Good day and welcome to the Xenia Hotels & Resorts Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Danielle Burgoon, Vice President of Finance. Please go ahead.

Thank you, Andrew. Good afternoon and welcome to Xenia Hotels & Resorts second quarter 2021 earnings call and webcast. I'm here with Marcel Verbaas, our Chairman and Chief Executive Officer; Barry Bloom, our President and Chief Operating Officer; and Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion of our quarterly performance industry fundamentals and the positioning of our portfolio. Barry will follow with more details about our operating results, details on our capital expenditure projects, and the current operating environment. And Atish will conclude our remarks with an update on our recent capital markets activities and balance sheet. We will then open the call for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued this morning along with the comments on this call are made only as of today August 3rd, 2021 and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in this morning's earnings release. An archive of this call will be available on our website for 90 days. I will now turn it over to Marcel to get started.

Thanks Danielle and good afternoon to all of you joining our call today. Since reaching an inflection point and turning cash flow positive at the end of the first quarter, the pace of recovery has accelerated. The quarter came in well ahead of our expectations. The results we reported this morning reflect the positive momentum in demand across our portfolio and across each segment of business. During the second quarter, we recorded a net loss of $42 million. However, adjusted EBITDAre and adjusted FFO per share were each positive at $27.4 million and $0.08 respectively. In addition to continuous sequential improvement in occupancy during the quarter reaching 55.5% for our same-property portfolio in June, our operating performance was fueled by strong rates and outstanding cost controls. Our June ADR was virtually equal to the ADR we achieved during June of 2019. Impressively, our same-property hotel EBITDA margin was 24% for the quarter. The hotel EBITDA margin we achieved during the quarter was the result of not only excellent cost controls and lower staffing levels at the property level, but also a shift in the revenue mix generated at those hotels and the sequential improvement in ADR as the quarter progressed. With leisure transient demand continuing to be the majority of overall rooms demand and group demand being a much smaller piece of the pie, food and beverage revenues continue to lag significantly behind pre-pandemic levels. This shift in revenue mix continues to be a driver of margin performance. On the rate side, the delta to 2019 same-property monthly ADR was reduced from 16% in March to only 0.3% in June and 17 hotels and resorts or half of our same-property portfolio achieved a higher ADR in June 2021 compared to June 2019. While the makeup and geographic mix of our…

Thank you, Marcel and good afternoon, everyone. The portfolio information I'll be speaking about today is reported on a same-property basis for 34 hotels, which excludes the Hyatt Regency Portland, which we commenced operations on May 24. For the quarter, our same-property portfolio occupancy was 51.4% at an average daily rate of $215.01 resulting in RevPAR of $110.45. As a note, RevPAR in the second quarter of 2020 was $7.19 and in the second quarter of 2019 it was $108.05. We continue to be encouraged by the sequential improvement month-over-month during the quarter as well as our continued strong performance in July, a testament to our portfolio mix and the performance of our individual assets. As of May 24, all of our hotels and resorts were open and operating. We have been pleased with the ramp-up and market acceptance of the Hyatt Regency Portland at the Oregon Convention Center. As we anticipated, there is significant leisure demand in Portland over the summer months that the hotel has been able to capture. For the quarter, portfolio performance exceeded our expectations, particularly due to strong June results, which continue to be a result of strength throughout the leisure segment and specifically in our drive-to leisure markets. April's occupancy was 48.9% at an ADR of $216.3, continuing to build on the strength we have seen in March when leisure demand at spring break filled many of our hotels. And results continued the sequential growth trend as occupancy increased to 49.7% with an ADR of $216.18, driven by increased corporate and group demand and healthy leisure demand over a very strong Memorial Day weekend. The layering of strong leisure vacation demand with four reopenings throughout California, led to significant growth in June occupancy to 55.5% with a modest decline in ADR to $213.03. We…

