Ladies and gentlemen, thank you for standing by and welcome to the Halliburton's Third Quarter 2021 Earnings Call. Please be advised that today's conference is being recorded. I would now like to turn the conference over to David Coleman, Head of Investor Relations. Please go ahead, sir.

Good morning. And welcome to the Halliburton 's third quarter 2021 conference call. As a reminder, today's call is being webcast, and a replay will be available on Halliburton's website for 7 days. Joining me today are Jeff Miller, Chairman, President and CEO. And Lance Loeffler, CFO. Some of our comments today may include forward-looking statements reflecting Halliburton's views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Halliburton's Form 10-K for the year ended December 31st, 2020, Form 10-Q for the quarter ended June 30 2021, recent current reports on Form 8-K, and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures that exclude the impact of special items. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our third quarter earnings release and can be found in the quarterly results and presentation section of our website. After our prepared remarks, we ask that you please limit yourself to one question and one related follow-up during the Q$A period in order to allow time for others who may be in the queue. Now, I'll turn the call over to Jeff.

Thank you David and good morning everyone. Last quarter, we discussed a longer view of a recovering market and our confidence in a multiyear up-cycle. I am pleased with the steady march of activity and Halliburton 's performance in the third quarter internationally and in North America, all reinforce our enthusiasm today, and for what we expect in 2022 and beyond. Our results demonstrate the effectiveness of both our strategy and our execution as the market recovery accelerates. Here are some highlights. Total Company revenue increased 4% sequentially with top-line improvements across all regions. While adjusted operating income grew 6% with solid margin performance in both divisions. Our Completion and Production division revenue grew 4%, driven by increased global activity. Operating margin was essentially flat in the third quarter, as we made operational choices to prepare for higher demand for our services in 2022. Our Drilling and Evaluation division revenue grew 4% with increased activity across multiple regions. Operating margin of 11% was about flat sequentially. North America revenue increased 3% as growth in U.S. land was partially offset by a decline in our Gulf of Mexico business due to Hurricane Ida. International revenue grew 5% sequentially in line with the international rig count growth. Our year-to-date free cash flow generation of almost $900 million puts us solidly on track to deliver our full-year free cash flow objective. Finally, we retired $500 million of our long-term debt and ended the quarter with 2.6 billion of cash on hand. As this upcycle unfolds in both the International and North America markets, Halliburton is executing on our strategy to deliver profitable growth and generate industry-leading returns. In the international markets, third quarter activity momentum continued, and I believe it will accelerate into year end and support mid-teen second half revenue growth compared…

Thank you, Jeff. And good morning, everyone. Let me begin with a summary of our third quarter results compared to the second quarter of 2021. Total Company revenue for the quarter was $3.9 billion and adjusted operating income was $458 million, an increase of 4% and 6% respectively. During the third quarter, Halliburton closed the structured transaction for our North America real estate assets that I described earlier this year, which resulted in a $74 million gain. We also discontinued the proposed sale of our pipeline and process services business, leading to a depreciation catch-up related to these assets previously classified as assets held for sale. As a result, among these and other items, we recognize a $12 million pretax charge. Now, let me take a moment to discuss our division results in more detail. Starting with our completion in production division, revenue was $2.1 billion, an increase of 4% while operating income was $322 million or an increase of 2%. These results were driven by increased activity across multiple product service lines in the western hemisphere, higher cementing activity in the Middle East Asia region, as well as increased well intervention services in the Europe, Africa, CIS region. These improvements were partially offset by reduced completion tool sales in the eastern hemisphere, lower stimulation activity in the Middle East / Asia region, and accelerated maintenance expenses for our stimulation business in North America, which related to upgrading our fluid and technology in preparation for the anticipated market acceleration that Jeff described earlier. In our Drilling and Evaluation division, revenue was $1.7 billion, or an increase of 4%, while operating income was $186 million, or an increase of 6%. These results were due to improved drilling-related services internationally and in North America land, additional testing services and wireline activity across…

Thanks, Lance. To summarize our discussion today. Halliburton is on track to deliver strong results and our financial commitments for this year. We see customer urgency and demand for our services increasing internationally and in North America. We expect to benefit from the accelerating recovery and deliver profitable growth in the international markets and maximize value in North America. We prioritize our investments to the highest returns opportunities and are committed to capital efficiency. As our forward outlook unfolds, we expect to deliver strong free cash flow and industry leading returns for our shareholders. And now, let's open it up for questions.

