EnLink Midstream, LLC

Greetings and welcome to the NLINK Midstream Q1 2024 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Brumgaard, Senior Director of Investors. Please proceed with your questions. Thank you, Brian. You may begin.

Thank you, and good morning, everyone. Welcome to NLINC's first quarter of 2024 earnings call. Participating on the call today are Jesse Aranivas, Chief Executive Officer, Delanka Simon, Executive Vice President and Chief Commercial Officer, and Ben Lamb, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session. We issued our earnings release and presentation after the markets closed yesterday, and those materials are on our website. A replay of today's call will also be made available on our website at investors.enlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. The forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise. Actual results may differ materially from our projections, and a discussion of factors that could cause actual events to differ can be found in our press release, presentation, and FTC files. This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures, as well as reconciliation of comparable GAAP measures, are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading risk factors. We'll start today's call with a set of brief prepared remarks by Jesse, Delanca, and Ben, and then leave the remainder of the call open for questions and answers. With that, I would now like to turn the call over to Jesse Aranivas.

Thanks, Brian, and good morning, everyone. Thank you for joining us today to discuss our first quarter 2024 results. While our operations were not immune to the impact of the winter weather during the quarter, our results showcase the resiliency of our business. We continue to be encouraged with the longer-term setup for Enlink, given our diverse systems and incremental demand potential for natural gas to help power our nation's growing industrial and power needs, including the developing industries around data centers and artificial intelligence. For the quarter, we generated $338 million of adjusted EBITDA, driven by the strength of our Louisiana system and offset by temporary volume impacts from the winter weather impacts of our GMP systems. These results were in line with our expectations and drove solid free cash flow after distributions of approximately $74 million. Consistent with our approach to return capital to investors, we repurchased approximately $50 million of units outstanding, taking our total buyback execution to nearly 10% of the units outstanding, over a little more than two years, all while continuing to invest and grow our business. Last quarter, we discussed our commitment to provide safe, reliable, and cost-efficient CO2 transportation solutions, linking emitters with sequestration providers. Despite recent progress on the regulatory front, and while we continue to develop our CO2 transportation expertise by operating both new-build and converted CO2 pipelines, the CCS industry as a whole has been slower to develop than we initially anticipated. However, we are continuing our discussions regarding CCS opportunities, ExxonMobil, as well as other parties and look forward to providing an update when we reach definitive terms. Overall, we continue to see positive momentum for our business. We have spoken at length in prior quarters about the next wave of LNG demand coming starting in earnest in 2025. and how that is reshaping the landscape and driving our three phases of growth in Louisiana. The LOCA will provide more color around our Louisiana natural gas strategy, and I'm impressed with the quick execution. We are seeing customers respond to the shifting market dynamics as they look to secure the natural gas critical to their operations. To that extent, we've executed our first project to help resupply the eastern part of Louisiana, to a capital-efficient, quick-to-market, de-bottlenecking project that is fully subscribed to high-quality customers. Beyond just Louisiana, though, the need for natural gas to help power our modern society becomes more apparent as industries look to secure reliable and affordable energy. Like you, we have been amazed at the rapid emergence of the data center demand for power, particularly driven by the AI revolution. This is occurring across the country, even right here in North Texas. We understand and can appreciate that these are early days and that consultants, policymakers, utilities, and the investment community are still trying to get their collective arms around the ultimate impact of this growth in demand. But the initial forecasts are staggering. While data center electricity consumption is approximately 2.5%, of the US total in 2022, there are forecasts for this demand to triple or more by 2030. To help put that in perspective, according to the Boston Consulting Group, this growth in consumption is the equivalent to adding 40 million homes. What is key for our industry is that these AI data centers are not only voracious users of energy, but they run 24-7 and do not turn on at all. Renewables will surely play a key part, but because of this dynamic, we expect natural gas to be a large contributor to meet the increased baseload demand for power generation. We consider this to be a potential incremental growth driver, creating a rising tide that will lift all boats in the natural gas industry and one that is likely to drive rapid and exciting change for our business. Wells Fargo analysts forecast that additional natural gas demand could be 7 BCF or more by 2030, assuming that natural gas accounts for 40% of the fuel mix. To wrap up my comments, NLINK is executing today to meet customer needs and excited about the growing need for natural gas to provide reliable and affordable energy to power our modern society. And with that, I'll turn over to Laka to provide an update on our commercial opportunities.

