Kinder Morgan (KMI) Q2 2026 earnings call transcript

Thank you, Ted. Before we begin, as we usually do, I'd like to remind you that KMI's earnings release today on this call include forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995 and the Securities and Exchange Act of 1934 as well as certain non-GAP financial measures. Before making any investment decisions, we strongly encourage you to read our four disclosures on forward-looking statements and use of non-GAP financial measures set forth at the end of our earnings release as well as review our latest filings with the SEC for important material assumptions, expectations, and risk factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements.

My remarks for this investor call could really be summed up in four sentences. First, the second quarter was another strong quarter for KMI as both our EBITDA and EPS continued to exceed both prior year and our own budget for 2026 by significant margins.

Second, the natural gas growth store remains very positive as demand for LNG export volumes and gas collective generation continues to grow.

Third, this growth is leading to numerous additional opportunities to build new mid-stream infrastructure supported by long-term contracts with credit worthy customers, and we expect to FID very substantial additional CAPX projects during the remainder of this year.

Finally, and very importantly, we can fund these projects almost completely with our internally-generated cash flow while still continuing to pay a solid and growing dividend and maintaining a debt-to-eat dollar ratio at the lower end of our targeted range. Now, some of you, those four sentences may not make a compelling case for investing in Kinder Morgan, not an exciting enough story, but I will remind you that this unexcited company has, over the last 29 years of its existence, grown its enterprise value at a compound annual rate of approximately 22% while also paying out over $40 billion in dividends.

Now, just maybe that gives us what we say a little bit of credibility, and with that, I'll turn it over to Kim and the team.

All right. Thank you, Rich. We're extremely pleased with our second quarter results. Another fantastic quarter for Kinder Morgan. They've won that reflects both the strength of our underlying business and the outstanding execution of our employees across the company. We significantly outperformed both last year and our budget expectations. Adjusted EBA DOT increased 12% compared to the second quarter or 25 while adjusted earnings per share increased 32%.

Importantly, growth was broad-based with every one of our business segments contributing positively to the quarter's strong performance. Given our results to the first half of the year and our confidence and the outlook for the remainder of 2026, we are increasing our guidance. We now expect full-year adjusted EBA DOT to be at least 5% above our 26 budget and adjusted EPS to be at least 12% above our original budget.

Turning to growth capital, our backlog remains one of the strongest in our history. During the quarter, our backlog decreased from approximately $10.1 billion to $9.6 billion. This decline was primarily the result of successfully placing more than $650 million of projects into service, partially offset by the approximately $200 million of new project additions.

While our sanctioned backlog was down modestly this quarter, today the board continually approved almost $400 million of projects, which are in advanced contract negotiations and will be added to the backlog upon contract execution, virtually offsetting this quarter's decline. In addition, we anticipate, as Rich said, adding significant projects from our over $10 billion opportunity set before year end, likely more than offsetting the approximately $1 billion of projects we expect to place into service during the second half of 2026.

Our three largest natural gas expansion projects that are underway continue to make excellent progress. Mississippi Crossing, South System Expansion 4, and Trident are each progressing on schedule and on budget. These projects represent critical infrastructure supporting increasing electric power generation, growing LNG exports, and broader natural gas demand across North America. For Mississippi Crossing and South System 4, we receive our final FARC environmental impact statement in June and expect to receive our FARC certificates by the end of this month.

An important milestone is both projects move towards construction. Try to continue to advance well and is now approximately 60% complete. Financially, we remain in an exceptionally strong position. Our balance sheet into the quarter at approximately 3.6 times leverage, providing significant flexibility to fund attractive growth opportunities while continuing to maintain our disciplined capital allocation framework.

Finally, I'd like to spend a moment on the broader market backdrop. The fundamental supporting our natural gas business have never been stronger. According to Wood Mackenzie's most recent outlook, U. S. natural gas demand is expected to exceed 160 billion cubic feet per day by 2035. That represents approximately 46 billion cubic feet per day of incremental demand growth compared to 2025.

The primary drivers continue to be increased LNG export capacity and rapidly growing power demand. The scale of this projected demand growth underscores the critical need for the infrastructure we own and the projects we are developing. With one of the largest natural gas transmission systems in North America, a premier portfolio of expansion opportunities, a strong balance sheet, and a highly experienced management team, we believe Kinder Morgan is exceptionally well positioned to continue delivering value for our customers and shareholders for many years to come.

