Thryv Holdings Inc (THRY) 2004 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the R.H. Donnelley's fourth quarter and full year 2004 results investor teleconference. (OPERATOR INSTRUCTIONS) Copies of R.H. Donnelley's SEC filings may be obtained by contacting the Company, its Website or the SEC Website at www.sec.gov.

This transmission is the property of R.H. Donnelley Corporation. Any retransmission or broadcast without the expressed consent of the Company is strictly prohibited. Please note that today's teleconference is being recorded as well as webcast live over the Company's Website at www.rhd.com. Now I would like to turn the call over to Jim Gruskin. Mr. Gruskin, you may begin.

Good morning everyone. I'm Jim Gruskin, AVP of Finance at R.H. Donnelley. On the call today are Dave Swanson, Chairman and Chief Executive Officer of R.H. Donnelley, Steve Blondy, Senior Vice President and Chief Financial Officer, and Peter McDonald, President and Chief Operating Officer.

Certain statements made today may be forward-looking within the meaning of the Private Securities Litigation Reform Act. We call your attention to our press release for the year ended December 31, 2004 and our Form 8-K furnished to the SEC yesterday, February 24, which both discuss our fourth quarter and full year 2004 results. We also encourage you to review the Company's other periodic findings with the SEC which set forth important factors that could cause actual results to differ materially from those contained in or suggested by any forward-looking statements.

During this call today we will refer to certain non-GAAP financial measures in discussing the Company's performance. You can find additional information about these measures and a reconciliation between these measures and the most comparable GAAP measures in the press release and related 8-K furnished on February 24, 2005. The separate 8-K filed on October 27, 2004 includes an explanation of the non-GAAP measures mentioned in connection with a recent SBC transaction.

Today we will be referring to adjusted pro forma results, which unless otherwise indicated, reflect the combined results of R.H. Donnelley and the directory business acquired from SBC, assuming the transaction took place at the beginning of the period presented. The press release is available on our website, and can be accessed by going to www.rhd.com under Investor Information. Now I would like to turn the call over to Dave Swanson.

Good morning everybody and welcome to R.H. Donnelley's fourth quarter and full year 2004 investor call. 2004 was a very busy dynamic and productive year for R.H. Donnelley, and I pleased to be able to talk about the impressive accomplishments of our management team and employees. I will take the next few minutes to provide you with a brief review of our full year highlights and performance for the quarter. And then afterwards Steve Blondy will take us through the Company's financial results in more detail. We will then be happy to answer your questions.

During 2004 we completed another critical step of our strategic transformation to owner operator by acquiring SBC's Yellow Pages business in Illinois and northwest Indiana. We now own all 389 of our directories and have control over our operations, our cash flow, and our content. We successfully moved our corporate headquarters from Purchase, New York to Carey, North Carolina, better positioning us to manage the demands of a larger company and take advantage of future opportunities.

We grew publications sales in our Sprint markets by 2.7 %. And we believe this represents the best sales growth among the major incumbent publishers. But more importantly, we know we can do better.

We made significant progress toward our online local search strategy by launching 137 new online city guides in digital searchable versions of our Yellow and White Page products. With 56 of our Sprint markets online by the end of the year, we exceeded our target of 50. And we also added another 81 in our Illinois markets.

We generated adjusted pro forma revenue of just over $1 billion, and normalized EBITDA of 600 million. We generated free cash flow of $317 million, excluding the 71 million of federal income tax refunds, and we repaid nearly $300 million of debt. Even with the additional SBC acquisition debt our year end total leverage was 5.2 times, only slightly higher than a year ago.

And finally, we were able to deliver a 48 % increase in our stock price for the year. Especially impressive when you consider that it is on top of a 36 % increase in 2003.

Now I will turn to some of the operating details for the quarter. While we were busy beginning the integration of SBC's Illinois business in the fourth quarter, I'm very pleased to report that our team didn't let that become a distraction for the rest of the business. Publications sales for Sprint branded products in the quarter increased 2.6 %, reflecting the continued impact of our RHD business process implementation. This represents our 8th consecutive quarter of improved year-over-year publications sales growth since we completed that acquisition at the beginning of 2003.

Strong advertiser renewal rates are the foundation of this consistently improving growth. Our advertisers continued to invest because the strong usage of our products is driving a steady stream of prospects to their door, making the return on investment very compelling relative to other media.

