AMC Networks Inc.
Q2 2019 Earnings Call Transcript

Published: 31 Jul 2019

[Operator:]

Good morning. My name is Jacob, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the AMC Networks' Second Quarter 2019 Earnings Conference Call. At this time, all parties will be in listen-only mode. Later, we will conduct a question-and-answer session. Thank you. I will now turn the call over to your host, Seth Zaslow, Senior Vice President of Investor Relations. Sir, the floor is yours.

[Seth Zaslow:]

Thank you. Good morning and welcome to the AMC Networks’ second quarter 2019 earnings conference call. Joining us this morning our members of our executive team Josh Sapan, President and Chief Executive Officer; Ed Carroll, Chief Operating Officer; and Sean Sullivan, Chief Financial Officer. Following a discussion of the Company's second quarter 2019 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our website at amcnetworks.com. This call can also be accessed via our website. Please take note of the following. Today's discussion may contain statements that constitute Forward-Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance or results and involve risks and uncertainties that could cause actual results to differ. Please refer to the Company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties. The Company disclaims any obligation to update the forward-looking statements that may be discussed during this call. Further, we will discuss non-GAAP financial information. We believe the presentation of non-GAAP results provides you with useful supplemental information concerning the Company's ongoing operations and is appropriate in your evaluation of the Company's performance. For further details, please refer to the press release and related footnotes for GAAP information and a reconciliation of GAAP to non-GAAP information, which we will refer to on this call. With that, I would now like to turn the call over to Josh.

[Josh Sapan:]

Good morning and thank you for joining us. We delivered solid results in the second quarter and I'm pleased to say we remain on-track to meet our financial targets for the full-year. We continue to deliver on our key financial objectives including growing adjusted operating income, generating strong free cash flow and using our capital to position the business for the long-term. As we have discussed on prior calls, AMC Networks’ strategic priorities have been and continue to be creating great content, maximizing the long-term value of our traditional linear business and diversifying our revenue by developing new avenues of content monetization through our expanding studio, as well as our growing direct-to-consumer interests. Later on the call, I will take the opportunity to provide more dimension on our direct-to-consumer reference, including details around both our evolution and overall strategy in this area. I'm pleased to say we continue to make significant progress on these goals in 2019.

[Sean Sullivan:]