Thanks, Jesse, and good morning, everyone. Last quarter, we discussed the shifting Louisiana gas supply and demand market and how we are focused on creating shareholder value. Today, I would like to provide a quick update. As I mentioned during the last call, we are approaching the Louisiana gas opportunity in three phases. On our first phase of opportunities, which is realizing the full value of our existing assets through renewing capacity at higher rates, our commercial team has worked with our customers and we have successfully renewed the vast majority of the contracts up for renewal in 2024. This renewal represents an incremental annual margin opportunity, which is included in our 2024 financial guidance. The second phase of opportunities is leveraging our assets to drive attractive quick to market projects. Last night, we announced the first execution of such a project. Through some additional compression, we are increasing gas supply to the Mississippi River corridor by approximately 210 million cubic feet per day. The project is expected to cost approximately $70 million with an in-service date in the fourth quarter of 2025. This debuffing project results in a mid single digit EBITDA investment multiple. We are pleased to have fully contracted the capacity with a diverse mix of highly credit worthy customers. The third phase of opportunities is to add new projects to increase supply to our gas pipelines to meet the increasing demand in the Mississippi River Corridor markets and to expand our gas storage position. In this regard, we are in the process of marketing our expansion of Jefferson Island Storage Hub and are very pleased with the response from our existing and new customers. We are excited about this longer-term opportunity as we can nearly double our working gas storage capacity through brownfield expansions. With that, I'll turn it over to Ben to provide an overview of our operations and our financial results.

Thanks, Sri Lanka, and good morning, everyone. Let's start with the Permian. Their segment profit for the first quarter of 2024 came in at $89 million. Segment profit in the quarter included approximately $9.3 million of gross operating expenses tied to plant relocations and $2.4 million of unrealized derivative losses. Excluding plant relocation objects and unrealized derivative activity, segment profit in the first quarter of 2024 decreased 10% sequentially but grew 12% from the prior year quarter. In addition to plant reload costs impacting operating expenses, the first quarter results included a one-time utility true-up expense, increasing Permian OPEX by approximately $5 million. Our diverse mix of producers remained active during the quarter. However, results were impacted by the winter weather and producer timing. Average natural gas gathering volumes were approximately 2% lower sequentially, but were 13% higher than the prior year quarter. The Tiger II facility is in the process of coming online and will enable the next phase of permian growth. Turning now to Louisiana, we experienced another quarter of solid performance in the gas segment, benefiting from price volatility, along with strong results in the NGL segment driven by normal seasonal effects. Segment profit for the first quarter of 2024 came in at $110.4 million, including $19.5 million of unrealized derivative losses. Excluding the impact of unrealized derivative activity, segment profit in the first quarter of 2024 grew approximately 26% sequentially and grew approximately 23% compared to the prior year quarter. Moving up to Oklahoma, we delivered segment profit of $85.7 million for the first quarter of 2024, including $4.1 million of unrealized derivative losses. Excluding the impact of unrealized derivative activity, Segment profit in the first quarter of 2024 decreased 19% sequentially and decreased approximately 7% from the prior year quarter, driven by lower volumes and the one-time contract reset that we discussed in last quarter's call. During the first quarter, we saw operators remain active with rigs on our acreage. However, average natural gas gathering volumes were 7% lower sequentially and 3% lower compared to the prior year quarter as a result of the winter weather and a few cases of price-related shutouts. Wrapping up with North Texas, segment profit for the quarter was $59.8 million, including $0.1 million of unrealized derivative losses. Excluding unrealized derivative activity, segment profit in the first quarter of 2024 decreased 12% sequentially and decreased 18% from the prior year quarter, driven by lower volumes and the one-time contract reset. Natural gas gathering volumes were 6% lower sequentially and 10% lower compared to the prior year. Like Oklahoma, volumes were impacted by winter weather and a small number of price-related shut-ins. These solid results reflect the benefits of our diverse asset mix. Winter weather was a modest headwind for our G&P businesses, while our Louisiana gas segment benefited from the short-term volatility. In total, our segments drove another robust quarter with $338 million in adjusted EBITDA. We are tracking toward the midpoint of our adjusted EBITDA guidance of $1.31 billion to $1.41 billion for full year 2024. While we don't give quarterly guidance, let me remind you that our Louisiana NGL segment experiences some seasonality with the second and third quarters being seasonally weaker. Capital expenditures, plant relocation expenses, net to end link, and investment contributions were $111 million in the first quarter of 2024. Free cash flow after distributions for the first quarter came in at approximately $74 million. On the balance sheet side, we continue to be in a very strong position with a leverage ratio of 3.3 times at the end of the first quarter, and we retain ample liquidity. During the quarter, S&P recognized our strong credit profile and upgraded us to BBB-, moving us into investment grade following the prior upgrade from Fitch. Consistent with our capital allocation plan, we maintained the common unit distribution of 13.25 cents per unit in the first quarter, which represents a 6% increase over the first quarter of 2023. Additionally, we remain active with our common unit repurchase program with approximately $50 million spent in the first quarter. This puts us on pace to complete our $200 million unit repurchase program for 2024. Since the end of 2021, we've now repurchased approximately 46 million common units, or nearly 10% of units outstanding. In summary, the InLink team delivered solid results in the first quarter of 2024, and we expect the momentum to continue for the rest of the year. With that, I'll turn it back over to Jesse. Thank you, Ben. The EndLink team delivered another quarter with solid execution in the first quarter of 2024 that showcased the resiliency of our diverse assets. We're excited for the future and remain committed to meeting the needs of our customers in 2024 and beyond. With that, you may now open the call for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Spiro Donis with Citi. Please proceed with your question.

