Canadian Imperial Bank of Commerce (CM) 2003 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the CIBC first quarter earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one, followed by the four on your telephone.

As a reminder, this conference is being recorded, Thursday February 27, 2003.

I would now like to turn the conference over to Kathy Humber, Senior Vice-President, Investor Relations. Please go ahead ma'am.

Thank you very much and welcome everybody. Here this afternoon to speak to you are John Hunkin, Chairman and CEO, Tom Woods, CFO and Wayne Fox, Vice-Chairman, Treasury Balance Sheet and Risk Management.

Here to respond to questions are Ron LaLonde, Head of Administration, Jill Denham, Head of Retail, Head of Retail Markets; Gerry McCaughey, Head of Wealth Management; and Dan Ferguson (ph), Head of Credit Risk Management. I would ask that you please identify yourself before asking a question.

Finally, I would ask you to take note of our forward-looking statement in our slide presentation, which I will summarize as follows: some of our comments today may include forward-looking statements that are subject to a variety of risks and uncertainties. Actual results may differ due to a variety of factors as detailed in our quarterly and annual reports. Thank you for your attention and I'll turn over to John Hunkin.

Thanks very much, Kathy, and good afternoon everyone.

First quarter results were much improved and demonstrate again the strength of our core franchise. We've reported first quarter after tax net income of 445 million, over 90 percent of which relates to retail, wealth management and commercial banking.

Let me report on several important initiatives we have underway. First, we have undertaken to reduce our exposure to large corporate loans. Business and government loans fell 2.4 billion or five percent this quarter.

Although there remain few opportunities for divestitures in merchant banking, we continue a focused reduction in this business. Write downs fell dramatically this quarter and were offset by revenues.

We are moving in the direction we need to. We are hard at work in cost (ph) reductions. Our efficiency ratio has fallen below the unacceptably high levels of last year. Our headcount is down from year end and the winding down of our U.S. electronic banking operations is proceeding on track.

Our on risk loan loss provisions remain at relatively high levels. We still see some signs of softness in credit in Canada and Europe. This was anticipated and is reflected in our expectations for loan loss provisions for the year.

We are monitoring all the risks closely and have further managed market risk down. Market conditions are expected to remain uncertain and we expect interest rates to rise. We have reduced our interest rate risk to the lowest I have seen in many years.

Our capital ratios are strong with our Tier 1 ratio at nine percent and we continue to take a cautious view on the coming quarters. Therefore, common dividends remain at 41 cents per quarter and we repurchased no shares.

There were several things that give us cause for optimism. The sale of Oppenheimer private client and asset management business was substantially completed in January, resulting in a small gain. More importantly, the sale allowed us to exit a business where we lacked scale. This will also -- well, this is will also allow us to put our resources to work in areas where we have a sustainable, competitive advantage.

We continue to gain share at Residential Mortgages and we are making ongoing improvements in our operational capabilities throughout the branch system. President's Choice Financial customers increased another five percent this quarter to 1.1 million. And we are seeing improvements in several of our world markets businesses.

Of note this quarter, we advised BCE in the sale of telephone directories business for $3 billion. The largest leverage buyout in Canadian history.

The first quarter was a good one, but it's much too soon to declare victory. We remain cautious about the weeks and months ahead. It is a focused environment at CIBC. We are working every minute of every day at maintaining the discipline necessary to operate in this changing environment.

Costs, risks, capital. These three things properly managed will lead to many more quarters better than this one. Thank you very much.

Thanks John. It's Tom Woods, CFO, speaking. Just refer you to slide three in the deck and I'll go through a number of the slides pretty quickly. I know it's a busy day with three banks reporting, so I'll try and hit the high points.

As John said, good quarter, clean, relatively few unusual items. Beginning this quarter we're no longer reporting adjusted earnings or operating earnings or non-core earnings. We're simply going to report reported earnings, that's the best practice these days. We're going to highlight any item that you may want to consider as unusual and let you normalize it as you see fit.

So in addition to the unusual items that we highlighted on slide three in the summary, I'll just point out a few other things. In the quarter we had optioned our star expenses pre-tax of 28 million. So that 28 million is already born by that $1.11 EPS. Twenty one million of that 28 million was for stars, but I'd like to point out that we've now hedged all our stars. The volatility when the stock goes up with no longer be there going forward.

Seven million balance was on options expense, and that'll creep up a bit probably till eight or nine million towards the end of the year. Pension cost issues are running at about 64 million per annum, versus 43 million last year. So that extra pension cost is born in that number. And we had a pre-tax gain of 11 million on our TSX holding.

Also normalized in our disclosure and we hope this is helpful, is normalization for the Oppenheimer Divestiture and the Merrill acquisition so that you can look at our wealth numbers on an apples to apples basis. Now I'd also point out that we've moved a number of businesses around.

We're not going to - hopefully not do this through the year, but in the deck there's material that shows you which businesses we've moved around. There's no impact on the consolidated numbers and relatively little impact on the SBU numbers. Tax rate this quarter is a much more normal 31 percent or 34 percent TED, and that really just reflects the return to a more conventional geographic PNL mix.

After slide three R, we have a respectable 16.8. Revenue's strong across the board. World market trading revenue trading up quite a bit from where it was the last three quarters. Merchant banking gains exceeded write-downs. Expenses, as John said, a mixed ratio that's starting to get back into the territory that's on the verge of being acceptable.

But good performance overall on costs. The costs saves are starting to kick in from the restructuring we did late last year. Non-comp costs adjusted for acquisitions well down versus Q4, as you'd expect it to be, but more importantly essentially flat with Q1 the year before and show you that slide a little later.

We've got what we feel is a conservative comp accrual and the plan is to keep the run rate as close as we can if not beat the non-comp costs you're seeing here in Q1. As further costs saves we will endeavor to in effect offset somewhat higher tax and seasonal marketing spend that will probably kick in towards the end of the year. Credit, you'll hear from Wayne Fox a little later, but suffice to say good news on new formations, Madam Parish (ph), Telecom and Power Exposure (ph) .

Tier one back at nine percent late in the middle of range. Unrealized gains back up over 700 million. I'll just refer you to slide six and seven. I won't talk to them, but a number of you I know focus more on the consolidated numbers so we tried to give you some run line comments on how the Deltas (ph) came in versus Q4 last year both on the revenue and the costs side. We obviously look at the business as viewed by you and my comments for the rest of the presentation will focus there. That'll give you a base to, you know, to look at what happened on a consolidated basis.

