Westlake Corp (WLK) 2005 Q3 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by.

Welcome to the Westlake Chemical Corporation third quarter earnings conference call.

During the presentation all participants will be in listen-only mode. After the speaker's remarks, you will be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, November 3, 2005.

I would now like to turn the call over to today's host, Steve Bender, Westlake's Vice President and Treasurer.

Sir, you may begin.

Good morning, everyone. Thank you for joining us for the Westlake Chemical Third Quarter Conference Call.

I am joined today by our President and CEO, Albert Chao; and our Senior Vice President and Chief Financial Officer, Ruth Dreessen.

The agenda for today will be as follows, Albert will first make a few comments regarding Westlake's performance during the third quarter; Ruth will then provide you with a more detailed look at our financial and operating results. After that, we will open the call up for questions.

Today management is going to discuss certain topics that contain forward-looking information that is based on management's beliefs, as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. Actual results could differ materially based upon factors, including the cyclical nature of the chemical industry, availability, cost, and volatility of raw materials and utilities, government regulatory actions, and political unrest, global economic conditions, industry operating rates, the supply/demand balance for Westlake's products, competitive products, and pricing pressures, access to capital markets, technological developments, and other risk factors.

Westlake has issued, early this morning, a press release with details of our quarterly financial and operating results. This document is available in the press release section of our web page at www.westlakechemical.com.

A replay of today's call will be available beginning one hour after completion of this call until 11:59 p.m. Eastern time on November 10th. This replay may be accessed by calling the following numbers, domestic callers should dial 1(888)286-8010; international callers may access the replay at (617)801-6888. The access code at both numbers is 63476770.

Please note that information reported on this call speaks only as of today, November 3, 2005, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay.

I would finally advise that this conference call is being broadcast live to an Internet webcast system.

Now I'd like to turn the call over to Albert Chao for a few comments.

Thank you, Steve.

Good morning, ladies and gentlemen, and thank you for joining us.

I'm pleased to say that this morning, before the market opened, we reported a solid third quarter, earning $0.67 per diluted share in spite of the impact that Hurricanes Katrina and Rita had on our industry and the energy price spikes that followed.

Before we get into the details of the quarter, I just want to emphasize the fact that during the third quarter we continued to benefit from the products diversification that our olefins and vinyl segments provide, and by our vertical integration strategy.

In addition, the chemical industry supply-demand balance remains very tight, and we have seen pricing improvements and additional industry pricing announcements across the majority of our products.

Having said that, our third quarter earnings outpaced last year's results; however, they were below the second quarter of this year primarily due to margin pressure in our vinyls business.

Year-to-date, both our olefins and vinyl segments experienced substantially higher revenue and earnings compared to the first nine months of last year. Our vinyl segment, benefiting from our downstream integration strategy, has seen record revenues and earnings. Our olefin segment experienced continued ethylene and polyethylene margin expansion in spite of unprecedented high energy and feedstock prices.

Due to the outages caused by the two hurricanes and the resulting energy price spikes, the vinyls industry has announced and is currently implementing a $0.12 per pound price increase in PVC resin. PVC pipe producers have reacted strongly to these increases in resin with their own pricing initiatives.

The hurricanes caused unprecedented petrochemical and polymer production outages in a market that was already strengthening and had low inventories.

Consequently, many buyers of plastics resin are experiencing some form of allocation by the suppliers. Polyethylene producers have announced price increases totaling $0.18 per pound for the fourth quarter.

As a result, both segments are poised for strong performance in the fourth quarter of this year.

The outlook for the petrochemical industry continues to be positive, driven by a continued global GDP growth, U.S. reconstruction efforts in the Gulf Coast area, and continued capacity constraints in a number of our products.

Now I'd like to turn the call over to our Chief Financial Officer, Ruth Dreessen for review of our third quarter results.

Ruth?

Thanks, Albert.

And good morning, everyone.

First, I would like to discuss the effects of Hurricanes Rita and Katrina as they relate to Westlake.

The company's operations were not significantly impacted by Hurricane Katrina; however, on September 22nd, we safely shut down our vinyls complex in Geismar and our olefins complex in Lake Charles in anticipation of Hurricane Rita.

While both complexes sustained minimal damage, the lack of electricity and other utilities and services caused extended outages at both sites. The Geismar operation was restarted on September 30th, and Lake Charles was restarted on October 14th.

