Crescent Point Energy Corp

TSX:CPG

Earnings Call Transcript 2022-Q2

[Operator]

Good morning, ladies and gentlemen. My name is Michelle, and I will be the operator for Crescent Point Energy's Second Quarter 2022 Conference Call. This conference call is being recorded today and will be webcast along with a slide deck, which can be found on Crescent Point's website homepage. The webcast may not be recorded or rebroadcast without the express consent of Crescent Point Energy.

All amounts discussed today are in Canadian dollars, with the exception of West Texas Intermediate, or WTI pricing, which is quoted in U.S. dollars. The complete financial statements and management's discussion and analysis for the period ending June 30, 2022 were announced this morning and are available on the Crescent Point, SEDAR and EDGAR websites.

All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session for members of the investment community. [Operator Instructions]

During the call, management may make projections or other forward-looking statements regarding future events or future financial performance. Actual performance, events or results may differ materially. Additional information or factors that could affect Crescent Point's operations or financial results are included in Crescent Point's most recent annual information form, which may be accessed through the Crescent Point, SEDAR or EDGAR websites or by contacting Crescent Point Energy. Management also calls your attention to the forward-looking information and non-GAAP measures sections of the press release issued earlier today.

I will now turn the call over to Craig Bryksa, President and Chief Executive Officer at Crescent Point. Please go ahead, Mr. Bryksa.

[Craig Bryksa, President and CEO]

Thank you, operator. I'd like to welcome everyone to our second quarter 2022 conference call. With me today are Ken Lamont, our Chief Financial Officer; and Ryan Gritzfeldt, our Chief Operating Officer.

As the operator highlighted, this conference call is being webcast along with the slide deck, which can be found on our website.

I'm pleased to report on our results for the past quarter, which demonstrate our continued focus on delivering value and returns for our shareholders. In the second quarter, we generated approximately $380 million of excess cash flow, allowing us to further reduce our net debt and accelerate our return of capital to shareholders. As a result of our significant excess cash flow generation, coupled with proceeds we received from our strategic noncore dispositions, we recently achieved our near-term debt target of $1.3 billion, ahead of our previously anticipated time line.

Given our success in strengthening the balance sheet, we recently increased our third quarter dividend by more than 20% to $0.08 per share or $0.32 per share on an annualized basis. This marks our fourth consecutive dividend increase in less than a year. We also continued to buy back shares under our NCIB, and have now repurchased over 21 million shares since December of 2021.

Earlier this month, we released our updated framework that highlights our commitment to returning capital to shareholders. As part of this framework, we are targeting to return up to 50% of our discretionary excess cash flow to shareholders above and beyond the return we are providing through our base dividend. We expect to provide this additional return through a combination of share repurchases and special dividends.

We see great value in our shares at the current levels and plan to allocate a sizable portion of our discretionary excess cash flow towards further share repurchases. As a reminder, we currently have the ability to repurchase up to 10% of our public float under our normal course issuer bid, which expires in March of 2023.

Our ability to deliver strong returns to our shareholders is a direct result of our focus on enhancing the company's balance sheet strength and sustainability. Moving forward, our strategy will remain focused on executing around these 2 key pillars in order to create additional long-term value for our shareholders.

We remain on track with our 2022 guidance to achieve annual production of 130,000 to 134,000 BOE per day this year, which includes the impact of our recent noncore dispositions. Subsequent to the quarter, we released our fourth annual sustainability report, which sets ambitious environmental performance targets, including reducing our GHG emissions by 38% by the year 2030, and reducing freshwater use and enhancing the strategic management of our water resources. These targets build on our other environmental initiatives to reduce our inactive well inventory by 30% by 2031.

Overall, we've had an incredible first half of 2022, and I'd like to thank our employees for their hard work and contributions towards another great quarter at Crescent Point.

I'll now turn the call over to Ken to discuss our financial results. Ken?

[Ken Lamont, CFO]

Thanks, Craig. For the quarter ended June 30, 2022, adjusted funds flow totaled $599 million or $1.04 per share diluted, driven by a strong operating netback of $76.57 per BOE. We also reported strong net income of $332 million in the second quarter or $0.58 per share.

Development capital expenditures for the quarter, including drilling development, seismic and facilities, totaled approximately $197 million. This generated quarterly excess cash flow of $380 million, the highest in our corporate history. We returned approximately $108 million or 30% of our excess cash flow back to shareholders during the second quarter through our base dividend and share repurchases.

