, meaning the length of contracts, and what it’s doing to the overall dynamic, given there’s just a lot more capital flowing into the space right now?

Thanks, Michael. I'll answer half of it and then pass over to Craig for his view. However, we're not seeing a dramatic difference compared to what we saw last year, as you're well aware, a lot of capital has moved into this industry over the past several years. For us, I think what we're seeing in returns and what's available out there is a pretty rich M&A market. That's why you continue to hear me emphasize the need for discipline when allocating capital. There are quite a few market opportunities out there with attractive assets. We'll see how those play out. But I think, with the increase in treasuries and rates, some of those trends have yet to manifest. Overall, IRRs have not really shown a significant downward pressure compared to last year, given that inflow because it's been happening for some time. But Craig, from your perspective, any difference?

Yes, sure. I'll go quick, Chris. In terms of new asset creation and development, honestly, the last 12 months have been crucial, allowing both energy suppliers, component providers, and energy customers to recognize the importance of project viability and sponsor strength. As we engage with customers today, they value important aspects more than they might have two years ago, such as the locational viability of individual projects based on their location in the transmission system, timelines for transmission interconnections, quality of siting for effective load-carrying capacity, and project sponsor capabilities. All these factors play to the strengths of companies like ours. Hence, I am quite optimistic about the upcoming years for businesses like ours, as demand for renewable or storage energy resources remains extraordinarily high, while there remains a scarcity of projects and sponsors capable of delivering them in a timely manner. Thus, I believe we will continue to create projects that provide a strong contracting and revenue portfolio for CWEN, ensuring adequate returns on investments and for the project creation process, persisting into the mid-decade even with all the incentives and capital flowing into the space.

And just real quick on contract tenors, are you seeing customers, the buyers, seek shorter-term deals than what you observed two, three, or four years ago?

Interestingly, the recent trend has actually shifted in the opposite direction. The inflationary trends observed in the last six months have shifted the calculus for many buyers wanting to lock in resources with predictable pricing as part of their procurement for an overall energy mix. When looking at the models that work for us, you'll notice we have undergone a substantial expansion in the development of resources out in the WECC. A lot of natural buyers for those resources have a preference for 20- to 25-year contracts to properly plan their systems for the long run. We have undertaken that expansion with the intention of meeting those long-term needs and have structured commercial contracts that put a price floor while allowing us to participate in price volatility upside. Therefore, we aim to construct a portfolio with both long tenors and open positions ensuring revenue protection. In total, many customers view these resources as attractive options, and tenders have been seeking longer-term agreements.

Our next question comes from Mark Jarvi with CIBC.

I wanted to revisit the IRA and talk about the impact on existing assets, particularly on wind. Could you comment on whether the legislation could affect how you manage those sites and the repowering? Do you have a feel for whether storage will be more impactful versus repowering? How many of the sites could even do both in the current portfolio?

No problem, though. I'll hand it over to Craig as usual. From our view, it's crucial to note that many of our assets are relatively new. As mentioned in prior calls, our repowering opportunities are more gradual, as we move through time, since many of our assets are relatively new and have long-term contracts that need to be renegotiated. Overall, the opportunity from a site perspective is certainly impacted by the rules regarding PTC and tax treatment. However, I wouldn’t want to overstate that given the current age of our fleet and the longevity of our PPA contracts, which means there is no significant opportunity in the next 24 months for mass repowering. But Craig, what’s your perspective?

Chris makes an essential point that the long runway created by this legislation allows us to select the optimal timing to repower our existing wind projects, generally aligning with the expiration of the PPAs from the original construction. Our repowering development program has systematically anticipated these PPA milestones while considering the equipment condition at those sites. This will be a staged program benefiting from this legislation, allowing us to maximize value from our repowering efforts as opposed to a shorter timeframe that would not have allowed for proper valuation. Regarding storage pairing, we have significant opportunities across both wind and solar assets, with thousands of megawatt-hours of paired storage or retrofit programs for development underway, particularly in the West and Midwest. We anticipate that many load-serving entities supported by these existing plants will seek commercial solutions that allow us to deploy storage hybridization while current contracts are active. As Chris said, achieving optimal outcomes will take time, but we expect substantial value enhancement in the portfolio moving through the decade.

Just on storage, would you need to be 100% contracted just as you start to understand that market better and assess asset performance? Is your comfort level on gigawatt open levels and being a bit more open on the storage side?

Yes. I think it's a more complex answer, especially depending on the assets it is paired with. I want to clarify that our preference would generally be to have it 100% contracted. However, it’s essential to consider the specific circumstances of the storage, what types of assets they are paired with, and how it integrates within the overall portfolio. This may lead to different answers on whether we need to be at 100%. In some cases, having a lower contracted level could make sense based on how it interacts with other assets.

When you look at the pipeline, Clearway Energy Group keeps expanding and has numerous opportunities. Growth is not constrained by a lack of assets. As you reflect on that, what else comes into the picture when you're negotiating which assets to take on? Is there any change in diversification asset mix as a result, given there are plenty of assets to consider?