We estimate the after-tax impact to be approximately $3 million in the third quarter, and approximately 12 million in the fourth quarter. However, the fourth quarter estimate does not take into account the sharp increases in product prices and generally tighter market conditions that occurred as a result of the storms.

Now on to our earnings. As we reported in this morning's press release, Westlake had improved sales of 605 million in the third quarter, compared to 572 million in the third quarter of last year, primarily due to higher prices.

Sales were also higher than the 581 million reported in the second quarter of this year due to higher selling prices and volumes for ethylene and polyethylene, which were partially offset by some price erosion in PVC resin, pipe, and styrene.

Net income improved to $44 million or $0.67 per share in the third quarter, compared to net income of 28 million or $0.50 per diluted share in the third quarter of 2004, primarily due to margin improvements and lower interest expense.

The third quarter 2004 included an after-tax charge of 9.3 million related to the early retirement of debt.

I will also remind people that our share count changed from the third quarter last year due to the company's IPO, which affects the EPS comparison.

Third quarter net income was below the 49 million or $0.74 per diluted share reported in the second quarter of 2005, primarily due to price and margin erosion in our vinyls segment, which we will discuss in more detail in a moment, some negative impact related to the outages caused by Hurricane Rita and a feedstock-related trading loss.

As we mentioned in this morning's press release, we had a loss related to feedstock trading activities in the third quarter of $5 million after tax, compared to $1 million loss last year. We believe that most of this will be reversed in future periods.

The third quarter results benefited from the use of FIFO accounting as compared to LIFO. As you know, our utilization of FIFO inventory accounting impacts our earnings differently than the use of LIFO accounting. The energy and feedstock price spikes related to Hurricane Katrina and Rita during the third quarter benefited Westlake's results as compared with companies using LIFO. We estimate the FIFO benefit for Westlake in the third quarter to be approximately $0.31 per diluted share. However, the year-to-date benefit was only $0.15 per diluted share due to the negative impact from FIFO in the first half of this year.

Please bear in mind that the FIFO calculation is only an estimate, is not audited, and is not a GAAP calculation.

We remain focused on our comp structure. During the quarter SG&A expenses remained at approximately 3% of revenues.

Our effective tax rate in the third quarter was 33.2%, compared to 38.3% in the third quarter of '04. The lower tax rate was a result of a one-time 2.3 million prior period adjustment, which reduced income tax expense and deferred tax liabilities. Also, as part of this adjustment, depreciation expense was reduced in the olefin segment by 2.5 million before tax.

These adjustments increased net income by 3.8 million or $0.06 per diluted share in the third quarter of '05. The effective tax rate, excluding the adjustment, was 36.6% for the third quarter and 36.1 on a year-to-date basis.

We paid taxes of approximately 16 million in the third quarter and will continue to pay cash taxes going forward.

Our olefin segment generated 45 million in income from operations during the third quarter of 2005, which is above the 32 million generated in the second quarter of 2005, and in line with the 45 million generated last year.

The sequential increase was primarily due to higher selling prices and sales volumes for ethylene and polyethylene, despite the impact of shutting down Lake Charles during Hurricane Rita. As Albert mentioned previously, the industry has announced significant price increases for the fourth quarter.

Turning to the vinyl segment. Our vinyl segment earned 29 million of income from operations during the third quarter, compared to 26 million in the third quarter of last year, and 51 million earned in the second quarter of this year.

Income from operations increased over the prior year due to margin expansion and higher sales volumes for PVC resin and PVC pipe. Segment sales volumes are up 8.7% versus last year driven by pipe and resin.

As a reminder, we purchased Bristolpipe last year during the third quarter. However, pipe volumes would still be up if we remove it from the comparison.

The sequential decrease in income from operations was primarily due to energy and feedstock price increases related to Hurricanes Katrina and Rita resulting in higher ethylene and feedstock costs. Our vinyl segment produces ethylene and purchases it from our olefin segment.

Despite sequential volume improvements of 2%, we experienced some price erosion in PVC resin and PVC pipe early in the quarter. The vinyls industry was starting to strengthen late in the quarter and then responded strongly to the hurricane-induced cost pressure with a $0.12 per pound price increase announcement for PVC resin effective for October, which is currently being implemented.