Thanks, operator. Morning, guys. First question on carbon capture, if we could. We're looking for a little more detail on the status of Pekin Island specifically. As you all noted in the last call, it's kind of like all the parties were incentivized to really come to a resolution quickly, just given some of the capture obligations coming in 2025. One, I'm just sort of curious, should we read anything into anything on the lack of the update here? And are you in a better position now than where you were a few months ago to maybe narrow the bands on any potential outcomes?

Hi, Spiro. It's Jesse. Thanks for the question. Yeah, I think last quarter we talked about the pause in Pecan Island and the broader opportunity to address, you know, additional or alternatives to the Pecan Island project. Those discussions continue. We don't have an update today, but we have made a lot of progress on defining the scope of additional projects. However, remember, this is a new industry, and it's been more challenging to find a mutually beneficial transportation option. We're still working that, and we'll have an update as soon as we have one for you. As I noted earlier, you know, this has taken longer for the industry as a whole. It's taken longer than we had predicted. But remember, we have to proceed at the pace of the emitters and sequesters. You know, until they define the definitive agreements, then, you know, our role can't be consummated. So at the same time, you know, We're gaining experience in the CCS space. Our Bridgeport facility is now operating and giving us valuable, practical experience, both transporting CO2, capturing new build, and repurposing of pipe. So we think this is key. We've said we are very well positioned along the Mississippi River corridor with pipe in the ground, decades-long experience with regulators. customers. And so we believe we've not lost conviction at all. We think CCS will play a major role in decarbonizing the industrial sector. We think we're very well positioned to take advantage of that. And ultimately, timing hasn't been as planned, but longer term, we believe we will win.

Got it. Thanks for that, Jesse. Second one, maybe for you, Ben, just thinking about some of the that impacted the first quarter. And I think about moving forward with 2Q. You mentioned some shut-ins in Oklahoma. Curious if you see a bigger impact there as we head into 2Q, if you think maybe wealth connections are enough to offset some of that. And then in the Permian, obviously you mentioned weather impact early in the quarter. Just maybe give us a sense of how you exited 1Q and what that looks like for 2Q.

