Q3 2023 Spruce Power Holding Corp Earnings Call
Thank you for standing by my name is Eric and I will be your conference operator today.
At this time I would like to welcome everyone to the Bruce Power third quarter 2023 earnings Conference call.
Lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there'll be a question answer session if you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
I would like to withdraw your question Press Star one again, thank you.
I would now like to turn the call over to Gunson flag head of MB head of Investor Relations. Please go ahead.
Thank you good afternoon, and welcome to Sprint's powers conference call to discuss results for the third quarter of 2023.
With me today are Christian Fong, our Chief Executive Officer, and Sara <unk>, Our Chief Financial Officer are.
Our call. This afternoon will include statements that speak to the company's expectations outlook and predictions of the future which are considered forward looking statements.
These forward looking statements are subject to risks and uncertainties many of which are beyond our control, which may cause the actual results to differ materially from those expressed in or implied by these statements.
We're not obliged to revise or update any forward looking statements, except as maybe required by law. Please refer to our disclosures regarding risk factors and forward looking statements in today's earnings release and other SEC filings.
Copy of our press release has been posted up to the Investor Relations page number one sector reference.
The non-GAAP financial measures discussed in this call are reconciled to the U S. GAAP equivalent and can be found in the press release that we issued this afternoon.
With that I will turn the call over to our CEO Christian go ahead.
Thank you Brandon and thanks, everyone for joining us today.
I'm going to start with a discussion of our strategy and then turn to the third quarter.
<unk> core strategy is to be the dominant long term owner and operator of distributed energy as our business model is straightforward.
First we create and sell clean electricity to our growing portfolio of home solar assets, our underlying value proposition for our customers that we provide consistent energy saving month after month compared to the installation of utility retail rates overtime as customer savings growth, especially in the expensive coastal markets their appreciation for solar grows too.
Second we delivered power services to our customers at high margin economics through our integrated servicing platform.
Having regular repeated touch points with customers has enabled us to achieve industry, leading customer satisfaction scores.
Third we capitalize on revenue opportunities to enrich environmental commodities markets across our footprint as policies in most of our 18th state markets have shifted to be even more pro solar.
They'll have renewable energy credits has been spruces fastest growing segment. This owner operator model combined with our low cost customer acquisition strategy positions. Both for long term recurring revenue and poor highly profitable growth across most interest rate and economic scenarios.
Let's turn to the third quarter I want to anchor my discussion with two metrics. The first is cash this quarter, we generated positive cash combined with just shy of 500000 shares repurchased in our share repurchase program. Our net cash per share increased by 4% excluding cash settlements that are expected of reserves.
Legal matters that Sarah will discuss our net cash per share is $9 14 at the end of the third quarter over the next few quarters, we'll focus on growing both our adjusted EBITDA and free cash flow as well either preserving our cash position or using it to buy multiyear cash flow streams at attractive prices.
The second metrics customer satisfaction, our trailing year customer satisfaction score rose to a record 76%.
Repeated interactions to establish the customer trusts necessary to sell the next product or service.
Three years ago that level why that about 50% our analysis showed that at 70% we'd be the industry's leading operator, and an 80% we'd be ready to ramp up a follow on sale.
Here, we go in 2024, we're aiming for 80% customer satisfaction and expanding the sale of power products and services.
Well instead of general update in operations current growth initiatives and capital market.
In operations, Bruce facilitates below electricity consumed by about 80000 households across 18 states are servicing team delivers outstanding execution, a Texas based customer support customer billing collections asset management in the technology infrastructure that links the functions together.
Done well this provides a great experience for our customers that supports growth in adjusted EBITDA to pay down project debt and add to our cash as I mentioned, our customer satisfaction scores at 76% up strongly from last year's 61%, Our Google review rating was $3 seven last quarter lifting our cumulative score.
Two a high watermark level today of two three in on time customer payment rates, which usually track customer satisfaction increased a strong 60 basis points in one quarter.
These improvements in customer satisfaction are coming with investments in technology and customer facing personnel across customer operations.
In the third quarter, we rolled out our enterprise data warehouse, which links all of our I T systems of record and gives us unprecedented internal collaboration tools and we continue to execute on the rollout of our first field services teams that we announced last quarter.
Services program is initially focused on new Jersey and California.
Why have teams in the field three reasons come together first to provide a better customer experience and some of our most dense markets. When there is a service call second to optimize the efficiency of creating and monetizing S. Rex in these valuable markets.
