Ares Commercial Real Estate Corp (ACRE) 2022 Q1 法說會逐字稿

Good afternoon and welcome to Ares Commercial Real Estate Corporation's Conference Call to discuss the Company's First Quarter 2022 Financial Results. (Operator Instructions).

I will now turn the call over to Veronica Mayer from Investor Relations.

Thank you, Matt. Good afternoon and thank you for joining us on today's conference call. I am joined today by our CEO, Bryan Donohoe; Tae-Sik Yoon, our CFO; and Carl Drake, Head of Public Markets Investor Relations.

In addition to our press release and the 10-Q that we filed with the SEC, we have posted an earnings presentation under the Investor Resources section of our website at www.arescre.com.

Before we begin, I want to remind everyone that comments made during the course of this conference call and webcast and the accompanying documents contain forward-looking statements and are subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may and similar expressions. These forward-looking statements are based on management's current expectations of market conditions and management's judgment. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. The company's actual results could differ materially from those expressed in the forward-looking statements, as a result of a number of factors, including those listed in its SEC filings. Ares Commercial Real Estate Corporation assumes no obligation to update any such forward-looking statements.

During this conference call, we will refer to certain non-GAAP financial measures. We use these measures as -- of operating performance and these measures should not be considered in isolation from or as a substitute for measures prepared in accordance with Generally Accepted Accounting Principles. These measures may not be comparable to like-titled measures used by other companies.

Now, I would like to turn the call over to our CEO, Bryan Donohoe.

Thanks, Veronica, and good afternoon, everybody. Following a very strong end to last year, we believe we are well positioned to continue to deliver attractive returns for our shareholders in 2022. During the first quarter, we leveraged the breadth of the Ares origination platform to navigate volatile and uncertain markets to originate $263 million of new loans. We continued this momentum with $123 million in new -- in loans closed to date in the second quarter, and we have more than $200 million in the closing process.

The overall credit quality of the portfolio remains stable, and we finalized the sale of our only REO property, the Westchester Marriott Hotel. And as Tae-Sik will discuss in detail, our earnings are positioned to continue to benefit from increases in interest rates due to our floating rate portfolio and the hedges we have on our liabilities. We began the year navigating significant market volatility caused by rising inflation, more aggressive Fed tightening and global conflicts, all of which serve to further slow what is already a seasonally light quarter for activity.

In the first 2 months of the quarter, we continue to be highly selective, and we believe that our patience was rewarded. Toward the end of the first quarter, when our transaction flow and originations increased, we began to see more attractive credit spreads on new investments. Our first quarter distributable earnings of $0.34 per share were influenced by our more measured approach on new originations early in the quarter. And as we discussed on our last quarter's earnings call, the pull-forward impact of early prepayment related fees that we recognized in the fourth quarter of last year.

While we are pleased with our execution of the sale of this REO property, holding the asset through what is a seasonally weak quarter for this hotel, we incurred a loss of $0.03 per share in the quarter. We expect the accelerated pace of our originations at wider spreads, coupled with increases in base interest rates should result in a pickup in distributable earnings for the second quarter, and our asset-sensitive balance sheet puts us in a great position to generate additional earnings, assuming interest rate increases throughout the year.

As a result of these factors, we believe we are on track toward our goal of having distributable earnings cover our dividends for the full year as we have done for the past 5 years. During the second quarter, we have seen investment opportunities with more conservative structures at wider spreads amidst the volatility. Our market visibility continues to increase from being a part of the broader Ares management global real estate strategy, which now has $46 billion of assets under management, including over $10 billion of real estate debt assets. Our presence in liquid and illiquid markets across the U.S. and Europe provides valuable insight into how we invest in dynamic markets.

We also benefit from in-house specialized capabilities like in the industrial sector, where we've been a top 3 buyer of U.S. industrial real estate over the past decade. This type of in-house expertise and the information that comes with it allows us to see trends in real time. As we have grown the real estate debt platform, we have also expanded our suite of products, which has allowed us to be even better partners to our sponsors and borrowers and to increase share. We continue to find attractive opportunities in our target sectors like industrial and self-storage, which can complement investments in other sectors where we see attractive relative value.

