Q3 2025 American States Water Co Earnings Call

Speaker #1: Ladies and gentlemen , thank you for standing by . Welcome to the American States Water Company conference call discussing the company's third quarter 2025 results .

Speaker #1: The call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at 5 p.m.

Speaker #1: Eastern Time and run through November 13th on the company's website, WWE.com. The slides that the company will be referring to are also available on the website.

Speaker #1: All participants will be in listen only mode should you need assistance , please signal a conference specialist by pressing the star key , followed by zero .

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your telephone keypad.

Speaker #1: To withdraw your question , please press star . Then two . This call will be limited to an hour . Presenting today from American States Water Company are Bob Sprouse , president and chief executive officer and Eva Tang , senior vice president of finance and chief financial officer .

Speaker #1: As a reminder , certain matters discussed during this conference call may be forward looking statements within the meaning of the private securities Litigation Reform Act of 1995 .

Speaker #1: Forward looking statements are not guarantees or assurances of any outcomes . Financial results . Levels of activity , performance or achievements and listeners are cautioned not to place undue reliance upon them .

Speaker #1: Forward-looking statements are subject to estimates and assumptions, as well as known and unknown risks, uncertainties, and other factors. Listeners should review the description of the company's risks and uncertainties that could affect the forward-looking statements in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission.

Speaker #1: Statements made on this conference call speak only as of the date of this call , and except as required by law , the company does not undertake any obligation to publicly update or revise any forward looking statement .

Speaker #1: In addition , conference call will include a discussion of certain measures that are not prepared in accordance with generally accepted accounting principles or GAAP .

Speaker #1: In the United States, these constitute non-GAAP financial measures. Under SEC rules, these non-GAAP financial measures are derived from consolidated financial information but are not presented in our financial statements that are prepared in accordance with GAAP.

Speaker #1: For more details , please refer to the press release . At this time , I will turn the call over to Bob Sprouse , President and Chief Executive Officer of American States Water Company .

Speaker #1: Please proceed .

Speaker #2: Thank you . Bailey . Welcome , everyone , and thank you for joining us today . I'll begin with brief highlights to our quarter .

Speaker #2: Eva will discuss some financial details

Speaker #2: and then I'll wrap it up with derived updates on regulatory

Speaker #2: activity . ASU has dividends . And then we'll take your questions . I'm pleased to report that recorded earnings per share for the third quarter were $0.11 per share , higher compared to the third quarter of last year , an increase of 11.6% favorable variance is attributable to the receipt of this final decisions from the California Public Utilities Commission .

Speaker #2: Or CPC , in January 2025 for a regulated water and electric utilities general rate cases , which authorized new water rates for 2025 to 2027 and authorized new electric rates for 2023 to 2026 , and higher earnings for our contracted services business .

Speaker #2: American States Utility Services, or ASU, stood at $0.08 per share, due mostly to increases in construction activities during the quarter.

Speaker #2: For the year to date , September 30th earnings were $2.63 per share , $0.21 per share higher than last year , or 8.7% .

Speaker #2: We continue to invest in our water and electric utility systems for the long term benefit of our customers . Our regulated utilities are on pace to invest a combined 180 to $210 million in infrastructure investments this year .

Speaker #2: In addition, our water utility recently received CPUC approval to provide water services at another new planned community that will be built out over time.

Speaker #2: With the first development expected to serve up to 3800 customer connections during the next five years and over the longer term , 20 plus years allows for the construction of 17,500 total dwelling units at full build out .

Speaker #2: ASU has continued to enter into U.S. government-awarded contract modifications for new construction projects and was awarded $28.7 million in new capital upgrade construction projects during the nine months ended September 30th of this year.

Speaker #2: These newly awarded projects are expected to be completed through 2028 . I'd also like to mention that we are pleased to be recognized on Time's America's Best Midsize Companies , 2025 list , and are one of only two investor owned water utilities on the list .

Speaker #2: Companies are ranked by revenue growth, employee satisfaction, and sustainability transparency. In addition, American States Water Company is the only water utility included in Barron's 100 Most Sustainable Companies for 2025.

Speaker #2: Companies were scored across 230 environmental , social and governance performance indicators from workplace diversity to greenhouse gas emissions . We believe these recognitions reflect our strategic growth plans , commitment to our workforce and focus on our initiatives and disclosures in the sustainability areas , and these will remain priorities for the company .

