Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) Q4 2024 Earnings Call Transcript

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) Q4 2024 Earnings Call Transcript February 24, 2025

Clear Channel Outdoor Holdings, Inc. misses on earnings expectations. Reported EPS is $-0.04 EPS, expectations were $0.03.

Eileen McLaughlin: Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings, Inc. 2024 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the conference over to your host, Eileen McLaughlin, Vice President, Investor Relations. Please go ahead. Good morning, and thank you for joining our call. On the call today are Scott Wells, our CEO, and David Sailer, our CFO. They will provide an overview of the 2024 fourth quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International BV.

We recommend you download the 2024 fourth quarter earnings presentation located in the financial information section of our investor website and review the presentation during this call. After an introduction and a review of our results, we will open the line for questions. Before we begin, I would like to remind everyone that during this call, we may make forward-looking statements regarding the company, including statements about its future financial performance and its strategic goals. All forward-looking statements involve risks and uncertainties, and there can be no assurance that management’s expectations, beliefs, or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and our filings with the SEC.

During today’s call, we will also refer to certain measures that do not conform to generally accepted accounting principles. We provide schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of the earnings presentation. When reviewing our earnings presentation, it is important to note that as of December 31, 2024, we have classified our Europe North segment and Latin American businesses as discontinued operations for all periods presented. Additionally, our Europe sales segment, including the business in Spain, was classified as discontinued operations in 2023. The consolidated results include the Americas segment, airport segment, and Singapore. Also, please note that the information provided on this call speaks only as of today, February 24, 2025, and may no longer be accurate at the time of a replay.

Please see slide four in the earnings presentation. And I will now turn the call over to Scott.

Scott Wells: Good morning, everyone, and thank you for taking the time to join us today. Our recent agreement to sell our Europe North segment as well as the recent sale of most of our businesses in Latin America marks significant progress in the execution of our plan to optimize our portfolio and focus on our higher-margin US business. To date, we have closed deals amounting to approximately $120 million and have agreed to sell our Europe North segment for $625 million. We are also optimistic about our ability to divest our businesses in Spain and Brazil, given their strong performance. As we said all along, we believe these sales will increase optionality and reduce risk in the business and focus 100% of our efforts on driving growth in our most profitable and valuable segments.

We anticipate prioritizing the use of sales proceeds after retiring the $375 million in CCIBV Term loans. To retire the most advantageous debt in our stack as permitted in our agreements to reduce cash interest and increase AFFO. During the fourth quarter, our America segment delivered record revenue of $311 million, representing an increase of 4.1% driven by strength in digital and local sales, which was in line with our guidance. As we previously noted, throughout the year, national remains somewhat choppy. However, we continue to win new business as a result of the sales force. Airports continued to perform well in the fourth quarter, with revenue increasing 4.3% to a record level of $116 million compared to a robust performance in the prior year and in line with guidance.

Our airports team delivered strong results throughout the year with consistent national demand for our premium assets and record travel activity. While the rate of growth normalized over the course of the year, we continue to see consistently strong demand. On a consolidated basis, we generated revenue of $427 million during the fourth quarter, representing an increase of 2.6%, which reflects the impact from a loss of a contract in Singapore as of December 31, 2023. Excluding Singapore, revenue from the fourth quarter for our America and airport segments was up 4.1%. For the full year, we generated consolidated revenue of $1.505 billion, representing a 5% increase over the prior year. Excluding Singapore, revenue for our American airport segments was up 6.6%.

Turning to 2025, we expect strength in our business to build as the year develops with healthy revenue, adjusted EBITDA, and AFFO growth. Fueling our optimism, we are benefiting from the more diverse revenue profile we have been building over the past few years, as we have more levers to grow our top line. Our roadmap for growth remains centered on expanding our digital footprint, strengthening our data and analytics capabilities, and strategically growing our sales force. Building on our radar platform, we recently launched our CCO in-flight insights measurement solution enabling advertisers to assess the impact of their out-of-home campaigns on store visits and gain insights into audience behaviors while campaigns are still live. We believe these initiatives are elevating our ability to make inroads with brands that have not been utilizing out-of-home to connect with their target audiences.

