Good day, ladies and gentlemen, and welcome to your Sinclair Broadcast Group Second Quarter 2019 Earnings Conference Call. All lines have been placed in a listen-only mode and the floor will be open for your questions and comments following the presentation.

[Operator Instructions]At this time, it is my pleasure to turn the floor over to, Senior Vice President and Chief Financial Officer, Lucy Rutishauser. Ma'am, the floor is yours..

Thank you, operator. Participating on the call with me today are Chris Ripley, President and CEO; Steve Marks, Executive Vice President and Chief Operating Officer of our Television Group; and Rob Weisbord, Senior Vice President and Chief Revenue Officer. Before we begin Billie Jo McIntire will make our forward-looking statement disclaimer..

Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors.

Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our second quarter earnings release.The company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net.

In accordance with Regulation FD, this call is being made available to the public.

A webcast replay will be available on our website and will remain available until our next quarterly earnings release.Included on the call will be a discussion of non-GAAP financial measures, specifically television broadcast cash flow, EBITDA, free cash flow and leverage.

These metrics are not meant to replace GAAP measurements, but are provided as supplemental detail to assist the public in their analysis and valuation of our company.

A reconciliation of the non-GAAP financial measures to the GAAP measure in our financial statements is provided on our website under Investors, non-GAAP measures.Chris Ripley will now walk you through the operating highlights..

Good morning, everyone, and thank you for joining our second quarter earnings call. Before Lucy gets into our overachieving results, let me highlight some of our recent accomplishments and noteworthy announcements. We continue to work with Disney towards Department of Justice approval in a third quarter close of the RSN acquisition.

Our recent closing of bond financing and successful syndication of bank financing to fund the acquisition received a strong positive response from the financial markets and we significantly exceeded our initial cost of capital assumptions from announcement.

Lucy will take you through those details in a few moments.Our stations continue to be recognized for their impactful news, storytelling and investigative reporting. So far this year our newsrooms have won 328 news awards and counting.

On the distribution front, we recently renewed our retransmission consent with Charter in a multi-year deal that covers our TV stations, Tennis Channel, Marquee and the RSNs, when closed.We realize there is noise in the marketplace with Nexstar and CBS dark on AT&T DIRECTV and with Meredith and the FOX RSNs dark on DISH.

In fact 19 of our JSA on partner stations, for which we do not negotiate retransmission consent, were also dropped from AT&T at the end of May or early June.

We believe, however, that both AT&T and DISH will recognize the value of broadcasters' highly rated content and come to fair terms with the industry, as season premieres and football season start in September.After partnering with the Salvation Army in March to support relief efforts for the unprecedented Midwest flooding, we once again partnered with them in early June to promote another day of giving to support communities across the country that experienced devastating tornadoes and floods.

All-in, Sinclair and our viewers collectively sent to Salvation Army about $80,000 from this day of giving to help with their mission. We also awarded eight scholarships to college students as part of our commitment to support diversity in broadcasting.Now, let me hand it over to Lucy to discuss our financial performance..

Thank you, Chris. As you mentioned, we overachieved this quarter in all key financial metrics. Media revenues for the second quarter were $721 million, an increase of 4% or $24 million higher than second quarter 2018 and exceeding the low end of our guidance range.

Included in our second quarter media revenues are $367 million of distribution revenue, a 15% increase over the prior year period.Based on current contract expectations, we continue to expect net retrans to grow low-teen growth percents for this year and next.

Political revenues in the second quarter were $3 million, versus $28 million in the second quarter of last year, an election year.

Media operating expenses in the second quarter, defined as media production and media SG&A expenses were $500 million, up 11% from second quarter last year, primarily the result of higher reverse retrans fees and costs related to our growth initiatives.

Our reported media expenses were $6 million favorable to our previous guidance on lower G&A and sales expense.For the full year, media expenses are expected to be approximately $1.979 billion to $1.981 billion. As compared to our prior guidance, the $8 million improvement is primarily due to the favorable expenses realized in the second quarter.

Corporate overhead in the quarter was $52 million and includes $28 million in non-recurring costs for legal, regulatory and transaction and $5 million of stock-based compensation expense. Excluding those amounts, corporate overhead was in line with prior guidance.