Now turning to the balance sheet and cash flow. Our working capital increased by $30 million during the third quarter as compared to the second quarter; however, 14 million of this increase is due to an increase in our cash balance.

The remaining components of working capital increased as compared to the second quarter due in large part to an increase in receivables. We generated 31 million in cash from operating activities and 14 million in total cash flow after spending 17 million for CapEx.

We have cash on our balance sheet as of September 30th of 123 million, up from 109 reported in the second quarter. We have no revolver borrowings at this time and expect our net interest expense to decrease as we continue to repay back debt and accumulate cash on our balance sheet.

Net debt as of September 30th was 144 million.

Our capital spending assumptions for 2004 (ph) will be in the hundred-million-dollar range, which is below our previous estimates, largely due to carryover into next year.

In summary, I would like to end by saying that we remain optimistic for a strong fourth quarter of 2005 with positive momentum going into 2006.

Thank you very much.

Now let me turn it back to Steve Bender.

Thank you, Ruth.

Before Albert and Ruth begin taking questions, I would like to remind you that a replay of this teleconference will be available starting an hour after we conclude the call. We will provide that number again at the end of the call.

Operator, we will now take questions.

Thank you very much, sir.

(Operator instructions.)

And we'll pause for a moment as questions queue up.

(Operator instructions.)

And your first question will come from David Begleiter with Deutsch Bank.

Please proceed.

Thank you.

Good morning.

Albert, can you discuss demand destruction, and potential acceleration of imports due to the high level of polyethylene price increases? Really, how healthy is it long term for the industry to be at these levels on the pricing side?

Thank you.

I think certainly that price of polymers would have impact on demand in the long term. It has also been compared with substituting a material such as paper or metals and so on and so forth.

I don't think in the short term there's demand destruction, but if polymer prices continue to have elevated levels for a long time, as in crude oil and natural gas, I'm sure there will be some switching to alternate materials.

And, Albert, can you just comment on your view of a converter customer inventories in the polyethylene chain?

Thank you.

Yes. I think that just like the producers, inventory has been very low. We are seeing a very fast turnaround in railcars with empty railcars coming back. So that's a sign the converters are using whatever resin they can get hands on.

And just any perspective on potential rebuilding impacts on PVC demand during next year?

Thank you.

As Ruth said in commenting on the vinyl segments, the vinyl business is very strong at $0.12 a pound implementation in October, which we believe will be implemented. There are discussions of potential further price increases in November or December. The housing start in September is quite strong and new permitting is very strong despite the fact that inventory -- long-term inventory -- interest rate has moved up a bit. We believe that U.S. economy, as we read from many economists, next year their views are the economy's quite strong into next year. And we believe the demand for PVC resin will be healthy.

Thank you very much.

You're welcome.

Thank you.

And your next question will come from David Silver with JP Morgan.

You may proceed.

Yeah. Hi.

I was going to ask a question about your view on vinyls imports. And I was wondering if you can see -- from your perspective, Albert -- whether you are seeing or whether there is an increase in the amount of product that's coming on shore. And I'm wondering if you are able to see it in terms of maybe resin on the one hand and maybe fabricated products on the other.

Thank you.

Yes. I'm sure when there's a large discrepancy in price there'll be (inaudible) import products. Just for your information that we believe, because of the freight costs and duty as well as repackaging, potentially we need to have a $0.15 to $0.18 a pound of price differences between Asia and the U.S, which is between 3 to $400 a ton just to break even.

As you know, the U.S., most of the resins and polymers are moved in railcars, when Asia you have more in bags or supersacks, and it takes some time to move palettes over.

But also, going into winter, usually that's a slow month for demand for PVC, especially in the pipe and construction area. So as the U.S. PVC producers, getting their plants back in operating, they're rebuilding of inventories both in the producer's side and the fabrication side.

On the fabrication area, our imports, I think in the flexible business imports not only from China but other parts of Asia and elsewhere in the world has made a large impact in the U.S. flexible business for quite awhile already.

As to the fabricated products, in the rigid side, I think that for most part of the rigid business in the U.S. the imports are -- the threats are rather limited. As you know, pipe, you are shipping really air. And transportations costs for pipe is very high. So we don't anticipate PVC pipe shipped even from Asia or any part of the world.

