Earnings Call Transcript - NTR Q3 2022

Operator, Operator

Good morning, ladies and gentlemen and welcome to the Nutrien 2022 Q3 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Friday, November 3, 2022. I would now like to turn the conference over to Mr. Jeff Holzman, Vice President of Investor Relations. Please go ahead.

Jeff Holzman, Vice President of Investor Relations

Thank you, operator. Good morning, and welcome to Nutrien's third quarter 2022 conference call. 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 reports to shareholders as well as our most recent annual report, MD&A and annual information form filed with Canadian and U.S. Securities Commissions. I will now turn the call over to Ken Seitz, President and CEO; and Pedro Farah, our CFO, for opening comments before we take your questions.

Ken Seitz, President and CEO

Good morning and welcome to Nutrien's third quarter earnings call. 2022 has been shaped by geopolitical events that have heightened the world's focus on food and energy security. Nutrien has responded by taking a number of strategic actions that position our company to meet the demands of our customers and deliver superior long-term value for our shareholders. We expect to generate record earnings in 2022. But acknowledge that potash market conditions in the second half of the year have been more volatile than previously anticipated. Potash demand in North America and Brazil declined in the third quarter as inventories that were built early in the year were worked through. These regions represent the two largest markets for Nutrien's potash. Therefore, the decline in demand and prices had a more significant near-term impact on our business. However, we view this as a temporary low. Our confidence in the outlook for the fundamentals of our business has not changed. Global grain supply remains very tight, with the stocks to use ratio projected to fall to a more than quarter-century low this crop year. High energy costs and export restrictions continue to impact global fertilizer production and trade, most notably in Europe. We believe these supply constraints will persist well beyond 2022. We maintained it in a supply-constrained environment; no other producer has the ability like Nutrien to bring on additional low-cost potash and nitrogen volumes to meet pent-up demand. Therefore, we continue to advance our strategic growth initiatives based on a positive multi-year view of the fundamentals. Pedro will speak more to our capital allocation plans for the remainder of 2022. But I will first provide a review of our third quarter results and outlook. Nutrien delivered record adjusted EBITDA in the third quarter and through the first nine months of the year, supported by higher realized fertilizer prices and record results from our retail business. Retail had a strong third quarter as growers were incentivized to invest in their crops. This led to increased demand for our proprietary nutritional products, which partially offset a delay in purchases for commodity fertilizer products. Demand for crop protection products was strong, and we delivered higher margins driven by growth in proprietary product sales and tight supply for many crop chemistries. We closed the Marca Agro and Casa do Adubo acquisitions in Brazil, substantially increasing our national presence in this large and rapidly growing agriculture market. We're on track to exceed our target of $100 million in annual EBITDA from Brazil in 2023. In potash, Canpotex increased volumes sold to Southeast Asia and delivered higher contract volumes to China. Shipments to Brazil slowed in the third quarter as buyers worked down inventory that had been built in the first half, which included significant purchases made in advance of export restrictions on Belarus and Russia. North American potash sales declined due to higher-than-expected carryover from the condensed Spring season, buyer deferrals as prices moved lower during the quarter and higher carrying costs. Our average realized potash price was well above the previous year but declined from the second quarter, tracking the reduction in spot prices in Brazil and North America. Over the last few weeks, the pace of decline in Brazil has slowed, and U.S. inland prices have been supported by restricted barge movements and a strong start to the Fall application season. Nitrogen benchmark prices strengthened due to higher European gas costs and associated plant curtailments as well as continued supply restrictions on Chinese and Russian nitrogen products. However, our realized prices were down from the trailing quarter as summer field programs were impacted by the seasonal reset that occurred late in the second quarter. We increased exports of nitrogen solutions to higher netback offshore markets in the third quarter but experienced gas supply curtailments in Trinidad that primarily impacted our production and exports of urea. Our phosphate business delivered solid results supported by having a more diverse product offering, including our high-value feed and industrial products. Over the past two quarters, we have recognized non-cash impairment reversals totaling $780 million associated with our phosphate operations, driven by improved market fundamentals and a more favorable view of phosphate margins. Now turning to the outlook, as mentioned in the opening, global grain stocks to use are projected to decline to the lowest level in more than 25 years. This would mark the sixth consecutive year that stocks have declined. Crop futures have moved higher in recent weeks and are indicative of multi-year strength in market fundamentals, with corn futures trading above $5 per bushel out to December 2025. Prospective crop margins are well above historical average levels, which provides an incentive for growers to increase acreage and push to maximize yields. The weather has been favorable in North America, and we anticipate that the rapid pace of harvest will support a large Fall ammonia application season and normal application rates of potash, phosphate, and crop protection products. Our retail fertilizer sales volumes in October were up from the previous year, which is a good early indicator of robust grower demand. The results of the Spring planting season are proceeding with favorable conditions, and soybean acreage is projected to increase by 3% to 4%. We anticipate a similar increase in corn acreage and strong input purchases over the next few months. We expect robust agricultural fundamentals will drive increased fertilizer consumption in 2023, and pent-up demand for potash will emerge as inventories are drawn down and prices stabilize. However, the current situation is unique in that global potash supply remains constrained. Potash production and exports from Eastern Europe continue to be impacted by sanctions on Belarus and restrictions on Russia that are related to the war in Ukraine. For 2023, we forecast exports from Belarus to be down 40% to 60% compared to 2021 levels, and Russian exports to be down 15% to 30%. Global potash shipments are projected to be between 64 million to 67 million tons in 2023, which is up from 2022 but still well below our unconstrained demand forecasts of over 70 million tons. We expect increased demand in North America and Brazil following the destocking that occurred in the second half of 2022. Based on this supply and demand outlook, we anticipate Nutrien sales volumes of approximately 15 million tons in 2023. Global nitrogen supply remains tight, and benchmark prices are projected to remain strong through the fourth quarter and into next year. Despite a recent decline in European gas prices, more than one-third of Europe's ammonia production is curtailed, and European gas prices are expected to remain high and volatile through the winter. We also anticipate a tight North American nitrogen supply and demand balance due to record exports and lower import volumes in the second half of 2022. I will now turn it over to Pedro to review our guidance and assumptions and capital allocation plans for the remainder of the year.

