Q3 2020 Weatherford International PLC Earnings Call
Ladies and gentlemen, thank you for standing by and.
Welcome to the Weatherford International third quarter 2020 earnings call.
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I would now like turn the call over to Sebastian <unk> Senior Director Investor Relations.
Sir you may begin welcome everyone to the Weatherford International third quarter 2020 conference call I'm joined today by Gibberish, Saligram, President and CEO, Carl Blanchard Executive Vice President and COO, and Keith Jennings Executive Vice President and CFO.
We will start today with our prepared remarks, and then we will open it up for questions.
You may download a copy of the presentation slides that correspond with today's call from the Investor Relations section of our website.
I want to remind everyone that some of today's comments include forward looking statements.
These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed herein.
Please refer to our latest Securities and Exchange Commission filings for risk factors and cautions regarding forward looking statements.
Our comments today also include non-GAAP financial measures has.
As noted in our press release the company adopted fresh start accounting in December 2019.
Our comments today include a comparison of the results of the predecessor and successor companies.
The underlying details and a reconciliation of GAAP to non-GAAP financial measures are included in our third quarter press release, which can be found on our website.
That I like to turn the call over to gibberish.
Thanks, Sebastian and thank you all for joining the call today, we looked on slide three.
Let me begin by saying, it's an honor to be entrusted the responsibility to lead.
I'm excited about our journey and opportunity for value creation we.
We are fortunate to have a talented committed and dedicated team that affords strong relationships with our customers suppliers and partners.
I look forward to seeing those continue to strengthen and flattish.
Before we get into the topics for today I'd like to recognize the for the nasty and resilience of the VAT affecting.
It has been a pleasure for me to see the concept of wanted by the flood in action and I am grateful for everyone's dedication to serving our customers and driving the business forward during a challenging year.
It's better to be booking collaboration resting got a foundation, both with a strong brand technology innovation and global footprint were key factors in me deciding to take on this role.
In my three short weeks I've already witnessed tangible demonstrations of all of the and I'm eager to learn more I.
Our senior leadership team has recently changed with the new CEO CFO and General counsel.
But keep the gaut, our beatty expedient than mature leaders and I'm very pleased to have a theme of this caliber companies held before.
Before turning it over to Carl who will give you some additional highlights from the quarter I'd like to thank him for his leadership over the past few months, it's a rare privilege Britain, becoming CEO does someone like Cogs to rely on and I'm grateful for his continued focus on driving leadership as we execute on our key priorities well what do you call. Thank you, Greg and once again.
Welcome to the one weatherford team.
Through our prepared remarks today, we will focus on our progress and four critical areas, which we've laid out on slide four.
That was our safety and service quality.
Bridging our product and service portfolio, expanding margins and enhancing our liquidity position.
I'm proud of how our team continues to deliver on these priorities. We made excellent progress on our cost saving efforts, having implemented the actions required to exceed our previously announced $800 million annualized cost savings target and we expect further cost and efficiency improvements going forward.
We improved our cash flow profile generating $107 million of Unlevered free cash flow during the quarter, an increase of over $300 million from the third quarter of 2019, and we continue to focus on the safety of our employees and their families managing returned to work place plans in line.
And with guidance from the home C.D.C. and local regulations.
We also strengthened our financial position with the closing of our financing transaction, which people touched on in his remarks. These.
These transactions meaningfully enhance our liquidity profile with Weatherford, having approximately $1.3 billion of total cash on hand at the end of September.
Slide five highlights recent trends for both rig count and drilling and completion spending in North America and international.
In North America third quarter drilling activity reductions were in line with our expectations average rig counts in North America declined 28% quarter on quarter.
Shut ins and production cuts were lifted slightly faster than anticipated, resulting in higher completion and workover activity Internet.
Internationally activity declines were again largely in line with our expectations for the quarter with average rig count declining by 12% sequentially.
Europe stabilized in the quarter and the recovery in parts of Latin America materialize faster than we had anticipated.
The Middle East and Africa saw an increased right of the activity declined largely due to customers adjusting spending to comply with OPEC plus production targets.
Notably despite these challenges we continued to meet our customers needs safely and efficiently and without disruptions to their operations. Our team in Brazil is just one demonstration of this by having now operated over 730 days without a lost time incident.
