Brightstar Lottery PLC (BRSL) 2009 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Lottomatica 2009 first half results ended 30th of June conference call hosted by Marco Sala, CEO and Managing Director.

My name is Maddy, and I will be your coordinator for today's conference. For the duration of the call, you will be on listen-only. However, at the end of the call, you will have the opportunity to ask questions.

(Operator Instructions) I'm now handing you over to Marco Sala, to begin today's conference. Thank you.

Thank you for joining us for the Lottomatica Group's '09 first half results presentation. With me today is Stefano Bortoli, the Chief Financial Officer of the Group, who will provide you with a review of the financial results for the quarter and half year.

Also with us are Jaymin Patel, CEO of GTECH, and Renato Ascoli, General Manager of Italian operations, who will join us for the question-and-answer period at the end.

I want to welcome Renato, as it is his first time joining us since taking over the leadership of our Italian operations. I would like to begin with an overview of our results.

Overall, the Group had another good first half. Year-over-year revenues were up 18%, and the net income attributable to the owners of the parent grew 21%, and earnings per share by 24%.

Speaking against the backdrop of a worldwide recession, it is a notable achievement for Lottomatica Group to continue to grow and prosper under these challenging conditions.

A simple but effective formula is behind this positive result. We have invested in new market segments and delivery channels to broaden and diversify our ability to pursue growth opportunities in various gaming markets.

Our investments in Italian gaming markets continue to perform well. Gaming Solutions, Sports Betting and Internet poker have become important contributors in the fastest growing market segment.

Our investing activities to launch GTECH into new markets such as Sports Betting and Internet wagering are beginning to make positive contribution, and that seems to drive our growth.

Many of GTECH's customers have entered and are exploiting an entry into the Internet wagering. Notably, Camelot, Finland, New Zealand, Luxembourg, and Ireland have launched Internet wagering site with handful of other [schedule] to go live during the next 12 months.

In order to drive greater integration within the Group, the organizational structure has been realigned.

The new media Sports Betting and Gaming Solutions organizations that previously were part of GTECH's structure has began reporting directly to me at Group level.

These integration activities form a very important foundation for our pursuit of some potential new operator opportunities.

I have asked Jaymin to take on the responsibility of leading our worldwide business development effort in this area.

Now, I'd like us to look at the operating result of our business lines. In core lottery segment, Lottomatica's Italian operation performed as expected.

It is important to note then when comparing sales with the previous years' results, sales in 2009 were impacted among other things by the unusual jackpot activities in the competing SuperEnalotto game.

We have also taken actions to help bolster the lotto sales that have experienced some minor erosion. A new game, the 10 and Lotto has been launched. Initial player response has been encouraging.

Recently, we were allowed to offer the game on a standalone basis, which drove an immediate increase in sales. We expected this to benefit the category as the new game takes over.

The Italian Scratch & Win market continues to perform well capturing EUR5 billion of wagering in the first half of the year. One minor disappointment was that the sales of Gratta quiz game were impacted by a retail commission structure that hampered the game's promotion.

Regulations are being amended to rectify that situation. We expect that Scratch & Win performance will sustain its momentum in the second half, particularly, as we continue to plan for a new EUR20 ticket for launch during the last quarter.

In general, we are encouraged by the result we have seen so far for Lotto and Scratch & Win for the month of July. I'll discuss the Scratch & Win licensing situation at the end of my remarks.

GTECH's performance is being positively impacted by an increased demand for government for new sources of revenue to meet severe budget shortfalls. There have been some encouraging signs of growth in same-store revenue which increased by 3% in the second quarter.

Gaming expansion is underway in a number of states, and new businesses model are being explored, most notably in Illinois, which could result in the outsourcing of, critically, lottery operations functions.

This new approach could provide an opportunity for us to introduce and drive the success of our best practices programs.

The pace of the procurement are expected to come into clearer focus in the next few months. The economic environment has also helped GTECH to continue its successful efforts to negotiate contract extensions in jurisdiction where the natural terms of this contract were approaching conclusion.

In July, the Wisconsin Lottery signed a 24-month extension to their contract with GTECH, which was to end in 2011. This is worth approximately $25 million.

On the commercial front, GTECH brought the West Virginia Lottery online with a seamless conversion from its previous vendor.

There were also some significant demonstrations over the capability of our product and services to address the needs of a wide variety of customers. From new lotteries recently launched in Nigeria and the Dominican Republic to state-of-the-art retailer terminal and communication systems being deployed in New York.

