Credicorp Ltd (BAP) 2006 Q3 法說會逐字稿

Good morning. My name is Toni and I'll be your conference operator today. At this time I would like to welcome everyone to the Credicorp third quarter earnings conference call. [OPERATOR INSTRUCTIONS]. It is now my pleasure to turn the floor over to your host, Peter Majeski from I-Advize. Sir, you may begin your conference.

Thank you, Toni, and good morning, everyone. This is Peter Majeski of I-Advize. Thank you for joining the management of Credicorp today to discuss the results for the third quarter of 2006 on this November 17, 2006.

Any comments made today may include forward-looking statements which are subject to various conditions and these are outlined in the disclaimer in the press release that we distributed yesterday. If you did not get a copy, or need assistance during today's call, please call us here in New York at 212 406 3694.

It is now my pleasure to introduce our speakers. Joining us from Lima, Peru are Mr. Raimundo Morales, Credicorp's Chief Executive Officer, and Ms. Aida Kleffmann, Investor Relations Officer. And with that, I'll turn the call over to Ms. Aida Kleffmann, who will begin the presentation. Please go ahead, Aida.

Okay. Good morning and welcome to Credicorp's third quarter financial earnings conference call. Throughout the third quarter we were pleased to see our stock appreciate, reflecting the improved performance of our corporation. It is very satisfying to see the market value and the successful implementation of our corporate strategy and the improvements in the Peruvian environment as well.

So, as much as we are pleased to see this appreciation, this has also depressed Credicorp's bottom line result, given the corporation's Senior Management Incentive Compensation Program, which is tied to the share price and led to higher related provisions for the quarter.

Net of this effect, however, Credicorp's results have been in line with expectations. We're pleased to be able to report third quarter results have continued showing solid loan growth and improved interest on loans and fee income. Nevertheless, costs increased, especially an increase in interest expense on our deposit -- very large deposit base which, together with other expenses, resulted in a fairly flat core business result quarter-over-quarter. We will see this in a lot more detail in the next page.

Numbers in the Peruvian economy and the financial system are available to you in our press release and we will therefore not spend time on them today.

Please pass on to page three of the presentation. Credicorp's total result for the third quarter dropped 20.3% quarter-over-quarter, reaching net income of $51.3m, though still 7.9% higher year-over-year. Therefore, return on average equity fell back to 16.3% from 21.7% for the last quarter.

Credicorp's results were clearly led by its banking operations, mainly Banco de Credito. BCP on a consolidated basis contributed with a total of $50.8m, which is 21.5% down from $64.8m. We will see the reason for this in a minute.

Looking at Credicorp as the sum of the different contributors, however, aside of BCP we can confirm a continuing positive trend and recovery of profitability in the results of the different subsidiaries forming part of Credicorp.

In fact, Atlantic Security Holding Corporation reports a contribution improvement of 25% quarter-over-quarter, which leads to 17% on a yearly basis and to [inaudible] for the nine months of the year. Banco de Credito Bolivia, which is consolidated within BCP, reports a contribution 7% higher quarter-over-quarter and 69% higher on a nine-month comparison.

PPS, Pacifico-Peruano Suiza, which was our major concern, reported a contribution 68% higher quarter-over-quarter and 112% higher on a nine-month cumulative comparison, continuing this great recovery from past losses and offering a strong future outlook. Business has grown, though not yet enough to recover market share. But management changes and focus in cost control have contributed to recover profitability in all insurance business sectors.

Finally, Prima AFP, though still a loss generator, should turn around next year after the merger of Prima and Union Vida is completed in December of this year. Prima's results consolidate also Union Vida's results this quarter and ongoing [important] merger costs, leading still to overall losses of $4.9m for the quarter.

The Credicorp and others line in the chart, as explained in the past, includes this year not only the withholding tax on dividends paid in 2006 through Credicorp's different local subsidiaries, which was already higher, in line with increased earnings and dividends, but also the provision for dividends expected in 2007, resulting this year in a double negative effect on Credicorp's bottom line earnings.

Given this contribution breakdown, we would like to give you some detail on the main earnings contributors. Next page.

