Clear Channel Outdoor Holdings Inc (CCO) 2011 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Clear Channel first quarter earnings call. I would now like to turn over the call to the head of Investor Relations, Mr. Randy Palmer. Please go ahead, sir.

Thank you, operator, and good morning, and thank you for joining us for our first quarter 2011 earnings call. Joining me today for the call are Tom Casey, Executive Vice President and Chief Financial Officer, and Brian Coleman, Treasurer. On today's call, Tom will provide an overview of the first quarter operating and financial performances of both CC Media Holdings, and Clear Channel Outdoor Holdings. After Tom's comments, we will open up the lines for questions.

Before we begin, I would like to remind everyone that this conference call may include forward-looking statements that involve uncertainties and risk. There can be no assurance that Management's expectations, beliefs and projections will result, or be achieved, or that actual results will not differ from expectations. Please see our annual reports on form 10-K, and our quarterly reports on form 10-Q filed with the Securities and Exchange Commission for a discussion of important factors that could impact our actual results.

Pacing data information may be mentioned during this call. For those not familiar with pacing data, it reflects revenues booked at a specific date versus a comparable date in the prior period, and may or may not reflect the actual revenue growth at the end of the period. The Company's revenue pacing information includes an adjustment to the prior periods to include all acquisitions and exclude all divestitures in both periods presented for comparative purposes. It also excludes the effects of foreign exchange movements.

During today's call we will provide certain performance measures that do not conform to generally accepted accounting principles. We have provided schedules to reconcile these NonGAAP measures with our reported results on a GAAP basis, as part of our earnings press releases, which can be found on the Investor section on our websites. A web cast of this call and the earnings press releases that were issued today can be found on the Investor section of our web site at www.clearchannel.com, www.clearchanneloutdoor.com, or www.ccmediaholdings.com.

A replay of this conference call will be available for a period of 30 days. And with that, I will now turn the call over to Tom Casey.

Thank you, Andy and good morning, everyone. My comments today will be focused on 3 areas; I will review the Clear Channel Media Outdoor holdings and radio results, and review the Clear Channel Outdoor holding results, and finally, I will review our capital spending and balance sheet. We're pleased to report that the positive trends that began with the advertising market rebound in early 2010 have continued into 2011.

We are continuing to see a gradual recovery across the global market place as advertisers compete for consumer attention, and we execute our strategy to build market share and improve our overall operating performance.

In the first quarter, CC Media Holdings revenues increased 5% to $1.32 billion driven by growth across our businesses for an improved advertising environment. Our revenues would have increased 4% excluding the effects of foreign exchange rates. The growth of our combined revenues along with a relatively small increase in expenses led to a OIBDAN of $314 million, representing 20% growth over the first quarter 2010. This improvement is indicative of the strong operating leverage in our model, with OIBDAN as a percent of revenue improving to 24% from 21% in the first quarter of 2010.

We have now generated growth in our revenues and margins for 5 consecutive quarters. Our improved results reflect the benefits of the leadership position of our assets, as well as a gradual recovery in the global economy, improved demand from advertisers in many of our markets, greater innovation and creativity across our organization and products and services we deliver, and a more streamlined and focused organizational structure, and a disciplined approach to managing our costs.

Some additional highlights during the quarter included Clear Channel amended its senior secured credit facility and its receivables-based credit facility, and issued $1 billion aggregate principal amount of 9% priority guaranteed notes due 2021. I'll provide more details on this later in my commentary.

We also made the acquisition of Thumbplay's leading edge cloud-based music technology business. This provides us with state of the art music technology and services, which we believe will enable us to accelerate the development and growth of the next generation of our Iheartradio.com digital products.

Finally, just this past week it was announced that we had acquired the Metro traffic division from Westwood 1. This acquisition will be very complementary to our existing traffic business, and w e look forward to working with the metro traffic team to best serve our affiliates and advertising customers. We believe these transactions demonstrate our focus on effectively managing our capital structure and ongoing investment in the company that will benefit us over the coming years.

Now let me turn to our Radio business. During the first quarter, our radio revenues increased 3% to $640 million, reflecting gains primarily in local, digital, traffic and other revenues. We have continued to carefully manage our costs; overall operating expenses for the first quarter, excluding non cash compensation, decreased approximately $12 million, or 3%, when compared to the first quarter of 2010.