Our net debt at quarter end totaled less than $1.5 billion, reflecting $307 million of net debt reduction during the quarter. This included repayment of approximately $225 million of senior note maturities.

In early July, we announced the disposition of certain noncore assets, allowing us to achieve our near-term debt target of $1.3 billion. Given our success in strengthening our balance sheet, we have accelerated our return of capital to shareholders, including an updated framework to return up to 50% of our discretionary excess cash flow beginning in the third quarter of 2022.

As Craig mentioned, we have increased our third quarter dividend to $0.08 per share or $0.32 annualized. Our dividend is based on a framework that targets sustainability at lower WTI prices, while also allowing the flexibility to return additional capital through other forms, including accretive share repurchases and special dividends. We remain disciplined in our buyback process using a conservative mid-cycle price assumptions and expect to continue to buy back shares in the current market given our compelling valuation.

Since December of 2021, we have repurchased over 21 million shares, including 7.2 million shares during the second quarter. Overall, our allocation of capital continues to demonstrate our commitment towards a model that generates value through a combination of meaningful shareholder returns, continued debt reduction and achieving strong returns on our capital invested within the business.

As we have continued to strengthen our balance sheet, we've also lowered the percentage of production that we have hedged as a part of our risk management program. As a result, we have hedged approximately 20% to 25% of our production during the first half of 2023, which is down from the approximately 50% of our production hedged during 2022.

We are currently layering hedges on future production on a 12-month rolling basis, allowing us to maintain a stable capital program and compelling return of capital offerings to shareholders. Through our continued capital discipline and operational execution, we have significantly strengthened our financial position, while also reducing commodity price volatility risk.

I will now turn the call over to Ryan to speak to our operational highlights. Ryan?

[Ryan Gritzfeldt, COO]

Thanks, Ken. For the quarter ended June 30, 2022, our production averaged 129,176 BOE per day, comprised of over 80% oil and liquids. Our production was down slightly from the prior quarter due to our North Dakota operations being temporarily impacted by a severe storm in late April that affected electricity distribution throughout a significant portion of the state. Our North Dakota operations were fully restored during the quarter, slightly earlier than originally expected, thanks to an all-hands-on-deck effort from our teams on the ground and from local utility personnel.

We remain on track with our annual guidance of 130,000 to 134,000 BOE per day, which includes the benefit of high-impact wells coming on stream in our Kaybob Duvernay and North Dakota resource plays during the second half.

During the quarter, we brought on stream our second fully operated multi-well pad in the Kaybob Duvernay play, with an average 30-day initial production rate of over 900 BOE per day per well, which was comprised of approximately 80% condensate and liquids. These wells are expected to pay out in approximately 6 months from the initial onstream production date at current commodity strip pricing.

Our ongoing execution in the play also includes a further reduction in drilling days on our latest pad, which averaged approximately 14 days per well. These reductions in days on site are efficiencies that we believe are sustainable throughout the commodity price cycle. I want to congratulate our teams for their hard work in realizing these efficiencies, especially considering that we are only 4 pads into the play on the drilling side and 6 pads in on completions.

Across our asset base, we continue to roll out our Operations Technology, or OT platform. We have used the OT platform to achieve both operating cost efficiencies as well as environmental and safety benefits. We are currently implementing our OT platform in North Dakota and the Kaybob Duvernay. And once this work is done, we will have completed a company-wide integration of our OT platform.

Subsequent to the quarter, we released our annual sustainability report, providing insight into our ESG approach and execution. Given our recent success in lowering our Scope 1 emissions by 50%, we introduced a new, more aggressive target to reduce our Scope 1 and 2 emissions intensity by 38% by 2030 relative to our 2020 baseline.

We also announced 2 new water targets to build upon our strong water management performance, including a 50% reduction in surface freshwater use in our Southeast Saskatchewan well completions by 2025 and the development of strategic water management plans for our major operating areas to enhance our stewardship of our water resources. We take great pride in our ESG performance and continue to integrate best practices into all aspects of the business to enhance our long-term sustainability.

Before I hand it back to Craig for some closing comments, I would like to thank our employees, and especially, our field staff for all their hard work, persistent dedication, operational excellence and continued focus on safe operations throughout the quarter.