Yeah, Spiro, starting in Oklahoma, I think most of the shut-in activity is either in the rearview mirror or will be here very shortly. It was very isolated. Between a little bit of that and the winter weather, volumes were a bit soft for 1Q. Actually have a pretty robust schedule of well connects for Oklahoma in the coming days here. So we feel good about Oklahoma for the rest of the year. In terms of the Permians, But for the winter weather, volume would have been about flat in one cube versus four cubes. And that's not surprising when you think about the way we've talked about the growth in the basin this year. After we had this furious pace of growth in the Midland Basin last year, this year Midland is flatter. And the growth is in the Delaware. Delaware has been full for us. In fact, we've been offloading some volumes, waiting on the plant to come online. Good news is the plant is coming online literally as we speak. And that's what will enable that next leg of Permian growth.

Got it. I'll leave it there. Thank you, gentlemen.

Thanks. Thank you. Our next question comes from the line of Parnis Chattis with Wells Fargo. Please proceed with your question.

Hi, guys. Good morning. I guess unless I missed it, can you give us an update for where you see CapEx trending in 24 and 25 in light of the Henry Hub to River project? Did anything change there as it relates to CapEx guidance? And then I think you've got $50 million, if I remember correctly, for kind of a placeholder for Exxon CCS projects in the budget this year. Could that be reduced given some of the delays that you mentioned?

Good morning, Pernice. Big picture CapEx, you know, the midpoint of the 2024 guidance is 465, and that has not changed with the Henry Hub to River project. We reserved some dollars in the capital budget for these Phase II Louisiana gas expansions, so there's no addition for this year. Too early, of course, to talk about 2025 CapEx, but I would just say that sitting here today, we don't have any reason to believe that it's materially different than the run rate we've been on in 24 and even back in 2023. On the CCS side, you're right. We did allow for $50 million of CCS spending in arriving at our FCF AD guidance for 2024. And you're also right that as the year goes on, and things have been slower to develop than we would have hoped, it becomes less likely that we spend all $50 million of that. We don't have an update for you today, but it potentially could result in an increase in 2024 FCFID.

All right. Thanks. And then I guess as I look at your, you know, phase one of your Louisiana growth strategy, I think you're getting a $20 million uplift this year. how much of your remaining Louisiana transport contract portfolio is still under legacy rates where you could kind of reprice it to current market rates? And I guess, do you think you could see another, you know, 20 million bump in 2025?

Hi, it's Dilanka here. Good morning. We're indeed very happy with the recontracting we've been doing now. Louisiana gas system speaks, you know, really well to the value of our assets. As you indicated correctly, most of the recontracting rates were already baked into the 24 budget. We don't see a similar uplift in 25. We are at this point substantially recontracted for the rest of 24, and we are working on renewables of 25. There might be a marginal uplift, but the majority comes in the number that was baked in this year.

Got it. Thank you, guys.

Thank you. Our next question comes from the line of Naomi Mosferati with UBS. Please proceed with your question.

Hi, good morning. Thank you for taking my question. Maybe as a follow-up to an earlier question, as we look ahead, it seems like Enlink has some good Permian growth expectations, particularly around the Delaware. Can you give us an update on potential need for adding processing capacity beyond the Tiger 2 replanting locations?

Yeah, of course we've been focused on getting Tiger II in service to enable the next leg of growth. As far as looking beyond that, the good news is we've now three times successfully relocated an existing processing plant to the Permian. And so that gives us the luxury of being able to time the decision to add capacity closer to the needs. So we'll be watching carefully as the year develops and as our producers share their plans with us when the right time to add that next capacity is. We don't think that's a decision we have to make today because with the benefit of a portfolio of assets eligible for relocation, we can bide our time a bit and learn more from our producers to get the timing just right.

Great. Thanks for the call. Maybe to switch to capital allocation, given earnings high FCFE is curious on the thought process around balancing the value proposition between buybacks and already leveraging.

Yeah, well, we remain focused on returning capital to the common unit holder. As we said in the prepared remarks, over the past few years now, we've eliminated about 10% of the shares outstanding through the share repurchase program, and we'll continue to execute the $200 million common unit repurchase program that the board authorized for this year. On the balance sheet side, we're in very good shape, having just gotten the upgrade to BBB- from S&P, and we are at or slightly below, in fact, our leverage target. So we're largely going to remain focused on the common unit holder.

Thanks for the call. I'll have a great rest of your day.

