Earnings Call Transcript - NTR Q2 2021

Operator, Operator

Greetings, and welcome to the Nutrien's 2021 Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Richard Downey, VP of Investor Relations.

Richard Downey, VP of Investor Relations

Thank you, operator. Good morning, everyone, and welcome to Nutrien's conference call to discuss our second quarter 2021 results and outlook. On the call with us today is Mr. Mayo Schmidt, President and CEO of Nutrien and Mr. Pedro Farah, our CFO. We also have the Heads of our Business Units, Ken Seitz for Potash, Raef Sully for Nitrogen and Phosphate. For Retail, we have Jeff Tarsi and David Elser and Mark Thompson, who leads our Strategy and Sustainability group. And of course, our Head of Market Research, Jason Newton. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain material assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions are contained in our current quarterly report to our shareholders as well as our most recent Annual Report, MD&A and Annual Information Form filed with Canadian and U.S. securities commissions to which we direct you. I will now turn the call over to Mr. Mayo Schmidt.

Mayo Schmidt, President and CEO

Well, thank you Richard. And I do want to pause to comment before I get into my prepared remarks. The Nutrien team and I want to wish you and your family all the best on your planned retirement, which will occur later this year, and certainly we recognize you and thank you for your 25 years of service at Nutrien. You have been an outstanding member of this team for many years and have enjoyed an exceptional career. You are appreciated, and you will be missed. I know you are pleased to be passing your torch over to Jeff Holzman, who I know many of you already know as our Vice President of Investor Relations. So good morning, everyone, and welcome to Nutrien's second quarter earnings call. Today, I will recap the actions our teams have taken to fully benefit from excellent agricultural fundamentals and demonstrate the advantages of our global integrated business structure, which together allowed us to execute on the delivery of record performance for the quarter and for the first half of the year. This morning, I will also provide an update on the outlook and decisive actions we have taken that allowed us to increase our annual adjusted EBITDA guidance to a midpoint over $6 billion for 2021, an increase of over 33%. Furthermore, we will illustrate the momentum we expect to carry forward well into 2022 and how the Nutrien team are enhancing our unique market position to drive value. Firstly, I would like to thank all our employees for the dedication and commitment they demonstrate each and every day in support of our grower customers in the more than 40 countries we serve as we work to feed a growing world. These efforts are especially apparent during the busy application seasons when our approximately 3,600 crop advisers are working directly with growers as we produced and safely delivered nearly 30 million tonnes of potash and nitrogen and phosphate globally. Myself, the Board, and all employees are very proud of how our potash team has responded to increase production significantly from our flexible, reliable, low-cost six-mine network in the second half of this year to ensure our growers have the potash they need to meet the ever-growing demand for food. Now, turning to our results. Our first half adjusted EBITDA was over $3 billion, up 36% over last year's level. We delivered excellent results across all businesses, geographies, and for most products and services. The key driver was impressive team execution with our well-positioned assets, higher prices for crop and fertilizers, and robust global demand. Our business also generated notable free cash flow of $1.9 billion in the first half of the year. Nutrien Ag Solutions, our retail operations, achieved a 24% year-over-year increase in adjusted EBITDA for the first half of 2021. In fact, almost all of our retail metrics showed significant improvement, and we are on track to meet or exceed our longer-term targets ahead of schedule. When we look across our Nutrien businesses, we generated a combined $1.2 billion in adjusted EBITDA in the second quarter, with year-over-year potash earnings up 48% and nitrogen and phosphate businesses up 45%. The increase was due to our continued focus on managing costs and making operational excellence toward everything we do, supported by stronger pricing. Our wholesale marketing and sales team execution was outstanding. Our team ensured we did not get overcommitted too early and optimized our retail distribution system. We evaluate our retail business on a first-half and second-half basis, representing the spring and fall application seasons. In the first six months of this year, we witnessed strong year-over-year performance across all geographies and the majority of our product shelves. Adjusted EBITDA in the first six months in the U.S., Canada, and Australia were up over 20%, driven by organic growth, while our South American team’s EBITDA was nearly double last year, driven by their strategic acquisitions. By product shelf, the biggest increase in earnings was for our crop nutrients with per-tonne margins benefiting from well-placed inventories in a rising fertilizer price environment as well as record sales volumes. Volumes for crop protection and seed were higher year-over-year, helping drive a significant increase in gross profit. The increase was also due to improved proprietary product performance across all geographies and products with profits from all proprietary products up an average of 13% year-over-year. We delivered excellent retail performance relative to our long-term targets, with adjusted EBITDA percentages surpassing 11.4% compared to 10.3% in the first half of last year, partially supported by strategic fertilizer procurement. Our working capital as a proportion of sales and cash operating coverage far exceeded our long-term target, and our average EBITDA per location showed significant year-over-year improvement. The ongoing progress in these metrics is made possible by our continued focus on meeting growers' needs while also rationalizing our network, optimizing working capital, and expanding our proprietary product line. We reported $1.6 billion in digitally-enabled sales in the first half of the year, nearly double the same period in 2020, and processed approximately 1.5 million grower payments through our system. We