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Good day ladies and gentlemen and welcome to the Q1 2018 Avangrid Inc. earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].
I would now like to turn the call over to Patricia Cosgel, Vice President of Investor Relations. Please go ahead.
Good morning to everyone. Thank you for joining us to discuss Avangrid's first quarter 2018 earnings results. Presenting on the call today are Jim Torgerson, our Chief Executive Officer and Rich Nicholas, our Chief Financial Officer. A team of Avangrid officers will also be participating on the call to answer your questions. If you do not have a copy of our press release or presentation for today's call, they are available on our website at www.avangrid.com.
During today's call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements, if any of our key assumptions are incorrect or because of other factors discussed in Avangrid's earnings news release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website, avangrid.com. We do not undertake any duty to update any forward-looking statements.
Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional informational and reconciliations of non-GAAP financial measures to the closest GAAP financial measures.
With that said, I will turn the call over to Jim Torgerson.
Thanks Patricia and good morning everybody and thank you for participating in our call. Avangrid really had a very good first quarter and we are on track to meet our earnings outlook for 2018.
When you look at the net income, as reported was $244 million or $0.79 per share, which was up 2%. Adjusted income was $243 million or $0.78 a share and that's up 7% over the adjusted numbers for the first quarter of 2017. It's very important that we are continuing to implement our strategic plan and as we said previously, we decided to sell our non-core gas storage business and we completed the sale of the gas trading business on March 1. We now have a definitive agreement which has been reached to sell the gas storage business, the assets themselves, and that's expected to close in May. Now once we close that sale, the proceeds from the two businesses will be about $225 million and that's going to be subject to the final adjustments.
The renewables business has, at this point, 497 megawatts onshore wind and solar that are currently under construction and those will be operational by the end of 2019. We are also executing on new opportunities that are not in our long-term outlook, but we’re very excited about the New England Clean Energy Connect project that was selected in the Massachusetts RFP and we will be making a filing with the Mass DPU shortly for that project.
Moving ahead with our Vineyard Wind partnership, as it's the first offshore bid in Massachusetts RFP to file the construction and operations plan and then commence the environmental assessment process. Now in the first quarter, Vineyard Wind also submitted a bid in the Connecticut RFP for 190 megawatts of offshore wind. The selections for the winners in both Massachusetts and Connecticut are scheduled for May and June respectively at this point.
Now on slide six.. You see the earnings results and for net income and this is what I will call the SEC GAAP required reporting. That still reflects the gas storage, two months of gas trading and mark-to-market. And as you can see on the left half of the slide, the earnings per share is up 2%. Our two businesses, network and renewables, performed well in the quarter. The comparison doesn't reflect their solid performance due to a less favorable mark-to-market and the absence of positive discrete tax adjustments in the first quarter of 2017 in renewables.
Now, on the right side of the slide, you see the reconciliation of the first quarter earnings to the adjusted earnings, and it started at $0.79, the gas storage and trading results. This is the removal of a positive result of $0.04. We had a trading loss from the held for sale measurement. Really, this was a lower price that we received and we estimated early on, and that affected it by $0.05. And then renewables mark-to-market was $0.01, so our adjusted earnings per share were $0.78.
Turning to slide seven and the adjusted earnings. Now this excludes certain nonrecurring non-core and mark-to-market items. And you can see that our earnings were up 7% and this positions us really well to achieve our annual guidance target. When you look at the quarter itself versus 2017, that net income was $0.73. Networks, actually, was up $0.09 to $0.65 a share. That was up 17%.
Now we look at the results of that, because of the multiyear rate plans in New York and Connecticut which also includes Southern Connecticut gas rate plan that went into effect January 1 of this year. We have been implementing our best practices and cost management and we also had some lower earnings sharing compared to the first quarter of 2017. The higher rate base, the tax reform impacted that as did our existing capital -- our additional capital spending. We really haven't adjusted the earnings sharing mechanism, probably do that in the second quarter or what we see.
