Good day, and welcome to the SkyWest Inc. Third Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Simmons, Chief Financial Officer. Go ahead.

Thanks, everyone, for joining us on the call today. As the Operator indicated, this is Rob Simmons, SkyWest's Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, Chief Commercial Officer; and Eric Woodward, Chief Accounting Officer. I'd like to start today by asking Eric to read the Safe Harbor, then I will turn the time over to Chip for some comments. Following Chip, I will take us through the financial results. Then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts. Eric?

Today's discussion contains forward-looking statements that represent our current beliefs, expectations, and assumptions regarding future events and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement. Actual results will likely vary and may vary materially from those anticipated, estimated or projected for a number of reasons. Some of the factors that may cause such differences are included in our 2019 Form 10-K and other reports and filings with the Securities and Exchange Commission. And now, I'll turn the call over to Chip.

Thank you, Rob and Eric. Good afternoon, everyone, and thank you again for joining us on the call today. I want to begin by saying how proud I am with the way our teams have pulled together to confront this incredibly challenging and unpredictable environment. Eight months into the pandemic, our industry has dramatically changed. Our teams are working nonstop to stay focused on the health and safety of both our people and our passengers, and we remain flexible in responding quickly to deliver on our partners' network and schedule changes. We have successfully resumed continued qualification training with pre-attendance COVID testing, as well as stringent requirements for social distancing, cleaning, and face coverings. We continue working to stay ahead of the latest CDC guidance, and our teams are successfully achieving things we couldn't have imagined a year ago. I want to thank them again for their outstanding work. Early on in this pandemic, we said keep priorities to ensure we were able to successfully emerge from the crisis and play a key role in the recovery. Our first priority was the personal health and wellbeing of our people and passengers. Second priority was maintaining strong cash and liquidity, and the third priority is remaining strong and agile as we work with our partners. We remain focused on these three priorities and on ensuring we're able to evolve with the changing industry landscape. Some of that evolution was announced earlier this week when we shared changes in our senior leadership. Greg Wooley was named Executive Vice President of Operations, stepping into his role with a tremendous background leading almost every aspect of regional airline operations over his 25-year career, and most recently overseeing our ground handling operation. He has wholeheartedly embraced the SkyWest culture and commitment to excellence, and I'm…

Today, we reported third quarter net income of $34 million or $0.66 per share. Our diluted share count for Q3 was 50.6 million, and our effective tax rate in Q3 was 27%. These GAAP results include the effect of a deferral of $30 million of revenue this quarter, down from $69 million deferred in Q2. As discussed last quarter, the timing and amount of future deferrals and the reversal thereof into revenue depends on the shape and cadence of the recovery of our flying. All deferred revenue will be reversed into revenue by the end of the various contract periods. We currently expect to continue to defer some revenue into late 2021 or 2022 when it may begin to reverse. First, let's talk about revenue. Total revenue is down 40% from Q3 2019, but it's up 31% from last quarter. This breaks down with contract revenue down 35% from Q3 2019, and up 28% from Q2. Pro-rate revenue is still down 58% year-over-year, but was up 69% from last quarter. As we have previously said, pro-rate revenue is nicely levered to a recovery as you can see in these numbers. Let me move to the balance sheet. We ended the quarter with cash of $822 million, up from $762 million last quarter. Our CapEx during the third quarter was $10 million comprised of aircraft engines and parts. At this point, our expectation is to pull back our CapEx for the year from $636 million last year to approximately $430 million this year, including the acquisition of four new E175s, and 21 CRJ700s in a 50-seat configuration coming up in Q4. We ended the quarter with debt of $3.1 billion, up slightly from $3.0 billion as of year-end. The increase in debt from year-end through the end of September is driven…

