Good day, and welcome to the Molson Coors Beverage Company First Quarter 2020 Earnings Conference Call. [Operator Instructions]. Participants can find related slides on the Investor Relations page at Molson Coors' website. Our speakers today are Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. Please note, today's event is being recorded. With that, I will turn the conference over to Greg Tierney, Vice President of SP&A and Investor Relations. Please proceed, sir.

Thank you, Eric, and hello, everybody. Following prepared remarks today from Gavin and Tracey, we'll take your questions. [Operator Instructions]. To the extent you have technical questions on the quarter, we will ask that you pick those up with me in the days and weeks that follow. Today's discussion includes forward-looking statements within the meaning of applicable securities laws. Important factors that could cause actual results to differ materially from expectations and projections contained in such statements are disclosed in the company's filings with the SEC. The company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise. GAAP reconciliations for any non-U.S. GAAP measures are included in our news release or otherwise available on the company's website at www.molsoncoors.com. And also unless otherwise indicated, all financial results the company discusses are versus the comparable prior year period and in U.S. dollars. So with that, I'll turn it over to you, Gavin.

Thanks, Greg, and thanks, everybody, for joining us this morning. It's safe to say that the first quarter of 2020 was unlike any other in our company's long history. We came out of a significant restructuring in Q4 of 2019 that was designed to free up resources to invest back in our business. In the early parts of Q1, we saw mounting confidence and enthusiasm for our plans and for our brands internally and externally. But in late February, that was interrupted by a tragic shooting at our Milwaukee brewery. And for the past few months, the entire global economy has been disrupted by the continued spread of coronavirus and the efforts to contain it. In a few short months, the landscape for all businesses has changed, not only for our industry but for all of industry. And so necessarily, the metrics by which we measure our business have also changed. What you will see today is that in the short term, we are making adjustments and no longer measuring ourselves against the 5 components of the revitalization plan that we outlined for the past 2 quarters, which was a demonstration of how we were reapplying savings generated by the restructure. Rather, we are looking at 2 overarching yet simple metrics: firstly, taking the necessary steps to protect our employees and to mitigate the immediate business challenges of the coronavirus; and secondly, positioning our business to succeed in the medium and long term as we enter a new normal. That's the context of what we will discuss today. I do think it's important to discuss what we are accomplishing before the pandemic hit in full force. Before the impact of coronavirus became widespread throughout North America and Europe, we were making progress against the revitalization plan. We continued to invest…

Thank you, Gavin, and hello, everyone. I will first cover the quarter on a consolidated and regional basis then move to our outlook. With the uncertainty in the current environment, we'll all be giving additional forward visibility, including some April volume results, and offering a perspective on how we believe we will be impacted by the coronavirus as we move forward. The April results are just one data point and represent only a portion of the second quarter but do give some visibility to the impact that we're seeing on our business now. We do not expect to continue to give this visibility on future calls. So to recap the quarter. Net sales revenue decreased 8.2% in constant currency. This decline was largely driven by our undershipment position in North America coupled with the impacts of the coronavirus across the entire business. These impacts include volume declines; estimated net sales returns and reimbursements of $31.5 million, resulting mainly from the return of kegs related to the on-premise channel; as well as unfavorable mix. These impacts were partially offset by higher global net pricing. Net sales per hectoliter on a brand volume basis decreased 1.6% in constant currency, reflecting the impact of estimated net sales returns and reimbursements related to the on-premise impacts of the coronavirus as well as unfavorable mix, partially offset by positive pricing. While we continue to deliver positive pricing in the quarter, our mix was unfavorably impacted by the various market dynamics and consumer shifts caused by the coronavirus. Specifically, the shutdown of on-premise locations, as well as timing of when stay-at-home orders went into place across our various markets, had an adverse impact on geographic mix. And notably, as many of our higher-end products are skewed towards the on-premise, the closure of these establishments had an…

[Operator Instructions]. Our first question today will come from Andrea Teixeira of JPMorgan.

I was just trying to get -- and I hope -- sorry, I hope all is well. I wanted to get a sense of the shipments, the STRs for on-premises against at-home. Obviously, we got the number for total. And I was just wondering if you have capacity and you have potential for improvement there in the at-home.

