The Goldman Sachs Group, Inc. (GS) Earnings Call Transcript & Summary

Good morning. My name is Katie, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Fixed Income Investor Conference Call. On behalf of Goldman Sachs, I will begin the call with the following disclaimer. The presentation can be found on the Investor Relations page of our website and contains information on forward-looking statements. This audio webcast is copyright material of the Goldman Sachs Group, Inc. and may not be duplicated, reproduced or rebroadcast without our consent. This call, which is being recorded today, November 9, 2023, is being led by Philip Berlinski, Global Treasurer; and Sheara Fredman, Chief Accounting Officer and Controller. Thank you. Mr. Berlinski, you may begin your conference.

Thank you, Katie, and thanks to everyone for joining us this morning. Let's begin on Slide 1. Since our 2020 Investor Day, we have been focused on 3 main strategic objectives: growing and strengthening our existing businesses, diversifying our products and services and operating more efficiently, and we are pleased with our progress. We have strengthened our core franchises, grown our more durable revenues, improved our capital footprint and diversified our funding mix. These strategic enhancements are all credit positive. On top of that, over the course of this year, we have narrowed our strategic focus. 2023 has been a year of execution for Goldman Sachs, and we're confident that the work we're doing now provides us a stronger platform for 2024. The firm's 2 core businesses are market-leading Global Banking and Markets franchise and our Growing Asset and Wealth Management platform are both being positioned to deliver mid-teen returns through the cycle. Moving to Slide 2. Goldman Sachs' risk management culture has always been foundational to our strategy. While the operating environment has been volatile in 2023, we are well positioned to continue to navigate the challenging backdrop and support our clients. We remain confident in the robust framework, processes and control systems we have in place. The continued refinements that we make to our risk management framework in less volatile periods allow us to be well prepared for times of greater stress. We have been through a number of periods of volatility in recent years, and our firm has a strong track record of navigating those with success. We will continue to remain thoughtful about resource and capital allocation in this regard. Since the fourth quarter of 2019, we have increased our common shareholder equity by more than 30% and our average core global liquid assets by more than 70%. Meanwhile, we have decreased our unsecured borrowing as a percentage of the total funding by 11 percentage points. I will now turn to Sheara to cover the next slide.

Thanks, Philip. On Slide 3, we provide an overview of our loan portfolio. Prudently growing our lending activity has been a key strategic priority since our first Investor Day in 2020, and we have focused on doing so in a manner that is consistent with our overall risk management orientation. Our $178 billion portfolio is well diversified and highly collateralized. $37 billion or approximately 20% of our loan book is comprised of corporate lending, which largely includes funded relationship loans and strategic lending activity such as acquisition financing. Commercial real estate loans, net of ALLL represent only 14% of our loan portfolio. Of these commercial real estate loans, approximately 40% are warehouse loans or other indirect exposures, which are supported by lower look-through loan-to-value ratios as well as structural mitigants such as margin and recourse rates. Office loans make up only 1% of the overall loan book. In light of the ongoing uncertainty in the macroeconomic environment, we remain focused on controlled growth and diligent underwriting. Our overall reserve levels reflect our expected life of loan losses as well as our macroeconomic outlook. For the third quarter, our charge-off ratio was 1% and as of quarter end, our ALLL ratio was 2.9%. Philip, back to you.