Speaker #2: For that, I will turn the call over to Eva Tang to discuss earnings and liquidity.

Speaker #3: Thank you . Bob . Hello , everyone . Let me start with our third quarter results recorded consolidated earnings were $1.06 per share for the quarter as compared to $0.95 per share for the third quarter of 2020 .

Speaker #3: For for our water utility , Golden State Water reported earnings were $0.86 per share as compared to $0.84 per share last year . The $0.02 per share increase in 2025 was largely due to new 2025 water rates , as a result of receiving a final decision in Golden State Water general rate case proceedings , higher gain generated on investment held to fund a retirement plan and lower interest expense , partially offset by higher operating expenses and a higher effective income tax rate .

Speaker #3: Lastly , there was a decrease in earnings of $0.02 per share due to the dilutive effect from the issuance of equity under DWR at market offering program .

Speaker #3: Our electric segment earnings were $0.04 per share for the quarter as compared to $0.02 per share for the same quarter last year , a $0.02 per share increase , primarily due to receiving the final decision on the electric generator case with the new 2025 electric rates as compared to 2022 rates used to record revenues during the third quarter of last year , earnings from Asus were $0.19 per share for the quarter , compared to $0.11 per share for the same quarter last year .

Speaker #3: That is an increase of $0.08 per share , which Bob will discuss further later . Lastly , losses from our parent company were $0.03 per share for the quarter when compared to losses of $0.02 per share for the same quarter last year , due largely to an increase in interest expense resulting from higher borrowing levels from credit facility .

Speaker #3: Consolidated revenue for the third quarter increased by $21 million when compared to the same quarter of 2020 . For revenues for the water segment , increased by $8.3 million , largely as a result of receiving the final decision in Golden State Water general rate case .

Speaker #3: With new rates effective January 1st , 2025 . Revenues for electric segment increased by $4.3 million , mainly due to new 2025 electric rates .

Speaker #3: As compared to 2022 rates used to record revenue during the same quarter of 2024 , revenues from Asus increased $8.4 million . Primarily due to higher construction activity during the quarter .

Speaker #3: Due to timing . Turning to slide nine , supply costs increased by $4 million , mostly due to higher overall per unit purchased water costs included in customer rates in 2025 .

Speaker #3: Looking at total operating expenses, other than supply costs, consolidated expenses increased by $10.3 million compared to 2024. This increase includes the impact of.

Speaker #3: The electric generator case decision issued in January authorized higher operating expenses, primarily for vegetation management and other wildfire mitigation efforts. These costs were previously excluded from customer rates and are not expensed.

Speaker #3: Were not expensed in the third quarter of last year as they were being tracked in memorandum accounts . They are now included in adopted electric revenue .

Speaker #3: In addition , the increase was due to higher as US construction expenses and higher overall operating expenses . These higher expenses were partially offset by lower interest expense , net of interest income , primarily due to decreases in interest rates and overall borrowing levels .

Speaker #3: Partially offset by reduced interest income from a decrease in regulatory asset balances . Lastly , there was an increase in other income , net of other expense , due largely to higher gains generated on investments held to fund a retirement plan during the quarter .

Speaker #3: As compared to the same period in 2024, due to financial market conditions, slide ten shows the EPS bridge, comparing reported EPS for the third quarter of 2025 against the same period for 2024.

Speaker #3: Moving on to slide 11 , consolidated earnings for the nine months ended September were $2.63 per share , compared to $2.42 per share for the same period in 2020 .

Speaker #3: For an increase of $0.21 per share , the increase is largely generated from higher earnings at our regulated utilities . Turning to liquidity on slide 12 , net cash provided by operating activities was $202 million for the year to date .

Speaker #3: September compared to $134.2 million for the same period last year , with increased largely related to the implementation of new rates at our regulated utility from approved generators proceedings , as well as various approved surcharges or additional base rates from advice , letter filings in addition , the increase also resulted from differences in timing of income tax payments , billing and cash receipts for construction work .

