SK Telecom Co Ltd (SKM) 2009 Q2 法說會逐字稿

(interpreted) Good afternoon. Welcome to the conference call for the fiscal year 2009, second quarter earnings results for SK Telecom. This conference will start with a presentation followed by a Q&A session. And now we will begin the conference of the fiscal year 2009 second quarter earnings results by SK Telecom.

(interpreted) Good morning. Good afternoon. Today's conference call will consist of the earnings presentation on the second quarter 2009 by SK Telecom's CFO, Dong-Hyun Jang, followed by a Q&A session.

To assist with the call, Head of MNO Planning Office Dong Sup Ji and Head of C&I Planning Office [Se-Hyun Oh] will also attend the conference call.

The conference call will proceed with consecutive interpretation. Let me also remind you that all the forward-looking statements are subject to change, depending on the macro-economic and market conditions.

Now let me present our CFO, Dong-Hyun Jang.

(interpreted) Good afternoon. My name is Dong-Hyun Jang, the CFO of SK Telecom. I would like to thank you for taking part in today's earnings conference for the second quarter 2009. Let me begin with the earnings highlights for Q2, 2009.

Revenue for the second quarter recorded KRW3,067.9 billion, supported by the subscriber growth, expanding by 4.7% year-on-year, and 6.7% quarter-on-quarter.

Wireless Internet revenue reached KRW671.2 billion, representing an 11.8% increase year-on-year, and a 7.4% increase quarter-on-quarter, with an expanding number of data price plan subscribers. [That] there has been such robust growth in spite of year-on-year revenue reducing factors such as the transfer of the MelOn business, reconfirms the overall growth potential of the wireless Internet business.

Marketing expense was KRW948.6 billion, which went up by 8.3% year-on-year, and by 43.6% quarter-on-quarter. The aggressive marketing activities by the competitors and our measures to deal with the competition led to an overheated market, pushing up the acquisition cost per new subscriber significantly. As a result, the marketing expense to revenue ratio reached 30.9%.

Operating income rose by 3.8% year-on-year, and edged down by 1.9% quarter-on-quarter, to record KRW553.4 billion. Despite the marketing expense increase, operating income edged down only slightly compared to the previous quarter, led by the revenue growth and other factors.

Net income was KRW311.6 billion. It was a 4.6% rise compared to the previous year, and a 1.6% decrease compared to the previous quarter.

EBITDA recorded KRW1,012 billion.

The total CapEx, including the WCDMA capacity expansion and quality upgrade investment, amounted to KRW319 billion. The accumulated total spending for the first half was KRW667.4 billion.

That was the earnings highlights. Let me now comment on the management environment as well as the strategic direction.

The mobile telephony market during Q2, went through an unprecedented competition, fueled by the aggressive marketing efforts by competitors. However, SK Telecom was able to further solidify its market leadership by proactively dealing with the competitive pressure.

SKT's commitment towards market stabilization has not changed. SK Telecom will not be triggering an overheated marketing competition before other competitors in any case. Nevertheless, we will proactively counter offensive moves by our competitors to make sure that the intense competition experienced in the first half of 2008 will not be repeated. We believe the market will stabilize again during the second half, based on such experience.

SK Telecom is maintaining its market leadership in its core business areas through continuous network quality upgrade, distribution efficiency improvement and customer centric management among others. We also plan to pursue consistent growth of the wireless Internet business by strengthening the fixed mobile convergence services by expanding the smartphone line-up and by diversifying the data tariff plans, such as integrated price plans comprising data call charges and information usage fee, like data zone free price plans.

While focusing on further strengthening the fundamental competitiveness, SK Telecom also plans to continue securing new growth engines.

The 11th Street, which was launched last year, has achieved stellar performance by emerging as a major e-market place player, with a monthly transaction volume of KRW130 billion in less than a year since opening.

Going forward, SKT plans to open [T-Store] to embrace the global trend that is the widespread usage of smartphones and app stores. We will also enter into the Smart Grid business, which optimizes energy efficiency by leveraging ICT on the existing power grid. Mobile telemetric platform development is one of many new business platforms we will be developing.

Through these efforts, we will continue to repeat the meaningful success.

Leveraging the ICT capabilities accumulated through various businesses, SKT seeks to create additional value by actively contributing to the productivity enhancement of other industries. Through such efforts, we will further expand the business scope to include not only the saturated retail market, but also the corporate market.

We will also continue the pursuit of new growth opportunities in the global market, and establish ourselves as the global ICT leader.

In the pursuit of new growth, SKT will start small and scale fast in order to minimize risk and ensure continuous growth.

Lastly, I would like to touch upon the shareholder return.

We plan to maintain the similar level of cash dividend for 2009 as the previous year, including the interim dividend, barring extraordinary circumstances. The interim dividend has been decided at KRW1,000 per share as last year. The BoD is expected to decide on other shareholder return policies flexibly, considering the market situations and management environment.

During the first half of 2009, SK Telecom has put in great efforts to ensure mid to long-term survival and growth platform. We promise to do our utmost to reap the fruit of all these efforts.

Lastly, I would like to thank all the investors and analysts once again for your unwavering interest and support for SK Telecom. Thank you.

We will now begin the Q&A session. Please go ahead with questions.

(interpreted) Now Q&A session will begin. (Operator Instructions).

The first question will be provided by Jong-In Yang from Korea Investment & Securities.

(interpreted) I have the following two questions. Recently there has been some talk in the market that soon iPhones will be introduced to the Korean market. So on one hand that could mean that the handset subsidy burden will rise; on the other hand it could also mean that data usage will increase in the market as well. So I would like to ask what SK Telecom's iPhone related strategy is?

And relatedly, recently in Korea, the smartphone usage has been on a rising scale. Therefore I would like to ask you how that will impact the market going forward?

And the second question has to do with your global business. There has been some report in the market that SKT is taking part in the bidding process for a mobile telephony operator in Kazakhstan. So does that mean that aside from the US, China and the Vietnamese market, SKT is willing to enter into yet another market in order to faster growth?

(interpreted) Let me first answer your question regarding the global business.

SKT, in terms of the global business as well believes that ICT technology will be the future growth engine regarding the convergence business going forward. So with such ICT capabilities and the technologies available, we hope to enhance and develop the productivity and efficiency of the Company. So that's one of our core strategies.

So, based on that basic strategy, we will be abiding by the basic principle that I have shared in the beginning of my opening remarks to start small and scale fast.

With regards to the MNO business we believe that MNO related investments is yet one of many options available for us and which is open to us. And again in the MNO investment area as well, we will abide by the basic principles to start small and scale fast.

Regarding the recently reported Kazakhstan related matter, I would like to remind you that we are in a very infant stage in the review process of the viability of this business. So there is nothing significant yet that I could share with you today and it's still in the beginning stage.

And regarding the Kazakhstan related investment matter, we will certainly abide by the existing stance that we will only make the positive decision once we decide that such an acquisition or participation will add value to SKT as a Company.

(interpreted) Yes, I am the Head of the MNO Planning Office, so I would like to answer your question regarding the iPhone related strategy. Of course, SKT is currently reviewing the possibilities of introducing iPhone and we will have to look at the needs of the subscribers, as well as the smartphone market environment and also the rest of the SKT related handset line-up portfolio and also we have to look at the viabilities between the operators in the market.

So, once these iPhone type of smartphones are introduced to the market, as you have so correctly pointed out, there is, of course, that pressure for upward movement of the subsidy. However, I believe that if the operators, like us, pursues the market in a very stable manner, I believe that we could prevent the overheated competition in this market as well.

And, if you look at other global cases, in the case of iPhone introduction in each of the global markets, I believe that there has always been a combination of providing subsidies, together with the mandatory price plan contract system for the new subscribers. So I believe, that in return for the subsidy, by securing that mandatory contract of the subscribers, I believe that we will have the revenue trade-off possibilities.

Let me elaborate just a little bit, if we are simply supplying such smartphones, in line with the demand that exists in the market, we might not need to expend so much subsidy related expenses. Whereas if the operators start over-supplying the smartphones against the limited demand coming from the market, then it might require further subsidy infusion. But, in any case, as I mentioned before, we have to consider the mandatory contract price plan effect, as well as the ARPU, which tends to be higher on the smartphones, when we do the calculations. So it has to be more multi-faceted calculations.

And, for your information, we have data available that says that smartphone related data ARPU tends to be twice as high as the regular handsets and we are still in the beginning stage of the smartphone usage in the market. So, looking ahead, as we begin to enable more web surfing available on the smartphones, as well as providing diverse applications for the smartphones, then we could even expect even higher uptake on the ARPU side.

(interpreted) The following question will be presented by Kim Hongseek from NH Securities.

(interpreted) Yes, I have the following two questions. First of all my first question has been slightly touched upon by the previous questioner, but whenever SKT related M&A news comes out to the market, rather than playing as a positive effect, it always tends to press down on the share price, I believe. Of course, you mentioned that your principle is to start small and to scale fast, so, in that case, does it mean that you will not be considering any mega-size acquisition going forward?

And, relatedly, aside from the telecom players, is there also a possibility of SK Telecom acquiring a non-telecom related company going forward?

And the second question has to do with your market share. The market currently is quite saturated, so I'm wondering whether maintaining the 50.5% market share target for SK Telecom in the long run would have a strategic meaning? In other words, is it worth keeping that line of market share even at the price of sacrificing some of your profit?

(interpreted) Let me first answer your question regarding the M&A issue. Currently we have no project in mind at the moment in the pipeline, which can be called a very large sized acquisition. As part of the growth strategy of our Company we are not only looking at the organic growth, but also inorganic growth and, in line of that strategy, there is also that possibility that we could possibly conduct an M&A in a non- telecom area. However, at this particular juncture we have no M&A related issues that are specific enough that we could share with you.

Let me now move on to your other question regarding the market share of 50.5%. Basically, at SK Telecom we have the baseline principle that we have to maintain the 50.5% market share. By making sure that the market dynamics are quite stabilized with that type of market share target and once we establish that position, I believe that, ultimately, that will contribute to the profitability of the Company.

(interpreted) The following question will be presented by John H. Kim from Merrill Lynch. Please go ahead.

Yes, thank you for the opportunity to ask questions. I have two. First, is regarding your tariffs. How does the management assess performance of some of your pricing strategies that have been introduced over the past couple of years, such as on-net tariff cut plan-- discount plan? The original expectation was that it would help improve consumer satisfaction regarding tariffs and also help lower churn rates. But, if you look at your Voice ARPU trend since, it is trending down, but it feels as if the public satisfaction with tariffs remain low and periodic noise regarding tariff cuts persist. So why does the management believe such a perception linger? I would appreciate your view.

And, second, if SKT were to make overseas investments, can you share what would be different about your approach for your upcoming projects, compared to, for example, your US investments in the past? If you can please share what lessons you've drawn from it, that would be helpful. Thank you.

(interpreted) Let me first answer your question about the tariff plans. SKT has been launching various types of price plans available for different segments of the customer groups. And, in line with that, we have introduced various types of mandatory price plans, as well as discount offerings and, internally, we believe that this pricing strategy has been quite effective.

Especially regarding the mandatory price plans contracts, such contracts tend to contribute greatly for reducing the churn rate, therefore, enhancing the retention effect. And we do have data available to support that and, more specific data can be accessed through our IR department separately.

And also going forward in the market we expect continuous application or launching of various types of price discount plans such as on-net discount and family discount and other types of bundle offerings between the fixed and mobile services.

Next I would like to comment on the lessons learned through the investment in the US market.

As I mentioned earlier in my opening remarks, SKT's global strategy has gone through a major change since the beginning of this year. Rather than simply focusing on the MNO business and the large-scale M&A opportunities or just simply focusing on the Greenfields development, we decided to focus on the ICT capabilities and look at such opportunities in a bigger framework of convergence. So, as I mentioned before, the principle of starting small and scaling fast will be the resounding principle.

It means that, in order for us to make a decision on a large-scale investment, the Company will have to have some certainties about the viability of such project and go through various validation and verification processes, after which we make the final large investment decision.

(interpreted) The following question will be presented by Mr. Mitchell Kim from Morgan Stanley. Please go ahead.

Yes, hi, I just have one question. I just wanted to ask CFO Jang, what's your outlook for a competitive situation in second half of the year, perhaps maybe a little longer, maybe including first half of next year? If you could just give us what could be the best case scenario and also the worst case scenario. That is, if we do see a competitive situation like second quarter persist, how long could that persist? And again, on the other side, how good can we see more improved outlook? Can we see marketing sales close to 20% of sales? Is that the best that we could expect? Any color on this would be very much appreciated.

(interpreted) I will first address your question regarding the profitability related to the marketing expense used for the rest of this year and also next year and I will comment on that. And it will be followed by the Head of MNO Planning Office answering your questions about the market competition.

As a CFO, I believe that, even in the worst case scenario, our profitability going forward for the rest of this year will not be worse than that of last year. That's my personal target as well. So regardless of the market climate changes, we will work to protect the profitability targets.

(interpreted) I am the Head of the MNO Planning Office. As you are well aware, the second quarter was quite overheated in the market, -- however, if you look at the past three years' historical figures, each second quarter was always overheated in terms of competition.

Frankly speaking, as the operator, or many operators in the market that is, when competing in the market they do consider payback period for the subsidies which have been paid out. In other words, we have to look at the payback period, through which we could gain back in terms of the tariff payment by the subscribers in return for the subsidy that has been paid out.

So, for example, let's say the payback period is about a six to seven month period, then there is a high likelihood that we -- all the operators, would have limited capacity to spend too much in the second half. So if you look back at the past three year period, each third quarter saw a stabilizing market trend. However, this [year] around, compared to the past three year period, there is a strategic difference that exists in the market between the market operators.

As our competitor's' strategic stance changed, unfortunately, we have seen an overheated market, even through the month of July. So under the optimistic scenario I would say that by August the market should stabilize. But my personal view, frankly, is that up to Q3 we might see some action in terms of intensified competition going forward.

(interpreted) The following question will be presented by Sean Lee from Citigroup. Please go ahead.

(interpreted) I have the following two questions. It's been two months since KT has merged with KTF, in the last conference call, you have mentioned that competing against the newly merged KT would be more competitive compared to just competing against the existing KTF of the past. So now that you have experienced the newly merged KT for the past two months, I would like to know, in terms of competitive environment or dynamics, is there anything that's different as opposed to before experiencing the competition or after experiencing the competition, so could you comment on that?

And the second question has to do with the iPhone, yet again. I believe that KT too is reviewing the possibility of launching iPhones, so should we assume that only one of the two operators, that is between KT and SKT will be launching iPhone? Or with some time lag, one company will be introducing iPhone maybe two, three months ahead of the other competitor, is that the scenario that is most likely?

(interpreted) I will address your question regarding the competitive landscape after the merger between KT and KTF and it will be followed by the answer given by the MNO Planning Office Head on the iPhone related question.

It's been two to three months since the merger between KT and KTF but at this particular juncture, I do not think that the full-scale competition has begun with the newly merged KT. SKT has been fully preparing to deal with the full-scale competition with the merged KT, so as way of such effort, we have reorganized our structure to introduce a new division for corporate business. And we are also closely collaborating with our other related companies such as SK Broadband and SK Telelink in order to fully prepare for a such full-scale competition. So such preparations have been complete.

But as I mentioned before, basically, rather than focusing on the unnecessary and unproductive competition in the existing market only, I believe that we should compete on the quality so that we could, together, create a bigger pie for the convergence industry. And as I mentioned before, we will leverage the ICT technologies in order to maximize industry related productivity. So therefore, in line with that, we will focus on the corporate market more.

(interpreted) I'm the Head of the MNO Planning Office and let me answer your question on the iPhone introduction. As I told you before, we are considering various factors relating to the iPhone introduction for our Company. But the introduction of such a handset to the Korean market would be completely up to each operator, therefore I cannot, at this point, comment on whether two companies will introduce it together or with some time difference. So I don't think that it would be appropriate for me to address that question here.

(interpreted) The following question will be presented by [Jay Park] from Samsung Securities.

(interpreted) Yes, I have the following couple of questions. Regarding the marketing related competition in the market earlier, you mentioned that there is a likelihood that the overheated market situation might continue, even into the third quarter. But if we look at the new subscriber related marketing expenses for the month of July, compared to May and June, it seems to be coming down somewhat, although it is still higher than the figure from April. But nevertheless, it is coming down it seems. But nevertheless, you said that it could even heat up through the third quarter as well. So does it mean that you expect the market to intensify in terms of competition through the months of August and September?

And also, the subsidy related competition seems to be turning into some type of price war so I would like to ask you to comment on that as well.

The second question has to do with the ICT-based convergence technology and how you plan to focus on the convergence businesses all together. However, we don't really get a clear sense of what this is, so are there such needs coming from the corporates and if so, what are those needs? And also, at what timeframe did you internally confirm the viability of this business model?

(interpreted) I will answer your question regarding the convergence strategies based on ICT and then the MNO Head will be answering your questions about the marketing competition.

Actually starting in June we have launched a separate independent division within SKT in order to cover the ICT-based convergence strategy.

Within this newly established organization there have been various assessments and analysis about various industry needs out there. And so they have held intense conversations and discussions with various players from the retail industry, the logistics and also medical, education and energy and even financial area. So they have met with various players as well as organizations to identify that there exists quite a bit of need from these industries. And we have also come to realize that there definitely exists a business model to provide ICT support for so many SMEs out there in the market.

Our Company already owns quite a bit of software solutions, and applications and using such capabilities that we already have, we came to the realization that there, we could provide a lot of support for these needs coming from the companies.

Also going forward we will continue to make the necessary analysis and surveys about the productivity enhancement needs in other related industries and we will also work on developing more specific business models as well. So once such efforts are completed you will be beginning to see more specific SKT business models that are based on ICT technologies available for the convergence areas.

(interpreted) Yes, I'm the Head of MNO Planning Office. Regarding our marketing strategy, as you are well aware, our basic principle is never to initiate an overheated marketing in the market unless the competitors take on a very offensive stance. So in the operation of our business in the market, we will be therefore reacting to such competitive pressure. However, when we do deal with such pressure we will be quite firm and adamant.

Thank you very much for your question regarding the outlook for the third quarter. Actually, within the SK Telecom as well, we do believe that the competitive pressure in the market will begin to ease into that period. The only question is how fast it will stabilize. Will it come down quite rapidly or is it going to be just a gradual easing of the market pressure, is the question. But we should keep in mind that all the operators are expressing their commitment to stabilize the market as soon as possible, therefore there also exists that possibility that the market stabilization will take place sooner than expected.

(interpreted) The following question was presented by [Tien Xuan Doe] from GIC. Please go ahead.

Hi, good afternoon. Thanks very much for the opportunity to ask some questions. Just a couple of questions. On the handset subsidies, you mentioned that operators are aware of the payback period. But what do you think the payback period was for your handset subsidies that you offered in the second quarter? And where do you think -- where would you hope that to be by the end of the year?

And the second question is just on CapEx. You've been spending about KRW300 billion one-off CapEx a quarter, how long do you think that can last for? And, say, over the next two years, what are the major CapEx projects that you've got in mind? Thank you.

(interpreted) Your question regarding the payback period will be answered by the Head of MNO Planning Office. So I will, first of all, address your question on the CapEx.

First of all, compared to the CapEx extended in 2008, if you look ahead to 2009 and 2010 there is very low possibility that the CapEx will increase significantly. You asked about the major CapEx item going forward, definitely in order to further upgrade the network quality we will be most likely focusing on the WCDMA related investment.

(interpreted) Actually, regarding the detailed payback period for the subscriber acquisition costs paid out to each subscriber, such detailed numbers can be provided for you through the IR department separately. But let me further elaborate what I meant to say earlier in my previous comments.

For example, let's say there is a subscriber and maybe perhaps KRW150,000 was used for the SAC, and in that case let's say that the subscriber pays KRW30,000 per month. If that's the arrangement, it may be for those subsidies that have been paid out in the month of July and August of a year, will not be captured as part of revenue within that very same year. That is why I meant to say that in the second half, typically, the subsidy payout tends to slow down somewhat.

(interpreted) The following question will be presented by Sam Min from BNP Paribas. Please go ahead.

Yes, hi. I have two questions. The first is on share buybacks, and you said, even under worst marketing case scenario that you would expect no worse than last year's profitability. If that's the case, then can we hope for a share buyback on top of cash dividends as was the case last year?

I wanted to expand also on capital expenditures. You said that, just prior, that HSDPA capital expenditures will likely pick up the most portion out of your CapEx. Can you tell us what your WCDMA HSDPA CapEx will be this year and next year please? Thank you.

(interpreted) Let me first answer your question regarding the treasury share buyback. As I mentioned in the opening earlier, for 2009 our basic stance is that in terms of the shareholder return, the cash dividend will remain at the same level as the previous year. And on top of that, regarding the share buyback, I believe that the BoD will be flexibly deciding on that matter, looking at the market climate and at the management environment.