Thanks and good morning. We are pleased of our results in the second quarter as total Company revenues were $772 million, AOI was $232 million and adjusted EPS was $2.60. The Company continues to generate very healthy levels of free cash flow $85 million in the quarter and $229 million for the six months ended June 2019. And we remain firmly on-track to meet our total Company targets for the full-year. I will touch on the outlook in more detail later on in my remarks. So moving to the performance of our operating segments at the National Networks Q2 revenues decreased 4% to $605 million, AOI was $236 million an increase of 1% as compared to the prior year period. Advertising revenue in the quarters decreased 11%. As we have highlighted on our last call, results were influenced by the timing of originals, in particular, fewer episodes of The Walking Dead and Fear the Walking Dead as compared to the prior year period. However, a number of factors helped to offset the unfavorable comparison, including growth at each of our other four networks, BBC America, IFC, Sundance and WE TV as well as increased pricing across our portfolio of network. With respect to distribution, distribution revenue increased 1%. As for the subscription revenue component, revenues were essentially flat with a prior period. In addition to the quarterly fluctuation based on the timing of various agreements, renewals and adjustments, we continue to see moderation mainly due to macro factors as we mentioned on our last call. In addition, our second quarter results were impacted by the interpretation of a contractual provision with one of our distribution partners. We're in discussions with this partner and are hopeful that will resolve our differences in the near future. As for the content licensing component distribution revenue, this line item continues to contribute to our top-line growth. The growth in the quarter was driven primarily by the availability of Fear the Walking Dead, The Terror and Lodge 49, which more than offset the absence of revenues from Diet Land and Dirt Gently in the prior year period. Moving to expenses, total expenses decreased 6% or $24 million versus the prior year period. Technical and operating expenses decreased 6% to $269 million. The variance principally related to the timing and mix of originals across our portfolio of networks. In the quarter we recorded $10 million in charges related to write off of various programming assets. This compares to write offs of $4 million in the second quarter of 2018. SG&A expenses were $113 million dollars in the second quarter, a decrease of 9% versus the prior year period. The variance primary related to a decrease in marketing costs due to the timing of originals. Moving to or international and other segments. In the second quarter international and other revenues grew 22% to $180 million. The increase primary reflected revenue from the acquisitions of RLJE and Levity. AOI was $12 million an increase of $6 million versus the prior year. The increase was primarily attributable to an increase on our international networks as well as the acquisition of RLJE. Moving to EPS, in the second quarter EPS on a GAAP basis was $2.25, compared to $1.82 in the prior period. On an adjusted basis EPS was $2.60, compared to $1.93 in the prior year. The year-over-year increase principally reflected a decrease in income tax expense, as well as a favorable variance and miscellaneous net. GAAP EPS also reflected restructuring and other related charges of $17 million taken in the quarter. The decrease in the book tax rate for the quarter reflected a benefit from the release of evaluation allowance relating to foreign NOL carry forwards. The restructuring and other charges related to our direct-to-consumer businesses. In the second quarter in connection with the RLJE acquisition, we announced a reorganization of the management structure for our D2C businesses. The reorder placed our subscription streaming services, Acorn TV, Shutter, UMC and Sundance Now under our common management team. We also implemented changes to our strategy resulting in the write off of certain programming assets. We believe that this new structure and strategy will allow us to more effectively and efficiently operate our SVOD services. As Josh mentioned, we are seeing very encouraging performance in this area of our business. Given this recent performance and our outlook to these services, we foresee achieving run rate profitability for all of our services in the aggregate within the next 18 months. Moving to free cash flow, the Company had another strong quarter generating $85 million resulting in a six months total of $229 million in free cash. Through six months, tax payments were $78 million, cash interest was $77 million, capital expenditures were $49 million and distributions to non-controlling interest were $10 million. Program rights amortization for the six months period was $469 million and program writes payments were $444 million resulting in source of cash of $25 million. This compares the use of cash for programming of $2 million for the prior year period. Turning to the balance sheet. As of June 30th, AMC Networks had net debt in capital leases of $2.5 billion, our leverage ratio based on LTM AOI of $955 million was 2.6 times. In terms of capital allocation, our primary focus remains investment in our core business, we continue to be disciplined and opportunistic in our use of capital for both repurchases and non-organic investments. With respect to share repurchases during the second quarter the Company repurchased $57 million of stock. This represents approximately $1.1 million shares. Subsequent to the end of the quarter, the Company has repurchased an additional $6 million or approximately a 115,000 shares. As of last Friday, the Company had $495 million available under its existing authorization program. So program to-date we have purchased approximately 25% of our outstanding shares. We expect to continue to be opportunistic with our share repurchase activity. Looking ahead there are no changes to the full-year outlook as we remain confident in our ability to achieve the target that we communicated at the beginning of the year. We continue to expect to grow total Company full-year revenue in the low to mid-single-digit and total Company full-year adjusted operating income in the low single-digits. Based on our performance through the first half of the year and the trends that we are seeing in our various businesses we remain confident in our ability to achieve our full-year revenue target. However given what we have seen year-to-date, the expectations for revenue streams continue to shift a bit. We continue to see an improvement in the outlook for domestic advertising revenue as well as the moderation on our expectation for domestic subscription revenue growth. With respect to domestic content licensing revenue we now anticipate the rate of growth to be relatively consistent with the prior year. So overall, the revenue streams have shifted a little bit while our expectations in the aggregate have not changed. As for the cadence of our performance during the year we anticipate continued quarterly variability as a consequence of the specific timing of our investments in content and the airing of our shows. In the third quarter on financial networks we expect revenue growth versus the prior year period. We anticipate this growth will be led by an increase in content licensing revenue. As for expenses of the National Networks, we anticipate a year-over-year increase due mainly to the timing and mix of originals airing on our networks. Our international and other segments our reported results will continue to reflect the impact of RLJE and we expect the impact of that business would be similar in the third quarter to what we saw in the second quarter both in terms of revenue and AOI. Excluding RLJE we expect the other businesses in the segment to deliver in-aggregate healthy growth in both revenue and AOI. So in conclusion overall, we feel very good about our performance in the first half of the year, and how the business is positioned for the remainder of 2019. So with that, we would like to move to the question and answer portion of the call. Operator if you could please open the call to questions?

