PLDT Inc (PHI) 2013 Q2 法說會逐字稿

Good afternoon, everyone, and welcome to the PLDT conference call to discuss the company's financial and operating results for the first half of 2013. This conference call is being recorded. Replay information will be provided at the end of the call.

At this point I would like to turn you over to Ms. Melissa Vergel de Dios, Head of Investor Relations for PLDT, for the introduction. Please go ahead. Thank you.

Good afternoon and thank you for joining us today to discuss the Company's financial and operating results for the first half of 2013. As mentioned in the conference call invitation, today's presentation is posted on our website. For those who have not been able to do so, you may download the presentation from www.pldt.com.ph under the Investor Relations section.

For today's presentation we have with us members of the PLDT Group management team, namely, Mr. Manny Pangilinan, Chairman of the Board; Mr. Poli Nazareno, President and Chief Executive Officer of both PLDT and Smart; Mr. Chris Young, Chief Financial Adviser of PLDT; Anabelle Chua, SVP, Treasurer of PLDT, and Chief Financial Officer, Smart; and Attorney Ray Espinosa.

At this point, let me turn the floor over to Mr. Poli Nazareno for the presentation.

Good afternoon. Thank you for joining us this afternoon. We are pleased to share with you PLDT's financial and operating results for the first six months of 2013.

When we announced our full-year 2012 results earlier this year, we shared our view that PLDT would return to growth in 2013 driven by the continuing growth on network and data revenue. We also expected operating costs to stabilize as the bulk of MRP or manpower reduction program expenses were incurred last year. As you can see, our first half results are largely in line with this anticipated outlook.

Service revenues for the first half of 2013 rose by 2% year on year and 1% half-on-half to PHP81.1b. Both our wireless and fixed line business registered growth compared with the first half last year and the last semester of 2012.

EBITDA for the period grew to PHP40b, reflecting a 2% increase versus the first half of 2012, which included a PHP1.7b manpower reduction program cost. Compared with the second half of 2012, this semester's EBITDA is 6% higher due to higher revenues, lower [cash] operating costs, partly offset by higher subsidy expenses in 2013 in line with our short-term strategy involving a greater (inaudible) postpaid plans to seed smartphone ownership expected to boost data revenues. EBITDA margin was steady at 49% first half 2013 and first half 2012 and higher than 47% in the second half 2012.

Reported net income for the first half of 2013 was higher by 2% year on year and 17% compared to the second half of 2012. Core net income of PHP19.4b rose 5% for the first half year on year and compared with the last half of 2012. Core earnings per share is PHP89.64.

On the second slide, this slide shows how our second quarter results compare with the same period last year and with the first quarter of this year. Service revenues in the second quarter were higher by 3% quarter over quarter and 1% year on year.

EBITDA for the second quarter registered a 5% year-on-year improvement but declined 4% quarter on quarter due to the higher subsidy expenses. As a result, EBITDA margin for 2013 of 48% was lower than 51% in the first quarter 2013, but better than 47% the second quarter last year.

Core income of PHP9.8b for the second quarter of 2013 is a 6% year-on-year and 2% quarter-on-quarter improvement. Reported net income for the period of PHP10.5b was a 13% year-on-year and a 15% quarter-on-quarter increase, mainly due to the PHP2b gain from the sale of the BPO business booked in the quarter.

On the next slide, in line with PLDT's dividend policy, the Board of Directors today declared an interim regular dividend of PHP63 per share, representing 70% of core earnings for the first six months of 2013. The dividend per share is PHP3 or 5% higher than the interim dividend of 2012. The record date for the dividend is August 30, while the payment date is September 27.

On the next slide, core net income for the first half of 2013 rose by PHP1b or 5% year on year to PHP19.4b and on track with full-year guidance of PHP38.3b. Higher revenues and EBITDA as well as lower depreciation contributed to the increase. This semester's core income included the PHP900m gain from the sale of the third tranche of Philweb shares captured is PHP2b gain from the sale of Beacon preferred shares and PHP1.7b in manpower reduction program or MRP expenses.

Reported net income as of June 2013 was PHP400m or 2% higher year on year at PHP19.7b, mainly due to the higher core net income, the PHP2b gain from the sale of our BPO business, offset by higher ForEx and derivative net losses of PHP2.7b, and a PHP900m adjustment arising from PAS 19.

