Good morning, ladies and gentlemen, and welcome to the FS KKR Capital Corp's Second Quarter 2019 Earnings Conference Call. Your lines will be in a listen-only mode.

During remarks by FSK’s management, at the conclusion of the Company’s remarks we will begin the question-and-answer session at which time I will give you instructions on entering the queue. Please note that this conference is being recorded. At this time, Robert Paun, Director of Investor Relations, will proceed with the introduction. Mr.

Paun, you may begin..

Thank you. Good morning, and welcome to FS KKR Capital Corp.'s second quarter 2019 earnings conference call. Please note that FS KKR Capital Corp. may be referred to as FSK, the fund or the Company, throughout the call. Today's conference call is being recorded, and an audio replay of the call will be available for 30 days.

Replay information is included in a press release that FSK issued on August 7, 2019. In addition, FSK has posted on its website a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended June 30, 2019.

A link to today's webcast and the presentation is available on the Investor Relations section of the Company's website under Events & Presentations. Please note that this call is the property of FSK. Any unauthorized rebroadcast of this call in any form is strictly prohibited.

Today's conference call includes forward-looking statements, and we ask that you refer to FSK's most recent filings with the SEC for important factors that could cause actual results or outcomes to differ materially from these statements. FSK does not undertake to update its forward-looking statements unless required to do so by law.

In addition, this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures can be found in FSK's second quarter earnings release that was filed with the SEC on August 7, 2019.

Non-GAAP information should be considered supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly named measures reported by other companies.

To obtain copies of the Company's latest SEC filings, please visit FSK's website. Speaking on today's call will be Dan Pietrzak, Chief Investment Officer of FSK; and Brian Gerson, Head of Private Credit of FS investments. We're also joined by Bill Goebel, Chief Financial Officer of FSK.

Michael Forman, Chairman and Chief Executive Officer of FSK is not available for today's call due to scheduling conflicts. I will now turn the call over to Dan..

Thank you, Robert. And welcome, everyone, to FS KKR Capital Corp.'s second quarter 2019 earnings conference call. On today's call, I will discuss the continued progress we have made over the quarter against several of our key initiatives, provide some perspective on the current lending environment and review our investment activity for the quarter.

Following my remarks, Brian Gerson will discuss our financial results, including portfolio performance, and then we will open the call for Q&A. Beginning with the quarter, the real takeaway from our perspective is that we are continuing to execute against our strategic initiatives.

In other words, we are doing what we have told investors we are going to do, as shown by the following five examples. First, as we have spoken about in the past, we wanted to increase our exposure to our strategic joint venture arrangement.

To that end, we are pleased to announce our partnership with South Carolina Retirement Systems Group Trust and our expansion to a $1 billion joint venture program. Our former partner, Conway Capital, sold their interest in the joint venture to South Carolina at the end of the second quarter.

The partnership is owned 87.5% by FSK and 12.5% by South Carolina, while voting control is split 50/50. This venture allows us to continue to take advantage of the full KKR private credit platform by expanding investment capacity for first lien loans as well as non-eligible portfolio company opportunities.

We believe the joint venture provides an attractive risk-adjusted return for FSK with an inception-to-date IRR of approximately 11%. Second, on the liability side of the balance sheet, we are excited about the significant progress we have made toward optimizing FSK's capital structure.

Notably, we've recently received an investment-grade credit rating for Moody's. In June, we closed our first middle market CLO, raising over $350 million of proceeds. Then in July, we issued a $400 million five-year unsecured bond and additionally closed on an add-on issuance of $175 million to our existing 2022 unsecured bonds.

Both the CLO and unsecured bond activity delivered attractively priced financing on a non-mark-to-market basis. We believe the size and pricing of these debt offerings further strengthens our capital structure and is an example of the strength of the FS KKR platform. Brian will speak about our balance sheet in more detail later in the call.

Third, in June, we received shareholder approval to increase regulatory leverage to two-to-one debt-to-equity.

Historically, we've taken a conservative approach to using leverage, and we expect that will continue while using a modest amount of incremental leverage to enhance our flexibility, take advantage of attractive investment opportunities and deliver attractive risk-adjusted returns for investors, doing all of this in line with our current investment strategy.

We expect to increase FSK's leverage over time with a near-term target of 0.95x debt-to-equity, and we expect to operate at or around this leverage target in the next 12 months to 18 months.

