E W Scripps Co (SSP) 2009 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the fourth quarter earnings report. (Operator Instructions).

And I would now like to turn the conference over to your host, Mr. Tim King. Please go ahead.

Thank you very much, Rochelle, and good morning, everybody. We appreciate you joining us for this call. We are going to switch this up just a little bit compared to our usual routine. Today, we are going to start by having Tim Stautberg, the Senior Vice President and Chief Financial Officer, discuss the fourth quarter financial and operational highlights and cover some nonoperating data for you, as usual. Then you'll hear from Rich Boehne, our President and CEO, who will elaborate on a couple of strategic initiatives, one of which was disclosed in this morning's release, that could be significant factors in our Company's performance in 2010 and beyond. After that, we will open up the lines for your questions. And as usual, Rich and Tim will be joined by Doug Lyons, our Controller, and the operators of our local media businesses; Mark Contreras, who runs the Newspaper division, and Brian Lawlor, who runs our television stations.

Now the commentary you'll hear from our executives this morning may contain certain forward-looking statements, and actual results for future periods may differ from those predicted. You can always go to page 11 of the 2008 Form 10-K to read some of the factors that may cause results to differ from what you're about to here. Now if you're unable to stick with us for the duration of the call, you can access a streaming audio replay by going to scripps.com and clicking on the Investor Relations link at the top of the page. We will have it active later on this afternoon and we'll keep it there for a few weeks. Now, if you don't have a copy of the earnings release in front of you right now, you can use that same link at scripps.com to find the document in the financial tables. So with that, I will turn it over to Tim Stautberg.

Thanks, Tim, and good morning, everyone. Much like you heard from our peers earlier in earnings season, our consolidated revenues in the final quarter of 2009 were down 18% to 217 million. Not long ago, it was hard to imagine being upbeat about a revenue decrease of 18%, but that figure compares to a 19% year over year decline in the third quarter and a 20% decline for all of 2009 compared to 2008. And the fourth quarter's decline would only have been 10% if you exclude political advertising from both years. On the expense line, we didn't just tighten our belt; we drilled a few extra holes in the leather to cinch that belt up as snug as possible.

We could not make up for the dollar decline in revenues, but we were able to reduce costs by about 17% in the fourth quarter. As a result, we reported income from continuing operations after tax of $0.22 per share, our best quarter since the separation of Scripps Networks Interactive in 2008. Two items that factored into our $0.22 figure require some elaboration. The first is the restructuring expense equal to $3.6 million after taxes or $0.06 per share, related to centralization of certain functions in our TV station group and the Scripps 3.0 project that we'll talk about in greater detail later. The second involves the calculation of EPS. Accounting rules require to us allocate a portion of net income in periods when there is net income to uninvested restricted stock units that have dividend participation rights.

We disclosed last year that in March 2009, about 9 million RSUs -- most of which vest over three years -- were grant to do eligible employees. Because we had net income in the fourth quarter, we must allocate a portion of that income to those shares. Note four in the financial statements illustrates how the math works for this calculation. While we are on the subject of RSUs, the first traunch of RSUs granted last year -- approximately 2.7 million of them -- will vest on March 5.

After withholding for taxes, an estimated 1.8 million Class A common shares will be deposited into recipients' accounts before the market opens on March 8. There are no restrictions on these shares once they have been deposited. Now let's turn to our operations. You heard me say three months ago that business trends at our TV Stations improved in the third quarter compared to the first half of the year, and I'm glad I can say it again about the fourth quarter. Revenue was down 21% due to the relative absence of political advertising, compared with the 26 million in political in the fourth quarter of 2008. But time sales actually increased in the local and national categories.

Cleansing political from both performance -- from the performance in both years, all other TV revenue rose more than 5% in the last three months of the year. And December's total ad revenues were up 11% compared with the prior year. Our expenses in the TV division declined 4.2%(Sic-see press release), a figure that was not helped by the contractual constraints for our syndicated programming. You have heard us say before that our decision years ago to invest in syndicated programming has yielded a solid return by building lead-in audiences for our profitable news blocks. Programming expenses were flat in the fourth quarter, but all other expenses were down 8%. Back in the third quarter of 2009, segment profit for the stations was 3 million. It jumped in the fourth quarter to more than 14 million, putting a little wind in our sails as we begin a year that should see a strong return of political advertising.

Looking ahead, we are encouraged by ad revenue trends at the start of the year which are consistent with our performance in December. Our three NBC stations have done a nice job selling the Winter Olympics, which will give us about $2 million of incremental revenue. Over at our Newspaper group, ad revenues continue to be weak, but we are taking some comfort from the fact that the rate of decline is moderating with each passing quarter. Total ad revenues dropped 20% in the fourth quarter compared with a 27% decline in the third. Local Advertising was down 24% compared with a 27% decline in the third quarter, and Preprint and Other was down 13%(Sic-see press release) compared with 21% percent in the third quarter. The best bouncebacks were in Classified and Online. Classified advertising was down 26%, an improvement of 1,000 basis points over the third quarter.

Within Classified, help wanted was down 43%, real estate down 37%, automotive was down 25%, and all other was down 9%. Online Advertising fell just 5% in the fourth quarter compared with a year over year drop of 20% in the September quarter. Online Advertising that is independent of classified upsells, what we call pure play, continued to grow impressively, rising 21% during the quarter. A change in the nature of the business relationship between the Company and certain newspaper distributors in select markets caused the increase in circulation revenue to 29.4 million from 28.3 million in the year ago period. The Company is continuing a transition to pay most independent distributors on a per-unit basis, recording circulation revenue after the transition at a higher retail basis and recording the per unit delivery cost as distribution expense. Excluding the effects of that change, which does not affect segment profit, circulation revenue in the fourth quarter would have been down $544,000 or less than 2%.

Let's now turn to expenses in the Newspaper division. Newsprint expense was down almost 50% from last year's fourth quarter, with more than two-thirds of the savings coming from price and the balance from reduced volume. The vast majority of the savings in the Newspaper division resulted from difficult decisions that we've made. Let's start with the reduction in employees. At the end of 2009, we had about 3,200 full time equivalent employees. That figure is down 18% from the end of 2008 and about 25% over the last two years. The headcount reductions in 2009, along with the decisions we made to adjust employee compensation and benefits, led to a reduction in employee-related costs of more than 23% in the fourth quarter. Total segment expenses in our Newspaper group declined 22%.

You may recall that we spent about $5.4 million on severance in the 2008 quarter. Backing out that figure, our expense reduction in the most recent quarter was still an impressive 18%. Newspaper segment profit in the quarter was nearly $20 million. Learn me turn quickly to United Media. The big news at our licensing and syndication business was mentioned in the release and will be discussed by Rich shortly, but I'll rundown the perform in the fourth quarter. Revenue fell by 3.6 million to $26.4 million. Part of that was due to weakness in apparel licensing in Europe, and part was due to a large one-time check we received from MetLife in the year ago period as part of a contract amendment. The management team at United Media trimmed expenses by 13%,, resulting in segment profit of 3.1 million which is about $1 million less than the fourth quarter of 2008.

Switching gears now to some nonoperating items, long-term debt at the end of the fourth quarter was 36 million, up from 30 million at the end of the third quarter. Contributing to the increase in debt was the Company's decision in December to voluntarily make a $20 million contribution to the Company's defined benefit pension plans. At the end of 2009, the value of the Company's pension plan assets was approximately $115 million less than the value of the Company's accumulated benefit obligations. At the end of 2008, that figure was $145 million. Although the Company is not required to make any contributions to its qualified defined benefit plans during 2010, we will like do so on a voluntary basis. Cash, cash equivalents and short-term investments totaled 27 million at the end of the fourth quarter, down from 32 million at the end of the third quarter.

Net debt stood at less than 10 million at the end of the year. Capital expenditures in the fourth quarter were $2.4 million, bringing the full year figure to 42 million. That's down from 84 million in 2008. The full year figures include construction of the newspaper facility in Naples, Florida, which is now complete and operational. We offered only limited guidance for our Newspapers and TV Stations in the release. Trends from the fourth quarter are continuing into the first, but there is still a lot of uncertainty among consumers and advertisers. We did provide a few full year numbers to help you with your modeling in 2010.

During the coming year, the Company will continue to implement the restructuring of certain functions, and the standardization and centralization of the key systems and processes in the Newspaper division. This realignment and pursuit of operational efficiencies could result in restructuring charges of up to $22 million during the course of 2010. For the full year, Capital Expenditures are expected to be about 20 million. Depreciation and amortization will be approximately 45 million. Corporate and shared expenses are expected to be approximately 32 million. And the Company expects to receive at least $45 million in State and Federal tax refunds in 2010. With that, let me turn it over to Rich.

Thanks, Tim, and good morning, everyone. Many years ago after a very tough 12 months, I sat down to write a draft of the shareholder letter for the Scripps annual report. It began with the line, "We prepared for the worst, then hoped for the best in 1991. Thanks goodness we prepared." The challenges of 2009 were much tougher than anything we faced back when I wrote that letter, but the pay off remains the same. Thank goodness we prepared. We made some very difficult real-time decisions as ad revenues fell early last year; but for the most part we stayed the course and worked our long-term plan, focusing on creating high quality news and information content and monetizing audiences across all platforms. This is the course we prepared for beginning with our separation of Scripps Networks in 2008 and the re-establishment of this Company as a news industry leader and entrepreneur.

The great recession of 2009 and beyond has been a huge distraction; but Scripps is still a low debt, financially flexible, news and content-driven organization determined to develop models for delighting audiences and advertisers for many years to come. Now with the business environment stabilizing, we are able to devote most of our energy to building for the future. Let me touch on two very important developments that will have substantial impact on 2010. First, we are entering the crucial phase of the reorganization of our newspaper operations. We believe local newspaper organizations can continue to play an important role in public service and marketing, but in an operating model that's very different from what made this successful in the four decades prior to the birth of the Internet. Our top to bottom overhaul is built on one driving goal -- define efficiencies in everything that doesn't directly affect readers and advertisers, and free the local organization to focus on the pillars of the business; local content, audience development and ad sales. The whole plan flows from that goal.

So while we are increasing standardization and centralization across many functions, including IT systems, production, accounting and even some editing, we are at the same time decreasing distractions that prevent the local organizations from being the leaders in outstanding journalism and service to advertisers. The division-wide implementation has just begun, increasing staffing in some areas and reducing headcount in others. Just last week, we talked with more than 100 employees about their future in the restructured organization, and some will be separated from the Company as we gain efficiency. Realignment will continue throughout the year and may include charges for more reductions in force and the deployment of new software systems. All of this geared toward focusing on what matters most -- producing compelling content, bigger audiences -- both in print and in digital formats -- and monetizing those audiences with greater efficiency.

2010 will be a transition year as we implement the program, but we believe we are on track to improve cash flow by roughly 30 million annually once fully implemented. Much more to do, but so far so good. Now let me turn to United Media. We announced today that we are exploring strategic alternatives for the character licensing portion of that division. Just a reminder, United Media is a business that started more than 100 years ago by selling or syndicating newspaper content -- columns, puzzles, editorials and obviously comic strips -- long a core offering of daily newspapers. In the 1950s, a new business sprung from the comic strips -- the licensing of characters and images for commercial purposes. Today, licensing represents about 80% of United Media's revenues, and much of that is derived from the Peanuts characters and our long-term partnership with the Schultz family.

Character licensing has been a good business for Scripps for many years, but recently there have been developments and consolidations among the other players that led us to the question, "Would our licensing assets and operations be more valuable if aligned with another organization?" We honestly don't know the answer to that question but believe now is the time to find out, especially considering the recent flurry of activity that we've seen among studios and entertainment companies that focus on and have the vast distribution networks available for maximizing intellectual property. We intend for this to be a fast process. We will be engaging interested parties immediately and will reach a decision as soon as possible. If this exploratory process leads us to the conclusion that we are best served by the continued ownership of the licensing operation, then we'll continue to nurture those brands as we have for many decades.

Regardless of how the licensing review comes, out we will continue to be in the syndication business, distributing content to newspaper, television and Internet clients. That menu of confident features our own Scripps Howard News Service, a Washington-based provider of great enterprise reporting. We will keep you posted on the United Media story as it unfolds. Bottom line, both the newspaper restructuring and the United Media review demonstrate that we are focused on being a strong and influential player in the future of the news industry and remain committed to demonstrating the economic value of public service. With that let's go ahead and here what's on your mind. Operator, we are ready to take questions.

(Operator Instructions). The first question comes from Craig Huber, Access 342. Please go ahead.

Yes, good morning. A few questions, please. This voluntary pension contribution for 2010, is your preliminary thought the size would be roughly equivalent to the 20 million payment you just made? That's the first question. Then my next question has to do with programming costs for your Television Stations for 2010. Can you just update us on what your thoughts are, what the percent change might be that you are looking for there for 2010? I also have some follow-ups.

