KNOT Offshore Partners LP Common Units representing Limited Partner Interests

Good morning and thank you all for attending E-NOT Offshore Partners fourth quarter 2024 earnings call. My name is Brica and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to your host Derek Lowe, Chief Executive Officer and Chief Financial Officer of Knott Offshore Partners. Thank you. You may proceed, Derek.

Thank you, Brika, and good morning, ladies and gentlemen. My name is Derek Lowe and I'm the chief executive and chief financial officer of Knott Offshore Partners. Welcome to the partnerships earnings call for the fourth quarter of 2024. Our website is knottoffshorepartners.com and you can find the earnings release there along with this presentation. On slide two, you will find guidance on the inclusion of forward looking statements in today's presentation. These are made in good faith and reflect management's current views, known and unknown risks, and are based on assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied in forward looking statements, and the partnership does not have or undertake a duty to update any such forward looking statements made as of the date of this presentation. For further information, please consult our SEC filings, especially in relation to our annual and quarterly results. Today's presentation also includes certain non-US GAAP measures, and our earnings release includes a reconciliation of these to the most directly comparable GAAP measures. On slide three, we have the financial and operational headlines for Q4. Revenues were $91.3 million, operating income $34.7 million, net income $23.3 million, adjusted EBITDA was $63.1 million. We closed Q4 with $90 million in available liquidity, made up of 67 million in cash and cash equivalents, plus 23 million in undrawn capacity on our credit facilities. We operated with 98.3% utilization, and the vessel time available for scheduled operations was not impacted by any planned dry docking. Following the end of Q4, we declared a cash distribution of 2.6 US cents per common unit, which was paid in early February. On to slide four. Our outlook remains positive on both industry dynamics and the partnerships positioning to participate fruitfully in our markets. Significant growth is anticipated in production in fields which rely on service by shuttle tankers. In particular, we've seen Brazilian FPSOs delivering and starting up ahead of schedule, with quite a few still to come. In the North Sea, the long awaited Johan Casberg FPSO is expected to start production shortly, while the Penguins FPSO began production recently. Penguins is Shell's first new operated platform in the North Sea in over 20 years, bringing production back to a field that's been offline since the decommissioning of the prior generation platform in 2021. On Johan Casberg, we're aware of some media speculation that a KNFP vessel has already offloaded cargoes, but I can clarify that this operation is our vessel coming alongside still as part of the commissioning process. Nonetheless, the picture at Johan Casberg is positive and we look forward to operations there. On the vessel supply front, we're seeing continued new build orders placed in order to service the large new production volumes coming online in the years ahead, including for our sponsor Knutson MYK. A measured amount of new Shuttle tanker ordering is unavoidable and in fact necessary as a shortage of Shuttle tanker capacity remains projected in the coming years. As usual for the Shuttle market, we believe that all known new build orders are backed by firm client charters, minimizes or even eliminates the dynamic of speculation around anticipated supply into the global fleet in two to three years' time. The partnership remains financially resilient, with a strong contracted revenue position of $870 million at the end of Q4 on fixed contracts, which averaged 2.4 years in duration. Charterverse options are additional to this, an average of further 4.8 years. With the market having strengthened and given expectations for tightness in the years ahead, The economic rationale for exercising these options has been strengthening and we increasingly expect these options to be taken up. Our near term charging exposure has been addressed by a swap of the Dan Sabia for the lever Knudsen, which we announced on the 27th of February. And our passive cash generation and liquidity balance is sufficient for our operations and the significant pay down rate for our debt, which is in the region of $90 million per year for installment payments. The debt on the lever acquisition fits in with this repayment profile also. On slide five, a number of developments in Q4 were announced already on the previous earnings call, including a new charter for Hilde Knudsen, which is about to begin. On slide six, our most recent developments include closeout of the insurance claim for Toral Knudsen, dating back to January 2024, totaling about less than $6 million. A brief option exercise for Brazil Knudsen and for Vigdes Knudsen, a switch to bare boat and extension of fixed duration by three years out to 2030, along with an option for a further two years. The most important recent development is on slide seven, showing a swap of the Dan Sabia for Lever Knutson. Lever has brought nearly five years of fixed or guaranteed future charter revenue, and this swap was a significant step in fleet and pipeline growth without the need for new funding. Additionally, this transaction leaves our fleet wholly concentrated in the most in-demand shuttle tanker classes. Onto slide eight, you can see consistent and growing revenues over the quarters and years, along with improving profitability. Slide 9 similarly reflects consistent and growing adjusted EBITDA, and you can find the definition of this non-GAAP measure in the appendix. On slide 10, there are two notable points in the balance sheet over 2024. The first is that four of our debt facilities have moved up from long term to current liabilities because of their upcoming maturities. The second is that even after the assumption of debt involved in the TUVA