Ladies and gentlemen, thank you for standing by. Welcome to the 2020 Third Quarter Earnings Conference Call for Clear Channel Outdoor Holdings, Inc. .

[Operator Instructions].

As a reminder, today's call is being recorded. I'll now turn the conference over to your host, Eileen McLaughlin, Vice President, Investor Relations. Please go ahead. .

Good morning, and thank you for joining Clear Channel Outdoor Holdings 2020 Third Quarter Earnings Call.

On the call today are William Eccleshare, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc.; and Brian Coleman, Chief Financial Officer of Clear Channel Outdoor Holdings, Inc., who will provide an overview of the third quarter 2020 operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International BV. .

After an introduction and a review of our results, we'll open up the line for questions. And Scott Wells, Chief Executive Officer of Clear Channel Outdoor Americas, will participate in the Q&A portion of the call. .

Before we begin, I'd like to remind everyone that this conference call includes forward-looking statements. These statements include management's expectations, beliefs and projections about performance and represent management's current beliefs.

There can be no assurance that management's expectations, beliefs or projections will be achieved or that results -- actual results will not differ from expectations. Please review the statements of risks contained in our earnings press release and filings with the SEC. .

During today's call, we will provide certain performance measures that do not conform to generally accepted accounting principles.

We provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release and the earnings conference call presentation, which can be found in the financial section of our website, investor.clearchannel.com. .

Please note that our earnings release and the slide presentation are also available on our website and are integral to our earnings conference call. They provide a detailed breakdown of foreign exchange and noncash compensation expense items as well as segment revenues and adjusted EBITDA, among other important information.

For that reason we ask that you view each slide as William and Brian comment on them. .

Also, please note that the information provided on this call speaks only to management's views as of today, November 9, 2020 and may no longer be accurate at the time of a replay. .

With that, please turn to Page 3 in the presentation, and I will now turn the call over to William Eccleshare. .

Good morning, everyone, and thank you for taking the time to join today's call. This is our third quarter conducting the call remotely. And once again, we ask that you bear with us in case there are any technical issues during the call. .

It has certainly been an unprecedented year for many of us. And like you, I'm sure, we continue to feel the impact of the COVID-19 pandemic on our business. But in the past quarter, we've also seen how robust our business is and how strongly it recovers as and when some kind of normality returns. .

We delivered better-than-expected consolidated revenue in the third quarter with reported revenue down 32% compared to the prior year, a substantial improvement compared to the 55% decline we reported in the second quarter.

Excluding China and FX, the decline would have been 27% and better than the low 30% decline guidance we have provided in early August. .

Our performance in Europe was better-than-anticipated and well demonstrated the resilience of our medium. As audiences returned to the street, our advertisers returned to our medium. U.S. performance also showed sequential improvement and was in line with our expectations. .

At the same time, we continue to implement initiatives to align our operating expense pace with revenues. Brian will expand on our cost-saving accomplishments in more detail later in the presentation. .

As a whole and in the context of the pandemic, the results in the third quarter, especially in Europe, were certainly encouraging.

We are continuing to leverage our investments in digital screens, in technology and in our footprint to manage through the crisis and ensure we have the flexibility to deal with the uncertainty as governments across all our markets deal with the ongoing challenges of COVID-19. .

Our focus on continued investment for long-term growth is well demonstrated by the recent announcement of our winning the contract for the rights to advertise in the New York and New Jersey airports. We are proud and excited to have won this significant tender, and I congratulate Scott Wells and his team in securing it. .

I will talk later in more detail about the contract and our confidence in its value to our business. .

Now as we look ahead, based on the information we have as of today, we expect a slight sequential improvement in the Americas revenue and adjusted EBITDA margin in the fourth quarter. However, we are not able to provide fourth quarter guidance for our European segment. The recent mobility restrictions in our European markets, most notably in the U.K.

and France in the past 10 days, have created volatility in customer booking activity, significantly limiting our visibility. .

Before moving on, I want to take this opportunity to highlight and thank our employees for the amazing resilience and tremendous discipline they've shown this quarter and since the pandemic started to impact us in March.

I'm proud of the incredible work our team has done and continues to do to reinforce our solid foundation and drive operational efficiencies in the face of rapidly changing business conditions. .

Moving on, I'll provide an overview of our business, the current environment and views on where we see the out-of-home market going from here. So please turn to Page 4. In the Americas segment, year-over-year revenue was down 32% in the quarter, which is an improvement compared to the 39% decline reported in the second quarter. .

Our Americas business is centered around the top 20 markets, which contributed to the significant growth we were delivering up to and including the first quarter of this year prior to COVID-19.

However, even though our audience levels are returning to normal, the largest markets in the top 20 are those most impacted by advertisers pulling back on out-of-home spending, especially on the East and West Coast, where national advertisers are most likely to be focused. .

Please turn to Page 5. Europe's reported revenue was down 13% against prior year, and excluding foreign exchange adjustment, was down 18%, which, as I noted at the beginning of my remarks, is a substantial improvement compared to the 62% decline we saw in the second quarter. .

The improvement in digital, which accounts for approximately 30% of European revenue and declined 17%, excluding FX impact was even larger due to the speed at which advertisers were able to launch campaigns as business quickly returned once lockdowns were eased. .

As I've stated in the past, our investment to digital is a key component of our strategy. Our digital network is a dynamic medium, which enables our advertisers to engage in real time, tactical, contextual and flexible advertising. .

I'd call out the strength of our sales team across Europe, who've done an excellent job responding with agility as markets opened up, our audiences were moving around again and advertiser interest returned.

We also benefited from our strategic focus on roadside locations, which historically account for about 2/3 of our total European revenue and are far less affected by COVID-19-driven restrictions than the transit environment which accounts for approximately 10% of our European revenue. .

Our U.K. business was a great example of this, where about 80% of revenue is historically from roadside inventory. Since mid-July, up until the recent announcements of new restrictions, our customer booking activity actually exceeded bookings made in the same period last year. .

Moving on to Page 6 and the Americas business. With the outlook in the Americas improving, we remain cautiously optimistic for the near term. Our longer-term focus remains on returning to growth, which we believe we can achieve in 2021. As we enter the fourth quarter, our visibility remains limited.

However, we have shifted from playing defense to playing offense, leveraging the investments we've made and continuing to make in technology. .

Even with the uncertainty created by the recent COVID-19 spikes, we believe our organization is in a stronger position to manage through the instability in the market. In light of that instability, we have expanded our client direct selling initiatives. Our focus is on selling creative ideas as opposed to specific billboard locations.

