KREF 2026年第3四半期決算説明会：返済によるレバレッジ低下で流動性が向上

主要なポイント

• KKRリアル・エステート・ファイナンス・トラスト（KREF）が発表した2026年第3四半期の米国会計基準（GAAP）に基づく純損失は600万ドル（1株当たり0.11ドル）となり、9月30日時点の1株当たり純資産価値（BPS）は10.14ドルでした。
• 配当可能損失は1億5,200万ドル（1株当たり2.64ドル）でした。実現損失および戦略的見直し費用を除く配当可能利益は500万ドル（1株当たり0.09ドル）でした。
• 年初来の融資回収額は24億ドルに達し、経営陣の通期予想である20億ドルを上回りました。第3四半期の回収額は計12億ドルで、2026年の回収額の80%以上が2021年および2022年に実行された融資（ヴィンテージ）によるものでした。
• 四半期末時点の流動性は約8億5,300万ドルに増加した一方、負債純資産比率（D/Eレシオ）は2.6倍から2.2倍に低下し、総レバレッジ比率は4.3倍から3.1倍に低下しました。
• 経営陣は、金利上昇、借り換え資金の減少、不動産市場の流動性低下により、処理完了までの期間が長期化し、短期的になお一層の引当金追加が必要になる可能性があると警告しました。
• 取締役会の独立委員会による戦略的見直しは現在も進行中です。自社株買いを含む資本配分が見直しプロセスの一環であるため、見直しの発表以降、自社株買いのペースは減速しました。

主要財務データ

事業および業績の動向

KREFは、2021年および2022年の市場環境下で実行された過去の融資からの入替を継続しました。これらのヴィンテージが年初来の回収額の80%以上を占めました。また、当四半期中にウォッチリスト銘柄の融資3件の処理を新たに完了しました。

新規融資実行額は計1億5,700万ドルとなりました。投資対象には、全米4物件を担保とするクラスAシニアハウジングのポートフォリオや、テキサス州のクラスAオフィスビルが含まれます。経営陣は、回収額を同額でそのまま再投資するのではなくバランスシートの柔軟性を優先するため、資金運用は引き続き抑制的なペースで行うと述べました。

同社は残る2件の商業用不動産ローン担保証券（CRE CLO）に対して任意償還権を行使し、両取引の償還を完了しました。経営陣は、担保資産の回収が進んだことで、これらの構造が時価評価対象外の他の調達手段と比較して効率性を欠くようになったと説明しました。

KREFは当四半期末時点で約8億5,300万ドルの流動性を確保して終了しました。これは過去最高水準の1つであり、過去の平均目安である約6億ドルを上回っています。この合計額には、現金1億6,600万ドル、四半期末のローン完済に伴いサービサーが保持している回収金5,300万ドル、および法人用リボルビング融資枠の未消化分6億ドルが含まれます。

経営陣の見通し

経営陣は、2026年第4四半期を通じて総レバレッジ比率が過去の目標水準を下回り続けると予想しています。また、不動産価格のリセットを受けた機会を見極めつつ流動性を維持するため、新規融資のペースも引き続き抑制的になると見込まれています。

従来は年内の完了が見込まれていた一部の資産処理は、2027年上半期にずれ込む可能性が高くなっています。経営陣は、回収額の最大化を目指しつつ、資産の現金化を継続して進めると述べました。

主に財務および法務アドバイザリー費用で構成される戦略的見直し費用は、第3四半期末に集中しました。最高財務責任者（CFO）のケンドラ・デシャス氏は、これらの費用が第4四半期にはフルに計上されるため、さらに増加する見込みであると述べました。

リスクと注目点

• 引当金（準備金）の増加リスク：経営陣は、資産処理手続きの進展や市場の流動性・評価額の推移に伴い、引当金が増加する可能性があると述べました。
• 集合住宅（マルチファミリー）の借り換えリスク：KREFは2021年および2022年に実行された集合住宅向け融資を注視しています。平均デット・イールドは6%台半ばと堅調ですが、下限に近い融資はより強い借り換え圧力に直面しています。
• 借入コストの上昇：近年の金利上昇に伴い元利金返済コスト（デット・サービス）が増加しており、特に評価額のピーク時に資金調達された物件で借り換え受入額が減少しています。
• 処理の遅延：非流動的な市場と不確実な評価額により、残るウォッチリスト資産の処理時期や最終的な回収価値を見極めることが困難になっています。
• 金利上昇による収益メリットの限定性：変動金利負債の規模が変動金利融資ポートフォリオの規模と比較的近く、受取保有不動産（REO）資産は利息収入を生み出さないためです。
• 戦略的見直しの不確実性：取締役会の委員会が戦略的代替案の評価を続けており、プロセスが進行中であるため、経営陣は詳細な言及を控えました。

