Good morning, ladies and gentlemen. Welcome to the Second Quarter 2021 Results Conference Call for Russel Metals. Today's call will be hosted by Mr. Martin Juravsky, Executive Vice President and Chief Financial Officer; and Mr. John Reid, President and Chief Executive Officer of Russel Metals Inc. Today's presentation will be followed by a question-and-answer period. [Operator Instructions] And I would now like to turn the meeting over to Mr. Martin Juravsky. Please go ahead, sir.

Great, thank you operator and good morning to everyone. I plan on providing a brief overview on the Q2 results if you want to follow along, I'll be using the slides that are on our website. Just go to the investor relations section and you can find it. If you go to Page 3, you can read our cautionary statements on forward-looking information. Let's begin on Page 5, to start with a bit of an overview. The results for the quarter were exceptionally strong and built on the back of a really strong Q1. The underlying theme behind the results is doing more with less. We are very focused on maximizing returns. And over the past several quarters, we made a series of changes within our portfolio that not only resulted in exceptional performance, but also positions us very well for the future. We look very different today than we did a year ago. And we have significant financial flexibility to pursue opportunities that would further enhance value. To begin, there's two items to discuss on a very broad based basis, the strong market conditions and the status of our portfolio realignment initiatives. In terms of the strong market conditions, we saw gains in demand that resulted in higher volumes, higher prices and higher margins in Q2 versus Q1. The favorable conditions from Q1 and Q2 are continuing on into Q3. Demand is good and the supply chain remains inventory constraint. The number of months of supply across the industry remains well below the historical average. The bottom line is that the fundamentals for supply and demand are continuing to be strong. Therefore we remain optimistic on the business outlook. In terms of the portfolio realignment initiatives, the objective behind the changes that we have made over the past while was to both, enhance revenue - enhance returns, as well as reduce risk. And this has really resulted in the transformation of the portfolio in a fairly short period of time. The OCTG line pipe part of our energy business had over a cycle, fairly low margins low returns and tied up a lot of capital and was fairly volatile. As such, the elimination of that part of our business should both, enhance our overall returns, reduce risk and free up capital to redeploy in other ways. We publicly set a target to reduce OCTG line pipe inventories by $100 million by the end of this year. We have far exceeded that goal. We reduced inventories by $30 million in Q2 and its $129 million since this time last year. In July, we closed the transaction with Marubeni-Itochu for our Canadian OCTG line pipe business. That transaction will repatriate a sizable amount of our invested capital, which was around $142 million at the closing of the deal. We continue to make good progress with our orderly liquidation of our US OCTG line pipe inventories. There's around $23 million remaining and this should be mostly sold by the end of the year. If you aggregate these initiatives we'll have repatriated almost $300 million of capital that has been tied up in our OCTG line pipe segment. In terms of capital reinvestment, we've been focused on value added projects and it's part of the multiyear process for us. We're seeing very good results from the recent investments and we'll be adding other projects over the next several years. As we've talked about before, these projects generally have around a three year payback so very attractive from financial perspective. In terms of free cash flow and capital structure, with $110 million of cash from operating activities in Q2 and liquidity of over $500 million, we're in a really good shape. All our credit metrics are strong, and we were recently upgraded by Moody's. In Q3 we'll realize additional cash proceeds from the Canadian OCTG line pipe transaction which will further enhance our financial flexibility. If we go to our financial results on Page 6, from an income statement perspective, the continuing positive momentum between Q1 2021 and Q2 2021 was across pretty much all of our business segments. Revenue of over $1 billion was the highest level in over two years and EBIT, EBITDA, EPS, service center, EBIT and returns were all, all time records. Gross margins, EBITDA and bottom line results all improved dramatically versus Q1. There were a few items to note that I just wanted to flag. Inventory reserves came down by about $3 million. And this is really a reflection of the reduced risk profile of the inventory given market conditions and various other initiatives. Stock based comp had a mark-to-market impact of what $8 million of an expense in Q2 due to the increase in our share price. And there was no P&L benefit from the wage subsidies in the quarter versus $3 million in Q1. From a cash flow perspective, we used about $42 million due to an increase in working capital. This was a build within the service centers and distribution segments, and it was somewhat offset by continuing downsizing of our energy working capital. Business condition improvements led to an increase in AR inventory, which was somewhat offset by an increase in accounts payable. CapEx of $7 million continues to be relatively modest. From a balance sheet perspective towards the bottom of the page, the strong cash flow has led to a reduction in net debt by a further $83 million in the quarter and was around $190 million as of June 30. Since this time, last year, our net debt has declined by about $250 million. As I mentioned earlier, our liquidity is very strong, its north of $500 million and our credit metrics are all in good shape. We've declared a quarterly dividend of $0.38 per share for the quarter. If we go to Page 7 and look at our segmented P&L information, let's go segment by segment for a minute. The service centers did exceptionally well as the market improved. Revenues were up $132 million in Q2 versus Q1, or 23%. And this was as a result of both higher volumes and higher prices. Our volumes are above pre-pandemic levels. If we look over