We also had numerous commercial and operational successes in Q3, which are highlighted on slide six.
Now I've mentioned previously how our organization adapted to the current situation both remotely from home and in the field throughout all of this change the Weatherfords teams spirit of collaboration partnership and discipline remain constant.
I think all of our employees across the globe for their sacrifice and hard work during these trying times.
Weatherford recently hosted the 15th annual weather pretty Enterprise software conference for Wesco as it is now having achieved yet another record attendance of over 500 customers from all over the world.
Well begin in 2005 as a user conference focused solely on sick Netscaler users is now the largest customer event and the industry's preeminent digitalization form.
This year, we hosted the event virtually in addition to production we expanded the idea to include drilling and completions offering as well, which is a testament to the breadth of whether its next generation digital technologies.
What makes this event unique is that our customers don't just a 10 they deliver significant portions of the conference presenting case studies that it tested as excess that we achieved using our technologies.
Weatherford is known for our Cigna and foresight production optimization platforms.
With Cigna and foresight on more than 400000 wells globally, we have set the industry standard for production 4.0, and have delivered incredible value to our customers, but equally important is how we have integrated digital technology across other product and service offerings.
So, let's turn to slide seven I'll.
I'll take you through some examples that demonstrate how we use whether it's digital technology to generate tangible results.
First we use automation and smart control algorithms during drilling to control fluid or gas influx is.
We've helped our customers drill over 3000 wells with our intelligent managed pressure drilling system recording nearly 1.4 million hours with an operating efficiency of 99.7%.
Second we use artificial intelligence and automation to eliminate subjective human judgment, when making facing connections. That's 2018, we deployed our baroque solution across the globe.
The result has been an average of roughly 10% reduction in the time to make up connections delivering significant rig time savings and approximately 10% reduction in damage connections.
The most important barrel technology reduces the size of crews required to perform a job and removes crew members from the rig and from the Red zone enhancing safety and cost.
Third we've established remote operating capabilities to plan and execute more efficient liner hanger, let's stop phishing and reentry jobs.
Its its introduction in 2019, the actually view platform has been used on over 300 jobs, resulting in a 60% improvement in non productive time.
And fourth we incorporated advanced analytics to increase production efficiency.
As an example through.
Through the application of our production optimization platform across 1700 wells on artificial lift and operate in the middle East achieved an average increase in production of about 6000 barrels per day, equating to approximately $50 million of incremental revenue per year for the client.
The solutions outlined above have helped us overcome the operational challenges we faced this year and they have accelerated the digital transformation by enabling our customers to achieve their goals. These solutions reduce the time it takes to drill wells improved service quality and decreased nonproductive time they reduce.
Slip costs and they increase the number of barrels per days.
Moreover, many of these solutions also help customers realize their safety goals by reducing personnel onboard the rig, particularly within the Red zone.
With that I'd like to turn things over to Keith to provide a financial update.
Thank you Carl.
Hi, I'm excited to join Weatherford and look forward to engaging with all of you during my time here.
Let's turn to slide eight and I will begin with a summary of our third quarter results.
Revenues in the third quarter were $807 million, 2% below the second quarter and 39% below the same period in 2019.
This sequential decline primarily resulted from reduced drilling activity in the middle East and Mexico, which were partially offset by low single digit growth elsewhere.
Third quarter, adjusted EBITDA was $104 million or adjusted EBITDA margin of 13%.
Despite the revenue decline during the quarter EBITDA margins reduce slightly versus prior year, but expanded over 300 basis points sequentially <unk> actions to expand margins as well as a onetime benefit related to capital sales from 2019.
This has resulted in favorable EBITDA decrementals defined as the change in adjusted EBITDA or the change in revenue.
Oh, a year over year EBITDA Decrementals were an impressive 15% during the third quarter and 7% year to date 2020.
Let me now provide a regional breakdown starting with the western hemisphere on slide nine.
Western Hemisphere revenue was $316 million in the third quarter grew 2% sequentially and declined 53% versus prior year.
Revenue in North America grew 2% sequentially outperforming the corresponding 28% decline in average North American rig count and in line with the estimated growth of hydrocarbon production in North America during the quarter.
Production and completion for PNC revenue increased 6% sequentially as producers lifted shut ins, which resulted in increased well completion and workover activity.