Thanks, Andrea. I hope all is well with you as well. From an STR point of view, obviously, the on-premise is virtually shut across almost all of our markets. And we've had some significant SKU shifts into the off-premise. I think similar to other beverage companies, our pack mix has shifted quite fundamentally because of the differing shopping habits. And so capacity has been, I would say, strained, mostly in the area of 12-ounce cans and folding cartons. It's not an issue that's unique to our business. It's across the whole beverage segment. So we're working with our packaging suppliers to prioritize SKUs. We're looking at qualifying alternative supply locations to help out with that. I would say that we've had minimal out-of-stocks in our North American markets because of this, but we're running from an off-premise large pack point of view, pretty much flat out in North America. In Europe, we have had some capacity constraints, particularly in the United Kingdom given that, that market has been substantially more on-premise focused with less focus on off-premise. So we have had some out-of-stocks in the off-premise in Europe because we haven't been able to meet fully the demand. I hope that answers your question.

It does. And then, the other question would be on the marketing spend. I understand that you shifted and some of the discretionary spending may not be realized. So I wonder if you can kind of weave that comment with your cost savings and how we're looking because perhaps you had excess expenses now for keeping your employees safe. And obviously, unfortunate for the tragedy and my sentiment, and condolences to everyone impacted. So if we should be thinking that the impact will be lower as we progress in the year? Or unfortunately, that some of the things are -- you can change given the timing and some of them are fixed? So just to understand your fixed costs and expense ratio going forward.

It's got a lot of questions in there, I think, Andrea. So let me try and try to address them. And if I don't, you can come back again. But obviously, there's no doubt, it's a really challenging time for us, not just for our business but for everybody in our industry. And our focus, as I said, right now, is mitigating the short-term business challenges and positioning our business to succeed in the long-term. From a sales to wholesalers point of view, the impact of the Milwaukee brewery tragedy, as Tracey, I think, said was from a shipments point of view in February and early March. And because of that, our inventory levels at the end of March were lower than we would have liked. Subsequent to that time, our supply chain folks have done a tremendous job building our inventories back up again. And I would say that they are pretty much where we would like them to be, with the exception of shortages on some of our large pack sizes where we have some supply constraints from a packaging point of view. So we would expect shipments to wholesalers to migrate closer to sales, to retailers, in the second quarter. From a marketing standpoint, consumers are still drinking lots of beer. In the U.S., 80% of our beer is consumed in the on-premise. Plans towards key platforms where we expected viewership to be higher like social gaming, podcasts, online video, over-the-top versus [indiscernible] and out-of-home, which is where we might have been before. We've enabled a large percentage of our creative to link to e-commerce beer purchases, so consumers can buy their favorite beers from the comfort and safety of their homes. And finally, we've identified opportunities where our brands could meaningfully and authentically provide value. For example, for Miller Lite, we created the virtual tip jar in the first week of isolation. And in Canada, Molson has launched the "Raise One For Your Local" to support a lot of Canadian bars through gift cards by encouraging more virtual happy hours. We will be eliminating marketing spend that doesn't add any value at the point of -- at this point in time, if it's focused on the on-premise or if it's focused in media channels, where our consumers happen to be. So as we were expecting a large increase in marketing spend in 2020, I don't think you can expect that right now.

Our next question will come from Dara Mohsenian of Morgan Stanley.

So I wanted to delve into the U.S. STR result you gave for the first week of April a bit more. Obviously, on-premise is driving the overall weakness, but it's still worse than I would have expected even with that on-premise weakness. So just trying to better understand that performance in terms of what you're seeing by channel, in the off-premise in the U.S., in April to help decompose that a bit? And then second, you highlighted the economy. Portfolio declines were a lot less severe than the premium brands in the April-to-date number. Is that more just due to channel mix shift away from on-premise? Or are you seeing trade-down within your portfolio in the off-premise channel already? And any forward thoughts on potential trade-down, both within your portfolio and from a beer category perspective? That would be helpful.

Thanks, Dara. I'm not sure I'm going to get all of your questions. So if I miss something, just come back at me here. I think the first point is the retail sales, which Tracey gave in the U.S., was for the 4 weeks -- not the first week. I think you said first week, but it's actually the first 4 weeks of April. Obviously, the on-premise has reduced to virtually 0. In the off-premise, we're seeing a meaningful shift into large pack sizes and into brands that consumers know and trust like Miller Lite and Coors Light. Miller Lite and Coors Light's performance has been particularly good as we've headed into April. We've seen -- we saw an acceleration behind Coors Light and Miller Lite behind our marketing initiatives in 2019, "Made to Chill" with Coors Light. The brand has seen sequential improvement in 3 straight quarters. And Q1 was actually the best share performance in 3 years, and April has continued on that trend. And Miller Lite continues to do really well. We've set about a 22 quarters now of segment share growth, and it's actually growing dollar sales share in the latest 52 weeks. So our big known trusted brands, we're very pleased with. The second part was our economy portfolio performance. And yes, we have seen an improvement in our economy portfolio, whether that's Keystone Light, whether that's Miller High Light. Hence, Steel Reserve are all brands, which are doing relatively much better in the first part of April than they were doing before. Did that answer all of your questions, Dara, or did I miss something?