For example, in the first quarter, we found an opportunity on a unique destination hospitality property backed by a highly regarded sponsor at an attractive spread. In terms of geographic dispersion, we continue to see robust activity in the South and Mid-Atlantic regions, where we see strong demographic growth drivers. Our originations this quarter were consistent with our existing portfolio, which is comprised of 99% senior loans and 98% in floating rate instruments and continues to perform well.

Let me now turn the call over to Tae-Sik to walk through our quarterly financial highlights.

Great. Thank you, Bryan, and good afternoon, everyone. This morning, we reported GAAP net income of $16.2 million or $0.34 per common share and distributable earnings of $16.3 million or $0.34 per common share. As Bryan discussed, our earnings were impacted in part by the timing of recognizing fees associated with earlier-than-expected repayments that were pulled forward into the fourth quarter of 2021. As we discussed on our last earnings call, in the fourth quarter of 2021, we saw repayments of $317 million, which included recognizing $0.04 per share of remaining unamortized fees as compared to just $0.01 per share in such fee recognition in Q1 2022.

In addition, our former REO asset, the Westchester Marriott experienced an operating loss for the quarter, which, as Bryan mentioned, accounted for about $0.03 per share negative impact on distributable earnings for Q1 2022. We ended the quarter with a diversified portfolio of 77 loans with an outstanding principal balance of $2.4 billion, up 27% year-over-year. In addition, we continue to benefit from our LIBOR floors, which had a weighted average rate of 0.98%. Our CECL reserve was at $24.7 million at 1Q 2022, a slight decrease versus the amount held at the end of the fourth quarter of 2021.

Our weighted average loan risk rating for the portfolio improved from 2.8x at year-end 2021 to 2.7x as of March 31, 2022, and no new loans were put on nonaccrual during this first quarter of 2022. As a reminder, the unpaid principal balance of the 2 loans that continue to be on nonaccrual represent less than 2% of our overall portfolio. I would also like to point out an inadvertent clerical error in the risk rating loan table in Note 4 on Page 20 of our 10-Q that was filed earlier this morning. In the table, the amount for year 2022 for risk-rated 4 loans should have been $61 million and not 0. And the total column amount for risk rated 4 loans should have been $163 million and not $102 million. Please note that this error was limited to this table and does not change our overall portfolio risk rating or our CECL reserves. We will be issuing a filing shortly to correct this inadvertent clerical are.

Let me now provide an update on our portfolio positioning in the context of changes in short-term interest rates. As Bryan stated, our portfolio is currently positioned to benefit from increases in benchmark indices with 98% of our portfolio, as measured by unpaid principal balance comprised of floating rate loans indexed to either LIBOR or SOFR. Taking into account our LIBOR floors, approximately 50% of our loans are sensitive to increases in interest rates and will benefit should we see further increases in LIBOR or SOFR above current rates.

In addition, we continue to match fund our assets and liabilities and hedged a significant portion of our floating rate debt through interest rate swaps and fix the interest rate on some of our longer-term liabilities, including the $150 million term loan that we upsized, extended and converted to fixed rate last year. Without our interest rate hedges, the pro forma impact of rising rates would have had the opposite impact and reduce our earnings. Additionally, as we continue to recalibrate our hedge positions to better align it with the forecasted changes in our portfolio, including repayments as well as movements in interest rates, we unwound a $170 million notional interest rate cap that generated an approximate $2 million realized gain or about $0.04 per share in distributable earnings for the first quarter of 2022.

Finally, this morning, we announced a second quarter 2022 regular dividend of $0.33 per common share as well as a continuation of our supplemental quarterly dividend of $0.02 per common share. At this point, it is the goal of the company to continue sharing a portion of the earnings benefit from LIBOR floors with shareholders through the $0.02 quarterly supplemental dividend and to continue covering our regular and supplemental dividends fully from distributable earnings on an annual basis.

So with that, let me turn the call back over to Bryan for some closing remarks.

Thanks, Tae-Sik. As we look further ahead in 2022, we believe our company is well positioned from a market standpoint and our balance sheet is strong with moderate leverage and an attractive asset-sensitive position. We continue to be on track for another record year of originations and to maintain a stronger pace of investments compared to the first quarter.

Before we take questions, we want to sincerely thank our team for all of their hard work and our broader Ares colleagues for their partnership in these periods of volatility where their breadth of experience has been incredibly valuable. I also want to thank all our shareholders for their continued support of the company.

