Yellow Corp (YELL) 2014 Q1 法說會逐字稿

Good morning. My name is [Jessica] and I will be your conference operator today. At this time, I would like to welcome everyone to the YRC Worldwide First Quarter Earnings Conference Call. (Operator Instructions). Thank you.

I would now like to turn the call over to Stephanie Fisher, Vice President and Controller. Ms. Fisher, you may begin the conference.

Thank you. Good morning. Thank you for joining us for the YRC Worldwide First Quarter 2014 Earnings Call. James Welch, Chief Executive Officer of YRC Worldwide and Jamie Pierson, CFO of YRC Worldwide will provide comments this morning. James, Jamie and Darren Hawkins, President of YRC Freight will be available to answer questions following our comments.

Now for our disclaimers. During this call we may make forward looking statements within the meaning of federal securities law. These forward looking statements and all other statements that might be made on this call which are not historical facts are subject to uncertainty and a number of risks, and thus actual results may differ materially. These include statements regarding the Company's expectations, assumptions of future events, and intentions on strategies regarding the future. The format of this call does not allow us to fully discuss all of these risk factors. For a full discussion of the risk factors that could cause the results to differ, please refer to this morning's earning release and our most recent SEC filing, including our forms 10-K and 10-Q.

Additionally, please see today's release for a reconciliation of operating income and loss to adjusted EBITDA, and the reconciliation of adjusted EBITDA to net cash flow from operating activities, and adjusted free cash flow deficit. During this call we may refer to the non-GAAP measure of adjusted EBITDA simply as EBITDA. I'll now turn the call over to James to provide comments on our first quarter report.

Thank you, Stephanie. The first quarter of 2014 was a hectic period of non-stop activity, as we worked to finalize our new Memorandum of Understanding, or MOU, which paved the way for us to recapitalize the Company and extend our maturities for the majority of our debt. The MOU process reached a peak of activity in the first quarter as we spent a tremendous amount of time meeting with our employees and educating them on why ratifying MOU was in the best interest of our employees and our Company.

And while I know you haven't, don't forget that the process that we worked through was a two ratification voting process during the quarter. Also, for a period of time before and after those two votes, distractions on the dock and on the road, along with the pending uncertainty negatively affected our labor costs and productivity at all four operating companies.

On the refinancing side, we completed what we set out to do a little more than two years ago. Although it may seem like a long time ago, we closed a quarter of a billion dollar equity raise and related delivering event and refinanced over a $1billion of debt just in the last three months. These milestones tapped our resources and distracted our employees. However, they laid the operational and financial groundwork for the foreseeable future. While no one ever wants to endure that type of disruption, everyone from our employees to our lenders to our shareholders appreciates the investment we made, looks forward to realizing the benefits from both the new MOU and the delivered balance sheet, and associated interest expense savings.

And while we experienced distractions inside the walls of our offices and terminals, outside Mother Nature and the winter of 2013 and '14 wreaked havoc upon the supply chain networks everywhere, and it was a big driver of our poor operating results in the first quarter. YRC Freight, Holland and New Penn were affected the most.

YRC Freight, for example, is a true, long-haul national carrier was mostly impacted by storms in the Midwest to the Northeastern states, which however negatively affected its network and productivity coast to coast. As a result YRC Freight found its freight flow disrupted throughout most of the first quarter. For example, during the first quarter of 2013, freight or load pattern adjustments where shipments are sent out a route peak at about 750,000 pounds per day. However, during the first quarter of 2014, those adjustments peaked at nearly 4,000,000 pounds per day. We made over 25 load pattern adjustments or diversions that added either additional inefficient land haul miles or additional handling costs on thousands of shipments.

We have to admit that operating income was adversely impacted by approximately $20 million in the first quarter. Thankfully, we are through the winter weather season and in April we have experienced a much more normal service cycle at each of the affected operating companies at YRC Worldwide. And, as is always the case, we could not do it without our employees and our customers, and I think it's very important to emphasize how appreciative and grateful we are for their loyalty and commitment through what was one of the most testing times in this Company's history.

In terms of the present and the future, while it's early in his ten years as President of YRC Freight, Darren Hawkins is making a quick and positive impact on the organization. He's leading the YRC Freight team with an emphasis on the four core operating principles; safety, service, efficiency and everyone sells. I like Darren's focus and his team is rallying around these four critical areas of success for YRC Freight. And more on YRC Freight later in my closing comments.