also continued to grow our retail business in Brazil and recently announced an agreement to acquire Terra Nova, the fourth value-enhancing acquisition in Brazil in the past 18 months. With this transaction, we operate 33 branches in Brazil and are well on our way to generating $100 million in run-rate EBITDA by 2023. Our retail team continues to demonstrate exceptional performance across the board in all geographies in which we operate. Our potash group's performance has been outstanding. Ken and his team responded to market conditions and have fully delivered commitments to our customers while taking action to increase sales and production significantly to ensure our customers have the product they need. We are the only producer globally with a capability to respond. We delivered record volumes in the first half of 2021 and are on track to achieve a full-year record. We are focusing all-time high global potash consumption in 2021 due to exceptional spot market demand in the U.S., Brazil, and Southeast Asia, where we saw a significant market recovery this year. The demand has positioned Canpotex to place greater emphasis on these higher netback markets compared to the contract markets of China and India. Overall, we project to produce nearly 14 million tonnes of potash in 2021. By the fourth quarter, we anticipate Nutrien to serve potash production to approximately 17 million tonnes on an annualized equivalent basis. We will continue to be proactive and flexible with our operating rate. Raef's teams in nitrogen and phosphate delivered excellent results in the first half, capturing much stronger prices, and for nitrogen achieved a 92% ammonia operating rate despite increased turnaround activity and weather-related challenges. Phosphate margins this quarter reached an impressive $195 per tonne and nitrogen margins averaged $182 a tonne, both were up almost 60% year-over-year despite higher input costs. We continue to benefit from the brownfield expansion projects completed over the past few years, which have both expanded production capability and increased product mix flexibility. These results also demonstrate our ability to leverage the competitive advantages of our extensive production and distribution network to execute on emerging market opportunities. For the near-term outlook, there is a wide range of crop conditions across North America. Crop maturity is generally ahead of normal, which bodes well for the fall application window. We may see some pull back on fertilizer applications in severe drought areas such as Western Canada this fall. Overall, in North America, we expect solid crop input demand supported by continued above-average crop prices. In Australia, very favorable weather conditions continue to support strong crop input demand. Some ongoing weather challenges in Brazil have impacted yields for certain crops this year, but the outlook for next season is a further expansion in seeded acreage, which will support demand for all crop inputs. For fertilizers, the current price environment is a result of robust demand for all nutrients, driven by strong agricultural market fundamentals. We expect these market dynamics will continue to support prices into 2022. That said, fertilizer affordability is something we monitor closely. But even at today's elevated prices, most fertilizer to crop price indices are close to average levels and grower margins continue to be very favorable into 2022. We expect global potash demand in 2021 to be at record levels between 69 and 71 million tonnes, and global inventory levels in key regions to remain very low. There is no news at this point about a potential contract with China or India. However, we continue to believe that China will need to negotiate a new contract before the end of the year as their inventories continue to draw down with strong domestic demand. Canpotex is already fully committed right into November and will continue to focus on higher netback regions. We believe the future outlook for our company is excellent. We expect crop prices to remain well above historical levels and fertilizer markets to remain tight. We will also benefit from our ongoing commitments to operational excellence, executing a keen focus on cost and inventory management, continued value-added growth, and a strengthening return on investment. As such, we are raising our consolidated annual adjusted EBITDA guidance by more than $1.5 billion, or over 33%, and our EPS by nearly 70%. This is due to stronger earnings outlook across all business lines and executing our competitive advantages. We believe this positive learning outlook will continue into 2022, further strengthening our balance sheet. We will maintain our disciplined capital approach, including the potential for further investment in the business, deleveraging of the balance sheet, and additional returns to our shareholders. Our purpose is to help growers increase food production sustainably. There is no better example of this commitment than our responsiveness in ensuring we can quickly and safely bring on an additional one million tonnes of potash production to improve access to the key nutrient for growers globally. These actions also delivered significant financial value for our shareholders, as the increase in production accounted for approximately 25% of the $900 million increase in our potash adjusted EBITDA guidance for 2021. Another example of executing in line with our purpose is our Feeding the Future plan and 2030 sustainability commitments, which include our ongoing focus on improving carbon outcomes. We are reducing the carbon footprint at our facilities, making great progress in our industry-leading carbon program at the farm level, and our recent announcement on our partnership to develop a marine vessel powered by low carbon ammonia as a fuel. Nutrien is committed to ensuring our strategy and operations remain world-class and successful over the long term, supported by strong integration and management of ESG risk and opportunities into our strategy and execution plans. We believe the outlook for Nutrien is exceptional. With crop and fertilizer prices anticipated to remain well above historic levels into 2022. No other company is more advantageously positioned across the value chain to be a catalyst for positive change in the global crop production system and help growers around the world feed a growing population. Thank you for joining the Nutrien team today, and we look forward to your questions.