Starting with Banco de Credito del Peru. Net earnings for BCP reached a total of $52.8m, 21.5% down from $67.3m. Most of this drop is explained by the extraordinarily high provisions required by a Stock Appreciation Rights Program, which are included in the operating expenses line. These reached $16.4m for the third quarter versus $8.8m last quarter. BCP's business evolution was, however, in line with expectations, reporting a sound growth in interest on loans and fee income for the third quarter. Both were up 7% quarter-over-quarter.

The higher interest income on loans responded to net loan growth of 2.4% on a quarterly basis, which resulted in a 22.1% growth year-over-year, most of which was concentrated in the retail segment, as we will briefly see.

Nevertheless, BCP's business development reflects the competitive environment. The solid increase in interest on loans was not enough to offset an increase in deposit rate, traditionally the main funding source of BCP which, added to increased volume of deposits and other increased costs of funding from borrowed funds, led to a net drop in net interest income and therefore also a drop of core earnings and net interest margin. Fee income growth reached 7.3% quarter-over-quarter and resulted from important growth in transaction volumes.

This drop in core earnings was, however, more than offset by higher than forecasted income from provision reversals and recovery. Thus, business results were fairly flat for the quarter.

In the third quarter, excess liquidity deposits at the Central Bank and in other less profitable assets at the beginning of the year were further channeled to loan growth. Thus, total assets remained flat, while loan growth was reported. This reflects a re-composition of asset allocation, a favorable trend which is expected to continue in the positive -- given the positive expectations for economic growth.

Despite the resulting better composition of assets, this was not enough to offset the lower net interest income and resulted also in a drop in net interest margins, as we will see in the next chart. The following chart will help us explain this development a bit further. Next page.

As mentioned before, solid loan growth and a further shift in loan portfolio towards higher-yielding retail loans resulted in an important 7% quarter-over-quarter increase in interest income on loans. The interest income, however, altogether dropped and left total income flat quarter-over-quarter.

Furthermore, funding costs were up 15.9% as a result of, first, higher volumes of deposits with monthly average balances up 6% quarter-over-quarter, and an increase in interest rates paid on different deposits. Thus, not only interest on time deposits was raised in an effort to attract and maintain clients but also raised on savings accounts and CTS accounts, which altogether represented an increase of 17 basis points on the deposit base of BCP. It should, however, be noted that rate increases happened in the whole banking system and that BCP continues having one of the lowest cost of funds in the system.

In addition, newly incurred debt with longer duration resulted as well in increased interest on borrowed funds by over $4m quarter-over-quarter. This included as well a loss for the third quarter of about $1.5m on interest rate swaps entered by BCP, compared to a gain reported in the second quarter of about $800,000, explaining in this way $2.3m of the differential.

The result of all this was a drop in net interest income of 6.2% quarter-over-quarter, from $114m to $107m. On the other hand, total fee income growth of 7% for the quarter was fueled by some volume growth, with average volume of transactions up to $24m versus around $20m a year ago. Therefore, transactional fee income was specifically affected by the strategic decision in the beginning of the year to reduce certain banking fees in favor of bank penetration, has been compensated, as expected, by increased transaction volume, growing around 20% for the year.

Transactional fee income is expected to become stronger since alternative and more cost-efficient distribution channels, such as the Agente Via BCP, are in full expansion and will increase the number of points of sales dramatically within the year, which in turn should continue boosting transaction volumes.

Altogether, the result was a more moderate drop in core earnings of minus 2.4% for the quarter. Next page.

A positive evolution of portfolio quality led to a positive effect on BCP's income statement, offsetting the described drop in core earnings. In fact, continuing economic expansion and increased consumer confidence led to a global improvement of all business sectors with an important positive impact on provisioning requirements, recovery of charged-off loans and all portfolio quality indicators. Therefore, past due loans ratio continued improving despite aggressive loan growth and the significant retail and SME business expansion, reaching 1.5% at the end of the third quarter. This indicator is a true reflection of the high quality of [the portfolio].

Reserves for loan losses also increased, including the coverage ratio to 221.6% in the third quarter versus 219% in the second quarter and 175% in the second quarter a year ago -- sorry, in the third quarter a year ago. This portfolio improvement led to provision reversal and resulted in extremely low provisions required for the third quarter of only 1.8% of net interest income or 0.14% of total average loans. In absolute terms, provisions for the third quarter reached only $1.9m versus $10.5m which were required in the second quarter.