Sure, Craig, this is Tim. With respect to the pension contribution, I think, yes, $20 million number feels about right. It may be more than that if we have the cash available. To the extent that we are make contributions prior to October, we are able to include that as an expense on our tax returns and get a refund carrying that back; so there's an automatic 35% return on any contributions we make this year, and that will be true in through 2011 as well. So that's the logic behind that.

Hey, Craig, it's Brian. On the programming side, for our syndicated programming, we are expecting our expenses to be flat to last year.

Okay. Then also on the Newspaper side, can you just give us -- I'm curious to here what the ad revenue percent change was for October, November and December, and maybe if you could just talk about how January fared.

Here's Mark, Craig.

Craig, let me get the -- we've got it by quarter. We did have -- let me just phrase the quarter as getting sequentially better, without going into detail since we don't disclose monthly stats any more.

Do you have it for maybe just December, then? Like you did for Television?

December was better than the quarterly number -- decently better than the quarterly number. And going into next year we're -- going into this year, we are encouraged that those trends are continuing.

Craig, you'll remember that we are on a calendar basis, and so we end up with Sunday switching and everything else that sometimes throws monthly numbers off.

Right. How would you characterize January, down the 10%, 15% range, like your peers are talking about?

I think that's a very safe number to use, Craig.

And then my last question, if I could just sneak this in, what would you say your average newspaper advertising pricing was down year over year in the fourth quarter? And more importantly, what are you expecting for 2010 for newspaper advertising pricing?

Let me hit -- this is Mark, Craig. Let me hit that by category if I could. And again, what we are talking about -- just to be precise about this -- is that we are talking about full run lineage only. We are not talking about zoned or anything else. But if you took retail as a category, local was down about 25%, lineage was down about 20% and rate was down 5%. So it's about 80% -- the decline was 80% attributable to lineage declines. If you went category by category using that same analysis, auto was down about 24% -- about half and half lineage versus rate; help wanted was down 43%, about 80/20 there lineage versus rate; real estate was down about 40%, and that's about 60/40 line versus rate; and other classified was down 9% -- more than all of that was lineage, rate was up just very slightly. So hope that's helpful.

And then for 2010, do you think it will be sort of in that range of maybe 5% to 8% down? What's your thought there?

We'll see. We don't have any plans that would alter that in the immediate future. So my guess would be that we would see single-digit kinds of rate declines depending on the category going forward.

Thank you.

But the big story to your question is, most of it in almost every category is lineage.

Yes, fair enough. Thanks a lot.

Sure.

Okay, thank you. The next question comes from the line of Alexia Quadrani of JPMorgan. Please go ahead.

Thanks, this is Townsend Buckles for Alexia with a few questions. First, your advertising and present seemed relatively weak in Q4 versus some of your peers. I know it's a very small segment for you, but was there any particular vertical that dragged it down?

Townsend, hi, it's Mark. Actually, travel was particularly weak; and honestly, one of the things that's held us back, we have a fair amount of exposure to California and Florida; and if you looked at those two states, they were both down 40% to 50%. Actually in other parts of the country, we actually saw growth. So I would say the lion's share of our aggregated national number was a result of California and Florida.

Okay. Thanks. And can you talk at all about your expectations for political revenue in 2010?

Go ahead, Brian.

I think our expectation at this point would be in line with what our 2004, 2006 and 2008 even-year political cycle was, which was a touch over 40 million.

Okay. And then is there any, I guess, sort of time line you've set for your review of United Media, and do you have any specific -- I don't know, use of potential proceeds in mind, or is it a little too early?

Hey, Townsend, it's Rich. The only particular time line that we have is just as fast as we can, so we can both remove the uncertainty that we've introduced into the lives of employees and just get it settled as fast as we can. Use of proceeds just will be to improve the financial flexibility of the Company. We've made an awful lot of headway, got a debt out of the way, pension down and we are in very good shape. But this would just further improve our flexibility as we look ahead and think about opportunities for the future.

And the 80% of segment revenue you mentioned from licensing, does the profitability there differ from the rest of the business?

A little bit, but not substantially. But yes, for the most part the profitability is also derived from licensing.

Okay. Is it better?

Yes, it's a little more than the 80% on the profit line.

Okay, and then sorry, last question is, should we expect your restructuring costs in 2010, will those be front end loaded in the year?

Townsend, it's Tim. I would say that they are probably more back end loaded. A large chunk is tied to the implementation of new advertising circulation editorial systems for newspapers, and that's probably more a second half event.

Got it. Thanks a lot, guys.

Thank you.

Thank you. Next question comes from the line of John [Cornwright] of Chandler Capital. Go ahead.

Yes, I hope you can here me. Did I hear you have a $45 million cash tax refund coming to you? What is that all about?

Yes, John, it's Tim. We expect that we will be filing our tax returns for 2009 and claiming refunds for Federal and State taxes that will be at least $45 million. Going back and capturing taxes that were paid in 2007 and net operating loss this year 2009 will enable us to do that.

And that will happen in calendar 2010?

Yes. We anticipate that will probably be a second quarter -- late second quarter, maybe early third, we should have all of that.

The other thing is then, what was political in '08? You said it was 26 million in the fourth quarter. What was it for the whole year of '08?

41 million.

Okay. Thanks a lot, guys.

All right, John.

(Operator Instructions). You have a question from the line of Barry Lucas, Gambelli & Company. Please go ahead.

Great, thank you very much, and good morning. A couple for Mark and Brian actually; and that is not just trends within the quarter, but trends within categories, and in particular auto, and how was that fairing as we go into 2010?

I'm sorry, Barry. Go ahead.

Barry, this is Mark. Let me just hit national real quick, which is a relatively small amount for us. For the fourth quarter in national advertising, we saw auto grow. Generally as we went through this year, it was very choppy. It was in the mid 20s every month. Going forward, I think as the economy stabilizes we should see some improvement on that 20% down number going into the first and second quarter of this year but it's -- I can't tell you with great specificity that we think we are going to get to flat any time in the next couple of quarters. Hope that's helpful.

Okay. And on Television, Brian?

Hey, Barry. You saw in the release we mentioned that we were flat in fourth quarter, and that was a big deal having been down 36% for the year. And I think we also mentioned that we were plus 12 in automotive for December. Some of my peers it sounds like are reporting first quarter being plus 40% to plus 50% for automotive, and I would tell you that's what we are seeing as well.

Okay. That's great. Thanks. And geographically -- and this is really for both of you. Any -- since Mark noted that you have the fairly broad exposure to both Florida and California, anything you can say more specifically about Florida, where you've got West Palm, Tampa, Naples, and I guess the steward of the Treasure Coast area, so any things that you can point to one way or the other in terms of either improvement or lack thereof?

I will jump in first, Barry -- it's Brian. I think Mark and I are having a little bit of different experiences. Actually, Florida is one of the our encouraging signs on the television side. It's bouncing back stronger than some of our other markets, and I'll give you an example. For the year last year, the Tampa market was down 22%, but in fourth quarter it was only down 11. For the year, the West Palm Beach market was off 25%, but was only down 14%. So in both third and fourth quarter, the pacing of the market was better than what it had been pacing for the year. So actually, I'm pretty encouraged by the way Florida is returning for us.

Yes, Barry, this is Mark. On the newspaper side for just Florida, the third quarter we were down about 30%. The fourth quarter we were down about 23% percent. So sequentially, it's a seven-point improvement; but in talking to our operators at both of our newspapers there, the Florida economy -- for the categories that impact us the most, which are related in large part to real estate health and home furnishings and other categories like that -- are still very, very weak. Unemployment in both markets is still an issue; and as we go category by category, both for ROP and preprints, Florida still is challenged in the fourth quarter and I think we will see some of that going into the first quarter. It really is a broader economic problem for us in those -- in that state. And California actually has very similar problems with real estate.

Right. Okay. And just for Rich, you talked a little bit about the long-term direction of the operating part of the Company but what's the long-term direction for the structure of the Company through small, mid-sized TV Stations and publishing properties? Does the business consolidate, or where does Scripps fit within that overall category?

Barry, those are very good questions as we sit here today. I think as we've talked about over and over and over, our focus is really on seeing how the news industry develops and what role we might play. So that might involve more today what we call broadcast TV markets. It could involve more markets that -- where there are newspapers today. But I think more than anything, we are very focused on improving our financial flexibility, trying to learn as much as we can about the new platforms for content like mobile and other digital platforms, and look for opportunities to create value over the very long-term.

We are not in any rush to increase the size of our current portfolio in the businesses that we are in today; although if we would see very unique opportunities, we might. But I think our future is as open and as opportunistic as any of our -- or more so than our peers, thanks to our financial flexibility. So we will just have to see how things develop. But first and foremost, we see ourselves as a content Company focused on the future of the news industry and creating value in those buckets.

Great. I will jump back into queue. Thanks.

Okay, thank you. (Operator INstructions). One moment, please. A question from the line of John Cornwright, Chandler Capital. Please go ahead.

