Starz Entertainment Corp (STRZ) 2014 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Lionsgate FY14 fourth-quarter and full-year earnings conference call.

(Operator Instructions)

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Peter Wilkes. Please go ahead.

Good morning. Thank you for joining us for our Q4 and full-year analyst call. We'll begin with opening remarks from our CEO, Jon Feltheimer. Following his remarks, we'll open the call for your questions. Joining us on the call today are our Vice Chairman, Michael Burns; Motion Picture Group Co-Chairs, Rob Friedman and Patrick Wachsberger; Chairman of the Lionsgate Television Group, Kevin Beggs; Steve Beeks, Co-COO and President of Motion Picture Group; Brian Goldsmith, Co-COO; Jimmy Barge, our CFO; and Rick Prell, our Chief Accounting Officer.

The matters discussed on this call include forward-looking statements, including those regarding performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various factors, including the risk factors set forth in Lionsgate's 10-K filed with the SEC on May 29. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. John?

Thanks, Peter. Good morning and thank you all for joining us. Yesterday we reported record adjusted EBITDA and earnings per share for the second year in a row as we continue the achieve significant contributions from all of our businesses. Before I discuss our recent progress in launching new franchises and extending our existing brands, I'd like to touch on the diversity of our portfolio.

This quarter a number of our television series continued to progress towards their syndication and other second-cycle windows, keeping us on track for the revenue and margin growth within our television business that we've recently discussed. Nashville was renewed for a third season on ABC. Orange is the New Black was renewed for a third season on Netflix, even before its second season premiered, and Deadbeat, the sleeper hit of the LA screenings, was picked up for second season on Hulu shortly after its first-season launch.

It's interesting to note that Orange is the New Black and Deadbeat have followed different path to their early success. Orange is a series in the Netflix model of premium content with a big ensemble cast and a budget of several million dollars an episode. Deadbeat is a series who's surprising robust international sales belies much lower online network license fee. In both cases, by continuing to operate as one of the premier content providers for new digital platforms, we're able to innovate financial models that capitalize on new or accelerated windows and make these shows significantly profitable.

Mad Men, Weeds, and Nashville, three shows that are not made for digital platforms, will still generate approximately $150 million in ultimate revenue from [S Log] windows that didn't even exist five years ago. Whether our shows launch on broadcast networks, cable, or online, emerging windows enable us to piece together multiple new revenue sources much earlier in our shows' life cycles, creating higher margins and accelerated profitability on a present-value basis compared to the traditional approach of deficiting series for five or six years and waiting for the syndication payoff.

This year we're returning nearly 90% of our shows currently on the air. But we're certainly not resting on our laurels. We're adding to our portfolio with one of the strongest development slates in our history, and we continue to average better than one show picked up to series for every three network projects in development.

Manhattan, a period piece about danger, deception, and sacrifice set in the clandestine world of Los Alamos during the race to build the atomic bomb, is a directed series order that debuts on WGN America on July 27. Judging by what I saw when I visited the set a couple weeks ago, it's poised to become another compelling Lionsgate drama in had the tradition of Mad Men and Orange is the New Black.

We're also very enthusiastic about the first series from our Southshore Television Partnership with Televisa, Chasing Life, which debuts on ABC Family on June 10. A young woman's inspiring story based on a hugely successful limited series, Chasing Life has already been picked up for an additional seven episodes, even before the first 13 episodes have aired.

Currently shooting in London, the Royals is a black comedy about a dysfunctional monarchy that is E's first entry into scripted dramas. The series order for the space travel thriller, Ascension, for the Syfy Channel, an animated pilot order from Adult Swim for Harold and Kumar, and a new pilot order from HBO rounds out a development slate that gives us new shows for six buyers with whom we've never previously done business.

With the consistency of our renewals, returning shows already headed towards syndication availability, and our ability to place new shows, we remain confident that our television business is heading towards $100 million in annual profitability in a few years. This past quarter also underscored our continued ability to create new film franchises as well as to expand existing ones, as we launch Divergent, began production on Gods of Egypt, announced our partnership on Power Rangers, and rolled out the home entertainment campaign of Catching Fire.

