Texas Roadhouse Inc (TXRH) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Texas Roadhouse, Inc. fourth quarter 2010 earning conference call. Today's call is being recorded. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for your questions.

At this time I would like to turn the call over to Mr. Scott Colosi, Chief Financial Officer of Texas Roadhouse, Inc.Please go ahead, sir.

Thank you, Sarah, and good evening, everybody. By now everyone should have access to our earnings announcement for the fourth quarter ended December 28, 2010. It may also be found on our website at www.texasroadhouse.com in the investor section.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact the future operating results and financial condition of Texas Roadhouse.

In addition, we may refer to non-GAAP measures and reconciliations of such measures can be found under the Investor Relations section of our website.

On the call with me today, as always, is G.J. Hart, our CEO, and Price Cooper our Vice President of Finance. G.J. will provide some insights about the performance and direction of our business and Price will give you the financial update. And then we will all be here to help answer any questions that you have.

Now, I would like to turn the call over to our Chief Executive Officer, G.J. Hart.

Thank you, Scott, and good evening, everyone. We finished 2010 with great momentum passing $1 billion in revenue for the first time. For the fourth quarter comparable restaurant sales growth of 3.1% led to diluted earnings per share growth of 13%. For all of 2010 comparable restaurant sales increase of 2.4% led to earnings per share growth of 20% for the year. We feel very good about our overall positioning and are encouraged by the strong start of the year evidenced by the 3.8% to-date comp we announced.

As you saw in our release, we are increasing our year-over-year new store development estimate by 43% to 20 restaurants in 2011. And we also announced our first ever cash dividend in addition to a significant share repurchase authorization, both of which I will discuss later. But we feel very good about the current state of our business as we are driving comp sales and building new stores with an economic model we believe will deliver solid returns. We are also returning capital to shareholders to drive long-term total returns.

Now I'll turn the call over to Price to walk you through the financials.

Thank you, G.J.During my review of the fourth quarter please note that many of the numbers I will mention are listed in a schedule of supplemental financial and operating data that was included in the Press Release.

Starting with our income statement, for the fourth quarter of 2010, as compared to the same period in 2009, both revenue and Company restaurant sales increased 7.6%. Growth in Company restaurant sales was driven by a combination of a 3.5% increase in average unit volumes and a 4.4% increase in store weeks. Our comparable restaurant sales growth of 3.1% was driven by positive guest traffic of 3.3% as price and mix were negative 0.2%. Comparable restaurant sales were positive each month, with October up 3.5%, November up 4.6%, and December up 1.7%. December was impacted by Christmas moving from a Friday to Saturday.

Additionally, for the first seven weeks of our first quarter, as G.J. mentioned, comparable restaurant sales were up 3.8%. Our average unit volume growth of 3.5% for the quarter exceeded comparable sales growth of 3.1% for the second quarter in a row. This means the restaurants we have opened over the last six to 18 months have higher sales than our previous groups, which we are very pleased about.

As we have done in the past I will provide a little more color here. For the quarter, the 252 restaurants in our same-store sales base averaged $68,600 a week in sales. These restaurants have been open for at least 18 months as of the beginning of the fourth quarter of 2010. The 11 restaurants in our average unit volume base that have been opened six to 18 months, and thus are not in our same-store sales base as of the beginning of the quarter, averaged $73,500 a week. $4,900 higher than our same-store sales base. Finally, our newest 11 restaurants opened sometime over the last nine months, and thus not in our same-store or average unit volume calculations, averaged $80,600 a week in sales during the quarter. In terms of restaurant margins, they actually decreased for the first time in six quarters by 35 basis points year-over-year. This was primarily due to the timing of some credits in the prior year, namely a payroll tax credit.

Some comments on specific line items. Cost of sales improved by 39 basis points over the prior year as we continued to experience food cost deflation, although not at the rate of earlier in the year. On a sequential basis, cost of sales increased 39 basis points, primarily driven by higher dairy and produce cost as compared to the third quarter.

On the labor line, despite positive comparable restaurant sales growth, we experienced 13 basis points of deleverage. This was driven by the fact that in the fourth quarter of 2009 we had a $1.2 million credit relating to favorable settlements associated with state unemployment insurance rate changes that had taken effect throughout 2009.

