Good day, ladies and gentlemen, and welcome to the First Quarter 2021 CF Industries Holdings Earnings Conference Call. My name is Beth, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of the presentation. I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick with CF, Investor Relations. Sir, please proceed.

Good morning and thanks for joining the CF Industries' first quarter 2021 earnings conference call. I'm Martin Jarosick, Vice President, Investor Relations. With me today are Tony Will, CEO; Chris Bohn, CFO; and Bert Frost, Senior Vice President of Sales, Market Development and Supply Chain. CF Industries reported its first quarter 2021 results yesterday afternoon. On this call, we will review these results in detail, discuss our outlook and then host a question-and-answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available on our website. Also, you'll find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website. Now let me introduce Tony Will, our President and CEO.

Thanks, Martin, and good morning, everyone. Yesterday afternoon we posted our financial results for the first quarter of 2021 in which we generated adjusted EBITDA of $398 million. These results are really the story of nitrogen prices that increased throughout the quarter, somewhat offset due to lower production and corresponding sales volumes. There were a lot of things happening during the quarter, such as winter weather driving up LNG demand and corresponding gas prices, and one very large winter storm event in the U.S. But if you take all these impacts together, they roughly offset each other. Let me provide a bit of color on our response to these events. But I'd like to refer you to slides six and seven in our posted materials. Back in February, during the Presidents' Day weekend, an extreme winter storm hit the U.S. Gas suppliers in several of our locations curtailed gas deliveries, and we were informed that we would likely face force majeure hard shutdowns. Our team mobilized quickly, discussed various options, and decided on the following course of action. Given we were facing the loss of gas delivery into our plants and would be shut down anyway, we opted to effectively sell the gas we had contracted for back to our suppliers by net settling our gas delivery contracts at prevailing market prices. We also reduced operating rates to minimum levels at some plants that were still receiving gas and sold the excess gas above those minimum levels back to suppliers. The result was a gain on sale of gas of $112 million. Slide six provides some details of how we mitigate gas price risk and outlines how the February storm affected gas prices. However, there were pretty significant impacts for operations as a result of the shutdowns that froze us. We experienced some prolonged outages and increased maintenance expenses, including fixed cost write-offs as a result of the abrupt disruption and extreme cold. Of course, gas prices rose for that portion of our gas that was not hedged. Because we lost a fair bit of production, we chose to purchase urea barges from the market so that we could meet existing customer commitments, which also cost us a small amount. The net result of all of this is shown on slide seven of our materials. Net-net, our sale of gas mitigated our increased costs, so we came out of it basically even. We did lose production and the corresponding positive margins we would have received, so the full picture was a net loss for us. But at least we recovered our out-of-pocket costs. Hopefully that provides some context for significant, unusual moving pieces. Even with all the challenges we faced in the quarter, we feel very positive about where we are at this point in the year. We had solid results. And Bert is now going to take you through the two main factors of why we are so bullish. First, coarse grain stocks-to-use ratios are extremely low, meaning, we expect grain prices to remain strong through several growing cycles, and farmers are incented to maximize yield, driving increased demand for nitrogen. Second, global energy spreads have continued to widen, such that production costs for Eastern European plants are actually higher than China now. Meaning that the nitrogen cost curve is not only steeper, but substantially wider for fourth quartile producers. Therefore, nitrogen pricing is expected to remain quite strong. With that, let me turn it over to Bert.

