Teekay LNG Partners L.P.
Q3 2020 Earnings Call Transcript

Published: 12 Nov 2020

[Operator:]

Welcome to the Teekay LNG Partners Third Quarter 2020 Earnings Results Conference Call. During the call, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. . As a reminder, this call is being recorded. Now for opening remarks and introductions, I would now like to turn the call over to the company. Please go ahead.

[Scott Gayton:]

Before Mark begins, I would like to direct all participants to our website at www.teekaylng.com, where you'll find a copy of the third quarter of 2020 earnings presentation. We will review this presentation during today's conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the third quarter of 2020 earnings release and earnings presentation available on our website.

[Mark Kremin:]

Thank you, Scott. Good morning, everyone, and thank you for joining us on our Third Quarter of 2020 Earnings Conference Call for Teekay LNG Partners. We hope that you and your families are all safe and healthy. I'm joined today by Scott Gayton, Teekay Gas Group's CFO. Before getting into our results, we will take a moment to thank all our seafarers and shore-based staff for their continued dedication to maintain business continuity. While COVID-19 is having an unprecedented impact on the world and is clearly a major focus for us, our long-term contract cover with our high-quality customers has ensured it has had minimal impact on Teekay's LNG's operations and cash flows again this quarter. We are truly proud of how our onshore colleagues and especially our seafarers, have continued to respond to COVID-19, while maintaining consistently safe and efficient operations for our customers. We have made good progress with crew transitions over the past few months, as we will discuss in a moment. Turning to Slide 3 of the presentation. We will review some of Teekay LNG's recent highlights in the blue boxes. We recorded adjusted net income of $58.9 million, or $0.59 per unit, which is down slightly from last quarter, mainly due to a heavier than normal number of drydocks, some of which were delayed from earlier this year due to COVID-related logistical issues. We anticipate fewer drydock days in the fourth quarter and, as our fourth quarter financial outlook slide in the appendix indicates, we expect our fourth quarter results to increase from these levels. Now that we are over 3/4 through the year and given the fixed rate nature of our business, we have good visibility to where we expect results will come out for 2020. And we're happy to say that we will still -- we still expect our financial results will be within the financial guidance ranges we provided last year, albeit likely toward the lower end of the ranges. Few weeks ago, we extended the charter on our 52% owned Marib Spirit to early 2022. With that, our LNG fleet is 100% fixed through the rest of 2020 and 96% fixed for 2021. Importantly, we expect an average LNG time charter equivalent rate of around $80,000 per day for 2021. Despite the COVID-related demand shocks we have been experiencing so far in 2020, the strong demand for LNG, particularly in Asia, is having a positive impact on LNG prices. Longer-term, we and our customers believe gas, and in particular LNG, will be a net beneficiary as the world transitions to a cleaner energy future.

[Scott Gayton:]

Thank you, Mark. On Slide 9, as Mark mentioned earlier, this quarter we reduced our proportionate net debt position by nearly $100 million, building on the long-term trend towards lower leverage and a stronger balance sheet for Teekay LNG, which benefits all of our stakeholders. This quarter, we have included another leverage metric, net debt to total capitalization, as represented by the gray bar in the top chart. Our net debt-to-cap peaked in early 2019 as we were taking delivery of a number of new buildings during this time. However, similar to our other key metric, net debt-to-adjusted EBITDA, our deleveraging picked up as these new buildings commenced their contracts and began generating cash flow and earnings. We will continue to monitor both metrics and expect them to decline in the years to come, and we remain on track to reach our target leverage range next year of 4.5 to 5.5x on a net debt-to-EBITDA basis. Looking at the bottom chart, our liquidity increased this quarter after the successful completion of a $112 million unsecured Norwegian bond at a record low fixed coupon of 5.74%. We have initially used these proceeds to repay our revolvers, thereby building liquidity and not impacting our delevering plan. However, looking out, we have the financial flexibility to allocate capital to create shareholder value, including the ability to be opportunistic in repurchasing any of our own securities if we see any market dislocations, whether it be our bonds, preferreds or common equity, which could add value for our investors and be accretive to our free cash flow and earnings. We have no debt facilities maturing this year. And for the 2 bank facilities which mature in 2021, we have made good progress since we last spoke with you. The $310 million Exmar LPG joint venture facility is 100% committed, and we are looking to close in the next week or 2. And we just recently launched the Tango refinancing into the bank market, and I'm pleased to report that we are already over 50% committed. And I expect we will have a fully committed facility in the next few weeks.

