Tutor Perini Corp (TPC) 2009 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Second Quarter 2009 Tutor Perini Corporation Earnings Conference Call. My name is Becky and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder, this conference is being recorded.

I would now like to turn the presentation over to your host for today's call, Mr. Ken Burk, Executive Vice President and Chief Financial Officer. Please proceed.

Good afternoon, everyone. Thanks for joining us on our Tutor Perini's Second Quarter 2009 Conference Call. With us today are Ronald Tutor, Chairman and CEO, and our President, Robert Band.

Before we start, I'd like to remind our listeners that our comments today will contain forward-looking statements including statements about future guidance. Management may also make additional forward-looking statements in response to your questions. These types of written and oral disclosures are made pursuant to the Safe Harbor Provision contained in the Private Securities Litigation Reform Act of 1995.

Investors are cautioned that such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from anticipated results. The Company cautions that any such forward-looking statements are based upon assumptions that the Company believes are reasonable, but are subject to a wide range of risks and actual results may differ materially.

These risks and uncertainties are discussed in detail in our filings with the SEC, including Tutor Perini's annual report on Form 10-K for the fiscal year ended '08, our definitive proxy statement filed on April 17, 2009, as well as in today's news release. Our statements on this call are made as of today, August 6, 2009, and the Company undertakes no obligation to update any of these forward-looking statements contained in the call, whether as a result of new information, future events, changes in expectations or otherwise.

With those formalities out of the way, it is my pleasure to turn the call over to Ronald Tutor.

Thanks, Ken. Good afternoon, everyone, and thank you for joining us on the call.

This was another very good quarter for Tutor Perini with revenues of $1.38 billion, net income of $39 million, and diluted earnings per share of $0.79. The backlog of uncompleted construction work at June 30, 2009 was $5.1 billion.

New awards this quarter include a $270 million courthouse in Southern California, a $204 million runway reconstruction project at JFK Airport in New York, and approximately $70 million in building projects in Florida and Pennsylvania.

Currently, we have approximately $2 billion of pending awards for which we have received positive indication from our customers, who have designated us as their preferred contractor. In fact, we just signed a contract for a $240 million energy manufacturing facility in Northern California this week. This project will enter backlog in the third quarter.

Most of the other pending awards should enter our backlog this year with the balance in the first half of 2010.

Regarding the broader markets, we continue to see private customers sitting on the sidelines, but there seems to be signs that the credit markets are improving.

Contrary to the commercial building market, our Civil business continues to add significant opportunities in public works for major infrastructure projects that will continue to be bid throughout the balance of the year. On Tuesday, August 4, we bid a large segmental bridge project in Northern California to the California Department of Transportation and we were the low bidder at a price of $124.5 million.

Given our expertise and geographic position, we continue to believe that we will be very competitive in landing a significant share of the new work we are bidding.

As for Management Services, we continue to look forward to our domination of the work program in Guam with all of the pending awards related to the U.S. movement of the Marines to Guam.

Our work at MGM City Center and Cosmopolitan continues to make progress toward completion with no real financing issues, or issues of any significance with our owners, other than the usual difficulties of getting multi-billion dollar jobs completed. We will begin a phase completion schedule with MGM for the fourth quarter of this year and are in agreement with most of the dates of delivery. Based on current plans, we believe Cosmopolitan will be completed in the second half of 2010.

Further, our work at McCarran Airport Terminal 3 continues to move forward and is currently 28% complete and on track for completion in early 2012. It has been a very pleasing project and we have developed an excellent rapport with the construction manager and the owner in what we believe will be an extremely successful project, both as to cost and to scheduled completion.

Our Civil Work group continues to improve their performance and is preparing for what we deem to be a significant growth in the near future. Our pipeline of Civil projects is absolutely full on both coasts and we continue to work toward that end.

And finally, Management Services still continues to deliver outstanding results, both in Iraq and Guam. They, too, are prepared for the dramatic increase in opportunities that the Guam market promises. We believe our strategy to sell and perform a higher content of work and grow our Public Works and Civil business is continuing to be demonstrated.

For example, comparing our backlog profit margins year over year, we have improved the overall margin by 81%. This is driven by the much higher margin that Public Works generates. Replacing the lower margins contained in private building work. Also, comparing the backlog mix of private work versus government public work; we were at 88% private, 12% public in the second quarter of 2008, and we now stand at 50% private, 50% public.