Turning to Slide 4. In addition to my role as Global Treasurer, I also served as CEO of Goldman Sachs Bank USA. In this capacity, I'm able to drive strategic execution for our bank entities and ensure that we are fully supporting the firm's broader strategic objectives. We continue to grow our bank footprint as a percentage of the overall firm in order to optimize our funding and liquidity position. At the end of 2022, 34% of the firm's assets were in bank entities, up from 25% as of 2019 year-end. We have streamlined our bank entity structure globally by integrating Goldman Sachs Bank Europe or GSBE, under GS Bank USA. This allows us to migrate additional bank-eligible activities into our bank and better utilize our deposit base over time. We have been steadily migrating EU clients to GSBE and plan to continue international expansion out of this entity. We are able to trade non-U.S. equities, both physical and synthetic in GSBE and we're now conducting a portion of our European equity business here as well. We have made good progress in executing on our bank strategy in recent years, and I believe that we have significant opportunity to further improve the diversification and stability of our funding base and lower our cost of funding over time. That brings us to our funding mix on Slide 5. We have been very focused on diversifying our funding mix across channel, tenor, currency and investor type. Since 2019, we have grown our deposits by 112%, and they now represent 36% of our funding versus 28% as of 2019 year-end. This has been increasingly efficient given the growth of assets in our bank entities as we saw on the previous page, and we will get into more detail on deposits shortly. Another important source of funding for the firm is our secured channel, which is particularly valuable in supporting client activity. Like all our primary funding sources, we consider both diversification an appropriate term on structuring our secured funding portfolio. We conduct daily stress testing to ensure that we have sufficient liquidity for relevant activity. Now moving to Slide 6. At just under $7 billion, our year-to-date benchmark issuance has been significantly lower than 2022. We also issued $1.5 billion of preferred stock upon calling our outstanding Series J preferred for $1 billion. Our current expectation for 2024 is that we will revert to a more normalized level of benchmark issuance. That being said, we will remain dynamic in response to changing operating environment and supporting the needs of our clients. We continue to leverage our unsecured non-benchmark funding channels as less costly, more diversified funding options. Our largest nonbank benchmark unsecured funding source continues to be our global structured notes program, which provides us with diversified funding opportunities across products, issuing entities, regions, currencies and tenors. So for this year, we have raised $41 billion from this program with over 1 quarter of this issuance in non-U.S. dollar currencies. Now turning to deposits on Page 7. We have $403 billion of deposits diversified across tenors and channels. This represents 58% of our total unsecured funding liabilities as of the third quarter, which is well above the 50% target from our first Investor Day. While we are now in a more challenging deposit raising environment given the Fed rate hikes, substantially all of our deposits are interest-bearing, reducing the risk of deposit outflow. We remain fully committed to growing our deposit base. In transaction banking, we continue to focus on improving the quality of deposits by further developing relationships with investment banking clients and growing share with existing clients through additional payment and liquidity solutions. Going forward, we expect the rate of deposit growth in this business to be slower as we diversify the portfolio away from excess cash and lower value deposits. Let's move to Slide 8 on liquidity risk management. We remain committed to the conservative liquidity principles that govern our approach, holding excess liquidity to prefund any potential needs in the short-term stress, asset and liability management designed to ensure stability of financing, rigorous stress testing based on conservative assumptions and a well-maintained contingency funding plan. We have a long track record of prudently managing liquidity risk, and we are continuously refining our methodologies to reflect changes in markets and our business mix and our modeled liquidity outflow. In the third quarter of 2023, our global core liquid assets or GCLA, averaged $406 billion and the firm's eligible high-quality liquid assets or HQLA, averaged $216 billion. Our average liquidity coverage ratio and net stable funding ratio exceeded the minimum requirement of 100% at 125% and 117%, respectively, with comfortable buffers. I will now turn it back to Sheara to cover capital.