[Mark Kremin:]

Thank you, Scott. This is the last time we plan to speak on an earnings call this year. We would like to conclude today's call by reflecting on the year we've had. Since earlier this year, the world at large, the broader energy and equity markets, and the natural gas and LNG shipping markets have all experienced volatility and bouts of uncertainty. We're pleased that during this time the people at Teekay LNG have quietly gone about their business. Our track record and focus on operational excellence remains, in fact. Our seafarers continue to operate at the top of their game, despite some of them playing into extra innings. And we continue to honor the commitments we have made to our investors to allocate capital in a balanced manner with a focus on delevering our balance sheet while sustainably returning capital.

[Operator:]

. We will take our first question from Omar Nokta of Clarksons Platou Securities.

[Omar Nokta:]

Thank you. Hi, guys, good morning. Mark, you went over this a little bit. And Scott, also, you mentioned the sensitivity being a bit minimal for 2021. I wanted to ask about the market as you see it currently, especially in the context of the renewals coming up for the Creole Spirit and the Methane Spirit. We've seen spot rates reach $100,000 a day. And we're quite a bit away from where things were this past summer at the lows. But time charter rates haven't really responded. They haven't come up with spot rates. And it's quite a bit different than last year when we saw spot rates bottom in the summer, spike in the winter with the time charter markets following suit. I guess maybe one, can you give us a sense of why you think this is the case that we haven't seen the time charter market respond? And then two, any signs that this could be changing here in the near-term?

[Mark Kremin:]

Sure. I think you're bang up. First of all, good morning, Omar. When we talk about the LNG rates now, they're in that, as you've seen. As you're well aware, they're probably in the 100s for the second half of December is what we're seeing get fixed at this point. But as you say, the spot rates haven't -- sorry, the time charter rates haven't really responded to that. There have been a couple -- let's just talk about why we're up before we talk about why the time charter rates haven't gone down. The -- if you look at, for instance, in 2018, we had prices in Asia at $7, and they quickly jumped to $12. And I wouldn't rule out that prices can jump quickly on demand, obviously. On the other hand, it's all about the ARP. So the Henry Hub hasn't -- it's gone from low $2 to high $2, and it seems to be pretty stable there. Any time you have a premium of more than $1, you can pull cargoes to Asia quick typically. So they have been going to Asia. You've been seeing some Bintulu outages. Those have been replaced by some longer haul, that should probably get corrected. There were some things over the summer that were slowing the market down. You saw Laura had an impact on liquefaction in the United States. We see no more named storms this November that are going to impact the liquefaction side. So there's a number of things going for us. And then even on the longer-term, we've seen now that China has signed up for 21 cargoes from Cheniere. That's a big reversal of the trade war things we've been seeing over the last year. So we see more -- maybe a resumption of China cargoes. We see Poland not renewing their gas SPA with Gazprom. So there's a lot of positives both in the very near-term and maybe the bit longer-term. But the bottom line that we see is that over 2021 and 2022, the -- there's probably too many ships for the cargo. So that's one reason you've always seen us. We're not shy about fixing forward. We do it a lot. We do this in direct continuation. We do it with -- we don't necessarily -- we make a call in the market. We don't take floating rate charters for the most part, because there's a lot of tailwinds happening. And of course, we've all seen Pfizer and all the rest. But I think there's too many ships over the long -- over the next 2021 and 2022. And that's why we've taken the -- perhaps more conservative approach to the industry.

[Omar Nokta:]

Thanks, Mark. And in February, you've got the two vessels coming up for renewal. The -- any sort of dialogue you're having now? And any sense of the type of term you're looking at getting? Is it still going to be in this market today, we're looking at maybe a max of 12 months as realistic?

[Mark Kremin:]

Yes. We are looking at -- and maybe it's too much competitive secrets, but we are always looking at that type of year or more if we can get it. And I say this because we've had peers in the past who said they don't want to go -- it doesn't matter what the rate is, they don't want to go long-termterm. We're not like that. If there's a good rate that's long-term, we'll go ahead and take it. And what we're in discussions for, for those two ships is indeed 12 months or longer. If we can't get a good rate at 12 months or longer? No problem. We have enough portfolio to cover that. As Scott mentioned in his prepared remarks, sensitivity is something we can handle. But our preference is longer-term charters, and I think we will hopefully be able to achieve that for one, if not both of these ships.