Slide nine; I'll just refer to as the slide that completely reinforces the strong core earnings of our retail wealth and commercial banking business. That's gone up from 2.20 back in 1999 to 3.65 last year and a $1.04 after Q1 this year. And I think that's a, you know, an important point to take away -- the strong core earnings base of our broader retail wealth, commercial banking business.

So, turning now to a brief review of our business line, slide 13, revenue and retail markets in Q1 was 1.2 billion, down 192 million from Q4, which included the $190 million gain resulting from the merger of our Western Bees (ph) operations with those of Barkley's.

On slide 14, you'll see we've given you some talking points that I'm going to refer just to make it a little easier for you to follow. Personal Banking, you see on slide four -- customer segment for the retail branch banking customers, except for those in Imperial Service. Revenue here was 456 million, just short of the record Q4 number. About 50 percent of this revenue is from deposits and about 25 percent is from loans. Balances and spreads for both deposits and loans were flat, or up marginally versus Q4. Internal commissions and other product sales and FX were down a bit on the quarter.

Market share on deposits held steady at 17.7 percent for the quarter, and was up a full .3 share points from a year ago at 17.4 percent. Market share on term loans was the same as Q4, but fell slightly on line (ph) to credit.

The second line, slide 15. Small Business Banking had record revenue of 138 million. Deposit and loan balances were both up about three percent on the quarter, and six percent on the year. Spreads were up marginally versus Q4. The outlook for these two businesses at Personal loans and Small Business is for slightly reduced revenue in Q2, which is three fewer days than Q1, but still, for a high-single digit revenue growth for the year.

On the third line, which is broken out on line 16, Cards was $313 million of revenue, down three percent from Q4's record 324. Net interest income, which makes up over half of Cards' revenue was flat, as balances were up four percent, but spreads were down due to the lower revolve rates we always see in Q1. Transaction revenue was up marginally on higher purchase volumes. Securitization revenue was lower due to higher seasonal loan losses. Card maintained its number one market share position in Canada 21.4 percent of outstanding, down .1 share points from Q4, and 32 percent of purchase volumes up .3 share points from Q4.

The market environment in Cards in Canada continues to be very competitive. While the amount of direct mail in the industry appears to have pulled back a little, we're still seeing fairly aggressive pricing for balance transfers. We expect slightly higher revenue, however, here in Q2, as the revolve rate usually increases off the higher Q1 balances. This should more than offset lower transaction volumes. Looking beyond Q2, we're optimistic that active account growth should lead to higher balances and purchase volumes.

The fourth line, mortgages, on slide 17 for the breakout -- revenue was 158 million, down from a record 191 million in Q4. As indicated last quarter, most of the increase in Q4 was due to gains on sale of mortgages to securitization vehicles, as well as hedging gains. This quarter revenue was slightly above the average for 2002 as a whole; as securitizations and hedge gains were lower than Q4. Residential mortgage interest income, which is the largest component of mortgage revenue, was up four percent versus Q4, as balances were up three percent and a full 16 percent balance increase from a year ago. Mortgage market share was 14.5 percent, up .4 share points from Q4, into the number two position in Canada, and up a substantial 1.2 share points from a year ago.

Looking ahead Q2 revenue for mortgages may be slightly lower, three fewer days in the quarter and lower expected pre-payment fees. Beyond Q2 however, we see good portfolio growth, possibly offset by somewhat tighter spreads and lower pre-payment fees.

On slide 18, you'll see the expanded other category includes President's Choice Financial, that used to be known as Amices Canada (ph) , the umbrella label, but that now appears in retail markets under the other line, West Indies (ph) , which is now Equity Accounted (ph) and the smaller student loans insurance and treasury allocation revenue streams.

Revenue is down here primarily because Q4 had the $190 million gain on the West Indies (ph) merger. The numbers before Q4 you see are higher, because we were fully consolidated the West Indies (ph) revenue before the merger. Now we equity account for a 44 percent interest in the larger company.

President's Choice Financial customer and funds under management growth continue that five percent for customers and seven percent for funds respectively on the quarter. And we remain confident that this would be profitable by Q4. The Amices (ph) [Inaudible] going down as proceeding as planned and we expect to complete it within the restructuring charge taken in Q4. The remaining Amices (ph) U.S. costs are not carried here in retail markets, but under the corporate slash other revenue line.

On slide 19, you see retail markets Niac (ph) was 253 million. Q4 Niac (ph) was 379 million or if you exclude the West Indies (ph) gain and the restructuring charge in Q4, the Q4 comparable number was 230 million.

I've detailed on slide 20 the main variances from Q4 to Q1. Looking ahead, I point out that the Q1 loan losses are typically a little higher in cards, due to seasonality and the Q1 expense a little lower, due to tech and marketing spend patterns.

Shifting to our second of three business lines on slide 25, wealth management, revenue was up considerably from Q4, due mainly to the gain on sale of our Oppenheimer U.S. full service brokerage business, which I'll comment in a moment.

Going to the drill down, first on slide 26, Imperial Service, our high-end retail banking advisory sales force, revenue was consistent with Q4 at 182 million.

Deposit account for about 50 percent of revenue here, which was up a bit on the quarter, however, lower internal mortgage commissions offset this.

Over 940 or 80 percent of our in-branch advisors are IDA registered representatives, and more than 650 financial advisors hold their certified financial planning designation, allowing them to advise and sell equities, bonds, third-party mutual funds, as well as the full suite of CIBC deposit, loan and investment products.

Imperil Service should show steady growth to the balance of 2003.

Slide 27, the second line, retail brokerage revenue of 367 million was up 48 million on the quarter, thought 39 million of this was due to the net impact of the Oppenheimer sale. The remaining nine million net increase came from better performance in both Canadian full-service and discount brokerage, which were up four percent, mainly from higher equity trade volumes, partly offset by lower mutual fund trailers.

Slide 28, wealth products, which consist of mutual funds, GIC and asset management businesses, and revenue was down four million from Q4 to 136 million, primarily due to lower GIC revenue. This was partially offset by higher mutual fund revenues, as we were the only major bank with positive net mutual fund sales in the quarter. Our mutual fund market share among all providers in Canada, not just the banks was constant at 8.6 percent and GIC shared decline from 15.2 in Q4 to 15.1 in Q1.