During our first quarter conference call, we indicated that we were in discussions with an acquisition target. Those discussions where terminated in July. However, we will continue to evaluate other acquisition opportunities that fit our vertical integration strategy.

As we look forward, we expect to continue integrating and leveraging our resources across all of our operations and execute our strategy to be an even more vertically-integrated Company. I am convinced that we will come through this year a much stronger and more diversified general contractor.

Now, I'd like Bob Band to share more details of our prospects and Management Services Group.

Thanks, Ron. Pending projects of $2 billion mentioned earlier by Ron include $800 million for hospitality and gaming, $500 million in healthcare work, and $300 million in industrial buildings, $300 million in education, and $100 million in sports and entertainment.

As was the case last quarter, our private negotiated customers, especially gaming and hospitality, are counting on their ability to achieve acceptable financing terms and conditions.

For the Building group, we have identified and are tracking approximately $4.7 billion in targeted projects that could be bid and proposed on in 2009. Most of this work is for the public sector; education, municipal offices and transportation buildings. Healthcare and industrial buildings continue to be an important target for Tutor Perini.

The market for public civil infrastructure projects, as Ron said, should continue to open up and provide good competitive bidding opportunities. We estimate the size of our targeted market in civil infrastructure to be in excess of $8.4 billion in 2009 in our target markets. Some of the prospects have shifted to 2010, but we see no reason why we should not win a meaningful share of this work in the third and fourth quarter of '09.

Although it's a slower ramp up than we originally expected, the estimates still range for $10 billion to $15 billion in construction spending over the next several years for the relocation of the U.S. Marines from Okinawa, Japan to Guam.

At the past industry Forum No. 3 held in Guam, the U.S. Navy spokesperson indicated that there will be a Guam multiple award construction contract worth up to $4 billion in total with perhaps awards to three to five firms. The contract will cover five years with individual task code of values ranging from $15 million to $300 million. The target date for the Final Environmental Impact Statement and Record of Decision for the whole program is 2010. However, planning for all of the major components of the program is well under way.

The prospects in Iraq continue with a series of projects being proposed on prior to the September 30, 2009 end of the U.S. Government's fiscal year. These include projects at U.S. military bases and embassy compounds with some overhead cover and some other facilities.

Project opportunities in Afghanistan have increased significantly due to the ramp up of U.S. military forces and activity there. However, they're very competitive due to the full and open competition, including Afghani firms.

Major ongoing projects in Iraq are progressing on schedule and include several overhead cover construction projects, which were recently completed,; hardened housing and other facilities for the U.S. military and the U.S. Department of State.

Our runway and taxiway projects in Guam under the U.S. Air Force SATOC program are under construction and on schedule. We have a proposal outstanding for a multiple award task order contract, which should be decided in the third quarter of 2009. We expect that the Management Services segment will add the backlog in the balance of 2009.

Now, Ken Burk will give you the financial details for the quarter.

Thank you, Bob. Our net income was $38.9 million for the second quarter of 2009 as compared to net income of $28.6 million for the second quarter of '08. Diluted earnings per share were $0.79 for the second quarter of '09 as compared to $1.03 for the second quarter of '08.

On a pro forma basis, including Tutor-Saliba, net income and diluted earnings per common share for the second quarter of '08 were $42.5 million and $0.84, respectively.

We ended the second quarter with a backlog of $5.1 billion. The breakdown by business group of our backlog at June 30, 2009 is as follows -- Building, $4.3 billion; Civil, $571 million; and Management Services, $260 million.

The high-level breakdown of total Building group backlog by major and market type is as follows -- hospitality and gaming, $1.3 billion; transportation facilities, $1 billion; healthcare, $837 million; municipal buildings, $614 million; education, $154 million; industrial, $108 million; and other commercial buildings, $198 million.

In the second quarter of 2009, revenues were $1.38 billion, a decrease from $1.39 billion reported in the second quarter a year ago. On a pro forma basis, including Tutor-Saliba, revenues were $1.8 billion for the second quarter of '08.

On a reportable segment basis, revenues from our Building group were $1.2 billion, a decrease of 6% from $1.3 billion in the second quarter of '08. The projects at City Center and Cosmopolitan have now reached their peak in earned revenues.