アナリスト質疑応答の要点

経営陣は、現在の信用損失引当金（CECL）が利用可能な市場情報を反映しているものの、不透明で流動性の低い市場環境のため、すべての資産処理について確定的な結果を特定することは困難であると述べました。引当金の水準は、取引の進展や市場状況の変化に応じて調整されます。

デット・イールドが5.5%〜6%程度の集合住宅向け融資について、借り換え結果は市場レベルの成長性、還元利回り（キャップレート）、スポンサーの流動性に依存します。経営陣は、高成長市場におけるデット・イールドは、新規供給を吸収中の市場における同様のイールドとは異なる意味を持つ可能性があると指摘しました。

KREFは、資産を保有・安定化させることで回収額が改善する場合には、一部の集合住宅物件の所有権を取得する可能性があります。ただし、経営陣は現在、このような対応を必要とする集合住宅資産の大規模な波が発生しているとは見ていません。

ボストンのライフサイエンス向け融資については、資産価値の変化を受けて、ノンリコース・ローン貸付人に同資産を譲渡（返還）しました。同社は自社保有分の融資について損失を計上し、当該融資はポートフォリオから除外されました。

経営陣は、レバレッジの低下と高い手元流動性にもかかわらず、KREFが融資市場において引き続き積極的であることを確認しました。慎重な融資ペースの理由として、四半期末における多額の返済、以前からのレバレッジ削減目標、ならびに柔軟性維持の重要性を挙げました。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to the KKR Real Estate Finance Trust, Inc. Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jack Switala. Please go ahead.

Jack Switala

Thanks, operator, and welcome to the KKR Real Estate Finance Trust earnings call for the third quarter of 2026. As the operator mentioned, this is Jack Switala. This morning, I am joined on the call by our CEO, Matt Salem; our President and COO, Patrick Mattson; and our CFO, Kendra Decious.

I would like to remind everyone that we will refer to certain non-GAAP financial measures on the call, which are reconciled to GAAP figures in our earnings release and in the supplementary presentation, both of which are available on the investor relations portion of our website. This call will also contain certain forward-looking statements, which do not guarantee future events or performance. Please refer to our most recently filed 10-Q for cautionary factors related to these statements.

Before I turn the call over to Matt, I will go through our results. For the third quarter of 2026, we reported GAAP net loss of $6 million, or negative $0.11 per share. Book value as of September 30th was $10.14 per share. We reported a distributable loss of $152 million, or negative $2.64 per share. Distributable earnings before realized losses and strategic review expenses were $5 million, or $0.09 per share. Lastly, we paid a $0.10 cash dividend with respect to the third quarter.

With that, I now like to turn the call over to Matt.

Matthew Salem

Thanks, Jack. Good morning, everyone, and thank you for joining us today. Let me begin with a brief update on the strategic review process. As we announced in July, KREF's Board established a strategic review committee composed solely of independent directors to evaluate potential strategic alternatives. Since that announcement, the committee has retained a financial advisor and legal counsel and continues to evaluate the company's strategic alternatives. Given the review is ongoing, we will not be providing any further commentary on the process during today's call.

Turning to the broader commercial real estate market, the recent increase in interest rates has created renewed pressure on property values, presenting both opportunities and challenges for real estate lenders. Existing borrowers will be impacted by higher debt service costs and lower refinancing proceeds, particularly for assets financed at peak valuations in 2021 and early 2022. We expect this environment to extend resolution timelines, and in some cases, result in additional credit losses. At the same time, these dynamics should drive increased demand for refinancing and recapitalization capital as borrowers work through upcoming maturities.