For the year, corporate overhead is expected to be $73 million, excluding $71 million in nonrecurring costs for legal regulatory and transaction and $19 million in stock-based compensation.Non-media EBITDA was approximately $11 million in the quarter.

That's $7 million better than our prior guidance on lower ONE Media expenses which will occur later this year and higher sales at our antenna company. EBITDA in the second quarter adjusted for the $28 million in nonrecurring costs for legal regulatory and transaction was $193 million.

That's $11 million higher than the high end of our prior guidance range. That's on the higher non-media EBITDA, higher revenues and lower media expenses.Net interest expense for the quarter was $49 million. Equity method investments for the quarter were a loss of $12 million.

Diluted earnings per share on 93 million weighted average common shares was $0.45 in the quarter and $0.70 when adjusted for nonrecurring costs for legal regulatory and transactions.

We repurchased 500,000 shares in the second quarter at an average price of $40.10.Excluding the $28 million in nonrecurring expenses for legal regulatory and transaction and net of $5 million in tax impact on those expenses, we generated $97 million of free cash flow in the quarter, exceeding the high end of prior guidance by $27 million.

$20 million of the free cash flow went to share repurchases, $97 million is to debt repaydown and $18 million in dividend distributions.Free cash flow in the third quarter is expected to be approximately $75 million to $82 million.

Please note that as compared to Street consensus estimates, the difference is due primarily to timing of CapEx and ONE Media expenses from the second quarter.

For 2018-2019, we are reconfirming our free cash flow guidance range of $1.150 billion to $1.220 billion or $6.16 to $6.54 of free cash flow per share per year on 93 million shares.We are also reconfirming our 2019-2020 free cash flow guidance of $1.2 billion to $1.3 billion or $6.43 to $6.97 free cash flow per share per year on 93 million shares.

These estimates are pre the RSN acquisition. We are reconfirming our expectation for consolidated free cash flow per share including the RSNs of $12 per share for pro forma '18 and '19 and $13 for pro forma '19, '20.Turning to the balance sheet and cash flow highlights.

Capital expenditures in the second quarter were $33 million, including $12 million for the repack.

For the full year 2019, we are maintaining our non-repack CapEx guide of $110 million to $120 million, but are reducing our 2019 full year expected repack CapEx guide from $136 million down to $82 million due to scheduling challenges for outside resources and tower crews.

This year's favorable decrease in the repack CapEx will be pushed to 2020.Cash programming payments during the second quarter were $24 million. And for the year we expect programming payments to be $94 million in line with our prior guidance.

Net cash taxes paid in the second quarter were $31 million, including $4 million related to last year's gain on the sale spectrum.For 2019, we are estimating cash taxes paid to be approximately $31 million with essentially all of that already paid in the first half of the year as a result of extension payments on 2018 taxable income.

For full year, free cash flow purposes, be sure to add back the $4 million of taxes on the 2018 spectrum sale gain.

The effective tax rate in 2019 is expected to be a benefit of approximately 2%, reflecting tax credits related to sustainability initiatives and lower book tax income on the higher nonrecurring costs for legal regulatory and transaction and lower gains on spectrum repack reimbursements from the FCC due to timing with some of those gains now being pushed into 2020.At June 30, total debt was $3.788 billion including $20 million of non-guaranteed and VIE debt.

Cash at June 30 was approximately $929 million. In addition, we have $484 million available on our revolver bringing total liquidity to roughly $1.4 billion.

In April, we paid in full the remaining $92 million of term A loans with cash on hand.Total net leverage through the holding company at quarter end was 3.27 times on a trailing eight-quarter basis excluding the VIE and non-guaranteed debt and net of cash.

The first lien indebtedness ratio on a trailing eight quarters was 1.08 times on a covenant of 4.25 times. We repurchased 500,000 shares in the second quarter. We have $743 million remaining on our share authorization.As Chris mentioned we successfully closed our bond offering and syndicated financing commitments to acquire the RSNs.

On August 2nd for the RSN silo, we raised $3.050 billion of secured notes due 2026 priced at five and three-eighths percent and $1.825 million of unsecured notes due 2027 priced at six and five-eighths percent These two note issuances have been funded into escrow pending the acquisition close.For the RSN silo, we also raised $3.3 billion of seven-year term B loans priced at LIBOR plus 325 basis points.

