Welcome to Onex fourth quarter and full year 2022 conference call and webcast. During the presentation, all participants are in a listen-only mode. Afterwards, we will conduct a question and answer session with pre-qualified analysts. At this time, if you have a question, please press star one one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference call, Jill Homenuk, Managing Director, Shareholder Relations and Communications at Onex. Please go ahead.
Thank you. Good morning, everyone, thanks for joining us. We're broadcasting this call on our website. Hosting the call today are Gerry Schwartz, our Founder and CEO, Bobby Le Blanc, Onex's President and Head of Onex Partners, and Chris Govan, our Chief Financial Officer. Earlier this morning, we issued our fourth quarter and full year 2022 press release, MD&A, and consolidated financial statements, which are available on the shareholder section of our website and have also been filed on SEDAR. Our supplemental information package is also available on our website. As a reminder, all references to dollar amounts on this call are in U.S., unless otherwise stated. I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks. I'll now turn the call over to Gerry.
Thanks, Jill. Good morning and thanks to everyone for joining us today. You know, we just completed our 35th full year as a public company. Time sure flies. I can't help but look back on what's been an incredible journey. Since our IPO in 1987, Onex has helped to build more than 100 businesses and completed more than 700 acquisitions, with a total value exceeding $100 billion. Over that time, we've generated a compound annual return for shareholders of nearly 13%, and that's versus 8% for the S&P/TSX index. We did this by sticking to our disciplined investment philosophy and maintaining a strong liquidity position to take advantage of market dislocations and opportunities. Of course, we did face many challenges along the way, and 2022 sure had its fair share.
The economy and capital markets struggled to find their footing. There were supply chain disruptions, geopolitical conflict, rising interest rates, and the highest inflation in 40 years. In the face of these headwinds, Onex did make good progress last year. We grew investing capital per share, delivered solid risk-adjusted returns to our fund investors, and made attractive new investments that should yield, and we expect will yield, future rewards. We raised $2.1 billion of new fee-generating capital across our credit platforms. We did this as investors were drawn to our creative capital solutions and defensive positioning in volatile markets. Fundraising environment for private equity was more challenging, reflecting a crowded and consolidated market. We continue to actively fundraise across our private equity platform and remain focused on delivering operating excellence across the portfolio and attractive returns to our limited partners.
We made progress in 2022, we recognize there is much more work ahead to deliver on our objectives. The next few years will be pivotal as we execute our strategic plan and continue to build the value our shareholders have come to expect. We've set the course. Now it's crucial to have the right leadership to execute on our plans. Our proposal to appoint Bobby Le Blanc as CEO following our next AGM will accelerate this progressive transition. To that end, we look forward to proactively engaging with shareholders in the coming days and weeks as we aim to move forward with our planned leadership transition. This will be an important milestone in the evolution of our business, Bobby and the team look forward to taking Onex to new heights in the years ahead, and I am sure they will. We're confident in our strategy and our future.
On behalf of our entire team, thanks to you for your continued support. I'll now turn the call over to Bobby. Bobby?
Good morning, everyone. Thank you, Gerry. Onex had a good Q4 underlined by improved investment performance. Investing capital per share was up 8% in the quarter and 7% through the year. We continue to deliver attractive risk-adjusted returns with our private equity investments up 7% in the quarter and 3% for the year. We also made solid progress in key strategic initiatives. As Gerry said, we know we have more to do. This is an important period in Onex's evolution. We are looking ahead with focus and commitment. Our Investor Day growth plan was largely predicated on increasing our fee-generating assets under management. In 2022, we raised over CAD 2.6 billion of fee-generating AUM.
Although not what we had projected at the beginning of the year, we believe it is a solid achievement in what was a very challenging year for markets. Our credit business raised over 2.1 billion of fee-generating AUM, with our CLO platform continuing to be a source of scalable growth and significant franchise value. We raised 1.7 billion in CLOs during 2022, very close to our $2 billion target, despite the market being constrained for much of the year. 2023 is off to a good start with the pricing of our 26 U.S. CLO last month, raising about $400 million. Ronnie Jaber and the team are actively managing our CLO portfolio and delivering good relative results.