Thank you. Our next question comes from the line of Jeremy Tonnet with JP Morgan. Please proceed with your question.

Hi, good morning. Good morning. Just wanted to touch base on the Louisiana side a little bit more as far as the phases of the project and just want to get an update, a better feel for, I guess, what the scope of the potential opportunity is in the timeframe that these – these phases could come to fruition.

Good morning. DeLong here again. The Henry II River project is indeed a great example of a quick-to-execute, good return on capital project that meets immediate cost of a demand and leveraging our assets in the ground. So just to be clear on the project, this one has compression along a 26-inch connecting the Henry Hub to the River Cordova market to increase throughput by about 210 million cubic feet per day. The best thing is that we are fully contracted for this project with a diverse set of credit-worthy customers. So that project is well underway and on execution. And also at that, we executed a similar project like this last year by adding compression to increase deliveries to the venture global capital pass project. again by about 200 million cubic feet per day. And the good news today is that there is more demand for this, and we are working on even other opportunities to bring additional supply to our systems through better interconnectivity, new built pipe, and natural gas storage expansions, et cetera. So the funnel of opportunities is quite encouraging. Beyond these debunking type projects that I just mentioned, the storage expansion, the new build type, et cetera, will take a little bit longer. But the team is very focused on bringing these projects to market because clearly there is a market demand for it.

Got it. So do I take that kind of like no question? We shouldn't really expect any incremental announcements in the near term, kind of things are accomplished in the near term for the Louisiana strategy, or just trying to get a timeframe of when these items could come together, as you outlined.

Sure. I think in the near term, you potentially can expect something on the storage side. We've talked about the 9PCF storage expansion we are working on. We've completed the engineering studies, and we are busily marketing that expansion. So in the next couple of quarters, you can potentially expect us to FID our storage expansion as well.

And Jeremy, this is Jesse. Let me just add kind of on a macro. We've said before the optionality of our Louisiana assets is envious. And we operate two of the four market systems. There's redundancy. So there's a lot of these low-hanging fruit that we continue to try to, you know, meet the customer demand. So I think, you know, it just proves that owning this diverse set of assets continues to provide future opportunity for our business.

Got it. Thank you for that. And then just quickly wanted to go to the Oklahoma and North Texas segments and just wondering if Given the current strip and given your producer-customer conversations, how do you feel about executing against segment guidance at this point?

We feel good about the segment guidance at this point. Clearly, there was a headwind from the weather and a little bit of that shut-in activity in the first quarter, but like I say, I think Most of that is in the rearview mirror or will be here shortly. And, you know, I think things look bright, particularly in Oklahoma, as we get closer to the end of the year, as the strip for 2025 gets closer, becomes closer to realization.

Got it. Thank you for that. I'll leave it there.

Thanks. Thank you. Our next question comes from the line of Elvira Scosho with RBC Capital Markets. Please proceed with your question.

Hey, good morning, everyone. I guess just one question for me. Any impact that you guys see from kind of where the Waha prices are, the negative Waha prices? I know you have some takeaway capacity, I believe, on Whistler, so it didn't really impact when Matterhorn – comes on, I think you'd get some capacity. But just any color there would be helpful.

Yeah, hi, Laura. We really haven't seen much impact from the challenges at Waha for the gas that we market. We've already hedged Waha basis last year at prices significantly better than, of course, what you see on the screen today. So it's not a direct price risk to us. And in terms of producer behavior, you know, obviously it's an oil-directed basin. Nobody's shutting in over negative Waha prices. But also just given who our customers are, they do a good job of planning their transportation needs. And so everyone has, you know, has egress out of the basin. We're really not seeing much of an impact from what's going on at Waha right now. We are excited, though, to bring Matterhorn on in the second half because clearly the market is demonstrating that there's a need for that capacity.

Great. Thank you very much.

Thank you. Our next question comes from the line of Wade Suki with Capital One. Please proceed with your question.

Good morning, everyone. Thank you all for taking my question. Just wondering if you might be able to comment on what you're seeing in the M&A market and maybe contrast how those sort of inorganic opportunities might rank compared to organic, if you don't mind.