Thanks Barry. I will provide an update on our balance sheet. Overall our balance sheet is stronger than it was pre-pandemic. We have less net debt, more liquidity and extended maturity ladder. We have achieved this without increasing our share count and without increasing the risk of future dilution. As a result of the successful high-yield offering we completed in May, our liquidity increased by approximately $300 million, since the end of the first quarter. Our liquidity is over $1 billion at present. It reflects approximately $500 million of unrestricted cash and a fully undrawn $523 million line of credit. We continue to have a well-diversified balance sheet at an attractive weighted average cost of debt of just over 5%. The average duration of our debt is 5.3 years, up from about four years pre-pandemic. And we have no debt maturities for the next 2.5 years. As Marcel mentioned, we have amended our corporate credit facilities in May. We have already announced the details around those amendments. Overall, we are pleased, as the amendments provide the company with more operational and transactional flexibility. And they reflect the continued positive relations we have with our bank syndicate. As we look to the second half of this year and into 2022, our outlook continues to be positive. From a corporate profit measures perspective and assuming a continuation of the demand trends we've seen in recent months, we expect adjusted EBITDA and FFO to be positive going forward. More importantly, since the pandemic began, the moves we have made and the moves we haven't made have positioned the company to manage through a variety of near-term scenarios and to eventually return to growing long-term shareholder value, no matter the exact near-term trajectory of the recovery. Our portfolio is positioned superior relative to other high-end lodging portfolios. Owning branded hotels that are located in higher-growth markets that are not overly focused on either citywide convention demand or international inbound demand and that have shown strong recovering momentum to date, will allow us to drive relative outperformance. And with that, we will turn to our Q&A session. Andrew, may we please have our first question?

Thank you. We will now begin the question-and-answer session. The first question comes from David Katz with Jefferies. Please go ahead.

Hi. Good afternoon, everyone.

Good afternoon.

So, look, I think at some point we've expected that there might be some set of distressed opportunities, right? And when we've had discussions in the past about it, not necessarily with you, but that as the recovery wore on there would be opportunities that bubble up for a variety of reasons. Is that still a fair way to think about it, or is this just not going to be -- is distress just not going to be a driver here?

Good afternoon, David. Well, from our perspective and I mentioned this in our prepared remarks, we do think that overtime there should be more properties coming to market and more opportunities than what we necessarily see today. I think we're seeing the early stages of that with certainly being -- some more properties being out to market. I think part of it is, people still need to really understand where the long-term trajectory is going with some assets and we talked about it a little bit, as far as having a little clearer direction on where things are going to go. Certainly, a number of lenders that have been willing to be very accommodating in the short term that may change over time as well. And I think, we're still kind of in the early stages of that. So you've seen some transactions happening that clearly haven't been distressed type of transactions. And you just haven't seen that much of that, but I think we're still really early on in this part of the cycle. And from our perspective, it certainly makes sense to be patient and wait for as better opportunities materialize.

So if I'm hearing correctly, as we get later this year and into next year is when those kinds of things start to present themselves is that fair?

Well, this is obviously -- to my point, it's hard to say whether you're going to see a large number of distressed situations. I do think you're going to see more products hitting the market, which will presumably create some more opportunity, because currently you're in a situation with a good amount of capital chasing a relatively small number of interesting deals, where the pricing ends up being pretty aggressive. So we think that -- and like I said, we're currently underwriting transactions too and analyzing a lot more than we did three or six months ago. But we're willing to be patient and willing to wait for those deals that are absolutely on strategy for us and that can meet our return requirements.

Right. And can we just double back and if this is repetitive, I apologize, but I just want to make sure we have. What is your sort of steady-state target leverage range that you'd like to sit in Atish?

Yes. Long-term David, we've talked about sub-five times, so -- through the cycle. So, we have been running the company kind of a low three to low four times debt to EBITDA range over the last five years. And I think that is the appropriate range for our business long-term. So, we'd like to get sub-five times certainly as soon as possible. And then, long-term kind of low threes to low fours is the right leverage range for us in terms of net debt to EBITDA.

Perfect. Okay. Thanks very much.

You’re welcome.

The next question comes from Bill Crow with Raymond James. Please go ahead.

Yes. Thanks. Good afternoon, guys. Any difference you're seeing in the September cancellation rate relative to August, a month ago? In other words, any impact from the Delta variance or just simply more cancellations because we're transitioning into business from leisure?

Hey, Bill, we've not. And obviously, we're watching it very, very carefully. We had a couple of smallish cancellations over the last week -- for kind of two weeks out. So, obviously keeping a very careful eye on that, but certainly not seeing deep cancellations in the September at this point.