GTECH has been able to successfully satisfy the needs of customers in markets that range from emerging to the most highly developed. Gaming Solutions segment, we have achieved tremendous growth in the Italian market.

Lottomatica grew its installed base by 23% coupled with a sizable increase in its direct ownership of gaming machines, some of which are being supplied by our Atronic subsidiary. Revenue from Gaming Solution in Italy near doubled year-over-year.

The Machine Gaming market in Italy will -- likely to expand significantly with the recent authorization of VLTs or Video Lottery Terminals to be launched next year.

With the help and support of our colleagues at [Spielo] and Atronic, we are preparing from the introduction of VLTs, and are confident that the games will enjoy widespread player acceptance.

I should point out that there is a strong business taste for VLTs. And we are prepared to invest the necessary capital to be a leader in the category.

In the United Sates, there has been recent authorization for new VLT programs in Illinois and Ohio. Pennsylvania is also actively looking at expanding its machine gaming program. This represents solid opportunities for our Spielo subsidiaries.

In the Italian Sports Betting segment, we enjoyed continued impressive growth. Revenues increased by 37%. Fluctuations in the Sports Betting pay-out, which were in the lower range in quarter one and in the upper range in quarter two, have stabilized to expected levels from the (inaudible) 2009.

Internet poker has continued to grow to the point that Lottomatica is now the third largest provider in Italy. Considering some of the major poker networks operating in the country, we are pleased with our progress so far.

To strengthen and reinforce our marketing position in Sports Betting and the Internet [wagering], we launched the G2 brand at the recent European Lottery Association conference in Turkey.

G2 will be a unified brand umbrella for the offerings from our Finsoft, St Minver, Boss Media and Dynamite Idea subsidiaries. The brand has been well received, and has had -- [raised our] profile in these market segments.

Now, I'd like to offer some comments about the recent decision related to the Scratch & Win concession in Italy. Obviously, it was surprising that the decision was taken to offer the multiple licensing return for an upfront.

Lottomatica has earned worldwide recognition and acclaim for the work it has done to make Gratta e Vinci the world's largest and more played Scratch & Win game.

In fact, other jurisdictions have approached us for assistance as they try to emulate our success. This is all history, but it serves as an important foundation for our continued success in this segment.

We know with relative certainty, what the future holds for Scratch and Win. We firmly believe that it will continue to be a highly successful and profitable path of the portfolio of the games we operate in Italy.

Lottomatica entered these into new competitive markets with over 45,000 retailers, most of whom carry more than one of our product lines. Our relationship with our retailers is well-established, multilayered and a distinct advantage for us.

Our relationship with the player is equally well-established. The success of Scratch & Win game has been driven by a regular intensive and comprehensive market research.

We gained important insight into the players' behavior and the preferences that they have helped us to create and deliver highly compelling content.

In summary, we are well positioned to take on the challenge and the opportunities to fulfilling new Scratch and line -- sorry, Scratch & Win licenses. Our well-established and comprehensive retail network, highly recognized brands, and in-depth marketing insight give us confidence that we will lead.

And we will continue hard work to dominate this market segment. In preparing for the potential bid, the members of our current consortium, Scientific Games, the tobacconist association, and Lottomatica have developed a memorandum of understanding committing ourselves to participating in [attendance] together.

It's important to note that the formal standard rules has not been promulgated, so we are unable to speculate about some of the details of the program that are yet to be resolved by our regulator.

From what we do understand the economics of the program are favorable, and should allow us to continue to generate profitable returns on our investments, and create value for our shareholders.

Now, I'd like to turn over the call to Stefano for a review of the financials, after which we will take your questions.

Thank you, Marco, and good evening everyone. I'm happy to report that, overall, we delivered solid performance in the first half of 2009 despite a difficult business climate.

Revenues for the first half of 2009 were approximately EUR1.1 billion, up 18%, compared to EUR928 million in the same period last year. At constant currency, revenues were EUR1.07 billion. EBITDA for the first six months was EUR431 million compared to EUR399 million in the first half of last year, up 8%.

On a constant currency basis, EBITDA was EUR421 million. EBITDA margins were 39% compared to 43% in the same period last year. The anticipated dilution is due to a change in the revenue mix.