In addition, continued improvement in our credit and collections process has helped us to convert even more of this revenue to cash flow. In the newly acquired Illinois region Q4 was a period of transition and integration. Published sales there were down about 2% for the quarter, as they were for the full year. As a reminder, substantially all of Q4, and even a good portion of Q1 '05 sales took place prior to the acquisition on September 1 of 2004. While we hope to see some very modest improvement beginning with Q2 as a result of our investments and initiatives, we know from experience that it is going to take us at least 4 to 6 quarters to get Illinois back on its feet.

Currently we are in the middle of the most challenging part of the integration process there. Over the last several weeks we have been transitioning the billing and collection functions. We're also moving some of the support jobs out of Illinois and into our centralized functions at headquarters. So as I am sure you all can appreciate it is quite a stressful time in Illinois right now.

We're also allocating a lot of marketing resources in Illinois. We have deployed a team of marketing professionals into several of those markets, rescoping and reconfiguring our product offerings to better satisfy the needs of users and advertisers. With 129 directory products to get to, this will be a multiyear project. But it will position us very well for long-term sustainable growth.

All in all Peter and I are very pleased with our progress on the integration to date. We have had no big surprises and we remain right on track.

Moving to our ongoing online initiatives, going into 2004 we set a goal of establishing online city guides in digital searchable versions of our Yellow Page and White Page products in 50 of our largest Sprint branded products by the end of year. I mentioned earlier that we ended the year with online products in place in 56 of 81 Illinois markets, far exceeding our goal. We have continued to accelerate the launch of online products for the rest of our directories. And we currently have 315 of our 389 directories available on the Web. We expect to complete the build out of our local city guide portals in all Sprint and Illinois markets by midyear.

In addition to new sites, we have also been improving the functionality, as well as the quality and relevancy of the search results. By electronically extracting the details in every advertisement that appears in the print directories and loading them into a structured database, we have enabled our users to effectively keyword search the deep local content we have built in our markets over many years.

So 2004 was a year of transformation and growth for R.H. Donnelley as we continue to reposition ourselves within our industry. It was also another year of creating meaningful value for our shareholders. But perhaps the most important message I have today is that we believe the best opportunities for our investors are ahead of us. Our print product remains strong and continues to deliver superior value to our advertisers relative to other local media choices. And our execution in communicating that value to advertisers continues to improve.

Next, online search and services will be a source of additional usage and value for advertisers. And these exciting new products and services will help us penetrate new market segments and attract new customers. Third, at current levels our stock price represents better cash flow value than most any other media stock. And finally, our strong predictable cash flow positions us to continue delivering attractive levered equity returns.

For 2005 we are keenly focused on 2 key priorities. First, rebuilding the Illinois business for the long-term, and second, continuing to expand and improve our online search offerings in the markets we serve. At the same time we will continue to improve our execution and basic blocking and tackling in every aspect of our business. Now let me turn the call over to Steve.

2004 was certainly a remarkable year. Our business process started to deliver results. Free cash flow of $388 million exceeded guidance. We completed a major strategic and accretive acquisition. Our stock price increased 48%, and we established an ambitious integration plan and 2005 budget that affords us the opportunity to invest generously in our future.

Here are the financial highlights. Sprint pub sales grew 2.6% in Q4 compared to 0.5% in Q4 '03. That brings full year Sprint pub sales growth to 2.7%, modestly above guidance, and higher than 1.2% growth for 2003.

SBC Illinois pub sales declined 1.9% in Q4 versus a 3.6% decline in Q4 '03. Full year SBC Illinois pub sales declined 2.1%, again better than guidance and compared to a 3.4% decline in 2003. As Dave mentioned, the sales campaigns for these publications were largely complete when we closed the SBC acquisition in September. We look forward to improving performance in Illinois as we implement our business process there.

Turning to the rest of the details, these P&L figures are all reported on a pro forma adjusted basis, assuming the SBC deal closed January 1 of both years, and all purchase accounting entries are reversed. Net revenue of $259.3 million in Q4 '04 compares to $260.2 million in Q4 '03. Full year '04 net revenue of $1,034,000,000 compares to 1,033,000,000 in '03. These figures reflect the impact of our deferral revenue recognition method as current quarter pub sales amortize to revenue over the next 4 quarters.