Thank you, Rob. I'll provide a fleet and production status update as well as an update on our pro-rate and leasing businesses. To update by partner, today we announced an agreement to place 20 used CRJ700s under a multiyear flying contract with American. These aircraft will be sourced from our current fleet of aircraft that have been in long-term storage for the last couple of years. As of today, we have 61 CRJ700s under contract with American. As a reminder, we still have nine more CRJ700s that will be placed into service under previously announced agreement. By the end of 2021, we are scheduled to have 90 CRJ700s under contract with American. Of the 29 undelivered CRJ700s four CRJ700s are anticipated to go into service during Q4 2020, and the other 25 ratably through 2021. As we shared last quarter, we worked with American to modify the timing of our 20 E175 deliveries. We now expect to receive a handful of these aircraft during the fourth quarter of 2021, and the rest through the middle of 2022. Let me talk briefly about our Delta agreement. We currently have four new E175 on order under our Delta agreement, which are scheduled for delivery during the fourth quarter, we plan to take delivery of our final Delta finance CRJ900 during the first half of next year. You may recall that we have 55 CRJ200s scheduled to expire under our Delta agreement by the end of this year. We have returned the 19 Delta-owned aircraft to Delta. The remaining 36 aircraft are SkyWest owned with no remaining financing obligations and will be fully depreciated by the end of the year. All of our current partner contract concessions expired in either September or October. The largest concession during the quarter was deferring payment due…

Okay, operator, we're ready for Q&A now.

We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Savi Syth from Raymond James. Go ahead.

Okay, thanks. Good afternoon, everybody, and this is a question for Wade, I think. Your CRJ700s have had so many dance partners, and you've been [buying some aircrafts] [ph] as well. I was wondering if you could help me out by kind of detailing how many you have with each partner today, and how many are sitting without partners because you talked about some in storage, and then what you expect that to be by year-end '21?

Yes, Savi, this is Wade. So our CRJ700 fleet, I'll first talk about American. So American, we have 61 today. We have nine more that are going to be delivered, and then the 20 we just announced will also be delivered. All of those, so we'll have 90 under contract with American, all of those will be in service by the end of 2021. We have 19 under contract with United, and those are under long-term agreements, and then we also have five with Delta that are under long-term agreements, and so after these 20 go in with American we will have no additional CRJ700s -- any excess CRJ700s. All of our CRJ700s will be under CPA contracts.

Okay, that's helpful, and then just the United partner you're subleasing to, is that different than the partner before, because I just want to make sure that -- to get comfortable that this isn't like the 29 aircraft that you had and then you only placed 13?

So it is -- they're different airplanes. We did buy those, but it's to the same United Express regional partner.

So you're comfortable that they can take it this time?

These aircraft are already flying there, and have already been converted, and in the 550 configuration, and they're already operating in their system today.

Okay, that makes sense. I'll hop back on the queue. Thanks.

Our next question is from Joseph DeNardi from Stifel. Go ahead.

Thanks. Good afternoon. Rob or Wade, can you just maybe frame for us, if we assume 20% reduction in block hours and as many of the 200s coming out, as you talked about, can you just frame for us what sort of CPA revenue that that environment would produce?

So, this is Wade. So the 20 -- so the Delta contract, it has 55 airplanes that are coming out. Delta owned 19 of those, and we were just leasing those for a nominal amount, and so the revenue associated with those are very minimal. Those airplanes have not had a lot of utilization on them over the past couple of quarters, Q2 and Q3. So there is an impact. There's not a -- it's not a major impact to contract revenue, and as we've talked about, with these CRJ200s, there's no book exposure. Well, these will all be completed depreciated by the end of the year. There's no financing obligations on any of these aircraft as well.

Okay, and then, Rob, can you just walk through some of the structural initiatives that you've taken to, I guess, adapt the cost structure to a lower block hour environment going forward?

Yes. Well, first of all, thanks, Joe, for your questions. I think that as we look at this environment, obviously we are trying to position ourselves with as much liquidity as possible and flexibility so that we can meet the needs of our partners going forward. As we mentioned in the script, we have started taking some actions, but again, we don't have any intention to go deeper than we said in the script at this time, and so, I think that everyone in this environment is looking for opportunities to be more efficient, and I think you heard us enumerate a lot of those actions that we've been taking to get more efficient.

And just so I understand the commentary around the 20% reduction in block hours. Is there where you think you'll be once the additional American aircraft come in, like net of the Delta aircraft that are going out or you just see a 20% reduction in kind of overall demand for your service?

