Good day. And welcome to Labcorp's Q3 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, this call is being recorded. I would now like to turn the call over to Chas Cook, VP, Investor Relations. Please begin.

Thank you, operator. Good morning and welcome to Labcorp's third quarter 2021 conference call. As detailed in today's press release, there will be a replay of this conference call available via telephone and Internet. With me today are Adam Schechter, Chairman and Chief Executive Officer; and Glenn Eisenberg, Executive Vice President and Chief Financial Officer. This morning, in the Investor Relations section of our website at www.labcorp.com, we posted both our press release and an Investor Relations presentation with additional information on our business and operations, which include a reconciliation of the non-GAAP financial measures to the GAAP financial measures discussed during today's call. Additionally, we are making forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the estimated 2021 guidance and the related assumptions, the projected impact of various factors on the company's businesses, operating and financial results, cash flows and/or financial condition, including the COVID-19 pandemic and general economic and market conditions, our responses to the COVID-19 pandemic, future business strategies, expected savings and synergies and opportunities for future growth. Each of the forward-looking statements is based upon current expectations and is subject to change based upon various factors, many of which are beyond our control, that could affect our financial results. Some of these factors are set forth in detail in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements even if our expectations change. Now I'll turn the call over to Adam.

Thank you, Chas. Good morning, everyone. Thanks for joining us today. At Labcorp, we continue to leverage innovation, science and technology to accelerate our strategy as we work to improve health and improve lives around the world. We serve as a trusted source of health information that helps customers advance health care and guide medical decisions. At the same time, we've remained focused on helping the world through the pandemic. In the third quarter, we delivered strong results. Revenue totaled $4.1 billion, adjusted EPS reached $6.82, and free cash flow was $650 million. As a result of our strong performance and our improved outlook, we're raising full year guidance for revenue, adjusted EPS and free cash flow. Glenn will cover those in more detail in a few minutes. The Base Business for both Diagnostics and Drug Development performed well with 10% and 22% growth, respectively. We saw consistent recovery across both businesses. In Diagnostics, we experienced broad geographic recovery in our Base Business and across our testing portfolio. Esoteric and routine testing demonstrated solid year-over-year growth for the quarter. The trailing 12 month net book-to-bill for Drug Development remains strong at 1.34. Drug Development continues to recover with nearly 85% of sites now open. The business also saw decentralized trials increasing by more than 50% versus prior year. Now I'd like to turn to our ongoing role in the pandemic response. Labcorp continues to support the fight against the pandemic in every way possible through both our diagnostic and our drug development capabilities. We experienced greater-than-anticipated COVID testing volumes in the quarter, although levels were below the same period last year. Time to results for COVID test remains an average of one to two days, with results typically available within one day. PCR testing volume averaged 85,000 per day in…

Thank you, Adam. I'm going to start my comments with a review of our third quarter results, followed by a discussion of our performance in each segment and conclude with an update on our full year guidance. Revenue for the quarter was $4.1 billion, an increase of 4.3% over last year due to organic growth of 3.4%, acquisitions of 0.4% and favorable foreign currency translation of 50 basis points. The 3.4% increase in organic revenue is driven by a 10.2% increase in the company's organic Base business partially offset by a 6.8% decrease in COVID testing. Operating income for the quarter was $767 million or 18.9% of revenue. During the quarter, we had $92 million of amortization and $48 million of restructuring charges and special items. Excluding these items, adjusted operating income in the quarter was $907 million or 22.3% of revenue compared to $1.2 billion or 29.7% last year. The decrease in adjusted operating income and margin was due to a reduction in COVID testing as well as higher personnel costs resulting from increased Base Business demand and a tight labor market as the company continues to invest in its workforce. Partially offsetting these headwinds were the benefit from organic Base Business growth and LaunchPad savings. The tax rate for the quarter was 23.5%. The adjusted tax rate, excluding restructuring charges, special items and amortization, was 24.4% compared to 25.7% last year. The lower adjusted rate was primarily due to the geographic mix of earnings. We continue to expect our full year adjusted tax rate to be approximately 25%. Net earnings for the quarter were $587 million or $6.05 per diluted share. Adjusted EPS, which exclude amortization, restructuring charges and special items, were $6.82 in the quarter, down from $8.41 last year. Operating cash flow was $767 million in…

Our first question comes from Ann Hynes with Mizuho. Your line is open.