Fourth, in terms of our share repurchase program, year to date through August 6, we have repurchased approximately $81 million of shares under our $200 million authorization. This is in addition to the significant repurchase activity that preceded the December merger of CCT and FSIC.

Over the past 15 months, the combined FSK entity has repurchased approximately $181 million in shares and including CCT's post-listing tender, approximately $365 million since November 2017.

Last, we also announced that in Q2 that the non-traded BDCs under the FS KKR BDC platform entered into a definitive agreement to merge, and that that combined entity intends to list independently of FSK.

While this is still subject to various approvals and market conditions, we believe this is an attractive liquidity solution for the non-traded funds and is the right course of strategy for the applicable investors. Turning now to the current market environment, the leverage credit markets were strong in the second quarter of 2019, amid rising U.S.

equity prices, declining U.S. treasury yields and stable corporate fundamentals. A more accommodative stance by the U.S. Federal Reserve caused steady inflows into high-yield bond mutual funds, while loan funds continue to see outflows. Clearly, we have witnessed a lot of market volatility over the past few days.

However, this does have not red through to the traded credit markets thus far in any material fashion.

The overall private credit lending market remains competitive today, but we continue to be disciplined and selective and believe that we are well positioned with our size, our scale, portfolio diversification, incumbency positions and origination capabilities to capitalize on opportunities.

We also believe that we have built and expanded our platform to differentiate ourselves through a cycle and periods of market volatility.

Furthermore, while renewed volatility in the capital markets over the last few days does not make for a long-term trend, we believe that such volatility may create attractive investment opportunities in the coming quarters as borrowers look to platforms such as ours to finance their capital needs. Moving to activity in the second quarter.

KKR Credit continued to see a high level of deal volume with over 300 transactions evaluated, allowing us to remain highly selective, as shown by our 3% hit rate during the quarter. Total deployment of the second quarter of FSK was $513 million compared to $549 million in the first quarter of 2019.

As we mentioned on our last call, we expected several large repayments in the second quarter as the market volatility in Q4 of 2018 and Q1 of this year had delayed certain transactions. Sales and paydowns at FSK were $692 million in the second quarter compared to $510 million in the first quarter of 2019.

We continue to see strong deal flow, and our net deployment through the first six months of this year is in line with our expectations. And during the month of July, we funded approximately $230 million of new transactions, and the pipeline remains robust.

As we have done in the past, we thought it would be helpful to review key highlights from a few transactions that occurred during the quarter, as shown in the earnings presentation on Slide 9.

Demonstrating the power of incumbency, KKR Credit was the lead investor in an incremental $264 million first lien term loan to fund the acquisitions for Apex Group Limited, a provider of administration services to alternative asset funds.

The continued investment in Apex is based on the company being a leader in an attractive market and exhibiting sticky, recurring and diversified revenue characteristics. FSK committed $105 million of the latest financing, while the rest of our BDC platform and other KKR Credit managed accounts committed the remainder.

We also recently closed on a $150 million commitment to an overall $1 billion venture with Home Partners of America, an existing portfolio company of FSK. As a reminder, all partners operate in the single-family rental space in the United States.

KKR Credit has had a long-standing relationship with Home Partners, having made an initial investment into the company in June 2014. FSK committed $65 million to this new transaction, while the rest of the BDC platform and other KKR Credit managed accounts committed the remainder.

The transaction provides balance sheet like capital to Home Partners, allowing the company to continue its growth trajectory, and this investment allows us to achieve attractive risk-adjusted returns with substantial downside protection from the underlying value of the homes.

It is worth noting again that both Apex and Home Partners are existing portfolio companies, which exhibits the power of incumbency as we deploy capital in today's competitive market environment.

In addition to these two transactions, we were the lead investor in a $260 million first lien loan financing for Torrid, a provider of apparel and accessories for plus-size women in North America.

Torrid has distinguished itself from other retailers, having grown from 287 stores in 2014 to 577 stores at the end of 2018, more than tripling revenue during that period. It operates as an omni-channel retailer with a strong e-commerce penetration and performance, generating 43% of sales online in fiscal year 2018.

Closing gross leverage was 2.3x, and the loan is highly structured with mandatory amortization payments and multiple covenants. FSK committed approximately $32 million of the financing, while the rest of the BDC platform and other KKR Credit managed accounts committed the remainder.

