USA 컴프레션 파트너스(USAC) 2026년 3분기 실적 발표회: DCF 가이던스 범위 축소

핵심 요약

• 2026년 3분기 매출은 전년 동기 대비 43% 증가한 3억 5,720만 달러를 기록했으며, 순이익은 4,730만 달러, 영업활동 현금흐름은 총 1억 1,770만 달러에 달했습니다.
• 계약 압축 운용 매출은 약 3억 800만 달러였습니다. 수익 창출 마력당 월평균 매출은 전분기 대비 1%, 전년 동기 대비 8% 증가한 월 23.14달러를 기록했습니다.
• 지속적인 고객 수요와 장비 가동 중단 감소에 힘입어 평균 가동률은 92.1%로 소폭 개선되었습니다. 분기 말 기준 보유 수송 마력(플릿)은 총 약 500만 마력이었습니다.
• USA 컴프레션 파트너스는 연간 분배가능 현금흐름 전망치 범위를 4억 9,500만~5억 500만 달러로 좁혔으며, 조정 EBITDA 전망치 범위 역시 기존 7억 7,000만~8억 달러에서 7억 7,000만~7억 8,000만 달러로 축소했습니다.
• 2027년 인도 예정인 신규 마력 수량의 60% 이상이 계약을 완료했으며, 상반기 인도분의 경우 약 90%가 계약되었습니다. 2029년까지 회사의 누적 신규 장비 수주 잔고는 약 5억 달러입니다.
• 연료, 윤활유 및 인건비 상승이 수익성을 압박했습니다. 경영진은 계약 갱신과 물가 연동 인상 조항을 통해 단가가 단계적으로 회복되겠지만, 현재 계약 단가에는 이러한 원가 상승분이 아직 완전히 반영되지 않았다고 밝혔습니다.

주요 재무 데이터

사업 및 영업 실적

핵심 사업인 계약 압축 수요는 견조하게 유지되었습니다. 장비 가동 중단이 줄어들면서 가동률은 전분기 말 대비 30bp 상승했으며, 일부 시장에서 소형업체들과의 경쟁이 심화되었음에도 불구하고 전체 포트폴리오 단가는 전분기 대비 약 1% 상승했습니다.

장비 공급 부족과 긴 계획 주기 때문에 고객들은 더욱 사전에 마력을 계약하고 있습니다. 경영진은 엔진 조달 기간(리드 타임)이 약 185주에서 200주에 달한다고 언급했습니다. 고객들은 최종 배치 지역을 확정하기 전부터 예상되는 수요 증가에 맞춰 미리 용량을 확보하는 경우가 많습니다.

계약 기간은 고객의 개발 계획과 시장 상황에 따라 일반적으로 2년에서 6~7년 수준입니다. 경영진은 진행 중인 계약 및 견적 파이프라인이 여전히 견조하다고 밝혔습니다.

기존 JW 컴프레션 장비의 SAP 시스템 통합이 10월에 완료되어 유지보수, 재고 관리, 보유 장비 실적 보고를 위한 일관된 체계가 구축되었습니다. 경영진은 시너지 효과가 영업비용 상승을 상쇄하는 데 도움이 되었으나, 원자재 인플레이션으로 인해 공시된 이익률상으로는 해당 절감 효과가 명확히 드러나지 않았다고 말했습니다.

경영진 가이드언스

조정 EBITDA 전망치 수정은 원자재 연동 영업비용 증가, 부품 및 서비스 판매 활동 둔화, 제조 장비 현금 판매 관련 전략적 변화를 반영한 것입니다. 현금 이자 비용과 현금 법인세 감소가 분배가능 현금흐름에 대한 원가 압박을 일부 상쇄할 것으로 예상됩니다.

경영진은 단기적인 성장이 완만한 수준을 유지할 것으로 예상합니다. 신규 천연가스 수요는 2027년 말부터 더 큰 영향을 미치기 시작하고, 근본적인 수요 동인이 2028년에 더욱 의미 있는 성장 가속화를 뒷받침할 것으로 보고 있습니다. 2027년 장비 보유량 계획과 관련해, 경영진은 장비 인도 시점 및 현금 판매와 계약 압축 장비 편입 간의 결정에 따라 달라질 수 있으나 연간 약 2%~3%의 성장 프레임워크를 재확인했습니다.