With that, I'll turn it over to that.

Thanks, Kim. Starting with the natural gas business unit, transport volumes were up 7% in a quarter versus the second quarter of 2025. There were multiple drivers for the incremental demand, including increased LNG feed gas deliveries on the Tennessee gas pipeline, incremental demand on our intro state system, incremental power demand along our El Paso pipeline, and greater exports to Mexico.

Natural gas gathering volumes were up 26% in a quarter from the second quarter of 2025 and increased across most of our gathering and processing assets, with the largest impact coming from our Kinder Hawk system in the Hanesville, which was up 54%. As we have continued to say, demand for gas on our pipes remains high and our system remains highly utilized.

Looking forward and consistent with Kim's comments on our shadow backlog, we continue to see significant incremental project opportunities across our natural gas pipeline network. For example, we are in various stages of development on projects to serve more than 10 BCF a day of natural gas demand in the power generation sector and approximately 3 BCF a day in the LNG sector.

In our product pipeline segment, refined product volumes were down 5% in a quarter compared to the second quarter of 2025, and crude and condensate volumes were down 16% in a quarter compared to the first quarter of 25, with most of the decline in crude volumes explained by the removal of double H from service for the NGL conversion early in the third quarter of 2025.

Excluding double H volumes in both periods, crude condensate volumes were down about 5% in a quarter compared to the second quarter of 2025. Regarding Western Gateway, KMI and Phillips 66 are steadily moving the project forward. While progress on our partnership agreements has been significant, the process has taken longer than initially anticipated, primarily due to the complexity of the proposed arrangement.

Our aim is to complete the documents within the next month or two, at which point, assuming satisfactory progress continues, we would plan to FID the overall project. In our terminals business segment, our liquid lease capacity remains high at 93%. Market conditions continue to remain supportive of strong rates and the utilization of tanks available for use is approximately 99% at our key hubs on the Houston Ship Channel and at Carteret.

While the temporary Jones Act waiver has added some market uncertainty, our tanker fleet remains exceptionally well contracted. Assuming likely options are exercised, our fleet is 100% leased through 2026, 97% leased through 2027, and 80% leased through 2028. We have opportunistically chartered a significant percentage of the fleet at higher market rates and have an average length of firm contract commitments of almost three years, and over three years when considering options that are likely exercised.

The CO2 segments saw 10% higher net oil production volumes compared to Q2 and 2025, which was led by a 15% increase in production at SACROC. NGL volumes were 9% higher, and CO2 volumes were 5% higher.

Finally, RNG volumes increased 8% as the significantly improved operations that are driving both greater uptime and hydrocarbon recovery at our facilities continued in the second quarter. And with that, I'll turn it over to David.

Thank you, Jack. We're declaring a quarterly dividend of 29.75 cents per share, which is $1.19 annualized, and an increase of 2% over 2025.

As you've heard, we've delivered record setting, we had a record setting quarter with both net income, attributable to KMI, and adjusted EBITDA reaching record levels for the second quarter. That performance was also meaningfully ahead of our internal expectations with EPS, more than 24% above our budget, and adjusted EBITDA more than 9% above our budget. This follows a first quarter where we achieved similar outperformance, so we've completed a first half of 2026, but that was extremely strong.

For the second quarter, we generated net income attributable to KMI of $867 million and EPS of 39 cents. These are 21% and 22% above the second quarter of 2025, respectively.

Adjust the EPS was 37 cents, a 32% increase from last year, and adjusted EBITDA group 12% from last year. These are very strong results, and as Ken mentioned, it was very impressive that each one of our business units contributed to the year-over-year growth.

The natural gas business saw higher volumes and favorable margins across the Texas interest state network. We also had greater gathering and processing volumes, as well as increased contributions from park and loan services, growth project contributions, capacity sales and utilization increases across multiple assets.

That's business benefited from improved commodity pricing, as well as greater viewing blending volumes and rates, partially offset by lower refined product volumes.

Our CO2 segments saw greater contributions from commodity prices, as well as very nice volume growth, as Daxment mentioned, especially at SACROC, which was up 15% from last year. In terminals, we had increased volumes and rates in our liquids business, as well as favorable commodity pricing, and those were partially offset by some favorable one-time items that we experienced in 2025.