[Operator:]

Our first question comes from Michael Nathanson .

[Michael Nathanson:]

Thanks. I have one for Sean one for Joss. Sean let me start with your for a second. Could you just help us with more details on the affiliate revenue line? What was the change in subscribers this quarter? And then what's the impact of that contract dispute? Could you scale up for us? And then I have one for Josh.

[Josh Sapan:]

Hey Michael, it's Josh. I will just give you if I may some response to your first question. There is just to say if we have an MVPD, who we have are in conversations with about contractual interpretation happens periodically in the nature of life and contracts that go over several years as the business changes. We think it’s one thing, they think it's another. We are currently actively engaged in conversations with them about it. I can't report how those conversations will conclude their dynamic and activism speed. Second piece of what was responsible for this, I guess it's a few million dollars in a quarter change in perspective is subscriber growth among the MVPD universe. As you know perhaps better than I in this and the quarter trended down a bit. So that of course is we are paid on individual units of subscribers affects us. So those are the two things you asked about and that is the State of the Union on that.

[Michael Nathanson:]

Okay. And Josh, can I actually about the film partnership. I'm trying to understand the economic interest on your side. So are you guys producing the show 100% taking the risks. So could you give a sense of what's the actually economic relationship here? And how could that film actually then maybe help other parts of the larger AMC franchise. So a little bit more of a film details for us.

[Josh Sapan:]

Sure. So let me just offer if I may - just provide context, if I may. I just think first if you don't mind, Michael, I will say that it's a really excellent vital sign from our point of view, in my point of view, that the opportunity to bring the franchise to the big screen is now partnered with a preeminent studio that has obviously, the track record of Universal speaks for itself. And so I just would note that that is an affirmation of those experts at the highest level, in the belief that the Walking Dead on a worldwide basis will be something that people will go to pay dollars to in the silver screen. And I just as it relates to the Walking Dead and which we now have three television series on games, merchandising, that is a meaningful piece of activity. And I will say that there was interest fairly widely among studios to do that. It was not unique, singular, and therefore it is a representation and an affirmation of strength and franchise. If you don't mind that comment, I think it's important. I'm not at liberty to go into details on the nature of the deal for us. It's sort of privilege information so what I would say is it’s very nice to have a movie for all the reasons we said, I'm sorry I'm going to have to stop short of getting into the who owns what and who gets what fees it is privileged information.

[Michael Nathanson:]

Okay, hurray for the move it then Josh.

[Josh Sapan:]

Okay good. You can pre buy tickets somewhere, not now but soon.

[Michael Nathanson:]

Okay.

[Operator:]

Thank you. Our next question comes from Marci Ryvicker with Wolfe Research.

[Marci Ryvicker:]

Thanks. I have two, when you talk about sub-trends trending down, can you give us what they are down this quarter versus last year relative to last quarter versus last year? That is the first question and the second question the subs on your SVOD and OTT services what percent are domestic versus international today and for all the targets that you gave are you including international as well?

[Sean Sullivan:]

Sure Marci. Just if I may, just on the subscriber counts, I think you receive I mean it, on reports everyone reports on subscribers as part of their filings, so we are subject to what the world is doing. Every company I think recently reported all the big ones, AT&T, Direct TV, Charter, Comcast et cetera. So that little look at the data would reveal exactly what is happening in universe and while we don’t track precisely with that I think you will see that we are significantly affected by that trend that I think that would give you a pretty clear picture of what that looks like. In terms of the subscription video-on-demand, the out year look does include international which we have not yet mined that. Significantly as I mentioned, we have much more experience with domestic performance, we have some experience with international, just beginning - so it does include both pieces of the business as we take a full-year look.

[Ed Carroll:]

And Marci this is Ed. I would say on the subscriber additions that we mentioned today, the 400,000 subscriber uptick that is substantially all U.S., we have really just begun operation for Acorn in Mexico and Australia for example. We have a little bit of Sundance now and Shutter in the UK and Germany, but by and large those subs almost all U.S. centric at this point, it’s very early days for international expansion.

[Marci Ryvicker:]

Okay. Thank you.

[Operator:]

Thank you. We have a question from Michael Morris with Guggenheim Securities.

[Michael Morris:]

Thank you good morning. Two questions or two topics if I could. First, Josh you mentioned the series that come back to AMC as they come off mainstream SVOD, can you talk a little bit more about your decision process about what to do with those series, how you way maybe reselling them externally versus keeping them internally and what those economics look like? And then second, on your specialty SVOD services and the targets you just gave us is that revenue solely subscription revenue and can you talk a little bit about the content that you need to build those to where you want to be and what the margins of those businesses could kind of look like overtime compared to your existing businesses? Thanks.

[Josh Sapan:]

Sure. So Michael the series of comeback will present us with decisions which I would actually characterize as opportunities happily. We will be in the privilege position of being able to make a determinations series-by-series about where and in what manner we can deploy them to optimize value. It’s something that is very much in the news in our industry today. Our opportunities will be, of course, to sell them to third-parties and evaluate on a worldwide basis, what that economic opportunity is and as our subscription services grow will also evaluate utilizing them themselves, including on AMC Premiere and on the four services that we mentioned. Just to complicate the answer, Michael, those answers may overlap. We could make a decision, because it's our decisions that - and this is simply hypothetical in certain geographies they are sold to others, for a discrete period of time, where we might not develop your own services and in other areas, we take them for ourselves. And the market does work that way. So we will make determinations on a series-by-series basis, balancing the values that we can drive on our own services, versus the money that we can yield from third-party services. And there is also although it's not much talked about in the SVOD world, there is a subject of exclusivity and non-exclusivity and so we will have that to make a determination about as well. The good news is, and it really is nice news is a number of these series, as you well know, have significantly established constituencies, reputation, histories and awards. And we have many humans and frankly, generations that have been under exposed. And so I think we're going to see that because we have in our genetics, a fair amount of quality and prestige and recognition, I do think that they are going to be of extraordinary value to us, as we make a determination about exactly to deploy them. As to your second question, our services are commercial free. There are no ads in them. Today, there are no ads contemplated for them for the future. So everything we talked about, really does presume and assume, and is commercial free subscription around passion at targeted groups. The whole subject of AVOD is a separate subject, which we are in and we can discuss in a different conversation. But what we're doing is these services are all commercial free, and the plan is for them to be commercial free.

[Sean Sullivan:]

If I can, Michael as it relates to your content question for example for Acorn. Many of its most popular programs are produced or coproduced by Acorn and against reasonable economics. So some of the breakout shows like Manhunt, and Queens of Mystery, Acorn is a producer or co-producer. And so we think that will continue because they are targeting using data and analytics to target a very specific audience, as you would imagine they have immediate feedback on what show is what streams are most successful. What is interesting though, is that we are beginning for appropriate AMC Networks content to also give that a window on our targeted SVOD. So for example, Nosferatu, which we just renewed to season two and that is our Vampire story on AMC that will have its premiere SVOD window on Shutter for example, and you begin to see early seasons of the Braxton's from WE TV on UMC. And then I will also mentioned Greg Nick Otero, who is a producer on the Walking Dead. He is executive producer of a horror series called Creep Show, which will make its premiere on Shutter. So you begin to see us benefiting from a symbiotic relationship between the linear networks and the targeted SVOD as they continue to gain mass on the platforms.

[Michael Morris:]

And so just despite the fact that the new platforms are single revenue stream versus the dual that you have on your existing business, you still think that the margin profile could look similar because of the sort of content sharing benefit you figured or is it fundamentally different from a profitability perspective?

[Sean Sullivan:]

No I think everything you just said is close to the way we think about it.

[Michael Morris:]

Okay. Great, thank you for that.

[Operator:]

Thank you. Our next question comes from Alexia Quadrani with JP Morgan.

[Unidentified Analyst:]

Hi this is for Alexia thanks for taking our question. And just going back to the SVOD services, how do you think about launching these services directly yourself versus partnering with the aggregation channel like Amazon or Apple which might serve as a larger funnel to acquire subscribers?