Furthermore, this overall economic recovery resulted as well in higher recoveries from charged-off loans than forecasted, leading in the end to a high recovery of $9.3m for the quarter, which resulted in a net positive effect of $7.4m in the balance sheet. This helped offset the drop in net interest [income]. In brief, a continuation of very healthy growth with low provisioning requirements and strong coverage on past due loans. Next, please.

Looking at loan growth in more depth and measuring average monthly balances, growth of the retail and SME segments confirmed their overall and consistent greater dynamism, reaching growth rates of 5.6% for the quarter and 24.6% on a yearly basis. In contrast to the second quarter '06, this third quarter the corporate segment reported moderate growth at 2.2% quarter-over-quarter, as would be normally expected. And the middle market segment dropped 1.6% quarter-over-quarter, due to lending seasonality related to the fishing season.

On a yearly comparison, both segments are still reporting strong loan growth at above 20% level. Altogether, total net loan growth reached 2.4% quarter-over-quarter and 22.1% year-over-year.

After a slight reversal in the second quarter, the recomposition of BCP's loan portfolio towards the retail and SME segments was resumed. This trend will most likely hold on as further economic expansion and banking penetration [continue]. Next page.

As we have pointed out in the past, the distribution and growth of net interest income and non-interest income by business segment on a year-over-year comparison continues showing the more important growth of the retail business. Again, the importance and potential of the retail and SME markets remains evident, given the large net interest margins that can be achieved in this segment, despite the recent pricing [initiatives].

Nevertheless, even though we continued servicing a recomposition of our asset allocation, which is a very welcomed evolution, overall net interest margins dropped to 5.01% from 5.34%. We expect, however, net interest margins to recover from this point after having a stimulated increased funding cost and as the retail sector continues growing as expected and our loan portfolio continues shifting towards this profitable sector. Next page, please.

On the expense side, most of the increase in operating expenses is explained by the Stock Appreciation Rights Provision, which was twice the amount of last quarter and reached $16.4m versus $8.8m the previous quarter.

So, cost control continues being our priority and corporate philosophy. Business growth and a strong expansion in the retail segment demanded increases in costs, especially related to network expansion with additional personnel needs and systems support. Despite the focus in low costs and various efficient network expansions, like the Agente Via BCP, additional branches were opened and thus a moderate cost growth could not be avoided. Throughout the year we have, in the meantime, opened 16 new offices.

Besides the new -- excuse me, besides a real increase in salaries and employees' benefits, there is also a currency translation effect since most operating costs are fixed in Nuevos Soles which, given the appreciation of Soles, resulted in an increased U.S. dollar amount. Next page, please.

All of this [inaudible] development led to a deterioration of the efficiency ratio as well as other performance ratios at BCP. This way, BCP's efficiency ratio reached 52% this third quarter '06, after having achieved 48.6% the second quarter.

Return on average equity for BCP reached 24.6% this quarter after an excellent 33% -- sorry, 33.8%, a real record number, in the second quarter '06. Return on average assets reached 2.2%. However, on a nine-month cumulative basis, ratios are still within our target. And efficiency ratio for the nine-month period was 49.7%, which is still below our 50% target. And return on average equity for this nine-month period was 28.6%, as well as return on average assets reached 2.5%. Next page.

Moving to the other of Credicorp's subsidiaries, we can briefly look now at Atlantic Security Holding Corporation. Credicorp's offshore banking -- private banking business at Atlantic Security Holding Corporation remains a steady contributor, with its contribution for the third quarter rising 25.4% quarter-over-quarter to $3.8m. This reflects a more moderate growth of 4.2% year-over-year, reflecting the long-term income stability.

Although net interest income -- fee income fell quarter-over-quarter as a result of the drop in offshore activity and investments as political uncertainties dissipated, other gains from sale of securities, provisions reversed and other income more than offset and reversed the drop, leading to the increased contribution from [the bank].

Assets continued growing, though at a lower pace, reaching only 2.3% growth versus 9.4% growth the previous quarter, while the trend in the recomposition of assets to a lower yielding, less risky asset continues. Third-party managed funds, which includes customers' deposits, mutual funds and securities deposits, continued growing at 9.9% quarter-over-quarter and 46.2% year-over-year, reaching $2.5b as of the closing of the third quarter '06. Altogether, consistent results and further business expansion. Next page, please.