gross margins, they averaged around the same level of 33% as they were in Q1, but the margin dollars per ton increased as prices kept moving up. One of the interesting things for us is when we look at the month-over-month trends this has been a continuation and has been taking place for some time. In fact, this trend has evolved probably over the last nine or 10 months, would continue to see improvements in prices improvements and margins for a nine month sequential period of time. Our business model gives us a lot of flexibility to maximize margins in an industry constrained environment like we're seeing right now. That being said, having the strong inventory turns in a diverse and frankly mostly non-contractual customer base also allowed us to manage through the down market that we saw in 2020 in addition to managing through the up market that we're seeing in 2021. One of the keys for us also is that from an end market perspective, the improvements that we are seeing are fairly broad based and across most regions and end customers. Within our energy segment, revenues came down due to spring break up in Canada. But the overall conditions are improving as you can see, with both an improvement in our gross margin percentage and operating profit. As we're nearing the finish line on the retooling of our energy portfolio, you can see the different margin profiles between our field stores and our OCTG line pipe business. Field store margins are north of 20% versus the OCTG line pipe margins, which are in the low teens and this has resulted in an overall energy margin that has averaged in the teens. Starting in Q3, you'll be able to see that the average energy margins improve with the elimination of the Canadian OCTG line pipe business. Within steel distributors, it had another exceptionally good quarter from a revenue, margin and bottom line perspective. Looking forward, the backlog of business remains pretty good going into Q3. If we go to Page 8, we want to put a little bit more context around our portfolio transformation and what that means from a return perspective. When we benchmark ourselves against our competitors, we have generated top quartile returns over cycle with our overall goal being a 15% EBIT return. As you can see, 2021 has been well above that target. For the first six months of 2021, we generated return on capital of 40% in Q1 and 57% in Q2, which is very good in both an absolute basis, but it's also top ductile when we look at it versus our competitors. Perhaps equally important is that we have generated higher earnings with lower overall capital. And if you see on the chart with the green bars, the average cap invested capital over the last few years was around $1.4 billion. And it's now closer to $1.1 billion. And that goes to the doing more with less observation. If we look at actions in 2020 and through the first six months of 2021, we did a variety of things in retooling the portfolio. Overall, it was doing more with less in the combination of reducing the OCTG line pipe capital where it was a drag on our returns, but at the same time adding capital in service centers and distribution working capital, investing in some value added processing projects, and we made one small acquisition. On a go forward basis, the value added processing is a multiyear journey for us. And we expect to add probably $12 million to $15 million dollars of CapEx per year for several more years. Going forward, the focus is more along the lines of doing more with more as we see opportunities to redeploy capital. We have a lot of financial flexibility to consider opportunities, but we will remain disciplined with respect to those opportunities, and they have to meet our financial as operational metrics. We expect these opportunities to include both internal and external investments. If we go to Page 9, we have our segmented inventory information to provide a little bit more detail and context around those capital reallocation changes that I just mentioned. Overall, inventories down around $200 million from the $862 million at this time last year even though we have substantially less capital invested in inventory, we generated record results. The key is that our inventory composition has shifted to much higher and better uses. In service centers, which you can see on the left hand part of the chart, we were at $401 million at the end of June versus 297 million at this time last year. Inventory in dollars has moved up, but our tonnage remains relatively low. Our inventory turns are always strong, and we've remained around that 4.8 times for the past while. Even though sales have picked up inventory discipline remains a key focus. Within steel distributors, it's a parallel situation to our service centers with an uptick in inventory dollars that aligns with business activity and higher prices. Our backlog is good. And we expect this to translate into ongoing business activity in Q3 and Q4. In energy, as I've mentioned a couple times already we have repatriated capital. Our inventories have come down from the $470 million at this time last year to $149 million pro forma the Canadian OCTG line pipe transaction that closed in early July. In the past few quarters, we've benefited from improved market conditions, and our tighter procurement controls to manage down that capital. Not only have we reduced our energy exposure in absolute dollars, but also as a percentage of our overall portfolio. When we look back a year or so ago, it was over 50%, about this time last year, and it's now around 23%. Also, the remaining capital that is within our energy business will be mostly concentrating the field store segment, which does have attractive, long-term fundamentals. In closing, on behalf of John and other members of the management team, I would like to express our appreciation to everyone within the Russel family for their tremendously hard work and commitment. There's no doubt that 2020 was very hard from a variety of perspective, but the resiliency of the team and the actions that were taken last year are having a positive impact. And we couldn't be prouder of how the team has worked together and how the business is performing. Operator that concludes my introductory remarks, if you can now open the floor to any questions? Thank you.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Michael Doumet, Scotiabank. Michael, please go ahead.