Thanks, Philip. Now moving to Slide 9. We remain committed to prudently allocating capital and improving the capital density of our business profile. As of the third quarter of this year, our common equity Tier 1 ratio was 14.8% under the standardized approach, 180 basis points above our current capital requirement of 13%. Our strategy to reduce the capital intensity of our business is resulting in sustained multiyear progress. We've reduced our stress capital buffer by 110 basis points since the onset of the framework including an 80 basis point reduction this year. This reduction will allow us to continue to remain nimble in dynamically deploying capital to support our client franchise. This progress has been driven in large part by our success in reducing our historical principal investment portfolio within AWM. Since the end of 2019, we have reduced this portfolio by approximately $43 billion. This year alone, historical principal investments are down by more than $9 billion. We are on track to achieve our 2024 year-end target of a historical principal investment portfolio below $15 billion. At the same time, we've been focused on thoughtfully managing our risk-weighted asset footprint in order to effectively allocate and deploy RWAs in support of the firm's broader strategic priorities. For example, within FICC, we continue to emphasize growth in our financing business. This has not only been beneficial from a capital perspective under the current regime but we expect it to be even more so once the Basel III reforms are ultimately enacted, as I will discuss in more detail momentarily. We also remain focused on delivering sustainable capital returns to shareholders. Given the uncertainty around the capital rules at this time, we continue to expect fourth quarter share repurchases to be more moderated versus the third quarter. We remain committed to paying our shareholders a sustainable and growing dividend. Now let's turn to the Basel 3 proposal, which is covered beginning on Slide 10. These proposed reforms represent one of the largest changes to banking regulation since the global financial crisis. But before looking forward, we need to look back. Between the year-end of 2007 and 2022, Goldman Sachs grew its common equity by 2.7x, driven by the original Basel III requirements as well as the stress capital buffer framework. As these new rules are currently proposed, we would expect an additional increase to our capital requirement of approximately 25%. So we are confident in our ability to adjust our activity to meet these new requirements. We believe that the rules as proposed, go too far. As you can see on the slide, the gap in capital standards between the U.S. and the European G-SIBs continues to grow, despite one of the key objectives of the reforms being to improve comparability. Dodd-Frank and other reforms have already significantly raised capital standards for the biggest banks and have drastically improved the safety and soundness of the banking system, especially in the United States. Not only did the U.S. bank substantially increase their capital levels in the last 15 years, they also increased liquidity and simplified their businesses, which has translated into banks for the most part, passing the ongoing annual stress test conducted by the Federal Reserve. Moving now to Slide 11. The proposal includes both broad impacts that will raise capital across all businesses and more targeted impacts, particularly for trading businesses. For example, changes in operational risk calculations would increase capital across all businesses, given that it's based on the firm's revenues, amplified by historical operational losses. On the other hand, higher capital requirements for market risk, credit valuation adjustment and securities financing transactions specifically impact banks trading and derivative businesses as well as the securities borrowing and lending businesses. The proposal also introduces higher risk weights for equity investments, which will primarily impact asset and wealth management businesses. Our projection of the potential increase to the firm's risk-weighted assets from the Basel III proposal is primarily driven by operational risk, market risk and CVA changes, with operational risk and CVA fully additive to the new framework. That said, we have a number of pre-existing strategic actions underway that we believe will ultimately be beneficial, including our planned sell-down of our equity investments as well as our significant investment in our modeling capabilities under the new market risk and CVA requirements. Now turning to Slide 12. Requiring too much capital will have negative consequences for the broader economy. First, we expect the proposal will increase cost of credit for businesses of all sizes. Second, U.S. competitiveness may go down, particularly given the more flexible implementation of the Basel III reforms already underway in Europe. And third, more activity may move to the unregulated shadow banking sector, which we believe will increase systemic risk. We, alongside clients and others in our industry, have been engaging heavily with our regulators and government stakeholders. And given this engagement, we expect that there will be ongoing debate and ultimately, changes to the proposed rules. I'll now pass it back to Philip.

Thank you, Sheara. Let me conclude with a few comments on Slide 13. As I noted at the start, we are highly focused on continuing to execute on our credit positive strategy. We are pleased with the progress we have made so far and confident in our ability to further strengthen the firm and unlock shareholder value. As we go forward, we will continue to focus on leveraging our strong capital and liquidity position, diversified funding mix and track record of superior risk management to drive continued strategic execution. With that, Sheara and I are happy to take your questions.

[Operator Instructions] We'll go first to Peter Troisi with Barclays.

So the regulatory agencies have proposed haircutting TLAC debt that matures between 1 and 2 years by 50%. So that naturally will just result in faster TLAC amortization. And if I just look at your 2025 maturities, that proposed change would affect, I think the 50% haircut would be over $10 billion. And then you also mentioned, obviously, higher RWAs coming with Basel Endgame that could have implications for TLAC as well. So just curious if you could talk a little bit about how these regulatory changes, how they affect, how you think about your TLAC buffers and ultimately, your debt issuance needs over the next few years?

Thank you for the question. I'll start with saying that we're currently not TLAC constrained. So it's obviously -- it's irrelevant, but it's not the only factor and how we think about our long-term issuance. I'll just reiterate also what Sheara said about capital. When it comes to liquidity, we've obviously had many -- we've obviously been live with NSFR since '21. We have many various constraints that we optimize around and manage our liquidity constraints around that. And so as I look forward, I don't think it's going to have a material impact in the way we think about our issuance plans. We have lots of different levers. We continue to move assets into the bank. And so as I said, we're currently not TLAC constrained. I don't think it's a big constraint for us on the go forward.