And with that, I'll ask the operator to open the line for questions.

(Operator Instructions) Our first question will come from Doug Harter with Credit Suisse.

Given the sensitivity you shared around rising short-term rates, can you just talk about how the Board and you're thinking about the supplemental dividend and kind of how -- if that continues or that gets converted to kind of being a regular way dividend and kind of how you're thinking about that?

Sure. Doug, thank you very much for that question. Yes, clearly, when we instituted the $0.02 supplemental dividend going back to the first quarter of 2021, we said it was for the purpose of sharing with our shareholders this extra benefit that we are getting from LIBOR floors. As you recall, the LIBOR floors have been running off for the past 15 months since we instituted that supplemental dividend. And we said that we would continue to evaluate the $0.02 supplement in terms of continuation as either a supplemental dividend, cessation of that dividend or continuation of it as a permanent dividend.

And really, there's 2 factors that go into it, right? One is how quickly do the loans that have the LIBOR floors run off. And I think so far, it's been tracking very consistent with our original forecast. The second factor is where is short-term interest rates going to be at the time we have some runoff of those interest rate floors. So for example, if you had a situation where most if all -- if not all of your floors have run off, LIBOR was still very low, it would be harder for the company to continue to pay the $0.02 dividend. On the other hand, if the floors have remained in place, it will be easier, obviously, for us to keep that $0.02 supplemental dividend in place.

But the third scenario is that even if the -- even if the loans with floors run off, but we have a increase in interest rates, we may still have the ability to, therefore, pay the $0.02 supplemental dividend and potentially convert that to a more permanent situation longer term. So I think things are, I would say, trending in the right direction. Obviously, we have seen the final -- the increases in interest rates over the past few weeks and months. So it's a little too early to say, but I would say it's certainly trending in the right direction of fitting within that third scenario such that while we are having runoff of loans that have floors, at the same time, we are seeing increases in base interest rates.

Got it. That makes sense. And then just around leverage. Is the goal to target still to kind of work towards kind of 3x debt to equity?

It is. As we had mentioned, we were certainly above that number prior to the onset of the pandemic, and we have purposely reduced our leverage down to about [2.2] to more or less fortify the balance sheet during the pandemic at a time when liquidity and stability of the balance sheet was at a premium. I would say our business model, our earnings model is really predicated upon maintaining about a plus or minus 3:1 debt to equity. We're still beneath that amount. That gives us headroom to continue to do originations, leverage the balance sheet further, generate and optimize the earnings potential of the balance sheet. But that is certainly the goal and continues to be the goal to be plus or minus 3x debt to equity.

Our next question will come from Steve DeLaney with JMP Securities.

Bryan, I appreciated your comments, I believe, in your remarks about the repayments or Tae-Sik, apology, it may have been yours because you're -- we're talking about the earnings. But I appreciate the impact of your clarity around the repayments and the difference between a $0.04 benefit in 4Q and $0.01 here in the first quarter, so a $0.03 difference that helps us understand your bottom line number. Could you give us a little feel for the outlook for repayments maybe for what you're seeing here near term in the second quarter? And then for the -- sort of for the full year, that would be helpful.

Sure. No, absolutely, Steve. And again, thank you very much for your question. We do think repayments are starting to so-called normalize, right? And normalized to us means that about 1/3 of our portfolio tends to repay on your average year, right? And it makes sense, given that we generally underwrite 3-year loans. And although we do get some early repayments, I think it's hovered around 2.5 to 3-year average. So to kind of think that our portfolio runs off by about 1/3 each year has generally been correct. Obviously, during the pandemic, we've had different circumstances.

But we do see the market in terms of repayments, returning to a more normalized period. So that would really sort of infer, call it, $800 million per year based on a $2.4 billion portfolio, $200 million a quarter. I'm a little reticent to even give a quarterly number because obviously, there is variability quarter-to-quarter. It's very hard to predict. $200 million per quarter, I think it's much more easier to forecast $800 million a year just because things don't happen neatly in quarterly increments. But we do get a sense that it is returning back to fairly normalized circumstances. I think when we look at our near, medium and longer-term forecast, that continues to be where we see repayments happening.