Hi, good morning.

Good morning, Ann.

So I know you're not providing 2022 guidance, but could you maybe provide some high-level thoughts on headwinds and tailwinds for each business going into next year? And in that context, maybe address any labor inflation pressures that we should consider while we're modelling? Thanks.

Sure. Good morning. Ann, again, we're not, as you said, providing guidance for 2022, but as I look at 2022, I think there are things that you've seen this quarter that you can kind of start to think about 2022. First of all, the Base Business for both Drug Development and Diagnostics is rebounding well. And if you look even for the first couple of weeks of October, that rebounded from where we were even in September. So we would expect the Base Business to continue to improve. At the same time, we've said before, we actually have several things that we're looking at when it comes to cost. One is we kept our headcount at a level that is higher than we typically would to ensure that we're prepared for whatever scenario could occur with COVID. And by the way, I'm glad we did that. If you would have gone back to the second quarter where we averaged 55,000 PCR tests, there was good reason to say we should reduce headcount because we saw tests going down. We didn't do that. And then when the tests came to 110,000 or so per day in the month of September, we still had a one day turnaround time for the majority of tests. So we're going to continue to keep our labor costs a bit higher based upon number of people to ensure that we're prepared for any scenario. And that's for both Diagnostics and Drug Development. I said Drug Development continues to rebound. 85% of sites are now open, but that still means 15% of sites are not open. We're continuing to keep that headcount because these people are hard to retain, they're hard to train, and we believe the business will come back. Separate and distinct from that, we…

Okay, great. Thanks.

Sure.

Our next question comes from Jack Meehan with Nephron Research. Your line is open.

Thank you. Good morning, guys.

Good morning, Jack.

On the strategic review, if you'll humor me, you're now, I think, around nine months into the review and expect to conclude this quarter. Are there still significant items at this point related to the business structure which are being evaluated? And what's your level of confidence that one way or another, you're going to be able to find a way to get better credit for the value of the businesses versus where your peers trade? And then just one procedural point. Any comment on what type of form you're going to choose for disclosing the results?

Yeah. So let me give you some additional context. And I appreciate the question, Jack. So first of all, I want to start off by saying that we believe that there is intrinsic value in Labcorp that's yet to be realized, we believe that. And we're working closely with our outside advisers, and we have several of them. And we're also working with our Board of Directors to evaluate our structure and capital allocation as you know. We are making significant progress to ensure that we find a way to best position Labcorp on lap the shareholder value. I can tell you, Jack, we are performing a very thorough and a very thoughtful analysis. And it just takes time to fully assess all of the alternatives, and we continue to assess all of the alternatives. Though we're not giving any additional updates today, we are looking forward to share the conclusions once the review is complete, and we still expect that to happen in this quarter. We haven't - I want to reach the conclusions, and then we'll figure out exactly how we communicate it on a very broad, direct basis. So as we reach the conclusions, then we'll think about how to best broadly communicate our decisions.

Great. Then one on the business in the quarter. Just wanted to talk about bookings in Drug Development. The trailing 12-month metrics look good, but my back-of-the-envelope math would suggest the quarterly awards were down year-over-year. So just curious how you're feeling about RFP flow in the quarter and win rates. Anything you would call out, which would make the year-over-year comparison look negative?

Yeah. I'll give you some context, and then I'll ask Glenn to provide additional context. So we still have a strong book-to-bill, it was 1.34, and we've always said that a 1.2 or above gets you high single - mid to high single digit growth. So anything above a 1.2, we think, is a very strong book-to-bill. And I've said time and time again, I wouldn't read too much into one quarter. I look at the trailing 12 months because it gives you a better understanding over time. And with book-to-bill, it could be lumpy. So you could fall in one quarter this year and fall out into a different quarter versus next year. So the quarterly, we try to watch carefully, obviously, but I wouldn't draw too many conclusions from one quarter versus another. What I look at is the RFPs, which continue to be very strong, and we continue to do very well as we go through the RFPs. So if you look at the trailing 12 month net orders, they were $7.8 billion. They were up 27% year-over-year. And if you look at the backlog, it was $14.4 billion. That increased by over $100 million in the second quarter, and that was up 15% year-over-year. So I think there's still strength there that you can see. But again, I focus on the trailing 12 month and I think above 1.2 is where you want to be. I don't know, Glenn, if you want to talk about some of the quarter fluctuations.