Revenues for drilling evaluation and intervention or de <unk> declined 6% sequentially due to lower drilling activity as well as changes in our business model to improve profitability within our wireline and drilling services product lines.
Additionally, both product lines benefited from seasonal activity increases in Canada.
Third quarter revenue of $141 million in Latin America grew 2% sequentially and declined 52% versus prior year.
PMT revenue declined 2%, while D. I grew at 5% with growth across both product lines in Argentina, and Colombia, where drilling activity began to recover from COVID-19 related shut down.
This was partially offset by lower customer spending in Mexico.
Segment adjusted EBITDA for the Western Hemisphere was $29 million in the third quarter and represents a significant improvement sequentially adjusted segment EBITDA margins of 9% improved over 700 basis points sequentially and were in line with prior year.
The improvements were driven by both increased activity and the impact of the company's cost reduction actions.
Let's move now to the eastern Hemisphere turning.
Turning to slide 10, Eastern Hemisphere revenue was a $491 million in the third quarter declined by 4% sequentially and 23% versus prior year revenue was in Europe Sub Saharan Africa, and Russia grew 1% sequentially and declined 34% versus prior year.
PNC revenues declined slightly driven primarily by lower product sales in Russia, and sub Saharan Africa.
D.I. revenues increased by 2% sequentially, driven primarily by the easing of coal bid related activity restrictions in Europe.
Revenue in the Middle East North Africa, Asia, a $319 million were down 6% sequentially and 15% versus the prior year.
PNC revenue was essentially flat sequentially and de <unk> revenue declined 13% due to lower drilling activity on.
On a sequential basis activity generally declined across the region, except for Kuwait, where we experienced mid single digit levels of growth.
Segment EBITDA for the Eastern Hemisphere was $104 million in the third quarter and increased $4 million sequentially. Despite the reduction in revenues adjusted EBITDA margins of 21% increased 160 basis points sequentially driven by the company's cost savings efforts and a 12 million.
All the onetime benefit related to capital sales from the third quarter of 2019, which were partially offset by lower activity levels in the middle East.
Slide 11 highlights the components are for year to date liquidity enhancements.
Company generated $105 million or free cash flow in the quarter, which is a significant improvement from the prior years level of negative $229 million.
This year on year improvement was driven by the monetization of networking capital Capex reductions of over 50% year on year and the Nonrepeat nonrepeating cash outflows associated with our financial restructuring.
The third quarters free cash flow, including $34 million of severance and restructuring payments our positive free cash flow combined with the financing activities resulted in weather for closing the quarter with approximately $1.3 billion of cash on hand.
Let me also touch briefly on the financing that we closed during the quarter.
In late August the company completed a related set of transactions, which included.
Issuing $500 million of senior secured first lien notes terminating our senior secured asset based lending agreement.
Amending an increasing the size of four senior secured letter of credit agreement to $250 million.
Carl noted the transactions meaningfully enhanced our liquidity, where the company closing the quarter with approximately $1.3 billion of total cash on hand at the end of September further.
Further by terminating the ABL, we eliminated the risk of a potential breach of the associated financial covenants and alleviated other complexities, including the going concern language included in prior financial statements.
With increased liquidity and no maturities until 2024, we have extended our runway, enabling a continued focus on supporting our customers and delivering on our priorities.
Our results included charges totaling $47 million that were not included in our adjusted EBITDA, which consisted primarily of severance and other restructuring charges and cost associated with the financing transactions.
Turning to slide 12, I will convey our thoughts on the remainder of the year.
There is still significant economic and industry specific uncertainty that precludes us from providing more specific guidance I.
I would like to provide some qualitative comments on how we expect the business to progress for the fourth quarter driven by a combination of business drivers, we are monitoring and input from our customers.
His comments do not assume another round of extended pandemic related lot Downs that me further curtailed oil and gas activity or disrupt the expected recovery of hydrocarbon consumption that is underway further.
Further these comments I assume a relatively stable commodity price environment and do not consider prices weakening due to a recurrence of sustained production increases or sustained reductions in hydrocarbon demand.
Let me start my comments well revenue progression.
In the Western Hemisphere, we expect revenues to increase by high single digits in North America PNC is expected to continue its modest recovery and we expect seasonal activity increases in Canada.