Okay. And then on Slide 5, the funding mix. How do you see that potentially changing given the smaller size of the consumer business, particularly if it continues to shrink from here?

I should start with the fact that our Marcus deposits both in the U.K. and the U.S. are absolutely strategic to the future growth of the firm, and we continue to invest heavily into both of those platforms. And so if you think about the mix of our funding deposits, especially consumer deposits will continue to pay an important role in that, and we continue to grow and invest heavily. And I have to say, given the competitive rate that we pay, we have very good client experience, and we continue to see growth in that segment. Obviously, depending on the path of the -- and the evolution of the consumer business, they may be slightly fewer -- less on the asset side. But again, that's a long-term evolution. And so if I think about our liability side, it's going to have very little impact given that deposits are -- remain and reside in AWM, and we continue to invest heavily. And then as I said in the script on our transaction banking business, which is also part of Platform Solutions, but not the consumer business, I think that we'll probably see slightly less deposit growth, but we -- through time, by deepening our relationship with our investment banking clients, we'll continue to improve the operational efficiency of those and make them more valuable to the firm through time.

Okay. If I could fetch just one more in, it sounded like the management team felt it's possible that there could be some changes to the Basel Endgame proposal. Maybe if you could expand on some areas that you think potentially could be changed.

Sure. Happy to. And we've -- since the proposed rule came out, we've been heavily engaged with the regulators and been having very fruitful conversations in terms of some of the components of the rule that we think may be disruptive to the capital markets and liquidity that exists in the United States today. I think to look at what may change, looking at how the European rule, which was finalized, maybe a good place to start. So as an example, there's some specific rules around secured funding transactions, so this is stock borrow and stock lending, how a haircut needs to work between the bank and the counterparty that they're trading with. That rule has not been implemented anywhere around the globe based upon everything that's been proposed and finalized to date. It's in the proposed rule that was issued by the Federal Reserve. We're hopeful that there'll be changes on that front. And then similarly, across the fundamental review of the trading book or FRTB, which is the new market risk rules, there's live discussions going on as it relates to how we think about calibration and correlation within that rule. And then at a high level, what's still yet to be addressed is the interplay between the Basel III Endgame and the stressed capital buffer. The United States is unique in that we have our peak to trough via the stress capital buffer, capitalized for every single day and how the Federal Reserve is going to address the relationship between the stress capital buffer and the Basel III Endgame, which they identified as something they need to address also remains open.

We'll go next to Robert Smalley with UBS.

I have questions around your cost of capital. First -- and with an eye toward preferreds, first, could you talk about your cost of equity at this point in the cycle. Usually, banks like to say it's around 10%. But given where rates are, it's probably elevated from that. And within that context, when we look at your preferred issuance, you did a 7.5% preferred, how is that efficient within that context? And how is not a 9% floating rate preferred efficient within that context. Further out, could you talk a little bit about your needs? Will you just be refi-ing preferreds that come up for call? And then ultimately and tagging on a little of Peter's question, in terms of RWA inflation down the road, do you see a need for more preferreds if you want to keep that 1.5% bucket filled? Is it important for you to keep that 1.5% bucket filled? How are you looking at all of that?

Yes. Thank you for the question. So I'll start with your cost of equity. Look, I think 10% is a typical way of thinking about it, so that's probably a fair starting point. I think I'll kind of move on to the question around preferred. So as you said, we did issue $1.5 billion of perpetual, 7.5% nonpreferred Series W. At the same time, we redeemed our Series J given that the spread there was wider than the Series W replacement. Look, we try to be as efficient as possible with our capital and funding structure. So we evaluate all options. We also look at both when we think about redemptions, I think you have to think about -- we have to think about both economic and noneconomic factors. So there's lots of things that go into that. And we obviously need to think about both regulatory and investor considerations. And so I think we will continue to evaluate and remain opportunistic based on the prevailing market conditions and liquidity positions. I would say, I mean, maybe sure if we can go on to Basel III Endgame. But obviously, if RWAs continue to increase, it's likely that the industry overall will have to issue more preferreds. I don't know, Sheara if you want to add anything on that?

Sure. I agree with what you said, Philip and I would just underscore the 150 basis points that banks are required to maintain between common equity Tier 1 and Tier 1 capital which is principally funded via preferreds as RWAs inflate in conjunction with the Basel III Endgame proposal, the expectation, as Philip noted, would be that, that capital would be built via press issuances.