The year date versus 2025, EBITDA has grown 15%, and adjusted EPS has grown by 35%, very impressive growth. So for the full year, 2026, as Kim mentioned, but is worth repeating, we expect to be more than 5% favorable to our budget on adjusted EBITDA and more than 12% favorable on adjusted EPS. That represents more than $430 million of additional EBITDA contribution.

You think this is a clear demonstration of the enhanced value of energy infrastructure in the U. S. , particularly as we suspect we will continue to see growing demand for natural gas across the country.

Moving on to the balance sheet, our net debt to adjusted EBITDA ratio ended the quarter at 3.6 times, which is down from 3.8 at the beginning of the year, and is down from what we've budgeted. And now we expect to end the year at 3.6 leverage as well, and that's down from the budget of 3.8 times, despite spending more on our monument acquisition and increasing our growth capital relative to what we have budgeted. And that's all driven by our EBITDA out performance.

This also puts us well below the midpoint of our target leverage range of 4.0 times. Year to date, our net debt increased $311 million, and I'll walk through a high level reconciliation of how we get to that increase. We generated $3.45 billion of cash flow from operations. We paid out $1.3, $1.5 billion in dividends. We've spent $1.92 billion in total capital, which includes growth capital, sustaining capital, and all contributions to JVs.

And with the monument acquisition of $500 million, it gets you pretty close to the increase in that debt for the year. And I'll turn it back to Kim for Q&A.

Okay. Thanks, David. Ted, if you'll come on, we will take questions.

With the current backlog, what happens to our debt to even dies, it comes down over time as we add incremental EBITDA and the debt balance essentially stays flat. So, you know, right now we're at 3.6, spending, you know, the roughly $3 billion per year debt to EBITDA comes down. At 3.6, if we needed to take that up to fund incremental CapEx and excess of our cash flow, you know, if we wanted to go to four times, you know, it's eight, we have $850 million in capacity for every point in one time. So if we wanted to go up to four times, for example, that's $3.4 billion of incremental balance sheet capacity. So we absolutely have the ability to finance incremental cash flow.

I mean, incremental CapEx stay within our, at the middle, potentially of our balance sheet target range.

And look, I think we expect that we will be adding projects to the backlog. And that's, you know, a lot of that's a really around power. Is the primary driver of those incremental expansion projects?

Bernice, this is Seithal. So just, you know, as you just take a step back and, you know, the way we look at this corridor, what drove the open season is we're seeing not only the demand in the Southeast and the South, but we're also seeing demand through the four state corridor, Tennessee, Ohio, West Virginia, and Kentucky, or we're starting to see a power corridor form.

And so given the interest that we've been seeing out there, our thought was to put out, you know, we know we have a, you know, somewhat of a brownfield opportunity with the smaller case. We are evaluating a larger case, but I think what we're, our objective here, we typically go out with open season with, you know, with anchor shippers in hand, but the market here is still evolving. And so our thought initially was to put the project out of the smaller size, and if the market indicates the need for a bigger one, we can evaluate it. We have the ability to morph this into something bigger if needed.

Hi, Jeremy. I just wanted to pivot towards Permian link if I could. And we just wondered if you could walk through a bit, what you see, the competitive advantages of that project are when do you think you might be in a position to take an FIB?

Okay.

Well, I was to the second one first. Our modus is we have a contract and we go to FID. We are in discussions with customers. As you know, we had an open season. Significant interest in the project. I think what differentiates this project is our, you know, when you look at the NGPL footprint, we basically have a little power cord or forming across the pipeline. But the real differentiator here is the link to storage, and hence the name Permian link. And I think as you see these power opportunities via data centers and organic power growth developed, you know, that 765 KB line is, you know, or caught to prove that. And that's going through there.

So we're starting to see a lot of activity. And that's the foundation for kind of the path that we've picked. Where we are today is we're discussing with our customers in the open season. And as you know, there's lots of interest out of the Permian to get additionally addressed projects. We will thanks in the project if we have contracts that support it with the returns that are acceptable.

I mean, just by the nature of the long leads, I mean, obviously, the sooner we get the contract signed, the faster we can go and start getting the long leads ordered. But still, you know, it's still competitive. But I would see the discussions are going well.