In Latin America, we expect to see activity increases across most of the region as it continues to recover from pandemic related shutdowns.
In the eastern Hemisphere, we expect revenues to decline by mid to high single digits driven by activity reductions in the middle East as customers continue to adjust their spending levels and to a lesser extent in Europe, largely due to seasonal activity reductions.
On a consolidated basis, we expect revenues to be flat to slightly down from Q3 levels.
Indicated previously we expect year end seasonal benefits to be more muted than in prior years.
For adjusted EBITDA, We expect total year Twentytwenty decrementals to be in the 10% to 15% range in line with our previous comments.
The benefit realized during the third quarter from capital sales will not reoccur and we also expect a sequential increase in noncash inventory charges free.
Free cash flow in the fourth quarter is expected X X is expected to decline sequentially, primarily due to interest payments as well as a reduction in the unwinding of net working capital as our activity levels begin stabilizing.
Thank you for your time today I will now turn over the call to give issue his closing comments.
Thank you Keith.
Our team has delivered a strong third quarter, we generated EBITDA of $104 million pre cash flow of $105 million and we will continue to execute on our cost savings actions.
These strong results coupled with the closing of the liquidity enhancing transactions and the removal of the substantial doubt language in our filings give me confidence in our future.
I'd like to close today by discussing our outlook for the market and my objectives and approach going forward.
In North America, we do not anticipate a meaningful recovery in drilling activity over the near term given the fact that the fall, but Gulf of commodity prices remains range. However, we do expect to see gradual increases in completion and production activity as operators look to Ducs and continue bringing production back online.
Internationally, we expect activity to be flat to slightly down overall, but perhaps a slightly negative bias as reductions in customer spending in the middle East and parts of Latin America may outweigh the calories in other locations.
We have seen significant reductions in rig count and customer spending globally. This year and our near term outlook of the market remains cautious. However, there are many external factors impact an outcome on our industry are far from certain.
Including the recovery in global economic activity rising Cobot, 19 cases, and the reinstatement of community protection measures, the timing and effectiveness of a potential vaccine and global policy measures.
Clearly at the last couple of weeks have indicated volatility remains high and it is likely to early to draw any definitive conclusions based on near term trends.
As a result, we're continuing our planning based on current activity levels, but the confidence that we can act quickly and adapted evolving conditions as we have demonstrated.
Moving to slide 13, my objectives for the company can be summarized as follows.
Must ensure that benefit will deliver consistent results for our customers and shareholders, we must be sustainably profitable and generate positive free cash flow.
While these simple objectives as a leadership team we have clear eyed about the challenge we face we recognized that we had a company in transition and are prepared to make the decisions necessary to capitalize these results.
However, a strong belief that the company's ability to achieve these goals as we operate going forward. We will continue to prioritize the safety of our employees and the delivery of outstanding quality to our customers.
To achieve these goals by initial focuses on three main areas.
First listening and engaging with our talented and committed employee base.
To reaffirming our commitment to our customers and understanding their needs in this evolving market.
And finally conducting a thorough review of our ongoing operations portfolio and cost structure.
These will provide critical inputs to developing a shotgun plan that will allow us to be successful in 2021, while simultaneously developing a longer term strategy that will encompass our current portfolio our role and focus on the energy transition and beyond.
In my first three weeks I've had the opportunity to speak to many of our team members and customers.
Team stand out for me as I reflect on all these discussions.
Firstly, the incredible resilience tenacity and commitment of our team to serve our customers through product innovation and service delivery.
With all the challenges we have been through it as heartening to see this and it shows that customer Centricity is a key value for us.
Number two the breadth of our product portfolio and differentiation key spaces.
While our overall share in the market globally is in the mid single digits, we have some outstanding market leaders across our segments and geographies.
Capturing the strength of businesses like tubular running services managed pressure drilling and cementation products, among others and leveraging them to spearhead our goal of profitability and free cash flow generation will be an important part of our overall approach.
I'm, especially excited about the convergence of multiple technologies that enable us to provide innovation and groundbreaking solutions and production optimization.
We have been a leader in digital technology, which comes from providing customers tangible results that impact our bottom line.
Now between customer feedback and support while our customers have significant challenges that they're dealing with and our products and services represent a cost to them I'm happy to see that we enjoy strong support from our loyal customers and they want us to succeed.