리스크 및 주요 점검 사항

3분기 말 월간 윤활유 비용은 상반기 대비 약 25% 상승했고, 디젤 가격은 9월에 역대 최고치를 기록했습니다. 인건비 역시 예상보다 빠르게 증가했습니다. 경영진은 이러한 원가 압박이 2분기 및 3분기 실적에 영향을 미쳤으며, 아직 고객 단가에는 완전히 반영되지 않았다고 말했습니다.

부품 및 서비스 매출은 핵심 계약 사업에 비해 예측 가능성이 낮습니다. 고객들이 장비를 더 긴 시간 고강도로 가동하면서 일부 유지보수를 연기하여 사업 활성화 속도가 더뎌졌습니다. 제조 판매와 부품 및 서비스 작업의 비중 조합 또한 분기별 이익률 변동성을 유발할 수 있습니다.

경영진은 유가 상승이 고객사의 재무제표 개선에는 긍정적이라고 설명했으나, 유가 상승의 지속성에 대해서는 불확실성을 지적했습니다. 유가 상승이 원유 시굴 활동의 광범위한 증가로 이어지지는 않았으며, 미국 북동부 및 텍사스 지역에서 기대되는 데이터 센터 관련 천연가스 수요도 아직 본격적으로 늘어나지 않고 있습니다.

애널리스트 Q&A 주요 내용

• 계약 활동: 경영진은 긴 장비 리드 타임으로 인해 고객들이 특정 설치 장소를 확정하기도 전에 더 일찍 마력을 확보하고 있다고 밝혔습니다.
• 비용 회수: 계약 갱신 시 단가 인상을 추진하고 있으나, 경영진은 단가 반영이 원가 상승보다 2~3개월 시차가 발생할 수 있다고 설명했습니다. 계약상의 물가 연동 인상 조항이 시간이 지남에 따라 추가적인 비용 회수를 제공할 것입니다.
• JW 시너지: 예상되었던 운영상의 이점 대부분이 이미 3분기 실적에 반영되었으나, 연료 및 윤활유 비용 상승으로 인해 명확히 가시화되지 않았습니다. 경영진은 더 광범위한 2027년 시너지 가이드언스를 제공하지 않았습니다.
• 분배금 정책: 회사는 분배금 인상을 위한 고정된 기준선을 두고 있지 않습니다. 결정은 자체 투자 수익률, 부채비율, 분배금 지급 여력 및 이사회와의 논의를 고려하여 이루어집니다.
• 자본 및 유동성: USA 컴프레션은 2035년 만기 6.75% 선순위 채권 6억 달러를 발행하여 해당 조달금으로 자산기반대출(ABL) 차입금을 상환했습니다. 분기 말 기준 이용 가능한 ABL 한도는 약 10억 6,000만 달러였습니다.
• 지역별 수익성: 경영진은 퍼미안, 멕시코만 연안, 북동부 및 기타 운영 지역 전반에 걸쳐 이익률이 대체로 일관된 수준을 유지하고 있다고 밝혔습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, everyone. Thank you for joining us, and welcome to the USA Compression Partners 2026 Third Quarter Earnings Call. [Operator Instructions] This conference is being recorded today, November 3, 2026. I now would like to turn the call over to Clint Green, President and Chief Executive Officer.

Micah Green

Good morning, everyone, and thank you for joining us. With me today is Chris Paulson, Senior Vice President and CFO; Chris Wauson, Senior Vice President and COO; and other members of our leadership team. Earlier today, we released our operational and financial results for quarter ending September 30, 2026. Today's call will contain forward-looking statements based on our current beliefs and certain non-GAAP measures. Please refer to our earnings release and SEC filings for reconciliations and definitions of non-GAAP measures and related risk factors. Moving to the quarter. performance reflects the resilience of our business and strong execution from our team.

We delivered sequential growth in revenue, adjusted EBITDA and distributable cash flow while average revenue-generating horsepower revenue per horsepower, total revenue and adjusted EBITDA each reached record levels. Distribution coverage remains strong and leverage stayed near our stated target. We are tightening our full year DCF guidance to a new range of $495 million to $505 million, reflecting 2026 cash flows in line with our overall expectations entering the year.