Hey, good morning John. Good morning, Marty. Fantastic quarter, obviously. First question, in the outlook you commented that gross margins are expected to moderate and Q3. I wonder if we should interpret that as a lower gross margin percentage or lower gross margin dollar per ton. And what's so far has played out during early Q3.

Yeah, so the dynamic attached to that is it's probably a little bit of dollars per ton, but the dollars per ton is probably still going to remain at a pretty strong level. And this is just the case of we're continuing to see prices go up both in terms of input costs as well as prices from our customers, but the pace between the two doesn't always move at lockstep. So we're probably starting to see some of the - bit of a catch up between the stuff coming in and the stuff going out. With that should translate into the margins in dollars per ton is likely to moderate, but still moderate at a pretty high level.

Understood, so for Q3 we should expect, I mean, presumably, again, depending on whether or were steel prices is moving through the quarter, higher revenue is, but lower gross profit dollars at metal service centers, right. That's the way to think about it.

From that part of it, yes. I suspect though, that we will see volumes off a little bit in Q3 versus Q2 because of some of the seasonal dynamic attached to especially in July and August, some holiday downtime, things in Quebec in terms of construction, quality period. But aside from that particular issue, your observation I agree with.

Okay, perfect. That's helpful. And then can you elaborate on the drivers to the volume increase in steel distributors, I mean was that driven by steel import arbitrage opportunities in Canada? And just how sustainable is that to the second half?

Michael, it's a couple of things on each side of the border. In Canada, you hit the nail on the head there that there were some opportunities where that came in. There were also some delays with shipments coming in. So keeping in mind in Canada, we presale most of that inventory. So as that came in from shipping challenges that are out there. Again, we started to see that release in June we'll see further releases in July and August. In the US again, more transactional business that we have in the US and there's just more opportunity there as they begin their buying through in four months in advance typically on our distribution business. And so as that's coming in we're able to move that into the market with the increasing price with it being transactional, they're able to achieve really nice margins off of that being very opportunistic.

Great and then maybe just one last one. I mean, historically, operating margins for the oilfield stores have been low double digits. And given that the OCTG line pipe business has been largely divested or restructured. Is that where we should expect energy product margins to get back to in the second half?

Yeah, I think so. We're seeing improvements in the rig counts, but they're modest improvements as we go forward. So I think we'll continue to see just that uptick in the energy field stores back to the normal level over time. Again, it's still a little challenging to know the industry, but we are seeing nice, long pickups.

Alright, guys, thank you.

Thanks Michael.

Thank you. Your next question comes from Michael Tupholme, TD Securities. Michael, please go ahead.

Thanks and congratulations on the quarter. First, question just relates to some of the commentary and outlook. You talked about still seeing limited inventory in the supply chain and extended lead times. Just wondering if you can provide a little bit more detail on specifically what you're seeing in both of those areas.