Importantly, underlying property fundamentals remain generally constructive across most sectors, supported by tenant demand and a meaningful slowdown in new construction activity. As we continue to reposition KREF's portfolio, we believe this environment provides an attractive opportunity to redeploy capital into new loans with compelling credit characteristics and risk-adjusted returns. Portfolio repayment activity has been particularly strong, with $2.4 billion of repayments year-to-date, surpassing our $2 billion expectation for the year. This quarter, repayments totaled $1.2 billion. This quarter's repayments nearly matched our annual repayments for each of 2024 and 2025.

Importantly, much of this activity has been concentrated in our older vintage loans, accelerating the natural rotation of the portfolio and reducing our exposure to loans originated during the 2021 and 2022 market environment. Those vintages accounted for over 80% of the repayments this year. We continue to make substantial progress executing the portfolio action plan we outlined at the beginning of the year. Our priorities have been to accelerate the resolution of watchlist and legacy office exposure, address our life science portfolio, and reposition the portfolio toward newer vintage loans with more attractive credit characteristics.

During the quarter, we resolved 3 additional watchlist loans. While the pace of resolutions has been encouraging, the timing and ultimate valuations of remaining assets is challenging. We continue to actively pursue monetization strategies for these assets, although some transactions previously anticipated to close before year-end are now likely to extend into the first half of 2027. We remain focused on advancing these resolutions while maintaining a disciplined approach to maximizing recovery. Given the more challenging liquidity and valuation environment, we could see an increase in reserves in the near term as resolution processes advance and market conditions continue to evolve.

With that, I'll turn the call over to Patrick.

W. Mattson

Thanks, Matt. Good morning, everyone. I'll begin with origination activity. During the quarter, we originated $157 million of loans, including a Class A senior housing portfolio secured by 4 properties across the U.S. and a Class A Texas office property. From a broader market perspective, conditions for new investments remained constructive. Credit spreads have been relatively stable. Financing for loans remains readily available, and liquidity across markets remains healthy. We expect our pace of originations to remain measured. Given our focus on maintaining balance sheet flexibility, we have been deliberate in deploying capital rather than seeking to replace repayments with new loans on a dollar-for-dollar basis.

Turning next to balance sheet and liquidity. The combination of significant repayment activity and our disciplined approach to capital management has meaningfully strengthened KREF's financial position throughout the year. At quarter end, liquidity increased to approximately $853 million, including $166 million of cash, $53 million of loan principal repayments held by a servicer following a repayment on the last day of the quarter, and $600 million of undrawn capacity on our corporate revolver. This represents one of the highest liquidity positions for KREF's history, well above the historical average of approximately $600 million.

Importantly, this liquidity provides us with significant flexibility as we continue to execute our portfolio strategy. We also continue to further optimize our financing structure. During the quarter, we exercised optional redemptions on our 2 remaining CRE CLOs, completing the retirement of both transactions. Given the substantial repayment activity and reduction in the underlying collateral pools, these transactions have become less efficient financing structures relative to other non-mark-to-market financing alternatives available to KREF.

Strong repayment activity during the quarter also drove a meaningful reduction in leverage, with our debt-to-equity ratio declining from 2.6x to 2.2x, and total leverage declining from 4.3x to 3.1x below our historical target range, and we expect leverage to remain below the historical range for the fourth quarter. In summary, the third quarter represented another important step in executing the priorities established at the beginning of the year. We materially reduced the watchlist, advanced the resolution of legacy exposures, exceeded our full year repayment expectations ahead of schedule, and further strengthened our liquidity position.

With that, we are happy to take your questions.

Operator

[Operator Instructions] Your first question comes from Tom Catherwood with BTIG.

質疑応答

William Catherwood

Matt, I want to go back to something you said in your prepared remarks about that you could see or we could see more reserves in the near term as the resolution process advances. So the question that pops in my head is what is holding you back from getting ahead of that and taking worst-case scenario type marks right now? Is it that you don't have the market comps because transactions are slow, or is it something else that is holding you up from kind of getting ahead of that and kind of creating a worst-case baseline?

