宏盟集團 (OMC) 2004 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Omnicom Group fourth quarter and full year 2004 earnings release conference call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If you do need assistance during the call, please press the star followed by the 0. As a reminder, this conference call is being recorded. At this time, I'd like to introduce you to today's conference call host, Executive Vice President, Chief Financial Officer of Omnicom Group, Mr. Randall Weisenburger. Please go ahead, sir.

Thank you. And thank you all for taking the time to listen to our fourth quarter 2004 earnings call. We hope everyone's had a chance to review our earnings release. We've also posted to our website both the press release and a presentation covering the information that we will present the morning. This call is also being simulcast and will be archived our our website. Before we start we need to provide one accounting reminder. As mentioned in our previous calls, effective January 1st, 2004, we adopted SFAS 123, which is accounting for stock based compensation. As a result, we're including the cost of employees stock option expense in our reported results. In connection with the adoption of 123, we've also restated our 2002 and 2003 annual results, and our 2003 quarterly results to make them more comparable. Therefore, today's earnings release and our comments reflect the impact of that statement. With that of the way, we'll begin the call with some brief remarks from John Wren. Following John's remarks we'll review our financial performance in more detail, and then both John and I will be happy to take questions.

Good morning. We're very pleased with the company's performance for the fourth quar -- quarter and for the full year. In 2004 we achieved all of the major objectives we had set for the group. Our revenue exceeded 13 percent, our net income grew over 12 percent. We substantially restored on incentive pools to pre -- pre-recession levels, our cost cutting programs are having an impact, a real impact, and will continue to benefis -- benefit us in the future. We expanded during the year our educational training programs for all of our people, and expanded those programs. As a result, we believe we continue to increase the market share of the company by growing our existing client relationships and by gaining new clients. And in the case of our operating margins for the year, they turned out as we expected. Despite increased costs in Sarbanes-Oxley, margins stabilized in the third quarter, and improved slightly in the fourth quarter.

During the quarter, we also announced the creation of Omnicom Asia, and appointed Michael Birkin as the CEO of the region. Michael is a trusted executive has helped develop DAS in Europe and the United States His appointment will allow us to develop more quickly in this very important and fast-growing region of the world.

In terms of trends that we saw in the fourth quarter, those were similar to those trends that we've seen through most of the year. Growth by region for -- in -- in the United States, South America, Asia, were similar to those seen in the earlier nine months, and in Europe, most of the markets are stabilized and are growing. The -- the U.K., France and the Netherlands are -- are not yet contributing to the full growth of the company, but we believe those markets are stable, and we continue to watch them as we move forward. Having said that, Randy is going to take us through all the detail, and then we'll be be available for questions. Thank you.

Thanks John. As John noted, we're very pleased with the performance of our agencies both from a financial perspective and the success that they've had in gaining market share and further distinguishing themselves in the marketplace. Overall, 2004 was a very good year. Revenue growth in the quarter was better than we had expected, increasing $283 million to 2.79 billion, that was an increase of 11.3 percent. As a result, revenue for the year increased 13.1 percent to 9.75 billion. Operating income for the quarter was 394.9 million. That was up 11.8 percent. That resulted in an operating margin of 14.2 percent, which was about a 10 basis point increase from last year. For the full year, operating income increased 11.3 percent, to 1.215 billion with an operating margin of 12.5 percent, which was down about 20 basis points from last year, which on a dollar for dollar basis or a dollar basis translates into $19 million.

While we strongly believe that it's most appropriate to evaluate our cost structure taken as a whole, a few of the larger items that impacted our margins in 2004 included the following. First, our overall utilization rates continue to improve as a result of our agencies prior cost actions and market share gains, as well as generally improving market conditions. Severance costs were down approximately $12 million year-over-year. However, 2004 turned out to be somewhat of an inflection point as increases in recruitment costs of $14 million, more than offset the reduction in severance. Sarbanes-Oxley costs, as John mentioned, were, and still are, very significant. We estimate that the combination of internal and external costs associated with Sarbanes totaled between 60 and $70 million for the year.

And finally as we've previously discussed, one of our objectives coming into 2004 was to significantly rebuild our incentive compensation pools, which we were successful if doing. On a year-over-year basis, our incentive comp pools increased 40 percent, or approximately $121 million.