Clearly, we must underwrite every day to serve them and demonstrate a superior value proposition still that encouragement access and spirit of collaboration is something we will continue to rely on and leverage right.
To wrap up its still early days for me, but because each passing day I'm more excited and proud to be a part of that but.
We recognize that the road ahead has been easy, but we are up for the challenge and immediate future will be defined by being a leader in the valuable and production solutions for our customers. We are committed to focusing on expanding margins and improving their ducts.
We also have a responsibility to our employees and the communities we operate in to provide exciting career opportunities and be responsible EEG stewards. The world is changing and we are confident that our strength in technology, our global footprint and committed team will be lead us today and into the future.
I will provide a detailed update on our strategic direction and plans for a successful 2021 in our fourth quarter update early next year. Thank you for listening today and stay safe everybody operator, let's open it up for acuity.
Thank you we will now begin the question answer session.
Asking question. He was our Star then one on a touchtone phone.
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Today's first question comes from Marc Bianchi with Cowen. Please go ahead.
Thank you good morning.
Hi.
First question has to do with just the revenue outlook for fourth quarter here.
Eastern Hemisphere down.
Mid to high single digit seems like a bit more severe than than what we've heard from other.
Other companies so far this quarter was that if given their fourth quarter outlook for international I'm curious, if there's anything unique to weatherford that you'd point out and.
If in fact it is unique.
How do you see that progressing as we go into 21.
Hi, Mark good morning.
Good question so.
So a few things that are I think are specific to our set of circumstances.
We have certain contracts and certain customers that are scaling back their activities.
We we.
We believe that this is in.
In line with the rig count decline that we've seen in the middle East Weve.
We've also seen some activity being pushed out to 2021. So that's the outlook that we have at the moment that's different from others I'll invite Carl to say anything specific about some commercial activities. It will color. He may have yet Matt This Carl.
I think the.
One of the differences may be just the timing of some of our contractual work, where we I think held ground.
A little longer in certain areas.
In in the Middle East, particularly.
But as you all know and they are in the market you understand what the rigs are doing in some countries over there are some of the major countries continue to drop.
But it isn't a reflection of any last act last worker last contractual work, it's more just the sequencing of when the worker cars for us.
The way, we see it but we still feel good about the position we've got we've got some great.
Contract positions and some you know looking forward into next year.
Good position as well, but it's more timing I think then.
Specifics to contract changes or losses et cetera.
Okay, Okay great.
And.
See if I sort of look at the guidance here for adjusted EBITDA.
I mean, you can you can get a very wide range for fourth quarter. If I use 10% decrementals are 15% decrementals it kind of goes to between breakeven and maybe 75 million Bucks.
Curious if you guys are willing to kind of comment how you see it within that range is it closer to 75 or or could it be be down so much and if it is down so much what's really driving that because I would have thought the cost savings would be be a tailwind.
Mark again good question. Thank you.
If you look at where we've been through year to date September or Decrementals have been a respectable.
Roughly 7%.
And so.
Barring any material changes in the macro environment and customer spending activity.
We do expect to come in on the low side of that range.
Meaning both in terms of.
Outlook for revenues, because we've got three quarters in we've given up a flat to slightly down for our Q4 and in terms of fall through we think that we should be able to.
Low side of that range.
But as we think about how to calculate that I think we also have to remember this needs to be a slight adjustment.
You know, we calculate that with excluding.
Executive stock comp so if you're looking at the baseline for full year 19, you're looking at revenues of 5.2 billion and then when you adjust for the exec stock comp, it's a base of 591 million. So.
Got it got it okay, so and just to clarify when you say the low end of the flow through you're talking about we should be using closer to 10% Decrementals as is 10%.
Yes.
Got it got it and then just a follow up on that is as as we think about going into 21, and I know Nobody's got you know the crystal ball and revenue, but if we think that things are fairly stable. As you mentioned you know North America may be grinding a little bit higher how should we think about these cost savings beyond the 800 program that you use.
You've talked about how material is that in and whats the timeframe of of realizing.
So the way Weve looked at the cost savings right now is we.
Using an algorithm of looking at the.
Run rate at December 2019, as our baseline.
And so we took a snapshot of our run rate at September 2020, and asked ourselves if you annualize that delta.
