Origin Materials, Inc.

Technology Behind Origin's patented platform for turning the carbon found in sustainable wood residues into useful materials for a wide range of end products, including clothing, textiles, plastics, packaging, car parts, tires, carpeting, toys, and more, while capturing the carbon in the process. The Green Chemistry Challenge Award is a key recognition for any technology at the forefront of environmental sustainability. The award spans multiple industries, from pharmaceuticals to basic commodity chemicals, and is recognized for impressive achievements. Since 1996, EPA and the American Chemical Society, which co-sponsored the awards, have received more than 1,800 nominations and presented awards to a small fraction of those that decreased the use of hazardous chemicals and resources, reduced costs, protect public health, and spur economic growth. The winning technologies have saved more than 20 billion gallons of water per year, almost 8 billion pounds of CO2 per year, and eliminated nearly a billion pounds of toxic and hazardous chemicals per year. For 2022, our fellow award winners include research powerhouses such as Amgen and Merck. Origin's journey as a company began in 2008 when we received a different EPA award called the People, Prosperity, and the Planet Award, which is focused on early stage research. Now, 14 years later, we are honored to receive this meaningful award from the EPA in the category of climate change. Next, starting on slide 12, I'm going to provide an update on Origin 1 and Origin 2. For those interested in the Origin 1 construction story, I would like to point you to a new construction update video that we posted today to the investor relations section of our website. For Origin 1, our first plant located in Sarnia, Ontario, construction is progressing well despite the challenging supply chain environment, and we remain on track for mechanical completion by the end of 2022 with preparations for commissioning and startup underway. We are maintaining our previously disclosed capital budget for Origin 1 of $125 million to $130 million. During the second quarter, we strengthened and added to the OriginOne operations leadership team and support staff. We accomplished a tremendous amount of construction since our last update. This is a large manufacturing plant with a lot of moving parts, and what we've been able to accomplish to date, despite COVID and macro supply chain issues, truly shows the capability, efficiency, and efficacy of our capital projects team. In our slides and in our construction video, you can see the progress we've made since our last update. We received additional major equipment onsite, including piping modules, which we have installed and interconnected alongside the plant's key production modules. The piping modules both interconnect our core chemical process modules and connect the OM1 plant with the utility supplied by the neighboring site. As we have discussed before, the modules were fabricated offsite using a modular construction approach and shipped in, which minimizes the work to be done in the field. Although installation is less complicated than the installation of our key production modules, these are nonetheless sizable racks and pipe modules. You can see that the team has largely interconnected them and connected them with the plant's utility systems and our ENCON evaporator unit. We receive tanks on site that will contain solvent that will be used and recycled as part of our core chemical process. Our site will have lots of integrated storage, which gives us the ability to manage our chemicals and materials. Our CMF storage tanks are in the final stages of fabrication and painting before shipment to the site. We started the construction of our biomass building, which is where we will store our sustainable wood residues entering the plant prior to processing and conveying to the reactor system. We started construction of our HTC building, where we will handle one of our platform products. Both the biomass building and the HTC building feature a significant amount of steel and a number of components and pieces connected together. The most interesting story here is that we received, lifted, and installed our filter press into the HTC building. The filter press utilizes the same HTC separation technique that is currently used at our pilot plant in California, but is much larger. As an additional note on a very important topic, the team has done an incredible job creating a great safety culture while executing this project. We will very much take what we have learned and the culture we've developed to Origin 2 and beyond. It's been a busy 18 months for the company, and the team has done an excellent job. We're not done yet, but from here, we have a clear path forward to mechanical completion, commissioning, and startups. With regard to Origin 2, our previously disclosed capital budget, construction timeline, and financing are unchanged. As discussed on prior calls, we are closely monitoring costs associated with the current high levels of inflation and the challenging supply chain environment. We continue to proactively manage our cost base and note that we have built appropriate contingencies into our initial production. We are not currently placing any equipment or construction orders for Origin 2, and we expect current inflation and supply chain conditions to likely change in our favor in the next 12 to 24 months. I would also note that materials companies generally benefit from higher product prices and margins in an inflationary environment, which can mitigate the impact of inflation on our capital budget. Origin two, our first world-scale manufacturing facility will produce carbon negative materials used to make PET plastic resin and fiber, which is used in packaging, textiles, apparel, and other applications. And HTC, which can be used as fuel, as activated carbon, and as a replacement for carbon black. Front-end design of the plant is underway, with detailed engineering set to begin in 2023. As previously announced, we've selected a site in Geismar, Louisiana, for Origin 2, subject to finalization of economic incentives. We expect the 150-acre facility will convert an estimated 1 million dry metric tons of sustainable wood residues each year into products for a wide range of end markets. Some of the reasons that we believe the Geismar site is the ideal location for Origin 2 include the extremely skilled labor pool in Louisiana, access to relevant infrastructure, and access to sustainable feedstock. Before I conclude, I'd like to give you some additional detail about what we are currently working on for Origin 2. The team is optimizing the scope and layout of the plant. We're evaluating contractors for FDL2 phase engineering and design work. We're also picking off environmental permitting, and we continue to work closely with landowners and fiber suppliers in Louisiana and Mississippi to put in place our feedstock strategy. To summarize, the team has continued to make considerable progress, and our expectation remains that Origin 1 will be completed by the end of 2022. Regarding Origin 2, the previously disclosed capital budget, construction timeline, and financing are unchanged. Origin 1 represents an important milestone for our mission to enable the world's transition to sustainable materials. We are excited by the progress our team has made as we approach commissioning and startup in the second half of the year. And with that, I'll turn it over to Nate to discuss some of the financial details.