Regarding CapEx, as I mentioned earlier, on a year-on-year basis, there is a very low possibility that it will be going up.

And regarding the specific investment amount for WCDMA, because there exists quite a bit of volatility in the market at this point, unfortunately we will not be able to share with you those specific amounts here. When I say volatility-related variables, regarding WCDMA, it is very much dependent on the migration speed of the overall market and the general market sentiment towards WCDMA.

I wonder if I can follow-up on the WCDMA question. Then can we expect your WCDMA investments for this year to be lower than last year? And perhaps next year's to be lower than this year's? Thank you.

(interpreted) Regarding the WCDMA portion only, I believe that on a year-on-year basis, yes it will be a little lower than the previous year this year. But regarding the next year's CapEx for WCDMA, it is very much up to the migration speed in the market so it is quite volatile right now.

(interpreted) The following question was presented by Han Joon Kim from Goldman Sachs. Please go ahead.

Thank you very much. Just a follow-up on the CapEx. So if you do acquire the SK Network -- after the acquisition of SK Networks' backbone network, would not the maintenance CapEx rise next year; just plugging that into your overall CapEx number? That's the first question.

The second question is on the potential reallocation of internal human resources and talent that you have. You've mentioned that you've had a shift in strategy in terms of your investment profile. Because of that, have you hired new people or reallocated internal resources to better focus on having the right people in the right divisions to get execution changed? And if you haven't, then can you give us an understanding as to what type of difference that we could invest in the execution part of the investment if, I guess, we haven't empowered the division a little bit more than before?

And my last question is really on Smart Grid because I think you've been talking about it for the past several weeks, at least. Can you just give us an understanding whether this Smart Grid initiative would actually require better connectivity between the fixed line infrastructure and the wireless infrastructure? And if so, would this potentially require additional investments? And given that I think you've been talking about for a little bit, would you have a perspective on the type of budget that it would require to actually get this deployed? Thank you.

(interpreted) Yes, thank you for your three questions. Your first two questions had to do with the backbone network acquired from SK Networks and how that could impact the CapEx overall. And also you asked about the human resources-related reallocation. And those two questions I will address, followed by the Smart Grid question being answered by the Head of C&I Planning.

With the acquisition of the backbone network from SK Networks, of course it will have some impact on the CapEx. However, as I mentioned before, SKT is managing the overall CapEx pool and as part of that, I could reassure you that the total CapEx amount on a year-on-year basis will not be greater this year compared to the previous year, and that goes the same for next year as well.

Let me answer your second question regarding the reshuffling or reallocation of human resources in line with the new growth strategy. As the Company pursues new growth strategies, it is true that there has to be further know-how and understanding about other industries involved. I'm sure to secure such capabilities, I'm sure probably we could choose different [vaults] however at the moment, SKT is maintaining the strategy that we would utilize the existing human resources in order to identify the needs that exist in other industries.

And in order to have this new opportunity to develop new businesses in various areas, all the employees and management of SK Telecom is trying to instill the growth of culture within the Company. So we are trying to significantly change the systems as well as the mindset. And to that end we do not have any immediate plan to go through a major reshuffling or reorganization of the Company, however internally we are making various measures to strengthen and to expedite the entire system so that we could support this type of new strategy.

(interpreted) Yes, I am the Head of the C&I Planning Office. So to answer your question regarding Smart Grid, this is a mid to long-term project that we are pursuing, so we are still in the very beginning stage, so we are trying to identify various business opportunities in various areas. Therefore, nothing has been concretely or specifically decided on to the level of how much budget we have allocated to enhance connectivity between wired and wireless for instance. So we do not have such detailed information as of yet.

Great, thank you very much.

(interpreted) Thank you for participating until the end of the conference call. All of your meaningful questions and interest will contribute greatly to the improved management activities of the Company.

As mentioned earlier, SKT is doing its best to strengthen the core competitiveness while securing new growth engines. We will work even harder to translate these efforts to improved profitability and shareholder value creation.

Once again, I ask the shareholders for your unwavering support and cooperation in SK Telecom's efforts to usher in a year of new growth for the Company. Thank you.

(interpreted) This concludes the CFO conference call for the second quarter 2009. Thank you.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.