Speaker #3: As military bases at as US , and the timing of its vendor payments for investing activities are regulated . Utility invested $151.8 million on company funded capital projects in the first nine months of this year , and we project to be on target to reach 180 to $210 million for this year for financing activities , American States Water Co , under its at market offering program , raised proceeds of $40.2 million during the nine months ended ended September 30th , net of issuance costs and legal costs , leaving a remaining balance of $68 million available for issuance under the program .

Speaker #3: In July, Standard & Poor's Global Ratings affirmed a credit rating of "stable" for Market States Water and the "A+ stable" rating for Golden State Water.

Speaker #3: These are some of the highest credit ratings in the US . Investor owned water utility industry . With that , I'll turn the call back to Bob .

Speaker #2: Thank you . Eva . On the regulatory front , as previously mentioned , in January of this year , the CPUc issued a final decision in connection with the recent water general rate case that covers rates for 2025 through 2027 .

Speaker #2: We have discussed the details of this rate case decision in our prior earnings releases and calls . We have begun preparation for our next water rate case , expected to be filed by July 1st , 2026 .

Speaker #2: As a reminder , the final decision ordered Golden State Water to transition from a full decoupling mechanism and a full supply cost balancing account , which were requested again in the general rate case application to a modified rate adjustment mechanism known as the Monterey style water Revenue adjustment Mechanism , or MrAm , and in incremental cost balancing account for supply costs effective January 1st , 2025 , without the continuation of a full revenue decoupling mechanism and a full cost balancing account for water supply , the company may be subject to future volatility in revenues and earnings .

Speaker #2: As a result of fluctuations in water consumption by its customers and changes in the water supply source mix, the final decision adopted the company's MrAm rate design proposal, which authorizes Golden State Water to increase the revenue requirement in the fixed service charges to between 45% and 48% of the revenue requirement, depending on the rate, making this area represent approximately 65% of the water utility's revenue.

Speaker #2: Fixed costs and aggregate . It also approved Golden State Water's sales forecast and its request for the continuation of a sales reconciliation mechanism , which would allow the company to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption .

Speaker #2: In August 2023 , Golden State Water entered into an agreement which was subject to CPUc approval to purchase from a developer . The water and wastewater system assets in a development located in California's Central Coast region .

Speaker #2: This is a new planned community which will serve up to approximately 1300 customer connections at full build out , which is anticipated to occur by 2034 under the current construction schedule .

Speaker #2: Barring any future delays . On December 5th , 2024 , the CPUc approved a final decision granting Golden State Water's certificates of public convenience and necessity that establish rates for water and sewer services , including the company's recovery of the purchase price through future customer rates .

Speaker #2: In this new San Juan Oaks service area, after receiving CPUC approval and finalizing other closing procedures in May of this year, the parties completed the closing of the transaction, which included the initial installation and conveyance of water and wastewater system assets of $10.7 million by the developer.

Speaker #2: A non-cash transaction to Golden State Water recorded during the second quarter of 2025 resulted in an increase in the company's utility plant, with corresponding increases in advances for and contributions in aid of construction in the future. Golden State Water will take ownership of the incremental water and wastewater system assets in phases as they are completed and ready to accommodate new connections.

Speaker #2: In addition , Golden State Water and the public Advocate's Office of the CPUc filed a joint motion with the CPUc in March to adopt a settlement agreement to authorize initial rates for water service in the new Sutter Point service area .

Speaker #2: Last week, the CPUC approved the settlement agreement in its entirety. The approval establishes initial water service rates for 2026 through 2028 and authorizes various balancing and memorandum accounts for this area.

Speaker #2: This new plan, a community in Northern California, will be built out over time. The first development is expected to serve up to 3,800 customer connections during the next five years. Over the longer term, a span of 20 plus years allows for the construction of 17,500 total dwelling units at full build-out, as part of the overall plan approved by the respective county.

Speaker #2: Turning our attention to slide 15 , we present the growth in Golden State Water's adopted average water rate base from 2021 through 2025 , which increased from $980.4 million in 2021 to $1,000,000,455.8 million in 2025 .

Speaker #2: That represents a compound annual growth rate of 10.4% over the four year period . Using 2021 as the base year for the calculation , Golden State Water anticipates a robust and sustained growth in its rate base over the next few years .

Speaker #2: As a result of receiving its recent general rate case decision that not only authorizes it to invest $573.1 million in capital infrastructure , but in addition to that , capital investments of certain projects through advice , letter filings upon completion that will contribute to a further growth in rate base in the second and third year of this cycle .