Revenues from our Civil group were $97.2 million, which increased by 66% from $58.5 million reported in the second quarter of '08. We expect the growth in our Civil group to outpace our Building business. Management Services' revenues were $69.5 million for the quarter, up 130% from $30.2 million a year ago. This favorable result can be attributed to increased volume of work in Iraq and in Guam.

Our total gross profit increased 52% to $108 million from $71 million in the second quarter of '08. Our total gross profit margin increased 5.3% to 7.8% from 5.1% in the second quarter of '08. This increase is primarily driven by the increase in revenues from the addition of Tutor-Saliba and a strong operating performance by our Management Services and Civil groups.

General and Administrative expenses were $44.5 million, up 57% from $28.4 million in the second quarter of '08. This was primarily due to the addition and integration of Tutor-Saliba. Total General and Administrative expenses were 3% of revenues for the second quarter of '09 compared to 2% of the revenues for the second quarter of '08. Part of this increase is due to one-time charges for acquisition costs and integration costs.

We had income from construction operations of $63.8 million in the second quarter of '09, a 50% increase from $42.6 million in the second quarter of '08. Overall, our operating margins increased from 3.1% to 4.6% year over year.

Breaking down income from construction operations by business group; Building income for the quarter was $38.2 million, a decrease of 9% from $42.2 million in the second quarter of '08. This decrease was primarily due to the lower revenues mentioned earlier. Civil group income from construction operations was $21.7 million in the second quarter of '09, an increase of $21 million from $700,000 in the second quarter of '08. The addition of Tutor-Saliba made a positive impact, along with improved operating performance from our New York operations from a year ago.

Management Services' income from construction operations was $14.2 million in the second quarter of '09, a 168% increase from the $5.3 million in the second quarter of '08. This increase reflects a significant increase in revenues noted before, including the positive impact from successful project execution in Iraq and also from the addition of Black Construction in Guam.

Other income was $600,000 in the second quarter of '09 compared to $2.5 million in the second quarter of '08. This is due primarily to lower interest earnings on available cash we invested in 2009.

Interest expense increased to $2.9 million in the second quarter of '09 from $400,000 in the second quarter of '08. This was due primarily to a higher average debt balance during the second quarter of '09. It should be noted that in July 2009, we repaid $125 million of borrowings under our revolving credit facility.

The provision for income taxes was $22.6 million compared to $16.2 million in the second quarter of '08.

Looking now at our balance sheet at June 30, 2009, our working capital stood at $358.1 million, up from $225 million at December 31, '08. This represents a current ratio of 1.22 to 1.

As of June 30, we had $450.9 million in cash and cash equivalents compared to $386.2 million at December 31, '08. The increase in our cash balance at June '08 on a year-to-date basis is primarily the result of proceeds from borrowings under the revolving credit facility during that period, which was offset by a $40.6 million use for operating cash, and $19.4 million of cash for purchases of property and equipment.

At June 30, 2009, long-term debt stood at $186.4 million, excluding current portion, and we had $119.1 million available under our credit facilities at that date. Again, we paid off the $125 million borrowed under our revolver in July.

Stockholders' equity increased $81 million to $1.2 billion from $1.1 billion at December 31, 2008. This was primarily due to the net income recorded during the period. We believe that our current financial position and the credit arrangements that we have provide us with adequate resources to meet our working capital requirements to execute on existing as well as new projects.

For fiscal 2009, we are refining our guidance for revenues from an estimated range of $5.5 billion to $6 billion to an estimated range of $5 billion to $5.5 billion. And we're tightening our diluted earnings per share guidance from an estimated range of $2.60 to $2.80 per share to an estimated range now at $2.60 to $2.70 per share.

I'll now turn the call back over to Ron for his closing comments.

Thanks, Ken. We feel we're in an excellent position to continue to increase our backlog in certain attractive Public Works, Civil and Building projects, which is right now our primary focus.

We continue to focus on execution and this year we'll complete the integration and transition of our businesses with a much strong Civil operation and a Building business itself performs a higher content of the work, more consistent with the philosophies that we bring from Tutor-Saliba.

Both of the operations will be able to achieve her margins than we have historically been able to achieve by introducing a different mix of work and a commitment to more risk breeds more reward.