As advertisers work to realign their advertising campaigns, we have found that CMOs are more willing to jump on a Zoom call to hear a great idea. Our ability to get a foot in the door is improving all the time. .

We continue to demonstrate to advertisers how our RADAR suite of solutions can help us help them. The audience levels are returning to normal but travel patterns have changed. Audiences are spending more time close to home and less time in city centers, but they're still out and about.

With RADAR, we're able quickly to adjust to these new travel patterns to help our customers understand the best inventory and roadways on which to reach their customers, we target those customers via a mobile ad and measure the success of the campaign. .

More specifically, in the fourth quarter, we are seeing continued sequential improvement in our business. For the first time since March, we've beaten comps in a number of weeks so far this quarter. In our national business, the number of RFPs is improving and is close to 2019 levels. .

Local continues to improve, and we are seeing continued strength in our perm inventory. We're currently in the renewal season and most are keeping their locations. That said, we are still waiting for more data to better understand the strength of the holiday season relative to previous years as the advertisers continue to delay buying decisions. .

Our largest category business services is holding up well and is performing at levels equal to last year. We're seeing increases in beverages with the continued weaknesses in amusements and entertainment.

Additionally, our revenue generated by our programmatic platform has rebounded faster than the rest of our business, although programmatic is still a small percentage of total revenue. .

Moving on to Page 7 for a review of the Americas technology initiatives and new contracts. During this past quarter, we continue to invest in technology and our digital footprint in America. We added 19 new digital billboards this quarter for a total of 57 new digital billboards this year, giving us a total of more than 1,400 digital billboards. .

We also partnered with Tremor Video to enhance our RADAR offering, which now provides advertisers a coordinated out-of-home and all screen video solution that seamlessly extends into TV, digital or social video campaigns that reach consumers when and where they're ready to engage with brands.

This is just the latest of enhancement to the RADAR suite, and we expect to continue to add customer-friendly capabilities to RADAR in the coming months. .

In addition, our data analytics capabilities expanded with our recently announced rollout of a new audience impressions methodology for airport advertising, developed in partnership with the industry measurement body Geopath, this innovation provides advertisers a more precise understanding of consumers' advertising journeys and behaviors as they traverse airports.

.

The new methodology marks a shift from measuring campaigns fully based on passenger count towards a more robust understanding of audience behavior and consumers likelihood are being exposed to advertising in airports, using the same Geopath data that is used to measure audiences in the traditional roadside out-of-home sector.

The data will become available to advertisers through Geopath as well as through RADAR. .

As I mentioned at the start, we are also delighted that the Port Authority of New York and New Jersey Board has awarded us the largest airport advertising contract in the U.S. to transform JFK, LaGuardia, Newark and Stewart Airport, into world-class digital media platform.

This is a landmark win for us and demonstrates our confidence in the underlying fundamentals of our business and our focus on long-term profitable growth opportunities beyond the temporary impact of the pandemic. .

The contract is for 12 years and is contingent upon execution by both parties, which we expect to occur in mid-November. We anticipate the contract will go into effect December 30, 2020. .

We worked with the Port Authorities to align our interests with contract terms that sets the stage for both parties to achieve our goals under the current conditions and for years to come, and it has the potential to become the new industry model.

The deal contains a 2-year transition period to account for the impact of COVID-19 and the traffic recovery at Port Authority airports. The actual MAG due each year as well as CapEx spend after the 2-year transition period will be dependent upon total passenger traffic. .

The Port Authority of New York and New Jersey airports are gateways to the world and as the region and travel recover, we believe our team is best [ seated ] to lead its historic transformation. .

With the addition of these high-value marquee airport assets to our footprint, brands will have the unique one-stop shop ability to execute campaigns that reach consumers as they drive, walk or fly throughout the New York and New Jersey metro area. .

Moving on to Page 8 in Europe, where we are seeing a range of performances within our markets due to the resurgence of COVID-19 cases. As I noted earlier, historically, about 2/3 of our revenue in the region is generated by our roadside displays.

In October, we continue to see strength in our street furniture and billboard inventory, given the audiences were still on the street, in contrast to continued weakness in transit. .

Our largest categories, FMCG and retail improved sequentially, in addition, fashion and beauty are benefiting from the holiday season. However, our visibility into November and December has been impacted by the spike in new cases and new restrictions, which have led some advertisers to pause their activity. .

Of course, we are keenly aware of the recent developments around the second wave of COVID-19 in Europe, and we're monitoring these closely.

While the new restrictions and the uncertain environment will impact our business in the near term, they're not expected to last as long nor are they as limiting in terms of movement of those we saw back in March and April.

As a result, we believe this second wave will have a much smaller impact on revenue in the fourth quarter than it did in the second quarter. .

More importantly, the resilience of the business is clear, when audiences return, out-of-home business come back strongly, and as I said earlier, in the U.K. and elsewhere, we've seen bookings equal or better than prior year in many weeks during the [ third ] quarter. .

Turning to our European technology investments on Page 9. In Europe, we continue to help brands navigate the audience and environmental impacts of changing COVID-19 restrictions through the application of smart data. For example, the U.K.'s return Audience Hub has become a go-to planning portal for advertisers. .

As I mentioned last quarter, the hub monitors a huge anonymized mobile data set to learn and openly share how the portfolio is delivering audiences compared to pre-lockdown levels. Clear Channel RADAR is now operational in both Spain and the U.K.

and has further strengthened our ability to help brands engage audiences effectively as mobility patterns evolve. .

We are seeing early benefits from our implementation of RADAR. For example, in Spain, we've booked campaign for PepsiCo using proximity to stores and more targeted audience demographic and behavioral data, being able to respond to new audience behaviors and mobility patterns through the changes we're seeing as a result of COVID-19. .

We continue to expand our digital footprint this year, adding 383 digital displays in the third quarter and 699 year-to-date for a total of over 15,000 screens now live.

As we continue to expand our digital reach across European cities, we are well positioned to deliver increased flexibility and enhanced contextual relevance at scale, improving our ability to meet brand's needs. This is evidenced by the improving digital revenue trends in the third quarter. .

Throughout our digital transformation, we are committed to making Clear Channel inventory more accessible to both new and existing advertisers. As in the U.S., we are developing our programmatic capabilities at an increased pace while securing and expanding partnerships with a number of leading supply side platform partners. .