Operating expense, excluding D&A in that quarter was $113.5 million, down from 125.1 million in Q4 '03, which included 7 million of structuring costs from the Sprint integration and our headquarters relocation. Full year '04 operating expense excluding D&A of $417.2 million compares to 432.6 million in full year '03, reflecting a full year of synergies from the Sprint integration, among other items.

Q4 '04 EBITDA was $145.8 million compared to $135.1 million in Q4 last year. This brings full year 2004 EBITDA to $616.8 million. Normalized '04 EBITDA of $600 million, representing a 58% margin, reflects 4 adjustments meant to enable a more meaningful comparison with '05 expenses. First, removing a $12 million benefit arising from preacquisition SBC bad debt and claims true ups. Second, excluding $7 million of headquarters relocation costs. Third, including $5 million of incremental compensation expense had we adopted FAS 123 at the start of 2004. And fourth, including $7 million net expense from other items consisting primarily of costs not allocated to the SBC carve out.

In 2005 estimated EBITDA will be impacted by 3 further items. Substantial investments in the business, including digital initiatives and increases in advertising and promotion in Illinois. Incremental compensation expense related to FAS 123, and the absence of P&L benefit derived in '04 from significant improvement in collecting Sprint receivables. After these items, expected full year '05 EBITDA of $575 million represents a 56% margin, which should still represent the best performance among the major incumbent publishers.

Cash flow from operations in Q4 '04 was $82.6 million, and free cash flow was $76.7 million. After repaying $65.5 million in the quarter, net debt at year end was approximately 3.12 billion, modestly lower than our guidance of 3.15 billion.

Last month we repurchased half our outstanding convertible preferred stock for $277 million, financed with 300 million of 8 year, 6 7/8% senior Holdco notes. This reduced our number of diluted shares outstanding by 4.9 million, while taking advantage of low interest rates to reduce our weighted average cost of capital. Net debt of $3.4 billion following the repurchase was approximately 75% fixed-rate and represented 5.7 times leverage. We expect this transaction to enhance 2005 free cash flow per share by 9%.

This concludes our prepared remarks. Thank you for your attention. Now let's turn the call back to the operator for your questions.

(OPERATOR INSTRUCTIONS). Karl Choi of Merrill Lynch.

A few questions here. Number 1, I wonder if you can update us on the competitive situation in Vegas? Any preliminary thought about how the July book might be coming along? And 2, if you could talk a little bit more about some of the digital initiatives that you might be thinking about doing in 2005?

It is Peter. The Vegas situation -- we are pleased, as we said in the past, I think with the approach that we've taken out there. We continue to focus on winning customers on our value proposition. And to date I would say that as we have said in the past, competition is not a new thing to us. We compete with 3, 4 different competitors in each of our markets. We have a healthy respect for all of our competitors. And that being said, I feel very positive about how we have performed in the Vegas market.

It is Dave. On the digital initiatives, consistent with what we have said in the past, what I think you can expect in '05 is we are going to continue to build out so I can make sure it is like we have got all of our markets, all of our data in these searchable databases, as well as online products and portals.

The second initiative you'll see from us is we will begin to work harder and a little more in earnest to begin to drive traffic to those sites. Something that we haven't really spent and lot of time and resources on to date, as we have been focused more on the build out. And third is this is a time that is like where we're very heavily involved in conversations with a number of players around this space to determine what kinds of partnerships and what kinds of relationships we think could bring value-added to the whole strategy.

I wonder if I can follow up. In terms of investment for these digital initiatives, if there is an amount that you are thinking about out of the $25 million that you mentioned in our press release? And second if you could comment on your appetite for acquisitions at this point?

We're really not breaking out the specific investments in that $25 million between the various initiatives. I outlined what the various components are, but it will depend on the specific return on investment that we think we can get from the different investment opportunities. And likewise with respect to acquisitions, we are always got our ear to the ground to look at what becomes available. And we will continue to use our disciplined approach.

Is there any preference for using debt versus equity at this point?

It is going to really depend on the specific circumstances. I think we continue to believe our share price is undervalued, and so we would be reluctant to issue shares under most circumstances.

Paul Ginocchio of Deutsche Bank.