Pedro Farah, CFO

Thanks, Ken. Starting with retail, our annual EBITDA guidance range increased to $2.15 billion to $2.25 billion, which is a record year for our retail business. The most significant factor impacting our guidance range is the extent to which we continue to have a wide open fall application season in North America. Our revised potash guidance assumes that spot prices stabilize around current levels and that we see limited restocking of supply chain in the fourth quarter. We have adjusted our potash production plans in the near term and have brought forward maintenance activities during this downtime that will position us well for increased volumes in 2023. We narrowed our nitrogen guidance range as ammonia and urea benchmark prices have been generally in line with our previous forecast. We anticipate a strong fall ammonia application season in North America, but have lowered our nitrogen sales volume guidance to reflect the impact of recent gas curtailments in Trinidad. Cash from operating activities is projected at approximately $8 billion in 2022, which is down from our previous outlook, but still roughly double the operating cash generated in 2021. As Ken mentioned, we remain confident in the long-term outlook for the business and intend to invest $1.4 billion on high return strategic growth and sustainability initiatives in 2022. In retail, we have invested approximately $500 million this year on acquisitions to grow our network in core geographies and continue to make investments to enhance our proprietary products offerings and digital capabilities. We are enhancing our low-cost nitrogen network through brownfield debottlenecking and decarbonization projects. The nitrogen team has completed projects at three sites this year that are expected to reduce annual CO2 equivalent emissions by more than 500,000 tons. We are advancing the front-end engineering work for our 1.2 million ton Geismar clean ammonia project and recently signed an agreement with a technology provider. This is a key milestone for the project, and we anticipate making a final investment decision in 2023. In potash, we continue to progress the ramp-up of our low-cost potash production capability. The projected global supply and demand balance supports Nutrien's scale for increased production as a valuable and low-cost option to close the projected supply gap. These projects come with a very low capital cost of $150 to $200 per ton, and the investment is spread across multiple sites. Therefore, we believe that there is low execution risk and symmetric upside potential given the incremental margin opportunity and short expected payback period. Finally, on our plans for returning capital. Last quarter, we announced our intention to return approximately $6 billion in capital to shareholders in 2022, including $5 billion in share repurchases. While some of these repurchases may now extend into the first quarter of next year due to lower forecast operating cash flows in 2022, we still intend on completing our existing 10% share repurchase program prior to expiry in February 2023. As we target sustainable and growing dividends over time, the significant reduction in share count will be included in the decision criteria for future per share dividend increases. Now I'll pass it back to Ken.