Yes. And Jack, in our remarks, we talked about this change in scope that we had that was $150 million that obviously negatively impacted the quarter. So as Adam said, when you put it in the perspective of the trailing 12 months, it gets kind of rounded out, if you will. We still have strong levels of backlog, strong levels of orders. To your point, while our orders on a trailing 12 would have been up around 27% year-on-year, including the scope change for the quarter, we would have been down slightly, down around 4%. However, what's interesting is that we actually received the order in the third quarter of a year ago. So it really has kind of a double effect. If you back it out of the year that we received it, the third quarter, and you take it out of now the change from the third quarter of this, would actually would have been up around 13% in orders, excluding it for the quarter. So it still reinforces, frankly, from our perspective, why we really focus on the trailing 12 because even with the volatility, you really get a sense of the true growth and the future potential of the business.

That will make sense. Thank you.

Our next question comes from Kevin Caliendo with UBS. Your line is open.

Thanks. And thanks for taking my call. I want to talk a little bit about the M&A pipeline. You obviously are excited about it. Are we talking about more focus in diagnostics, are we more focused in clinical? Take me through sort of where the opportunities lie. And are we talking about technologies on the diagnostics side or market share? Can you - any more color on what the pipeline looks like now and how it might be different than what it was a year ago or two years ago?

Yeah. Sure, Kevin. Good morning. First of all, we remain excited, as you said, about the pipeline that we have. And we continue to see the ability to acquire hospital, local, regional laboratories, and that kind of makes a lot of sense. They're accretive in the first year, typically. They return their cost of capital very quickly, and we know how to integrate those, and we see significant potential for that as we go through this year into next year. I've said before, those sometimes take longer than I would expect, but the good news is that we continue to have a very strong pipeline. And I'm confident that we're going to have some really interesting things that we can do with regard to those types of acquisitions. Then we look for strategic acquisitions, and those can be something like Ovia, where it's a digital platform that enhances our capabilities in technology and digitalization, but it's also in a very important high growth market where we have a very strong share in women's health. And then you look at things that we've done before, like SnapIOT or GlobalCare, where it gives us strategic capabilities in drug development. I mentioned that the decentralized clinical trials that we're doing were 50% higher year-over-year, and we're going to need more capabilities and more technology in areas like that. So I kind of separate it into three buckets. The diagnostic laboratory acquisition opportunities, then the strategic opportunities for both diagnostics and for drug development, and we've got multiple different things that we're looking at in each of those areas.

Has anything changed from the seller's perspective, in your opinion, around the diagnostics, the hospital acquisitions and the like? Is their environment tougher or are they - are you being more aggressive? Has anything materially changed in terms of the buy, sell algorithm?

Yeah. I think their environments are tough. I also think that with COVID, they've realized they had to update a lot of their machinery in order to do the COVID testing if they want to do it in a hospital. They had to take a look at how they were using their capital. And they realized that running their laboratory might not be core to what they do every day, and they probably would do better if they had another surgical operating suite or put their money towards something like that versus updating laboratory equipment. So as we have more and more discussions with the hospitals and hospital systems and local laboratories, I think the realization is that diagnostics does take capital, in order to have the right machinery, you have to run that machinery often to get the best output and margins through running that type of equipment; and that we can do it extraordinarily well for them. So I think all 3 of those things have led to us having a more robust pipeline now than what I've seen in the past.

Is there any - just one quick last follow-up to that. Is there any impact that your M&A pipeline has on the strategic review or vice versa? Meaning, can you run both of those separately? Or are they any way intertwined?

Yeah. So we're continuing to execute on our strategy today, and we're doing a very thorough and thoughtful strategic review. We're making sure that, of course, we consider both as we move forward, but it's not getting in the way of us doing what we need to do to run our business and be successful, execute in the marketplace today. And hopefully, what you see when you look at our numbers is that we're executing extraordinarily well in both Diagnostics and Drug Development. And we're continuing to do M&A as we showed with what we bought from Myriad for the rheumatoid arthritis drug, Ovia, OmniSeq. But at the same time, we're making progress on the strategic review.