[Omar Nokta:]

Great. Than you. And maybe just one more quick follow-up for Scott. In the slide deck, you went over the debt maturities and the two refinancings that are hopefully well underway now. Of the $400 million debt maturities for 2021, after these refinancings, do you have a perspective you can give us of what the amortization will be for next year?

[Scott Gayton:]

Yes. I don't expect it to change a lot, really, Omar. I think that we've said in the past, it's -- on a totally – on a total basis, so including all the debt at our joint ventures, it's roughly $300 million per year. And I don't see that changing absent these maturities. So we tried to normalize it at $300 million for you.

[Omar Nokta:]

Great. Thank you. Thanks, Scott, and thanks, Mark.

[Mark Kremin:]

Thank you.

[Operator:]

Thank you. We will take our next question from Randy Giveans of Jefferies.

[Randall Giveans:]

How are you, gentlemen? How’s it going?

[Mark Kremin:]

Hey, Randy, good morning.

[Randall Giveans:]

Good morning. So I guess starting with the NOK bonds. Just trying to think through the strategy there. What was the reasoning for issuing those five-year notes to kind of repay the revolvers? What were the interest rates on the revolvers? When do they expire? And did you cancel them or just kind of pay off the remaining balance?

[Scott Gayton:]

Sure. So I think the -- when we looked at the maturity that we had in May, we did pay that one off with cash because we didn't like the terms that we were seeing. We didn't like the rates that we saw and it just wasn't the right time to do it. The Norwegian market was just not out of sort of the COVID hangover, if you will, by that point. And I think that we also had opportunities that were presented to us in that February-March time-frame when there was obviously the massive dislocations that we had. And I think with these two commercial bank facilities that were maturing, the NOK bond, our liquidity level was just at a point where we were not able to be as maybe as opportunistic as we otherwise could have been. So we saw the summer proceed. We saw the U.S. high-yield markets go absolutely crazy and then that followed off into Norway. And then we decided that we were able to rebuild our liquidity at an extremely competitive rate. The treasury rates were bottoming right around the end of the summer. And so at 5.74 all in for five years, we thought that's a great price for us to go and rebuild that liquidity balance. Such that if we do get some market dislocations like we had -- obviously, in some ways we -- you never want to wish that, but we do think that we're now positioned that we could step in and look at purchasing securities and really add some long-term value. If we look at the pricing differential, it's relatively small. I think that all-in our revolvers are probably in the, call it, 3, 3 and a bit range. So it's costing us a couple of hundred million bucks in order to have that extra flexibility and firepower. And we didn't cancel any of our revolvers. They're still there. And you can see if you look at that slide on Page 9, they -- one of them is a two-year facility, and so it rolls in 2022. And then the other one is a longer-term facility that we would look to reduce. So those are the body of work that we will have for 2021, is to roll those maturities in 2022.

[Randall Giveans:]

Got it. Okay. And if you do, would that then be kind of a use of interest rate arb there to roll those revolvers, especially if you can get them at under 4%, draw those down and repay, yes, some of your preferreds or some of your higher-priced securities?

[Scott Gayton:]

Definitely something that we look at and something that we do analyze. And we can draw those down in a matter of about 3 days if we were to see some real opportunities. And so I think what you're going to see is we're going to be patient. As Mark says, it's good to be boring sometimes. And I think right now, we're sitting on the sidelines, and we're going to be patient. And having that extra flexibility is one of the hallmarks that we think that is a benefit to investors.

[Randall Giveans:]

Great. All right. And then 1 more question. Just looking at your distribution, do you have any kind of growth target or anything like that for next year? And maybe what are some of the drivers regarding possible distribution growth? Is it just rechartering your vessels, specific leverage metrics or maybe a certain yield that you're targeting?