Net interest expense for the quarter was $10 million. That was flat from last year. For the year, net interest was 36.6 million. That was down from 42.8 million last year. The year-over-year decrease was primarily the result of not having to pay a sweetener payment last February on our 2031 convertible bond, as well as a reduction in our average outstanding borrowings. Going forward, due to the sweeteners/consent payments we made to bondholders in the second half of 2004, we expect our interest expense in 2005 to increase by about $10 million. The tax front, our tax rate for the quarter and for the full year was 33.6 percent. For the quarter, this was an increase of about 60 basis points. However, a on a full-year basis, the rate was flat with last year.

The final result, net income for the quarter increased 12.2 percent to $236.5 million, bringing full-year net income in at 723.5 million, which was an increase of 14.7 percent. Fully diluted earnings per share for the quarter increased 14.3 percent to $1.28 per share, and for the full year, diluted earnings increased 15.1 percent to $3.88 per share. The fully diluted share count for the fourth quarter was 185.3 million shares. Over the course of the year, we repurchased approximately 5.8 million shares at a cost of 446.5 million. We also received 74.8 million of proceeds from both the exercise of options to purchase 1.377 million shares, and the purchase of 288,000 shares in our employee stock purchase plan, bringing a net amount of stock repurchases in at 371.7 million.

Analyzing our revenue growth a bit, organic growth was very strong in the quarter, actually even a bit stronger than we had expected, coming in at 6.4 percent, and accounting for 160.3 million of our revenue growth. For the full year, organic growth accounted for 571.3 million, or 6.7 percent of our overall revenue growth, which was an increase of about 200 basis points over last year. Acquisition revenue in the quarter totaled only 19.2 million, which added about 8/10 of 1 percent to our revenue. For the full year, acquisitions added 163.9 million, or about 1.9 percent to our revenue. In 2004, new acquisition activity was very light, as our senior financial executives were largely focused on completing our Sarbanes-Oxen -- Oxley initiatives. As a result, we spent only about $32 million on new acquisitions. Based on the acquisitions and dispossessions we completed through the end of Q4, and a divestiture in the first quarter of 2005 of a sales promos -- promotion agency located in Australia and New Zealand, acquisition revenue in Q1 of 2005 should be marginally negative to flat.

On one clarifying point, it's apparent that there may be some confusion on GAAP accounting for acquisitions of partially-owned subsidiaries. This is -- although I'm pretty sure most of you already know this -- how this works, we want to eliminate any potential confusion. In accordance with GAAP, if we own more than 50 percent of an agency, it should be considered a subsidiary and it's P&L and balance sheet would be consolidated. The portion of that agency's net income attributable to the minority ownership position would be included in our minority interest expense line and reduce our net income. If we acquire an additional interest in one of those subsidiaries, it would have no impact on the reported revenue or operating income. The minority interest line would obviously be reduced, as a result our net income would increase.

If we own less than 50 percent and greater than 20 percent of an agency, it would be considered an affiliate. We would not consolidate it's P&L or balance sheet, and we would include our percentage of its net income on the equity and affiliates income line of our P&L. If we acquire an additional interest in one of these agencies, or an affiliate, bringing our ownership interest above 50 percent, we would then consolidate the agencies result as a subsidiary. When this occurs, the transaction is accounted for as an acquisition, as included in our calculation of acquisition revenue. I think we only had one of these this past year. Again, while we're pretty sure most of you already understood this, I hope this clears it up for those of you who didn't.

Moving on, FX continued to have a positive impact in the quarter, adding 103.5 million to our reported revenue, or about 4.1 percent. For the full year, changes in FX rates added 390.6 million, or 4.5 percent, which is down from prior year rates of 6.2 percent. As for our mix of business in the quarter, traditional media advertising accounted for 43.1 percent of our revenue, and marketing services accounted for 56.9 percent. For the full years -- for the full year, the ratios were almost identical. As for the respective growth rates, traditional media advertising continued to show steady growth at 9.3 percent in the quarter, bringing the full year in at 11.4 percent. And marketing services, which was driven by the continuing strong performance of our CRM business, grew 12.8 percent in the quarter, and 14.3 percent for the full year.