Okay, thanks so much.\

Our next question comes from Ricky Goldwasser with Morgan Stanley. Your line is open.

Yeah, hi. Good morning. So clearly, there - COVID is going to be the biggest swing factor, Adam, to your point next year. But how should we think about what's the right earnings base to think about for next year? I think maybe for us, could be easiest if you can exclude sort of the impact of COVID this year and kind of we start what's the right baseline for next year? And then also, I know you haven't provided sort of long-term earning targets for some time now. Is this going to be also part of the strategic -- unveiling the strategic review? Will you give us long-term growth goals?

Yeah. Thank you, Ricky. Good morning. So first of all, as baseline, I tend to look at 2019 and go pre-pandemic. And then I look at what the growth would have been if everything was normalized. And that's kind of just how I think about how to grow the Base Business as we move into the future. I'd be very careful comparing versus 2020 or 2021 because the Base Business was recovering, the COVID testing was different. For example, as we saw COVID testing grow significantly in September, we saw an impact on the Base Business in September. It was slightly less than August. Now we see COVID tested less for the first couple of weeks of October. We've seen the Base Business now nearly flat to where it was in 2019. So using 2020, 2021, I'd say you have to be really thoughtful and careful with that. I use 2019 as the baseline to figure out where we should kind of get from a normalized perspective as we look at next year. And then with regard to long-term guidance, we're looking at everything as we go through the strategic review, and we're discussing all options for structure as well as capital allocation and how we communicate those things. So we haven't reached a conclusion on that, Ricky, but I can tell you, we are considering all of it.

Okay. And then just one follow-up, I think you mentioned that the Base Business is almost flat versus 2019. What are the sort of the variability between the different geographic regions? And when we think about 2019, is that sort of the 2019 exit run rate or just on a full year basis?

Yes. Ricky, it's Glenn. As we've seen even currently, so you can use it as a run rate or you can look at it for the full year, both businesses' top line revenues are kind of at the high end of historical levels compared to '19. So we really feel good about the current levels of performance. What's interesting and unique, and I think a little bit to your question within the Diagnostics business, is that we're keeping our revenues at the same level of growth compared to '19, but we're doing it through price/mix because effectively, our volume levels have been plus or minus relatively flat to '19. So as we go forward, obviously, we would expect volume to continue to tick up and go above '19 levels but obviously, see a corresponding decline, if you will, in tests or price mix, which has been driven by tests per session that have been higher than normal given people have had fewer visits. But overall, to Adam's comment, as we look to pre-pandemic levels, both businesses are kind of tracking well to it, albeit, you can argue, the mix of how we're getting there is a little bit different.

Thank you.

Our next question comes from Justin Bowers with Deutsche Bank. Your line is open.

Hi. Good morning, everyone. Can you just give us an update on kind of the mix of COVID or vaccine-related orders or backlog for Drug Development?

Sure. Good morning, Justin. The first thing I'd say is that's important because as you think about last year, we had a significant amount, between 10% and 15%, that we discussed of the book-to-bill on COVID. And a lot of those studies were in third and fourth quarter of last year, and they happened very quickly because everybody was working as fast as they could to enroll those trials, get the results of the trials so that we can get the vaccines and the therapeutics to market as fast. So you're burning through those studies faster than you typically would. If you look at where we currently are, the mix is much less COVID right now. It's less than 5%, frankly, of the total that we have for the backlog. So it's significantly less than it was before. We are still doing some work. But again, as you start to think about future comparisons, you just have to remember, third and fourth quarter of last year had significant COVID studies in them.

Got it. And then just in terms of DCTs, any way you can help us -- you can kind of frame the order of magnitude for that? Maybe just what percentage of subjects or trials or new bookings have some kind of DCT component?

Yes, sure. I mentioned that was greater than 50% increase that we've seen. I'd say it's about a third of the new awards have some type of DCT component, if you look at the current quarter, and that's significantly more than it would have been a year ago. But if you look at the total trials that we do, it's still less than 10% of the total trials that have that type of component. So it just shows that as we move forward, having those skills and capabilities are obviously going to be more important. And that's why the acquisitions that we made last year, like GlobalCare and SnapIOT, were so important. We were able to get ahead of where we knew the market or believe the market was going to end up.