Ken Seitz, President and CEO

Thanks, Pedro. I would just make a few final comments. The longer-term fundamentals for our business remain very strong, and the challenge of feeding a growing world has not abated. In fact, over this past quarter, we have seen further pressure on global food supplies that will need to be addressed over several growing seasons. In meeting with stakeholders over the past year, my optimism for the opportunity that's ahead for our business to serve the growing and evolving needs of our world has only strengthened. As our business evolves, so will our people, and I wanted to introduce a few new members of our executive leadership team that are on the call today. Chris Reynolds is our new Executive Vice President and President of Potash. Chris was previously leading our global sales organization and also served as Interim President of Potash since the start of the year. He has been with Nutrien for over 18 years and is extremely well positioned to lead our potash business. Trevor Williams has taken on the role of Interim President of Nitrogen and Phosphate. Trevor has been with Nutrien for over 11 years, most recently as our Senior Vice President of Nitrogen Operations. He has diverse global experience leading large chemical operations and strategic growth initiatives. In addition, Mark Thompson, who many of you have met in the past, is taking on the newly created role of Executive Vice President and Chief Commercial Officer. Mark has been with Nutrien for over 11 years and will utilize his extensive experience working across all our business units to advance our global commercial strategy. With that introduction, we would now be happy to take your questions.

Operator, Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. One moment please for your first question. Your first question comes from Joel Jackson from BMO Capital Markets. Please go ahead.

Joel Jackson, Analyst

Hi, Ken. So interesting year in straight up and potash. Can we -- I mean, when you just made the decision to expand potash. It's an obvious reason why you were going to do it, right, what's going on with some of your competitors and the restrictions and tensions. But you must have known in June that the market, the demand in the spring wasn't as good as thought and that inventory was going to build that the situation could possibly happen. You have to make a decision based on multiple years. Well, it's Belarus to PPC story has issues, I need to have capacity for the world and for the market. But can you talk about how maybe Nutrien got this wrong? On understanding what demand should be this year? And on what the right production will be for this year? Was that more Russian tons leaked out than you thought was at demand elasticity at higher prices worse than you thought? And then what will be your entering production rate for January 1st, 2023? Is that 50 million tons? Thank you.

Ken Seitz, President and CEO

Yes, good morning Joel and thank you for the question. So yes, if we look at 2022 and what's happened in the market, it's really two things. We can talk about North America and we can talk about Brazil. Starting with North America, we had a strong fall application in the fall of 2021. Heading into the spring, looking with the backdrop of agricultural fundamentals, looking at a very strong 2022 for growers, and certainly all the incentives there to lay down the appropriate crop nutrients to maximize yields. But we're in agriculture, and of course, weather in the spring of this year, a late start to the planting season led to a compressed planting season. At the end of the planting season, we saw prevent plant acres, crop switching, and just fewer crop nutrients going to ground in the spring in North America, resulting in larger carryover volumes through the summer than we had anticipated. Heading into the fall, we observed farmers incentivized to apply the appropriate crop nutrients, looking at corn and wheat at 50% above the 10-year average. We see farmers motivated to use crop nutrients. Over the summer and into the fall, at the start of the application season, farmers looked at their bins with fertilizer supplies and lower prices, and delayed purchases until the last moment. In North America, we've seen inventories coming down, with Midwest pricing around $640 per short ton. Moving into the fall application season, we're preparing for the spring. From Brazil, Brazilian farmers enjoying a strong year saw imports in the first half of the year at 37% above the previous year. Brazilian farmers and distributors sought to reinforce volumes ahead of expected supply-side challenges with sanctions on Russia and Belarus. These larger inventories prepared Brazilian farmers for their big spring planting season. Prices surged to over $1,000 a ton during the purchasing period, but as planting season commenced, those inventories are drawn down. Farmers there, again, hesitating to make purchases, watching prices decline. Looking forward to the Safrinha corn crop, those inventories will need rebuilding. Both North American and Brazil are among our largest export markets and we feel the results. The liquidity in potash trade faced constraints over the summer. Heading into 2023, we observe a strong backdrop for agricultural fundamentals, yet a challenged supply situation. Through 2022, the export levels of Belarus and Russia have played out as we expected — roughly 50% from Belarus and 20% from Russia. Heading into 2023, we continue to face similar circumstances and readjust our expectations based on the known supply constraints in that region. In terms of entering 2023, our guidance suggests volumes and sales for Nutrien will be around that 50 million ton level. We will refine that guidance as we approach February. But we expect strong year driven by the replenishing inventories.

