豐田汽車 (TM) 2009 Q1 法說會逐字稿

Hello everyone.

My name is Elaine and I would like to welcome you to the Toyota Motor Corporation's fiscal year 2009 first quarter financial results conference call with your Chairperson, Mr.

Takahiko Ijichi.

Your line will remain muted until the question and answer session begins.

(OPERATOR INSTRUCTIONS).

I would like to remind all participants that this conference is being recorded at the request of your hosting company.

I would now like to turn the call over to Mr.

Yang from Toyota, who will introduce the conference.

Mr.

Yang.

Thank you.

Hello everyone.

Thank you for joining us today.

My name is Sen Yang and I'm a member of the Accounting division of Toyota Motor Corporation.

I would like to welcome you to today's discussion of the earnings results for the three months ended June 30, 2008.

I'm joined by Mr.

Takahiko Ijichi, our Senior Managing Director and the narrator Mr.

Miles Carver.

First Mr.

Ijichi will discuss the summary of Toyota's earnings results.

And Mr.

Carver will provide further details.

At the end of our presentation, we will open for your questions.

We expect that the entire call will last approximately one hour plus.

Also, please note that the following presentation contains forward-looking statements that reflect our plans and expectations and our actual results may be materially different from those expressed by these forward-looking statements.

A complete cautionary statement with respect to the forward-looking statements is included on page three of today's presentation material.

In addition, a complete cautionary statement with respect to insider trading is included on page four of today's presentation materials which, again, can be downloaded from our Internet website.

Now, I would like to turn the call over to Mr.

Ijichi.

Hello everyone.

I am Takahiko Ijichi, Senior Managing Director of Toyota Motor Corporation.

Thank you for joining us today.

I would like to present Toyota's financial results for the three month period ended June 30, 2008.

I will begin by giving you a brief overview of our sales and financial results before turning the presentation over to today's narrator, Mr.

Miles Carver.

Our consolidated Vehicle sales for the fourth quarter increased by 24,000 vehicles to 2.186m units.

In North America and Europe, especially in Western Europe, sales declined as a result of the general market slowdown.

On the other hand, by responding to strong demand in resource rich countries and emerging countries in regions such as Asia, Central and South America and the Middle East, our total global sales increased.

At the bottom of the slide are the figures for our total global sales including those of non-consolidated affiliates.

These sales increased by 41,000 units.

Our consolidated financial results for the first quarter are shown on slide seven.

Both revenues and income have declined compared to the previous first quarter.

I will now turn the rest of today's presentation over to Mr.

Carver.

Thank you Mr.

Ijichi.

Slide eight shows changes in our consolidated net income over the last four fiscal years.

Now I will discuss the factors that impacted Toyota's profit in terms of net income.

Net income decreased by JPY137.9b to JPY353.6b compared with the previous first quarter.

The left side of this slide shows the factors of fluctuation in operating income.

As you can see the impact of ForEx rates, such as the appreciation of the yen against the US dollar, was a major factor in the decrease of operating income.

In addition, soaring raw material prices have cancelled out our cost reduction efforts, resulting in a negative JPY10b impact.

These factors exceeded the contribution made by factors such as marketing efforts, resulting in a decrease in operating income by JPY262.9b.

Equity in earnings of affiliated companies increased by JPY13.2b.

Please go to slide 10.

From this slide I will explain our operating income by region.

This bar graph shows our operating income on a quarterly basis.

The number of vehicles sold is indicated by the line plot.

In Japan due to factors such as the appreciation of the yen against the US dollar, operating income decreased by JPY179.5b to JPY217.1b compared to the previous first quarter.

On the other hand, favorable sales of new models such as the Crown and the Alphard or Vellfire in the domestic market led to increased sales volumes.

Furthermore, owing to the strong demand in Russia, Australia and the Middle East, export volume increased.

Next I will explain North America.

The bar graph excludes the impact of valuation profit or loss on interest rate swap transactions.

Including this valuation profit or loss, the operating income for the first quarter in North America is JPY69.1b.

Although in the US market, primarily the truck segment is slowing down, Toyota's share was 17.4%, a record high for Toyota in the US market.

However factors such as the decrease in sales volume, the shift of product mix to compact cars, the increase in sales expenses such as incentives and the increase in the amount of reserves set aside for bad debts have resulted in lower profits.

