Sinclair, Inc. (SBGI) Q3 2012 Earnings Report, Transcript and Summary

Greetings, and welcome to the Sinclair Broadcast Group Inc. Third Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Amy, Executive Vice President and Chief Financial Officer. Thank you, sir. You may begin.

Thank you, operator, and good morning, everyone. Participating on the call with me today are David Smith, President and CEO; Steve Marks, Chief Operating Officer of our Television Group; and Lucy Rutishauser, Vice President, Corporate Finance and Treasurer. Before we begin, Lucy will make our forward-looking statement disclaimer.

Thank you, David. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports on Forms 10-Q, 10-K and 8-K, as filed with the SEC and included in our third quarter earnings release. Our earnings release was furnished to the SEC on an 8-K earlier this morning. The company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Reg FD, this call is being made available to the public. A webcast replay will be available on our website later today and will remain available until our next quarterly earnings release. Redistribution of this call is prohibited without the express written consent of the company. Included on the call will be a discussion of non-GAAP metrics, specifically television broadcast cash flow, EBITDA, free cash flow and leverage. These metrics are not meant to replace GAAP measurements, but are provided as supplemental detail to assist the public in their analysis and valuation of our company. A reconciliation of the non-GAAP metrics to the GAAP measures in our financial statements is provided on our website under Investor Information, Reports and Filings.