Thanks, John. I'll begin with some commentary on our second quarter results, then our financing expectations for origin one and origin two, and finish with an update on our 2022 outlook. Speaking to slide 21, second quarter operating expenses were 8.7 million compared to 6.7 million during the same period in the prior year. Adjusted EBITDA loss was 6.9 million for the second quarter compared to a loss of 3.0 million in the same period in the prior year. And finally, net income was 46.9 million for the second quarter compared to a net income of $62.5 million in the same period in the prior year. Turning to our balance sheet, Origin ended the second quarter with $406.6 million in cash and cash equivalents and marketable securities. We maintain our expectation of fully funding the construction of both Origin 1 and Origin 2 using our existing balance sheet cash and cash equivalents and previously indicated traditional financing sources. With regard to the financing of Origin 2, as previously mentioned, the State of Louisiana, pending finalization, is expected to award a private activity bond. Tax exempt bonds authorized by state and local governments for the financing of qualified projects with private capital, the volume cap allocation to the company in the amount of 400 million. We also expect to receive more than 100 million in pending state and local incentives. We maintain our financing assumptions for Origin 2 remain reasonable and achievable, with Origin 2 fully funded from existing cash on hand and previously indicated traditional project financing sources. The $400 million private activity bond allocation from the state of Louisiana provides a strong foundation for the financing of Origin 2, and in combination with certain 2021 Infrastructure Investment and Jobs Act provisions and other non-volume cap tax-exempt financing could enable the debt financing of Origin 2 using entirely tax-exempt bonds. Origin also continues to work with leading financial institutions on other forms of traditional private financing and federal loan programs, including through the U.S. Department of Agriculture and Department of Energy. As we have highlighted in our previous earnings calls, inflationary pressure remains an area in focus. However, as John discussed, at this point we are not adjusting our overall capital budget for Origin 2. We acknowledge the situation remains fluid and we continue to closely monitor our cost estimates such that we can communicate any changes to the market at appropriate times as we progress through the project. I'll now wrap up with an update on our 2022 outlook. We are maintaining our prior outlook for an adjusted EBITDA loss of up to $36 million and capital expenditures of up to $175 million.

With that, I'll turn it back to Rich for closing remarks. Thank you, Nate.

In closing, I'm incredibly proud of our team's continued progress and execution on our mission to enable the world's transition to sustainable materials. The head of the commissioning and startup of OriginOne, we continue to see robust demand for our industry-leading technology as the world moves aggressively to a zero-carbon future. I would like to thank all of our customers for their commitments to Origin, our team and construction and engineering partners for their contributions to our company's success, and our shareholders for their continuous support. And with that, I would like to ask the operator to open the line for questions.

Certainly. We'll now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. Our first question is from Salvador Topiano with Bank of America. Please go ahead.