We will aim to take swift actions in accordance with market changes by increasing the supply of models high in demand and launching new models.

In Europe operating income decreased by JPY18.2b to JPY20.3b compared to the previous first quarter.

Sales in Eastern European markets such as Russia remained strong.

However, due to the slowdown in Western European markets, our European sales volumes as a whole declined.

Later this year and into next year Toyota will launch new models that will continue to meet standards of CO2 regulations to boost sales and generate profit in Europe.

Next I will discuss Asia.

Operating income increased by JPY19.7b to JPY69.3b compared to the previous first quarter.

Sales in markets such as Indonesia continued to show strong results.

And sales of the remodeled Corolla launched at the beginning of this year have also been increasing.

Increase in export volume of the IMV to regions outside Asia also contributed to the increase in income.

In Central and South America, Oceania and Africa operating income increased by JPY5.9b to JPY44.5b compared to the previous first quarter.

In Brazil the fully remodeled Corolla launched this March, and sales volume as a whole increased by approximately 30% compared to the previous first quarter.

Furthermore, sales in Australia and Argentina continued to show strong results.

As for results in the financial segment, the bar graph in slide 15 excludes the impact of valuation profit or loss on interest rate swap transactions.

On this basis, operating income decreased by JPY21.8b to JPY23.6b compared to the previous first quarter.

Although the expansion of lending margins contributed to the increase in profit, higher percentage of credit losses in the United States, as well as the increase in the amount allocated as reserves for bad debt and residual value losses resulting from decline of used car prices, were the main reasons for the decreased profits.

However, with our traditionally prudent approach in lending together with our efforts to further strengthen the credit control and the collection system, the percentage of credit losses has shown some stability.

And as for residual value, we will continue to keep a close eye on the used car market and set suitable values in a timely manner.

Equity in earnings of affiliated companies increased by JPY13.2b to JPY95b compared to the previous first quarter.

Notably joint venture companies in China continued to make significant contributions.

Unconsolidated financial results are shown in slide 17.

Unconsolidated net income decreased by JPY40.4b compared to the previous first quarter.

The negative impact of the rise of the yen against the US dollar exceeded the positive impact of marketing efforts resulting from increased domestic sales and export volume.

Please turn to slide 19.

As our business environment rapidly changes, the financial results for this quarter were severe, resulting in decline in both revenues and profits.

It is vital for us to respond to this situation rapidly and flexibly.

And we are working to manage this with speed.

One example is our plan to restructure our production system in North America.

This market has been shifting to compact and fuel efficient vehicles with increasing speed since around April this year.

In order to respond to this change and reduce excess truck inventory, we have decided to suspend production lines in three plants for three months beginning in August as a short-term measure.

This decision was made to further increase the productivity of the plants following initial adjustments started in May.

Meanwhile we will increase the supply of compact and hybrid vehicles in order to flexibly respond to the rapid increase in demand.

Please turn to slide 20.

Furthermore, we intend to take drastic measures with a mid to long-term vision.

Recognizing the fluctuations of the North American market as a structural change, we decided to restructure North American production by changing and adding models to be produced at each plant in order to facilitate a stable supply of local production from a long-term perspective.

In particular we will commence Prius production at our new plant in Mississippi.

It will be the second hybrid vehicle produced in North America.

As demand for hybrid vehicles is expected to remain strong in the future, localizing production of hybrid vehicles will allow Toyota to respond to customer needs.

And it is also a step towards establishing a more stable production structure in North America.

We acknowledge the market slowdown in North America to be temporary and that in the mid to long-term we will recover as a growing market -- it will recover as a growing market.

By achieving a stable supply structure that can respond to structural changes and market demand, we intend to turn the challenges we face into business opportunities.

Next I would like to explain the prospects for fiscal 2009.

As for prospects in consolidated Vehicle sales, we have revised our original plan to 8.74m vehicles, a decrease by 173,000 units from the previous fiscal year.

Unconsolidated Vehicle sales such as those in China, excluded from the bar graph, are expected to increase by approximately 170,000 units, bringing total Vehicle sales to the same level as the previous first quarter.

As for our prospects for consolidated earnings, consolidated operating income JPY1.6trillion and consolidated net income JPY1.25trillion remain unchanged from those announced at the beginning of the fiscal year.

As for the factors of change in our prospects for operating income, we have revised our marketing efforts in line with our revised sales volume prospects.

