奧馳亞 (MO) 2015 Q3 法說會逐字稿

Good day and welcome to the Altria Group 2015 third-quarter earnings conference call.

Today's call is scheduled to last about one hour, including remarks by Altria's management and a question-and-answer session.

(Operator Instructions)

I would now like to turn the call over to Ms. Sarah Knakmuhs, Vice President Investor Relations for Altria Client Services.

Please go ahead, ma'am.

Thank you.

Good morning and thank you for joining us.

We are here this morning with Marty Barrington, Altria's CEO, and Billy Gifford, Altria's CFO, to discuss Altria's 2015 third-quarter and nine-month business results.

Earlier today, we issued a press release regarding these results.

For a detailed review, please see the earnings release on our website at altria.com or through the Altria investor app.

During our call today, unless otherwise stated, we are comparing results to the same period in 2014.

Our remarks contain certain forward-looking and cautionary statements and projections of future results.

Please review the forward-looking and cautionary statements section at the end of today's earnings release for various factors that could cause actual results to differ materially from projections.

Future dividend payments and share repurchases remain subject to the discretion of Altria's Board.

The timing of share repurchases depends on marketplace conditions and other factors.

Altria reports its results in accordance with the US generally accepted accounting principles.

Today's call will contain various operating results on both a reported and adjusted basis, which excludes items that affect the comparability of reported results.

Descriptions of these non-GAAP financial measures and reconciliations are included in today's earnings release, which is available on our website and via the Altria investor app.

Now I will turn the call over to Marty.

Thanks, Sarah.

Good morning, everyone.

We are pleased to report yet another strong quarter for Altria Group.

We delivered outstanding performance in the third quarter and for the first nine months of 2015.

We grew adjusted diluted earnings per share 8.7% in the quarter and 11.5% for the year to date.

Each of our reporting segments has contributed to our strong earnings performance, especially the smokeable products segment, led by the terrific Marlboro brand.

So let's begin there.

The smokeable products segment grew adjusted operating Company's income more than 11% in the third quarter and over 13% for the first 9 months.

For the year to date, solid net price realization, the benefit from the end of the federal tobacco quota buyout payments, and higher volume continued to support double-digit adjusted OCI growth and good margin expansion.

The industry continued to benefit from near-term moderation in cigarette volume declines, which combined with PM USA share gains resulted in strong volume results for PM USA.

Reported cigarette shipment volume for the quarter was up 0.1%.

After adjusting for trade inventory changes and other factors, PM USA estimates that its cigarette volume was unchanged in the third quarter.

For the year to date, reported cigarette shipment volume grew 1.5% and PM USA estimates that its adjusted cigarette volume increased approximately 0.5% versus the year-ago period.

In line with strategy, Marlboro gained 1/10 of retail share in the third quarter and 2/10 for the year to date.

So our investments in the Marlboro architecture continue to pay off.

And by all key measures -- OCI, margin, price realization, volume, and share -- our smokeable segment is performing very well.

Turning to the smokeless products segment, USSTC delivered income growth and combined retail share growth on Copenhagen and Skoal.

The smokeless products segment grew adjusted OCI 2.5% in the third quarter and almost 4% for the first 9 months, primarily through higher pricing, partially offset by higher promotional investments and SG&A expenses.

The iconic Copenhagen brand remained the fastest-growing brand in the category, with 8/10 of retail share growth for the first 9 months of 2015.

And thanks to investments in Skoal's equity and overall value equation, the brand's retail share declines continue to moderate.

Our objective remains to seek combined share momentum on these two brands in this competitive category.

The wine business continued its strong performance.

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Michelle grew OCI almost 13% in the third quarter and nearly 20% for the year to date, primarily through increased volume and improved premium mix.

In innovative tobacco products, Nu Mark continues pursuing disciplined innovation in e-vapor.

We've seen encouraging trial on MarkTen XL, allowing us to expand our lead market presence.

Nu Mark also continues its in-store evaluation of Green Smoke's retail positioning.

We focused first on getting the product right and we are learning a great deal about the adult tobacco consumer response.

We are optimistic about these brands as we move forward.

And of course, Altria continued to return cash to shareholders.

We paid approximately $3 billion in dividends in the first 9 months of 2015.

Additionally, we raised our quarterly dividend by 8.7% in August to an annualized rate of $2.26 per share, marking our 49th dividend increase in 46 years.