Breaking down of marketing services revenue for the quarter, CRM was approximately 35.2 percent of our revenue, public relations 10 percent, and specialty communications 11.7 percent. As for their respective total growth rates, CRM continued be to strong at 10.5 percent in the quarter, and 14 percent for the full year. Public relations, which began to recover in the second half of 2003, maintained momentum, growing 15.7 percent in the quarter, bringing the full year growth rate up to 12 percent. And specialty communications increased 17.8 percent the quarter, continuing to benefit from the strong performance of our healthcare agencies, and a rebound of our recruitment advertising business, bringing the put year rate up to 17.6 percent.

Our geographic mix of business in the quarter was 51.7 percent U.S., 48.3 percent international. In the United States, total revenue growth for the quarter was 113.9 million, or 8.6 percent. Acquisition growth totaled 18.7 million, and organic growth totaled 95.2 million. In the international side, revenue increased 169.1 million, or 14.4 percent. Acquisition growth was only one half of $1 million, organic growth was 65.1 million, and FX had a positive impact of 103.5 million.

We added a couple of new slides to our investor presentation this year-end showing the computation of our after-tax free cash flow and our primary uses of cash. As you know, our business is very straightforward. Our primary source of cash flow is net income, adjusted for basic non-cash charges, which for us are primarily stock-based compensation charges, basically stock option expense and restricted stock amortization, and then depreciation and amortization. In addition, we have a fairly significant difference between our book taxes and our cash taxes. This is primarily due to the tax benefits associated with our convertible bonds and tax deductible goodwill amortization. As a result, our after-tax free cash flow has consistently been between 300 and $400 million more than our net income. As our revenue increases, working capital is also a consistent source of free cash flow. However, due to the large swings in these numbers month to month, internally we analyze our cash flow excluding changes in working capital.

Our primary uses of cash are also fairly straightforward. First, our CapEx and dividends. Our CapEx is limited primarily to furniture and fixtures and PCs and servers. In 2004, CapEx totaled approximately $160 million and our dividend payment which is currently $0.90 per share per year totaled 163 million. Our next use of free cash is acquisitions and investments, which in 2004 totaled only approximately $340 million. As I mentioned earlier, in 2004 our acquisition activity was very light. We invested only $32 million in new acquisitions, the balance going primarily to earn-out payments and the acquisition of additional interest in existing subsidiaries.

And finally, with our remaining free cash, we look to repurchase shares. In 2004, we repurchased 446.5 million of our stock. We also received 74.8 million of proceeds from option exercises, and stock sold on our employee stock purchase plan, bringing the net amount to 371.7 million. And now, on that positive note, John and I will be happy to answer any questions that you may have.

Great, thank you. And ladies and gentlemen, if you do wish to ask a question, please press the star followed by the 1 on your touchtone phone. You'll hear a tone indicating you've been placed in queue. And you may remove yourself from queue at any time by pressing the pound key. Again, if you are using a speakerphone, you may need to pick up the handset before pressing the star and then 1. And one moment please for our first question. And our first question does come from William Bird with Smith Barney. Please go ahead.

Yes, I was wondering if you could talk a bit about the acquisition pipeline, and what your expectations are for '05. And you gave a figure on Sarbanes-Oxley cost 60 to 70 million. I was wandering what you would expect that to be in '05, and where you think the normalized level might be? Thank you.

The acquisition pipeline, Bill, is -- is very strong, given what our objectives are. We don't, however, have a budget for acquisitions. They're built on the requirements of our companies to expand client relationships geographically, or in some cases product lines which are easier to buy than to build as new things come on the market. So, the activity and our focus is clearly picking up now that Sar-Ox is -- is something that we're cycling through, and we expect that that activity for 2005 will certainly exceed that of 2004, but, we don't have a budget, per se, for -- for that activity.

On the Sarbanes front, I think the 60 to 70 million, unless the rules change, is probably a fairly good number for, you know, for going forward costs. The -- there is somewhat of a -- of a shift as we've gone through it in that in the early part we spent a lot more money on the first time documentation, and, you know, building some systems and things that we used to monitor Sarbanes testing. Now, it's largely testing which we do on a quarterly basis in about 970-some locations, that we also have obviously increased asset, internal audit, we have a -- a full-time Sarbanes team, and then there's the external cost with KP&G.

Thank you.

Thanks And we have a question them from the line of Alexia Quadrani with Bear Stearns. Please go ahead.

Hi, good morning. John, could you give us some color in terms of what your clients are saying about their budgets for 2005? And then also I don't -- I don't think you mentioned the German marketplace in your opening remarks. Are you seeing a -- a little bit of a positive trend there?