Moving on to Lottomatica, we posted revenue growth of 15% versus the first half of 2008. Our Scratch & Win business continues to perform well with gross wagers of EUR5 billion compared to EUR4.9 billion in the first half of 2008.

The number of tickets sold was comparable to the first half of last year at 1.3 billion. The average price point grew from EUR3.7 in the first half '08 to EUR3.8 in the first half of this year driven by the continued success of new higher price point tickets.

Lotto game wagers were EUR2.9 billion, down slightly versus the same period last year. The recently launched Keno-style game, 10 and Lotto, is expected to enhance players' options and strengthen lotto wagers in the future.

Sports Betting wagers grew 36% to EUR499 million in the first half due to the continued strong performance of Finsoft's sports betting. Finsoft's sports betting wagers in the Italian market were up 7% from the same period last year at EUR2.1 billion, while Lottomatica's Finsoft's sports betting wagers grew nearly 55% to EUR432 million over the first half of 2008.

At June 30th, Lottomatica's share of the market was 20% in terms of total wagers.

Gaming Solution wagers were EUR2.1 billion, up 24%, compared to the same period last year. There were over 51,000 Amusement with Prizes machines installed, of which approximately 25% are managed directly by Lottomatica.

Lottomatica is currently the number two operator in the Italian gaming market -- in the gaming machine market, in terms of the number of machines connected to our system.

We are reporting for the first time our Interactive business as a separate segment with EUR162 million of skill game wagers in the first half of 2009, primarily from online poker.

Lottomatica maintains a 16% market share in the interactive business in Italy, again, in terms of wagers primarily relating to online poker.

All of these is a measure of the success of the investments we have made in these growing business segments. Lottery revenues were EUR361 million compared to EUR368 million in the first half of 2008.

Revenues for Sports Betting increased 37% over the prior year to EUR96 million, while revenues from gaming solutions were up 95% to EUR73 million driven by the increased placement of AWP machines.

Revenues in Commercial Services were up 11% to EUR46 million, while revenues in Interactive segment generated [EUR90 million].

To offer a better perspective on GTECH lottery service revenues in the U.S. and internationally, this slide illustrates a second quarter trend which, overall, is encouraging. Total same store revenues for the quarter were up 3% on a constant currency basis.

International lottery revenues increased 4%, while U.S. lottery revenues grew 3% constant currency. These increases are principally due to games in jurisdictions such as Mexico, Jamaica, the UK, North Carolina, Michigan and Georgia.

Given the current economic conditions, the fact that jackpot activity in the second quarter was comparable to the same period last year, and that first quarter U.S. lottery revenues were down 1%, we find this U.S. trend encouraging.

On slide 10, we provide a breakdown of GTECH lottery service revenues for the first half of 2009 versus the first half of 2008. At constant currency, total same store revenues were up 2% compared with the first half of 2008.

International lottery same store revenues at constant currency increased 4% driven by good performance in Jamaica, Morocco and Slovakia, while U.S. lottery revenues increased 1% primarily due to the performance in Florida, North Carolina, Georgia, Michigan and Texas, some of which was mentioned previously.

Lottomatica's 2009 first half revenues grew 15% to EUR595 million from EUR517 million in the first half of 2008. This increase was primarily attributable to Gaming Solutions, Sports Betting and Interactive. For GTECH, revenues were EUR504 million, up approximately 23% compared to EUR411 million in the first half last year.

In the first six months -- GTECH same store service revenue increased 2%. GTECH's G2 business unit contributed approximately EUR33 million to our first half revenues. When during constant currencies, G2's revenues increased EUR21 million versus the same period last year. Note that in the first half of last year, Boss Media and St Minver contributed only two months to GTECH's revenues.

First half revenues include EUR71 million in product sales, up 90%, versus EUR38 million in the same period last year. Please keep in mind that the timing of product sales tend to be cyclical.

Lottomatica's EBITDA was EUR280 million -- EUR286 million, up 10%, from EUR262 million -- sorry, EUR260 million in the same period last year. This increase was primarily driven by the expansion of Finsoft's Sports Betting, Gaming Solutions, and Interactive.

GTECH EBITDA was EUR146 million -- EUR145 million, in the first half, compared to approximately EUR139 million in the first half of last year with the Lottery segment contributing EUR2 million and G2 and Gaming Solutions contributing EUR1 million and EUR3 million respectively of the increase.