Other operating expense was up 64 basis points. Three things really drove this. First, as has been the case throughout the year, we experienced pressure from higher bonuses for our operators as profitability at the restaurant level has improved due to higher sales and margins. Second, credit card fees were up this year due to continued growth in credit card usage, and a $221,000 credit recorded during the fourth quarter of last year in conjunction with a settlement. And lastly, as we have been more aggressive with remodels, we have incurred more non cash costs in conjunction with writing off some of the older assets replaced. This was up about $500,000 year-over-year for the quarter.

Moving down the income statement, there are a couple of other items to point out. Pre-opening expense was up $1 million. We opened more restaurants during the fourth quarter of 2010 than in the fourth quarter of 2009. And we have more in our pipeline. Keep in mind pre-opening in 2011 will be substantially higher as we ramp up our openings. During the quarter, we did record $1.7 million in impairment charges in conjunction with our annual goodwill impairment testing. G&A expense was up $1.7 million year-over-year and 30 basis points as a percentage of total revenue. I will mention that this increase was exaggerated by about $1 million primarily due to a higher bonus payout in 2010, higher payroll taxes associated with the exercising of more stock options by employees, and some one-time payments to employees no longer with the Company.

Our effective tax rate has continued to come down as we received higher work opportunity tax credits. For the year the tax rate came in at 32.2%. We do expect this to tick up some in 2011 due to the expiration of certain tax credits.

On the balance sheet, we ended the year with $82 million in cash and $52 million in debt. Given the fact that we have $50 million in interest rate swaps that go on for another five years, we intend to keep $50 million drawn down on our bank credit facility, plus we will have $2 million worth of third party debt outstanding. Both very manageable, in our view.

Now onto our 2011 outlook. Our current goal is to grow diluted earnings per share by approximately 10% this year. This is predicated on the following three assumptions. First, approximately 20 Company-owned restaurant openings, which will be back half loaded, thus will result in a little over 5% operating week growth. Secondly, our goal is based on comparable restaurant sales growth of approximately 3.5%, which is roughly in line with where we were at year-to-date. This includes the impact of a 1% average menu price increase we're in the process of implementing. Our third primary assumption is that food cost inflation will be in the 3% range.

A couple of additional comments on 2011. We anticipate that our restaurant margins will be down 20 to 30 basis points. Although we are taking some pricing and believe we have tremendous momentum in the business, we continue to remain focused on driving market share and thus margin dollars versus margin percents. We also anticipate both pre-opening and G&A will be up in terms of absolute dollars in 2011. We hope to leverage G&A as a percentage of sales but anticipate the absolute dollar amount will be up.

And with that said, let me turn the call back over to G.J.

Thank you, Price. In addition to our fourth quarter and year-end results, we announced a few other things today. Including a new share repurchase authorization and our first ever first quarterly cash dividend. We're very excited about both and believe they are a great complement to our overall growth strategy and a component of building shareholder value over time. Behind the board's reasoning here is that our cash flow and balance sheet positions have never been better. And despite plans to grow our restaurant base at an increased rate over the next several years, we still anticipate having excess cash flow to deploy.

Consequently, we felt it was prudent to allocate a portion of this excess cash flow to, at the very least, offset share dilution created by older stock options and restricted stock unit grants. In total, this amounts to around 1 million shares in any given year. With $50 million authorized, however, we may be more aggressive should the opportunity present itself from a stock price perspective.

Additionally, we believe we have more than sufficient cash flows to make a dividend payment. Our board authorized such a payment this quarter in the amount of $0.08 per share. We hope they will do this each quarter in conjunction with our regular meetings, which are typically a few weeks after our earnings announcements. We anticipate that the per share amount would remain constant for the year and the amount itself would be revisited annually.

Now, as to organic growth, we believe we have a good amount of momentum, as evidenced by our sales trend during the back part of 2010 and into the start of 2011. We are staying conservative on pricing, taking approximately 1%. While we anticipate losing some margin this year, we're going after market share and positioning ourselves to win longer term. Additionally, by taking less pricing now, we believe we would be in much better position should we face higher inflationary pressures in 2012 and beyond.

In summary, our goal is to continue creating value for our employees, our guests, and our shareholders. As such, we are committed to further challenging ourselves, striving to be the very best we can in terms of providing a great place to work and a great place to dine. We've proven that if we can do this effectively, financial performance will follow. And finally, as always, a big thank you to all of our team members for a great 2010 and a very solid start to 2011.