Well, thanks, Lucy. Before we go through the results, I wanted to highlight some of our most recent accomplishments for the quarter. In a show of confidence from our free cash flow generation, and reflecting our belief that the government will let the Bush tax cuts expire, leading to an increase in the dividend tax rates to ordinary income tax rates next year, our Board of Directors acted to return meaningful shift [ph] value to our shareholders this year. The $1 per share special dividend that the board declared represents a payout of approximately $81.2 million. In addition, the board declared the regular $0.15 quarterly dividend in a testament to our ongoing free cash flow generation. The combined annualized $1.60 per share dividend rate represents a 12.7% yield on our $12.60 stock price and an approximate 63% payout of our estimated 2012 free cash flow. We continue to strengthen our portfolio of television assets, and in August entered into an agreement to buy the non-license assets of KBTV, the Fox affiliate in Beaumont, Texas from Nexstar. The purchase price is $14 million or roughly a 4.7x blended BCF multiple after synergies. The transaction is expected to close in the fourth quarter, pending closing conditions. And although this is a smaller market than what we define as our core DNA, the acquisition provides us a terrific opportunity to unlock value since we already operate in the market with this CBS affiliate that we bought as part of the Freedom transaction. In September, we announced that we entered into an agreement to sell the assets of WLAJ, our ABC affiliate in Lansing, Michigan, that we acquired from Freedom in April of this year. The station is being sold to Shield Media for approximately $14.4 million, which represents an approximate 8.4x multiple on the 2011-2012 trailing BCF. We expect the sale to close early in the first quarter of 2013. Please note that WLAJ's results from operations have been reclassified from continuing operations and reflected as discontinued operations for all periods. We expect the FCC to approve our purchase of the 6 Newport stations shortly, now that both the Nexstar and Cox have been approved. We expect closing would be in early December. This month, we raised $500 million in 10-year senior notes, the proceeds of which will be used to fund the Newport and Beaumont acquisitions, as well as the previously announced Bay TV and Baltimore Station acquisitions. In addition to funding the acquisitions, a portion of the proceeds were used to repay our revolving line of credit and will be used for general corporate purposes. Lucy will take you through the terms in note offering later. In September, we announced that we entered into a multiyear retransmission consent agreement with DISH Network. We are currently in discussions with Mediacom, whose contract expires at the end of this year, followed by DIRECTV, which expires in February 2013. So now turning to our results. And as a reminder, these do not include WLAJ in Lansing, which has been reclassified to discontinued operations. Net broadcast revenues for the third quarter were $226.4 million, an increase of 49% or $74.5 million higher than the third quarter of '11, and coming in at the high end of our guidance. Political, which we had estimated to be as high as $23.5 million, exceeded expectations by over $4 million, coming in at $27.8 million. Excluding $45.7 million from the acquisition, same station revenues were up 18.9%. Excluding political, same station core revenues were up 6.9%, with growth coming from retrans, time sales and digital interactive. Effective advertising revenues were up, even with the amount of political book and a potential crowding out effect, as a testament to the strength of the underlying business. Television operating expenses in the third quarter, defined as station production and station SG&A expenses before barter, were $105.6 million, up 44.9% or $32.7 million from third quarter last year. When excluding $23.6 million related to the acquisitions, $400,000 of stock-based compensation and $1.2 million of corporate overhead allocated to the TV operations, same station expenses were up $7.9 million or 10.9%. The increase was due to higher network reverse retrans fees, increases to employee compensation, higher commissions on the higher revenues and higher promotion cost for the start of the fall season. Corporate overhead in the quarter was $8.3 million, up $2.5 million versus the same period last year. Excluding $300,000 in stock-based compensation and adding the $1.2 million of expenses allocated to the TV operations, corporate expense would've been up $3.6 million due to higher group insurance cost, the acquisition-related costs and staffing, as well as compensation and other increases. Television broadcast cash flow in the quarter was $105.9 million, up $40.7 million or 62.4% from last year's third quarter BCF. The broadcast cash flow margin on net broadcast revenues for the quarter was 46.8%. The acquisitions contributed $26.2 million [ph] of BCF in the quarter, and on a same station basis, the BCF was up -- it was $85.7 million, up 31.4% or $20.5 million. EBITDA was $100.1 million in the quarter, up $38.1 million or 61.5% higher than the same period last year. The EBITDA margin on total revenues was 38.4% for the quarter. On a same station basis, EBITDA was $79.9 million, up 28.9% in the quarter or $17.9 million. Net interest expense for the quarter was $35.3 million, up $10.8 million versus third quarter last year. The increase was due primarily to the financings related to the Four Points and Freedom acquisitions. In addition, under GAAP, we were required to expense $5.3 million of the fees associated with the amendment of our bank credit facility, which is primarily related to the planned financing of the Newport stations. Our weighted average cost of debt for the company, including our new senior notes and excluding the amendment fee expense, is approximately 6.5%. We recognized $1.9 million of income from our other investments primarily related to the gain on the sale of our investment in a shopping center, which was offset in part by the write-down of a strip mall investment. We had diluted earnings per share of $0.32 in the quarter compared to $0.24 in the same period last year. Adjusting for one-time interest charge, net of taxes of $3.4 million -- what I'm trying to say there is that, as I mentioned earlier of the $5.3 million of fees and when you adjust for taxes there, that comes out to $3.4 million, so the impact to diluted EPS would have been $0.36. The acquisitions net of the financing cost contributed $0.05 of diluted EPS in the quarter. We generated $45.2 million of free cash flow in the quarter and $183.1 million for the trailing 12 months. During the past year, we converted 52.6% of our EBITDA into free cash and distributed 22.4% of the free cash to our shareholders. We produced a 20.1% after-tax free cash flow yield on our market cap and paid a 5.4% annualized dividend yield based on our third quarter closing price of $11.21. Based on our current outlook, free cash flow for 2012 is estimated to be approximately $205.8 million. Since our last earnings call, our equity has appreciated by almost 20%. We expect the transition of the new stations to go just as smoothly as the Four Points and Freedom additions, and for them to contribute to our growth and performance as we head into 2013. Now Lucy will take you through the balance sheet and cash flow highlights as well as some housekeeping items.