And just as a follow-up, could you talk a little bit about -- you mentioned the economic and the noneconomic concerns. Could you talk a little bit about the non-arithmetic concerns or considerations that you use when you're looking at the preferred stack? And also, there's been talk about changing the leverage ratio. You're not bound by the leverage ratio, but is that something that would impact your preferred issuance as well?

Yes, I don't think we're impacted by the leverage ratio, and I don't think it will impact our preferred issuance. Look, there's obviously the economic factors, which I think are quite clear. When it comes to noneconomic factors, we have a lot of stakeholders, including the investor community. And so we obviously -- we meet with you on these calls, we have smaller group meetings as well. And so I understand, I get the feedback around kind of expectations around calls and some of these calls are close decisions. And so we think about both economic and noneconomic factor when we think about pref issuance. So I think there's not much more to add on that.

We'll take our next question from Scott Cavanagh with APG.

Just wanted to delve further into kind of your slide deck that said looking for a more normalized level of issuance going in '24. Given the backdrop of the changing consumer strategy at Goldman, the pending Basel III Endgame NPR, the TLAC changes, the subdued IB outlook and probably a subdued client demand, how should we really be thinking about that? Because if we look at '23 issuance, it was down substantially and that was followed by couple of years of elevated issuance. So could you give a little bit more context when we look at the amortization at like roughly $50 billion going forward? Just trying to get a little bit more context of that. And then on the -- on the capital inflation with Basel III, you put out the helpful guidance of 25%, rough. What is the actual RWA inflation that's baked into that given all the things that are going on within that proposal and then internally at Goldman with the evolving strategy?

Thanks for your question, Scott. So obviously, as you noted, this year's issuance has been quite low at less than $10 billion. And as I said in the script and you mentioned, expected to a more normalized level. And so just to put that into context and give a reference point, if you look at our recent years, there's been a few outliers. Obviously, we had over $60 billion in 2021. We've also had another outlier on the downside in 2019 of, I think, sub-$7 billion and so if you exclude the highs and the lows, you kind of get to a median average range of $20 billion to $25 billion. So I think, again, that's a good reference point for you to keep in mind. Ultimately, as you said, there are many, many factors that go into deciding on the size of the issuance, including client demands and different regulatory factors that come into it and the macro environment. And so we continue to be dynamic. As I try to show in the deck, we have lots of other levers in terms of raising both deposit secured and unsecured funding. And so I just wanted to give a reference point based on recent history. And I think then I'll pass it on to Sheara on your question around Basel III Endgame.

Sure. So we thought the most meaningful metric to provide to our various stakeholders was the expected increase in capital, which we've noted is 25% in conjunction with the proposed rule. We haven't yet quoted an RWA inflation number publicly but the main drivers of our RWA increases will be operational risk, CVA and the fundamental review of the trading book or market risk. The reason why we think capital is a more important metric is because there is an interplay between the RWA inflation from Basel III Endgame and its effect on the stress capital buffer, which uses RWAs in the denominator of its calculation as well as the G-SIB buffer, which also uses RWAs in one of the component of the denominator of its calculation. And so that's why we've quoted the 25% increase in capital, which we think is the most meaningful metric for our stakeholders.

So in another way, could we expect you to keep the same buffer that you have currently looking forward? So that way we can just kind of back it into it that way?

Sure. So our management buffer that we use to provide dry powder for opportunities that we see our clients present that we want to invest in, currently is between 50 and 100 basis points. We're obviously operating north of that range as we build capital associated with the proposed rule. Once we are live with the proposed rule, we will recalibrate that management buffer based upon the volatility that we experience in the RWAs, the opportunities that are presenting itself and obviously, ultimately what the final rule looks like.

Very helpful. And then lastly, we've had a lot of regulation or principles, laws passed on the climate and within that framework of how the G-SIBs need to look at it. So looking at the June submission of the climate scenario analysis, when it comes out in December, the aggregate report, the guidance on financial risk management and then the passing of the California climate disclosures, how should we be thinking about this? What lessons learned have you had? And how concerned are you about potential litigation going forward over these numerous potentially conflicting disclosure requirements?