Our U.S. CLO's underlying loan portfolio outperformed the Credit Suisse Leveraged Loan Index by 1% in the year, and we continue to be a top-performing manager globally in key industry metrics. We are adding new investors to our platform, drawn to our fundamental credit expertise, ability to navigate tough markets, and long-term track record. Sandeep Alva and the junior capital and direct lending teams are also delivering positive results. Following a strong first close for Falcon Seven in November, the team is busy putting money to work. Fund six has completed investing, and we are already executing deals for Fund seven. The market for mezzanine funding remains active with many attractive opportunities.
Our pace of investing, as well as our top quartile performance for funds five and six should benefit us as we aim to reach our target of 1.5 billion in a final close later this year. Our fee-generating AUM growth plans rely heavily on a meaningful contribution from credit. We are pleased with what the team has delivered this year and are excited to see what they can achieve in the years ahead. The fundraising environment for mid-market private equity, unfortunately, continues to be challenging. In addition to LP timing and PE over allocation considerations, we are also feeling the impact of LPs allocating more of their investing dollars to the larger consolidated alternative asset managers, given today's still uncertain environment. We are confident in the value of our client relationships and our ability to drive long-term investment performance for our LPs.
The team is working hard towards maximizing our second close for Onex Partners VI. We will continue to provide updates on our progress. ONCAP V held a close in December for LPs wanting to allocate in 2022, raising approximately $360 million, including Onex's commitment of 250 million. The team is seeing strong client engagement, which is not surprising given ONCAP's formidable track record. We're expecting a subsequent close next quarter. While LPs are generally taking more time to confirm commitments, we are confident in reaching our target fund size of 1.5 billion later this year. We are mindful that environments like these can be positive and opportunistic from an operational perspective. Recent performance within our ONCAP portfolio is proof of the outcomes we can achieve with proactive management.
As an example, PURE Canadian Gaming recently completed a sale-leaseback of its real estate assets, surfacing meaningful value and strengthening its capital position while also paying a distribution to investors. The International Language Academy of Canada, or ILAC, has performed strongly since pandemic restrictions eased. The company's recent recapitalization and related investor distribution contributed to the current gross realized MOIC for our investment of 2.7x. There are many more of these examples across our portfolios, a testament to our team's focus on delivering performance even in periods of market headwinds. Our private wealth business, Gluskin Sheff, also delivered solid results in the year. The business had gross sales of close to CAD one billion during 2022, following CAD 1.1 billion of gross sales in the previous year.
This is an impressive result, particularly as was achieved without increasing the size of our advisor team. We have ambitious plans to grow our private wealth assets under management. The team is making good progress with a transformational infrastructure and technology project. This work, when completed, will give us the foundation to quickly accelerate scale, both with advisors and investors. Last year, we also continued to actively buy back our shares, reaching a total of just over six million shares repurchased. As we always say, it's an opportunity we prefer not to have, but we have conviction in the value of our business. As Gerry said earlier, 2023 will be a pivotal year for Onex. I feel confident in our long-term growth plans and our team's ability to execute. We continue to make progress as we evolve into a truly multi-strategy alternative asset manager.
Yet, we know there's more to do. We are committed to doing what is needed, which includes ensuring we are allocating capital and human resources to our most attractive opportunities. Many of you have told us that fee-related earnings have the potential to be a real catalyst for our stock performance. We agree. Recognizing that FRE is about revenues and expenses, we are very focused on both. You can expect to hear more about the work we are doing on expense management as the year progresses. As we look ahead to our annual meeting, we hope that you see a clear path forward for Onex, and that we will have your support. As a 23-year Onex veteran, I feel a strong commitment and accountability to this organization, to our team, to our clients, and to you, our shareholders. Chris, with that, I'll now turn it over to you.
Thanks, Bobby. Good morning, everyone. Onex's investing capital per share was up 8% in Q4 and 7% in 2022, driven by fair value increases across our PE portfolio and the positive contribution from share buybacks. We bought back 2.4 million Onex shares in Q4, bringing our repurchases in 2022 to more than 6 million shares, which captured more than CAD 330 million of hard NAV for our continuing shareholders. Looking back a little further, over the last five years, Onex's investing capital per share has grown at an 11% CAGR despite some challenging markets. Our private equity portfolio continued to perform and was up 7% in the quarter. Returns were well distributed across the portfolio, with our four largest verticals all posting gains for the quarter and full year.