The growth in revenues along with the decline in expenses grove the strong OIBDAN growth during the period. Radio OIBDAN increased to $223 million, a 15% increase over the $194 million we reported in the first quarter of 2010. Our Radio OIBDAN, as a percent of revenue, improved to 35% from 31% in the first quarter of 2010.

During the quarter we posted improved revenue gains across many of our markets, with particular strength in our top 25 markets. Categories that performed particularly well included entertainment, financial services, auto and restaurants. In looking at our digital business, we saw strong revenue growth during the quarter, along with the following; we saw approximately $26 million downloads of the iheart radio application, and monthly uniques of nearly $29 million.

We also launched a new iheart radio application for the iPad on April 8, and we are quickly approaching nearly 200,000 total downloads. The iheart radio application peaked at number 3 for all free applications, and held the number one position among free music applications for over a week.

Turning to the current period, trends remain positive for Radio, although visibility remains limited. As of this week, overall radio revenue was pacing up approximately 2% for the second quarter, as compared to the prior year period. Turning to our Outdoor business, beginning with a recap of the overall Outdoor Company performance.

Clear Channel Outdoor holdings reported revenues of $650 million in the first quarter of 2011, a 7% increase from the $609 million reported for the first quarter of 2010. Excluding the effects of the movements of foreign exchange, the revenue increase would have been 5%.

As a result of higher revenues and more efficient infrastructure, Clear Channel Outdoor Holdings' OIBDAN grew 16% over the first quarter of 2010. OIBDAN was approximately $117 million for the first quarter of 2011, compared to $100 million for the first quarter of 2010.

Clear Channel Outdoor Holdings' OIBDAN, as a percent of revenue, improved from 16.5% in the first quarter of 2010, to 18% in the first quarter of 2011. Our OIBDAN gain reflects the operating leverage in our Outdoor business and the positive impact of our restructuring program that was completed late last year.

During the first quarter, Americas Outdoor revenues increased 7% to $289 million, reflecting growth across most of our display types, particularly in our digital displays. Excluding foreign exchange, the first quarter revenues were up 6%. Americas' OIBDAN rose 5% to $94 million.

While we had strong performance across many of our markets for the quarterly period, our larger markets continue to be our strongest performers. Bulletins, particularly digital, street furniture and airports all contributed to our growth during the first quarter.

As of March 3, we had deployed 658 digital displays in 36 US markets, including 43 displays that were installed in the first quarter. Over the past 12 months, we have installed over 170 digital displays.

Finally, categories that were particularly strong for the first quarter included entertainment, telecommunications and auto. Looking ahead, during the current quarter, while visibility remains limited, business trends remain positive across the majority of our domestic markets. As of this week, Americas Outdoor revenues were pacing up approximately 5% for the second quarter, as compared to the prior year period.

Let me turn to our International operations. Our International Outdoor revenues for the first quarter increased 7%, and excluding the impact of foreign exchange, international revenues for the first quarter rose by 4%. Revenue growth at our International business during the first quarter was primarily driven by growth from street furniture across most of our markets.

As a result of our revenue growth and improved margins across a number of countries, International OIBDAN saw a significant increase of 41% in the first quarter 2011 as compared to the first quarter of 2010. Excluding the impact of foreign exchange, International OIBDAN for the first quarter rose by 39%.

During the current quarter, our International businesses continue to attract increased demand from advertisers, with street furniture continuing to lead the way. While we continue to see varying degrees of economic improvements in the countries where we operate, we are pleased with the diversity of our business, and the growth that we are seeing in several of our markets. As of this week, International Outdoor revenues were pacing up approximately 6% for the second quarter as compared to the prior period.

Looking at our total capital spending for the first quarter, CC Media Holdings spent approximately $64 million compared to $55 million in the first quarter of 2010. Much of this spend, approximately $46 million, was in the Outdoor business, and included the ongoing build out of our digital board footprint, and various street furniture and transit contracts.

Clear Channel Outdoor Holdings' net debt stood $1.97 billion, and leveraged under its indentures, stood at 3.5 times as of March 31, 2011. As we look at CC Media Holdings' net debt as of March 31, 2010, it stood at $18.9 billion. Clear Channel's leverage as defined under its credit agreement was at 7.2 times compared to 7.3 times as of March 31st, 2010.

For the quarter, Clear Channel repaid at maturity $692.7 million in aggregate principal amount of its 6.25 senior notes. During the first quarter of 2011, Clear Channel amended its senior secured credit facility and its receivable-based credit facility, and issued $1 billion aggregate principal of 9% priority guaranteed notes due 2021.