Our clients are -- with respect to their overall marketing spending, are bullish, you know, in comparison to what we've seen over the last couple of years in terms of their plans for this year. There are shifts from broadcast TV to other -- other areas, but they're -- they're individual to each one of the clients. But, I'd say given our portfolio of -- of companies to service our clients, we're very pleased with the increases that we're seeing in the budgets that our companies are -- are indicating that the client is talking about. So that's all to the good. In terms of Germany, Germany stabilized -- the economy, I think is still pretty flat. Our companies have been performing well over the last two quarters in Germany, given the economic growth of that area. It's -- I'd have to say that the major countries of Europe are not yet contributing to growth at the same pace that, say, the United States is contributing to growth, Asia, and South America, to our overall performance, and we expect that that -- we hope that that will come on-line as we get further into 2005. But, at least there's modest improvement across most of that -- those countries, as opposed to what we have suffered in the past, which were flat to negative growth. So. it's a better situation. It's still not contributing actually to the -- at the same pace as we've seeing everywhere else

And on your -- on your comments about some of your clients moving dollars away from broadcast TV to other areas of marketing, does that an opportunity or is that -- or does that hurt your margins? Could you just comment and sort of how the impacts your business, and I know you're a very strong arena of marketing services business. But are they always as profitable necessarily as maybe broadcast work you may doing for them.

I would say in the aggregate, yes. I mean. there's not much of a swing in margins, if any, really, between one activity and the other. But, what it does do is it helps us grow the relationship with our clients, instead of money going out to to the third party, which would be a TV network, it's being spent on activities which we're more closely at, you know, participating in, and -- and that's why we have the portfolio of companies we have and the diversity within the portfolio that we have, in order to be able to service those needs.

Thank you.

Thanks. And we do have a question then from Lauren Fine with Merrill Lynch. Please go ahead.

Hi. Thank you very much. I'm wondering if you could comment on new business activity in the quarter? And then I'm also wondering, given some of the M&A activity in the market, does that make you slightly more cautious as you look at your customers' ad budgets in 2005, and then just a snapshot right now what you're seeing in terms of the impact of foreign exchange to date in the first quarter.

Questions there. In terms of -- I'll take the second one, and then Randy can have the first and third. In terms of merger activity, obviously, when there's a merger, there's obviously change. We've always take then position that change is a -- is a net positive to a company like Omnicom, because it gives us the opportunity to expand our relationship. Obviously, there's risks that you don't get, you lose one or two, but the company has been built in such a fashion that we think we win more than our fair -- you know, our share, when -- when we have the opportunity to demonstrate that we can do, so oft times it's a -- it's an opportunity to meet new people and to expand relationships. So, we take everything serious -- seriously. No individual client can impact the results of the company because of the way it's been built, significantly, so it's all just part of the -- the fabric of who we are.

Going to your first and third questions, Lauren, new business activity in the fourth quarter, if that's what the question was about, was just over $1 billion. Some of the bigger wins were Capital One financial, Subaru, and Crick (ph) Communications I think were the -- the -- the three larger ones. As for FX in Q1, based a upon the -- I'll say the daily average exchange rates, I'll say through last week, if we were hold the -- that rate -- if we take the daily average to that point and then hold that rate for the balance of the quarter, it would probably have between 1.5 and 2 percent positive revenue impact on us in Q1.

Right, and one last question if I might. You know, should -- you've indicated in your acquisition activity of new subsidiaries hasn't been that great, yet your free cash flow continues to be very strong. Should we anticipate increased share repurchase activity, because it looks like you slowed down in the fourth quarter?

Yes, we -- we were active buying stock in the first quarter. Yes, you know, we -- we basically think that we'll take our excess free cash flow. Acquisitions get such a great return on our investment there, probably come first, then after that, we'd spend the money buying in shares.

And is there any reason that it slowed in the fourth quarter, or just was that timing, or a comment on your share price, or anything of that nature?

It certainly wasn't a comment on the share price. It was a combination of timing and -- and, you know, the other -- the other things that we were focused on at the time.

Okay. Great. Thank you very much.

Thank you.

Thanks. And we have a question then from Michael Nathanson's line with Sanford Bernstein. Please go ahead.

