Sinclair Inc (SBGI) 2005 Q1 法說會逐字稿

Good morning, ladies and gentlemen and welcome to the Sinclair Broadcasting Group, Incorporated first-quarter 2005 earnings release conference call. At this time, all parties are in the listen-only mode and there will be a brief question-and-answer section following the formal presentation. [OPERATOR INSTRUCTIONS] As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Amy, Executive Vice President and Chief Financial Officer.

Thank you, operator. In the room with me today are David Smith, President and CEO, Steve Marks, COO of our Television Group and Lucy Rutishauser, Vice President Corporate Finance and Treasurer. Before we begin, I would like to make our forward-looking statement disclaimer. Certain matters discussed on this call may include forward-looking statements regarding among other things future operating results. Such statements are a subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors as set forth in the Company's most recent reports on forms 10-Q and 10-K. As filed with the SEC and as included in our first-quarter earnings release, which we furnished to the SEC on an 8-K earlier this morning.

The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. In accordance with Reg FD, this call has been made available to the public along with a Webcast of call available on our Website. The Webcast replay will be available until our next quarterly earnings release. Redistribution of this call is prohibited without the express written consent of the Company.

Included on the call will be a discussion of non-GAAP metrics, specifically television broadcast cash flow, EBITDA, free cash flow and leverage. These metrics are not meant to replace GAAP measurements but are provided as supplemental detail to assist the public om their analysis and evaluation of our Company. A reconciliation of the non-GAAP metrics to the GAAP measures in our financial statements is provided on our Website, www.sbgi.net. Please note that use of discontinued operations accounting treatment has been applied to all periods discussed as a result of the sales of our Kansas City and Sacramento stations.

Before we go through the financial and operating results, we wanted to highlight some announcements and activities that have occurred since the last earnings conference call. Last week, we closed on our previously announced sale of KOVR, our CBS affiliate in Sacramento. The gross proceeds of 285 million were used to repay bank debt, saving the Company an estimated $12 million in annualized interest costs. This morning, we announced that the Board of Directors approved a $0.10 per share increase to our common stock dividend. Bringing the annual dividend per share to $0.30. Since instituting the dividend a year ago, we have tripled it, a reflection of our free cash flow story.

In the past two months, we have entered into multi-year retransmission agreements with Comcast and DirecTV. Both of which include our digital channels and multitasking rights. Although there are nondisclosure agreements in place regarding to the terms. Our position has always been we won't allow carriage of our digital signals without some form of consideration. In April, the Board of Directors approved accelerating the vesting of 400,000 shares of the Company's stock options, which are now exercisable. This action was done in anticipation of financial accounting statement number 123-R titled, Share Base Payment, which requires companies beginning January 1, 2006 to value their options and incur compensation expense. By accelerating the vesting, we do not expect to incur any material compensation expense in the second quarter regarding these options. However, had we not vested the options, we would have incurred 800,000 of compensation expense from '06 through '08. Going forward, the Company will use restricted shares to issue stock to employees rather than using options.

Now let's turn to the financial results. Net broadcast revenues for the first quarter were 145.2 million, down only 0.8% or 1.2 million versus first quarter of '04. This represents a $1.6 million overachievement of our prior guidance, which had called for net broadcast revenues to be down 2%. The better-than-expected performance was primarily due to higher national and other revenues. Television operating expense in the first quarter; defined as station production and station SG&A expenses before barter, were 73.1 million, a decrease of 0.9% or $700,000 over first quarter last year's expenses of 73.8 million and coming in lower than our prior guidance, which called for TV expenses to increase by 1.2% or $900,000. That's 1.6 million better than expected.

Operating expense level is due primarily to lower news and promotion costs. Operating income in the quarter was 32.5 million, an increase of 28.7% over last year's result of 25.3 million, due primarily to lower film amortization. Interest expense, net of interest income, was down 1.9 million in the quarter due to lower debt levels from station sales, higher free cash flow and lowering borrowing spreads. Net incomes from discontinued operations was $2.9 million in the quarter. We had diluted income per share available to common share holders in first quarter of $0.10, as compared to diluted loss per share of $0.03 in the same period last year. The improvement is due primarily to the higher operating income, lower interest expense, and unrealized gain on derivative instruments and offset by higher taxes on the income.