We are also updating adjusted EBITDA guidance $770 million to $780 million, reflecting higher commodity-linked operating costs lower overall retail parts and service activity and some strategic shifts related to manufacturing cash sales. Importantly, our core contract operations business remains strong, and our guidance update does not reflect a downward shift in this demand. Putting performance in the context of the broader market, higher oil prices over the past 9 months have strengthened customer balance sheets but have not led to a broad increase in oil-directed drilling activity. At the same time, domestic consumption and natural gas, excluding LNG, is still waiting on material data center growth to ramp in the Northeast and Texas. Put simply, our 2026 results have been driven by execution.

From here, we expect near-term growth to remain in system but measured Higher oil prices remain constructive, but uncertainty persists around duration. While incremental natural gas demand continues to build with a greater impact expected in late 2027. Overall, macro fundamentals remain healthy, while the underlying demand drivers build toward more meaningful acceleration in 2028. In compression supply remains tight contracting activity remains healthy and growing natural gas infrastructure needs provide a compelling long-term growth opportunity. Our approximately $500 million aggregate new unit order book through 2029 reflects our confidence in the durability of the opportunity and our ability to capitalize on.

As we enter 2027, we believe our newly integrated platform will be in an even stronger position to execute. We have a broader customer base, more opportunities to high-grade the portfolio and greater flexibility to direct equipment and capital toward the most attractive returns, including the ability to ship manufactured units between cash sales and our contract compression fleet as opportunities evolve. Combined with the execution we have demonstrated this year, we believe that scale and flexibility position us to win across market cycles.

With that, I will turn the call over to Chris Watson.

Christopher Wauson

Good morning, everyone. To start, through a period of significant organizational and operational change. Safety has remained our top priority. Our safety metrics continue to compare favorably with industry benchmarks reflecting the continued focus of our teams on the processes and standards that support safe, reliable service for our employees and customers. That commitment is fundamental to how we operate. Next, Commercial execution was strong during the third quarter. Customer demand remained consistent while unit stops moderated, contributing to a 30 basis point increase in utilization since the end of the prior quarter. More than 60% of our new horsepower scheduled for delivery in 2027 is now contracted, including approximately 90% of first half deliveries.

Importantly, we have built this order book while maintaining our commercial discipline, engaging our Tier 1 customers and continuing to improve the credit profile of our cash flows. Our pending contract and quote pipeline remains robust, and we continue to see opportunities progress toward executed contracts. Pricing across the broader portfolio also remains constructive, as we delivered solid 1% sequential rate growth during the third quarter despite increased competition from smaller operators in certain markets. We continue to take a disciplined approach to pricing while working to maintain a healthy commercial pipeline.

Customers continue to prioritize dependable equipment, strong field service and a compression provider with the scale and capabilities to support multiyear development plans. To better serve those needs, we will continue to enhance our ERP platform business applications and analytics capabilities. A significant step forward came on October [indiscernible] First, when we completed the integration of the legacy JW compression units into SAP, this brings our operational teams on to a more consistent framework from maintenance activities, inventory management and performance reporting while providing greater data and performance visibility across the fleet.

With most core integration work behind us, we are increasingly focused on operating as 1 organization in strengthening the capabilities of the combined company. That includes greater use of analytics and intelligence tools as well as a planned investment in larger, more standardized training facility in the Dallas-Fort Worth area. By moving our facility from San Angelo to Dallas, we will have a more centralized location to train and upskill our people, promote greater consistency across the organization and create additional opportunities for employee development. We continue to navigate higher fluids, fuel and other commodity linked costs, monthly lube oil costs exited the quarter approximately 25% higher than in the first half of the year. While diesel prices reached an all-time high in September.

These increases weighed on our second and third quarter results but were largely offset by strong synergy capture. Nonetheless, they present a near-term headwind that is not currently reflected in pricing to our customers. Additionally, labor costs across the industry have increased at a faster rate than anticipated with the higher cost base is largely incorporated into our third quarter results. Despite these pressures, we remain focused on disciplined execution in the areas we can control. and continue to look for opportunities to get the most out of the combined platform.

With that, I'll turn the call over to Chris Paulson.