That covers our prepared remarks so Operator, if you would, open the line for questions.

(Operator Instructions)We'll take our first question from Destin Tompkins with Morgan Keegan.

Thank you. I just wanted to follow-up on the menu pricing. I know you mentioned the 1%. I'm just trying to understand the thinking, why you didn't take the 2% in test. Is it as you said?Do you feel like it gives you more ability to take pricing in 2012 and you feel like there's going to be some pressure?Can you maybe speak to the pressure that you could see in 2012 and how you're thinking about commodity inflation even though it's a ways out?

Destin, as you know, we continually stay conservative and try to gain it through gaining market share and we believe we'll continue to do that. As you know, we're always conservative on that front. In terms of inflationary pressures for 2012 I think it's too early to tell, although I do think that we will see increased inflation for what we'll see in 2011 based on our contracts that we have in place.

Okay. And then it seems like with the share repurchases that may be you're taking a little more aggressive position than you have in the past. It seems like maybe you've been a little more price sensitive to what level you're comfortable repurchasing shares at. Is it safe to assume that we'll likely see a little bit more -- you won't maybe discriminate on price as much as you have in the past?

Destin, this is Scott. We're very committed to limiting the amount of dilution that we see going forward from our stock compensation programs. And at the same time, since we've accumulated so much cash over the last few years, it's just given us a level of confidence to be more aggressive in our share repurchase program. I can't tell you exactly what prices we'd be comfortable at, but we're definitely committed to limiting dilution, again, from our stock grant program.

Great, thanks, guys.

Moving on to David Tarantino with Robert W. Baird.

Hi, good afternoon. Just a question on the 2011 outlook that you're giving with the 10% earnings growth. I'm wondering if you could reconcile that point estimate versus the range that you laid out on the Q3 report of 5% to 15%. What are the moving parts that maybe is weighing that number down relative to the high end of the guidance that you gave last time?

David, it's Price. The biggest difference is the pricing itself. Our prior guidance, 5% to 15%, assumed flat to basically up 2% in menu price increase. And so then when we settled on that 1%, and then taking it a little later into the year then we ended up basically at the mid point of the prior guidance of 5% to 15%.

Got it. And then just a follow-up question on the pricing decision. I think maybe it was asked earlier but was the decision to take 1% related to any pushback you might have seen in the test of 2%? Or was it more related to wanting to capture market share and maybe have less earnings growth this year?

David, it's GJ. The pricing is just relative to our ongoing strategy of being more conservative on pricing and gaining it on stealing share. We've been successful in doing that in the past two years and we believe we'll be successful in the future. If you look at our sales trends for the first seven weeks, we feel very good about where they are. And so, being conservative, allowing ourselves to be able to relook at that potentially later in the year, depending on what we find out about 2012 as soon as we get more clarity, will allow us some flexibility. And so, I'll remind you that while our goal is on earnings per share of 10%, as you know we will continue to update you as things change. And as a management team we've continued to perform in some pretty difficult environments.

Sure, understood. And GJ, on that point on the pricing, just so I understand the approach, this is more about running the business as you think about the rest of the year. And coming back to the question, did you see anything in the 2% pricing test that would have caused the alarm, or is this more about the decision to keep running the business the way you have been running it?

The short answer is no we didn't see anything that really gave us any pause. However, to be very fair, there was a lot of moving parts during the time while we did the price testing. And as you know, it's somewhere between art and science. And so there was nothing that really stood out that said -- Oh my God, we've got to push back on this 2%.

Okay, very helpful. Thank you.

And from Barclays Capital, Jeffrey Bernstein.

Great, thank you very much. Just two questions. One, just a little bit more clarity from the commodity side of things. You alluded to having room for potential increase in inflation in 2012. Just wondering whether you can give us a little bit more color on '11.I know you're now saying the overall basket up 3%. I think you previously said 50% to 60% of your basket was locked which included 88% of the protein. So I'm just wondering if you can give us an update on those percentage.And perhaps the portion that's not currently locked, within that 3% guidance that you're giving for inflation, what are you assuming for that portion that's not currently locked? And then I had a follow-up question. Thanks.