Thank you. [Operator Instructions] Our first question comes from James West with Evercore ISI. Your line is open.

Hey. Good morning, guys.

Morning, James

Morning, James.

Just -- clearly, a very bullish global outlook of North America and International. It seems though that International really stepped up even further than you thought, maybe initially in the last 3 months since the last conference call. Could you perhaps describe where the -- these pleasant surprises are coming from?

Well, thanks, James. Look, I think broadly if I look out at the improvements, it's really a function of the tightening macro, and what we see and so. I think supply is clearly short. I mean, this underspending that's been happening for really 7 years is starting to have an effect on the supply side, and that drives clearly urgency, but it's harder to do. And then along with that, we've got short supply service assets, and that is also driving great environment for us and Halliburton's in the right places. And so when I think about profitable growth internationally and also maximizing value in North America, that's right in the fairway of where we want to be. And so this beginning of an up-cycle, I think what we'll see are our operators work very hard to improve production, but it's short-cycle style barrels are just going to take a lot more work around the wellbore. And all very good. And it's really, as I said, beginning of what I see as a very strong up-cycle for our services.

Sure. No doubt about that and we certainly agree. One follow-up from me, North America, the 20% number that you put out there, which is actually the same number that we're using, but how much of that increase is activity versus pricing in the inflationary environment that we're now seeing in North America? Meaning, is activity in that scenario up 10%, 12%, is up 15%. How are you thinking about activity levels versus the overall spend level?

Look, I think -- clearly it's a combination of both. I think that we will see certainly inflation, I'm not going to give you a number today, but I think that we're seeing strengthening pricing -- strengthening pricing into 2022 so I think that'll be a part of it. In fact to our strategy of maximizing value in North America, I think that we're going to be really sharp around where we work and how we generate those returns. So I -- is it -- I would -- I think that pricing will move up more. And I think there will be a lot of effort put into the activity but the combination of equipment shortages that drive prices are going to probably be a headwind to a degree on activity as we get into the year, biased more to price than activity probably.

Okay. Got it. Thanks, Jeff.

Thank you. Our next question comes from Neil Mehta with Goldman Sachs. Your line is open.

Good morning team. I want to go back to the comments last quarter, the 400 basis points of margin improvement by 2023. Given we're in a firmer oil macro environment and the activity pick-up that you anticipate. Do you see potential for that actually get pulled forward. And how are we tracking relative to the 400 basis points of their upside or downside, as you tested out real-time.

So thanks, Neil. But look, I'm really excited about the outlook and the possibility to pull that forward. Certainly, that's a possibility. I think that we're on track. I mean, everything that I see indicates that's well on our viewfinder in terms of getting to the '23 outlook that I had. The pace at which oil -- oil demand comes back, which I would say is surprising a little bit to the upside in spite of what's out there with respect to COVID, certainly encouraging, certainly highlights what we've been seeing for some time, which is how important oil is, and more importantly, the impact that not spending normal rates for quite a long time has on the supply of oil. Of course, operators are going to work really hard to accelerate that, which is fantastic for Halliburton. So I'm very encouraged about the outlook and the Pacing.

Alright Jeff. And then the follow-up is just return of capital, that $500 million of debt this quarter next year is set up to be a good free cash flow year, how do you think about getting the dividend or capital returns profile to be more competitive relative to the rest of energy

Yes, Neil, this is Lance. Look, we certainly -- no doubt, we see an environment that provides us with a lot more flexibility as we look towards 2022. And I would just say this year, 2021, we've had a strategy and we're continuing to execute that. It starts with EBITDA growth, Capex control, and a focus on deleveraging throughout the course of the year. The dividend raise is certainly in the viewfinder as our outlook plays out. We're still going to continue to be focusing on deleveraging our business and to a certain extent accelerating it when it makes economic sense. So there's still work to do there, but I think the message is that we've got a great opportunity to address all of these things as we move into next year.

Thanks, Lance.

Thank you. Our next question comes from David Anderson with Barclays. Your line is open.