Here are some of the key highlights of the amendments. The amendments allows Clear Channel to request future extensions of the term loans and/or revolving credit facilities. It allows Clear Channel to utilize the Accordion in note form, as well as loan form.

It provides additional debt capacity in the form of secured or unsecured notes at Clear Channel or Clear Channel Outdoor holdings under certain provisions. And it also permits Clear Channel to utilize the Accordion in note form for 9 months following the scheduled maturity of Clear Channel's legacy notes to replace any cash used to repay such legacy notes. I'd refer you all to our SEC filings for more specific details on these amendments.

With the $1 billion of priority guaranteed notes, Clear Channel used the proceeds of the notes offering to prepay $500 million of its indebtedness outstanding under the senior secured credit facility. The $500 million prepayment was allocated on a rateable basis between outstanding term loans and revolving credit commitments under Clear Channel's revolving credit facility, thus permanently reducing the revolving credit commitment under the Clear Channel revolving credit facility to $1.9 billion.

And finally, as I mentioned earlier, Clear Channel also used the proceeds from the offering of the notes, along with available cash on hand, to repay at maturity, $692.7 million in aggregate principal amounts of 6.25% senior notes, which matured during the first quarter 2011. We were pleased with the favorable reception that we received with this offering, and believe that the amendments provide us financial flexibility to address our future maturities, primarily in 2014 and 2016.

So, to recap our results, overall, we were very pleased with our first quarter performance. Although the recovery is occurring at a slower pace than many thought, we are still benefiting. The revenue growth coupled with our control on cost is continuing to generate strong OIBDAN, as indicated by our first quarter results. And as I mentioned earlier, we have now generated improved financial results for 5 consecutive quarterly periods.

Overall, we remain encouraged with the outlook for our Company. Trends remain positive in the current quarter as we continue to benefit from gradually improving global economy, the leadership position of our assets, the ongoing execution of our strategy, and the strong operating leverage in our model. That ends my prepared remarks. Operator, we can now open it up for questions.

(Operator Instructions) Your first question comes from the line of Marci Ryvicker. Please go ahead.

Thanks, good morning. I just want to dig into the pacing information you gave us for Outdoor. Seems to be there are different trends in International versus Americas, with International improving sequentially, and Americas decelerating a little bit. So just first for the Americas division, is the deceleration coming from any specific categories, and can you comment on pricing versus occupancy? And then in International, can you talk about the countries that may be showing sequential improvement, or anything specific you can point to for us?

Sure, thanks. Well, first off, I don't see any deceleration that you're referring to. One thing to keep in mind that American Outdoor actually was a slow recovery last year. If you look at the pacings last year, they were 0.3% in the first quarter, so we saw a nice growth, 6.8% this quarter, whereas 2Q they started to see some improvement, about 2.6%. So, we're continuing to see good, strong recovery in American Outdoors. In addition, with regard to rate and occupancy, obviously various markets are seeing different levels of improvement, but overall we're feeling very good about our overall rate of growth, as well as our levels of occupancy across the business.

With regard to International, again, we saw some very, very good improvement internationally. Some of the countries that we are seeing perform the best are Sweden, China, UK, Belgium, Turkey, and a few others. And we also saw some weakness in France, but overall that's continuing to improve in the second quarter. So, internationally we feel very, very good about our business, and it's really a reflection of all the restructurings that they've done, and the focus they've brought to that business.

Okay, great. So it sounds like Americas is just tougher comps from Q1 to Q2, nothing more than that?

Yes, we're seeing the health of the business is very high, rate and occupancy are in line, and yes, it's just the year-over-year comp that's bringing that pacing down a little bit.

Okay, and I have one follow up in Radio. Has local continued to do better than national in the second quarter?

Yes, local is obviously the biggest part of our business in Radio, and had a terrific quarter locally. National was obviously what brought us out of this -- was the first part to lead us out of the recovery. But local is definitely strong in Radio for the first quarter.

Thank you.

Your next question comes from the line of James Dix. Please go ahead.

Good morning. Just had 2 questions. First, in Outdoor, you had, looks like slightly negative operating leverage, so just wanted a little bit of color on that and what the outlook is there in terms of operating leverage for the balance of the year.