What are you watching from a larger group event calendar basis to kind of be a harbinger of attendance? And hopefully it's not Alice. We didn't hear great things about that. But as you look into September, October, November, give us a few conferences that you're watching to be indicative of trends.

Yes. So, in large part, we don't have a significant number of citywides in our portfolio in general, which is not in those markets -- in those types of properties. But we have a few -- I guess without divulging exactly who they are and what properties they're at, a few bellwether groups that we kind of look at within each segment. So, we're obviously focused -- we look very carefully at the pharma business, which when it materializes is a very strong business for us and we're watching that very closely, because they often have the ability to make decisions to book short-term. But once they have, they can push business off even in normal times depending on when they do product launches and things like that. So we've been very careful on that. We're looking at business where we have a large -- a relatively large number of international attendees. In general, in our internal forecast, we have watched much of that out. The hotels have watched, much of that out because we know that international attendance is certainly not assured at this point. So, if that gets to particularly challenging points when we saw this in the early days of COVID as well, companies may cancel their meetings if they're not going to get the international attendees they want and that goes for both corporate group but that's particularly notable I think for larger association groups that draw internationally. I think those are two good examples of things we're keeping a careful eye.

And then, finally for me if I could one more. Just any incremental change in the ability to hire at the property level over the last month or two?

Yes. And I think I mentioned this in the prepared remarks. In markets where they have -- where they're no longer getting supplemental unemployment, we have seen increases in number of applicants and ultimately number of hires. So when that happens we've gone in immediately with job fairs and we are seeing more than what we would have seen a month prior. It's not exponential, but it is notable and has helped fill the ranks in a number of our hotels, particularly in the Sunbelt markets Florida and Texas.

Great. Thank you.

The next question comes from Dori Kesten with Wells Fargo. Please go ahead.

Thanks. Good afternoon, everyone. Somewhat of a follow-up question to Bill's labor question. So, if we were sitting here today Barry, under our pre-COVID model, how many FTEs would you have at these demand levels? And then, just compare that to what you actually have today?

Yes. So, one of the things that we -- coming into this, as you know, had by virtue of our property organization process, we have developed always kind of within traditional operation levels kind of target FTE metrics. And then, we went back last year in the depth of COVID, in particularly as hotels were closed looking at what staffing models would look like at every occupancy deciles of that to get back to that. We're -- what I can tell you is -- we're very reticent to put that number out there in total. And obviously it changes every day in our hotels as they hire employees as employees fleet things like that. We are -- it's very fair to say that we have no hotels in the portfolio that wouldn't take more staff if they could get them right now. And I think they're truly trying to balance a couple of things one of which is, making sure that we're not increasing the overall wage model over time by hiring more employees today than we can comfortably take on and changing the entire wage structure of our hotels and quite frankly our industry that's one; two that we're also balancing and have always tried to balance to ensure that we don't get staffing ahead of where demand levels are because in this environment we want to make sure that we've not -- we're not overstaffing. Again that's not to say, we wouldn't take more employees in any of our hotels. Our managers are constantly looking for more and better employees. But I think to put an FTE number on that is really a challenge and quite frankly across the portfolio given the variances we have between outperforming hotels and hotels that are still way, way, way off in terms of their business levels it's a tough number to make sense of in the portfolio as a whole.

Okay. Thank you.

The next question comes from Bryan Maher with B. Riley FBR. Please go ahead.

Thank you. Two questions for me. One on the food and beverage. I know it's not up to the level that you would expect or hope for. It was above what we were looking for. Can you give us a little bit of the dynamic of the leisure traveler? And is there potential over-propensity to spend on F&B. I mean how is that dynamic working relative to what you would normally see with group using a lot of F&B?