Yes, thank you very much. So, congratulations on the Carbon Black Partnership. So, I was just wondering, now that you're starting to have these, I guess, agreements to sell HTC for Carbon Black, how do the economics and the pricing compare to the CMF economics, firstly? And also, how much of the HTC production at OriginOne is now contracted with these agreements?

Yeah, this is Reg. Thanks for the question. So we're very excited about Carbon Black as a product and excited to have announced three partnerships, Mitsubishi Chemical Holdings, Intertex, and ATC Plastics, as partners that we will work with to access that very large Carbon Black market. At this time, we're not sharing more about economics or which plants those materials will be coming from, Carbon Black is a higher value material that in our original projections that are in the investor presentation, we hadn't planned on really getting to until the Origin 3 timeframe. So efforts we're taking to accelerate getting more of our HTC to Carbon Black is beneficial to our overall economics.

And just as a follow-up to what you just mentioned, so the reason we hadn't planned on selling more or getting into it till Origin 3, which is many, many years away. Was it more from a technological standpoint or a commercial standpoint? What has changed?

Yeah, I would say what's changed is, you know, we've continued to add it to our team, advance our technology and develop in products. And so part of it is just, you know, getting to know a market, partnering with various players in that market. and working towards having commercial applications. And so we're optimistic that we're making even better progress than we had thought we would in this space.

Okay, perfect. And I just also wanted to ask about the California plastics bill and the recently, I guess, proposed climate and inflation bill in Congress. Firstly, on the California one, it is a little bit surprising that you would still, I guess, have to pay a fee for your product, right? So why is that? And I guess, is there any chance that down the road, renewable plastics could be totally excluded? And given the proposed climate bill, is there anything there that, I know there are a lot of things with regard to credits for carbon capture and biofuels, anything you've seen there that could help you as well?

Sure. So first on California's SB 54, you know, these bills all go on their own journey. And you're right that we, customers using our materials would have a reduced fee versus using fossil-based materials, which has the potential to be meaningful in terms of the price advantage of using our materials. And as to the reason that it's, you know, different than recycled, that's a lobbying question. engagement with legislators, um, that we continue to advance and, um, you know, materials like ours are, are, are relatively new. Um, and so I think there's just sort of an educational process that we're certainly very active in and on the, on the federal, uh, proposed legislation, I guess it's called the inflation reduction act. Um, yeah, our, our review of that is that there is, um, um, there was a lot in there that could be relevant to us. So that could certainly be quite meaningful in terms of potentially helping with our plans.

Perfect. Thank you very much. Thank you.

The next question is from Frank Mitch with Ferrium Research. Please go ahead.

Hey, good afternoon, folks. I really enjoyed the video. So very helpful to see that and see the progress that you're making. In the press release, as well as in the slides, you mentioned that you amended and expanded the agreement with Danone. Obviously, they're one of the original investors-slash-partners. Can you give a little insight as to what happened there?

Yeah, hi, Frank. All we can really share is that Danone was an investor- in origin, one of our earliest customers and really development partners that helped us prove our technology all the way through to PET. And as part of that relationship, we had a, you know, kind of a legacy agreement that just needed to be amended and updated. And so what we've done is completed that amendment process as well as expanded our relationship. And that's pretty much what I can share with Danone.

I see. Okay. And then I believe John mentioned that you've been expanding headcount during the quarter, particularly at OriginOne. I was wondering if there was any metrics that you could share with us in terms of that, the trends. And any comments that you can offer in terms of retention? Obviously, it's a pretty volatile job market and people are moving around. But I'm curious. I suspect that, you know, given your mission, that you might have a higher retention level. Is that correct?

yeah so uh the metrics i can give you and by the way hey frank please talk to you um the metrics i can share on or on one are really that we have uh we've got our management team for origin one in place so we're really uh excited about that and we're starting to fill out the other uh positions as well so we're sort of well underway on that front on um retention and recruitment uh yeah so i think i said last quarter you know recruitment has been great uh we've had A lot of success getting really, really high quality people from across the industries that are related to Origin. And that continues to go really well. And from a retention perspective, similarly, we have just frankly great retention. It's essentially, you know, you couldn't possibly ask for better retention than we have shown. And that's been true historically, but it's continued to be true right now.

Thank you. Thank you so much.

Thank you.

The next question is from Eric Stein with Craig Hallam. Please go ahead.