As usual we continue to be pleased with our regional segments' operating performance. Their shipment, tonnage and yield growth continues to demonstrate that they are very much valued in the regional markets that they serve. And we anticipate that they will continue on improving their performance throughout the remainder of the year and end up with a strong 2014. I will now turn the call over to Jamie, for his comments, after which I'll make some additional observations regarding the changes we've seen at YRC Freight.

Thanks, James, and good morning, everyone. For the first quarter of 2014, we reported consolidated, adjusted EBITDA of $23.4 million, which is a decrease from the $60.7 million we reported in 1Q '13. The decrease is primarily the result of two items. First, and foremost, as James has already stated and just like everyone else, we experienced extraordinarily severe winter weather across most of the Company, causing service delays, load pattern changes and increased use of purchased transportation as we dug out of storms that negatively impacted productivity, most notably at YRC Freight, Holland and New Penn.

Secondarily, we experienced $13.2 million, year over year, increase in expense related to worker's compensation, BIPD and cargo claims, which was driven by an increase in the number of claims due to the adverse weather conditions, as well as favorable development experienced in the first quarter of 2013.

Now, for the year over year first quarter stats. YRC Freight's tonnage per day was up 1.7%. In regional tonnage per day was up 2.6%. YRC Freight's revenue per shipment was down 0.4%, which included a decrease of 2.6% in revenue per hired weight and an increase in its weight per shipment of 2.3%. While the regional carriers increased their revenue per shipment by 1.9%, their weight per shipment increased by 0.9%, which in turn caused revenue per hundredweight to increase by 1%.

Moving on to earnings, YRC Worldwide reported consolidated revenue of $1.2 billion for 1Q '14, an increase of $48.4 million over 1Q '13 from topline revenue growth at the regional carriers due to both tonnage and rate increases, plus an additional 4.5 days in the quarter at Holland and Reddaway in 1Q '14 when compared to 1Q '13. Additionally, we reported a consolidated operating loss of $32.4 million for 1Q '14, a decrease of $42.3 million when compared to 1Q '13. Finally, as I stated earlier, we reported adjusted EBITDA for 1Q '14 of $23.4 million.

On a segment basis, for the first quarter of 2014, YRC Freight reported an operating loss of $32.5 million, a decrease at $34.9 million over their prior year, which translates into an operating ratio of 104.3, a decrease of 460 basis points versus 1Q '13. Further, freight reported negative adjusted EBITDA of $3.7 million, a $37.3 million decrease in the first quarter of 2013, primarily due to the MOU inefficiencies and weather already discussed and a lack of positive worker's compensation, BIPD and cargo claim development in first quarter of 2014 when compared to 1Q '13.

Our regional segment reported operating income of $7.9 million, a decrease of $4.1 million over 1Q '13, and an operating ratio of 98.3. Additionally, the segment reported adjusted EBITDA of $25.9 million, which was a decrease at $3.1 million over the first quarter of 2013, due to the MOU inefficiencies and weather already discussed.

Turning to cash flows and liquidity, we ended the first quarter with balance sheet cash and [ABO] availability of $223 million, which is a slight decrease of $5 million from the fourth quarter of 2013, but an increase from the $214 million in the first quarter of 2013. Our ability to maintain liquidity at this level is due to our continued active management of our balance sheet, and working capital, and the current seasonality of the business cycle.

Now, I would like to leave with what I consider to be a few key takeaways for the quarter. One, as we noted in the fourth quarter call, we plan to reinvest in our equipment, technology and workforce as we move throughout 2014. If the first quarter we committed to the installation of 38 dimensioners in our distribution centers at YRC Freight, and plan to continue to piloting the same on a selective basis in our regional companies. We anticipate all 38 will be installed by the end of the year, and further anticipate seeing the planned run rate benefits by the end of 1Q '15. This technology enables us to more precisely measure the actual cubic volume on a much higher percentage of the shipments we handle. The capture of precise shipment dimension improves our ability to determine the true cost of each shipment based on weight and space utilized. Finally, this technology positions us to accommodate a shift in the market towards density based pricing methodologies.