We are also seeing the benefits of our expanded sales force and verticalized focus where we have added professionals with experience and relationships in our target verticals. Beyond building business in pharma, we are laying the groundwork to grow our presence in the auto and beverage categories as well. Finally, once we complete the Europe North divestiture, we will be in a position to take steps to further address our cost structure through zero-based budgeting. As we prioritize our spending to drive growth in our America and airport segments, all of these efforts are aimed at strengthening our higher-margin US businesses and enhancing our ability to organically grow adjusted EBITDA and AFFO, with a priority to reduce leverage and strengthen our balance sheet.

A central goal in our focus on enhancing shareholder value. Turning to our forecast, full-year consolidated revenue is expected to reach between $1.562 billion and $1.607 billion, representing a 4% to 7% increase over the last year. Dave will provide a detailed overview of our guidance in a moment. In the current quarter, we are continuing to see revenue growth in our American and airport segments. So overall, we are pleased with the progress we are making in executing on our plan. I would like to thank our company-wide team for their continued contributions to our success. I especially thank our colleagues in Europe, North, and Latin America for their hard work and operating focus throughout the sales processes. With that, let me hand the call over to Dave.

David Sailer: Thanks, Scott. Please see Slide five for an overview of our results. As Eileen just mentioned, as of December 31, 2024, we have classified our Europe North segment and Latin American businesses as discontinued operations for all periods presented. Additionally, our Europe sales segment, including the business in Spain, was classified as discontinued operations in 2023. Moving to our consolidated results, which include the America and airport segments. The amounts I refer to are for the fourth quarter of 2024, and the percent changes are fourth quarter 2024 compared to the fourth quarter of 2023 unless otherwise noted. Now onto the fourth quarter reported results. Consolidated revenue for the quarter was $427 million, a 2.6% increase.

Loss for continuing operations was $1 million, Adjusted EBITDA for the quarter was $145 million, up 2.5%. AFFO was $37 million, a 1% increase. On to slide six for the Americas segment fourth quarter results. Americas revenue was $311 million, up 4.1% with growth in both digital and print billboard revenue. Digital revenue, which accounted for 39.5% of America revenue, was up 7.6% to $123 million. Local sales accounted for 62.3% of America revenue and were up 6.9% on a comparable basis. This is the fifteenth consecutive quarter local has grown year over year. National sales accounted for 37.7% of America revenue and were flat with the prior year on a comparable basis. Direct operating and SG&A expenses were up 6.5% to $174 million due in part to higher variable incentive compensation and a 3.6% increase in site lease expense to $93 million, mainly driven by the new roadside billboard contract with the New York MTA.

Segment adjusted EBITDA was $137 million, up 0.47%, a segment adjusted EBITDA margin of 44.1%, down from the prior year, primarily due to the ramp-up related to the New York MTA roadside billboard contract. Please see slide seven for a review of the fourth quarter results for airports. Airport’s revenue was $116 million, up 4.3%, with strong advertising demand led by the Port Authority of New York, New Jersey, San Francisco, and Denver airports. Digital revenue, which accounted for 63.9% of the airport’s revenue, was up 1.5% to $74 million. National sales accounted for 63.9% of airport’s revenue, were up 10.2% on a comparable basis. Local sales accounted for 36.1% of airport’s revenue and were down 4.7% on a comparable basis. Direct operating and SG&A expenses were up 2.6% to $83 million.

The increase is primarily due to a 3.2% increase in site lease driven by lower rent abatements and higher revenue. Segment adjusted EBITDA was $33 million, up 8.9%, with a segment adjusted EBITDA margin of 28.2%. This elevated margin is related in part to rent abatements that are not expected to continue in future periods. Moving on to CCI BV on slide eight. Clear Channel International BV, which I will refer to as CCI BV, is an indirect wholly-owned subsidiary of the company and the borrower under the CCI BV term loan facility. CCI BV includes the operations of our European businesses, which have been classified as discontinued operations. As of September 17, 2024, it also included operations in Singapore, which were sold to another indirect foreign wholly-owned subsidiary of the company.

Historically, the financial results of the Singapore operations were immaterial to CCI BV. We reported results of the Europe South business as discontinued operations in the CCI BV consolidated statement of income. However, because all CCI BV businesses are now sold or held for sale, we have gone back to reporting CCI BV consolidated results, including businesses that are sold or held for sale. As follows, CCI BV results for the fourth quarter of 2024 compared to the same period of 2023 are as follows. Revenue decreased 13.7% to $224 million from $260 million, primarily due to the sale of the business in France on October 31, 2023. Operating income was $42 million compared to $38 million in the same period of 2023. Now moving to slide nine and our review of capital expenditures.