Our Divergent franchise is off to a great start, with first film grossing $150 million domestically and approaching $275 million worldwide, opening on a par with the first X-men film and the first film in the Fast and the Furious franchise. Book sales have skyrocketed from 3 million last May to over 20 million copies today, putting the Divergent book series on a steeper growth trajectory than the Hunger Games.

The second film in the series, Insurgent, began filming in Georgia last week. We've added academy award winner Octavia Spencer to the cast, and we believe that Shailene Woodley's performance in Fox's upcoming The Fault in our Stars will continue to enhance her global stature. These factors all validated our decision to extend Divergent to a fourth film, creating a major new franchise as films will be made for less than the cost of a typical studio tent pole, and which will contribute very significant incremental profitability through FY18.

In the quarter we also announced our partnership with Saban Brands to launch a series of live action films based on the immensely popular and enormously successful Power Rangers brand. What's noteworthy in this competitive environment is that we were able to attract an outside party who believes that our production, marketing, and distribution prowess creates an ideal platform for launching this very special property.

No project speaks both to the vitality and the discipline of our franchise model more than Gods of Egypt, currently filming in Australia for release on February 12, 2016. The budget of $140 million encompasses an epic re-imagining of mythical ancient Egypt, with tremendous visual scope, while tax incentives for filming in Australia and robust licensing to our international distribution partners around the world have left us with a US GAAP of less than $10 million, even less than the average film on our slate.

And no discussion of our franchises would be complete without an update on the Hunger Games. Jennifer Lawrence and the rest of the cast joined us in Cannes as we dazzled international distributors with a sneak peek at footage of Mockingjay. The nonstop action, incredible battle scenes, and epic visual scope that director Francis Lawrence has brought to the iconic characters in Mockingjay give us every reason to believe that we'll continue to grow the franchise's global appeal.

As you'll recall, Catching Fire's international box office grew 60% from the first Hunger Games film, even as it became the 10th highest grossing domestic release of all time, and we're confident that the odds for continuing to expand the franchise remain in our favor. We've recently taken several significant steps designed not only to extend the Hunger Games brand at the global box office, but into new businesses as well. I'm pleased to report that we've partnered with, Kabam, one of the leading companies in the free-to-play game space, to create a new mobile role-playing strategy game that creates an immersive experience for Hunger Games fans around the world.

Similarly, Thinkwell, one of the leading designers of theme park attractions and other location-based entertainment around the world, including the making of Harry Potter in London, is spear heading initiative to explore line extensions for the Hunger Games, and all of our other brands. As a first step, they've already designed a state-of-the-art Hunger Games traveling museum involving costumes, props, and other elements of the Hunger Games world that will begin touring the US next summer.

The Hunger Games wasn't the only Lionsgate franchise conquering Cannes a few weeks ago. Sly Stallone and his cast of Expendables, including newcomers, Mel Gibson, Harrison Ford, Antonio Banderas, Wesley Snipes, and USC Champion Ronda Rousey literally stormed the Croisette in battle tanks, providing a taste of the fireworks to come when the film is released August 15. Buzz is already building for our Expendabellles spinoff that will extend the series to female action stars, and I think you'll be surprised at the level of casting.

Following the tremendous breakout success of the first Now You See Me film at the global box office, we began developing the sequel, and are producing Now You See Me 2 on three continents to continue to broaden the property's worldwide appeal with Jeffrey Eisenberg, Mark Ruffalo, Woody Harrison, and Isla Fisher all returning. I

n fact, 12 of our 25 wide releases are franchises or potential franchises, we continue to build a portfolio of brands with formidable breadth and scope. These include upcoming releases like the action comedy Mortdecai, starring Johnny Depp, Gwyneth Paltrow, and Ewan McGregor, as well as high-profile properties in development, such as The Last Witch Hunter starring Vin Diesel, a film adaptation of best-selling author Kimberly McCreight's upcoming sci-fi trilogy, The Outliers; and the action comedy, American Ultra, starring Jessie Eisenberg and Kristen Stewart.

In addition to our traditional film and TV slates, we're committed to exploring innovative new types of long-form content and exciting new directions in storytelling that bring us closer to our next-generation consumers. Last month we announced a partnership with Freddie Wong and the team at RocketJump, creators of the iconic web series Video Game High School. They've launched a broad range of properties on YouTube and the RocketJump platform that have attracted nearly one billion views and seven million subscribers, and RocketJump is the kind of kindred entrepreneurial spirit with whom we want to be in business to expand the breadth and diversity of the content we bring to our audiences.