We remain focused on our target dividend payout ratio of 80% of adjusted diluted EPS.

So our year-to-date results have been very strong and we are happy with our progress against our full-year plans.

Thus, we reaffirm that we expect to deliver adjusted diluted EPS in a range of $2.76 to $2.81, representing growth of 7.5% to 9.5% from our 2014 adjusted diluted EPS base of $2.57.

This guidance reflects expected moderated EPS results in the fourth quarter as compared to last year due to several factors we've discussed previously, including lapping the benefit from the expiration of federal tobacco quota buyout payments, lapping some of the effects of a stronger economy and lower gasoline prices and a higher effective tax rate on operations.

Additionally, trade inventories for cigarettes may moderate going forward and unfavorable foreign currency translation could affect prior-year comparisons of earnings from Altria's equity investment in SABMiller.

Finally, let us provide you with a word on the proposed AB InBev combination with SABMiller.

We know there is a great deal of interest in this transaction and we look forward to providing the details for us at the appropriate time.

But as I hope you can appreciate, we have to wait until final terms have been reached before doing so.

But until then, here's a brief update and some background on this transaction.

Earlier this month, AB InBev and SABMiller announced an agreement in principle on key terms regarding a possible transaction between the two companies.

Yesterday, AB InBev and SABMiller jointly announced that the UK takeover panel has extended the relevant deadline until November 4, 2015.

We are pleased to see this transaction moving forward and that the parties are reporting progress has been made, including AB InBev's completion of confirmatory due diligence of SABMiller, reconfirming the financial and other terms of the possible offer, and confirming the availability of financing facilities.

The extension gives AB InBev and SABMiller additional time to finalize the details necessary for AB InBev to announce a firm intention to make an offer for SABMiller.

As you know, Altria has been a shareholder of SABMiller since 2002 -- indeed, its largest shareholder.

The SABMiller stake has provided us access to the global brewing profit pool, diversified our business, contributed nicely to our long-term earnings growth, and strengthened our balance sheet.

Of course, the approach we have always taken is to manage that asset for the best interest of Altria shareholders.

We believe that combining the largely complementary businesses of SAB and AB InBev to create the world's largest brewer is a compelling opportunity.

We are excited about the proposed transaction and are working constructively with the parties to complete the transaction.

And with that, I will turn things over to Billy.

Thanks, Marty.

And good morning, everyone.

As Marty mentioned, stronger volume in the smokeable products segment helped deliver double-digit adjusted OCI growth for the first nine months.

When adjusted for trade inventory changes and other factors, PM USA estimates that industry cigarette volume was down 1% in the third quarter and 0.5% for the first 9 months.

In addition to retail share gains on Marlboro, L&M also gained share, allowing PM USA's total retail share to hit 51.3% for both the quarter and the first 9 months.

This represents an increase of 0.4 of a retail share point and half a retail share point, respectively, from the year-ago periods.

Cigar volume growth also contributed to the smokeable products segment's results.

Middleton's reported shipment volume increased just over 1% in the third quarter and nearly 4% for the first 9 months.

And contributions from Black & Mild Jazz and Casino helped Black & Mild grow its leading position in the high-margin cigar segment.

In fact, Black & Mild Casino was recently recognized by CSP Magazine as the 2015 Retailers Choice Best New Product in the cigar category.

In total, the smokeable products segment increased adjusted OCI margins by 2.7 points in the third quarter to 47%.

For the year to date, adjusted OCI margins in the smokeable products segment expanded 2.8 points.

In the smokeless products segment, USSTC reported shipments increased approximately 1% in the third quarter and 2% for the first 9 months.

We estimate that smokeless industry volume has grown approximately 2.5% over the past 6 months.

In both the third quarter and for the first 9 months, Copenhagen and Skoal grew their retail share on a combined basis.

In the third quarter, higher pricing was partially offset by higher promotional investments and SG&A expenses, resulting in adjusted OCI margins contracting 1.1 percentage points to 63.8%.

For the year to date, adjusted OCI margins narrowed 0.1 percentage point to 64.5%.

In the wine segment, reported shipment volumes have remained robust, growing at nearly 9% in the third quarter and over 6% for the first 9 months.

OCI margins expanded 0.8 percentage point to 21.7% in the third quarter and over 2 points to 21.7% for the year to date.