And I was just curious, as you, you know, you look at your project portfolio, what you see is possible out there. Do you see many, you know, other projects in that size, that chunky size, or their smaller projects, just wondering, you know, if you think about these larger projects, do you see more than just like a couple out there?

Yeah, I mean, I think there are, I mean, it's like our existing backlog. They're a handful, are opportunities that have a handful of, you know, the billion dollar plus. And then, you know, a lot of $100 to $500 million projects. So, you know, it's, it's somewhere in terms of size and scope and number of projects.

And then to really square it up, how do you think about the timeline for some of that shadow backlog to convert into FIDs? Is that still kind of a 2026 timeline when you think about these larger lumpier projects? In terms of the $400 million, so that on those, you know, we've got the project designed, we've got the costs.

We have, you know, agreed on commercial terms with the customers, and we are a long way through agreeing on a contract. And so, you know, it's, you know, it's weeks to a month or something, probably before you get contract signatures on those. So, I think, you know, those are at the, on the lip of the cup. And then, you know, your second question was with respect to converting the shadow backlog. And I think, you know, it's hard to predict exactly when, you know, projects are going to be FID.

But as we have all said on this call, I think, you know, one, there is a lot of opportunity. We are not seeing a slowdown in the opportunity set. If anything, you know, we're seeing increases.

And, you know, second, I think we expect to add, you know, significant projects in the back half of this year.

Yeah. So, just, you know, when you look at the NGPL footprint, you've got the, you know, the, the Permian link corridor, if I will, just that 765 KV line. There's a lot of activity there. We've got activity in the market area up in the north. You know, there's a convergence of inquiries coming in. And so you've seen some capacity reservations where we were trying to target that, that demand up in the north, northern half of the northern section of NGPL. Once again, these are all fluid, you know, once you get highly competitive.

But we're, you know, our goal is to try and get these knocked down as fast as we can.

Yeah, this is back. As I mentioned in my comments, I think we've progressed the documents along pretty far. We've made a lot of progress and, you know, we would expect based on what we see right now to FID the project in the next month or two.

Yes, we've got a very significant footprint in the Haynesville. You know, and if you look, I mean, what do you look at? Our numbers or Woodmax numbers, I think we're expecting significant growth coming out of the Haynesville between 2025 and 2030. So, you know, on our number, on Woodmax numbers, it's like seven BCF a day and on our numbers, it's 10 BCF a day.

And this quarter, we're seeing, you know, we're seeing sort of the start of that. Our volumes in the Haynesville were up as backside over 50%. This quarter, I think we averaged 1.9 BCF a day. For the quarter and, you know, volumes got to around 2 BCF during the quarter. And so, over 2 BCF during the quarter. So, we're just when the process of completing a $500 million investment to bring on incremental transport and screening capacity.

And that project is on time and on budget. And my office reminds you, that's another BCF of processing capacity. And we just hit a peak here in June in the Haynesville.

Well, look, I'll talk about Tennessee and the benefits of Tennessee. I mean, you know, ultimately each, I'm not going to talk about Borealis, but I mean, Tennessee's, you know, what we view as an advantage for Tennessee is, you know, it's in our existing corridor. We've got four pipes going through that corridor. There's a developing market through that same corridor.

And we have some capabilities using some of our existing footprint to help facilitate. I think that's, you know, I would call advantage number one for the base smaller project. In terms of access to supply, we can reach back all the way, you know, to the 219, Marshall, Pennsylvania area, which has additional supply points from the southwest.

You've got, you know, some of the traditional supply. You know, when you think about declaring an opportunity, we can even look to link to access to clearing to an area along the way. So supply diversity is there, the south of the Utica. I think, you know, when you look at that diversity, I think that's an advantage. And then you have market advantage, you know, in terms of all the access that you get along the way in that developing corridor. Plus, we can get the, the volumes all the way to our Mississippi crossing project and then ultimately into the southeast. That's, that's kind of the design and the nature of the, of the base plan. So, I think that's, that's it in that show.

Let me say a couple things and I'm going to pass it to Cecil, but there is a clear need for additional expansion in this region. I mean, Georgia power earlier this year filed their large mode economic development report, which showed over 75 gigawatts of potential power demand between now and the mid 2030s. And that is one utility in one state. And so, you know, projects will be competitive on what people come in a couple of this, but you know, our asset position and the southeast market, I think, is, is put up in a great spot between SMG. You know, MSX that we're developing bridge that we're developing our 50% interest in FGT. So, it is, it is an exciting market.