For some other products which have a much higher bulk density, there could be some imports from overseas. We cannot speak to each item, but that depends on the quality, the specs, deliveries, and many other -- we go to things like sidings, windows, and profile, there are many SKUs and colors and shapes and warranties and qualities. So those are much more complicated than things like pipe.

I don't know whether I answered your questions fully.

Well, it's -- thank you. I was especially interested in your comments about the logistics and the practical difficulties on the pipe side.

If I could also ask you to make a comment -- you mentioned Asia, but if you could give us your view of your operations in China in terms of fundamental demand, and then also the pace of capacity increase or production increase in China.

Thank you.

We have a joint venture. We own 40-odd percent in the PVC calendaring and resin plant in China. The calendaring business is doing very well. We are one of the premier quality calendary (ph) company making semi-rigid and soft film in China. We go into printing and lamination, into -- for the downward integration. And we have a resin business which supports partially our calandary operation. That's what supplies the Chinese market. It's an ethylene-based, VCM-imported operation, so we are affected by the discrepancies between VCM from ethylene-based manufacturing vis-a-vis the carbide.

As I'm sure you're aware, the carbide VCM products and quality are much more inferior than the ethylene-based VCM PCV product. So we have more the premier qualities of these resins in China as well.

Okay. One question for Ruth, if I may. And this would go to the perspective -- prospective FIFO effect in the fourth quarter. So you cited a net benefit of approximately $0.31 per share in the third quarter. Then, of course, the timing of the storms and the run-up in crude and especially natural gas happened towards the end of the quarter. And I was wondering if you have any perspective based on today's levels of costs for your feedstocks and energy, whether you would anticipate another meaningful FIFO benefit or whether it's too early to tell as you look to the fourth quarter.

Yeah. David, I think it is too early to tell. I will say that volumes were pretty low at the end of the last quarter because of the all the disruptions. But other than that, it's just -- it would be wild guessing.

And I'm guess -- just to follow up on that, but I'm guessing, is there any way you could comment on the amount of inventory that you may have kind of chewed through in the third quarter? In other words, what level or what type of difference there was between your production levels, which might have been disrupted for various parts of the quarter in your shipments.

I can tell you that basically our days on-hand were down about seven days, eight days.

Okay. Thanks a lot.

Thank you.

And your next question will come from Edlain Rodriguez.

Can you please state your company name, please?

Goldman Sachs.

A quick question to Albert. In terms of the last question on the FIFO impact, in terms of that, what's the split between the two segments?

I would say --

Benefit.

-- most of the impact is in olefins, Edlain.

Okay. And also, can you please elaborate on the statues (ph) of the price increases in polyethylene? Like what has gone through and what's left to go through for the fourth quarter?

Yes. In October 1, in the fourth quarter there was an announcement for $0.05 a pound, which went through. In October -- November 1, there's announcement of $0.08 a pound due to the hurricanes and the thing -- we believe it's been implemented. And then there's a November 15 announcement of $0.05 a pound, which is -- will be implemented as of November 15th comes along, by the industry.

Okay. That's good.

And one last question. On the feedstock feasibility (ph) project, can you remind us again where we are and when do you expect this to go -- to come to fruition?

Yes. We are planning to be ready for the feedstock flexibility in the -- during the turnaround next year in our ethylene plant, and we believe it'll be around the first half of 2006.

Okay. Thank you very much.

You're welcome.

And your next question will come from Nancy Traub with Credit Suisse First Boston.

You may proceed, please.

Good morning.

A question on Geismar. I know last time we talked you had finished the building of the new -- the PVC unit, and I -- we had one line operational. And have you ramped up the second one? And at what kind of operating rates are we working at now?

Yes. We are -- the first phase was completed in December of 2004 and start production. The second phase we are working on, but still we anticipate to be completed by the second -- by the end of 2005, the end of this year.

So you -- it's still not complete as far as construction?

Well, it's not construction, it's revamping and changing and improving and all that. As you know, this plant was shut down and was an older plant, and we're improving the process and capability. So we are doing in various components of the plant.

Okay. The other thing is you did mention in a previous answer about how housing starts were good, but I wondered, also remodeling has a lot to do with PVC demand. And how important is that for your business?