Thank you, Dave. We realize that we have a lot of transactions in process right now, which can make the financial modeling and valuations complex. Although we have an expectation of when the various transactions will close, because we must wait for FCC approval, we have decided to simplify our fourth quarter outlook by only assuming those transactions for which we have already have approval to close. So therefore, our outlook includes forecasted results for the Sinclair legacy stations, the Four Points stations, the Freedom stations, and the purchase of the Bay TV stations. We have not assumed the closing of the Newport, Beaumont and Baltimore stations or the sale of the Lansing station. And remember, Lansing now is down in discontinued operations. However, keep in mind that we have raised the funds for those acquisitions. So when you value the company, you will want to include the pro forma EBITDA since we are carrying the corresponding debt. So basically, if we had owned all of those stations at January 1, 2012, based on our guidance that we provided this morning, our pro forma EBITDA for 2012, including the pending acquisition and after synergies, would be about $490 million. Now, turning to the balance sheet. Total debt at September 30 was $1,726,800,000. Included in that amount was $69 million of the nonrecourse VIE and Cunningham debt that were required to consolidate on our books. We ended the quarter with $44.6 million of cash on hand and $15 million drawn under the revolver. Capital expenditures in the third quarter were $11.7 million, with no change to our full year guidance of $45 million. Cash programming payments in the third quarter were $17.2 million and estimated at $70.2 million for the full year. Of the $45.2 million of free cash flow generated in the quarter, $8.3 million went towards debt repayment, $12 million to dividends and the remainder, along with the revolver withdrawal, was used to pay the $41.3 million cash deposit on the Newport acquisition and the $1.4 million deposit on the Beaumont purchase. As Dave mentioned, this month, we raised $500 million in 10-year senior unsecured notes bearing a coupon of 6.125%. The proceeds will be used to fund the acquisitions of Newport, KBTV in Beaumont, WUTB in Baltimore and Bay TV in Tampa, as well as for general corporate purposes. We also used $15 million of the proceeds to pay down our revolver in October. Now while we could've tapped the bank market and secured a lower short-term rate, it is important that we take advantage of current market conditions, lock in low -- long-term debt at rates never before seen by us, extend our maturity profile and preserve flexibility at other levels in the cap structure. Now because we didn't want to risk having the market move away from us, we did raise the funds in advance of the closing, and so we are carrying an extra $4 million-plus in interest costs this quarter. However, when you consider the rate that we were able to secure, it was prudent to raise the funds earlier than needed. Total net leverage to the holding company at quarter end was 4.14x. And again, this excludes the VIE and nonrecourse debt and is net of cash. The first lien indebtedness ratio was 2.31x on a covenant of 3.75x. The total indebtedness ratio through the television operating company was 4.17x on a covenant of 7.25x, and interest coverage was 3.46x on a covenant of 1.35x. Based on our guidance and including the pro forma results after synergies from Newport, Bay TV and Beaumont, total hold co net leverage at year end is estimated to be approximately 4.3x, even after acquiring over $1 billion in assets this year and making a special $1 dividend to our shareholders. Steve Marks will now take you through our operating performance.

Thank you, Lucy, and good morning, everybody. Our net broadcast revenues in third quarter were $226.4 million, and as Dave have mentioned, at the high end of our guidance. This reflects an 18.9% same station growth and 6.9% growth, excluding the acquisitions and political, a real testament to the strength of the underlying business. Political revenues in the quarter were a record $27.8 million. Half of the amount came from just 3 states: Ohio, North Carolina and Florida. 49% of the total was candidate-related. Including our new station acquisitions, local broadcast revenues were up 34.5% in the third quarter, while on a same station basis, local net broadcast revenues were up 8.5% and up 7.3% when excluding political. Including our new station acquisitions, national broadcast revenues were up 96.8% in the quarter, while on a same station basis, national net broadcast revenues were up 49.9% and up 2.4% when excluding political. On a same station basis, the automotive category was up 12.2%. We also saw 11.8% growth in telecommunications, which was a category that had been down for the past year. Other categories showing growth were direct response and travel. Categories that were down were services, schools, fast food, media and restaurants. We believe that some of the decline is due to our normal advertisers not wanting to pay the higher rates as a result of the political pressure on inventory. Turning to our outlook. For the fourth quarter, we are expecting net broadcast revenues to be approximately $268.1 million to $270.1 million, up 48.3% to 49.4% as compared to fourth quarter 2011. This assumes $54 million to $56 million of political versus $4.1 million in the same time period last year. The amount of political we expect to book in the fourth quarter is as much, if not more, than our pro forma 2008 for full year political. Also included in the fourth quarter estimates is $59.8 million of revenue related to the acquisitions. Excluding the acquisitions, same station net broadcast revenues are expected to be up 20.4% to 21.5%, with core revenues approximately flat, excluding political. Based on our fourth quarter guidance, our pro forma full year political revenues will be approximately $100 million as compared to $54.9 million, pro forma 2008. This would represent an 82% increase, a record-setting number for us. In addition to political, our fourth quarter on a same station basis is expected to be driven by retrans, renewals and digital interactive revenues. We're expecting core time sales to decline slightly due to the amount of political being booked and the crowding out effect that comes with it. Categories expected to grow on a same station basis are automotive, direct response, restaurants and fast food, while school, services and retail are expected to be down. Oil is expected to be up by mid-single digit percents, despite the amount of political being booked. On the expense side, we are forecasting our TV production and SG&A expenses in fourth quarter to be approximately $112.7 million, of which $26.3 million relates to the acquisitions, $1.3 million relates to corporate expenses that we will be allocating to the stations and $400,000 to non-cash stock-based compensation. Excluding these, same station expenses would be up 11.8% over fourth quarter last year due to higher reverse transmission payments to the networks, higher compensation and bonus expense and higher commissions on the increased revenue. We expect EBITDA in the fourth quarter to be $132.1 million to $134.1 million with 65% to 67.5% growth. Of that, the acquisitions are expected to contribute $30.8 million. On a same station basis, EBITDA is expected to be up 26.5% to 29%, representing $21.2 million to $23.2 million in incremental EBITDA. For the year, net broadcast revenues are expected to be $905.7 million to $907.7 million, with the acquisitions contributing $176.6 million. Excluding the acquisitions and political, same station growth is expected to be approximately 3.9% for the year. EBITDA for the year is expected to be $400.4 million to $402.4 million, with the acquisitions contributing $77.8 million. Now remember that Freedom is not in that number for the first quarter of the year, which would represent another $16 million after synergies. On a same station basis, EBITDA is expected to be up $53.1 million to $55.1 million or 19.7% to 20.5%. And as Dave mentioned, we expect free cash flow for the year to be approximately $205.8 million. We feel very good about all that we have accomplished this year. If you think about how much we grew the company, successfully transitioned the new stations, growing their bottom line and not skipping a beat with our legacy stations, it says volumes about our management teams, our station personnel and our sales forces, and we feel very confident about our position in strategies going into 2013. With that, I'd like to open it up to questions.

