Discovery Communications Inc (DISCA, DISCB) Q1 2020 earnings call dated May 06, 2020
Corporate Participants:
Andrew Slabin — Executive Vice President, Global Investor Strategy
David M. Zaslav — President and Chief Executive Officer
Gunnar Wiedenfels — Chief Financial Officer
Analysts:
Jessica Reif Ehrlich — Bank of America Securities — Analyst
Ben Swinburne — Morgan Stanley — Analyst
Michael Nathanson — MoffettNathanson — Analyst
John Hodulik — UBS — Analyst
John Janedis — Wolfe Research — Analyst
Zilu Pan — JPMorgan — Analyst
Doug Mitchelson — Credit Suisse — Analyst
Rich Greenfield — LightShed Partners — Analyst
Presentation:
Operator
Ladies and gentlemen, thank you for standing by and welcome to the Discovery Inc. First Quarter 2020 Earnings Conference Call. At this time all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to your speaker today, Mr. Andrew Slabin, Executive Vice President, Global Investor Strategy. Sir, you may begin.
Andrew Slabin — Executive Vice President, Global Investor Strategy
Good morning, everyone, and thank you for joining us for Discovery’s first quarter 2020 earnings call.
Joining me today are David Zaslav, our President and Chief Executive Officer; and Gunnar Wiedenfels, our Chief Financial Officer. You should have received our earnings release, but if not, feel free to access it on our website. On today’s call, we will begin with some opening comments from David and Gunnar, and then we will open the call for questions.
Before we start, I’d like to remind you that comments today regarding the company’s future business plans, prospects and financial performance are forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are made based on management’s current knowledge and assumptions about future events and they involve risks and uncertainties that could cause actual results to differ materially from expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our Form 10-K for the year ended December 31, 2019, and our subsequent filings made with the U.S. Securities and Exchange Commission.
And with that, I would like to turn the call over to David.
David M. Zaslav — President and Chief Executive Officer
Good morning, and welcome, everyone, to our Q1 earnings conference call. These are clearly unprecedented times as we confront the challenge unlike anything in recent history. I want to start by thanking frontline heroes, everywhere, for the lifesaving work, especially here in New York, which has had a big battle on its hands, the doctors, nurses, EMTS and all of the first responders; and on behalf of all of us, at Discovery, we thank you.
I am enormously proud of how our leadership team and employees have stepped up and pulled together during this time. They have done so with resilience, heart, and creativity. Their health and safety is everything to us at Discovery and to me. With meaningful populations across Asia, Latin America and Europe, we’ve been at this for about three months. Starting with office closures across Asia in January.
I’m proud to say that our business has not missed a beat. Our early and continued investment in technology and automation, and moving our broadcast and global infrastructure into the cloud, is serving us very well at this time. We are extremely pleased with the level of productivity, the morale of our employee base, and how well we are able to serve viewers, advertisers and our key partners, even as we work remotely. We continue to have great command and control across our businesses everywhere in the world.
With so much macro uncertainty, there are obviously a lot of questions at this time about impacts on our business, the direction of the economy and markets and the broader video ecosystem, all well founded. And we are left with a number of unknowns ourselves. Yet, these uncertain times highlight the distinct characteristics of Discovery’s business and the strategic advantages that set us apart.
We have content leadership in core genres that are durable, popular and differentiated. We have an efficient, low-cost content production model with global appeal that offers viewers and partners safe and positive brand environments. We have short production cycles that provide us with the ability to refresh our deep library, quickly and efficiently, and we have demonstrated this with more than 50 self-shot shows turned around in weeks, sometimes days, including the extension of our TLC’s juggernaut, 90-Day Fiance: Self-Quarantined.
We have a deep and broad library that we can reach into to nourish and entertain a wide range of consumers globally. And we have revenues that are 40% long cycle. They’re contracted affiliates, and an asset mix largely insulated from some of the most near-term challenge segments; namely: theme parks, cruise ships, scripted production, film studios among others.
Our core programming genres, trusted brands and authentic real-life talent offer comfort, familiarity and consistency to families and viewers around the world, something that is very relevant during this cultural moment.
Our talent is enthusiastically creating new content at a time when most others can’t. They are proudly taking us into their homes, their kitchens, garages, gardens, or basement science labs. And this is truly what we and what our personalities are all about. We’re about authentic real-life storytellers.
As I’ve always said, we are strongest, when we are closest to real, and in the moment with our viewers. We’ve never been so much so as we are right now.
As an example, look at Ree Drummond, Pioneer Woman from Food Network. Along with her band of kids that are filming her in her home, she is producing fresh episodes that audiences love, and she is having fun and relaxed around her family in her home, and it shows and resonates. She is nourishing viewers in a truly authentic way.
A few weeks ago, Joanna Gaines took viewers into their home kitchen with a special in, The Kitchen: Quarantine Episode on Food Network, which was mostly filmed by the Gaines kids. Close to three million viewers tuned in, the network’s highest rated in The Kitchen ever.
And a little over a week ago, we leveraged DIY’s newly expanded reach for a four-hour block to preview Magnolia Presents: A Look Back & A Look Ahead. The special drew over 2.5 million viewers, DIY’s highest ever. But more tellingly, the 7 p.m. episode on DIY with Chip and Joanna was second only to CBS’ 60 Minutes in the time slot. It also helped to drive a meaningful uptick on go for DIY.
We believe there is a huge and special appetite for Chip and Joe, two strong and authentic voices and they are curators across television and streaming, supported by their combined almost 20 million followers on Instagram alone. Their inspiring focus on home, family, food, safety and community has never been more resident than now. We’re seeing that with everything that come in contact with, including Joe’s cookbooks, which were number one and two on the New York Bestseller list last week.
The audience reaction and viewership, we have already seen for Chip and Joe, as well as their programming, gives us a real sense of confidence that we will be able to successfully launch Magnolia Network to a very large audience both on cable and online.
Viewers in general, who are home around the world are indeed finding us. In April, our portfolio continued to outperform the marketplace with significant ratings growth, led in primetime in the U.S. by TLC, the number one cable network among women. And the function and utility of networks like the Food Network, HGTV, DIY and the cooking channel has driven meaningful viewership gains and we are proud to have supported the many global distribution partners that have asked to include a number of our channels in their free previews for broader availability to their viewers around the world during this time.