Most recently, in Spain, we successfully ran our first fully programmatic campaign for car brand CUPRA in partnership with SSP Broadsign reach. Broadsign reach is already is live across Holland and Switzerland..

In the U.K., we just announced a new programmatic partnership with SSP Hivestack. Across Clear Channel Outdoor, we strive to create products and provide services that excite and engage our consumers, communities, advertisers and business partners. As a result, we believe we are well positioned to return to growth in 2021. .

At the same time, we recognize the pressures of the current environment, and we will continue to take steps to preserve liquidity, including balancing the need to defer capital expenditures and reduce costs while still investing in strengthening our platform. .

Now I'd like to turn it over to Brian to discuss our third quarter 2020 financial results. .

Thank you, William. Good morning, everyone, and thank you for joining our call today. Please turn to Page 10. Before I review our third quarter results, I want to remind you that during our GAAP results discussion, I'll also talk about our results adjusting for foreign exchange, which is a non-GAAP financial measure.

We believe this improves the comparability of our results to the prior year. .

Additionally, as you know, we tendered our shares in Clear Media on April 28, and therefore, our Q3 results in 2020 do not include Clear Media. However, our results in Q3 of 2019 did include Clear Media's results. Consolidated revenue for the quarter decreased 31.5% from last year to $448 million. Adjusting for foreign exchange, it was down 33.1%. .

If you exclude China and adjust for foreign exchange, the decline in revenue was 27%, which was better than the low 30% decline we had projected in early August. Our better-than-expected results are due to a stronger-than-anticipated rebound in Europe.

Consolidated net loss declined $77 million to $136 million in the third quarter of 2020 as compared to $212 million in the third quarter of 2019. Adjusted EBITDA was $31 million in the quarter, down 78.4%, and excluding FX, was down 78.9%. .

Now on to Page 11 to discuss the Americas results. The Americas revenue was down 31.8% during the third quarter from $328 million in 2019 to $224 million. As William mentioned, this is an improvement over the second quarter results, which were down 39%.

Revenue declines in national and local as well as digital improved relative to the second quarter, while the decline in airports increased. .

In general, our airport inventory is considered premium space, so while advertisers did not immediately reduce their airport advertising campaigns in the beginning of the second quarter, they began pulling adds in the back half of the quarter and into the third quarter.

Local, which accounted for 64% of revenue, was down 27.6%; and national, which accounted for 36% of revenue, was down 38.2%. Digital accounted for 30% of revenue and was down 34.8%. This compares to a 53.7% decline in the second quarter. .

Our long-term contracts for print large-format billboard, which we refer to as perms, continue to hold up well, even though total print ad revenue was down.

Both direct expenses and SG&A were down 19% in the quarter, primarily due to lower site lease expenses and lower compensation costs as a result of the decline in revenue and cost reduction initiatives. .

Adjusted EBITDA was $71 million, down 48% from the prior year. As we have stated in the past, our business is a high fixed cost business, and although we are working on reducing expenses throughout the organization, the decline in revenue resulted in a larger reduction in adjusted EBITDA. .

Please move on to Page 12 to review Europe. Europe revenue was down 13.4%, excluding foreign exchange, revenue was down 17.9% in the third quarter. This is a substantial improvement from a 62% decline reported in the second quarter with all markets contributing to the improvement. .

France was up in the quarter due to the new Paris street furniture contract in addition to a partial rebound in the underlying market. Digital revenue accounted for 30% of total revenue that was down 16.6%, excluding FX, slightly less than the overall decline. .

Adjusted direct operating expenses and SG&A expenses were down 8.9%. The decline is due to lower site lease expense in addition to lower compensation expense, primarily related to the decline in revenue in addition to cost reduction efforts. Adjusted EBITDA was a loss of $8 million due to the decline in revenue and high fixed cost base. .

In August, we issued senior secured notes through our indirect wholly owned subsidiary Clear Channel International, B.V., which we refer to as CCIBV. Net proceeds from the note offering provides incremental liquidity for our operations. .

Our European segment consists of the businesses operated by CCIBV and its consolidated subsidiaries. Accordingly, the revenue for our Europe segment is the revenue for CCIBV. Europe segment adjusted EBITDA does not include an allocation of CCIBV's corporate expenses that are deducted from CCIBV's operating income and adjusted EBITDA. .

As I just discussed, European CCIBV revenue decreased $34 million during the third quarter of 2020 compared to the same period of 2019, $217 million. After adjusting for $11 million impact from movements in foreign exchange rates, Europe and CCIBV revenue decreased $45 million.

CCIBV operating loss was $38 million in the third quarter of 2020 compared to operating loss of $16 million in the same period of 2019. .

On to Page 13 for a quick review of other. Our other segment includes Latin America and Clear Media. The 2019 results include Clear Media, which was sold in Q2 of 2020. Latin America revenue was $7 million in the third quarter, down $15 million from the prior year.

The spike in COVID-19 in Latin America started later in the year, and it is taking longer to control the spread of the virus in Latin America. Direct operating expenses and SG&A were $13 million in the third quarter, down $4 million from the prior year. Adjusted EBITDA was a loss in the quarter. .

Now on to Page 14 to discuss CapEx. Capital expenditures totaled $26 million in the third quarter, down $34 million from the prior year as we proactively reduced our capital spend to preserve liquidity and sold our stake in Clear Media.

Even with this substantial reduction, we did continue to invest in digital in key locations with 19 new digital billboards in the U.S. and 383 new digital displays in Europe. .

Please move to Page 15. Clear Channel Outdoor's consolidated cash and cash equivalents as of September 30, 2020, totaled $845 million, including $417 million of cash held outside the U.S. by our subsidiaries. .

During the third quarter, we transferred a portion of the proceeds from the sale of Clear Media to the U.S. Our debt was $5.6 billion, an increase of just over $500 million during the year. As a result of our drawing on our cash flow revolver at the end of March and issuing the CCIBV notes in August. .

Cash paid for interest on the debt during the third quarter was $147 million, up slightly from the prior year due to the timing of interest payments, partially offset by lower interest rates.

The company anticipates having approximately $21 million of cash interest payments in the fourth quarter of 2020 and $350 million in 2021, including the interest on the new CCIBV secured notes with the first interest payment in April of 2021. .

Moving on to Page 16. As William touched upon, we continue to focus on managing our cost base and strengthening our liquidity and financial flexibility, while driving improvements in the top line trends that will return the business to its pre-COVID trajectory. This includes our proactive steps to rightsize the business. .