Speaker #2: Turning our attention to Bear Valley Electric as previously noted . In January of this year , the CPUc issued a final decision on the Electric general rate case that sets rates for 2023 through 2026 .

Speaker #2: Like the water utility rate case, we have discussed the details of the electric rate case in our prior earnings releases and calls.

Speaker #2: We are working to file our next electric rate case in the first quarter of 2026. This past April, Bear Valley Electric also implemented new base rates to recover the revenue requirement associated with $11.6 million of capital projects approved for recovery through advice letters.

Speaker #2: In July , Bear Valley Electric and the public Advocate's Office of the CPUc filed a joint motion with the CPUc to adopt a settlement agreement resolving all issues in Bear Valley Electric's application to construct solar energy generation and battery storage facilities .

Speaker #2: The Solar energy Generation Project will help Bear Valley Electric meet approximately 18% of its renewables portfolio standard requirement . These facilities will also help enable Bear Valley Electric to better control its energy and energy related costs through Self-supply from a local generation resource , and also provide energy shifting capabilities and additional capacity during emergencies and peak load conditions .

Speaker #2: Among other things, the settlement agreement authorizes the construction of the facilities for a total combined cost of $28 million, plus an allowance for funds used during construction.

Speaker #2: The settlement agreement is pending approval by the CPUC for the proposed decision, expected by the first quarter of 2026. If approved, the costs associated with the projects would be recoverable in customer rates at the time the projects are completed and in service.

Speaker #2: Let's continue to ASU US, which contributed earnings of $0.19 per share in the third quarter of 2025, compared to $0.11 per share for 2024.

Speaker #2: The increase was a result of higher construction activity due to the timing of when the work was performed. Management fee revenues resulting from the resolution of various economic price adjustments and lower interest expense from lower borrowing levels were partially offset by higher overall operating expenses.

Speaker #2: During the quarter . ASU has made substantial progress on its construction activities , with year to date earnings of $0.45 per share as compared to $0.44 per share for the same period of 2024 .

Speaker #2: We continue to project that ASU will contribute $0.59 to $0.63 per share this year, representing an increase of 7.3% to 14.5% year over year.

Speaker #2: ASU is awarded $28.7 million in new capital upgrade construction projects through the year to date . September of this year to be completed through 2028 .

Speaker #2: As we look ahead to 2026 , we project that Asus will contribute $0.63 to $0.67 per share . In addition , we remain confident that we can effectively compete for new military base contract awards .

Speaker #2: I would like to turn our attention to dividends in the third quarter . We raised our dividend by 8.3% and our quarterly dividend rate has grown at a compound annual growth rate or CAGR of 8.5% over the last five years .

Speaker #2: These increases are consistent with our policy to achieve a compound annual growth rate in the dividend of more than 7% over the long term.

Speaker #2: Our unrivaled dividend history since 1931 is something that the company is proud of and will continue to be an asset to our shareholders.

Speaker #2: I'd like to conclude our prepared remarks by thanking you for your interest in American States Water Co. I will now turn the call over to the operator for questions.

Speaker #1: We will now begin the question and answer session . To ask a question , you may press star , then one on your touch tone phone .

Speaker #1: If you are using a speakerphone , please pick up your handset before pressing the keys . If at any time your question has been addressed and you would like to withdraw the question , please press star then two .

Speaker #1: At this time, we will pause momentarily to assemble our roster. Our first question comes from Ian Rapp with Bank of America. Please go ahead.

Speaker #4: Hey , good morning guys . Congrats on the good quarter . Good to talk to you .

Speaker #2: Thanks .

Speaker #4: Ian .

Speaker #2: Good to talk to you .

Speaker #4: Yes , I'm just curious on Asus , obviously a good quarter and a good contract announcement there . If I look at the the incremental contract , I'm just curious if you could provide a little color on the timing and when we might see that further into EPs over the like you said , 25 to 28 , period .

Speaker #4: I'm just looking at the Asus guidance for 26 , and it looks like year over year is a little bit down relative to the last three years .

Speaker #4: So just curious if that's just contracts rolling off or what the what the earnings power looks like going forward . There . Thanks .