While this incremental distribution will mostly be temporary, viewership across networks like DIY are up over 100% and many of our networks are reaching all-time highs. We believe that some of these viewers who have re-engaged or discovered our networks for the first time will continue to make us a part of their everyday viewing even after this moment passes.
Internationally, our portfolio has enjoyed a strong uptick both in linear and in our DTC next-gen initiatives. In Q1, we delivered the highest ever average audience for our total international portfolio, which was up 4% in overall share.
Additionally, we saw best ever viewership for a number of key brands in the quarter, including TLC, DMAX, HGTV and Food Network, the latter driven by impressive growth in Italy and new network launches in Colombia, Peru and Ireland.
In terms of our streaming portfolio, Dplay, Motor Trend, CDNs Player, Go and Food Network Kitchen are all seeing strong upticks. And Food Network Kitchen also took a meaningful step forward last week with a strong and expanded Amazon partnership, which is offering this first of its kind food and cooking product to tens of millions of their FireTV users, free for a year, courtesy of Amazon along with marketing by Amazon on FireTV. And it’s off to a great start.
Gunnar will take you through the quarter and provide some color on the current state of play. So, I’d like to offer some high-level thoughts on the industry and our place within it.
Clearly, these are challenging times, and while there are significant uncertainties from a cyclical perspective, I don’t subscribe to the view that consumption of behavioral patterns being shaped by the coronavirus will be permanently disrupted. The near-term question is, of course, what is the magnitude and duration of this quarantine moment? And what will an eventual recovery look like?
In many countries, operating trends may worsen before they get better. But given our unique reach and coveted demos, we like our portfolio and we really like our hand. Anchored by strong verticals and endemic advertisers, we have a differentiated offering when the marketplace resumes to more normalized operating conditions.
And the idea that we will emerge with significantly more share; and having had for weeks or months, people spending a lot more time with our channels, our characters and our brands, we think will provide nothing but value.
As for distribution, we naturally won’t be immune from subscriber churn from pay-TV, particularly in cases where it is driven by economic pressures. Though, we are as well represented as anyone across the OTT and skinny bundle landscape in the U.S. and around the world. And we continue to enhance our portfolio of global AVOD and SVOD content and lifestyle platforms.
We recently completed distribution renewals with some key partners in the U.S. for carriage of all of our channels. There was a time when many questioned, whether in our renewals we will be able to include all of our channels? We have. Which underscores the value of our characters, our programing and most importantly, our brands.
We remain confident in both our financial and operational model, which is one of the most efficient in the industry. We drive an unparalleled conversion of AOIBDA to free cash flow. And though there remain a number of moving pieces, we would expect this to continue.
Gunnar and his team have been opportunistic and have done a great job managing our leveraged portfolio and maturities, which he will touch on shortly.
Lastly, we have adopted and evolved as a leadership team, and I am proud of our performance, and I’m confident that we will emerge a stronger and more focused company when we resume business as usual.
Before I turn the call over to Gunnar, I’d like to once again thank our hardworking employees for their dedication and resiliency in this most uncertain time to deliver an outstanding product on a global scale.
And now, I’d like to turn the call over to Gunnar.
Gunnar Wiedenfels — Chief Financial Officer
Good morning. Thank you again for joining us this morning. I’d like to echo what David said and thank all of the frontline workers who have tirelessly provided critical services, and a big thank you to Discovery’s dedicated employees working from home to ensure that our business remains on-track.
Turning to our Q1 results. We had a solid January and February before we began to feel the impact from the COVID-19 pandemic. We did note a very modest impact to advertising, specifically in Asia, when we spoke with you last on February 27. This naturally evolved throughout the region and then into Europe beginning in early March with closures in many of our key markets such as Italy and Poland, among others, followed by closures here in the U.S. for a good portion of March.
Though, even with that, total revenues in Q1 were largely flat on a constant currency basis, while AOIBDA declined 3% year-over-year ex-FX, as we’ve continued with plans to invest and support our next generation initiatives.
As a reminder, in late March, in conjunction with the move of the Olympic Games from this summer to next, we recalled our forward-looking financial projections and outlook for both Q1 and the year.
Let me review our key revenue drivers, beginning with U.S. advertising, which was flat versus the prior year. As noted, we did see some impact from the lockdowns in March with an uptick in cancellations and deferrals. To some extent, the rise in cancellations in March was offset by higher audience deliveries. With people isolating at home, delivering the people 25 to 54 demo across our portfolio of networks increased by over 10% in total day versus the pre-stay at home period.
Audience growth has been particularly strong for our food and home networks, which provides useful ideas, comfort and inspiration for families who are hunkered down and more engaged with cooking and home projects.
The number of Discovery’s largest advertising categories are holding up nicely, such as certain CPG verticals like food and cleaning products, pharmaceuticals, insurance, financials and e-commerce companies; while travel, movie studios and some autos and retailers understandably cut back significantly.
We have predictably seen higher cancellations and deferrals in Q2. And based on preliminary results, April is down around 20% year-over-year. And based on business booked for the remainder of the quarter, both May and June are looking slightly better than April, though we remind you that this is a very fluid marketplace at the moment with a lot of cancellations rolling month-to-month. And where appropriate, we’re accommodative as best as we can to our partners’ needs.
U.S. distribution in Q1 was up 2% year-over-year as rate increases were partially offset by linear subscriber declines. We recently completed affiliate deals with some of our key distribution partners, which we believe helps underscore the value of our content as well as provides visibility on rate increases.
Subscribers through our fully distributed networks, which account for around 80% of total U.S. distribution revenues were down 4% year-over-year at the end of March, while total portfolio subscribers were down 6%, in line with our prior commentary of reverting back in line with the broader industry trends.
As a reminder, this is the first full quarter having fully lapped Hulu and Sling. We haven’t seen any distinguishable COVID-related impact on subscriber trends. So, we don’t necessarily have real time color as we receive remits one to two months in arrears, and we obviously aren’t immune from overall trends, which are naturally dependent on the magnitude and duration of this current moment across the country and potential long-term macroeconomic implications.
Turning to international; advertising in Q1 was flat year-over-year, ex-FX. For the first two months of the year, international advertising was pacing up 5%, which include the previously noted deferrals in APAC. As many of our key advertising markets in Europe began to shutdown, we saw a more pronounced impact with March down nearly 10% year-over-year.