[Operator Instructions] Our first question comes from Aaron Watts from Deutsche Bank.

So I guess one question, you were talking about free cash flow. As we think about that going forward, you've taken your special dividend, you guys are going to be generating a lot of free cash flow, how should we think about kind of the balance between more shareholder-friendly actions, M&A and paying down debt? And maybe on the M&A front, David, if you could just talk about -- in terms of your appetite for that, is it just a matter of attractive assets coming up, you'll grow as long as those keep popping on your radar? Or do you feel like you've gotten to a size now where you're comfortable and satiated with that appetite?

Well, as to the M&A, we're -- we've always said, very matter of factly, for the last 15 years, that if we find something that fits our profile and kind of bolts on to what we've got here, then we're certainly a candidate for it. But again, if we can't buy it at the right price, then we're not a buyer. That's always been our position, nothing's changed.

Okay. And absent the M&A, is it striking a balance between sort of the dividends or share repurchases and things like debt paydown going forward?

Yes, I think that's a fair view.

Okay. And then, I'm just curious as you -- and I've asked this to a couple of your peers, also I'm curious to your thoughts. As we look at and think about kind of some of the viewership pressure the networks are having, which I think is translated into a not exactly robust scatter market, the potential for a fiscal cliff may be giving some large advertisers some pause in setting their budgets for the next year, and just an overall sluggish economy, which obviously is impacting the local environment too. How do you think about kind of the core advertising outlook for the next 12 months and do you think that you can kind of grow on that core basis?

Well, I think what's critical is a couple of key categories for us, which is the automotive category and telecommunications. It continues to show strength. And once we get out of the political window, interestingly enough, we're seeing our core business, especially for December, looking pretty positive right now, which is a very good indication. So I think as you go into 2013, when you look at our company in particular, you have to remember also, this is a company that picked up a lot of CBS affiliates throughout the course of this year and we'll enjoy the Super Bowl in first quarter, so that will give us a good push to start the year off. We ended last year with 2 CBS affiliates and we'll have a quite a bit more than that going into first quarter 2013. So we're very optimistic. We're actually -- when you take a look from top to bottom on how these stations are fortified in terms of their lineups, our ratings continue to grow that surround the networks, and any buys that comes up, Sinclair stations are extremely competitive in their respective marketplaces. So we continue to grow our ratings that surround the network. And as far as the scatter market, it's really never affected spot TV. Most of our business predominantly comes from the local marketplaces. So the scatter business is really more of a network influence than it is a local broadcast TV.

