Q3 2024 Otter Tail Corp Earnings Call
Speaker Change: Good morning and welcome to Adertail Corporation's third quarter 2020-24 earnings conference call.
at this time, participants are in the listening mode. After the speaker's presentation, there will be a question and answer session.
asked a question during the session you will need to press star 1-1 on your telephone. You will then hear an automated message, advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to turn the call over to the company for their opening comments.
Beth Eiken: Good morning everyone and welcome to our third quarter 2024 earnings conference call. My name is Beth Eiken and I'm Audertail Corporations Manager of Investor Relations. Last night we announced our third quarter financial results.
Our complete earnings release and slide that company in this call are available on our website at audertill.com. Our recording of this call will be available on our website later today.
Speaker Change: With me on the call today our Chuck MacFarlane, Audertill Corporation's President and CEO, and Todd Wahlund, Audertill Corporation's Vice President and CFO.
Speaker Change: Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call. As noted on slide 2, these statements represent our current views and expectations of future events.
They are subject to risks and uncertainties, which may cause actual results to differ from those presented here. So please be advised against placing undue reliance on any of these statements.
Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review.
Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments, or otherwise.
I will now turn the call over to Otter Tail Corporation's President and CEO, Mr. Chuck MacFarlane.
Chuck MacFarlane: Thank you, Beth. Good morning and welcome to our third quarter 2024 earnings call.
Chuck MacFarlane: Please refer to slide 4 as I begin my comments on our quarterly performance.
Our team members continue to perform well as they navigate changing market conditions.
Chuck MacFarlane: We are generally pleased with our consolidated financial results.
Chuck MacFarlane: Despite diluted earnings per share decreasing 7% to $2.03 per share compared to the third quarter of 2023, the results exceeded expectations and year-to-date earnings are ahead of last year by 4%.
Chuck MacFarlane: Additionally, we are guiding to what could potentially be our best year yet in terms of annual earnings.
Chuck MacFarlane: Electric segment earnings increased 16%, or $4 million, primarily due to the impact of interim rates in North Dakota, as well as the financial impact of a recent FERC ruling on transmission return on equity.
Chuck MacFarlane: Plastic segment earnings decreased 8%, or approximately $5 million, as the sales price of PVC pipe continues to decline.
The manufacturing segment is experiencing demand-related headwinds across several of its end markets.
Chuck MacFarlane: resulting in a decrease in earnings of 71%, or approximately $5 million, due to lower sales volumes.
Chuck MacFarlane: While plastic segment earnings were lower than the same time last year, its financial results exceeded what we had anticipated for the third quarter.
from our previous range of $6.77 to $7.07.
Speaker Change: In a moment, Todd will provide more detailed discussion of our third quarter financial results and our updated earnings expectations for 2024.
Speaker Change: Slide five shows our expected five-year compounded annual growth rate and earnings per share with and without the impact of our plastic segment.
through the end of 2024 based on the midpoint of our updated earnings guidance.
Speaker Change: Even without the impact of the extraordinary results generated by our plastic segment over the last few years,
Chuck MacFarlane: We expect to produce a compounded annual growth rate above our long-term earnings-per-share growth target of 5 to 7 percent.
Chuck MacFarlane: Turning to our electric segment, slide 7 provides an overview of our electric operations.
Chuck MacFarlane: Earlier this year, our regulated electric utility announced a sizable five-year capital spending plan, with significant amounts being allocated to renewable generation.
Chuck MacFarlane: transmission investment and technology
Chuck MacFarlane: In addition to Autotail Power's rate-based growth, we continue to explore opportunities to bring new large loads online.
Chuck MacFarlane: which is summarized in more detail on slide 8.
Chuck MacFarlane: Otter Tail Power is well positioned to address the needs of new large loads.
Chuck MacFarlane: We have approved tariffs already in place and have several sites available that could support these loads with minimal delivery infrastructure investment needed, increasing the speed to market as well as reducing the cost to do so.
Chuck MacFarlane: We will continue to evaluate and pursue these opportunities while balancing the needs of our current customers.
Chuck MacFarlane: Slide 9 summarizes Otter Tail Power's 5-year capital spending plan.
Chuck MacFarlane: which is expected to produce rate-based growth of 7.7%.