Unlike the U.S., which enjoyed the benefit of a structured upfront marketplace, many international markets are more flexible with advertising volume, reacting more immediately to changes in economics or viewing shares, both down as well as up.
Based on preliminary results, April is down about 40% in aggregate across all international regions. Depending on the market, the range is anywhere from down 30% to down 50%. And though we’re early and only one data point, we are starting to see some signs of stabilization in markets like China, Taiwan and Korea. So, this is a relatively small portion of our mix.
International distribution was up 1% year-over-year, ex-FX, in Q1. As we’ve mentioned before, we are accelerating the rollout of our D2C services like Dplay, in some cases coming at the expense of our linear business, which is a response to market behaviors in countries like Denmark.
Consolidation among distributors means that we have to push harder to get full value for our content portfolio. As such, we have continued to play more offense, which infers that we may and are facing incremental top-line headwinds. This is even more pronounced at a time when there are no sports as our value proposition in key markets in Europe is predicated on local sports, for example, in Denmark and Sweden, where Dplay has near exclusivity on certain football rights.
Naturally, with no sports being played anywhere in the world, both Eurosport Player and Golf TV and even certain premium tiers of Dplay has seen a pullback in activity, which has weighed on segment performance. Though we expect momentum to continue whenever play resumes.
So, even without sports at the moment, we are seeing nice momentum in Dplay subscriber growth, driven by our compelling entertainment offering. Similar to the U.S., we have not seen any material change in net subscriber trends, though where appropriate, we may work with distributors in an effort to be good partners and helpful as they seek to absorb near term churn.
Even amidst the uncertainty surrounding our revenue, we feel very confident in our ability to flex our cost structure to mitigate as much of the topline shortfalls as we can.
As you know, following the Scripps acquisition, we’ve been disciplined about the management and transformation of our cost base and rightsizing our operations to reflect the state of the industry. While the merger provided a great opportunity to open up and examine many of our practices and procedures, so too, we believe, will this moment. And you should expect us to be appropriately focused here as well.
We are learning valuable lessons during this lock down period. Case in point, as David mentioned earlier, content produced by our talent at home has proven to be some of our most successful programming and we’re not making just an hour here or there. So far, during the lockdown period, we’ve been able to create nearly 350 hours of new premier content.
Furthermore, with traditional content production largely shut down or paused, we expect to see content amortization savings versus our 2020 plan as less originals premiere, even as we continue to make certain content investments in our next generation initiatives.
With sports currently sidelined, we’re not expensing the rights cost. Though, these costs are only being deferred until a bit later in the year, if and when sports return.
We are also refining all marketing and personnel-related expenses, as we’ve implemented a hiring freeze, and as you could imagine, T&D spend is minimal currently. At this point, we currently expect total operating expenses to be around flat with last year on a constant currency basis, as we continue to reallocate investment to our next generation portfolio.
Accordingly, we expect expenses related to the core traditional business to decline in the mid- to high- single-digit range. To the extent that there is either as faster than expected return to normalcy or a far more protracted one beyond the end of the year, we would expect total expenses to fluctuate a few percentage points above or below our current flat outlook based on how quickly we can begin to ramp up production and see our recovery in advertising sales.
Turning to free cash flow, which was down year-over-year in Q1, some of this was timing related, like our cash tax payment, while the rest was related to the increased level of planned investments prior to the pandemic.
While we don’t anticipate sustaining the same level of free cash flow generated last year, we still expect to achieve an industry-leading AOIBDA to free cash flow conversion rate, though there are a number of moving pieces on the working capital front that could influence free cash flow in either direction based upon when we begin to ramp production as well as how the cash cycle in the advertising ecosystem evolves.
We remain comfortable with our balance sheet and our current leverage ratio at 3.2 times on an LTM basis. I am confident in our liquidity position, having finished the quarter with roughly $1.5 billion of cash and another $2 billion of availability under our fully committed revolver. We have $600 million of debt coming due in June, and no additional maturities until June of next year, when $640 million of notes mature.
The rating agencies have remained supportive of our business plan and capital structure, an important signal during this moment. We remain committed to our investment grade credit ratings as recently affirmed by the rating agencies and to our longer-term net leverage target of 3 times to 3.5 times.
We filed a separate 8-K this morning, outlining an amendment we signed with our bank group. You can refer to the 8-K for additional details. This amendment relates to the gross leverage covenant in our revolver to 5.5 times beginning in Q3, returning to its original 4.5 times threshold by Q3 of 2021.
While we do not expect to approach this level, we requested this change out of an abundance of caution in order to preserve full access to our revolving credit facility throughout this period of uncertainty. Any increase in leverage, should it occur, should be viewed as temporary and related only to impacts of COVID-19 rather than a change in financial policy.
And with respect to this additional cushion, when reflecting on the point that David made, I believe it’s worth reemphasizing that given our asset mix and what I would consider to be very flexible and adaptive methods of production, should our traditional production chain be impaired for an overtly long period of time, we would say are relatively well from a cash efficiency profile, that is to say, we would be able to produce impactful and relevant content on very attractive unit cost per hour for as long as needed.
Turning to capital allocation; in Q1, we repurchased $523 million worth of shares, reducing our share count by over 19 million shares. We have largely been out of the market, since we reported our 2019 results with the exception of a short period in late February, early March in which we purchased around $200 million of our equity. We have $1.8 billion left on our authorization.
And finally, FX was approximately a $30 million drag to revenues and $10 million drag to AOIBDA in Q1. For the year, based on current rates, we expect FX to have a negative $130 million to $140 million impact on revenues and a negative $30 million impact on AOIBDA.
With that, I’d like to turn the call back to the operator to take your questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] And our first question comes from Jessica Reif Ehrlich from Bank of America Securities. Your line is open.
Jessica Reif Ehrlich — Bank of America Securities — Analyst
Thanks. I just have a couple of questions. First on sports; Gunnar, it wasn’t unclear — I wasn’t clear on — you’re not recognizing sports costs. But on a cash basis, are you paying right now? And if you are, what flexibility will you get kind of in the back end? And are you changing your approach to the Olympics now that they have moved? Is there anything different? Will the loss be the same a year from now? And so, sports is one thing.
Direct-to-consumer on Food Network Kitchen, every day is like a Super Bowl. Unfortunately, I mean, it’s good for you. But can you give us an update on how it’s doing? I know you moved out Magnolia timing. But if you can give us an update on direct-to-consumer?