Thanks, Tony. As we look at the first quarter and into the foreseeable future, we believe that positive conditions in the global nitrogen market are likely to prove resilient for some time. Since late 2020, global commodity crop prices have been rising steadily, driving strong nitrogen demand. Global urea prices rose alongside this demand, and prices for other nitrogen products followed. Our team did a good job of capturing these opportunities in the first quarter, especially as they dealt with the impact of the severe winter weather on our production volume. I will note, however, that our UAN segment results do not fully reflect the positive environment at hand. We continue to face challenges there from subsidized Russian UAN imports that have depressed prices in North America. Coming out of the first quarter, the spring application season in North America has progressed very well. Nitrogen prices have remained high, demand is strong and supply is tighter than the market expected. As we look further out, positive agricultural fundamentals are setting up an extended period of strong margins across the entire value chain. Strong global demand for all major commodity crops has resulted in low stocks-to-use ratios and higher commodity crop prices. Given where those ratios are, as well as the continued robust demand for commodity crops, we do not believe stocks will be replenished in just one growing season. In fact, if you look back to the last time we had stocks-to-use ratios this low, it took several growing seasons to recover, as you can see on slide nine. As global stocks recover slowly, commodity crop prices should remain higher for some time, supporting strong financial conditions for all aspects of the channel, from producers to wholesalers to retailers to farmers, to grain originators, to grain processors and protein suppliers. We believe this will underpin heightened demand for nitrogen into next year and likely beyond. CF is well-positioned for this opportunity due to an increasingly favorable global energy pricing environment. As you can see on slide 10, energy costs in Europe and Asia have both dramatically increased from the lows of last year and returned to sizeable differentials compared to Henry Hub prices. This has steepened the global cost curve significantly. Additionally, with European natural gas at around $9 per MMBtu today, and the outlook from the forward curves, we expect that Eastern European producers will act as the marginal producer in the near term. These conditions have created a very positive environment for the company. The steeper global cost curve increases margin opportunities for low-cost producers such as CF. We also expect the traditional nitrogen price reset in the third quarter to be at levels well above the last few years. We are operating in the most favorable environment we've seen in many years. And we believe this will have a relatively long tail. We expect that the need to rebuild global stocks will persist at least through next year, resulting in strong economics across the agricultural value chain and robust global nitrogen demand. At the same time, the forward curve suggests CF will benefit from favorable energy differentials for the foreseeable future. As a result, we believe this presents a tremendous opportunity ahead of us as we leverage our manufacturing distribution and logistics capabilities to deliver for our customers. With that, let me turn the call over to Chris.

Thanks, Bert. For the first quarter of 2021, the company reported net earnings attributable to common stockholders of $151 million or $0.70 per diluted share. EBITDA and adjusted EBITDA were $398 million. The trailing 12 months net cash provided by operating activities was approximately $1.5 billion and free cash flow was approximately $1.1 billion. These results reflect generally higher year-over-year prices, partially offset by lower year-over-year volumes and higher realized natural gas prices. They also reflect how we offset the challenges we faced in the first quarter through management actions. As Bert described, the nitrogen pricing outlook through the rest of the year is very favorable in comparison to last year. Partially offsetting this benefit will be a number of factors. We expect gross ammonia production to be around 9.5 million to 10 million tons compared to 10.4 million tons last year. This reflects the impact of the planned turnaround activities and the production we lost due to the weather. This level of production, along with lower inventories to start the year, will likely result in the company selling between 19 million and 19.5 million product tons this year, compared to over 20 million product tons last year. We also expect our natural gas costs to be higher compared to last year. Based on forward curves, we would expect our average MMBtu price at the end of the year to be similar to 2018 or 2019 levels. Finally, we anticipate that our capital expenditures for this year will be in the range of $450 million. This will be much closer to our capital expenditures in 2018 and 2019, reflecting a return to normal levels of plant maintenance and turnaround activities. That said, the positive nitrogen industry conditions we have described should support expanded margins for the company compared to 2020, driving significant free cash flow this year. We will continue to invest in growth in line with our clean energy strategy. The recent announcement of our partnership with thyssenkrupp on our Donaldsonville Green Ammonia project was an important step forward in our efforts. The cost of this project fits within our typical annual capital expenditure budget. We also continue to advance discussions with other potential partners for green and blue ammonia, validating the broad opportunities we believe will be available in the future. In March, we repaid the $250 million remaining on our senior secured notes that were due in December. As we remain focused on investment grade, and positioning the company to execute our clean energy growth strategy, we'll continue to evaluate opportunities to further reduce gross debt over time. We will continue to return cash to our shareholders through our quarterly dividend and opportunistic share repurchases at attractive levels. With that, Tony will provide some closing remarks before we open the call to Q&A.