Just a couple of questions. First it seems to be everyone is launching companion directories, Dex and Verizon, I think even SBC is talking about it. Can you talk about the opportunities there and if that is something that you're looking at for some of your Metro markets? Including, you probably can't say much about TransWestern, but is there -- if somebody were to get it, what is the best case and sort of what would be the worst case, if you can elaborate? What should maybe the market be worried about or hopeful about where that Company ends up?

It is Peter. I think the way to look at companion directories or any of our products, and I think this is the best way to look at it -- we will continue with our approach, our kind of disciplined approach here to look at each product that we have out there and drive it from what the users really want. And we're evaluating everything. I think there has been some terrific success with companion directories. We obviously will look at that. And each of our markets have different issues that we have to look at. But all of our products will be driven by what makes sense for the user.

On the TransWestern question, we don't even want to begin to engage in that kind of speculation at this point.

If I can ask a follow-up. Some of the RBOCs were stating that -- or all of them were stating that -- the 3 RBOCs were stating that pricing was very difficult in '05 and that was really holding back revenue growth. What does it look like in your markets?

I think, Paul, we focus on value, and the value that we deliver, and the return on the investment with our advertisers versus I would say more focus on price. And so we find that as we continue to monitor the value that we are delivering, the conversations that we have at the customer level are always about the value and how we are delivering that to them. And we're finding it has a very favorable reaction in the customer level.

Michael Meltz of Bear Stearns.

I have a few questions for you. The expense upside or I guess better-than-expected expenses in the quarter, can you talk a little bit about the bad debt expense at Sprint, and maybe talk about what it was for full year? And how you think that will play out in '05?

And secondly, can you talk a little bit about -- or just say what your average cost of debt was in the quarter, what it is now please? And thirdly, I guess this kind of follows that earlier question about additional companion books. Dave, you mentioned rescoping and reconfiguring properties in the DonTech book. What does that means exactly, and what have you done to date? Thank you.

We will start with your last question, and then we will turn it back over to Steve. I'm going to give that to Peter because he is right in the middle of it.

I think it is not that we have launched new books. We're rescoping -- that has come out that we've launched new books. It is really that we're rescoping. And what we thought we were going to do before we bought the property was to look at the really the shopping patterns within Illinois, and we thought there was opportunities. When we did our research it came back that there really were some significant opportunities. So we have launched a few of these. And I think that we are going to continue to challenge every one of their products, because if we have the product of choice, which has been our state in the past in the marketplaces, we feel that the ability to give good return on investment to our advertisers is there. So that is the way that we look at it.

You're just cutting the trade areas differently than historically?

If you look Illinois, a lot of what they designed the directories really were around the old telephone company exchanges. And we have really kind of taken a whole different approach of looking at shopping patterns, traffic patterns, and spent quite a bit of time in the field doing our research. And it is clear the direction we need to go, and that is what we're doing.

But you haven’t launched new books?

I would say they are rescoped.

As far as the other parts of your question, the simple question first I guess is the average cost of debt. During 2004 it was about 6.8% on a cash basis. And at year end and pro forma for the recent notes offering for 2005, it is currently about 6.5%. So a little bit lower than it was last year. We have actually lowered the spreads on our bank facility, for example, which we announced that back in December.

As far as the Q4 expenses, as I mentioned, last year in Q4 we had about $7 million of integration costs associated with the Sprint deal. It involved the closing down of our facility in Blountville, Tennessee, which did not repeat itself in this year's fourth quarter. So that is really the big difference on the quarter to quarter expenses. As far as bad debt goes, the bad debt in the Sprint markets is in the 4 to 5% range. And that a kind of where we feel comfortable, and expect that is where it will be for '05.

I guess, Steve, then maybe another way to ask it is your EBITDA came in several million dollars higher than you had said it would have been -- this was a month plus ago -- but your revenues were at the same level. We already knew about the headquarters cost. So what other -- what else was there that led to that -- the upside?

It was just some pretty good cost controls.

Mark Bacurin with Robert W. Baird.

A couple of questions. First, Steve, is it possible for you to give us a breakdown both in terms of OpEx and maybe the EBITDA numbers between the Sprint and SBC contributions?

We're really not providing that information. We look at the difference at a pub sales basis, and we provide a reconciliation in our schedules to the press release. I think you can back into what the revenue numbers are. But once you go below that, we're trying to focus on economies of scale in our back office operations and publishing and IT and billing and collections and customer service, etc. And so we really don't run the business that way, and we don't focus on those numbers.