It does. And then just one clarification within off-premise. Can you talk a little bit about the channel performance in the first 4 weeks, off-premise, and the divergence you're seeing from a channel perspective? And then also, consumer trade-down, just wanted a bit of a forward-look on your thoughts there and if that is likely to be significant in the industry.

Well, we've seen a strong growth in the grocery channel, particularly in large format. We have seen in sort of first part of the coronavirus, the C-store channel did not do as well as the larger format. It has had somewhat of a recovery since then, but it's still not performing as well as large format, which frankly is not surprising given the impulsive nature of many of the C-store purchases. Our online sales channel has certainly seen a meaningful surge, as you would expect. And hence, we're focusing a lot of marketing activity in that direction and partnering with various online delivery platforms to make sure that our consumers see our brands and that they're top of mind. And we've also launched a product locator to help our consumers find out where our brands are. Hopefully, that answers your questions. Thanks.

Our next question will come from Kevin Grundy of Jefferies.

I wanted to wish you well as you navigate through a clearly difficult environment. My question relates to debt leverage and to the dividend. So first, your debt covenant, a 4x net debt-to-EBITDA on a trailing basis. You mentioned some of the proactive steps the company is taking around cost and spending. However, based on where we sit today, I was hoping you could comment on your level of comfort with the covenant and what will undoubtedly be a challenging year. And then relatedly, with respect to the dividend, maybe you can put some guardrails around potential cuts or suspension to the dividend.

Thanks, Kevin, and thanks for the thoughts. I'll ask Tracey to handle those questions, if you don't mind.

Yes. Kevin, so look, we're aware of all of the current obligations under our credit agreement, and we're in compliance with them. As we said, we are taking a number of actions, which will help us navigate the short-term impact to our business and ensure that we have adequate liquidity. So we -- just to reiterate, reducing capital spend by about $200 million. We are substantially reducing discretionary spend. We've limited new hiring. We're furloughing some employees, especially in Europe and some of our North American hospitality areas. And we're also reducing marketing spend, as Gavin just mentioned, ensuring that all our marketing investments are delivering value in our current environment. But we are still supporting our big brands, as Gavin mentioned, and supporting our innovations. So this is a very fluid situation. And again, we are monitoring it. We're having discussions with our Board and evaluating our capital allocation decisions, which, as we said in our remarks, does include a suspension or reduction or a temporary elimination of the dividend. And we will, of course, communicate in due course, any key capital allocation measures and decisions as they are made.

Kevin, just one point that I'd make. As you mentioned a 4x debt covenant ratio. That's -- at the moment, it's actually less than that. I'll just refer you -- sorry, higher than that, sorry. It's 4.25x. I think if you look at our SEC financial filings, you'll see it laid out there as to the path.

Our next question will come from Sean King of UBS.

Sorry if I missed this, but you referred to estimated keg returns in Q1. Does that account for, I guess, all shipments expected to be -- all shipments that are expected to be returned? I mean is there any way to quantify what continuing overhang there would be in Q2?

Yes. Thanks, Sean. Look, I mean, the estimate that we've made would cover all of the keg returns that we would be expected to take back. So the $50 million in aggregate between the impact to net sales revenue and cost of goods sold is our best estimate right now. And obviously, we'll adjust that as the actual numbers come through. But when you say an overhang, I would say we've tried to get as close to 100% of what we expect our liability to be based on what we know.

Our next question will come from Vivien Azer of Cowen.

Hope everyone is well. Gavin, given your experience in the beer industry, I was hoping that you could offer some historical context as we think about how do we anticipate shifts in consumer or purchase behavior when the consumer is under pressure. So just thinking back maybe to the financial crisis, if you view that as a helpful analog. Just remind us the cross-category dynamics that you saw between beer, wine and spirits. And then specifically within beer, how meaningful was the down trading?