Television broadcast cash flow in the quarter; defined as net broadcast revenue plus barter revenues minus station production expenses, station SG&A, barter expenses and program payments, was 46.5 million, a decrease of only 1.2 million or 2.4% lower than last year's BCF of 47.7 million, but $4.3 million higher than our previous guidance implied. EBITDA; defined as BCF plus corporate expenses minus the loss or plus the income from operating divisions, was 41 million in the quarter, 800,000 or 1.9% lower than the 41.8 million from last year. The BCF margin on net broadcast revenues was 32%, and the EBITDA margin on total revenues was just - - was 24.9%. We generated $9.9 million of free cash flow or $0.12 per share in the quarter. With that, Lucy will take you through the balance sheet and our cash flow highlights.

Thank you, David. Good morning, everyone. Capital spending the quarter was $3.6 million. Cash on hand at March 31 was 21.3 million. Debt on the balance sheet at quarter end was $1 billion 627.2 million(ph). From a liquidity standpoint, there was approximately 121 million of borrowing capacity at quarter end. Leverage at the operating Company as of March 31 was 5.75 times on a covenant of 6.25 times. Leverage at the holding Company was 6.62 times on a covenant of 7.50 times. And at the senior level, we were levered at approximately 1.8 times.

If you pro forma last week's sale of Sacramento into those statistics, the holding Company leverage at March 31 on a pro forma basis would decline from the 6.62 times to 6.21 times. Operating Company leverage would go from 5.75 times down to 5.26 times and senior leverage would be a mere 0.83 times. To put in perspective how meaningful this is, you would have to go back to December of 2000 to find leverage numbers this low. So today we have a very much improved and stronger credit profile than what you have seen in the past. After the repayment of term debt from the KOVR sale proceeds, our bank facility outstandings are only $92.5 million. We are currently in the process of refinancing our bank deal to benefit from more favorable current market terms and the now lower outstandings.

We expect the facility to close this month and then we will be able to discuss more fully with you the terms of the refinanced facility. In response to our improved credit profile and anticipated bank facilities, Moody's recently upgraded our senior secured debt from a BA-2 to a BA-1 and upgraded our outlook from negative to stable. Steve Marks will now take you through the operating performance.

Thank you, Lucy. Good morning. On a monthly basis time sales were down 2.6% in January, up 4.6% in February, due primarily to the Super Bowl and down 4.6% in March. For the quarter, local time sales were up 0.03% and national was down 3.5% due primarily to the absence of political dollars. Categories that showed increases in the quarter were schools, medical and services, while telecom, fast food, home products and movies were down. Auto, which represents about 25% of our revenues was down only slightly at 0.06%. On an excluding political basis, our ABC's, FOX's, and UPN's were up while our WB's were down.

Revenues generated through our new business initiative was 5.4 million as compared to approximately 3 million in the same time period last year. We had a very good February rating book and the early fringe through primetime day parts ratings for adults 18 to 49 were up 19% on our ABC's. In comparison, other ABC station operators in the top 100 markets were only up 7%. Our FOX stations indexed even with other FOX operators growing roughly by 3%. Our WB and UPN stations were down 11% and 23% respectively, which was in line with other WB and UPN operators in the top 100 markets and reflective of the network performance in primetime. With most of our markets reporting results, indicating that we grew share in first quarter.

Turning to our second-quarter outlook; from a category perspective, we are currently seeing strength once again in services, entertainment, and medical. While again, telecommunications, movies, and fast food continue to show softness. In the automotive category, Chrysler and Ford are showing weakness. We are not expecting any meaningful amount of political dollars in second quarter as compared to last year when we booked just shy of $4 million at 3.9 million. From an affiliate standpoint, on an excluding basis, our FOX stations are pacing up. Our ABC group is flat, and our UPN, WB stations are pacing down.

Current pacings including political are down 1.4% in April, down 0.6% in May and down 8.1% in June. We do expect June, however, to improve from its current pace. For the quarter, we are forecasting net broadcast revenues to decline by approximately 1% to 2%, off of a base of $167.1 million last year. And for TV production, SG&A expenses to decline by about 3.3%. With that, I would like to open it up to questions.

Thank you, sir. [OPERATOR INSTRUCTIONS] Our first question will be coming from Victor Miller of Bear Stearns.

Good morning. May I ask a question on expenses, please. You obviously are doing a good job in first quarter and second quarter on your expense growth, which obviously is one of the issues that has plagued you in the past. So if you could talk about two aspects. What is driving the decreases in expenses that you have given for second quarter? And on News Central, as you look to an investment that is probably costing you $8 million to $10 million a year in EBITDA a year to continue that. At what point do you think you have enough ratings to get breakeven and at what point you decide this isn't working and the $8 million to $10 million of incremental EBITDA by shutting this thing down is probably worth it? Thanks.

Victor, the - - what's driving the current expense improvement is primarily coming from our direct mail initiative. We are improving the margins on our direct mail significantly, almost - - as each month goes by. I have talked in the past how those margins have ranged in the 20% range and of some our best performing stations, approaching 60%. And what we are seeing now is that our lowest margins in that category have reached - - have moved into the 30% range. So our expenses have really - - are being affected by the impact of lowering our costs associated with the direct mail piece.

And then just a very close and diligent focus on our expenses on a day-to-day basis at the station level. And in terms of the news, a little color and Steve will add some of this as well. We're focused on the news operations. We are focused on what the costs of those are. And as I mentioned - - which I've mentioned in the past, the February's rating book has shown some improvement in terms of ratings. So we are very focused on what the value of those properties and those - - that news - - those news operations are to us. But we haven't made a decision as of yet as to what the next step will be.

Well, we could appreciate how long it takes to build a news operation and take - - I would like us to take a look at our first sign-on which is Flint, Michigan. Which is a diary market and not a meter market. In February, the last rating book to come out, our 10:00 news in adults 25 to 54 actually beat the NBC television station in the marketplace when comparing our rating to theirs at 11 p.m. We popped a 2 rating in the demo, the NBC station there is doing a 1. And that operation, which was our first operation to sign on, is now going into its third year of operation.

So you can appreciate that it takes time to build these franchises. And we are building them on obviously WB television stations for the most part. So at this particular point, there's not a day that goes by that we don't sit down and talk about how to continue this growth. We are seeing pockets of growth as Dave Amy just mentioned in the most recent rating books. Albeit slow growth but nonetheless growth. Most of these markets we are doing News Central, 70% of them are showing demo growth from book-to-book and year-to-year. So at this particular point, we sit in a room and we discuss what is the next step in how to make this indeed more profitable at a quicker pace. And those are discussions that are go on an ongoing basis.

There's another angle to this thing that we haven't spent a lot time talking about which is worth mentioning now: And that is with the advent of the multichannel world and broadcasters having the ability to become multichannel players in every market. Either by virtue of over the year distribution or by virtue of cable distribution. Which I am sure you have seen we have announced our transaction with Comcast causes us to have the ability to become a multichannel player in every one of our markets where we have a relationship with them. And I am sure it isn't lost on you that all the major networks, as well as all the major broadcasters are trying to figure out what to use on those additional channels should they so decide. And I think one of the things that is interesting to us is the idea that we could use our infrastructure to become a content provider in every market we have multichannel capacity to provide news on a rolling basis. So that is essentially done at no real incremental cost to us because the bodies and structure and equipment and everything is in place. So it's something that we are - - from a longer-term perspective looking at as a large valuable asset that the can provide some significant opportunities for us. Not only in the context of news but in the context of weather.

I am sure you have probably seen some reft leases about NBC wanting to use its affiliate body to start a weather channel. I would tell you - - I can't tell you whether you can make money from that or not. All I can tell you is we have the exact same capacity they do. Downstairs we have our News Central operation. An therefore, have the complete capacity if we decide to do that to go do that tomorrow literally. And it is something we are looking at on a constant bases and when we decide to go, we will go. And we will announce it.

Thank you very much

Our next question will be coming from Shawn Feely of Credit Suisse First Boston. Shawn, your line is live.

Hello? Hello?

Yes. Hey, shawn.

Hi, how are you. I have a quick question here. Just - - as you guys - - I apologize I just jumped on the call. So, I am sorry if you already answered this. But it looks like your expense outlook for the rest of the year, you are looking for expenses down a little bit in Q2 and then down a little bit for the year. What is - - what's driving the underlying kind of lower expense kind of outlook for the year?

Victor just asked that question.

My apologies.

That's okay.

And then my other question was just on the revenue side, you came in - - you guided it to down 2 and you came in kind of down 0.8. What was there any particular category strength? And specifically - - the auto category, maybe you can talk a little bit about that and whether or not - - and what you are hearing and seeing from kind of domestic manufacturers as they look at their spending patterns for kind of the second half?

Well, the first quarter of the auto category for us was virtually flat. We were down slightly. And certainly benefited from having so many FOX affiliates with the Super Bowl. Second quarter, we are not going to be as fortunate as first quarter in terms of pace up against 2004. And we are seeing virtually almost every manufacturer in terms of factory money, at least in the Sinclair markets are down for second quarter. Not substantially but nonetheless down. And we haven't really got a pace for third quarter yet because most manufacturers are placing money on a quarterly basis this year as opposed to last year with the political placing it up front. But at this particular point, we were flat for first quarter virtually, just slightly down. Second quarter, we will not be as fortunate. And I would think that third and fourth quarter probably would fall closer in line to second quarter.

I think one of the - - when you talk about the categories, one of the areas that we are finding some strength in is entertainment. The entertainment area and that has really worked to our benefit to offset and mitigate the softness in auto to a great degree. So that helped us out quite a bit in the first quarter. We were also down in the - - sort of a telecom cable area in the first quarter and that's coming back in the second quarter. And starting to match up against last year.

Great, thanks.

Our next question will be coming from Ken silver of CRT Capital Group.

Hi, good morning. This may be a review but do you have the 2004 revenues, and broadcast cash flow for the Sacramento station. Have you broken that out? And can you if you haven't?

Ken, we actually had that up on the Website.

Fine, I will look there. And then just one quick - - one follow-up. And I guess - - this is more of a general question about the sort of the M&A environment. Everyone we talk to and hear on conference calls says the environment is uncertain for a variety of reasons. But yet you guys have managed to sell one big station and at least one other smaller station. Can you talk about why you think you have had success where others haven't? Is the bid ask spread on other stations just too wide or maybe just whatever you want to talk about that?

Sure. The - - this is sort of; if there is a will there is a way in a lot of regards. And we've always had a personality in that culture that exemplifies that and our approach towards what needs to be done in the markets. We haven't been shy about the real need for the smaller markets in this television broadcast spectrum to be able to come together and put deals that make sense. And we can point to examples here that Peoria, Illinois, Tallahassee, Florida, et cetera. where it's just very, very difficult to compete and make a profitable result. And we - - even though we have implemented and used the joint sales agreement in that regard where it has benefited both parties.

And we've stayed well within the SEC guidelines in doing that. And we just have that kind of personality. And I think you can see that emerging in some areas. And like you are saying, most have been that you talked to are sort of more conservative in their approach. But when you take a look at Kansas City and the deal we did with Meredith who has been a traditionally conservative company, even they see the opportunity to come in and put a deal together that really helps them competitively in a market such as Kansas City. Where they are up against a FOX and they are up against Hearst-Argyle in determines of a duopoly et cetera, et cetera. And you have to be able to battle that out in your markets. So approaching that and being creative is really the answer I can give you that way. So, we are willing to entertain that.

One quick follow-up. In the past I think buyers have been willing to pay up for underperforming stations under the guise that they can improve them significantly. Do you think that's still the case? Or has that changed?

The difference between a single station and a duopoly station is quite different. Our single station markets where we do not have a duopoly where we have a WB or UPN by itself, our margins are in the sort of the 10% to 15% range. When you take that station and combine it with another station, those margins double or triple. So it's just a very powerful way to change the dynamics in the performance of the station.

Thanks.

Our next question will be coming from Lee Westerfield of Harris Nesbitt.

Thank you, good morning, everyone. I have a question on the direct mail business. In the fourth-quarter conference call you mentioned that in 2005, you would be focusing more attention on specific markets. Pulling back on the number of markets overall where you are doing direct marketing. I wonder if you can elaborate on that this year? And specifically whether that has a material impact on the margins in the direct marketing business and your outlook for it for this year in terms of profitability? And then - - I know you asked for one question, but this is such a short one. Lucy, if you can provide a program cash payment projection for the year, in addition. I think you provided the amortization outlook for the year as well.

Well, to answer the direct mail question, as you can tell by our release, our first-quarter performance up against last year's first-quarter performance was up substantially by over $2 million. We suspect that second quarter will be at least that amount again. In terms of the actual printing, this is a focus that we have in terms of selling and the printing factor as it pertains to first and second quarter. We have, in fact, cut back the amount of this year's that we are mailing. Our profit margins for first quarter are exceeding expectations and have certainly helped expectation and we are making this a very profitable business for us. In terms of the emphasis, the emphasis hasn't changed. We have every single one of our markets participating in this. And as you can tell by the results year to year, we are starting to hit a rhythm here that is sending in quite a bit of cash for us. The expenses are in line. And again, meeting and beating our expectations.

Lee, for the program contract payments, we reported in the earnings release this morning we expect second quarter to be 26.8 million and for the year 104.6 million.

All right, thank you very much.

[OPERATOR INSTRUCTIONS] Our next question will be coming from Barton Crockett of J.P. Morgan.

Okay. Thank you very much. I wanted to ask a question tied to use of your free cash flow. I mean, you guys are upping your dividend which is great to see. But I was wondering if you could talk a little bit about share repurchase? In particular, I mean, one could hypothesize given your success in selling stations that it wouldn't take much more station sales to fund a repurchase of much, if not all of the outstanding float. And I was just wondering if you could talk about how you guys view that as a possibility? Obviously there is strategic benefits to having shares which could be used as acquisition currency. But you've also commented about how you see the markets basically undervaluing the assets relative to private markets. And so you might see your shares as a bargain at these prices. So if you can comment on that? I would appreciate it.

We have been beating a drum consistently about the value of the public market equity and the common shares. We thought it was a great buy at $13 a share. So certainly when it is down here at these levels at $8 and less, it is very, very attractive. And we really can't understand why it is sit at these levels especially when you consider the value of the private market values and that tax affected that. And just as we said before, fully liquidated value of our comment on it, that if we sold the Company that, after tax, would probably be $10 to $12 a share. Absolutely we see this as a very important value in terms of taking the potential opportunity we see in regards to buying back our equity. And that is the question we are getting as far as; how much of the KOVR proceeds will be used to reduce debt, how much will be used to repay dividends. How much will we use to buy back stocks. So, certainly those are all important issues.

We have indicated that for the time being, we are paying down debt. But we are not going to sit back and allow us to sort of pass on this opportunity that we see in terms of the price of our equity. But I am not going to tip our hand as to when you will see us in the market and to what degree. And with that statement, the idea of going private is certainly one that you are suggesting and one that hasn't been lost on us. But overall, if we were going to make that kind of announcement, we'd be talking and directing everyone in that direction. But we are not making that comment today. We are not announcing that we are going private. So that's not on the table at this point.

Okay. But just to follow up to be clear. Do you see value at this point in continuing to have shares that are publicly traded?

Yes, absolutely. To just turn around and say take the Company private, it would be at a premium from the $8 a share. We would have to either bring in a sponsor to replace the public market or we would have to fund it through very expensive debt. And really strap the Company's balance sheet and our flexibility to compete in this - - in the marketplace, in such a way that wouldn't make a lot of sense to us. This business is getting tougher and tougher every day. And it is very important for us to have a strong financial balance sheet to be able to do what we need to do to handle that. And the last thing that we want to be faced with is a situation where we cannot react to the dynamics of the market.

We've invested well over $150 million in our digital operation. And as Dave mentioned earlier, that's just - - at this point notes on a piece of paper as far as what can be accomplished in regards to digital. So I expect that we will see more and more investment in our digital spectrum. But that opportunity to grow that business is significant. And the last thing we want to be is sitting back wishing we had some money to be able to take advantage of that opportunity. So, no, I don't see us strapping the Company and putting ourselves private just so we don't have the public as our partner.

Okay. Great. Thank you very much.

Our next question will be coming from Sean Butson of Legg Mason.

I guess the first thing is, Dave, you were talking about how in your opening comments on national and other revenue came in better than expected. And then later on how entertainment was strong.

Versus your original guidance and what you guys did just to be clear on the revenue side, was it the entertainment category that pushed you up above what you were looking for? Or were there some other things in there as well? And then secondly, I know you have confidentiality agreements with your cable and satellite partners. But is there any info overall, not specific by cable or satellite Company, but maybe for the total Company, any sort of info you can give us towards cash compensation that you are getting retrans from them? Thanks.