On prior calls, we've also spoke about our focus in investing in asset-based finance opportunities and how investing in these transactions can provide compelling returns as well as diversification in our investment portfolio.

During the second quarter, in addition to the Home Partners deal previously mentioned, we saw continued growth in our asset-based finance portfolio. We are also pleased to announce the full monetization of an asset-based finance deal, Java Investments within FSK, which occurred after quarter end.

This investment resulted in an asset level IRR of nearly 18% and a multiple of money invested of roughly 1.5x. Java has a mezzanine debt position secured by a portfolio of Irish residential mortgages with a loan-to-value of 60% to 80% at closing. I'll now turn the call over to Brian to discuss our financial results during the quarter..

Thanks, Dan. I'll provide a summary of the financial results for the second quarter of 2019. You can find this information starting on Slide 4 of the earnings presentation. For the three months ended June 30, 2019, net investment income was $0.19 per share, which compares to $0.18 per share in the first quarter of 2019.

During the second quarter, total distributions for the joint venture were $15.9 million compared to $7.3 million in the first quarter of 2019. Second quarter distribution included a special distribution of previously undistributed net investment income declared in conjunction with the sale of the interest in our joint venture partnership.

Going forward, we expect the joint venture will declare dividend based on current quarter net investment income. During the second quarter, net realized and unrealized gains and losses were flat. This compares to net realized and unrealized gains and losses of positive $6 million or $0.01 per share in the first quarter of 2019.

In the second quarter, net realized losses on investments was $59 million primarily related to restructured assets. Net unrealized depreciation on investments of $61 million was primarily due to the reversal of unrealized depreciation on those restructured assets. Otherwise, the portfolio was essentially flat quarter-over-quarter.

During the quarter, we paid regular $0.19 per share dividend, representing a 9.6% annualized yield based on June 30, 2019 NAV. Our Board of Directors declared a third-quarter dividend of $0.19 per share, which will be paid on or about October 2, 2019, to stockholders of record as of the close of business on September 18, 2019.

The fund's net asset value was $7.88 per share as of June 30, 2019, as compared to $7.86 per share at March 31, 2019. This represents another quarter of stable NAV performance since merging FSIC and CCT.

The main drivers of the change in NAV can be seen on Slide 6 of the earnings presentation, which include the benefit of the share repurchase activity. Turning to Slide 8 of the earnings presentation. At June 30, our investment portfolio had a fair value of $7.3 billion consisting of 197 portfolio companies.

At the end of the second quarter, our top 10 largest portfolio companies by fair value represented 21% of the portfolio, relatively in line what we reported at the end of the first quarter. We continue to focus on portfolio diversification, which we view as a key risk mitigation tool.

Consistent with our focus on senior secured investments, our portfolio is comprised of 72% senior secured loans and 53% in first loans by fair value as of June 30. Also, consistent with our focus on financing borrowers at the upper end of the middle market, the median EBITDA of our borrowers was $53 million, and the median leverage is 5.1x.

This compares to median EBITDA of $54 million and median leverage of 5.1 x at March 31, 2019, which is relatively flat quarter-over-quarter. As far as the portfolio return profile, the weighted average yield on occurring debt investments was 10.5% at June 30, 2019. This compares to 10.8% at March 31, 2019.

At June 30, 2019, approximately 1.2% of FSK's portfolio was on non-accrual on a fair value basis as compared to 0.4% at March 31, 2019, and 1% at December 31, 2018. During the second quarter, our subordinated debt investment in Hilding was placed on non-accrual.

Hilding is a global mattress manufacturer, which has seen headwinds in raw material input prices as well as competitor online offerings. We have taken an active role in Hilding, and we are working intently to maximize value and protect our position. Turning to the balance sheet.

As of June 30, 2019, total investments at fair value were $7.3 billion, total cash was $288 million and total assets were $7.7 billion. This compares to total investments at fair value of $7.4 billion, total cash of $92 million and total assets of $7.7 billion at March 31, 2019. Moving to the right hand side of the balance sheet.

Total debt was $3.4 billion with total committed debt of $4.6 billion diversified across lenders and markets. Our net debt-to-equity at the end of the second quarter was 77% as compared to 80% at March 31, 2019. Our weighted-average interest rate on debt was approximately 4.4% at June 30, 2019, down from 4.6% at the end of the first quarter.