Got it. Thanks so much.

Thank you.

Our next question comes from Tycho Peterson with JPMorgan. Your line is open. Q –Unidentified Analyst: Hi, guys. This is Casey on for Tycho. Maybe just going back to COVID volume. So 3Q's average was 85,000 per day, peaking at 110,000 mid-September. Can you give us an idea of what you exited the quarter at and then where you are currently? Just want to understand sort of the step-down you're seeing here in the near term given infection rates. And then what is the high end and low end of your guide assumed for 4Q? And then maybe any kind of 2022 baseline framework that we can use for our models? Thanks.

Yeah, sure. And just to give you a little bit additional history. So in the second quarter, we averaged 54,000 per day. And in the third quarter, we averaged 85,000 per day. But if you just look at the month of September, it was 114,000 that we were actually averaging in September. But as we went through September, we saw that number going down. And if you look at the first couple of weeks of October, we continue to see the number of COVID tests going down. If you look at our guidance, we think it will be somewhere between 50,000 and 70,000 per day as we look at the fourth quarter and where we are currently, and I think that's a kind of pretty good range for you to work within. Q –Unidentified Analyst: Got you. And then just one more on inflation costs. Your largest competitor last week talked about potentially passing some of those costs through to its customers via pricing. Do you have any sort of comments on potentially you guys doing the same? Or is it more about managing inflationary pressures through cost savings?

Yeah. So I just believe that as an organization, you have to continually pressure your cost base, and you have to continually find ways to take out cost. In health care, and I've been involved in health care for 35 years, it's very hard to pass on price increases. And other certain areas within our business where we may be able to, of course, we'll look at that. And if there are opportunities, we would work on those opportunities. But I don't think that's something you should put in your base case. In your base case, I think it has to be how do you have cost reduction initiatives that continue to have the quality that you need, that continue to enable you to retain the people that you have, but also that you can do it more efficiently. So as we go forward, we're going to continue to really find ways to reduce our cost base.

Our next question comes from Ralph Giacobbe with Citi. Your line is open.

Thanks, good morning. I just want to go back to that last question, Adam. You answered sort of for 2021 and maybe purposely didn't talk about 2022. But is there any baseline of a floor that you guys think about on COVID testing? You mentioned sort of that the lows this year, we're still -- or you guys are still doing 50,000 a day. I'd imagine the floor would be lower than that, but I'm not sure if you have some baseline or -- and sort of at-least figure per day? And then just what about reimbursement for next year as you think about sort of COVID and PHE? And then the second question more broadly, the managed care companies are talking a lot more about virtual first primary care offerings. As that sort of developed, how do you think that impacts you? And just give us a sense of your relationship with some of the tele health providers. Thanks.

Yeah, sure, Ralph. Good morning. So I'll start with the second question first. We have a great relationship with the vast majority of the tele health providers. And in fact, we work with them. And technologically, we have most of them where they can be directly working with us through their electronic medical records. So we embrace telemedicine. We think that it's good for health care where it makes sense. And we'll continue to work to ensure that as people get telemedicine, they can also get the appropriate diagnostic testing. And we have a team that is focused on ensuring that we have those relationships and that they work smoothly. With regard to COVID testing, I want to get through this year and see where we end up, and we will provide guidance next year, and it will be a range of potential. It really comes down to a couple of things. Will there be another variant that is not as manageable with the current vaccines? Will you need a different booster in the future? Will antibody testing become more important in order to know if and when people should get vaccines? So I don't want to give numbers for next year. I want to get through this year and see how it plays out. We gave a range, between 50,000 and 70,000 tests per day this year. I also want to see flu season because if you have a high flu season, I believe you'll probably see more COVID testing to the work that we do. Because if somebody is not sure if they have flu or COVID, I think they're going to want to come to us and get an answer as quickly as they can. And we have the at-home collection kit, but also physicians can prescribe a diagnostic test to look at both of those, and our turnaround time is very good. So let's see how this year plays out. Let's see what happens with the flu season. And then when we give guidance for next year, we'll give you an appropriate range.

