Anywhere Real Estate Inc (HOUS) 2011 Q4 法說會逐字稿

Good afternoon, and welcome to the Realogy Corporation full-year 2011 earnings conference call via webcast.

Today's call is being recorded, and a written transcript will be available in the investor information section of the Company's website tomorrow.

A webcast replay will also be made available on the Company's website.

At this time, I would like to turn the conference over to Realogy's Senior Vice President, Alicia Swift.

Please go ahead, Alicia.

Thank you, Chanel.

Good afternoon, and welcome to Realogy's full-year 2011 earnings conference call.

On the call with me today are Realogy's President and CEO, Richard Smith; and Chief Financial Officer, Tony Hull.

I would like to call your attention to three items.

First, you should all have access to a copy of our financial results press release for the year ended December 31, 2011 issued earlier today, which we furnished with the Securities and Exchange Commission.

This document is available on the investor information section of our website, as well as a copy of today's webcast live.

We plan to file our Form 10-K for the year ended December 31, 2011 later this week.

Second, the Company will be making statements about its future results and other forward-looking statements during this call.

Statements about future results made during the call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are based on current expectations and the current economic environment.

Forward-looking statements and projections are inherently subject to significant economic, competitive, and other uncertainties and contingencies, many of which are beyond the control of Management.

The Company cautions that these statements are not guarantees of future performance.

Actual results may differ materially from those expressed or implied in the forward-looking statements.

For those who listen to a rebroadcast of this presentation, we remind you that the remarks are made herein are as of today, February 27, and have not been updated subsequent to the initial earnings call.

Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements and projections are set forth under the headings forward-looking statements, risk factors, and Management's discussion and analysis of the financial condition, and the results of operations in our annual report on Form 10-K for the year ended December 31, 2010 and our quarterly reports on Form 10-Q for the quarters ended March 31, 2011; June 30, 2011; and September 30, 2011; and in our other periodic reports filed from time to time.

Third, we will be referring to certain non-GAAP measures during today's call.

Today's press release contains definitions of these terms, a reconciliation of these terms to their most comparable GAAP measure, and a discussion of why we believe these non-GAAP financial measures are useful to our investors.

In terms of industry data, we use the National Association of Realtors and Fannie Mae as benchmarks of the direction of the residential housing market.

We believe changes in Realogy's home sales statistics will continue to vary from those reported by NAR because they use survey data as the basis of their historical reports, whereas we use data based on our actual reported results.

While we believe this industry data is derived from the most widely recognized sources for reporting US residential housing market statistical data, we do not endorse or suggest reliance on this data alone.

Let me briefly review the headlines from our release issued today regarding Realogy's full-year 2011 results.

Specifically, for the year ended December 31, 2011, we reported revenue of $4.1 billion; EBITDA before restructuring and other items of $476 million; maintained covenant compliance with a ratio of 4.44 to 1, or 3.87 to 1 on a pro forma basis, after giving effect to our February 2012 bond offering and the application of the proceeds; net loss attributable to Realogy of $441 million.

And finally, earlier today, the Realogy Board of Directors appointed Richard Smith as Chairman of the Board in addition to his ongoing role as CEO and President.

His appointment as Chairman will begin March 15, 2012, which is the effective date of Henry Silverman's resignation from his positions as a Director and the Non-Executive Chairman of Realogy's Board of Directors.

Silverman also resigned from all other positions he holds at Apollo Global Management and its subsidiaries, affiliates, and portfolio companies, also effective March 15, 2012.

Now I will turn the call over to Richard Smith.

Thank you, Alicia, and thank you all for joining us on today's call.

The US economy remained weak in 2011, and our business results reflected that weakness.

Despite the difficult macroeconomic environment and another challenging housing market in 2011, Realogy finished the full year with $4.1 billion in revenue, which equalled our 2010 results.

While we experienced modest softness in our real estate franchising and brokerage segments, as did the rest of the industry, the weakness was offset by continued growth in our relocation and title services segments.

Earlier this month, we successfully completed a $918 million refinancing transaction, which extended our only significant near-term corporate maturities from 2013 to 2020.

Tony will discuss this transaction in more detail, but the offering was well received and was an important step in our continuing efforts to improve our capital structure.

In November, we signed a 17-year lease on a new headquarters location in nearby Madison, New Jersey, that will best meet our long-term needs.

