Q2 2021 California Water Service Group Earnings Call
Yeah.
Okay.
Good morning, and welcome to California water service.
Q2, 2021 earnings conference call.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
If anyone should require assistance during the conference. Please press Star then zero on your Touchtone telephone.
Service and as a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host David Healey, Vice President and corporate controller you may begin.
Carol well.
And welcome everyone to the 2021 second quarter results call for California water service.
With me today are Marty crop book, Nicky, our president and CEO.
Tom's Nagel, our vice President and Chief Financial Officer.
And Paul Townsley, our vice President of corporate development, and Chief regulatory Officer.
Replay.
Group Island information for this call can be found and our second quarter results release, which was issued earlier today.
The replay will be available until October 27th 2021.
As a reminder, before we begin the company has a slide deck.
<unk> Dot company the earnings call this quarter.
The slide deck was furnished with an 8-K. This morning and is also available at the company's website at Ww Dot Cal water group Dotcom.
Before looking at the second quarter results, we would like to.
It took a few moments to cover forward looking statements. During the course of the call. The company may make certain forward looking statements.
Because these statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially.
Take it from the company's current expectations.
Because of this the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risk and uncertainties found in our form 10-K.
Form 10-Q press releases and other reports filed from time to time with the Securities and Exchange Commission.
I'm going to pass it over to Tom to begin thanks, Dave and good morning, everyone and thanks for being with us for our second quarter earnings call.
Today I'm.
To talk a little bit about our financials, and then turn it over to Marty and Paul to talk about some of the other aspects that are going on for the for the quarter.
So I'm going to start and I'll walk through the slide deck. So.
As usual I'll refer to the page numbers. So you can follow along try to be as descriptive as possible if you.
I'm going to <unk> with you.
For the quarter, the company's net income rose to $38.2 million.
As compared to $5.3 million and the second quarter of 2020 on and earnings per share basis that is 75.
Per diluted common share in 2021 as.
Don't have the 211 cents for the quarter in 2020 and that was on slide 5 if you flip to slide 6 and I can talk briefly about the year to date results.
Here, we have and net income of $35.2 million on a year to date basis that compares to a net loss in 2020 of $15 million.
Compared and on a per share basis, we have earnings of 69 cents per share in 2020, 1 and that compares to a loss of 31.
In 2020 and for the year to date, the capital investments I will highlight a $138.5 million of capital investments as compared to 100.
<unk> $33.5 million of Capex in 2020.
Flipping to the next slide slide 7 and then.
The story here and the second quarter is very similar to what we talked about at the end of the first quarter.
On the financials are primarily better because we have the result of the 2018.
California Water service company General rate case.
And that did a number of things for US first of all if you'll recall last year in.
And the second first and second quarters, we did not book.
The interim rates or the regulatory mechanisms that the company eventually got approved by the commission.
<unk> because of the uncertainty at that time. So we did book those in the third quarter of 2020, so when you're comparing our results here in 2021 to those results from 2020 keep in mind that you were missing a big chunk of what ended up being the earnings and 2020.
And.
And our core operating costs are increasing as expected we have lower equity P. D. C is anticipated as we've talked about before capital spending is on track to our target, which is between 270 and $300 million per the year.
We did have some other impacts on the quarter and I'll talk a little bit more extensively.
The Unbilled revenue accrual.
And because thats, giving us a big pop for the quarter and the market value of our some of our pension assets reduced our EPS by about <unk> <unk> on the quarter.
Looking to slide 8 you can see the earnings bridge.
These are the factors we were just talking about rate relief.
About regulatory mechanisms Opex this benefit plan and investments Mark to market. There. The unbilled revenue is adding 17 cents on the quarter.
And I guess I can talk about that now it's also on the next the next slide but.
And what we've experienced and California is a.
A warmer.
Prior year as Marty will talk about a little bit later.
And what we believe is happening is we've advanced the unbilled revenue, which normally pops for us in the third quarter, we see that unbilled revenue accrual, increasing very rapidly here and the second quarter.
This happens from time to time with the company we have.
Inflections and our water sales that usually happen around June July as the weather gets hotter and California that seems to have happened on the earlier and this year and so what we're looking at is earnings associated with recording the Unbilled revenue accrual that would more likely and a different year <unk> third quarter earnings.
And drop and so we can talk a little bit about what that means but.