As Dan highlighted earlier, we've made significant progress on the liability side, further strengthening our capital structure through issuing our first middle market CLO and two unsecured bond offerings. Regarding the CLO, we sold the AAA and AA tranches at a weighted cost of LIBOR plus 182 basis points.

We believe that this is an attractive source of financing given it is match funding with no mark-to-market at an attractive rate.

With regard to the unsecured bond offerings, post quarter end, we issued a $400 million five-year unsecured bond at a yield to maturity of 4.73%, and we closed an add-on issue of $175 million to our existing 2022 unsecured bonds at a yield to maturity of 4.27%.

We used the proceeds of this capital activity to retire our 2019 notes and fully terminate the $325 million prepayable portion of the $725 million secured JPMorgan facility.

Pro forma for the activity, we view our debt maturity profile attractively, with only $405 million of debt maturing over approximately the next three years, with $1.5 billion in undrawn capacity. We believe the progress we have made on optimizing our capital structure speaks to the overall strength of the FS KKR partnership and platform.

Now I'd like to turn to Slide 14 and discuss our joint venture. As Dan mentioned earlier, we are pleased to announce we now have a new partner, South Carolina Retirement Systems Group Trust, and our joint venture now has $1 billion of equity commitments. At the end of Q2, our joint venture investment represented 4% of our total portfolio.

As we previously mentioned, we've been actively exploring ways to accelerate the growth of this vehicle, and we believe our joint venture provides ample investment capacity while continuing to generate attractive risk-adjusted returns. I'll now turn the call back to Dan..

Thanks, Brian, and thank you to everyone for your time today. As always, we appreciate your support. With that, we will now open the call for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Casey Alexander from Compass Point. Your question please..

Yes. Hi, good morning. I have a couple of questions here.

First of all, can you kind of dice up the amount of shares that were repurchased during the second quarter versus what's been repurchased thus far in the third quarter?.

Hey, Casey, how you doing? Thanks for the question. I think – so the number that we quoted in our prepared remarks was through August 6. I'm not sure we have handy – yes, $24 million actually is the number..

$24 million was the dollar amount that you purchased in the second quarter?.

Yes..

Okay, great. Secondly, you mentioned that you have a repay during the third quarter on Java, and you mentioned that you had $230 million of funding so far through the end of July.

Are there any other repays? And secondly, the $690 million of repays during the second quarter was there anything that you learned from those repays or any commonality of theme there?.

I'll take maybe the second one first. I don't think any sort of commonality per se other than what we've seen historically. We're not seeing transactions repaid or refinanced by competitors.

Most of these are just companies growing in their natural course of business and moving into the syndicated loan market or potentially refinances some M&A or other strategic transaction. I think one of the things we talked about on the last call was with the volatility we saw in Q4 and in Q1, many things were pushed back.

The markets just weren't open. So we were expecting a decent amount of repayments here in Q2. We did want to talk about Java on the call. I think we want to educate people on the asset-based finance bucket within FSK, which is roughly 10%. I think we've seen some pretty good performance there. I think it was worth sort of talking about that.

In terms of just regular way, pipeline is good. I think we had an active July. I think we're active in terms of screening and sort of looking at deals. It is a competitive market, as you know, but I think we're pretty happy with the deal volume we're seeing..

And on the retirement of the JPMorgan credit facility, are there going to be any debt amortization costs accelerated into income?.

Nothing material..

Yes. Okay, great. I'll jump back in the queue and if I have anything else, I'll come back in..

Okay. Thank you, Casey..

Thank you. Our next question comes from the line of Rick Shane from JPMorgan. Your question please..

Hey, guys. Thanks. Casey really touched upon what I wanted to explore, which is really the pace of repayments.

I'm curious sort of whether or not – what you think the mix of organic repayments is versus sort of culling in repositioning the portfolio over the last couple of quarters and when you would think the sort of contribution of portfolio rotation in terms of repayments will start to slow down a little bit?.

Yes. Thanks for that, Rick. I mean I think it's probably not a perfect answer to that. As I said, most of the repayments we're seeing are companies’ sort of growing and hitting the syndicated market or companies involved in some type of strategic transaction.