Our next question is from Marci Ryvicker of Wells Fargo Securities.

Just a quick question on Q3. Excluding retrans, was spot advertising up?

Yes, Marci, it was up slightly.

Okay. And then in terms of Q4 guidance, so I just want to make sure I am clear here. Steve, you said core revenues are flat without political and core time sales will be down slightly, but that December is looking positive. So it sounds like October and the beginning of November will have some significant displacement. Can you talk a little bit more about December and maybe some of the categories that are down now that are looking positive?

Well, actually, if you take a look at the third quarter compared to the fourth quarter and what we just spoke about, interestingly enough, fast food, [indiscernible] and restaurant are down for third, but they're going to be up for fourth. We're seeing continued growth in telecommunications for fourth quarter. And the automotive category continues to be pretty strong for us. So actually, our December right now is extremely strong. I expect it to recede a little bit. But we're quite frankly, actually surprised how strong it is right now for December. It's a very interesting month for us. You would expect October to be difficult in terms of spot because of the amount of political that we're enjoying and it is really immense, the amount of political that's coming in as we speak. So we have that issue for October and obviously, for the first handful of days of November. And it's encouraging to see where November and December are all right now.

Okay. And then one last question for David, on our broader industry issue. Any comments on the NPRM that came out on the broadcast incentive auctions? Any surprises there? Anything you'd like to say?

No, there's nothing there that presents any issues that we haven't already talked about, Marci. Our view is and always has been and I'll just follow the networks on this is the networks have generally said they had nothing for sale. Our view is, we have nothing for sale and I can't imagine any broadcaster out there who's running a real business has anything for sale. I can appreciate that there may be some one-off players in some of the larger markets who are struggling to survive, who aren't in any way tied to a real programming or such. Maybe they'll go, but I can't imagine anybody in the top 200 markets letting go of CBS, NBC, ABC, Fox, MyNetwork, CW, Univision, whatever happens to me, I can't just fathom that happening.

Our next question is from Davis Hebert, also Wells Fargo Securities.

Just wanted to ask quickly on the dividend. I'm assuming that is going to be paid out of existing cash on hand and free cash flow generated in Q4?

That's correct.

Okay. So Lucy, I just wanted to clarify the 4.3x hold co net leverage number you gave. You said that was after the acquisitions and the special dividends?

That's right.

And is that a Q3 2012 LTM number?

That would be -- right, that would be full year 2012, so using the guidance we put out this morning for all of our currently operated stations and then taking into account the pending acquisitions, which as I mentioned, we have the debt signaled into bulk, so you've got to put the EBITDA in there.

Okay. All right. So I just wanted to clarify the -- I guess, the special dividend would not be necessarily leveraging of that...

No.

No, not with the amount of free cash flow that we're looking to put off in the fourth quarter as well as the cash that we already have on hand.

Okay, great. And then I just had a quick question on the telecom category. A couple of your peers have reported that category being a little bit volatile, even down in some cases. Is there anything specific your markets or your station affiliations that are driving that result positively for you?

For us, in particular, I can't speak for other groups, but AT&T came back with some direct response ads pretty heavily in the last few months and that speaks well to our group of different television stations, especially the MyNets and CWs, which we have a significant resume so maybe in part because of a mix of television stations, but we've been touting this category as a category that had bottomed down and was ready to rebuild itself, and that's exactly what we're seeing take place now.

Okay, great. And on political, how much of the impact would you characterize as super pack money that's driving that result?

It was -- looking at the percentage breakout, I don't want to say minimal, but it was in the 14% to 15% range.

Our next question is from Alexia Quadrani of JPMorgan Chase.

This is Nadia Lovell in for Alexia. Just a few questions. CBS has mentioned that it's basically sold out for inventory for Super Bowl. What are you seeing in terms of booking [indiscernible] and Super Bowl in January?