CapEx totaled $35 million in the fourth quarter, flat with the prior year. The increase in America was due to timing, and the decrease in airports was due to reduced spending at the Port Authority of New York, New Jersey airports as they are substantially built out at this point. Now on to slide ten. During the fourth quarter, cash and cash equivalents were $164 million, including $55 million held by discontinued operations. This represents a decline of $38 million as compared to the end of the third quarter of 2024, primarily due to cash interest payments. Cash paid for interest during the fourth quarter increased $17 million compared to the same period in the prior year, primarily due to the timing of interest payments in connection with the debt refinancing transaction that occurred in March of 2024.

Our liquidity was $346 million as of December 31, 2024, down $31 million compared to liquidity at the end of the third quarter. Our debt was $5.7 billion as of December 31, 2024, in line with the third quarter. Our weighted average cost of debt was 7.4%, also in line with the third quarter. As of December 31, 2024, our first lien net leverage ratio was 6.6 times. The credit agreement springing covenant threshold is 7.1 times. Under the senior secured credit agreement, the calculation of the first lien net leverage ratio excludes the impact of all businesses classified as discontinued operations, whether the sale is closed or pending. As a result, EBITDA from discontinued operations is not included in the calculation. Additionally, the calculation does not give effect to the anticipated net cash proceeds from the sales of our international businesses or any intended uses therefrom.

Consequently, our first lien net leverage ratio as of December 31, 2024, is higher than in previous periods and may not be directly comparable to such periods. However, all things being equal, after the paydown of the CCI BV term loans and the receipt of the Europe North proceeds and the proceeds from the sale of our businesses in Mexico, Peru, and Chile, we expect our first lien net leverage ratio to be considerably lower. Now on to slide eleven and our guidance for the first quarter and the full year of 2025. For the first quarter, we expect our consolidated revenue will be between $329 million and $344 million, representing a 1% to 5% increase over the same period of the prior year. We expect America revenue to be between $252 million and $262 million, and airports revenue is expected to be between $77 million and $82 million.

Moving on to our full-year guidance. We expect the consolidated revenue to be between $1.562 billion and $1.607 billion, representing a 4% to 7% increase over the prior year. Americas revenue is expected to be between $1.19 billion and $1.22 billion. Airport’s revenue is expected to be between $372 million and $387 million. On a consolidated basis, we expect the adjusted EBITDA to be between $490 million and $505 million. AFFO guidance is $73 million to $83 million, representing an increase of 25% to 42% over the same period of the prior year. And due to uncertain timing, it does not include the potential benefit of reduced interest expense. To be clear, this guidance does not include interest expense related to the CCI BV term loans. Capital expenditures are expected to be in the range of $75 million to $85 million, with a continued focus on investing in our digital footprint.

Additionally, we anticipate having cash interest payment obligations of $77 million in the first quarter of 2025 and $422 million in 2025. This guidance assumes that we do not repay, refinance, or incur additional debt. Upon the anticipated closing of the Europe North businesses, we will use the net proceeds after payment of transaction-related fees and expenses to prepay the CCI BV term loan facility. Excluding interest on the CCI BV term loan facility, we expect annual cash interest payments of approximately $394 million in 2025 and $393 million in 2026. Again, assuming that we do not repay, refinance, or incur additional debt. And now let me turn the call back to Scott.

Scott Wells: Thanks, Dave. To recap, we have made considerable progress in divesting our international businesses while strengthening our product offering in the US as we continue investing in our technology and strategically growing our sales force. We remain committed to selling our businesses in Spain and Brazil, which will complete our plan to focus on our higher-margin US business and generate cash for debt reduction. As we operate our simplified business, we are off to a promising start and expect to deliver growth in consolidated revenue and adjusted EBITDA in the year ahead. Over the last few quarters, to highlight our focus on cash generation, we have emphasized AFFO less discretionary CapEx. We continue to expect growth in that metric, but going forward with the simplification of our business, we will focus our comments on AFFO, for which we anticipate significant compound growth.

We expect this growth to be driven by adjusted EBITDA growth and debt reduction. Now let me turn over the call to the operator.