Chuck MacFarlane: As discussed in our last earnings call, with the approval of our Integrated Resource Plan in Minnesota earlier this year,
Chuck MacFarlane: We anticipate upside to our five-year capital spending plan and will provide an update during our year-end earnings call in February of 2025.
Chuck MacFarlane: I will now provide a few details on several projects within the existing five year planning period and beyond.
Chuck MacFarlane: Otter Tail Power's Advanced Metering Infrastructure, or AMI, project is progressing well, as summarized on slide 10.
Chuck MacFarlane: Approximately 90% of the 173,000 meters have been upgraded, and we look forward to leveraging the additional data these meters will provide to better serve our customers and enhance their experience.
Chuck MacFarlane: We expect this project will reduce operating expenses through lower meter reading costs and technology-enabled savings.
Chuck MacFarlane: Turning to slide 11, our wind repowering project, with an investment of approximately $230 million, remains on budget and on schedule.
Chuck MacFarlane: We expect to finish the equipment upgrades at the first of our four owned wind energy centers later this year, with the other three by the end of next year.
Chuck MacFarlane: This project continues to be an excellent example of capital investment that serves both customers and investors.
Chuck MacFarlane: Slide 12 summarizes Otter Tail Power's investments under Tronch 1 of MISO's long-range plant.
Chuck MacFarlane: which we are expected to total approximately $420 million.
Chuck MacFarlane: We continue to be in the development phase of these projects and are working to secure the various required regulatory approvals.
Chuck MacFarlane: Separately, in June of 2024, MISO revised their proposal for Tronch 2 of their long-range plan and released their near-final Tronch 2 portfolio projects.
Chuck MacFarlane: We currently anticipate Otter Tail Power will co-own three projects included in the portfolio.
Chuck MacFarlane: and anticipate the MISO Board of Directors to approve the portfolio later this year.
Chuck MacFarlane: These long-range transmission investments, which help to support overall grid reliability, are expected to have a limited impact on our retail customer rates.
Chuck MacFarlane: as they are allocated across the entire MISO-North footprint of which our customer base only comprises a small percentage.
Chuck MacFarlane: In addition to the transmission investments available through MISO's Long Range Transmission Plan, MISO and the Southwest Power Pool, or SPP,
Chuck MacFarlane: partnered to develop the Joint Targeted Interconnection Queue, or JTIQ, portfolio projects focused on improving the interconnection queue backlog along the MISO SPPC.
Chuck MacFarlane: MISO and SPP have filed their cost allocation tariff with FERC.
Chuck MacFarlane: and requested them to act on or before mid-November.
Chuck MacFarlane: If FERC approves the filing, we expect the MISO Board to approve the portfolio at its December meeting.
Chuck MacFarlane: We remain optimistic about the potential investment opportunity, which we estimate to range from approximately $350 million to $400 million.
Chuck MacFarlane: While TRANCH2 and JTIQ represent incremental transmission investment opportunities for us, most of the spend is likely to fall outside of our current five-year planning period.
Chuck MacFarlane: Thank you.
Chuck MacFarlane: Turning to slide 13, ensuring affordable electric service for our customer remains a top priority of ours, and we are proud of Otter Tail Power as some of the lowest electric rates in the country compared to other investor-owned utilities.
Chuck MacFarlane: We continue to seek ways to keep customer bills low while making significant capital investments to support safe, reliable, and increasingly clean electric service.
Chuck MacFarlane: Slide 14 summarizes Otter Tail Power's key regulatory matters for the remainder of 2024.
Chuck MacFarlane: North Dakota staff and intervener testimony relating to our rate case was received in October and as expected there are differences between our request and their position.
Chuck MacFarlane: Despite these differences, we continue to expect being able to work towards a constructive outcome.
Chuck MacFarlane: An evidentiary hearing is scheduled before the North Dakota Commission in December.
Chuck MacFarlane: and we anticipate the final outcome of the rape case will occur in early 2025.
Chuck MacFarlane: For more information regarding the case, please refer to slide 15.
Chuck MacFarlane: We do not expect to file a rape case this year in either Minnesota or South Dakota.
Chuck MacFarlane: Separately, we had an informal hearing before the North Dakota Commission in October to discuss our Integrated Resource Plan.
