Baidu, Inc.
Q3 2020 Earnings Call Transcript

Published: 17 Nov 2020

[Operator:]

Hello, and thank you for standing by for Baidu's Third Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference is being recorded. . I would now like to turn the meeting over to your host for today's conference, Juan Ling, Baidu's Director of Investor Relations.

[Juan Lin:]

Hello, everyone, and welcome to Baidu's third quarter 2020 earnings conference call. Baidu's earnings release was distributed earlier today, and you can find a copy on our website as well as on newswire services.

[Robin Li:]

Hello, everyone. We delivered solid results in the third quarter with Baidu's total revenues, reaching RMB 28.2 billion, up 1% from last year. Baidu Core revenue reached RMB 21.4 billion, up 13% sequentially, which is an acceleration from the 8% sequential growth for the third quarter last year. China saw a second wave of COVID-19 cases in July and was quick to contain the pandemic, giving us confidence that China has standard operating procedures in place to promptly deal with the new COVID outbreaks. Many of the advertising verticals that saw negative growth in prior quarters have turned around, including healthcare, education, auto, lifestyle and software. As the Chinese economy continues to recover, we are in a good position to further benefit from such improvement in the business environment. Over the last few years, we have focused on strengthening Baidu's mobile ecosystem by increasing log-in users, aggregating content and services on Baidu's platform, and adding social engagement to our platform. Such strengthening of our mobile ecosystem has not only improved the search user experience, it has also allowed users to do more on Baidu, from information research to social interaction to closed-loop purchases.

[Herman Yu:]

Thank you, Robin. Hello, everyone. Welcome to Baidu's Third Quarter 2020 Call. All monetary amounts used in my discussion are in renminbi, unless stated otherwise. Baidu's total revenues reached CNY28.2 billion or $4.2 billion, increasing 1% year-over-year, rebounding from the trough in Q1. Our business improvement mainly came from Baidu Core, whose revenue reached CNY21.4 billion or $3.1 billion in the third quarter, up 2% year-over-year versus down 13% in the first quarter and down 3% in the second quarter. IT revenue reached CNY7.2 billion, down 3% year-over-year. IT membership revenue was up 7%, offset by an 11% decline in IT advertising revenue. IT advertising did not perform as robustly as we had hoped, but on a sequential basis, IT advertising gradually is recovering, up 16% quarter-over-quarter. Non-GAAP cost of revenues was CNY12.7 billion, down 22% year-over-year, primarily due to a decrease in content costs, traffic acquisition costs and cost of goods sold. Non-GAAP SG&A expenses were CNY4.3 billion, down 1% year-over-year. Non-GAAP R&D expenses were CNY3.6 billion, down 6% year-over-year, and non-GAAP operating income for Baidu was CNY7.6 billion, up 107% year-over-year. Non-GAAP operating income for Baidu Core was CNY8.5 billion, or $1.3 billion, up 37% year-over-year. Non-GAAP operating margin for Baidu Core was 40%, up 10 points from last year. Total other income in the quarter was CNY8.3 billion, or $1.3 billion, which includes a fair value gain of CNY9 billion from long-term investments. Adjusted EBITDA was CNY9.1 billion, up 77% year-over-year. Adjusted EBITDA for Baidu Core was CNY9.8 billion, or $1.4 billion, up 31% year-over-year. And adjusted EBITDA margin for Baidu Core was 46%, also up 10 points from last year.

[Operator:]

Ladies and gentlemen, we will now begin the question-and-answer session. . Your first question comes from Alicia Yap from Citigroup. Please ask your question.

[Alicia Yap:]

Hi, thank you. Good morning, Robin, Herman, Dou and Juan. Thanks for taking my questions and also congrats on solid results. So my question is related to this rationale behind the acquisitions of YY domestic live streaming business. So could you help us understand the intention behind? I think you mentioned about expanding into non-advertising business. But I think, given live streaming business has been more saturating and maturing, so maybe you could help us understand what are the strategies or thinking behind that Baidu could help YY to revive the growth? And then second is, given live streaming technology is also becoming more and more as advertising tools, would that become an interest for Baidu to actually spend the ad monetization opportunity with live streaming go beyond the commerce with -- becomes more like a marketing technique, right, for a lot of the industry vertical to build the branding and also drive conversion. So any color you could share would be appreciated. Thank you.