Got it. And of course, second quarter was -- excuse me, first quarter was right on that $200 million in the fourth quarter was 50% higher. So it kind of explains it. Okay. And I see, Doug got leverage, I guess my comment would be just that any time you have a quarter where you're $0.41, you're $0.34, it raises some questions as to my view from what I would look at the 2 sets of numbers in the fourth quarter and the first quarter, somewhere in the middle is probably more like when you look at all the adjustments that you had between the quarters, it seems to me that that's a probably more realistic run rate, but I'm not going to ask you to comment on that, just -- and the fact that there were -- there was noise both ways with the hotel operating loss and the derivative gain and et cetera. But the one-timers, if you will, seem to be working against you more than benefiting you this quarter anyway. That's just my take on the bottom, the $0.34 figure. So that's all I have. Stay well, and we'll do it again in the second quarter.

That's great. Thank you so much, Steve.

Our next question will come from Rick Shane with JPMorgan.

Look, obviously, the markets evolve, there's an opportunity for you guys to improve pricing, improve term. I'm curious, as the market shifts, if there are opportunities that are being created either in geographies or in property types that you were deemphasizing that are rebounding in terms of attractiveness at this way?

Yes. Great question, Rick. I'll answer it in 2 ways. First is that some of the opportunities that we're seeing in the market are driven by the change in liability structures for many of our competitors and many of the folks in the real estate debt space. And what I'm referring to is those entities that are reliant upon the CLO market, where you've seen such impactful widening, one that's causing spreads to widen across the board in all liquid markets and even illiquids to a degree. And then certainly opening up some opportunities in that sense.

From a geographic or product or sector-specific opportunity set, I think you can probably correlate those to how the -- how lenders structure their liabilities and find some of that. I wouldn't say that it's necessarily tied to geography as much. As we've touched on in previous quarters, our footprint allows us to be somewhat agnostic but focused on where we're seeing demographic growth in the Southeast and Southwest, and those areas are not immune to the widening in the CLO market. So see some opportunities there.

And as we touched on in our prepared remarks, while our focus as a platform, real estate debt and equity is in industrial, is in multifamily, is in self-storage, there are those one-off opportunities in office, in lodging that are going to consistently present themselves and we have the ability to underwrite those pretty efficiently.

Got it. Okay. It's helpful. And it's actually good for [selective] in terms of the broader markets because sometimes, obviously, we look at things a little bit more narrowly or myopically, perhaps. So it's helpful context.

Yes. Absolutely.

Our next question will come from Jade Rahmani with KBW.

Can you talk about what you're seeing in the market in terms of impact from higher rates as all-in coupons and spreads have increased significantly. I believe, how are borrowers in the market reacting to that?

Thanks for the question, Jade, and it's a good one. I think it's -- the story is still being told in real time. When you take the factors you mentioned and some of the unnatural factors like the war in Ukraine, for instance, we've got a lot of different tides and wind moving in opposite directions. I'd say that it's -- there's a quantitative side to what we do. And when you increase borrowing costs, it has to inform the value of underlying properties. But that runs counter to a degree to the inflation story where our assets that are in the ground are a greater discount to replacement cost today.

And in the sectors that we are most focused on, industrial, multifamily and self-storage as kind of a multifamily corollary, you're seeing, at least in shorter-duration leases in industrial, rents that are outpacing the impact of higher interest rates. I think as a whole, as an industry, I think we're seeing -- we had a record transaction volume as an industry last year. I think you'd be hard-pressed to say that, that will continue this year. Just the denominator has to shift downward to a degree. And I think people will be at least a little more pensive on their investments, notwithstanding capital flows.

So as we touched on our remarks, we're going to be -- we were extremely careful at the beginning of the quarter. We saw opportunities that were attractive towards the latter half, and we're still seeing that today. But I think in a broad stroke, as I said, you'd be hard-pressed not to think that values of certain assets will be impacted by rising rates. Just the buying power is lesser today than it was 6 months ago.

So it's not as if the current rate impact we've seen thus far, the rate move thus far has frozen the market. There's still a healthy degree of transactions?

There are. I mean I think if you think about the natural life cycle of a real estate transaction, Jade, you're thinking that's going to take 90 to 120 days from beginning to end. So I think you're seeing the culmination of the transactions that were begun prior to some of the more aggressive movements in spreads or underlying base rates. So maybe the jury is still out, but from our specific denominator perspective, there's plenty to do.