Yes. That's a great question Bryan. And it's obviously different in -- it's a different kind of spend. So I'll put it in a couple of buckets. One in our resort hotels we're seeing significant pool bar expenditures and food and beverage that serves pool bars they're literally at the pool all day in a lot of these cases and are buying food and beverage from us. Similarly, we've seen something we've not traditionally experienced in the resort hotels either which is the propensity of guests to stay on property and eat on property more times rather than go off property. Some of that has to do with difficulty in getting reservations and things like that. But our kind of 3-meal restaurants in our resorts are doing better business they have ever done not just because we have more leisure guests and therefore more people in the restaurants, they're just in the restaurants more and they're eating three meals a day sometimes in the property over multiple days. So we're seeing that. We're also on the food and beverage side -- on the banquet food and beverage side where we have had banquets, the banquet spend per group room is fairly comparable to what it has been historically. We're not seeing significant reductions in that at all. And then the last piece which is universal across the portfolio we're seeing unbelievable business in our markets or cafes or coffee shops not in the restaurants per se, but in the grab-and-go outlets we've always had. The volume in those is in many cases double or triple what it would have been in a typical year. Again, leisure is driving a good bit of that. They're obviously not going -- they're not having the same kind of breakfast that a corporate traveler would have. We're not capturing them in a banquet breakfast related in a meeting. But all of those are what is helping us sustain higher levels, I think than even we might have expected. But those pieces if you think about those, those are also part of what is driving what we consider to be department of profit at food and beverage probably better than again what we would have expected or underwritten in this type of environment.

Thanks. And then maybe for Marcel as you think about acquisitions it seems like everybody wants to chase after the hotel du jour, Sunbelt leisure drive-to. What are your thoughts about going after northern urban assets, if you could pick them up at a significant discount and either reposition those properties or wait for an eventual recovery? How are you thinking about the two different buckets to buy in?

From our respect as you know we've always focused on having our strategy be primarily top 25 markets key leisure destinations. So, you're absolutely correct that a lot of the hotels and resorts that people are particularly attracted to these days are the type of assets that we've also bought over time. As you know we've never said we don't want to be in gateway markets. There is a time and a place to invest in those type of markets. And we absolutely felt that the last five years or so was not a great setup in those type of markets because of many factors that we're aware of. So, over time we absolutely will continue to look at those type of markets and the challenge, of course, and New York is obviously a poster child for this is that even if you buy a hotel where you feel that your discounts to replacement costs might be pretty attractive. It's still a very difficult operating environment in some of those markets. And we're clearly looking for opportunities where we can drive long-term value increases but also make some operational cash flow and be able to really affect those cash flows. And in some of those markets this is really tough to accomplish. So, we will continue to look at kind of a wide variety of markets. And the good thing about our strategy has always been and will continue to be that we can be pretty opportunistic within that strategy and we'll look to find deals that are actually on strategy for us and again drive the right kind of return for us over the long-term.

Yes, thank you.

The next question comes from Aryeh Klein with BMO Capital Markets. Please go ahead.

Thank you. Maybe just on the services front. How are you thinking about bringing some of those back? You mentioned kind of the modified services in certain hotels and markets. And what if any customer pushback have you seen or heard?

Thanks Aryeh. I appreciate the question. So, obviously, our hotels follow the leadership of and direction from their brands. And as you know Hilton has come out with a pretty rigorous standard on housekeeping or formal standard housekeeping. Marriott is still working through that as is Hyatt. So, let me start by saying that. And our hotels in general complied with their brand standards. What we have seen is in some cases some of our hotels have moved to what we would call a modified housekeeping model which is really where we're getting in rooms most days particularly in the resorts that have heavy, heavy usage and have lots of use of towels and lots of people in them, and lots of garbage generated this it started making sense to go into rooms every day and do what we call a life touch cleaning. But we're really taking care of the garbage, taking care of towels, but not necessarily doing the clean to would historically do every day. And that's gone a long way towards increasing guest satisfaction in the hotels and resorts that have implemented that system. I will tell you that most of our hotels if a guest wants housekeeping on a daily basis, our hotels are not necessarily declining that opportunity. Our hotels are obviously in business of satisfying guests. So, even though the standard may be to go in that room every second or third or fourth day, depending on what each individual brand and each of those companies kind of set as a standard, we're doing whatever it takes to satisfy those guests in terms of what they want. We've seen -- what's interesting is that when you look across the portfolio, our highest guest satisfaction scores are in properties that are actually achieving the highest average daily rates. And so in those hotels I think we're obviously doing a good job of giving guests what they want and what they expect, particularly when they're paying rates that are significantly in excess of what they have historically. I hope that helps.