I'll now pass it back to Craig for final remarks.

[Craig Bryksa, President and CEO]

Thanks, Ryan. As you can see, we've had a very successful second quarter, highlighted by our operational execution, financial discipline and excess cash flow generation. I'm proud to report that we are on track to generate approximately $1.4 billion of excess cash flow in 2022, assuming $100 per barrel WTI pricing for the remainder of the year, supported by our high netback asset base.

We also continue to benefit from our significant tax pools, which currently total over $9 billion, further enhancing our excess cash flow profile in future years. Our team continues to work hard to mitigate cost pressures in the current inflationary environment through proactive supply chain management, disciplined capital allocation and by realizing operational efficiencies. We will continue to monitor our cost expectations as the year progresses.

We're proud of our success so far this year, and we're excited about our future outlook for our company and the industry as a whole. I'd like to thank our shareholders for their continued support and our employees for their hard work and execution of our business strategy.

I'll now open the call to questions from the investment community. Operator?

[Operator]

[Operator Instructions] Your first question comes from Dennis Fong of CIBC World Markets.

[Dennis Fong, CIBC World Markets Inc.]

Maybe the first one I'd like to start off with was the Kaybob Duvernay results. Obviously, averaging over 900 BOEs a day, a very encouraging result, especially when you compare it to some of the docks that you completed and brought online about a year ago. Obviously, these wells are longer in length. And I know you guys changed the frac design to some degree.

I was just curious as we look forward, I know that there was continued focus around optimizing frac design as well as kind of well optimization on a go-forward basis. And I was just wondering which parts are you kind of more focused on? Is it more on the improvement of productivity because that's obviously a pretty good step forward? Or is there kind of some combination of looking on the cost structure side as well? Or how should we be thinking about this on a go-forward basis as well?

[Craig Bryksa, President and CEO]

Dennis, it's Craig. So I'll give you a little bit of color, and then Ryan can add as well. But we've been off to a real good start here in Kaybob. To the point earlier on, just being 6 pads in now on our drilling and 4 pads in our completion is a real good start. This last pad that we brought online, exceeding our book type. So things on that front look really good.

I'll give Ryan to give you some color. But I would say, we're driving down the path on both of those initiatives that you've talked about, Dennis. So both on increasing productivity and continuing to focus in on that cost structure and driving that down.

So with that, I can maybe pass it to Ryan, and he's better equipped to give you some of those answers.

[Ryan Gritzfeldt, COO]

Yes. I would say that the pad we just spoke to, it's basically the same area as the first fully operated pad we brought on, maybe a little bit better reservoir. So we were hoping to see the slightly better IP results. The pad that we just brought on actually is a little bit further to the east and in good reservoir as well. So excited to see what that does.

And then, yes, good question. Obviously, as we tweak our frac design, I think it's always a little bit tempting to increase sand tonnage and fluid intensity, which obviously increases costs. And obviously, in this inflationary environment, it's probably not the time to do that and focus on returns. And so I think going forward here, at least in the near term, you'll see us adopt similar frac techniques that we have here over the past year.

[Dennis Fong, CIBC World Markets Inc.]

Perfect. Perfect. My second question is a little bit of a follow-up in terms of your activity, setting kind of a further reduction in terms of drilling days and shortening kind of the length of time being spent on wells. How are you thinking about the pace of your activity and potentially when you could finish your 2022 program? Is it possible that you finish a little bit earlier this year? I wonder some of your considerations if you potentially get to that point, maybe in kind of mid-Q4.

[Craig Bryksa, President and CEO]

Yes. And so thanks, again, Dennis. So we're working through that right now. Obviously, we're having a lot of success here on the drilling days like you've noted. So we're getting them done a little bit faster here than what we budgeted. We're currently looking at the budget now on how that's going to set up here as we look into Q4 and then into Q1 of 2023. And we'll see how that ends up playing out. But ideally, Dennis, that we just -- the plan here is to keep that rig running right now and keep that operation as efficient as possible. So ideally, we just keep drilling right through Q4 and then into Q1 on that front.

But working through it right now, and then as we get into a little bit later in the year, look for us to provide a little bit of color on 2023 guidance, not only on the capital end but production as well.

[Operator]

Your next question comes from Jeremy McCrea of Raymond James.