acquisition in September, our overall liabilities decreased by $29 million in 2024. as we continue to make contractual debt repayments in the area of $90 million per year. The debt facilities can be seen on slide 11, which sets out the maturity profile. On line one, the first of our revolving credit facilities is due to mature in August 2025. And on line two, the loan secured by Tover Knutson and Sanova Knutson matures over September and October 2025. The second revolver matures in November 2025. We typically seek to refinance such facilities on very comparable terms and we have a good track record of refinancing success, even in less favourable market environments. The highlighted column shows how the outstanding balances of each facility have been reducing because of the repayments we've been making in line with scheduled repayment terms. The current instalments are the amount of capital repayment due over the next year, which do not include interest or the final bloom payments due on the maturity date. Of note, $93 million in current installments is due to be paid during 2025. Our typical pattern is for our vessels to provide security for our debt facilities, and that applies to 17 out of the 18 vessels in the fleet out of the 31st of December, with the one exception being Dansabia, which is the vessel we sold earlier this month. $883 million out of $910 million in debt facilities at 31st of December are secured by vessels, while the two revolving credit facilities taking $50 million of capacity are unsecured. The Lever Knudsen, which we acquired earlier this month, have 73 million of secured debts attached maturing in October 26, and on very similar terms and conditions to the other secured loans shown here. The maturity profile of these debts is set out graphically on slide 12. As you can see, repayments are spread out over the coming years, but include material balloons in each of 2025 and 2026. Slide 13, shows the contracted pipeline in chart format, reflecting the developments I set out earlier, as well as the fact that Raquel Knutson's option period is the only material outstanding period for the year, as well as the possibility of brief off-hire as the Brazil Knutson transitions between charters. While nothing is certain until it's formally in place, we are cautiously optimistic about securing that additional coverage in the current tight market, either as an extension or under a new charter. Similarly, slide 14 highlights an encouraging 94% of fixed charter coverage for 2025. We currently have 75% of 2026 fixed as well, although the open percentage does rise materially over the course of the year, which demonstrates the need for our continuing commercial efforts. On slide 15, we see our sponsors' inventory of vessels which are eligible for purchase by the partnership. This applies to any vessel owned by or on order for our sponsor. where the vessel has secured a firm contract period at least five years in length. At present, four existing vessels and five under construction fall into this category. There's no assurance that any further acquisitions will be made by the partnership, and any transaction will be subject to the board approval of both parties, which includes the partnership's independent conflicts committee. We continue to believe that key components of KNOP's strategy and value proposition are accretive investment in the fleet and a long-term sustainable distribution. As such, we intend to pursue long-term charter visibility and accretive drop-down supportive of long-term cash flow generation. On slides 16 to 18, we provided some useful illustrations of the strong demand dynamics in the Brazilian market as published by Petrobras. We encourage you to review Petrobras' materials directly at the webpage as shown there. The primary takeaway from each of these slides is consistent. There's very significant committed demand growth coming in the Brazilian market in the form of new FPSOs that will require regular service from shuttle tankers. We believe that recent reports of additional vessel construction contracts are an endorsement of the strong anticipated market conditions in the medium and longer term. Five outstanding new-build contracts are for our sponsor, Knutson MYK, and are due for delivery by the end of 2027. We would not be surprised to see further new-build orders placed in order to service the large new production volumes coming online in the years ahead. In a trend that also applies to oil production globally, you'll see that even in the years ahead where aggregate production growth slows, deep offshore production, in this case the Brazilian pre-salt, continues to outpace the overall market and take market share. On slide 19, we provide information relevant to our US unit holders, and particularly those seeking a Form 1099. Those holding units via their custodians or brokers should approach those parties directly. Those with directly registered holdings should contact our transfer agent, Equinity Trust Company, whose details are shown there. On slide 20, we include some reminders of the strong fundamentals of our business in the market we serve, our assets, competitive landscape, robust contractual footprint, and resilient finances. I'll finish with slide 21, recapping our financial and operational performance in Q4 2024 and the subsequent time and our current outlook. We're glad to have delivered high and safe utilization, which have generated consistent financial performance. We're delighted to have taken the further growth step by swapping Dan Savi for Lever Knutson, Our continued commercial focus remains on adding to our longer-term charter visibility and the cash flows that provide us with the capacity for both accretive investment in the fleet and a long-term sustainable distribution. And in the coming months, we will also be addressing the four refinancings which are coming due this year. In total, though, we are making good progress and are pleased to have established positive momentum against an improving market backdrop. Thank you for listening, and with that, I'll hand the call back to Brika for any questions.