And then secondly, from Clear Channel Outdoor's perspective, what do you think the impact is on Clear Channel Outdoor's strategy, if any, from the majority ownership of CC Media Holdings? Thanks.

Let me first hit the operating expense issue. As I've been talking over the last few quarters, we continued to invest in the infrastructure of our Outdoor Americas business and internationally as well, we continue to see great opportunities there. Some of the noise that's going on in the first quarter, though, we did have a favorable legal settlement that adjusted for last year, would have brought that expense level down more in line about 5%. So we're continuing to see margin improvement in that business, and as we continue to see revenues growth, given the investments we've made over the last 5 to 6 quarters, we feel very good about the level of investment and the operations there.

With regard to CCMH ownership of CCOH, no change in our investment outlook or any new developments to come.

So, just one follow-up. So roughly that 5% adjusted number on OpEx is a good expectation for the balance of the year for Outdoor?

I think that given where we're seeing pacings, I would say that's probably in line. I think the issues that we're seeing, acceleration that could slightly go up, if we're seeing some deceleration, then obviously we'll execute on various levers that we have to keep our costs in line, and maintain our margins.

Great, thank you.

Your next question comes from the line of David Miller. Please go ahead.

Yes, hello, guys, congratulations on the stellar results. A couple questions, so on International expense growth of only 3%, looks like you guys just blocked and tackled beautifully there. I recall it was maybe around 4 or 5 years ago that you guys always had kind of a problem with that line. I remember, I think it was maybe '06, '07 or so, that International expense growth line was usually well above 10%, now it's plus-3%, is that a pretty good run rate to model throughout the year? I know you've promised loosely to keep expenses low, but I just want to make sure there's no, you're not planning any blips up in the future in terms of expense growth? It sounds to me like that's the right number to model going forward for the rest of the year, but I want to hear it from you guys, and I have a follow-up. Thanks.

I think you have to go back a ways, as you said, the business' expense focus has been pretty significant over the last, really, 6 quarters or so. The International business went through a very significant restructuring that's been completed now, but has not lost sight of the controls around expenses. So we are seeing pretty significant increases in the OIBDAN, up 41%, even adjusted for FX up 39%. So we're feeling very, very good about their focus of top line as well as their expenses.

As far as level of expenses, we don't give guidance for the year, but I'd say the same thing I said about Americas, which is, if we continue to see the revenue pacings that we're experiencing, then we would see the margins continuing to grow. And if they decelerate, we'll obviously take the necessary actions we need to, to reduce expenses. Particularly in the International business, obviously their expenses are also dependent on some of the tenders that they may win, and so we may have some additional expenses as a result of that. But again, we feel very, very good about our growth in margin, it's been a focus of ours really for the last 5, 6 quarters, and we're very happy with the improvement we're seeing in our International business.

Okay, great. And then also, as you guys get a little bit more aggressive with these digital installs, are you running into any sort of regulatory heat in any states with regard to certain regulatory bodies maybe not wanting the signs in the first place? Or saying that the signs cause accidents, all that stuff? Or maybe forcing you guys to take down 2 signs for every 1 digital sign you put up?

We know Lamar has had issues with this in the last 2 or 3 years or so, with regard to certain areas around Texas and upstate New York. We know you guys don't really operate in west Texas or upstate New York, obviously, but I was just curious if you've run into any regulatory heat of late? Thanks.

Yes, obviously the regulatory issues here are ones that we are working very closely with all the local communities. We have now put in 43 signs for the first quarter. It's well ahead of our pace for 120 for the year. And I would say that while those are challenging, we are working through them in an expeditious way, and partnering well with the local municipalities.

With regard to sign changes and things like that, we're not seeing any significant issues there. We haven't experienced that. I would say that digital continues to be an important part of our business, and we're going to continue to deploy our capital in developing those new signs. But I don't see any obstacles. There have been a number of traffic studies, we've participated in a number of them, and have not seen any indications of any issues at all, and we are continuing to focus on our strategy to continue to deploy digital across our platform.

Okay, wonderful. Thank you.

Your next question comes from the line of Stacey Finerman. Please go ahead.

Hello, congrats on earnings. Can you break out what the growth was on the Outdoor side between digital and the regular boards?

Stacey, we don't break it out, but I would tell you that digital continues to be one of our fastest growing. Obviously, it's benefiting from the additional capacity we're putting in with an additional 43 boards. Over the last 12 months we've put in about 170 new boards, so you can see that we're deploying quite a bit, so that's obviously helping its growth. But we're seeing growth in traditional as well, albeit at a slower rate, but we're feeling very good about our inventory in Americas as well as Internationally.