That said, there are definitely names that are repaying or sort of hitting different markets because we've made clear to them that we might not be constructive on a go-forward basis because we'll be pretty happy to see a position like that leave the portfolio.

I think we're trying to be pretty disciplined on the portfolio management side, if we see things in a name or in a sector. We will make it clear to people and encourage them to potentially refinance. So it's a little bit of both, but probably not a perfect scientific number, of that $690 million..

It's interesting. I think that when we tell them the numbers, it seems a bit more organic repayments than the mix shift seems a little bit toward – more toward organic repayments than I would have thought.

And it must be interesting, it's kind of like having the conversation with your kids about, hey, it's time to get out of the house for those companies..

Yes. I mean there definitely was some larger-sized organic repayments as well, right. A lot of that – a couple of those were things that I think would have actually repaid in Q1. If that market volatility wasn't there at the end of the Q4 sort of during Q1.

And some of those were companies that had just – we'll call it, grown beyond the private credit market, which is something that we expect, right. We expect sort of churn in this portfolio.

We're generally lending the companies in that $50 million to $100 million EBITDA area, you're expecting a growth story there, and then they will access a different market, which probably gives them better pricing and more flexible structures..

Got it.

And last question, on the ones that you're basically saying, hey, we're pushing you out of the nest, is the conversation, look, your loan is going to mature in the next 18 months, we just want you to know that we're not going to be participating in potential refinance transactions, and you don't want to get stuck here, so you should get ahead of this.

Is that how those conversations typically go?.

It does. I mean we want to be a constructive lender and a constructive partner. So it could very well be that. It could be – we see there could be a potential covenant breach in forward quarters.

We want to make clear that we're going to require either some meaningful economics or sort of equity contributions to want to participate in some type of waiver there. We want you to get ahead of that. We want you to be aware. And that will drive – hopefully, drive a refinancing..

Terrific. Thank you, guys, for taking my question this morning..

Happy too. Thank you..

Thank you. Our next question comes from the line of Robert Dodd from Raymond James. Your question please..

Hi, guys. On the dividend income in the quarter, I mean, obviously you provided clarity on the JV. If I look at the best of the dividend income, also seemed larger than usual. I mean, Toorak paid its normal kind of $2.5 million, but that looks to be at about $5 million from other sources.

Is there anything else that you'd – run in time in that dividend income contribution this quarter?.

Yes. It's a good catch, Rob. So thank you for that. I mean, I think the Toorak number was actually roughly $3.3 million, although I'm looking at sort of others in the room. So that was up more than 50% kind of quarter-on-quarter. That business continues to perform quite well.

That book is growing meaningfully and the returns on that are, quite frankly strong. I mean we're probably, at the end of the day, earning close to a low to mid-teens return on that overall asset portfolio, and the Company has been paying out sort of a 10% dividend. So you've seen growth there.

And then there was a $2 million plus dividend on K2 Aviation, which is one of the aviation leasing businesses. That is something we expect dividends to continue on a go-forward basis as well. We've – I'm pretty happy with the asset portfolio that's been built there. And we're pretty happy with the risk of that position..

Got it. Thank you. And then on to the JV going forward? Obviously, I mean you made comments about the new partnership should enable us to accelerate growth there, so two components on that.

I mean, what's the – do you have any view of how quickly market conditions being in your favor, if they are, you would grow that business? And secondarily, what's the target leverage there. I mean, obviously, its 0.9, like now, and it's been there or a little bit lower over the last few quarters.

I mean do you think the asset mix in there, primarily firstly, thing would support somewhat higher leverage or what's the outlook for that?.

Yes. It's a good question. I mean we've – both myself and Brian talked about the South Carolina sort of piece. I think we're pretty happy with that. I think that fits kind of right in with what we've been talking about as one of the levers that we have available to provide growth here.

I think we're still sort of mindful of probably a one-to-one target there in terms of leverage, I mean and I think we're always going to be probably modest in the amount of sort of leverage that we are using. But I think that's probably the right target.

And I think on the last call, we said, and I think we feel the same today, probably about 24 months to sort of ramp the JV sort of over time.

Last time, we talked about more of a position sizing in the overall portfolio, but now you've got a maximum size of the JV in terms of what we could do with South Carolina there, but 24 months is probably a fair time line to ramp..