Good afternoon. It's Aaron Spahala for Eric. Thanks for taking the questions. Hey, how are you? I'm doing good. How are you? Doing well. Good, thanks. First, maybe on the major U.S. supermarket chain, know you said further details to come just anything else you can share to better understand you know where you might fit in there and then also on atc plastics saw you know language around co-developing for various applications can you just talk a little bit more about that what that might entail and and um you know if you're seeing more opportunities like that with with partnerships going forward um absolutely so i'll start with atc plastics um yeah that's an example of a partnership where we will be working with them

to develop our products and figuring out which applications work best, which applications to start with, and what's the path to increasingly higher value applications within the carbon black world. So that's definitely a co-development partnership and pretty pretty common in terms of what we do, especially in some of these newer markets for us like Carbon Black. So that's what we're looking for in partners is someone to come on the journey with us and help make a big impact in that market. And with respect to the major grocery chain, I can't really share specifics, but what I will say is that when we talk about grocery chains or retailers or customers like that, they obviously have a lot of products that that they make themselves, private label, and then obviously a lot of products from other people. And so a huge opportunity for us when you look across all of the materials that are moving through those companies. They do typically start with the private label business, which is where the companies can have the most direct impact and then look to expand from there. So we're excited to have our first major grocery partnership.

Right. Okay. Thanks for the caller. And then Maybe just on the USDA bio-based label announcement, can you just maybe give a little bit more details on the significance of that, any markets or opportunities that might open up? And I mean, I see you kind of talk about potential funding for Origin 2, just trying to better understand what that might mean for you. Sure.

So it's a significant certification. And one of the areas where it can be most directly helpful is it does benefit from certain federal purchasing opportunities. So there's sort of the halo effect of having the USDA certify your materials as being bio-based and then the specific benefits from there being certain advantages with respect to federal purchasing.

Understood. All right. Thanks for taking the questions. I'll hop back into the queue.

Thank you.

Once again, if you have a question, please press star then one. Our next question is from Graham Price with Raymond James. Please go ahead.

Hey, good afternoon. Thanks for taking the question. I guess first one, as you get closer to origin one startup, just wondering if you have visibility on when the first quarter with product sales will be.

Yeah, so I think, you know, what we're looking at is mechanical completion towards the end of this year still. So we're on track for that. And then, you know, commissioning and startup is going to be slated for mostly Q1. And generally speaking, we expect revenue to start after that. We haven't provided guidance for next year yet, and we're not going to on this call. But generally speaking, you know, we're still looking good for next year. And frankly, you know, we're looking good for – an on-time and successful startup for OriginOne, which will be associated with revenue production as well.

Got it. Understood. And then quickly, if I remember correctly, you hinted at a partnership with a major toy company during the last earnings call. Just wanted to check in there and see if there were any additional details.

You're right. We did announce a partnership with a major toy company, and we don't have any additional details to share at this time.

Got it. Understood. Thank you very much. I'll jump back into you. Thanks.

The next question is from Steve Byrne with Bank of America. Please go ahead.

Yeah, thank you. With Origin 1, sorry for the noise here, with Origin 1 completing near the end of the year, have you already lined up your feedstock for that plant? And is it reasonable to expect that you would be experimenting with different feedstocks of that plant? Depending on how much lignin is in there and hemicellulose, it would affect feedstock. probably the quantity and maybe the quality of the HTC. Is that true? And can you comment on the rough cost of that feedstock? Are you getting some pretty inexpensive material? Hey, Steve.

Yeah, sure. So you're right. Origin One, we've always talked about that as sort of a strategic plant, both on the product side where We can make a variety of different products from it, and we can sort of accelerate some of the commercialization of different functionally differentiated products from our platform. But, you know, to your point on feedstock in some ways, it's also a strategic plant from the feedstock perspective. So we can demonstrate feedstocks at reasonable scale that, you know, maybe we we would use in future plants of the origin to sort of scale. And so we do expect to use a variety of different feedstocks to origin one. I think we have ready supply of very predictable feedstocks lined up, but I think some of our partners are quite interested in how we can use feedstocks that sort of promote circularity around their specific businesses. And we're happy to use those. Generally speaking, the variation in hemicellulose content and lignin content doesn't really have a strong effect on the quality of our different products that we can make at our plants. But it can, although to your point on HTC, you know, there are some things that you can do to sort of adjust the HTC behavior. Although again, probably not as much as you might imagine. But certainly having different quantities of cellulose and hemicellulose and lignin can make a pretty big difference in, you know, sort of low double-digit percentages, difference in the proportion of different products coming out. And similarly, if you had feedstocks, for example, that had only cellulose in them, that would have a pretty strong effect on which the proportions of the products that we're making. And some of the more sort of circular feedstocks are quite heavily weighted in just cellulose content, which tends towards CMF, of course. So certainly we expect to see a variety of different feedstocks there, and we expect to use those with our farmers.

