Good afternoon and welcome to Green Brick's Partners Earnings Call for the Second Quarter Ended June 30th, 2022. After today's remarks, we will have a question and answer session. Please note that this call is being recorded and will be accessible for playback. Additionally, a presentation will accompany today's Webcast and can be found on the company's website at investors.greenbrickpartners.com. On the call today, we have Jim Brickman, Co-Founder and Chief Executive Officer; Rick Costello, Chief Financial Officer; and Jed Dolson, Chief Operating Officer. Some of the information we discuss today will be forward-looking, which includes the company's financial and operational expectations for 2022 and beyond. In yesterday's press release and SEC filings, the company outlined important risks that could affect its future results. The company's statements are current as of August 3rd, 2022, and there is no obligation to update any forward-looking statements made. The comments will also include non-GAAP financial metrics, and the reconciliation of these metrics along with other required information can be found in the earnings release issued yesterday and in the presentation on the company's website. With that, I will now hand the call over to Jim Brickman.

Thank you. We're pleased to share results of another outstanding quarter. During the second quarter, we delivered a record 881 homes, generated record quarterly total revenues for any quarter of $525 million, and achieved a record homebuilding gross margin of 32.3%, despite a challenging supply chain and labor environment. As a result, the company generated a record $101 million in net income, or $2.08 per diluted share, representing a year-over-year growth rate in quarterly EPS of 104%. Green Brick has a track record of generating some of the best returns among our peers, and this quarter was even better with an annualized return on equity of 45.6%. We encourage you to take the time to compare our results and key operating metrics with any of our homebuilding peers of any size. I'm also excited to share that we officially joined the S&P SmallCap 600 in July. This is a milestone that is not possible without a hard-working, talented team. During our call today, I would like to discuss why we believe that Green Brick is well positioned to succeed in a rapidly changing environment. Rick will discuss our Q2 2022 highlights, and lastly, Jed will provide some color on what we are seeing in the housing markets and the supply chain, as well as updates on our capital allocation strategy. While our second quarter performance broke records in many key financial and operational metrics, we began to see moderation on the sales floor in the second half of the quarter. This happened due to multiple aggressive interest rate hikes by the Fed and inflationary pressures. The market is still seeking a new equilibrium after the Fed's rate hikes that accelerated the Fed funds rate by 200 basis points from May 1st to July 27th. Despite what we see as a choppy market over the short-term, we continue to believe that demand for single-family homes in our markets is here to stay over the long horizon. Here are a few reasons: First, on slide 4 of the presentation, over four million millennials between the ages of 35 and 44 are entering their prime homebuilding years. For many of them, buying a house is not a discretionary purchase. In fact, marriage alone doubles their homeownership rate. On top of that, a large amount of institutional capital has flooded to build-for-rent space, creating a unique group of homebuyers in the housing ecosystem that did not exist during the housing bubble. We believe the build-to-rent sector will provide more stability and future buyers for the housing market. Next, for the housing supply chart on slide 5, the inventory of new and existing homes today remains near historical lows and is a fraction of the supply compared to the Great Financial Crisis or even the inventory adjustments seen in 2018 and 2019. For Green Brick specifically, we ended the second quarter with only 10 finished spec homes. While the supply of homes for sale will increase over the coming months, we believe that the recent decline in expected future reductions in single-family starts should mitigate a buildup of housing inventory in 2023. Lastly, as seen on slide 6, due to the limited housing supply, rental prices in major US cities are seeing double-digit growth, while occupancy remains at high levels. This further complicates the buy versus rent decision among first-time homebuyers whose urgency to purchase their first house will only grow as they age, marry, and form families. In addition to those long-term tailwinds, we believe that Green Brick is strategically positioned to navigate in this evolving environment, as shown on slide 7. To begin with, we operate in some of the best markets in the country. Demographic shifts and migration will continue translating into housing needs over the long haul. DFW, our biggest market, has experienced tremendous business activity over the last 18 months. According to the Dallas Chamber of Commerce, over 120 companies have announced office relocations or expansions into the DFW area in 2021 and 2022. We believe our markets will exhibit more resilience in a weak economy and a higher growth rate in a booming economy. Second, within our strong growth markets, we primarily build in infill locations. Over 80% of our year-to-date 2022 revenues were generated from those infill submarkets. Those submarkets are typically land and lot constrained and face limited competition. Development in those submarkets requires our recognized expertise and local knowledge to address more complicated entitlement, regulatory, and development processes. The mixed-use neighborhood of retail multifamily units and a 450-unit residential lot neighborhood, which we closed in the North Atlanta suburbs upcoming, is an excellent demonstration of our ability to successfully manage and navigate a complicated development pipeline in very supply-constrained locations. Third, since we went public in 2014, we have been focused on maintaining a strong balance sheet despite significant business growth and aggressive stock purchases. Among our peers, we had one of the lowest debt to total capital ratios at 28.9%, despite purchasing $102 million of stock year-to-date through July at an average price of under $21 per share. Our repurchases represent almost 10% of total shares outstanding at the end of 2021. Further, 87% of our debt outstanding as of June 30, 2022 is long-term and fixed rate. At the end of the second quarter, our weighted average interest rate was only 3.4%. Fourth, we believe we've always had one of the best lot positions that will support our future growth. Together with a strong balance sheet, we are in a position to stay opportunistic in our growth and manage our business in a way that's accretive to shareholder value. Lastly, since inception, we have incrementally improved our back office and homebuilding operations over time, and we will continue to look for ways to increase our efficiency. With that, I'll now turn it over to Rick.