Thanks, Chris. Before we move on to your questions, I want to thank everyone at CF for their fantastic efforts during the quarter, especially at a time when many of our employees were still working remotely. I am particularly proud of our teamwork and collaboration, critical thinking and data-driven decision-making, and our agility at recognizing and capitalizing on disruptions in the market. We are very optimistic about where the company is positioned. We believe our first half results will be strong. And our outlook for the remainder of this year and into next year is very positive. Nitrogen industry dynamics for producers in North America are the most favorable we've seen in years. This along with the progress we are making on our clean energy growth strategy positions us well to create shareholder value in the near and longer term. With that operator, we will now open the call to your questions.

Thank you. As a courtesy to others on the call, we ask that you limit yourself to one question. If you have additional questions, please re-enter the queue, and we will address them as time permits. Your next question is from Joel Jackson from BMO. Your line is open.

Good morning, everyone.

Good morning, Joel.

Tony, I know you don't really give guidance. It would seem like Q2 is setting out extremely well when we think about order book lags and where nitrogen prices have trended across the quarter in Q1 into Q2. Can you give us a little bit of color on how good Q2 could look versus Q1? Like could we see 50% higher earnings in Q2 versus Q1? So any color you can add would be really helpful to understand how well prices — stronger prices are going into your P&L?

Yes, Joel. As you mentioned, I'm not going to give real firm guidance, but just a little bit of color here. Gas prices are behaving themselves in North America. So our cost structure is kind of where we expect it to be. Internationally, gas prices have really blown out. So the TTF price in Europe, the JKM price in Asia, are very high. So to bid production into the marketplace in those regions requires strong nitrogen pricing. That not only sets up really well for Q2, but I would anticipate that this means, and Bert is going to get into this, I'm sure later, the reset in terms of what our fill program is — our expectation is that will be quite a bit higher than it's been in recent years. So, I don't think this ends at Q2. I think we've got a really strong rest of the year in front of us. In fact, based on, as Bert talked about, the stocks-to-use ratio, and it taking more than one growing season to recover. We think this is at least into 2022, if not beyond, so we're really excited about it.

Your next question is from John Roberts from USB. Your line is open.

Thanks. Could you discuss the UAN results? It looked like there was something unusual that happened there?

No, I think it's a reflection of several things like I articulated in the prepared remarks. We have had an influx of low-cost subsidized Russian UAN consistently, and that's put pressure on all of the importing regions, which is East Coast, Gulf Coast and West Coast. And then, I think you have to remember, we're coming out of a pandemic. When we were in 2020, it was a risk-off market globally. So, you saw low prices in different regions and an inability or reluctance to purchase at first. And so we had a low price environment in Q3, Q4, and into Q1. Our situation, as well as others, you have logistical assets that move as well as plant production, even with the disruptions that you have to keep moving. We always have a forward book on. The prices started moving up for UAN in mid-Q1. So you're not going to have immediate price realization anyway. We expect to see more of that in Q2. Our initial expectation is that the reset will be at a different level than it has been, and we anticipate that to be very positive. So more good things to come, we think. We're watching all the variables and keeping our focus on that.

This is Chris, John. The other thing I would add is in the UAN segment there, it's a little misleading gross margin there, because the items that Tony spoke about regarding the natural gas settlement, we placed entirely under ammonia, where those higher maintenance costs and fixed costs write-offs were against all the product lines. So if you adjust for that, you're closer to something that resembles what it was last year during Q1.

That's helpful. And then could you discuss the competition between the industrial markets and the agricultural markets for ammonia, because you've got industrial recovering here at the same time?

Yes. So I think industrial caught up. We lost our spring program in December, and then prices moved up also in Q1. We have a fairly attractive Q2 Ag application season, not only volumetrically, but you're right, prices improved. I think that's going to reflect well for the fall. Fall application takes place in November, and we would project today based on corn prices and availability, that that price will be very attractive. On the industrial side, that's a reflection of globally and for all the products; urea, UAN, ammonia nitrate and ammonia, we have a very tight market. As Tony articulated, driven by energy cost differentials, high-cost producers it has been attractive to import and buy and decrease or even stop that production of ammonia, tightening up the global ammonia market in the Baltics, Blacks as well as in Tampa, and you've seen prices move up to above $500. It's been many, many years since we've been at that level. Healthy margins on the phosphate side have caused phosphate producers to seek enough ammonia for their operations. And a recovery economically has driven industrial demand for synthetic fibers in different areas along the Gulf Coast, as well as globally, leading to a tight ammonia market through this year and probably into next. The competition for that time, there's a portion of our book that's aligned with industrial demand. We usually see better margin uplift from Ag, but we'll be watching that and moving appropriately to capture that opportunity.