In addition to the temporary cost saving plans we enacted in the second quarter, we have also initiated restructuring plans throughout the company. Plans are expected to generate annualized pretax savings of approximately $32 million upon completion, with total charges for the plans in the range of $23 million to $26 million to achieve these savings.

While we remain confident, the business will return to pre-COVID levels, we still don't have the visibility yet on timing. Given the uncertainty, we felt it was prudent to take the appropriate steps to work to align the cost base at the current business environment. .

Additionally, during the third quarter, as previously discussed, we issued $375 million in senior secured notes in August through our indirect wholly-owned subsidiary CCIBV. We continue our site lease contract negotiations with landlords and municipalities to better align fixed site lease expenses with reductions in revenues.

We generated rent abatements of $24 million during the third quarter and $53 million year-to-date. .

We continue to benefit from compensation cost reductions through actions enacted in the second quarter, the majority of which are temporary. We obtained European government support and wage subsidies of $7 million in the third quarter and $15 million year-to-date. We eliminated and reduced certain discretionary expenses.

We deferred capital expenditures, as I just mentioned, and we deferred site lease expenses and other payments to optimize working capital levels. .

From a liquidity standpoint and given what we know today, we believe that we have sufficient liquidity, including the $845 million of cash at the quarter end to fund the needs of the business as the economy and our business recover. .

Please move to Page 17. As William mentioned, in the Americas, we expect to see a slight improvement on a sequential basis in revenue and adjusted EBITDA margin. In Europe, we saw a strong sequential improvement in the third quarter.

However, our visibility in the fourth quarter has been impacted by the recent mobility restrictions put in place in some of our largest European markets, most notably in the U.K. and France. These restrictions have created volatility in customer booking activity, significantly limiting our visibility and ability to provide guidance. .

And now please turn to Page 18 and let me turn the call back over to William for his closing remarks. .

Thank you, Brian. As I mentioned, our team continues to work exceptionally hard through the challenging environment, and we are seeing the results of our efforts. We're encouraged by the way we've seen advertisers return to our inventory in the last quarter, demonstrating the resilience of our medium and the value of our locations.

We're benefiting from our continued investments in technology and expansion of our digital footprint, and are proud of securing new contracts, most especially winning the New York and New Jersey Port Authority airports. .

We remain focused on the strong medium and long-term opportunities within our sector, and are confident Clear Channel is well positioned to capitalize on these improving trends. As I conclude my remarks, I want to reiterate a few things.

First, as Brian mentioned, the actions we took earlier in the year give us what we believe to be sufficient liquidity to manage through the pandemic, even with the sites we've seen in the U.S. and Europe. .

Second, we will continue to identify both temporary and permanent cost reductions to better align our expenses with the current economic environment and expand on our restructuring plan. .

Third, in the third quarter, we delivered better-than-expected results with a strong rebound in Europe, demonstrating the underlying resilience of our business. In recent weeks, in both some European markets and the U.S., we have at times equaled or bettered the prior year performance.

When infection rates decline and restrictions are lifted and our audience returns, our markets come back. .

Looking ahead, the course of the pandemic is still unclear with the second wave in Europe and continued uncertainty in the U.S. Although we expect the next few quarters to remain challenging, we believe in the underlying fundamentals of our industry and our business. .

As both Brian and I said, given the resilience of our team, investments in our business and strength of our platform, we expect to deliver a slight sequential improvement in Americas revenue and adjusted EBITDA margin in the fourth quarter.

We are not providing fourth quarter guidance for Europe given the recent mobility restrictions creating significant volatility in our booking activity. However, we remain cautiously optimistic that we will return to growth in 2021. .

Lastly, as we've stated before, we always remain open to dispositions and opportunities that accelerates our path to creating enhanced value for shareholders.

However, given the current economic environment, our focus remains on continuing to own, operate and enhance the value of the current portfolio of assets in order to drive shareholder value as the economies rebound. .

I look forward to providing updates regarding our progress. And now Scott will join Brian and myself in taking your questions. .

Operator?.

[Operator Instructions].

Our first question comes from the line of Steven Cahall of Wells Fargo. .

A few for me. Maybe first, just on the New York airports win. For those of us who kind of count JFK and LaGuardia as a second home.

I was wondering if you could talk about, in a little more detail, what that rollout looks like? And do you have any substantial CapEx increase in 2021 related to that contract?.

Steve, let me hand to Scott for that.

Scott?.

Great, thanks William. So as William referenced, the contract has not yet been signed, and it's, therefore, it's not out in the public domain. So our ability to give you lots of details about it is limited. But let me tell you a couple of things to the [ spirit ] of your question.

As you know, being a regular visitor to JFK and LaGuardia, New York has invested -- the Port Authority has invested enormously in all of the 4 airports around New York City. .

And what we would expect is that Newark is actually going to be our first priority in building out in some of the new terminals there. And it will go then a pace across the footprint over a number of years. It's not going to be something that the build-out is completed in year 1. But we're very excited about the plans that we've got. .

We're excited to be able to share more information on those plans as the contract gets finalized. I do think that you'll see an uptick in CapEx from us next year, but it's not going to be a shocking number would be sort of the best I can give you on that.

I don't know if William or Brian, you have anything you'd add?.

Okay. And then maybe on just some of the cost reductions, Brian, would love to hear a little bit about that $32 million in cost savings. Do you think that's fixed? And also, I think your debt costs are down even with the recent notes issuance.

And so I was just wondering how you're thinking about maybe what the cash runway looks like, and if there's going to be an opportunity to do anything with the 9.25 notes those kind of jump out in terms of their cash interest cost at the moment? And then I just got one more after that. .

Sure. Thanks, Steve. On the cost side, I think the recent plans that we've talked about where we expect $32 million in expense savings ultimately to be taken out of the business is structural and permanent in nature. I mean, if the business changes, we need to -- we may need to readdress it.

But I think what we're doing right now is rightsizing the business for the current environment and these plans are across the company. Some have been in the works for a little while, some will take a little long complete, but we're in the of it. So hopefully, that answers the questions on the expense side. If not, we can go back to it. .

On the interest side, I think you're thinking about it the right way. The unsecured notes were the first notes that we refinanced actually prior to separation. They carry a rate, which is much higher than all the subsequent refinancings.

The subsequent refinancings reflect the number of measures that we took post separation, the issuance of some equity, the debt carrying cost is much lower. .