Yeah, well, you know, there's quite a few assets in private hands that need to find permanent homes. And I do think that seller expectations has somewhat moderated over the last couple of years, but we're going to remain very disciplined in doing anything in the M&A market to make sure that it does exactly what you're talking about, that it competes favorably with the other uses of capital that we have, including all the things that Delonka's talked about, in Louisiana. So while we're always in the flow of those discussions, you're going to see us remain very disciplined.

Got it. Thank you. And just thinking about commercial activity in Louisiana, could you maybe contrast sort of what you're seeing today in terms of pipeline prospects versus, you know, what you might have been seeing six months ago, a year ago?

Well, I think that's one. I think we are seeing the demand driver to continue. A lot of the industrial facilities in that region are facing the dynamic of the LNG pull of gas, particularly as the venture global documents facility comes online. So I would say that the difference is that people are seeing the demand materialize. A lot of people kind of tangentially knew this was going to happen, but it's becoming more real, as you've seen in the recontracting of our capacity and the ability for us to bring relatively quickly these projects to market. And as I mentioned earlier, we have several other projects that we are pursuing, and that together with the participants in that area kind of coming to terms with the changing dynamic there, I think, works really well for future projects for us.

Fantastic. Thank you. One more, if I may squeeze it in here, kind of dovetailing off that last bit, more of a macro question. You all seeing any signs of a softening or a slowdown among your industrial customers, to the extent you can speak to it?

No, we are not seeing that. In fact, there are some expansions being announced, particularly On the ammonia side, with all the incentives that are at play currently, the blue ammonia sector is kind of really taking off. You know, recall that one of these ammonia plants, kind of the world-class kind of train, which is about 1.3 million tons of ammonia, is about 110 to 130,000 mmBg of gas per day per train. So many are... being discussed around the river corridor, around our assets. So that's creating incremental demand in addition to the kind of the robust demand there already exists in that area. One thing I'll add is the storage component. With natural gas price volatility together with the demand from the LNG plants that are coming along to meet their operational flexibility, you really need storage gas storage to balance that out. The increasing power demand is another reason for that to grow. So I think, again, our just knowledge storage, our surrender storage, our Napoleonville storage are very crucially located to absorb that market demand as well. So we are very excited about that opportunity in storage in addition to the transport bit.

Fantastic. Thank you so much for taking my questions.

Thank you. Our next question comes from the line of Harry Mathier with Barclays. Please proceed with your question.

Hey, good morning. I have a follow-up on the balance sheet, and I'm acknowledging you're a bit below your leverage target, but now you do have IG ratings at two of the three agencies. Does that change anything for you in terms of ways you could optimize the balance sheet, whether that's, you know, different tranches of the debt, coupons or tenor. And I guess related, when you look at the preferreds, does the shifting narrative recently about the trajectory of rates this year cause you to maybe reconsider paying those down further or maybe replacing with senior debt since you do have some balance sheet capacity? Thanks.

Hey, Harry. It's Ben. Lots of impact there. I mean, I think the good news on most of the debt structures is that it was put in place at a time when base rates were significantly lower than they are today. And so while the upgrade to investment grade is recent, we already had a very low-cost debt structure in place. And so I don't think that there are that many opportunities to optimize within the existing debt structure. Now, on the preferred side, in general, we still think that it's better value to focus our excess free cash flow on returning capital to the common unit holder. But we have opportunistically reduced the preferreds, particularly when we can get them below par, which frankly lately hasn't been very easy to do. Don't be surprised to continue to see us do a little bit of that opportunistically, but we don't have anything, no current plans to do anything bigger on the preferreds, including by using, as you say, the little bit of leverage capacity that we have. Because having just gotten the upgrade from triple B minus, we want to be clear we're committed to retaining that triple B minus rating. And I think that increasing leverage to do that, to deal with the preferreds at this point would maybe not be in keeping with that goal.

Got it. Very clear. Thank you.

Thank you. There are no further questions at this time. I'd like to pass the floor back over to Jesse for closing comments.

Thank you, Alicia, for facilitating our call this morning. Thank everyone for being on the call. As always, we appreciate your continued interest and investment in INLY. We look forward to updating with our second quarter results in August. In the meantime, we wish you well and have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.