Okay, got it. Thank you..

Thank you. Our next question comes from the line of Terry Ma from Barclays. Your question please..

Hey, good morning. Can you maybe just talk a little bit more about Conway's decision to sell out at JV? And also what South Carolina is actually doing the partnership that Conway did not have..

Yes. I'd be happy to. I mean Conway's been a great partner for us for many years. That dates back to the CCT days. And I think we're quite happy with how that sort of grew. I think we're quite happy with the performance. You can see by the 11% sort of historical IRR we sort of quoted.

I think that they were sort of backed by some insurance names as the providers of capital there. I think as rules and regulations have evolved over time, being a levered owner of a portfolio of assets in an unrated sort of levered note is not as necessarily attractive from a regulatory capital perspective.

So I think the overall just returns weren't as great. South Carolina is someone we've known for a long time, who's been a great partner. I think they share in some desires around being opportunistic in nature. In addition to just the regular way flow out of this JV. So I think they're going to be a great partner for us.

And I think we look forward to ramping it up over time..

Okay, got it. And I think you guys have spoken in the past about kind of targeting 10% as a percentage of the portfolio for the JV.

Is that still the case? Or do you expect that ultimate target to be a little bit higher with SC being the partner?.

No, I think 10% is kind of the right number, right? I mean, obviously, that falls inside the non-EPC bucket. We've also talked about the asset-based finance bucket as kind of 10-plus sort of percent and then you've got to want some flexibility in there for just things that could go into that bucket as well. So I think that's still the right number..

Okay, got it. That's helpful.

And then lastly, you mentioned a special dividend, how much was that this quarter? And what's the run rate for the regular dividend be going forward?.

Sure. This is Brian, Terry. The special dividend was about $7 million. So if you back out that from $59 million sort of in the mid-8s to mid-9 as being the run rate based on the current size of the portfolio..

Okay..

But then as that portfolio grows, we'd look to be ramping that up. So I think that's – I think we feel good about the dividend component is I think the question that was asked. So the prior was a good one. There are other components of that dividend income, the growth of this quarter from just outperforming investments..

Okay, got it. It's very helpful. Thank you..

Thank you. [Operator Instructions] Our next question comes from Casey Alexander from Compass Point. Your question please..

Thanks. I got it already. It was in relation to the JV.

I would ask you, do you expect it to sell any investments into the JV this quarter?.

I think that's the normal course of business for us. So yes, the short answer is, yes. I think you'll – if you look at the numbers that are in the presentation, most quarters, we are selling in. This quarter, we were not as we knew that this transaction was taking place..

All right. That's what I thought you would say. I appreciate you taking my question. Thanks very much..

Thank you, Casey..

Thank you. Our next question comes from the line of Paul Johnson of KBW. Your question please..

Good morning, guys. Thanks for taking my question. This is sort of a big picture question, but you guys have a very large portfolio, you guys obviously managed a lot of assets in the BDC space.

I'm curious, have you guys seen any effects from the ongoing tariff disputes affect any of your businesses or any other sort of interesting themes that you might have caught on to?.

Yes. Thank you for that. It's a really good question. I mean, that's been top of mind as one of the risks for us, and it's clearly got a lot of headlines in the overall market. I think we've talked about in some of these calls that are prior. We do get to fully review the portfolio quarterly as kind of a risk management measure.

We did do a special – kind of kick the tires of the portfolio for what I'll call tariff risk. Some of the names in there, we definitely either have seen a bit of impact or are predicting some further impact. Some of that's been actual dollars and cents.

Some of it's actually been logistics in nature, meaning people are trying to get a lot of goods into the country prior to a tariff increase kicking in, and they struggled with just getting access to ships are sort of otherwise to kind of do that.

So we do see a bit – I think, overall kind of portfolio-wise, it's probably not that material, but it's something that we have to have our eye on because it seems like this could very well continue for some time..

Thanks. That's very interesting.

Is there any sectors that stand out as you went through that analysis that maybe experience more of that than others?.

Yes. I think some of that would be, as you probably imagine, kind of consumer and retail, right. People who were getting goods in – from China into the different ways..

Okay, great. Thanks. Those are all my questions..

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dan Pietrzak for any further remarks..

I just want to thank everybody for their time here today. And we very much look forward to talking again next quarter. So thank you. Goodbye..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..