Sure. Thank you for that question. It's an important area of focus by the firm. And in light of -- consistent with your question, there's lots of different stakeholders and governments around the globe with varying focuses on sustainability and climate and the disclosures that they're going to require of various constituents around the world. And so we have teams around -- across the firm that are focused on ensuring at each of the different go-live dates that we will stand ready, whether it's the European disclosures or the U.S. disclosures, which the SEC is still finalizing, that we will be in compliance with it. But I agree with you, it's a critically important area and because of the divergent views in terms of what will actually be required to disclosed, we work in constant with our lawyers to ensure we're doing exactly what the various rules require.

We'll go next to Keven Maloney with BlackRock.

Clearly, you've grown your bank and infused a lot of trading activity there. If I look at the numbers, it's gone -- trading assets gone from $40 billion to $80 billion since the end of last year to the third quarter. And just wondering how more you can put into the bank and how much do we expect to happen?

We haven't given any guidance on what we expect to happen. I would say that -- what I was trying to highlight in the script, if you think about our non -- our GSBE, our non-U.S. bank chain, we can put equities in there. Obviously, I think that's a very, very long-term and slow journey, but I think that the March will be to have -- to onboard more client native businesses there. And then if you think about the overall strategic imperatives of the firm, which is growing our financing business, most of that financing business can also exist in the bank. And so I think through time, we'll continue to see a shift towards moving assets to the bank entities. It's difficult to give exact numbers, but I think we have a short-, medium- and long-term path of moving more in. We can move a lot more in. And so it's just about executing that strategy, and that's going to take time because there's a lot of considerations from both the client side and regulatory issues in terms of the various jurisdictions that we operate in. But I just -- I would expect that to continue to grow through time.

Okay. Good. And just real quickly on the question about the preferred. Can we expect to see more issuance on an ongoing basis? Because obviously, you're going to try to reduce the RWA requirement, but it's obviously going to go up from what it is today. So can we see -- go to [ 1.5 ] or [ 2 ]? Or is it simply that you try to develop capital through internal generation, meaning earnings?

Yes. Look, I would say it's still just -- this is -- the rule is still just a proposal. So I don't want to get ahead of ourselves. But obviously, if the rule were to be passed the way it is, we'd have to issue more preferred through time. I think there's a long phase-in period. And so we have a lot of time to do that. And then as we normally do, we'll continue to look at all the available options that we have. And based on prevailing market conditions and liquidity and RWAs, we continue to evaluate and be opportunistic. But you should just remember, this is still just a proposal. And until we have the final rule, I think it would be premature to make strong assumptions around the future issuance.

We'll go next to Arnold Kakuda with Bloomberg Intelligence.

If I could hop back on to Basel Endgame and in terms of some of the assumptions there and I think -- is it fair to say that you're looking at your future requirements to be kind of in the range of, I think, the target that you had mentioned before, which I think is a little bit below the 13% requirement that you have right now?

Sure, happy to address. The way in which we like to talk about the impact of the proposal on the firm's capital is by talking in actual capital dollars versus ratio because even though the ratio will change, the actual capital dollars required will go up because the risk-weighted assets have gone up. And so that's why the way in which we quote the impact of the proposed rule on the firm, is a 25% increase in the required capital relative to where we stood at the end of the third quarter. And so that's the way to contextualize the increase associated with the proposal. And that's the fully phased. So that would be based upon the proposal, July of 2028.

Okay. And then -- because I think in the past, you had aimed for a lower kind of midterm requirement based on like a lower potential SCB and G-SIB. So that is incorporated or not?

So we had at our first Investor Day and then continue to reinforce the expectation that the firm's ratio will be somewhere between [ 13 ] and [ 13.5 ]. And that was under the expectation that we would be able to reduce our stress capital buffer as we reduce our historical principal investments within our Asset & Wealth Management segment. And as I mentioned in the prepared remarks, we've been able to achieve that with a 110 basis point reduction in our stressed capital buffer that we've experienced since that framework was implemented. As it relates to what our ratio target will be under the Basel III Endgame, that's going to be dependent upon the interplay between risk-weighted assets as based upon the final rule in the Basel III Endgame as well as how that denominator features in the stress capital buffer and the G-SIB requirements. And so therefore, that's why we tend to focus on capital dollars required versus ratio.

Thank you. At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs Fixed Income Investor Conference Call. Thank you for your participation. You may now disconnect.