Good day, and welcome to the Wyndham Hotels & Resorts First Quarter 2023 Earnings Conference Call. At this time all participants have been placed on a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] I would now like to turn the call over to Matt Capuzzi, Senior Vice President of Investor Relations.

Thank you, operator. Good morning and thank you for joining us. With me today are Geoff Ballotti, our CEO; and Michele Allen, our CFO. Before we get started, I want to remind you that our remarks today will contain forward-looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied. These risk factors are discussed in detail in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the SEC. We’ll also be referring to a number of non-GAAP measures. Corresponding GAAP measures and a reconciliation of non-GAAP measures to GAAP metrics are provided in our earnings release, which is available on our Investor Relations website at investor.wyndhamhotels.com. We are providing certain measures discussing future impact on a non-GAAP basis only because without unreasonable efforts, we are unable to provide comparable GAAP metric. In addition, last evening, we posted an investor presentation containing supplemental information on our Investor Relations website. We may continue to provide supplemental information on our website in the future. Accordingly, we encourage investors to monitor our website in addition to our press releases, filings submitted with the SEC and any public conference calls or webcast. With that, I will turn the call over to Geoff.

Thanks, Matt, and thanks everyone for joining us this morning. As expected, our brands delivered record levels of domestic RevPAR for our owners in the first quarter with 4% growth versus prior year, and our international regions continued their recovery growing RevPAR by 37%. Globally, net rooms increased 4%, and we grew our development pipeline by 11% and by another 3% sequentially. Adjusted EBITDA, which increased 10% on a comparable basis was ahead of our expectations. This over performance is reflected in our new outlook that Michele will walk you through in a moment. We generated $84 million of free cash flow and we returned another $87 million to our shareholders. By all accounts, it was a great start to 2023. With U.S. unemployment at its lowest level since the 1960s and consumer savings of $1.6 trillion, our guests, who are primarily middle class with household incomes of over $90,000, nearly 30% above the U.S. median, are allocating a higher share of their wallets to travel this year. This surge in travel spending has been unabated by the economic headlines throughout the year and reflects their strong desire to reconnect with family and friends, explore new destinations and create lasting memories. U.S. RevPAR growth for our economy brands was in line with fourth quarter performance, a reflection of the cadence of growth for this segment, which had fully recovered by the second quarter of 2021. Meanwhile, our mid-scale and upscale portfolios benefited from continued recovery in occupancy while still driving rate gains. We grew our overall system sequentially for the ninth consecutive quarter. We opened over 10,000 rooms globally, and we maintained a retention rate of 95.3% over the last 12 months, a continued indication of our brands improving market share and value proposition. These results position us solidly on…

Thanks, Geoff, and good morning, everyone. I will begin my remarks today with a detailed review of our first quarter results. I will then review our cash flows and balance sheet, followed by our revised outlook. Before we get started, let me briefly address some housekeeping items. One of our key priorities has been to simplify our business and create a greater focus on our high-margin franchising business. With the exit of select service management and the sale of our owned assets in 2022, we quickly turned our attention to transitioning our full service management business in the U.S. to franchise-only contracts. And now with that effort substantially complete, we’re changing the composition of our reportable segments to eliminate the Hotel Management segment. The results of the remaining full service management contracts approximately 65 internationally and only two in the U.S. are immaterial and have been aggregated on a prospective basis within our hotel franchising segment beginning with this quarter’s results. Additionally, the year-over-year comparison of our financial results for both this quarter and next is impacted by the sale of our owned hotels and the exit of the select-service management business. The comparability of all four quarters this year is also impacted by the timing of our marketing fund spend. This year, our marketing fund spend has returned to a more normalized pace. In contrast, last year’s spending pattern was heavily influenced by concerns regarding the potential impact of the Omicron variant on demand. To enhance transparency and provide a better understanding of the results of our ongoing operations, I will be highlighting our results on a comparable basis, which neutralizes these impacts. We generated $308 million of fee-related and other revenues compared to $316 million last year, which included $38 million from the select-service management business and owned…

The floor is now open for questions. [Operator Instructions] Thank you. Our first question comes from Joe Greff with J.P. Morgan.