Renewables was actually down $0.04 to $0.15 a share. However, we had very positive operating performance at renewables with improved wind resources. We had 590 megawatts of new wind and solar projects and increasing production on the PTCs, really reflects this. The renewables’ operating performance. The adjusted gross margin was actually up 11%. Although, there were some positive discrete tax adjustments in the first quarter of 2017, which reduced our year-over-year comparison, the net capacity factor was at 33.6% for the quarter versus 31.5% in the prior year. This was a result of better wind and new capacity. Average prices were down about 2%.
Now, the PPA and merchant mix remains about 72% to 28%. And when you look at the PPAs, we really have none expiring in 2018, about 104 megawatts in 2019, none in 2020, just under 300 megawatts in 2021 and then a little over 542 in 2022. Our secured portfolio remains at 1.45 gigawatts that’s secured, highly likely is up 100 megawatts, that's 0.3 gigawatts. So with that, we have 1.75 gigawatts we’ve put in the secured and highly likely category. So have we got 2.1 gigawatts that we need here, 0.9 gigawatts are secured and to get to the 2.7 that we want to have by the end of 2022.
So turning now to slide eight, the networks regulatory update and we want to talk a little bit about the Tax Cuts and Jobs Act. In New York, in March the staff recommended the net benefits to be deferred and passed back to customers through a current rate case or a surcredit would be effective on October 1 of this year. The company is proposing to offset some of the storm costs and the AMI revenue requirements instead of just passing it directly back. Now in Maine, we are proposing a Tax Act savings to offset recovery of the October 2017 major storms in our July 1, 2018 annual true up.
In Connecticut and Massachusetts, the proceedings are in progress. And under FERC, the New England Transmission Owner formula rate will automatically capture the benefits of United Illuminating and CMP. FERC has also opened proceedings and is addressing comments at the moment. Some other areas for the regulatory in New York, the AMI discussions are ongoing. We anticipate approval later in 2018. The earnings adjustment mechanism discussions have been impacted by the ongoing storm activity and the AMI discussions and other things, so that's been delayed somewhat.
Connecticut and Massachusetts, we are planning rate filings for Connecticut Natural Gas and Berkshire Gas in the second quarter of 2018. For CNG, rates will be effective for January 1 of 2019 and for Berkshire Gas, probably in effect in the second quarter of 2019. With FERC, the Administrative Law Judge has recommended no change in the ROE for Complaint IV. The existing ROE was not shown to be unjust and unreasonable. We feel that's positive but the commission will still ultimately need to decide and there's really no time frame at this point to make that decision. There has been no progress on Complaint I remand or the Complaints II and III.
Now on slide nine, very pleased that the New England Clean Energy Connect was selected and this is in partnership with Hydro-Québec. Now Hydro-Québec has responsibility to the border in Canada and CMP is all through Maine. To refresh your memory, the project is 1,200 megawatt to the DC transmission line above ground. It's going to link Québec and New England so we can deliver a hydropower to Massachusetts. It is the lowest cost solution, we believe and it's also the shortest. It's 145 miles, all of that on right of way we control and there is an existing transmission corridor for about two-thirds of the project. The other third will be through, what I call, virgin territory. But we have talked to the land owners. They understand we are going to be building it and we are getting strong support from the communities involved.
It's a $950 million investment, excluding AFUDC. The pricing is fixed. The levelized pricing for 20 years and keep in mind, it's levelized as many projects are in this context. The construction will be between 2019 and 2022 and the ongoing contract negotiations with the electric distribution companies in Massachusetts with the goal of filing with the Mass DPU shortly and approval then would be expected in 2019. The remaining permits and approvals were all filed in 2017 and we expect to receive all the main approvals by the end of 2018 and other approvals by the end of 2019.
As you can see the list of the key permits and approvals, we have the Massachusetts PUC Approval of the Contracts, then we have the Maine PUC Certificate of Public Convenience and Necessity, the Maine Department of Environmental Protection approval which really goes along with the Presidential Permit and then ISO-NE Impact Study, Army Corps of Engineers and then the FERC Approval of Tariff. We are highly confident of our ability to deliver this on time and within the budget and keep in mind, it was not included in our long-term projections and we have the financial strength to be able to absorb this and then finance it directly.