Thank you, Derek. We will now begin the question and answer session. If you would like to ask a question, you can do so by pressing star followed by one on your telephone keypad. And if for any reason you would like to remove that question, please press star followed by two. And again, to ask a question, please press star one. And as a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly whilst questions are registered. We have the first question on the line from Liam Burke with B Reilly Security. You may proceed.

Thank you. Hi, Derek. How are you today?

Hi, Liam. Good. Thank you, Newt.

I'm doing just great. Thank you. Derek, you've got a long history of being able to refinance high-quality assets. You're improving. Your liquidity is improving. Your cash flow is up year over year. up nicely. How do you think about allocation of capital now that you've got a fairly safe lease book here?

Thank you. We are pleased with the way things are going. I would say at the moment that we do count in our freely available liquidity $50 million worth of RCF capacity. So 90 isn't 90 of cash without other considerations. That's probably the first thing to be mindful of as you look at those balances. We don't take anything for granted in our debt renegotiations, and the world is perhaps a slightly more volatile place now than it has been in the last couple of years. And so we're going to proceed with those debt renegotiations in good time, well ahead of maturity dates as as we as we usually do and um i agree our track record on that is good and we don't see any particular obstacles there but nonetheless that is a more immediate priority and then um into the medium term we are still looking to fill um uh spaces in our chance of coverage uh next year if you saw on um slide 14 i think uh the coverage average is 75% fixed for next year, but clearly it drops away over the course of the year, and that's something that from our chartering team we're particularly concerned to fill up. So there's a number of priorities there already, but in terms of use of capital, which I think was your basic question there, the board continues to think it's in the long-term interests of the unit holders to both to consider accretive acquisitions and the long-term sustainable distribution, and they have both of those things in mind as they look at decisions that they make.

Okay, fair enough. On the charter coverage, obviously you mentioned 75% covered in the next year. If you're looking at the amount of FPSO or production activity coming online, either in the North Sea or in Latin America. Are you comfortable that your available vessels will fit into that demand profile?

Yeah, we don't have any signals that they won't be, and they're all of a specification that fits.

Okay. All right. Thank you, Derek.

Thanks, Liam.

Thank you. We now have Frat with Alliance Global Partners. Your line is open.

Can you address the open windows for 2026 for the Fortaleza and is it the Recife or Recife? Are we potentially facing the same situation we had with the Danzabia and the other smaller shuttle tanker that was on airboat charter to Transpetro. Can you just address sort of the specs of those vessels and, you know, how you're looking at rechartering at this point in time?

Sure, yes, Forza Laser and Recife, and you're looking at page 13, I think, aren't you, where those charters expire outside the middle of next year. I think the main difference is between those and the two DANs are sized. I mean, the fortilizer and receiver are approximately double the capacity that CISNA and SARBIA have. So we're far less concerned about the ability to continue deploying them than we were with CISNA and SARBIA.

That's helpful. But there isn't any option, you know, when are you currently, trying to you know line up time charters for those or is it too early to you know work on those oh we work on all open periods all the time okay any interest in those or can you give us a flavor for you know the yeah you're confident you said you were confident so what kind of confidence interval should i use

Well, that's a market conditions observation. We don't comment on individual negotiations until we've got something that's signed and announceable.

Okay. Can you just address the shift with Shell on the Vignes? Why did they decide to flip over to bare boat chartering the shuttle tanker and You know, can you just give us the dynamics of that decision? And then also, is there an impact to the net cash flow that will be generated from that shuttle tanker?