Christopher Paulsen

Thanks, Chris. For the third quarter, total revenues were $357.2 million compared to $250.3 million in the prior year period, an increase of approximately 43%. Contract operations revenue was approximately $308 million, driven primarily by the addition of the barn horsepower and higher average revenue per revenue generating horsepower Retail parts and service revenue was approximately $30 million, including sales to affiliate parties and benefited from the timing of certain manufacturing unit sales that occurred in September rather than the fourth quarter.

Third quarter net income was $47.3 million, operating income was $102.2 million. Net cash provided by operating activities was $117.7 million and cash interest expense net was $47.3 million. Adjusted gross margin percentage was 62.2%, down modestly from the second quarter, primarily reflecting the commodity like cost pressures and a higher mix of parts and service revenue during the quarter. Turning to our operating metrics. Total fleet horsepower at quarter end was approximately 5 million-horsepower. Average revenue per revenue generating horsepower per month was $23.14 up approximately 1% sequentially and 8% from the prior year period.

Average revenue-generating horsepower was approximately $4.48 million and average utilization was 92.1%, slightly higher versus the prior quarter. Third quarter expansion capital expenditures were $87.7 million and maintenance capital expenditures were $18.5 million, Expansion capital primarily reflected the new units and reconfiguration supporting the growth of our contract compression fleet, while maintenance capital remained consistent with the needs of our larger fleet. Turning to guidance. As Clint discussed earlier, we are tightening our full year distributable cash flow guidance to $495 million to $505 million.

Lower cash interest expense and cash taxes are helping offset a portion of the pressure reflected in our cost outlook, leaving our cash flow outlook in line with expectations entering the year. We are narrowing our full year adjusted EBITDA range to $770 million to $780 million from $770 million to $800 million. The revised range reflects the higher operating costs Chris discussed as well as softer retail parts and service revenue than previously expected. We continue to expect maintenance capital expenditures of $60 million to $70 million and expansion capital expenditures of $230 million to $250 million inclusive of the modest deposits tied to limited 2027 new unit orders for third parties.

Leverage for the quarter was 3.78x and remained in line with our 3.75x target during the quarter, even as we accelerated capital spend and certain financing costs. In September, we issued $600 million of 6.75% senior notes due to 2035 and used the proceeds to reduce the borrowings under our ABL. This issuance at near historically tight energy spreads and a 10-year treasury rate much lower than today, enables us to remain patient in addressing our March 22 maturities. At quarter end, we had approximately $1.06 billion of available capacity under the ABL facility, providing meaningful liquidity and financial flexibility to execute against our longer-term capital allocation priorities. Those priorities remain consistent, supported sustainable distribution, invest in attractive organic growth opportunities that grow our underlying net asset value and maintain a prudent leverage profile, while preserving the flexibility to pursue compelling inorganic opportunities within that framework.

And with that, I'll turn the call back to Clint for concluding remarks.

Micah Green

Thank you, Chris. Before we open the call for questions, I want to thank our employees for their continued hard work and dedication throughout a year of significant progress and for their willingness to embrace and elevate USA Compression's culture of safety, and putting our customers first. Their efforts and execution are what continue to drive our success, and I'm thankful for our entire team. With that, I will open the call up for questions.

Operator

[Operator Instructions] Your first question comes from the line of Douglas Irwin with Citi. Doug.

질의응답

Douglas Irwin

Thanks for the question. I wanted to start with some of the contracting activity you talked about during the quarter. Could you maybe just provide a bit more context here about kind of how your customer conversations are progressing? Are you maybe seeing a little more of a sense of an urgency from your customer base here now that we're a bit deeper in a longer time environment and the demand outlook here seems to keep expanding pretty quickly.

Micah Green

Doug, this is Clint. I'll start off, and then Chris Wauson may chime in here. we're seeing customers with the long lead times, customers are working to get their contracting done sooner. There's they -- when you're talking about 4 years to get a compressor 185 to 200 weeks, somewhere in there to get an engine, there's definitely an urgency to make sure they have equipment for what's going -- what's coming down the pipe. When you're talking about demand growth between now and 2029, 2030. So yes, I would say we feel like there's an improvement there. Chris, you want to add?

Christopher Wauson

To add a little bit to that, maybe said a different way, too. So with the tight supply and long-term planning cycles, customers are securing horsepower further out, but not for specific locations. It's more of a they're running off a forecasted growth curve, so they're trying to get horsepower to meet those curves just not 100% sure where it's going to end up.