Thank you, Jim. Please turn to slide 8 of the presentation. Our total revenues in Q2 2022 increased 40% year-over-year to $525 million. Our residential units revenue increased 54% year-over-year to $513 million, driven by record closing volume in ASPs. During the quarter, we delivered 881 homes for a 16% year-over-year increase, and ASPs climbed 32% year-over-year to $579,000. We continue to make good strides on operating efficiency. Our SG&A leverage ratio improved by 200 basis points year-over-year to a record low of 8.2% during the second quarter. And higher residential units revenue led to a 550 basis points improvement in homebuilding gross margin year-over-year to 32.3%, the highest in our company history. Sequentially, our gross margin increased 450 basis points. As demonstrated on the comparative bar chart on slide 9, we have consistently demonstrated superior margin versus our mid-cap and small-cap peers. In the second quarter, our gross margin performance tops the chart. Diluted EPS was up 104% year-over-year to $2.08 during the second quarter as a result of growth in revenue and improvement in both gross margin and SG&A leverage. Sequentially, EPS grew 73% on a 33% growth in total revenues. Our year-to-date annualized return on equity was 37.4% as compared to 23% last year. As Jim mentioned earlier, we started to see a slowdown in traffic, which accelerated in June and continued into July. Record-breaking heat has also discouraged buyers from visiting our model homes in DFW. As a result, net new orders decreased 9.8% year-over-year. However, our absorption rate during the second quarter was up 4.4% year-over-year to 7.1 homes sold per average active selling community. Our cancellation rate ticked up each month during the quarter, and the overall second quarter cancellation rate increased to 11.4%, which is still lower than many of our peers. During the last eight quarters, our cancellation rate has varied between 6.0% and 12.3%. We believe our lower cancellation rate is based on higher buyer quality and the larger amount of earnest money that we require. To put the topic in perspective, we have consistently stated that a cancellation rate in the range of 15% to 20% is appropriate in a normal environment for the industry prior to COVID. As of the end of June, we had 1,087 homes in backlog with an ASP of $653,000 compared to 1,876 homes with an ASP of $519,000 at the end of June last year. Backlog units decreased 42% year-over-year due to one, closing a record number of homes during the second quarter; and two, moderation of demand in the second half of the second quarter. The decline in backlog units was partially offset by a 25.8% increase in the ASP of backlog units, resulting in a total backlog of $710 million. We expect the majority of our current backlog to close by the end of 2022 or Q1 2023. Spec units under construction rose from 45% of total units under construction last year to 57% as of the end of Q2 2022. While this level is slightly higher than our historic range, our Trophy brand now represents a higher portion of our units under construction. We believe many first-time home buyers are willing to forego the selection process to buy a spec home that can be delivered within two months after the contract, where the buyers' mortgage interest rate and delivery date can be known. As a result, Trophy's business model contemplates a higher proportion of spec units than our other brands. One of our many priorities for the remainder of the year is to find a good balance between our backlog and spec units, as well as to manage sales pace, home prices, and start pace, which Jed will expand on shortly. With that, I'll turn it over to Jed.