Hi. Good morning, Jeff. So the question on everyone's mind right now is net pricing in the U.S. and whether or not you're getting that now. I was wondering if you could just confirm you have in fact recently put through a pricing increase in U.S. pumping business. And addition, if you could address the topic of labor inflation and how much is that offsetting pricing and what could that mean if the industry looks to add, say, 20 or so fleets on the coming quarters. Our E&P seem to think pricing is going to stay flat outside of inflation, so I'm just kind of curious where you think that disconnect could be.

I think the disconnect will be around supply of equipment and also the type of equipment, there's a lot of demand out there. I'll talk about pricing may be first. We're seeing it now, it looks a little different than maybe in prior cycles in the sense that it's more of a process than it is a point in time, but yes, making a lot of progress around that. We've talked about premium equipment and clearly that's -- a lot of demand for that and it's in short supply and likely stays that way. And so that's certainly positive. Our outlook is that we're going to, certainly, getting that pricing -- getting some net pricing now, and we expect to continue that, particularly as equipment tightens. It starts with the premium equipment, but my view is that we will see that across the entire fleet as we go into 2022. And so with respect to inflation, yes, seeing that, I think that's been passed along fairly straightforward manner, but that's not the pricing that actually we're looking forward to and seeing some of now. From a labor perspective and, if you described 20 more fleets into 2022, your 40 to 85% utilization today, that takes us what, like close to 100. That drives a lot of pricing activity around equipment, and the labor, I think, it will exacerbate that. We were very fortunate at Halliburton that we're able to manage the labor, other elements of transportation, I think, more effectively than the market. I described some of that in my comments. But I think that will continue to get tight and I like the way we're differentially positioned around those things also.

Clearly, labor is an issue everywhere and I'd have to think of the oil field especially acutely. A separate question. You touched on this a little bit, but I'm really wondering what the inventory of kind of both directional drilling and completion tools globally. Now, you're spending only about 5% of revenue on Capex. It's less than half the rate of just a few years ago. Your competitors have also been very capital disciplined. Obviously, not just the E&Ps were capital disciplined, but you guys have been as well. But now on this cost of this global recovery in activity, as you said, multi your up-cycle unfolding. And we're also seeing the supply chain issues across the industry. I guess my question is, if there's going to be the shortage of type of specialized equipment next year and where do you see it most acute? You talked about reallocating equipment, but I feel like we've done this already a couple of times, and I know you've been moving it around, but it feels like we're kind of coming into this inflection on a lot of this equipment out there, and I'm just kind of curious of your views on that.

Well, we likely are and we are -- it's getting tight, it's tighter, and we're going to reallocate equipment to the highest return opportunities. And I think we're just going to see some tightness, which is a healthy thing, which is going to drive better asset allocation to projects. We're -- we see capital velocity as a strategic plank for us that we're very focused on and we think that's the key to driving profitable growth. And I say it that way because there will be many opportunities, our focus is on the profitable slice of that. And things that we're seeing set up as it gets more active internationally. Short-cycle barrels clearly will use equipment, but as we see, some element of offshore activity creep into that, that soaks up more capacity. And so I expect we'll see quite a bit of tightness which is very, very positive for Halliburton and our outlook. I mean, I don't -- I think that the returns haven't been there, and we expect to see solid returns, and growth in returns, and free cash flow, and a tight market is what makes that happen.

Looking forward to them. Thanks, Jeff.

Thank you. Our next question comes from Chase Mulvehill with Bank of America. Your line is open.

Good morning, everyone. So I just wanted to --

Good morning Chase.

Good morning. I just want to follow up on the commentary around the North America Capex being up 20%, obviously U.S. onshore will be up a little bit more. But I just want to connect the dots there and just try to understand how you're getting to the 20%. Because if you just look at operating cash flow of E and Ps, those could be up 30 to 40% year-over-year. So that would imply that they would spend less of operating cash flow [Indiscernible] today, they're spending about 50% of operating cash flow. And if you just look at consensus for public E&Ps, we're talking high teens already for growth. So that implies a more modest pace of growth for the private E&P s. So I just I want to kind of understand the 20% [Indiscernible] that you put out there for North America.