Additionally, Altria reported equity earnings from our SABMiller investment of $187 million in the third quarter and $546 million for the year to date.

And finally, you will remember that we completed our $1 billion share repurchase program early in the third quarter and that our Board authorized a new $1 billion program, which we expect to complete by the end of 2016.

That wraps up our results.

Marty and I will now take your questions.

While the calls are being compiled, I will direct your attention to altria.com.

Along with today's earnings release, for your reference, we have posted a list of quarterly metrics to include pricing, inventory, and other items.

Operator, do we have any questions?

(Operator Instructions) Bonnie Herzog, Wells Fargo.

I have a two-part question on Marlboro.

First, could you talk a little bit more about your new Marlboro line extension, Marlboro Midnight, and then how that brand will be positioned relative to the rest of the Marlboro portfolio?

And then second, I'd be curious to hear more about your new Marlboro app and your goals for this new technology.

Thanks for those questions.

I think they both represent good examples of how Marlboro is innovating at the core of our business.

We talk about innovation in the innovative products side, but it is important to remember that innovation is everywhere.

And boy, at Marlboro, you see it all the time.

So Marlboro Midnight is the latest innovation in the under the architecture.

It will come out in the Black family.

It is a unique and a bold menthol for Marlboro and should help Marlboro participate in the growing menthol category.

It has very differentiated and unique pack.

It's going to be supported with beautiful POS to raise awareness among adult smokers and we'll position it as a new and exciting product in the Marlboro family, particularly for menthol smokers.

So we are excited about Midnight and I think it's off to a good start.

I think it's going to hit wholesale, if I recall, Bonnie, in mid-November and it will be retail a couple weeks after that.

So you will be seeing it there.

And on the digital side, we continue to see strong innovation as well.

We now have mobile couponing.

As you know, that coupons can be at delivered to adult smokers' smartphones.

It's a tremendous step forward in terms of efficiency and meeting adult smokers where they are.

That's now available nationally.

And we have launched a Marlboro app.

It's available on the two large app platforms.

It's responsibly done; age-verified.

And it will be a place for the brand to connect again with adult smokers in a very innovative way in the digital space.

So we are excited about both those innovations.

That makes a lot of sense.

And then just to clarify on the app, is the goal there to increase customer engagement?

And then could we also see more efficient promos and maybe a reduction in expenses because of this app rollout?

All of the above.

What we are trying to do is connect the brand to its adult smokers.

And the app obviously gives us another way of doing that, in addition to all the other marketing tools that the Marlboro team is doing such a good job with.

Okay, that's helpful.

And then I have a question on your smokeless business.

You generated higher pricing in the business and then Copenhagen volume was strong.

But margins were down a bit.

So could you talk about some of the dynamics at play here and then how sustainable this better pricing is with share gains for Copenhagen?

And then Skoal still seemed to be quite weak and underperforming.

So any updated plans to turn this around?

Sure.

Let we mention one or two things and then I'll ask Billy maybe to comment on the cost side.

Actually, we are pretty spot on strategy in the smokeless business, I would say.

Our strategy there is to grow our income by growing volume in line -- or better, if we can -- with the category.

And of course, the category volume has picked back up again, we estimate, about 2.5%.

And actually, you see Copenhagen and Skoal combined doing a little bit better than that, at about 2.9%.

Copenhagen is growing; you are right.

And Skoal doesn't grow share.

But I would point out that I think we have begun to moderate the share.

If you look at it sequentially, it's at 19.8, I think, if you look at the year-to-date number, Bonnie.

And boy, I tell you, we are glad to have 20 share points of Skoal business in this category that has 65% operating margins.

So Skoal can always work harder.

It's got to compete with both Copenhagen and its principal competitor.

But we are pretty pleased and I think they are having a solid performance over there.

Maybe Billy can comment on your cost question.

Sure, Bonnie.

When you look at it, if you look at it on a year-to-date basis, you can see margins are basically flat, as Marty mentioned: right around the 65% margin base.

When you look at a quarter-to-quarter comparison or shorter period of time, you can see fluctuations based on the timing of expenses flowing through.

So again, I think if you look at it on a year to date, the margins are very high compared to other consumer products categories and virtually flat.

Okay.

Thank you, everyone.

Michael Lavery, CLSA.

Could you just talk about your market share momentum a little bit?