Thanks, Vivien. Yes, look, this is certainly an unprecedented time. And when we've been through recessions before, I don't think we've been through something quite like this before. But certainly, ultimately, the question is what this will do for consumer behavior. It's not about whether or not drinkers will continue to consume because they will. But it's about how, where or what they will consume. And the early results and what we're seeing at the moment show that consumers are continuing to purchase beer, particularly pantry-loading -- to doing the pantry-loading phase of this pandemic. We're seeing a lot more purchases of large pack, and we're seeing more on premium and economy versus above premium. I would say craft, in particular, has been disproportionately negatively impacted. We have got a very diverse portfolio of products, pack types and price points, which are going to help us capture the volume regardless of where the consumer trends actually take us. We're well-positioned because we play in all segments. It's clear that the whole industry is impacted. We believe that we've got the segments and the brands, and we've got the right approach. Ultimately, we're confident that we've taken the right steps to mitigate the short-term risks and position the company to compete in the long-term. We also believe we're still tracking towards the vision laid out in the revitalization plan despite the current environment. And we'll pivot as necessary in the short-term, depending on where the consumer trends take us.

Our next question will come from Bonnie Herzog of Goldman Sachs.

I hope you're doing well. I wanted to touch briefly on Vizzy. So it sounds like the brand is doing well based on your comments. But that said, we are hearing from a lot of our contacts about the tough environment right now for newer brands. This is just in general. So would love to hear your take on how the launch has been potentially impacted by COVID. And then maybe, what you've done to mitigate some of the unforeseen impacts. You've likely had maybe around distribution and marketing of this brand.

Thanks, Bonnie, and hope you're doing well, too. Yes. Look, I mean, obviously, it's not the ideal product time to launch new products in the marketplace. So I'm sure you don't need me to tell you that. And as a result of coronavirus, we have made some adjustments to our original innovation plan, which we had. We've delayed some innovations, and we're using those savings to protect our cash and liquidity positions. But as far as the seltzer market is concerned, we've got a very clear strategy in hard seltzers. And we're being what -- we think we're being smart in how we execute our first 2 launches. We're first focusing on Vizzy is the big bet, and then we're rolling into Coors Seltzer in the fall. This is a huge segment, and it's got plenty of room for multiple brands and solutions. Our approach with Vizzy is making sure that we carve with it with a real point of difference, not just another seltzer, to carve out a meaningful space for ourselves in what's an increasingly crowded category. And that point of difference for us is the first hard seltzer made with acerola cherry, which is the super fruit, which is high in the antioxidant, vitamin C. And we're confident that this proposition is going to resonate very well with consumers. We're not going to share specifics on what our media investment is going to be, but we're in the midst of rolling out a pretty robust campaign, which will include national TV in the right spots, digital and social retail tools and a sampling effort. It's our biggest play yet in the hard seltzer market, Bonnie. And whilst it's still only a few weeks into the launch, we're actually very pleased with the early reads. And we believe…

Our next question comes from Laurent Grandet of Guggenheim.

Gavin and Tracey, I hope it's -- find you in a healthy shape. Got a question on the -- on all the extra costs. I mean you, mentioned all the actions you took to protect your employees, increased social distancing and rates pay, amongst others. Could you please give us, at least directionally, the total financial impact it has in the quarter by segment, I mean, Europe and the U.S. And if those actions are just one-offs in nature and we should think, I mean, those extra costs will just be lifted once we return to some cap normality probably in the second half of the year.

All right. Thanks, Lauren. Thanks for the questions. Obviously, as I said, one of our -- our top priority is protecting our employees and ensuring that they're safe. So in many respects, most of those costs will, as life gets back to a new normal, disappear. We've -- the thank-you pay bonus, for example, will be removed at a point in time when we believe it is appropriate. We took steps in Europe and in North America to ensure that our employees that were higher-risk, either of a certain age or who had preexisting conditions, were given the opportunity to stay away from work and not be disproportionately financially impacted. In the United Kingdom, there is actually a program where 80% of their pay is reimbursed by the government. So the impact in the United Kingdom for the folks that have stayed at home is not as impactful as, for example, in the United States. So I rambled a little bit there. I think [indiscernible] the answer to your question is no, there won't be permanent negatives forever. They will only be there for as long as we believe it's necessary. Our number one value that we launched -- we launched new values in January. Our number one value is people first, and that's how we're making all of our decisions. I think, obviously, our social distancing practices will remain in place for quite some time. But the cost of that is relatively low. Our breweries are big. There's a lot of space in our breweries. And I think, the fact that we put in all these policies fairly early on in the process has certainly gone a long way to make sure that we've mitigated any impact from a supply chain point of view.