The outlook for revenues across wealth management will be market driven, that we see good potential to grow revenues through the balance of the year as our duly licensed sales force continues to consolidate client assets on the CIBC platform.

Slide 29 shows you the trend of Wealth Management niad (ph) at 121 million. In slide 30 we've provided the unusual items, which normalize that 121 million down to about 60 million to be apples to apples with Q4, adjusting for the Oppenheimer sale and the lower Merrill Lynch retail integration charges.

This $23 million normalized improvement in Niad (ph) reflects both higher continuing revenue of 29 million, as I've just reviewed, 12 million and lower continuing costs and a somewhat higher tax rate.

The final SBU World Markets starts on slide 30. As you can see, the revenue breakdown, which as you can see was significantly better than the previous two quarter. Going to the draw (ph) down on slide 41 in Capital Markets, revenue of 420 million was almost back to the level we saw in Q1 last year.

I should point out that 20 million of this number is the 9/11 business interruption insurance recovery, which we've highlighted as an unusual item. The equities component of the Capital Markets revenue, which represents about two thirds of the $420 million number, was up over 50 percent from Q4. And the debt component was up over 60 percent.

Within equities, revenue from equity structured products was the highest it's been in eight quarters. Tighter credit spreads helped convertible hedging strategies. And in Canada we capitalized on structuring opportunities for a number of clients.

On the debt side, as I said, revenues were up over 60 percent from Q4 as tighter credit spreads here, too. Higher flows and increased structuring opportunities were present both in North America and in Europe. Europe was particularly strong in debt for us, although not a big percentage of the final debt number.

Year to date share in equity trading in Canada increased from 12.6 to 12.9. And equity trading share in the U.S. also increased from 0.9 to 1.1.

Q2 in Capital Markets has begun somewhat better on the debt side, but slower on the equity side. Although we're only one month into the quarter, the current market tone points to a somewhat weaker Q2 in Capital Markets.

Slide 42, the second line -- Investment Banking and Credit had its best quarter since Q2 2000 with revenue of 495 million. Q4 was abnormally low because of 161 million in write downs due to our CDO (ph) and high yield portfolios.

The largest increases were in U.S. real estate securitization, which is a very big business for us, U.S. high yield where the market has improved considerably, U.S. structured finance and Canadian and U.S. M&A In each of these areas we led or were part of several large transactions.

Revenue booked and pending across most of these areas, however, for Q2 was not as strong as Q1 delivered.

Slide 43 -- Merchant Banking had revenues of 5 million as gains and other income of 68 million exceeded write downs of 63 million. And I'll remind you that I've provided extensive detail on Merchant Banking during our investor Web cast on October 21st when I reviewed how we mark and maintain those portfolios. This Web cast is still archived on our Web site.

Slide 44 -- Commercial Banking continued to produce consistent revenue with its best quarter since Q3 of 2001. Slide 45 shows World Markets Niad (ph) of 129 million. And the build down (ph) on slide 26 shows you that that was driven by revenue of 1.05 billion, as I've just gone through. Considerably up from 304 million in Q4. Slightly lower loan losses and expenses that were down from Q4, which had a restructuring charge and higher litigation expenses.

I'll just conclude with slide 57, which is the way we look at our costs. And you'll see here that we try and isolate non-comp costs adjusted for businesses acquired and sold, and you can see as I said at the beginning that costs, obviously, are considerably down from Q4. But we're very close to the Q1 number.

So with that I'll hand it over to Wayne Fox.

Thank you very much Tom. Its Wayne Fox speaking, Chief Risk Officer. Good afternoon. As Tom pointed out, our specific provisions for the first quarter totaled 339 million, up by 59 million from the fourth quarter of fiscal '02 but 201 million less than the first quarter of last year.

General allowance remained unchanged at 1.25 billion, and as at the end of the first quarter were 100 basis points of risk weighted assets as compared to 99 basis points at year-end. Overall, our allowance for credit losses now totals 2.4 billion and provides us with a coverage ratio of 104 percent of our gross impaired loans as compared to 101 percent at year-end.

This is come government credits specific provisions totaled 204 million, an increase of 11 million from the fourth quarter. While consumer credit provisions increased by 48 million over the prior quarter, 235 million. The telecommunications and cable and utility sectors accounted for 52 percent of the business in government specific provisions in the first quarter. At 135 million in Q1 our consumer credit specific provisions are only six million higher years over year than in '02.

Consumer provisions continued to be largely attributable to the credit card business, which accounted for 68 percent of the Q1 total. We anticipate that the seasonality trends which we have seen in years past with respect to our consumer credit provisions will repeat themselves in fiscal '03. For example, in fiscal '02 our consumer credit provisions averaged $91 million in the second to fourth quarters. Which was $38 million less than the first - last year's first quarter.

The current slide highlights our Canadian credit card delinquency rates over the last three years and illustrates both the historical seasonal Q1 peaking experience as well as noting that our January 31, '03 delinquency rate of 2.36 percent is three basis point improvement year over year. Our guidance for our fiscal 2003 full year credit specific divisions remains unchanged at approximately 10 to 15 percent lower than 2002 levels, which maps to a range of 1.25 to 1.35 billion.

Net loans and acceptances before the general allowance totaled 143.9 billion at the end of the first quarter, down 1.3 billion from year-end. As we mentioned, mortgages increased by 1.1 billion during the first quarter and now comprises 47 percent of our total net loans and acceptances. Personal loans decreased in the quarter by 266 million but are approximately 700 million higher year over year.

Student loans reduced to below 2.9 billion at the end of the first quarter, a 479 million reduction year over year and in keeping with our announced business strategy in this portfolio. Credit card outstanding continued to increase up by approximately 400 million in the first quarter and by more than 1.1 billion year over year. Business and government loans acceptances reduced by five percent, were over 2.4 billion to 44.8 billion in Q1, in line with our strategy of reducing exposure and capital in this sector.

In fact, since Q4 of '98 the business and government credit portfolio has reduced by approximately $13 billion. My fourth slide displays that our consumer credit assets represented 69 percent of the total net loans and acceptances as of January 31, versus the 31 percent represented by business and government loans.

Year over year, we have shifted the percentage split of our loans and acceptances by five full points, from 6436 to 6931, consumer versus business, thereby positioning our credit capital much more towards our retail activities going forward.

This continued shift in our portfolio is reflective of our strategy to shift our business mix in favor of retail in conjunction with our ongoing focus on balance sheet and capital management.