And to further show our commitment to the importance of technology for our long-term strategy and success, we hired [Jason Ringenberg] to be the new Chief Information Officer at YRC Freight. Jason was a managing director in Accenture's freight logistics practice and brings with him over 20 year of experience serving clients across all modes of transportation, including LTO. And, finally, our [Check X] plans for 2014 currently forecast spending about three times more in technology dollars than we did in 2013, and about as much as we spent in 2011, '12, and '13 combined.

Two, as with the case in 2013, we plan to continue our strategy of using operating leases to acquire new revenue equipment, and have already placed the orders for both tractors and trailers, which we anticipate taking delivery in the second half of the year. And, before you ask, in the Q&A portion of the call, we do not give specific guidance on capital expenditures or otherwise.

Three, at YRC Freight, March of 2014 was one of three months in the last 24 in which total shipments per day positively comped year over year at an increase of 2%. And, while it's too early to tell if it's from real economic growth or a spillover of pent up demand from the winter weather, we saw this trend continue in April. Month to date, through Friday, April the 25th, total shipments per day for April were up approximately 6% at YRC Freight, and approximately 4.5% at the regional segment.

In closing, our first quarter results were undoubtedly disappointing. No doubt that first half of the quarter was consumed with issues related to the ratification of MOU, and the finalization of the 2014 financing transactions. The second half of the quarter was devoted to deploying our strategies to implement the new policies provided under the MOU, and the winter weather was a consistent battle throughout the entire quarter. As we continue to move through 2014, we will focus on implementing the policies and the flexibilities provided by the MOU, continue to invest in our equipment, technology and our people, and focus on operational execution.

I will now turn the call back over to James, to discuss the positive trend that we saw in the last part of March and into April that we believe will lead to improving results for the remainder of 2014.

Thanks, Jamie. I'm optimistic about the prospects of improved performance at YRC Worldwide starting in the second quarter. Before opening up to Q&A, I thought I would share with you some of the support from optimism, specifically at YRC Freight, and here are five quick reasons.

Number one, implementation of the over the road purchase transportation changes in the approved MOU are underway, and will continue to grow. As a reminder, we can run up to 6% of our annual miles with over the road purchase transportation. Two, the YRC Freight network is operating much more like we designed it to and sustainable progress is being made every day. We are handling higher than anticipated volumes in April without disruption and service levels have improved as expected now that we're able to adhere to a normal load plan without diversions due to the weather backlogs.

Three, with the network service cycle getting back to where want it, the reduction in re-handling of shipments is translating into improved productivity. Four, the newly negotiated national attendance policy is reducing absenteeism, as we have seen improvements in the number of tours per line haul driver and in the number of hourly employees who are working a full work week. This is a benefit that will lower cost at each of our four operating companies.

Five, the new division structure Darren put into place after being named president, which combined operations and local sales under the seven division VPs is gaining tractions. Key decisions are being made where the trucks are operated and the revenue is generated. This shift to local empowerment is resulting in hands-on local leadership getting us back to being in cycle.

And, finally, the combination of everything I have outlined above will allow to pursue yield improvement. It starts with the service cycle, and it's managed one customer at a time and one lane at a time through our scheduled contract rate negotiations. We will continuously improve margin with each interaction in 2014, and, for example, have already completed approximately 30% of our annual contract negotiations at YRC Freight with solid results.

So, having completed a historic transformation of the Company's capital structure, and gotten the MOU ratified we are well positioned and completely focused on implementing the opportunities in front of us to drive improved financial results. With these comments, we're ready to take your questions.

(Operator Instructions).

And your first question comes from Thom Albrecht from BB&T. Your line is now open.

Hey, guys, can you hear me OK? I'm traveling.

I can hear you.

A couple of different questions, starting with YRC Freight. Relative to either the month of March or April, were you able to have an operating ratio at 100 or better in either of those two months?

Hey, Thom, it's Jamie. Yes, we don't do inter-quarter or even on a quarterly basis, so not the [first comment] about that, but we can certainly from a volume perspective, and having the service cycle -- actually having the network in service, we actually feel pretty good about it.

Let me ask the question another way. How bad was your worst OR in the quarter, on a monthly basis?

Well, it was in January, I can tell you that.

It was in January?

Yes.

OK. All right. So, relative to, you know, when you did debt refinancing, you laid out some EBITDA targets. Given your performance in the first quarter, are you going to have to revisit those targets? Or do you still feel comfortable about those goals that you laid out for the financial institutions?