In the case of Pacifico Peruano Suiza, results obtained for the third quarter show continued recovery after a year 2005 which was characterized by higher claims and business management problems. This improvement led to better underwriting results and net income, which were higher than those of the second quarter.

Net consolidated earnings before minority interests for the second -- for the third quarter reached $2.6m [sic - see documentation] which, after all minorities and consolidation adjustments, resulted in PPS' contribution to Credicorp for the quarter of $4.6m. That is 68% higher than the previous quarter.

Total premiums growth was flat quarter-over-quarter and reached 8% year-over-year, while net premiums earned grew 5.2% quarter-over-quarter to $67.4m, reflecting its better business management. This resulted in improved contributions reported by all three insurance business segments.

Property and Casualty reported premiums for this segment dropping 4.5% quarter-over-quarter, though they were still 11% higher on a yearly basis. Underwriting results were flat quarter-over-quarter which, together with a slight reduction in costs and a still low claims ratio, led to net earnings for Property and Casualty segment of $2.5m, 8.6% higher on a quarterly basis, a significant and consistent improvement.

In the Life segment, total premiums grew 4.4% quarter-over-quarter and 5.6% year-over-year, with underwriting results significantly better for this third quarter, at $1.4m. That is $1.8m above the second quarter. Financial income was also better this quarter. However, increased expenses and a $2.5m expense for profit sharing resulted in a contribution 22% below the previous quarter.

In the Health segment, total premiums at EPS, which is the Health segment, grew 3.6% quarter-over-quarter and 4.8% for the year. However, net earned loss ratio improved to 81% versus 84.5% in the third quarter '05, leading to underwriting results of $2.3m. Though this underwriting result was lower on a quarterly basis, in the absence of the extraordinary costs reported last quarter, earnings contribution was higher at $1.3m.

Therefore, the combined ratio and net loss ratio show important improvements quarter-over-quarter and year-over-year. In fact, the combined ratio fell finally below the 100 mark. Next page, please.

At our new private pension fund venture, Prima AFP, a continuation of the good result and the completion of the announced acquisition process can be reported. Despite huge competition following the acquisition announcement, Prima AFP continued growing without losing its high portfolio quality. The number of affiliates surpassed 125,000. Contributors' ratio remained high at 89%. Prima's market share in terms of administered funds continued growing and surpassed 7%.

For the third quarter of '06, Prima again reported losses despite its continued growth in income, better returns on invested reserves and the consolidation into Prima's results of Union Vida's bottom line result. As expected, Prima's increased commercial expenses related to the more intense competitive pressure resulting from the acquisition of AFP Union Vida and extensive pre-merger expenses, which included a loss of $2.3m of Prima's deferred taxes, made it difficult to achieve here breakeven.

On its balance sheet, a $112m increase in capital was recorded, which added to the $29m loan from BCP provided the funding to acquire 99.97% of AFP Union Vida shares. This operation mainly explains the increase in equity, assets and liabilities, though we should also point out that the company acquired its headquarter building in $7.2m with a BCP loan.

The final merger of the acquired pension fund in Prima will take place in December of this year.

Furthermore, its funds under management grew 30.3%, from $713m in the second quarter '06 to $929m this quarter, reaching a market share of about 20%. It is noteworthy that this market continues growing at very good rates. Growth of funds under management was very strong, at 12.9% growth, supported by high returns achieved this third quarter, reaching a total volume of administered funds of [$12.8m]. This denotes still the large potential over a still young business in a growing environment. Next page.

On the overall, and summing up business growth, we feel confident of our business strategy and feel the business results are in line and confirm this fact. Despite this quarterly setback to the bottom line result, our ratios for the nine-month cumulative period of 2006 are within our targets. This reassures us in our effort, especially having achieved this throughout an extended uncertain election process that was the first half of the year.

On the BCP side, continue -- BCP continues reporting solid loan growth, though bottom line results were this time affected by extraordinary provisions-related costs and a reduction in margins, resulting from increased cost of funds. Dynamics in the most profitable retail and SME segment continue favoring the asset shift towards higher-yielding assets.

This business expansion was achieved while [inaudible] continued improving these actual very comfortable levels. Lower bottom line results led to the deterioration of all ratios for the third quarter but on a cumulative nine-month basis these do show significant improvement versus 2005, and are within our target.