Good morning, everybody, Geoff, Michele. Michele, thanks for the comments on developer and the financing topic that probably is front and center for most of us on this call here. Maybe you can even give us a little bit more detail in terms of what percentage of your new construction typically has financing associated? I know not all of it does particularly as maybe you go down chain scale orientation and what percentage of conversions typically need or have financing, and then when you think about stuff in China and/or internationally overall, can you talk about that a little bit as well?

Good morning, Joe. I – if you think about our 2023 new construction additions, all that financing is already in the house. From a conversion standpoint, I would say in our pipeline the majority of what’s in our pipeline already has financing in place. So we feel really strong about the 2023 financing situation. If we look at new construction starts, that could impact our future year additions. Developer interest remains strong. Geoff mentioned that in his prepared remarks and new construction projects continue to progress with almost a dozen deals beginning site work in the first quarter and after that kind of March 10 headline. So for season developers those relationships are really long and really deep and financing is very much available. In fact, we saw a term sheet came – that came through after that March 10 date for an $8 million loan on a $10 million new build La Quinta property with a small regional bank in the south with some of the best lending terms we’ve seen in a while. So we’re not concerned about financing largely for new construction projects that that don’t currently have financing in place. There certainly seems to be a good amount of capital still available there. And then on the conversion side, the only other point I would make is that we have – we’ve got 40 deal – 40 new deals that have executed since that March 10 date. That’s actually up versus the same time last year. And then we’re also seeing buy sell volumes across our portfolio increased year-over-year. So we continue to believe that the current environment is healthy and supportive of conversion activity.

Great. Helpful. And then getting a lot of questions last night, this morning on the buyback in the 1Q and that level was down sequentially and down versus the average of the last three quarters. Is this how you’re thinking about, I guess returning capital with form of buyback absence, any I guess asset producing incoming cash is that it’s the excess cash after excess cash flow, free cash flow after the dividend is kind of the maximum buyback activity? And if that’s sort of how you’re thinking about buyback at now, that would imply something just sub of 3 times net leverage. And why is that the right leverage ratio, particularly when your peers are at least a half a turn above that?

Sure. So if you look at quarter-over-quarter, year-over-year, I think our buyback was up about 40%, but as we mentioned on our February call, the 2023 buyback volume will certainly be lower than 2022 due to the absence of those one-time proceeds received in 2022 from the owned assets [indiscernible] CPLG ex, which was about $260 million. So we always say our first preference is to invest in the business, but absent any compelling investment opportunities just from a free cash flow generation perspective, after we pay our dividend and then require debt payments, we’ll have over $200 million to deploy this year. And so I think that’s a minimum amount you can see go into the share buyback program. There is potential to relever and I’d say our stock is trading at a significant unwarranted discount relative to the peer set today, and of course, compared to our own estimates of intrinsic value. So that does present a compelling opportunity. You can expect us to lean in more heavily when the stock is trading like this. But we do generate a significant amount of cash flow, so we don’t necessarily need to lever up to do that. It’s predominantly, I’d say a math exercise, especially in today’s interest rate environment, the value gap versus the interest that that that we would be paying. And I think it’s fair to say we could potentially use leverage to borrow free cash flow capacity, pulling forward future share repurchase volume, when the stock is trading like this, but that leverage increase would likely be more temporary in nature rather than a permanent increase. We are – our stated target range is 3 to 4 times. We are at the very low end of that at 3.0 times. We do not expect to be lower than 3.0 times. And that also means obviously that there is some room there as well. So I think we have ultimate flexibility when it comes to share buybacks this year.

Great. Thank you very much.

Thank you.

Thank you. Our next question comes from Stephen Grambling with Morgan Stanley.

Hi, thanks. There’s lots of talk, I think, from some competitors moving into various areas that at least on the surface may have overlap with some of your brands, either in the extended stay or economy mid-scale segments. How would you characterize the competitive environment when you are looking at potential development opportunities? And are you seeing any change in either requests or even your willingness to put in additional key money to make these deals get over the line?