Andrew Wong, Analyst

Thanks. Good morning, I guess you could call me wrong because we were all wrong on a quarter, I guess. Looking at potash sales this year, it'll be around 12.5 million tons based on guidance. Capacity is set to be 15 million tons next year. There's a lot of moving parts right now on both supply and demand side. And I'd say also, it's fair that we also have a lot less visibility on both. So does it make sense to kind of for Nutrien to see sales and demand kind of catch up with capacity? And just to see some more confirmation on the more positive view here before continuing to ramp up some more?

Ken Seitz, President and CEO

Yes, thank you for the question, Andrew. These investments that we make in our ramp-up capability and production are incremental. We're not jumping from 14 to 15 or to 18 million tons all in one leap. We'll be prudent with how we allocate capital in light of what we see going on in the market. But Andrew, I go back to grounding ourselves in the fundamentals. The backdrop for agriculture is strong. All we need to do is look at where agricultural commodities are today and where futures are trading for corn, which, even as far out as 2025, is above $5 per bushel. Those prices are strong, bringing corn and wheat at values 50% above the 10-year average. There exists this strong backdrop, with a persistent supply constraint. Our forecast is 64 to 67 million tons in 2023, because it's a supply-constrained market. In a non-constrained view, we could estimate demand around 70 million tons. For our part, we've been careful about expanding capacity and pacing it with the market but believe these supply-side challenges are real and will create a market for our volumes in the years to come.

Christopher Parkinson, Analyst

Are you going to hear me now? All right, sorry, I'll ask it again. I was just asking, given all the puts and takes and now that the dust has settled since the initial reaction to the Ukraine war and trade flows have adjusted on the potash side, we have a little bit of a better idea of what the Russians and Belarussians are capable of. There's volatility in gas prices on the nitrogen side. Can you just give us any additional framework on your specific way of thinking on a segment basis? As it pertains to your $9 billion normalized EBITDA estimate, just any thought process would be very helpful. Thank you very much.

Ken Seitz, President and CEO

Yes, I think I'll start with a few opening thoughts, then pass it over to our Chief Commercial Officer, Mark Thompson for further insight. As we have seen with the conflict in Ukraine, it presents medium-term challenges in terms of the energy complex in Europe and hindered exports of crop nutrients out of Russia and Belarus. We anticipate a structural shift in our industry that will change mid-cycle pricing and the price strip. Mark, I’ll hand it over to you for more detail.

Mark Thompson, Chief Commercial Officer

Yes, thank you, Ken. Good morning, Chris. Fundamentally, we don’t see any different view around the projection for normalized midcycle earnings in the $9 billion range for EBITDA. There are two components to that: one on volume and the other on pricing. When we look specifically at potash, we see the market needs further tons from Nutrien in years ahead. Prices are driven by various fundamental factors that indicate structural changes in the markets, which will support this projection.

Vincent Andrews, Analyst

Thanks. I wanted to follow up on nitrogen prices and what you think the price-setting mechanism is today, and what it might be in 2023. There's a lot of debate in the investment community about whether European TTF prices and production costs should set a floor for nitrogen prices. Recently, I’ve found it hard to determine what exactly has been setting the price over the previous months. Can you provide your thoughts?

Ken Seitz, President and CEO

Great. Thanks, Vincent for the question. I'll pass that over to Jason Newton, our Chief Economist to discuss the moving parts.

Jason Newton, Chief Economist

Yes, good morning, Vincent. The price depends a bit on the marginal cost of the product and the time of year. We've just come through the third quarter, which is a seasonal low point for global demand. When examining European production costs in that quarter, it's clear they were well above market prices, with over 50% of ammonia capacity idled. Looking at it long-term, we need prices to at least align with marginal costs for ammonia and nitrates, especially in Europe. As we move into 2023, a demand-driven environment is anticipated, where actual demand will significantly influence pricing.