Matthew Salem

Tom, thanks for the question. I think if you think about what is on kind of the watchlist now and the kind of processes we are in, a lot of that is just a function of a little bit of opaqueness, and some of these markets are relatively illiquid. We obviously are marking even have CECL reserves appropriate for what we are seeing in the market today. But as we have seen over time, number one, markets can change, and number two, just given how the liquidity in some of these markets, we do not know exactly where these processes can end up. As we kind of continue to work through those, we will obviously adjust it in real time for what we are seeing. But just understanding kind of where the overall market is today, we wanted to obviously highlight that as we continue to work through the resolutions here.

William Catherwood

You mentioned resolutions on the watchlist. I assume, though, this applies to kind of the remaining legacy loans. Obviously, that amount came down in 3Q with the repayments, but are you expecting more modifications? Are you expecting more things that you think could have reserves or more migrations out of that legacy, but 3-rated or better portfolio?

Matthew Salem

I think everybody, including ourselves, is looking at their portfolios in a new light now, clearly with adjusted values and the interest rate that we are living in today. And I think where we are seeing potential noise, I would say, is certainly on some of the multifamily. That feels like it has been the most impacted in the rate hike environment in those vintages we called out on the call in terms of the 2021 and 2022 vintages. So that is probably the area we are watching closely.

We have got a lot of repayments and a lot of those loans, like we said, this was a huge repayment quarter for us, equaling almost all of last year and the year before. 80% of that, as we highlighted, was in those vintages. So we are seeing real velocity there. But values are down a little bit and some of those loans are close to the line, and so we will have to continue to monitor those as they come up for refinance.

William Catherwood

Just quick follow-up on that one, Matt. Just do you have a sense of -- for those legacy multifamily loans you mentioned, do you have a sense of where those debt yields sit right now?

Matthew Salem

Obviously, there's a huge range. I think on average, we're well into the 6s. But it's the stuff at the lower end of that range that is going to be the most acute and have the most problems, obviously, refinancing. So those are the ones we're really focused on. But we'll continue to see how the market evolves from a value perspective. I think it's changing, I'd say, on a day-to-day basis as the market resets expectations around not only cap rates, but just growth profile as well.

Operator

Your next question comes from Jade Rahmani with KBW.

Jade Rahmani

Can you give any color on the Boston Life Science resolution? I didn't see clearly in the 10-Q what happened to that loan. Was that sold or acquired? Any color would be helpful.

W. Mattson

Jade. It's Patrick. Happy to take that. So on that loan, we had financing on that. That was non-recourse financing. As values have changed on that asset, we assigned that loan back to the lender. What you see reflected in this quarter was the loss on our portion of that loan, and it is obviously removed from the portfolio at this point.

Jade Rahmani

Okay. That is helpful. On the multifamily portfolio, can you comment as to what percentage is pre-2023 vintage and what the in-place debt yields are on that? Also, can you further comment if there is a property that has, say, a 5.5% to 6% debt yield, would that require KREF to absorb a loss because that would imply close to 100% LTV, so not necessarily a loss, but it depends on the friction points and what happens in such a situation?

Matthew Salem

Yes, I do not have the exact percentage of the 2021 and 2022 multifamily in front of me, so we can follow up on that. On the second part of your question, the 5.5% to 6% debt yield area, I think certainly we would be watching those very closely. It really comes down to 2 things. It is number one, what is the embedded growth in the market? Because the 5.5% in New York City or San Francisco or some of these markets that are experiencing real growth is very different than some of the Sun Belt markets that are still absorbing supply, as you well know. So there is going to be a range of cap rates depending on the market.

The second thing is really around sponsor. Number one, what is their liquidity level? What else is in their portfolio that they're dealing with, and what's their willingness to continue to play forward and try to continue to grow cash flows over time to enhance their outcomes on their equity? These are all in play, and we've seen it across the board. I certainly think having a portfolio outside of KREF as well, that we're seeing marginally more capitulation in the multifamily sector from borrowers, just given this latest rate hike. That speaks a little bit to the second point. I'm making that I think you are seeing a little bit more velocity, whereas before we were getting a lot more pay downs and playing it forward. I think there's been slightly more capitulation in the market today around some of that. But that corridor is certainly the ones that we're focused on in terms of their ability to refinance.

Jade Rahmani

A follow-up would be with multifamily as a more liquid asset class and fundamentals potentially nearing a trough. Could you devise an alternative strategy to fund REO with leverage and hold some of these assets more so than you've done with, say, office? Does that make any sense, or do you think the better outcome is to just work these out, share in some of the value reduction, and take hits to book value?