We'd like to reprice the unsecured notes. The first call, I believe, is in February of next year. I don't know that the refinancing rate right now is attractive, but you should assume the company will continue to monitor that.

And as we start to see a recovery in the business, a rebound in our trading levels, we would hope there's an opportunity to reprice these securities, more in line with what we have in the rest of the portfolio and continue to benefit from the decreased interest expense. .

So I'll pause there. And if you have any follow-ups, please let me know. .

That's helpful. And then just last one from me. William, thanks for that outlook for some sequential improvement in the Americas, and I get that Europe and LatAm are a little tough to call.

Should we similarly expect improvement in free cash flow in the fourth quarter? Kind of as you think about the business, does it -- are you kind of through the worst and free cash flow can start to improve from here? Or is it still too a little too volatile to make that call?.

It is still volatile. It should improve from here. I'll let Brian give you a little more detail. .

Yes. Look, I think on the Americas side, we're seeing improvement. And given the guidance we provided, you should expect that to continue at a modest pace. Europe, obviously, the volatility through the incremental restrictions is difficult to predict.

I would point you, though, to the resilience that was shown in Q3 and really the closing of the gap with respect to the becoming at least on an operating or segment -- segment operating basis close to free cash flow neutral. .

So hopefully, we'll continue to make progress there. We're certainly seeing on the Americas side. Europe is a bit tough to call, but we're hearing good news out of the -- kind of the macro environment that things may be improving. So hopefully, that will settle down. But right now, it's tough to predict. .

Just to be absolutely clear, though, on Europe for Q4, just if I may, for a second. Just because I think we are saying, we don't want to call it at the moment for obvious reasons, U.K. went back into lockdown last week as did France, and those are our 2 biggest markets.

But I do want to be very clear just to underline that these lockdowns are not directly comparable to what we saw in the second quarter. Schools and universities remain open. There is still significant traffic out there on the streets and in the city centers in a way that there absolutely wasn't back in like April. .

So whilst it's difficult to provide any real guidance for Q4, I do want to be clear that we expect -- we don't expect to see anything like the impact from COVID that we saw in Q2 in Europe. .

Our next question comes from the line of Lance Vitanza of Cowen. .

Let me start with the -- I want to go back to the Port Authority contract. In the press release that came out, there is a reference -- references to a transition period.

And I'm wondering if you could -- and I know that this isn't in a public document yet, but could you talk a little bit about what exactly is contemplated to occur or not occur during this transition period?.

And then is it possible to estimate when air travel -- if and when air travel eventually returns to its pre-COVID levels? How do we think about the possible size of this opportunity in terms of annual ad sales or percentage of your ad sales? I mean, how meaningful should we think this could [ someday ] be meaningful?.

So I'll take that 1 again, Lance. So a couple of things. Like, as I said, the contract is not yet public, it's not yet signed. So we want to be very thoughtful in details we share. But you should think of the transition period as being akin to what we're doing with Airport Authorities that we were the incumbent with.

So it's things to reduce risk and exposure during the time that we think COVID is going to be most prevalent. .

And then as William referenced and as was referenced in our press release, the build back of the MAG and the build back of the CapEx schedule is tied to recovery in air traffic, which is a concept that we think would be very constructive to build into future airports contract, that's something that we're certainly considering as we pursuing future ones, just to minimize the uncertainty during times like what's just happened.

I mean, certainly, this has been pretty unprecedented. .

In terms of the size, I don't want to anchor you on a particular number but these are public numbers that result from these kind of contracts. And if you look back in the last couple of years that the current incumbent had the contract, it was in the $60 million, $70 million range.

And I certainly think if you predicated on air traffic recovering, you could see it getting back to that sort of level, but I don't even really want to escalate on that because we don't know the curve of how that recovery is going to happen. .

But we're certainly very excited about it because we are big believers in New York, and we do believe that this will also help us in cross-selling other inventory that we have in the region. So we think this is going to be a real positive for the business. .

Great. If I could just get one more question. And just what about RADAR. I mean, that actually looks really interesting now, all the more so given consumers changing travel patterns.

But relative to your peers and really, I guess, I'm thinking about OUTFRONT and Decaux, does your radar platform differentiate you? Or is this simply table stakes in today's advertising world?.

So, William, you want me to take this one or?.

Yes. .

Yes. So I've been pretty consistent about this since we started talking about RADAR that I believe that out-of-home is going to need to deliver the same kind of insight that marketers are able to achieve when they do business with digital partners.

It may not be in exactly the same ways, but they're going to need to be able to do the same kind of analytics on ROI that they make. .

RADAR will have elements to it that are differentiating just like creative would have elements that are differentiating or how you do operations would have elements that are differentiating. But the core of what it is and the ability to deliver insight about audiences is something that I do believe will be table stakes in time.

And I think the market has been behaving in that way. We've seen more and more emphasis on this from the different players. .

So how we do it? There are things that we can differentiate. We can make the customer experience better. We can be faster on certain things. We can provide more granularity, more functionality, things like that, but the core concept of providing data to do ROI analytics is something that I do believe will be table stakes. .

Yes. Let me just add a couple of thoughts on that, Lance, if I may, because I think that's right. But I do think -- I don't think we should be unduly modest about the fact that it does give us an advantage in demonstrating to the market what our inventory can deliver.

And specifically, if I can, just for a moment on Europe, I would certainly want to congratulate Justin Cochrane and our team in Europe for delivering a very strong performance in Q3. .

But I would also say, I don't think we could have done that without RADAR in the U.K. and Spain, which really helped us to demonstrate to advertisers that audiences were coming back and was part of our value proposition. So for the moment, certainly, it does give us an advantage.

Medium to long term, I agree with Scott, this will become just table stakes. .

Our next question comes from the line of Ben Swinburne of Morgan Stanley. .

A couple of questions, maybe starting, Scott, if you could talk a little bit about what you're seeing in the U.S. business. You mentioned that national was down more than local. When you look out over the next 3 to 6 months, are you starting to see the national money come back faster. I know that tends to be more tied to digital, so a shorter cycle.

Just trying to get a flavor of kind of the local versus national outlook because obviously, national has pulled faster, but in theory, it could come back quicker. .

And I also was just curious if -- I think, William, you described the Port Authority deal as maybe a model. And I think, Scott, you just talked about why. Are there other major transit opportunities in the U.S.

or abroad that you're looking at over the -- during this kind of COVID period, which may give you an opportunity to reshape the model and take advantage of -- I mean, there's only so many port authorities out there.