Our next question will come from Bryan Spillane of Bank of America.

Gavin, Tracey, hope you all are well. Just wanted to follow-up, I guess, on Kevin Grundy's question about the balance sheet and the dividend. And Tracey, I think if we're thinking about liquidity and cash needs, I believe you've got a maturity -- the September maturity, right, coming due, which is, I think, $500 million later this year. So I guess as we're thinking about that maturity, the liquidity you have now, right, you still have about $900 million in the credit facility to beat that you could draw. Is the decision on whether or not you touched the dividend really predicated on maintaining investment-grade and terms around refinancing, avoiding things like steps and other things? Or would touching the dividend really be just a function of, it's a bad year and just you're going to need the extra cash. Just trying to understand what the decision tree would be, the need to touch the dividend. And then again, how your comfort level around that September maturity.

Okay. Brian, thanks. I'll ask Tracey to answer that question. But just to correct one quick point is it's not USD 500 million. It's CAD 500 million. So it's somewhat less than that in U.S. dollars.

Yes. Yes. So roughly sort of USD 357 million equivalent. So as we mentioned in our prepared remarks, Bryan, we'll continue to monitor and take steps to ensure proper business continuity and adequate liquidity for the company. And we are actively evaluating our capital allocation decisions with our Board. So as it relates to that CAD 500 million notes that comes due this year, that's a capital structure decision that we will make in consultation with our Board as we get closer to the maturity of this debt, and then sort of make further decisions. The conversations that we're having with our Board around capital allocation does include that -- what we mentioned around the dividend. And again, I just want to say that we'll communicate that in due course as soon as any decision is made. But just a final point, I mean, we are aware of all the current obligations under our credit agreement, as I've said. And we are in clients with them, and we will continue to take the actions needed because we do have a continued desire to maintain our investment-grade rating.

Our next question will come from Bill Kirk of MKM Partners.

So I think Coors Seltzer was originally set to launch in July. So I guess the question is, if COVID pressure somehow ease or begin to ease, would there be a willingness to pull what is a delayed launch forward again, and do it again in July? Or is it now definitely in the fall?

Yes. Bill, thanks. Look, based on what we're seeing in the marketplace, I think you can safely assume that it will be in the fall. In other words, we -- I would say, based on what we know right now, we will not be bringing forward the launch. We'll keep it as to where we've moved it to now.

Our next question will come from Rob Ottenstein of Evercore.

Great. I'd like to kind of first circle back to the U.S. and just make sure I didn't miss anything here. You gave us some April numbers in terms of down volumes, I think, 14%, I believe. Can you disaggregate how much of the impact of pantry-loading is or deloading at this point hit the April number, so to give us a little bit better sense of what the ongoing rate is in April? And then you -- obviously, there's a negative mix impact. Can you maybe perhaps touch on what the pricing environment is today? Is there -- the industry's had really good pricing discipline for the last number of years. Is that staying in there? And then just kind of circling, kind of finishing off with the U.S. If you could then contrast Canada, which hasn't really come up on the call or in the press release. Is Canada looking kind of better or worse than the U.S.?

Thanks, Robert. So several -- let me unpack what you said there. So from a mix point of view, obviously, on-premise to off-premise has negative mix implications for us. In terms of Canada and how they're performing relative to the U.S. in the first part of April, pretty similar, quite frankly, Robert. Not a number that's terribly dissimilar to the 14%, which Tracey mentioned. Canada actually had its best share performance in the first quarter in quite some time. We launched Molson Ultra National in Q1, and it's producing a much better result than the brand which it replaced, which was Molson Canadian 67. Miller Lite continues to grow strongly in Canada, strong double digits with the functional message of carbs and calories. And Belgium Moon is growing strongly. So Canada actually had a reasonably good -- or one of the better first quarters that we've had for some time. From a pricing point of view, pricing in the first quarter in the U.S. was pretty similar to what it's been for the last 3 quarters. So it's holding up. Mix was relatively flat. And we do have some negative in NSR per hectoliter in the United States, in freight and fuel as we passed substantial savings across back to our distributors, in line with our freight and fuel program, which took the freight and fuel for hectoliter number down by about 50 basis points in the U.S. Obviously, we've got the keg return negative hit in the U.S., which is impacting our NSR per hectoliter. That's about 100, 110 basis points for unusuals in total. Canada pricing has held up well from a frontline point of view. Frontline is about 260 basis points. And then I think the final part of your question was the impact of pantry-loading in March versus what's happened in April. Obviously, we had the timing shift of Easter. So the numbers got a little bit difficult to compare between March and April, and even within April. I would say to you that the strong performance in the off-premise, I mean, it still continues, but it's just not enough to offset the loss of 100% of the on-premise business. Hope that helps, Robert.