Yeah, I mean, the first, I'll answer your last point first. The bare boat terms are commercially comparable to the terms that would have applied under the previous time charter. And so from a financial point of view, we are obviously content with that switch. It's also been extended as well. So we've got fixed coverage for that vessel for longer as part of that negotiation process, which obviously is welcome too. In terms of shells and tensions, there are benefits of an oil major operating their own fleet rather than putting them out on management contracts. And that's what I expect Shell were looking at. I mean, they've had an option to make that switch in place since the original time charters were put in place. So that option, they've contemplated that for some time.

It does lower your operating risk on that shuttle tanker, correct? And then can you highlight whether any other time charters have the same option to shift to bare boat?

Yeah, I don't think any come to mind at the moment. If that's incorrect, we'll get back to you, but none come to mind at the moment.

Yeah, it's interesting too because, you know, I'm not sure if you saw the recent award of, you know, I think it was nine shuttle tankers where Petrobras or Transpetro intends to bare boat charter the vessels, which seems, I'm just trying to figure out, you know, why the shift to potentially bare boating instead of, you know, just straight time chartering.

Yeah, that's probably a question for that vessel owner.

Okay. And then, you know, we always play a game of cat and mouse with the time charter rates. and you know the renewals and extensions and you know it's always interesting and you know you never give sort of specific guidance but can you just highlight the the large jump sequentially in time charter revenue you know you you seem to be all of a sudden hitting a new level and can you talk about the forward-looking time charter book will is 84 million in time charter revenue a reasonable expectation going forward? Or was there something in the fourth quarter, maybe bonuses or other things that would have pushed that number up that won't recur in the first half of 2025?

Yeah, I appreciate the question and the reason for it. And we have the same competitive issue that we don't think it makes sense to expand on day rates too much There weren't any bonus type elements in that number. So one-offs, for example, the insurance payment you can see was received and accountable separately. So it's not as if that's included. The biggest difference is that we had some new operations starting in fourth quarter. So if you go back to, I think it's slide five, and those are developments that we discussed on the last call, actually, because they just happened already by that stage. We've got, I think it's Ingrid and Torrell. Yeah, so Ingrid and Torrell were new operational starts, and the others were news about future contracts, but they sort of don't count on that point. In terms of what will happen to that line, that 84 line in the future, well, That comes back to what are the new operations? Well, question, are there any operations that come through in Q1, Q2 and so on, which would impact that? And the answer to that is yes. So we've got particularly the swap out of the SABU and swap in of the LIVA, which obviously was closed on the 3rd of March and therefore will apply to a small extent to Q1. and then in full in Q2. And as you're aware, we've got the HILDA due to go on hire by the end of this month. And so minimal impact from that in Q1, but the Q2 figures should reflect a full quarter of that HILDA commercial contract as well. So it's down to, I'd say the more notable changes won't be particularly down to rate, which I understand is what you're looking for as well. but simply the fact of chances starting.

But we have hit a new level. And as you mentioned, that new level was driven by pretty much the Ingrid and the Hilda early in the quarter. And then, you know, the Toro later in the quarter. Yeah. Okay. And then can you, Can you share with us the potential impact to backlog of the LIVA acquisition? Because that potentially, I assume that's not in the stated backlog of $870 million. Can you give me a ballpark on, you know, how that will change the backlog, the contract backlog?

Yeah, I mean, we can't give specific numbers on that, but what you would want to look at is when was it that that rate was set, because the market really is around when you contract a rate rather than when the rate is being earned once the vessel's on hire. And of course, for the vessel that's on the first charter after delivery, that rate was set at the point when the new build order was made for her. So if you backdate from the delivery date by a reasonable period to allow for construction, you're looking at market levels that were contracted around then. I can't guide you as to what those were specifically, but that will give you an idea. So the fact that the vessels newly arrived in –

uh in march of 25 doesn't make it a march 25 sort of rate understood but it will have a you know it'll it'll add what five and a half six years of contract backlog or contracted revenue to that contracted backlog number so in the second quarter under five november um Okay. Can we talk about OpEx? There was a big drop in OpEx in the fourth quarter versus the third quarter. You highlighted the impact of what was it the, I think the, you know, the return of the one of the dance, right? Can you just talk about sort of the run rate for OpEx in the first half of 2025?