Jacob Bout, Analyst

Good morning. Historically, we used to talk about the balance of pricing versus new supply in the potash industry. What do you see as the sweet spot for pricing? How focused are you on market share? And what incentives do you see driving buyers to engage? I know you mentioned inventories in the U.S., but what are they looking like in Brazil, India, and China? Is it primarily price-driven?

Ken Seitz, President and CEO

Thank you, Jacob, for the question. Our approach to the market is centered on our longstanding customer relationships. Pricing should ultimately facilitate affordable crop nutrients within strong agricultural fundamentals that tailor incentives for high-quality production. The volatility we observed throughout 2022 is driven by supply and demand. When considering the market ahead, the majority of new supply expected over the next five years will come from Nutrien. Given continued challenges with new supplies from Belarus and Russia, farmers have ample incentive to replenish inventories in advance of the robust planting season in Brazil and the northern hemisphere.

Ben Isaacson, Analyst

Thank you very much. Good morning, everyone. I have a question about potash prices and their impact on the retail business. Historically, the crop nutrients segment to retail earned about a billion dollars a year in gross profit. Last year, that increased to about a billion and a half, approaching $2 billion this year. However, your EBITDA guidance is for around $2 billion this year and around $2 billion in 2025. Now that potash prices have retreated, how do you expect that to impact retail EBITDA as crop nutrient gross profit declines? Should we be considering retail EBITDA in the range of $1.6 to $1.7 billion next year?

Pedro Farah, CFO

Great. Thank you for the question, Ben. I'll pass that over to Jeff Tarsi. Good morning, Ben. We've seen margins remain attractive in the nutrient shift for us and retail in both '21 and '22. Momentum persists this fall as crops are harvested early. Growers are preparing for '23, leading to sustained attractive margins. While we may observe historical margin levels returning, this could still constitute an increase from figures in 2020. Our expectation is for margins to stay strong through the end of '22, and as we transition into '23, we'll realign ourselves as inventory levels are low. We anticipate favorable conditions for both this fall and into 2023.

Edlain Rodriguez, Analyst

Thank you. On the inventory destocking that's happening currently, how long do you think it will continue? With increased production from Nutrien and more products coming out of Eastern Europe next year, do you have any concerns about further pressure on product prices?

Ken Seitz, President and CEO

Thank you for the question. I'll pass it over to Mark.

Mark Thompson, Chief Commercial Officer

Good morning. We currently see the market undergoing inventory destocking. Key markets in North America display movement of products as growers actively engage, pushing product straight into the fields. We expect robust inventory levels for both the U.S. and Brazil as we exit 2022, a combination that drives demand due to attractive crop commodity prices, pushing growers to resume purchasing after the pauses observed in Q2 and Q3. The market dynamics indicate that as we transition into 2023, the tightness in supply—complicated by ongoing geopolitical tensions—will influence product availability.

Steve Byrne, Analyst

Yes, I'd like to drill into potash a little bit more. Shipments down into the U.S. corn belt in the quarter were effectively zero in September. What was unexpected by you? Are your retail businesses characterizing competitor inventory levels in that retail channel as now high normal, or are they low? Are you seeing application rates that are entering normal or potentially above normal? And sorry, one more on potash. Ken, you ran Canpotex in the past, and they would listen to your view. But looking ahead at the 2023 contract, with domestic pricing in China almost having a four in front, how do you balance your view that the potash market will be supply constrained with managing contract timings?

Ken Seitz, President and CEO

Thank you for the question, Steve. To reiterate, carryover volumes from the Spring season in North America were larger than anticipated. Our summer program began in August. We noticed buyer hesitation stemming from inventory awareness and falling pricing. As we move into the application season, we see normal engagement levels at around $640 per ton Midwest pricing. Now, regarding Canpotex and contract settlements, it’s true, domestic prices in China have softened, but they do not dictate settlement levels. Instead, negotiations are informed by global market dynamics. Despite the challenges, we anticipate that Canpotex will negotiate favorable terms reflecting the ongoing demand for standard-grade products internationally.