[Ed Carroll:]

Sure. So yes this is Ed. So we think both are good. We are partnered on some of the larger platforms, but as Josh mentioned at this point the majority of our subscribers are direct-to-consumer both of our platform which we have been working to develop for a number of year. That gives us more immediate feedback, that gives us a much more data about who our subscribers are, what shows they are watching, what percentage of episodes they watch to completion, where they go after finishing one series, what series they go to next. You get that with D2C. We also have analytics against those subscribers that make it very, very efficient for us to keep subscribers. As Josh and Sean were alluding to a very, very critical component is managing new churn and so if you control the platform you just have a larger window to managing churn rate to subscriber preference and to reaching out with your marketing methods at maximum efficiency. Having said that Amazon is a good partner, Apple is a good partner, we think we will continue to be both on our own platform and on some of our partner platforms.

[Unidentified Analyst:]

Thank you. That is great and as a follow-up on, I think recently announced in other show will be simulcast on ABC and Sundance, do you see more of that going forward obviously Killing Eve, saw a great success being simulcast two channels. How do you maintain the distinct brand of your channel at different time?

[Josh Sapan:]

Yes the simulcast is not something we do a lot of, we are quite - creatively with Killing Eve and we thought it was the unique opportunity to give this show wider exposure, which seem to work and interestingly the ratings on BBC America held fast continue to be strong and we think new people on AMC were able to sample the show and tonight the show got Emmy recognition as well. So we will use it occasionally for big events such as the Planet Earth franchise, we have done a simulcast to a road block and in that way not only got more attention to what we think is extraordinary programming, but where our advertisers are concerned we are also able to give them more value in a world where people are looking for big events and special events and that is the thinking behind it.

[Unidentified Analyst:]

Great. Thank you.

[Operator:]

Thank you. We have a question from Todd Juenger from Sanford Bernstein.

[Todd Juenger:]

Hi good morning. Thanks for taking the question. Can I talk a little bit with you guys if you don’t mind about the content licensing sort of line. And so Sean just quickly, I think in the past couple quarters, you had been saying that 15 or 19 would be higher than 2018 in growth rate. I think this morning you said it would be similar to 2018. So I don’t know of how big that change is, but just wonder what has changed and lead to that, if you could share that with us. And then broader maybe Sean or Josh, going forward with the SVOD services and talking about your own content playing a role on them, how do you reconcile that with your content licensing business revenue opportunities there, it seems like that is a trade off, you will have to contemplate, and even specifically how does that relate to the output deals that are in place and when you think about output deals going forward - the question is, how does that come together and does it change your philosophy on content licensing and partners overtime and the financial impact? Thanks.

[Sean Sullivan:]

Thanks Todd. Yes, on first one, you have got it right in terms of our outlook for the year on content licensing. Again, we continue to believe for 2019 it’s an area of growth. It's moderate a bit, a lot of that is related to timing, frankly. But as you know, that is not only the exploitation of the show on domestic and international SVOD. there is gaming, there is licensing and merchandising, there is home video, EST, et cetera. So there is a lot of components that we don't have, perfect visibility to. But, so some of those other areas have moderated a bit. But overall, it's really a timing on effects.

[Josh Sapan:]

Todd on the subject of what we do with content. And I will ask Ed to chime in, if he has anything to add, if I may. The development of our SVOD services, which is now several years into activities, represents an opportunity for us. And I think you will understanding the trade-offs instantly, you have been a student of the subject. Our services as we described, are quite different in their cost composition. And then the general entertainment or whole house services that are now competing with one another for share and spending at very heavy levels, obviously. So what we will do is we will take a look at every show that we have, Frankly what is economics are, and what its applicability is. And we will factor that also increasingly into our development thinking as these services begin to scale. There are some projects, which will be naturally attractive to the services we have because of their nature, their editorial nature and also because of their costs. There will be other shows that I will call them bigger or if I may, much, much bigger. That we may find appropriate to simply exploit on a worldwide basis or an international basis with third-party services as we make a determination of where the greatest return is. So for us, there will not be a playbook, its hard and fast. It will be a developing playbook based upon the size, scale and net economics of our SVOD services. The nature of the content, where the greatest return is, and it will not be binary or the same plot show-after-show. I know there is much discussion in the more mainstream SVOD world about all of that, and rights coming back. We live and play in a different arena and we will follow a pattern that has sensible economics in each instance that balances strategic opportunity and grow against economics.

[Todd Juenger:]

Okay. Thank you very much.

[Seth Zaslow:]

Operator. Let’s take the next question.

[Operator:]

Thank you. Our next question comes from David Joyce from Evercore ISI.