We continue to view corporate credit diversification as an important objective, and are continuing to place greater emphasis on more active loan portfolio management to groom (ph) the portfolio to improve our returns. Our business and government portfolio continues to be reasonably diversified from an industry perspective, as evidenced by the breakdowns shown on the current slide.

Business Services is the largest industry segment at 5.3 billion, or 12 percent of the business and government loan portfolio before general allowance, as displayed on the right-hand side of this slide. Loans (ph) were reduced by approximately 200 million in this sector, quarter over quarter.

For most (ph) material quarter over quarter industry sector reductions were, with respect to real estate, reflecting the completion of two public securitization transactions, as well as the Utilities and Communications and Cable sectors.

Specifically, with respect to Telecommunications and Cable, our Q1 growth exposure totaled approximately 3.9 billion, a decrease of 340 million, as compared to October 31st, '02. Net impaired Telecommunications and Cable loans totaled 513 million at the end of the first quarter, 115 million less than at yearend.

As of January 31st, we had 129 million in specific allowances against the telecom and cable portfolio, which, when combined with 456 million in borrower-specific credit protection and hedges against our outstanding loans and acceptances, combined to reduce our sector exposure to 3.4 billion, a reduction of 320 million since the yearend.

Slides eight through 10 provide detail with respect to our outstanding exposure to companies whose primary business is power generation and/or which have a material energy trading business, generally as a byproduct of an operating pipeline activity. Outstanding loans and acceptances to this group of companies were approximately 1.9 billion as of January 31st, and reduced by 229 million during the quarter. The credit quality of the outstanding exposure of 1.9 billion is spread (ph) 36 percent, 64 percent, investment grade to non-investment grade, and is 66 percent U.S.-based, 21 percent Canadian-based, and 12 percent European-based. European exposure reduced by 226 million during the quarter, while U.S. exposure reduced by 72 million.

The large majority of our quarter-over-quarter credit exposure reduction was attributable to loan repayment and sales of investment-grade borrower exposures in the diversified utilities and generation project sectors.

As of January 31st, we had 69 million of specific allowances against the power generation and energy trading portfolio, which, when combined with 166 million in borrower-specific credit protection and hedges against our outstanding loans and acceptances, combined to reduce our net sector exposure to approximately 1.7 billion, a reduction of 180 million since the year end.

We had 11 deals with our exposure to the airline sector, given the challenging conditions, which these companies continue to face. Extending that loan and acceptances for this group of companies was 558 million as of Jan. 31.

We rate 75 percent of our airline exposure as investment quality due to the collateral pledged against these loans, such as cash, G7 government securities, and a single A or better rated bank lenders of credit.

We have 38 million of credit protection in place against our 142 million of non-investment grade credit exposes and confirm that we have no outstanding credit exposure to U.S. shuttled or chartered airlines.

I'll recap the amount of credit protection that we have purchased on a business and government portfolio as that quarter ends. Of the 2.3 billion in credit protection against our outstanding loans and BA's, oil and gas at 318 million and forest products at 236 million are the largest hedged outstanding concentrations, after telecom and cable at 456 million.

All of the credit protection, which we have purchased has been from counter parties, who's current public long-term debt ratings are A- or better.

Net of portfolio management continues to actively manage down the non-core corporate loan portfolio. This quarter's activities included loan sales of 138 million at a cost of less than one cent per share. As of January 31st, we have five percent of our outstanding and government loans, credit protected.

Our growth compared loans increased during the first quarter by 29 million to 2.3 billion, the three largest new growth impaired credits recorded in the first quarter, for two privately owned European power generating companies at 59 million and 49 million Canadian dollars equivalent respectively, and the Ottawa Senators Finance Corporation at 38 million.

As of Jan. 31, net impaired loans were negative 85 million, as shown on the bottom right hand side of this chart, representing an improvement of 72 million over year-end.

As a percentage of total loans and acceptances, net loans, net impaired loans were negative six basis points at the end of Q1, as compared to negative one basis point at the year-end.

Business and government net impaired loans improved by 66 million during the quarter, while consumer net impaired loans improved by seven million.

Business and government net impaired before general allowances as of January 31, represented 2.6 percent of total business and government loans effectively flat at year-end.

Fifty-two percent of the new classifications occurred in the business and government portfolio with Canada accounting for 46 percent of this amount. Three hundred and seventy-seven million, business and government net new formations were significantly lower than the 809 million reported at Q4 '02 and we're also 484 million less than Q1 of '02.

From an industry perspective, the largest levels of new corporate classifications were from a utility sector at 39 percent.

Now let's look at the consumer loan books. The major consumer loan portfolios, including credit cards, continue to perform very well. The domestic credit card delinquency rates were marginally improved year-over-year, which is a continuation of a five-year trend. And as was noted earlier, following seasonal trends, delinquency rates are expected to decline materially during the rest of the year.

A level of net impaired residential mortgages as shown on the right-hand side of this slide increased by nine million during the past quarter to $160 million and is 24 basis points of net mortgage outstanding. They're affecting the continuing strong employment market and healthy housing market.

Net impaired personal loans, including student loans, improved by 16 million over the past quarter. We did seem to negative 199 million over January 31st.

Now, I'd like to turn to market risks, slide 19, which displays the daily value at risk in our trading portfolios against daily trading revenue. Note that on no occasion did losses exceed the value at risk.

Another way of looking at the performance of our trading portfolios is to look at the distribution of trading revenue. In Q1, 91 percent of trading days provided us with positive revenue. This obviously represents a significant improvement over Q4 as improved market conditions and levels of customer activity generated were consistently positive revenues without any increase in risk.

This leads to slide 21, which shows the risk in our trading books over the last three years. This remained stable during Q1, consistent with our goal of constraining revenue volatility. Value at risk in our trading books averaged under 13 million (ph) in this quarter, comparable to average levels during 2002, but well below historical levels.

Slide 22 shows continued stability in the bank structure interest rate risk. This is the risk that primarily results from differences in maturities or replacing dates of assets and liabilities both on and off balance sheet.

Since early 2000, we have reduced this risk by almost half, consistent with our strategy to reduce direction or positions in the asset liability gap.

My last slide displays that risk related assets have declined by $20.6 billion since the end of 1998. Since 1998, wholesale risk related assets have declined by almost $35 billion of which 24 or 69 percent was related to the reduction in the wholesale credit portfolio.

Detailed risk related assets have increased by approximately 14 billion, primarily due to strong growth in mortgages, credit cards and personal loans. In Q1, risk related assets decreased by 1.6 billion, primarily due to reductions in wholesale credit related activities. That is the end of my report and I'll turn it back to Kathy.

Ladies and gentlemen, we'd be pleased to take questions at this point.

Thank you. Ladies and gentlemen, if you would like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request.

If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. If you are using a speaker phone, please lift your handset before entering your request. One moment please for our first question. Our first question is from the line of Jamie Keating of RBC Capital Markets. Please proceed with your question.

Hi, thank you. I have a couple of quick ones. One, I just hoped I could get a little more flavor on the trading revenue line. If you could just describe the impact of credit spreads -- corporate spreads or credit derivatives if you had long positions helped? And/or if you could just perhaps what you think -- Tom or otherwise -- what the sustain ability of that number might be on a go forward basis at the 292.

And Tom, if you have the floor, could you also just help us -- walk us through -- some of the JV impact here? We've got West Indies now. We've got -- I guess we've got a position in Fond Stock (ph). If you could just give us some color on the financial impact and how that's going to work going forward?

A very brief one. Slide 67 for Wayne. Did you talk about the non-investment grade portion of the telecom portfolio? I missed it if you did.

Yes, thanks, Jamie. It's Tom speaking. Yes, on the trading revenue -- trading revenue this quarter was 292 million, and just as a frame of reference last year the average was 163 for us and 2001 it was 285.

Credit spread I think, you know, had a reasonable amount to do with it in Q1. Credit spreads obviously narrowed, but not nearly as much as opportunities we found in the equity structured products business. That, you know, bounce back to levels that we haven't seen in eight quarters. So I would say, Jamie, some benefit on the credit derivative but not big.

Sustainability is always a hard one. You know, I don't think we've ever said or tried to draw a line in the sand on sustainability for trading revenues. I think what each of you needs to do is assess - I mean, obviously make a call on markets both spreads and volatilities, but also asses quality by franchise, quality by people, quality of technology, which I would say is very high in our equity business in particular. And then look at the volume of capital we've assigned.

So one thing I would say is I don't think you're going to see the variability in trading revenues that we and some of the other banks both here and in the U.S. have delivered. But, you know, I can't tell you that the 292 itself is sustainable. I think you've got to interpolate probably over the last eight quarters based on the factors that I just went through.

The JV accounting isn't material. I'd be happy to give you specific numbers later. We're now equity accounting our West Indies number which per quarter is pretty small. I can get you the exact number. It's probably under 10 million. The fund stock interest, we have about a convertible divesture into I think mid-30's percent. Pretty low coup on the beginning.

That sits in the corporate other. It's a small number as well. So both of those are small and immaterial in the scheme of things, Jamie.

OK. Terrific. No investment grade on the telecom, Wayne, did I miss that?

I didn't verbalize it, but it is on slide six, Jamie. The answer to the question on the non-investment grade component is 2.8 billion.

OK. Sorry about that. Thanks a lot.

Our next question is from the line of Robert Wessel of National Bank Financial. Please proceed with your question.

Yes. Good afternoon. I just have two quick questions. One is, if you look at the regular workforce headcount it is almost exactly 6,000 employees lower than what it was two quarters ago. Can you just give some flavor as to where those people - not where they went, sorry, but can you give me some idea as to what segments they came out of? Even if it's just rough.

Just bear with me a moment, Rob, and I'll get that for you. I mean, just let me look it up.

Do you want me to go to my next question?

Yes. Why don't you go ahead and I'll get the right answer.

Sure. In terms of PC financial and forgive me if I'm incorrect, but I had thought the bank was targeting Q4 of this year, i.e., 2003 for being break even. Is there any change to that? I'm actually thinking a little bit of whether or not if you're pushing that out and I'd like to know if you could at least maybe disclose if you haven't already and maybe I've missed it. What, you know, the current drag is?

Yes. The current drag - well Q1 drag in Canada was three cents and in the U.S. it was four cents. That four cents is probably going to go down to one cent in Q2 in the U.S. and disappear after that. And the Canadian drag will be two or three cents in Q2 and Q3 and then we believe profitable in Q4 this year.

Let's - just on the - well, let me - I just can't find the specific number, but what's been happening in our regular workforce headcount number, Rob, is the following.

Amicus U.S. -- the closure of that probably represented about 1,200 positions. The integration of our Merrill Lynch business into Canada reduced headcount in that business. Now, that would have gone up, so if you're using a 4,000 figure on a net basis, that would go up. Rural (ph) markets, in particular, had pretty significant reductions primarily in the U.S., so that would have been another factor. We also did a deal with HP this year where we outsourced -- I'm not sure of the exact number, but perhaps as much as 1,000 jobs to HP. So, the way the headcount works, those people, technically, are now with -- I'm sorry.

Comstock (ph) .

Yeah. I'm just saying on the HP side. Yeah, the PCB (ph) divestiture was the next one, which would have been what -- Gerry, how many jobs?

1,200.

12,000 jobs. So, those four or five things would account for the vast majority of the 4,000 jobs.

Right. OK. And actually, one final question. On the credit card business, given that loss rates, you know, moved up somewhat smartly, can you give us a sense for, you know, the profitability of that portfolio in terms of -- I don't know -- maybe even if you could give that income, or at least take a stab at it.

Yeah, we've not broken that out, Rob, and we don't intend to. I think we're the only one that actually discloses card revenue. It continues to be quite a lucrative business for us. The loss provision you referred to picked up from the seasonally low Q4, but, as Wayne said, you know, there's no reason to think that that's going to increase further in the year.

OK. Great. Thank you very much.

Our next question is from the line of Michael Goldberg (ph) or Desjardez (ph) Securities. Please proceed with your question.

Thank you.

[Inaudible] we've discussed this in the past; you seem to have a bit of a unique accounting treatment of a couple of items -- gains and losses on limited partnerships, and advisory fees on structured products and third-party securitizations. To start with, can you tell us how much these two amounts were in the latest quarter? And can you also maybe give us some historic comparables on these figures? And finally, why do you include these in your other miscellaneous revenue, rather than including them in investment gains and capital gains and market revenue as the other banks do?

OK, Rob, it's Tom.

Yeah, let's have -- Michael -- I'm sorry. What Michael's referring to is in non-interest income, the final, catch-all category, and called "other income" for us has grown through the last several quarters. And we're actually looking now at breaking that out to give people a bit more granularity.

I mean, I think most people still look at our business the way we do on a management reporting basis by SB (ph) , but for those of you that look at it on a consolidated basis -- which there are a number -- we'll do what we can to drill down here.

Michael, for Q1, the total number is 346 million that he's referring to. And a good part of that is -- well, let me give you some of the bigger items. The gain on the sale to Fawnstock (ph) was 52 million. The business interruption insurance recovery was 20 million. FX revenues are in there, as well, at 57 million. So, you can find 129 million of that elsewhere.

The biggest remaining part of that revenue unexplained of about 200 million, not quite half of that is in respect of our very strong quarter we had in securitization, both in Canada and the U.S. as well as the real estate securitization business. We're not breaking out the individual numbers, but think of it as just in and, you got less than half, or less than 100 million of that 217. And that would be up considerably, like three items what it was in Q4, for example, Q4 was a down quarter.

The limited partnership gains were, were flat, zero, or negative one actually, slight loss, whereas in Q4, that was negative 89. So that was a big swing in Q1 the other way.

So and I'd be happy afterwards Michael (ph) to go back and give you more historic drilldown on that.

Thank you very much.

You're welcome.

Our next question is from the line of Ian de Verteuil of Nesbitt Burns. Please proceed with your question.

Yes, thanks, I guess just first of all, congratulations on a great quarter. The, there's a comment with respect to the events of 9-11 that you, there was a $14 million item that with respect to total contract termination costs on some facilities in Manhattan. Can you, is that a charge and sort of leading to what the occupancy costs look very low in the quarter. Was that a gain that came through Tom?

So the two things I'm looking at is on the narrative, page five and on page four, the sub part, looking at the occupancy costs, which are down quite a bit.

Again ,it's Tom. Yes, the occupancy is down, it was 169 in Q4, down to 114 in Q1. Couple of reasons for the drop. One, the main reason is the sale of our U.S. retail brokerage business to fund stock. So all of the space by quarter end was gone. Also we, we're no longer occupying the World Financial Center. We've not been in that building since 9-11, but the way the math on the leases worked; this was the first that that came up. And finally, Amicas (ph) U.S. wind down, freed up a lot of space that there was ramp showing up on that line. So that's a number, which, you know, should be sustainable going forward.

What was your other question Ian?

In the narrative, in the actual press release, page five, in the section it says events of September 11th, you talk about $14 million in total contract termination costs...

Do you have that page number?

It's page five in the narrative.

Page five in the narrative. Yes, whereabouts is that. I just want to be sure, because there's a couple of things going on.

Events. Yes, again if it's too detailed for this forum, you can give me a call. I just wondered if it's correlated with the drop.

Let me call you back on that. I mean, our whole New York State situation is in flux, we did take some sub-lease losses. I don't see that number here, so I want to be sure I give you the right number. So I'll call you back on that Ian.

Thanks. Thank you.

Our next question is from the line of Quentin Broad of CIBC World Markets. Please proceed with your question.

Yes, good afternoon. Couple of things. First, I think Tom you mentioned that the mix ratio is down, but still above what is an acceptable level. So, could you give us a sense of what that acceptable level is?

And the secondly, I guess, for Wayne. Just in terms of credit protection. You've mentioned the 456 on telecom and the 2284 of total. Can you tell us how much of that relates to non-investment grade credit? And how much of the provisions and credit hedges on the two key sectors -- telecom and power/energy relate impaired loans? I would have though none of the credit hedges relate to impaired loans, but?

They're quoting that sum on the next (ph) [Inaudible] . In the annual report you'll see that our goal over the next three year period is to get it down 60 percent.

And in the short term, I think we've got a very firm plan on the cost side. The only variable there is the extent to which we give the green light to some tech spending later in the year, depending on revenue.

We would like to get it lower than 67 for this year. I don't think we're going to be able to get it lower than 65 unless we have a pretty significant bounce back in the capital markets, meaning revenues higher than what you saw in Q1.

But I think -- at the risk of oversimplifying -- I think if you were to draw a straight line from where we are at 67 to 60 in three years, that would be about as good a way to look at it as possible. But recognizing that this is as much a revenue issue as a cost issue.

It's Dan Ferguson (ph) responding to the second question. Good afternoon, everyone.

Quentin, in both the telecom and cable area as well as the power generation energy trading area, it is broadly the case that our protection is approximately one third against investment grade borrowers and two third against non-investment grade borrowers. And in neither portfolio was there a protection against impaired positions at the quarter end.

Great. Thank you. And just if I could, on the CIBC World Markets revenue line of investment banking and credit prox (ph) . I think you might have touched on this earlier, Tom, but obviously a fairly sizeable number. You know, rivals the best we've seen, certainly, in the last five years or so.

Was your suggestion that you touched on this that you'd have to look at how that played out over the last, let's say, four to six quarters as more a reasonable number vis a vis the 495 we see in this actual quarter?

Yes, we had a lot of big fees this quarter. Our real estate securitization business in particular. M&A both sides of the border. High yield we did five deals. We haven't done five deals in quite awhile.

I do know that I made a reference on the last four or five quarter -- and perhaps that was your reference, Quentin, but you know, I think that you'd need to get a market much better than we're seeing week in week out for us to deliver that.

I think we came in Q1 much better than the market conditions themselves. Somewhat fortuitously. A number of the deals that we'd been working on closed in the quarter. And we were strong just about everywhere. So, we're delighted with the quarter.

But in terms of backlog and pipeline right now we're not seeing that for Q2.

Great. Thank you.

Our next question is from the line of Heather Wolf of Merrill Lynch. Please proceed with your question.

Hi. Good afternoon. Two quick questions. First, with respect to the U.S. franchise of World Markets, we know that there's been restructuring going on there but I'm not exactly sure what type of restructuring, how much and in which businesses in particular. So I was wondering if we could get color there.

And also in your merchant banking portfolio, if I'm not mistaken, the size of the portfolio did decrease over the quarter. Curious if you could give us a little color on what's happening there?

Sorry, Heather, is the second question which portfolio were you referring to?

I'm sorry. The merchant banking portfolio.

OK. Let me start with the first one. David Kassie's not here, unfortunately, we've got an investor conference in Westchere (ph) that he is opening tonight so he isn't with us. We did over the last year as every Wall Street investment bank, maybe save one, over the last year two or three scale backs to take capacity out in light of revenue visibility.

The last one was at the end of Q4 and I believe it was 200 positions we took out. And what we did was we focused the investment banking and the research group that partners with those various industry groups down to fewer groups. So that was the program that we took - that we did at the last in Q4.

We're continuing to review that in light of, you know, look for revenue but at the moment, you know, that's where we stand. The merchant banking portfolio, let me just get the numbers here.

Can I just ask a quick follow up on the U.S. restructuring? Do you have a headcount reduction from the peak?

Yes. Well from the end of 2000 it was down over 20 percent in total. I don't have a U.S. but I can get that for you. From the end of 2001, Heather, I believe it was 15 percent. In fact, I have it right here. Just bare with me a second. WorldMarkets at the end of Q1 this year FTE, which is a different metric than you see in the book, but this is a metric that we actually managed here. It was 2643. The peak that I see here was 3265 in Q3 last year.

So call it 600 down or 20 percent from that peak, but going back even two years it was down 15 to 17 percent.

OK. Great.

Merchant banking, the portfolio - let me just try and get you the precise numbers. Yes. The metric that we focused most on, Heather, is what we call the active merchant banking portfolio. That doesn't have some of the more strategic investments in it. It now stands at 2.37 billion Canadian and that's in one of the slides.

At Q4 that was down from - in Q4 it was 2.468 billion and so it's down 100 million or down pretty small, but down from 2.79 billion back at the end of Q2. So there were some divestitures in the quarter, not significant. We're still not seeing the kind of liquidity or bids that have been attractive enough for us to begin to move that portfolio in what we might call in earnest.

But it continues to go down for the fifth quarter in a row.

OK. And in terms of your outlook going forward on merchant banking revenues for the year?

We're not - I don't know that anyone's able to, again, draw a line in the sand in terms of where that's going to be. Now, the tone (ph) better than it sells (ph) at certainly six months ago, and even three months ago. We continue to be pretty cautious about that. It's still pretty event-driven. Our portfolio, as I say, continues to go down. You're not seeing the hits in the U.S. portfolio, so one would like to think the worst is behind us. But, I think it's probably going to take 12 to 18 months before there's much certainty on that. But, we feel better about it than we did six months ago, for sure.

OK. Great. That's helpful. Thank you.

Our next question is a follow-up question from the line of Jamie Keating of RBC Capital Markets. Please Proceed with your question.

Thank you very much.

This may be for Jill. The Arrow Plan (ph) sale, I guess, over to Onyx (ph) by the airline -- are there any financial implications for the bank, is sort of one part. And for any of us who might be cardholders, is there any implications?

We have Cards.

We're currently reviewing the implications of this to us, and we are in some discussions with Air Canada on this topic. At this time, we're taking a business-as-usual approach to our Arrow Gold (ph) card, and we're continuing on as we were in the past.

OK. Thanks.

Our next question is from the line of Steve Cauley of TD Newcrest. Please proceed with your question.

Hi, Wayne.

Slide 66 to 70 -- you don't have to give it now, but if you could maybe post it to the website sometime soon, I think having gross impaired loans and net impaired loans for these two groups would be useful and it would match the disclosure that we're getting from the other banks.

And for Tom, the securitization of the real estate that you were referring to that represented about 100 million of the other, other income, and that would have made it into the investment banking and credit products of the world markets SBU. What was the net income impact of those securitizations? Is it roughly similar to the revenue impact?

Just to be clear, Steve, that -- I said roughly 100 million, and that had a number of things in it -- just so everyone's clear. That had revenue -- not net income -- but revenue from our U.S. real estate securitization business, and we did two large transactions, where we gather pieces of real estate paper -- mainly mortgages -- and then securitize them. It has our normal course Canadian and U.S. securitization -- our conduit (ph) business -- and it also has revenue from the gain on the sale of residential mortgages we've been making every quarter, as I think all but one other Canadian bank gives (ph) every quarter through the CMHC structure. So, there's really four pieces of revenue, and in round numbers, it's actually just shy of 100 million.

So, on a NYAT (ph) basis, all of that would attract tax at the, you know, mid-30s, probably. So, NYAT (ph) -wise that would be, you know, whatever 60-ish million.

So, this 60-ish million we wouldn't necessarily have seen in previous quarters, and we shouldn't expect to see in future quarters?

No, no, no. You would. Like, what I was saying to Michael was those numbers happen to be up by about three times what you saw in Q4.

OK.

OK? So, it's not like these are one-timers. It just happened that each of those four businesses had a great quarter. And I can't recall whether Q4 -- I only see Q4 in front of me -- was a down quarter. It probably was because it was slow everywhere. So, I don't know that you would hiccup (ph) that 100 million back down to Q4 levels, but it has been higher than it's been in sometime.

OK, and this is just really client-driven type stuff that can periodically come up and, that's why it tends to be lumpier?

Well it's certainly not, it's structuring activity, underwriting activity with real clients. See, in fact, the Canadian, Canadian real estate mortgage business is very, every quarter there's a deal of five or 600 million into the CMAC (ph) trust. So that component of it is very stable. But the other stuff is obviously market driven and client opportunity driven.

My second relates to President's Choice Financial. It's been a while since we've gotten significant amount of discloser from that. Would there be a way at some point in the time to get some kind of sensitivity analysis again? I think, if I can recall back to December of 2001, I believe that you provided four deposit type spread information whereas is interest rates were supposed to go up by x percent, then we would see x percent change in the net income of President's Choice financial. That kind of information would be useful to me, maybe in the future.

OK.

Thanks a lot.

Our next question is from the line of Jim Bantis, of Credit Suisse First Boston. Please proceed with your question.

Good afternoon. Most of my questions have been asked, but couple of to the drivers in terms of the retail business and the world financial business was the fact that expense were at unusually low levels or have come down significantly over the past, let's say six quarters. Are we at a point where this is sustainable going forward, or do you see more progress, more progress over the next few quarters. And I put into context, Tom, perhaps in terms of, I know there's not a specific target in terms of where the nicks ratio is going, but is there an absolute dollar target in terms of year-over-year expense savings. Do you have like a $500 million plan that you want to communicate to us or something of that nature? Just to give us a little bit more comfort that the expense levels are sustainable and actually could come down further.

Yes, Jim, last year was a bit of an anomaly certainly in Q4. I think the best guidance I can give you is what I said a bit earlier, is that we would like to keep, certainly in Q2, Q3, the non-comps similar to where we saw Q1, OK. I mean you can do the math and contrast that with last year, but certainly Q1 as I said, compared to Q1 last year, which was a more normal comparison was essentially bang on.

The moving parts are solid in the wealth side, you're seeing further cost cuts coming in the middle of the year. So I think the outlook for wealth is pretty good for the rest of the year, just because of the cost cut program we've got in place.

On the retail side, there's a lot of moving parts. There's higher advertising and project span that typically kicks in towards the end of the year that you're not seeing in Q1. On the other hand, there's more cost cuts coming out of the restructuring program we did towards the end of the year, but the project budget that we would like to, you know, give the go-ahead to, would probably push costs in the retail market side, up late in the year on a quarter run rate versus what we did this year.

So long answer, but suffice to say, the run rate we're seeing in Q1, we'd like to maintain that. If we fail to maintain it, it will be because we've given the green light to some tech spending.

And I imagine, because of that green light to tech spending, there will hopefully be a corresponding increase in revenues, you feel comfortable in that regards?

Well, really what happens Jim is the cost come out, I mean, there's revenue as well, but the business cases are driven often as much as on the cost take out, two and three quarters later, as on the revenue side, but all three, both of those come into the mix, but typically on a six to 12 month light (ph) basis.

That's great. Thank you.

Our next question is a followup question from the line of Quentin Broad of CIBC World Markets. Please proceed with your question.

Yes, back to the headcount question, I guess, Tom.

The regular workforce had count numbers that the bank presents per operating unit. Should that be a useful piece of information in terms of what's happening? Because as I look at those numbers, for instance, I'm trying to find the 1,200, I guess, that Gerry talked about with the PCD (ph) . The Oppenheimer sale.

So, I'm trying to understand. There's a lot of headcount reduction -- 600, for instance, in World Markets quarter over quarter. And you talked about that being 200 positions taken out further to Q4.

So, I'm trying -- are there different numbers that we should be thinking about or is that the one that should help us understanding what's happening inside the various operating units in terms of headcount and expense?

Quentin, let me have another go at that, because I've got my notes here now and there's one moving part that I didn't tell you about.

But let's just deal with regular workforce headcount, because that's the number we disclosed. It's not that different from FTE. FTE is something we managed here and there's some subtle differences.

But to help add some clarity of this, if you go to page one in the supplemental, two thirds of the way down you see the regular workforce headcount number. For Q1 that's 38,546 and that's down from 42,552.

retail markets were down a little over 200. And two thirds of that was the closure of Bismart (ph) and the rest was an internal transfer of people in that business into our technology business, which is in the other category, which I'll get to. OK?

Wealth Management is down a little under 2,000. OK? PCD (ph) represented about 1,200 of that, which is what Gerry referred to. And PCI or Private Client Investment in Canada was down around 500 and that resulted from the integration program that Gerry's people have continued on subsequent to the acquisition of the Merrill Lynch retail. OK? So, that was a number that I didn't raise a moment ago. World Markets was down 600 -- 200 was that restructuring program. Another 300 were internal transfers. One was the Juniper investment, which was held in Merchant Banking, which is now held under the corporate and other. That has over 300 positions. So, that's a bit of an anomaly and that represents the missing link in your calculation, Quentin.

The other line was down 1,200 to 1,300. Amicus (ph) represented about 800 of that. Technology was down about 700 and the Juniper added about 300 of that. So, that hopefully squares out the numbers for you.

Great. Thank you, Tom.

Our next question is a followup question from the Ian de Verteuil of Nesbitt Burns. Please proceed with your question.

Thank you. My question's been asked and answered.

The next question is from the line of Neil Madison (ph) of Standard Life Investment. Please proceed with your question.

Thank you very much. Good afternoon. Tom, it's sort of a followup question on some of these cost questions and it's a little bit of detail.

The Amicus (ph) U.S.. That has moved into the corporate side. Do the historical results move into the corporate side as well in a reclassification?

Yes, we restated those going back, Neil (ph) .

OK. So, you've moved them to the corporate block. All right. And the Oppenheimer. Has that been moved out as well or is that in the Wealth Management numbers that we see here?

Well, it's divested now so I guess, what, two months of Oppenheimer. Just to be clear, Oppenheimer is just - when I say Oppenheimer I mean the full service retail broker.

Yes. Yes.

Yes. So that is no longer there, but for Q1 we had two months of revenues and expense there.

OK.

When we tried to normalize that out in the slide so you can do an apples to apples with Q4 though.

OK. But even in the supplemental when it's showing the improvement in the efficiency ratio, this is not related to Oppenheimer because it's still there?

Well, it was there for two months. But it helped just not being there for one month. Not to the extent. It's a good transaction ...

Wow. OK. Thank you.

I wonder if I could interrupt here and say that we have time for one more question?

The next question is a follow up question from the line of Quentin Broad of CIBC World Markets. Please proceed with your question.

The last question. Given David's not there, I just wonder with World Markets in terms of the sustainability model that he talked about in Q4. Perhaps, John, is this quarter reflective of the type of sustainable earnings model that he would be comfortable with in his, I think the revision now is towards a four to $600 million full year run rate?

Well clearly the four to 600 million run rate is where we're managing towards in terms of the reductions that we have talked about in both our merchant banking and in our loan book. Whereas what I've said in terms of sustainability is that I still don't - I'm not convinced that we are through or into the upturn, if you will, in the credit cycle.

And I mean, upturn towards better times, and therefore as I said today at the shareholder's meeting that I still think that we've got, you know, 12 to 18 months where we could see volatility in loan books and merchant banking books. So - but certainly that is what we are managing towards and I think that, you know, we didn't get any help really positive help this quarter from the merchant banking book and the loan book behaved pretty much as we had suggested.

OK. Thanks.

Still on the line, Tom and I, Kathy Humber and Jennifer Sumbarga (ph) are around to answer any follow up questions you may have. And finally, I'd just like to remind everybody we have our retail and wealth investor conference next Friday, March 7, and that can be accessed on the phone and over the web site and in person.

Just wanted to say thank you very much for attending, and we'll sign off. Thank you.

Thank you.

Ladies and gentlemen, that does conclude the conference call for today. We thank you very much for your participation and ask that you please disconnect your line.