Operator, Operator

[Operator Instructions]. Your first question comes from the line of Ben Isaacson with Scotiabank.

Ben Isaacson, Analyst

Thank you very much and congrats on the beat and raise. A question for Mayo and Pedro. So you are going to generate $6 billion, $6.5 billion of EBITDA this year. And even if prices moderate a little bit, you will probably do something similar next year. And that's a lot of free cash flow to generate, especially considering you don't have any major capital projects. So in that context, and rather than talking about your capital allocation philosophy, can you give us some actual goalposts in terms of what you have planned? How much debt reduction do you want to see over the next 18 months? You have a buyback authorization. Do you expect to finish that within a year from now? How much have you earmarked for M&A in retail, whether it's in the U.S. or Brazil? Thank you.

Mayo Schmidt, President and CEO

Sure. Happy to comment on that. Pedro and I have had those good discussions frequently, and it's an outstanding year, which gives us a number of opportunities, including both strategic and also, as you mentioned, buyback relative to our strategic initiatives. So I will ask Pedro if he will run us through some of the options in front of us, which we are very pleased to have.

Pedro Farah, CFO

Yes. Ben, nice talking to you again. To your point, we will continue our disciplined capital allocation approach, which would involve sustaining our assets. We could have guided for a little bit more expenditure as we were a little depressed in the past due to COVID restrictions that we couldn't do what we needed in our facilities. We have increased dividends earlier this year and we are looking into the balance sheet now that we are above mid-cycle prices in terms of opportunities to delever. That very much will depend on how we look through the cycle, and we would like to position ourselves to have flexibility in the future. So I don't have a specific number for you as we are evaluating various options. In terms of the compete for capital approach, as you mentioned, we do have options both organically and inorganically and we have started to deploy that. You have seen us do some acquisitions in Brazil, and we are also investing in our ESG projects for nitrogen and will continue to look at those in the future. And we are, as you pointed out, considering the NCIB option together with all the other ones. It's a fluid environment here, so we will analyze our options and will come back with more specific points when we have them.

Operator, Operator

Your next question comes from the line of P.J. Juvekar with Citi.

P.J. Juvekar, Analyst

Yes. Hi. Good morning. I was wondering if you can just talk about the level of inventories in the retail channel by NPK? And where do we stand post to the summer fill?

Mayo Schmidt, President and CEO

Jeff, would you mind taking that question for us, please?

Jeff Tarsi, Retail Lead

Sure. I would be glad to. We can talk about inventory in two capacities. We talked about crop protection. If we look at the end of quarter two, we are probably a little higher from a revenue perspective. Currently, on NP and K, we have about $150 million higher in the U.S. than last year. That's planned, as we are starting to load in products for what we anticipate to be a good fall application season. We need to get a really early start from a logistics and supply chain side. That higher inventory value also has credibility, as we are looking at higher product pricing than we were last year. We feel good about our position on inventory and plan for a normal fall application season. David, do you want to add anything else?