Yes, hey, Thom, it's Jamie again. Yes, that number was based on the information we knew at the time, and obviously didn't anticipate the weather that we, you know, incurred, that everyone incurred, candidly. It was up on a couple of other assumptions, whether it be macro or how quickly we can implement the MOU. We clearly have been impacted by the weather since then, and we provided that information to the holders of that information that's provided, in part of the refinancing. So, we don't intend to update this information as, you know, it's our policy not to provide guidance at this time.

OK, and then another question would be on the 6%, I think you said, tonnage growth, or was it shipment growth in the month of April for freight?

Shipment.

OK. So, how much of that is catch up? And how much of that is some of the sales and marketing initiatives you undertook last year, but which were slow to develop because of the uncertain economy? Or, I'm sorry, uncertain labor situation?

Sure thing. It would be hard to put a specific percentage on it, but it certainly a little bit of all that you described. You know, Darren came back a senior VP of sales marketing in January of '13, and I think has our sales effort much more on a better track at YRC Freight. Obviously, you know, the -- the winter weather pent up, as is everyone, you know we're having hard time trying to figure it out, is that temporary or is it sustained? But, you know, April was a very strong at all four operating companies and, you know, we'll have to see how that goes into May before I can really say is it winter weather hangover, or do we have more sustained, you know, internal growth?

But, definitely, I feel better about what's happening with our sales efforts at all four companies. And, you know, our salesforce went through a really tough time, Thom, as you know, between the MOU distractions and discussion and uncertainty around the refinancing, and it was very tough time for our Company. And, certainly, you know, our customers really hung with us very, very well. But I think it's a little bit of both, and hopefully some underlying fundamental improvements with the economy, so we're anxious to get into May and see what happens, because we were definitely liking what we saw in April.

And the weight per shipment increase that you saw in the first quarter, has that continued into April? I think that's outpacing your shipments by at least 2%.

You know, Thom, I don't think it's a meaningful change, candidly.

You mean change from what you were experiencing? Or --

Yes. That's true.

Or tonnage? OK.

I think the weight per shipment basis is pretty flat.

OK. OK. All right. I'll get back in the queue, thank you.

Your next question comes from David Ross from Stifel, your line is now open.

Yes, good morning, everyone.

Hi, Dave.

At YRC Freight, D&A declined 12% year over year. You know, some of that probably is the shift, you know, from owned to lease equipment, as you were talking about, Jamie, but is there anything else going on there?

You know, we certainly, are you talking about the general administrative expense?

No, the D&A, actually, yes, on the depreciation.

Oh --

It went from $28 million down to $24.7 million in the first quarter.

Yes, David, I think it's just really the fact that we continue to depreciate the equipment. There's not been any real seismic shifts in what we've done from a capital expenditure prospective at all. You know, from our viewpoint, we ended 2013 with good results on our ability to enter into operating leases for the capital equipment. And, it's our intent, our strategy to continue to do so for the balance of 2014 as well.

OK. And, then, the three new terminals that are set to be opened up, you know, at YRC, were they previously closed facilities that you guys had had in your network already, and you're just, you know, starting them back up? Or are they recent lease-purchase deals?

They're in the same proximity of geographic location, David, but they're not going back into the same exact facilities. But, three locations that we needed a little bit of relief, that we probably overestimated our ability to handle with some larger sized facilities in a few of those areas. So, we're going back into make sure that those service territories can be serviced the way that we want, and we're very optimistic that we're going to see some nice growth out of those.

OK, so they're new facilities? They're not, you know, mothballed facilities that you're bringing back online?

Yes, one is the same, and then two are different facilities.

OK. And, then, last question is just on the tax picture going forward. Yes, I'm sure you've got, you know, plenty of NOLs, but don't seem to be using them too much. Is there a period when you'll be able to use more NOLs and what are you expecting for the effective tax rate?

Yes, it's going to be minimal going forward, David. I mean, because of the change of ownership that we had in the most recent transaction, in Section 382, limiting the use of those NOLs going forward.

OK, should we be, you know, modeling, you know, a little bit of a tax benefit in loss periods? And, you know, say a 35% tax rate, you know, in profitable periods?

Yes, what I would say is given the loss of those tier four's, it would probably'll be using just a normal tax rate.

OK. Helpful. Thank you.

Yes.

Thanks, Dave.