[Mark Kremin:]

Well, maybe I'll take a stab at this, Randy, and pleased to have Scott come in, but I'm not sure we're going to say much. As you've seen, we haven't said much -- we haven't said anything really. We're going to wait until next year this time before we give guidance for our 2020 distributions. As you know, we've increased it in each of the past years and sustaining that is important to us. We certainly learned our lesson in 2015. It's ancient history for a lot, but not for Scott and myself and others. So the Board will be meeting in December, and we're going to discuss that. As you say, there's a broader allocation this time than perhaps in previous years. But like we do that every quarter, we're going to do that. And we're going to come back to you through our intentions in 2021. But I think it's important to say now and that we are not thinking of a cut in our distribution. We're well covered and I -- hopefully, we can leave it at that. But Scott, if you have anything further to add?

[Scott Gayton:]

No. I think the only word I would put in there is that any increase that we do talk about with the Board, I think we want to make sure is sustainable. We do have an extremely fixed-rate business, so we've got good visibility. And unlike a lot of peers out there, particularly in the energy space, we look at having our dividend covered by earnings. So as we said, this quarter, we're roughly 2.4 covered by earnings. So it's obviously well north of that on a DCF basis, but we want to make sure that we're earning our dividend and never end up in a situation where you're -- that relationship is upside down. So I don't think we have any real target, except for like Mark said, we'd like to have that track record of increasing it year-on-year. But in terms of the magnitude at this point, I think that's something we'll just wait until we come back to talk to you early next year on that.

[Operator:]

We will take our next question from Ben Nolan of Stifel.

[Benjamin Nolan:]

I wanted to come back to something. I think, Scott, you'd mentioned that the long-term target on net debt-to-EBITDA is 4.5, 5.5x. And that you expect to be there next year. I'm curious what is -- what's sort of the thinking or the calculus as to why that's kind of the magic number? And is it something that you think about as sort of a, moves over time? Or is that just kind of a feel good spot?

[Scott Gayton:]

Yes. Thanks, Ben. I think you're right. There's probably more art than science. And so sometimes, it's just where it feels good. You're correct. I think that we all know that where we ended up at around 9x was way above anybody's comfort zone. And I'd say on the low end of it, to get into the 3s or the 4s is probably too low for us to be competitive. So the 4.5 to 5.5, we did some work on that and we revisit it yearly. Some of that had to do with the way that the banks look at us, some of that has to do with the credit rating agencies

[Benjamin Nolan:]

Okay. So -- and just sort of from where you sit today, I appreciate that this can evolve. But as we move into next year, as you begin to approach the -- that target, with 5.5% target, sort of higher-end of that target range. Where do you think would be, again, based on today, the best use of the incremental dollars? To continue to push it down closer to the 4.5 range? Or are you seeing opportunities in the market? Again, I appreciate the preferreds or whatever got blown out, maybe that will happen again. Are you being approached by people or in situations that are attractive that maybe as you begin to approach that range you feel like, well, if we were there today, we'd do it. Is that materializing yet? Or there's still just not those opportunities that you're seeing?

[Scott Gayton:]

Yes. Maybe I'll go, and see if Mark has any follow ups. No, absolutely. I'll see if Mark has any follow-ups on the asset side. But on the security side, I'd say, no, we're not seeing anything that is sufficiently attractive that we want to step in and diverge from that delevering that we've got going on. And then I think the first part of your question was asking does that change over time? Or what's the feedback been? I'll tell you, when we meet with a lot of our MLP investors -- and I think, Mark, we've done more phone calls this year than we've ever done in the past, which is nice because we can do it from our sitting rooms -- but the vast majority of the -- particularly to the MLP midstream guys that we talk to that come along and say, well, geez, your 4.5 to 5.5x is still looking pretty rich, why don't you get that into the 3s or in the low 4s? And so there is a fairly wide bid-ask as to what people are accepting. And so I think that, that's what we're trying to do is to thread that needle and be thoughtful and make ourselves competitive, but also don't make ourselves something that investors are afraid of.

[Mark Kremin:]

And just on the asset side, Scott, you're right, we're not seeing anything this year. Everything has been a little bit delayed. Certainly Qatar, we expected it to come out by now. At least on a technical, noncommercial basis, it hasn't. So I think that's firmly into next year, it's a point. But I guess the good thing is that we wouldn't rule out potential investments next year. I think that we're setting ourselves up over in the future for being able to act when others can't. The delevering is happening as you guys have seen and yard prices are bottoming out pretty well. And so I wouldn't rule it out next year, but certainly, we would not do anything this year.