And then finally, sorry for so much; but cancellations were due last week for a third quarter. Can you give us some color on what you’re seeing because your advertising actually — that you’re seeing so far seems actually pretty good?
David M. Zaslav — President and Chief Executive Officer
Sure. Why don’t I get started, and then I’ll pass it over to Gunnar. Having no sports is a challenge for all of us. But 90% of our deals have either force majeure provisions or provisions that specifically relate to us not paying for content that we don’t get. And so, I think we did a particularly good job in our sports deals, which we expect that that’ll come back and it will just be a move. But to the extent that they don’t, we have a real opportunity.
With that, on the Olympics, we think it’s going to probably be a little bit better for us because one of the issues with the Olympics is it’s separated by such a long period of time.
In terms of building our digital direct-to-consumer platform, the fact that we’ll have summer and then winter only a few months apart, the fact that we can get advertisers in to both of them together where we can string it together. And we’re hoping that when people get to Tokyo, it’s going to be a real opportunity for people to get back together with a lot of excitement.
I think when sports does come back, it’s going to come back very big. People are really yearning for it. I’m excited in talking to Jay Monahan, who is doing a terrific job as Commissioner of PGA, and we’re, as you know, partners around the world, hoping to come back in June, and has a great plan for it and we’re rooting for that. I think that we really need — we need sports.
Having said that, what we’re experiencing is different than what’s here in the U.S. As I’ve said for a very long time, sports works differently outside the U.S.. When people want sports, in most cases, it’s on Premium, and they’re making the choice to pay for it. Here we have an over-stuffed bundle where sports has been stuffed in and leveraged in, which is one of the reasons why we see this — the challenge that the U.S. marketplace has been seeing, where subs are flat or slightly growing around the world and declining here. It’s because between $20 and $30, sometimes more of sports rights are being paid by consumers and they’re not getting.
And so right now, consumers in this difficult time, this really highlights the idea that there is a huge subsidy that’s being paid for sports. And now at a time when they’re paying the subsidy, which creates, I think, even more of a challenge when people say: “Why am I paying that?” And that may be one of the reasons why you’re seeing some people disconnect.
Having said that, I look at Food and HG and Cooking, we’re the new sports. Our channels are the new sports. The numbers are huge, the engagement with our characters and with our talent is enormous. We’re the real-time player right now on television, whether it was Mike Rowe on his couch or Guy Fieri, or Ina Garten or Ree Drummond, where 350 hours of live content that’s really working with our characters.
And so, we started most of the sports issue, but I do think it’s an overhang here in the U.S. and we’re leaning into our channels like we are sports, we are real time in many ways. And as you look at what’s going on in the U.S., you have News networks and then you have TLC and HGTV as the big networks.
So, with that, I’ll just say that Amazon, it just started a week ago, but whether they have 30 million or 40 million, they have tens of millions of subscribers to Fire, they love Food Network Kitchen. They’re providing the opportunity for people to get that for a year for free, which we think is fantastic. The partnership is strong and they’re marketing it. And I agree with you that this is a moment where we can really shine with that.
So, Gunnar?
Gunnar Wiedenfels — Chief Financial Officer
Yes. So, maybe just a couple of points to add, I mean, on the cash flow question for sports. It’s going to be a mix. So far, most of the events have been postponed rather cancelled. So, you should expect, not only P&L but also the cash profile to be adjusting accordingly and we will keep an eye on this as we go through the rest of the year.
Regarding the Olympics, we will have two events much closer together, which should be positive. We also have a little more time to get to prepare the ad market to go to market with bundled packages. So those would be positive. But bottom line is, it’s a little early to start about a specific guidance. But right now, I wouldn’t see a change versus what we have guided for this year.
And then, regarding the cancellations, you’re right, the upfront option cancellation period has started. It’s way too early to have a view. And as I said a couple of minutes ago, we will make sure that we work in partnership with our platforms here and work through this together.
Jessica Reif Ehrlich — Bank of America Securities — Analyst
Thank you.
Operator
Thank you. We’ll take our next question from Ben Swinburne from Morgan Stanley. Your line is open.
Ben Swinburne — Morgan Stanley — Analyst
Good morning. David, I just want to pick up on the comments you were making before about the sort of sports subsidy in the U.S. and what’s happening to the ecosystem. And I think everything you’re saying makes a lot of sense. And all of these trends are probably accelerating because of this financial and health situation going on as you pointed out.
You have been talking about a U.S. OTT offering of your core content now for maybe a year, maybe a little less. And I’m just wondering if what’s happening in the marketplace with cable operators increasingly just passing on these sports cost to the consumer, pushing people out of the bundle is accelerating your thought process or changing how you think about it?
And your reach is falling in the U.S., really with no fault to you guys. It’s really an industry issue. And you’ve got, obviously, massive consumption through streaming, including on a lot of your products. But you still haven’t laid out to us or talked publicly more about how you plan to extend the core IP?
I don’t know if you’re ready to talk about that in more detail. But I’d love to just get an update on that because I think it’s really an interesting opportunity for you guys.
David M. Zaslav — President and Chief Executive Officer
Sure. Well, look, I think the advantage to us right now is that people are spending a lot more time with our channels. Our share is up really significantly everywhere in the world, and it’s two months here. It’s longer than that in number of areas in Europe and Asia. And behaviorally, people are spending a lot more time with our characters and our channels, and we think that that’s a huge benefit to us on this existing platform, because there is a real habit here. And as well, we’re seeing it in a meaningful way on GO.
We’re not able to fully monetize all the share, obviously, domestically and around the world, but it’s — we view this really as an important moment for us. Because as a company, our focus is to entertain, and when we are at our best to inspire. And that’s what, we have a great-great creative team that’s doing all kinds of content from home. We’re learning a ton.
And it’s resonating with distributors. They’ve come to us and said, “Can we add DIY?” Many of them, to all of our subscribers, “Can we add cooking to all of our subscribers? You have a lot of other channels that are very strong, your Hispanic channels, can we add them?” This is going on in Latin America, in Europe and the U.S., and they’re getting very good feedback and the viewership is increasing significantly.
And so, I think the viewership we’re getting in the average age on GO of 26, the viewership we’re getting for all of these channels and all of our characters around the world reinforces how valuable what we have is. And it also, as these distributors take a look in the U.S., there is going to be, I believe, more and more pressure on them because it’s just becoming abundantly clear.