No changes, Stephen, really in terms of and we’ve been out on the road quite a bit over the last few weeks and we’re not seeing any impact to our economy or our mid-scale brands. Given that our proposed PIP requirements far exceed in terms of value to our owners, what’s being put on the table – the competitive PIP requirements far exceed our average PIP conversion costs, which don’t necessarily get measured in millions of dollars. Our renovation in PIP costs generally run 3 to 5 times less than many of our larger brand peers. And when you look at the across the economy segment, we have the most recognized brands in the economy space that are performing right now at historic RevPAR index. And we know these owners and we know what’s important to them and what’s most important to them is their cash outlay. And what’s also important is a very flexible relationship with their brand and their cash on cash return. We have plenty of owners that are building new construction, Microtel, for example, right now with us along with competitive economy and competitive mid-scale and upper mid-scale brands, and they’d tell you that their Microtel deliver best in class cash on cash returns right now. And certainly, we have thousands of owners who’ll tell you that there’s no better cash on cash return right now than their Super 8s and their days in. So we will continue to provide the most flexible and the most competitively priced brands in the space, not only on our PIPs, but also on our operating. And technology stack costs, which are running significantly less than I think what they’re being offered. And I think most importantly, in terms of not seeing any impact, we executed more economy rooms in Q1 than we did last year. So again, not seeing any impact.

That’s all super helpful. Maybe one unrelated follow-up and I recognize that you referenced accelerating trends into April, but I think there’s always this broader concern about the macro, when you look back at your portfolio of assets and how they perform through various downturns. I guess, what does the so-called recession playbook look like for the business? Do you typically see trade down? Are there things that you would do different? Are there things that you’re even looking out for to try to assess that kind of environment? Thank you.

We’re always looking out and trying to assess the environment. I think Matt did a good job on Slide 30 putting out in our investor presentation last night how our brands would continue to perform in the event of any macro slowdown, which we’re certainly not seeing. We would continue to grow net rooms within our guiding range and we would put – we would continue to provide the best value proposition out there in the economy, in the mid-scale segments to our guests and outperform the broader lodging market as our brands did in really all of the last three downturns. Our brands outperformed, I think it was by 300 basis points post 9/11 by more than that after the GFC. And if you look at how our brands performed throughout COVID, 25% better than the overall industry from a RevPAR standpoint, the value proposition in terms of to your suggestion trade down is compelling. That $50 gap right now between the economy and the upper midscale segment is continues to widen, it’s now over $55. And if you look at the gap between the upper midscale and the upper upscale, that gap which was $80 a couple quarters ago, I think is pushing a $100. So we remain a very compelling trade down opportunity should things slow. But again, in terms of what we’re seeing out there, as we said in our prepared remarks, we’re not seeing any signs of any slowdown.

That’s great. Thanks so much.

Thank you. Our next question comes from Michael Bellisario with Baird.

Thanks. Good morning, everyone. Just wanted to go back to the development topic and dig into a little bit more of those 41 new deals you mentioned, any particular brands or locations where you saw strength. And then maybe also on the flip side, where if any have conversations stalled or deals that you expected to get signed – didn’t get signed?

Yes. From an opening standpoint and an execution standpoint, we’re not seeing any signs of slowdown either, pre or post as Michele said in her remarks. Our conversion signings increased over the first quarter of 2019, which we always look back to and think that that was a high water year. Our new construction signings picked up, and we’re seeing great interest. And certainly, as I mentioned, our economy brands, we signed more, Microtels, more Wingates, more Hawthorns, and we continue to see that pick up really across the country.

Got it. And then just one follow-up on the RevPAR performance you mentioned, I think, plus 8% in the U.S. in the first quarter, plus 10% in April. Can you provide any color on international trends, what you saw throughout the first quarter and then into April as well?

Sure. As Michele noted, the first quarter international RevPAR improved sequentially, and we’ll continue to present a significant tailwind for us for 2023. Overall, it was up 20% versus 2019 and up 37% to prior year, really with strong growth, Mike, across all of the regions in constant currency, which was in line with our expectations. Canada was up 30%, which was good to see. Southeast Asia, which is now back to 2019 levels, was up 40%. And Europe, has come back strong. Germany has been very strong with us with RevPAR now running over 20 points ahead of where it was back in 2019. And I think the standout for us internationally was Latin America, which was up 60% in the quarter with Mexico continuing to lead the way into their high season. I was down there with the team last week, and they’re having a very strong April. And then, of course, China, we’re very happy to see what we expected to come in, up 15% year-over-year as both inbound and outbound travel in China ramps back up.

Thank you.

Thanks, Mike.