[Benjamin Nolan:]

Okay. That's great. And I appreciate you guys, it wasn't lost on you that being boring is a good thing, as we wrote.

[Mark Kremin:]

We stole that from you, so thanks.

[Operator:]

We will take our next question from Liam Burke of B. Riley.

[Liam Burke:]

You've laid out the different capital allocation alternatives. But looking at your fleet or potential fleet additions, do you see vessels out there with sufficient contract coverage to be attractive? Or do you have a backlog of those potential acquisitions?

[Mark Kremin:]

So you're talking about acquisitions of other people who have long-term contracts that may be attractive to us?

[Liam Burke:]

Correct.

[Mark Kremin:]

Yes, unfortunately -- well, I should say, fortunately -- we have long-term contracts for the most part in this business. So it is pretty -- and with an average remaining tenor of around 10 years. To find that is pretty darn difficult in the space, unfortunately. So as you say, there should be opportunities with -- there could be opportunities with folks who have a lot of spot exposure that they may want to get rid of a jewel or two. But currently, the answer is no. We're not -- there's none that we are aware of that are available.

[Liam Burke:]

And would you -- with that scarcity, would you consider moving into some adjacencies, smaller vessels or FSRUs?

[Mark Kremin:]

It's possible. So if you talk about both of those adjacencies, we do have two small-scale LNG carriers right now. They're 12,000 cubic meters, but we actually train them with ethylene because there's just the small-scale projects take awhile to develop. So we see small-scale projects. We just haven't been a part of them. It would be difficult for us to -- we always use the phrase, thread the needle for GDP -- when these ships cost on average, maybe $50 million compared to an over $200 million LNG carrier, but don't rule out the space. And as I say, we're in it. So if there's small scale LNG, we're going to take a look. On the FSUS, another is our FSRUs. Again, it's good adjacency for us to look at it. It's not that technically difficult. It is very much within our adjacency space. The issue there, as we see it, is that it's overbuilt currently. So I wouldn't -- and for the same reason, a small-scale LNG, these projects take some time to develop. And so there's a fair amount of specialty orders and increasingly some roll-offs, which aren't -- don't have products for them. But if that market can sort itself out, it's certainly something we would look at.

[Operator:]

We will take our next question from Nick Kovich of Beach Investment Counsel.

[Unidentified Analyst:]

Scott, I guess, a question I would have is you didn't include in the slide deck this quarter, the guidance ranges for net income, EPU, consolidated EBITDA and total EBITDA. You've commented that you expect to be at the low end of the range, and I understand drydocks were one of the reasons. But could you highlight kind of the three reasons relative to budget, why you think you'll be between the midpoint and the low end of the range for 2020 at this point?

[Scott Gayton:]

Yes. I think you're right. The drydocks are one of them. And I think when we came out with our guidance, I guess, this time last year, we did have some ships that were rolling in the early part, I believe it was, of '20. And at that time, we were seeing a pretty rosy market, to be frank. And unlike Mark's comments earlier where he was correctly saying that the spot market today is very high and the time charter market is quite a bit lower than that. If we go back a year ago, we had a high spot market and we had a fairly high time charter market. So we had some confidence that we would be able to charter those ships onto longer-term contracts at fairly healthy rates. And then obviously, the bottom fell out, as we all know, in the earlier part of the year, and we were forced to fix those ships, I'm glad that we did. We got the high utilization. They were in direct continuation of the existing contracts. So we didn't have a lot of utilization drain. But ultimately, they were at lower rates than we had predicted when we were in November of, I guess, that would have been 2019. So I think that's probably the biggest reason. We've had some positive tailwinds in terms of lower interest rates. And I think those are really the primary reasons that I can think of, Nick, that we're probably on the lower end of that guidance range. But I think in today's world, to simply be providing that guidance like we did, and to still be meeting it, is a hallmark as far as we can tell.

[Unidentified Analyst:]

Yes. It's definitely been a solid year of performance. Now that the election here in the U.S. is pretty clear, and there's some visibility as to what may happen on the tax front, what is the strategy in terms of a consideration to move to a C Corp? Will that be on the agenda at the December Board meeting?