The term loans are committed and subject to customary closing conditions will be drawn at the closing of the acquisition.

In addition the RSN silo raised a $650 million five-year revolving line of credit initially priced at LIBOR plus 300 basis points.Meanwhile, the Sinclair silo raised $700 million of seven-year term B loans that will be drawn at the RSN closing. The cash capitalized the RSN silo. The term loans will be priced at LIBOR plus 250 basis points.

Sinclair also intends to increase its $485 million revolving credit facility to $650 million which will mature five years after the closing date and is initially priced at LIBOR plus 200 basis points.Due to the high demand for the debt issuances, we expect to increase the Sinclair term B loans by an additional $600 million.

It will be used to redeem the Sinclair five and three-eighths percent notes due 2021.

That redemption and funding is expected to occur on August 13th.As we think about net leverage, on a going forward basis, after the RSN acquisition closing, our near-term target leverage for the Sinclair silo is high threes low four times which we believe we will achieve within 12 months of closing.For the RSN silo, the near-term net leverage target is low to mid-four times which we expect to achieve in 18 months.

Longer term for the consolidated company we are targeting investment-grade which is where diversified media companies are levered and believe that will align our equity value with where those companies are trading.Steve Marks will now take you through our operating performance..

Thank you, Lucy, and good morning, everybody.

Not only did we exceed the low end of our media revenues for the second quarter, our core advertising was up low single-digits and our automotive up slightly, I'll repeat that, automotive up slightly.For the third quarter, core advertising expected to be flat to up while we are seeing some slowdown in the automotive category for third that is being offset by strength in insurance, legal, and home products categories.Fourth quarter and full year core advertising are still expected to be positive.

On the political front, we are seeing campaigns spend sparingly actions we witnessed in our second quarter results and even in our third quarter outlook.As I've stated on prior calls, we expect 2020 to be our biggest political year on record, especially when you consider that campaigns and packs have raised more money at this point in the election than previous presidential elections.Our digital business continues to perform very well with revenues growing 30% -- revenues growing 30% in the second quarter as compared to the same period last year.Turning to our outlook.

For third quarter, we are expecting media revenues to be approximately $695 million to $703 million down 4% to 5% as compared to third quarter 2018.

This assumes $3 million to $4 million of political versus $70 million last year and includes between $363 million and $366 million in distribution fees versus $331 million last year.On the expense side, we are forecasting media expenses in the third quarter to be approximately $500 million to $502 million versus $458 million in the third quarter of 2018 with the majority of the increase coming from reverse retrans and growth initiatives.For the year, media expense guidance is estimated between $1.979 billion and $1.981 billion versus 2018 media expenses of $1.821 billion.

The year-over-year increase is due primarily to higher reverse retrains, annual compensation increases, and growth initiatives.As Lucy stated, our full year expense guidance is $8 million favorable to our last outlook.

Adjusted EBITDA in the third quarter adjusted for $34 million in non-recurring costs for legal, regulatory and transactions, is expected to be approximately $159 million to $165 million versus third quarter 2018 EBITDA of $234 million.

The decrease is driven primarily by the reduced political revenues, growth initiative investments, and tennis rights partially offset by an increase in net re-trans initiative expense. As Lucy commented, we are reconfirming our free cash flow guidance.With that I would like to open it up for questions..

Thank you. The floor is now open for questions. [Operator Instructions] And we'll take our first question from Marci Ryvicker with Wolfe Research. Please go ahead..

Thank you. Just curious on the Q3 guidance for distribution revenues. We thought AT&T comes up in August. So we're curious why there's no step-up from Q2 to Q3. And then can you confirm when Charter kicks in? We know you renegotiated and then I have a follow-up..

Yes. So AT&T does come up later this -- here in this quarter. So you only have a partial order that would be in the numbers. And then don't forget as Chris mentioned, we also have the JSAs which we don't negotiate for that are dark right now. And then you also have CBS DirecTv NOW, which is also currently dark and that's a CBS-negotiated contract.

But all CBS affiliates once they got dropped are also dark..

And I would just add to that Marci that when you -- your gross was a bit higher than our guidance in Q3 but the reverse was also higher. So the net number is still in line and our guidance for net re-trans is still the same as it was before low teens for 2019..