Turning now to the P&L, operating income was EUR261 million in the first half of '09 versus EUR250 million in the same period last year, up 5%, included in operating income where depreciation and amortization of approximately EUR168 million in the first half compared to EUR143 million in the same period last year.

The increase is primarily due to additional sports betting licenses and additional AWP machines installed, as well as an increased Euro value of GTECH's U.S. dollar denominated depreciation and amortization.

We incurred approximately EUR79 million of financial charges compared to approximately EUR92 million last year. Prior year financial charges included EUR14.2 million of foreign exchange losses, which were principally unrealized. You would see further detail on our net interest breakdown in the appendix.

Income before tax was EUR182 million compared to EUR158 million in the same period last year. The tax rate for the first half of '09 was 34.5%, consistent with the same period last year.

Group net income was EUR119 million compared to EUR104 million, up 15%. An income attributable to the owners of the parent was EUR94 million, bringing our earnings per share to EUR0.63, up 24%, over the same period last year.

The Group's net cash flow from operating activities was EUR343 million. Profit before tax of EUR182 million included non-cash depreciation and interest expense of EUR244 million. Cash payments for income taxes totaled EUR56 million, and investment in operating assets was EUR29 million.

Cash available at the end of the six-month period was EUR66 million. Our first cash flow performance gives us confidence in our look for -- our outlook for 2009.

On slide 15, we provide a breakdown of maintenance and growth CapEx and acquisitions. Overall CapEx and acquisitions were EUR126 million in the first half of '09, whereas just EUR292 million in the same period last year.

Maintenance expenditures for the fist half were EUR48 million down from EUR66 million in the same period last year. GTECH's first half maintenance CapEx was EUR42 million compared to EUR53 million in the same period last year.

GTECH's growth CapEx of EUR29 million consisted primarily of investments in Printed Products, West Virginia and the Dominican Republic.

As you recall, GTECH's acquisitions in the first half of 2008 included Atronic, Boss Media, St Minver, and Finsoft now. For Lottomatica, maintenance CapEx was EUR6 million; growth CapEx was EUR49 million, as we continue to make strategic investments to exploit growth opportunities in the Sports Betting and Gaming Solution segments in Italy.

Our net financial position as of June 30, 2009 was EUR2.69 billion substantially in line with EUR2.71 billion at the end of December 2008. Cash from operations net of CapEx was allocated for the payment of interest and dividends.

At the end of June, we had over EUR0.5 billion of cash and committed undrawn credit line to support the organic growth of the business.

Now, we will open the lines for Q and A after which we will hear closing comments from Marco. Operator, please.

Thank you. (Operator Instructions).

And the first question comes from the line of Alessandro Baj-Badino from Deutsche Bank. Please go ahead.

Yes, okay. My first question is regarding the Scratch and Win.

Definitely, the brand name Gratta e Vinci is -- we'll give back to AAMS once the concession expired, what about the ticket's brand name, are those also property of the AAMS or yours, of the consortium?

Second question. You provided, recently, a guidance with the CapEx for the full year '08 of EUR360 million-EUR380 million. Definitely, the first half CapEx being much lower than last year, Is that -- is there going to be any change also in the light of the video lotteries' potential expansion?

And the last question is regarding the Illinois RFPs, and can you give us some sort of timetable on when you expect the RFP to be published? Thank you.

I answer regarding the first question regarding the Scratch and Win, Stefano, the second, and Jaymin the third.

Regarding the Scratch and Win, what I can tell you is, the contract of the current product lines are belonging to Lottomatica.

Thank you

Alessandro, the guidance we had given at the end of April indicated EUR360 million-EUR380 million and we have a very well-defined plan of investment, which is on its way.

We know exactly which are the targeted investments to execute. And although you have read the [actuals] at the end of June, the plan is still a valid plan.

And on top of that, of course, we had prepared a guidance with the information available at the time we had published those guidances.

So when considering the year-end projections, you should somehow appreciate which could be the impact of the ongoing standard of Scratch and Win, which you had mentioned as well as the additional potential opportunities of VLTs.

Of course, as VLTs and W -- and AWPs somehow overlapping, we might consider to allocate some of the expected anticipated investments for AWPs to be incurred at the end of 2009 for the VLTs opportunities.

With respect to Illinois, the good news is that the governor signed the budget bill into law in Illinois approximately two weeks ago, which validates the proposal to issue an RFP from operator contract to operate the Illinois lottery for a period of 10 years.