As we have stated previously, under the new lease, our annual base rent will be reduced by about 25%.

In exchange for keeping more than 950 jobs in New Jersey, we will receive approximately $12 million in tax credits from the state's economic development authority.

According to the National Association of Realtors, NAR, existing home sale transactions for 2011 increased by 2% over 2010.

With 4.26 million homes sold in the US in 2011, according to NAR, 2011 is the fourth consecutive year that existing home sale transactions have been in the 4.1 million to 4.3 million range on an annual basis.

It appears this range may well be the run rate base for existing home sales in the United States.

In terms of average home sale price, NAR reported a year-over-year decline of 3%.

In December, NAR changed its home sale reporting methodology, which resulted in a downward revision of its national existing home sales survey data for the five-year period from 2007 to 2011.

The revisions were limited to unit sales and did not change any of NAR's reported historical median or average home sale price figures.

Realogy's reported existing home sale transaction sides were unaffected by NAR's revisions.

Since our transaction count remained unchanged, while NAR's total existing home sale figure decreased, the net result was an increase in our market penetration.

Realogy's existing home sale transaction volume for domestic transactions involving a real estate brokerage firm in 2010 increased to 26%, up from the 23% previously reported by the Company, and held steady at 26% in 2011.

Realogy was involved in approximately 1.2 million transaction sides during 2011.

Keep in mind that the broker-assisted market remains the dominant channel for home sale transactions in the US.

The for-sale-by-owner market share, and other non-brokerage-assisted transactions, as reported by NAR, have dropped to 13% from 21% during the past decade.

NRT, our Company-owned brokerage operations, recorded home sale units in 2011 that were flat to the prior year, while at the Realogy Franchise Group, home sale units were down 1% year-over-year.

Average sales price was down 2% for NRT and flat for RFG.

From an overall volume perspective -- sides, times, average price -- RFG performed in line with the national statistics, with a 1% overall volume decline, compared to NAR's reported volume decrease of 1%.

NRT's volume decline of 2% was modestly below NAR's reported figures.

Now, let's review the 2011 operational highlights of our Businesses.

The Realogy Franchise Group, RFG, is the largest real estate franchise brokerage in the world, with 245,800 independent sales associates operating from approximately 14,000 offices in 101 countries and territories.

At year-end, excluding Company-owned operations, none of our franchisees individually represented more than 1% of our franchise royalty revenue.

On average, our franchisees' tenure with our brands is about 18 years.

In terms of domestic franchise sales for 2011, RFG added new franchisees and sales associates representing $276 million in annualized franchisee gross commission income, or GCI.

Our reported franchise sales are defined as new franchise agreements, as well as GCI acquired by our existing franchisees with our assistance.

In terms of franchisee retention, in 2011, RFG retained 97% of its franchisee production as measured by GCI, which is up from 95% in each of the two prior years.

On the global front, RFG's international royalty revenues in 2011 were up 11% year-over-year and reached record levels.

During the fourth quarter of 2011 Sotheby's International Realty executed franchise agreements with firms in Mexico and Italy, and both Caldwell Banker and ERA entered Brazil.

We are encouraged by RFG's 2012 franchise sales pipeline for both our US domestic, as well as our international, markets.

Our brands received several prestigious national awards thus far in 2012.

Sotheby's International Realty won Franchise Business Review's Franchisees' Satisfaction Award among real estate companies for the fifth year in a row, and improved to number two overall among all franchise categories.

Caldwell Banker earned a top 10 finish among Training Magazine's list of the top 125 training organizations, and Century 21 and Cartus also made the Training top 125 list.

NRT, our Company-owned brokerage, is more than three times larger by sales volume than its next closest residential real estate brokerage competitor.

At year-end 2011, NRT had approximately 725 offices and 42,100 independent sales associates.

The Company's average sales price of $426,400 remains almost double NAR's national average sales price of $214,000, and reflects NRT's geographic diversity and focus on 35 of the nation's largest metropolitan markets, with a significant proportion of its business occurring at the high end of each of those markets.

NRT management's focus on organic growth through sales associate recruiting has been very effective.

In this regard, in 2011, we placed an increased emphasis on recruiting groups of sales associates, literally walking them from a local competitor into one of our neighboring sales offices.