Thanks, Chase. Look, 20% is a good starting point. Obviously, could it be more? It could be certainly and I think the more activity there is, the more price there will be and so kind of take those in tandem. When we look at 2022, clearly there's a call on U.S. production at the kind of commodity prices that we see today, and particularly given the supply shortage. So we have always expected that we would see North America move first and strongest as we got into the real heavy lift around short supply. That said though, I do believe that it is moderated to a degree because there are formulas in place around how reinvestment -- around reinvestment rates, around dividend requirements, around compensation schemes. So all of that's in place which serves to certainly moderate activity for the public. And I suspect we'll -- those budgets aren't out, but I certainly expect that we'll see those. The privates clearly are very active. An evidence to me that we see sort of that strengthening, is we're finding more work. The reality is -- was we readjust pricing and look at the market that requires moving around to different operators at different times. And we're doing some of that now. But the old adage, you don't quit a job till you have a job. And we're finding jobs. All of that is positive, but I think that there will be tightness around equipment in that environment. I don't -- we're in and around 20 is just sort of a current outlook on 22. I don't mean that to be prescriptive. Could it be more clearly, it could be more. But I also think it will be very tight.

Thanks. Great. Can I follow-up on the frac maintenance expense. I mean, you noted -- in the press release you talked about it during the earnings call. I don't know if you would offer up how material it was, is it -- does it recur again in 4Q and so maybe that's impacting margins on the CMP side a little bit. And also maybe, is -- should we think about this is as an indication that you think you're going to be able to get the pricing you need in 2022 to really kind of drive more activity on the frac side.

Yeah. Look at the -- the maintenance was maybe a penny. But clarity around where that equipment will go. I mean, that's an indicator that we have certainty around where that equipment will go to work and the kind of things we're doing are like the, the [Indiscernible] end are things that drive better margins for us and a longer life over the life of that so it's just wise to do, I think more important is that we've got real clarity around where that equipment goes and 22 and we want to make certain that we're ready and it goes to work at prices that clearly eclipse any cost of maintenance on the equipment. It's just the thing that we want to do. Q4, we've given you our guidance and all that's in that guidance. So look, I take it as a real positive that we've got the clarity that we have, and just the concrete evidence of where this equipment will go. And we just want to make certain that we're taking care of everything in real-time.

Right. Perfect. I'll turn it back over. Thanks, Jeff.

Thank you.

Thank you. Our next question comes from Scott Gruber with Citigroup. Your line is open.

Guys, good morning.

Hey, Scott.

Morning, Scott.

I just want to come back to the domestic inflation question again. Are there any numbers you could put on the delta in your inflation versus the market inflation just given your advantages. And now that you're securing, what I assume is market-based price increases, kind of what that combination could be. The framework is -- if the market pricing is up 15%, but peers are seeing like 10% inflation only getting net 5. But -- there is a meaningful gap for Halliburton, maybe you're net inflation or your net pricing gains are 10% because you aren't experiencing half of the inflation. So if you could tell us what that inflation gap could be and obviously I just made those figures up, so [Indiscernible] any color on the potential net pricing gains for Halliburton vis -a - vis the competition would be great.

Yeah. Look, guys, it's very competitive information. I'd say we out perform ed the numbers you laid out. But maybe I'll just walk through the components of how we manage these things. It's very -- we have very sophisticated supply chain organization and they are working overtime, but absolutely getting it done. Price fairly passed on to customers. The labor [Indiscernible] the ability to recruit nationally in the US, and the ability to have a strong local workforce internationally, both are key elements of managing inflation for Halliburton. From our raw materials perspective. Again, supply chain buys from the entire world, we manage logistics, and we actually see that improving in terms of tightness as we go into 2022. Particularly we're seeing sort of space on airplanes. As the world opens up and we see more carriers sort of get back to work, we actually believe the international logistics around raw material gets better. And then in North America, our relationship with Vorto is having quite an impact. I mean, we are able to add drivers. We were able to retain drivers, it's been quite disruptive but very effective. And so look, I'm confident that we outperform in terms of managing inflation for Halliburton, but that's a separate topic from where we see pricing going in 2022 and many cases now.

Just a quick one on international Jeff, you mentioned an acceleration in international activity next year. Any early read on where that figure could go. Are you thinking potentially mid [Indiscernible], high - [Indiscernible]. We've seen 20% growth in past years during strong up cycles. Just any early read on where international activity growth could ascend to next year?