On the category subject, we did see growth as Dave mentioned in the entertainment area but we also saw significant growth in packaged goods. As we mentioned we managed to pretty much hold our own on automotive and certainly the Super Bowl didn't hurt us in first quarter. And when you take a look at our performance in first quarter overall from all the audits that we have received so far, which are substantial, the Company grew share. So I attribute that quite frankly to utilizing our LMA's in a lot of these markets. Where category spending may have been down, we used the shelf space of both television stations to margin share on particular buys to able - - further our revenues. So although some categories may have been sluggish, we were able to package up both television stations and offer more spots for higher shares.

As far as the - - any specifics in terms of the retrans. We are not allowed to discuss any specifics. I think most of the deals out there have the cable and satellite companies have with other broadcasters have most favored nation-type clauses in there. So it is very important that the specifics are not disclosed to anybody. From that, just - - we just can't talk about it.

Okay. Thanks.

Our next question will be copping from Bishop Cheen of Wachovia Securities.

Good morning, everybody. As usual you laid out everything in detail. If you were to make the decision to maximize shareholder value and go private, is there a comfort level on your leverage that you would have?

I don't think it is really an issue, Bishop, because I think as David said, I think - - we are at a stage now where with having sold Sacramento, we are at one of the lowest leverage points we have been for quite a while. Given that there are what we think are significant long-term opportunities in the context of the multichannel world, we don't necessarily want to move in the direction of leveraging up and going private and then deprive ourselves of those business opportunities. It just doesn't make a lot of sense to do that. So I think we are very content to sit where we are right now. And if we have to make an investment, we have the capacity to do so, and rolling out one, two, three, four, five channels or whatever it happens to be. Or partnering with other people to provide distribution on content, those type of things. So, I just don't think we are really inclined to want to explore that capability right now, that possibility right now.

Thank you, David. That's very helpful.

Our next question is coming from Jim Boyle of Wachovia.

Good morning. David, if Les Moonves uses the CBS LMO's for a retransmission icebreaker do you think that will break the stalemate? And as a followup, Lucy what is the frequency of the direct mail drops and the average per revenue drop now please?

Well you are know, it would be - - it would really be fitting, I think, for CBS and Les to use their platform to be an icebreaker. Especially given when you go back, and if my history is correct, you go back and look at the history when CBS was owned by - -

Larry Tish.

Larry Tish. And he kind of - - at least my recollection is; kind of single-handedly went to Congress and got this renegotiated retrans must carry type legislation through and then promptly sold his business. And wasn't able to take advantage of it which was kind of a sad thing. But I think it would be really appropriate now for Les to use his CBS's to go to the cable industry and say you are know what, I am not really hooked up with all those other cable channels anymore. I am just a stand-alone broadcaster. And you are going to have to pay me. And I think it would be a wonderful thing because I think it would certainly break the ice. And we would certainly look forward to taking advantage of the opportunity. And I wish I could sit here today and tell you how much money that is and what it would mean to us as a Company to be able to finally get paid what we are worth. It would just be a staggering amount of money, and my sense is that that day is coming. But it isn't coming at the rate of speed everybody would like but clearly competition is going to cause that to happen. So just stand by.

Lucy, direct mail?

Actually I'm going to have - - Steve is going to answer that one for you.

Hey, Jim.

Thank you.

Basically what we look at, Jim, on a -- it is market-by-market basis based on whether we are mailing monthly, mailing at all, or mailing quarterly. So it is really based on each market's performance. In terms of a monthly number, we really look at it on a quarterly basis. And as we said in first quarter, we generated over 5 million, and we expect to average somewhere between 5 million and 6 million per quarter. Which would put us substantially ahead of where we were last year.

Is there a full year budget for it?

Again, it is a work in progress. Of course there is a budget for it. And right now we are pretty much on line with our expectations and exceeding our expectations in terms of the profit margin.

Thank you.

Gentlemen, there are no further questions in the queue at this time.

Well, thank you, everyone. And have a good morning.

Thank you, ladies and gentlemen for participating in today's teleconference. You may disconnect your lines at this time and have a wonderful day.