As I mentioned a moment ago, video games represent a natural extension of our content business. We just hired Peter Levin, the co-founder and former CEO of Nerdist, a veteran of CAA and Disney, and one of the leading entrepreneurs in the game space to head up our interactive digital initiatives and lead our entry into the video game arena. Peter has been tasked with incubating new properties and investing in existing games and other digital media vehicles, as well as leveraging Lionsgate's franchises and other branded properties into the gaming space.

In closing, we are pleased that the overall trajectory of our business, depth of our content pipelines, and diversity of our portfolio give us sufficient visibility to extend our guidance for another three years. We expect that our strong operating momentum, coupled with continued enhancement of our capital structure, will result in continued strengthening of our financial results for the three-year period through FY17. In that period we anticipate generating between $1.2 billion and $1.3 billion of adjusted EBITDA.

In addition to reinvesting in our content portfolio, we remain committed to returning value to our shareholders through accretive transactions, ongoing stock buybacks, and the continuation of our dividend policy. As you know, we have a buyback authorization from our Board of Directors of $300 million. We have repurchased $90 million of stock in the past quarter, and we continue to believe that at current levels our stock is a very good value and an excellent use of our cash. We also paid another quarterly dividend of $0.05 a share today, and going forward it's our intention to increase that dividend on a yearly basis.

The environment for content creation is more favorable than ever. Our platform continues to become broader and more diversified, and our ability to generate repeatable income from our film franchises, television properties and library continues to grow, giving us even greater confidence that we can continue to accelerate the pace at which we create value for our shareholders. I'd now like to open the call to your questions.

(Operator Instructions)

Your first question comes from the line of Alan Gould from Evercore. Please go ahead.

Thank you. In your guidance, I assume you're assuming -- are you assuming Divergent shows a similar pattern to the Twilight series, where there was a big increase in the box office the second film from the first film?

That was a nice description on the TV side. Can you give us some timing of when the big syndications will be hitting?

On Divergent, we have modeled the first film about $275 million worldwide, Alan. We've modeled the second one around $350 million -- $350 million, probably expect $350 million to $400 million worldwide. And frankly, we expect growth after that, although I think we've modeled it pretty conservatively, in terms of what it's going to contribute through 2018.

In terms of television, I'm not going to give you the specific dates for syndication, but obviously we're looking at Nurse Jackie, Orange is the New Black, Anger Management, House of Payne, a couple of the other shows moving into syndication within that period. I can tell you, sort of as I look from today through 2017, probably looking at margins going from around 7% to probably doubling around 14%, and revenue increasing about 50% in that period of time.

We're also looking at -- when I look down the road at 2017, we're also looking at shows like Wendy Williams, which, at the beginning, was not significantly profitable. As we go down the road, the success of that show -- potentially Celebrity Name Game starring Craig Ferguson -- some of these other shows that look like annual strong contributors should get significantly better as we go down the road.

Jon, if I could just follow up on two specific shows, then? Nashville just got picked up for its third season, I believe. Would you typically be syndicating that in the fourth or fifth year?

If I'm correct, Orange is the New Black -- you licensed to Netflix, and the rights come back to you after, I'm not sure, typically four or five years. Do you then have the right to resell those rights?

The way television works right now is there's so many new windows that you might be able to pick up what you would call syndication as early as the first or second year. Some of the networks are making shows available earlier in the window, particularly to SVOD platforms, because they feel that it actually provides kind of a marketing ability to the viewers -- a catch-up ability. So, again, it's hard to put a specific time frame on it, but certainly Orange and Nashville are coming up relatively soon, in terms of potential of what you would call second-window revenues.

Okay. Thank you very much.

Your next question comes from the line of Ben Mogil from Stifel. Please go ahead.

Hi, guys. Good morning, and thanks for taking my question. So, first question: In terms of the guidance that you're looking for, when you look at (technical difficulty).

Ben Mogil, your line is open. Please go ahead.

Ben, start over.

Ben, we lost you there. Start over.

Okay, sure. Can you hear me okay now?

We can.

Great, thanks. In terms of the guidance, when you look at 2017, (technical difficulties) a new Hunger Games being out (technical difficulty), and if you want to break it down between TV and film, that's fine.