And now, for two months, people have been enjoying cable for two months, so it raises two questions. What am I paying all that money to sports for? But also, it’s a great product. I’m spending a lot more time, and I’m really, really enjoying. So what we should have in the U.S. is what everyone else has, which is a bundle of content that doesn’t have sports that would be very affordable and we would likely see a very quick turnaround in this issue of subscriber loss, because we’re saying take it for $80, take it for $100 or don’t take it at all. And even services like Philo, we’re seeing — which we’re an investor in, we’re seeing big-big uptake in this idea, and they don’t even have the broadcasters.
And so, I’m hoping that you follow the behavior, you follow the need in the marketplace and you follow what’s equitable and fair, and ultimately it might put pressure on some of these big sports players that are bundling and forcing and leveraging and jamming, to say even in this moment, “All right. Enough. Go ahead. And I’ll give you more flexibility to give America what they want, a chance to buy a multi-channel and broadcast package without stuffed sports.”
We are — we have been building. We have a very strong team. We have over 150 people and engineers working. We’ve slowed down a little bit because we can’t hire new. But we’re on-track with our platforms. All of the platforms we have outside the U.S. are working exceptionally well, they’re ours. And the platform that we have — that we’re working on here in the U.S. to give us full optionality to go right to the market is doing very well.
And so, I think you’ll hear more from us. But I think our IP looks stronger. And more and more, a lot of these other platforms that don’t have a lot of content are seeing how much people are spending time with us and they’re talking to us about whether our content would be available to them. And right now, we think our aggregate content is most valuable for us and for us to be able to continue to look at going to non-cable subs ourselves.
Ben Swinburne — Morgan Stanley — Analyst
All right. That’s really helpful. Just one quick follow-up on Food Network Kitchen, the Amazon announcement was quite interesting. And I know you probably don’t want to share the specifics. So I’m just curious if you’re getting wholesale revenue or anything you can tell us about sort of the financial impact or even the kind of marketing push that’s going to be associated with that, Amazon offer to their Fire subs, Fire users?
David M. Zaslav — President and Chief Executive Officer
I would just recommend that you all go to Fire. We’re on the front page. We’re getting equal billing with Hulu and some of the other big great platforms. And there are some days where they put us on, basically take over most of the page. And so, they are a great partner, they love the product and we’re rolling together.
Ben Swinburne — Morgan Stanley — Analyst
Thanks a lot.
Operator
Thank you. Our next question comes from Michael Nathanson from MoffettNathanson. Your line is open.
Michael Nathanson — MoffettNathanson — Analyst
Great. Thanks so much. David, a couple of questions for you. On the European side, where you have your sports network, are there any minimum number of hours you need to deliver to maintaining type of license fees? So, that’s one.
And two, given how clean your company is on cash flow and the balance sheet, can you talk about maybe leaning into M&A and how you would think about M&A given how you dislocated some of the valuations around the world?
David M. Zaslav — President and Chief Executive Officer
Sure. On the sports side, we don’t have anything in our existing deals. When you look at our aggregate package that people are paying for in Europe, what we’re delivering to customers is meaningfully higher than it was before. Ratings are down significantly on Eurosport and where we will be very excited when the sports comes back. But no, there is nothing in those existing agreements.
But again, the sub-fee for whatever it’s worth is relatively small. It’s very different than here in the U.S. It’s not in the dollars or almost $10 range, it’s much smaller. And so, distributors tend to look at our overall delivery and they’re seeing — we’re the top performer or one of the top performers in every market in terms of what we’re delivering on a multi-channel basis.
On M&A, all I would say is that we — it took us a very short time to absorb Scripps. Ken Lowe built a great-great company with a great culture and we’ve integrated fully. We’re really — this is everything best of what Ken built and the best of what we built. We have a great leadership team that’s fully integrated. We view it as really the best of both companies and it’s presented that way.
We’re grateful for the great comfort channels that are now part of our portfolio here and around the world. It’s been a huge help to us. We’re so proud of those, those brands and all of that great talent that was added. And that deal worked out really well.
As you know, we added over $1 billion of free cash flow and we did it in 18 months and we went from 4.8 times to 3 times levered, to below 3.5 times levered. So, I think what we show to our Board and to ourselves is that this is what we do and we do it well.
Having said that, that was a really good transaction for us, not just because of synergy, but it was — we really bought IT and we bought something with great characters that added to our overall bouquet. We believe that there are some good stuff out there and great companies that might not be in the same kind of free cash flow position with the same kind of balance sheet as us.
So, we are looking at everything. We’re going to be — but we have a great hand right now. But I do think, depending on how this goes over the next several months, there will be some companies that have great IT or great assets that are facing some difficulty. And many of them, some of them have already come to us, and said, “Hey, we look a lot better with you. You have all that free cash flow.” Instead of having to cut all this and trying to figure out if we could survive, and no other company has — we have 10 to 12 channels in every country in the world, we have — so we have synergy in every country, we have an ability to promote those channels of promotion in every country.
And so, we’re going to be very careful and deliberate. We’ve got a great Board that’s good at this. We have Bob Myron in the new house family that are focused on quality and spending money on content and owning content globally; and we have John Malone, who is fully engaged in looking at our balance sheet and looking at our overall strategic assets around the world and seeing what would make us stronger.
And so, I think this is a really unique moment where we could lean into. We’ve got a great Board with — and we have a great leadership team and we have a great balance sheet.
So, we’ll be patient. And if you see us do something, it will be because we think it’s going to help us grow faster in this new and changing world.
Michael Nathanson — MoffettNathanson — Analyst
Okay. And can I ask you one last one on the upfront. Given the strength of your verticals, given that you can actually have fresh content in the fall, how do you think about going to market in the upfront where others maybe can’t sell anything right now? So, what’s your strategy there?
David M. Zaslav — President and Chief Executive Officer
Well, there is a divide in the market and you’d expect that it’s such an unusual disrupted moment. But there’s a number of them, and we’re talking to all of the big players and they’re going to ultimately make the decision for their advertising clients.
I’d say, more than 60% to 70% of them are saying or more than 50% are saying, “Hey, we’re going to do a regular upfront.” And a number of them are saying, “Maybe we shouldn’t do a regular upfront, maybe we should go later and see what happens and move later.” We are open for business. We have fresh content when others don’t.