From our perspective, we haven't had rigid diversification goals, like aiming for a 60-40 or 50-50 split on the Renewables side. We prioritize ensuring we have the right asset in the right place at the right value. That being said, as articulated by our acquisitions over the last two years, we've tended to diversify outside California. So, on the margins, if there's a dollar in play, we probably lean a bit more outside of California than within it, which is why you've observed much of our third-party M&A recently. Our approach is to pursue high-value assets at a proper price, focusing on good assets in the right location.

Regarding geographic diversification, are you expressing specific views on certain power markets in terms of where you think they may be underappreciated or where the market has been overly optimistic? Does that play a role in your decision-making as you consider the long-term tail value?

As you know, most initial tenders are predominantly contracted, which helps inform our longer-term perspectives on where we want to be as contracts expire. However, this doesn't significantly affect our decision-making during the contracted period.

Our next question comes from Justin Clare with ROTH.

I wanted to follow up on the Inflation Reduction Act. It seems like project economics could meaningfully improve here, which might lead to more growth in the market. Can you share how you're thinking about the potential economics of drop-downs? I know this will depend on the market, but do you see potential for higher CAFD yields? Additionally, could you elaborate on how changes in tax equity treatment might impact your economics?

Sure. I think there are a few pieces to consider. In terms of actual cap deals and the like, this is much more contingent on the macroeconomic environment, how our stock trades, and where treasury yields are, rather than the IRA directly impacting returns. The act would mainly affect the projects rather than causing a direct impact on returns. Regarding tax equity, specifically pertaining to the solar PTC, it allows for a greater cash return, increasing CAFD returns over an ITC model, where we currently aren't a taxpayer, thus limiting our benefits. I believe it alters the demographics of returns that we can achieve, but we’ll have to see the final outcomes to determine if it significantly changes CAFD yields or IRRs.

On the supply chain, could you provide insight on how disruptive the UFLPA enforcement might be for solar module availability? I assume you have modules ready for the Hawaiian projects, but could you update us on Daggett Solar? Are you considering module availability in the near-term commitments you are making?

Sure. I'll first address your last question. We typically take over projects at commercial operation date. Hence, we usually aren't taking a lot of construction risk regarding panel arrivals. For context, we tend to fund at or near COD, depending on tax regulations. Craig, can you cover the other part of the question?

I’m proud of the work our team does concerning technology forecasting and procurement, particularly in the solar domain. We've generally been a few steps ahead by anticipating supply chain needs and initiating contracts focused on U.S.-made materials while complying with UFLPA provisions. Through our forecasts and responsibility, we are optimistic about our ability to import all modules for our near-term pipeline while complying with the UFLPA. The compliance expectations around UFLPA are incorporated into our estimated CODs outlined in today's earnings material for future near-term drop-down opportunities. While temporary holds at the border are possible for industry participants generally as enforcing begins, we believe that it will be a manageable risk without significantly delaying project CODs due to our procurement strategies. Overall, we've established a procurement plan that aligns with U.S. policy objectives, which positions us well for future challenges. Though there may be disruptions, we believe we will navigate them effectively based on our sourcing strategies.

Our next question comes from Noah Kaye with Oppenheimer.

To begin with a high-level question regarding the Total cooperation, I know you are in the planning stage since it hasn't closed yet, but based on discussions so far, can you outline where you see opportunities for collaboration? Could you guide us through development, recontracting, and even the financing and M&A side?

I'll address some parts and then have Craig respond for development. I should note we currently don’t require external financing and have a strong presence in capital markets.

As suggested by your question, we're in the early stages of discussions with Total concerning collaboration. During the time from signing to closing, we must navigate regulatory constraints. We can collaborate around energy management and the interaction with power markets, allowing Total to leverage its U.S. presence and provide trading counterparties that help establish revenue contract positions for projects while managing value and risks effectively. Regarding development activities, we will collaborate on global procurement strategies with them and GIP, which helps drive value for our projects and enhances their U.S. operations as well. We see considerable collaboration opportunities in newer asset class categories, specifically in green hydrogen, where Total's global capabilities complement our expertise in citing, building, and operating renewable assets. We’ll work together on suitable sites for green hydrogen production. Additionally, Total is a global leader in offshore wind, while Clearway leads in the Western U.S. in anticipation of a strong presence in offshore wind. Although it's early, I'm optimistic about our collaborative potential.

As a follow-up, could you discuss the recent quarter's process in terms of uncertainty around tariffs? What disruption or delays have you experienced and the timeline for any potential impacts on CODs?

The COD forecasts presented in the earnings materials reflect our current outlook for project completions. They've not shifted much from what was expected six months prior. This stability largely stems from our strategic vendor partnerships, which prioritize capacity for our projects. Our proactive engagement with panel suppliers ensured their top priority remains our projects, and we've absorbed incremental costs to perfect our supply chain position. Our goal has been to move projects forward so customers can receive resources close to their planned timelines amidst disruptions. While not without impacts in terms of cost, we remain committed to advancing these projects for CWEN to deploy capital efficiently.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Chris for any closing remarks.

I just want to say thank you to everyone for attending, and I look forward to talking to you all in November. Take care.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.