Our next question comes from Dany Asad with Bank of America.

Hi good morning, Geoff, Michele. I just wanted to touch back on development one more time, sorry, but yesterday, a competitor said that they expected the development environment to slow, and that was sort of their experience as conditions tightened around the global financial crisis. So what is your expectation as this plays out from here? I know you’re not seeing any cracks it, but from here, and then how do you get projects to still pencil with higher prevailing rates, lower credit availability? And then maybe what are some of the offsets to those higher project costs for developers?

Hi Dany, I’ll start. And Geoff, if you want to add anything, please feel free. So, I would say from an ROI – owner ROI perspective, you can see we actually presented in the investor presentation, we posted to the website that even at a 7% cost of debt, these – the ROIs are still in the high teens, so really strong returns. And as you know, interest rates are impacting all asset classes, not just hotels. But hotels are unique in that they have the ability to continuously change room rates and then offset some of the costs out of that equation, whether it be inflation or interest with that higher pricing. And so sophisticated investors perceive lodging to be a highly desirable real estate class during an inflationary environment for sure and developers are underwriting these increases into their base cases. So we and well-capitalized developers believe this is still a great time to build, although the interest rates are higher than the historic lows. Everyone is expecting they will decrease a bit once the Fed is done and select service hotels, specifically, with minimal staffing requirements are delivering very high ROIs for owners even in this environment. And so that’s why they’re still very much in demand.

Yes. And I would say that, as we mentioned, we’re seeing – we saw last year a record number of opens and signs. We’re not seeing any slowdown, Dany, in the first quarter, and it’s really spread across the world. I mean our pipeline has 63 countries in it. I mentioned last week, I was down at the Latin American conference and demand for our new construction prototypes across Mexico and Latin America, for example, just continues to grow. There’s no better example of that than the eight La Quintas that are now under development in the Dominican Republic along with new Super 8, the new Super 8 Manzanillo in Mexico with 19 more to come. So we’re confident that what we needed to do in the first quarter, we’ve done. We’re on track, and we opened what we expected to. And again, we’re not seeing any signs of anything slowing down.

Great. Thank you so much for that. And you did give a lot of color on your – on RevPAR and the acceleration on the four-week average, super helpful. Can you maybe give us a little bit of insight into – with the data that you have in front of you, kind of what is your expectation or underwriting for how April plays out and then especially as we head into the summer travel period that’s coming up, kind of what is your expectation for domestic travel?

You want to go, Michele? I’ll start off and Michele can jump in. I mean we’re both excited as Michele noted with what we’re seeing. Our April domestic RevPAR, as she noted was a point ahead of our prior four weeks. But for the last four weeks, Dany through April 22nd, our RevPAR is up 2% to last year and up 10% to 2019 versus as you mentioned, it being up, or I think Mike mentioned up 8% for the first quarter. And we’re seeing economy RevPAR also accelerate. It’s up now 12% last four weeks to 2019, and certainly mid-scale, which has further opportunity to drive our RevPAR is accelerated at 4% versus last year and up 8% to 2019 versus the last four weeks of 2019. So we’ve got to remember that our segment is when you look at our segmentation, it’s different. And again, what Matt put out on the IP on Slide 25, I think demonstrates why we’re so bullish. I mean, 70% of our business is leisure and then 20% of it is that blue-collar infrastructure worker that is really picking up right now. We have less than 2% of our business being white-collar business travel, and less than 1% of our business being grouped. So we’re very optimistic with our guests more employed than they’ve ever been with the savings balances that they have. And with both real ADR and occupancy in our mid-scale and above segment, still below 2019. Our guests are telling us they’ll be allocating more than ever to travel to your question this summer, 93% of our guests have told us that they’re planning a trip in the next six months in our surveys, and that 93% is at an all-time high. So we do believe that leisure travel will defy any economic gravity that might be out there. And the other important point, I think on Slide 26 of our investor presentation highlights that not only our guests not low income earners, their household incomes at over $90,000 are growing and they’re increasingly, significantly younger. And so all of that plays out in terms of what we’re seeing with the metrics that give us confidence. Our booking windows being up 15% as we mentioned to last year, our web traffic now running 40% ahead of 2019 levels. You just have to look at April month to date Google search volumes to get excited about the summer ahead, running 13% ahead of last year. And then we’ve got from a leisure perspective, our average length of stayed running significantly ahead of 2019. So we’re looking forward to the summer. We know that our guests are driving further than ever, and they’re staying more often.