Thank you, Rick. With high inflation, volatile rates, and lumpy demand, we are closely monitoring our operations and are laser-focused on several key priorities that we believe will drive better performance for Green Brick. These priorities are summarized on slide 10. First, we will continue to manage closings of our backlog. During the second quarter, our buyers through mortgage company partners had an average credit score of 750 and a debt-to-income ratio of 34.9%. Approximately 30% of our buyers year-to-date are first-time home buyers. We expect our buyer quality to remain consistently high. When necessary, we are assisting our buyers in securing financing with our mortgage companies through rate locks or rate buydowns. Currently, over 50% of our buyers who are utilizing our mortgage companies and are scheduled to close in the third quarter have locked their rates. As Rick mentioned earlier, our cancellation rate went up to 11.4% during the second quarter, primarily due to more mortgage disqualifications. In some instances, we were able to transfer the buyers to other more affordable homes, featuring less square footage in order for them to secure financing and close. Second, we will continue to manage our sales pace and starts as we seek to get an even flow. To counter a slowdown in foot traffic, we offer incentives on a community-by-community basis for new orders signed in June and July, which averaged approximately 2%. These incentives included a combination of moderate price cuts, credits towards closing costs, and rate buybacks. Additionally, in some communities we are selling at earlier stages of construction to allow personalization of optional features. Given our industry-leading gross margin position, we believe we have the flexibility to be more aggressive on incentives if our markets require that rate. That said, we do not intend to lead the market downward. Third, we continue to focus on managing capital allocation prudently. We are fortunate to have a great land book today that allows us to be opportunistic. We believe it will also give us an edge on margin due to attractive cost basis relative to the current market. Additionally, we self-develop most of our lots, which has provided us an advantage in achieving an exceptional level of margins versus peers and controlling our own destiny and delivery dates. We've been conservative with underwriting and where we're being even more diligent and cautious when we look at land opportunities now. We want to ensure we are capital efficient and only invest capital that we believe will generate long-term value for the company and shareholders. Our expansion in Austin has been an excellent example. We remain bullish in its long-term fundamental backdrops and are on track to start construction in early 2023. Lastly, we intend to continue strengthening our balance sheet. We have a strong balance sheet today, providing us more flexibility to manage our business in a changing environment. Let's switch gears to the labor markets and supply chain. As new starts slow down, we're seeing some signs of relief in the labor and trade markets. For example, during the last several weeks we have seen an increased number of inquiries from subcontractors for more work as they have more available crews. We are seeing this primarily with the subcontractors used at the front end of the construction process. The labor market remains tight for finding well-trained professionals, but we believe we will see more pricing power shift in the coming months, if housing starts decelerate as we expect. The supply chain remains disruptive and lumpy, but we believe we are also at or close to an inflection point with cycle times. As for lumber costs, we will start to see a tailwind from decreased prices reflected in our margin late this year and into 2023 as the lower prices pass through to future home buyers. With our position as the third-largest builder in Dallas-Fort Worth and the improved technology and processes in place, we believe that we are in a great position to manage costs and cycle times. With that, I will turn it over to Jim for closing remarks.

Thank you, Jed. In closing, we believe our infill locations, disciplined capital allocation, strong balance sheet, superior land position, and efficient operations will allow us to be both defensive and offensive in a normalizing marketplace. I would like to thank our entire Green Brick team. Going forward, we believe Green Brick is in a position of strength to manage our business in an evolving housing landscape. We remain focused on creating shareholder value and will continue looking for ways to build a better company. This concludes our prepared remarks. We will now open the line for questions.

Thank you. Your first question comes from Alex Rygiel with B. Riley. You may now ask your question.

Thank you. Good morning, gentlemen. Very nice quarter. You've got a very large number of homes under construction at a time when new orders are softening a bit here. Can you discuss your flexibility in altering those plans to possibly accommodate a buyer that is in need for a longer average selling price?

Yes, Alex. This is Jim Brickman. Jed, you can chime in after I talk a little bit about this. Alex, right now everybody is trying to really figure out how elastic or how pricing is going to really impact the demand of that first-time buyer. Trophy is our entry-level and first-time move-up builder and is more dependent on that first-time buyer than our other brands. But as we noted in the call, about 80% of our revenues are still being generated from less competitive supply constrained infill markets. So we feel really good about those markets. And we really don't have a lot of visibility right now into what is going to be taking place with that first-time entry-level buyer. It's very spotty right now, and we think it's going to improve, but we're just not sure. Jed, do you have anything you want to add to that?