Yeah, well, you should see a similar impact of the other dam coming out of the fleet. In fact, a very close equivalent because the sale of each of those vessels was just two months into the quarter, into the half year. And so you should find that the further impact on OPEX of the Savio being sold should be fairly similar.

Can you quantify the impact of the NAND Savio in the third quarter? Because I don't recall that you actually talked about that on the December call.

If you look at a fairly reasonable OPEX rate assumption and then look at the times when she was on contract versus not, that would give you a good guide.

Okay. And just to summarize, so the first quarter will be impacted from a cost standpoint, but then the second quarter of 2025 shouldn't see a similar impact?

Not for those reasons, no, because we won't have had any vessels off fire. we'd be paying for. Okay.

And is there any outstanding off-hire, you know, receivable, any, you know, at this point in time, is that all cleared up and you have nothing, you know, nothing in negotiations as far as off-hire, you know, reimbursement or anything like that, Derek?

No, nothing significant. The biggest one was the, for the Torrell claim, which we've discussed on a number of quarters, I think, and it's that completed in January.

Yeah, that was a pleasant surprise. Thanks for your time.

Great, thanks both.

Thank you. Just as a quick reminder, if you would like to ask any further questions, you can do so by pressing star followed by one on your telephone keypad. And we now have the next question from Marilyn Edmund with First New York. Please go ahead.

Hi, gentlemen. Thank you very much for the opportunity to ask questions. I think my first question is to see if I'm thinking about this right. If I take a quarter like this and a full year of a quarter like this, you would probably have like cash flow before that amortization of about $160 million a year. And if you have $90 million a year of amortizations, you're talking about almost $70 million of cash flow after amortizations per year. Am I wrong in my analysis?

If you included interest in the first line you gave us, did you do that? Yeah, of course I did. I did, yes.

I subtracted the interest and the insurance from this quarter and you're like a 40 million of cashflow. You had a 63 of EBITDA, something like that, take six and then the 16 of interest. And that's really where you land. So this is more than $2 per share of cashflow after amortizations now. And so it's quite a hefty number. Now, I understand that you that you want to be secure with, you want it to be recurring in order to pay your dividend or not, but there's a lot of recurring cash flow that is already there. So do you think you have to have 100% charter coverage in order to increase the distribution to match it a little bit to the $2 change per year? And this is before the increases that you just described that are likely to come. So I'm just a question of how, I mean, could we see maybe a little bit more dividend? Because there's a big difference between paying all the cash flow and some of the cash flow. If you could give us a little bit more color in how you're thinking about it, I would appreciate it.

Yeah. Yeah, thank you. Thank you for the question. Well, the board's view is that the long-term interest of unit holders are served both through accretive investment and a long-term sustainable distribution. And we think those things come together. The partnership started with four vessels 12 years ago and is now at 18 vessels through that combination. So we expect that balance to continue in the minds of the board as they uh look forward um you you annualize some figures um obviously that we've had one quarter and that you've used for that basis and and that time needs to um to pass and the the new charters that are starting uh need to feed through to the results i think to get to the position that you were describing so that that in itself is some way off um the last uh the last point you say would would there be some sort of um threshold passed if we had 100% charter coverage. Well, the thing is that there's a continuing, there's a rolling need to renew charters. And so a high 90s percentage for a foreseeable period is not going to last simply with the passage of time. So clearly a good level of coverage is always going to be sought and welcome. But there's a lot of optionality in the In the charter outlook, as you can see on slides, I think 13 and 14, especially 14, you can see the fixed periods dropping away during the course of next year. So that's why there's a continuing rolling commercial focus on filling up the charter schedule.

Thank you for that. I agree with that. There is some sense of a connection between your decision to pay more dividends and the charters. And as you just said, you always have some charges rolling off. So that would mean that you perhaps would never want to pay a dividend using that logic. I'm not suggesting that that's your point of view, but I'm just sort of extrapolating that logic. As unit holders... Yes, I appreciate that.