On slide 10, I want to give an update on the offshore wind. The offshore wind prospects are getting considerable momentum in the U.S. Now, a part of our long-term growth strategy although again not in our long-term forecast established the offshore wind. We established that about a year ago as new business and we plan to be a leading role in the industry with offshore wind. Now one of the first one we do was in March 2017 when we won a Bureau of Ocean Energy Management auction off Kitty Hawk, North Carolina. We have a 100% ownership of that lease and that could produce up to 2.5 gigawatts of energy. We also acquired through an acquisition of a 50% interest in the partnership of Vineyard Wind. Now, it's a partnership with Copenhagen Infrastructure Partners. We believe this is the most mature offshore wind project in the Massachusetts RFP. Now I will get to that in a minute as to why.
Now, there was an RFP for renewable energy resources in Connecticut and Vineyard Wind did 190 megawatts offshore into that process. The selection should be announced in June of this year. Massachusetts had legislation requiring 1,600 megawatt of offshore wind by 2027. Now the current RFP in place is for up to 800 megawatt. Now you are required to bid 400 and could bid also 200 or up to 800. Now that selection is expected later in May. Vineyard Wind actually bid 400 and 800 megawatt project. We expect to be commercially operational by 2021 and we are the only company to provide direct benefits to Cape Cod. Our O&M center is going to located in Martha's Vineyard and we are the first company to apply for the construction and operation plan and to start the environmental assessment process.
Also there is other activities on offshore wind opportunities that are coming up. In New York, they are looking for 800 megawatts in the fall and 2,400 megawatts by 2030. Rhode Island is evaluating or looking to evaluate the implications from the Massachusetts RFP and want information on that, how it could impact Rhode Island. So there is an expectation that Rhode Island may be looking for some offshore wind as well.
And Massachusetts BOEM opened two new areas for lease that could impact the future there and we will be looking at those very closely. And Governor Phil Murphy in New Jersey is said to be looking for about 3,500 megawatts offshore of New Jersey.
On slide 11, we will focus on the offshore wind again. And Avangrid is very well positioned for leadership role in the U.S. offshore market. We have significant proven U.S. onshore renewables and transmission experience. Renewables has the third largest installed capacity in the U.S. of 6.4 gigawatts. We have a pipeline of eight gigawatts of projects we can get into. And we also in Maine, the recent successful completion of over $1 billion transmission project which came in on time and on budget.
We have significant proven global offshore experience with our affiliate of Avangrid and Vineyard Wind partner CIP. Both have significant experience with offshore wind. They have deep technical knowledge and engineering experience, well developed supply chain and relationship and we have experience managing offshore O&M through the Iberdrola. We have strong financing capabilities. Avangrid's balance sheet and CIP's experience investing in and financing offshore wind. So we are in a great position to be able to capitalize on this. We have global teams but we also have the local knowledge that's going to be required.
Turning now to slide 12. We are going to execute on opportunities to achieve our strategic goals. We are exiting the gas trading and storage business. That removes the volatility related to commodities and trading. It also eliminates ongoing net losses from the business, which have been significant. So March 1, we completed the sale of the gas trading business to CCI U.S. Asset Holdings. That's a subsidiary of Castleton Commodities International.
On February 16, we announced a definitive agreement to sell the gas storage business assets, which is Enstor Gas, LLC to Amphora Gas Storage which is an affiliate of ArcLight Capital Partners. That transaction is expected to be completed in May.
We are continuing to progress on our execution of our renewable growth plan. The highly likely project, as I said, increased to 100 megawatts. So the secured plus the highly likely totaled 1,746 megawatts. That's about 64% of our 2.7 gigawatt target. We entered into a contract for 100 megawatts at Klamath Peaking Plant. Renewables entered into a contract with Portland General Electric and it is a contract for five years beginning in 2019. We are also moving forward with targeting of transmission in new regions. So the networks business has registered submit transmission bids into the RFPs in MISO.
Now slide 13. I want to highlight a couple of long-term the outlook. It is on target, as we said from our February 21 Investor Day. We had solid earnings performance in the first quarter of 2018, the new wind projects in operation. It is a multiyear rate plan for NYSEG, RGE, UI and SCG. We continue to employ the best practices and achieve cost mitigation. This is an ongoing process that's going to continue and as we keep moving forward, we are going to keep looking for best practices and reducing our costs and being as efficient as possible.