The law proposes that the award will be made by the 1st of March 2010. It's our expectation that within the 90 days or so, there'll be some clearer guidance on the RFP requirements. And so we will know further exactly what the bidding structure is, and what the requirements are.

So I would say that in the next two or three months, we'll have a clearer picture. The timeframe appears to be quite aggressive given that we're already in July 2009. So to select a vendor by March of 2010 might be quite aggressive, but we'll wait for more guidance from the Department of Revenue and the Illinois Lottery on that point.

Thank you.

You're welcome.

Thank you. And the next question comes from the line of Fabio Iannelli from Kepler. Please go ahead.

Yes, I -- good afternoon, it's Fabio Iannelli from Kepler Capital Markets.

My question is on GTECH. And as far as I remember, in Q1, GTECH was impacted by very low activity on jackpots, and there was also price compression in renewal contract, and -- while product sales was very supportive.

So now, looking at the GTECH figures, I guess,that Q2, as on -- there was a recovery in Q2. So my first question, if you can breakdown on these three issues.

And so I just want to understand the recovery in GTECH revenues was led by better jackpot activity, better product sales. And whether this trend can basically continue or improve throughout the year? Thank you.

Let me start by answering that question, and perhaps we can add more at the end. So in terms of GTECH's second quarter results, we were certainly helped by quite strong same store sales growth in the U.S. market, and certain international markets in the second quarter versus the first quarter of 2009, and certainly the second half of 2008.

What we are seeing in the U.S. market is that many large jurisdictions such as -- sorry, such as Texas, New York, and Illinois, we are seeing a resumption of sales growth as these jurisdictions launch new products, particularly instant games, and are driving through marketing programs with successive launches of those new games to keep [some] momentum going.

As Marco mentioned in his script, we are seeing a drive from many jurisdictions to increase revenues from gaming as states deal with budget shortfalls. The level of jackpot activity in the second quarter of 2009 was actually quite comparable to the second quarter of 2008.

So that was a small driver of same store sales, but not the big driver. So I -- my comfort level in U.S. same store sales growth picking up is quite good. The second half of 2009 should be also in line with that trend, because we did have a fairly weak second half of 2008, so the comparable should be quite solid.

No real change in the product sales outlook, product sales can be quite choppy quarter-over-quarter. But overall, they're in line with our expectations.

Okay, thank you. Okay, I have just another follow-up question.

Can I ask you what are the margins today on product sales? Is it still between 5% and 10%, on -- or there's any margin squeeze on the -- on product sales, or they're still supported? Thank you.

Margins on product sales depends on the type of product sales we're talking about. If we're talking about a straight sale of hardware, rather than a combination of hardware and bundled services that we can deliver to the customer, but margins are much higher than 5% to 10%.

They're lower than corporate averages, but we're talking about margins which are in the range of, let's say, over the 20% margins.

Okay, thank you.

Thank you. And the next question comes from the line of Micaela Ferruta from Intermonte. Please go ahead.

Yes, good evening. I have a few quick questions. One regards Illinois. I was wondering whether you can rule out already that the RFP is going to entail an upfront payment.

And the second question regards, actually, covenants. I would like to know if you can tell us, based on the targets that you disclosed on 2009, what kind of headroom you have on covenants, and whether you expect the outcome of the Scratch & Win tender to require you to renegotiate the covenants with the financial institutions.

That's it actually, thank you.

Very good. So to answer your first question on Illinois, the budget bill that was passed into law does not contemplate an upfront license fee for the 10-year operator contract. The law, as currently drafted, suggests that the operator fee will be up to 5% of gross sales with no requirement for upfront fee. Stefano?

In terms of covenants, the guidance that we had disclosed were falling well within the threshold that we consider. And we think that we can maintain, based upon the multi-concession model that we are starting as far as we know today, and the additional opportunity, I think we have the flexibility to undertake the -- this investment within the covenants that we have today in place. So, no need to renegotiate these conditions with anybody.

As a follow-up, can I ask you on what assumptions you are working when you consider the upfront fee, are you considering it to be split among the four concessionaries, or are you considering also a more negative case, for your consortium clearly, where you are required to pay a higher upfront fee versus the minimum EUR200 million -- 800 divided by 4. Thank you.

So Micaela, what we have considered so far is the -- based upon the information that the Italian government is willing to have up to four concessionaires. Any different approach would be, at this point, a -- just a speculation.