Joe, this is Chip. Just real quick, I think that there's a lot of moving pieces that it's difficult to speculate on because a lot of what we're talking with aircraft coming in come in throughout the rest of 2021, and when we talk about 20% reduction, it's what we know today relative to the 200s and the things that we know today. The big outlier for us, when we get to the end of 2021, is what did this virus do? We are clearly looking at the next four months of November, December, January, and February, and are extremely cautious because it's winter. We don't have a vaccine yet. We're taking a look at the infection rates these days, but there's still the number one thing that we feel is important is to stand ready for the things that may happen in March and the summer months. So from that perspective there's a delicate balance between making sure that we have an absolute lean cost structure for what we know today, but again, most importantly, make sure that we stand ready for what may happen in March, in the summer months to be ready to resume what could be some impressive demand, particularly with the smaller sized aircraft we have and where we fly. So, again, I think that hopefully gives you some color, but there is a tremendous amount of uncertainty still that we're trying to understand, starting in March of '21 through the end of '21.

Got it. Thank you.

Our next question is from Catherine O'Brien from Goldman Sachs. Go ahead.

Hi, good afternoon, gentlemen. Thank you for the time. So a couple here, just based on your expectation that you'll deferring some level of revenue to the end of next year or maybe even early 2022, should we assume that means it will take into those periods, get back into pre-COVID levels of block hour production, and then can you just remind us what the bar is for you to stop being required to defer revenue? Is it block hours recovering to 100% of pre-COVID levels or can you start booking some back before then, and then last one on this topic, before I have another follow-up is, is some of this tied to concessions? I wasn't sure if Wade alluded to that in his remarks. I might have been misunderstanding. I know there's a couple there, so thank you for the time.

Hi, Katy, thanks. This is Rob. I -- look, and let me talk about deferred revenue conceptually. First of all, one thing to remember is 100% of the revenue that's differed -- that was deferred last quarter that has been deferred this quarter, and will be deferred possibly over the next several quarters. All of that will be reversed into revenue by the time that each of those individual contracts expire. So under no circumstances will we not recapture that. We've received the cash. There's ongoing performance obligation under those. So we will -- that all of that deferred revenue will reverse. Now, the timing of when [technical difficulty] starts to reverse again is hard to guess at this point. It is going to depend on getting back to something -- some semblance of "Normal," whatever that means in this environment, but look, our best guess right now is that as you saw, deferred revenue came down pretty significantly from Q2 to Q3. We think that there will be some modest deferred revenue deferred over -- for at least several more quarters, and then, again, potentially start to reverse depending on what this recovery turns out to look like, but then in no circumstances will that revenue not be fully recognized by the time that each of the individual contract periods ends.

Okay, got it. So just -- so there is a little bit of an assumption that through next year you don't completely recover to pre-COVID block hour production, is that right?

Yes, that's right.

Okay, got it, understood, perfectly clear, thanks, and then given that your major -- just on the deals you announced today. Given that your major partners are, for the most part, taking actions to shrink their fleet. Can you just help us think through like what the new American and United fields you announced are stemming from? Are partners seeing a need for a net increase in regional list over the next couple of years or are you winning share by locking these deals? Thanks.

Yes, thanks. This is Chip. Again, I think that -- I mean so some of your questions are probably better suited to our partners, to be candid, and it's probably better for them to answer. A couple of things that we do look at, there's certainly our some limitations given everybody's reduced schedules relative to -- and they had some impact on the regional -- their regional fleets, respectively. Our job is not to get too tied up into that stuff, because that's more of their business, and as we continue to press forward with this we feel like we've got good economics on a good product that helps in recoveries. We've been in the industry for a long time. We've seen things like the financial crisis, and 9/11, and certainly with what we're facing today is somewhat similar, where smaller aircraft have a good niche presence to not only maintain market share but make sure you're delivering the type of service to their entire market, and it gives them good flexibility. That having been said though, our job is to mostly work really, really closely with them, communicate frequently, and stand, as we've said several times, agile for the long game, and make sure that we're their partner of choice not only when times are good but also when times can be difficult, like we're in today, and that's our focus.

Got it, understood. I was just impressed to see new aircraft coming on in the middle of everything going on right now. If I could maybe just sneak one quick into Rob, appreciate the time. How are you guys thinking about what level you will draw under your CARES Act secured loan? Is that just depending on where demand goes, and then are you trying to minimize the amount drawn through that loan by potentially looking to other capital sources or you're happy with the terms, and that will be your first choice if there was a need for additional liquidity? Thank you very much.