Implementing the tax reform at all the major jurisdictions. As we said, we completed the sale of a non-core business, gas trading March 1, gas storage is going to be in May and we are well positioned for long-term growth outside of the plan. New England Clean Energy Connect program that's selected in the Mass RFP, we are positioned for growth in the offshore with lease ownerships and multiple New England region offshore wind targets. So today we are affirming our 2018 earnings per share outlook of $2.16 to $2.46 and the adjusted earnings per share to $2.22 to $2.50. And the 2018 guidance is based on adjusted earnings per share.
Now before I turn it over, I want to acknowledge Rich Nicholas who has announced he is going to be retiring in July, early July. So this is going to be his last earnings call, I believe. Rich and I been working together for a dozen years now and he has been a great assistance provided us. When you look at the things we accomplished starting with UIL and doing the acquisition of the gas companies, Rich was integral on that and then just as importantly an integral part of the merger with Iberdrola USA. So Rich has done a great job of getting and helping get that done and then the integration afterwards.
So, Rich, we want to thank you for everything you have done and now I will turn it over to you.
Well, thank you Jim, very much. I really appreciate your kind comments. So again, just to wrap up on the first quarter earnings. I am on slide 15 now where we have our U.S. GAAP roll-forward from first quarter of 2017 to first quarter of 2018, by segment. As Jim mentioned, the strong performance in networks contributing significantly to the increase in earnings over that period,
And when you turn to slide 16, we have the adjusted earnings per share, a 7% increase quarter-over-quarter, again really driven by networks and renewables strong operating performance, but we had positive tax adjustments last year that did not recur in 2018. And I will cover some of those positive results from an operational perspective in renewables in just a moment.
So on slide 17, we have the segments broken out there. And networks up 17% on an adjusted basis year-over-year, quarter-over-quarter, primarily driven by the rate plan increases, the steps that were already approved in New York NYSEG and RGE and in Connecticut for UI and Southern Connecticut Gas. In addition, we continue to focus on cost management implementation of best practices. Now last year, in Rate Year 1, we had accrued about $10 million pretax in the first quarter for sharing with our New York companies. And Rate Year 2 will be determined in the second quarter of this year. Given the growth in rate base, both from our capital program as well as tax reform, we would expect the sharing amount will probably be somewhat less in 2018.
On the FERC regulated transmission side of networks, we did have a higher rate base on our capital program. And that contributed $0.01 a share in the quarter compared to last year.
Moving to the corporate segment. It was essentially flat year-over-year.
For the renewable segment, we really benefited from the increased capacity in service from the projects that went in, including the production tax credits that come along with those and net of increased depreciation on those assets, we picked up $0.06 a share quarter-over-quarter from that new capacity. Sales from existing wind and solar assets added $0.01 per share. This was offset somewhat by the production tax credit roll-offs of $0.02 and lower renewable energy credits of $0.02 a share. As I mentioned, tax was a negative when you compare quarter-over-quarter, but as you recall, there were positive adjustments primarily related to state unitary taxes that occurred in the first quarter of 2017.
On slide 18, we have some additional operational details around the renewables segment. As you can see in the upper left quadrant, we added 590 megawatts between the two years and we have 497 megawatts of PPAs that are now under construction. In addition to the new capacity, earnings were positively impacted by a 7% increase in our load factor which was up to 33.6%, such that our overall production increased 15% as shown in the lower left quadrant. Overall pricing declined 2% primarily due to renewable energy certificate sales as compared to last year.
Moving to slide 19. We bring all these components together in terms of gross margin impacts which was up 11% quarter-over-quarter or $25 million. And that adjusted gross margin for the quarter had the largest contribution coming from the new capacity. As I mentioned, that was about $21 million. Existing assets added $5 million offset by a negative $5 million in pricing. PTCs, even net of the roll-off, we did pick up $6 million and roughly $2 million negative from everything else. Again, very positive operational quarter for the renewable segment.
So turning to slide 20. Our financial strength remained strong. As Jim mentioned, the ability to finance some of these new projects closed the quarter was 28% net leverage and net debt to total capitalization, 30% funds from operations to net debt and 2.9 times net debt to adjusted EBITDA with BBB+ investment grade credit ratings across the board.