Yeah. And so, Teresa, we're, you know, we're obviously we're evaluating projects to serve the entire southeast, right? And we're trying to see what we can do as highly competitive. So we're obviously very cognizant of that fact, but we feel good about the opportunity set and we're trying to get some of these across the finish line. I would say, in terms of the southeast in particular, it's not just the SMG footprint is we got EEC. We've got other assets in the basin that can help, you know, solve some of these, these long-term needs. And so, the teams are working hard to try and get these across the finish line.

The potential to add volumes in terms of the capacity. We, like I said, when we had the last call, we have capability to bring incremental molecules down. We're in a pretty competitive market here. And so, until we get another contract, I'm not going to comment on that. But we have capabilities to further expand. And I think that, you know, that'll involve some collaboration with other parties. And because it's so competitive, we're just going to stop there.

And how are you mitigating that risk of so? So, one, we're starting to see, you know, we are starting to see pressures on some of the timelines. Obviously, we have relationships with some of these providers, and we're doing our best to make sure we stay ahead of it. Our teams focused on the opportunity sets that we see in front of us.

And we're trying to manage that. We're trying to factor that into our project economics as we're starting to bring these projects across. And the teams just trying to do it. They're doing an incredible job staying on top of all the variabilities. So, I think the way, you know, when we see this developing, we're just trying to stay ahead of the impending, I guess, delaying supply chain that may develop over time.

And I'd say, you know, it hasn't lengthened out that much recently. You know, this has been an ongoing phenomenon. And so, you know, we've been on top of this, you know, since we started doing MSACs and South and so forth. So, it's something that over the last two years, we've gotten very good at taking into account and dealing with.

And as you think about the complexion of the project, are these primarily gas-related, maybe with the exception of Western Gateway, which I assume is included in that billion dollar figure?

The answer is yes, other than Western Gateway, they are primarily gas-related. And what I would say with respect to, you know, what projects they could be, you know, I think that everybody knows the themes is what I would say. You know, where the demand is growing in the areas that need pipeline capacity. And so, I don't think you will be surprised by the underlying drivers of the demand.

And then just go to the balance sheet, maybe for you, David, but just now at 3.6 times, 3.4 billion of capacity from here. You talked about the organic growth potential, which might end up consuming a lot of that capacity, but just curious to check in here on the M&A side and see where that fits in, how you see that landscape today. And if this maybe opens up room to do something larger in scale.

All right. So, you know, on the M&A side, as you know, we announced an M&A deal with last quarter that we have now closed, 500 million.

And that's, you know, consistent with, we've been seeing opportunities of about that size over the last couple of years and have been able to roll them in without an issue because, you know, those come with cash flow and, you know, you don't. So, it's not as diluted to your leverage metric initially given in place, even though. The other thing I'd say about those is that everybody looks at the going in multiple and says, oh, well, you know, expansions better opportunity than the acquisition side. And what I would say about that is you can't just look at the going in multiple on something because, you know, on an acquisition, you get the cash flow immediately on an expansion project, you have a little bit of a drag.

And so you could have a higher going in multiple on an acquisition than you have on an expansion and still have similar IRRs.

And so they all, those things all compete for capital. But right now we don't feel like we are capital constrained at all.

So I think one, you know, obviously in the first quarter, we had a winter storm. You know, we've had some more hospitals. We had, you know, a little bit of which of one time in the second quarter, we don't have that much. In fact, nothing material that I would call one time. And so the second quarter reflects pretty strong performance across the base business.

I also think that, you know, it's debatable whether all of the winter storm is a one time, because I think the system as tight as it is and when you're going to get volatility, you're just going to, you know, the demand for our services and our assets is just going to be greater because it's foreseeable future. You know, I think generally, you know, we try to be somewhat conservative when we project out for the balance of the year. There is some performance that is baked into this guide up for the balance of the year, just not as much as what we saw in the first half of the year given some of the things that happened in the first quarter.

Looking forward, would you expect the pace of converting that shadow backlog to a sanctioned backlog to be faster over the next year or two, a similar cadence or is it too hard to say?