So, so right now, again, as we said last quarter, our mill partners have done a tremendous job getting us what we bought historically plus a little bit more. As you go into Q3, and Q4, if you look there are several mill outages that are planned month-over-month, and so we'll have three to four mills out per month for a standard maintenance outage. So we think that will continue to restrict the supply chain that's coming in. We're planning for those outages and trying to find an advance as I'm sure the rest of the market does as well, but that will continue to keep pressure on. We are seeing imports come in to give some relief. I think it's a timing issue with the - there's not a long-term projection here for the imports to continue to come in, as you're saying people that have availability in their quotas that are not part of the 232. They're bringing in and maximizing those quotas in this pricing environment to give them a little bit of an arbitrage there on pricing. So there is some availability coming. Last month, there was more availability coming in both, June and July, but again I think that in the coming months as well. So I think we'll continue to see restricted supply throughout the balance of Q3 well into Q4

Okay, that's helpful, maybe just a little bit of a follow on to that John. Just in terms of the lead times, I was under the impression that maybe lead times had started to come back in a little bit. I guess first question is, can you tell me or confirm if that was the case or has been the case. And secondly given the dynamics that you've just talked about, would you expect lead times to extend as we get into the second half from where we are right now.

So they've bounced around a little bit, but there's really been no material movement in lead times. Again, they're bouncing around a little bit I think with the seasonality that Marty mentioned and obviously, I think July and August, maybe even a little exaggerated because everybody take vacations - taking vacations and they've been cooped up for 18 months. So there'll be a little bit of catch up there that may help bring the lead times down. But then I think I'll expand back out as we go into this period of shutdowns. So I just really don't see a whole lot of change in mill lead times. They're running at 85% capacity, which is basically full. And they have to shut down for maintenance for periods of time, the nature of a steel mill, so I just don't see a whole lot out there that's going to change on our lead times, the North American mills that are out there.

Okay. And I know historically when you've provided a little commentary given the nature of steel industry, and then there can obviously be meaningful volatility in prices, you tend not to want to look out too far when commenting on pricing trends. But I guess given everything you're talking about, is it - do you have some visibility? Are you - or would you be comfortable sort of suggesting that the kinds of pricing we're seeing right now, given everything you're talking about with respect to lead times and outages there's some sustainability here to the kinds of prices we've been seeing at least, sort of through the back half of the year, or just any commentary on that front would be helpful?

Yeah, it'll be comfortable and definitely through the third quarter, I mean, it's already booked. And so there's not much availability out there. So I think through third quarter, going into fourth quarter, I think we're pretty firm, as well. There is some availability late fourth quarter that's out there right now. But again, I just don't see any reason for, again, when you look at Canada and the US Mills, predominantly North American mills, there full, and so I just don't see a lot of negotiation around there for those prices to slip. We'll watch the world market closely to see what continues to happen on the world market barring any unforeseen demand drops that are out there or any black swan events I just don't see anything leading to the prices tailing off. Probably see some modest increases throughout Q3 and then as we go into Q4, we'll watch for the increases closer. But every product that we buy right now in the last week has seen another increase.

Okay and I appreciate that. Thank you, John. And then I guess just lastly, on the subject of capital allocation, obviously, the balance sheet is in extremely good shape at the end of the second quarter and will improve further with the closing of the OCTG line pipe transaction early in the third quarter. So how are you thinking about capital allocation priorities now? And what should we expect? And I guess as part of that, what is the current M&A environment look like? And are there opportunities there?

So it's a good question, Mike. For us, our capital allocation priorities remain pretty much the same, which is we're looking at internal opportunities for investments. And we're pursuing a variety of projects this year. And those are going to continue on for several years. And I suspect we're going to have a bit of an uptick in some of those internal opportunities next year. As businesses continuing to remain strong, there's an internal need for capital just within the working capital part of our business. Dividend has always been front and center for us through the cycle through good times or bad and maintaining that dividend has always been important. And to your last point, external growth, we look at acquisitions all the time and we'll continue to look at acquisitions. If we can find the situations that make good financial and operational sense for us, we have a lot of dry powder to deal with those. And I know that's very superficial in terms of kind of a motherhood statement. But we are seeing a lot of deal flow activity. We look all the time. And we're not looking to grow just for the sake of growth. If it makes good financial sense for us, we have more than enough financial capability and operational capability to deal with it. So I suspect that over a couple of year period, when you look at capital allocation priorities, it's going to be pushing on all those leavers. We're going to find some acquisitions that make sense. We're going to continue to push on our internal reinvestments both within our equipment as well as within our working capital, as well as returning capital to shareholders by the dividend. I think it's All the above over a multiyear period.