Yeah. Look, the entire international market is a huge market, and so to move all of that at a high rate is probably more difficult to do, particularly given where the supply chain actually in project backlog is for clients. But nevertheless, could it be low-teens to mid-teens? Yeah, certainly could be. Super excited about Latin America and the pace of growth and the outlook there. Middle East should be very strong. And I think we're going to see the kind of broad-based improvement that allows pricing and pockets of places to continue to get better. So it's going to be good. It should be really, really good market internationally. I think we build into it throughout 22 as well.

Got it. Thank you.

Thank you.

Thank you. Our next question comes from Arun Jayaram with JPMorgan. Your line is open.

Good morning. I wanted to get a bit more color on some of the implications of house decision to reposition some of your frac fleets to get the better pricing you mentioned and exposure to long-term contracts. So I wanted to maybe get a sense of are you mobilizing that equipment today. So, is that going to be a little bit of a drag on 4Q, and as you get that equipment into those newer markets, does that give you some tailwinds as we think about 2022.

Yeah. I think it does give us tailwinds as we go into 2022. Drag our headwinds near-term. Not much -- any of that would be in our guidance. But look, this is making -- maximizing the value in North America, which is clearly what strategically we want to do and plan to do. And our doing involves making decisions around what we do with the assets that we have. And I think you're seeing that and will continue to see that from Halliburton. And so I'm super encouraged, and a lot of the discussions we're having today with customers are around 2022, in fact, most of that dialogue is 2022 and beyond, actually, even into some sort of 23 type discussion. So I'm super encouraged, so what we want to make sure is that our assets are deployed where they're the most valuable for us and our clients. And yes, that does include moving them around. When we're moving them around, we tend to do more maintenance on them and what not. That's the opportunity that we take typically to do high-grades of fluid ends and that kind of thing. And so it should be interpreted in a very positive way what we're doing, and particularly a demonstration of really two strategic planks. One is maximizing value in North America and the second is capital velocity. Capital efficiency.

Got it. Got it. Any color, Jeff, on which basins that you sense is a better opportunity to get better pricing in these long-term commitments?

Well, fortunately, we're in all the basins. And so I don't really take a view of basin by basin as much as we do customer opportunity by customer opportunity, and that can be wherever it might fall. I'm not going to necessarily carve out a particular location. Clearly, there's more activity nearly in all of the basins today, and so that's very encouraging.

Okay. My follow-up is just on international -- there's 3.5 to 4 million barrels offline by OpEx Plus. I wanted to get your views on -- are you seeing any shifts internationally from customers, perhaps shifting from a focus on maintenance Capex, sustaining Capex projects, to growing productive capacity. and if so, which markets are you seeing perhaps some shift towards that -- into a bit more growth?

Look, I think [Indiscernible] we're going to find internationally, there's been a lot of under spend for quite a long time and a lot of countries are declining today. Declining is hard to overcome. They'll work hard to do that, but that doesn't necessarily move the needle in terms of production. It might get it back to flat instead of even with extra work, it takes extra work to just stem the decline. All of that's positive for us. I mean, clearly we see more activity as we go into 2022 in the Middle East and Latin America. But again, I think that those that can spend and are in a position to do so will, but there's the capital austerity by a number of clients is still well in place, and so I think that -- and I say that in the sense that I think that production is going to all be near wellbore, which is very good for us, and I think that a lot of work will get done. But I still see supply as tight for really quite some time. I mean, it doesn't turn back on. Maybe a point worth remembering, in 2014, the number of big multi-billion-dollar projects with 30-year payouts that were being completed or in the process of finishing, we don't see those today. And the reality is that means there's less spin on infrastructure and a lot more spin on what we do. And I think that's all very, very positive.

Thanks a lot.

Thank you.

Our next question comes from Ian Macpherson with Piper Sandler. Your line is open.

Good morning.

Good morning, Ian.

Jeff, it seems like an unsung hero of your year so far has been Latin America. It's whe -- That's where you've had really outsized growth and the market there, the total activity has grown, but it looks like you punched above your weight in Latin America. Can you speak to those strengths? And you said, I think it's -- not towards in your mouth, but synchronized global, international growth going into next year. For Latin America, in particular, do you expect to see continued momentum on par with the rest of Eastern Hemisphere growth into next year as well?