Douglas Irwin

Got it. That's helpful. And maybe a follow-up. It sounds like JW synergies were maybe a nice tailwind on the quarter, helping offset some of the cost inflation -- just curious now that integration is complete, if you could maybe just provide an update on where you might be trending versus some of the initial synergy guidance you laid out and if that could keep you any kind of a nice uplift on gross margin here in the next year.

Unknown Executive

Yes, Doug, I think you said it well. I think many of these synergies were captured in our Q3 numbers that remain opaque and will probably show up when commodity driven input costs fall. Right now, given where we were with our fuel cost, with our lube cost and those relative increases you're not able to see those synergies take effect and then the way in which a lower commodity price environment, you may see it. As it relates to 2027 synergy guidance, we don't have anything at this stage other than as we've noted within 1 of our filings this quarter, we did invoke some DCS synergies that we anticipate for next year associated with moving contract compression to MLP status and the related cost savings there on the DCF front.

Operator

Your next question comes from the line of Jim Rollyson with Raymond James.

James Rollyson

Just kind of circling back on the margin question. I guess, Glen, if you think about where costs are today for fuel and new oil and things like that and some of the JW integration impacts. I think it was mentioned on the call in the prepared remarks that your contract pricing today is not really reflecting the higher costs? Like how do you think through this, if oil prices look to say, remain elevated through next year, how long does it take to actually start seeing your ability to capture that in rates and actually show margin improvement?

Christopher Porter

That's a good question. We start off and talk about margin. We knew when we brought in the JW acquisition that we were going to see a little bit of margin degradation from our normal contract business. With that said, it was a very small percentage. And then if you look at our contract compression, those margins remain very well. But when you have the higher inputs of third-party sales and AMS that we had for this quarter, that pulls our margin down. Now when you're looking at going through next year with higher commodity prices, we will start to push some of that out with escalators as we move forward into next year. But I don't -- I mean you hit the nail on the head. It's -- it's really hard to know where oil prices are going to be through next year, crude oil prices driving blue boil prices. there's a volatility there that we're doing the best we can to prepare for.

I don't know, do you want to add anything to that?

Unknown Executive

Yes. No, just to maybe add a little bit more around just keep in mind, our core contract services business is slightly above Q1. So despite increases from our commodity line costs, operations is executing very well, and we're super pleased with where we're at, that we have horsepower coming month-to-month. So there's our ability to grab some more rate increase. We're doing that as those contracts come and we renew new contracts. So that -- there is a little time delay. So keep in mind, it's not immediate. So there's 2 or 3 months there where there's -- we want it sooner, but sometimes it's just the nature of the beast.

James Rollyson

Understood. No complaints just waiting for that kind of coiled spring effect that seems to be building. And maybe for Chris, I know you're not giving guidance for next year, but as I think about growth CapEx for 2017. I guess we should be just thinking about the kind of 2.5% annual fleet growth that you kind of laid out a quarter ago and maybe would ever pick your price on cost per horsepower is kind of the right place to triangulate. .

Unknown Executive

That's right. I think ultimately, we'll provide that guidance in a few months, and that guidance will be predicated to some extent on timing of deliveries and those timing of deliveries are still fluid. But as we laid out, Jim, 2% to 3% is the right number. And we'll also look at the respective cash sales that we'll consider with manufacturing as well. We're talking to our customers, both on the cash fell front, the contract compression front and then ultimately, we'll decide on the final contract compression numbers that will go on to the growth capital.

Operator

Your next question comes from the line of Elias Jossen with JPMorgan.

Elias Jossen

Maybe if we just think about the optionality to extend term a customers. Are you guys kind of seeing that? Are they looking to sign longer contracts? And how do you kind of balance that with elevated spot prices? And how have those conversations kind of evolved in the past year or so?

Christopher Wauson

Yes. Thanks for the question. It's Chris Wauson. To address that, our customer conversations, we're targeting anywhere from a 2 to 6, 7-year term, right? So it just depends on how things are looking from a customer standpoint, there where they're at in their cycle and that couples with ours as well. So we are still having great contract term lengths. I'm not going to say that it's all 5-year terms, but there are some 2- and 3-year terms out there that we are taking. So it's still very positive. The commercial team is doing a great job with keeping our term secured.