Yes, thanks, Katy. So, look, I think that, number one, we're grateful to the work that treasury and the government has gone through to make that available to us. Again, we drew the minimal amount required under that facility, and again, we have $665 million outstanding that right now is a very inexpensive liquidity option for us. So we're going to wait and see, I mean we've got until late March of 2021 to make a final decision on what, if any, we might want to draw on that facility, and I think it's pretty likely that we'll just wait till then and see what the recovery looks like, see what the situation is, and then make that call. Obviously this is impacted by whether or not there's another round of PSP and a number of things, but for now, we think of it as an inexpensive liquidity option and we're grateful to have it.

Great, thank you.

Our next question is from Duane Pfennigwerth from Evercore ISI. Go ahead.

Hey, thanks. Just a follow-up on Cathy's line of questioning there, so I think in the fourth quarter here, the plan for American is to be down call it 50% in capacity, all else equal, and so, can you just speak to who you're replacing because that would be the most obvious explanation? Is it a Compass that's no longer flying? Is it one of their wholly owns that they're having concerns about? Like why would they be adding shelves with you?

Yes, Duane, this is Wade. First of all, just say American, we've been working on this agreement with them for the past couple of months. This is something that's uniquely came up, they have some unique scope as you know, they have a small RJ, and a large RJ scope, the small RJ scope has 65 seats. The CRJ700 is very much a very good aircraft to fill that scope. We were able to fill it very economically for them. I'm not in a position to comment on who it's replacing, or what it is doing. I would ask you to follow-up with them on that, but we have an airplane that very, very uniquely fits their scope, and they seem to like it.

Okay, that's fair, I don't mean to certainly put you on the spot, I guess you can speak to the regional industry and a number of these smaller players that have fallen by the wayside. Can you speak to the number of RJs that have kind of permanently left the industry at this point, since the pandemic started?

This is Chip, Duane. Not really, I think that there's a lot of information out there that we're candidly not privy to, and to be candid, we really don't care. What we're mostly focused on is what we can provide to our partners, and we don't necessarily try to target certain things within the industry. We're just delighted we're in a position, and as Wade said in his script, we've worked on our position for the last five years to reduce risk, to have the capital and have the outstanding professionals at our company that we have that enable us to be agile and aggressive with capital, and I think that, from my perspective and for all of our strategies perspective is, it's about working with partners, not working against competitors, and that's the key to our strategy, and that will be the key for a very, very long time.

Okay, appreciate that, and then maybe just lastly in terms of, kind of guaranteed minimums in the existing contracts, can you speak to kind of maybe in the fourth quarter or the third quarter, and obviously, the third quarter is a little noisy with the PSP, but how much below your guarantees are you operating, and is that essentially what this deferred revenue is to kind of make you whole for that investment at some point in the future, and appreciate guys taking the questions.

Yes, this is Wade. So, as far as the contract minimums, every contract is a little bit unique. There some of and each of our partners are flying each aircraft a little bit separately, little bit differently. I will tell you, there are some of our contracts that are at the contract minimum, some of them are slightly below it, and so, it's kind of a variety of where we will be in the fourth quarter, and as far as the deferred revenue, the deferred revenue is a little bit different than the contract minimum. It's really deferring the fixed rate portion of our contract to match the block hour, the completed block hours over the remaining contract term. So it's a little bit different.

Okay, appreciate the thoughts.

Our next question is from Mike Linenberg from Deutsche Bank. Go ahead.

Yes, hey, good afternoon. Hey, Rob, on the 21 airplanes that were acquired the 700s, is that a third quarter acquisition or fourth quarter acquisition, and can you just give us the rough CapEx hit?

Yes, sure. So in the fourth quarter, we expect CapEx to be somewhere in the neighborhood of $250 million that's just the math of what was in my script. So the 21 new airplanes represent a little over $100 million of that, and then, we've got the four E175s coming in the fourth quarter, that's roughly $100 million dollars of CapEx and then just some other roadable unusual spare parts.