On Atlantic Security Holding, it continues expanding its asset management business and represents a stable and low-risk income generator.

Pacifico Peruano Suiza has continued its recovery with improved results, as shown by the positive bottom line result in all business segments.

And our newly created pension fund company, Prima, reported results on track with projections. And even the process of merging the acquired Union Vida AFP, which should be concluded in December.

Finally, Credicorp's return on average equity, though deteriorated in the third quarter along with BCP's result, on a nine-month cumulative basis is still within our target for the year, reaching 19.25%, slightly short of our 20% target.

Altogether, Credicorp has benefited from the strong economic performance in the country and is well positioned to continue doing so, and to demonstrate its ability to face strong competitors in financial markets and achieve interest growth. Next page.

In this chart you see the market numbers which reflect this performance. Just as an additional note, we would like to mention that on October 13 this year the rating agency FITCH Ratings assigned an investment grade BBB- rating to Banco de Credito del Peru as issuer of long-term debt in U.S. dollars and Soles. This rating puts BCP's foreign currency issues one notch above the Peruvian government's Global Bond rating of BB+ assigned by FITCH Ratings.

It is noteworthy that, under the methodology used by FITCH Ratings, the highest possible rating that can be obtained by a local private corporation in Peru is the BBB-. Being Banco de Credito del Peru the first Peruvian company to obtain such rating, which is a further step towards obtaining an investment grade rating for the country.

We are now ready to go over to our question and answer section. Our CEO, Mr. Raimundo Morales, will be pleased to answer any questions you may have. Thank you very much.

Thank you. And I am here at your disposal. Would you go ahead with the question and answer period, please?

[OPERATOR INSTRUCTIONS]. Our first question is coming from Juan Partida of JP Morgan. Please go ahead.

Hi, good morning. First of all, I am glad to see Aida is back fit and fighting.

Thank you.

I have two questions. The first question is regarding the net interest income this quarter. You explained that you don't expect -- or you expect net interest margins to improve going forward. Wouldn't you think that competition will continue to increase in the future, making it hard to maintain margins?

And the second question has to do with fees. They were strong at the Bank but on a consolidated Credicorp basis they were even stronger. Could you tell us what that additional strength came from, from what subsidiary? Thanks very much.

Thank you. On the net interest income, what we continue seeing is a healthy and strong growth in the consumer -- the retail sector of the Bank. And, based on that, we think there we will see an increase in the participation within the overall portfolio of the Bank whereby the margins, even though it's been slow or smaller on the consumer side, are much better than the middle market and the corporate market. So, based on the composition of the loan portfolio, we think we will have an improvement in the margins.

The other thing that happened in this quarter is that some of our hedges on long-term rates impacted negatively on our cost of funds. Basically, as rates -- or long-term rates decreased during the quarter, we had a negative impact on cost of funds and that also affected somewhat our net interest margin. And we don't think there will be any substantial decrease in long-term rates in -- during this quarter.

So, there we think that on -- when looking on a medium-basis that our net interest margin will [feel] stable and perhaps improve a little bit, to the extent that we are successful in increasing the growth in our retail and small business portfolio, where we are seeing a very, very strong growth.

On the fees, I would ask -- [David?] No? Not [inaudible]. Prima, I planned to [inaudible]. No? On a consolidated -- we are going to have to get back to you, I don't --

That's okay. If I could follow up quickly, so you would expect the pressure on funding costs to relent a little bit, or to remain going forward? And be -- and you then would expect that to be offset by loan growth?

I think the pressure is going to stay but I think it's going to offset by loan growth and it's going to be offset by the fact that we are moving a little bit more our portfolio towards the retail sector, where the margins are much better.

On the corporate side, the spreads, I don't see any way they can be reduced. I think they are already very, very competitive. And on the middle market, we're seeing some reduction in spreads, but not as substantial as it has been in the past, basically because the market liquidities during this year have been very, very large. And that has resulted in depressing margins, both in corporate, middle market and retail. But the key for us, I think, is going to be the fact that our composition of the loan portfolio is changing and that will have an impact on our overall [net] spread.

Thank you very much.

Thank you.

[OPERATOR INSTRUCTIONS]. Our next question is coming from Valerie Fry of Merrill Lynch. Please go ahead.