Okay. And with respect to those asset classes that have benefited from strong rent growth, such as multifamily, is it your view that IRRs have been running paper IRRs in a model been running a couple of hundred basis points above required hurdle rates. So there's room in the pro forma returns to stomach some increase in rate. There's also a lot of capital on the sidelines, so you could adjust -- you could take less leverage. That helps with the interest rate cost. You could take less term, you could use some IO. There's -- do you think, in your view that there's room in the model to absorb some of the rate impact without pressuring values at this stage?

I think it depends on the vintage of acquisition and the specific geography. Certainly, you're seeing rent growth that would have and is expected to continue to outpace initial underwriting as we sit here today. But some of that IRR above pro forma that you're mentioning was owing to lower cap rates, right? And if you -- what we do, and I think this is where the breadth of platform is super important. If you go back to cap rates when rates were equivalent to where they are today or at least go back a couple of weeks, and that was 2019 levels, you'd expect to see those 3.5 to 4 cap multi and industrial assets maybe widen to 4.25 to 4.75, just interest rate equivalent.

And we've gone back and we check that data and that informs the way we underwrite. But certainly, if you look at specific assets that have benefited from rent growth that really no one would have underwritten and cap rate declines over the past 2 to 3 years, that's been significant. So portfolio-wide, I think you'll see a lot of equity holders benefit from that combination, and it will be interesting to see whether continued rent growth in those sectors outpaces the change in cap rates. But I think you're thinking about it the right way.

And are you changing at all your underwriting of multifamily? And is that still a sector ACRE is very focused on? The Fed has said that they want to get inflation under control and I believe 1/3 of inflation is what they call the shelter index, which is a composite and that includes rent growth. And if we're seeing new lease rent growth at 17% and housing appreciation at 21%, it's [staying] the reason that they absolutely need to slow the housing market and the rental market to control at least to reduce 1/3 of inflation. So are you at all moderating your assumptions in multifamily underwriting? And is that still a target asset class?

Absolutely. Great question. Still a target asset class. I think what I'd say at a macro level, one of the unique attributes of inflation today, and if you go back to the 70s for this as well is the supply side dynamic. When we think about reducing rent growth, there's kind of 2 ways to do it. One is legislatively and the other is through supply. And the United States was undersupplied from housing from 2010 to '20 pretty dramatically. And inflation is causing cost to escalate significantly to develop new multifamily assets.

So some of the arrows that would theoretically be available to kind of lessen that rent growth aren't really there. Now -- so what are we looking at? One is just absolute underlying economy to what we expect to see in a downside situation where we have a recession or a similar household deformation in order to lessen the broader impact of higher rental rates, but that's not really our base case today. I think our expectation in the near term is for continued rent growth and that it moderates. But what we're focused on, again, is just the affordability index, right?

And I think that's when you start to see -- you might start to see bad debt creep up on the income statement of some of the residential focused REITs. And we're certainly looking at that in our portfolio between debt and equity to see if that's starting to creep up in any way. So I wouldn't say wholesale changes remains a strong focus area for us, but we are absolutely paying attention to risk to the downside.

And one last question is ground leases. Is that a competitive form of capital that you're seeing in the market currently?

I wouldn't -- I think the movement in rates is making that arena pretty dynamic. We are seeing throughout the last 2 quarters with that changing dynamic, a little bit lesser participation in some of the ground lease businesses. We treat it and when we underwrite an asset, is just simply additional debt. And I don't see that -- I don't see broadly that, that market will kind of outstrip just the traditional financing lines. But it is certainly an interesting space to watch.

Our next question will come from Stephen Laws with Raymond James.

You've covered a lot already, but I wanted to ask about office, Bryan. It's about 1/3 of the portfolio. I don't think you've originated loans in the office sector over the last couple of quarters. But maybe what are you seeing there? You mentioned you might see some one-off opportunities there. But what are you seeing both opportunity-wise in office? And then maybe update us on how that 1/3 of your loan book is performing and what you're seeing inside the portfolio.

Yes, absolutely. I think if we go back 9, 12 months, we did see some one-off opportunities in the sector. I think broadly speaking, one of the unique attributes of the office sector today is that average rents in a given market no longer tell the full story. Maybe they never told the full story, but they're certainly telling less of the picture today. There's just a great bifurcation in terms of tenant demand between newer assets with high amenity package, either interior, exteriors. So I think well-located SOHO office in the New York market are similar.