Thank you for all the color.

And then – that’s perfect, Geoff. I think the only thing I would add to that is with respect to the rest of the year. We are expecting the U.S. to perform pretty similar to how it performed in the second or in the first quarter. And our outlook is providing a range of outcomes. And then, Geoff mentioned, he thinks we’re pretty well insulated from any economic gravity, I think were the words that he used. So within that range, I think we would see any potential impacts muted by again, that strong consumer preference for experiences including travel, the continued international recovery and benefits from the incremental infrastructure spend coming into market. And then just remember, we have very little exposure to corporate transient business travel. So we really won’t feel the impact of any potential T&E [ph] reductions in that quarter. And I do want to remind you while we’re on this topic, the economy segment is the only segment we can say is running double digits ahead of 2019 at this point in time.

Thank you. Very helpful. Thank you so much.

Thanks.

Thank you. Our next question from Steve Pizzella with Deutsche Bank.

Hey, good morning, everyone. Thanks for taking my questions. Just wanted to go back to the new construction pipeline. And for the rooms in the construction pipeline that have not broken ground yet, can you talk about what percentage of those you believe have committed financing and those you expect to be completed?

Sure. Everything entering into the system in 2023 has financing in place. And then beyond that, I would say probably a third to a half has current financing in place.

Okay. Thank you. And then just following up on the conversions, can you remind us of where your conversions are typically sourced from independent owners, change of control or other brands? And does that profile change any during a downturn?

During a downturn, Steve, it does change a bit. It skews a bit more independent, and there’s certainly, if you look at the United States of America, 1.3 million economy rooms [ph] over half of which are not branded, that in a downturn, which we’re not seeing, that could skew. But it’s usually 1/3, 1/3, 1/3, 1/3 from competitors, 1/3 from independents and then 1/3 from picking up what might be being built out there in terms of additions to supply.

Okay. Thank you. Appreciate it.

Thank you. Our next question comes from David Katz with Jefferies.

Hi. Good morning, everyone. Thanks for taking my questions. Covered quite a bit already in the questions ahead of me, but I wanted to just go back to Asia and drill a bit deeper. I know you indicated it’s a bit of a tailwind. I think historically it’s been some outsized growth. Can you describe what you’re seeing in terms of on the ground, what stage we’re at? And just remind us what the sort of revenue intensity is relative to the whole as that recovers?

Thanks, David. In terms of the stage we’re at, as Michele noted we’re not yet back to where 2019 was nor did we expect to be. I think the gradual improvement in the first quarter came in exactly as we expected. It’s certainly been encouraging over the last few weeks to see the continued positive trends that – that’s being reported out there. And it’s great to see the significant uptick in occupancy. But we improved from 60-ish percent of 2019 levels in the fourth quarter to about 75% I think it was in the first quarter, and year-over-year we’re seeing acceleration. In terms of what we’re hearing from our teams on the ground, it’s both domestic travel and inbound travel that’s so encouragingly bounced back. China has resumed visa applications, flight capacity, which isn’t yet back to where it was in 2019, it’s picking up. I think the flight that most of our team takes between Singapore and Shanghai, given that we have offices in both cities, which was running three times a week back in COVID, has picked up to 40 flights a week, and we’re hearing that, that could increase to 50 flights a week by June. So that’s encouraging. Our partners – our marketing partners over there Ctrip, they’re reporting April search volume for Mainland China up 126% versus 2019 as we come into the busy vacation period. And we’re hearing from our team of some very aggressive government actions to stimulate tour and travel in cities like Foshan, providing credits to meeting planners, mice planners on cost for events. And then on the development side, finally, we’re just very pleased with what the team has been doing. We saw a 1% sequential growth and a 5% overall net room growth for our entire China system, including our master license agreements. And our team opened more direct rooms in the first quarter than they did last year. I think this was the third consecutive quarter of double-digit net room growth for our domestic China direct franchising business. So we’re really pleased. And I think importantly, what Michele and I were most pleased about what the team was to see our conversion pipeline in China growing sequentially and year-over-year moving that China pipeline up to – on an overall basis.

Okay. Thank you. Appreciate it.

Thanks David.

[Operator Instructions] Our next question comes from Brandt Montour with Barclays.

Hey good morning everybody. Thanks for taking my question. I just wanted to circle back on Joe’s question to ask in a slightly different way for conversions. I know that some of your brands like for days in you can convert a very low cash outlay. But maybe you could tell us for the conversion activity overall, what the average cash outlay is? And then what percentage of deals would need financing?

Yes, it’s a low percentage of deals, Brandt that would need financing very rarely on days in conversions as their financing involved. And when we look at bringing in a competitive or an independent hotel in terms of the cost of that property improvement plan, we’re looking at something three to five times less what we’re seeing in the marketplace that our larger brand competitors are offering. And we believe that’s been a big piece of how our conversion rooms increased in terms of both openings and signings. Our conversion rooms increased 7% domestically and 3% globally in the quarter versus what we did back in pre-COVID. And we opened more domestic economy and we opened more mid-scale conversion rooms than we did last year. So we’re pleased with the progress, and we’re not seeing any signs of slowdown there.

Yes. For typical economy – yes. Brandt, for a typical economy property in decent condition, it’s going to be less than $1 million outlay on the owner side.

Perfect. And then on the – it’s great to hear that April trends bounced back, I think you guys were specifically talking about economy but maybe not. I don’t know, Geoff, if you want to defer my shelf take a stab at what we saw in March, it looked like SCR showed a little bit of a dip in occupancy. I think it was tax return timing, or if it was weather or if you want to take a shot at what you think might have happened in March?

Yes. As we said, our quarter came in just as we expected, but March as well came in as expected, Brandt. If you think about our domestic business, it was fully recovered in 2021. Unlike many of our peers, we did not feel the impact from Omicron last year that the higher chain scales felt. And if you look back at March of 2022, its growth was 30% over March of 2021. So again, it came in as expected. And to your point, I did mention the economy RevPAR accelerating, but overall for the last four weeks of April through the 22nd, our RevPAR is up 2% to last year and up 10% to where it was in 2019, which is ahead of where it was for the quarter.

Great. Thanks a lot.

Thanks, Brandt.

Thank you. Our final question will come from Dan Wasiolek with Morningstar.

Hey, good morning guys. Thanks for squeezing in my questions. So maybe just one on ECHO kind of interested in the potential of the contribution that brand might have to NUG [ph] over the coming years. How are you guys thinking about the long-term unit and room potential for that brand? What percent of the current contracted pipeline is conversion versus new build? And how long does it take for a new construction ECHO brand hotel to open? Thanks.

Yes. All great questions. We’re looking anywhere, depending on the developer between 12 and 24 months, I think, averaging 18. These are very sophisticated real estate developers with strong construction backgrounds behind them and third-party management companies behind them, and they’re off and running and as excited as they could be. We’re expecting another two dozen ground breaks this year. We said we’d have 100 open in the first five years. They will all be to your question – good question, new construction. We will not be doing conversions with this brand. And we’re expecting 300 in the first 10 years, and we feel very good about both of those numbers based on where we are. And there’s no reason we can’t do more given the demand out there that’s building, especially in states like Texas or Georgia or Arizona that are receiving so much of the infrastructure building that’s driving a lot of this. We are expecting an increase of $10 million to $12 million of royalty fees for every 100 hotels that we open and expecting that to drop about 85% of it.

Okay, that’s great information. Thank you so much.

Thanks, Dan.

Thank you. At this time, I’ll turn the floor back over to Geoff Ballotti for any additional or closing remarks.

Well, thanks, Todd, and thanks, everyone, for your questions and your interest in Wyndham Hotels & Resorts. We were very pleased with our first quarter where we delivered adjusted EBITDA growth that outperformed expectations and allowed us to raise our full year outlook. Our team members are very enthusiastic about the opportunities that lie ahead and confident in our ability to deliver outstanding value to our shareholders, our guests and our franchisees. Michele, Matt and I look forward to talking to and seeing many of you in the weeks and months ahead and at many of the upcoming investor conferences that we’ll be attending. Have a great day, everyone.

Thank you. This does conclude today’s Wyndham Hotels & Resorts First Quarter 2023 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.