And one of the things that we’re seeing is the live and engaged viewership on our channels have never been higher. And when people — when the advertisers are putting on content that’s in the moment, that recognizes what’s going on in the world, the viewership of those commercials are up dramatically. People are watching the commercials when they’re talking about this is a tough moment in America and here’s what we’re doing, people are watching it.
And so, we’re open for business. Those that want to move in the traditional window, we’ll move with them. Those that want to move later, we’ll move with them. And it’s not for us to decide who is going to do better. It may be that the ones that moved early, do a lot better; and maybe the ones that moved later, do better. But we’re open for business.
And in the meantime, what we’re reducing our — to the extent that we’re not sold, we’re reducing the amount of inventory that we’re selling and we’re finding that that also is helping our ratings and that’s something we need to do as an industry anyway.
Michael Nathanson — MoffettNathanson — Analyst
Okay.
Operator
Thank you. Our next question comes from John Hodulik from UBS. Your line is open.
John Hodulik — UBS — Analyst
Okay, thank you. Two questions. First, David, anything you can tell us about the pricing you saw on those recent renewals you mentioned? And then a follow-up to Michael’s question, obviously $1.5 billion in cash, lot of liquidity, you bought back more stock than we expected before the outbreak. Can you talk about what you need to see going forward maybe just from a stabilization of the ad market or what it would take for you guys to restart the buyback? Thanks.
David M. Zaslav — President and Chief Executive Officer
Okay. I’ll have Gunnar answer. Why don’t you start off Gunnar with answering that, the second part?
Gunnar Wiedenfels — Chief Financial Officer
Yes. So, yes, I mean, as you read this morning, we did buy back some stock right after our full year earnings call. As you would expect us, we’ve been a little more careful since the beginning of the full outbreak here. And as you would expect as well, we have taken precautionary measures to make sure that our capital structure is in good shape.
And again, from what we’re seeing right now, we continue to have a lot of confidence in our ability to generate free cash flow. We were free cash flow positive in the first quarter. From what we’re seeing, we’re going to be free cash flow positive in April, etc. But as you would expect, we don’t have a lot of visibility into the second half of the year. And so, from the perspective of what I would have to see, clearly, we’d be looking at a signal of pickup in ad markets.
And again, we’re not giving guidance here. We don’t have the visibility. We thought it was helpful to provide you with what we’re seeing today, which was — which is the April — the April numbers. And from a booking perspective, slightly better in May and June. But as I also said, I’m just giving that to you guys in full transparency here, we’re seeing a lot of rolling cancellations etc. So, take it with a grain of salt. But — so that’s really — that’s really the point on capital allocation and buybacks.
And then the pricing on recent renewals, your first question, as you know, we don’t disclose any details. But what I can say is that I’m very happy with those deals. As we said many times before, we do believe that we have amazing content, provide amazing value to our affiliates and I’m not surprised that again we were able to strike deals that are mutually beneficial, additional value on both sides. And in terms of the size of the portfolio, no re-tiering etc. etc. So, top to bottom, deals that are in line with what we have been seeing in the past.
David, anything to add?
David M. Zaslav — President and Chief Executive Officer
The only other thing I’d say is that the — there was a lot of talk. We even changed over the last several years, so that more than 80% of our value was against our top eight channels. But all of our channels were renewed. Right now — and we got additional carriage for some of our channels in the renewals. In some cases, meaningful additional carriage.
And after Fox News launched, the next channel that launched was OWN, which became the number one channel for African American women, that was us launching new assets with new IP that we can take around the world. Then, ID, which became the number one channel or number two channel for women in All Day, which was our second asset.
And we think, now, looking at DIY in the ratings and the fact that it’s in more homes and what the Chip and Joanna Gaines have been able to do and the reception for the great content that they created, not even just what they’re doing themselves, but their curation and taste, we have a chance to launch another good asset, really good asset that advertisers love both on cable and in digital.
So, we’re very pleased with — the negative is that, look, we’re cheaper than one regional sports network. So, in some ways, we’re providing all this value with all these characters and we are the new sports, our key networks. But on the other hand, we’re very inexpensive.
And I think the power of our channels is much more now as they take a look — as operators take a look, distributors, how much time are people spending with Food and HG, they’re watching it all. The length of view is higher than almost any channel and on cable. And so, I think the good news is that we were able to do good deals. The issue is that we’re not getting paid close to what we deserve, a fraction of what we deserve for what we deliver. But we’re going to keep working on it.
Gunnar Wiedenfels — Chief Financial Officer
David, let me add one more point reflecting on, Michael, on your question, and John, your question as well, both for M&A and buybacks. You’ve heard me say earlier that we’re in a very constructive dialog with rating agencies and you should know that we’re continuing to honor our investment grade rating. It’s a big priority for us and that’s the backdrop against which you should take all these answers regarding whatever M&A, buybacks, etc.
John Hodulik — UBS — Analyst
Great, thanks guys.
Operator
Thank you. And our next question comes from John Janedis from Wolfe Research. Your line is open.
John Janedis — Wolfe Research — Analyst
Thank you. David, you guys talked about pushing your own two key solutions more aggressively in Europe. I’m wondering does the COVID impact the rollout? And can you give us an update on the Dplay expansion? And then separately, you talked about your short production cycle and fresh content. Can you give more detail on how you’re thinking about availability of originals across the platform later this year and into ’21 relative to normal, and to what extent, a non-scripted programming is better positioned relative to Scripps production comes back online?
David M. Zaslav — President and Chief Executive Officer
Sure. Kathleen Finch is just a great creative executive, Nancy Daniels, we have creative leaders on each of — at each of our channels and we have go-to talent that are authentic. They love to cook. They — Mike Rowe, I’ve been on the phone with him three times in the last week with ideas of what he could do and the excitement of shooting before the catch from his couch.
So, we have a fully engaged creative team. And as Gunnar said, over 50 projects, 350 hours and one of the things that we’re — this idea of we’re best when we’re closest to real, you know, if you scripted the talent on there, they can come out and people know them. But the idea that we could Guy Fieri even close to live and maybe even eventually live from his kitchen, from his barbecue, and we have found that the audience will go with us. And in some cases, they love it. “Oh, look at that, look at Guy. His son is shooting it. I wonder what his son looks like. Look at his living room, look at his kitchen. Guy, what’s that book behind you there? You know, did you get any recipes from that?”