Our business in the downstream fabrications -- in PVC side we sell to all customers, the mostly rigid side, obviously on the olefin fabrication side we're primarily in the pipe side, which goes into both residential housing, nonresidential commercial and infrastructure for sewer and water lines. But I think the housing area also applies to the fabricated products such as windows and profiles, door profiles and fence and these things. And those are associated more with remodeling.

Certainly with the smaller diameter pipe, when people remodel homes, they also use the small diameter of PVC pipe.

So if we had a recession -- and you probably know this from past experience -- what is the variability in the volumes in fabricated products-type business?

I think for housing there's some impact certainly, but depending on the dynamics of the various segments -- as I mentioned, there are three segments for the pipe industry. Residential is only probably -- I'm thinking a third or so. They have nonresidential commercial there is and an infrastructure. So depending on dynamics of those three, I think as you have heard, that the U.S. infrastructure is getting old and there's a lot of demand for water -- new water and sewer lines. A lot of speak about the reconstruction efforts along the Gulf Coast that's currently going on.

But also commercial construction has been impacted. It's not even as strong as residential. So people are seeing more recovery on the commercial side. So I think those three will balance each other somewhat.

Okay. Good.

And one last thing, ethylene margins, could you kind of give us an indication as to where they are versus the average in the third quarter and what the impact of lower like ethane costs is going to have on the pricing --

Yes.

-- and the margins?

Are you talking about right now versus the third quarter, or third quarter versus second quarter?

No, right now, versus third.

Well, we have seen, because of the many shutdowns due to hurricanes, many plants -- ethylene plants shut down. Ethylene price, especially spot price has gone into the high 60s. And so the margin, with those prices, certainly has gone up a lot. But we don't anticipate spot price to remain at that lofty height for a long time. Even as the cultured (ph) price margin is quite good and depending on the -- certainly the pricing of energy and gas and crude oil we've seen that the last few days has come down a fair amount and as well, ethane, propane has come down a lot, but that will help. But we don't know.

We're just going into winter, we don't know how the dynamics will work, whether they'll jump back again or not. But a lowering of feedstock energy costs would also help the margin as we speak.

Right. Thank you.

You're welcome.

And your next question will come from Kevin McCarthy with Banc of America Securities.

Please proceed.

This is Vital Ileon (ph) standing in for Kevin.

This is a question for Ruth. Ruth, given the status of your balance sheet, any thoughts regarding a potential dividends increase?

Vital, as you may know, we just increased our dividend the last -- during the last quarter. And that is something that we will revisit from time to time. And it's also a possibility, but we just recently announced a dividend increase in the normal rate.

Understood.

And my second question would be, there's a comment regarding feedstock trading losses. Would you kindly elaborate and maybe quantify that statement?

Sure. The number for the third quarter, as I mentioned, was 5 million after tax. And what that really refers to is we are big -- as you know, feedstocks and energy are major components of our cost (ph) structure. And from time to time we enter into derivatives protected by physical positions. And that was what happened in the third quarter. However, due to the volatility in the quarter, we did incur losses on the derivative side, and we had to market those losses.

We also, at the same time, liquidated some of our physical positions and had a net loss.

A lot of this is actually timing. And we believe that we will make it up in future periods.

Thank you very much.

And your next question comes from Mark Kurland with Bear, Stearns.

Please proceed.

Yes. You guys do a very good job of discussing or showing the pricing of some of the products in your press release. So I just was curious, because I've lost track of where your product pricing is, can you tell me where you think the industry price is for ethylene, polyethylene, the major products? Or just give us a good hand on where things are now, because we hear so many price increases.

Well --

With the industry, where do you think the industry's at (inaudible) --

Well --

-- change.

-- if I may quote a popular industry (inaudible), the CMAI, they reported on October 31st that the ethylene price in the U.S. contract is between $0.58 a pound in the U.S. And the total-weighted (ph) average is also 58. And they mentioned spot price as between $0.54 and $0.68 a pound. That's the end of October.

Now, in November, there's -- we don't know how that price will move.

And poly?

Poly, the numbers are all over the place. They report a general purpose nondiscounted list price, which is in the 80s. As you know this price will be discounted upon the (inaudible) negotiations with customers. Audi (ph) in 80s, real low in the mid 70s.

And how about caustic?