Ralph, the one other thing, I guess, I would add, too, is that when you think about even the volatility that we experienced this year and the changing in our guidance as we went through, we really had kind of two variables. It's what was the demand going to be and what was the reimbursement going to be. And then obviously, as we kept to see the public health emergency continuing to expand, the pricing kind of just held out. So as we tighten the range, if you will, especially with the fourth quarter, as Adam said, we have a range of testing that we feel as best as we can. Here's a range that we think will happen but with an assumption that pricing will hold. As we think about '22, and again, we'll give you our best guess at that time, but I think it's fair to assume you're going to see a fairly wide range starting out the year because you go back to the uncertainty with regard to both volume and pricing. And again, we'll wait and see and update it, which is, again, to Adam's point earlier, that we'll continue to break out COVID testing separate from the Base Business so you can see the impact of both.

Okay, got it. Thanks very much.

Our next question comes from Brian Tanquilut with Jefferies. Your line is open.

Hey. Good morning, guys. I just want to follow up, Glenn, I guess, to the point that you made earlier on the price mix being one of the key drivers of revenue, right? So on a normalized basis, maybe post '22, because obviously it's going to be noisy and COVID is in the background. But as I think about base, what's the right way to think about your longer-term view on revenue per req? And then I guess, as I look at your guidance here, you're showing the CAGR versus 2019 at 3.64% on the Base Business. Is that a good way to think about this, given broader utilization trends post 2022?

Yeah. No, Brian, I'd say historically, we've always talked about that organic growth -- revenue growth for the Base Business would be, call it, in a 2% to 3% level with, call it, 1% to 2% coming from volume and then 1% from price/mix, which was mostly driven by mix because, as Adam said, assume that pricing, unit pricing, is overall relatively stable. So the view would be that long term, that's where we'll gravitate to. Obviously, we continue to add new innovative tests that could skew it hopefully upward. Obviously, we would add acquisitions to the mix that would skew it upwards. But just the organic Base Business trends, you would expect to see that. So it wasn't surprising that our revenues right now is still tracking at or slightly higher compared to '19 from a revenue standpoint, but we're seeing just an unusually high level of price mix than what we would normally expect to see, call it, in a normal environment.

Got it. Thank you.

Our next question comes from Derik De Bruin with Bank of America. Your line is open.

Hi. This is John on for Derik. I wanted to dig into the pricing for any surveillance pool testing as well as in terms of the volume. I feel like there is been some related announcements from schools in Florida and Texas looking to do some back-to-school surveillance testing. Any updates there?

Yeah. Good morning, John. I think that there are a lot of places that are doing surveillance testing. But typically, they're using the rapid test that you can kind of do on-site. We're not doing a lot of pool testing, although we have the ability to do it. And most of our testing is being done for people that either have symptoms, that have been exposed to COVID. It's much less of the surveillance. A lot of the surveillance work is being done by the other types of tests out there in the marketplace. So as we look to next year, we'll continue to make the service available. We do more of that through our Labcorp Employer Services group than we do through the core Labcorp Diagnostics business when it comes to surveillance. But of course, if there are opportunities out there, we are ready to help with those and serve in those, but it's not a significant amount of the testing that we do today.

Got you. And then if I could just ask one more question. In terms of your esoteric testing, I wanted to ask how the oncology testing volume is trending and if you could provide any color on the uptake for the OmniSeq, the oncology test you launched.

Yeah. So if you look at OmniSeq, we are seeing good uptake with that, although it's not a significant part of our testing overall at the moment. And if you look at oncology testing in general, it's recovered like the other esoteric tests recovered, and we feel that it's getting back to levels pre-pandemic.

Got you. Thank you.

Okay. Thank you.

There are no further questions. I'd like to turn the call back over to Adam Schechter for any closing remarks.

Thank you. So first of all, thanks to everybody for joining us today. And I hope you can see we're encouraged by our progress, and it led to another strong quarter, and it led us to increase our full year guidance again. More than 70,000 employees are going to continue to work relentlessly to achieve our mission to save and improve lives, but also continuing to help the world through the pandemic. So I'm grateful to my colleagues around the world for their dedication and focus. Lastly, if you've not yet been fully vaccinated and are eligible, please stay safe, please get vaccinated, and be careful as we approach the holiday season. Thanks, and we'll be in touch soon.

This concludes the program. You may now disconnect. Everyone, have a great day.