And then just a question on your cost side, both in Radio and Outdoor, and specifically in International, I think it has been touched on, the margins continue to increase quite significantly. Is that something that we can continue to expect or near, or should that start to trend down as you come over harder comps throughout the year?

Well, the whole focus that we've had on the restructuring the business is to get our margins back to where they were. We continue to strive to get them back to the high watermarks that we experienced in the past. I would say that the focus that our management teams have around the world are to continue to drive, improve the pricing and disciplined expenses. So while the rate of change may decline, the focus will not.

We think that there's additional opportunity to continue to expand our margin, really in all of our businesses. So as we see the gradual recovery in the economy, putting additional growth into our revenue, we're focusing on maintaining our level of expenses, our variable expenses are in good shape, and we would expect to have additional margin expansion as we move forward.

Okay, great. And with the high-yield market still being pretty robust, any thoughts right now on looking at anything in your capital structure?

I think we're very, very satisfied with what we did in the first quarter. We were very proactive to go out and get the series of amendments that we wanted. We've got very favorable feedback from the investors that we visited and met with. And we like what we're able to put in place.

The offering is trading very well. We have now been able to push out some of our maturities, and it's something that we'll continue to look at opportunities to be proactive and manage our maturities, particularly the 2014s and the 2016s, in the most proactive way we can. As we said earlier, it's a balancing act of speed and cost, and it's something that we'll continue to evaluate.

Okay, great. Thanks so much.

Your next question comes from the line of Jim Goss. Please go ahead.

Hello. I have a question about the financial issues again. Is it correct to think that access to the cash generation of Clear Channel Outdoor by CC Media Holdings would be limited with the options, primarily either dividends or intra-company borrowings, or sale of a public stake or something of that nature, or is there any access that's not restricted?

Well, I would put it into 2 categories. This is Brian Coleman. First, the daily operating cash from the domestic subsidiaries are swept up through an intra-company note, and that's reflected in the due-to and due-from Clear Channel line item on the Outdoor note. So there is daily access to that excess cash, and consequently, a receivable or a payable between the 2 companies.

I think over the long term though, you characterized it properly. Over the long term, in order to access funds from Outdoor, you have to see it in a dividend or some other kind of inter-company note. Those are the ways that I would look at it, so I think that you've characterized it properly.

Okay. Is there any demand for that? Or as the business has begun to improve on both sides, both the Radio and Outdoor side, has some of the pressure been coming off of that issue?

Is the question -- is there a demand from -- ?

-- from the parent level to the Outdoor.

Well, I think both entities have significant cash reserves. They have good operating cash, and I think if you're looking at it from the CCU level, we have minimal debt maturities over the next 3 years. I think we have another $140 million this year, maybe $250 million the following year, and a few hundred million more. So our cash reserves could easily fund the next 3 years of debt maturity.

I don't see anything pressing, or any need to access that cash. And I think the cash balances at Outdoor serve their liquidity needs. So I guess the answer is no, I don't see an imminent need to access that cash.

I think the key thing here is that we're continuing to see good growth in all of our businesses, and obviously that gives us lots of flexibility to manage our way through any short-term cash needs.

Okay. On the Radio side, I was somewhat surprised the pacings weren't a little bit stronger than that, it seems like some of the traditional media been strengthening quite a bit. And I know you've also been looking at Radio, or the whole business as not just Radio anymore but in a broader sense. Just wondering where we are in the recovery phase until we're getting to sort of gains that relate to changes in the business, rather than coming out of the recession that had been pretty deep?

Well, clearly, I think everyone was expecting a little bit faster recovery coming out of the recession. With the latest GDP posting of 1.8%, we feel like our business is in line with that. We continue to see our ability to outperform the market, and feel that we're right in line with where GDP is.

I think as you look out for the rest of the year, we're going to participate in that recovery. It's challenging to know exactly the pace and the trajectory of that recovery, but it's one that we feel that we've been positioning to benefit. You go back to what I said earlier about the focus on expenses, go back to the focus that we have on some of the new initiatives we have in our business, and we're continuing to invest in it. So, we feel good about our business, and feel that we can benefit in line with the recovery of the economy.

All right. Thanks very much.

And your final question today comes from the line of Lance Vitanza. Please go ahead.