Or with the expectation that we would have as described on slide on slide 10 is that Unbilled revenue generally will not add to earnings over the course of the entire year and so this is really a seasonal effect and so if youre looking.
At this from a modeling standpoint. This is not some is not some new factor that's going to give us extra profits for the year and in most cases.
And typically that's going to come back down to around zero at the end of the year.
Talking about slide 10, and do you want to emphasize a couple of other notes.
These are things that we generally.
We talked about on prior calls, but I wanted to remind that the community and interested parties about these.
As I mentioned in Q3 of 2020, we recognized $43 million of net income, which was attributable to Q1, and Q2 and 2020 and that was because of the delayed our California General.
On a rate case, we had not booked interim rates and we had not book the regulatory mechanisms because we weren't sure of the probability of recovery and we did end up booking those and the third quarter. So another thing to think about is that the third quarter of 2020, we had extremely high earnings release that quarter that included all.
Net income associated with Q1, and Q2, which is now being properly recorded and the proper period. So keep that in mind, when you're thinking about the third quarter earnings are coming up.
And once again, our authorized rate base for all operations and total is $1.82 billion that is remember we're on our rate regulated.
All of this our rate of return on rate base and so you can you can work into a general.
Our rate range of earnings so to speak with with respect to the company just by by calculating the rate base times, the rate of return and get to and the capital structure, there and get get to that number.
Our operating costs.
<unk> are increasing as expected depreciation property taxes and wages in particular.
As I mentioned on the last call last couple of calls the eligible mains and services state tax deductions will be lower in 2021 and that raises our effective tax rate.
And that that was.
Something at the end of 2020, where we saw a big bump up from the enormous amount of state tax repairs deduction that we received that year.
The net income from recognition of equity AFDC and 2021 is lower and is expected to be lower because we have fewer long duration projects that are accruing equity.
Equity AFDC.
And finally to add here that the market value of certain retirement assets that was up quite a bit and 2020, and it's a fair bit and 2021, we don't ever know what the market is going to do I'm sure all of US would like to know what the market is going to do and the future but.
So we can't predict what that was.
That will add or subtract from earnings for the total year.
So thats my financial update and general and I'm going to turn it over to Paul to talk about the regulatory update.
Thank you Tom turning to slide 11.
And I am pleased to report that.
And your water service company filed its general rate case with the public Utilities Commission on time July 1st.
This rate case, the largest and our history.
And is requesting approval of just over $1 billion and capital expenditures during the 3 year rate case cycle.
Calif, we've worked very hard on addressing customer affordability when preparing this case and have been able to keep increases under $5 per month for the media and residential customer in all of our service areas.
Because this will be our first rate case, and which the full Ram M. CBA is now part of the.
We've also taken a deeper dive into sales forecasting and rate design to enable us to balance customer affordability revenue stability and conservation.
This has led to a 6% lower sales forecast and in our last adopted.
But also and innovative rate design.
And finally provide significant discounts for the first 6 units of water used each month and.
And increase increases the amount of revenue collected and our fixed monthly service charge.
We're now and the discovery phase of this case and expect a commission decision before the end of 2022.
And which just recently commissioned and are Darcy how it was named as the assigned Commissioner awake and our rate case. She is the newest commissioner at the public Utilities Commission, but its been an administrative law judge at the Commission is an attorney and understands commission processes.
Commissioner how he is also the assigned commissioner.
And or for our cost of capital case, which we expect a decision by the end of this year.
And other news a week ago, we filed our general rate case, and Washington State, which covers both our legacy Washington, and water service company customers, plus our new East Pearce.
Customers that we acquired from the.
Rainier view water company and we expect a decision in that case sometime this fall.
With that I will hand, this off to Marty.
Thanks, Paul.
Everyone are 2 areas I want to provide operational updates on starting off on page 12 talking about the recently declared droughts.
And I say droughts and Pearl given the approach to state is set for early on and the second quarter and by doing so there they were evaluating and drought conditions on a county by county basis.
And as we wrapped up the second quarter, the drought and kind of quickly spread and we have 51 of the 58 counties and the state of California.
And yet now under a declared a drought emergency.
Accordingly, as part of our planning process and rate case process with the public Utilities Commission, we filed what's called rule 14.1, which is our water supply master plans and June and within that water supply Master plan is something called scheduled 14th.