Yes. Thanks for that. And then just -- you talked about a little bit earlier the trends you've seen in July. Can you maybe provide a little more granularity on what you're seeing in some of the urban or business-oriented markets that have maybe been a little bit slower to recover? And how that's progressing?

I think, obviously, July ended two days ago or three days ago and we're still sort of filtering through the information to understand what it really means in terms of the portfolio. So, I think we'll probably -- if we can take a pass on that for now until we can really sort through what the trends really are and which markets are seeing that performance. We can certainly -- as we noted, obviously, rate has moved significantly across the board in the portfolio in July over June. But I think getting an individual market conversations probably we're not ready to do that today.

Thank you.

The next question comes from Austin Wurschmidt with KeyBanc. Please go ahead.

Great. Thanks and good afternoon everyone. Barry you mentioned group lead volumes were up 50% between March and June and sorry, if I missed this, but is that based sort of on room night demand or number of inquiries? And I'm curious if those trends continued into July kind of the sequential improvement?

The 50% I mentioned was actually lead volume from where it was at the end of March to the end of June. So we -- so obviously that's incoming business. It doesn't reflect necessarily what was booked which is harder to look at and process and we are still processing July data. So there's really no update on that at this point.

Got you. And so what percent I guess of revenue is on the books that you'd typically target for either the back half of the year or 2022? Can you give us just some sense at this point?

Yes. So for 2021 for the back -- for the full second half of the year at the end of June, we were down 43% in group room nights with rate down about 3%, but it does vary by quarter. Q3, the revenue pace is down about 50%. Q4 revenue pace is down 35%. So it's certainly -- and we've always known and seen that the group business for this year continues to be back-loaded literally not just quarter-by-quarter but month-by-month with the exception of December, which obviously is always an outlier.

Got it. And then anything for 2022 at this point that's worth noting?

No. We talked about being down right now compared to 2018 to 2019. So compared to a more normal year where right now room nights are down 33% and rate is up 2%. So -- and there is -- we also see there in Q1 and Q2, kind of, Q2 down less than Q1 is down. So again we -- which gives us a lot of confidence that this is all going to fill in at some point, it's just a matter of when it fills in.

No, that's very helpful. And then Marcel you talked about continuing to evaluate ROI investment opportunities. And I'm just curious with some of these new projects that the two new ones that you announced and as you think about additional spend, I mean, how do we think about the pace of spend as you get into 2022 versus what you have planned for this year?

We don't have an exact number to talk about there yet, but clearly it will be a number that we expect to be higher than where we are this year. As you know we've last year deferred a good number of projects. Some of those roll into this year. But being at about $40 million for this year that's obviously the below watermark for us historically. So we certainly expect this to be a little bit more normal going into next year. But it's a little bit early to talk about that because we don't want to get too far ahead of ourselves as we continue to work through some of these potential ROI opportunities that could swing a bit. So I don't really want to get too far ahead of ourselves on that yet.

Fair enough. Thank you.

The next question comes from Michael Bellisario with Baird. Please go ahead.

Hi, good afternoon everyone.

Good afternoon.

Barry first one for you. Just on ADR overall. Maybe can you dig a little deeper here? What are you seeing by segment? Are you really just seeing ADR increases from leisure transient travelers? And then any impact for more loyalty redemptions at your resorts? Just any more detail on the segmentation breakdown for ADR would be helpful.

Yes. So no question that the primary driver of ADR is on the leisure side because our hotels as you know are primarily being -- are primarily capturing leisure guests at this point. In fact, what we've seen and it's a little bit disappointing is that are -- because we're not necessarily getting to peak occupancies we're actually absorbing a lower redemption rate from the programs than we would if we were getting those occupancies up into the 80s and 90s where we might typically have been during a peak demand period. So there is actually some downward pressure on the actual rate transients are paying that you see in the overall rate because of the blending of kind of the contracted if you will redemption rate from the brands. And we're getting substantial redemption demand particularly, at the resorts. One of the interesting things is we are seeing improvement month-over-month in corporate rate. Some of that is due to just the customer that we are getting but it's also a lot of those rates are driven off of the best available rate or bar. And because the bar rates were because we've done a good job in the hotels of maintaining higher bar rates where corporate demand is choosing to stay with us we're actually producing a pretty good corporate rates because we kept that bar rate at a higher level. And many, many of the kind of not necessarily the very top accounts but the second-tier accounts are all priced at a discount of a bar. And we're seeing production, we think in line with where the rest of the market is on those.