Your next question is from Adam Samuelson from Goldman Sachs. Your line is open.

Thanks. Good morning, everyone. So maybe, Bert, to your point on — the cost curve has deepened pretty materially. I'm trying to think one, with $9 Eastern European gas. How do you think about that kind of helping set a floor price at NOLA? It's below where it is now, but it's well above where it's been the last couple of years, I'd imagine. And against that, how do I think about the ammonia and UAN kind of end values? It seems like those spreads versus the urea and value have returned to more normal levels here in the last couple months, where they've been pretty depressed for the last couple of years. I'm just trying to think about how you view that going forward?

Yes. Your question on setting a floor at NOLA, I would kind of take it to a global perspective; it sets a global floor. You're going to see this in the — we've already seen it in the India tender that was open this morning or yesterday, and the prices are reflecting probably an agricultural number of 320 to 330 per metric ton FOB. There is significant demand that needs to be covered without heavy inventories globally. Coupled with high costs, or a high-cost producer's now unable to export or participate in the export market, low inventory levels globally, and a need for Brazil and India to consistently be in the market and purchase from now, from this point forward, you'll observe our season picking up later on in the year. You have a solid setup for a very healthy floor level, likely higher than what people are anticipating.

Your next question is from Ben Isaacson from Scotia Bank. Your line is open.

Thank you very much and good morning, everyone. Quick question on UAN again. You keep talking about subsidized Russian UAN imports. You saw what Mosaic did on the phosphate side. Can you talk about whether that's something you guys are exploring or will explore in terms of potential countervailing duties?

Good morning, Ben. Yes, in reference to the comments, it's just a fact. I just wanted to lay out there that situation that has taken place. You're right from the Mosaic situation about subsidized gas. As we've had several questions reflecting poor UAN performance, when you peel back the layers, there's a direct correlation to the incoming product and the resulting nature that drove down prices, so it's just more to inform you.

And that, I'd say, Ben, the other thing to add here, which is that the ammonia that goes into MAP and DAP is a relatively small percentage of the aggregate total cost of production. The gas that goes into producing UAN constitutes 70% or 80% of the cost of production. So when the FTC found that there was subsidized gas and therefore duties that the Russians needed to pay, if that's true for MAP and DAP, it should be doubly true for UAN. So I'd say it's something we're continuing to take a hard look at.

Your next question is from Vincent Andrews from Morgan Stanley. Your line is open.

Hey. This is Steven for Vincent. Thanks for taking my question. Just wanted to ask about the carbon capture initiative and whether or not there was any more color to provide around substance and timing in regard to those discussions; anything of that nature would be much appreciated.

Yes. I think it is something as we talked about that we continue to have conversations with many different people who are looking to partner on that. It's really because of, I would say, our ability to capture CO2 today, as there are a lot of industrial organizations that do not have that capability. We have a net position where we are already removing the CO2 from our ammonia stream and capturing that, which puts us ahead of a lot of other parties in that regard. But we're being diligent as we look at what opportunity we want to join. There are no known classics permits that have sequestration points right now, but there are opportunities for a tax credit as well for enhanced oil recovery. So I would say we are continuing to explore those opportunities and are in discussions with several parties.

And I'd say not just the Donaldsonville but there are opportunities in a number of places across our network, including both of our plants in the UK.

Your next question is from Steve Byrne from Bank of America. Your line is open.

Hi, good morning. This is Luke Washer on for Steve. So you guided ammonia shipments this year to 19.5 million to 20 million tons. I guess just thinking about the outages you had in Q1, how are your ammonia plants running right now as you enter into Q2? How does that set up the cadence of your shipments over the course of the year?

So, it wasn't ammonia shipments that we were talking about between 19 million and 19.5 million; it’s total product shipments. Ammonia production is kind of 9.5 million to 10 million tons. We tend not to break out real-time status for our plants, as we believe that information is competitively sensitive. However, I believe our guidance reflects both the increased level of turnaround we have this year versus last year, and the big winter storm event's impact on our production. When we look at those two things together, we feel pretty comfortable about the guidance that Chris provided for ammonia production for the year and aggregate sales volume in terms of product tons.