We started putting our presentations together a couple of weeks ago and I think like we're seeing and we witnessed in the third quarter, we don't have a lot of NBC stations although we're about to take 1 to 2 more on. We saw in the Olympics what special event programming has really become to the spot community. I think this year's Olympics was extremely robust, and probably beat all estimates for NBC stations. And I think the Super Bowl falls into that category, that's the premier special event program. And typically, we get easily 15% increases at a minimum over year previous, and there's no reason to expect that this year will be any different. It is the premier event of the broadcast year. And when you take a look at our resume of the television stations as I mentioned earlier, we picked up a lot of CBS affiliates, which ensures that we should be able to get first quarter off to a pretty good start for the company.

Okay. And can you also talk a little bit about programming expenses and how should we think about that going forward as we factor in the Newport station? How much of a lift can you see?

Yes, so Nadia, I'll take that one. If you factor in for all of the pending acquisitions for next year, I think you'd be looking -- you should have your model somewhere in the high $80 million range for film payments.

Okay. Listen, I'm not sure if this is a question for you, but any thoughts about taking out the 2017 notes that are callable next year?

Yes, that is something that we've talked about quite a bit. It is our highest cost of debt at 9.25%. And so that's something that's become callable in November of next year, so we will be taking a good hard look at that, see where the market looks. And that's one of the reasons why we put the senior bond in place. As I mentioned, make sure we have flexibility that we could have the bank market. If need be, we could also go back to the senior market now that we have a new benchmark bond there. So the good thing with where our leverage profile is and how we structure the cap table is that we can really access any part of the cap table to take those bonds out.

Our next question comes from Douglas Arthur of Evercore.

Lucy, just to be -- to revisit this and be absolutely clear, the -- in terms of the revenues you reported for the third quarter, Lansing obviously is not in that -- by the way, Lansing is in that, Beaumont is not in that, correct? And that's also true for your guidance for the fourth quarter?

Yes. So third quarter, Lansing is not in that. Lansing, since we've announced the sale, that is on its own line item in the income statement called discontinued operations. Lansing is not in any of the operating income numbers. Beaumont...

Okay. Yes, I know. I saw how you netted it at the bottom, but you're saying -- so it's not in the revenue number.

It is not in the revenue number. That's right. Had it been, we would've had even more revenue than what we've reported. Okay, Beaumont, we have -- since we've only announced and we have not closed on that yet, that is not in any of our numbers. The only thing that we've done with Beaumont is we funded the $1.4 million deposit. And that's running just through the cash flow statement. And so fourth quarter, Beaumont, since, again, we don't have approval yet, that is not in our guidance. So Newport, Beaumont are not in our guidance for fourth quarter yet.

Okay, okay. And then -- that's very helpful. And then just in terms of comparing the sort of flat core guidance for Q4, with the 6.9% in Q3 and I realize there's some retrans going through both numbers, I believe. It sounds from your commentary that a good part of that up until after the election is crowding out, and then you are -- but you are seeing pretty strong indications for December, which you mentioned may come off a little bit. I'm just trying to kind of equate those 2 numbers for Q3 and Q4.

Yes, that's right. When you look, Doug, when you look at the amount of political that we expect to book here in the fourth quarter, as Steve said, $54 million to $56 million is as much as we did in the entire year of 2008, and we're looking to put that in, in a 5-week period. So there is crowding out that is occurring in those 5 weeks. And naturally, the difference, when you look at Q3 to Q4, we're not seeing anything fundamentally -- any issues with the business, any issues with our advertising category. It really just is displacement because of the amount of political that we're putting in. It's twice as much as we put in for all of Q3.

Doug, just as early as yesterday, we were looking at, even though October is over, looking at the political for the balance of the week. And it's pretty much -- assure you that the number were providing we probably are close, but who knows. It's very, very dynamic right now in terms of just how much revenue is coming in and how fast the political revenue is coming in just for this last couple of days here. So no question, we have to push out existing customers and advertisers over the next few days.

[Operator Instructions] It appears we have no further questions at this time. I would now like turn the floor back to management for closing comments.

Well, thank you, operator. As Steve commented, we feel very good about the business as we head into '13 and we thank you for participating in our earnings call this morning and if anyone has any additional questions, feel free to contact us and good luck there in New York with all the problems that you're having.

Yes, thank you.

This concludes today's conference. You may now disconnect your lines at this time, and thank you for your participation.