So as soon as we will have in front of us the request for proposal, we will be able to give you some more definite answer to this question.

But I'm not wrong if I understand that you are thinking about the upfront fee to be divided among the four equally, if this -- if I understood you correct, or you're just not willing to comment?

Again -- I -- Marco Sala replying. We want to have a clear view on what is going on in terms of RFPs. First of all, we have a law that is not yet approved, and will be discussed definitely between today and tomorrow at the Senate. After that we have an RFP that will define the rules of participation.

What I can tell you is that we are quite comfortable bidding (inaudible) there all the scenarios. But I cannot comment more in details, because we need to have a clearer perspective, not to speculate on it, but to give you a right guidance.

I understand, thank you very much.

Thank you. And the next question comes from the line of Domenico Ghilotti from Equita. Please go ahead.

Good afternoon. I have a question on the letter of intent you have --

Operator -- sorry, Operator, we can't hear. We -- only very --

Hello, can you hear me?

Please go ahead, sir.

Can you hear me now, hello?

Okay.

Okay. Well, I have a question on the letter of intent you have signed for the Scratch & Win. Does it mean that the participants in the consortium will be the same, and/or also the stake in the consortium will be kept unchanged or not?

And the second question is on the SuperEnalotto, the impact that you mentioned on Q2, given the fact that the SuperEnalotto is probably increasing momentum, should we expect that also in July we will have some negative impact on the lotto performance?

For the time being regarding the first question, what we can tell you is that the MOU is defining the participants. We will see later on the stake of each participant. Having said that, I will turn into Renato to make the answer regarding SuperEnalotto.

Yes, for sure, SuperEnalotto performance is astonishing, but we do not see any real or relevant effect on the performance of Lotto now so far. On the other hand, (inaudible) launched 10 and Lotto actually is contributing positively both to the game itself and probably to the Lotto game as well.

In July, we expect that the -- the average wager per draw will be over the performance of last year. So the combined effect of the Lotto trend and the (inaudible) Lotto, very positive start is overall contributing to the Lotto business.

Thank you.

Thank you. And the next question comes from the line of [Laura Pennino] from Banca Leonardo. Please go ahead.

Hello, I have just a question regarding the timing for the Scratch & Win lottery. You said that for Illinois, it was -- timing was quite stretched. Is your feel -- do you feel comfortable on the fact that the government will be able to find the winner of the new concessions already in 2009, or do you think it will be more shifted to 2010?

It's Marco Sala answering. I guess that the commitment of the government is to award the concessions by the end of this year. It's clear that the timetable is tight but I guess that they will try to reach this objective.

Okay. And another thing regarding CapEx. The -- how much will you spend on -- do you think that -- or the AW -- the video lotteries, will -- you will install them all together, or will you have a more slower investment to see on the return or the answer from the public, from the customers.

Laura, in terms of VLTs, we are yet to read carefully the regulation, so that we will have precise instructions in terms of timing of the go ahead, and the type of the machines that we have to deploy in the territories.

It has then to be clearly assessed which type of venues would be interested for these VLT machines. So that -- it's still too early to make a complete assessment of the investment required to pursue these opportunities.

Okay. So it could be shifted also to 2010?

Definitely, it is a plan that will start in 2009 and will be completed in 2010, will be, let's say, covering the two years. But we will know more as soon as we will have precise timeline indicated by the regulators.

Okay, thank you.

Thank you. Ladies and gentlemen, we have no further questions coming through. (Operator Instructions).

And we have no further questions coming through. So I will hand you back to your host Marco Sala to conclude today's conference. Thank you.

Thank you, Operator. Let me sum up with some brief thoughts. As we look to the near term we are greatly encouraged by the wide range of opportunities that are across all our business lines.

Italian market will be a focal point of our investment, particularly in Scratch & Win and VLTs businesses. We believe that we will be able to accommodate those investments while continuing to maintain and grow the other part of our worldwide enterprise.

We are also firmly committed to maintaining an investment grade credit rating as we pursue these opportunities. To be able to continue to grow invest during these challenging economic times is a critical factor of our ongoing success.

We have positioned ourselves for continued growth to strategic initiatives that have diversified our approach to the market and opened up new delivery channels.

We accomplished this through diligent and disciplined planning that is grounded on an abiding commitment to protecting and announcing shareholder value. Thank you to all of you for joining us today.

Thank you ladies and gentlemen for attending today's conference call. You may now replace your handsets.