But even if they're smaller scale, do you see other opportunities like this out there to go after?.

Sure. So Ben, let me touch on your first part. First, the national versus local, you're right that national pulled back much more aggressively and much more quickly. And local has been more steady and more stable. And I think I've talked about this on other calls, but the diversity of performance across our portfolio is vast.

If you look at our smallest markets, some of the smaller cities in Florida, some of the smaller cities in Texas or in Arizona versus the New York or San Francisco, it is dramatic, the differences and the main driver of that is because of the national spending pullback. .

We did see in Q3 some really nice recovery in our digital space, particularly our roadside digital space. And we have been seeing -- I think the big challenge as you think about our business is that it does lay in over time. And advertisers are very uncomfortable making future commitments on anything except the most iconic assets.

And so our visibility is much lower than what it even is in typical times. And as we get more and more digital, the visibility gets somewhat lower as well. But the things that we're seeing right now, in quarter, we are beating comps, again, which we have not been doing much of the year. .

We are seeing programmatic pickup, and it's been quite robust for us in the last stretch. And it has a lot of features that advertisers really like right now in terms of being able to decide the very last minute, whether they're committing. And we're seeing that here in Q4.

I think we're going to have a similar dynamic as we head into Q1, the things -- [ going to be ] booking really late. .

Hopefully, as we see progress on things like the vaccine, I thought the news out of Pfizer was really encouraging as that starts to build, confidence starts to build and you start to get the prerequisite -- the conditions that you need for a full-on ad recovery, but obviously, that's something that we're not in any position to call. .

As to your question about other transit contracts, a number of contracts that were anticipated to be coming out have actually been delayed. I don't think that there are any big ones that are in process right now that any major ones. I mean there's always some smaller markets and things like that.

I think the next 1 in the hopper is the Chicago airports and LAX will be sometime not too far beyond that from the kind of transit that we follow and then you'd be better off with the OUTFRONT to get the perspective on some way and rail. .

I don't know, William, if there are any global ones that you'd want to speak to?.

No. I would just say we learn all the time from every contract negotiation that we go through. And certainly, I think we've learned a few things in this one, which we would take forward into future transport contracts, but there's nothing specific on the horizon at the moment. .

William, can I just ask 1 follow-up? I don't know if you'd really wanted to give it to us, but I thought I'd take a shot. How was Europe in October? Or if you don't want to talk to a number, was it an improvement from kind of the trends you saw through Q3? Just trying to get a sense of the underlying trends before the lockdowns get back. .

Yes. I can't look at my lawyers because I'm on my own here in London. So I would say we were optimistic that we were going to be able to show continued sequential improvement into Q4. We had good momentum, and October was looking very encouraging to enable us to be able to do that. But the new lockdown, specifically those in France and the U.K.

kind of made us -- made us pause is what I would say. So it continued to be very encouraging into October, is all I think I should say, Ben. .

Our next question comes from the line of Aaron Watts of Deutsche Bank. .

Two questions for me. Let me start with one. Focus on the U.S. business. As you look at this recovery and specifically, volume versus price.

Can you talk about the dynamic between those two?.

And if you've had to give some concessions on price, do you see a path for bringing the pricing back up, knowing that historically, that's been the more difficult of the two to kind of push back to normalized levels?.

Sure. No, I let me address that in a couple of ways. I think first off, the nature of the downturn that we have right now isn't fundamentally about price sensitivity. The discomfort that people have in a lot of ways is more about appearing out of step with what's going on in the markets.

And so think of that as something that is inhibiting people wanting to commit, particularly to printed campaigns that are several weeks out. When you have so much volatility in where the cases are springing up and how governments are reacting to and things along those lines. .

So when you start thinking about volume versus price, the volume hit is really driven by not price elasticity or anything having to do with that. It's much more about terms and it's much more about the ability to go up and down.

So as a result, as we're working through things, I mean, certainly, during the times when traffic was down, we were having dialogues about concessions and make goods and things along those lines. .

As we look to the future and we look to traffic being back, we are striving to not be focused on that element. And I've talked on a number of other earnings calls about how what we really measure is yield.

And we measure it pretty -- in a pretty segmented way, looking at our assets in terms of our very most in-demand assets, segmenting out into lots of other categories. .

And so what you typically see happen in soft periods is that the demand for the super premium assets remains pretty stable and that even when people will step back, so William referenced this in his comments that we're in the upfront period for our long-term renewals, things we call perms.

Even when somebody steps back from a perm, we're almost always able to resell it to somebody else oftentimes at an attractive rate. Because it's just the nature of that type of inventory. And what you see then is that the longer tail of our assets are where the dynamic is, is tougher as it plays through. .

So I'm not going to call how yield is going to evolve over the next year because I don't really know how the virus is going to evolve, and we've seen how much of an impact it's had on the business.

But I do believe that our ability to optimize yield and our ability to work constructively with our advertisers to create compelling value propositions, remains that we're going to be able to recover things pretty well. Hopefully, that answers your question as best I can. .

That's helpful context. And my second question is on the cost side.

And I'm hoping you can frame up a little bit more how to think about the fourth quarter and maybe even the first quarter cost base levels, given the cost actions you've put in place, but also some of the ebbs and flows of the arrangements you made with landlords, whether it's in Europe or here in the U.S.

and how those costs may ebb and flow with as time moves forward and the recovery moves on. .

Should fourth quarter cost look somewhat similar to third quarter costs? I guess it's another way to put it. .

Well, it's I would break it into kind of 2 categories. One are the costs that are not really tied to revenues. They're the ones we control. We have provided some information about what we expect to take out on an annualized basis and you should see some of that begin to occur. We started Latin America very early.

They're almost completed, Europe and Americas are working on their plans now. We'd expect Americas to be done over the next quarter. .

Europe, we're operating in a lot of different countries and cost reduction initiatives take a little longer. We expect to complete those in 2021. And that's really cost out of the business. .

With respect to other costs, in particular, our largest category, our lease expense and the abatements and the deferrals that we've negotiated with counterparties, that has had a big impact. We've been very successful. We've talked about the level of relief that we've gotten on our lease expense.

That -- we expect to get some of that -- continue some of that through the end of the year. And we'll continue to do what we can to negotiate continued relief and deferrals as appropriate. .

That being said, that is really going to come back as revenue starts to come back. And so as we see improvement in the underlying business.

Obviously, both the relief that we've gotten and future relief that we may hit we'll start to dissipate deferrals will start to come due, and we'll start to see some of that likely in fourth quarter, and it will continue as revenue comes back. .