Okay, and maybe if I can just push you a little bit on this. That makes sense. But in the event that it takes a little bit of time to find an acquisition opportunity, or in some of these internal investment initiatives sound like they're in the next year, given where the balance sheet is, I mean, would you look at - historically, the dividend has been sort of maintained at the current level, but would you prioritize or look more seriously at a potential dividend increase?

Yeah. So if you look at us over the recent cycles, we're hovering right at our 80% payout that we always have talked about over cycles, so we're hovering at that. It is something we evaluate each quarter very closely with our board. We're not beholden to an increase. Again, 12 months ago, everybody was asking us if we're going to decrease. So we're very disciplined in how we look at that going forward. We want to understand where we are in the cycle. So it's not something that's out of the realm of possibility. But again, it's something that we would say we're definitely looking at.

Okay, and then just lastly, I guess, just to close the loop on all this, you didn't mention it specifically, Marty, but and I think I know your philosophy on this, but where do buybacks fit into this?

Yeah, it's a good question. But it hasn't been a priority for us historically to the extent that there was an opportunistic reason to be buying back shares, we can consider that down the road, but it hasn't been in the priority in the past, and it's not front and center today.

Okay, thank you.

Thank you. Your next question comes from Alex Jackson, RBC capital markets. Alex, please go ahead.

Hey, thanks for taking my question, guys. Just in terms of capital allocation and looking at potential acquisitions, curious if there's been any changes in the criteria you're looking for? And if in talking to businesses out there, sort of what their sentiment is? Are there sellers out there or are they wanting to continue operating and not sell in this current market environment? Thank you.

Yeah, we would definitely say a lot of activity. So there are sellers out there, the key is this valuation expectation. And looking at it over a cycle and not looking at it over the last six months and making sure that the buyer and the seller have a reasonable meeting of the minds. Again, it's something that we see change in strategy. We're very disciplined in our strategies when it comes to acquisitions and what they do over the long haul for us. We've worked very diligently to free up underperforming capital that was on our balance sheet in the OCTG line pipe side. So we want to make sure we redeploy that in the discipline framework that continues to add to our existing portfolio. So again, we'll go with our continued disciplined approach, but it really puts us - the balance sheet has really got us in a tremendous flexible position to where we can take advantage of opportunities as they present themselves. But we don't have to do anything, even if it just doesn't make sense for us.

Thanks. And then maybe just one more on corporate expenses, those obviously moved up this quarter. And I was just curious, is that really just driven by variable compensation and things that are really moving with the market?

Yeah, short answer is yes. That goes to our direct drive in variable compensation model. And that flexibility actually played itself out in a down market, like we saw last year, in keeping our costs in check. And people benefit within our Russel family, as the market improves as profitability improves. So it's directly correlated to that and it is the variable compensation expense.

Got it, thank you, that's all for me guys. Thanks.

Great, thanks Alex.

Thank you. [Operator Instructions] Your next question comes from Frederic Bastien, Raymond James. Frederic, please go ahead.

Thank you. And Good morning, guys. I want to push you further on M&A and I know the other guys have as well. But I know you're looking at a lot of files every quarter. I mean, you have the same kind of answers to us. But our expectations when you look at your confidence levels, in potentially closing an acquisition over the next six months versus where you were maybe 12 months ago, I mean, are you confident you can bring a couple of M&A or whether it's tuck in or midsize acquisition pass the goalpost.

Yeah, so I wouldn't put a timeframe on anything because in many ways that puts us in a box and we don't like being in a box to say, we're going to do something, regardless. And that's just not our philosophy. We like having the flexibility that we have right now, financial flexibility. We like the deal flow that is inbound. But we're not going to be hardwired to say we're going to do something regardless. That being said, I do have a degree of confidence that over an extended period of time, we're going to find stuff that meets our financial and operating criteria. I just wouldn't want to hardwire an artificial timeline around it.

I appreciate that. But I mean are you more excited today about acquisition potential than say you were six months or 12 months ago?

I'd say yeah, that's a good way to characterize it Fred. I am we're seeing more stuff. And we're seeing more stuff that has potential interest.