Operator: Thank you. We will now be conducting a question and answer session. For participants using speaker equipment, it may be necessary. Our first question is from Cameron McVeigh with Morgan Stanley. Please proceed.

Q&A Session

Cameron McVeigh: Hey, good morning. You guys have a morning. You provided a relatively wide guidance range for the first quarter. Is this conservatism, or is there more uncertainty out there now? Just curious any color you could provide there, and maybe the macro expectations that are baked into the guide would be helpful. And then secondly, if you could just walk through an update of how you are thinking margins should trend this year now that you have exited a few territories. Thanks.

David Sailer: You want to take both those days? Sure. From a guidance range, I mean, it is usually our normal range that we kind of put out the first quarter, but when you when I am thinking about the first quarter, there are a couple of uncertainties when you think about when went off went on in LA. Feel pretty comfortable with kind of where we are, you know, from an airport standpoint, and the guide is actually, I think, pretty tight in the first quarter. When you think about it for the year, obviously, you know, there is a lot that can go on between now and the end of the year. I mentioned, you know, what is going on in LA. Just from an economic standpoint, we have a new contract with the MTA. So that is going to ramp as the year goes on.

A little bit slower of a ramp as that contract ramps in the first part of the year as we get to towards the back half of the year. So I think that contract is going to ramp, and I think overall, when I look at the year, I think it is going to be up. We are off to a little bit slower start in the first part of the year. We are going to have growth across both segments. But I do expect that to pick up as we get back into the third and fourth quarter. So from a guidance standpoint, and what was the second question? I apologize. Margin Oh, from a margin standpoint. I mean, we have talked about this many times. When I think about the margins of our business, you know, what we have talked about before is that MTA contract ramps, you know, that will have an impact on our margins, you know, from an America standpoint.

And, again, the first quarter, and this is apparent for both the Americas and airport standpoint, in media businesses in general, you know, you are going to book, you know, more revenue as you get into the back half of the year, and your margins will build, you know, throughout the year. We will see a little bit of margin declines on the MTA contract. We have talked about airports, and we have had a lot of rental abatements because of COVID in 2023 and into 2024, and I think we have been pretty clear those will go away in 2025. So from a margin standpoint, we were definitely elevated, especially in the fourth quarter for airports, and, you know, that will come back down to more normal levels. I think we have talked about in the past on airports, we were in the high teens.

We will probably be in the 20% range as we get into 2025. You know, some quarters will be a little bit higher, probably ramp, you know, as you get later into the year. You know, probably a little bit, you know, tighter or smaller margins in the early parts of the year.

Cameron McVeigh: Makes sense. Thank you.

Operator: Our next question is from Daniel Alsley with Wells Fargo. Please proceed.

Daniel Alsley: Thank you. Good morning. You mentioned national ads were flat. Morning. You mentioned national ads were flat year over year in Q4. I was wondering what your expectation for national is in 2025 and what categories are seeing strength or weakness?

Scott Wells: Sure. So Yeah. I mean, I think the word we keep using on national is choppy, and that is really specific to the America National was, you know, quite good in airports all year long. It was up double digits in airports all year long. So the choppiness is more in the roadside business. You know, I think what we have seen is just some relatively big campaigns coming in and out over the last couple of years. There were COVID-related campaigns that were strong toward the end of 2023 that did not recur in 2024. Telecom came back in a pretty strong way over the course of 2024. It just has been a little bit choppy. And we are seeing, you know, those advertisers. We are having to do a lot more work to reliably get that money in, and that is why we have been focused on doing category development, doing the things we have talked around with data and so forth.

So I think as we look to the year, I think there are a couple of things that we think are tailwinds within national spending for this year. I think California in general, you know, coming out of the fires, of course, in Southern California, but particularly looking at San Francisco, Northern California, I think we are going to see some real strength in California this year. The early look there is that advertisers are, you know, looking at that region and coming back to that region in a pretty meaningful way. Again, particularly in Northern California, there is a little more uncertainty in Southern California. I think from a vertical perspective, we think that the media entertainment slate is better than 2024. And that should be something that is a positive for us.