And then does Charter come in October?.

No. Charter is already in effect..

Oh, it is. Okay..

Yes. We did Charter and announced that one a few weeks ago..

But it really kicked in well in Q2..

Okay. And then you reiterated the $12 and $13 pro forma guide. I assume that that assumes the RSNs are picked back up by DISH.

Correct?.

Yes. We assume that those will be carried..

Okay. Thank you..

Thanks..

Our next question comes from Aaron Watts with Deutsche Bank. Please go ahead..

Hi, everyone. Thanks for having me on. Just a couple of questions. Let me start with advertisings. It sounds like you're expecting stable to even improving core advertising going forward despite a little bit of a mixed bag from auto.

Where is the auto softness coming from? And is it your expectation that even if auto is kind of give or take up or down that you can still grow core over the kind of near to medium term?.

I think auto quite frankly for the first six months for us has not been down. It's been up. And I'll repeat that it's been up. And I'm not sure you're hearing that from other broadcasters. We've been saying this for a few quarters now. We mentioned a few quarters ago that we have a secret source and we do. And our numbers are up.

And now we do expect third quarter to take a little bit of a turn and we expect third quarter to be slightly down.

But our automotive category for the first six months is up and I'm not sure you're going to hear that from anybody else.In these other categories that you're mentioning retail and goods and services is right on top of the automotive category in terms of dollars and with plus.

So between retail and services and top three categories we're pumping along. So we do expect the core to be positive by the end of the year and that's a good story for us. So the core advertising has been consistent. It hasn't been robust but it's been consistent and it's been positive..

And Aaron, if I can just reiterate that point that Steve is making. So second quarter we were up low single-digits. We're looking for third quarter to be up -- flat to up. And fourth quarter we would expect to be up as well. So again I think the companies sort of confirm it so far are not seeing those trends..

Okay. That's helpful. And then just secondly maybe a little bit of a follow-on to the prior comments. But it seems like there are several programming disputes going on right now resulting in content going dark not necessarily just for Sinclair, but across the industry. It seems like those disputes are becoming a little more commonplace of late.

Why do you think that is? And are you still confident? I mean Lucy you talked about your expectations for net re-trans growth this year and it sounds like you're still confident you can get that growth.

But is it going to become more difficult just given the environment right now?.

We are still very much confident in our guidance that we gave. I think what you're seeing right now is really all coming from AT&T and DISH. And they have a few different motivations right now. It's certainly a time of year when there's a lack of active programming on broadcast. So it's a -- there is a time -- a good time to go dark.

It's certainly this time of year. That changes in short order here in a few weeks.And then there's also some political motivations with the STELAR bill that's come up for renewal. There's a big push by -- I think many lawmakers just to let it expire. It's really not needed anymore and AT&T and DISH very much would like to see it renewed.

And so, they have sort of -- they have a number of motivations to act in the way that they are. So I think that's what you're seeing right now. And ultimately, the incremental economics that are represented by carrying broadcasters and the subscribers that we support on their systems will ultimately win the day..

Okay. Thank you very much..

And our next question comes from Alexia Quadrani with JPMorgan. Please go ahead..

Hi. This is David Karnovsky on for Alexia.

Just a follow-up on all the distribution questions Can you provide just any additional color on how your underlying subs are trending from Q2 into Q3 both on the linear and virtual side?.

Yes. So, all in for the pay TV universe in our stations, we saw very, very slight decline in the quarter..

And we don't break out between traditional and virtual but we are seeing, as you'd expect, growth on the virtual offsetting. And most of the declines which are coming from -- most of the declines are coming from the satellite players..

Okay. And then just on STIRR. We saw the announcement of 1 million downloads. I don't know if there's any incremental color you can provide on -- how many of these are regularly using the product and how that's trending over time and maybe what channels within the application are getting the most consumption.

I understand it's still early, but is there any commentary you can provide on what type of advertising demand you're seeing as you scale the service? Thanks..

So I'll speak to the users and then maybe Rob you can speak to the advertising. It's been a great start. We're only six months in, we're well ahead of budget. I think we're, right now on the usage basis. Monthly average users are in excess of 0.5 million people.