[Jeremy McCrea, Raymond James]

A bit of a follow-up with Dennis' question there here, too. Just on your Duvernay. I know -- and I don't think it's a big figure that you guys were interested in the XTO Duvernay lands. Is there still an ability to potentially farm in on that? Or are you guys looking to do additional M&A, looking for other Duvernay lands? I just want to get a better idea of your M&A strategy here for the rest of the year.

[Craig Bryksa, President and CEO]

Yes. Jeremy, it's Craig here. So obviously, there is some interest on the XTO lands just based on us haven’t done that farming with XTO in the past, and completing those wells and had some -- a lot of success on that front. So those wells, I'm happy to tell you, are producing in at or better than typo on that front as well. So things on that look good.

As far as M&A moving forward, like we've talked in the past, Jeremy, anything that's out there that makes sense for us, we will look at. It's got to certainly improve us in the context of one of the pillars that we've talked about in the past, whether it's balance sheet strength or sustainability. And if it makes sense and improves the business on either of those, then we would certainly look at doing it.

That said, don't look for us to chase anything that doesn't make sense on that front. But there's lots of things out there. There's always tire kicking, and we'll just see how things play out here over the year. But expect us to continue to be disciplined like we've demonstrated here over these last 4 years. If it fits, sure. If it doesn't fit, no.

[Operator]

Your next question comes from Travis Wood of National Bank Financial.

[Travis Wood, National Bank Financial]

Dennis was kind of hitting on it a bit, but I wanted to follow up now that some of the noncore dispositions have closed, it feels like we continue to hit some inflationary pressure broadly. How does that impact kind of the remainder of the '22 capital budget? How that's shaping up? And then what could that mean for next year as we kind of run through some scenarios strip or low side on the capital profile? And then lastly, could we -- you've kind of been running 25% to 30% targeted on the Kaybob area. Could we see that take up a bigger chunk of the broader capital budget into next year as well? I'll leave it there.

[Craig Bryksa, President and CEO]

Travis, thanks for the question. So first, on inflation. So I can tell you that's absolutely real in some of the areas we're seeing 15% or even higher than 15% on some of the cost pressures that we're feeling. So I would lean towards the high end of our guidance. Our guidance for us right now is at $875 million to $900 million. I would certainly lean to that high end, Travis, as we work through this. And then again, look for us to provide some color on 2023 as we get to a little bit further down this year and into the fall, and we'll provide some color on that and what our capital spend looks like. We're going through that right now and just finalizing those numbers. So we'll have some color soon. And then your second question, again, Travis, sorry?

[Travis Wood, National Bank Financial]

Well, you might -- well, I'm just looking for kind of the allocation for Kaybob next year kind of been 25%-ish.

[Craig Bryksa, President and CEO]

I would expect a similar profile. Actually, Travis, how things are setting up around the bulk of the areas is very similar capital allocation across the asset base. Right now, we've been running that 1 rig program in the Duvernay, expect it to be very similar to that. The only difference is like we mentioned, we're chewing through our drilling days here quite a bit, and things are becoming quite efficient. So that end up creating a little bit more of a capital spend within the Duvernay program. But those are good things that have been happening here in the near term. So very similar capital allocation across the asset base.

[Travis Wood, National Bank Financial]

Okay. And then just 1 follow-up to see if I can pull it out of you here. Kind of growth profile next year, kind of low single digits. Is that fair as we think about firming up kind of that capital profile with inflationary budget?

[Craig Bryksa, President and CEO]

Yes. So even, Travis, if you look at this quarter, where we just exited kind of that 129. And then if you look out into Q3 and Q4, Q3 for us is around that 130-ish. And then when you start to look into Q4, you're in that, call it, mid-130s, 135, 136-ish as some of these Kaybob pads start to come online. So you're starting to move upwards here into the back part of this year. And then as we start to think into 2023, like we're a very disciplined management team and growth for us when we talk that is in the reasonableness range. So we're in that kind of, call it, 3% to 5% is how we think through things. So somewhere in that might be a reasonable number to assume.

[Operator]

Your next question comes from Chris Sakai of Singular Research.

[Chris Sakai, Singular Research]

Just had a question, I guess, you mentioned that you're targeting the 50% excess cash flow return to shareholders. Do you have a date, a target date on that?