We also revised the efforts of ForEx rates in line with our revision of prospects for ForEx rates.

Let me read that line again.

We also revised the effects of ForEx rates in line with our revision of prospects for ForEx rates.

Despite the challenges we are facing amid the rapid changes in the business environment such as the rise in prices of raw materials and the slowdown of the markets, our entire Company will work together to strive to achieve our goals.

Consolidated prospects for capital expenditures, depreciation expenses and R&D expenses remain unchanged from those announced at the beginning of the fiscal year.

Unconsolidated prospects are shown on slide 26 and also remain unchanged from our previous announcement.

Finally I would like to explain about the purchase of our own shares authorized by the Board of Directors earlier today.

Starting from August 11 to August 21 we will purchase up to 15m shares with an upper limit of JPY70b.

This is a part of the maximum total of 30m shares, up to JPY200b, authorized at this year's general shareholders meeting.

We will continue to strive to improve capital efficiency and actively return value from our earnings to our shareholders.

This concludes the presentation.

Thank you very much for your kind attention.

Thank you Mr.

Ijichi and thank you Mr.

Carver.

During the question and answer session we will also conduct interpretation for questions and answers in both Japanese and English.

Now our conference call operator will explain how to connect your lines.

Thank you.

Today's question and answer session will be conducted electronically.

(OPERATOR INSTRUCTIONS).

We will take our first question from Rick Herman from Philadelphia International Advisors.

Hi.

Thanks for taking my call.

The first question is on page nine, under 'Others', can you explain the JPY106b?

(Interpreted).

I guess you're talking about JPY106b that appears under 'Others' and especially the increase in operating expenses and Others.

And specifically your question relates to the 'Others' aspect and the subtraction reductions by JPY106.3b.

First factor relates to the translation gains and losses of operating income generated by other business subsidiaries.

And during this period it's subtracted about JPY9b from the operating income.

So negative of of JPY9b there.

In addition there has been some increase in [hybrid's] expenses due to an expansion of business and scale.

And those increases totaled approximately JPY90b.

Let me elaborate a little bit on the specific content of this increase.

First of all there has been some increase in other -- various expenses stemming from the repair maintenance or preventive maintenance of that plant among others, and also increasing expenses due to expansion of plants.

And, at the same time, the outsourcing expenses increased somewhat.

In relation to that, there has been some increase in quality related expenses.

[Spoken in Japanese].

Okay.

Thank you for that answer.

Then on the cost reduction efforts only minus JPY10b, do you -- is that in line with what your expectations were?

And do you expect that to improve at all going forward because, historically, during these kind of trying times for Toyota, your cost reduction has picked up.

And that seems to be a rather dismal effort.

(Interpreted).

You are quite right.

I truly believe that we do have the capability of cost reduction that exceeds JPY300b per year.

When we made the announcement of our full year financial results in May of this year, we mentioned that the amount of cost reduction achieved will exceed JPY300b and at the same time about the same amount will be absorbed in terms of the increase in raw material prices.

Those were the assumptions we had at the time and therefore, when we made those announcements of financial results in May of this year, we mentioned that the amount of our cost savings made would be offset, more or less, by soaring raw materials prices resulting in zero amount of cost reductions specifically.

However, during the first quarter of the current fiscal year, the actual increase in raw materials prices exceeded somewhat the level we had anticipated prior to that.

And therefore, for the financial results for the first quarter of this period, the net cost reduction amount achieved was the negative JPY10b.

And on the full year basis there is the possibility of raw materials prices increasing more than we had assumed in the past.

At this juncture however, we intend to absorb all of that increase in raw materials prices by cost reduction efforts and savings generated by that.

We have a clear prospect of achieving that.

And therefore, for the full year, cost reduction, or cost savings amounts, currently we cite the net level of zero.

As we previously pointed out five or six years ago, we did have cost savings achieved close to JPY300b.

However, unfortunately, at this point in time, the raw materials price surge has been such that it almost cancels out the actual amount of savings made through cost reduction efforts.

Given that, we are making all out efforts within TMC as well as in the entire Toyota Group to further accelerate the cost reduction efforts.

Okay.

Well, thank you very much Ijichi San and good luck and [spoken in Japanese] in your efforts.

[Spoken in Japanese].

Thank you very much.

Thank you.