Hello, guys, thanks for taking the call. I have 2 questions, if I could. The first on the Outdoor side. In terms of the street furniture and transit business, can you discuss the competitive landscape, both domestic and overseas? And then on the Radio side, I'm just thinking with the comps getting tougher over the balance of the year, should we expect negative comps at some point in the back half? Thanks.

Lance, just on your question of product competition, I'm not seeing anything spike up in the quarter. We have obviously a number of competitors that participate in these products across the globe. We are continuing to be very disciplined, as you can see in our financials in International. The revenue is up almost 7%, even adjusted for FX of 4.5%. While we're seeing competition, we're able to perform quite well.

In Americas, the issue there is we continue to deploy capital at a higher rate than the average across the industry with our digital deployment, so we see that as a terrific growth opportunity. So we're not seeing your comment about specific competition affecting various product types.

With regard to Radio, while we will see increased comps as Radio performed better in 2010, I would say probably the biggest delta year over year is going to be lower levels of political. Last year obviously had significant levels of political advertising, which will affect probably the third and fourth quarter.

But as I said earlier, our revenue is going to be in line with GDP. Our ratings continue to perform, our minutes are about flat, and we're seeing good rate improvement. And so I would say that we would expect to perform in line with that, notwithstanding some of the political improvements we had last year that are not going to recur in this year.

Thanks, and congratulations on the quarter.

And you have another question. That question comes from the line of Avi Steiner. Please go ahead.

I appreciate you taking the questions. Real quickly here, on metro traffic, can you walk us through your costs? And if you could give us any color on what the EBITDA contribution should be? And then I have a couple more. Thanks.

Avi, we have not broken out specifically what the earnings profile of that acquisition will be. We have seen our traffic business perform quite well over the last few years. This is an acquisition that comes in at a pretty small price. We think it enhances our products and services going forward, and really leverages our combined assets. So I think that we're quite encouraged by being able to get this acquisition done, and expect a very good return as a result of it.

Okay. Just going back to the Radio deceleration in the second quarter, and if you already mentioned this I apologize, but is it just a matter of maybe contrasting smaller markets versus larger markets? And is the network business at all of a drag there?

Yes, I think there's a little bit of a comp year over year. We did have last year, second quarter, we were up about 4.3% as Radio was really leading the recovery. So you do have a little bit of the comp issue year over year. But having said that, I think that we're still seeing good, strong growth in our local business, and I'm not seeing a deceleration. Clearly we would like it to be higher, but as I mentioned a number of times, we're in line with where first-quarter GDP came out. The consensus estimates for GDPs are more in the 3% range, and we'll have to see how we play out for the rest of the year, and how that flows through. But I'm not seeing necessary a deceleration.

Okay. And then I just -- couple clarifications from me. I want to be clear that there was no restructuring charges in this quarter? And also if you could just follow-up on the favorable legal settlement comment you made about the Outdoor space earlier?

Yes, 2 specifics. Restructurings were pretty small this quarter, I think it was about $800,000, so pretty nominal -- for radio. We expect some restructuring costs for the rest of the year, but not significant.

With regard to the favorable expense item last year, it was just a legal settlement, we aren't going to comment on specific details, but I think I gave the adjusted expenses were about 5%.

Okay. And then maybe one last for me, and I really appreciate you taking the questions. You talked about your thoughts on debt and balancing your maturity needs, your runway with costs. And just thinking about your bank debt in 2014, those first 2 tranches, do you feel comfortable that you can, I guess, execute and amend and extend in the bank debt market, which I think would be, at least my view editorially, cheaper than doing something in the bond market?

And secondarily, your comfort of extending a meaningful amount of bank debt beyond some of your 2016 maturities? Thanks a lot.

Thanks, Avi. As I think we've commented before, the amendments we got in the first quarter we think positions us well to manage through the 2014 and 2016 stacks. We did not do the extension, but we do have the ability to do them now. I think that my comments about being proactive about how we manage through those maturities is still where I would want you to conclude. It's really just how far in advance do we do that. And that's something that we continue to evaluate and monitor, and we'll take the necessary actions as they become more clear.

Thanks, again.

Okay. Thank you, operator, and that's going to complete today's conference call. We appreciate each of you joining us today. If do you have any follow-up questions over the next week or so, please feel free to contact us. Thanks, again.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation, and for using AT&T executive teleconference service. You may now disconnect.