We continue to see pharmaceuticals ramp. We think that will be good for us over the course of this year. And, you know, we do have efforts going into a number of other categories that we are looking to drive. And I am encouraged by what I am seeing in telecom, and I actually think the T-Mobile acquisition of Vistar is a positive data point within that broader category that it is an endorsement of the importance of out-of-home for telecom. I think those are some of the puts and takes, but until we get to the point where our pipeline is what is driving national as opposed to, you know, the varied in and out campaigns, it is going to remain a little choppy in that segment. We need to get sort of similar momentum as we have enjoyed in the airport segment.

Daniel Alsley: That is helpful. Thank you.

Operator: Our next question is from Jonathan Navarrotti with TD Cowen. Please proceed.

Jonathan Navarrotti: Hey, good morning. Just want to touch on the MTA billboard contract. Should we still be expecting 2% growth there for the America segment? And can we talk a little bit about the CapEx and EBITDA ramp related to the contract?

David Sailer: Sure. I mean, from an MTA standpoint, when I am looking at it from a full year, from a revenue standpoint, yeah, you are going to get a couple of points of growth, you know, on top of the Americas segment. Obviously, that is going to ramp a little slower in the first quarter, but it will ramp. We obviously, that contract started in November. From a CapEx standpoint, and that is going to run through our normal, you know, our normal CapEx. So you are not going to see a spike in the overall business from a spending standpoint on CapEx. You know, that will be part of our, you know, digital upgrades and in our normal, you know, kind of maintenance CapEx. Maybe it will be higher, obviously, in the first several years of the contract.

But I do not think you are going to see, you know, a spike as far as from our overall CapEx, and it is included in our guidance that we are thinking about. But that will help the contract as you are spending CapEx on that property as you get into the second, third, and fourth year because it will take those new boards a little bit of time to ramp.

Jonathan Navarrotti: Got it. Thanks. And, just the last one is on airport’s local revenue during the fourth quarter. I think I calculated there was a decrease there year over year. I am just wondering if maybe you could talk a little bit about that and if there are trends that we should be aware of. Thank you.

David Sailer: No. What I am if you look at it for the full year, I mean, it is up double digits. So just kind of the ebbs and flows. There were a few direct deals, just some comps that we had year over year. That roll up into the local number, but if you think about that local number for the full year, I mean, it is up pretty substantial. It is actually in the high double digits. Probably closer to 20%. So really no concerns from our standpoint on that fourth quarter number. And national was up. So overall, I think this segment performed really well, and it was, you know, when you think about that fourth quarter and where we were three or four years ago, I mean, that segment is up $30 million to $40 million. So it is performing quite nicely.

Operator: Our next question is from Avi Steiner with JPMorgan. Please proceed.

Avi Steiner: Hi, good morning. Thank you for taking the question. I have two here if I can. One, curious what the implied guide for corporate is in 2025. I apologize if I missed it. I hopped on a couple of minutes late. And then relatedly, I guess, as more assets get sold here and you get down to your kind of core US focus, I am curious if there is upside to that corporate number. And I have one follow-up. Thank you.

David Sailer: Well, from a corporate expense standpoint, which I am assuming you are talking about, how is it going? We had said in the past that our corporate expenses, you know, roughly $31 million of expenses. And I say that number is probably closer to mid-thirties at this point in time. We are continually working on that. I think you will see savings as we get into this year, obviously, as the divestitures are made. But, really, I think you will see more of an impact as we get into 2026. When we will still have all the recording, you know, we still have the companies that are signed but not closed. So a lot of that work is still ongoing. At this point in time, I, you know, I see a line of sight. You know, quite close to the mid-thirties. And I think that number will grow as we get later into the year and as we are working on it, you know, into 2026, you will see more expenses come out.

Avi Steiner: That is very helpful. Thank you. Then my last one, and thank you for the time, Scott, you have been talking about getting down to a core US-focused business for a long time. And while it took a little longer than expected to your credit, we are really right on the doorstep here. So I guess the question is, how do you tackle the balance sheet or how do you think about tackling the balance sheet from here while investing as you want in the US business? Are they mutually exclusive, you know, can you do both? And thank you again for the time.

Scott Wells: Thanks, Avi. Yeah. No. I appreciate the question and it however long it felt to you, I assure you it felt longer to us. So we are very pleased to be at a point that we are making the good progress that we have made. You know, I have said it in a few settings as we shift from divesting the European businesses, which has been a pretty substantial effort. Of corporate development, finance, just human resources. I mean, the amount of diligence done across all these businesses is just kind of staggering. As we get past that, we are going to be able to take the creativity and the energy that has been focused in that area and focus it on things we can do. And there are a few things that make me feel good about our odds.