Can we have the next question please?

Our next question comes from Steven Usher from Japan Invest.

Please go ahead.

Good evening and thank you very much for giving us this call.

I have three different questions if I might.

First of all, can you please give us the detail on the increased provisioning for your residual price loss reserve as well as the loan loss reserve?

And, in addition, do you expect that these increases in reserves will carry you through the rest of the year?

Or do you think that there may be further increases going forward?

Should I ask all three questions now or one at a time?

Please go one by one.

And may I interpret at this juncture please?

Okay.

(Interpreted).

During this current quarter at TMCC, increase in loan losses and also the provisioning made for loan loss reserves totaled the subtraction from the operating income of approximately JPY30b.

And regarding the residual losses, the amount of residual losses plus the provisioning made for residual loss reserve totaled around JPY9b.

And that was the amount subtracted from the operating income.

Regarding the outlook for the future course of those issues, first of all regarding loan losses, the loan loss percentage at TMCC at the moment is less than 1%.

And we do have very vigorous credit controls in place as well as strengthened collection efforts as well.

And therefore we do not expect that the loan loss will not -- substantially increase going forward.

Let me rephrase it.

We do not expect loan loss to increase substantially going forward.

And therefore the loan loss related issues will hardly have any impact going forward, financially speaking.

However in the case of the residual losses, because of the continued decline in US dollar values and prices, there may be some impact seen going forward.

On the full year basis we somehow anticipate around JPY20b impact stemming from residual losses.

Unlike the residual losses at General Motors or Ford, in the case of TMCC every three months we compare the residual value and the price of used cars at that particular time in the month.

And any difference is amortized over the remaining period duration of our lease.

And therefore the provisioning is made every three months.

And so the evolution of that provisioning for the residual value reserve will be quite moderate and mild.

It is not likely to see any substantial surge in residual losses at any given -- one time.

That's fine.

Thank you very much.

Definitely you have revised your profits -- the impact on profits from your marketing efforts quite significantly, from JPY180b positive to a negative JPY100b.

Could you please give us a breakdown by region on that?

And also what is the impact that you are expecting in terms of price increases?

And what is the outlook for price increases in the various regions -- the product price increases, your product price increases?

(Interpreted).

Unfortunately I will not be able to answer -- unfortunately, I will not be able to share with you the impact of our pricing increase for each region.

But I will share with you the volume of sales for each region and therefore please make your own conjectures from that.

First of all, starting with the overall picture compared with the initial outlook, we made the downward revision of 320,000 units.

And let me give you regional breakdown of those downward revisions made.

And let me give you the regional breakdown of those downward revisions made.

Minus 30,000 units in Japan.

North America, minus 140,000 units.

Europe minus 100,000 units.

Asia minus 40,000 units, and other regions minus 10,000 units.

And based upon those sales unit numbers, please make your own judgment regarding the impact of the regional profitability and income.

Did I answer your question in the manner you wanted?

Well, it was very helpful.

Thank you very much.

I would like -- what -- if I could follow up a bit though, what -- could you share with us a bit more detail on your strategy with regards to price increases?

You've announced price increases for the Prius and the Lexus in Japan.

But what are you considering for some other regions?

(Interpreted).

We have made no announcement regarding the Prius nor the Lexus.

And I guess that what you have just referred to are the value growth made by journalists on their own speculation.

The market conditions remain very tough here in Japan.

And the market environment is not conducive to any pricing change or upward pricing change, in our view.

But we would like to study this while closely observing the market conditions and consulting with the market going forward.

That's our approach.

Regarding vehicle pricing, based upon the competitive environment in any given market, we set the prices for each region and each market at the optimal level.

And actually, in certain areas, we did increase prices.

Outside of Japan, we were able to increase prices in various regions, including North America, Europe, Russia, China and Near and Middle East, for example.

In the interest of time I will not go into any more detail.

But if you have any questions, we are ready to answer them.

Excellent.

Thank you very much.

And then just one final very brief question.

In terms of your cost reduction efforts and raw material price impact in Q1, could you give us the breakdown for the negative impact of higher raw material impact and the positive impact of your cost reduction effort?

(Interpreted).

I would like to facilitate your understanding by describing the situation in the following manner please.

We strongly believe that we do have the fundamental capability of saving costs of around JPY300b or more per year.