So on slide 21, we are affirming our 2018 outlook on both a GAAP and an adjusted basis and for the business segments as well as the consolidated amounts. On an adjusted basis, our guidance is $2.22 to $2.50. And again no change in the segments. The outlook does reflect the sale of the gas storage and trading business, normal wind and the additional 590 megawatts of capacity that went into service in 2017 and we assume networks will earn it's allowed return and into the sharing bands.
On a personal note, As Jim mentioned, I will be retiring in early July. So this will be my last Avangrid's earnings call. And although I will see many of you at the upcoming AGA financial conference, I just want to take a moment to acknowledge the many incredibly talented people both inside the company and in the investment community that I have had the privilege to work with and come to know as the CFO of UIL Holdings and now Avangrid.
Thank you for your time, your energy and always your interesting questions. And in particular, I would like to thank Jim for demonstrating every day that being a leader and being a gentleman are not mutually exclusive. It has truly been my pleasure.
I will now hand the call back to our operator for one more round of those interesting questions.
[Operator Instructions]. And our first question is from Julien Dumoulin-Smith with Bank of America. Your line is now open.
Good morning everyone. This is Josephine on the line for Julien. Hope everyone is doing well.
Hi Josephine.
Hi. So my first question is on the New England Clean Energy Connect. We have heard some concerns around grid congestion. Could you provide any color on that? Is there possible mitigants that you have been considering?
The grid congestion, it's really the cluster study that's being done at New England ISO that has to be done and there's one party in front of us that puts us – kind of pushed it back a little bit. We are not concerned about it. New England did a study earlier that said there was 1,200 megawatts of transfer capability into the New England system from Maine. And Bob Kump is here, who heads up our networks business. I don't know, Bob you want to?
No, you are absolutely right. The studies have been done and shown that there really isn't congestion. So we have no concerns in that regard.
Okay. Got it. That's great to hear. And then second, how are you thinking about the financing for the project? Is that going to be all debt on your end?
We certainly could. This is Rich. So we certainly could finance it with all debt, given the strong balance sheet that we have and still be one of the leaders in terms of the strength of our balance sheet going forward.
We have internal cash flaw and between internal cash flow and debt, we will be able to finance that project rather easily.
Okay. Great. And then just moving to the offshore. I think you had highlighted that you have the most mature projects. I should note that one of your competitors is looking at the FAST-41 program. I was wondering have you considered that as well or --?
Well, Laura Beane here, who heads up our renewables business is here. So I will let Laura touch on that.
Yes, you bet. We definitely did consider that. We have been working hand-in-hand with BOEM all throughout the process and the determination that we made, not in isolation, was that our current path was going to be optimal. And as you know, we have submitted our COP, and it out for public comment through April 30 and then we will be expecting our environmental impact statement this fall with another 45 day public comment period. At that point it would be approved or approved with comments or rejected. So we are well on our way and we feel confident in our ability to meet the 2021 online date.
And when would be the construction beginning for that? Like when would you start construction? Sorry.
It depends on how you define construction. But we would probably begin at least 24 to 18 months prior to the online date.
Okay. Great. That's all on my end. Thank you very much.
Thank you.
Our next question is from Greg Gordon with Evercore ISI. Your line is now open.
Hi guys. Good morning. It's Durgesh, on for Greg. How are you?
Hi Durgesh. Good. How are you?
Great. Just to follow-up on the New England Clean Energy project. So there you will be booking AFUDCs as you do construction from 2019 through 2022. There shouldn't be any material regulatory lag, right?
Correct.
Okay. And then just one follow-up on the Klamath contract. Is that currently a merchant or it's already in the contract and you are simply extending it?
There was a contract that we had previously, and this is a new contract which starts in 2019.
Got it. Perfect. That's all I had. And Rich, big congratulations, and it's been a pleasure.
Thank you very much. I appreciate that.
Thanks guys.
And our next question is from Praful Mehta with Citigroup. Your line is now open. If your line is on mute, please unmute it. And our next question is from Andrew Levi with Avon Capital. Your line is now open.
Hi. Good morning.
Hi Andy.
Hi Andy.
Congratulations Rich.
Thank you sir. I appreciate it.