I think it's hard to say when things come to fruition, but I think we see a good line of sight of sanctioning a fair number of projects in the back half of this year. And so, I mean, I think we are bullish on the opportunities of adding. I'd also point out that the 10 billion dollars haven't decreased despite the fact that we added $2 billion and are looking to add at least $1 billion in the back half of the year.

And so, you know, our opportunity set has continued to grow.

To this $1 billion number, I think. I think what Kim is trying to say is we have a lot of opportunities and we expect to do at least that kind of thing, that 1 billion threshold. So I wouldn't take that as that's all we're going to do in the last half of this year. There's a lot of opportunities out there. And I think we're poised to move quickly on them. But again, we have to get the horses and the corral.

So one, I would point out that the CO2 oil production was very strong. That's one of the larger out performers per the quarter versus our versus our budget. We had, you know, SAC rock is year to year to date, up 15% over last year, which is, which is better than what we expected commodity prices. Obviously with the Iran conflict contributed to how performance across multiple assets, across multiple business units. So that contributed in the quarter are natural gas business, both in the Texas interest state and across other inter state systems. Continue to squeeze out additional margins, margins in the Texas interest state business and then capacity sales at greater rates and greater capacity than what we expected in the, in the inter state business.

And so some of those are hard to call for the rest of the year if that's going to continue for the rest of the year. My prices are out of our hands. And so that's probably part of the reason why for the rest of the year, we haven't projected as much out performance for the rest of the year. The relative to what we experienced in the second quarter and can already touched on the first quarter. We mentioned a lot of these.

What I would characterize is kind of non recurring, potentially non recurring. Really a really stronger winter weather relative to historical norms and extended cold periods that led to some out performance across some of our natural gas assets. We had a contract buyout in our terminals group. So some of those are the things that led to a little bit about performance in the first quarter. So for the rest of the year, while we're still expecting that these kind of non recurring items are less than half of our overall out performance for the full year, we've probably taken a little bit more of a conservative guide for the second half of 2026.

Okay, let me let me point out two things. You know, like rich, just what we said, it was at least a billion. And so it could be more than that. Absolutely. And again, I think it's absolutely possible that, you know, the $10 billion we could go above the $10 billion backlog. And so I think we're saying the opportunity set here is just really tremendous.

What is hard to call is the timing of it. And so, you know, we want to be somewhat conservative about calling our timing because you're negotiating with customers and they don't, you know, everybody doesn't always move at the pace that you expect. With respect to Western Gateway, when we talk about the billion dollars, we are not talking about our asset contributions to that.

You know, to the extent that it would be part of the billion dollars, we would just be counting the cash contribution.

Oh, no. So I think it was waiting on capacity. So as soon as we got it up, it pretty much was full. And that's been the case on all of our part projects out of the Permian. They've been pretty full as we've brought the facilities on. So I think, you know, what you're probably seeing is maybe less of the maintenance activity around that also probably contributed to some of that.

But GCX itself has been full.

Yes, Sunil. What I was saying is we are adding a BCF processing capacity, treating capacity. And so we have, you know, right now where we are is our system is effectively full. And so we're offloading any volumes that come onto our Haynesville system. And so we're trying to catch up those off loads or, you know, from a margin standpoint, not as a creative as us keeping those on our own system. So we're adding a VCS of treating capacity. And, you know, if the demand profiles hold up, the production should be there to support it. And we just got to have the capabilities to get it from point A to point B. And so that's all we're saying.

And then, you know, on price sensitivity, I'd say our largest customers have hedge. And so, you know, I would expect that, you know, most of those volumes that we're expecting are going to be price insensitive understood.

And then thanks for your comments on the GCA volumes. I was curious, you know, although there are a number of gas pipeline projects in pipeline, are you starting to see discussion with customers on the next phase of growth in Permian, considering what we are seeing in the commodity market?

Yeah, look, I mean, we are, you know, our Permian link project is just one example. There's a lot of discussion going on. You know, it all depends on where the demand. I think one thing you're seeing now is where the demand is going to show up, is where, you know, that's where the molecules are trying to point.

And so, as those demand centers start developing, that's where those discussions will lead. But, I mean, we are in discussions today with customers about several options out of the Permian.

Okay, thank you all and hope everybody has a good evening.