You are still getting the modest momentum on Marlboro, but also a very strong lift from discount.

Just how do you prioritize that or balance that?

Obviously, you don't want to turn away discount share.

But certainly your focus has always been on Marlboro.

So what are some of the priorities there?

And have you seen any sort of changes?

This is the first full quarter since the competitor's transaction closed.

Are you seeing any different competitive landscape?

Obviously, it looks like L&M is still going quite strong.

Yes, sure.

Good questions.

We have not seen any changes, to take the last part first.

We do want to modestly keep momentum on Marlboro.

You've heard us say this before, Michael.

Call it 1/10 or 2/10, maybe, a year.

And you can see that year to date, that's exactly where we are in Marlboro.

Our focus is on premium.

90% of those shipments for PM USA are premium.

But L&M has a role to play and what it does is it competes nicely in the discount space without growing it.

The industry as a whole is moving more towards premium.

And so what you see is that L&M is basically consolidating share out of the other discount players.

So it works; a spot on strategy for PM USA.

That has been the strategy and that is how we are still thinking about it.

Okay, great.

And then just to follow up on Bonnie's question about Midnight.

Could you just maybe give a sense of magnitude or how maybe it compares to something like Rich Blue, which was another new extension in the menthol segment, but seems to have been a little more limited in scale?

Does this have any -- and I think Rich Blue had a geographical, a regional focus.

Is this national or does it have any geographical focus?

And is it priced similar to the rest of Black at the introductory level or does it have a different price point?

Yes.

It's going to be national and we will do some special price promotions to go along with the POS so that we can promote trial.

Again, in this category, where you don't have a lot of the traditional marketing tools, the place where you have to meet adult smokers to let them -- to try new products is at retail.

So we will have some price promotions there.

Basically, Michael, it will be the same strategy.

We want them to try the brand.

We want them to be aware of it.

And then obviously, as these brands get traction, we can dial back the promotions so as to pursue our strategy of maximizing the income out of this category.

And then just in terms of scale, would this likely be a bigger opportunity than something like a Rich Blue?

Or can you put any context around what you might expect from it?

Well, I won't get ahead of our skis on that, except to tell you that we are very excited about the brand.

I think it's a terrific product.

I think the package looks fabulous and I think it's going to be very exciting for adult menthol smokers to try.

And we are hopeful of getting conversion from competitive smokers.

All right.

Thank you very much.

Vivien Azer, Cowen and Company.

I wanted to also [go] up on the new Marlboro line extension.

Sorry to belabor the issue.

I was just curious, given that one of your competitors had to pull a couple of SKUs out of the market because the FDA did not deem them to be substantially equivalent, whether this is innovation that's already grandfathered in or was marketed as a different Marlboro variant being transitioned from a packaging perspective?

Yes.

I don't want to get too tactical about how we bring our products to market under the FDA regime.

But we are confident that we are fully qualified to bring that product to market.

Okay, fair enough.

On the inventory levels, obviously like the market share momentum has been good and easing industry volumes are certainly, I think, helping.

But as I look across your wholesale inventories, they have been growing sequentially for about five quarters now.

But I'm just curious to hear your thoughts on what the right level of wholesale inventories is as we think about potential unwinds in the fourth quarter.

Well, they go up and down over the course of the year.

They usually smooth out for us over the course of the year for PM USA.

We do have this trend this year, of course, where the volume declines have not been proceeding at the same pace as before.

So there has been probably a little bit of disruption there.

If you look at the quarterly comparisons in Q3, there's not much to say about that.

They look to have about the same effect.

But you are right: they are a little bit higher at the end of Q3 than they were at the end of Q3 last year.

So that's why we've called out in our release and also in our script that they may moderate in the fourth quarter.

Perfect, thank you.

And Billy, just one for you.

I recognize currency has been a challenge for a lot of multinationals for quite some time.

So as I look at the SABMiller numbers this quarter, in isolation, I appreciate the drag from currency.

But as I look across prior quarters, it feels like there was like a courtesy catch-up or -- I'm just having a hard time understanding why there was such a big hit this quarter that we hadn't been seeing, given where the dollar has been trending for over a year now.

Sure.

Thanks for the question, Vivien.

I think you have to step back first.

And I'd just put it in context of the overall Altria enterprise.

When you think about the earning streams that we have, we have very limited impact to foreign currency exposure.