Got it. That's helpful. And then just one for Marcel, just back to the transaction market and the way you're kind of underwriting deals today at least the fact you said you were underwriting more deals. How much of that is: one more deals to be underwritten? Two, did the deals look more attractive to you and that's why you're underwriting more? And then three, how much of it is you now have more flexibility to spend money and invest post bond deal and maybe that's the reason why you're looking at more deals. Can you maybe break those three down for us?

Yes, clearly based on the way you're asking the question I think you somewhat know the answer of it. It's a combination of all three, right? We are definitely seeing some more properties hit the market. There's no question about that. Clearly, when the short-term focus was much more on reducing monthly losses and having monthly cash burn, you look at things a little bit differently than when you're starting to stabilize from an operating perspective and you obviously, start turning a little bit more from defense towards offense. So that's certainly a component of it. And as we think about the attractiveness of potential acquisitions, clearly, some of them become more attractive so that you're not dealing with short-term cash flow losses and those type of things. But that all being said, we're being fairly cautious in the way that we're underwriting things. And we're just maintaining a really disciplined approach in potentially adding assets. You mentioned and we mentioned earlier having the flexibility now under our credit agreements which obviously, changes things a little way too. But it doesn't mean that we just feel like there's this money burning a hole in our pockets. We were very active coming into the pandemic. We've got a number of hotels that we are very excited about the growth that we can still get out of those. So we really feel like we're not behind in the game if you will because we were so active coming into the pandemic and have so many opportunities to grow coming out of this as a result of that. But we would love to find some interesting opportunities, that we think are going to be good drivers for growth for the portfolio going forward. And certainly, with the track record that we've had over the last couple of cycles, I'm pretty optimistic we'll find those opportunities. But we're going to maintain a lot of discipline as we're looking at it.

Got it. And then just as a follow-up there, given what's happened over the last 18 months or so, any change in your view or at least maybe how you underwrite branded versus independent hotels today?

No really not. So we -- if anything we feel strengthened in our overall strategy that we have coming into this. We like being affiliated with some of the biggest brands in the business. And we've talked many times about some of the benefits we see in working with those stronger brands. And certainly the way that they were able to react to the pandemic and the way that we think they will be very helpful in building back the customer base on both the group side and the corporate side going forward will be very important to our portfolio. We feel good about obviously the geographic diversification that we had and that certainly helped us. If you think about the occupancy that we have that actually is on our basically entire portfolio and we don't have anything closed anymore we're able to open everything as quickly as we possibly could. We feel very good about that overall strategy and how it sets us up both in times when times aren't so good like we've obviously seen here recently and also during recovery. So we really don't see any kind of reason to stray from the strategy and are very happy with that.

Got it. Thank you.

The next question comes from Tyler Batory with Janney Capital Markets. Please go ahead. Q –Unidentified Analyst: Good morning. This is Jonathan on for Tyler. Thanks for taking our questions. Just one quick one for me today. Barry I wanted to follow-up on the rate discussion. Any additional color on your expectation for corporate rates moving through the fall and into next year? And I guess the crux of the question is, how sustainable do you think those higher rates that you were talking about are in the medium and near term?

I think that's really probably a question best directed at the brands who leave the large majority of those discussions for the very largest corporate accounts. I think we are certainly -- the feedback we're getting and also the feedback we're providing is that discounts off a bar seem to make a lot more sense necessarily than taking low rates in a market that we don't take -- potentially taking low rates in the markets many multiple markets so we don't know exactly what the supply demand equation is going to look like on your typical business pattern for next year. Q –Unidentified Analyst: Okay. Great. Thank you for the details. That's all for me.

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

Thanks Andrew. Thanks to everyone joining us today. We are certainly very optimistic about both the medium and long-term growth prospects look like for our company and aren't closing our eyes to some of the shorter-term challenges that I'm sure we and many other people in the industry will be dealing with. But we feel very well positioned with our portfolio and look forward to continuing to update you over the quarter's end.

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