Matthew Salem

Well, I think similar to every time we have an issue in the portfolio, we're going to look at all the options available to us and how do we optimize the outcome and maximize recovery for the balance sheet. You think about what we did in Raleigh, North Carolina, on that multifamily deal. We felt like we could go in and stabilize cash flow and operations there and then sell it into kind of a better environment. I think we're proving that out on the operations side for sure, and we feel very good about the occupancy there and where we are on a cash flow basis.

Obviously, they carry a lot easier, to your point, I think is what you might be suggesting, than some of the life science we have, for instance, where you just don't have the tenants there, and so there's a kind of a net cost on an ongoing basis. That certainly will factor into the analysis. Hard to predict the future. Obviously, the market's very dynamic right now. But when I look at our portfolio, I don't see a wave of opportunities to do that, if that's part of the question. I think we could have isolated situations where the loan is closed, and we ultimately have to take some reserves on it. But, I don't think we're looking at it like, wow, this is going to be a big portfolio of multi that we have to make decisions on. That may help you think through it a little bit.

Operator

Your next question comes from Rick Shane with J.P. Morgan.

Richard Shane

Look, you guys, I know you won't comment per se on the strategic review process, but at the same time, you have 2 other things going on. One is resolution of the existing portfolio. And then the real question is, how are you sort of approaching the market in terms of additional investment? You guys did originate loans this quarter, but leverage is now below target ratio. You are sitting on a lot of liquidity. Do you see yourselves as active participants in the market? And more importantly, from sort of a management perspective, how do you sort of motivate employees in the context of this sort of potential uncertainty?

Matthew Salem

Right. Thank you for the question. I guess just to be direct, 100% we are active participants in the market. We originated 2 loans this quarter. I will come back to that piece of the question here in a second. Let me answer your final piece of the question. Keep in mind that the team that invests on behalf of KREF invests for other pools of capital within KKR as well. This is a smaller piece of our overall business, and that business is continuing to grow, and we have lots of different types of capital that we invest there. We invest bank capital, we invest insurance capital, we invest debt fund capital. So there is lots of capital, and we are actively originating loans across our $43 billion of AUM within real estate credit at KKR.

There is lots going on, and so the motivation question you had, I don't think is particularly relevant for our team and our situation. When we just think about how we are positioned in the market, I think you are right to kind of put a few things in there. When I look at this quarter, in particular, let us just understand, last quarter, we were above our target leverage ratio, and we had talked about wanting to bring that down. So we were able to accomplish that.

The second thing which I highlighted earlier was we got a ton of repayments this quarter. You never quite know, especially in a market where the Fed starts hiking again, like, okay, what is going to come through? What is not? Do things get extended? Some of those were actually pretty back-ended in the quarter. So you have this moment in time where certainly that contributed to it, where there is a lot coming through in the quarter, a lot coming through towards the end. We weren't leaning in to originations either because we were trying to bring down leverage and trying to understand kind of where we were in the quarter.

So some of it is just the complexity around that. I would say the last piece of it is creating some more flexibility right now and optionality for ourselves, I do not think is a bad thing either, where we start to look at what is going on in the market. Values are resetting. Perhaps the loan you are going to make tomorrow is better than the loan you could have made 60 days ago. I think there is also a reason to just be prudent as we kind of think about what is going on in the market today. None of those factors are the single determinant of where we snap the line at the end of September, but they are all kind of factoring into it, of how we kind of think about the go forward here. But certainly closed loans in the quarter and are active.

Richard Shane

Look, it's a very fair point, and you linked up something that I didn't that I heard but didn't link up, which is how heavy the repayments were at the very end of the quarter and given the uncertainty that the third quarter events created, the macro events created, and the potential sort of extension of timelines on anything in the meeting of the minds makes sense to sort of be careful until all of that stuff closes. I don't know if you covered this, I apologize, but it looks like the cadence of the buyback really was just in July and then slowed down. Is that related to the strategic review or how should we think about that going forward, particularly given the leverage, et cetera?