In spite of the ongoing economic challenges and softness in the credit markets, we remain confident in our strategy and the long-term growth potential of our Company as one of the few remaining general contractors of size and scale committed to self-performance in the delivery of large-scale civil and building projects.

That concludes our prepared remarks. Now, myself, Bob Band and Ken Burk are prepared to take your questions.

(Operator Instructions). Your first question comes from the line of John Rogers of D.A. Davidson. Please proceed.

Hi, good afternoon.

Hey, John.

Ken, you mentioned some one-time charges related to the merger?

Yes.

Were those in the second quarter?

We had -- the merger being we had some incremental costs flow over from Tudor-Saliba, but most of that was related to the Keating acquisition.

Okay.

And then we had some expenses charged during the second quarter for the acquisition that we were working on that did not go through.

And can you tell us how much those charges were in total?

We have, I would say, including all of the costs, John, for acquisitions and some of the integration it's about $2.5 million.

$2.5 million, okay. Thank you. And then, secondly, I guess for Ron, in terms of the Civil market in the second half of the year, is that related -- how much of that is related to stimulus projects or work that was already in process and the schedule is just coming together at this time?

Is that you, John?

Yes.

I know there's a stimulus program because the government keeps talking about it, but we haven't seen it. And since we're not in the business of paving alleys and doing urban gutter work, the truth of it is the overwhelming array of Civil work that we're looking at, and we're seriously bidding a major project a week in some part of the country, I believe was mostly preplanned and already funded. And I really haven't seen any signs of that stimulus money yet. That doesn't mean we don't live and pray for it, but as yet we haven't seen it. What we see is just an enormous array of major Civil work in power plants that were in the pipeline that are finally coming through.

And it sounds as if the schedule is a lot heavier in the third and fourth quarter. Is that correct?

Yes. It continues to ramp up. Our schedule, I believe the last time I looked at it we had something in the neighborhood of $5 billion of Civil work alone, exclusive of buildings and municipalities to bid just out of our Civil group between August 1 and December 31.

Okay, wow.

It is; it's just overwhelming to put it mildly.

Yes. And then just one other question on Guam, you mentioned or Bob you mentioned, a $10 billion to $15 billion opportunity. And I'm not sure if I got this right, but you expect those awards, the initial task orders, in 2010 now?

Bob, maybe you want to respond. I believe we'll get our first notice by the end of '09 won't we, Bob?

Yes. I think they're going to try to put out the initial large task order contract toward the end of '09. There may not be individual task orders awarded under that, but I think they'll try to make their selection sooner rather than later.

Okay, and that's of the three to five firms that'll be involved?

Correct.

Okay. Thank you very much.

Yes.

Your next question comes from the line of Richard Paget of Morgan Joseph. Please proceed.

Good afternoon, everyone.

Hello, Richard.

Just to expand a little bit more on John's topic, with the bid market I know you guys have been saying that the larger project market, the bid table is not as crowded as some of the lower end. Is that still the case and maybe you could be a little bit more specific on some of the jobs that you have been low bidder; how many people were at the table; and you know.

Let me give you an example. At the JFK Airport where we were $204 million, there were three other bidders. The Shasta Bridge that we bid this Tuesday we were low bidder. There were four other bidders. Most of our work in the Civil end we very seldom have more than four other bids, sometimes one to two. As they get larger, the competition gets less. So, most of what we're bidding in the Civil sector is $100 million and up and the even more desirable ones are at the $300, $400 and $500 million range, where very typically there's two bids, maximum of three.

Okay, and then just to be clear, it sounds like with the bid opportunities starting to pick up in the second half here, it's more reflective of the financing market getting better versus any stimulus money getting kicked in.

I don't know if that's it since they're all publicly funded, but obviously money is flowing out of the public coffers, both from the Feds and the states and the local municipalities. Because we're seeing a real -- we're seeing a very significant influx of major Civil work, much more so than, let's say, in 2008. And another sector that's growing very rapidly that we're seeing a lot of opportunity, is the generation of power. So there are those sectors that evidently are somehow depression-proof, at least for the time being.

Okay, could you maybe expand a little bit more on the power opportunities for you guys that you're seeing right now?