Chuck MacFarlane: We are waiting on a decision from the Commission to obtain further clarity on what renewable resources additions, if any, would be jurisdictionally allocated to North Dakota.
Chuck MacFarlane: Turning to our manufacturing segment on slide 18, VTD and TO Plastics continue to face end-market
Chuck MacFarlane: Demand-related headwinds. We continue to take actions to tightly manage costs to mitigate the impact of lower sales volumes on earnings.
Chuck MacFarlane: Despite this near-term softness, we remain confident in the longer-term fundamentals of the segment.
Chuck MacFarlane: Our BTD expansion project in Georgia is progressing well and we anticipate occupying the new space later this year.
Chuck MacFarlane: We look forward to bringing this additional capacity online in early 2025 to better serve our customers in the Southeast, which is a growing market for us.
Chuck MacFarlane: We anticipate the additional capacity at our Georgia location can support up to $35 million in additional annual revenue.
Chuck MacFarlane: Turning to our end market outlook on slide 20, many of the end markets BTD serves have softened.
Chuck MacFarlane: primarily within recreational vehicle, agriculture, construction, and lawn and garden.
Chuck MacFarlane: Teoplastics Primary and Market Horticulture has softened as well.
Chuck MacFarlane: Distributor and grower inventory levels have largely normalized after working through elevated inventory levels during the latter part of 2023 and most of 2024.
Chuck MacFarlane: but we are
Chuck MacFarlane: facing increased competition from import markets.
Chuck MacFarlane: Additionally, end-user demand is expected to be flat to down as the market adjusts to consumers' post-pandemic behaviors and buying patterns.
Chuck MacFarlane: Thank you.
Chuck MacFarlane: Slide 21 provides an overview of our plastic segment.
Chuck MacFarlane: Despite plastic segment earnings decreasing from the same time last year due to lower sales prices of PVC pipe,
Chuck MacFarlane: The segment continues to perform better than expected.
Chuck MacFarlane: Capitalizing on customer sales volume growth and improved distributor and end market demand.
Chuck MacFarlane: Our ability to fill orders on an immediate basis is serving us well in the current environment.
Chuck MacFarlane: The first phase of our Vinyl Tech Expansion Project in Arizona continues to progress well and is nearly complete. We look forward to adding large diameter PVC pipe production capability at this location.
Chuck MacFarlane: later this year so that we can better serve our customers in the South and Southwest while simultaneously freeing up large diameter capacity at Northern Pipe Products in North Dakota.
Chuck MacFarlane: PVC pipe prices continue to decline, but at a slower rate than we expected.
Chuck MacFarlane: Our prices reflect the dynamic nature of the business and the industry, including the supply and demand of PVC pipe and the cost of supply and material inputs, including PVC resin.
Chuck MacFarlane: Improved demand has moderated the rate of pricing declines. However, we continue to expect the sale price of PVC pipe to decline over time.
Chuck MacFarlane: We continue to closely monitor new home construction.
Chuck MacFarlane: vacant lot development and interest rates.
Chuck MacFarlane: As I conclude, I want to acknowledge the class action lawsuits against many of the pipe manufacturers in the industry.
Chuck MacFarlane: We believe there are factual and legal defenses to the allegations in the complaints, and we intend to defend ourselves.
Chuck MacFarlane: These are current and active cases. We will not be commenting further today on these allegations and claims against Otter Tail and the industry.
Speaker Change: I will now turn it over to Todd to provide additional commentary on our third quarter financial results and our expectations for the remainder of the year.
Todd Wahlund: Thank you, Chuck, and good morning, everyone.
Todd Wahlund: Diluted earnings per share for the third quarter totaled $2.03.
Todd Wahlund: A 7% decrease from the same time last year.
Todd Wahlund: Despite the lower quarterly earnings, our year-to-date earnings exceeded last year by 4%.
Todd Wahlund: Our plastic segment continues to perform better than expected, capitalizing on customer sales volume growth, distributor and end market demand, and PVC sales prices that have remained stronger than what we had anticipated.
Todd Wahlund: Due to the continued strong financial performance within our plastic segment, we increased the midpoint of our 2024 earnings per share guidance by 15 cents, or 2%.
Todd Wahlund: Please follow along on slide 25 as I provide an overview of our third quarter financial results by segment.
Chuck MacFarlane: Electric segment earnings increased 16% from the third quarter of 2023 due to the impact of the North Dakota Raid case.
Chuck MacFarlane: Interim Rate Increase.
Chuck MacFarlane: increased transmission and rider revenue.
Chuck MacFarlane: and the impact of favorable weather.
Chuck MacFarlane: This was partially offset by higher interest and depreciation expense.
Chuck MacFarlane: Transmission revenue for the quarter was higher compared to last year due to a recent decision issued by FERC which supported our lowering the estimated refund on the allowed return on equity dating back to 2013.
Chuck MacFarlane: This resulted in a non-recurring earnings per share increase of 4 cents in the third quarter.
Chuck MacFarlane: product pricing and sales mix changes.
Chuck MacFarlane: and Decreased Scrap Revenue.
Chuck MacFarlane: This was partially offset by lower SG&A expense.
Chuck MacFarlane: Sales volumes in the manufacturing segment decreased 13% in the third quarter of 2024 compared to the same time last year.
Chuck MacFarlane: The end markets that saw the greatest declines in the quarter included recreational vehicle, agriculture, construction, and lawn and garden.
Chuck MacFarlane: Sales volumes have softened due to lower-end market demand, as well as manufacturers and dealers tightly managing their inventory levels amid uncertain market conditions.
Chuck MacFarlane: Lower profit margins were largely driven by the mix of products sold during the quarter, as well as reduced leverage of our fixed manufacturing costs due to decreased production and sales volumes.
Chuck MacFarlane: Despite the near-term softness, the fundamentals of the segment remain strong, and we expect the manufacturing segment to produce earnings growth in line with our EPS growth target over the long term.
Chuck MacFarlane: Plastic segment earnings decreased 8% from the third quarter of 2023, primarily due to lower profit margins, which was partially offset by higher sales volumes.
Chuck MacFarlane: Gross profit margins decreased in the third quarter due to lower sales prices.
Chuck MacFarlane: Pipe sales prices have steadily declined throughout the year and decreased 11% compared to the same time last year.
Chuck MacFarlane: Sales volumes increased 13% from the third quarter of 2023 due to incremental customer sales volume growth and improved distributor and end market demand.
Chuck MacFarlane: With the increased earnings in cash generated by our diversified business model, our balance sheet and credit metrics continue to be very strong.
Chuck MacFarlane: Slide 27 shows our total available liquidity on our lines of credit as of September 30th, 2024.
Chuck MacFarlane: This combined with our 280 million dollars of cash results in total available liquidity of 544 million dollars.
Chuck MacFarlane: Our consolidated equity layer of nearly 62% continues to be at a very healthy level, and our return on equity over the last 12 months exceeded 20%, outpacing our utility peers.
Chuck MacFarlane: During this slide 28, due to the continuous strength within our plastic segment, we are increasing and tightening our 2024 diluted earnings per share guidance to a range of $6.97 to $7.17.
Chuck MacFarlane: from our previous guidance range of $6.77 to $7.07.
Chuck MacFarlane: This increases the midpoint of our guidance to $7.07, which is a 15 cent increase over our previous guidance midpoint.
Chuck MacFarlane: We are maintaining our electric segment and corporate cost center guidance for 2024.
Chuck MacFarlane: Our electric segment earnings are expected to increase 7% over 2023 levels.
Chuck MacFarlane: We are decreasing our 2024 earnings guidance for our manufacturing segment, primarily due to lower anticipated sales volumes in the fourth quarter.
Chuck MacFarlane: As mentioned previously, many of our markets are experiencing end-user demand related headwinds, and we expect manufacturers to continue to tightly manage their production and inventory levels in response throughout the remainder of the year.
Chuck MacFarlane: Additionally, we anticipate product pricing-related pressures due to weakened demand.
Chuck MacFarlane: We will continue to take action to tightly manage our costs in this down cycle while ensuring our team and operations remain agile to respond quickly when demand improves.
Chuck MacFarlane: We are increasing our plastic segment 2024 earnings guidance for a couple reasons.
Chuck MacFarlane: First, our third quarter financial results were better than what we had expected.
Chuck MacFarlane: Second, while we anticipate the sales prices of PVC pipe to continue to decrease, we now expect this decrease to be at a slower rate of decline than what our previous earnings guidance assumed.
Chuck MacFarlane: Additionally, we expect sales volumes in the fourth quarter to be higher than what we had previously assumed.
Chuck MacFarlane: With the changes made to our earnings guidance for the year, we anticipate our earnings mix for 2024 to be 30% electric and 70% non-electric.
Chuck MacFarlane: Net of Corporate Costs
Chuck MacFarlane: While this anticipated mix deviates from our long-term earnings mix target of approximately 65% electric and 35% non-electric,
Chuck MacFarlane: The incremental earnings and cash generation helps drive shareholder value as we remain in an enviable position to execute on our long-term growth plan with the support of a strong balance sheet and no equity needs in the current five-year planning period.
Chuck MacFarlane: We continue to expect to reach our targeted long-term earnings mix of 65% electric and 35% non-electric as plastic segment earnings decline to a range of $45-50 million on an annual basis.
Chuck MacFarlane: while our electric segment earnings grows at a rate in line with our projected rate-based growth compound annual growth rate.
Chuck MacFarlane: Our 5-year capital spending plan, which is a key driver of earnings growth for our electric segment, is included in more detail on slide 29.
Chuck MacFarlane: No changes have been made to this plan since it was first announced earlier this year.
Speaker Change: However, as Chuck mentioned, we expect sharing an updated five-year capital spending plan during our year-end earnings call and anticipate incremental capital investment opportunity, primarily within our electric segment, over the next five-year spending period.
Chuck MacFarlane: Slide 30 provides a summary of our financing plan for 2025 through 2028. We continue to plan for retiring and not replacing our only outstanding parent-level debt when it matures in 2026.
Chuck MacFarlane: and continue to forecast no equity needs within the existing five-year planning period and potentially beyond, despite our significant rate-based growth plan.
Chuck MacFarlane: This helps to differentiate us from many of our utility peers that will need to issue additional equity to fund their rate-based growth plan.
Chuck MacFarlane: resulting in earnings per share dilution.
Chuck MacFarlane: We are positioned well to deliver upon our increased 2024 earnings guidance and meet our long-term investment targets as summarized on slide 33.
Chuck MacFarlane: Our diversified business model continues to produce above-average returns and long-term value for our shareholders.
Chuck MacFarlane: We have many growth opportunities across our segments and are positioned well to grow with our customers.
Chuck MacFarlane: We are in an excellent position to support this growth with our strong balance sheet, ample liquidity, and investment-grade credit ratings.
Chuck MacFarlane: We are now ready to take your questions.
Speaker Change: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star-one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star-one-one again. Please stand by while we compile the Q&A roster.
Chuck MacFarlane: And our first question comes from Ida Wozniak of Siebert Williams and Sheng. Ida, your line is open.
Ida Wozniak: Hey, Ed's Chris.
Ida Wozniak: Chuck, you've talked about some potential new large loads for a while. Have you got any ability to elaborate or give us any sense of what kind of timeline that might be?
Ida Wozniak: All right, Chris, thanks for the question.
Ida Wozniak: You know, we as many in the industry are working with a number of
Ida Wozniak: and the end-use customer and people that would make the facilities in a data center.
Ida Wozniak: mode, but also
Ida Wozniak: Crypto mining, and then particularly to our geographic area, we have a lot of interest in
Ida Wozniak: Clean Fuels, whether it's sustainable aviation fuel or low-carbon ethanol-type facilities in each of those. I would indicate we're in discussions with a number of people. We have not...
Ida Wozniak: move to
Ida Wozniak: signing any electric service agreements, but we have several projects that are in
Ida Wozniak: Letter of Intent Situations.
Ida Wozniak: on that. So from a time frame, I would expect, you know, we will have to have something here within the next two quarters.
Speaker Change: Okay, that helps.
Speaker Change: As far as the plastic segment goes, you now have rising volumes, which has its own pressures on price. You know, and that's beginning to sort of offset.
Speaker Change: Thoughts on what the new normal will ultimately be changed at all?
Speaker Change: Chris, I don't think that our idea where the new normal would be has changed. We have been fairly consistent in that.
Speaker Change: $45 to $50 million, we anticipate that in the 2026.
Ida Wozniak: timeframe and we anticipate the prices will continue to recede between where they are now and that level over that time period.