On the next slide, PLDT's combined subscriber base stood at 78.7m at the end of June 2013. Our combined cellular base grew by 5% or 3.5m to 73.4m from the end of 2012. Talk 'N Text added 3.4m subscribers while Sun added 400,000. After a reduction in subscribers in the first quarter, Smart registered net adds of nearly 142,000 in the second quarter.

Prepaid subscribers accounting for 97% of our total cellular subscriber base rose by 3.6m or 5% year on year to 71.2m. We believe that the Philippines is fundamentally a prepaid market, so we will continue to direct our efforts to grow our -- to growing our prepaid subscriber base.

Compared with our efforts in the past, however, and as part of expanding our data business, we have in recent quarters increased initiatives on growing our postpaid subscriber base as we believe postpaid subscribers will likely (inaudible). As a result, our postpaid subscriber base increased to 2.2m and we added nearly 115,000 subscribers in the second quarter alone, following a decline in subscriber count in the previous quarter due to a cleanup of inactive Sun accounts.

Our combined broadband base on the other hand stood at 3.2m at the end of June 2013, consisting of 2.3m wireless broadband subscribers and over 920,000 DSL subscribers. We had 2.1m fixed line subscribers at the end of the first half of 2013.

Next slide. Consolidated service revenues for the period grew by PHP1.4b or 2% year on year to PHP81.1b. 21% of our service revenues are dollar-linked. Had the peso remained stable, consolidated service revenues would have been higher by another 1% or PHP700m.

This semester, increases from our growing business segments outpaced declines in the legacy revenues. Growing revenue streams from non-SMS data services of PHP16.9b, accounting for 21% of total revenues, were higher by 13% year on year or PHP2b. This more than offset the PHP1b decrease in revenues from our legacy businesses, namely NLD, ILD and LEC and satellite services. Revenues from cellular voice, cellular SMS and LEC, which account for 60% of total revenues, were stable at PHP48.9b.

Consolidated EBITDA grew by 2% or PHP900m to PHP40b at the end of June 2013, while EBITDA margin was stable at 49%.

On the next slide, the highlights for our value segment starting with broadband. Broadband service revenues now contributing 16% to total service revenues maintained their upward trajectory with a 14% year-on-year growth to PHP12.7b for the first half of the year. This includes mobile internet browsing revenues of PHP2.1b which rose 49% from the same period last year. Broadband ARPUs registered year-on-year increase in this semester compared with the same period last year.

We anticipate growth in mobile internet browsing revenues to accelerate with increased smartphone ownership as smartphone prices are on the decline and there is an expanding secondhand smartphone market as early adopters upgrade their units. Also we are seeing more aggressive marketing initiatives from the distributors of Chinese-made handsets, challenging the local preference for branded handsets.

Smartphone penetration of our total subscriber base is about 10%, with that for postpaid higher at 54%. To grow the broadband business further, our efforts are directed towards encouraging an increasing usage. These efforts include bundling engaging and compelling content on multiple screens. I will provide you more updates on this later in the presentation.

We continue to craft offers that address concerns about bill-shock such as affordable social-network-only variants and postpaid bundles with price caps.

Finally, key to growth of our data business is a reliable network that ensures quality experience. PLDT's network quality and coverage remains unrivalled and can more than fully support the requirements of our data customers.

On the next slide, our wireless business registered a 2% or PHP1b year-on-year rise in service revenues for the first six months of 2013, reflecting continued growth of non-SMS data and a modest increase in cellular voice revenues. Efforts to further increase wireless revenues are directed towards mitigating declines in cellular voice, in SMS ARPUs, as well as growing non-SMS data revenues. These include our short-term strategy of seeding smartphone ownership under postpaid plans.

Moving to the fixed line, this segment registered a PHP700m or 3% year-on-year increase in service revenues to PHP26.5b in the first half of 2013, net of interconnection costs. Upward momentum in DSL, corporate data, including data center revenues accounted for PHP1b of the improvement, while NLD, ILD and LEC revenues declined by [PHP400m].

Improving Philippine economic conditions augur well for our Home and Enterprise businesses. Increased purchasing power and the growth in internet usage, plus our ability to offer interesting content supports demand for PLDT DSL, Telpad and Fiber. In addition, the unabated growth of the BPO industry and SMEs, emerging demand for data center and cloud services provide rich growth opportunities for our enterprise business.

On the next slide, free cash flow as of June 2013 stood at PHP20.7b, higher than our core income of PHP19.4b for the period. Higher cash from operations and lower CapEx were offset by movements in working capital and cash from deconsolidated operations.

Our free cash flow plus PHP14b of proceeds from the sale of our BPO business and the third tranche of Philweb shares were used for dividend payments amounting to PHP24.1b, deposit on MediaQuest PDR subscription of PHP2.6b, and repayment of PHP1.3m of debt.

PLDT Group CapEx for 2013 is expected to be PHP29b, lower by PHP7.4b from previous years. At the end of June, PLDT Group CapEx stood at PHP4.8b, almost half of the CapEx in the first six months of 2012. The year's CapEx will continue to fortify PLDT Group's unrivalled network which is designed to maximize the customer's quality of experience especially in data.

Continued investments in expanding 3G and LTE coverage are being made. At the end of June, our LTE coverage reached the market with the expansion to 1,100 sites and presence in over 170 cities and municipalities nationwide.

Because backhaul and transport are keys to delivering data, our CapEx program includes further investments in extending our fiber footprint which now stands at 71,000 kilometers including 7,200 kilometers of international submarine fiber and 4,000 kilometers of domestic submarine cable.

In support of our multimedia strategy, we recently commissioned our content delivery platform to support Smart Music, the country's biggest music portal -- online music portal, and a delivery system which allows Cignal customers to watch their favorite channels on their mobile phones and tablets.

On the next slide, net debt at the end of June 2013 was $1.7b or $200m lower than at the end of 2012. Net debt to EBITDA was also lower at 0.98 from over 1 times at the end of last year. 51% of gross debt is denominated in US dollars.

Taking into account our US cash holdings and hedges, only 36% of $975m (Sic-see presentation slide-11 "$975") of our total debt is unhedged. 68% of our debt are fixed-rate loans. PLDT's debt profile remains healthy with maturities well spread out. PLDT's credit ratings with Fitch, Moody's, Standard & Poor's remain at investment grade.

On the next slide, our strategic direction is to transform PLDT into a multimedia organization in step with the convergence of the worlds of telecommunications, media and the internet. In line with this, we are pursuing a significant number of initiatives, a few of which I would like to update you on.

In partnership with MCA Music, Smart recently launched Smart Music, a game-changing online music portal which allows Smart, Talk 'N Text and Sun subscribers to download music at very competitive prices, as low as PHP15 or $0.34 per track. For the Philippines alone, digital music accounts for 40% of the PHP700m domestic music business.

As for CignalTV, the direct-to-home or DTH business that PLDT is investing in via Philippine Depository receipts or called PDRs, its subscriber base has grown from 457,000 at the end of March to nearly 515,000 today. PLDT had also recently made available its first triple-play offer which includes landline, fiber-to-the-home broadband of up to 100 megabytes per second and -- megabits per second, and CignalTV content.

We also have a tie-up with Clickplay which allows our subscribers to access on-demand over 200 blockbuster movies from distributors like Sony Pictures and Warner Brothers. The latest launch is CignalTV-To-Go, an over-the-top service that allows Smart and Sun subscribers to view real-time broadcast feeds of Cignal channels on their smartphones or tablets. Currently in its beta phase, the service is available on the Android OS but will soon be available on other operating systems.

There are only -- these are only a few and just the beginning as we continue to explore new ways of providing engaging and compelling content to generate new revenue sources while capitalizing on our network and content strengths.

Lastly, we are encouraged by our first-half results and continue to see 2011 -- 2013 as the year we return to growth. Our goal remains to pursue growth in data while maintaining equilibrium of our four businesses and managing the declines in our legacy services. Though contribution to profitability may be modest this year, we will actively pursue our multimedia strategy as we offer more content to complement our [assets] business while using our network strength as leverage to expand our customer base.

In this light, we confirm our guidance of PHP38.3b of core net income for 2013.

That captures the highlights of our first half results. Again, thank you for joining us today. And we are now ready to take your questions.

We will first take questions from those who've joined us through the conference facility before we take questions from the floor. Operator, could you repeat the instructions to ask questions?

Thank you. The floor is now open for your questions. (Operator Instructions). Our first question is from Mr. Luis Hilado. Your line is now open, you may go ahead.

Hi, good afternoon. Thanks for the call. I had three questions. The first was regarding the ARPU trends in the quarter. It seems like for Smart and Talk 'N Text it is flat whether it's postpaid and prepaid, but there is movement in the Sun Cellular prepaid and postpaid in opposite directions. Just wanted to know if this is a conscious effort to shift the prepaid subscribers of Sun to postpaid and hence the ARPU uplift at postpaid?

Second question is I noticed the PLDT triple-play on the slide. Just wondering if at a certain stage you will also put mobile as well as part of that bundled package.

And last question, if you could give us any update on the CURE frequency auction.

Hi, Luis. Thank you for your questions. I think in terms of ARPU -- in terms of ARPU, there will be -- the ARPUs for the first quarter compared to the second quarter are practically stable, but there are certain adjustments at the Sun side when it comes to the postpaid ARPU.

Right now it is not included. Actually it's because (inaudible) mobiles. It is only included in front of the connected screens because right now we can't offer [Cignal] -- for Cignal's subscribers to be able to avail directly the real-time [soft] channel signals, for example, CNNBC and all the rest.

On the CURE frequency, I think this is up to -- it's still with the NTC. We are waiting for action on their side, but it is already with them at this point. The ball is in their court.

Right. Could I have just one follow-up on the triple play? Thinking more of would you be able to bundle mobile with the whole package and then give a discount for each of the services as a result, or it's more of, as you mentioned, just putting the content of Cignal onto the mobile platform?

We are not there yet when it comes to bundling mobile data with the fixed. We're still looking at our platforms for combined visibility within the fixed and the wireless subscriber base. But pretty soon we should be able to do that.

Okay. Good. Thanks.

Any follow-up questions, sir?

That's all for now.

Thank you. Our next question is from Mr. Arthur Pineda. Your line is now open; you may go ahead.

Thank you for the call. A few questions for me. Firstly on the EBITDA margin, it seems to have softened owing to your postpaid focus. Is this a strategy that you will be pursuing for the remainder of the year and going into 2014?

Second question I had is with regard to multimedia. Is there any guaranteed off-take for your exclusive partnership with MCA? What are the growth and margin expectations that we could put in on this one?

Last question is again on media. If we look at PLDT from a three-year perspective, where do you see your media contributions versus your conditional service? Is there any investment commitment from media as well that you're pulling in?

Well, right now for the music, it is still -- you can download free up to August 30, so we're still uncertain on how it's being used. There are certain commitments as to the amount which we pay MCA, but these are actually based on historical figures, based on our value-added services already. As I mentioned earlier, out of the PHP700m spent on music over the air, something like half of this is already on digital.

Yes. These subsidies are of course going to continue as they are because we're seeding the market for postpaid -- for postpaid smartphone take up. And that is going to continue for the rest of the year as we are trying to get our postpaid growing. If you look at the second quarter, our net adds on postpaid have been a historic high, at 150,000 net adds combined Smart and Sun already. And that should form a base for future revenues. We will continue to be seeding this base because we feel that postpaid, based on the analysis that we have looked at, it's now over half or 54% (inaudible) as far as smartphones are concerned.

I think the media, the component part of the whole multimedia, like was just said, we're putting together with respect to [cost] and available with the increased take-up of smartphones. So the -- at the moment the direct event that we have made is in the form of PDR subscriptions with respect to the Cignal effectively [everything] (inaudible) through the bought PDRs. So that's what we have confirmed and are certain here.

Sorry, if I could just follow up on the second question on the postpaid focus. I recall in the past that Sun had a different accounting for subsidies. Has that been fully aligned with PLDT, i.e. do you extend subsidies upfront at this stage?

All our (inaudible) are aligned with the PLDT Group ever since the acquisition.

Got it. Thank you.

Any follow-up questions, sir?

No, that's all. Thank you.

You're welcome. We will now move to our next question. Our next question is from Neeraja Natarajan. Your line is now open; you may go ahead.

Hi. Thanks very much. My question is in this first half you're obviously trending well in terms of core net income, and obviously we've seen margins improve because you had the manpower reduction. So if you look at the back half of the year in terms of costs, is the concern more because of the rise in subsidy expenses? Is that the only -- is that the big event to watch for? And should it continue at 2Q level or do you think there will be a further step-up? Apologies if I didn't -- if this was already asked. That's my first question.

And secondly, I guess we did see Globe's result, which is quite strong. Are you -- do you see that as a bit of a mark -- they have talked about some of the high-end subscribers that are churning over to them. Is there any strategy that we are doing to address or protect the high-end subscribers? That's my second question.

And thirdly, how do you see this MVNO arrangement that Globe has gone ahead with, which is expected to launch in the back half of this year? How do you see that impacting any of your segments, if at all? Thank you.

I think when it comes to subsidies, it will depend on how the market will follow. But definitely we will seed, as I said, seeding the market for more smartphone take-up on the postpaid side.

As far as the competitive situation is concerned, the rivalry is pretty intense and that will continue to be so. But the situation is now conducive to growth. I think both of us are growing subscriber base with our -- we are growing faster I think. In the postpaid we're growing faster. And therefore that's should form a base for future revenues moving forward.

The second question was (technical difficulty).

Yes, we have strategies. But we would like to keep it to ourselves. We're not seeing any serious migration out of our high-end subscriber base. What we are seeing though is in some cases our high-end prepaid base are migrating downwards to our lower-profit pricing and our own brands but staying within our network.

(technical difficulty)

I think good luck for that and our strategy remains there. We have the multi-screen strategy in play already and we have launched TV to go. And there will be more products that will be coming out in the next few months.

Sorry, if I may just come back. You said that you are seeing some monthly subscribers move down to lower price packages. How are we going to address this? That itself is a risk, right, in terms of --?

I guess that is part of our dynamics of the markets moving. But what we are doing though is moving towards higher [D nodes] or higher denominations and longer durations as far as [monthly] is concerned. And in terms of [only] our tri-net services are limited to Smart, and these are now upgraded in terms of costs.

All right. Thanks very much.

Any follow-up question, ma'am.

No. That's it. Thank you.

(Operator Instructions). Our next question is from Chate Ben. Your line is now open; you may go ahead.

Good afternoon, everyone. Thank you for the opportunity to ask the questions. My questions would be related to smartphones and your data revenue. And the first thing is what -- you have disclosed some statistics regarding smartphone penetration. May I confirm with you again how do you actually define smartphones in your definition?

And second question is regarding the PHP2.1b revenue from the mobile data. Would you be able to break down for us what's the percentage of contribution from postpaid in that? And if it's majorly postpaid or the portion that's coming from postpaid, is it mainly from the monthly unlimited plan or what's -- or how users actually pay for their mobile Internet right now.

And third question is more on the CapEx side. I understand that you provide the CapEx figure from FY'13. Anything you can share in terms of what to look at for FY'14? Should we expect further decline or stabilize the active level? Thank you.

The definition of smartphone. A smartphone is a device that everybody knows what it is. It is what -- it's either Android, OS or Symbian 60 operating system. It is a device where you can download apps over the air and that's basically how we define.

Right. So in that -- so basically the (multiple speakers) include --?

Our aim to be -- sorry?

Yes. Does it include like feature phones and also like Nokia with Symbian operating system and also [battery] as well?

As long as -- from Symbian, I think Symbian 60 and later models, that's how we define it. And backhaul is Symbian 60. We're seeing roughly on our network a little over 6m of these smartphone based on this definition in our system. And roughly the penetration is -- we estimate is about 10% overall. And on postpaid subscribers it's about 53%, 54%.

As (inaudible) said, we do not disclose the breakup of that, but what we are seeing is that in terms of the postpaid subscribers, there's a higher penetration of smartphones obviously and a higher propensity to use data revenues among postpaid subscribers. Our postpaid subscribers have the ability to go on always on a limited data plan per month or some volume-based type of plan. Prepaid subscribers have the option of going either five days, PHP5 for 15 minutes or PHP10 for 30 minutes. They can also go on by the day or (inaudible) pricing for the whole prepaid side of the market.

Our guidance for the CapEx, Chris, do you want to?

I think PHP29b for this year was restated. I think initially the thought going into 2014 was around about the same level. Longer term, we had or have been looking at spend around about [17%, 18%] of consolidated revenues. As we move into 2014, we'll continue to build out the content of the platforms. I think Poli described that in some detail, the very important initiative for us in phones. So that's something we've incorporated in 2013 and 2014 numbers.