In the industry, this is referred to as a walkover.

We believe this strategy is cost effective, and it will continue to be an NRT growth strategy.

A typical walkover requires very little upfront capital as compared to acquisitions, and in the aggregate, creates meaningful top-line growth for the Company.

During the past 12 months NRT recruited new sales associates who collectively generated approximately $64 million in annualized gross commission income.

More traditional mergers and acquisitions in 2011 added about $19 million of GCI.

Thus, between organic and non-organic growth, NRT added approximately $83 million of GCI to its revenue base in 2011.

The retention of high-performing sales associates is of equal importance to NRT, and management has been exceptionally effective in that regard.

In the past two years plus, NRT has consistently retained over 93% of the production from its first- and second-quartile sales associates, the top producing segments of its sales force.

Cartus, our relocation company, successfully won the business of 124 new clients during 2011 and expanded domestic and international services with 300 of its existing clients.

Global revenue grew approximately 20% in 2011 compared to the prior year, and that was aided by the new clients and expansions.

Management has grown market share in a tough environment, and today provides global relocation services to over 70% of the Fortune 50.

For calendar-year 2011 Cartus provided diverse relocation services to 1,500 active clients, who moved 153,000 employees to more than 165 countries.

Cartus has offices in the US, as well as in the United Kingdom, Canada, Hong Kong, Singapore, China, Germany, France, Switzerland, and the Netherlands.

Title Resource Group, TRG, our title agency and underwriter business, completed over 93,000 purchase transactions and 62,000 refinancing transactions in 2011.

TRG also continued its growth in the lender channel, expanding the breadth of its existing relationships while adding new clients to the mix as well.

In 2011, TRG successfully grew its revenue by 10% and increased its earnings by 16%.

On a full-year basis, TRG's underwriter, Title Resources Guarantee Company, experienced 37% earnings growth and reported an underwriting claims loss ratio of approximately 1%, which continues to substantially outperform the industry average loss ratio of about 6%.

Now, let's look at the current operating environment.

We continue to see signs of a stabilizing housing market.

In its February 22 release, NAR reported 6.1 months inventory as of January 31 of this year, which is down considerably from the 2011 peak of 9.3 months inventory.

Also, NAR's January 2012 report showed that the rate of existing home sales increased year-over-year by 1% over January 2011, and on a seasonally adjusted annualized rate basis, the average sales price declined 2% year-over-year.

Further support of a stabilizing market comes from REAL Trends, an industry publication.

It recently reported that closed home sales in January of this year are up 10% year-over-year.

The first two months of business for our franchised and owned operations seem to validate that forecast, as we have seen high single-digit gains in volume, sides times price; and the sales volumes gains are being achieved by a year-over-year increase in home sale transaction sides, which more than offsets the modest price decreases occurring in many markets.

This is an encouraging sign of a return to normalcy in the housing cycle.

That is, as price moderates, demand increases, which is typically followed by an increase in pricing.

For full-year 2012, NAR is forecasting 4.55 million unit sales, which would amount to a 7% year-over-year increase, while Fannie Mae's forecast calls for a 6% increase to 4.5 million units.

With respect to median sales price, NAR's current estimate calls for a 1% increase in 2012, while Fannie is more conservative, showing a price decline of 3% for this year.

The expected high proportion of distressed sales in the mix of overall home sales will continue to depress national median price forecasts.

For 2013, NAR is forecasting existing home sale increases of 3% and median price increases of 3%.

The Fannie Mae outlook also calls for a 3% increase in 2013 home sales, with median sales price flat compared to 2012.

On a net basis, that puts the anticipated range for 2013 at up 3% to 6% on a combined sales volume basis.

In a February 21 report, Fannie Mae forecasted that in 2012, the housing market will make a positive contribution to GDP growth for the first time in seven years.

The long-term outlook for the housing market remains inextricably linked to the overall US economy.

Under normal conditions, the current low mortgage rates, high affordability, and pent-up demand for housing would be enough to drive home sales and home prices upward.

Under today's market conditions, with underemployment rates above 15%, stringent underwriting standards, and approximately 25% of homeowners who have mortgages currently under water on their equity, many typical home purchase decisions have been put on hold.

Housing demand will respond most favorably to sustainable job growth and improved consumer confidence.