Your next question comes from Scott Group from Wolfe Research. Your line is now open.

Hey, thanks. Morning, guys. Congrats on getting all the stuffs done in the quarter.

Thanks, Scott.

OK, wanted to know if you can maybe talk about kind of the tenor of conversations with customers? And do you feel like, did you lose a lot of business when there that couple of weeks of real uncertainty? And now that there's more certainty, are you -- do you think you're in a position to be taking market share back?

Good question, Scott. This is James. If Darren wants to jump in, he certainly can when I get through. But, you know, if I'd been a betting man before we went through the timeframe of difficulty that we did with that whole two MOU vote process, I would have thought that our business levels would have fallen down. And, certainly, they were affected some, but not nearly like what I thought that they could have been. You know, I think maybe the winter weather had something to do with everyone having problems servicing and picking up freight, but, you know, our customer base really stayed pretty steady.

But then the thing I think that's been most encouraging to me, Scott, is the fact that our contract negotiations with customers since the MOU was finalized and the refinancing was finalized, and, you know, we kind of got some certainty and clarity and stability about our foreseeable future, you know, we've been able to do much better with our rate increases, with our customer specific negotiated increases. And then we've seen some, you know, of our existing customers give us more business than they had, which is something, you know, when I came back I was hoping that we could eventually get to, so you know, we still had a big base of customers, but didn't have as much business with some of those customers as we used to have. So, it was good to see some increases from existing customers, and we've had some new ones as well.

So, I'm not sitting here saying that we're going to take market share, that's not really something that is at the top of our list, to go out and price it or do whatever we have to do on that side. What we want to do is provide very good, consistent service, repeatable, dependable, reliable service and we think we can grow our business that way. I don't know, Darren, if you want to jump in there from what you've seen.

One of the things that was mentioned on the front, as James mentioned, 30% of our contract negotiations being completed. That's 1,357 negotiations we've completed, and based on the solid results we've seen from that, it goes back to a real strong asset of YRC Freight for a long period of time, and that's the loyalty of our customers. That's very encouraging for me moving forward. And, I was also quite impressed, coming out of the MOU ratification that we didn't have a lot of ground to make up, to replace business. It allowed us to focus on keeping those negotiations current, and also implementing the GRI, which certainly has an impact on about 23% of our revenue.

Hey, Scott, this is Jamie, if I'm at it as well, you know, we are not pricing for market share. We are pricing for profitability and we're pricing for those customers that rate that fit with inside our network. And, at best, actually serve our ability to efficiently service those customers.

Yes, yes, I hear you. Do you think then -- do the yields then turn positive, starting in the second quarter? Because, you know, the tonnage was better than we thought, and the yields were negative, and worse than we thought. So, just how should we think? And tonnage is accelerating. I don't know if yield growth accelerates as well and turns positive. Do you have any color you can give us? That'd be great.

Sure, Scott. It's Jamie again. What I would say is that, you know, we're continuing to see CISNEs in that 3 to 4% range.

Sorry, continue to see?

CISNEs in that 3 to 4% range.

The specific negotiations with customers. Like, you know --

OK.

--contract negotiations.

And then just last two things. One, I didn't see a press release. I don't know, did you guys announce your GRI? When and how much? And does the faster tonnage change your CapEx expectations for the year? I know you're not going to tell us a number, but are you changing your CapEx expectations for the year?

Yes, the GRI was April 14th, and that was 5.9. I'll let Jamie kick around the other question.

Yes, and great question, Scott on the CapEx. You know, I actually would anticipate us spending more than we had anticipated at the beginning of this year. We're seeing some real good, strong volumes in terms of our regional companies, so in order to, you know, not continue to enter into expensive local, day to day, leases on tractors and trailers, we very well may actually go longer into more equipment. But, again, probably more on an operating lease basis than a straight up CapEx buy.

OK, great. Thanks, guys. Appreciate it.

Thanks, Scott.

Your next question comes from Rob Salmon from Deutsche Bank. Your line is now open.

Hey, good morning, guys.

Hi, Rob.

Hi, Rob.

Just a quick follow up to Scott's last question about kind of the yield trends that we're experiencing. You may have mentioned this in the prepared remarks, but could you give us a little bit more color in terms of how the national and local accounts trended throughout the quarter? And what you guys are seeing with tonnage reaccelerating in the month of April?