Your next question is from Michael Piken from Cleveland Research. Your line is open.

Yes. Just wants to get in a little bit more in terms of your thoughts. I know you mentioned that you expect higher seasonal lows. How are you thinking about summer fill for UAN? And just in terms of balancing the desire to keep imports out versus the more favorable supply-demand backdrop? And I guess, in phosphate, there's already been some fill; a little bit of sales done. When you sort of expecting to come out with a fill price? Thanks.

Yes. When you look at summer fill, we've had different programs for different years, depending on when demand materializes and what our situation is. We believe this year that the fall applications will be later than normal. The latest we've gone is August, the earliest we've gone is June. I would tend to be more towards the latter side of that spectrum for moving or announcing the fill program. Inventories are going to be low for all products. When you look at the imports and production to date, taking into account what was lost due to the winter storm in February, and we're projecting 91 to 92 million acres today—though, talking with different participants in the grain markets, I'm personally leaning more towards 94 million acres. With additional applications for yield, you're going to have robust demand coming. I don't see big inventories. We will need to fill those inventories because following the current yield, whether it's average or good, we'll have to repeat in 2022. When you’re looking at the fill programs, as well as the fall applications for ammonia, I'm not prepared to give a price today. But we expect it to be higher, because it's worth it. Nitrogen will contribute to yield and represent good value. This is a good time for our industry, and we're excited to launch our full program.

Your next question is from Andrew Wong from RBC Capital Markets. Your line is open.

Hey, good morning. Thanks for taking my question. Just following on an earlier question about the coming quarters. I know it's hard to give us guidance. Can you just help us maybe qualitatively understand how much volume was sold forward into Q2 and Q3? How should we think about realized prices versus some of the pretty high prices we're seeing in the market today, given nitrogen prices have moved up quickly and sharply? Thank you.

Yes. Qualitatively, I mentioned on the last review that we're in a very good environment. This statement gives you the guideline. Quantitatively, we don't have anything sold for Q3. We'll be monitoring that moving forward. For Q2, as I said earlier, we have a book going into the quarter, and we've been active daily in the market. If you conduct channel checks, we're still selling products for Q2. Different products move at different times; ammonia generally comes first. Those programs were part of an order sold in December and left open for this period. Then you move into urea and UAN for wheat, as well as further north, where applications are just starting in the north and Canada. The bulk of the UAN market will be in the latter part of May and early June, and we think we're well-positioned for that also, having tons available for the pivot run and the rice run. More specifics to come, but we like where we are.

Your next question is from Mark Connelly from Stephen Inc. Your line is open.

Good morning. This is John Rider on from Mark. We saw a fairly normal seasonal swing to coal this winter in China and, as far as we can see, a pretty normal shift back. Where are you seeing Chinese operating rates right now? What are you assuming in your global forecast for Chinese operating rates for the rest of 2021?

I'll start, John, with coal prices in China. There has been a lot of discussion about Chinese coal softening, specifically anthracite over the past year. It's remained relatively consistent at about $160 per metric ton. On an energy equivalent, we’ve seen it range from seven to 750 per MMBtu. From a Chinese perspective, we've seen them as the marginal producer. However, with the expansion of energy differentials, you're seeing Eastern European and Asian producers becoming the marginal producers, and there is a widening of the cost curve in that fourth quartile, coupled with the deepening of that slope. I'll let Bert discuss expected exports from China this year.

Yes. Specific to China, we're closely following it, as they do represent roughly 10% of the export market; Yara have been the marginal producer that expanded contract as pricing allows, and have been active participants in the India tenders. Our estimates suggest that they are operating at about 70 to 72 percent capacity, which would lay out for the year about 56 to 57 million tons of production. For exports, we're estimating around 5 million tons. However, we must remember that consumption within China has risen from what we estimate to be 48 million tons to around 52 million tons over the last four years—a 4 million ton increase. They need to fertilize for yield, and the significant corn and soybean imports this year reflect their inability to produce that due to limited water and soil quality. Therefore, they're likely to be focusing on addressing this going into the next growing season.