I would like to agree with what Jim mentioned. We don't have many lots in prime locations within each neighborhood, so we will modify our sales strategy accordingly. Often, those lots are very difficult, if not impossible, to replace. In the entry-level community, we are beginning to see some positive signs from first-time buyers at lower price points, and we are planning to launch several new neighborhoods in the coming months where we expect the average selling prices to be at or possibly below $400,000. We are confident in our ability to offer an affordable product moving forward.

Excellent. And then one of the challenges that we have is to try to model and forecast what kind of pressure, if any, could be on gross margins from some of these incentives and price discounts and so on and so forth. If we look back into Green Brick's history back in 2018, gross margins did decline from a 26% level to a 21% level when demand moderated. I didn't follow the company back then. So I'm looking to you for a better understanding of maybe some of the dynamics that played out in 2018 that caused that gross margin erosion and how in the next 12 months could be different.

Yeah. Good question. There are a lot of differences this time around. First of all, in 2018, one of the reasons the margins went down was we had purchased a whole chunk of very inexpensive lots in 2013, 2014, and those very high-margin lots were burned off our business and we were replacing those lots with most of our self-developed lots. So that was part of the reason for margin erosion. The second big component is since 2018 in those four years, we have worked very hard on our back-office operations. This is purchasing national accounts and just really running our business better. I don't think you're going to see that margin degradation to 21% or anything like that like we experienced in 2018 because we are running the company so much better today than we were four years ago.

Excellent. Thank you very much.

Your next question comes from the line of Carl Reichardt with BTIG. Your line is now open.

Thanks everybody. You've talked a little bit, Jed, about slowing starts. We're hearing that from others. Can you talk a little bit about how current conditions might impact your decision to open new communities? Is it still full speed ahead with your ramps, or are you starting to think about holding some of those back?

No. We're full steam ahead. We're excited about the new communities. Many of them were bought, coming right after COVID set in. So they were bought at very attractive cost basis. The land development costs were much lower for the majority of those communities. So, while most of them are geared toward entry-level buyers, we're extremely excited about the new community.

Okay. Thanks, Jed. And then, Jim, you and I have talked a number of times about your own lot position is 84% of your lots are owned versus option. I'm interested in sort of how you're seeing, with the potential change in the market here, how you're seeing that position knowing that you've got a relatively low basis, know you work hard on the pricing and the process of getting those to market. How do you contrast your position versus the folks who are more focused on option lots and where their risk profile sits compared to yours?

That's an interesting question. It will be intriguing to see how this develops. I believe Wall Street has oversimplified the land-light model. The land bankers financing this model are among the most knowledgeable in the field, and they aren't letting builders profit at their expense. Consequently, any builder adopting a land-light approach will face high capital costs paying the land banker. Additionally, these builders must acquire lots at retail prices, not wholesale prices, which will be a disadvantage during an economic downturn. Builders claiming to be land-light will be stuck with retail-priced lots on their balance sheets. Furthermore, investors may not realize that many of these lots have 6% price increases built into them, meaning that the lots land-light builders are acquiring today will cost 6% more at this time next year. Lastly, while it's true that they can walk away from their options, doing so could be very costly due to the sizable earnest money deposits they would forfeit. I cannot predict exactly how this will unfold over the next year, but I can confidently say that we are in a strong position compared to those who purchased land-light lots at elevated prices that will affect their balance sheets.

Thanks, Jim. You didn't have that speed prepared or anything, did you? It sounded like you might have.

No, I've been wanting to talk about this for about the last 10 conference calls.

I have one more question, if you don't mind. It's regarding share repurchase. The significant amount of stock you bought back last quarter was a surprise, at least for us. You have $57 million remaining on the authorization. Can I assume that despite the current price being much higher than your average of $21 million, you will continue to consider buybacks? Additionally, once you're done with that, how will you approach buybacks compared to other potential uses of capital, particularly in terms of investing more in developing the lots you have?

Well, first of all, we look at everything all the time in a way that the opportunities of growing the business, buying land, and buying stock. One of the things I'm excited about more than I ever have been in the past is that as builders are not going to be aggressively probably growing revenues over the next 12 months. I think we're going to see opportunities in the private acquisition sector that we haven't seen really since we bought GHO five years ago. We may want to have capital reserve for that potential going into 2023 because I just don't see the builders that sold last year and the year before. The private builders probably did a great job, but I think it's going to be a much more competitive landscape and a more attractive buying market possibly next year.

Thank you so much. Appreciate it, guys.

Your next question comes from Jay McCanless with Wedbush Securities. Your line is now open.

Good morning, everyone. Thanks for taking my questions. So, Jed, I'm encouraged to hear your comment about an inflection in the supply chain. Could you maybe dial down on that?

Yes, it's a broad topic. For instance, on the land development side, we're able to get the 8-inch water line pipe as needed, though it's still quite costly. We believe that as inventories rise, prices will eventually decrease because suppliers won't have the capacity to store all the excess water lines being produced. This serves as an example of the trend we're experiencing repeatedly. While some items remain difficult to source, we are observing a significantly improved supply chain today.

Okay. And when will it be on vertical construction?

Yes, the same can be said for HVAC coils. We are observing challenges with certain items, such as smart locks that require chips for entry. Those remain difficult to obtain. While not all supply issues have been resolved, we are in a significantly better position compared to this time last year or even the beginning of this year.

Great. And then, when I look at the order decline for this quarter, could you talk about geographic differences in that? I mean Dallas and Atlanta, your two core markets, did both of them suffer equally, or was it more pronounced in certain areas versus others?

Jed, why don't you take that or Rick? We look at this really on a daily basis. We get a sales report on every house in every neighborhood in our four markets. So, Jed and Rick, why don't you take the rest of the question?

We've seen a universal kind of decline as we pointed out in our release in sales in the second half of the quarter. When we look at the Dallas market within Texas, we are now this winter, we'll be opening up in Austin. So we talked to our peers and our mortgage companies that do business across the state of Texas for example. I can tell you, Dallas is weathering the storm much better and seeing much smaller declines than other parts of the state, and we still see strong demand in Atlanta and Florida. Florida has been a smaller division for us over the years. So again, as Jim has pointed out before, we really like where our book of business is and we really like our basis in our land book. We're excited about the next 12 to 24 months.

Hey, Jay. This is Rick. One of the things that we're keenly aware of is the huge difference getting back to the 2018-2019 era when there were multiple reasons for what was happening back then. Yes, the interest rate spike back then and you had a low period in terms of sales. This is a very recent phenomenon for us, a couple of months' worth of lighter sales going from a position of metering sales. We have 10 finished units as of the end of the quarter. Just lighter sales are not going to create an inventory accumulation simply because, A, we have backlog, and B, because we were metering sales, there's not that much coming through the pipe on a short-term basis. So, it's really an interesting conundrum that we're going to be interested to see how you have an inventory adjustment when there's no inventory. We're going to be watching as well and just adjusting as we go through it. But starting with the very best margins in the industry is certainly a preferred position.

Rick, let me add one thing though because I think the analysts are correct in that, in Dallas, for example, we were running in the first quarter at a 60,000-ish annual start rate. Builders generally did continue to start homes, expecting a 60,000 start rate. So if we reduce to 45,000, or anybody who knows what the number is going to be, there is going to be a reduction in starts and some demand. Yes, there are going to be some of those starts that are going to finish over the next two or three quarters. But at the end of the day, we still are very confident about our markets, whether Dallas is a 40,000, 45,000, or 50,000 start market, it's still probably going to be the largest housing market in the United States, and we think we have the best lot position. In Atlanta, it's a little more unique for us. We are totally in the very AAA location infill areas. Interestingly, John Burns came out with a report last week that still ranked Atlanta as a higher or better market than Dallas. Florida is just very seasonal. Our builder that we own 49.9% of in Colorado Springs and Denver. Colorado Springs is still just booming, and Denver has really slowed down. So that's pretty much how we're looking at the market.

Okay. That's great. Thank you, guys. Appreciate it.

Your next question comes from the line of Alex Barron with Housing Research. Your line is now open.

Yes, thank you gentlemen. I was just wondering if you guys could comment on your approach to competitive actions by others, whether it be incentives or price cuts, what your general philosophy is? And do you feel that this slowdown is something temporary or something that might be more extended?

Jed?