So that's ahead of our expectations in terms -- and usage times are quite long.In terms of what people are watching, it's really dominated by the local channel, which is a key differentiator in STIRR where we give you your local news and increasingly we're going to start more -- adding more syndicated product that you would normally see on our air.

And that channel, which we call STIRR City, which is localized to your area is far and away the largest viewership. But we're currently over 40 channels and growing. Every month we're adding new channels, which adds to the variety of viewership..

I'd say we've launched 41 channels in a very short period of time, which creates – month-after-month, we've seen demand increase. We're seeing increase month-over-month in this that we're driving and we expect that to continue throughout the rest of the year as the STIRR brand is recognized on the national and local level.

And we're seeing combination of sales both nationally programmatically and through our local sales path as well. So it's all boding well and we're ahead of our plan year-to-date..

Thank you..

[Operator Instructions] Our next question comes from Kyle Evans with Stephens. Please go ahead..

Hi. Thanks. Chris maybe an update on the launch of Marquee, I was lucky enough to attend an event where you guys were pitching the MVPDs and just like kind of how that's going early on..

It's going well. We had a great event for -- it was an NCTC event in Chicago where the NCTC conference was there, and we hosted all the small cable companies on Wrigley. And so the build-out of the studio is well underway. So we're on track to be fully operational for Q1 of next year and conversations are going well..

I'd also add that we did a deal with Hometown Sports to nationally represent Marquee and they represent the majority nationally of all RSNs. So the sales efforts are underway as well..

Great. I'm a little confused about which FOX RSN deals you guys can and will negotiate. It sounds like you got Charter done but you're not doing the DISH one.

What determines whether or not you can negotiate the deals yourself?.

Yes. That's really governed by our contract with Disney. And specifically Charter was a little bit different than that. It was a prospective contingent renewal whereas DISH has being actively negotiated by the team right now. Look we're expecting to close shortly here. We're in Q3.

So after DISH, I'd expect the deal -- all the other deals going forward to be handled by us..

Great. Thank you..

And our next question comes from Zack Silver with B. Riley FBR. Please go ahead..

Okay, great. Thanks for taking the question.

Just wondering if you could address the network's recent lawsuit against Locast and how you think that plays out and also whether Locast emergence and also some growing I guess OTA household usages pressuring any of your retrans negotiations?.

So we're certainly happy to see the networks act. Locast although not of any significance in terms of size or subscribers and I guess just sort of area of 2.0 and it's a -- really a commercial entity masquerading as a non-profit. And so it should be shut down and we think that lawsuit will be the start of that process.

And in terms of over-the-air viewing, eating into our subscriber situation. Certainly over-the-air viewing is growing, it's only growing slightly. And there's no evidence that it necessarily contributes to people "cutting the cord." So it's the other streaming options that are driving that.

And so we don't really see over the year as having a big impact on that overall trend..

Got it. And then just one on the RSN side.

If you could talk about whether you've had an opportunity to sit down with any of the teams and gauge what their interest is in becoming an equity partner in their respective RSNs and if you maybe see that as a mechanism to keep rights -- the escalation somewhat subdued over time?.

So while we're in the spirit of waiting for close that type of discussion is not something we really can do until after we've closed. We already do have significant ownership with key teams and a lot of the RSNs which we like. It aligns interest. It variabilizes more our cost structure. And that will be a key tactic in renewals going forward to do that.

So I'm not necessarily expecting teams to proactively go buy into their RSNs day one though I do know there is some interest out there. But we just haven't been able to have those discussions yet, while we're in this intervening period, waiting for close. But -- so maybe there are some that do happen.

But on renewal I think you'll see more and more teams have ownership..

Okay, great. Thanks guys..

Thank you..

And our next question comes from David Joyce with Evercore ISI. Please go ahead..

Thank you. On the digital revenue front being up 30%, could you talk about the components there? Like how much is CompulseOTT contributing to that? And sort of what the cadence is for growing that? Thank you..

Well I'll start with the cadence for growing. We've struck deals with Mediaocean. So each local broadcast station on the OTT front will show up and they can buy OTT in the markets specifically by call ladders. We've done a deal with comScore to normalize the OTT world within the reach and frequency.