Jeff Zekauskas, Analyst

Thanks very much. Sort of a two-part question. In your potash forecasts for India for 2023, you're well below where demand was in 2019 and 2020. Why is that? Is that a function of Belarusian and Russian shipments or something else? And then in your Ag Solutions business, what do you think you can do about inflationary costs that are eating away at your margins?

Ken Seitz, President and CEO

Thank you for the questions, Jeff. For India, the regulatory control within the domestic market and profitability from the importers are challenges. The domestic maximum retail price has limited the growth of grower demand, caused by a higher pricing environment that has adversely affected feasibility for farmers. From an agronomic perspective, the optimal rates suggest usage would be 2x to 3x higher than what we witnessed this year, but the current policy landscape inhibits such growth. Now, regarding inflation, we observe inflationary pressures like every industry. Nonetheless, we've improved our cash operating coverage ratio significantly. Fuel costs have risen, but we have strategically adjusted application rates. We've managed to pass some inflation through to our customers. Our margins demonstrate robust performance in retail overall, which values the investments made.

P.J. Juvekar, Analyst

Yes, hi, good morning, a question on seeds. What are your expectations on seed pricing based on the price cards that have been put out earlier this year? And what is the market share of Dyna-Gro? One large U.S.-based seed company has claimed they have been gaining share in the retail channel, and I was wondering if you had any comments on that.

Ken Seitz, President and CEO

Thank you, PJ. I'll pass it over to Jeff Tarsi. Yes, with regard to seed, we just initiated our 2023 selling season, which typically kicks off in the third quarter and extends through the fourth. From a pricing perspective, you can expect increases in the mid to upper single-digits for the '23 season, around a 5% to an 8% increase tied to the relevant suppliers and hybrids. Our market share has increased by 20 basis points, overall. Dyna-Gro has performed well, seeing substantial share increases in various crops like cotton, rice, and soybeans for the 2022 season.

Steve Hansen, Analyst

Yes, good morning. Just sticking to the potash theme. I respect the decision to hold the line on the expansion strategy given the backdrop you described. But could you remind us how the incremental capital outlays will play out here as we contemplate the million tons a year effectively over the next three years? Are you making those investments predominantly upfront or will they come incrementally as capacity tranches are developed?

Ken Seitz, President and CEO

Great question, Steve. It's a little bit of both. We are staging that capital, but with some orders already committed. However, we also save capital when feasible. I’ll hand over to Chris Reynolds, our President of Potash for more specifics.

Chris Reynolds, President of Potash

Good morning, Steve. Thank you for the question. To date, we’ve committed about $200 million of the $580 million needed to increase to 18 million tons of capacity by 2025. It's staged, but we have committed some capital as long lead items. The supply chain has been manageable, and we are optimistic that this investment will enable us to meet future demand.

Adam Samuelson, Analyst

Yes, thank you. Continuing on potash. Considering the inventory situation in Southeast Asia, and India being relatively dry on the inventory side, how do we balance up imports when affordability might worsen due to potential subsidy cuts? Additionally, I'd like to discuss the relationship between wholesale and potash business and retail, reflecting on your experiences this year with differing signals affecting inventory positionings.

Ken Seitz, President and CEO

Thank you, Adam. I will start with Jason on inventory in Southeast Asia, and then shift to Jeff Tarsi to discuss retail and wholesale business dynamics.

Jason Newton, Chief Economist

Good morning, Adam. We don’t possess precise data on inventory levels in Southeast Asia, but we’re aware of drawdowns at the beginning of the year, leading to reduced shipments in that region. Demand remained relatively firm in the latter half of the year. For 2023, we expect lower inventories driven by rising palm oil prices and recovery in the fertilizer market.

Ken Seitz, President and CEO

Yes, relating to retail business decisions, there were challenges predicting what we saw earlier in the year with the late and compressed spring. Growers prioritized planting over fertilizing, working hand to mouth. We’ve witnessed solid engagement as we close the year, with our nitrogen demand peaking. We anticipated current growing conditions, and the underlying demand remains strong. We expect a seamless transition into the remainder of the season.

Operator, Operator

There are no further questions at this time. Mr. Holzman, I turn the call back over to you.

Jeff Holzman, Vice President of Investor Relations

Thank you for joining us today. The investor relations team is available for any follow-up calls. Have a good day.

Operator, Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.