And you see the headlines, right, where Class B rents are $40 to $50 in New York and Class A rents don't seem to have a ceiling in terms of some of the newer developments. In terms of the opportunity set, we'll continue to be selective there. And from a portfolio standpoint, where we pay attention is to tenant retention and weighted average lease term. And I think in our top assets in the office sector, we still have long duration in excess of 5 years, which is obviously beyond the loan tenor that we would typically see. So a space we're paying attention to from a risk management perspective, and we'll continue to be selective from adding from an addition to the portfolio perspective.

Our next question will come from Eric Hagen with BTIG.

For the new originations in the quarter, does the yield of 7.1% use the forward SOFR curve at the end of the quarter? And do you feel like there's any room for that to improve as the Fed raises rates? And can you also say how the yield compares to the secure -- should the loans that paid down in the period?

In terms of the quoted number, the unlevered effective yield, that is using the spot rate as of the quarter end. And these are floating rate loans. So they should go up in coupon and rate as further increases in rates happen. But the quoted number is based upon the spot rate today. In terms of what is running off, I don't have the exact number in terms of the unlevered effective yield of the loans that paid off this quarter, but it was certainly below what was originated for the first quarter. And again, it's based upon, again, the March 31 rates and not any sort of forward-looking curve or forward-looking rates.

Got it. That's really helpful. Can you also talk about plans around managing the CLO that you sponsored in 2017, whether there's an opportunity to maybe refinance that or issue a new one? And maybe even more generally, can you point to any kind of catalysts for spreads to tighten in the CLO market right now?

Sure. In terms of our FL3, 2017-FL3, that loan -- that securitization has been modified a couple of times now, in fact, to extend the management period in which we can continue to replace loans that run off within the CLO structure. This is the loan -- this is a CLO structure that we were able to place with one institutional buyer of all the investment-grade certificates. So we have continued to work very closely with the one holder to, again, extended a couple of times. I think it's been extended twice now to, again, extend both the revolving period and the eventual term.

I think it's a very good example of the type of benefits we get by being part of Ares management. This is a CLO that we did without the assistance of a third-party placement agent and therefore, saved significant sums in terms of expenses and fees associated with it. But far more important because we have that excellent relationship with the single holder of the investment-grade notes, we've been able to keep this CLO going for 5 years plus now. And I think it's been a huge, huge benefit, both in terms of amortizing what is generally a very expensive cost of getting a CLO done, plus reducing the risk of getting market execution on new CLOs.

And I think your second question was about, again, just sort of market changes in CLO spreads. I mean, clearly, in the first couple of months of this year, we saw significant spread widening in the CLO market. I think the pace of that widening has slowed down from our perception -- from our perspective. But we don't think it has certainly come in anywhere near what the levels were in 2021. But we are seeing sort of a slowing down of the spread widening itself.

Yes. And I'll just pile on, Eric, if I could, just with respect to spreads for our underlying loans, I would say, similar to what Tae-Sik said, it's tough to see what the catalyst would be for tightening as we sit here today. Normally, when we see rising rates, we would see the compression in credit spreads, and we're just -- we're not seeing that right now. And I think that's just a function of the market dynamic I touched on earlier. And if you go through investment-grade corporates and the movements there, high yield similar and obviously, the stock market being down 12%, 13% year-to-date, there's not a great catalyst for tightening.

Overarching, I think this type of volatility is something that gets us excited just given as we think about our own liability structure, not being reliant on the CLO market, and having steady partners that finance a good portion of our business as well as, as we touched on a bit earlier as well, increasing our leverage to that 3:1 target. This is a pretty sound environment for us to invest.

This concludes our question-and-answer session. I would like to turn the conference back over to Bryan Donohoe for any closing remarks.

Thanks. I just want to thank everybody for their time today. We certainly appreciate your continued support of ACRE. And we look forward to speaking to you again in about 90 days. Thank you.

Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of this conference call will be available approximately 1 hour after the end of this call through June 3, 2022, to domestic callers by dialing 1 (877) 344-7529 and to international callers by dialing 1 (412) 317-0088. For all replays, please reference conference number 702-7178. An archived replay will also be available on a webcast link located on the homepage of the Investor Resources section of our website.