Is it a fair way to look at the historic numbers to take what you guys previously reported as adjusted expense and EBITDA for Sprint and then take the new numbers with SBC rolled in, and subtract the 2 and that is a good proxy for SBC, or were there some historical adjustments?

I think that is a reasonable approach from an analytical point of view. You have got to back out the DonTech partnership income, and back out the pre-press and IT revenues we were getting from SBC. And then you've got to make some assumption about sort of G&A expenses and public company expenses. You could probably figure that out if you tried -- come up with some reasonable estimates.

Could you talk about what contribution you may have seen in Q4, and what the expectations are for '05 with regard to revenue from the online effort?

We're really not focusing on online revenue versus off-line revenue. We're really focusing on growing the whole pie, and that is really the way we are approaching the business.

Is it fair to say there was less in Q4 though from the online efforts, or is it still immaterial it in terms of revenue contribution?

We forecast at the beginning of the year 4 to $6 million in 2004 online revenue. Then we came out in that range.

Perfect. And Dave, maybe you could talk about -- you're talking about some additional marking activities in Illinois to try to boost pub sales there. Could you give us a little more specifics on exactly what the efforts are, and maybe what kind of dollars are surrounding that activity?

I will give that to Peter.

I think the key things that I think that we have talked about in the past and that we're executing on is, first, the advertising and the branding. We have launched some significant advertising campaigns in the Illinois marketplaces. And we think that is important. We're also investing in the products, not only by scoping differently, which has some expected tax (ph) to it, but also in the features that are in the products. And when we have gone to the consumers or the users of the products and determined what exactly they wanted in there, we continue to drive the product, and those expenses are also part of the marketing costs.

I will say that the resources that we have across the country now to be able to help focus the attention on Illinois is -- really our number 1 goal for 2005 is to try and move that in the right direction. And marketing will be the key driver of the whole process.

Is there mass media marketing involved in that as well?

We are on TV, we're on radio. Yes.

And just final, could you give us an update on the Mbox platform upgrade in terms of timing for the completion there, and how the implementation has gone so far?

We're still at the fairly early stages of that. As we said I think in December, we've got about $15 million of our CapEx budget for '05 focused on that. And the goals are to -- I think is to capture and manage new forms of data, accelerate our local commercial search strategy, and also to update our hardware and software to improve our scalability in case there are future acquisitions.

I think it is kind of a mid 2006 completion on that.

Maurice McKenzie of FBR.

Just a couple of questions. Can you discuss trends you're seeing in national and local ad spending? And secondly, if you could just give a breakout of fixed versus floating debt at year end, including any hedges? Thank you.

I'll comment on the trends. I think that we are seeing slight improvements in the economy, and that is reflecting in the attitude of the local advertisers that we have. And so I think there is some lift to our numbers, and I think probably across the industry.

On a national basis we are seeing a similar trend. And our national doesn't get the same benefit of like the Olympics and everything else, but our national buyer is in some ways very similar to the local buyer in the way they look at things, because there's a lot of local business that they do. And I think we're also seeing very positive trends in national as well.

On the debt question, we're about -- just a hair over 75% fixed at the end of the year. And a hair over 75% fixed pro forma for the notes offering. We were just a hair under 75% before the 300 million of notes offering. That's including all of our swaps.

Thanks much and congratulations on the quarter.

(OPERATOR INSTRUCTIONS). Fred Searby of JP Morgan.

Actually it is Fredrick Searby of JP Morgan. Thank you. A couple of quick questions. You kind of touched upon this, but in the past you had talked about DonTech struggling with a very competitive or somewhat more competitive than other local markets in Chicago. And I wondered if you could comment if you still see the Chicago market is fundamentally more difficult or struggling at the local level?

And then secondly, Yell, they have had the very strong results, and it looks like they're still aggressively expanding. And we know about what is happening in Las Vegas. Are there any other major markets where it would be likely they would enter in next year or 2 where you are not competing with them now? Thank you.

I will start and then I will turn it over to Peter. Quite honestly what we I think pretty said this like pretty much all along is that most of our issues in Illinois and the Chicago area have revolved around the employment levels and economic conditions there. And it still is not as strong as some other regions of the country that we've felt. While Illinois is a competitive environment for us, it is not unlike the competitive environment that we have in pretty much every market that we do business in right now. That is I think the long and short of the competitive situation there.

I would agree. I think that -- I have been spending quite a bit of time in the field in the last couple of months in Illinois and it is not -- I think customers or advertisers are looking for good value. And so another directory, and there's multiple directories that are always being launched in all of our markets. So it is not really a different situation.

In our conversations I find are more on, how can we help return investment to the local advertiser, as well as help them get into our online product. And so they are looking at us as more marketing partners, and there's almost little discussion on another competitive directory out there. There's lots of ways that we can market their business, and another competitive directory is just one of them.

And on the expansion, Yell's expansion, we're engaged in every market already. So there's really no place I think that they can really go that it would make any difference to us. I'm sure that maybe in some other market there are opportunities, but --.

We have 4 or 5 -- in almost every market of any significance there is somebody there.

But specifically which -- I know you have 4 or 5 -- but which of your markets of significance is Yell not in yet?

I could say Orlando, but we have 4 or 5 other competitors in Orlando with BellSouth and others. And I don't think -- I think it is a tougher pot to go into a marketplace as the third, fourth, fifth directory competitor.

Arnie Ursaner of CJS Securities.

I have a question for Steve regarding Schedule 7, if I could. You had SBC for the entire fourth quarter yet you did not include it in the reported results. Why is it still pro forma if you had it for the entire quarter?

I'm not sure I understand your question. Let me just -- (multiple speakers).

Let me try to make it easier for you, if I could. Take a look at your Schedule 2, which is reported. You show 170 million of revenue. Then you show a pro forma of 259. If I then go to Schedule 7, the reconciliation between the 2 is SBC, but you had SBC for the entire quarter. Why would it be pro forma?

Got it. You remember our revenue recognition method says that we record revenue for directories for 12 months following the publication date. Actually it includes the publication month and the 11 months following that until the next publication comes out. Under that revenue method and the application of purchase accounting, we are not permitted under GAAP to record the revenue associated with directories which published prior to us owning the business. So that revenue you see in Schedule 7 there of $89 million would represent the amortization of publication value for directories which published prior to and including September 2004.

Okay.

And likewise the expenses that go along with that. There's a matching principal that you have got to record expenses on a matched basis with revenue.

Okay. A question for Peter on the online business. What percent of your customers today are customers who use you for print as well as online?

I think there is, I guess the general number would be in the -- about the 30, 30 to 35% of our current advertiser base participates in our first year products. Remember, we only started this. And I think the way to look at it is the larger ones are a much higher percentage, and the lower -- you know, people who have just a bolt (ph) listing with us are much lower. The 30 to 35% is a good number.

That is those that have been offered the product. As I said, is like we had -- not every market had an online product for us to offer.

And are you surprised the percent is that low?

No, it is the first -- this is relatively new for many of our advertisers. It is a first year products out there. The participation level is at the advertiser where they are doing display ads, etc., is significantly higher. And relative to any other product launch, this is by far the highest level of participation probably I've seen in my career.

And also it is like another kind of interesting stat is that where we're going back on year 2, those numbers are going up.

One more follow-up if I could on the online business. Just again, remind us how you distribute this for people who are PDA and other devices? Are you tied in or are you affiliating with search engines like Google? Is that part of your plan at this point?

As I mentioned, to date it is like we're not distributing on those platforms. But this is, as I mentioned earlier, one of the things that we are working hard on in 2005 is looking at all of those kinds of partnerships and evaluating which ones make sense for us now.

If I may ask one more question of Peter, the issue in Chicago going back when you didn't have full control was billing control. And they had some serious billing issues. You mentioned you are integrating it in. Where do you stand on fixing some of the old billing issues they have as it specifically relates to some bad debt?

I think that I feel very good about -- the group that we have in our billing -- and having been associated with lots of different Yellow Page companies in my career -- I'm very comfortable that they have a very good control of what they're doing. And I think if you look at the history that we have, and the group there in billing also went through this experience when they converted the Sprint billing. So I think -- I feel like we've got a Class A team there, and I feel very good about what we are doing.

I would just add it is like that most of the problems like with billing in Illinois it is like going back a few years, and the partnership did a lot of work to clean that up. And so what we're taking on now is in pretty good shape.

We have no further questions.

I would like to thank everyone for their attention and interest today in R.H. Donnelley. And we certainly look forward to updating you on our continued progress. Have a great day.