Thanks. I have two questions. One was in the last conference call, you guys were both pretty -- pretty clear that we -- there may have been a pull forward from the Olympics from fourth to third quarter spending. I wonder, you both said that fourth quarter was unexpectedly good in terms of revenue growth. Can you give us some color on where was the improvement, what did you see, and in terms of the timing of that? And secondly, there's been a lot of chatter about consolidation and media buy in planning amongst agencies, and something that you've not really participated in the past couple of years. I wonder how do you see media buy in planning fitting into your mix of services, and is there -- is that an opportunity that you want to get bigger into?

In terms of what we said last quarter, and -- and we -- we did see a pull through, and we also said, then, that we wouldn't have a -- a very clear picture until around Thanksgiving as to whether or not possible expenditures were being made by our clients, or they were going to be conservative going into the rest of the quarter. As it turns out, we benefited from being conservative, and there was spending. It was pretty much across the board. We were looking at that prior to the call this morning, trying to identify if there was any single specific thing that occurred, and there wasn't. It was just a -- a broad base of activity that continued through the end of the year.

Okay.

And in terms of media buy in, it's incredibly important to us. If you're speculating as to whether or not we have any huge acquisition plans, we don't, in terms of those -- those units that are out there. But, you know, we -- we think that OMD was ranked, I think, number one as the media agency or group of -- in the world last year, so we don't think the headlines of some of the account wins that, you know, maybe you're seeing are really reflective of any trend which doesn't include us. Media consolidation is something that's been going on for a long time. Occasionally, because of cli -- cli -- pre-existing client relationships, you're either invited to the pitch, or you're not. When you're not, you're not, and when you are, you either win or lose. So, we think media buying is an important part, or element, of the company moving forward. It is not, as is no other element to the company, a dominant factor. And we -- we think we'll continue to prosper and as long as we keep up the quality that we've been recognized for as we move forward.

Great. Thanks.

Thank you. And again, ladies and gentlemen, if you do wish to ask a question, please press the star followed by the 1 on your touchtone phone. And we sh -- are showing a question then from Steve Barlow -- Steven Barlow, pardon me, with Prudential. Please go ahead.

Good morning. Let me talk a little bit more about your European utilization. It looks like it's a -- it's a little better. I guess U.K. in particularly comes to mind, Publisys and Havas, have pretty good numbers out of the U.K. It sounds like you're still struggling there. Maybe that's too strong a word. But, I guess what is going on, maybe, in the U.K.? And if all of Europe picks up more next year, how is that going to affect the tax rate in '05?

Well, you -- you -- first of all, I -- I can't make any meaningful comparisons to Publisys or Havas. We have to be double the size of Havas, and four-plus times bigger than Havas, so you're dealing with different magnitudes of, you know, organizations. U.K. is a -- is a very established and a very strong market for us. The growth there isn't as robust as it is the United States, it's been steady and positive, and we continue to think that it'll improve as we move forward, and we're waiting for that improvement to the -- to the -- to the major markets in Europe. We think our growth in the aggregate is probably the best in the industry, and that's without that 20, 25 percent of the business contributing in the same fashion as the -- the remainder of the business. So, we -- we look at that as an opportunity, and something that will come our way in due course, and -- and not really a concern. Now, when you have to reorganize things, and you get into cost utilizations, it's very expensive once -- when we make changes in Europe. And that's been an ongoing process during the last 18 months for the company, and might continue a little bit into the first quarter for us, as well, as we -- as we trim our sails in -- in certain places and try to expand in others. So, I don't know if that is responding completely to your point, but that -- that's our sense of it.

As far as the taxes go, frankly, we're -- we're, you know, we're of a size now, and a diversity that you -- you have to have a fairly significant change in our overall mix of business in order to impact our tax rate, you know, in a significant way. You know, could it -- could it be plus or minus 1/10 of a point, you know, maybe, but -- but that would be about it.

Okay. So no wholesale decline at this point. Waiting -- on other conference calls you've talked about it's hard to predict some of the revenue growth, and certainly, going back to Michael's point you did very, very well in the fourth quarter on tough comps. Was any of that having to do with more project-based marketing services? And that -- that always seems to be a wild card. And -- and, I guess, how does that market look? Did that make a difference in the fourth quarter?

the fourth quarter always has a -- a bit of year-end sort of project-based work. You know, it can be an incremental, you know, 100, $200 million of revenue potentially. That business, while it, you know, it -- it seems fairly consistent year to year, it's not as predictable as longer term, you know, sort of month-to-month fee type arrangements.