[Craig Bryksa, President and CEO]

Yes. And so we're targeting 50% of our discretionary excess cash flow to shareholders. So keep in mind, that's after -- and it's after a base level dividend. So discretionary for us is post our base-level dividends. So when we think of the 50% plus the base level, it actually ends up being about 55% of our excess cash flow. So we're doing that right now. We're actively in the market repurchasing our shares. So that started here in July with Q3, and we're down that path already. So I would expect the bulk of that discretionary cash flow that allocation to be directed towards share repurchases here in the near term with maybe a little bit going -- coming out in the form of a special. But we're active in it right now.

[Chris Sakai, Singular Research]

Okay. Great. Good to know. Can you talk about your oil volume hedged for 2023? It looks like you're out to what hedged out to June 2023. For the second half of 2023, what sort of oil volume hedge are you looking to have, about the same as the first half of 2023 or more or less?

[Craig Bryksa, President and CEO]

Yes. So typically, in the past, we've built a hedge book in and around that 40% to 50% of our hedge volumes. And that was for a couple of reasons. One, we wanted to protect our excess cash flow generation; and two, we wanted to continue to pay down debt and solidify the balance sheet. So with our debt not being an issue whatsoever anymore, we don't feel we need to hedge up to those volumes.

However, Chris, look for us to have a little bit of a hedge book built somewhere in that, call it, 20% to 25% range. And how we're thinking about that is, right now, with the backwardation in the curve, we're looking out about 12 months. So Q1 to Q2, we built a little book as we looked out into Q1 and Q2 of '23. And now with us starting to roll into July here, we're looking at Q3 of 2023 and just bumping into that slightly.

So as we progress through the year, look for us to build up a little bit of a hedge book into the back half of 2023, but I would say it's going to be in that range of in and around 20%. So a little bit less than what we've done in the past, but still gives us a little bit of downside protection when we look at the base level dividends and the capital program and that sort of thing. And then the other thing I would add to that is, right now, the tool of choice has been collar. So you've got some upside runway there, and at the same time, you've got that solid floor in the base. So look for us to continue to do that. But in and around that same range, like you mentioned, 20-ish percent.

[Chris Sakai, Singular Research]

Okay. All right. Sounds good. And then if crude oil continues to stay high, will you have more debt reduction? Or is this where you want to be?

[Craig Bryksa, President and CEO]

Yes. No, certainly. So of that 50% excess discretionary cash flow that we're allocating toward shareholders, the other 50% is staying within the business for us to continue to solidify the balance sheet, continue to pay down debt, and at the same time, use for reinvestment, whether that's inorganic or organic. So that's how we're thinking of it. But certainly, here in the near term, that portion that's staying with the company is being directed towards the balance sheet.

[Operator]

Your next question comes from Michael Harvey of RBC.

[Michael Harvey, RBC Capital Markets]

So you mentioned tax pools, Craig, and we do have you guys paying some cash taxes next year. But maybe you can give us a sense for just the materiality of what you're modeling kind of '23, '24 on the tax front? And then also if there's anything kind of strategy-wise that you consider to minimize those tax bills and that could be just drilling more to add pools or acquiring businesses more pools or if it's just a cost of doing business that that's okay, too. But any color on that from you guys would be great.

[Craig Bryksa, President and CEO]

I think I'll pass this to Ken. He's probably the best to speak to the tax pools.

[Ken Lamont, CFO]

Sure, Mike. Based on our modeling and strip, we actually don't see us being cash taxable in '23. We would look to probably have that kick in probably likely in 2024. And obviously, that's commodity price dependent. As far as materiality goes, as you guys know, we do have significant pools right now available to us. So I would expect if strip continues that we'll probably be in that, call it, 5% to 10% effective tax range as we become taxable. And again, that's a big commodity price dependent. So that's the profile we see.

As far as managing that, obviously, we're very aware of the value of tax pools as we look at M&A activities. That's going to be a key criteria, obviously, looking at things on an after-tax basis as well too. So taxes are real. They're real for everyone here in the sector. It is a cost of the business, and it's something that we're going to try to manage down as much as we can. But it's obviously -- there's only so much you can do vis-a-vis enhancing your taxable coverage, but we've certainly got our eye on that.

[Operator]

Your next question comes from Dennis Fong of CIBC World Markets.

[Dennis Fong, CIBC World Markets Inc.]