Hello Jeff, this is Price. I'll start off on that. Where we sit now as far as being locked for this year, we're locked on almost, about 65% of our total cost. Part of that does include a floor and ceiling for some of our proteins. On the beef specifically, we're locked on over 80%. The items that we're unbooked on, we float most of our dairy and produce. We do have some ceiling programs in effect but for the most part we're at the market on those. And then we've got some proteins in the back part of the year that we have not booked at this point. And what was the other one?

I was wondering what assumptions you're using in that 3% for those things that are not locked. Are you assuming prices where they are at right now, or that they get worse or better, just for the floating portion, the 35%?

Not getting overly specific on what we're assuming but I think we're assuming very fair amounts, I would say, for what we think prices will be. I'll give you an example. We're not assuming the produce and dairy costs stay this high all year. So if produce and dairy was to stay at these levels, then that would be an increase above the 3%.

Okay. But the menu pricing that you alluded to, it sounds like this 1% is pretty much all you're expecting for the full year? Or you could potentially revisit and raise prices at some point in the back half of 2011, if need be.

Yes, that's what we alluded to. We could revisit and possibly raise it in the back half of 2011, I think G.J. mentioned, as we get more clarity around exactly what we're thinking 2012 inflation will be.

Okay and then just lastly in terms of the weather, you mentioned fairly severe. I don't know whether there's any color in terms of the December or the first seven weeks, a ballpark estimate as to how you were impacted by the weather?

Jeff, this is Scott. We haven't tracked the weather. So we don't really know how much we've been impacted by it. Anecdotally, a lot of people are talking about it, talking about that their restaurants had more closed days this year than last year. But, again, we don't track it, so we can't give you an exact number on it. We know we're going to have snow days every year, whether they're more in December, January or February, we don't know, we don't track it. And it doesn't really factor into any of our day-to-day or long-term strategies on how we're going to run the business.

Got it, thank you.

Next we'll hear from Jeff Omohundro with Wells Fargo.

Thanks.Regarding that stuff up in the Q4 other operating expense, about how much of that was related to those Q4 bonuses?

Hang on just a minute, Jeff.

And while Price is looking for that, you alluded to the average sales of the more recent store openings. And particularly given the heavy load in Q4 of new store openings, those numbers did step up but were you pleased with them?Did they meet your expectations?

I'll take that, Jeff. It's GJ. We are very pleased with the numbers. And we think that's largely due to some things that are going on internally, as well as the brand awareness. I think we talked about some of the ongoing training that we continue to do with our new managers and keep them in the system longer before they have their restaurant. And in addition we have done a lot around keeping our trainers in a new restaurant opening longer. We're starting to see some benefits. So we are pleased.

Jeff, Price here, getting back. The bonuses were up about 15 basis points year-over-year.

That's helpful. Thank you very much.

Moving on to John Glass from Morgan Stanley.

Thanks. A couple of questions, too. Just first, Price or Scott, when you talk about restaurant margins being down a little bit in 2011, can you just walk through the key items?Even with the pricing do you expect food cost to delever once you take it?Maybe, can you just talk about that other restaurant line item in 2011?I suspect a lot of these things will recur, particularly the remodeling cost. So can you maybe just give us some color on each of the big line items, please?

Yes, a little color on them.The biggest impact is the fact that we're assuming 3% in food inflation and only 1% in pricing. So food cost is where we expect there to be the biggest amount of deleveraging. On labor it will depend a little bit on traffic. If traffic stays where it is, could be flat or get a little leverage there because we are seeing low single digit-type year-over-year wage rate inflation. On the other line, it will be a little bit a wild card but with sales going up and then margins coming down a little bit, I think bonuses will be not as big of an impact this year on a percentage of sales basis. So by far the biggest impact will be on the food cost. 1% price.

There were two issues you cited, though, in previous quarters. One was on some insurance. And then you said in the fourth quarter some either accelerated depreciation or maybe some just write-offs of equipment. Does that continue into next year or not?

I would assume that we'll continue remodeling restaurants. It's an ongoing thing for us. We spend $14 million to $15 million a year on maintenance CapEx. And that's above and beyond the $10 million or $12 million a year we spend in repairs and maintenance-related expense that hits our P&L directly. So we assume that will continue. You are right on the insurance. We have had a few hits this year, specifically on the general liability insurance, driven by the fact that we are partially self-insured for that. And how that plays out in 2011 will depend on our experience factors.