Speaker #2: Yeah, I mean it's a pretty good step up, I think, in the earnings from $59 million to $63 million to $63 million to $67 million.

Speaker #2: It's but it would just talk a little bit about the new capital upgrades . Those have been an important part of our overall performance .

Speaker #2: And getting almost 29 million of new capital upgrades is a pretty good year for us . Additionally , last year we we had a fairly significant amount of new capital upgrades relative to our history .

Speaker #2: And , you know , in the neighborhood of 55 million . So so between those two , we've got a pretty good , pretty good backlog to do new capital upgrade work in in 26 and beyond .

Speaker #2: We also have the renewal and replacement work where that we're doing . So , you know , it's a I would say a pretty good year recognizing we don't we're not adding any new bases in that number .

Speaker #2: You know , it's I think as you know , Ian , there's a transition period . We typically have to go through once we are awarded a contract and .

Speaker #2: So you know, the expectation is we likely won't have a new contract to deal with in 2026. Just because of that.

Speaker #2: That transition period . And where where we think the government might be on privatizations .

Speaker #4: Okay . Got it . Yeah . That makes a lot of sense . And then just on the on the new announcements or I guess the new approvals on the new customer connection growth looks like some robust activity around , you know , the new development projects .

Speaker #4: I'm just curious , if you look at these numbers , should we think about translating that , that those new customer connections to rate base based on , you know , looking at your Golden State rebates relative to your customer base or as a rule of thumb , or should we think about it more just on the the capital that you've applied for or just any , any color as to how we should think about the the rate base translation would be helpful .

Speaker #2: Yeah , I guess the one difficult thing with those new customers is it is a function of people wanting to buy homes and the developer signing them up to buy homes and and so , you know , looking at the , the potential there , you know , it is it is under this incremental acquisition approach .

Speaker #2: So as phases are done , the company will buy the infrastructure . I think the way to think about it maybe is the distribution infrastructure for these houses .

Speaker #2: And that's a pretty favorable activity for both the company and the developer , because typically the developer would have had to . Advance those facilities through the company to be then paid back over 40 years .

Speaker #2: So we will be we will be acquiring new new systems . There . And I'm not exactly sure what to tell you about how you bake that into your your rate base forecast .

Speaker #2: Because I do think figuring out when those customers are going to be added is a challenge.

Speaker #4: Right ? Okay . Well that's helpful . Color . And with that growth , maybe just one more . If I could squeeze it in .

Speaker #4: Obviously the big thematic these days is , is corporate M&A . As you look at it , your your growth profile , do you feel like , you know , gaining scale in California or other other places would be beneficial or .

Speaker #4: I'm really just curious to hear your thoughts on how you're thinking about M&A. Is, as an investor, attention kind of shifting toward it?

Speaker #2: Yeah , I mean , we were a bit surprised by the announcement of the merger between American Water and Essential Utilities , which I think that that's what you're sort of asking about .

Speaker #2: However , we don't really think that merger will impact our company's strategic direction . Going forward . We are optimistic about the future of our company .

Speaker #2: The rate bases at both of our regulated utilities continue to grow at strong rates of growth hour by hour. Asia's business also continues to grow at a good pace.

Speaker #2: We noted in our presentation materials that 10.4% four year kegger on our rate base for 2025 to sorry , 2022 to 2025 at Golden State Water in our presentation and Bear Valley Electric Rate Base has been growing at a faster rate than that .

Speaker #2: And then , of course , we will see additional customer growth . We believe through the two new developments that we've mentioned , San Juan Oaks and Sutter Point over time .

Speaker #2: So , you know , I think generally we're happy with our growth plan . That's that's not to say a good deal came along .

Speaker #2: We you know , we wouldn't we wouldn't try to buy some some systems that are in places where we believe the up regulatory framework is , is neutral .

Speaker #2: To positive. That answers your question.

Speaker #4: Yeah . That's super helpful . And that all makes a lot of sense . I appreciate you guys walking me through it . And congrats again on the on the quarter .

Speaker #4: And I will echo your your confidence on the growth rate . It looks looks promising . Thank you .

Speaker #2: Thanks , Ian .

Speaker #1: Our next question comes from Angie Storozynski with Seaport. Please go ahead.

Speaker #5: Thank you . Thank you guys okay , so you added the your rate base projection for 2025 on slide 15 . It is actually a little bit lower than I would have implied .