As we have discussed in the past, we are monitoring a wide range of economic, legislative, and regulatory issues, and we continue to proactively work to make sure that the housing industry's point of view is included in the dialogue in Washington, DC.

We recognize that many important housing policy decisions may be delayed until after this election cycle.

That said, we will continue to make our voices heard throughout the political process.

To that point, in December, we were invited to serve on the Bipartisan Policy Center's newly formed Housing Commission, which we gladly accepted, and are proud to be part of their policy advisory efforts.

Most recently, we assisted Senator Menendez, a Democrat from New Jersey, in drafting new legislation called the Preserving American Homeownership Act.

Specifically, the bill provides a shared appreciation mortgage solution for underwater homeowners to work together with their lenders to achieve a mutually beneficial outcome, and it enables both parties to avoid the lengthy and costly process of foreclosure.

And regardless of which side you take regarding the $25 billion national mortgage settlement between attorneys general from 49 states, the federal government, and the nation's five largest mortgage servicers, the simple fact that the parties have finally reached a settlement removes a known negative from the market.

In closing, while we are encouraged by the early indications of an improving near-term housing market, a stabilizing market does not necessarily imply a broad-based and uniform improvement.

As the macroeconomics improve, residential real estate will revert to the norm, which almost always depends on local market dynamics, local job growth, local tax policy, quality of schools, shopping, quality of housing inventory, et cetera.

So we will expect to see some markets perform better than others once the recovery is certain.

With that, I'll turn the call over to Tony Hull, our CFO, for a detailed review of our financial results.

Thank you, Richard.

Before I discuss the results for 2011, I have a few brief comments on the refinancing transaction that we completed earlier this month.

We had $918 million of debt coming due in 2013, which we refinanced with $593 million of first-lien bonds due in 2020 at a fixed rate of 7.625%, and $325 million of first- and half-lien bonds, also due in 2020 at a fixed rate of 9%.

As a result of this proactive transaction, we have no substantial maturities on our corporate debt until 2016.

We continue to have a unique deleveraging mechanism built into our balance sheet, which will provide an immediate reduction of approximately 30% of our debt balance if our convertible bond holders elected to convert their debt into equity.

This would also result in a $232 million reduction in our annual interest expense.

Apollo and three other investors hold substantially all of this convertible debt.

In discussing the financial results, I will be referring to the webcast slides.

Looking at slide 10, the breakdown by category of our $4.1 billion of total net revenue for 2011 was as follows -- gross commission income totaled $2.9 billion in NRT, a decrease of 1% from 2010.

Service revenues, principally from Cartus and TRG, increased to $752 million, up 7% from 2010; and RFG's third-party domestic franchise fees decreased $7 million to $256 million for the year.

On slide 11, we compare expenses during 2011 versus 2010.

Total commission and other related costs of $1.9 billion were flat year-over-year.

Operating expenses of $1.3 billion increased $29 million, or 2% year-over-year, primarily in conjunction with increased revenue at Cartus and TRG.

Marketing costs increased by $6 million, or 3%, primarily due to the increase in marketing fees collected from and expended on behalf of our franchisees.

General and administrative costs increased $16 million, primarily due to a full year of employee retention costs recognized in 2011, compared to a half year in 2010.

EBITDA before restructuring and other items for 2011 was $476 million, an 11% decrease from 2010.

Approximately half of the EBITDA decrease was related to lower home sale transaction volume.

The remainder was due to a full year of retention expense in 2011, increased legal expenses, and certain benefits in 2010 that did not recur.

The increased legal expenses in 2011 include reserves relating to the Cooper case, the settlement of which received preliminary approval by the court on February 21, 2012.

We fully reserved for this case in 2011.

Next, I will discuss our key revenue drivers from slide 12.

In the fourth quarter of 2011, RFG home sale sides increased 5% year-over-year, while average home sale price decreased 4% to $194,700.

RFG's volume increase was largely a result of more unit sales at lower price points.

In many markets, where it is now less expensive to own than to rent, first-time home buyers are entering the market more actively.

At NRT, home sale sides increased 2% year-over-year in the fourth quarter compared to 2010, and average home sale price decreased by 9% to $405,400.

The average price decline in the fourth quarter of 2011 was due to a shift in the mix of business to more lower-price properties compared to higher-price properties in Q4 of 2010; because, as with RFG, first-time buyer activity was more prevalent in many of the markets NRT serves.

