World Kinect Corp (WKC) 2009 Q3 法說會逐字稿

At this time I would like to welcome everyone to the World Fuel Services third quarter earnings conference call.

(Operator Instructions)

Thank you. I will now turn the call over to Mr. Frank Shea, Chief Risk and Administrative Officer. Mr. Shea, you may begin your conference.

Good evening, everyone and welcome to the World Fuel Services third quarter conference call. I am Frank Shea, Executive VP and Chief Risk and Administrative Officer, and I am doing the introductions on this evening's call, with as we did last quarter, a live slide presentation. This call is also available via webcast. To access this webcast or future webcasts visit our Web site www.WFFcorp.com and click on the webcast icon. With us on the call today, are Paul Stebbins, Chairman and CEO, Michael Kasbar, President and Chief Financial Officer. Ira Birns, Executive Vice President and Chief Financial Officer, and Paul Nobel, Chief Accounting Officer. By now you should have received a copy of our earnings release, if not, you can access our release on our website.

Before we get started, I would like to review World Fuel's Safe Harbor statement. Any statements made or discussed today that do not constitute or are not historical facts, particularly comments regarding World Fuel's future plans and expected performance are forward-looking statements, and are based on assumptions that management believes are reasonable. But are subject to a range of uncertainties and risks that could cause World Fuel's actual results to differ materially from the forward-looking information. The summary of some of the risk factors that can cause results to materially differ from our projections can be found in our Form 10-K for the year ended December 31, 2008, and other reports filed with the Securities and Exchange Commission. We will begin with several minutes of prepared remarks which will then be followed by a question-and-answer period. At this time, I would like to introduce our Chairman and Chief Executive Officer, Paul Stebbins.

Today we announced earnings of $29 million or $0.97 per diluted share for the third quarter and fiscal 2009. This was another very strong quarter for World Fuel, and the results record the adaptability of our business model and the ability to deliver consistent results in highly variable market conditions. Throughout the quarter, we continued to focus on the same four primary objectives we discussed in Q2. Number one, continuing to aggressively manage risks in an uncertain global economy. Number two, defending our leading position in the marine market at a time where the shipping industry is challenged by a slump trade. Three, rebuilding our commercial aviation volume while reducing risks. And four, strengthening the platform for growth in our land business.

We were successful in accomplishing all four of these objectives, while achieving an 18% return on invested capital, a 17% return on equity, and an 82% return on working capital. Our robust global service offering, strong balance sheet, and excellent liquidity continued to be powerful differentiators in the market. In our marine segment, we were very pleased to see volume and margins consistent with our Q2 results. Our conservative approach to the market has served us well. And we were happy to see the pace of demand destruction we're experiencing throughout the first half of the year, abated somewhat in Q3. And while we would regard any discussion of a recovery in the shipping market to be premature, we were gratified to see further proof in the quarter, that our business model was well-designed to adapt and respond to the changes in the market.

With every crisis there comes opportunity, and the silver lining for us within this difficult operating environment for the shipping industry has been our ability to achieve a significant level of competitive differentiation among suppliers and customers alike. Access to credit continues to be an important consideration for customers. And suppliers are more concerned than ever about counter party risk and channel management. For our customers we continue to add significant value in the areas of competitive pricing, global service, technology, and operational support. For our suppliers, we continue to add significant value with our financial strength, global sales and marking capabilities, and efficient processing of ratable demand.

As the economy recovers, we believe we are well positioned to benefit from any rebound in the shipping market. In our aviation segment the results were excellent. As discussed in or previous conference call, the Company was focused on growing volume, and reducing risk. We changed our mix of business, and reduced margins, but added approximately 100 million gallons of new business quarter to quarter sequentially. Our offering in the market continues to be increasingly broad acceptance, and we now supply fuel to most major airlines in the world. It has taken us years to build this strong market position, and it bodes well for the future as we continue to improve our supply position, and grow our customer base in passenger, cargo, government, and business aviation.

As we look forward, we are well positioned to provide a differentiated value-added service to customers and suppliers in a highly volatile and fragmented marketplace. In our land segment, we delivered solid gross profit results. We are excited about the developments we see in this space, and the opportunity to continue to grow organically and through acquisition. Q3 was a very good quarter for World Fuel. We delivered strong performance in an operating environment which remained uncertain the difficult to predict. Our volume and margin metrics were solid.