Well, we have developed a joint venture with O&G Industries, which is an old partner. They're on our Board. They were an investor with me years ago, who has been in the power plant business and we developed a partnership with them and another company in certain locales.

And it seems the one thing that's being pushed hard in this country is the development and building of more power, and there's only a half a dozen of us and these are -- when I talk power, I'm talking plants in the $300 million to $700 million price range general contracts, and there's only a handful of us that have that capacity. And we think with our mechanical and electric contribution, as well as with the Civil fees, that joint venture can continue to take on even more work than O&G took on alone.

Would this be primarily gas, or you guys are somewhat technology agnostic?

It's distributed.

Okay, and then finally --.

It's both generated and gas. It's a variety of the -- that's really determined by the owner. We just build what they bring to us.

Okay, and then finally with the acquisition that fell through, can you guys elaborate anymore on that? Was it just negotiations broke down? Was there another bidder? Did the --.

No, there wasn't another bidder. It was just fortunately, or unfortunately, a last-minute derailment that we're not at liberty to discuss.

Okay, thanks. I'll get back in queue.

Your next question comes from the line of Steven Fisher of UBS. Please proceed.

Good afternoon.

Hi, Steven.

Related to the guidance, I'm just wondering how much work you still have to book in order to hit the guidance? I mean just kind of characterizing it between how much is still booking versus just executing on what you have?

Well, Steven, it's Ken Burk. Obviously, it's becoming less and less as we go further into the year in terms of dependency for new business. But, we still do have some need for new business, and fortunately as Ron indicated and Bob indicated, we have very good prospects that still could contribute this year.

Okay, and related to the JFK project, for example, I'm just wondering how quickly that can get up and running? I think it's a three-year project?

It is, but the fact remains that we do most of the paving next year. I believe that 80% of the job will be done by the third quarter of '10. The way it's staged we really -- we've almost finished the project by the third quarter of '10.

And so you'd be recognizing most of the profit in 2010 as well?

That's a fair statement.

Okay, and then just in terms of the bidding process for all these possibilities that you have out there, can you just comment on how long does it typically take between the time you put a bid in and the time an award comes? And I guess maybe if there's any differences between the Building side and the Civil side that would be helpful.

Well, the Building side for some reason always procrastinates more and I can't tell you why, other than it seems they study and restudy. For example, Caltrans has already called us this morning. They intend to award Shasta in 30 days or less. We think JFK was awarded in 45 days. I think typically the Civil Works' contracts, and most Public Works' contracts, as long as you're within their budgets awards come quickly. You mobilize and get started.

The only exception to that is the design build in some of the public-private deals. They can take longer just because of the partnerships with the design firms. So that would be the exception to the normal public bid arena.

Got it, and then just lastly, I wonder if you can comment what you're hearing about the potential for specifically doing overhead coverage work in Afghanistan?

Bob?

Yes. I mean so far I'm not aware of any projects that have been advertised for overhead cover there. There are some continuing demands for that type of product in Iraq and we are proposing near-term on some projects in Iraq. So, it's not -- none of that has been advertised in Afghanistan yet.

Okay, thanks a lot.

Yes.

Your next question comes from the line of Avi Fisher of BMO Capital Markets. Please proceed.

Hi. Good afternoon and thanks for taking my questions. The G&A costs, the jump in G&A costs and I know someone asked about this before. If I heard correctly, you said there was $2.5 million of restructuring costs in there, or integration costs I guess you called it.

Yes. During the quarter we had about $2.5 million of acquisition-related costs and integration costs; which, for example, we're going through a centralization of our systems. We're creating a data center. So those are all coming together now, and as I think we covered on the last quarter call, Ron indicated that we expect to start generating significant savings and reducing the G&A overall starting in the fourth quarter and certainly picking up full steam through 2010. Also, severance would be in there from the headcount reduction. That, of course, those are all one-time related costs.

The other piece of the G&A is really structural, because we obviously have created a stronger base. And again, we think that that structure is going to provide the growth opportunity, and then as you see us scale, you'll see that improvement in the overhead percentage come back around. And I think it's evidenced by the operating margins that you're looking at on a pretax from a construction operation standpoint.

Right. Is this the new -- I mean what should be the new -- I mean obviously there's a big jump in G&A. What should we think about as the new base level, either as a percent of revenues or as sort of a dollar value?

Okay, well that's a hard one to answer, Avi. The real answer is it's going to depend on the continuing mix of the Company. As you know, we've touted that we're going to have multiples of improvement in the Civil margins. It's going to depend on how much volume. As you know, in the Building business we've seen a lot of volume that will mathematically lower the percentage.

So it's really -- I wouldn't fixate on the percentages much, as to remember that we are going to reduce our overhead. We've touted that we think we can reduce it by over $10 million just by the programs that we're currently working on. So, I guess, I would just end with caution on trying to peg a percentage and look at what our run-rate is expected to be in the future.

Are civil projects more expensive to bid than private projects? I guess private projects -- are public projects more expensive to bid than public -- private? You know what I'm saying.

I'd say on the Building side, public versus private, they're very similar.

Okay.

Civil work just by its nature is more costly to bid and I think you're going to get a better sense of our final G&A by year end when all of the severance packages are done. We laid off a significant number of people in our Building group. I think you'll see the reductions we talked about and more, but before you see it hit the sheets we're going to have to get severances written off. And many of these major reductions were during the second quarter lapsing into the third. By year end, I think we'll hit everything we said and then some.

Yes, and I think to add to that, we'll be giving out -- our plan is as we customarily do is we'll be giving out guidance for '10 in the third quarter call. And I think Ron's right, we'll be able to give you more visibility at that point.

Got it. And on the -- there are two quick questions on the California bridge contract. Is there any significance that it was bid under Tutor-Saliba and not Tutor Perini?

No, not really. Tutor-Saliba is one of the biggest Civil Works' contractors in California, where Perini historically hasn't done any civil work here for 30 years. And we have a longstanding, great relationship with Caltrans stemming from our work on the I-80 approaches to the Bay Bridge, as well as the rebuilding of the Richmond-San Rafael Bridge. So we typically bid big civil work in California through Tutor-Saliba, and on the East Coast in Tutor Perini.

It's just a brand; no significance there?

Pretty much so.

And I know we've disagreed in the past on this, but what variance, what bid variance should we look to where it's either a comfort zone or a zone of concern?

Well, you shouldn't be concerned. We've been doing this for a long time. Some of our most profitable jobs we left the most money on the table. We think we're pretty good at it in Civil Works, and we haven't had a bad Civil Works' job at Tudor-Saliba in I can't remember when. We left 15% on the table on the Shasta Bridge as well. It's pretty much the same amount on the [White] paving job, too.

Without getting into the specifics of our margins, we've left that much or more and made 18%, 20% and 25% margins in the past on big Civil work. Were I at liberty to give you the specific jobs, I would, but that's just how we operate. Right or wrong, when you -- unlike the Building business where you take sub-bids and all the generals take the same sub-bids, and therefore, when you assemble your final price you're maybe doing 10% of the work so the bids are tightly bunched. On a big bridge job or civil job where we're doing 75%-80% of the work, when you look at a 10%-15% differential, it's just not the same.

Okay.

Would I prefer we be closer? Yes, it makes you feel better for about 15 minutes, and you still have to bill the work in accordance with what you perceive your costs would be.

Got it. All right, I appreciate the color. Thank you.

Sure.

Your next question is a follow-up question from the line of Steven Fisher of UBS. Please proceed.

Hi. I was wondering if I could just ask you to comment on the couple of paragraphs in the press release that talk about the registration of shares. I was wondering if you could just walk through what the thinking is there and what we should be expecting.

Steve, it's Ken Burk. As you recall, we have the Tudor Shareholder Group. In particular, Ron and his control group has the right to call on the registration for his shares, for a block of his shares, and that's what the Company is doing. We received notice and we're going ahead. That right, if you recall in the Shareholders Agreement, provides for 30% that is available under his decision and discretion. So, there's really nothing more we can comment on. It's really just a facts and circumstances' situation.

Okay, sorry, and when does that become effective and when will the window actually be open and available?

Well, we don't know. We're going through the process now of following the guidelines in terms of giving notice, but we do expect to proceed with the filing. Which is why we decided to put it in the press release today, but we are moving forward.

Okay, thank you.

(Operator Instructions). I'm showing there are no further questions. This concludes the question-and-answer session, as well as your conference call. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. Have a great day. You may now disconnect.

Thank you, everyone.