Well, it's hard to comment on, you know, what we saw in April was just good volume growth, and good shipments. I don't know if we want to get too detailed on April, but certainly the yield did not backwards and it continued to move forwards. So, I think that we're feeling pretty good about our position, and, again, anxious to see what May brings.

And, what I would say, Rob, is I think we're seeing a pricing increase across all the channels. So, I wouldn't say that it's any one channel that's performing better or worse than the other. It's kind of the rising tide's lifting all boats.

You know, I was just trying to get a little bit more to the mix. If we should start seeing the revenue per hundredweight increase a little bit more in line with that 3 to 4% that you guys were mentioning in terms of the contractual increases as we look --

Yes.

--throughout the year. I realize there are lot of different moving parts, so.

Yes, I know, Rob, I think so. And the reason I say that, you know, in this quarter, which flatly, short linked to [paul], we had higher weight per shipment, and we even had, you know, some lower fuel prices in the first quarter of '14 versus the first quarter of '13. And, obviously that's going to result in a lower fuel surcharge, but we also had, you know, that's just the numbers side of the equation. What I'd say qualitatively is that we also had two other factors going on. One, the MOU, which everyone is very aware of. And you know, during those tenuous times in negotiating with that customer, it's a little bit more difficult to do it with the sure footing that we have now, on the other side of the MOU. So, I think that we'll be in a better position for those negotiations. But, also, don't forget in the May of 2013, we went through the change of operations and lost some of our profitable local accounts. I think we said on the last couple of calls, and on a year by year comping basis, we're comping against a more difficult set. Yes, it'll just take a little time for the CISNEs to show up.

Jamie that makes a lot of sense. When we're thinking about the weather headwind that you called out in the quarter, is that $13 million increase in terms of the worker's comp, is that included in the $20 million? Or is that an incremental headwind that you guys experienced in the first quarter?

This is James. That was an incremental headwind that we experienced, other than the $20 million for weather.

I appreciate that clarification. And, my final question is kind of circles back to the, you know, how much available capacity you guys currently have on both the brick and mortar side as well as your rolling stock. Jamie, from your comments, it sounds like on the regional side, that you're probably much closer given the fact that you're increasing the overall CapEx that you would have expected for the full year given the performance you guys have seen to date, but, you know, any sort of color you could give us. I realize it varies by location, but just how we should be thinking about the overall network right now?

I'll make a couple comments. This is James. Certainly the regionals are running more at capacity. We still have some capacity, certainly at YRC Freight, but with the way volumes spiked in April, that could be a little bit more questionable if May and June continue on the trends that we saw in April. But, you know, again, that's yet to be determined. But, definitely the regionals are running at a tighter level of capacity than YRC Freight, but with the network redesign that we did at YRC Freight last May, you know, it doesn't have quite the capacity that it had before the change of operations. So, again, I think as we move forward, it'll give us a good opportunity to make sure that we have the right kind of business on the truck line at YRC Freight and hopefully we'll continue to give stability to work that [yodem preme] inside.

Thanks, guys. Appreciate the time.

Thank you, Rob.

Your next question comes from Thom Albrecht, from BBT. Your line is now open.

All right. My fingers are crossed, I'm in a tunnel. A year ago you shared a statistic that about 22% of your miles at freight were on equipment that was two years or newer. Can you share a target how soon you could get that figure to 40 or 50%?

Thom, 22% of miles were on tractors two years?

Tractors --

Yes, you gave that number two quarters in a row last year. What percentage of your line haul miles were on equipment at freight that was two years old or newer?

Yes --

It was 21%, and then 22.

Yes, I don't have that at my fingertips. Thom, let me follow back up and I'll let you know.

And, even just looking forward, as you refresh your fleet, when can you get that figure to 40 or 50%?

Yes, no, it's going to take a while. I mean, we've got 60,000 pieces of equipment running across the network at any one given time for the consolidated companies. So, this is going to be more of a turning of the battleship than it is going to be a flip of the switch.

Well, if you could get me the follow up then where you are currently, that would be helpful. Thank you.

OK.

And we have no further questions at this time. I'll turn the call back over to the presenters.

That concludes our call for today. Thanks, everyone, for joining us. Please contact me for any follow up questions you may have. [Jessica] I'm turning the call back to you.

This concludes today's conference call. You may now disconnect.