Our risk management discipline was tight, and balance sheet remains strong, and we have achieved strong performance on return on invested capital, return on equity, and return on working capital. On the cost side, continuing discipline and expense management is driving scalable improvements and efficiency across the Company. Looking forward, we will continue to pursue opportunities to grow organically, and use our significant liquidity position to pursue acquisitions which fortify our strategic position in the market, and our accretive earnings. We appreciate your continued support and I will now turn the call over to Ira for a detailed review of the financials. Ira?

Thank you, Paul. Before I review our results, I would like to point out that during the third quarter of 2008, we reported record results across the business at a time when we were presented with extraordinary market opportunities, due to near record fuel prices, unprecedented market volatility and financing constraints in the global credit market. Today we are reporting the third highest level of quarterly profits in the Company history. However given the extraordinary events of last year, while I will provide year-over-year comparisons, I believe it is more meaningful to focus on sequential results. Those of you participating via webcast will be able to see our performance versus all applicable periods on the following slides.

Consolidated revenue for the third quarter was $3.2 billion, up 26% sequentially but down 41% compared to the third quarter of last year. The year-over-year change in revenue is impacted by the significant decline in crude oil prices, from an average of $120 per barrel in the third quarter of 2008, compared to an average of $70 per barrel in the third quarter of this year. The aviation segment generated revenues of $1.2 billion, up $322 million or 39% sequentially, but down $891 million or 44% year-over-year. A $154 million of the sequentially increase was a result of higher average fuel prices, and $168 million was a result of increased volume. Our marine segment revenues were $1.7 billion, up $325 million or 24% sequentially, but down $1.2 billion or 42% year-over-year. The entire sequential increase was a result of the increase in average bunker fuel prices during the quarter.

Finally, the land segment generated revenues of $342 million, up $22 million or 7% sequentially, but down $141 million or 29% year-over-year. The sequential increase was primarily due to results of higher fuel prices during the quarter as well. Our aviation segment sold 555 million gallons of fuel during the third quarter, up 21% sequentially, and up 7% year-over-year, representing our highest level of quarterly volumes since the second quarter of 2008. Our sequential growth in aviation volume was principally driven by increases in our secured lower margin business, as well as increases in contracted commercial activity.

Our marine segments total business activity for the third quarter was 5.2 million metric tons, flat with last quarter, but down 25% year-over-year. We did a good job sustaining volumes this quarter by leveraging our core competencies to navigate a marine marketplace that continues to show weakness. Although we are beginning to see signs of a slight recovery in certain markets, our highest priority continues to be managing risk and maintaining a strong receivables portfolio. Fuel reselling activities constituted approximately 80% of total marine business activity this quarter, slightly higher than the average percentage over the past several quarters. Our land segment sold 165 million gallons during the third quarter, down 3% sequentially, but up 16% from last year's third quarter.

Our Texor, TGS and Henty businesses continue to perform to our expectations. We remain focused on growing this segment while leveraging our investment in people and technology. Consolidated gross profit for the third quarter was $95 million, an increase of $3 million or 4% sequentially, but down $29 million or 24% compared to the third quarter of last year. Our aviation segment contributed $43 million in gross profit, an increase of $3 million or 8% sequentially, but down $7 million or 15% compared to the third quarter of last year. During the quarter, we strategically increased our inventory position to meet increased customer demand. Our self supply models jet fuel inventory position was approximately 39 million gallons or $67 million at the end of the third quarter, up from 25 million gallons and approximately $43 million in the second quarter.

While the jet fuel prices started and ended the quarter at approximately $1.80 per gallon, average jet fuel prices during the quarter increased approximately 15%, driven principally by a significant run up in price during the first month of the quarter. The impact from inventory average cost was similar to the impact we experienced last quarter. The marine segment generated gross profit of $40 million, flat with last quarter, but a decrease of $23 million or 37% compared to last year's third quarter. Our overall margin per metric ton remained effectively flat when compared to the second quarter, despite market conditions, which remain soft. Our strong customer value proposition, and our expertise in global supply continues to deliver results. We remain focused on aggressively managing risk, while maintaining our disciplines that require risk adjusted returns that exceed our cost of capital.