And 1 which is our water supply and contingency plans.
Which cover the various stages of drought very happy to share that on July 14th The Commission approved our rule 14, 1 plans as well as our schedule 14, 1 water supply contingency plans and we are officially.
<unk> and a stage 1 drought and all the districts that we operate in and we are currently monitoring and water supply conditions at every location within the state of California that we have.
We have asked our customers for a voluntary 15% reduction.
Over the summer months.
And we're utilizing the same model that we developed during the last route which is really doing a customer what we call. The customer first approach trying to give our customers as many options as we can to help them hit their reduction targets. So we're utilizing that same model, which includes a drought steering committee that we have within the company that I meet with every.
And the week as we go into the end of the summer months.
I think what's important to note about the current drought conditions and the state of California as it highlights the proactive moves we've made over the last 2 years on the ESG and risk management front to prepare for drought and more riskier weather type of conditions.
1 of the things. We did is we combined our water supply planning team and our water conservation teams, which were in different parts of the organization to come together as 1 team to look at supply and demand within 1 group and focused on water supply and resiliency, including the impacts of climate change. So we're going to continue the path that we're on the foundation has been laid for.
And our contingency plans as we move throughout the stages of the drought and want to take the same approach that we had and the last major drought, which all of our customers hit and then what was the 25% reduction targets moving on to talk about the continued impacts of COVID-19, and the pandemic.
For all of our company's employees have returned to work, we started a phase and back in the.
The first week of July to get our employees back at work remember that 90% of our employees have been at work every day throughout the pandemic. So the ones, we phased back and most of them on our corporate staff and jobs that could be worked on remotely during.
And the pandemic, we have faced them back and at work we continue to be vigilant.
For employee and customer safety, including all of our campuses are still locked down.
We have encouraged and and put incentives out there for vaccination rates for our employees, we follow our local masking rules and we have employee screenings at every location every day.
And again, despite the pandemic we had been at work every day 365 days a year 24 hours a day.
And looking at the Collectability process, and what's happening on the receivable front, and new Mexico, and Hawaii, they've allowed us to start the billing collection process, again, and California and Washington.
We're still under a moratorium the moratorium and Washington will end on October 1 and in California. We are working through a recent decision that came out from the PUC that lays out the rules that will allow us to restart the collection process here. So I don't have an exact date yet the decision just came out last week and we're working through that now.
And at the end of the second quarter, we saw increases in customer accounts.
And.
And remember that we have suspended collection activities and we haven't done that and about and well over a year bills outstanding and increased slightly to $12.5 million. We think that's good news, it's leveled off a little bit.
We have continued to increase our reserves.
For doubtful accounts from $5.7 million out of $6.3 million and within the budget for the state of California, which is our largest operating entity the states that we operate and California's largest.
And the state of California has reserved a $1 billion for water utilities.
Ridge management relief so in other words the state.
Is going to be picking up a good chunk of the tab on these late receivables the process and how theyre going to be distributing that money is still being determined.
Working with the state and through our association with the other water companies to determine the best process forward, but it looks like there will be some relief that comes from this day to help offset the bills from the people affected.
<unk> by Covid and their ability to pay their water bills.
Incremental cost of COVID-19 for the second quarter of continuing to run about $200000 a quarter, so water up to about $1.3 million total since the beginning of the pandemic, that's being captured and a memo accounts.
And note that water sales and California.
<unk> are at 103% of the adopted numbers that were approved and in the last general rate case and year over year residential consumption is up 4% and.
That's been offset by lower business and industrial sales and of course as the economy was slowed installed out there for a little bit but as businesses come back we expect to see the.
Business and residential sales to continue to climb lacroix with liquidity remained strong at the end of the quarter with over $66 million cash on hand, and additional borrowing capacity of $405 million on our line of credit subject to various borrowing conditions, but what are your remains strong as we move and to the warmer summer months.
With that Paul.
Paul I'm going to turn it back to you for a business development update.
Great. Thank you Marty if.
If you'll turn to slide 14.
California Water service group has been busy and the business development area.
And May we announced our establishment of Texas water service and our entry into the fast.
Growing region of Texas, known as the Austin, San Antonio Corridor.
As part of our entry into Texas, We also announced a majority ownership of the BV, our tea water resource company, which in turn owns more wastewater utilities and this Austin San Antonio corridor.