Then also, when you look at the slate, should we be thinking about it as very similar to FY14 with Divergent and a film like, say, Now You Can See Me, but no blockbuster on the Hunger Games level?

Ben, I'm sorry. We sort of lost you again about a third of the way in.

Sorry. Let me try this. Is this better?

Well, it's better to start, anyway.

Let me start. So, in terms of the guidance that you're looking for in the three-year guidance, when you look at 2017, post sort of a new Hunger Games, what kind of revenue range are you looking for, for that year?

In terms of the slate, is it sort of one of those years where it looks a lot like FY14 ex-Hunger Games? So, a Divergent and, say, something along the lines of Now You Can See Me, but no big, big blockbuster? Is that the right way to think about 2017?

I think the right way to think about 2017 -- we certainly -- it's pretty far out, but we have populated 2017 with our film titles and a fair amount of our TV titles. Obviously, some of those titles will change. But I think the right way to look at 2017 is: It's a similar blend of contributions from our various business units as we've had this year, last year, in the next couple of years, but I would say TV will have a somewhat larger percentage contribution.

And, Ben, we're not giving particular color on any given year, but obviously with our guidance, we do not see a cliff. As a matter of fact, we like our visibility throughout the planned period, and expect the three years to be somewhat back-loaded.

Okay. And then, in coming up with your guidance, when you look at Epix and the contributions there that flow up to your adjusted EBITDA calculation, are you expecting a lot of growth from Epix? Obviously, it's had a great turnaround. It's now got much better carriage. Do you see a material ramp from the $90 million or so of EBITDA the business was doing on a consolidated basis going forward?

I think we have really not modeled as much growth, frankly -- nearly as much growth in Epix as I think we're going to have.

That's great. Thank you very much.

And next we go to the line of David Miller of Topeka Capital Markets. Please go ahead.

Questions: Jon, just correct me if I'm wrong. So, with the television production profile that you outlined in your prepared remarks, by this time next year you'll have 39 shows on 28 networks. Is that about right?

Well, I can't assume everything is going to work.

Right.

And frankly, obviously, we don't model that everything is going to work. But obviously, we've got a very robust Business right now. What I particularly like about it, as I said, is: Most of the things that we have do not require a large deficit going in.

Yes.

And obviously, we think, from an ROI perspective, we've got a really good model. But again, I can't say that every single thing is going to work, and obviously, I don't model that everything is going to work.

Okay, fair enough.

And then, following up on Alan's question on the syndication issue, should we assume that television syndication, be it either international or domestic, is going to be fairly smooth over that three-year time frame? The reason I ask is because my sense is that FY15 will be exceptionally strong for television syndication, but I'm trying to profile 2016 and 2017. Should we assume a front-loaded effect on television syndication, or do you think it will be fairly smooth over the three years?

No, I would say, and speaking to Jimmy's point, we're looking overall at the Company probably at overall revenue of sort of in the $3.25 billion range in 2017. Some of that is driven, as I said earlier, by perhaps larger contribution from television. I would say the syndication is more back-loaded towards 2016 and 2017.

Okay, and then just a final question. Just wanted to get your guys' take on the Epix launch on the Time Warner Cable system. I believe that launched on March 18, if memory serves. It's been a couple months. Just any kind of color you guys have on just the response with overall subscribership over these past couple months. Thanks very much.

Okay. Yes, I think the launch has been really, really strong on Time Warner Cable. I think, again, people are starting to recognize the value that Epix is bringing, the flexibility that the way they can package Epix has brought. We had a 90-day introductory period -- free period. Turned out to have great usage by the Time Warner Cable consumers. And frankly, Epix has become one of Time Warner Cable's most watched networks.

So, we think it's going to be great. We think it's going to generate significant incremental ARPU for Time Warner Cable; definitely this has been a win-win.

Okay, wonderful. Thank you very much.

And next we go to the line of James Marsh of Piper Jaffray. Please go ahead.

Good morning. This is Stan in for James. I guess first question is on Divergent. The film opened on March 21; played for 11 days in the quarter. I assume most of the film-related costs have been sort of front-loaded in the quarter. What is your rough estimate of Divergent profits that you'll recognize in FY15, percentage-wise?