Yes, thank you. Good morning, everyone. I have a couple of questions. The first one is regarding the Stock Appreciation Rights program. I was wondering if you could indicate, or explain, whether you are already starting to hedge for this program, such that in future quarters we won't be seeing the same kind of earnings volatility as a result of the increase in provisions.

And the second question is regarding the pension fund business. Here my main question would be whether we can expect -- or when, rather, we can expect to see a turnaround in the earnings generation of this business, whether in the fourth quarter we can already expect to see a positive result or whether we can still expect some merger expenses coming through. And, if so, whether -- at what point next year we can see this turnaround. Thanks.

Thank you, Valerie. On the Stock Appreciation Rights, we started building in a hedge about three or four months ago and today we are almost fully hedged. So I don't think we will see any major impact on our balance sheet for the next -- in the future. Unfortunately we didn't have very many alternatives to hedge before, because it would have worked out well, as we've seen that the prices are going up.

On the pension fund, on the fourth quarter we will be incurring in basically the major expenses related to the merger, basically in terms of the reduction of personnel. We are going to be writing off the systems investment which was carried on [Union's books]. And we still have a fairly large sales force that means incurring in fairly large amounts of commission and income, and the competition is still very aggressive.

So we will see in this fourth quarter, in terms of merger costs, an extraordinary charge which will be around -- between $8m and $10m approximately. And still we will see in -- at least for the first two quarters of next year a negative result at the pension fund management company, and probably start turning around during the second semester next year. We expect to end next year, on the overall year, for Prima to be on a profitable basis. But still we have certain accounting definitions to be made related to the goodwill and the way it will be amortized, to determine exactly what the size of the earnings will be next year.

Okay, thank you.

Just one thing on the Stock Appreciation Rights program; just a comment. The hedge that was put in place is -- we would have liked to have it earlier, obviously, but it did at the end of the day provide some kind of coverage. And we saved about $5.1m in provisions thanks to the hedge.

Okay, great. Thanks.

[OPERATOR INSTRUCITONS]. Our next question is a follow-up question coming from Juan Partida of JP Morgan. Please go ahead.

If I may follow up with a question on the provisions, there were -- the provisions this quarter were very low. What should we expect going forward, given that you are growing very strongly in the retail portfolio? How long should we expect provisions to be relatively low?

The net provisions have been low; the gross provisions are not. I mean the net in terms of the reversals of provisions that were made in previous years, plus the recovery of loans charged-off. We still think that next year we are going to have provisions that will be a little bit lower in terms of net provisions compared to the gross provisions. And what we think is on a medium-term basis that approximately around 10% of our spread, between 10 and 13% of our net interest margin should result in provision expenses. But still next year we think that number is going to be somewhat lower than that 13%.

But gross provisions should come back to levels similar to first and second quarter?

Gross provisions should be around 13% to 15% at the most.

Okay, thank you.

Thank you.

Thank you. There appear to be no further questions at this time. I would like to turn the floor back over for any further or closing remarks.

Thank you. I just wanted to add to Aida's comments on the presentation that we are basically very optimistic on Peru. We think that we are going to have at least three to five years of solid growth. There are a lot of investment projects that are almost on the brink of being developed right now. And that should assure us the growth in our GDP at rates over 5%, I think comfortably over 5%. And that should be accompanied by a greater bankarization of the system.

We feel that this is the time to invest and we are doing so. We bought Union Vida, the pension fund management company, from Santander. We are increasing, rather aggressively, our infrastructure. We've grown in offices of the Bank, additional offices of the Bank to date up to 18 additional offices in the year. And aside from that, we are growing in our new distribution channels of agents of BCP. As well as that, distribution channel now has around 500 agents already operating. And we are increasing also our other investments in systems and ATMs and other infrastructure.

We feel that this year and probably next year are years of investment, are years where we should prepare for growth. And this investment might have a minor impact upon the profitability on a short-term basis. But we are really confident that starting in the second semester, at the end of next year and then 2008, 2009 will be years of very solid growth and very solid profitability. We are optimistic about the economy, we are optimistic about the future. And we feel it is time to make some investment, foreign investments in developing and making this market grow going forward.

I just wanted to thank you all for listening in and we'll probably be in touch early next year for the next quarterly conference. And we have an answer to be provided in terms of the fee income [that's pending there].

Thank you for listening in and have a good day. Bye-bye.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day.