And so, we’re seeing big social energy around it. Our talent is getting stronger. So, we already had a short cycle. But now we’re finding that we can produce all this content and it’s dramatically cheaper. And in many cases, it feels more authentic and the audience loves it. And so, we’re just leaning into it.
Kathleen and Nancy, and the whole team, Courtney White and Jane Latman. Jane runs HG, and Courtney runs Food. They’re — we’re on the phone with them every day, they’re just super excited, and so is the whole creative team that they could do this.
And so, I think you’re going to see a robust slate of content from us that will continue and there’ll be others that will be idle. We won’t be idle. Our issue is going to be where is the advertising market? I think there is no question. Every week our ratings go up. Every week people are spending more time with our portfolio and they’re enjoying it more.
And so, the question for us simply is that we’re dramatically under-monetizing it right now, which is okay. But we’re also learning that with less commercials, we’re actually finding it would be better. So, I think the slate is going to be a huge advantage for us and our characters and their engagement is a huge advantage.
On Dplay, we — I think we have the right strategy, local sports, local entertainment and large library of local entertainment that you grew up on. It’s compelling and it’s understandable.
So, okay, I got Disney+, great product. I have Netflix, great product. I’ve got Amazon Prime, great product. But almost all of them are very little amount of local, whereas we’re local, local, and people get it, and it’s growing and we’re leaning into it. In some cases, we’ve decided to lean harder.
And yes, that’s what you see that we did in Denmark, because it’s a market that has been accelerating with direct-to-consumer. They have a huge penetration of broadband, high speed. And so, we’re leaning into it. And JB and his team are doing a great job with it and we think the strategy is starting to break through. It’s going to take more time. But this moment is putting a lot more attention on all the direct-to-consumer products in a good way.
John Janedis — Wolfe Research — Analyst
Thank you.
Operator
Thank you. And we’ll take our next question from Alexia Quadrani from JPMorgan. Your line is open.
Zilu Pan — JPMorgan — Analyst
Hi, this is Zilu Pan on for Alexia. Thanks for taking our question. Can you talk a little bit more about how your own streaming services has trended in the Nordics after the discontinuation of your carriage agreements? And then just on production, are there any countries where you still might be able to shoot normally, that you can take advantage of? Thank you.
David M. Zaslav — President and Chief Executive Officer
Okay. Thank you so much. One point that I wanted to just add to the answer to John is, look, on Golf, on the Eurosport player, on cycling, we don’t have sports, it’s dropped off significantly, as you would expect. And our free funnel is fine where people are coming in and they’re reading from Golf Digest, and they’re seeing some short-form content. But the fact that we don’t have live sports is having a meaningful impact on those businesses as you’d expect, and we think when they come back, it will kick in.
In terms of traditional production, there is some that have come back a little bit in Asia, but it’s mostly shutdown. We do have — we have a lot of content that was shot that we’re working on. We have content in our library. We are shooting new, but the ability to actually — we’re not pushing for anyone to get out.
We had this moment after we closed down where we had a number of cases. We have over 10,000 employees, and it was tough. Those were 14 of maybe the toughest days for me in my life, is everyone okay that has this, we had a — we did had a number of employees that were struggling. And you feel it. You feel it because they got sick coming to work.
And so, we’re not in any rush to push any, because we’re working remotely so effectively. We look good. We haven’t missed a beat. We’ve learned a ton. But we don’t want to push anybody into the field. We don’t want to have that feeling again. We had a call every morning on this virus: “Who has it? Who’s been tested? What’s going on? Who did they come in contact with?” Really an extraordinary effort led by Adria Alpert Romm and David Leavy, but it was every day.
And so, we’re not in any rush to get back to those calls because we couldn’t breathe. And thank God, all of our employees are safe and they’ve gotten through it. Not so for a lot of employees’ families where there have been challenges, which everybody is facing, but we’re in no rush.
I will say that it’s bringing this company together. When I joined Discovery, for one year, we had a call every morning at 7 o’clock, every morning. And it energized the company. We were all talking on one page and we have a call every day, every morning now, every single morning. And we’re all together, what are we doing today, it started out with what’s going on with the virus and now it’s “Where are we winning, how do we press on that, what — how do we do this differently, how do we get less people in the office?” And, we’ve learned a lot. We used to have 14 people in a control room. Now, we’re doing it with one.
So, there’s going to be very significant change in business when we come out of this, I think for the good, in terms of what we’ve learned, including how we shoot content and how we pay for it.
Gunnar Wiedenfels — Chief Financial Officer
Let me maybe add to the Nordics question. We’re seeing dynamic growth on our Dplay platform. Regarding the traditional affiliate deals, you mentioned sort of having lost deals. We’ve actually gone dark with one traditional affiliate in Denmark and we’re seeing very dynamic growth on our Dplay offering in that market, more so than in — or it’s above the already dynamic growth in other markets.
And beyond that, we’re also very excited about sort of new types of partnership deals with the likes of Telia, Telenor, where we’re engaging in broader partnership deals, both on the traditional side as well as in the wholesale B2B2C relationship for our direct-to-consumer products, which I think is going to be a very fruitful partnership mark.
Zilu Pan — JPMorgan — Analyst
Thank you.
Operator
Thank you. Our next question comes from Doug Mitchelson from Credit Suisse. Your line is open.
Doug Mitchelson — Credit Suisse — Analyst
Thanks so much. A question for Gunnar, a multipart and then a question for David as well. Gunnar, opex coming in $100 million or so lower year-over-year in 2020 is certainly interesting. When you look at the core decline of mid- to high- single-digits, how much of the costs that are coming out are temporary? How much is permanent?
And then you mentioned cost flex, to the extent that there is change in revenue versus expectations, where does that flex come from? Will the next round of cost mitigation start to impact DTC efforts or is there still a material amount of flex in a traditional business?
And for David, it refers to Ben’s question on streaming, before we start to run with the a la carte narrative for Discovery, do your existing deals with pay-TV distributors have any limitations on Discovery going direct-to-consumer sort of a la carte? And I’m sure you would like to work with the cable guys on bundling with broadband. But do you have any concerns about putting satellite distribution at risk? And I guess for fun, how much do you think consumers will be willing to pay for a standalone Discovery a la carte streaming service? Thanks.