As Bobby mentioned, our PE investments provided attractive risk-adjusted returns in 2022, with a net gain of 3% compared to declines of about 18% for the S&P 500 and the MSCI World Mid Cap Index, demonstrating the value of a diversified private equity portfolio. Turning to credit, we generated a $7 million gain or 1% return from credit investments in Q4, driven by an increase in the fair value of our CLO investments consistent with strengthening leveraged loan markets. As a reminder, CLOs represent about 50% of Onex's credit investments. In addition to the attractive return potential, this allocation of Onex capital allows Ronnie and the team to issue CLOs in a wide range of markets and consistently grow the FRE of that business line.
Having said that, we've actually reduced the capital intensity of our CLO portfolio over the last couple of years and plan to continue to grow with little or no net increase in Onex's balance sheet exposure. Overall, our investing capital per share ended the quarter at $96.95, or just over CAD 131. Turning to the asset management side of the business. Onex's fee-generating AUM of 34.1 billion was up 4% in Q4 and 3% for the year. While gross capital raised was about 8% of the opening balance, it was short of our plans due to the challenging markets that Bobby referenced. Our CLO platform had a solid year, raising $1.7 billion in fee-generating AUM from two refinancings and three new CLOs.
The CLO team continues to build high-performing, defensively positioned portfolios, which are seeing increased demand from investors. As Bobby mentioned, our U.S. CLOs' underlying loan portfolios outperformed the Credit Suisse Leveraged Loan Index by 1% in 2022. In a year that saw default rates creep up to 1.2% in the U.S., we maintained a 0% default rate and ended the year in the top decile in terms of CCC exposure. Following on the heels of a European CLO in November, Onex was one of the first managers to price a U.S. deal in 2023. All of its debt tranches were oversubscribed with nearly 30 unique investors across the structure, including seven investors that represent new relationships. Turning to fee-related and distributor earnings.
Overall FRE in Q4 was negative $4 million, including a $1 million loss from the asset management platform. The improvement in FRE from the third quarter was primarily driven by a reduction in incentive-based compensation. FRE for the year was negative $44 million, adjusting for an underaccrual of 2021 compensation that was therefore expensed in 2022, we were essentially flat to the prior year. As a reminder, we do expect a reduction in Onex Partners management fees in 2023 when OP V exits its commitment period, and we begin accruing fees on a lower base associated with the initial closes of OP VI. As we progress on fundraising in 2023, we'll keep you updated on the near and long-term impacts to FRE.
While our asset managers are focused on growing FGAUM and management fees, we are also committed to optimizing our cost structure. After a couple of years of significant growth in our cost base to support the launch of many new platforms and products, we expect to find meaningful opportunities to improve go-forward margins. Looking at distributable earnings, we generated $67 million in Q4, driven by PE and CLO distributions. For the full year, Onex had distributable earnings of $308 million. Finally, an update on Onex's carried interest opportunity. We ended the year with $281 million of unrealized carried interest. The Q4 increase was driven by Onex Partners IV, reflecting the recovery of mark-to-market losses from earlier in the year and the magnified impact of the catch-up phase of that fund's waterfall. We continue to see meaningful upside for shareholders from carried interest.
Onex had an interest in nearly $26 billion of carry paying AUM at year-end. All in all, Onex's performance in 2022 was mixed. A relatively strong increase in investing capital per share, but progress in growing FRE delayed by a difficult fundraising market. Looking forward, we expect the PE platform to drive shareholder value in 2023 through attractive net returns on shareholder capital. Whereas fee-generating AUM growth in the credit platform should accelerate in 2023 and drive a marked improvement in FRE contribution from that platform. Even in an uncertain environment, our investing expertise, strong balance sheet, and network of relationships will allow us to build value in the years ahead. That concludes the prepared remarks. We'll be happy to take any questions.
Certainly. Ladies and gentlemen, if you have a question at this time, simply press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, please press star 11 again. Our first question comes from the line of Nik Priebe from CIBC. Your question please.