[David Joyce:]

Thank you. Just had little bit more questions on the Aurora addressable advertising efforts. I was just wondering is that starting to enter the discussions in the up fronts and has that impacted the pricing there. And to-date since you had some strong growth in that, is it bringing incremental advertisers into the environment, if you could just provide us some more color there? Thank you.

[Josh Sapan:]

Hi David. Yes, I think very much Aurora is part of our upfront conversations and very much it helps with the pricing or the CPM part of that conversation. And I think really that has been at strength more than bringing new advertisers in, it’s bringing bigger commitments at higher pricing and so particularly in the auto category, in that movie studios category, in the pharmaceutical category we are seeing receptivity to the Aurora tool and its ability to create efficiencies for client marketers and to hyper target their prospects.

[David Joyce:]

Alright. Thank you.

[Seth Zaslow:]

Operator at this point we would like to take one last question please.

[Operator:]

Thank you sir. Our final question comes from Vasily Karasyov with Cannonball Research.

[Vasily Karasyov:]

Alright good morning. I think my question is for Josh and Ed. Josh you touched on AVOD, so my question is I think it’s two parts maybe a little more. So first of all are you surprised by the growth in AVOD usage in the U.S. and I'm not only talking about who, I'm also talking about Pluto TV. I think Viacom has been disclosing a lot of growth metrics after they closed the acquisition, especially given the quality of content that was available on it before Viacom started putting on their content. So and what does it tell you about that being a competition for your linear networks and also what would you say to an argument that your DTC offerings internationally maybe there is an argument to be made back and ad supported tier at least is a way to get subscribers given how PayTV evolved internationally historically where people showed more propensity to watch commercials and free to ad television and PayTV ARPU was lower per capita given lower per capita GDP and income and so on? So would appreciate your thoughts on this guys.

[Josh Sapan:]

Sure thanks for that. I think we are not surprised, we are participants in AVOD, we license our content to AVOD services, so we have been tracking them for some time and partnering with them for some time. And so we are active participants in AVOD services and understand what the trends have been. I think that it’s an attractive platform and attractive medium. So I wouldn’t say that we are surprised. I think on the question of their relationship to SVOD, we get into some interesting and rich territory because they have been, as you know at least in the U.S. discrete entities. Crackle was around for a while, it didn’t call itself AVOD, but it really was an AVOD service run by a movie studio, there was just a transaction surrounding that. So it has different people running it and, Pluto and (Ph) are around and others. And so they are interesting models to consider. And I don't know that the jury has determined what the final resolution to the optimal model will be, because Hulu is the one that perhaps emulates some music services where you pay for this and then you pay for it without commercials. That is sort of a variation that is particular to Hulu that has been relevance and successful. As you mentioned, the other AVOD services don't have a premium option in the in the video world. But we see premium options in some cases in the audio world that work quite well. Just to expand on this, perhaps more than you even want to hear is it's really curious to think about what occurs in the world of video, you know that there are video platforms that were inhabited with advertising like YouTube, that then launched commercial free variance and it's worth looking at how they performed, because I think it's telling. I guess my conclusion about all of this is the jury is not made a determination in any geography necessarily about whether a commercial free opportunity to create as it's called traffic is the best entry point to an up sell for a commercial free variant. We have probably more experience in the video world with AMC and AMC Premiere than almost anybody else in the U.S., except Hulu. And we understand a fair amount of that from our experience with AMC Premier. The rest of the AVOD services has been dedicated AVOD as Destiny AVOD with no commercial free buy up, if you want to call it that. So that is an in complete perhaps answers your question about where the future lies, but I think you correctly point out, that sensitivity about price in different geographies or different democracies in the U.S. may provide a big clue to where to really focus on that. Where people are more concerned about this specific dollars coming out of their wallet in which case, AVOD may be A, better final destiny or B, a better point of entree to an up sell. But the evidence to-date I would say is really quite mixed in its flavors and doesn't necessarily say a pattern is the right one.

[Vasily Karasyov:]

Thank you.

[Seth Zaslow:]

Alright. Well at this point, we would like to thank everyone for your interest in AMC Networks and for joining us on today's call. Operator, you can now conclude the call.

[Operator:]

Thank you sir. That concludes the call. Everyone you may now disconnect.