I think in addition to that, we're seeing increased economic activity in China, which will drive usage—further supporting Bert's point on consumption. We are also monitoring that domestic production in India is expected to be down, leading them to import larger amounts, with China likely to be a big piece of that. This reinforces a very constructive nitrogen pricing deck for North American producers.

One last thing to remember about China: in the last three years, there have been 12 million tons offline and closed. That's a significant move. When you add what we estimate exportable tons will be this year at 2.5 million tons, those closures will lead China to essentially become a domestic producer with marginal tonnage coming out. But that’s okay.

Your next question is from Rikin Patel from Exane. Your line is open.

Hi, thanks for taking my questions. Firstly, a follow up on the market and your comments on India. I think you said production is expected to be down this year. How does that play into your expectations or views on some of the new plants that are ramping up there right now? Secondly, on free cash flows, keeping the guidance of $450 million of CapEx this year, can you help us understand the phasing of that into Q2 and the second half of the year? Lastly, on customer advances, I saw there was a slightly higher step up this quarter. Does this imply a higher outflow in Q2? Thanks.

On the India front, several new plants have been launched over the last couple of years, including Matix and others. However, we haven't observed a net increase in domestic production. It seems that while new production comes online, older plants are either reducing operations or shutting down. With LNG at current prices, it's often cheaper for those plants to import urea rather than operate. Additionally, the impact of COVID and current conditions in India have led to supply chain and labor issues that pose significant challenges. Consequently, we expect no excess production on a net basis in India for the full year. Regarding capital expenditures, we typically schedule turnarounds when prices are lowest, which usually occurs at the end of Q2 and into Q3, so that plants can be fully operational before the fall ammonia application and prepare for Q1 and Q2. Most of our turnaround costs generally happen in the second half of the year.

Yes. Historical quarterly CapEx spend is a good reference for when we take plants down for turnaround work, and that would be a useful proxy for where you'd see spending allocations over the remainder of the year.

Regarding India, over the past six or seven years, they produced around 24 to 24.5 million tons consistently since 2015. Even with the addition of the newer plants, as Tony mentioned, they're struggling to keep up. Reports indicate they are typically behind schedule with these plants and don’t run at full capacity initially. Hence, this is likely a multiyear issue. We're still witnessing multiyear growth in imports that may not maintain the current pace, but will certainly sustain a healthy level in the foreseeable future.

On the customer advance front, as Bert indicated, we haven't taken many Q3 orders, so the customer advances on the books are really for Q2 deliveries. To your earlier point, as we proceed to fulfill those orders, we expect to see a decrease in that advance number correspondingly. Bert also mentioned the timing aspect of fill; we are more likely to see that later in the window compared to earlier. Therefore, a lower customer advance number is anticipated as we work through the quarter.

Your next question is from Roger Spitz from Bank of America. Your line is open.

Thanks. Good morning. Regarding your comments in the prepared remarks about your focus on investment-grade ratings, are you working specifically towards obtaining an IQ rating from agencies? What have they said about what it might take to get that rating?

Yes, so good morning, Roger. Thanks for the question. We are looking at getting back to investment-grade status. We believe our metrics are in place for that. If you look at what we've accomplished recently, we've reduced our gross debt to $3.75 billion and our net debt under $3 billion. This positions us at 2.1 times net debt to EBITDA on a trailing twelve-month basis. With the strong outlook we foresee this year and ahead, we see an opportunity to not only invest in our growth projects but also reduce a bit more debt and return cash to shareholders as well. The feedback we received from rating agencies largely hinges on observing how the market develops. Right now, the outlook appears strong for this year and into next year.

Additionally, consider that entering the spring and summer of 2020 pressed the market into a risk-off posture, prompting analysts to adopt a more conservative perspective on materials and industrials. There were numerous downgrades and negative watches, which outweighed positive outlooks. While our results did show some sequential downturns in 2020 compared to 2019, the demand for our products remained robust. It was largely driven by the pricing environment. Given the current prolonged pricing environment and ongoing debt reduction, I believe we have a solid case to argue for investment-grade status, even without incrementally reducing debt. However, it is crucial to note that agencies proceed cautiously, preferring to see sustained strong performance before making such adjustments. But we're optimistic it may happen soon.

Thanks, everyone, for joining us today, and we look forward to speaking with you at upcoming conferences. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.