Matthew Salem

Yes, I think you're right to call that out. I think we mentioned this on the last call. The buybacks is all. Think about that. Strategic review is one of the key things they're looking at, of course, is capital allocation. And so, share buybacks will be part of that, and that really effectively impacted, if you will, our participation in that investing piece of the business after that announcement.

Richard Shane

Got it. Okay. Actually, when I really think about that from a legal perspective, it totally makes sense. Thank you for pointing it out and answering that question timely, but totally. At the end of the day, it doesn't really make sense to be buying back stock when you're doing that, because you've got information. Anyway, I get it.

Matthew Salem

Thank you. Appreciate you joining.

Operator

[Operator Instructions] Your next question comes from Chris Muller with Citizens.

Christopher Muller

Looking at your slide deck, the interest sensitivity slide stands out. Can you just talk through why higher rates are not a more meaningful benefit to the bottom line?

W. Mattson

Chris, it's Patrick. I'll take that. Yes, it's a good sort of highlight. We would expect normally, right, that you would get some benefit from higher rates. A couple of factors here. One, we're at the point where we've got some floors that are effectively pretty close. As we think about going up a little bit higher, it's not changing that much. We're not getting the additional benefit on the asset side.

The other factor is just that if you look at our debt outstanding that's subject to a floating rate and look at our loan assets outstanding that are subject to a floating rate, they're fairly close to each other. We're not obviously levered one to one. We've got a lot of value tied up, for example, in the REO assets. But the REO assets aren't producing income, right? So they're not subject to the benefit of higher interest rates. So it's really the fact that the secured debt outstanding, the term loan B outstanding is fairly close to the loan portfolio size.

Christopher Muller

Got it. That makes sense. And then, looking at the strategic review expenses, I heard you guys mention the legal counsel and financial advisor. Is that all that is going into that bucket there? Is that an ongoing expense or was it more one-time in nature?

Kendra Decious

Chris, it's Kendra. Thanks for the question. So I would say that the strategic review costs predominantly include financial advisors and legal advisors. I would point out that it is ongoing, as you asked, and also consider that the timing of when the strategic review committee was formed. So the expenses were back ended in Q3. So I think you can assume from that in Q4, those expenses will grow on a full quarter basis.

Operator

Your next question comes from Gabe Poggi with Raymond James.

Gabriel Poggi

Matt, Patrick, I've got kind of a top of the house question. What is KKR doing holistically? I mean, Matt, you alluded to all the different buckets of capital that the team works on, right? What's KKR looking at across commercial real estate in this environment? What activity do they find is interesting? I noticed the life science JV with Alexandria that was publicly announced a few days ago. But any color you can provide as to kind of the opportunity to KKR or that you're seeing and doing in other pockets of capital away from the REIT, I think would be helpful.

Matthew Salem

Thank you for the question, Gabe. I guess you could break it down between equity and debt. I'd say on the debt side, we remain active with all of our pools of capital and think it's an attractive lending environment for all the reasons we talk about on this call and for our peers talk about ability to lend on reset basis with supply coming down in a higher interest rate environment. I think it's a good credit story. We're seeing that demand from our insurance company. But also on the private debt fund side, I think there's a lot of capital kind of getting allocated to the sector. I'd say there we're continuing to invest in what you would expect in terms of on-theme assets from a property type, so nothing too new there.

You saw in this quarter we did originate a loan within KREF on senior housing. So that's an area we certainly have a lot of experience and positive experience on the equity side of our business, and have been involved on the debt side. But in terms of new things we're looking at, that's probably one area that we're slightly more active. Otherwise, it continues to be heavily focused on multifamily and industrial lending for the most part. I think when you put the equity hat on, the market's probably opening up a little bit for us in terms of investing kind of the value add opportunistic funds. It's early days, but I think there's going to be a lot of investors, ourselves included, spending time in the multifamily segment of the market.

I think Jade was pointing out the fact that supply's coming down, yet now you have another kind of pressure point on value, and this could be an interesting entry point. Not to call the bottom, but certainly as you think about investing capital, it looks like an attractive place to go, and a lot of capital structures are coming due, like we talked about in our portfolio and in our peers. I think that's an area in particular we'll spend more time on.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Jack Switala for any closing remarks.

Jack Switala

Great. Thanks, operator, and thanks, everyone, for joining today. Please reach out to me or the team here if you have any questions. Take care.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.