David Elser, Retail Lead

No. Jeff, I think you hit the facility side quite well. On crop protection, we were just preparing for our upcoming fungicide spray. So I think that's it.

Operator, Operator

Your next question comes from the line of Steve Byrne with Bank of America.

Steve Byrne, Analyst

Yes. Thank you. I just wanted to hear if you had visibility on where you think third quarter realizations could be in potash in both offshore and North America? Do you have that visibility through Canpotex on how much is already sold forward and at what price?

Mayo Schmidt, President and CEO

I will make a couple of comments and then ask Ken to comment. We certainly expect limited new supply in the next couple of years, and most of it's coming from former Soviet Union producers, particularly Eurochem. We think we are well-positioned, and we are sold out for a period of time, continuing to look at strong prices. Ken, do you want to fill in your thoughts?

Ken Seitz, Head of Potash

Thanks, Mayo. Yes, thank you, Steve, for the question. We do have visibility through Canpotex, which just released information recently that they are committed into November. So the remaining volumes to be committed in the year are shrinking. In North America, we are also committed through October, and uncommitted volumes are relatively small compared to what we are doing for the year. With respect to third quarter realizations, we can follow benchmark prices, as there's always a lag between reported benchmark prices and what we realize. In this rising price environment, those reported prices are based on thinly traded volumes. It may take a few weeks for prices to firm at that level. So yes, we do have good visibility and are expecting a strong third quarter.

Operator, Operator

Your next question comes from the line of Jacob Bout with CIBC.

Jacob Bout, Analyst

Good morning. My question is on potash demand and inventory levels. Spot pricing for potash is back to levels not seen since 2008, 2009. Are you seeing any evidence of demand destruction? And what are you seeing in your other key global markets for potash inventory at the retail level?

Mayo Schmidt, President and CEO

Thank you for that question. Jason is with us today, and I think he can offer some insights.

Jason Newton, Head of Market Research

Yes. Good morning, Jacob. As we look at demand and inventories worldwide, starting with the spot markets, we believe what is being sold is being applied to the ground. In the U.S., weather during the fall season drives demand and impacts inventory levels. As Jeff mentioned, we expect good engagement given affordability and the crop stage. For contract markets, they are priced out of the market, and we see inventories drawn down, evident in the domestic market and within China, where prices have been firm. This indicates a tight supply-demand balance. I would pass it to Ken for additional comments.

Ken Seitz, Head of Potash

You summed it up well, Jason. Heading into the fall, assuming reasonable conditions, we expect inventory levels to remain low. We have committed volumes through October and November, which will impact our volumes and inventory levels by year-end.

Jeff Tarsi, Retail Lead

Hi Jason. I might add that we've discussed weather and timing of harvest. The yield predictions are aligning with trendline yields, suggesting a strong removal rate as crops come off. Our agronomists will conduct extensive soil testing, which should drive fall demand.

Operator, Operator

Your next question comes from the line of Jeffrey Zekauskas with JPMorgan.

Jeffrey Zekauskas, Analyst

Thanks very much. There really wasn't any change in crop protection margins. Why is that? Why shouldn't pricing be better than costs? And what's your outlook for that sub-business and your retail operation over the coming year?

Mayo Schmidt, President and CEO

David, could you take that question? You lead that for our group.

David Elser, Retail Lead

Yes. Thanks, and I appreciate the question. Our crop protection sales volumes and margins have remained stable in the first half. This is due to acreage expansion and strategic purchasing with suppliers. The crop protection industry faces pressure from a generic perspective, and we are working to strengthen our proprietary position to boost margins moving forward. In the first half, our upfront margins on proprietary business were strong, and we will continue to make progress.

Operator, Operator

Your next question comes from the line of Adam Samuelson with Goldman Sachs.

Adam Samuelson, Analyst

Yes. Thanks. Good morning, everyone. I was hoping to get some color on retail performance in the first half. Specifically, it says that same-store sales adjusted for movements in fertilizer pricing and FX were up 1% on a year-on-year basis. I am trying to square that with results in the segment overall, which look quite good. Is that a function of weather in Western Canada and California? Any additional color there?