I think thing one is that we are a very innovative bunch here, and we have some very creative ideas that we are looking forward to testing in the marketplace. That we think all of our stakeholders will value if we are successful. Cannot promise that they will succeed, but can promise to show similar doggedness in trying to drive those innovative solutions that are kind of win-win-wins. I think the other part that makes me optimistic is not a week goes by that somebody is not trying to get me to opine on the out-of-home sector to some investor, and I do not do any of those routinely, you know, particularly not in our quiet periods, of course. But I know there is a ton of research going on in this sector and I think we are a really interesting and really credible partner for people who want to invest in this space and that there might be some creative things we can do along those lines to create opportunities for growth maybe not using our capital, but maybe with us benefiting from, you know, the activity.

Again, cannot promise anything. We have not started working on that yet. But I think of those as kind of the more innovative and creative things, and then I think the other thing you have to factor in is we are going to have excess proceeds over the BB. And I think there are some creative things we can do to accelerate that AFFO growth that is going to allow us to, you know, bring down the interest expense and, you know, bring up AFFO, bring up cash flow, and, you know, start to get into the functioning high-functioning public LBO position that we aspire to be as opposed to the, you know, stuck in place public LBO that we have kind of felt like the last couple of years. So I am pretty upbeat on our prospects as we start to get these things done.

So hopefully, that gives you enough flavor without me giving away too much of the store here.

Avi Steiner: Oh, heck of a teaser. Thank you very much for the time, safe travels. Thank you. Thanks, Avi.

Operator: As a reminder, the star one on your telephone. Our next question is from Patrick Scholl with Barrington Research. Please proceed.

Patrick Scholl: Hi. Good morning. Just had a question on capital spending plans. I was just wondering with the focus with the greater focus on the US, do you anticipate sort of accelerating the pace of digital board installations? And I was also curious on how, I guess, trade uncertainty has kind of impacted those investment plans.

Scott Wells: Sure. So we have kept a pretty steady pace of adding signs to our portfolio, and I do not think we are going to particularly accelerate it, and that is at least partly driven by where our footprint is. There are three or four of our cities that are underpenetrated in digital that we are working very diligently to get opportunities to expand in digital and should those opportunities break, we will accelerate at that point. Much of the rest of our footprint we are doing a really good job of just kind of expanding around the perimeter and expanding the core of already robust digital offerings. You know, we have everything from markets that are in low single digits percent revenue all the way to markets that are 60% digital revenue.

And this is in roadside and airports. It is, you know, advanced of that in terms of the sort of spread. So I do not think we think that, principally, converting our own digital signs, setting aside the three or four cities where there are ordinance changes that could help us, is going to be our principal thing. We will continue to do that at a steady rate, but we are not going to, there is not a lot of upside in us just accelerating that. And then I think, you know, beyond that, what I was referring to with Avi may be a place that we creatively deploy some capital maybe in conjunction with partners and things along those lines, but I am speculating as that develops.

Patrick Scholl: Okay. And then just within the digital revenues that you generate on both billboards and airports, is there sort of a breakdown that you could provide on like the mix of local versus national within that?

David Sailer: No. I mean, I would look at it, and it is very similar to just kind of the overall business when we kind of break out local, national. I do not think it is going to be widely different, you know, those numbers when you look at it from a digital or printed sign. You know, from a client standpoint, international clients like digital. They like printed. It is the same on the local side, so I do not think it will be widely different.

Operator: Okay. Thank you. With no further questions in the queue, I would like to turn the conference back over to management for closing remarks.

David Sailer: Great. Thank you, operator. Thank you, everyone, for joining us today. We appreciate the interest and the time. I think the main thing I want to mention as we wrap up is that we understand we have a lot of moving parts in our financials and that it can be somewhat confusing as things go into disc ops and as we work the tail on transition services and bring down corporate expense. We appreciate that, and we have a plan to get an investor day together for the end of the summer, where we will be able to shed some further light and do some more unpacking of the kind of questions areas that people have had here. Just wanted to put that placemark out there and we will certainly be talking with you between now and then, but appreciate everyone’s interest and wish you a good balance of the week.

Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time. And thank you for your participation.