Our land segment delivered gross profit of $11.7 million in the third quarter, an increase of 2% sequentially, and 15% year-over-year. Our acquisition of Texor, TGS and Henty have provided a platform for growth, resulting in improved product offering, in the markets we serve. Operating expenses in the third quarter, excluding our provision for bad debt were $52 million. This is well below the bottom of the range I provided on last quarter's call. Expenses were down $3 million sequentially, and down $5 million compared to the third quarter of 2008. We continue to leverage our technology systems, allowing us to operate more efficiently and maintain economies of scale while taking on additional business activity.

For modeling purposes, I would assume overall operating expenses, excluding bad debt expense of approximately $52 million to $56 million in the fourth quarter of this year. Our total accounts receivable balance was $865 million at quarter end, up approximately $100 million from the second quarter mainly due to the increase in average fuel prices during the quarter. However, year-over-year, our receivables balance has declined over $500 million. Driven in part by the sequential increase in our receivables balance, we recorded a provision for bad debt of $1.8 million this quarter, an increase of $1.3 million sequentially, but down $5 million compared to the third quarter of last year.

Consolidated income from operations for the third quarter was $41 million, an increase of $5 million sequentially, but down $19 million from the record third quarter of 2008. Income from operations for our aviation segment was $21 million, an increase of $3 million or 20% sequentially, but down $3 million or 11% from the record results achieved last year. Our marine segments income from operations was $22 million for the third quarter, a sequential decrease of $600,000 or 3%, and a decline of $20 million from last year's record results. Our land segment had income from operations of $2.7 million, down $1.2 million sequentially, but up 13% year-over-year. The Company had other expenses which included net interest expense and other financing costs, as well as foreign exchange gains and losses of $1.3 million for the third quarter, compared to $600,000 in the second quarter, and $5.3 million in the third quarter of last year. Excluding any foreign exchange impact, I would assume other expenses to again be approximately $1 million to $1.5 million for the fourth quarter of 2009.

The Company's effective tax rate for third quarter was 26.4%, compared to 21.4% in the second quarter and 27% in the third quarter of last year. Our third quarter tax rate is higher than the range I provided on last quarter's call, principally due to a significant sequential increase in domestic earnings, taxed at much higher rates than our earnings in other international jurisdictions. As I have previously stated, our quarterly tax rate can vary based upon shifts in our distribution of worldwide earnings, as evidenced by the significant sequentially change this quarter. We now estimate that the effective tax rate for the fourth quarter of 2009 will be between 23% and 27%, which would translate into a full year tax rate of between 22% and 25%, generally consistent with our 2008 full-year tax rate of 23.5%. Our net income for third quarter was $29.1 million, an increase of $1.4 million over the second quarter, but a decrease of $11 million year-over-year. While down $11 million from last year's record third quarter, on a year-to-date basis, net income is actually up, $6.2 million or 8% compared to 2008.

Diluted earnings per share of $0.97 increased 4% sequentially, but decreased 29% from the record performance in the third quarter of last year. This was the third highest level of quarterly earnings per share in Company history. On a year-to-date basis, our earnings per share were up $0.15 or 6% compared to the first nine months of last year. Return on equity was 17% for the third quarter, flat with the second quarter, and return on assets were also flat at 10% quarter-over-quarter. Our return increased sequentially from 17% to 18%, well in excess of our cost of capital. While our days sales out standing declined to the lowest level ever, our overall net trade cycle increased from 4.9 days to 5.7 days sequentially, principally due to our strategic increase in jet fuel inventory. Our return on working capital remains strong in the third quarter at 82%, still significantly ahead of the returns generated in 2008.

In the third quarter, we posted $4 million of negative operating cash flow. This was impacted by the additional investment of approximately $24 million in aviation inventory, to support the significant increase in volume achieved in the quarter, as well as the increase in average fuel prices. Despite the slight use of cash this quarter, we still generated over $310 million of operating cash flow over the past twelve months. Driven by our continued focus on managing working capital, our balance sheet remains very strong and liquid, with $357 million of cash and short term investments, down only slightly from the second quarter, and $635 million of committed liquidity facilities, which are generally un-utilized today.