Yeah.
Also in May we closed on our acquisition of the Coppola water and Coppola wastewater company and added a thousand new Maui customers to our Hawaii water service company.
Last month in June we announced the execution of a definitive agreement to acquire.
On wastewater utility on the island of Hawaii, and Hawaii, which will bring 1800 equivalent dwelling units to our Hawaii water service company and we will be filing the application with the Hawaii public utilities.
Commission shortly for its approval of this purchase.
A week ago in July we filed.
Prior relocation and that with the new Mexico Public regulatory commission for approval to acquire the Morningstar water company, and northern New Mexico, and bringing its 2000 customers to our new Mexico water service company.
And next week, we anticipate that the California public Utilities Commission.
And at the at its August 5th open meeting.
And we'll approve our newest California utility known as the preserve at Miller, 10, which is a greenfield or new development water wastewater and recycled water utility, which will ultimately bring about 2800 customer connections to California water.
On average company.
If you turn to slide 15, <unk> is a little bit more detail on our entry into Texas and you can see on this on this map before utilities that we have and you can see that they are really poised to capitalize on the tremendous growth in this region.
Remember that's Boston.
Austin and San Antonio are among the 5 fastest growing cities and the U S.
We have approximately 2500 customers and customer commitments today and these among these 4 utilities and anticipate that their combined service areas could build out to over 60000 customers.
Meanwhile.
Texas water service is seeking out other opportunities in Texas.
And if you turn to slide 16.
That's my final slide there they've got really a recap of some of our recent business development activity.
We have a full pipeline of growth opportunities and we are excited.
And our potential to further grow the company through acquisitions and through other deals.
And with that I will turn it back to Tom.
Thanks, Paul.
Looking now at slide 17, and as promised in the first quarter, we've updated slide 17, and 18, which are Capex and.
And.
And our rate base slides to reflect the proposal that's been made in the California General rate case, and so the last 3 bars on each of these charts represent the.
And the effect of the proposal and I do want to remind everyone. Obviously that this is a proposal that's been made to the to the commission and is going to be evaluated.
By the CPUC and the determination will be made as Paul suggested late in the year 2022, with an effective weighted 2023 and so these numbers can obviously change as we go through the regulatory process.
But what it does show for 2022 through 2024 is that we would anticipate.
And if I and Capex with California, and the other states to be and the range of $355 million to $365 million a year.
And that corresponds to the $1 billion proposal that Paul's group put to the CPUC plus.
Plus the Capex that we're spending and our other states.
And then the result of that.
If you flip to slide 18 is the estimated rate base thats associated with that and once again, our current rate base is about $1.82 billion.
For 2021, we have another step increase thats associated with the last California.
The rate case and that that would potentially impact.
Our combined 2022 to give us a higher rate base adopted there.
The proposal that Paul has.
And fourth to the CPUC and his team.
It would increase our rate base to the to the point of 2 to 2.5 and $2.75.
And combined.
And the other states.
And that proposal were adopted as proposed.
So certainly a lot for us to do and the regulatory process, but.
Good news good news ahead from a company growth standpoint, and all and all of the respects. So thank you Paul for doing both of those aspects of your of your work the heavy lifting.
Alright, I'll skip the 2 big generating revenue generating items.
Alright, well I'm going to wrap us up here just in summary, Q2 results were in line with our expectations.
Sorry for the Lumpiness sifting through the financials as Tom did a really good job pointed out and <unk>.
Our graphs.
Again, and our earnings reconciliation that was really driven by the late <unk> that we had and there was not much we can do about that but just to remind everyone that those comparable quarter over quarter year over year, you've got a factor and that delayed general general rate case.
Clearly, we're seeing the effects of the drought and the second quarter, what that Unbilled revenue, which is really our revenue accrual.
We typically see as consumption increases as we move into the warmer months and the summer you'll see that accrual will go up and then Youll see turned down and the winter and when you see consumption and go down as the rain started and on the West coast. So we clearly saw a pickup from the Unbilled revenue due to the drought and the weather conditions so consumption.
Went up earlier than we anticipated.
Tactically there are really kind of 4 things going on and we're focused on as we move into the fourth quarter, obviously, the cost of capital first and foremost and trying to get that wrapped up this year, followed by as Paul said the discovery phases of our 2021 general rate case, where the state of California, which is a herculean.
And there's a lot of data requests that go back and forth hundreds and hundreds and hundreds of data requests and so we're going to stay vigilant and stayed keenly focused on wrapping up those 2 regulatory proceedings, we look forward to working with commissioner on how to bring those to a successful resolution on time and on schedule and Additionally.
And tactically 2 big things going on on the West coast, and and and specifically in California, once the drought and as I said, we are officially on our stage 1 drought for our customers and the second thing is as wildfire season, and there are currently 9 wildfires burning and the state of California, 2 major wildfires.
2 major wildfires are.
And of our burning and National Forest area. So there are no threat to our service areas that we operate and but obviously youre seeing smoke.
From the West coast and make it all the way to the East coast as these smoke plumes travel throughout the U S.
Big accolades to the operations team for their early readiness for fire season.
Season, this year that means for us that August September and October.
Given the dry conditions, we think could be pretty volatile, but I will say the team finished their wildfire readiness planning ahead of schedule and all the employees have gone through all their trainings and we're ready to go into the hotter and hotter drier.
<unk>.
Focused on minimizing any damage from wildfires and making sure that our customers day.
Supply with clean and fresh drinking water.
And then lastly strategically.
We're going to keep our focus on climate change resiliency for the long term.
Focusing on the effects of climate change on our on our customer.
<unk> on <unk>, and our business and what we can do as a company to help slow those effects and Youll hear us talking more about climate change and risk management, and our K and Q filings that we put out there and our investor presentations. If you haven't read our ESG report that's been put out there I strongly encourage you to do that this is going to strategically be.
Keen focus on the company here I think for years to come so with that Carol we will officially and our prepared comments and we will open it up for Q&A. Thank.
Thank you so much if you have a question at this time. Please press Star then the number 1 on your Touchtone telephone.
Your question has been answered.
Customers to remove yourself from the queue. Please press the pound key.
And well pause for just a moment to compile the roster.
Do you have a question from the line of Ben <unk> with Baird.
Hey, guys good morning.
And.
A couple of questions just first.
Are you would build revenue could you just maybe explain a little bit.
And so.
And you don't think its going to be.
Carryover or is it definitely not going to be a carryover and then.
And I get the question right there.
Yes.
So.
And then.
We've talked about this.
On the on multiple occasions.
And it's a confusing aspect of our business because the.
On the key thing to remember is that the Unbilled revenue accrual is outside of our Ram mechanism.
And so what we're doing is measuring the.
The number of customer days that have not yet been billed for multi.
Supplied by the expected bill that would be okay.
Occurring on those customers and so what.
And what we've seen.
What we normally see is that that bill goes up and the third quarter and you have a higher unbilled revenue accrual and the third quarter. This year. The bill went up more and thats because of higher rates and more custom.
Customer usage and so that is that is reflected here in the second quarter and it's a bit unusual so what's what's going to happen is if you have a normal third quarter, where that bill is still as high as it was.
You're going to you would normally see a bump up in earnings and the third quarter representing net.
Additional accrual.
That probably won't occur at least to the extent that it.
And the past.
And so we're essentially that I'd like to I'd like to say that the unbilled revenue accrual that we're booking and the second quarter is really borrowing from third quarter earnings.
Because this normally would be in effect that we'd see in the third quarter.
Then when you get to the fourth quarter because of the colder weather and typically rain and our service areas that you see a dramatic drop in the.
And the normal Unbilled revenue and that is always a factor and why we don't earn as much money and the third quarters were reversing out that big summer Unbilled revenue accrual because the bills.
Or lower because we're in the winter period so.
Does that does that help Ben yes, Okay. That's great Bob on the DRC could you remind us kind of book.
I think it was like $860 billion to $1 billion with Infor and 2008, when you submit a bid and then kind of what's shook out and then.
Maybe.
And I noticed you guys can't really talk to what will be allowed but maybe talk about the $1 billion and what that consists of.
And you've mentioned climate change is a climate change related stuff and as that.
And what California is looking for.
Maybe just talk a little bit more about what's.
By the rate case.
Do you want me and I can start on that.
Okay.
Hi, This is Paul Townsley. So the rate case is very similar to our last rate case in terms of the types of projects that are included on.
Obviously the replace.
And so on aging mains.
And our all of our different service territories is a big part of this case.
As well as well replacements.
Treatment, new treatment facilities, and other what I would call bread and butter type sales on our capital investments.
So.
And I would expect that the commission review of our rate case will be on whether there was particular investments are appropriate for this time or should be postponed to the future, but I do not really expect a lot of controversy on the types of projects that we've included in this case and I am hoping that we will have a very good.
And adult coming out of the commission in terms of the approval of the capital projects.
Just like we did and our last case.
Yeah, and I think the thing I would add to that Ben for those of you that have followed kind of what what we are focused on and on our management team has really been better integrated planning.
For the rate case and for the company and so.
On the last rate case, we did we did very well on our ask versus what we received.
And that process that we followed and last rate case, we've improved on for this rate case.
I will say just kind of my.
My gut feeling about the rate case normally.
And I'll follow rate case, Paul and his team are working close to 24.7.
And this year and I think because of just continued improvements and our planning process and our capital planning process as well as our expense planning process for other categories.
And the team was very well and control.
That.
And we normally the week before the rate case on bringing on dinner every night I'm over there asking shy, bringing them as soon as they get people and massages on them.
And at our Tom's I'm, bringing and caffeine and bringing on donuts 6 in the morning. The team was really really and just outstanding kind of control going into the final weeks this year and I just think.
And Matt are indicative of all the improvements we've made and the planning process and the significance of that as we learn the more upfront work, we do and planning the capital and rate case items, the better we do with the outcomes and so I think we're feeling really good going into the rate case.
I think the bigger challenge.
It is and there is the fact that we're still on the middle of the pandemic, but we just got to remind people that these are for rates to take effect.
A few years from now and so it's not an immediate effect on somebody's rates right now and as Paul said, we were keenly focused on affordability 1 of the things I really like with what the team did with the rate design.
Alonge here.
As we move away from decoupling.
<unk> and 2023.
And we think we figured out a way to handle kind of that the underserved and low income communities, while increasing our fixed cost recovery and.
Balancing the rate plans out and so I'm anxious to see how this rate plan.
And does the team did and I think a fantastic job working with and economic modeling from.
Modeling out how that should look and I'm anxious to see how it goes go on through the Commission I think the question is going to like the rate design.
Got it and then the last 1.
And with the cost of capital coming up can.
Can you just maybe give.
But what we should be looking for as far as.
Benchmark with Oh.
And then I think you said time and Lewis.
Next couple of months.
So Ben.
Made the filing we have the commission's process.
Internal to the timeline has slowed down a little bit I will.
Say normally you would very quickly have what's called a pre hearing conference and the.
And the regulatory staff the ratepayer advocate staff kind of said well, we'll get you our report pretty soon and a month after the.
Pre hearing conference, we've not yet had a pre hearing conference and so it's difficult to tell what.
We'll schedule is going to be and Paul.
The details more than I, but.
We're expecting a staff report from them.
Really sometime probably September October time frame and then the normal process would be potential settlement discussions here.
Hearing over each of the parties.
The acquisitions, and then and eventual decision by the Commission.
I don't know that we have any expectation about what the ratepayer advocate is going to come up with obviously, they usually come up with a lower number.
And then it goes it goes from there.
Is there anything thats been in the market decided recently.
The indicator.
Nothing in California that I'm aware of.
So that.
No no obvious benchmarks there yes, okay. Thank you thanks guys.
Thanks Ben.
And once again.
And I ask a question. Please press Star then the number 1 on your touch tone telephone.
And if your question has been answered or you wish to remove yourself from the queue. Please price.
Pound key.
Once again that is star 1 for any questions or comments.
Okay.
And gentlemen, there seems to be no further questions. At this time. So at this time and I'll turn the call back over to management.
Zero harm.
Okay. Carol Thank you very much I know its earnings week, and there's a lot going on and we appreciate everyone's support obviously, we got a lot on we got a lot of irons and the fire here as we go into the second.
Half of the year and any kind of material changes that come out of the company we will communicate it.
Accordingly, and and.
And if nothing comes up between now and then and we'll talk to everyone and for our third quarter earnings call, but anything and material happens between now and then you can look for us to put a filing out sooner so with that thanks for being with us here today and.
We will talk to everyone soon and be safe. Thank you.
And ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Yeah.
[music].
Okay.