And -- and, you know, just -- I'm sure you understand that when you use the word project, generally that's a funding of assignments from existing clients as opposed to, you know, one off type of projects that are just suddenly coming up out of the blue. Most of the things that money is spent on were programs that the clients have been discussing, clients have made plans to -- to actually execute. And then they have the flexibility as you get into the fourth quarter, as to whether they want to execute them or if they don't want to execute them. And what we saw predominantly was that most of the spending that was potentially planned, the client felt comfortable enough or the need to and actually spent the money in the the fourth quarter, and that -- that's a good thing. But it's -- it's -- it's really assignments with -- with existing clients. [INAUDIBLE]

Okay. Thanks for your help.

Thank you.

Thanks. And we do have a question then from Troy Mastin's line with William Blair & Company. Please go ahead.

Good morning. Thank you. I wonder if you could characterize the environment for us for 2004? Was it a relatively normal year, strong year, weak year as you look over the long-term cycle? And as we look into 2005, how would you characterize the outlook for '05 versus the normal cycle? And then, finally, on the third quarter numbers given the strong organic growth rate, how should we think about that in the context of the current environment? What -- was there one-time spending in Q3 from the Olympics, or is, you know, sort of a high 6 percent organic growth number sort of the right way to think about '04, or should we think about it more in the sort of low to mid 6 percent range?

Let's see, I'll start, and then John can correct me. I guess my view of -- of '04 activity in general is the U.S. was pretty strong. Asia was pretty strong. Latin America was pretty good, and, you know, Europe was flat and probably, you know, starting to show some signs of -- of recovery in the fourth quarter. So, you know, roughly 65 to 70 percent of our revenue base was performing at a pretty good rate, and 25 or 30 percent, was, you know, could -- could -- we could certainly see some improvements in those areas. As far as your organic growth rate numbers go, you know, we're -- we're the first ones, I think, we've probably -- we've said it for years that, you know, plus or minus 100 basis points on organic growth is -- is a degree of accuracy that, you know, inside of that, we just don't have. I'm not sure anyone necessarily has it. So whether it's, you know, low 6 percent, mid-6 percent, or high 6 percent. That's -- that's a little too fine-tuned for -- for my view. I think, you know, 5.5 to 6.5, or 5.5 to 7 percent organic growth is probably the way to think about it.

If the growth rates in the economies that we're talking about remains the same is the only point I would add. And in terms of the impact of the Olympics. Possibly in the quarter -- in the third quarter, to the overall performance or spending worldwide. In terms of groups like Omnicom, and the way that we get compensated, I don't think it has a significant impact, because it -- it -- it does impact the media, I think, you know, the presidential elections and -- and -- and Olympics. But in terms of the way media buying groups and agencies that come up with supporting programs, it -- the impact is not significant enough to bring [INAUDIBLE] in to -- in to the callout from my perspective in terms of, you know, what '04 was versus what will be '05 as a result of that not repeating. I -- I don't think it'll have much of an impact at all.

Keeping in mind that 1.5 or 2 percent growth change in Q3, that's, you know, 30 to $40 million, did 9.7 some odd billion for the years, 30 or 40 million, you know, is not a huge number.

And if you could just comment on the tone of -- of your clients in the industry, entering '05. Where -- where does that stack up in the cycle, and maybe where we were entering '04, if you can just give some qualitative perspective? Thanks.

I think the tone was good going into '04 and the tone remains good going into '05. I think you've seen almost across the board companies have exhausted their ability to reduce expenses and the -- the smarter companies are focusing on growth at the top line. And when that becomes the focus, that typically benefits our industry. At least that's what we do. That's what our contribution is, in terms of trying to grow revenues. And so the tone remains -- remo -- remains good. I think, you know, there's a certain caution which still is present in the minds of most of the CEOs that -- that I talk to, but I think that's healthy.

Okay. Thank you.

Thank you.

Thanks. And at this time, we're show nothing further questions in queue.

That sounds great. Thank you all very much for taking the time to listen to our call.

Thank you. And ladies and gentlemen, that does conclude our conference for today. Thanks for your participation and for using AT&T's executive teleconference. You may now disconnect.