Speaker #5: It from just the , you know , the the pace of CapEx , depreciation . I mean , Eva , is there any reason why again , just assuming that you're spending about , I don't know , 190 million , right .

Speaker #5: And around 30 something over of the that would have implied a slightly higher rate base for 25 versus 24 . No .

Speaker #3: So Angie , you know , we we talk about we have tons of advice letters yet to be filed for the end of this year .

Speaker #3: You know, in the rate case decision, we will authorize about $76 million of advice letter that we can file by the end of this year to get new rates effective January 1 next year.

Speaker #3: So we are preparing the documentation and close the job . And to get the final number in Q4 . So we anticipate that should be approved rates effective one one of next year .

Speaker #3: So, after 2025, those actual advice letters project amount will be added to the rate base. So that may be something you.

Speaker #5: Okay .

Speaker #6: Yeah .

Speaker #5: And that's 573. That number does that include the advice letters?

Speaker #3: The . No it's not including the the vice letter . That was that was started to do prior to the racket cycle . So there are $58 million I would think of as letter coming from the prior case that were allowed to add it to rate starting next year .

Speaker #3: So in total, $573 million, I believe, including $17 million of the new advice letter project. But we have another $58 million project that is coming from the prior rate case.

Speaker #3: So both of which can be added to our rate base starting next year .

Speaker #5: Yeah . I mean , and again , I don't want to nickel and dime you here , but it's just that that would imply the 573 number .

Speaker #5: Right . That's I'm spending about again , assuming that it's readable . 191 90A year . Right . If I divide it just by three simple math and then subtract 30 or say 35 , that would still suggest that that rate base should have grown by about 150 something million versus the 100 million that that is shown of , of a growth between 24 and 25 .

Speaker #5: So is it deferred taxes again , just like simplistically .

Speaker #3: Oh , actual spending is about that amount . I was just talking about the adopted rate base .

Speaker #6: Okay .

Speaker #5: Okay .

Speaker #2: And we are okay . We are spending a little ahead . We are spending a little ahead of the rate cycle because we do have an earnings test in California that we have to meet .

Speaker #2: Yes . And you are predisposed to try to spend early because it's a 13 month average . So , so that that may be contributing a little bit .

Speaker #2: I don't know what .

Speaker #3: Yeah, I think that would definitely contribute. And we want to make sure we can finish a vessel of the project so we can follow this year.

Speaker #3: So, we've been spending the $76 million that authorized us to file.

Speaker #5: And that wouldn't count towards the rate base because my point is that the rate base is lower than it would have been implied from the approved CapEx , minus the .

Speaker #3: Yeah, it will count as actual rate base. It's just currently not in the revenue requirements based on the adopted rate base.

Speaker #3: We'll have a new rate next year to cover what we spent so far.

Speaker #6: Okay, that makes sense. Okay.

Speaker #5: Yeah okay . And and even though you have gone through the the GRC for , for the water business , you will not show the projected rate base for 26 and 27 .

Speaker #3: We will, we will show that next time for sure, because we want to make sure we have the exact number of what we can file by the end of this year.

Speaker #3: For those advice letter . Even though we we are authorized 76 million not sure that's exactly number will be in the adopted rate base .

Speaker #3: So, you know we're very conservative. We like to have a pretty certain number before we announce to the world. So, we will definitely announce that next quarter's earnings.

Speaker #5: Okay okay . I've been I've been asking so I'm just repeating the question okay . That's all I have .

Speaker #6: Yeah .

Speaker #3: I can probably share with you the top the number for next year . But I don't have the information right now . But it's .

Speaker #6: Public .

Speaker #3: Information so I can shoot you an email . Angie .

Speaker #5: Awesome . Thank you so much . Thanks , guys . Thank you . Thank you .

Speaker #6: Bye bye .

Speaker #2: Thank you .

Speaker #6: Angie .

Speaker #1: This concludes our question-and-answer session. I would like to turn the conference back over to Robert Sprowls for any closing remarks.

Speaker #2: Thank you . Bailey , just want to wrap up by thanking you all for your participation today , letting you know that we look forward to speaking with you next quarter and then wishing all of you a happy holiday season .

Speaker #2: Thank you very much .