Okay, that's helpful, and then just, Wade, I know, you said you had said you have 156 E175 now, and then I know, I heard middle of 2020, you're going to have 213 that's obviously not right. What was it the middle of what year are you going to have 213 E175s?

So the 156 number was at the end of 2019.

Oh, okay.

And then the 213 is the middle of 2022.

Okay. That's actually very helpful. Rob, the deferred revenue with your partners, is that with all four major partners, that you're actually deferring the revenue? Is that with the math and block hours?

Yes, it's again, as Wade said, it applies to all four of our partners, and it applies to the fixed rate component of those CPAs, that, under 606 needs to be accounted for, sort of consistent with the variable the block hour production component of that.

Okay, that makes sense, and then just one last one here, you know, on your parade flying, you did indicate that 20% of that is a guest going away permanently, and yet, when I think about the world of demand for air travel today versus previously, and your gauge and what you have available, it would almost seem that there would maybe be more pro-rate opportunities for you as margins have been resized, smaller, not larger. So I'm just -- is it the planes are so old, and you just want to put them out to pasture or maybe you have a full plate, but I would think that there would be more opportunities for markets where the big guys would just back away from because they don't make sense today, because the volumes aren't there. Is my thinking wrong on that or what?

So Michael, this is Wade. Yes, so as we said in the script, we probably have close to excess of 40 CRJ200s, and we're going to be a little bit patient with those airplanes right now.

Okay.

Okay. We obviously can utilize engines, we can utilize some of the parts, what we will do is we will monitor the demand and the recovery very closely, and as we see things coming back, and we work with our major partners on the demand and things they want to do themselves versus what we want to do. You know, we will do that, and just as a reminder, those airplanes are the financing obligations are completely done, and they are fully depreciated. So there is not a lot of financial risk, and so we can be patient with this model a little bit, and we will monitor it. The 20% number that I gave is just what we are seeing right now, and so we'll continue to monitor that very, very closely.

Yes, and Wade, I would just add to throw in as a last point, I do believe that as best as I can tell you may be one of the last viable operators of the CRJ200 in the world, so take advantage of it. Anyway, thanks for answering my questions.

Michael, this is Chip, one more thing on that. We recognize your last point, and I want to emphasize that's going to continue to be a very strong strategic point for us. We don't anticipate that these airplanes are going to sit idle for very long, but it is the times we live in relative to visibility of demand.

Yes.

We're really not too worried about deploying them. We think that there is good economics. So to your first question, you're thinking about this perfectly. We just need to the -- whole world needs clarity on this pandemic right now, and we think that comes these will get used.

Great, very good. Okay. Thanks, everyone.

Our next question is from Helane Becker from Cowen. Go ahead.

Thanks very much operator. Hi, everybody, and thank you very much for the time, and also thanks for all the information this afternoon. So a couple of questions, first, were there any transition costs in the quarter, and can you just talk a little -- I know this is kind of a boring modeling question, but can you talk about D&A relative to the changes in the fleet?

Yes, let me talk about depreciation first, Helane, this is Rob, and thanks for your -- jumping on the call and asking your question today. From a depreciation standpoint, as you have noted, it's been running a little hot the last couple of quarters partially as a result of some of these 200s being expected to come out of service by the end of the year, and so, we wanted to match up the depreciation schedule there. So, year-over-year, you can see the depreciation is up, but sequentially, from Q2, it's down and it will likely continue to trend down for a bit now that we've sort of got some of these 200s behind us.

Okay, that's very helpful, and then, the other thing -- I don't know, maybe this is what Mike was asking, you're growing in a market that's declining, and then, as you think about that, over the next few years, are there deals out there that you think you could still pick up that might be attractive, and also, as part of that question, why shouldn't we expect you to be more profitable coming out of the pandemic and the slow-growth period than you were before? It just seems like with -- E175s and the larger 70-seaters being a bigger part of your portfolio, you would be in a position in fact to see your growth and your revenue growth accelerate when things turned around. No?