Okay, thanks. Some of the U.S. competitors have suggested potential for a relatively more healthy fundraising environment in 2023. Are you able to update us on progress at OP VI and just when we might expect to see a second close on that fund?
Hi, Nik, it's Bobby Le Blanc. Yeah, people were, or LPs were, definitely over-allocated in 2022, or some are still over-allocated, in 2023. I think it's really LP specific. Some of it's, you know, regions of the world specific in terms of people wanting to get more money in PE than they've had historically. But it's clear that it's taking longer to get commitments in this market than it has been in our history. That's not just us, as you saw with the, with the other big U.S. players announcing. We're in a cycle, right? In terms of our PE business. Again, ONCAP and Falcon Seven, we still are planning on closing those funds this year, and we feel confident about the targets.
I do expect OP VI to likely go into the beginning of calendar year 2024. We're gonna target to have an update for you on our second close, what we're calling internally 1B, by the end of Q2.
Okay. Very good. Just a second question on buybacks. Share repurchases were pretty healthy in the quarter. You know, just in the context of being 87% invested, is there a minimum cash balance you'd wanna maintain just in the context of existing commitments to the funds? Or would you expect to remain, you know, pretty active over the course of this year if that, you know, the current magnitude of the discount to NAV persists?
Yeah. Hey, Nick, it's Chris Govan. I don't think we're anywhere close to our minimum cash balance today. We're, we're very comfortable with our liquidity position. I would say, though, that given the markets that we're in, including fundraising markets, we do believe there's gonna be some pretty exceptional opportunities for us over the next handful of months and the balance of the year to, you know, on one hand, invest through some of our platforms, but in a way that probably provides real platform value, where, you know, our balance sheet can be used to support the extension of a platform so that in the long run we've got a better platform from an FRE perspective.
The other thing, you know, there's a lot of GPs out there obviously living in the same fundraising market we are that don't have a balance sheet. I think we'll be open to, you know, potentially growing our business inorganically. We're probably a little bit more conservative on the stock buyback right at the moment, given how invested we are, as you pointed out. But should our liquidity improve, we'll be right back at it 'cause obviously we've got great faith in the intrinsic value of our shares and think it's a screaming buy at the current price.
Understood. Okay, that's good color. That's it for me. Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Geoffrey Kwan from RBC. Your question please.
Hi, good morning. Just wanna follow up on the last question with Chris. Your comment, it sounded like you may look to, within some of your platforms, make acquisitions to try and grow and scale those up and grow the FRE. Is that correct? Just, and Bobby maybe, or Gerry in general, just comment on kind of the monetization environment and the acquisition pipeline. Obviously, it's choppy out there, just wanted to get your latest thoughts.
Yeah. Again, when we laid out our strategic plan, what, 16 or 18 months ago, that plan was all organic. When you have market turbulence like you're seeing today, it's not that we are, you know, about to announce a new acquisition for the FRE platform, if you will, but I'd like to have the liquidity at hand to be able to take advantage of market dislocations. Right? Again, as Chris said, as we get more liquidity in from monetizations, you know, over the coming months or quarters, once that cash position begins to get a little bit higher, obviously we're gonna be back in the market, buying as many shares as we can find.
I just think these times are actually quite good to have strong liquidity to be able to take advantage of opportunity. In terms of the pipeline on the PE side, you know, it's relatively slow. Like, the credit markets haven't opened up to any meaningful extent, given that their people are not coming to market with assets because they don't think they're gonna be able to maximize price. Some people are still trying to come to market, given they're trying to post DPI for fundraising or for other reasons. Where I think we're gonna begin to see better pipeline is in corporate carve-outs, which we haven't seen for almost a decade in any meaningful way.
The cost of capital at these corporations is also going up and for a long time, given they could essentially borrow for 0, there wasn't a lot of scrutiny in terms of how to fund the growth of the business. I think that's gonna begin to change. Strategic decisions are gonna have to be made. Between that and founder-owned businesses, we're spending most of our time there rather than waiting for the secondary market to improve. We've always tried to rely less on the secondary market for obvious reasons, but overall, you know, it is not a good market to buy. It's a good market to buy, there's just not a lot of inventory. Yeah.
Got it. just going back to your comments on the fundraising and then just trying to take this in comparison to your comments from last quarter. I mean, would you say that the fundraising environment, how you feel about it today is unchanged versus last quarter? Would you say it's a bit more cautious in terms of your outlook or maybe even a little bit better than what you were saying last quarter?
No, I think it's about the same. There's been no step function change one way or the other. Again, it's taking longer, you know, to grind out getting the commitments than we've been used to historically. That's as an OP. That's like across our platform. It's just taking a bit longer. No, I wouldn't say it's gotten better or worse. I'd say it's about the same. The overall market-
Okay, just my last... Oh, okay.
Yeah, sorry. Go ahead.
Just my last question was, you know, I think you made a comment earlier about LPs, some of them may be consulting some of their investments with other alternatives or larger alternatives managers. Does that have you think about, you know, Onex's product offering maybe expanding into other verticals? If so, is it something that doing it organic versus acquisition has more appeal?
Yeah, look, we're studying all of those things. I think where some of the bit larger players have had success is in, you know, bundled sales of, like, you know, multi-billion dollar commitments with an LP where they're doing business across the platform. That's obviously somewhere we'd like to get ourselves as well. We are constantly looking for ways to build on our PE and credit businesses, and those ways are both organic and inorganic. We would be open to longer term other legs of the stool if we could find the right partner and the right culture fit with another firm or with an acqui-hire of some sort.
Yeah, we're constantly looking at those things, and I think those opportunities may actually be, more, you know, there may be more of them, right? Just given the current environment, which comes back to the liquidity point that Chris and I were talking about.
Okay, great. Thank you.
Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Graham Ryding from TD Securities. Your question please.
Yeah, Bobby, just on that consolidation theme, like does it make sense to consider being a seller at all? Do you have any assets that you think would be attractive, and you're trading at a big discount to your NAV, so the market's not giving you much value for the asset management business? Are you considering anything from that lens, or are you only considering sort of scaling up and growing the business yourself?
Yeah, much more so the latter. Like, you know, several quarters ago, when we looked at the way our PE portfolio was trading, you know, in terms of our share price, right? There are secondary markets that have arisen. They're quite large actually, that bid for LP stakes, right? And PE portfolios. We're obviously the largest LP in our businesses. When, you know, we actually thought about, you know, trades where we would show shareholders that people were willing to pay more than you know, NAV for a chunk of our portfolio, it has an implied value of 0.30 to the dollar if you adjust for cash and marketable securities.
We've explored that market like the rest of the market, that the bid in that market was still well above, you know, where we're being valued by public shareholders, but not high enough where I'd wanna actually sell. But we are constantly looking at all of those things and to try to provide proof points to our shareholders that why we continue to buy back so many shares and why we think it's undervalued. Got it. That's helpful. You gave us a pretty good update, I think, on, you know, OP and ONCAP in terms of expectations around fundraising. Anything on the transportation fund and maybe just credit overall for 2023, what should we be looking for in terms of fundraising expectations? Yeah. Transportation's early innings.
It's getting good reception though, just in terms of the market that it's trying to address, which is not a highly saturated market in the PE or infra world, depending on where you'd slot that in. We think of that as more of a, you know, an in-between type return between a PE and infra platform. Falcon Seven is in the market real time. The target there is 1.5 versus their fund size of 1.2 last time. You know, mezz, generally, when you look at the opportunity set across the balance sheet, mezz has very attractive pricing right now. I expect that attractiveness to yield good results for Sandeep and his team, particularly because their last two funds have been first quartile.
They seem to be... You know, no guarantees in this role, but they seem to be just in the right spot in the capital markets, and with that track record, they should be okay. CLOs, look, we've done one already this year, but you really do need a somewhat healthy LBO market to really do a lot of CLOs. You know, we're really happy with the team that, you know, Ronnie's built both here in the U.S. and in London, but it's hard for me to predict how many CLOs we'll be able to issue this year. It's somewhat capital markets dependent, but they've also been pretty creative in figuring out ways to get them done even in this market. Overall, I feel good.
Those are the things that should be in market this year for Onex Credit. I don't think I'm missing.
The institutional fund-
Yeah.
-for direct lending-
Yeah.
-to go alongside the BDC with the other, I'll call it, needle mover-
Yeah.
in the year.
Yeah.
I think, Graham, you know, our plans would be to have, you know, significantly more, again, it's market dependent, particularly with the CLOs, but significantly more FGAUM raised in credit this year than in 2022. It should be an up year.
Okay. Understood. Just my last question would be for you, Chris. Just given your outlook for fundraising, which remains fluid, can you get FRE positive in 2023, or is this more likely a 2024 target?
I think overall, Graham, it's not gonna be 2023, particularly because, as I've sort of mentioned over the last few calls, there is gonna be a step down in fees for OP, just given the way... If the fundraising continues into 2024, which we fully expect, regardless how much things improve in 2023, when we go out of the commitment period for OP V, we're likely gonna see a step down in the private equity in-year fees. It's not gonna be a 2023 event. I think what you should keep an eye on, and what we'll be sort of highlighting over the course of the year, is the progress of FRE growth within the credit business on a standalone basis.
sort of tying back a bit to your question about whether we've got businesses, within Onex that we think are valuable, and we certainly think we do have businesses that are valuable, today within Onex. I think you'll see some real progress at credit, in terms of their FRE contribution.
Okay. Understood. Do you know when that step down on OP V is gonna happen, or is that still fluid as well?
It's fluid because it really depends upon when we close out the fund. If we were to make the last investment shortly, then it would step down shortly. The outside date, unless we were to get an extension on the commitment period, is November.
Understood. Okay. That's helpful. Thank you.
Thank you. One moment for our final question. Our final question for today comes from the line of Scott Chan from Canaccord. Your question, please.
Yeah. Thanks a lot. First question just on Gluskin Sheff. You talked about the gross sales being really strong last year to CAD 1 billion, you did have net outflows or modest net outflows implying some significant gross redemptions and a high redemption rate relative to peers that we track. It doesn't seem like the issue is on the gross sales side but on the redemption side, I was wondering if you could comment on that part of it. Yeah. There were redemptions, there's no question about it. I think there were net was CAD 200 million or maybe CAD 300 million, if I recall correctly. I don't have the numbers in front of me.
There were some larger redemptions related to a couple of institutional clients and a couple of estate planning situations, if you will, that were abnormally large. I continue to see Dave make good progress on the filling of AUM. I do expect the redemptions to get more muted over time relative to the dollars coming in. That we were absolutely 200 million net negative inflows versus outflows.
Okay. Then on the private equity side, when you break out your now performance by segment, your four core ones continue to do well. The last one, consumer and retail, which
Does comprise eight businesses, but it's the lowest proportion, you know, was down quarter-over-quarter and down 26% year-over-year. Is that more of a segmented, you know, issue, you know, within private equity and that consumer and retail, or are there specific investments there that you would call out that impacted that?
No, there's no business that I would call out to say, you know, we've got a business in trouble that's making up most of that decline. It's really, you know, it's getting more and more difficult in retail businesses to deal with inflation and wage pressures. You're just seeing the effect of that sort of across that part of the portfolio more so than in our other segments.
Okay. Chris, just lastly on your NCIB, you said you're, you know, pausing after, you know, being aggressive the last 2 quarters and in 2022, and you also talked about liquidity and sourcing liquidity. I was wondering if you could maybe elaborate on that, if you see some near-term events, perhaps with your direct investment, public investment or, you know, maybe lasting monetization opportunities.
Yeah. I don't think, Scott, that I would signal any specific source of liquidity. I don't think that's sort of been our strategy. We don't think that's the right thing to do, to talk about particular opportunities that we might be thinking about. But look, we've got a large private portfolio with 30-some names. We've got a significant amount of our value in five or six public companies across the portfolio. Although it's difficult markets, you know, from time to time it's the right time to sell businesses even in more challenging markets just because of where you're at in the investment thesis.
When I just sort of step back and think about that size of the portfolio, that much of it in public names, it sort of just makes sense that one should expect that we regularly have liquidity events.
Okay. Thank you very much.
Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Gerry Schwartz for any further remarks.
Thanks, operator. Especially thanks to everyone for joining us today. We have had really nice support from shareholders, and we continue to appreciate, really, truly appreciate that support. We look forward to continuing this conversation, particularly as it comes up in the next quarter. Thanks, everyone, and see you soon.
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.