So when they're buying both OTT and linear, we can now show them that one plus one equals 2.5 to 3. So there's accretive action by buying both mediums.And as far as where it stands it's our fastest-growing vertical and we have 80 different verticals plus in our tool chest.

And we have significant resources and people dedicated along with our local sellers to the space. And we're bullish that this is an extension of linear TV for next-generation viewers..

Thank you.

And if I could switch gears to the programming expense side, how much -- can we think about how much of that is for your proprietary content and local news in STIRR and what have you?.

Yes. So we -- David we don't break out our programming expense to that level of granularity not publicly..

All right. Thank you..

Yes, but let me just say that we spent -- we've been doing a great job over the years of bringing down our programming costs particularly on the syndicated side..

All right. Thank you..

And next we'll go to Dan Kurnos with The Benchmark Company. Please go ahead..

Yes, thanks. Some little left here, but just a little housekeeping maybe on Q3, just the headwinds or the comp difficulty you have maybe with World Cup offsetting some of the benefit you have from crowd out. And then maybe Chris, just kind of give us as a sense you've announced some incremental updates on ATSC 3.0.

So just how that's moving towards commercialization in the test markets that you guys are seeing?.

Yes. No headwinds from World Cup. We really didn't get any revenue -- incremental revenues from that..

And we didn't have an American team..

Yes the U.S. wasn't in there..

And then -- and we should benefit in Q3 from crowd out from the prior year. So on ATSC 3.0, there are a number of things happening there. The industry has committed to roll out ATSC 3.0 on 62 stations in markets covering 72% of the U.S., so that they should be on air by the end of 2020.

That's the -- sort of the accumulation of the industry commitments so far.

And so that sort of solves the chicken and egg problem with 3.0 because you need to get the transmission side up for receivers to start penetrating the marketplace.And on the receiver front our partner Saankhya Labs out of India who debuted the first mobile ATSC 3.0 chip at CES has made its first sale of those chips to -- there's a number of people interested in them to start testing and developing new products around that.

So that was another major milestone as OEMs and manufacturers start thinking about how to integrate this in a variety of different products.And then also on the international front, ATSC 3.0 is set for full ITU membership which would make ATSC 3.0 an international digital standard for adoption in other countries around the world.

So that's a major step in terms of other countries that would adopt 3.0. And we think some -- that would that our targets for us to focus on our India and Brazil who would benefit immensely from the 3.0 standard specifically in India they've got hundreds of millions of people who have low to no connectivity and UHF spectrum just links out of there.

So it's an incredible use case for that country. And we'd love to see them move forward in this specific step for the ITU to adopt the standard..

Great. Thanks for the color..

Thank you..

And our last question comes from Davis Hebert with Wells Fargo. Please go ahead..

Good morning everyone. Thanks for taking the questions. I've got two here. One on the DISH RSN blackout.

Would you expect any I guess near-term negative impact on your RSN outlook? And if so, what is that revenue to EBITDA flow-through for the affiliate fee revenue?.

Look we -- there is no financial impact to the current blackout because we don't own it yet. And our full expectation is that -- this dispute gets worked out..

Okay. And then my second question is you mentioned the satellite companies advocating a STELAR renewal. Just curious, what you think they're hoping to accomplish for that because as I understand that your network affiliation agreements, I guess largely trump that risk, so maybe if you can provide any incremental color there? Thank you..

Sure. Look it's -- as STELAR exists today it's not problematic for the industry. It's just really an arcane piece of legislation that prevents certain orphan counties from being able to get their local news which there's a handful. And so, it's really not a big deal.

What I guess the broadcast industry really doesn't like about it is it just creates a whole rigmarole around retransmission consent every few years because it sunsets. So, it becomes just an opportunity for everyone to pile on all our commercial adversaries to basically make a stink.

So, if it renews as is it's not -- it isn't a problem as you point out. But it really isn't a piece of legislation that is needed anymore for anything. So in our opinion it should just be left to expire..

Great. Thank you..

Thank you..

And that does conclude our Q&A session for today. I'll turn the call back over to Lucy Rutishauser for any closing remarks..

Thank you, operator, and thank you everyone for joining the call today. This really was a very good quarter for the company exceeding our expectations as well as reconfirming our future valuation metrics. But as always, if you have any questions, please feel free to give us a call. Thank you..

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time and have a great day..