Yes, hi. Is ABC acting as a drag?

Go ahead, Brian.

In addition to the macro?

Can you repeat the question?

Yes, I'm sorry. Is ABC acting as a drag on your ABC stations?

Are they acting as a drag?

Yes.

I don't think so. I mean, we are actively right now involved in our affiliation agreement with them so -- and the contract discussions with them, and so we're -- I don't want to say a lot about that at this point. But I think ABC is performing well and our relationship is good, and I would expect both of those things to continue.

Any estimate as to what retrends could be? I think it looks like it's running at an $8 million per annum pace?

We will be over 11 this year.

Okay, thanks a lot, guys.

Thanks, John.

Okay. Thank you. Next question from the line of Craig Huber, Access 342, please go ahead.

Yes, I do have a housekeeping question follow-up here. This circulation accounting change, if you will, at some of these newspaper distributorships in some of your markets, can you just let us know, is that going to be ongoing throughout the rest of this year, or when do you think you will mostly be done with that?

Yes, Craig, it's Tim. I'd say that It will continue into 2010 through that year as we are standardizing across the newspapers contracts with all of our distributors and everything else, moving to a per-piece basis for payments. That will continue as we have a couple more markets to square away. It doesn't affect segment profit at all, it just -- we book revenue at kind of a retail basis or what the subscriber pays and then book a distribution expense.

But it looked like it was roughly 1.5 million higher revenues than the corresponding cost hit in the fourth quarter. Do you expect that to continue for -- I'm sorry, how many more quarters? It kind of runs off?

It will run through 2010 as we transition a couple other markets.

Okay. Very good. Thank you.

Yes.

Thank you. And a question from the line of Barry Lucas, Gambelli & Company. Please go ahead.

Thanks again. Tim, on the CapEx issue, is there any carry over from Naples? Because I would have thought that CapEx should have dropped a little bit more as we get into 2010.

No, Barry. In fact, what we have is a fair amount of money in there for our TV Station group in 2010 tied to some of the projects that they have going on. We've centralized some functions, and mobile is in there as a place holder. Newspapers is pretty tight. I think it's down probably 5 million. And of course, we won't spend what we don't need to.

So what might a run rate for maintenance CapEx be?

My sense is 20 million is about right. I mean, we've always talked about 25, maybe 20; but we've got a lot of property and a lot of iron and a lot of equipment out there in TV Stations that needs to be updated.

Okay. That feels about right. And last question for me, since I want to come back at this. With the issue that John noted on a $45 million tax refund, you should be generating free cash before any cash severance or restructuring charges; and based on capital requirements, you pretty much should be in a fairly sizeable net cash position, assuming things continue to improve at the end of 2010 and after a ballpark $20 million pension contribution. So, A., what do you do with it? Or maybe put more broadly, what's the right capital structure for the business?

Sure, Barry, it's Tim. I would say that we recognize 2010 is going to be a good year from a cash flow perspective and that's why we want to make sure that we took care of the balance sheet from the pension liability standpoint and bank debt. We also, having gone through 2009, want to make sure that we have a very conservative posture heading into 2011 which will be a nonpolitical year on the TV side. And my crystal ball isn't any better than anyone else out there. I think we still want to be very, very thoughtful and prudent as we approach our businesses from a financial flexibility standpoint. That said, we are not interested in just building a cash ward here. To the extent that we don't have any good uses for it, we would find an appropriate way to return it to shareholders.

Great. Thanks very much, Tim.

You want to say something, Rich?

Barry, I was just going to say you've been with us a long time, and we were always very free cash focused, believing that with great flexibility in free cash you can take advantage of opportunities and get the best returns as they come along, be that whether it's plowing it back into the current capital structure or putting into developments. So yes, we've been very focused on improving our cash position as best we can even in this environment. Our folks have done a really awfully good job.

Thanks for the follow-up, Rich.

Okay, thank you. And there are no further questions in queue. Please continue.

Rochelle, we appreciate your help this morning, and thanks, everybody, for your help this morning. That will conclude the call, thanks.

Okay, thank you. And ladies and gentlemen, this conference will be made available for replay after 11:00 a.m. today until March 2 at midnight. And you may access AT&T Executive Playback Service at any time by dialing 1-800-475-6701, entering the access code 14392. International participants, dial 1-320-365-3844; and again, that access code is 143962. And that concludes our conference for today. Thank you for your participation and using AT&T Executive Teleconference service. You may now disconnect.