Mayo Schmidt, President and CEO

Thank you for the question, Adam. I will start by saying we are very pleased with the 2021 seed selling season. You are correct that the Canadian crop has been dry in that area. However, we are building momentum in seed and expect growth across major crops. Despite the challenges, we are seeing increasing share gains. David, would you like to elaborate?

David Elser, Retail Lead

Yes. I think Mayo captured it well. Growing share in seed is a priority, with strategic increases across our four major crops: canola, cotton, soybeans, and corn. Some price pressure in soybeans is noted, but we are making progress moving into the next selling season.

Operator, Operator

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Vincent Andrews, Analyst

Thank you and good morning, everyone. Mayo, I wanted to ask about potash. You referenced the $17 million tonne run rate from a production perspective in the fourth quarter. How should we think about that production run rate going into next year? What are your thoughts on how high of a potash price you want to see on a go-forward basis?

Mayo Schmidt, President and CEO

Thanks, Vincent. We expect global demand to continue to grow by 2% to 3% a year, translating to an additional 14 to 23 million metric tonnes over eight to nine years based on our annualized run rate of about 17 million tonnes by the fourth quarter. We will leverage our production capability, but we need to be price sensitive to avoid value destruction. The market is challenging, especially with Brazil's pricing situation. Our focus will be on servicing our growers to keep them in the game and pricing accordingly. Ken, do you want to add anything?

Ken Seitz, Head of Potash

Thanks, Mayo. Yes, everything he said is relevant to the fundamentals. We are confident that there will be strong demand through 2021 and into 2022. Notably, inventory levels are at multi-year lows, and new production announcements are scarce, excluding our operations. While Belarus and the sanctions create uncertainty, we aim to meet our customers' demands as needed.

Operator, Operator

Your next question comes from the line of Mark Connelly with Stephens Inc.

Mark Connelly, Analyst

Thank you. I hope you can help us understand what part of your retail portfolio is being most impacted in California so far? Assuming the drought continues, how might that impact progress?

Mayo Schmidt, President and CEO

Jeff, could you take this for the California market?

Jeff Tarsi, Retail Lead

Sure. We've seen some impact, primarily because most crops are irrigated. Reservoir levels aren't alarming right now; however, the biggest impact may come later during the fall planting season, as we'll depend on water released for growers. Fungicides are likely affected, but overall, our business has performed well considering the circumstances. We expect to see more impacts from the drought once we hit the fall planning season.

Operator, Operator

Your next question comes from the line of Joel Jackson with BMO Capital Markets.

Joel Jackson, Analyst

Hi. Good morning, everyone. Can you talk about your guidance for EBITDA and potash? Given the uncertainty with fall weather and the Belarusian sanctions, what assumptions are you making for the high and low end of your range?

Mayo Schmidt, President and CEO

Thanks, Joel. There are many variables influencing the commodity business. Despite the volatility, we expect strong follow-through. Regardless of Belarusian challenges, we remain well-positioned. We achieved a new company record with adjusted EBITDA of $3 billion in the first half of the year, which is a 36% increase year-over-year. Our solid crop signals indicate continued strength, which we expect to carry into the future.

Ken Seitz, Head of Potash

I agree, Joel. There are many moving parts, but they have presented us with opportunities this year. We are committed through Canpotex into November and domestically through October. The year is set, so our guidance reflects our strong confidence in earnings potential across the board.

Raef Sully, Head of Nitrogen

For the nitrogen side, Jason can comment on the Chinese export situation while I provide an update on pricing and planned outages. Pricing remains firm and we have committed volumes through the third quarter. It's looking confident with minimal changes expected.

Jason Newton, Head of Market Research

Following up on the Chinese export situation, we have seen several attempts by the Chinese government to pressure state-owned enterprises regarding exports. Industry associations have been addressing members not to export urea and phosphate. The market does not seem to believe these restrictions will hold. If restrictions are implemented, this could positively impact us.

Operator, Operator

Your next question comes from the line of John Roberts with UBS.

Lucas Beaumont, Analyst

Good morning. This is Lucas Beaumont, on for John. I want to ask about retail. Your EBITDA per location is now 15% above your 2023 targets. Do you expect that to trend back to your target, or should we consider raising them?