Sorry, I just had a couple of follow-ons. One was really just around the balance sheet, and maybe that's following along to Chris' question to some degree there. As you continue to pay down a fairly significant amount of your outstanding leverage, a quick question for me is just around the 2023 and 2024 term note maturities. Are those -- as you take those out, are those potential, we'll call it, triggers for increasing the dividend as those are kind of permanent reductions to the interest side of the cost structure? And so how should we be thinking about kind of balance sheet strength and level of balance sheet strength versus comfort levels on potentially increasing the dividend on a go-forward basis.

[Ken Lamont, CFO]

It's Ken Lamont here. I'll take this question. So no, I don't think the debt maturities and repayment of them is a trigger for dividend increase. Obviously, as we talked before, our dividend is really framed around our view of cash flows and has to be sustainable at lower oil prices. So I don't think our approach in thinking about the dividend sort of changes due to that.

You did point out that we do have some debt maturities coming up next June or through next spring. So obviously, we want to be in a good position there to have adequate cash to take care of all that. And I think right now, as Craig pointed out earlier, we are comfortable in taking half of the discretionary excess cash and still driving our balance sheet down lower and stronger. And we don't see any problems with that or are there any issues with that. And as I said, it gives us a pool of money or funds in which to look at things like organic and organic opportunities.

So obviously, strengthen our balance sheet is still a key pillar. It's still something we want to focus on, as well with respect to the fact that we're still giving half of our discretionary excess cash back to the shareholders. So that's the balance that we're doing, and we're perfectly comfortable in driving our balance sheet lower here.

[Dennis Fong, CIBC World Markets Inc.]

Great. And then my final question here is just with respect to the OT or the Operational Technology deployment. I know North Dakota and Kaybob are a fairly significant component of kind of the NOI by, we'll call it, area components as they roll up into the business. But they are also relatively newer areas in terms of the wealth that were drilled and kind of the development there versus some of the other areas like South Sask. Can you maybe characterize approximately, on a relative basis, how much do you think some of the cost savings you could see by deploying OT in kind of these final 2 tranches could compare to what you've seen in some of the other areas where you've seen kind of more significant cost savings, as well as the safety improvements with lower kilometers traveled?

[Ryan Gritzfeldt, COO]

Yes. Good question, Dennis. I think we spoke at length over the last couple of years putting our OT platform across our Saskatchewan assets, where there's literally thousands of producing wells. North Dakota, Kaybob, a little bit different, right, with the pad development. There's way less pads than number of wells. And so I wouldn't look for any huge decreases in cost savings or in costs on Kaybob Duvernay, where I think where we have continued to see wins is on like the environmental side, the safety side. We're changing the way we operate. We're equipped way better to deal with environmental events and the Operational Technology platform has really enhanced our safety program, too.

So I think for North Dakota and Kaybob, where like you say, there the wells are relatively newer and we're dealing with pads instead of, like I say, thousands of wells in Saskatchewan. I wouldn't look for the significant cost savings that we've realized in Saskatchewan go forward for North Dakota Kaybob. I think it's more just building it into our corporate platform and really using it for, like I say, our ESG initiatives on environmental and safe operations.

[Operator]

Your next question comes from Aaron Bilkoski of TD Securities.

[Aaron Bilkoski, TD Securities]

My question is on return of capital strategy. Should we expect you to fully maximize the NCIB before declaring a special dividend? Or would you consider a special dividend alongside your share buyback program?

[Craig Bryksa, President and CEO]

Good morning, Aaron. Yes. No, that's a good question, and it's actually one we're getting quite a bit. We're considering it alongside the share repurchases. Like I say, we're active in the quarter right now bumping into our shares. We certainly see how compelling it is at the current valuation. So we've been active against that.

But as we look through the quarter, certainly, there will be maybe a little bit of that coming out in the form of a special as well. So I would say both tools are in play right now. Not looking to execute against one and then move to another. I would say, for us, it's both at once.

[Operator]

There are no more questions from the phone lines. I'll turn the conference back over to Mr. Bryksa for closing remarks.

[Craig Bryksa, President and CEO]

Great. Thanks for joining our call today. If you have any questions that were not answered, please call our Investor Relations team at your convenience. Thanks, everybody.

[Operator]

Ladies and gentlemen, this does conclude your conference call for today. We would like to thank everyone for participating, and ask that you please disconnect your lines.