So I don't have specific numbers on that, and I think that's still to be determined. What I would convey, Aaron, is our operators are very involved in working with counterparties on the leasing side to make sure that we're aligned at capturing all the benefit that we can in a current environment.

But as revenues return, you should expect those costs to come back. .

Our next question comes from the line of Kannan Venkateshwar of Barclays. .

I guess just following up on that comment. When you think about your costs coming back, should we think about them as being proportionate to revenues? In other words, to cause some of these are deferments and abatements, I would assume that as revenues come back, some of the concessions you've given may basically come back on a larger scale as costs.

.

And therefore, when you think about cash flows last year, I guess the unlevered number was roughly about $300-odd million, if I'm not wrong, but that includes China.

So what period should we expect that number to come back over? Is it 2 years, 3 years? Because my guess is the operating leverage is probably going to cut the opposite way for some time as revenues come back. And so it may not be a linear path back to the same level of cash flow. So some color around that would be useful. .

Well, I'll address it at a high level. And then if William or Scott want to dig in a little deeper on what they're seeing from the operating side, I'll turn it over to them. .

I think that the way you're thinking about it is the way we're thinking about it. And what I mean by that is, as revenues come back, certainly, some of the relief we've gotten, the lease expense is a big category. It'll come back, it'll be difficult to predict.

What form that takes? How long that will take? How that is proportionately tied to revenue? But I think we should anticipate that it's not a linear recovery on the cost side because these could come back rapidly. .

But that's a good thing. That means that our underlying business is coming back. Our revenues are increasing. And ultimately, we'll get to the point where this will approach pre-COVID levels or over time, exceed pre-COVID levels. .

When that will occur? Who knows. I think that we've got large -- I think that we are anticipating being back to free cash flow neutral during 2021 with large interest payments in Q1 and Q3 that is likely toward the end of 2021. But that's based on a recovery curve that may or may not come to fruition.

So I think it's a challenge really to predict how all this will unfold. What we saw in Q3 was resiliency in the business. As the audience came back, we saw the advertisers come back. That was particularly acute in Europe. Of course, Europe had a lot more to come back from. .

We saw positive momentum, but at least in Europe, we've paused because of the new restrictions. It really depends, I think, on how the recovery plays out. But I do think we're well positioned in terms of liquidity that we have a runway, and we see a path to recovery in 2021.

So I don't know, William or Scott, if you had anything to add, but that's kind of at a high level, the way that I would think about this question. .

Scott, do you want to add anything from the U.S.

on the cost side?.

I mean I think the only other thing I'd emphasize, and we've said this before, is that these dialogues are ongoing dialogues. They're dialogues that just because we got a concession in Q2, it doesn't mean we won't get a concession in Q3 or Q4 or Q1.

And some of these things because, particularly the municipal-oriented or the ones that are related with the governmental agency take a long time to work through the approval process. And so you will probably see some lumpiness in savings that flow through over the next couple of quarters, which may actually relate back to prior quarters.

It's not going to be a huge number, but the point for you to take on this is that these conversations are ongoing, and they are lumpy as you get agreements. .

Yes. And just to finish on this, I mean, I echo Scott's point about the lumpiness, you'll certainly see that in the European piece as well in terms of some of the renegotiations on contract.

But I think in terms of your kind of broader question, does all of the costs kind of come back once the market comes back? I think the answer to that is some of it does, but a lot of it doesn't.

I think one of the things about a major disruption like COVID has obviously been is it does force everybody to look very hard at their business and that's the way they operate, and looking for efficiencies in the way they're operating. .

And some of the restructuring, some of the headcount reduction, we would absolutely expect that to remain once revenues return. So I don't know whether that helps with anybody's model, but I do think that's an important point to land. .

Got it. And if I could just follow-up on the Port Authority contract. Given that the structure is linked to COVID and the path of revenues going forward.

What does the breakeven period look like relative to maybe other comparable contracts? Does the cash flow breakeven also take longer relative to other contracts? Or is it comparable or when you think about this particular contract?.

So it's different in some ways, but the outcome will likely not be wildly different. If you think about our typical deployment in a typical environment, we are actually very focused on deploying the capital as fast as we possibly can because that's how you drive growth in the revenue base of the contract. .

In this case, we're going to be a little bit more methodical. We're going to partner very closely with the port on our joint priorities for the build-out, but we're not going to be going flat out because of the nature of the environment that we're in right now.

And so that probably will add a little bit of time to the cash flow breakeven but it's really hard to give you an answer on that, not knowing exactly how long the travel levels stay depressed. But we do feel very good about the protections that we've got built in and the partnership that we've got lined up here to manage things. .

Our next question comes from the line of Jason Bazinet of Citi. .

I hate to go back to this cost question, but maybe I can try and ask it this way.

Maybe in simple terms, can you just give us a sense of the fixed portion of your cost basis, let's say, in '19, and where you think that will be in '20 as a percentage of total expenses?.

And then if a dollar of incremental revenue comes in, how much will flow to EBITDA based on whatever access you think is most useful, whether it's a geographic split or whether it's billboard versus transit street furniture, just some simple rules of thumb, I think, would be quite helpful?.

William, do you want me to try to respond to the question?.

Yes. Go ahead, Brian. .

Yes. Okay. Yes, it's -- let me hit the cost question first. I think we've given some commentary pre-COVID and then maybe post COVID about what our cost structure looks like. the amount that's fixed. At the end of the day, the largest portion of our expense is sight lease.

And I think we've talked about around half of that -- least being half of our operating expense and close to half of that being fixed. .

And so post COVID, you're in this environment where you're attacking that because of the revenue decline. And I do think that we've talked about the success we've had but also that coming back potentially as revenue comes back.

There could be timing, as Scott mentioned, there's lumpiness, but our largest expense is largely fixed, we have a large fixed base. .

And so that kind of leads to the next part of your question. And in that, as revenues come back, what is the incremental drop to the bottom line? And in the past, we've talked about the operating leverage of the business. And I think in a normalized environment, there's a significant amount of each incremental dollar that falls to the bottom line.

And so we work very hard to drive revenue. .

I think between where we are today and where we will be, say, to get to a normalized level, we've got some interesting things going on. And that is that rule of thumb where the additional dollar revenue proportionately the more you bring in, the greater amount falls to the bottom line because of your fixed base, doesn't really play out.