And third to have teams in place to install retrofit batteries as we ramp up customer power sales later in 2024.
Next let me address the performance of our assets.
Our Q3 performance ratio, which is production compare theoretical maximum would be installed solar panel with 89% lower performance reflect high rainfall on both the east and West coast at the beginning of the summer yet our weather adjusted performance ratio is 101% year to date.
Overall, the portfolio is doing great and generating strong cash flows we expect run rate annual cash inflows of between 120 and $130 million. This is largely supported by recurring revenues and investment cash flows from our residential solar portfolio that has a 12 year.
<unk> remaining average contract life.
Next is our growth initiatives.
Our customer acquisition strategy is a compelling competitive advantage rather than carry a high fixed cost sales force, we add customers through the purchase of existing residential solar portfolios, just keeps customer acquisition costs low and we never feel compelled to overpay for growth.
In Q3, we closed on two deals that first in August was for about 2400 contracted customers and the credit card portfolio a deal that exceeded our equity return target of 18% IRR. We also bought out one of our tax equity joint venture partners in a small tuck in deal that we projected over 30%.
The IRR.
Over the last year, we've acquired the cash flows from about 25000 rooftops for a 49% growth year on year.
Our M&A team is still busy looking at deals renewable power markets, especially for installers seemed to have liquidity concerns with higher interest rates in the capital markets pulling back.
In that environment, we adopt Warren Buffett's biologics since we have cash higher IRR is it's like having recurring cash flows on sale.
Bruce is known as a strong buyer and secondary markets and we stand ready for installers, we'd need to recycle capital through portfolio sales.
Apart from acquisition, we also pursue organic growth opportunities to increase revenue per customer first.
Burst versus environmental commodities market business is firing on all cylinders in.
In Q3 cash inflows ticked up 25% sequentially as our ECM crude down more opportunities to mint and sell renewable energy credits from our assets across the U S. We like this business is ability to add cash returns on assets, we already own.
We see increased demand for retrofit battery installation. This is largely in California due to that states net metering rules, we arent yet budgeting for large battery lease revenue, which was just a couple of hundred thousand dollars. In 2023, we anticipate scaling this up by the end of 2024 to a more meaningful level.
In the next three months, we'll watch Bruce Pro our new brand focused on selling services to the commercial and industrial segment.
Next I'll cover Spruces capital and financing strategy and funding growth.
Residential solar assets naturally support what can seem like high levels of project level debt due to contracted cash flows coming from our customer base with a weighted average FICO score greater than 750, but.
But its really apples to oranges to compare it to installers fundamentally installers are not our peers and it doesn't work to use the same financial analysis, we lock in debt that is nonrecourse, we don't use any convertible debt and above all we protect our cash position, which again stood at a net $9 14 per share.
At the end of the quarter.
We have historically used senior loans to pay for between 75 and 85% of the acquisition cost of a residential solar portfolios previously we've used even higher advance rates through a mezzanine debt facility that we havent expanded that since becoming a public company.
The debt markets for seasoned assets are still very robust in fact in the new deals. We're looking at now lenders have been offering us more money than we want to take because our portfolios have such strong performance history, I'm, not saying, we're going to raise our debt levels. Just because we can yes, we do like having untapped debt capacity as a backup liquidity.
Yeah.
Now tying our liquidity profile to our growth.
Spruce is fully funded to achieve our near term goal of reaching a customer contract portfolio of 90000 by the end of 2024 in fact, thats already baking in reducing our growth rate from 49% over the past year to about 20% annual growth going forward.
With a disciplined approach to acquisition.
We aren't afraid to weight and preserve cash.
T Bill and shell, we can make acquisitions still that exceed our 18% investment return hurdle.
Finally, before handing over to Sarah to walk through our financials I want to preview the significant headway in moving past that broad transitional tasks associated with our merger with <unk> late last year first in September we reached an $11 million settlement with the SEC and we hope to reach settlement soon and the previously disclosed shareholder lawsuits in New York.
Delaware, we're glad to turn the page on those and get clarity on their financial impact second we executed the one for eight reverse stock split in early October to get out of Penny stock status and address the NYSE continued listing standard.
Third we finished most of the efficiency steps following the merger there are just two people from XL fleet left at spruce and nearly all the duplicate systems are shut down.
Plainly said M&A is our core competency and we're running a textbook post merger integration fast and focused on harvesting savings.
As a final remarks since our entrance into public markets last fall, we have grown our base of solar assets and contracts leading to meaningful growth in cash flows going forward, we have no equity capital needs through at least 2025, while still meeting our growth targets still increasing EBITDA and still increasing free cash flow if the obvious.
That I'll keep repeating we're trading bar below that net cash position of $9 14 per share even as our operations and acquisition returns are hitting all time levels.
With that I'll hand, the call over to Sarah to walk through financials.
Thanks, Christian before getting into the quarterly results I'd like to quickly address a few housekeeping items that impacted our financial reporting.
Consistent with the prior few quarters legacy XL business drivetrain and XO grade are presented as discontinued operations within our financials.
These legacy businesses were divested in the first quarter of 2023, and we do not expect any material expenses going forward related to discontinued operations.
Our continuing operating results in the third quarter reflects certain expenses related to ex healthy, notably legal expenses related to the previously disclosed SEC inquiry and related shareholder lawsuits and update on these during the third quarter spruce announced the resolution of the SEC inquiry of ex healthy the settlement 11.
Civil penalty was paid in October.
Also during the third quarter spruce reached an agreement in principle with respect to the previously disclosed Securities class action lawsuit filed in the Federal District Court for the Southern District of New York related to the 2020 merger ascription its predecessor company <unk> to settle the matter for $19 five.
Million subject to agreement on documentation and court approval.
Additionally, Bruce determined it is able to estimate its exposure and the previously disclosed securities class action lawsuit filed in the Delaware Court of Chancery related to the 2020 merger I'm just curious its predecessor company X helps me Claire.
Bruce estimate for settlement amount of approximately $300000.
Collectively these three items total cash costs and reserves of $38 million Bruce.
Where do you expect the settlement amounts to be offset by approximately $4 5 million of related insurance reimbursements, our total cash costs and reserves at $26 3 million.
Please note that these net settlement amount has been recognized on a GAAP basis in third quarter financials.
That settlement announced while we funded with corporate cash, which stood at 193 million at quarter end.
The net cash position would be $166 million.
Moving to third quarter financial results.
Third quarter revenue was $23 3 million up 2% from the second quarter was $22 8 million revenue was higher primarily due to incremental revenues related to the acquisition of 2400 residential solar systems in contracts that we announced in August as well as higher quarter over quarter revenues from solar renewable energy credit.
Don.
The increase was partially offset by lower PPA revenue due to the previously discussed weather impact during the quarter.
Third quarter core Opex, which includes both the company's SG&A and portfolios O&M was $15 9 million compared to $19 million in the second player.
Portfolio O&M expenses increased to $3 5 million in the third quarter from 3 million in the second quarter. A sequential increase is tied to continued investment in our meter upgrade campaign as we replace legacy meters across our fleet to maintain the most efficient fleet as possible as well as moderate Ashok shortfall payments.
SG&A expenses decreased significantly to $12 $4 million in the third quarter from 16 million in the second quarter just to be clear SG&A expenses, excluding legacy XL legal items were $14 3 million in the third quarter, a slight increase from $13 million in the second quarter.
The increase of core SG&A, it's largely tied to nonrecurring IP and deal acquisition costs.
Net loss attributable to stockholders was $19 3 million in the third quarter and again just to be clear excluding legacy XL fleet legal items.
Net income of $5 1 million in the third quarter.
Adjusted EBITDAX totaled $7 million, adding in the cash flow from the spruce powered for a portfolio, which in our financials. It's called proceeds from investment in lease agreement, bringing the total to $14 9 million.
In measuring the value of our long term solar assets and contracts, we provide any metrics on gross and net portfolio value, which represents the present value of the remaining net cash flows from customers.
Using a base case of 6%, our gross portfolio value with $973 million.
After adjusting for non recourse debt and cash balances, our net portfolio value was $590 million.
Next I'll speak to our capital and liquidity position.
As of September 32023, we had cash and cash equivalents of approximately $193 million. This compares favorably to approximately $192 million at the end of the second quarter.
Positive change in sequential cash is primarily attributable to strong performance from recent acquisitions and the decline in expenses tied to legacy <unk>, mainly legal expenses.
The total principal balance of long term debt was $657 million as of September 32023 up from 644 million a sequential increase is attributable to debt raised alongside our latest acquisition this past holiday.
Pricing, our existing SBA facility and offset by scheduled principal amortization across our facilities.
Renewable power markets, our Broadway facing pressure on concerns about higher interest rates, so I would like to address that.
As detailed in our 10-Q that Sac consists of four project finance facilities that support 13 of our residential solar portfolio acquisition made since late 2018. We also have a mezzanine facility that was entered into in the company was private.
All of these facilities are supported by project level cash flows and are non recourse to spruce corporate level cash.
Bruce has zero corporate level debt.
No one's coming to term until late 2020, the weighted average blended all in rate for our debt profile with approximately five 7% as at March 30. Additionally, we are effectively hedged away floating rate exposure with 97% of our debt profile hedge that quarter ends with mark to market on our swap at 930.
Positive $44 million.
An important attribute of our swap position is that the maturities of our swaps extend beyond the stated maturity on the underlying credit facility a common element of project finance structure.
All of our swap position extend into the early 2013.
Put simply in our refinance events, we're seeing credit facility, maybe we can carry over to swap positions to refinance facility, providing significant protection to then prevailing market reference rate. We have this protection for all of our senior credit facility through another refinancing cycle and to reiterate our nearest maturing facility.
He is in the back half of 2012 as.
As far as bank reference rates the weighted average margin on our senior credit facility is attractive at about 250 basis points. This was actually in line with the indicative pricing we are seeing today in the market.
To land the plane here of the highly predictable long term cash flow profile of our solar assets provide adequate coverage of our long term debt facilities, our FX inherently support the ability to refinance and curious as current yet have adequate protections against prevailing market reference rate over the medium term with swaps into the early 2000 <unk>.
Please.
We currently do not envision any scenario in which corporate balance sheet cash would need to be injected into a portfolio company to support underlying project financed structures inside we are watching the normal pay down of our debt balance through our scheduled principal payments.
My final comments around our share repurchase program during the third quarter, we repurchased approximately 500000 shares for $3 4 million at quarter end, there was $45 million remaining under our $50 million program. Our board of directors continually reassess the repurchase program I think you said capital.
With that I'll hand, the call over to the operator for questions.
Thank you.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Participants will be allowed one question and one follow up question.
Your first question comes from the line of Tristan Richardson with Scotiabank. Please go ahead.
Hi, Good afternoon Christian you you mentioned in your prepared comments about seeing a target rich environment.
The pivot towards PPO bolsters the pipeline.
Certainly we've seen some stress in the ecosystem, particularly in the long tail, maybe with installers can you talk about the M&A landscape, how it's changed versus maybe a year ago.
And certainly in the context of your 90000 customer goal by the end of 'twenty four.
Sure, Chris and thanks for joining.
We grew by 49% over the last year, so clearly that target rich environment has enabled us to grow pretty well over the past year looking forward. We're at about 75000 owned systems to measure. These two different numbers, we say $80 and Thats. The number of service systems, because we do some third party so when I talk about getting to.
90000 by the end of 2024, which I've been consistent on.
Since the beginning of this year.
Reiterate that affirm that we're headed.
Get to 90000, that's about 20% growth and so while I continue to think Hey, this is a target rich environment.
They actually would enable us to slow down growth a little bit to a more moderate 20% and still hit those numbers in terms of what we're seeing.
I think of the pipeline of installers and what they are producing on the PPA and lease that is the PPO or third party owned.
Hi.
Yes.
Approach to financing and putting these in customers' homes and so now I'm going to draw from.
Some of my I'll call them upstream peers had the installers have identified we may be seeing some softening nationwide, perhaps 10%.
Looking forward to the next year, however that is way more than offset by the swing toward ppas and leases that have gone from I don't know 30, or 40% upwards of 65% or 70% of that market. So there are even more of our core business targets being created today.
And there were before and we anticipate that that will continue going forward that is the forward supply outstrips, what we had a year or two ago.
The final piece I would say that this is we're currently in bilateral negotiation on over 10000.
Different.
The home systems of contracts there is no guarantee that any of those 10000 will come to fruition in the deal will land, but our pipeline we always keep it stocked were constantly in negotiation.
With various installers and owners of assets that are looking for liquidity for some reason or perhaps even setting up something programmatically.
For repeat sales going forward to us so I don't typically go into any more detail on our pipeline just because those are active negotiations.
But I do want to give that sort of transparency of to add 20%. That's 15000 more and with the pipeline that involves 10000 right now we feel pretty good.
But I appreciate the context, and then maybe just to your prepared comments around field services in that initiative.
Can you talk about how this helps the platform <unk> the P&L.
I think these are certainly capital light customers I assume right.
Did these contribute to these high margin customers and then how do you think about them from an O&M perspective.
Just.
In the context of.
Pushing folks out into the field.
Making calls rolling trucks et cetera.
Yes, let me put this in the context of three different things one we are protecting revenue.
One of the fastest growing segments that we have is our entire environmental commodities markets.
More plainly to market insiders, Sps Rex solar renewable energy credits.
Other states have slightly different names for them, but broadly the <unk> markets we are seeing.
Yes.
I'll just take millions of dollars of growth.
And they are really active in those core markets that we're talking about California, and New Jersey, The places where we're initially looking at field services. The reason that then I would say, it's protecting and enhancing that revenue stream is because there is a fair amount of.
The home systems.
<unk> become non visible if I could say it that way that has three key meters shut down and we've been clear about this getting our <unk> meters.
Upgraded to <unk>, sometimes their Wi Fi at places where self service is strong.
And so getting the field services in place actually allows us to get to a home fast if we can't see it. There's a lot of reasons why you might not be able to see it maybe a cell phone signal that maybe a Wi Fi signal.
So it has changed their password or something so this this is a revenue side enhancements as well on the cost side, though we are looking at our most dense markets because a truck roll to a customer cost about $300. So if you do two or three of these a day youre talking about $1000 that youre going to pay somebody well.
We stick with our O&M partners. The local electricians that are in the field of course, they have to have their profit margin on top of that as well. So when we start thinking about the utilization of our asset utilization rates would be the way we think about this.
Our most dense markets are going to keep the small teams of our own field services folks.
<unk> engaged pretty much all the time.
The density of our assets that we scaled up too so we see both revenue.
Protection enhancement and in those markets, our O&M costs should go down.
As we just save on.
Not having to go to outside parties.
Helpful. I appreciate the context. Thank you.
Thank you. Your next question comes from the line of.
Joseph Osha with Guggenheim. Please go ahead.
Hi Christian.
Hey, Jeff.
You actually touched on in your comments, just now something I wanted to amplify.
I would think that there would be.
More installers now out there looking for.
Not just kind of moving portfolios and one off basis, but.
Kind of an ongoing.
Monetization strategy.
How how do you view that and as you kind of think a year or two four could that be.
That approach of jewelry kind of just being a liquidity pipeline as opposed to being out there you'll have in your M&A guys Hunt for deal here.
How important a piece of that business.
Could that become.
This could become really significant.
In active enough conversation, we actually have an internal name for this but I'll. Just go ahead and say some markets for the first time, we call. This a programmatic off taker agreement.
Are actively talking with folks about being a programmatic off taker. These are going to be installers that we.
We call them Super regional install it it's we're not talking about folks that are doing 200, or 500 systems a year, we're talking about some of the most dominant consolidated installers in their particular regions.
For those for those folks we are a great partner because our M&A process is so sophisticated and replicable.
Our cost of capital has only declined as we've gone from being a private to public company and so this is a direct adjacency to our M&A core competency to do this programmatic off taker and we are I'll just say in active conversations with some of those super regional installers about connecting with them in.
That way.
Could be.
There is significant and I don't want to get out ahead of myself on where we might have success in setting up those relationships.
Their need to.
To know where these assets are going and not have them on their balance sheet I think simply becomes more important as the cost of capital and the cost of warehousing rises for them. So we're trying to solve a known capital markets issue for the installers by getting them off their balance sheet faster faster turns.
Hence there.
Turns of capital if you think about their model and get it to our balance sheet as fast as possible, we would still not be going up to prior to the installation. So that's where we will differentiate ourselves from what some other folks have are doing in the marketplace.
These are folks that are still going to be able to create and put them on the rooftops. So that by the time, we acquired them. The cash flow is already going the customer relationship has already done the asset has already built.
Okay.
Yes, I find that very interesting and then second question.
You're a lot about how transferability might or might not impact.
Residential I am just curious as to your thoughts and also whether there might be a role in facilitating.
Well ITC monetization that you guys could see yourselves point.
Well again, just attaching it to that last question of we don't intend to be doing programmatic off taker.
With partners and then take ownership prior to the installation and so that taxes, our tax equity moment.
From a policy perspective is attached to who owns it at the point that it comes into service.
So the.
Those partnerships that we are in discussions with our folks that are sophisticated enough to have their own tax equity lined up or to your point to begin to monetize the ITC and have that trade. So we are downstream by I don't know it may be weeks or months.
From that moment.
Certainly aware and because of our environmental commodities markets group, we do have the ability to place and trade ITC as a read through I would say, we do get calls from folks that are interested in making that trade.
And we typically are pointing them to again some of our upstream peers that will have those ITC, but certainly if it came down to us we have folks that are actively reaching.
One thing to acquire them.
Yes. The reason I ask is that obviously for regular ITC world. There are lots of reasons in terms of size and lumpiness and whatnot, but that doesn't make sense, but I would think transfer ability.
To extend that kind of a metaphor.
Metaphor you just talked about might actually provide an opportunity at that moment, where to move a little further downstream because it is a less lumpy exercise I guess yeah absolutely.
Sometimes thought show that one of the challenges to moving upstream to being an installer is the tax equity component and.
So kudos to the policymakers for removing the moat.
Strategically we are not ready to say Hey, let's go ahead and cross that bridge that policymakers have created for us and head up towards installation, but certainly one of the key notes are being an installer and that has the ability to get tax equity partners at scale that moat, just got filled in and.
I think folks can reach.
Can compete in the installation market.
More readily now, we certainly could more readily and yet.
<unk>, we're not looking at becoming an installer or getting upstream into the installers role.
Okay.
I appreciate that.
Okay.
Thank you.
As a reminder, if you would like to ask a question. Please press star followed by the one on your telephone keypad.
Your next question comes from the line of Jordan <unk> with <unk> Securities. Please go ahead.
Hey, guys. This is on for Jordan. Thanks for taking my questions. So piggyback on Christian's question on M&A.
So you guys have been talking about how low your customer acquisition cost has been.
It appears that this study has a work out well for you guys and you get two acquisitions. This year show. So I'm. Just wondering are you worried about or have you seen any other competitors or new entrants that are trying to be a copycat of your model.
Thanks for joining.
We have not seen.
Other entrants coming into the M&A space.
To your point it is it is extremely low.
Cost of goods.
Cost of acquiring a customer of cap cost.
Sure.
The.
We've been doing this for five years now and the.
Dahlia rate of M&A is historically high for for corporations that don't develop the M&A muscle memory. If you will there is a lot that goes into M&A, whether it's technical accounting.
The things that would be in Sarah Sarah has landed the CFO to make sure. She gets right. This is complex stuff.
Integration of multiple kinds of contracts.
<unk>.
Installer peers may have the luxury of knowing that all of their contracts are the same home transfer behaves exactly the same it's why we've actually been investing money into our it systems and making sure that we have a consistent customer experience that is hard to do when you've got a lot of different flavors of PPA.
And leases.
<unk>.
It's work that we've already accomplished.
I would say that if somebody tried to step into the market. They called me up and said what would you how would you recommend we do M&A I would warn the math and say you need to be prepared for three years or four years of really hard work systems upgrades service center upgrades before.
Before you try to do this so fundamentally there's nothing that keeps people from it except that really hard work of being prepared to do it I think it would take Amy one thats tried to step into the space a number of years to get to where we are our mode.
Our most sometimes is just that integrated servicing of such complex assets and diverse assets.
Yes.
Great. Thanks for that detailed answer so Sara Lee maybe just for you.
You have plenty of cash flow guidance of 1% to 22, 1% 30 run rate. So that's great. So can you maybe address I mean address.
Address the outlook and walk us through the puts and takes in your projections or anything we should be aware of thanks.
Sure Hi, Matt Thanks for that question.
When I think about the top of that.
Final one we've got about 151 15 coming in in customer collections that would include the buyout and the prepaid that we see throughout the year.
Have another seven to eight and renewable energy credits the abstracts that Christian spoke about previously and then another 7% to eight and interest on our cash that's investments that gets you to the top and then circling down for O&M and SG&A gets us down to that 77 cash available for debt service that we previously.
You've spoken about as kind of being in the middle.
And then after our loan interest and principal payments, we land at around five to 10.
Analyzed cash flows.
Before any kind of additional capex, it infrastructure or meet our swap initiatives.
That's helpful.
Yes.
Yeah.
Thank you at this time there are no further questions I will now turn the call back over to Don can flag for closing remarks. Please go ahead.
Thanks, operator, and thank you again for joining us today and for your continued support if you have any questions. Please contact me or our Investor Relations team. This concludes our call today you may all disconnect.
Okay.
Okay.
[music].
Okay.
[music].
Sure.
[music].
Okay.
Okay.
Yes.
Okay.
Yes.
Yes.
Sure.