Certainly. No, I understand that. Would you think that if you maybe took out the pantry-deloading instead of being down 14%, maybe you were down kind of mid-single digit? Does that sound about right?

Robert, look, I'm not going to try, on this call, unpack that to that level of detail. All I can say to you was that in March with the initial pantry load, we had the 4th of July kind of week performance. And obviously, that has not continued and we don't expect it to continue. But performance has still been good in the off-premise.

Great. And just -- I actually just got a -- well, we're on a question from a large shareholder asking me to ask you what's going on with promotions. In a lot of industries, the promotions have been reduced significantly. Is that happening in the beer industry as well?

Well, as it regards to the large packs, I mean, we're not promoting large packs because we're, as I said earlier on in the call, we're actually -- we've got -- we're a little bit of hand-to-mouth from an input material, packaging material basis. So from our perspective, we're not promoting large packs. I can't speak for our competitors. But from our perspective, we're not.

Our final question will come from Lauren Lieberman of Barclays.

I just wanted to know if we -- if you could help us at all when we think about COGS per hectoliter. Anything that you can offer us on fixed versus variable costs? I know we'll have to sort of manually play with some assumptions in terms of mix dynamics, which is anything that you could offer help on fixed versus variable costs in the COGS line?

Right. I'll ask, obviously, Tracey to answer the cost of goods sold question. Obviously, there are some impacts within cost of goods sold, which are somewhat unusual in nature. We're not treating them as unusual, but they're one-off of nature, which is all the extra steps that we've taken to protect our employees. But Trace, do you want to get into COGS in more detail?

Yes. So I mean, a couple of drivers. We did mention that our COGS was up 3.3% in constant currency on a consolidated basis. I mean, the big drivers were around the volume deleverage, which was around 200 basis points of that. And then in addition, this quarter, we did have the keg returns and the on-premise reimbursement program as well as some finished goods obsolescence, which drove higher COGS. That was roughly around 90 basis points. And then, we did see some inflation, and that was partly offset by some of the cost savings. I do want to just remind you from an inflation point of view, we do have a robust hedging program, and it's a multiyear program. We were fairly well-hedged coming into this year. So when we see commodity prices being reduced, we will, obviously, participate in that but only to the extent that we have an unhedged portion for those commodities.

Okay. All right. That's really helpful. And then I wanted to just ask -- actually, first on ethanol COGS there's been no mention of it, but any issues in terms of CO2, just the news headlines that have been out there. I just wanted to check in on your CO2 position.

Yes. So look, Lauren, obviously, with the drop in the price of ethanol about a month ago, many of the ethanol producers have stopped producing. And since that ethanol is used by our CO2 suppliers, there are expected shortages in the markets, and we're monitoring this very closely. However, we do have secondary sources in test. And as yet, we have not had any disruptions to our supply. And we also are collecting as much CO2 at our breweries as possible so that we can be self-sufficient, but at this point, no disruptions.

Okay. Great. And then the final piece, sorry, was just in the release, there was a mention on tax in the possible $100 million to $200 million tax expense in the second quarter. So anything you could elaborate on there or a sense yet of cash component of that, whether it's the second quarter or through the year?

Yes. So look, we're still doing a full technical and legal analysis of the tax rigs and to really understand the full impact and the implications for cash taxes as well as the timing. And so the $100 million to $200 million that we mentioned in the release is a P&L impact, and it relates to the period from 1st of January 2018 right up until March 31, 2020. So that estimate considers the full range of impacts. But again, we're still doing some of the legal and technical analysis, and we'll be able to give more in Q2.

That will conclude our question-and-answer session. I would like to hand it to Gavin Hattersley for closing remarks.

Thanks, Eric. And look, I know there may be some questions we weren't able to answer today. So please follow up with Greg, if you have them directly. And then, Tracey and I look forward to talking with many of you as the year progresses. So stay safe and healthy, everybody, and thank you for participating in this morning's call.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect.