E W Scripps Co (SSP) 2010 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. You will have an opportunity to ask questions after the presentation. (Operator Instructions)

As a reminder, this call is being recorded. I would now like to turn the conference over to our host, Mr. Tim King. Please go ahead.

Thank you very much, Mary, and good morning to everybody. We appreciate you joining us on this call.

As we've done for the past few quarters, we're going to start this morning with Tim Stautberg, our CFO and Treasurer, who will discuss the fourth quarter financial and operational highlights, and cover some non-operating data before giving you a little more color on your -- on trends that will benefit your first quarter models. Then, you'll hear from Rich Boehne, our President and CEO, who will give us some closing thoughts on 2010 and how you may want to think about Scripps going forward.

After just a few minutes of those prepared remarks, we'll open up the lines for a Q&A that will include Mark Contreras, who runs the Newspaper division; Brian Lawlor, who is in charge of our TV stations; and Doug Lyons, our Controller.

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 read more about some of the factors that may cause results to differ from what you are about to hear by turning to page 11 of the 2009 Form 10-K, and speaking of the K, we expect to file the 2010 document with the SEC in just the next few days.

As a reminder, you can always go to scripps.com and click on the investor relations link at the top of the page. From there, you can print this morning's earnings release and tables as well as access a streaming audio replay of this call. It'll be active later this afternoon and we'll leave it there for a few weeks.

So, having said that, Tim Stautberg will start today's discussion.

Thanks Tim, and good morning everyone.

I suspect by now you have had a chance to digest the results we released this morning. The fourth quarter was a nice exclamation point on a year that saw sustained strength in our television business and a steady easing in the revenue declines of the newspapers. For the first time since we've spun off Scripps Networks Interactive in June of 2008, we reported a double digit year over year increase in our top line with fourth quarter revenues jumping more than 12%.

Our costs increase during the period as well, but at a slower pace of less than 7%, driven largely by increases in TV programming and promotional expenses and newsprint. I'll dig into those details in just a few minutes.

Our operating income, which was less than $13 million in the fourth quarter of 2009, was nearly $29 million in the 2010 period. On the bottom line, the Company reported income from continuing operations net of tax of $24 million or $0.37 per share, nearly doubling the $0.19 per share we reported in the fourth quarter of 2009.

Digging into the operations, you already heard us comment on the last call and in our two webcasts from New York in December, about the political revenues garnered by the Scripps television stations. Election campaigns poured $28 million into our stations in the first five weeks of the quarter, bringing the full-year total to a Scripps record of $48 million in political spending. Total on-air advertising revenue at the stations was $95 million compared to $68 million a year ago. That means the amount of revenue we booked that was associated with our core broadcast product was 40% higher than a year ago, a real testament to the hard work of the sales executives at our stations.

Aside from political ads, other categories continue to show promise despite the effect of displacement caused by the politicians. Even though the comp was a little tougher for auto advertising, because the category started its rebound in December 2009. The auto category was up more than 30% for us in the fourth quarter.

Our retransmission consent revenue was up 18% in the fourth quarter, bringing the full-year, year over year improvement of 46%. As we've said before, most of our retransmission consent rights are tied up for years to come in agreements reached before we spun off Scripps Networks Interactive. This means there is significant upside in the long run, as old contracts roll off and new deals are negotiated in the coming years. We closed a few new deals in 2010 that, while relatively small, will move the needle nicely for us in 2011 and beyond.

Revenue from online and mobile advertising in our television division was up nearly 40% in the fourth quarter. Again, these are small pieces of the pie, but we believe they'll be increasingly meaningful in the coming years, and we're making all the right moves to make sure we take more than our fair share of local ad dollars on these platforms.

Total revenue for the TV division topped $100 million in the fourth quarter, a 37% increase from a year ago. Expenses in the TV division were up 7.5% year over year, similar to what we reported in the third quarter. The increase was due in part to payments to ABC for its programming.

You probably saw our mid-November press release announcing a new five year affiliation agreement with the network that includes Scripps paying ABC a licensing fee for their programming that is consistent with the amounts we have been accruing throughout 2010, and, as you saw in today's release, we recently extended the relationship in our three markets with NBC. So, all of our affiliation agreements now reach into the second half of this decade.

Our TV division employee expenses rose more than 7% in the quarter, largely a result of the restoration of certain performance bonuses which had been suspended in 2009. TV segment profit was $37 million in the fourth quarter of 2010 compared with less than $15 million in the 2009 quarter.

Over at the Newspaper group, total revenue declined 2.7%, sequentially better than the previous quarter and continuing a long march toward a top line that we hope is flat or even better. The rate of decline in ad revenue improved to 5.3% in the quarter after being down 6.8% in the third quarter and 7.7% in the second.

Within advertising, the local and national categories improved sequentially from the third quarter. Local was down less than 7% and national was down about 10%. Preprints were down 6% in the quarter. Our digital line, which we used to call online, was flat at $7.5 million. You know the story here, the digital upsells suffer from being tied to print classified advertising, but our pure play digital sales rose 16% in the quarter.

Nothing has hurt newspapers more in the past few years than the decline in classified advertising, but the pain is less severe than it used to be. Classified was down in the double digits when the year started, but declined 6.6% in the third quarter and only 4% in the fourth. Within classified, real estate remained weak, owing to our footprints in California and Florida, but the automotive category was up 5.3%, and help wanted up 11%.

In the fourth quarter, our reported circulation revenue increased 4.4% to $31 million, but I'll remind you of the effect of the change in the nature of the business relationship between the Company and certain newspaper distributors in select markets. Excluding the effects of that change, which does not affect segment profit, circulation revenue in the fourth quarter was down 1%. Newspaper expenses moved up 2.2% to $99 million. We continue our disciplined control over employee costs, which were down 3.8%, but they were offset by a 10% increase in the expense for newsprint and press supplies caused by a 30% increase in newsprint prices.

Segment profit from our Newspaper group was $14.7 million, down from $ 20 million in the year ago period. In the Syndication and other segment, revenue was down 2.4% in the fourth quarter to $5.3 million and we reported a segment loss of $400,000.

The real news in this segment, however, will be announced in a press release in just a few moments. After we sold our licensing business last year, we announced that we would restructure our remaining syndication operations at United Media. We have met that goal by turning over to Universal Uclick, most of the functions of the syndicate. We continue to own the copyrights associated with the comic strips, but Universal Uclick will do the heavy lifting of syndicating, marketing and fulfillment. This transition will start immediately and will wrap up in early June.

At E.W. Scripps our core strategy is to focus on news and journalism enterprises, so it makes sense to hand these comic strips and features over to an organization that is focused on the future of syndication.

Let's turn now to some non-operating items. Our balance sheet continues to distinguish us from our newspaper and TV station group peers. We're still debt-free and have more than $200 million in cash on hand. During fourth quarter, we announced a $75 million share repurchase authorization and proceeded to establish a 10b5-1 plan for the Company in late November.

By establishing a trading plan, the Company is able to repurchase shares throughout the duration of the plan if certain criteria are met. During the fourth quarter, we did not back -- buy back any of our own stock, but we do stand ready to invest in our shares if there is a compelling return above our cost of capital.

Before I leave the balance sheet, I'd like to give you an update on our pension plan. You will recall that we used a portion of the proceeds from the sale of the licensing business to make a tax advantaged contribution to our pension plan. Between that voluntary contribution and the investment performance of the plan assets, we reduced our unfunded pension liability by $79 million over the course of the year.

The difference in the fair value of the pension plan assets and the projected benefit obligations declined to about $48 million as of December 31. In essence, we are 90% funded in our qualified plans as of year end.

As we look ahead at the expected performance of our operations in the first quarter, our guidance remains consistent with the trends that we discussed in early December press release, coinciding with our appearance at year end investor conferences. On the top line, we expect TV's ad revenues to increase at a low single digit rate, taking into account the absence of $3 million in Olympics advertising at our NBC stations last February, and nearly $1 million in political advertising.

Newspaper revenues are expected to decline at rates similar to those recorded in the fourth quarter. On the cost side, expenses at both newspapers and our TV stations are expected to increase at a mid single digit rate in the first quarter. We have been disciplined in managing expenses in the past few years, but the combination of newsprint price increases, the restoration -- and the restoration of certain employee benefits among all of our employees will affect the P&L in 2011.

For your full year models, corporate and shared service expenses are expected to be approximately $32 million. Depreciation and amortization will be approximately $40 million this year. Capital expenditures should again be less than $20 million. Restructuring charges, primarily related to completion of the Scripps 3.0 project in the Newspaper division will be about $10 million.

And with that, let me turn it over to Rich.

Thanks Tim, and good morning every body. We had a very good year in 2010, both financially and toward our plan to refocus this Company as a news industry leader and innovator. So, let's look ahead to what you can expect in 2011.

Most importantly, our driving strategy will continue to be creating value for shareholders through service to communities and interest groups across this country. We're investing through our P&L in high quality news and journalism content that attracts valuable audiences and enables advertisers to build their businesses.

This emphasis on quality products and services we believe gives us a strategic advantage and an opportunity to gain audience and revenue share at a time when many competitors are financially challenged and less able to invest in both products and in new revenue streams. Simply put, charging more for less is not our strategy. Instead, we'd rather make more money by providing consumers and advertisers with great value.

In 2011, like in 2010, this will play itself out in several ways. Although we're shifting and reorganizing to better meet the opportunities, we have no plans to reduce newsroom expenses and diminish the quality of the contact we provide. In just a minute, Mark Contreras can give you examples of how he's been bolstering resources in the TV -- in the newspaper newsrooms in a way that we get it done for great expense and produce a lot of additional content.

Over on the TV side in fact, we'll continue our aggressive revamping of TV news operations to improve both quality and quantity of enterprise journalism content. Past investments are beginning to pay off in higher local TV news ratings and better revenue performance, and we have no intention of turning back.

Of equal importance is investing in a new business model so we can best monetize our investments in content and marketing. We'll begin rolling out this year a series of ventures aimed at protecting and building sustainable cash flow streams. Like some others, we'll experiment much more aggressively with various forms of pay walls and subscription services, including those for the emerging mobile marketplace.

Despite what will be our best efforts, some of these experiments may fail and a few we believe could take hold. Given our financial flexibility and our opportunity to leverage development across both operating divisions, we believe these projects are crucial to continued success. In the Newspaper division, specifically, where we have reorganized operations to put greater emphasis on the business's two big drivers, content and ad sales, and also to lower expenses. The attention now turns to using these new tools to produce the best and most valuable products and services.

Financially, 2011 will be tougher on the revenue line due to the obvious cycles and political advertising, but as we head into the year with a strong balance sheet and the opportunity to continue to invest through our P&L in content marketing and development of new businesses, through external investment, by enlarging our footprint in places we already do business, and as Tim talked about, buying back -- by buying back our own shares, or lacking other alternatives, we can return capital to shareholders through other vehicles.

Strong financial discipline has helped us produce attractive returns in the past, and that is not going to change.

Finally, just a reminder of what else won't change. We believe, as our new mission statement says, that doing good is a strategy for building value. We intend to help make communities we serve be more vibrant, more fair and more successful, and in return, we expect to receive an economic benefit through the expansion of our media businesses.

Operator, now we are ready to take questions.

(Operator Instructions)Your first question comes form the line of Alexia Quadrani with JPMorgan.

Thank you. I have a couple of questions. The first one is, how should we look at the circulation revenue in 2011? Is it going to be similar to what we saw in the fourth quarter given the new distribution agreement?

Alexia, this is Mark. We have a plan in place to try to grow circulation copies. Largely, the revenue increases that you saw, which were kind of a one-time bump, they are done as of the end of 2010, but we are devoting on the expense side and with sales focus, a plan to get our circulation copies flat by the end of 2011. So, you should see some reasonable performance in circ revenue, but coupled with some expense to get us there.

Do you think you also have room to also raise pricing on the circ side?

We have taken some pretty aggressive steps over the last 3 years on rates, and that is not going to be our primary focus during 2011. If you looked over the last couple years, most of our newspapers have experienced double-digit rates in circulation pricing growth in the home delivery area, and we are not going to use that as a primary lever during 2011.

Okay, so it's mostly volume. And then just staying on the newspapers for a second, I think I might have missed, did you give us the real estate classified decline in the quarter?

Alexia, this is Tim. Yes we did.

16%.

I'm trying to find out where it is.

Okay, 16%. Great. And how should we think about news, or what are you guys budgeting for newsprint pricing in 2011?

You should see pricing in the first three quarters of high teens, roughly, in terms of rate, and in the fourth quarter, low teens, low double-digits. But we are coming off of exceptionally low pricing during 2009 and through the first part of 2010. So, that's probably the best way to characterize. First three quarters, high teens, last quarter, low teens.

Okay. Thank you very much.

Our next question comes from the line of Craig Huber, Access 342.

Yes, hello, good morning. My first question is, can you give us more detail of what you are seeing for news and for ad revenues January and I guess so far here in February. How are they different from what you saw in the fourth quarter, if they are?

Craig, this is Mark. They are slightly worse in January than they were in December. I know that some of that is weather related in January, and I think the best way to characterize our look for the first quarter is to wait until it is done. The visibility is still very, very murky for the first quarter. Our plans, though, would have the first quarter look roughly the same as the fourth quarter in overall aggregated ad revenue.

Would you mind breaking out then, if you would, October, November and December? Was their material differences in the ad revenue performance in the quarter?

Since we are on a calendar basis, it's probably more helpful to look at it on a quarter by quarter basis. We had a lot of switching with Thanksgiving and so forth, but that 5.3% for the fourth quarter is a pretty good number to use. I don't think it's terribly productive to look month by month in the fourth quarter given the fact that we're on a calendar basis.

And you're basically saying that you think the first quarter will be in that roughly down 5%, 5.5% range?

In that ballpark, yes sir.

Okay, and also could you speak a little bit further on your expectation for costs newspaper is up 4% to 6% here in the first quarter. Do you anticipate that to continue for the rest of year. I know that you're saying higher benefit costs, or do you think it'd be conservative saying up 4% to 6%?

I think we have baked in some healthy increases in newsprint costs. That's going to be kind of be a fixed block of costs that we are not going to be able to avoid. And obviously, Craig, the way we manage our business is to make sure that we are attentive to, as closely as we can, align revenues to expenses. So, there are some operating expenses, travel and some others as well as our hiring decisions that we can use to mitigate some of the other revenue shortfalls. But a big chunk of our plan for the expense increases for 2011 are newsprint related as well.

But do you think it will be pretty even over the course of the year up 4% to 6% for your total newspaper costs? Or maybe a better way to ask is excluding newsprint, what do you expect in your non-newsprint cash costs to be up?

I think it would be safe for you to take a couple of points off of that.

If I could just squeeze in another question here. The same question about television side if I could. This up 4% to 6% TV costs there. Can break out, if you could, what are you expecting for the year for your programming costs?

Hi Craig. It's Brian. Our programming cost for the year, we expect to be down over prior year, and that does include the fact that our network affiliation payments are included in the programming. So, even with that increase, we are looking at a programming cost to be down. Part of that has to do with the end of Oprah, which happens in September, and so we will be capturing a lot of that come the fourth quarter.

Do you think on a full-year basis it might be down pretty significantly, down 8% to 10%, say?

No, that sounds high.

Okay, thank you.

And, our next question comes from the line of Alfred Anderson, Anderson Family LLC.

Thank you very much. I have four questions, and I will pose them one at a time if I may. The first question I had with was on the balance sheet. I noticed accrued liabilities had gone from $58 million to $78 million from December '09 through December '10, and I'm wondering why would there be that big increase in accrued liabilities?

Mr. Anderson, it's Rich. We will let Tim answer that question.

I will have to call you back, Alfred, I don't have that detail in front of me. I just have the balance sheet itself. So, we will have to dig into that and get you an answer.

But go ahead and hit your next one, and we'll see if we can circle back and get that one for you before we leave the call.

That's fine. The second one, has there been a change in your view towards making outside acquisitions at all. I noticed you made one small one last year. Of course I am looking at the $205 million on the balance sheet, and the fact that you are cash flow positive to a considerable extent and will be this year. Has there been some change in the attitude of not making external acquisitions?

No, not at all. We have the same position we have always had. We are looking for good tangible cash on cash returns on investment when we buy something externally. I would say if you look over the past 36 months for sure, we and many others have been more conservative than in the past as businesses change and as the recession sort of rolls through, but, no, we are looking for good opportunities to put money to work, provided we can show very good cash on cash returns on investment.

In the same mode, you have mentioned these new internal things that you are going to try out. Newspapers and televisions, to try and to move with the Internet tide and online subscriptions and that sort of thing. Any idea how much these new initiatives are going to cost?

The big difference there is, those would be investments we would be making, as I talked about, right through our P&L. So, those would be expenses we would be incurring believing that we could get the revenue back. So, those are not enormous, and they would be baked into the guidance that we are providing you. But, without a doubt, we are investing through our P&L and believing that we can show a return on it over time.

They are not part of the $10 million restructuring charge that you have provided for then?

They are not.

They're not. Okay. The next question, is the money that you have got in cash and short-term investments, what sort of return are you getting on that currently?

Alfred, the return on that is about 50 basis points, and that's generated by just leaving compensating balances at the banks to help offset the fees that we are generating through our activity. And in answer to your earlier question, the additional $20 million on the balance sheet at the end of the year is two factors. One is an accrual for the payment of taxes that we will make here in the first quarter, and the other is an accrual for bonuses that will be paid in the first quarter as well. Those two items total $20 million.

Any idea how much for each?

$10 million each.

$10 million each. The final question was you had mentioned earlier that there was no point in repurchasing shares unless the share purchase price would be a significant discount from the intrinsic value on the E.W. Scripps Company as you see it. Could you give us any indication of what you consider to be the intrinsic value of the E.W. Scripps Company?

This is Tim. No, I am not going do that on the call, but value is in the eye of the beholder, and we go through exercise on a regular basis. As I mentioned, we have a 10b5-1 plan that is established. We try and do that over a two or three month period of time that enables us to buy shares. When we would otherwise be shut out of trading because we are too close to the end of a quarter. So, we set certain criteria and then we just let that go for a period of time. But that's the extent of our comments on valuation.

This is Rich again. I wouldn't let our activity or lack of activity in the first quarter provide some indication as to how we view the long-term value of the Company. We are a long-term buyer and investor, and I think you just have to come back to us over time and see what we have done.

Okay. That substantially answers all of my questions. I didn't expect a numbers answer to the intrinsic value question, but I thought I'd ask it anyway. My main concern was to highlight the difference between getting 50 basis points on $205 million versus repurchasing shares or distributing money to the shareholders. That was my point of concern. Okay. Thank you very much.

Thank you, and our next question comes from the line of Edward Atorino with The Benchmark Company.

I wanted to follow-up on Craig's question on the TV cost trends as the year goes along. I imagine there going to be front-loaded as you cycle through declines in programming. So, could you sort of give us a picture of the cost trends in television as you go through the full-year comps?

Ed, this is Brian. I think we are looking at mid single-digit increase as we work through the first two or three quarters. As you just referenced, our expenses will improve come fourth quarter as our programming costs improve, but we do have increased network affiliation costs, some increases in commission at higher levels, some investment in capital. And so, those are the things that are driving those increases as well as a slight increase in employee costs.

Would you look for low single digits in the second half for flat? Not flat, I guess.

Probably not flat, but I think low single digits, low to mid, will probably be reasonable.

Secondly, if you look at your markets, where do you see candidates for early political given the political climate? I have a theory and some other people do that we might see early political this year.

We are watching those pretty closely right now. We do see a couple of states where there will be some early elections. We are not seen to seeing them being overly robust right now, but we are actively cultivating that space, and as things pop up, I think you saw how strong we performed in political. I think we have a great strategic plan as it relates to political and ability to take more than our share. And I think we are well aligned again, but at this point, there is a couple of things out there, but nothing that looks like it will be a key differentiator at this point.

Thank you.

Thank you, and our next question comes from the line of Barry Lucas with Gabelli & Company.

Thank you very much. A couple of items, one, probably going to be small, but any financial impact from the transaction or the shift of the business on the syndication side?

Barry, it is Tim. I don't expect it to be a significant number, and the timing of it and everything else, we still got to work through on the accounting side. Again, we are planning this transition to start now and be wrapped up by early June, but we will be probably recognizing fees paid to us from Universal Uclick as opposed to a gross revenue number that we have today, but from a profitability standpoint, there will be an improvement. I think this year is going to be more of just a transition. We will have some severance related to this, but I think it is all manageable, and I don't think it's anything that is going to be too striking.

Will that segment essentially disappear, and the income will effectively be below the line?

Now, we still have some other entities that we roll up into this other segment. So, there are still some other smaller non-newspaper and non-TV station group activities that generate revenue and have some costs associated with them that are in there. So, it will be an even smaller number, and it's probably going to be a flat to slight loss given the activities that are involved in that.

Shifting gears to the pension side, you are 90% funded with a $48 billion unfunded. Can we take from that, that the likelihood of another contribution is fairly small over the next several years?

That's a fair assumption. We have a surp that is by its nature, unfunded, and that's about $20 million, but we are not planning to make any voluntary contributions to the qualified plans. Now, PPA pushes you towards being fully funded over time, but I don't see it being significant. By 2013, we may have some funding, but it should be manageable, it just depends on performance, but our goal is to move towards a higher long credit fixed income exposure. We are at 70% right now long credit. So, about 50% of our interest-rate exposure is now hedged across the liability and assets.

In terms of discount rates, what are you thinking for this year?

Doug?

We are using 5.85% as our discount rate on the plan.

Great. Last area, not too beat this horse to death, but 50 basis points on $200 million, that's like $1 million. How could not buying stock--How could buying stock not be a better investment than $200 million in cash if you have any confidence at all in the business?

I don't know that it's an expression of confidence in the business. It's an expression of valuation, and, as Rich mentioned earlier, we are very conservative. I kind of subscribe to the Warren Buffett school of repurchasing shares. And we do our best to come up with a fair value range, and to the extent that we can buy back shares at a significant discount to that, such that there is room for us to being wrong, that's kind of the approach at this point.

Thank you, and our next question comes from the line of Craig Huber, Access 342, please go ahead.

Actually, it's a follow on to your comment right there about not buying back stock here. Is part of your hesitation also just given the macroeconomic concerns out there and also the secular pressures on your newspaper business, not quite sure where that is going, and it makes you feel much more comfortable, I assume having the $200 million of cash on the balance sheet? Is that also part of the hesitation not buying back a lot of stock right now?

Craig, I don't know that there is hesitation. We establish a 10b5-1 plan with certain criteria in late November, and that carries through to the end of February. So, we will have a new trading plan probably established at that point. We may change the criteria, but that way we are able to trade throughout, and Tim is not sitting at a quote TRON machine or Bloomberg terminal trying deciding day in and day out whether to buy shares. But, this is an investment decision, and we look across the different alternatives that we have. Clearly 50 basis points on cash is not necessarily a compelling return, but it is also very low risk. Whereas, there still is risk associated with their media businesses, as everybody accepts. So, I would say over time, we have the ability to return capital. We've expressed a willingness to do that. The form is still taking shape, and a lot of that is dependent upon market forces. We do have the ability to pay a dividend as well, which is a neutral to value decision, and that's something that we have regular conversations with the Board about. And I expect that to continue.