Sure, Stan. As a matter of fact, the P&A expense obviously largely, almost exclusively, fell in the quarter. So, that's been expensed. We moved forward with the profitability in 2015.

We're not going to size the profitability on any specific franchise or film, but feel good about where we're positioned with the entire franchise and the film in particular moving into 2015.

Okay. And then, on TV side, obviously you guys had nicely benefited from growing number of outlets stemming from new original content. However, do you guys see any industry shifts to bring the TV production in-house to capture more of the upside of their platform? I know AMC has been out there highlighting their AMC studio-produced shows. What kind of trends are you seeing there?

I'm not sure I got the front part of that question. Can you repeat that?

I was just saying that you guys have benefited from growing number of outlets demanding new original content from you guys and buying your shows. But we've recently seen some studios, or some parties, producing TV shows in-house. AMC studios, for example, producing their own shows. Are you seeing any of those trends taking place on the TV side?

Look, we -- certainly, this trend has been going on for, I don't know, 10 years. Networks, online companies are certainly trying to own more rights. We don't ever produce for hire, if you will. We own virtually all of our IP. We produce all of it in-house. We retain generally all of the distribution rights.

And I think, frankly, that most of the networks -- you can see in this particular quarter, we're announcing six new projects with six new buyers. I think that most networks recognize our ability to create great IP. And we have found an ability to come up with an economic formula with everybody, from Hulu to ABC, that is economically beneficial to both sides. So, I'm not concerned about that trend. We continue to be a very, very strong content provider for all networks.

Thank you. And then just one last one on EBITDA margins. Obviously, those have improved nicely over the past few years. Do you see margins reaching maybe potentially size 20%, as more and more of your revenue comes from TV, digital sales, and library?

I would say, again, we focus a little bit more on margins than revenue. I've mentioned, to the previous question, we do see revenue continuing to increase. Our model shows us around $3.25 billion in 2017.

Our margins went up from about 12% to 14%. We expect them to go a little bit higher next year, and we're going to continue to push them up. I think your number's -- in this period of time, I think your number's a little aggressive.

Okay. All right. Thanks.

And next we go to the line of Alexia Quadrani of JPMorgan. Please go ahead.

Just looking at your extended guidance, could you give us a sense how much conservatism or how much what you're thinking is really for the new franchises, such as Gods of Egypt. Are you assuming it'll be another break-out hit, or are you [assuming] pretty conservative assumptions?

I would say that, any time we give guidance -- right now we gave three-year guidance -- a couple of years ago. We're tracking nicely towards that guidance, or exceeding that guidance. So, we always tend to believe that we're giving you the best look at where we see our numbers coming in.

So, I would say it's neither conservative nor aggressive. I would say we've given you what we think is our base case, with certainly nothing extraordinary happening in that period.

And just a follow-up on the home entertainment revenues that were a little bit lighter than we had expected in the quarter. Can you give us a sense of, if you guys sense there's any softness there; what caused it? And do you think that you've already seen most of the benefit from the Catching Fire in-home entertainment in the past quarter, or will you see some of the benefit in the June quarter as well?

Alexia, this is Steve Beeks. I would say, in the quarter, as well as in the fiscal year, the drop in home entertainment revenue is really just a matter of timing, as well as the slate. In FY13, we had 19 wide releases versus 13 in FY14. So, obviously there's a difference there. The rest of it's a matter of timing. And obviously, in home entertainment we also have some SVOD revenue, which tends to be lumpy depending on when we're syndicating a show or making a library sale.

We haven't really seen any softness in home entertainment overall. As a matter of fact, when you look at the first five months of the calendar year, overall home entertainment consumer spend is actually flat versus last year. Which is not only great news, the better news is: You're seeing a lot of growth in digital, primarily EST, being driven by the ownership model supported by models such as UV, as well as new entrants such as Comcast, which we mentioned before.

So, I think we're seeing not only margin percentage increase, you're seeing overall operating margin dollars at the studio level actually growing. So, we're fairly bullish in home entertainment overall. An even more granular example of that is strength of digital is the fact that you look at Catching Fire compared to the Hunger Games. So, 1.5 years later, our actual operating margin dollars on Catching Fire will be approximately 90% of that of the Hunger Games -- 1.5 years later. That's demonstrating that growth in digital is really, I think, the exciting thing happening in home entertainment.