Elias Jossen

Awesome. And then I know that kind of leverage continues to trend positively in coverage as well. So -- can you just remind us kind of what the bogey is if you were to start to think about a distribution hike and how that fits into your kind of broader capital allocation framework heading into next year.

Unknown Executive

We don't have a bogey per se in terms of the distribution hike. As we look at our capital allocation framework, we look at our opportunities to invest within the core business. The core business remains extremely strong. we've been able to increase that relative growth in the anticipation of a 2% to 3% annualized look, not only next year, but going out a little bit further. So if through 2029 into 2030, our opportunities to invest in the business allow for us to have returns that are far in excess of our cost of capital. We're going to look very strongly in investing in those.

Our near-term leverage target is around 3.75x. We're there. We need to continue to evaluate whether or not that's the appropriate target through cycle as our business grows in size and capacity. And then we need to have those discussions in concert with our Board as to our distribution. We've been very pleased to see that distribution coverage continue to increase. It's increased quite a bit since I walked in the door in November 2024. That's largely through the efforts of the team here and the team in the field. And so to see our numbers and the move from the [indiscernible] range is a terrific outcome for the company, and we're really pleased at where we are -- the other thing I'd point to is we are delivering and returning capital to our unitholders in a way in which other companies within the space just are not -- and plainly, we're not only derisking the business and doing it in the way in which we do it today, but we're also realizing the excess returns associated with growing the business as well.

So we keep all that in mind as we try to triangulate around the right answer. I think it's a great question. It's 1 that's a fair 1 to continue asking. And we continue asking ourselves the appropriate way in which to allocate capital over the next many years, and some of that is somewhat dependent upon where you think you are in the cycle of the compression business within the lower 48.

Operator

Your next question comes from the line of Nate Pendleton with Texas Capital Bank.

Nathaniel Pendleton

With the improved geographic outlook and really the depth that JW has provided. Can you talk about how margins compare when we look at the Permian versus other areas such as Gulf Coast and Northeast.

Unknown Executive

Yes, Nate, it's Chris. Good question. I will say that our margins are actually pretty consistent across the company. So there's not really 1 region way ahead of the other. We do a great job. Operations has our culture across the company. That message is the same and consistent across the entire organization. So our operating philosophies are much aligned across the entire U.S. So I'm super proud that our margins are very consistent across this business.

Nathaniel Pendleton

Got it. And then staying on the additional capabilities you guys brought in-house with -- specifically on the parts and services side, can you talk about the growth outlook there and how margins are trending, given some of the shop space that you alluded to in your prepared remarks? .

Unknown Executive

Yes. So growing that business does affect our historical contract services margins. So -- we look at it as a positive. The more we do there, that's more EBITDA contribution in DCO. So we look at it as very meaningful and impactful to the business.

Unknown Executive

It's an area where, overall, there is a focus on growth going forward. As others in our space of experience, the ability to ramp up through this year has been a little bit slower going, and we noted that within the quarter. As we look towards next year, it continues to be a focus. And I think that focus will really be somewhat dependent on commodities to people continue to defer some maintenance that's out there. Do folks ultimately ramp up the parts side of the business, which we very much have a focus on. I think it's a natural area and taking in JW that we felt like we ultimately could start to move the needle on.

So that will be a part of focus for next year. But ultimately, we're seeing companies at $95, $100 oil continue to run equipment harder for longer. And at some point, I think that will start to bear out in terms of more consistent parts and service revenue on a go-forward basis. But again, it's a lumpier side of the business, as Chris alluded to, dependent upon the manufacturing contribution of the business, the parts and service contribution in the business our ultimate operating margin may vary from quarter-to-quarter, and we're still appreciating that difference in terms of how the complexity of that difference relative to our legacy USA business pre JW.

Operator

There are no further questions at this time. I will now turn the call back to Clint Green for closing remarks.

Micah Green

SP.

Yes. As always, we really appreciate everyone joining our call. We're super proud of the execution that we've accomplished this year with lots of change. and integration and moving to a new ERP platform. So we're really happy with where we're at, and we're happy about there. We're excited about the future for -- through 27, 28 years beyond. -- today, today, we get to exercise our right of Americans to go vote. So if you haven't done that, go vote, and thank you for joining our call.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.