My... Apologies. Do go ahead. Sorry.

no no that was it i guess let me let me let me move on i understand what you're saying i wanted to sort of i think that as a unit holder there's quite a bit of room now to pay dividends you could pay maybe if you have a policy where you pay 40 or 50 percent of the cash after after uh after amortizations and and that might be the beginning of being remunerated so let me ask another question in terms of I imagine that there's four vessels now that you may purchase that are now actually out there on the water. Two of them are in Brazil, and two of them are in the North Sea. Would you buy some in the North Sea, given that the long-term outlook for that market is smaller and the growth rate is not so high? not as secure as in Brazil?

Yeah, that's a question that our conflicts committee would be looking at, definitely, when we're looking at drop-down. Some listeners may not be aware, we have a committee of the independent members of our board who look at any transaction that is contemplated with our sponsor. It's called the conflicts committee. They take independent financial and legal advice when any potential transaction comes along. And that's exactly the type of question that they would be considering. Is any given vessel and the associated commercial exposure of that vessel the right thing to look at? It's not simply the terms of a transaction.

Okay. And then the final question is like... I understand that the drop-downs with the business makes a lot of sense. But now, if you do drop-downs, likely to do them with cash. How would you look at the difference between the cash, the point to buying back shares versus a drop-down? I would think the cash to the shares It's a lot higher investment right now than doing an additional drop time. Would that be something that you would consider when you make a decision?

Well, the board's looking at the long-term interest of unit holders. And so they look at the two together, not necessarily regarding them as in some way competing with each other. So yes, those two factors are always considered. But on the distribution side, particularly the sustainability office is very much in the board's minds. Okay.

All right. Thank you very much for your questions.

Great. Thank you.

Congratulations. That's a very good report. Thank you very much.

Thank you. We have a follow-up from Pearl Fratt from Alliance Global Partners. Please go ahead when you're ready. Please ensure your line is unmuted locally before speaking.

I apologize. Yeah, you probably didn't think I had another question, Derek, but I do. Can you look at first quarter utilization and how has utilization been this quarter? And can you highlight any dry docking activity that you know about for the, either the first quarter or the rest of the year?

Sure. I don't have any specific disclosure to you on utilisation during the first quarter, but we haven't had any issues that we'd like to disclose to you. Let's put it in those terms. The dry docks, I appreciate the chart's a bit small, but on page 13, we've highlighted when in the year the dry docks are appearing and also which dry dock it is in case you want to make different assumptions about the dry docks that happen at different stages in the vessel's life. So you can see those figures there. We are looking at four vessels during the course of this year.

The Windsor, the Raquel, the Tobay, and the Tuba, correct?

Yeah, I think Tuva might be slightly later into 26.

Okay, great. That's helpful. Thank you.

Thank you.

Thank you. Just a final reminder, it's Star 1 to register for a question. And we now have Clement Mullins with Value Investors Edge. Please go ahead.

Hi, thank you for taking my questions. I wanted to start by asking about your debt repayment schedule pro forma for the recent swap of the Dan Sabia for the lift Knudsen. Could you talk about how much the facility on the lift Knudsen adds to the scheduled debt repayment for 2025?

Yeah, we will be disclosing more details of the debt facility on that vessel when we file our 20F. And as we've not Expanded on that detail in this disclosure, I think it's probably best if you wait for that. But you'll find it highly recognizable by comparison with other debt facilities.

Makes sense. And this one is more market related. Over the past couple of years, the North Sea had lagged behind the Brazilian market. Does the Penguins and Johan Casterberg's startup have the potential to, let's call it, close the gap?

Well, we're not necessarily seeing the comparison in that way. I mean, they're clearly extremely welcome and long-awaited production starts in the North Sea, and they are the key difference to pick up in the North Sea market that's been anticipated for some time. But aside from that, I mean, clearly we welcome strengthening in both markets, but it's quite hard to make a comparison as if one is catching up with the other and so on.

All right. Thanks for the call. Thank you for taking my questions.

Thank you.

Thanks.

Thank you. I can confirm we have no more questions in the queue, so I would now like to hand it back to Derek for some final closing comments.

Thank you, Brika, and everyone again for joining this earnings call for Knott Offshore Partners' fourth quarter in 2024. And I look forward to speaking with you again following the first quarter results.

Thank you all for attending today's earnings call. I can confirm today's call has now concluded. You may now disconnect and thank you all for your participation.