Caustic, I think we reported in our -- report in our press release the end of the third quarter average price was $350 a ton -- sorry, $390 a ton at end of the third quarter average. 390, third quarter average.

Yes, I see that.

And that's being announced, the price announcement for caustic sinks third quarter totaling -- the announcement made in October for $50 a ton for caustic, which has been implemented. The $75 announced November, which we believe will be implemented. And then some discussion potentially of another $60 for effective December.

And chlorine, lastly?

Chlorine price we reported the end of the third quarter about $350 a ton the CMAI price, but for short term that is. And there are no price announcements that we know for the fourth quarter.

Can I now, after you've done this, can I assume that your price increases for you guys are consistent? I'm not asking the exact prices, but you're consistent with the industry?

Yes. More or less, yes.

All right. And one last thing, is there -- in terms of capacity utilization rates, can I make the assumption that you're -- except maybe in PVC or in styrene you're operating 100% or as much as you can?

I would think right now most of our plants, because of the shortages in the industry are running at whatever they can, yes.

Okay. Thank you.

You're welcome.

(Operator instructions.)

And your next question will come from Steve Harvey with UBS.

Hello. It's actually Seth Harvey.

I just wanted to clarify something that you had said on CapEx. For the fourth quarter, do you have any type of guidance? And then you say you are taking '06, your guidance down to about a hundred million?

No, I'm sorry, that was '05.

'05. Okay.

So the total for '05 we're saying is about a hundred. We had been saying about 120 before, but we've got some carryover into next year.

Okay. So '05 comes down to a hundred. And then do you have anything for '06?

We haven't actually completed our budget for '06 yet. So we'll -- we can address that probably in the next conference call.

And then I just had a basic kind of follow-up to some of the questions about the industry, the PVC industry and things -- you kind of started off this year a little weak in the PVC market. You just weren't seeing -- it seemed like the demand wasn't there. And then generally we see kind of a seasonal slowdown maybe the fourth quarter. Is there -- is it right now post- kind of the hurricane effects and the tightness in the industry, do you think that you're going to -- that the industry is kind of running hard through the fourth quarter and is that going to carry over into the first and second quarters maybe next year?

Yeah. As Ruth mentioned, in the vinyl segment that PVC was hit with margin pressures during the early part of this year and really the early part of the third quarter. But we see that even before a hurricane came, the PVC business started to improve, and then the hurricane issues definitely has impacted. And I believe all the plants are running at the highest rate they can. Those plants are running.

And we believe that not only producers but the downstream customers will build back inventory to a reasonable level.

And most people produce inventory for the following year. Springtime is a very strong time for the year, for people that normally build even during the wintertime, both producers and fabricating level, especially for pipe --

Right.

-- there was supply a big demanding in the springtime.

And do you normally see that pick up? Are we seeing like something at the end of the first quarter, or is that -- is it generally a first quarter event starting January 1 people start building inventories for the spring season?

People do it intermittently (ph) wintertime of whether it's December or January and February, depending on how bad the winter is. And then come March, April, that's the time that most of the construction work will start in the north. In the south, they're going all year.

Right. Thank you.

You're welcome.

And you do have a follow-up from Nancy Traub with Credit Suisse First Boston.

You may proceed, please.

I may have missed this, but Ruth, you did mention the vinyls volumes were up 7.8% year-over-year and also sequentially up 2%. Do we have similar numbers for olefins?

Yes. They're in our press release. Let's see. The olefin volumes were down versus last year. As you may recall, last year was a very, very strong quarter. And they're up sequentially, about 1%. They're down 14.2 versus last year, but they're up sequentially 1%.

Okay. Sorry, I missed that.

That's fine.

And there are no further questions at this time.

Thank you, operator.

Thank you all, again, for participating in today's call. We hope you will join us again for the next conference call to discuss our fourth quarter results.

Ladies and gentlemen, thank you so much for participating in today's Westlake Chemical Corporation Third Quarter Earnings Conference Call. As a reminder, this call will be available for replay beginning an hour after the call has ended and may be accessed until 11:00 p.m. Eastern time on November 10th.

The replay can be accessed by calling the following numbers, domestic callers should call (888)286-8010; international callers may access the replay at (617)801-6888. The access code at both numbers is 63476770.

Once again, ladies and gentlemen, thank you so much for your participation in today's conference.