Our balance sheet continues to differentiate us as the counter party of choice in the marketplace, which allows us to capitalize in opportunities that provide added value to our suppliers, customers and shareholders. We remain focused on growing the business and managing risk, in what continues to be a challenging economic environment. Our global scale and operating discipline continues to provide a value proposition to our customers and suppliers. Our team continues to strive for excellence and continuous improvement in our operating model. Our very strong liquidity position also allows us to continue to capitalize on investment opportunities which can drive both strategic and operational synergies adding even greater value for our shareholders. I would now like to turn the call over to Marcello to open up the call to your questions and answers

(Operator Instructions)

Our first question is from John Chappel with JPMorgan. Please go ahead with your question.

Thanks, good evening.

Evening.

Paul, we have reached the one year anniversary of the huge 3Q 08 surprise, and I was wondering if you can give an update on the competitive landscape in the marine business. The margins have remained well above historical levels, although they seem to be just ticking down a little bit sequentially. So is it credit easing, has competitive landscape improved at all?

We live in a market in which there will always be competition, and we have to be humble about that, and respect the fact that there's always going to be people out there who will compete. I would say that certainly the market is still stressed from credit and liquidity point of view. Which I think benefits us to the extent we are highly differentiated in terms of our financial strength. So I think that manifests itself not only in term of the business that we can take on with credit lines, but also how we are viewed by suppliers and the absolute limits of credit lines, that is we might have with suppliers versus some of our competitors. Competition is never going to go away. It is a reality of the market. I think it all has to do with what is the total value proposition that we offer to the market. To the customer it is all about being able to getting deep and robust service around the world.

It is about granular understanding of complex markets, and the ability to deliver that information to the customer base, particularly in the shipping market like today, where it is relatively stressed and they need all of the help they can get to generate savings and be competitive in their trades. So we feel our value proposition is more enhanced than ever, in terms of our ability to generate cost savings for our customers. On the supplier side, you can imagine what is going on in a relatively conservative liquidity. I think that there's competition, but its a matter of our relative strength, and it is not that the competition ever goes away, but it is how well do we perform our value proposition in today's operating environment. I think we done a good job.

Great. Got it. This is a little bit longer term, but there's a lot of talk about new marine fuel regulations. Getting away from the bunker fuel. Have you thought about that world fuel longer term, does it put you in a better competitive position, could it become a challenge? And then overall, is there just enough non bunker fuel to meet the global fleet right now?.

Sure. It is a subject that we have been deeply involved with for years. It wouldn't be normally the kind of thing we would discuss on a call like this. But we have been very active with all of the regulatory developments in this industry for over a decade. We have got senior technical people that sit on the ISO committees that have been involved as representatives on the IMO level. We got people who are experts in the low sulphur initiatives, and experts in terms of what's going on at Marphal in the UN directives. We are active participant in supply of the low sulphur product in areas, and we do -- and I would say this is something that we have been deeply involved with for a long time. So it's not some surprise or news to us. This is something that we have been preparing for as part of our business model for the better part of a decade. This is not new stuff. The evolution of this regulatory climate has been coming for a very long time and we have been active participants in it. We have helped shape it and guide it.

I think on a go forward, we see it actually as opportunity. I think all of us are going to be citizens of a new world in which carbon footprints is very important, in which emissions are very important, in which our citizenship as businesses in the global business community is getting more attention than ever. We see it as incumbent upon us to play a role in that, and have it to be part of the value proposition. We see it as an opportunity to be partnering with our customers and suppliers as they reshape their own positions in this market. We don't see it as a threat. You are right when you get into the complexity of refining slate, and you look at the competition for what's going to come out of the refinery in terms of diesels and distillate, and residual fuels, and where those markets are going to be. There are going to be some challenges on the refining side, but I would argue that that's not an immediate issue today. But we see it as an opportunity, it is great news for us.

Great. Sounds good. Alright, two more quick ones, the fuel reselling percentage has reached 80% for just the second time as far as my model goes back. Is that a focus to try and take away a little bit from the brokerage business, because the resale that much more profitable, or is that just a function of how the business played out in the third quarter>

It think it is simply the way it played out in the quarter. There was no effort to strategic effort to fine tune that. If you look back over the last several quarters it is always been tracking in the high 70s. So but no there was no deliberate strategy. It is just the way it shook out..

Okay. Finally just a clarification, Ira, you mentioned the self supply model added roughly the same as in the second quarter, is my memory correct, is that roughly $5 million of operating income benefit ?

No, it was less than that, somewhere between $3 million and $3.5 million.

Okay. Great. Thanks.

Okay.

Our next question is from the line of George Pickral with Stephens, Inc. Please go ahead with your question.

Evening. Ira, just to make sure I heard you correctly. You have said the increase in your bad debt expense this quarter e was due to accounts receivable going up and it was nothing customer specific; correct?

The customer specific piece always bounce around quarter-over-quarter so it is a combination, and on a sequential comparison, on slightly more on the customer specific side, than what we had in the second quarter.

Okay.

So it does include both components.

So you might be seeing just a small up tick in customer charge-offs versus Q2.

That's correct.

Okay. And secondly, on the aviation volumes, the 100,000 increase sequentially, is that coming from a few big customers, or a bunch of smaller ones?

It is 100 million gallons.

Sorry.

And it represents a very diverse cross section of the international market. Which we are very happy about actually, because it's further validation of the effectiveness of the model, and I would say that Mike Clemente and team, as they have broadened that value proposition -- its actually a highly diverse portfolio across all segments. I think its also the US, its Europe, its Asia, which think is even more exciting whereas perhaps our original business model had been US-centric in the early days. And it has become a very robust offering through out the world market. So it's a really big win for us on lots of levels, and we are pretty excited about i.

I am sorry if I missed it in the prepared remarks. Can you talk about how we should think about overhead corporate costs going forward. They're down substantially year-over-year and even down $3 million sequentially. Is that %5 million kind of a run rate we should go with, or is that.

George, it is IRA. I will take a crack at that one. I think it is fair to say we had a really good quarter on expenses at $52 million, which was even a bit better than what we had forecast internally. So, you're focusing on just the corporate piece.

Yes.

So the corporate piece would bounce around for one-time items for things like professional fees, etc. So I would say that number in the third quarter was a little lighter than our current run rate would be which drove -- which drove the total number on expenses down from $55 million to $52 million. That represents a descent piece of that decline.

Okay. Thank you.

And George, this is Paul .I think I would add the volume as you know we talked a lot on previous call that is the sort of the corporate maturity and efficiency drives systems that might for a couple of years. This stuff is really beginning to get legs throughout the organization. That's an exciting part of it.

I completely agree. One more question if I may. There has been a lot of confusion over the years and it seems like the past few months on your derivative and hedging business. Can you talk you maybe talk about what percent of your revenue comes from hedging, or maybe what percentage of your customers uses some of your hedging or derivative products. Does that have a meaningful impact on your gross spreads?

Yes, it has been negligible within this year, George, as you know, we have talked about it on a couple of calls. That if you look at what's was going on at the end of last year and into this year, it was a very, very difficult climate with what was happening in the economy for everybody to be putting cash from the balance sheet into the derivatives business. So this has been a pretty marginal part of the overall picture. The other thing, is that there has been a lot of changes in accounting. So in the way the business works today, is that everything is based on same-day gain. So is built right into your absolute margin, but I would say that and that shows up every single period. There's no extended period. It is not way it used to be. But for derivatives, we still think that is an important part of the strategy. Because it does help people manage their exposure and volatility over time, but the reality is in this year, just given the stresses on the general world, it just didn't feature at all as a major part of the overall portfolio. Now that I would tell you that strategically, we would love to see it become a robust part of the package going forward. It is an area we have a lot of expertise in, and we think it adds tremendous value to both sides of the equation, the customer and supplier. And particularly as these begin to sort of stabilize their financial outlook, and get more confident, and get their legs, after what has been just a brutal environment. Clearly, hedging represents an important strategy going forward in terms of just stabilizing volatility in their P&L. But this year it has been a non-event to date, its just a small part of the overall picture .

Great. Thank you for the color there, Paul. Good quarter.

Thanks, George.

(Operator Instructions).

Our next question is from line Steve Ferazani with Sidoit Go ahead with your question, sir.

Good evening. I just want to circle around on the operating expenses. The reduction in compensation, is that a head count reduction and can you continue that?

No, there is a small impact from headcount, but principally its driven by compensation, the amount that was booked in third quarter versus second quarter. But it is not, not much of it at all is related to head count.

And last year, the fourth quarter you had a jump and I assume that was maybe not the full bonus accruals, on what as a very strong year, but your guidance for full compensation and G&A doesn't show that much of an increase, so we should not expect a repeat in this fourth quarter, is this fair?

We call that in the fourth quarter of last year, some special bonus awards that were awarded by the Board to senior management. You would have to ask the Board that question, to be honest, to see if that could possibly happen again.

We would be happy to give you their number.

That's right. So that wasn't a typical every year type of event, because of the extraordinary results last year, there was some rewards booked in the fourth quarter. I can't tell you if that's going to happen again.

Fair enough. On the significant growth on sequentially on the aviation volume, how much of this is old customers coming back, either because the risk profile has changed. or what you are going after in terms of unit profitability has changed, and how much is new customers you have seen.

As you know there was stress on our current and existing customer base, so there was a reduction in their ability variability to volumes. So some of it has been a recovery,. But I would say also, it speaks to the quality of our overall business model. Our ability to generate against supply, and give a very robust service offering has actually opened up doors to a variety of new customers that perhaps we are not on our radar, or we were simply not allowed in the door as a serious player, going back a year or two. And I would say it was very exciting we've had access to a level of blue chip customers, who are responding to our higher service level, to our robust global offering. And I think that one of the most exciting things, in that 100 million gallon story, is the number of new customer that is are also, global company that rally represent best-in-class companies that are very sophisticated buyers, and are really seeing the value proposition for the first time. That's very exciting. So, it is just a great development for the team.

Is there a significant customer base you can pursue that you haven't yet? That you can continue -- obviously I wouldn't expect repeat sequential growth but is there new markets or customer bases you haven't pursued yet.

Yes.

Fair enough. And then on the marine side, what is the -- what needs to happen to see that sequentially grow again? Is that an economic recovery? Is there anything you can do on your side?

I think the fundamental driver in all of that is again, let's go back to foundational economics, 80% of the world's goods are being carried on marine vessels. The economy still challenged and while you see -- this is sort of the teasing game. One minute the news is filled with recovery. The next minute there's deeper systemic fears about what will happen. I think the reality is that when you look at these supply chains and the lag time there has got to be a systemic and true durable recovery, before you will see any material big shift in that trade pattern. So but I think we are incredibly well positioned. And I think for us this is discipline internally, a very good risk management focus, a lot of reinvestment into our vol proposition, very high focus on competitive pricing, and being able to give deep, deep and robust,service offering to these customer.

All of this is the farming that you do in in these difficult times, because while the global economy isn't roaring right now, this is the time where you reinvest in all your basics, your system, your technology, you're reinvesting in your operational quality of support, you're interviewing and surveying your customers, you're getting closer to them and understanding their needs going forward. We are focusing a lot more on technical expertise, financial situations and how to help them be successful when they come out of this to market. We do see some things that are helping, the flow- steaming is helping, there's also some recovery. China has been an area of positive news, and as you can imagine anybody is in, this continues to be a very, very big market. But I would say that right now, I don't think you are going to see any radical change in that landscape until there's a more durable signs of an overall global recovery. But as before that comes we are incredibly well positioned. We have been doing a lot of work to prepare for that.

Last question, just uses of cash, are you seeing good acquisition candidates out there?

We -- look part of our strategy as we talked about on many calls, is to take advantage of what's been a difficult market, to look at undervalued assets, assets whose values have been discounted. It is part of our internal discipline is to have a constant pipeline and screening process of M&A opportunities across all of our segments. We continue to the process but we want to make sure these are robust, they fit with our business model, and how effectively they can be brought into our model and work. So this is just a discipline, this is process of evaluation is ongoing, and it is constant. In any one given month we are paying, and it is to look at it and make sure sure long term, and we can get the values we think .

Great. Thanks very much.

Thanks.

It looks like do have one other question in queue.

(Operator Instructions).

At this time we do have a question from the line of Brian Jones with SunTrust. Go ahead with your question.

Real quickly from housekeeping, can you update us on the cash inventory and AP balances are currently?

The cash balance including, inventory was $1.75 million accounts receivable where we sit down intraquarter. We don't normally report that beyond the quarter end period to be honest.

With that we have reached the end of the allotted time for questions and answers. I will now turn the call over for Mr. Paul Stebbins.

We would like to thank you for joining us today. It was a great quarter for us and we appreciate your support. It is a volatile and for all of the investing community to manage but we are excited about the progress the Company continues to make, and we look forward to talking to you for the Q4 call. Thanks very much. .

Ladies and gentlemen, this does conclude today's conference call. We thank you for your participation. You may now disconnect.