[Mark Kremin:]

It's not on the agenda per se. It's something we're always looking at. The -- I'm not sure the tax issue for us has been the predominant one for a while. But the -- if we can get a broader investor base, it's certainly something we're looking at. But I wouldn't expect it this year. It's not going to happen this year, but it's something we're always looking at.

[Unidentified Analyst:]

Okay. By this year, you mean 2020, but possible 2021?

[Mark Kremin:]

Yes, we'll take another look at it in 2021 and see how the markets are reacting, that is to say if there is some tax shift that results in MLPs become increasingly favorable or whatever it is, we'll take another look at that in 2021.

[Unidentified Analyst:]

Okay. And then I guess the last question I would have is, you've talked about -- or someone asked the question about acquisition opportunities, eventually begged off on that. Do you envision, given that there's going to be weakness in the -- possibly this -- rates in 2021 and 2022, do you envision opportunities where some of your competitors may have problems? And do you anticipate possibly having opportunities to buy distressed properties?

[Mark Kremin:]

So I do anticipate there's going to be some challenges, more so for our competitors than for us, certainly, in my opinion. But what I always say is, I think, it doesn't necessarily create opportunities for us to acquire ships on long-term charter because they just aren't available as we've kind of discussed. But probably and perhaps what it might do and what I'm hoping is we're going to be in a, not necessarily unique, but a good position to bid when others can't. So if those LNG charters, long-term contracts, if they're not available, then for on the water ships, I think we're going to be in a better position to bid for a tender. So whether it's, mention Qatar or whatever it is, and we don't know the time period that Qatar or others will come out with yet. I think we're going to be able to take advantage of competitor weakness in that regard. Hopefully we get a better return for newbuilds that will deliver by the time we will have delevered and just get a better return on those.

[Unidentified Analyst:]

Okay. I guess I do have one last question. As you've deleveraged the balance sheet, Scott, what do you think your blended cost of capital is when you think about making capital allocation decisions? Where are you with the balance sheet? Where you want to be looking into '21, where do you think your cost of capital is?

[Scott Gayton:]

Well, I think if we look at it, the biggest component is obviously our -- where the debt is right now. And I'd say that we were at around 5.5x and -- all in. And I think that, that's going to be coming down, as I talked about with some of the new facilities as well as just the lowering base rates. And so that's going to have likely the biggest impact just simply given the leverage that we're at today. And so that does help to make us more competitive and also helps to make -- when we look at other acquisition opportunities and whether that's our own securities or whether that's ships like Mark talks about, we can be more competitive than a lot of our peers who are not able to go out and, for example, raise NOK bonds in the 5.74 range. So we're trying to do everything we can to reduce that -- particularly that debt cost, which will allow everything else to be a bit more accretive.

[Operator:]

We will take our next question from Chris Tsung of Webber Research.

[Chris Tsung:]

I wanted to just ask about your allocation policy with regards to deleveraging. And I guess, any other projects that are possibly attractive. I know you guys -- somebody asked earlier about and you that Qatar has been kind of pushed out, but what about Arctic 2 now that, that process is kind of coming together? Does that also -- is that something that you guys -- is there any capacity there that you guys would be interested in participating in?

[Mark Kremin:]

No. We've been saying for quarters that, that's not for us. And there are a couple of different reasons for it

[Chris Tsung:]

Yes. That makes sense. And what about the longer-term plans for the LPG fleet?

[Mark Kremin:]

\ So there's two types of LPG fleets that we have

[Chris Tsung:]

Okay. And just one last quick one for me. There's, I think, two vessels that you guys own, the Sylvie and the Tokyo, that their expirations are coming up October this year. What are your plans there?

[Mark Kremin:]

I'm sorry, the line was pretty garbled on that one. Sorry about that. Can you repeat your question?

[Chris Tsung:]

Yes. Sure. So for the Sylvie and the DW Tokyo that are chartered in, the charter expirations are happening later this year. Are there plans to renew or...

[Mark Kremin:]

I have to think about this. I don't want to say right now. I want to discuss that with Exmar before we say anything about those ships. It's a lot more material to them than us. And so I'd prefer to just leave that to -- we'll get back to you on that.

[Operator:]

We have no further questions in queue.

[Mark Kremin:]

Well, thank you very much, everyone. And again, stay safe, and we look forward to updating you next quarter. So take care.

[Operator:]

Thank you, ladies and gentlemen, for your participation in today's call. You may now disconnect.