In this interim time, the incremental dollar revenue is great, but then you'll have some of these fixed costs come back as the abatements that we previously had roll out. .

I don't think there is a rule of thumb in this time period. I think from an operating perspective, we will continue to negotiate with our counterparties to make sure that our lease costs are aligned.

From a business perspective, we'll look for opportunities to continue to rightsize the business, and we've talked about that and certainly, and we'll continue to drive revenue because it will benefit the business. And when we get back to that normalized environment where we have strong positive operating leverage, that will be a good place to be.

I don't know -- I can't predict when it will be. But we've seen positive signs in Q3. I think, fundamentally, what I'd want to say, Jason, is the underlying assets have proven themselves to be very resilient, and we would expect that to continue as audiences come back and as advertisers come back. .

Our next question comes from the line of Stephan Bisson of Wolfe Research. .

I was hoping you might be able to give us a little bit of color on how audience trends and revenue trends seem to correlate and what types of conditions led to certain markets to actually outperform their 2019 models?.

Yes. I mean it's not -- thanks, Stephan. It's not an exact correlation, but clearly, if advertisers thinks that there's nobody out there looking at our boards, then they're less likely to support the medium.

And once they see traffic returning, we have seen a very strong sense that advertisers have come back and with the increasing flexibility of our medium, we've seen us being able to exploit the benefits of digital and so on, as we've said. .

So there is clearly a relationship but there are other factors, too. And I would say the other biggest factor is going to be the kind of macroeconomic environment, consumer confidence in relation to that, consumer confidence tends to lead to advertiser confidence. And we see markets respond to that as well.

But I think those are the main drivers that we see for revenue and. .

As I said in answer to an earlier question, I think what's encouraging is that we have seen a pretty sharp snapback as those audiences have returned. We're clearly cautious at the moment because we've seen some further restrictions, but we'll obviously be monitoring that closely in the U.S. and in Europe in the coming weeks.

And so I think that's all I would say at the moment. .

Great.

And then on the second part of the question, did you see any kind of conditions that permeated in those markets that did outperform 2019 levels during the third quarter?.

I think they tended to be the markets where the restrictions had been well observed and where governments were clearly responding quickly to the pandemic. So Switzerland in Europe was the first market that we saw the recovery come back.

I think I spoke about this even on our last quarterly call, and they -- that was a country where the restrictions were quickly imposed. They were then well observed, and then they were lifted and spending came back very quickly.

I think where we've seen perhaps slower recovery is where there's been less compliance with the restrictions and a higher and prolonged rate of infection. .

William, the other thing I think might be interesting to think about is our asset base, the countries that we performed well in we have a low transit exposure, particularly in Europe. I think it's around 10%. In the Americas, it's around 17%, largely airport. So in places where we have street-level assets proportionately larger than the competitors.

We performed very well. Also, I think what we've had digitization of the street-level assets, it's been very beneficial. So I think those are 2 other things I'd point out. .

Yes. I mean you're absolutely right, Brian. That certainly, the high proportion of digital has made a big difference in some of those European markets to the quick snapback. In Europe, we saw digital reach nearly close to 70% in the third quarter.

And that is because it's flexibility enabled advertisers to come back very, very quickly into the medium, certainly true. .

Ladies and gentlemen, we have time for one last question. Our final question will come from Jim Goss from Barrington Research. .

I wanted to ask a little bit more about the New York airport installations.

Could you talk about the blend of information, advertising and entertainment that might be used over the systems and whether the airports would interconnect, say, would you have information on flights at LaGuardia and the Kennedy displays, in case there were tie-ups or something of that nature? And if this might set a template for other airport installations you either have or intend to make bids on, including, say, Chicago and LAX?.

Go. Sure. So the exact architecture of how we're going to handle information. I mean every airport contract has an element of that, and this one has a robust set of things in terms of communicating within airport about dynamics that are going on.

I don't actually know off the top of my head if the plan is to show flight information from different airports across the field. So that's one I'd actually have to look into. .

But there will definitely be way finding information, there'll be information about things that are happening within the airport, different information that the port is looking to share with the people passing through the Port Authority airports will be part of it. .

When I think about this as a template for future airports, the digitization and the ability to integrate the digitization across the airport is something that I think we'll continue to see, I think, some of the contract elements in terms of anticipating movements in the audience levels is something that we'll be looking to add in future contracts.

But I don't actually -- it's a good question. I hadn't thought about the cross airport communication. .

Okay. Maybe one last one and you don't have to get too much into it.

But you've seen -- or the commentary about the Pfizer announcement of the vaccine was somewhat muted in terms of, I guess, more of a wait and see is how it would affect your business?.

Do you think -- should we be cautious about how we think it will flow back into your ability to develop an audience sell ads, that sort of thing? Or do you -- are you optimistic that the turnaround could be very quick, and therefore, benefit from the constrained cost structure you've described?.

I'm hugely optimistic. Do you made to take it, Scott, in general? Because I think that's across the world. I am hugely optimistic.

If the vaccine proves to be as effective as the claims are coming out, then I am absolutely optimistic that our audiences will enthusiastically return to the street and advertisers will enthusiastically return to our medium. And I think we have real evidence that they do come back. .

But I'm not an epidemiologist, I'm not an expert on vaccines, and I haven't seen the detail of the clinical trials, and I believe there's more -- at least another month of trials needed before you get widespread use of the vaccine. But I am positively disposed, I'm highly optimistic.

And if things come good with it, then even before -- we could see December coming back because confidence will return so quickly. And certainly, we would see that going into Q1. .

I mean, I think the one thing I would take seriously and importantly on this development is that I think things will move very quickly once the evidence is there. I think take up will be very quick. And I think reaction from -- in terms of confidence and enthusiasm will similarly be very fast.

But as of this moment on this day on the 9 November, I think it's too early to call that, frankly. .

All right. Well, I'm not in a epidemiologist either, but they said the efficacy rate was over 90%, which was on par with smallpox and measles. .

So I take that, definitely. .

So flu is 40% to 60%. So this sounds pretty good. .

Yes I mean if we -- yes, absolutely. So thank you, and thank you, everybody, for joining our call, and I'm delighted to end on such an optimistic and positive note. I would just end by saying, I think we we're very proud of what we delivered in Q3.

We have some bumps and some lumpiness ahead of us in the next few weeks, but we are absolutely optimistic about 2021, and we look forward to keeping you updated with developments in the business in the coming months. And thanks, everybody, for your support and your interest. Thank you. .

Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect..