Equinor ASA (EQNR) 2004 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. It is a pleasure to welcome all participants here in Oslo, and a warm welcome also to you participating in this conference call through the Internet. I am Mari Thjomoe from Investor Relations in Statoil, and I will introduce this presentation of our first quarter result. As you know, we have published the results and made all background information available on the Internet, on our Investor Relations Web pages, this morning at 8.30 Central European time. This is also where you can find the presentation used for this meeting. Before we start, please note that we have included a disclaimer in the material as we are going to make forward-looking statements. May I also remind you that the Web participants are welcome to send out questions during the presentation to us. If anyone participating on the Web is having a bad or poor sound quality, they might call the telephone number 47 for Norway, 23000400 and they can listen into over our phone line. Eldar Saetre, our acting Chief Financial Officer will together with Peter Mellbye, Executive Vice President for the Natural Gas area, will go through the achievements for the first quarter, and they will comment on the strategic developments and progress of the group. After the presentation, there will be Q&As. So Eldar, please.

Thank you Mari, and welcome to all of you. Statoil delivers record results from operations in the first quarter this year. NOK 16b in earnings from operations is an all-time high and an excellent start of 2004. Unit cost is low, production and regularity is high, and the trading environment is also robust. Capital efficiency remains high at the level of 19.2% after-tax, which we believe is among the best in the industry. During the first quarter, we have seen some important events for Statoil. First of all, the appointment of Helge Lund as CEO and President for the group. He will take up his position on August 15, and until then Erling Overland is acting as CEO. We have submitted an extensive application for new exploration acreage through the 18th licensing round of the Norwegian Continental Shelf, and have high expectations to the final awards. We have secured a new five-year gas contract with a Dutch energy company Essent, with annual deliveries of 1.4 bcm. We have sold our share successfully in VNG. The Lufeng production in China is extended until 2008, through the application of new technology. So, all in all, first quarter makes a very good start for Statoil in 2004.

Earnings of NOK 16b were 17% higher compared to the same quarter last year. The increase is mainly due to a 6% in lifted oil and gas volumes and a 10% increase in the gas price measured in Norwegian Kroner. EBIT also includes a historic rig accrual, a reversal of historic rig accruals of NOK 350m this quarter. In the first quarter last year, we increased the rig accruals by NOK 700m, consequently, a net change of NOK 1.1b. EBIT also includes a pretax gain from the sales of our share, approximately 5% share in VNG with NOK 600m pretax, corresponding to NOK 400m after-tax. The contribution from downstream was reduced by approximately NOK 600m compared to the same quarter last year, and this was mainly due to the sale of the Navion, the shipping company, which contributed with approximately NOK 450m in the same quarter last year.

Net income was NOK 4.7b, that is a 31% increase compared to last year. NOK 170m lower net financials combined with a fall in the corporate tax rate from slightly more than 70% to 68% this quarter was the main reasons for increased improvement versus EBIT. Statoil's capital efficiency, as I have already said, remains high. We are reporting a return on capital employed of 19.2%, which we believe is very competitive. The underlying capital efficiency as measured by normalized return on capital employed is 12.4%. This is ahead of our 2004 target and is mainly due to improvements in the underlying operations. The target for the year remains at 12%, as capital employed will increase during the year. Oil and gas production remains high at 1,184,000 barrels a day, which is 2% higher than the same quarter last year, 25,000 barrels per day increase. This is the first quarter production that we have ever had. 35% of the production is now natural gas and 8% comes from the international business. Oil and gas lifting was at 1,166,000 barrels a day, which was, as I said, 6% higher than last year. This also means that we had also this quarter underlift of approximately 18,000 barrels a day in total compared to an underlift of almost 60,000 barrels in the same quarter last year. So, the accumulated position on the liftings versus production is now pretty much in balance.

We expect production in the second quarter to be lower than in the first quarter. The reason for this is regular turnarounds taking place both in the second quarter and at a higher level also in the third quarter, and seasonal lower demand for natural gas. Then if you commence through our production costs improvements, our production cost per barrel continues to decline and is now at NOK 22.3 per barrel lifted for the last 12 months compared to NOK 23.2 per barrel in the same period 12 months ago. E&P Norway's achievements are delivering these improvements. Continued cost control and success for lowering the platform costs are the main reasons for this development. Internationally, we are struggling somewhat more. The extension of the production period for Lufeng will not contribute to further cost reductions since the production cost on this installation is linked to the oil price. Nevertheless, this is a highly profitable decision for us, and overall our target of $2.7 per barrel this year stands firm. E&P Norway has over the last three years had a very successful campaign to lower their production cost. As a matter of fact production cost is reduced with 13% since 2001 to the current level, cost level we are seeing this quarter if we adjust for changes in portfolio and also inflation. In particular, E&P Norway has been successful in achieving more efficient logistics onshore support and also more flexible working processes. And in connection with the implementation of the new two, four onshore, offshore working schedule, the workers have accepted their reduction in salaries against more leisure time, which we have managed to implement without increased staff. And so, in total therefore achieved both increased efficiency and reduced salary expenses in total.

Then to our financial position. Adjusted for 50% of the tax payment, which was at NOK 17.2b, taking place on April 1, this year, Statoil's net debt remains just below NOK 21b. Gross debt is at NOK 38.4b, which is slightly higher than last year, but this is due to the currency, as we have all our debt in US dollar, mostly all our debt in US dollar. In US dollar terms, gross debt is actually slightly down. Net debt to capital employed adjusted for this tax payment is now at 21%, which is down from 23% at the year-end. Statoil's capital structure remains strong and is well below our defined comfort zone of 40% to 45%, and I would also mention that S&P, Standard & Poor's, have recently changed their outlook from negative to stable outlook on the rating of Statoil. The Norwegian Kroner weakened with 23 euro during the quarter versus the dollar, and consequently, we haven't unrealized loss on our long-term debt of NOK 1.1b, and we believe this should be as expected and in accordance with our guidance. Financial expenses at NOK 250m, it's about normal of us. Financial income of about the same amount reflects a high cash position during the quarter. And as you know, due to falling Norwegian interest rates, we would expect financial income to force somewhat in the coming quarters.

Gains on securities reflects approximately NOK 150m gain from equities, and almost NOK 100m in gain from bonds and certificates. Investments year-to-date of NOK 6.7b is according to plan. The outlook for the year is still at NOK 30b. Capital spending, excluding the Algerian transaction, which we still estimate to be at approximately NOK 10b accumulated for 2003 and 2004. We expect the investment level to remain at that level as we have also set previously for 2005 and 2006. Lehman have recently evaluated the integrated oil companies on their ability to add value to shareholders versus their capital employed. As illustrated right on this graph that are measures very well with its peers. We have a very robust project portfolio, all upstream projects, have positive increase than oil price of about $14 per barrel. Consequently, value equation in today's oil price environment will be very high from these projects and further improve our ability to create value for our shareholders. Then, I will leave the word to Peter Mellbye to go through the results and major events on each of the business areas, and also add some comments on the corporate

results. Please Peter.

My task here is to sort of add a few comments to each of the business areas and some of the things that have been covered by Eldar. I will start out by an E&P Norway, which is the most important cash standard in Statoil's portfolio. The production from E&P in first quarter amounted to, as you see, a little more than or almost 1.1m barrels a day. The liftings were up by 3%. The unit production cost was down by 3%, and this comes as a result of extensive and systematic work in the E&P organization. We also achieved very good results on the regularity oil production, which is an important contributor to the profitability. In addition to that, we had a reversal as Eldar mentioned of some rig accruals and our rig accruals totaled today's standard about NOK 1b. Statoil has an extensive project portfolio as already has been mentioned by Eldar. One of the projects that have received some attention during the past months has been decreased in project, and we have previously mentioned that an adjustment of the investment cost in the order of NOK 1.5b to NOK 2b might be necessary.

We have always known that the case

project was a complicated project from rest of our point of view, and we have concluded that the Garn reservoir where the larger part of the reserves actually are located is more complex than expected. As a consequence of that, we have chosen a production strategy with use of horizontal wells to ensure a recovery rate in line with what was originally illustrated. And might be the only one this hearing is ringing sound as I talk or do you all hear it? Shall I then test out and take this one off until it happens. Okay, let's hope this works better. So, as I said we have the effort chosen after that business strategy with use all horizontal wells to ensure a recovery rate in line with what was expected at the time when the investment decision was made. We will implement this strategy stepwise and if it does not yield the expected result, we will have to revert to the original strategy of only producing the reservoir by using the normal procedure of vertical wells. I would like to add that the increase in national cost of NOK 1.7b amounts to about NOK 200m after-tax

taking into account our share of 46% and also the tax rate. After this adjustment, the total investment cost decreased in project will be at about NOK 18.9b, and the project remains a profitable project, which passes the hurdle rates as already outlined by Eldar in his description of our project portfolio.

If you then move on to the next slide, this tend to highlight the main events in our Norwegian E&P activity as already has been mentioned high production, very high regularity, and of course good development on the cost side. We have also submitted an extensive application for the 18th round and we see substantial values in the 18th round, and of course are looking forward to the awards to take place sometime during this summer. We are also submitting for sanction to the authorities the development of Svale and Staer two satellites to the Norne field. They will produce a peak about 70,000 barrels a day out of which Statoil holds an ownership share about 40%. They've also made a small discovery in Alve.

Then moving on to the international E&P, also in the international E&P we have record results from the operations in first quarter this year. This is due to 43% higher liftings and 4% higher realized oil price than the same quarter last year. On the project side, I'll bring the attention to the Lufeng project, which Eldar mentioned. The Lufeng project has been in production since 1997. It is operated by Statoil, actually the total development was also done by Statoil, extensive use of Statoil developed technology was used. Originally, we expected to produce about 25m barrels, we have till to date produced about 32m barrels. We will drill sidetracks wells three in all and we will be able then to extend the production to 2008 and this will add 4.8m barrels of entitlement oil to our total production from Lufeng. Lufeng is presently producing at about 3500 barrels a day, so it's a fairly small field and this will increase to about 5000 at

, but it is profitable and it is a very interesting project.

Then moving on to the natural gas, we have an EBIT in natural gas of 2.9b in first quarter 2004, that's up by 1.1b from the same quarter last year. This is related to increased sales and as some of you may know the underlying contract portfolio is increasing year-by-year well beyond 2000 and then of course the increased sales to some extent reflect that. The gas price was up by 10% reaching a level of almost NOK

and we sold out our 5.26% share in the VNG, which is a German regional gas company. The shares were purchased by

also actually both the shares of Rhurgas

and Shell Exxon in the same company. And buyback transaction, we realized a pre-tax profit of about NOK 600m. The natural gas sales in the first quarter reached about 6.3b cubic meters, out of those 6.3,

were equity gas and the remaining was sort of third party gas. Our forecast for the year 2004 remains at 20.5b cubic meters. We expect the gas offtake and production to be reduced in the second and third quarter, as sort of is the natural pattern given the fact that people tend to use less gas when the weather is warm than what they use when the weather is cold, and also due to the fact that we have extensive maintenance activities, maintenance, and development activities going on within the Asian continent itself leading to extensive shutdowns at among other coastal plant. How this will distribute between the second and third quarter is very much a question and how the customers optimize their takes against the expected gas price developments. The highlight for natural gas in the first quarter was the contract entered into with Essent. We entered into a contract with a cumulative volume of 6.5bcm over a period of five years. We have eventually received the approval for the long lay of the pipeline that is going to export gas into the UK market, and that project is now going ahead.

We are in discussions with Dominion the company owning the Cove Point, the LNG receiving facility on the East Coast of United States with a view to taking a position on capacity in the Cove Point terminal. And internally to Statoil, we have transferred the Kollsnes plant and our international gas activity to natural gas so that our gas activities are now concentrated in the gas business unit. Then, going on to our last business area, which is the manufacturing and marketing. The market out before the markets picture for manufacturing and marketing has been somewhat mixed with the refining margins 60% lower than first quarter last year with 17% lower of methanol prices, but with petrochemical margins 41% higher than first quarter in the previous year. Going on to the EBIT for manufacturing and marketing, the EBIT was down by about NOK 580m, out of that of course the effect of having sold out Navion to Teekay is a significant factor. It did contribute by about NOK 400m to the result of manufacturing and marketing in first quarter the previous year. Apart from the market circumstance that I've already mentioned, we have also had extensive price wars in Denmark and pressure on downstream margins in the Baltic Republics, which has negatively impacted our results. Then lastly, I will say a few words about HSC. We had unfortunately yesterday a fatality in our operations in Iran, and unhappily one of our contractors was killed. That is always tragic and unfortunate, and something of course which will lead to necessary actions. When we look at the main indicator on our HSC performance, we are concentrating on the total recordable injury frequency and the serious incident frequency, and as you can see from the graph during the past two years, our results have been sort of fairly stable. Internally in Statoil, this is something which has given a high level of emphasis given the fact that good HSC results also reflects good quality in our operations and good quality in the operations has a positive impact on regularity, which of course is our bottom line directive. So, in addition to the human factor related to this, HSC is also very important from an economic perspective, and it is very much in Statoil about individual behavior and training and attitude. So that finalizes my part of the presentation. So, it's up to Eldar to bring it all together to end the conclusion.

Thank you Peter. So, as you can see from this scorecard overview, first quarter this year marks the step in the right direction towards our 2004 targets. And in addition, we have a strong financial position well below our comfort zone. Then to the summary page, first quarter was a strong start of 2004 for Statoil with the record operating results, high regularity, and high production. Helge Lund was appointed as new CEO and President for the Group, taking over office from August 15. A good, strict cost control, and lower unit costs improves the underlying profitability for the company. We have submitted an extensive application for the 18th licensing round. A new gas sales contracts has been concluded, successful sale of our shares in the VNG. And finally, the Lufeng production will be extended until 2008 and 4.8m entitlement barrels of oil, and earn us a good example of a successful international operatorship for Statoil. This concludes my presentation. And then, I think, we will be opening up for questions. So, Mari, the word is yours.

Thank you. Yes, I will invite you here and the people participating in the Web to ask questions, we have a microphone to be used here in the audience. I can start with one, I just received from Deutsche Banc, Nick Griffin, he asks, could you please explain why you normalized your earnings for movements in the foreign exchange rates, but not your capital employed in the normalized ROACE calculations? If your net debt was to be normalized at the same NOK/USD 8.2 rates that your earnings are normalized at? How much would this increase your capital employed and hence diluted your normalized returns?

Okay. It's a good question. And I have to admit; it has been one of the issues that we have been discussing internally for quite a long time. Basically, we did this when we did the IPO, and the main arguments is really sort of the complexity of calculating this continuously and the possibility to be transparent throughout on this calculation. So, we did the choice and we have to stick to that to say this is a kind of risk that we will have to take when meeting our targets. So, that is why, I also don't really have a number for you. But, obviously, I think we have different types of debts, which were picked up at different currency rates. I think, in general, you would see a slightly lower than 12.4%, but I haven't got an exact percentage for you on that question.

Also, one question from here. This is on the Amy Ann from Alfred Berg.

I have question on natural gas, you mentioned the target of 20.5 for 2004, is that equity gas?

This 20.5 is equity gas. That's the answer.

There is one question from Jeremy Elden in Lehman Brothers. If oil prices remain at current levels, will your gas selling price rise further or have they reacted -- reached apart of the curve, over S-curve where gas prices does not change much with oil price?

Peter?

If the oil price and -- as a consequence active product prices will increase, the gas price will continue to increase.

Please.

Bjoern Johnson, DnB Markets. The Kristin update you have increased now the cost, but on the reserve side, you say it's more complex reserve. In the discussions on the SEC reserves and with more complex reservoir, with the same number of well you have drilled so far, have you evaluated to downgrade the reserves in Kristin in the SEC numbers?

Yes, obviously. That's one of the exercises that we do and (Audio gap) there is no indication that would have any implication for the present booking that we have on accessory service of Kristin. That's due to the deterministic method that we are applying on our accessory service. And the purpose of the whole exercise with the new drainage strategy on Kristin is to increase the reserves back to the original level at the time when we took the decision.

It is

from

? Could you just confirm that's your collection target 1120 this series, exclude all three?

That's confirmed, yes.

And the only question is, could you comment on the exploration program this year, and if you have changed any of our previous plans?

We are planning at the moment and plans tend to change. But at the moment we are planning at something like 14 wells in total on the Norwegian continental shelf and approximately eight wells internationally. On the Norwegian continental shelf we have drilled two wells, two dry wells and one additional well at the Alve Prospect, which is a discovery but we don't know sort of the exact size of that discovery at the moment. Currently, we are drilling two wells; one in the Gullfaks license going into the Visund license and hopefully that is going to be a positive one. We are very optimistic. And then we are drilling also on the Linerle, north of the Norne field, that prospect. So that is the ongoing activities. Beyond that we are hoping that we can start exploration in the Barents Sea at the end of this year, and have our first well as budded at the end of this year. I cannot give any exact dates for that. So, the remaining part of the program will be party in the Norwegian Sea and also partly in around existing infrastructure in the North Sea. Internationally, we have drilled three wells, two in Angola and also one in Gulf of Mexico. We will drill additional wells in Angola. We hope to drill also the next well in Gulf of Mexico. We also hope to drill a well in Plataforma Deltana in Venezuela, possibly also a well in UK. And I guess that pretty much adds up to the program that I was talking about.

I have one question from Henry De

. He asks us to quantify the second and third quarter maintenance in the North Sea. And also in that connection asks for the confirmation of the 2004 production target that I guess you just gave.

Yes. So the target remains firm. I think we have a 16,000 barrels a day plant, if everything goes okay. Turnaround activity in the second quarter and the third quarter, I think we are talking in 28,000 barrels a day as again as planned in the third quarter.

There are two questions I want to take from the Web before the audience and that is both from Morgan Stanley and from

asks for an update on the Snow White projects, on the new situation and if there is expectations for cost overrun?

Okay. So the Snow White project, the progress at the moment is getting close to 45% completion on the Snow White project. The activities at Melkoya is progressing according to plan. Also the offshore-related activities is according to plan. On the LNG plant there is a lot of modules, some of them are slightly behind schedule, but that is not critical for the project. And in fact, the first modules at the end of March came in place at Melkoya. So the critical issue at the moment for the Snow White project is the topside construction going on at Dragados in Spain. That is an activity, fabrication activities which is the critical line for the project. We renewed our cost estimate and time schedule for the project in February and the cost estimate stays unchanged. Some changes to the schedule, but no changes that's had any impact on the basic plan of transporting the barge with the topside to Melkoya during July next year. So that is our plan, but it is a critical project. There is still a lot of risk involved, I would say both on the cost side and on the time scheduled, but our basic plan is the same and we are putting a lot of effort, management effort also, into following this project very closely week by week. So, it has a lot of attention, alternate attention that it deserves and we believe we can manage this according to the average return, and the changed, revised cost estimate that you will know about.

There is one question from here.

Pear

, Independent Consultant. I have two questions, the first one is regarding your G&A cost which is down significantly and I was hoping you could comment on that? And the second is regarding your return on capital employed, which you commented on and considers to be one of the best in the industry. But since it is excluding NOK 10b plus of goodwill, it is likely to be down at a level of Repsol and Hydro on the ranking you showed. So, I was hoping you could confirm this difference.

Okay. So, the sales, general and administrative cost is down on a quarter-to-quarter basis, that is in fact, the simple explanation is that that is corresponding to the changes in the rig accruals. So they are included in that item taking us down by NOK 1.50b on a quarter-to-quarter basis. That explains the change that you see there. On the return on capital employed we have said, have been consistent transparent that the Algerian transaction is not going to be included in our normalized performance versus our targets for 2004, so it's not going to be included. Then we've also said that our return on capital employed is going to be reduced and we will come back in 2007 with a higher level because of the investment program, the heavy the investment program that we are taking on, also included the NOK 10b on the Algerian transaction. So, we expect to see a lower return on capital employed on a normal basis. We don't expect to see that below 10% and we will still maintain our targets for 2007 at 12.5%,13% return on capital employed. The capital employed at the moment is approximately NOK 90b, so the Algerian transaction on an annual basis is approximately 1% as shown on the return on capital employed.

What I mean, should the NOK 10b, I was more thinking of the SDFI goodwill which should be in the --

Yes, the goodwill. This is the price we have paid for this purchase accounting, so this is the price we've paid for the project.

On the SDFI portfolio?

The original transaction? Okay, that one. Yes, we have consolidation that was done on the SDFI transaction, didn't implicate any goodness. So all our targets is obviously based on continuation of that basis. If you ask what could be the exact implication if the goodwill had been included, I cannot give you. I think that question last quarter as well, I cannot give you an exact number, but it would mean something, I don't know, between 1% and 2%, presented once in terms of original capital employed. That is not the case, that is not our consequence.

Yes, one more thing. You know that if the ROC is going to reflect the true return, will it be an idea to normalize it for those SDFI goodwill numbers?

I don't think you would find any company that sort of would take any normalization in that direction. So we won't do that and I am not stating, I'm not claiming that return on capital employed in any way is the precise and exact, and even, perhaps, the best measure of profitability on returns but it's the industry practice and we stick to that, and our targets is based on that practice of consolidation. So it is a consistent and transparent way of reporting it.

I have a few questions from the Internet again.

Williamson asks Statoil regarding the targets for the international business in 2004. Will you meet those requirements and how is this developing so far in 2004?

We have basically one target on the international business for 2004, and that is the production target of 120,000 barrels a day, and at the moment, I have to say it is more likely, as we have also indicated at the year-end presentation. It's more likely that we will not meet the 120,000 barrels for the year as a whole than that we will meet. The main reason for that is that we have the delays on the current field, which we now are looking at a startup, let's say early 2007, that would have accounted for something like 20,000 barrels a day. We sold our Danish assets and we have been trying really to compensate for these transactions and changes, but we have not been able to do so. I'm not excluding the possibility that we can meet 120,000, but I maintain what we said, in the last quarter as well, that it is a challenge and there is definitely a risk that we will not be able to meet that part of our production targets.

Merrill Lynch, Alister

has one question for Peter. What elements are needed in place before Statoil agrees to take the expansion capacity as core point, in particular I'm asking about the company's equity LNG position versus LNG reclassification?

The decision on core point will have to be taken sometime during June. It is completely excluded that we by that time will have firmed up equity LNG positions and this a question of either sort of finding gas in Barents Sea, which would allow a development of a second thing at Snohvit or a question of materializing some of the many leads that we are working on which could lead to LNG positions in Algeria, in Venezuela or in West Africa. So the decision will have to be made based on the sort of view of the probability of realizing that. In addition, however as the core point facility will startup receiving gas or will be able to startup receiving gas from 2008. We will also carefully have to evaluate third party market and probably for a period due as we are presented during a core point taking in gas from third parties and trading that gas to the terminal. So it is not a question or sort of one sort of absolute point, but everything together at present.

Thank you, we have still questions from him. I'd like to read one more from Morgan Stanley. This is Irene Himona asking about how the normalized ROACE in 2004 is affected by the planned acquisition of the Algerian assets of 10b Norwegian Krones this year?

So that is excluded in both on the EBIT, on the resource and on the balance sheet.

And it was -- and the affect is?

The affect on the Algerian transaction on 2004, that depends on versus targets, there's no affect because we have excluded it. The actual affect that is depending on when the production is getting started and the good news is really that we have seen the first gas from the In Salah project, and we hope to have commercial quantities on gas from In Salah starting deliveries in -- let's say at the end of May. On the balance sheet we are talking about 10b in Capex.

So you are actually also excluding the income from that area this year?

Both the income and the balance sheet.

One question from JP Morgan, Jason Turner. What reserves are associated within Statoil fields?

65m barrels in total, approximately I would not be precise on that, but approximately in that range. That's a 100% number so our share will be 40% approximately on that.

I will just go on reading if you. .?

That's a 100% number so our share will be 40% approximately of that.

Exactly and it's not included in the SEC reserves booked for Statoil in end of 2003. I have one more question from

in Deutsche. Your earnings release mentioned a possible affect of the white paper, could you please explain how this tax change may affect group earnings or group tax rates going forward?

Yes, I would not speculate on that. It will have impact on our, sort of, the international business in particular, and how that is consolidated, and the tax impacts in Norway but I will not speculate, no major impacts, but I cannot give you any direction on that.

I have one final question received from the Internet. If there are no more questions from here, I'm going to finalize this Q&A session. I'm reading this one from CS First Boston, it's Catherine Arnfield. It looks as though your exploration Capex was quite low this quarter, are you still planning to spend the NOK 3b on exploration in this year, in both Norway and international E&P area?

We have the same number of wells planned at the moment as we did when we gave the number of NOK 3b. So, basically, yes, according to our plans if we are successful with the plans that we are going forward with, we will spend in the range of NOK 3b. But obviously, there are risks that could delay some of these activities, but that is the starting point done with the planning.

Well, then this is all from here in Oslo. Thank you all for participating in this Web conference, and have a nice day.