Specific to SAB, you are right: the primary driver there is foreign currency.

And it's really the strengthening of the dollar against their various emerging market currencies as well as currencies around the world.

That is something that we've experienced year to date as well as in the third quarter.

And I think it's very reminiscent of what you are seeing with other global companies.

But nothing in particular to call out in 3Q for SAB Miller?

Nothing in particular, no.

Okay.

Thank you.

Owen Bennett, Nomura.

I just wanted to get your views on the cigarette industry volumes for the year.

Obviously, a bit of a slowdown into the second half, which you said was to be expected.

But I was just wondering your views on how you see volumes for the full year now.

And then also, you noted the stabilization in smokeless industry volumes now, which is encouraging.

I was just wondering how you see the smokeless category trending from here.

Thanks a lot.

Okay, thanks for the questions.

So year to date, our estimate of industry volume decline is down a half.

That obviously is a difference from what the historical trend has been of somewhere between 3% to 4%.

And we will just have to see going forward what the effect is going to be.

But historically, the long-term trend is more like 3% to 4% on the smokeable side.

On the smokeless side, several years ago, they were growing at -- the industry volume was growing at 5%-ish.

And that it fell basically to nothing.

And now we are trending back up where our estimate for the latest 6 months is about 2.5%.

So it's good news that the volume has come back into the category.

And probably the principal driver there is that tobacco consumers continue to try different tobacco products throughout the categories.

That probably explains the greatest part of the change in the volume trend there.

But we are glad that the volumes are back.

Okay, thanks a lot.

Judy Hong, Goldman Sachs.

Billy, I actually do want to go back to Vivien's questions about the equity income because I still can't reconcile why the third quarter was down so much more than what we had been seeing in the first half of the year.

It just doesn't seem to jibe with the first half; you were down, I think, in the low single digits on a year-over-your basis.

And in the third quarter, that drop off was much more significant.

So I know there's a little bit of a sensitivity around what you can say about that performance, but just anything that we should be aware of just in terms of the third-quarter impact?

No, Judy.

I basically would reiterate what I said to Vivien.

I think when you look at it, it really is primarily driven by the currency impacts that you see in other global companies.

Anytime you look at a short-term period, you are going to see those fluctuations through time.

I think if you look at it over the long term, it's very similar to what you're seeing with other global companies with currency impacts.

But thanks for the question.

Okay.

And then maybe just in terms of fourth-quarter guidance -- and I know you talked about the comparison getting a little bit tougher.

Obviously, the FX sounds like it's going to be another drag in terms of the fourth quarter.

If I just look at your smokeable segment in the fourth quarter last year, though, it doesn't look like the profitability comparisons are that much tougher.

So is this really more of an FX issue?

Or any other investments that we should be thinking about in the fourth quarter; if you do get some volume upside, the potential you're looking to reinvest back the upside into any of those initiatives?

No, I wouldn't read that into what we've said.

Honestly, the factors that we think are going to cause the moderation are called out in the release and in our remarks this morning.

We are lapping a very significant effect from the quota.

And we believe that even though the adult tobacco consumer is doing much better, we are lapping the period where they got the effect towards the back end of last year in terms of gasoline prices and the like.

So it's nothing more than that.

Got it.

Okay, thank you.

Matthew Grainger, Morgan Stanley.

Two questions -- first, I wanted to come back to smokeless.

The level of net pricing was a bit higher than what we've seen recently, both in absolute terms and on a year-on-year basis.

And this comes against a backdrop of still somewhat choppy category growth.

And we've talked in the past about the factors playing into that.

I'm fishing a little bit here, but has there been any shift in the way you are thinking about that balance between volume and pricing realization in that business over the near term?

No.

The strategy remains the same.

When I look at the pricing, it's up on a per-can basis about 3%, call it, for the quarter.

But actually, if you look at it year to date, Matt, it's about 2%, 1.9% or something.

So naturally we are happy to have the pricing there.

But with a category with 65% operating margins and where we've got more than 50% of the share, we are trying to grow income principally through volume gains.

Okay.

Thanks, Marty.

And two questions on vapor.

One: we seen more volatility in e-cigarette category growth, at least in measured channels, recently.

And I know it's hard to gauge, but do you have a sense of the level of growth that we are seeing in the overall vapor category, to the extent you can track that?

Yes.