Unit sales of homes at NRT below $300,000 increased to 61% of total sales in the fourth quarter of 2011, up from 57% in the same period in 2010.

Moving from an overall perspective, here is a look at select regional NRT performance data for the fourth quarter of 2011.

The trend of an influx of home buyers at lower prices was most pronounced in NRT's Midwestern operations, where we had a 13% increase in home sale sides, offset by average sale price decreases of 8%.

NRT's Northern California operations in the fourth quarter of 2011 had home sale side increases of 14%, offset by average sales price decreases of 10% compared to the fourth quarter of 2010.

Weaker areas of performance included NRT's Southern California operations, which reported an 8% decrease in home sale sides, and an 11% decrease in average home price; and the Northeast, which experienced sides decline of 4%, with average sales price down 8%.

The first-time home buyer effect is not only being seen in the average sales price at RFG and NRT, but also in inventory levels.

As Richard mentioned, overall national inventory dropped from a peak of 9.3 months in July of 2011 to 6.1 months in January of 2012.

To illustrate the demand for inventory at different price points, in the Miami area for January, market inventory was at a six-month supply overall.

However, for homes below $250,000, there was only 4 months of supply; while for homes between $500,000 and $1 million, there was 12 months of supply.

The lower inventory levels, the more modest price points, is a further indication of greater demand from entry-level buyers.

Looking at what we are seeing for the first quarter, preliminary closed home sale sides combined for RFG and NRT increased approximately 9% in January and February, while average price decreased 1% versus 2011, a net 8% gain on volume.

Based on our open contracts in February, we expect high single-digit increases in transaction sides year-over-year in the first quarter, with modestly lower average sales price.

Similarly, NAR's pending home sale index, released today for January of 2012, showed an 8% increase year-over-year.

33% of NAR members polled in the latest realtor confidence index survey reported at least one contract cancellation in January of 2012.

Despite widespread reporting of this number by the media, this should not be interpreted as a 33% total contract cancellation rate, because the total number of contracts remains unreported.

Looking at our Company-owned operations, NRT's cancellation rate in January 2012 was in the low teens, which is consistent with our historical norms.

Moving on, average broker commission rates for the year ended 2011 increased 2 basis points in NRT to 2.50%; while RFG average broker commission rate increased 1 basis point to 2.55% from 2.54% in 2010.

Also, the Realogy Franchise Group's net effective royalty rate declined 16 basis points to 4.84%, as its larger affiliates continued to achieve higher volume levels.

RFG's top 250 companies represented 54% of total GCI in 2011, versus 51% in 2010, which is the primary reason that the royalty rate declined year-over-year.

Cartus relocation initiations for the year increased 3%, and referrals increased 4%.

At TRG, 2011 purchase unit volume decreased 1%, which was consistent with the NRT unit volumes.

Company's refinance title and closing units increased 1% for the year compared to 2010.

This compares favorably to overall refinancing volume in the US, which decreased 22% in 2011 compared to 2010, and our outperformance was due to expanded business in our lender channel operations.

Average fee per closing at TRG increased 2% for the year.

Now let's review revenue and EBITDA before restructuring and other items by business unit for the year ended December 31, 2011, as shown on Slide 13.

Total revenue at RFG was $557 million in 2011, compared to $560 million in 2010.

The 1% revenue decrease was due to the decrease in home sale volumes and the decrease in the net effective royalty rate discussed earlier.

EBITDA before restructuring and other items at RFG was $320 million in 2011, compared with $352 million in 2010.

The $32 million EBITDA decrease was due to the $3 million revenue decline, along with a $10 million increase in legal expenses due to higher legal costs and related settlement reserves in 2011, along with favorable legal outcomes in 2010, an increase of $7 million in employee-related costs, and $5 million due to franchisee conference expenses in 2011 that did not take place in 2010.

Revenue at NRT decreased $46 million, or 2%, due to the decrease in average sales price.

NRT EBITDA before restructuring and other items in 2011 was $65 million.

This was $27 million below 2010.

The EBITDA decline was due to the $46 million revenue decrease, along with a $4 million decrease in PHH Home Loans earnings, partially offset by lower intercompany royalties and a $21 million decrease in operating expenses due to cost-saving activities, as well as reduced employee costs.