Yes. You have been very helpful to us. So we really appreciate all the time that you spent with us. So thanks again. So just on the renewable side, could you guys just talk about just kind of what the wind resource was like? I guess our understanding is that we had very strong wind resource in the quarter. And then I have a follow-up to that.
I think the wind resource was pretty much as expected for the quarter for us, because keep in mind, we are across the entire U.S. So it varies in different areas. But it actually looked pretty good across the board. I don't know, Laura you want to comment a little more?
Yes. I think it really did come in just about at our average that we have been pointing to for the last couple of years. February was particularly strong in the Western region. And as Jim said, it really depends, varies by region and because we are operating in all regions, it tends to be an average for us.
Okay. And then just to kind of weed that out a little bit because I guess looking at various maps, it seems that the wind resource, particularly in the Midwest was particularly strong, but maybe it was too strong from talking to people where depending on types of machines you had, you had to dial back the machines because of the strength of the wind. Did you see any of that happening for your machines? And then I have one more follow-up to that.
Yes. I think we definitely experienced high wind cut outs in various regions. I would say in the Midwest this first quarter, it was really weather that impacted us more than anything in terms of icing conditions and heavy snows. We had numerous instances where we were unable to man the farms and we were unable to reach turbines for corrective maintenance or putting turbines back online after strong winds for short periods of time. So that probably affected us the most.
Well, very interesting. Because we tried to just figure it out for the industry in general. And then can you guys just talk about on a high level, because I guess obviously we have kind of been working on is, I guess, depending on maybe the age of the machines, but obviously the technology that was possibly on the existing machines or enhanced or whether the machines are new, but I guess there's the ability that when the wind is very strong, as you know, that if you have, I don't know, like Siemens makes a gearing technology where instead of having to move the machine to neutral, you kind of gear it down and gear it up. Could you kind of talk about that as far as your fleet is concerned? And if not, you guys can follow-up. I don't know if you have that detail. But we were just kind of curious, because like in the Midwest, I guess, it seems like it's more weather related, whether you have that technology on your machines and I don't know if the word is percent or majority or however you want to talk about it and maybe just talk about the technology in general, as we find it very interesting.
Yes. Sure. I think it's probably best for us to follow-up if you want specific details. We do have turbines from six different OEMs across our fleet. And it will all really vary based on manufacturer as well as vintage of the turbines. As you are aware, every new version of the turbines come with improved technology and I think the industry has done a really nice job working to increase capacity factors and resiliency of these machines and their ability to continue to generate through high wind conditions where, as you referenced before previously, they would just be turned into neutral or tread themselves out of the wind. But we could certainly follow-up with technology specific update, if you are interested and what technology we have available and where on our fleet.
Yes. I guess I would. And if IR to call us, that would be really helpful because I just kind of doing a lot of work on that right now. And I guess also the age of the machine too, right, makes a difference as far as whether you would, obviously if it's a new machine, it has that technology, but if it's an older machine and the PTCs are running out, you may not want to repower, I should say. Maybe that's not the right word, repower, but you understand as far as recontracting or maybe I guess repower is the right word. But the point is, whether you would add that technology? Have you been adding that technology to some of your older machines?
When you say, add technology, for the most part --
Well, I guess the ability to gear it, I guess.
Andy, there is a couple of things you could do. One, repowering is clearly one. But that's when you actually replace 80% of the moving parts pretty much or 80% of value in order to get the PTC. That's one aspect. The other is software upgrades, which is what Laura was talking about and we are actually doing that right now with a lot of our machines which boost the power output from them. So those are things that we look at all the time. And as you said, also the newer tech, the newer machines actually have more technology in them. So you pick up more of it. So there's a lot of things going on. We keep up to speed on all of that.
Okay. Thank you. If we can get a call, we would appreciate. Thank you very much.
Okay.
Thank you. And I am showing no further questions. I would now like to turn the call back to Jim Torgerson for any closing remarks.
Well, I want to thank everybody. As we said, we had a very good first quarter and we look for that to continue through the year and I want to thank everybody for their participation. I want to thank Rich again for all his great contributions to the company over the years. So, thank you all.
Thanks everyone.
Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect. Everyone have a great day.