Alongside that, we will continue to build out the fiber network to address the retail subscriber and provide wholesale capacity to the cellular networks. So slightly higher 2013/'14 and then probably settling about [17%, 18%] of earnings as we go into 2015 and on.

Right. Thank you very much.

Any follow-up questions, sir?

No. That's good. Thank you.

You're welcome. Our next question is from Rama Maruvada. Your line is now open; you may go ahead.

Hi. Good afternoon. Three questions from me, please. Firstly with regards to your overall cash OpEx, would you be -- it is turning somewhere around PHP18b to PHP19b at the moment per quarter. Just wondering how do you -- how should we think about this in the longer term in terms of its evolution? And also with regards to this, could you just provide an update on how you think the digital acquisition is going in terms of cost savings, especially on the network side? And also do you expect to see further reduction in personnel expenses going forward? So that will be one.

Number two is on the fixed line side. Again, looking at the IDD revenues, it has been very volatile in the past couple of quarters. Just wondering if you could provide some idea of what the basic drivers are and how this should trend going forward. That'll be the second one.

Third one is really with regards to your tax rates. Seem to be very low in the first half. Just wondering what it's going to be for this year and what we should assume going forward. Thank you.

I'll do two and three. I think on the tax rate, if you look at the recovering revenues, it's a bit more than 20%, I think about maybe 22%. We are anticipating that that will be the case for the full year on the core. Obviously some of the non-recurring gains are taxable (inaudible). But on the recurring I think you can work on about 21% to 22%.

For the IDD, the main factors that drive that are the exchange rate; the percent the peso strengthens reduces the amount of IDD revenues on the fixed. The two other major things are secondly, the IDD traffic moving to wireless. And then lastly, services such as Skype and other VoIP services. So you're right there; they are volatile. But the trend I think in short to medium term is continued decline. I think we're looking at about something in the region of about 8% to 10% on a [round] basis.

I think the good thing, if you look at it from the [big] perspective now, is that two major items of legacy revenues which are the NLD and the ILD, which are effectively the toll businesses, are now getting to be significant -- less significant than they were a few years ago. I think they're less than 25% of the total. So as we see data growing quite robustly plus the fixed line business, I think it might be 8% to 9%. The [leg] businesses are staying fairly stable. The [fixed] been able to effectively absorb the reductions in the toll business and also show some growth. So I think we're seeing growth, excluding interconnect items, of about 3% to 4%, with a possibility that that might accelerate a bit as we go into 2014 and 2015.

On the question regarding the cost benefit from the digital acquisition, I think we're making good progress on that. We have certainly indicated that's not an overnight thing; that will take a two-year journey in terms of putting together certain [types] of the network, which effectively has to go all the way through the end of next year. We continue to look at how to (inaudible) so to put together. So that's considerable effort on our side, so for the (inaudible) revenue generating goes to the network goes to the op support. So, there's still ongoing networks in that sense.

Sure. Maybe if I can just clarify in that regard, in terms of the overall OpEx then, are they -- should we expect further significant reduction in the cost base or are there attempts to maintain the current cash cost level going forward?

On the cost side we are running a very low overall increased level, as you can see, so that combination of all the efforts now (inaudible) will be the level of the subsidies. But outside of that, with respect to the tax effect, that's like the benefits that we will get from the integration will contribute to our ability to maintain the expense growth at the low single-digit level.

Okay. Thank you very much.

Any other questions?

No, that's fine. Thank you.

Thank you.

Are there any other callers in the queue, operator?

As of the moment we don't have any other questions on queue.

Are there any questions from the floor that you might maybe add? Back to you, operator, for any questions.

As of the moment there are no other questions on queue.

If there are no questions, I hand the floor]over back to the operator to (inaudible) replay information.

Thank you. I would like to give everyone the instant replay information for today's call. This conference will be available on a 24-hour instant replay starting today, daily on through August 21, 2013. Replay information for this (inaudible) call, international caller number is 852-301-84302. US toll free is 1-203-369-4575. Passcode is 8780. Conference leader is Melissa Vergel de Dios. I will now turn the conference back to PLDT for any additional or closing remarks.

If there are no questions from the floor, we invite you to join (inaudible).

See you November 6 for the next results presentation. Join us for refreshments outside. Thank you.

And that concludes today's conference. Thank you for your participation. You may disconnect your lines in your own time.