Okay, makes a lot of sense. And then one more for you. Any update on your experimental efforts with PEF or the use of HTC in soil amendments?

So no update to share yet on HTC with soil amendments. But on PEF, we continue to be excited about PEF. And I would say even more broadly, we continue to be very excited about FTCA as a monomer, both in polyesters and other polymers. We think it's a really, really interesting monomer. And I think for anybody that is unfamiliar with PEF, and just to give a little bit more breadth here, The answer that I would give you, Steve, is, you know, PEF and FDCA are interesting for a couple of reasons. One, of course, because they're well known to provide better gas barrier properties, which lets you use PET and polyesters that have FDCA in them in much broader applications, right? So, packaging for foods and drinks that might be oxygen sensitive, for example, which includes pretty much anything that's fast in them. So that's one, and that's a really interesting application all by itself to replace multilayer barrier film that usually would both be expensive and not recyclable, right? So that's exciting. The next piece, of course, is that there's evidence in the public patent literature that I can refer to, which says that FTCA-based polyesters actually improve the quality of the recycled PET that they get included in. So to be more specific, You know, if you have a big bin of recycled PET bottles and some of them have FDCA in them, then that whole bale, that whole bin of PET is going to end up processing better in a recycling infrastructure than just straight PET does. So that's exciting as well. And especially when you consider that with the fact that you might be replacing multi-layer barrier films, which are not recyclable with something that is not only recyclable, but is in fact making the rest of the recycling infrastructure better. That's really exciting. And then the last piece that we find really exciting about FDCA-based polymers is that at high enough levels of FDCA, you can see that these polymers tend to be degradable. And so, of course, degradable polymers are great, especially when you're dealing with really small particles that people call microplastics. Getting those microplastics to degrade is really important. And so from our perspective, PEF and FDCA-based polymers really check a lot of important boxes in what does an ideal polymer look like. And when it's being made from our platform, you can imagine that it's carbon negative. It's from non-food sources. It's not only recyclable, but it actually makes the recycling of other polymers work better. And it's degradable if it leaks out of this sort of end-of-life handling supply chain. So we're really excited and bullish on FGCA and PEF. So thanks for asking.

No, thank you.

This concludes today's live Q&A segment. I will now turn it over to Ashish Gupta, Investor Relations, to conduct the next segment of our investor Q&A.

Great. Thank you, Gaylene. As we did on our last call, we invited all investors to submit questions for our second quarter call as part of our Ask Origin campaign. We're pleased to have once again had such high participation and want to thank everyone who submitted a question. In the interest of time, we'll be taking the most commonly asked questions. Our first questions are for Rich. Starting on carbon black, Rich, there's been a lot of discussion regarding carbon black's potential to be a game changer for batteries. Has Origin been in contact with anybody attempting to use its carbon negative carbon black as a component in the anodes of batteries, especially the next gen battery companies or legacy? as well as the EV-specific automakers?

It's a great question. And I've talked a lot about Carbon Black on the call and the progress that we're making. And the short answer is yes, we are exploring the application of our HTC and our Carbon Black for those applications.

Great. Now moving to licensing. Would you speak to the company's progress on licensing deals? Is it a prerequisite for OM1 or OM2 to be mechanically complete before large licensing deals are realized?

So we don't have any specifics on licensing to share currently, but I can say that in the ordinary course of business, we have continued to have discussions with various parties about many different forms of potential partnerships that include licensing deals. And we don't think there's a prerequisite for origin one or origin two to be complete for us to enter into a licensing agreement.