Craig, this is Rich. All of the factors you talked about are obviously captured inside our calculation when we are going to buy, but in general, I would say we are going to continue to be a financially conservative company. We don't have any desire to leverage this thing up to keep a little more cushion than we have had in the past. We are just barely 12 months into a period where we have a good excess cash story. So, I think we are very comfortable with what we are doing over time, and I don't mean over 10 years, I mean just over a few years to come. So, we will be happy to be judged over a little bit longer period of time. It's just a little bit tough to manage day in and day out or quarter to quarter to quarter.

Okay, fair enough. And then also, Tim, if I could ask, your tax rate this last year on a GAAP basis was like 3%. Obviously, you could make some adjustments here for these one-time items and stuff, but what are you expecting your tax rate here for the new year, 2011?

That is a tough one. Doug, would you want to comment on that?

I'll try. Craig, we still have a lot of audit issues that involve combined reviews with S&I, and there is a lot of reserves on the books related to those, and there's adjustments to those, and you are seeing a lot of that come through the tax provision over the last couple of years. If you trip that out and look going forward on an annualized basis, we are looking at somewhere at 37%, 38%.

Okay, that is helpful. If I could also ask, your CapEx this last year, I didn't heard you say what it was.

It was $17 million.

Then my last question if I could on the TV front. You mentioned auto up 31%, what was the non-political, non- auto piece of your business, percent chance year over year on the TV side? And also what percent of the total was auto?

Auto represented 14%, almost 15% of our revenue in 2010.

What about the quarter, please?

In the quarter--I'm sorry, that was for the quarter.

Craig, we will have to get to that number because that's not a number that we would normally calculate.

Okay, very good. Thank you guys.

And our next question comes from the line of Edward Atorino with The Benchmark Company.

On the line, this is sort of a Mickey Mouse question. How small of a number should we block in there? For what used to be the syndication business?

Probably $1 million a quarter.

Thanks a lot.

And our next question comes from the line of Aaron Rosen with Archview.

Good morning. I just wanted to touch on the comment you made on the dividend and just reflecting on the fact that there were no shares repurchased in the quarter, and as many others on the call have pointed out, you're not making any money on the cash you have. I would like to think that your shareholders could probably do better with that cash. So, I'm wondering, at what time point, at what timeframe do you set -- are we are going to be sitting here at the end of 2011? Is there some point in time where you say -- okay, we have $200 million in cash, let's do something more forceful?

Aaron, this is Tim. I am not going to put a timetable on it, I would just share with you that it is a topic of discussion at every board meeting. We are not interested in seeing a $200 million or bigger numbers sitting on our balance sheet for a long period of time, but I can't tell you what the Board is going to decide in consultation with management. So, it's not something that I can comfortably talk about any more than just saying, it's something that we discussed and we are trying to be thoughtful about it.

Aaron, this is Rich. We obviously talk about it all the time, but we are very comfortable with our decision making over a little bit longer period of time. And what that includes is understanding that we have a job to show you good returns as an owner, and we intend to do that.

Thank you.

Thank you. And we have no more questions in queue at this time.

All right Mary then we appreciate your help, and I'd like to thank everybody for joining us on the call this morning. Thanks and take care.

Thank you ladies and gentleman. This conference will be available for replay today after 11.00 am Eastern Time through March 4 at midnight. You may access the AT&T teleconference replay system at any time by dialing 1(800) 475-6701 and entering the access code 188883. International participants dial (320) 365-3844. Those numbers again are 1(800) 475-6701, and (320) 365-3844. The access code is 188883. That concludes our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.