And secondly, just on deeming, have you had any dialogue with the FDA recently to get a sense of -- not so much on timing, but any shift in their thinking as they are working toward a final rule on the deeming of other tobacco products?

Okay, thanks for the questions -- good ones, both.

The answer to the first question is e-vapor growth has slowed down this year.

So we had triple-digit gains year over year a couple years ago and then 50%-ish last year.

It's obvious that while the category continues to grow, it's not growing at anywhere near that rate.

With respect to deeming, we know that the reg, as you know, has gone to ONB.

But we do not have any insight into what they took on board.

I know there were lots of comments, including ours, that were filed in respect of the proposed deeming regulation.

But we don't have any insight into what they have sent over.

Okay.

Great.

Thanks, Marty.

Chris Growe, Stifel.

Just had two questions, if I could.

The first question -- and I know you had mentioned that you've seen very little change in the competitive dynamic in the category.

But you have two competitors going through and selling in new retail contracts, and a lot of that comes to fruition here in the fourth quarter.

I'm just curious if you've seen any change at the retail level from that.

Are you seeing retailers potentially making some significant change in the shelf space and that kind of thing?

Any opportunity then for Altria is what I'm trying to get to.

Okay.

The answer is we really haven't.

But just to frame this out, this isn't the first time that there have been changes in the industry.

And naturally, everybody competes really hard at retail, Chris.

So everybody has got a lot of experience with their trade programs.

We have evolved our trade programs for 2016.

We've obviously anticipated that there might be changes and I think we are well positioned to compete there.

But we haven't observed a lot yet, to answer your question directly.

Okay.

And then I had just a follow-up to Matt's question on vapor, a kind of two-pronged question.

One being that MarkTen XL is expanding beyond its lead categories.

Does that mean it's going national and we see this across the country?

Or is it just a slow, methodical build from here?

And maybe related to that, then, how your promotional tactic has changed in the category, just given that the category has slowed and we are lapping the initial launch of the product last year.

Are you changing your promotional tactic now and maybe focusing more so on profitability than on pure trial of the product?

The answer to both questions -- the word I would use is disciplined.

The way that we are going -- we are very happy with how MarkTen XL is performing.

We were in lead markets, as you know, and then we've had a terrific consumer response there.

So what we are going to do is with discipline, we are going to roll it out in some additional lead markets through select accounts and learn more and try to get wider awareness and distribution of MarkTen XL.

We are very encouraged about the consumer response to MarkTen.

So we will do that in a disciplined way.

I would say on promotions, it's the same thing.

We have to get the product right.

You have to listen to the consumer.

You want to build awareness in trial.

But you certainly don't want to overspend, particularly, I might note, in a category where the growth has slowed.

So we will be very disciplined about how we do that.

But it's a place where we want to play.

Our aspiration is ultimately for leadership.

But this is emerging -- an emerging product category.

We want to do it with a lot of financial discipline.

Okay.

Thank you for the time.

(Operator Instructions) Todd Duvick, Wells Fargo.

A quick question for you on the balance sheet.

I've noticed your debt has been going down the last couple years, and your leverage is in really good shape: 1.5 times.

But it's also declining.

Can you talk about are you wanting additional capacity on the balance sheet for something like a share buyback or acquisitions?

Or is this a change in financial policy and just deciding to operate at a lower leverage level?

Yes, thanks for the question.

When we look at the balance sheet and our debt levels, we feel like we are in a good range currently, where we are at.

But we are always assessing the financing needs of the enterprise.

Then when we make that decision that we want to go to the market, we look at market conditions and other factors to decide when we will go.

But no, there is no change in our financial strategies.

They are our policies.

And we feel good about where we are at.

Okay.

And then just related to the Anheuser-Busch/SAB transaction, I think that you would be due some cash in the door from that transaction.

Any ideas as to potential use of those proceeds?

I think it's too early for us to be talking about that.

As I mentioned in our remarks, I just don't want to get ahead of a deal that has not been announced as to its final terms.

So if you can forgive us, we will just hold off on that until that happens.

Fair enough.

Thank you.

At this time, I would like to turn the call back over to Sarah Knakmuhs for closing remarks.

Thank you, everyone, for joining the call this morning.

If you have any follow-up questions, please contact us at Investor Relations.

Thank you.

This does conclude today's conference call.

You may now disconnect.