And then another question that's a follow-up on the regulatory environment. Can you speak specifically to what lobbying or educational efforts origins engaged in to get present regulators to differentiate between recyclable bio-based carbon negative plastics and legacy plastics and materials?

Yeah, so we've been very encouraged to see the really wave of legislation. We've talked about several of the recent ones on this call, federal, state, local levels in the U.S. and around the world, all that support our business model. And so we do closely track these legislative developments, and we do engage with the – with the relevant legislators and policymakers to help tell our story and make sure they understand the incredible impact that we can have and how we're aligned with the spirit of these legislations.

Thanks so much for that, Rich. With that, we'll turn to John for some questions. John, on OriginOne, can you help us understand exactly what is meant by mechanically complete versus tuning in startup?

yeah so i think a good way to think about this is um uh is really mechanically complete means is the plant physically put together um you can you can sometimes generally define that as at what point does it start to commission but the the reality is that of course you're doing commissioning uh you know unit by unit um as you finish a complete construction of some of the other games it's not quite as strict as that um but but the the right way to think about it is you know is the plant built If the answer is yes, then it's mechanically complete. And that's the definition we use. Of course, after that, you go through a commissioning phase where you're making sure that all the things are working the way that they're supposed to. You're pressure testing them. You're water testing them. Making sure that the valves are all operating the way that they're supposed to, that the control systems are operating the way that they're supposed to. Generally sort of running the plant through its paces. And then the final, you know, startup phase is really when you put chemicals in the plant. So it's the point at which you start really running reactions. and unit operations with live chemicals, so to speak.

Great. Very helpful. You touched on employee strength, and we have one that's a little bit more specific here. Basically, along the lines of our ability to recruit talent from large chemical and oil and gas companies has been something we've talked about in the past. Wondering if you could comment on areas of of origin where that talent is going into.

Yeah. So it's really it's across the company. So obviously, you know, there's a really natural spot for for people that are highly technical in our engineering organizations, our technology organization, R&D organizations. manufacturing, project execution, but you actually see it in the commercial side and even in the finance side of our organizations as well. You know, there are pretty natural spots for people to slot in there. And so we really do see it across the organization. It makes a huge, huge difference having access to a really highly skilled talent like that. One of the other interesting things is, you know, we're not just pulling only from one industry. And so it's similar as the chemicals and the oil and gas and the refining industries might seem, you know, and they obviously have lots of overlapping skill sets, there is a difference to the way that these kinds of companies and these industries approach the business. And even, of course, within those sectors, there are differences from company to company. And we're getting, you know, a lot of, I won't say that we're the only ones getting the best and the brightest, but we're getting a lot of the best and the brightest from these different industries and companies. And so it's really, frankly, it's a lot of fun and it's really interesting to see how those different perspectives and approaches to business and technical problems all knit together.

Great to hear. And then just turning to technology, this is our final question. And I know you gave a lot of detail on PEF versus PET in Steve Burns' second question, but just wanted to make sure, since this is a topic near and dear to your heart, is there anything else you wanted to add on the benefits of PEF relative to PET?

You know, I think I did cover a lot of it with C's question, so I won't go into a lot more detail, but I will say that there are a couple interactions that I think are really interesting to highlight, and one of them that I mentioned is the interaction between degradability and microplastics. I think that is a particularly salient one in this particular case because, you know, often people think of degradability as as a solution to a big macro almost aesthetic problem right i look into the ocean or the river and i see these big pieces of plastic floating around and that's the thing that they're worried about but the reality is that microplastics are a much more sort of clear and and present issue uh from a technical standpoint um they you can't see them but they're but they're important um from a variety of for a variety of reasons and The other thing that's really important, there's something may not degrade rapidly at a macro perspective, but it may degrade much more quickly on a microscopic, at a microscopic level. And so sort of solving for microscopic degradation, I think is the most important technical challenge in the, on the degradable side of plastics. And so we're really excited about the way that, that FECA can help polyester specifically in that area.

Appreciate it, John, and thanks so much, Rich, as well. I want to also thank all the investors who submitted their thoughtful questions. We really appreciate your participation. With that, we'll conclude today's Q&A portion of the call. I'll turn it back to Rich for closing remarks.

Thanks, Ashish, and thank you all for joining us today. We look forward to keeping everyone updated on our progress.

Have a great day.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.