And so we we believe if you annualize that run rate Delta. We are now easily above the $800 million annualized target that we set for ourselves.
If we look at the Qataris ticks off the sales I would say that it's a 50 50 split between what structural and what came out because of lower activity.
And so as we put that all together I think about.
Going forward in the future.
That will play out as we you know.
Finished a planning and think about and given some kind of guidance for 2021.
So thats, where we are.
Got it got it thanks, very much I'll turn it back.
And ladies and gentlemen next question comes from Gregg Brody with Bank of America. Please go ahead.
Hi, good morning, guys.
Good morning.
Just I.
Im sorry, I joined a couple of minutes late.
Did you clarify how much the onetime capital selling three to 20 impacted your results.
Yes, so it was a 12 million dollar gain in the quarter.
[noise] and that demonstrate to to treat it.
Great to EBITDA it.
It's you think that the nature of the transaction.
It's.
It's not an unusual transaction for US is this really a week when a transaction for us.
It happened in the eastern Hemisphere, we deployed as you know last year one.
As close as the first time Floyd or cruise.
Perform some surface work the customer changed their minds about how the work should be done and instead, they wanted to purchase or surface equipment. So this is not not equipment, we do not sell we do sell it but since we had equipment on the ground, we basically sold equipment from our capital sleep versus equipment from our inventories.
And that created.
Yes, the nature to disclose that.
Excessive gain on the transaction.
Got it that makes sense.
Just sort of run through some some pre cash flow line items just to see if you can provide clarity for fourth quarter and this maybe beyond so I. Appreciate you have the big interest payment in the fourth quarter.
Can you give us a sense of how we should think about taxes.
Restructuring cash expenses, and then working capital.
So I think and then I will talk about it from 21 to be helpful. Tim.
We're not we're not yet prepared to talk about 21, but if we if we think about cash taxes.
You know I think we are going to come in below what Weve said before I think that given a range of 90.
Two $100 million earlier in the year.
Should be inside of that.
In terms of cash interest I think we are in line in terms of Capex I think.
The guidance that we gave was a 100 to 150 I think were in line.
In line with that and in terms of all the other components.
Restructuring, rather and so forth.
I think that.
We're also going to be in line with the guidance that we've given up between $150 million to $200 million.
And there is.
Other line item that shows up in the quarter as there is to remind us that there is an expectation there.
Which which other line item.
When I look at the way you reconcile.
Free cash flow for this quarter, you had 25 million positive.
There.
Last one according to Forbes 11 is there a number to think about there.
In other.
So for US the other includes everything.
Severance restructuring FX LC fees all the different.
Pieces everything that I've covered here is included in that line.
Perfect. That's that's helpful.
And then maybe just last question so congrats on getting the capital or is done.
If you could just.
Is there.
Is there a way to quantify how long you think how it's in today's environment, how much of that 500 million to reduce before you get to sort of a recovery or cash flow situation.
Our free cash flow and then also just is there ability to raise any more capital.
Within the indenture.
That'd be great.
So I think if you think about our situation at the moment.
We do have.
Yes.
Some covenants inside the indentures that we have to think about if we were to indeed to raise more capital I think.
The best way to think of it at this time that we don't need to raise more capital.
We have raised $500 million to base, our eight well, which affords us the.
The full rights to manage our business with liquidity on hand versus having to work through a complicated ABL structure that was not designed for the current dynamics in our business and.
And so we will think about how to best use this runway and over the course of time.
Hopefully we can replace the ABL with something that better reflects the nature of our business, which is an international.
International business, if you look at our earnings.
Hemisphere still delivers a lot of or EBITDA and as such we need to think about how to operate an AP tools that war without it.
Work with structural for a business.
In terms of time.
As we work through the the model for 2021, it will tell us what our free cash flow profile is but if you look at our free cash flow profile year to date were positive.
And so.
Once we pay the interest in Q4 will probably be slightly negative in terms of free cash flow, but when you're sitting on $1.3 billion of cash than we do have a fair bit of runway to think about how to structure our business.
And I appreciate it I appreciate the time.
Is it for me.
Thank you Greg.
And ladies and gentlemen. This concludes the question and answer session I'd like to turn the call just back over to the management team for any final remarks.
But that did that today, thanks, everybody for calling in appreciate it.
Thanks, everybody. This concludes todays conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.