David M. Zaslav — President and Chief Executive Officer
Okay. Why don’t I start and then I’ll pass it to Gunnar. We don’t have limitations, but we also have a hell of a business with our existing distributors. And I’ve been in this business for 30 years and a lot of those distributors are my best friends. And we’ve done very well by supporting each other and working together, and that’s what we’re doing with GO with our authenticated product.
And there’s 30 million broadband-only subscribers. And so whether it’s Pat Esser at Cox or whether it’s Dave Watson at Comcast or whether it’s Tom Rutledge at Charter, they’re in the broadband business, this 30 million people that are broadband-only. And so, we are in discussions with all of them about the fact that we have this great package of content.
If you take a look at the front screen for Disney, you see Pixar, and you see MARVEL and you see Disney films, and people look at that, and go, “Oh, I love that stuff.” And then imagine, they open up and they see HG and Food and Oprah and Discovery and BBC Planet Earth, and then behind each of those circles is all the great talent that we have. And we’ve done a lot of research and people look at that and they go, “Wow, that’s all — those are my six favorite channels, that’s five or four of my favorite channels and those are my favorite characters. ” So, we all agree and talking to this — everyone agrees there’s a lot of value there.
And so, I think you’ll see over the next year or so, our goal is going to be to do something with the distributors, because they have direct access to those 30 million and they have enormously helped Netflix by promoting Netflix and by billing for Netflix. And the churn for Netflix and any product goes down when an existing distributor that’s billing bills for it and they have a good relationship with all those broadband subscribers because they’re providing an incredible service.
And so, I think it’s — it will start with that and it has started with that. And so, I think when you see us move, you’ll probably see us move broadly, but also in tandem in a way that creates value for both of us, which is what we’ve been talking about. And I think what — a number of the distributors that we’re talking to feel good about and encouraged that instead of just doing our own thing, we’re in talking to them about doing some things together.
Gunnar Wiedenfels — Chief Financial Officer
Okay. Doug, then on the opex side, I want to answer this on a couple of levels. Number one is, we’re still enjoying significant impact from the transformation of our company. We had a full — a tool box here of initiatives that we’re still in full swing as we came into the year and we continue to deliver those and some of the longer cycle cost improvements where we had to put systems in place, etc. We’re also enjoying the fact that some of those investments are coming down, but we’re reaping the benefits now. So, a lot of this is going to be lasting impact.
Now, obviously there is timing stuff. If you look at T&E, for example, you wouldn’t expect us to spend a lot here. So obviously that is going to be fired up again once the global economy opens again and that’s explaining some of the variability.
There is also variability obviously, as previously pointed out, in the direct-to-consumer space where we have a lot of subscriber acquisition cost that are variable, but also the pace at which we’re hiring. As you would imagine, we’re going a little slower on hiring right now. So, all of those expense buckets are going to start to ramp up.
And then finally, there is content where obviously, it’s a function of the ecosystem’s ability to produce and deliver content and the mix of sort of the in-home content that we talked about versus, let’s call it, traditional production.
So, it’s going to be a mix. And that’s why we gave that range. Some of the expenses are going to come up when the economy opens again. Others are not. But I just want to reiterate the point, we had a large range of transformation initiatives going into this year. And as you would expect, we’re also learning right now and there is additional ideas coming through and going through the pipe here right now.
Honestly, this company is functioning very well in this environment and there are lot of learnings for us in the future process setup.
Doug Mitchelson — Credit Suisse — Analyst
Thank you, both.
Operator
Thank you. And we’ll take our last question from Rich Greenfield from LightShed Partners. Your line is open.
Rich Greenfield — LightShed Partners — Analyst
Hi, thanks for taking the question. I’d just love, David, kind of from a high level, when you think about the virtual MVPDs, I think you all did a great job of getting on to these platforms and sort of using the crowbar of the Scripps acquisition to kind of push your way into a lot of these packages.
We saw Hulu last night on the live side, their growth has really slowed dramatically. I think they added like a 100,000 subscribers in the first quarter. Is the V-MVPD like, what do you think is going on there? Like, you would have thought with the click of a button you could add TV during the pandemic, while everyone is stuck at home and you certainly didn’t see that in Hulu live. What’s going on with that part of the business? And is there anything that they can do in your minds to reaccelerate growth?
David M. Zaslav — President and Chief Executive Officer
I think it’s simple, they’re charging an awful lot of money. You can get a package of multi-channel television for $10 or $20, sometimes less than $10 everywhere in the world. And if you took sports out, we could do that very easily. And so, I think they’re saddled with regional sports networks, saddled with overstuffed re-trans and sports channels and that’s an issue in general.
And I think that it’s — when you look at that price now and you’re not getting any sports, I’m not surprised. We’re not seeing that outside the U.S. The pump levels are up around the world, so people are spending more time. They’re obviously spending a lot more time with our content.
I think there should be a rationalization of the market and some of this stuff should just get puked out and up. And I think, particularly in a moment where we’re in a recession and people are really watching every dollar, if you put up a TV set, people are waiting in lines to get things, and yet, add up what they’re paying for sports that they’re not getting and then you wonder why aren’t more people waiting in line for that. It makes no sense. You’ve got to puke out that stuff, and you got to go to the players in the marketplace that are stuffing that in, and saying, “Not now, back off, not now.”
But the thing that’s good for us is we’re in every single packages, all of them. And one of the things that I think will help us is these things are going to fluctuate. Everyone hasn’t reported yet. We’ll see how Charlie does. I think in the long run, we don’t know how long this is going to last. There are some — we’re seeing real growth with some of the smaller packaged players, as I mentioned, so we’ll see —
Rich Greenfield — LightShed Partners — Analyst
I’ve just been surprised how much they’re pushed. I’m just surprised how much they’ve been pushing price rather than rethinking packaging.
David M. Zaslav — President and Chief Executive Officer
Well, look, ultimately the distributors are very-very smart and their job is to serve their existing customers and to keep the customers happy. So, I’ve always said, eventually this will get rationalized. But ultimately, it’s way too soon to draw conclusion. There have been quarters where it looks like we’re not losing subs anymore in the U.S., then there’s quarters where it looks like, “Oh, no, we’re losing a lot of subs.” And in the end, we’ll see where it ends up.
I believe that if we could offer some cheaper packages, we’ll do extremely well. But I don’t see anything in the marketplace that makes me feel like wow. So, let’s see what happens. Okay. Thanks, everyone.
Operator
[Operator Closing Remarks]