Mayo Schmidt, President and CEO

Before I ask Jeff to respond, let me say the retail performance has delivered record results in the first half, with double-digit growth in revenue and margins. We serve over 500,000 farmers year-round. Our proprietary offerings support strong momentum. Jeff, what are your thoughts?

Jeff Tarsi, Retail Lead

We're pleased with our performance this year. We've seen strong growth across all categories, largely driven by our investment in new technologies and proprietary products. We believe the gains we've made are sustainable, and we aim to continue leveraging our platform.

Operator, Operator

Your next question comes from the line of Andrew Wong with RBC Capital Markets.

Andrew Wong, Analyst

Hi. Good morning. Have you seen any inflationary pressures on commodity producers yet? Were there any issues related to hiring back labor while ramping up potash production?

Mayo Schmidt, President and CEO

Thanks, Andrew. I will let Pedro start with that.

Pedro Farah, CFO

We have experienced inflationary pressures as we scaled production. However, we feel balanced in terms of volume versus inflation. Most impacts will be felt by potash. Ken, would you like to add any comments?

Ken Seitz, Head of Potash

We have had success hiring amid production ramp-ups, so we are confident in our human resources to meet production needs.

Operator, Operator

Your next question comes from the line of Steven Hansen with Raymond James.

Steven Hansen, Analyst

I appreciate the commentary on potash production. Are you considering adding another 500,000 tonnes in the near term, given existing high prices?

Ken Seitz, Head of Potash

Yes, we evaluated opportunities in the market based on customer requests. We concluded that a million tonnes of additional production was appropriate for this year. Could we produce more next year if needed? Yes, we could.

Operator, Operator

Your next question comes from the line of Michael Tupholme with TD Securities.

Michael Tupholme, Analyst

Can you talk about which mine you expect that incremental potash production to come from? And how do you expect potash costs and production to evolve as a result?

Ken Seitz, Head of Potash

Vanscoy plays a crucial role, but we expect additional tonnes from Cory and Lanigan. Our goal is to assess market demand and produce efficiently. Increased production will help cash costs, but the stronger Canadian dollar may create an offset.

Operator, Operator

Your next question comes from the line of Michael Piken with Cleveland Research.

Michael Piken, Analyst

What volume capacity are you anticipating for nitrogen in 2022? What does your turnaround schedule look like for the rest of the year?

Raef Sully, Head of Nitrogen

We have had larger than normal turnarounds this year. After completing the largest ever turnaround at Borger, we expect volumes to rise next year to around 11.5 million tonnes with brownfield expansion projects helping us as well.

Operator, Operator

Your next question comes from the line of Duffy Fischer with Barclays.

Duffy Fischer, Analyst

Regarding anti-dumping actions for UAN, what's your view on its validity, and if favorable for U.S. producers, what would be the impact?

Raef Sully, Head of Nitrogen

I cannot provide specific comments. We are addressing questions from the Trade Commission and maintaining a neutral stance on the matter.

Operator, Operator

Your next question comes from the line of Rikin Patel with Exane BNP.

Rikin Patel, Analyst

You are hitting your 10.5% margin year-to-date. Should we be more aggressive in assuming you can achieve your targets on an annualized basis?

Pedro Farah, CFO

We are pleased with current progress and will review targets going into next year. Our recent results do support a potential increase in targets.

Operator, Operator

Your next question comes from the line of Adrien Tamagno with Berenberg.

Adrien Tamagno, Analyst

Could you explain the rationale behind the Brazilian acquisition and its impact on your market share?

Mayo Schmidt, President and CEO

I will turn to Mark Thompson, Head of Business Development and Sustainability, for more context.

Mark Thompson, Head of Business Development

The Terra Nova acquisition enhances our retail model in Brazil. Our focus is continuing to establish a comprehensive retail framework similar to North America. This strengthens our foothold in the region, and there is significant room for further expansion of our integrated model.

Operator, Operator

Thank you. This does conclude the Q&A portion. I will now turn the call back to Richard Downey for closing remarks.

Richard Downey, VP of Investor Relations

Thanks everyone. Thank you for joining us this morning. If there are any follow-up questions, Investor Relations is always available to help you out. Have a good day. Thanks for joining us.

Operator, Operator

Thank you. This does conclude today's conference call. You may now disconnect.