Speaker Change: Okay, great. You alluded to some import pressures on manufacturing, you know, end markets.
Speaker Change: Can you elaborate on that and how much of it do you think is, you know, some consumer pressures from interest rates and maybe postponing some purchases hoping for a better 2025?
Speaker Change: overseas freight has declined significantly and while it was there pre-pandemic during the high freight periods a lot of that pressure from imports dropped off that you know we feel that that's now
Speaker Change: Come back.
Speaker Change: Okay.
Ida Wozniak: So, lastly, with the new capacity in Arizona,
Ida Wozniak: Can you just sort of talk about the dynamics between
Ida Wozniak: you know, the large diameter pipe.
Ida Wozniak: Market in Arizona
Ida Wozniak: you know, the absence of having to ship the pipe. So what does that do to Arizona margins? And also if North Dakota isn't selling into the Arizona market, you know, do they have a void there that they can fill with their large capacity pipe? So are you expecting?
Ida Wozniak: you know, um...
Speaker Change: improved margins overall and volumes
Ida Wozniak: um
Ida Wozniak: facility because it didn't have equipment able to make that.
Ida Wozniak: South and Southeast.
Speaker Change: And what ends up happening to the, you know, volumes that North Dakota was providing? Will they be able to sell that locally?
Speaker Change: We believe so. It was not a lot of volume. It is a long ways to ship pipe.
Ida Wozniak: Right.
Speaker Change: Okay, thanks a lot. I appreciate the details.
Speaker Change: Thanks, Chris.
Speaker Change: Thank you very much. One moment for our next call, please.
Speaker Change: Our next call comes from the line of Tate Sullivan of Maxim Group. Tate, your line is open.
Tate Sullivan: Great, thank you. Hi Chuck and Todd. And I mean first going back to PVC, I mean can you talk about why
Tate Sullivan: distributors that buy the PVCs such as Corn Main and Ferguson's are willing to pay prices above the historical spread to resin? Are your customers, the distributors, waiting for extra supply? Do they still want extra inventory? Can you go into some background on that dynamic please?
Speaker Change: We believe that there's...
Speaker Change: A lot of supply and dynamics in PVC pipe and pipe pricing.
Speaker Change: a number of issues that go into how that's set.
Speaker Change: Ascertain what you know speak for the distributors and beyond that, you know, we just
Speaker Change: We're not really going into any of the...
Speaker Change: stuff that's going into the litigation, since it's in ongoing litigation. I'm not in a position to comment particularly on that.
Speaker Change: And then when you comment on, I mean, the margins going down, the pricing going down in the PVC, eventually, are you really basing that on what you're seeing for the resin prices? And can you comment, what have resin prices done since September, since you probably have more visibility than many?
Speaker Change: There's a lot of things that go into the pricing, not just resin.
Speaker Change: We're not able to go into that anymore at this time due to the litigation.
Speaker Change: Okay, I understand and then
Tate Sullivan: And then Todd, the manufacturing you mentioned on the weakness in BTD, you covered it in one of the comments and the questions. What is the relative manufacturing revenue mix between BTD and teoplastics, is it still well a majority of BTD or is teoplastics, I mean have you given the percent breakdown before?
Speaker Change: You're absolutely right, Tate. BTD is the much larger entity of the two.
Tate Sullivan: So, yeah, most of our financial results would be driven by BTD.
Tate Sullivan: And this year, TLP has been very challenged all year long with sales volumes, so it's a little higher this year than normal.
Tate Sullivan: And then just, sorry, just on the PVC as well and you mentioned a 45 to 50 million is a normal. What is that referring to? I mean, because you have 350 pounds of capacity, growing that by about 7%. What were you referring to with that number?
Speaker Change: I was referring to our forecast net income.
Tate Sullivan: from that segment in 2026 or beyond.
Speaker Change: 45 to 50, perfect. Okay, thank you very much.
Speaker Change: Thank you very much. As there are no remaining questions in the queue, I would now like to turn the call back over to Chuck for his closing remarks.
Chuck MacFarlane: Thank you for joining our call and your interest in Otter Tail Corporation.
Chuck MacFarlane: If you have any questions, please reach out to our investor relations team. We look forward to speaking with you next quarter.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.