Helane, how are you? Thanks so much. This is Chip, and those are two really good questions. Let me go back to the first question that talks about -- we continue to see some opportunities for growth in a market that's declined -- I'd kind of remind you, as of today, the decline is still significantly stronger than what our growth is. We still -- technically, our fleet is still going to be down from what we anticipated it being at the beginning of the year, but from that perspective, again, we have outstanding partners, we have outstanding relationships with them, and we do fundamentally see some opportunities to help them. As far as a deal out there, I can tell you that there is nothing that we see in the near future that would cause us to get overly interested. We want to stay in the lane that we've been in for the last five or so years, and continue to do things organically and strategically through our operating entity and our leasing companies, but from a transactional perspective, we don't see anything out there, and we've looked quite candidly, but it has to -- for us to go back into that role, there has to be an incredibly unique situation. And then, lastly about post-pandemic profitability, I hope your question certainly comes true, there's a lot of runway between here and there, and a lot of things that have to happen. There's no doubt that we're living in a pandemic and political climate today that it's hard to see what that could mean, but our job is to continue to work on the fundamentals to make that a possibility to the extent that we can control that, but that's still in our view way down the road, and candidly, our partners have some recovery to do in that process that we're going to continue to assist them with, because again, we said it a couple of times today and in scripts that we want to play this for the long game, and we think that if we do some things right today, that long game is very positive, but in comparison to the past, it's still too early to be able to predict that, but it's an outstanding question, thank you.

Thank you.

Our next question is from Savi Syth from Raymond James.

A little bit along the line of Mike's question, I'm just kind of curious, I think of kind of regional airline business primarily more focused on business markets just given your high unit cost, and just wondering in this current climate where business demand hasn't really picked up, and I know this is not what you planned, but where do you see that your partners -- are your partners putting kind of SkyWest like in different types of markets, or -- just kind of curious what type of passengers that you are flying today, and does your kind of recovery outlook and maybe even looking at pro-rate and thinking maybe 20% doesn't come back, is that based on kind of a business outlook?

Yes, Savi, that's a terrific question, this is Chip again. I would say that we do have some geographical shifts within our fleet. So, that's mostly due to some of the consolidation happening, some of the efficiencies that our partners are gaining and some preferential places in which we are trying to schedule flights, they quite candidly are being scheduled completely different than they were a year ago. I would also advise that given the data that we see about travel today, it's probably going to look 180 degrees different probably a year from now when we make our way through the pandemic a little bit better. So, what we're seeing today is not a tremendous amount of market-based shift, more of a schedule-based shift, and certainly volumes are down pretty much everywhere we are flying outside of some of the consolidation I referred to earlier, but to the extent that you see what's in the industry about speculation, about what travel is going to look like down the road, there's some things that could be very compelling to the regional model. We know that there's a lot of movement out of larger cities into smaller cities, off the coast more into the Midwest and those types of things, all those things certainly bode well for us, the commuter aspect of it, the business travel aspect of it, all these things are kind of crossed up right now as you've probably seen from some of the other calls that we are -- we are certainly paying very close attention to all of it, and are generally optimistic about the fleet that we fly, how we can execute, and how we can provide value to our partners, and I think that's probably as close to a solid answer to your question that we're comfortable giving right now.

No, that's helpful, appreciate the follow-up.

Our next question is from Joseph DeNardi from Stifel.

Thanks. Yes, I have a quick follow-up. There's obviously a lot of volatility in terms of how much your partners mainline scheduled are able to fly. I'm wondering if you all have more visibility into your schedule over the next several months. So, when we look at scheduled capacity for you all -- is that firmer just because of the contractual nature of that or is that still in as much flux as the mainline flying. Thank you.

Yes, Joseph, this is Wade. So, we obviously work very closely with our partners on our schedule. Pre-pandemic, we were probably getting visibility to our schedule six, nine months in advance. Now, we're trying to give our partners as much flexibility as they need to match capacity with the demand that they're staying in. So, it's a lot closer in right now. We have very good visibility to obviously our November, and we're starting to get a lot more clarity on December as well. So, that's about where we're at. There's not a lot more clarity from our schedules at this point.

Okay, thank you.

This concludes our question-and-answer session. I would now like to turn the conference back over to Chip Childs for closing remarks.

Thank you, Kate, and thanks everyone for joining us on the call today. Again, we really appreciate your interest in SkyWest. Once again, I want to thank our people. I'm so proud of our airline and our teams for the great work they're doing to support each other for the long-term success of SkyWest, and we look forward to talking to you all next quarter. Thank you.

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