Alexia, just to give you a little more color to add to what Steve's saying, remember: The prior-year packaged media -- there was tough comp against Breaking Dawn 2 and Hunger Games. And as Steve mentioned, the continuing rollout of the larger FY13 slate continued, certainly did benefit the prior year revenues. And a case in point in that in packaged media is there were six releases in packaged media a year-ago quarter versus four this quarter.

Okay, thank you.

Despite that, we were still up year over year.

Okay. Thank you very much.

Next we go to the line of Matthew Harrigan of Wunderlich. Please go ahead.

Two things: First, Chaos Walking, is that still in development, or is that more or less either been shelved? You just have a plethora of projects, it seems.

Then also, I think there was a report in Hollywood Reporter that you were also working with Johnny Depp on a Houdini -- kind of America's first superhero adaptation that kind of sounded interesting. I don't know whether you could comment on that or not. Thank you.

It's Rob Friedman. Chaos Walking is still an active development property for us. We're very excited about it. We're still working to put it together with both director and star. There's three books, as you know, in the series.

Houdini is a property that we are very, very excited about it. We have had conversations with Johnny, and we're moving forward on that property as well.

Thank you.

Next question.

Your next question comes from the line of Tuna Amobi from S&P Capital. Please go ahead.

Hi. Thank you so much. My first question is on free cash flow. I know that you guys don't focus on it in terms of guidance. But I was just looking back the last couple of years; it seems like the conversion levels has been pretty high -- north of 70% to 80% free cash conversion of adjusted EBITDA. In the context of your new guidance, I'm wondering if you think that those kind of levels are sustainable? I have a follow-up question.

Sure, Tuna. Obviously, while we don't provide guidance on that, we're very focused on driving free cash flow. So, what I would tell you is that we expect to continue converting a significant portion of our adjusted free cash flow, or adjusted EBITDA to free cash flow.

In addition, I would note that we've reduced our cash interest to an annual run rate of just under $40 million, and cash taxes should continue to be $15 million to $20 million a year as we extend our NOLs into FY17. So, we feel very good about our free cash flow conversion.

Okay. That's helpful.

Separately, just a bigger-picture question, perhaps for Jon. So, as you think about your TV business and you try to grow it out, obviously some of your peers are piggybacking on YouTube channels to kind of incubate some new franchises, marketing, whatnot. I'm just kind of wondering: Given the audience that you serve, it sounds to me like that kind of strategy might be somewhat amenable for you guys as you grow your TV. I'm wondering if you have any interest in perhaps leveraging YouTube, either organically or even through acquisitions of an MCN, and how you view that strategy in the context of your television business?

We've seen a couple of deals lately. Again, all of our projections are -- going forward, are without any M&A activity at all baked into them. We've looked at a couple of those MCN deals. To me, the numbers look really, really high.

We've certainly done the Freddie Wong deal. We've got our partnership in Defy. We've got -- frankly, we don't talk a lot about it because, again, until any of these ventures start printing profits and money, it's not (inaudible) talking about. But BeFiT alone, our YouTube channel, has 2 million subscribers right now. And what -- everybody's got a YouTube channel right now, or even a YouTube show, is really trying to figure out is what the right way to monetize that is.

We're focusing on two or three things that we think extend our intellectual property, extend our leadership in, for example, in that case, the fitness and wellness area. And we're going to continue to concentrate on that. And we're looking at sort of the online channel, not necessarily with a YouTube, but that online channel area as potentially an interesting way to monetize our content in well, and we're talking to actually a number of really interesting partners in that space.

Okay. Thank you.

Your final question today comes from the line of Eric Wold from B. Riley.

I'll make it easy. My questions have been answered; appreciate it.

All right. Thanks so much. Thank you, everybody. We'll look forward to our next call.

Also, just please refer to reports, presentations under the corporate section of the Company's website at www.lionsgate.com for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thanks again.

Ladies and gentlemen, this conference will be available for replay after 8 AM Pacific time today through June 6. You may access the AT&T teleconference replay system at any time by dialing 1-800-475-6701 and entering the access code 326366. International participants dial 320-365-3844. Those numbers once again are 1-800-475-6701 or 320-365-3844, with the access code 326366.

That does conclude your conference for today. Thank you for your participation and for using AT&T executive teleconference. You may now disconnect.