However, during this period, the actual increase in raw materials prices exceeded that level on the per-year basis.

Since I was just referring to the quarterly figures, if you could just divide that by four, you could come up with the relative relationship between cost savings we can achieve and the actual amount of the raw material price increase that has taken place.

And as a result of that, actually the raw material price increase exceeded the cost reduction savings by around JPY10b.

And that resulted in cost reduction efforts of minus JPY10b.

Okay.

Great.

Thank you very much.

I appreciate it.

Thank you, Mr.

Usher.

Can we have the next one please?

(OPERATOR INSTRUCTIONS).

We'll take our next question from Kurt Sanger from Deutsche Bank.

Good evening.

Kurt Sanger at Deutsche Bank.

Ijichi-San, (spoken in Japanese).

I have -- I'm sorry, is that better?

Okay.

Sorry about that.

There you go, I've got it off the speaker.

Sorry gentlemen.

Okay.

A few questions from me.

First, Ijichi-San, during the Japanese call you mentioned about JPY10b cost related to realignment of the North American production effort.

Can you confirm that number, and also tell me when the timing of that charge will be?

Was that in the first quarter or should that -- we consider that for a second quarter impact on earnings?

(Interpreted).

The JPY10b I cited in the Japanese conference call related to TMMI and more specifically the Tundra.

The losses related to the cancellation of jigs used for the production of Tundra and tooling chains -- tooling.

And therefore the costs relating to the restructuring of North American production structures as well as the cost related to the suspension of production operations at the three North American plants for three months are somewhat bigger than that figure.

And the timing of that charge of JPY10b I mentioned earlier is likely to be during the current fiscal year.

We plan to do so, but I cannot give you any more precise timing than that.

Okay.

Great.

Next question is on the finance business.

Ijichi-San, can you tell me what the core profitability of the North American finance business was?

There's valuation gains of JPY67b, reserves of minus JPY39b.

Should I assume core profits for the business were JPY35b, JPY40b?

(Interpreted).

Would you be kind enough to elaborate on what you mean by core profitability?

Sure.

The reserves are one-time adjustment.

The valuations are just interest rate swap valuations.

So just the normal operating profit of the finance business in North America, excluding the extraordinary factors we saw for the quarter.

(Interpreted).

Let me share with you our concept of this profitability.

We believe that the provisioning against residual losses, variable loan loss reserves, represents expenses that we have to take regarding the financial businesses.

So these are more or less the recurrent expenses that we simply have to take charge of as we do business in this area.

And therefore the valuation gains and losses relate to interest rate swaps and therefore that we need to get through this from the core earnings of this business.

However, as I mentioned earlier, the provisioning for reserves represents the expenses that we do incur as we conduct financial businesses.

And therefore we consider that as a part of the core operating income, although they represent the limited side.

Okay.

Maybe I should ask this question from a different angle.

If I assume some -- frankly my calculations show that the auto business in North America was break-even or slightly profitable at best for the quarter.

Is that an accurate assumption, that the auto business, excluding finance in North America, was basically a break-even business for the first quarter?

(Interpreted).

I do admire the outstanding analysis you have just shared with us.

I will assume that means it's correct and you can't answer that question.

Thank you.

(Interpreted).

Having said that, allow me to add the following.

That is to say, so-called destination of gains and losses include exports from Japan.

And even with the appreciation of the Japanese yen we did register positive profit out of this export from Japan.

And please make sure that you do have the correct understanding of that.

Certainly.

Okay.

One final point of clarification, Ijichi-San.

I know you have some new factory startups in Canada, for instance, that is a higher cost for you.

What -- should we expect any improvement -- material improvement over that result for the rest of the year?

What is your view on that poor profitability, obviously excluding the export impact?

(Interpreted).

In autumn of this year our Canadian plant is going to start the production operation, based upon single shift operation.

And we will be incurring some startup operating expenses.

But at the same time, as far as the North American business is concerned, you do seem to have the concern over this that we will not be able to generate any meaningful positive profit in our North American business.

But that is not the situation.

And I would like to give you the reason why.

With respect to the North American business, to the extent that the current exchange rate relationship or market conditions continue, we also are [secure] to see the continuation of a very tough environment up until March 2009.

However, we expect the North American market to start showing upward movement next fiscal year, probably in spring or in the mid year.

We do expect improvement in the North American market by that timeframe.

And therefore to make sure that we will not be behind the pace of the market improvement or recovery, we are making every effort in preparing ourselves for the stepping up of sales activities by, at the same time, aligning -- realigning our North American production operation structures at the same time.

And therefore we do expect the continued tough market conditions during the current fiscal year.

But starting our next fiscal year, we do have a very bright prospect for the market recovery and we do believe that the future prospect is very good.

Let me be more specific in this regard.

Currently we have not been able to satisfy the order backlog for Corolla and Yaris.

However, we are now introducing the supply capabilities which will allow us to satisfy the orders for the Corollas and Yaris starting in August or September of this year.

And furthermore, because of the short supply of batteries, we have not been able to satisfy the very strong orders for the Prius.

However, here again, once the new generation of Prius is introduced next year we will have the capability of producing 150,000 units more of the batteries for that.

And therefore we will be able to supply enough Prius in this period as well.

And therefore substantially in the next fiscal year and beyond I believe the situation will improve in the very material manner.

And we do have such a sales plan at the same time.

So it's true, the continued toughness will be seen during the current fiscal year.

But those measures I have just mentioned will start contribution for the positive income next fiscal year and beyond.

Okay.

Thank you for your very patient answer.

(Interpreted).

My pleasure always.

Thank you, Mr.

Sanger.

Due to the time constraint, next will be our final question.

Please?

We will take our final question from Barbara Heap from British Airways Pensions.

Thank you.

I actually have two questions but they're both very short.

The first is could you just clarify for me please the valuation profit and losses?

In terms of page 11 you have JPY67b.

On page 15 you have JPY55b.

And on page 52 -- sorry, on page nine you have JPY52b.

And I'm just confused about how this JPY52b is made up.

There should be a loss somewhere else.

Is that correct?

(Interpreted).

Regarding the valuation gains and losses of transactions, the North America, that is TMCC, has a substantial positive figure for that, whereas in Japan we just have the opposite situation of around JPY10b.

And netting that out is the figure you see in the total column.

Okay.

I'm still not sure how that makes the JPY52.5b, so JPY67b, plus JPY55b, minus JPY10b.

(Interpreted).

Let me try again by citing some figures.

North America, that is TMCC, has posted JPY70b.

And TFC in Japan, that's through the finance, has negative JPY13b.

And we also have financed business subsidiaries elsewhere in the world.

For example, our Canadian subsidiary has some negative figure there.

And we also have financial subsidiaries in Asia as well.

But the predominant portion of the figure I have just cited stems from TMCC and also Japan, that is through the finance, which, as I said, carries the negative figure.

And that, I think, somehow tallies with the numbers you have said.

The balance is basically made up by the overseas and the Asian subsidiary?

Excuse me, please give us a moment.

(Interpreted).

May I ask you to refer to the slide once again?

The figures you see on page 11 are the absolute figures, whereas the figures you see on page nine are changes.

I understand.

Right.

Can I -- yes, I'll go back and calculate it.

Can I just ask the final question which is just very quickly on the raw material side?

Obviously the negotiations were completed with your Company during the first quarter.

Can you give us an indication whether the second quarter increase in raw materials will be greater quarter on quarter than the first quarter increase?

So basically was the full effect felt in the first quarter or will the second quarter have a larger impact?

(Interpreted).

Are you just talking about price increase of steel?

No.

But steel obviously is a large impact.

So really it's overall for raw materials, whether or not the second quarter, whether you will see an increase quarter on quarter.

So was the full impact felt in the first quarter or is there a delay and a larger impact felt in the second quarter?

(Interpreted).

Yes.

The price increase has a cumulative effect.

And therefore the impact will be more strongly felt in the second quarter than in the first quarter.

But, at the same time, the amount of cost savings will have accumulated as well which means that there will be bigger savings impact in the second quarter than in the first quarter.

And those two need to be offset against each other when you consider the total picture.

Thank you.

Well, time sure flies fast and it's now for us to conclude today's conference call.

Should you require further information regarding today's conference or on Toyota, please feel free to contact our IR representatives in London and in New York.

Their contact details were given at the end of the invitation to this conference call.

Thank you again for joining us today.

Have a good one, and goodbye.

Portions of this transcript that are noted "Interpreted" were interpreted on the conference call by an Interpreter present on the live call.

The Interpreter was provided by the Company sponsoring this event.