At Cartus, revenue increases of 4%, or $18 million, were largely driven by increased international transaction volume.

EBITDA before restructuring and other items was $116 million in 2011, up from $112 million in 2010.

Revenue increases were partially offset by higher volume-related international expenses, and $8 million due to higher employee-related costs.

At TRG, revenue increased 10%, or $34 million, as a result of increased underwriting volume and refinancing transactions.

EBITDA before restructuring and other items increased $2 million as a result of revenue increases, partially offset by a $25 million increase in variable operating costs and $3 million in legal expenses.

The bulk of the operating cost increase was the result of an increase in underwriter and refinancing volume.

Turning to the balance sheet on slide 14, we ended the quarter with a cash balance of $143 million, which includes $101 million of readily available cash and $42 million of statutory cash required for our title business.

In December 2011, we extended our $400 million Apple Ridge securitization facility through the end of 2013.

The borrowing costs, inclusive of interest and lender fees, under the amended facility, increased by approximately 100 basis points.

At year end 2011, the amount borrowed under Apple Ridge, together with amounts borrowed under UK securitization was $327 million, supported by relocation assets of $366 million.

Turning to the liability slide on our balance -- of our balance sheet, our due to former parent line item dropped from $104 million at year-end 2010 to $80 million at December 31, 2011, which drove a decrease in the synthetic letter of credit.

The remainder of these obligations are expected to be resolved over the next several years, not all of which will result in cash outlays.

We had $175 million of borrowings on our revolving credit facility at December 31, 2011, which was reduced from $300 million at the end of October.

At February 27, our revolver balance was $55 million.

With refinancing completed earlier this month, we retired our $289 million non-extended revolver, and have $363 million of capacity under our remaining extended revolver.

Net of outstanding borrowings and our outstanding letters of credit, we have $227 million of available capacity on our revolver as of today.

We expect that the current borrowings will be repaid by the end of March, but consistent with past experience, we expect to borrow additional funds in April, principally to fund interest payments.

We were in compliance with our senior secured leverage ratio at December 31, 2011.

Our senior-secured-net-debt-to-adjusted-EBITDA ratio was 4.44 to 1, which is well within the required 4.75 to 1.

On a pro forma basis, giving effect to the refinancing we completed earlier this month, the year-end ratio would have been 3.87 to 1.

We expect to remain in compliance with our covenant for at least the next 12 months.

Let me provide you with expectations for certain cash-flow items for the full year 2012.

Corporate cash interest is expected to be approximately $645 million to $655 million for the year, which includes the $11 million AHYDO payment due this April.

Capital expenditures are expected to be approximately $50 million to $55 million for the full year.

Working capital, inclusive of cash restructuring costs, is forecast to be a use of cash of between $20 million and $30 million.

Net funding of legacy issues is expected to total approximately $10 million for the full year, and the Company's current net operating loss carry-forward is approximately $2.1 billion.

As a result, we do not expect to incur substantial federal cash tax obligations for the foreseeable future.

In conclusion, we anticipate first-quarter home sales to increase in the high single-digits year-over-year, and average sales price to be modestly down versus 2011, as indicated by our preliminary January and February results.

The trend we are seeing currently is that in many of our markets, housing affordability, particularly for first-time buyers, is driving activity at the lower end of the housing market.

At the same time, the high end continues to perform reasonably well.

The first-time buyer activity should have the impact of increasing unit volume while putting pressure on average price.

With resolution of the AG lawsuit with the major mortgage lenders, an uptick in consumer confidence, and improving employment picture, there has been a renewed sense of optimism in the housing market.

Combined with lower inventory levels in many markets, which should help support average sales price, along with continuing low mortgage rates and high affordability levels, we are encouraged about the prospects for 2012.

With that, I'll turn it over to Alicia for some concluding remarks.

Thank you, Richard and Tony.

A few quick points of information before we conclude today's call.

First, a transcript of this webcast will be available on the investor information section of the Realogy.com website tomorrow.

Second, our 10-K will be filed later this week.

Third, we anticipate announcing the first-quarter 2012 results at the beginning of May, with the exact date still to be determined.

We thank you for taking the time to join us on the call, and we look forward to speaking with you in May.

Thank you.

Thank you.

This concludes today's call.

You may now disconnect.