John, this is Scott. One of the things on the general liability piece is that we actually brought our claims handling process in house. And so we're saving quite a bit of money there just in the fees we used to pay before. But additionally, we've got some in-house folks handling the claims. And so the number of claims, for example, that are going immediately to litigation has gone down dramatically since these folks started with us. We're actually somewhat optimistic that we may see a little bit of additional savings on the claims side with regard to general liability.

That's great. And then just the language on the dividend, I just wanted to clarify it or make sure I've got that straight. It is a regular quarterly dividend. You'll increase it annually as you see fit. But there's no hesitation on your part or the board's part that it would somehow be an infrequent dividend or a variable dividend like some other companies have proposed, is that correct?

John, it's Scott. No, the intention is this is the start of an ongoing dividend payment program.

Got you. Thank you.

Next we'll hear from Matthew DiFrisco with Oppenheimer.

Thank you. Can you just clarify for us, you had large impairment cost in the fourth quarter. Your estimate, backing out all of your impairment charges, comes out, I believe, to $0.82 for FY10. Is that the base you're looking at to grow 10% earnings growth off of?

No. This is Price.No, we base that off of our reported numbers. We don't back out.I know a lot of you guys back out the impairments for what you look at but we base our guidance off of the reported $0.80 in diluted EPS.

Okay.And then also, just looking at the second concept. Aspen Creek. Is there any new developments on that or do you have any plans to add a fourth store any time soon?

I'll take that, it's GJ.Right now we're going to stick with the three units we have open. We're going to continue to learn on what works and what doesn't work, and we will determine at a later date what our next steps are. We'll also be talking about that tomorrow at our investor conference.

Just a follow-up on that first question I had about the impairment charges. Do you have any impairment charges or comparable impairment charges expected in 2011?

It's Price. Don't know. These impairment charges that we've booked and recorded in the fourth quarter had to do with some annual testing around our goodwill. We have a lot of restaurants that we've acquired over the years from different franchisees. We've got about $110 million in goodwill associated with those. And it relates to roughly 60, 65 restaurants that we've acquired over the years. So fourth quarter is our annual time that we do the testing. So, it's early. We assume that there exists a chance that we'll have some impairment every year. It's just tough to predict exactly how much.

Okay. So, is that a way of saying then the 10% earnings growth has something of impairment? Or impairment would be incremental, negative, to your 10% growth?

Matt, it's Scott. We absolutely consider the possibility of impairment in the 10% forecast that we've given out.

Okay. Thank you.

And from JPMorgan we'll hear from John Ivankoe.

Great, hi, thanks.On your beef for 2011, I think you mentioned 80% is currently contracted. There was almost an allusion that G.J. made in his prepared remarks that based on your current fiscal '11 contracts that you had perhaps expect fiscal '12 inflation to be higher than fiscal '11. It's a several-part question.One, how favorable is that 80% relative to the 20% that you're not contracted, if I can ask that? And secondly, we hear a lot of different things so I would love to hear it from you, what really is your outlook for the steak market over the next year-and-a-half?Is it as bad or as negative as people think, or could it perhaps be a more moderate increase in 2012 relative to 2011?

John, it's GJ. I would tell you that on the 80% lock versus the 20% that we have not locked, the 80% would be, on average, at a lower cost than the 20% that we do not have locked. That is the assumption that we are making currently that may or may not come to pass.

Can you quantify that? Or would you feel comfortable in quantifying that?

No, we wouldn't. But let me go ahead and comment that in terms of the steak category, or beef in general, into 2012, I would tell you that where the futures markets are today, it would suggest that it could be fairly scary into 2012. But, and I've said this many times before, that at the end of the day it's about a supply and demand. And I would tell you that things are never as bad as they seem and that there will be some coming back into balance as we go into 2012. So, just from one person's perspective, that I don't see it being as bad as what you hear people to say.

Okay, thank you.

And next we'll hear from Larry Miller, RBC.

Hello, guys. Can you give us an update on the smaller store format?How many you have open, how are those performing? I think there were some in Utah. And I had a follow-up, too.

Larry, it's Scott. There's actually a couple different formats that we have. And the one store in Utah that you're thinking of, it's about 150 square feet smaller than our historical prototype, you could say. It actually has more seats. The configuration of the seating has changed a little bit.We have more six tops and fewer two tops in that site. And most of our stores built in 2010 are under that similar configuration. At the end of 2010 we did open a smaller size prototype, about 6200 square feet, with fewer seats. I think it's about 220 seats. And we opened a second one in New York state last week. And both of those locations are doing very, very strong sales. And so we're coming to a point now where we've got numerous prototypical options, something between 7,000 square feet and 6,200 square feet, and a couple of sizes in between which gives us a lot of flexibility into going into various locations where we may be restricted, in some cases, on the size of the building that we can actually construct on a certain site. We're going to talk more about that tomorrow at our Analyst Day but we're feeling very, very good about where we are from a development perspective.

Good, that's helpful. And then a lot of people are talking about where the plan might be aggressive. When you guys look at your plan for 2011, where do you think you might be planning conservatively?It sounds like you're not assuming that all of this price flows through, or maybe you're assuming that traffic doesn't sustain at this rate. But maybe a little color on that would be helpful. Thanks.

Larry, it's Scott. Certainly we're hopeful that our traffic trends continue. And given that we are taking less price than probably almost anybody else in the industry, and we continue to execute at a very, very high level with regards to our food quality and service levels, who knows where we could end up from a traffic perspective. Certainly 3.5% sounds like a fairly high number but we've been tracking it at that clip now all year. And certainly when you add a little bit of pricing on top of that, who knows where we could go for the balance of the year. So, usually if there's a lot of fluctuation between a forecast such as ours, it's going to be sales related. And certainly if we can do better than the 3.5% then there's probably a lot of upside to our numbers. And, of course, if it goes the other way then we've got some challenges in delivering.

Thanks, that's very helpful.

(Operator Instructions)We'll go next to Keith Siegner with Credit Suisse.

Thanks. Just a quick question on the CapEx guidance. You increased it from the preliminary numbers after the third quarter. Unit growth stayed the same. Where does that gap come from?Are the units costing more than you thought?Is it more remodels?Is it anticipation for 2012 units?Just getting a sense of that delta, please.

Keith, it's Price. It's what you mentioned last there. It's the anticipation of 2012 and the timing of those. Right now we're in great shape for 2011. We're already into working on 2012 and am very optimistic in planning that 2012 will be much more front-end loaded and thus the increase in the CapEx.

So given that, would you expect that at this time, or would you be willing to talk about could 2012 unit openings be more than 2011?Is that a possibility if you can get more going in the front of the year and have a more balanced run rate?

Yes, that is a possibility and that's definitely what we're working towards.

One last question for you, and this is a little bit random. It's been a couple of years since you bought out any of the franchisees. It's something you used to talk about a lot more as you have something in the contracts that enables you to buy them out for a fixed number of shares. But it's been a couple of years. Now that the debt is basically where you want it, have you thought more about that? Is that something you do consider or is this something that's off the table for now?

Keith, it's Scott.We always consider it and there's always conversations going on. Myself, GJ, in particular, and various franchise partners. It's a flowing dialog but it is pretty constant. And you're absolutely right, with the amount of cash that we do have sitting in the bank it's not earning a whole lot of money. So, yes, we would absolutely like to acquire some franchisees and get some nice returns, certainly relative to what we're earning in the bank.

Okay, thanks.

We'll take our next question from Andy Barish with Jefferies.

Hello, guys. Can you just give us a little sense on, I think the implementation of pricing on the menu this time around was more across the board versus certain specific section or number of items. Do you expect any shifts or mix impact from any of that or have you seen any mix shifts even going into the pricing on the menu currently?

Andy, it's GJ.The pricing that we've taken, or are taking towards the end of this quarter, is more even across the menu, just like the test was. And so, no, we don't anticipate it.

Thanks.

And gentlemen, there are no further questions at this time. We'll turn the conference back over to you for any additional or closing comments.

All right, thank you all for your interest in us. We look forward to seeing many of you here tonight in New York at our reception or tomorrow at our Investor Day. For those not attending, feel free to log into our website tomorrow morning from 8 until 11 AM Eastern Time to listen in. And thanks to all of you, and we'll see you next quarter. Good evening.

Ladies and gentlemen, that does conclude today's conference. We thank you for your participation.