Yes, I can address that. It really varies significantly. Builders with large backlogs tend to be reluctant to offer incentives or change prices because they aim to complete their backlog at higher margins. On the other hand, speculative builders with smaller backlogs are less inclined to hold onto completed homes, making them more willing to offer discounts. In the Dallas-Fort Worth area, most public builders are present except for a couple, along with many private builders. Each entity will have a unique strategy, so there's no single approach being adopted currently, given the diverse mix of private and public builders. I believe this trend is reflected across the various markets in which we operate.

Right. I understand each has different strategies, but I'm starting to see several builders resort to cutting prices, which frankly surprised me because I didn't think it merited that so soon for the reasons you stated that it would scare people in backlog. But I'm just wondering if you guys are doing that or thinking of doing that, or if not, how do you sustain sales with others doing that?

Well, Alex, this is Jim. Obviously, we don't set the market; we meet the market. As we said, 80% of our revenues are more infill that are a little bit insulated from this. I read D.R. Horton's investor call with great interest as a builder that's doing 80,000 or 90,000 starts. Obviously, if we're down the street from Horton in some neighborhoods, we're going to have to be very aware of what Horton does because we think we can sell our homes for incrementally more dollars, but we are not immune. When we get into a very perimeter location to what a competitor like Horton does, we haven't seen in any neighborhood, whether we are down the street from Horton major price cutting. But we're going to watch it very closely day-by-day.

Okay, great. Thank you very much.

Your next question comes from the line of Michael Rehaut with JPMorgan. Your line is now open.

Hi everyone. This is Andrew in for Mike. I was wondering if you have noticed any changes in the cancellation rate. Have you taken steps to ensure that customers can still complete their purchases? If you have observed any changes, what impact have they had?

Yes. And obviously in our entry-level brand at Trophy, the cancellation rate is more elevated than it is in other brands. We have no crystal ball really trying to figure out how cancellation rates are going to trend. Our cancellation rate is very low, but we think that with the entry-level buyer at Trophy, it's just going to be really a battle all the time in terms of keeping people qualified for mortgages. Jed, do you have anything you want to add to that?

Yes, we do stress test the backlog, but most of our cancellations occur either shortly after a contract is signed when the buyer experiences remorse or at the closing table due to changes in underwriting or the buyer's circumstances. Therefore, it's challenging to predict the cancellations that happen at the last moment.

One of the other differentiators we do that I think we're doing is to even in our perimeter neighborhoods, whereas some peers will allow a buyer to contract for a home for $1,000, plus or minus earnests money deposit. We're getting a multiple of that even in our entry-level buyers because we don't want to have the cancellations, and we want to try to maintain and understand our backlog a little better. So, we aren't really going after that bottom, bottom pool buyer.

Yes. No, that makes a lot of sense. I guess just a follow-up. Can you kind of speak to SG&A outlook for the rest of the year? I know you guys had a nice improvement there.

Yes, we had a great improvement just because revenues our quarter is a little bit more lumpy. We were able to convert a tremendous amount of backlog. SG&A, if you just take a look on an annualized basis, we think it's going to be pretty consistent. So it all gets down to how many revenues you're going to push through the company each quarter.

Okay. That’s all for me. Thank you so much for taking the question. Congrats on the quarter.

Thank you.

Your next question comes from the line of Bill Dezellem with Tieton Capital. Your line is now open.

Thank you. A couple of questions. First of all, specifically in your markets, what are you seeing from competitors in terms of their start rates?

Jed just had dinner with four division presidents last week and the situation varies. Some builders, including a large one that is the fourth largest, are significantly reducing their starts. Others are not cutting back much at all, and we find ourselves somewhere in the middle.

Thanks. And then what are you seeing in terms of buyer behavior in terms of their requesting smaller homes or any other actions that buyers may be taking to make homes more affordable or reduce the price?

Well, three months ago, when we opened up communities, we were really surprised in that we had floor plans that ran from 1850 to, let's say, 2200 square feet. We weren't selling any 1800 square foot houses. Low interest rates were driving these people to buy bigger houses. And Jed, aren't some of these people now for the first time converting to smaller houses?

Yes. We're seeing people buy 1600 to 1800 square foot homes that nobody wanted really a year ago.

There are no further questions. This concludes today's conference call. Thank you for attending. You may now disconnect.