Okay, thanks for that additional color. Now, obviously, the industry had to make a lot of adjustments to deal with all these supply chain constraints we're dealing with today. Do you think these adjustments are going to be sticky? Meaning that when prices and supply does ease that there's some lessons learned from the last couple of years that the industry can take into the next several years?

Fred, I think the industry as a whole is learning how to manage inventory better. It's something we've done for a long time in working capital management. And obviously as this goes - as we see a downturn at some point in the cycle and pricing comes off. The interesting thing that we haven't seen in the past is the inventory at the levels that they are in the industry. So we're turning at historic high levels for the service center industry distribution, again, with the Canadian side being all back to back, it really helps limit exposure, depending on the pace at which this thing comes off or it falls very quickly or it's a slow fall, it should allow the industry to reset very quickly to the bottom, but we don't see the dramatic drops. Exiting OCTG and line pipe, again, those are largest areas where we had exposure in the past. So we think that would really limit our exposure, comparatively on a downturn. So overall, I think the industry has learned how to turn better. Again, it's been part of our DNA for a long, long time. And even fair turns at 4.8 and service centers. You're getting to a point where again, it's not going to get inside we'll get a hold on higher, we'll start to have stock outs. We're very comfortable operating in that world on a competitive basis where I feel like others are learning how to do that and are suffering in some areas.

Awesome, thanks for the color. Thanks, John and Marty. Have a great day.

Thanks Fred take care.

Thank you. Your next question comes from Anoop Prihar, Stifel. Anoop, please go ahead.

Yeah. Good morning guys, two questions. First, Marty, just a point of clarification on the comments you made about gross margin for the second half of the year, perhaps feeling a little bit of compression. When you guys talk about the outlook, you're saying pricing is strong demand is strong and the inventory levels remain low. So to me that would suggest that whatever price increases you're incurring you can pass it all through. So I'm a little confused as to why we should be expecting a little bit of pressure on the gross margin.

Yeah and I think - Anoop, this is John. But I think what Marty was saying that we'll see just slight pressure. I don't think it's anything that's - as we see balancing coming into play in third quarter - throughout the - early part of the first quarter, we've not seen a lot of pressure, frankly. So I think its slight pressure that will come in. It should see some balance in inventory, maybe people are getting a little bit more aggressive in the marketplace what they've have to react to. The other thing that we're trying to really get our head around and pin this down completely is in our inventory, gross margin gains when you look at those over quarter-over-quarter, we continue to grow that value added piece. So we think that part is definitely sticky for us. And so as we return back to a more normalized level in time, it would be interesting for us to see what that gross margin profile looks like, but we think it's probably added a couple basis points. So I don't see - I understand your point. I don't see a tremendous amount of pressure, I just think there's a - I think as we stabilize and get closer to a flattening at the top line with price increases or modest price increases, I think you'll see more pressure from the marketplace in turn.

Okay. Alright, well, that's helpful. So okay and then secondly, Just coming back to the question around the dividend, it seems to me that the issue with the dividend relates more to what you're going to do with your bondholders than it does with anything else and your balance sheet is as strong as ever been. So should you choose to - you do - it seems to me have the flexibility financially to deal with the bondholders, which would allow you to bump the dividend. So like, is that an unrealistic expectation?

Yeah, so I wouldn't connect those two things together Anoop because we have flexibility within our existing covenants to change the dividends. So the existing notes are not a constraint on that we have baskets that allow us to do that. So I wouldn't connect those two points together. That being said if there's a situation for us where it makes sense to take out the notes somewhere down the road, because the 2026 notes are callable. They're callable at a 4.5% premium today. That premium comes down to 3% in March of next year, that's something we'll monitor as a potential capital allocation as well. But right now, that's not something we're doing today. But I also get back to my earlier point I wouldn't connect what we do with our debt to what we're doing with our dividend.

How much flexibility you have with those remaining baskets to move the debt higher?

There's an $80 million basket.

Okay, thank you.

Thanks Anoop.

Thank you. There are no further questions at this time. Please proceed.

Thank you, operator and look, appreciate everybody for joining the call. Appreciate the really good questions. If you have any follow up questions, please feel free to reach out at any time. Otherwise, we look forward to staying in touch during the quarter. Have a good day everyone.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.