Yes, I do. Look, I'm very encouraged about Latin America. And that team has punched above its weight in Latin America. We've got an excellent team, great position. We're in every country. The technology introduction has been effective there which I've talked about sort of our Drilling Tools and what we've been able to accomplish. Our project management capabilities are very strong in Latin America and it's allowed us to outperform in my view. I think that continues into 2022 as more work comes on. And again, that's a part of the world where oil production, and it's very important to economies and operators. and I think that we'll continue to see a strong Latin American business.

Great. Thanks, Jeff. And then I was going to ask a follow-up to Lance after. You had a really good quarter here with free cash, with the disposals, and some working capital as well. Any indicators for Q4 [Indiscernible] with regards to extras outside of the basics of free cash with respect to net disposals and working capital movements to close the year.

Yeah, I think we certainly expect continued strength in the operational profit piece of the equation. That's pretty obvious based on our guidance for the quarter. Some of that will be offset by some of that acceleration in Capex spend that we talked about in my prepared remarks.

We'll be looking to round out the year around Capex. And look, I think we'll have to see how working capital continues to play out. We have clearly been very focused on working capital and the required investment it would take to put back that investment as we continue to grow, a great outcome this quarter where we actually still generated cash from working capital, despite the fact that our revenue was growing globally. So all good facts historically, whether we can keep -- whether it's realistic that we can keep that momentum from a working capital perspective going forward might be a little bit harder. So those are all the things that we think about. I mean, look, overall, I'm excited about the way that free cash flow has behaved so far this year and I continue to be encouraged about what that means for next year as well.

Great. Thank you, Jeff.

You bet. Thank you.

Our next question comes from Marci Bianci with Cowen (ph). Your line is open.

Thank you. I guess, with regard to CMP in North America here, you've got these little bit of maintenance overhang, I guess it's about 50 basis points based on your comment, Jeff, and then there's these pricing initiatives. Is there any way you could give us a sense of the margin leverage that you could see in 2022 from all of this? I don't know if it'd be perhaps unreasonable to get to 19& or 20% margins towards the end of the year in CMP, if you're willing to comment on that or any other color about how you would see the margin average shaping up.

Look, I feel good about our business in 2022, most certainly for the reasons I've described. I'm not going to try to give an outlook today on 2022, but what I can say from an operating -- from an earnings power standpoint. We've been very effective at maintaining the earnings power reset that really happened a year ago, but that's well in place. And all of the things, there were a lot of things that we did when we were reducing costs a year ago that really they were going to be savings as we saw activity pick up, but they were sort of the things that improved margins with activity. We didn't have much activity, so we didn't see the benefit of that, but a lot of the digital work that we've done in North America and reduction of roofline and changing of maintenance and all of those things become more valuable as we get into an environment where we see more activity. And so we're really encouraged about the outlook. And not only activity but our technology offering, particularly around frac in North America, is very unique and I think we will see the power of that also.

Yeah. Okay, great. And then, Lance, going back to free cash flow, it looks like you're going to be approaching maybe 50% conversion of EBITDA here in '21. Maybe walk us through the puts and takes as you look at '22 Capex, probably in that 5% to 6% range, but just any other color you could talk to around the conversion, that would be great.

Yes. So, I think as we look to '22, it's certainly healthier, right? Generally speaking, I describe it that way because it means that our operational profit contribution is clearly moving higher as -- into the year -- into next year. But like I said earlier, even as I was relating to the fourth quarter, our revenue increase is going to require incremental working capital. Look, 21 is proof that we're focused on it, and managing it as tight as we can and as efficiently as we can. And then you're right, Mark, from a Capex perspective. I think we've been pretty clear what the guardrails are on our business even into next year, 5% to 6% of revenue. But look, at the end of the day, maximizing value in North America, growing international profitably, and that keeping real tremendous amount of focus on capital efficiency. I think all leads to free cash flow growth next year.

Great. Thanks so much.

Thank you. That's all the time we have for questions today. I'd like to turn the call back to A - Jeff Miller for closing comments.

Thank you, Katherine. Look, I'm pleased with the quarter and look forward to speaking with you again at the end of the next quarter as we see this multiyear up-cycle continue to unfold. Katherine, you can close out the call.

This concludes today's Conference Call. Thank you for participating. You may now disconnect.