[Robin Li:]

Hi, Alicia, this is Robin. Let me address your questions first. If you look at -- as you know, YY is one of the pioneers in one of our live streaming business. You probably noticed that the early players have all matured and have been asked by the larger mobile eco platforms. That demonstrates that live streaming as an independent business is kind of tough when you -- or scale, it's not large enough. On the other hand, for large platforms like Baidu, we have an aggregate of about 300 million daily active users. It's only natural for us to integrate with live streaming business such as YY and further monetize our existing user base and traffic. Like I mentioned during the prepared remarks, if you look at the revenue stream of Baidu and other comparable mobile ecosystem, the advertising revenue for us represents a much larger percentage than any other mobile platforms you can think of. On the other side, we have been very focused on providing the best marketing solutions to our customers. But on the other hand, we should really explore and diversify our -- explore new initiatives and diversifying our revenue source. So YY has a very sizable business in terms of live streaming. We have a lot of experience in terms of operating such an ecosystem of performers in the so-called big Rs who pay tips to those live performers. And with that kind of operational experience and stakeholders in the live streaming ecosystem, we think it's very valuable for the overall Baidu ecosystem. And about live streaming as a new form of media, you sort of mentioned that it can be used for other purposes, not just for the show business, it can be used for purchases, which is already very popular among other mobile ecosystems. It can also be a very effective tool for online marketing. In my mind, live streaming is comparable to short video and text and image. It's just a new form of media. We can, and we should leverage this new form of media to further enhance our mobile ecosystem, provides a better user experience and provides better values for the advertisers and customers the Baidu ecosystem.

[Alicia Yap:]

Thank you, Robin.

[Operator:]

Your next question comes from Eddie Leung from Bank of America Merrill Lynch. Please ask your question.

[Eddie Leung:]

Good morning, guys. Yes, just a follow-up on Alicia's question on the rationale behind acquisition of YY. Yes, we understand that Baidu has quite some drop, which can help a monetization by YY. But I'm just curious on two things. One is, why are not thinking about doing live broadcasting just by yourself, just developing the business organically? And then secondly, in terms of timing, I think, Alicia pointed out a good point that live broadcasting is not a fairly very new business in China. So why now? Why not earlier? Thank you.

[Robin Li:]

Hi, Eddie, just to clarify, we have been doing live streaming series of Baidu apps, including Baidu App, Tieba, Haokan and Quanmin. What we have seen is that the revenue from live streaming have been growing very, very quickly. I basically mentioned that over two years, our non-advertising revenue grew like 2.6x. And if you talk about, let's say, last month, live streaming revenue on the Baidu platform grew more than 80% year-on-year. So that gives us the confidence that the Baidu ecosystem is actually very suitable for live streaming, when you can see the live streaming as a way of monetizing your system or user base. And why not earlier? So I told you, we've been doing this. And why not organically? Basically, like you said, it's new. It's not new as a business or as a way of monetizing user classic. YY, as a pioneer in the space, they have accumulated a lot of operational experience. As you heard from Herman, it's a sizable business and it's got very good margin. So there are a lot of things that we can learn, and they have a very good, very loyal user base and common creator community that is hard for us to get in a very short period of time. So that's why we decided to make this acquisition.

[Eddie Leung:]

Understood. And then just a quick follow-up on Herman's comment on mobile ecosystem versus the legacy business. So just wondering if you guys can share a bit more color on the growth trends, especially the differences in growth rates between the mobile ecosystem, especially your app versus the legacy pieces? Thanks.

[Herman Yu:]

Yes. Hi, Eddie. Yes, actually, in our prepared remarks, we talked about that. When you think about our mobile ecosystem, we talk market in-app services. So what we said was for in-app services, in-app advertising grew double digits this quarter, and we've been able to grow double digits for the last three quarters despite COVID-19. So leveraging our AI capabilities, our AI building blocks and marketing services platform, we're able to do much better. On the other hand, our legacy business, we've been seeing a continuous drop. Part of it is, there's less traffic to buy. Handsets are not selling as well this year. So you have less new phones and less traffic to buy. And secondly, for this area, as we mentioned many times, it's -- we're focusing on maximizing profit rather than revenue. That's why you're seeing as we're pulling back on some of this traffic, you're seeing our margin actually improve. Number one is focusing on profitability growth rather than just absolute revenue growth. And number two, as we switch over -- as a proportion of revenue switch over from legacy business into in-app, we're able to have better profitability. We don't have to pay for tax.

[Eddie Leung:]

Understood. Thank you.

[Operator:]

Your next question comes from Piyush Mubayi from Goldman Sachs.

[Piyush Mubayi:]

I have three questions. The first is with regards to the Core business. We're trying to better understand the drivers of where the business sits today. And in particular, on the pricing side, where are we? Looking at the numbers on a year-on-year basis, if you could just take us through that dynamic, and if possible, through industries, it would be very helpful. The second is on the cost side where your margins continue to improve, just wanted to understand how much of that came through. The change in the accounting estimates of future viewership consumption patterns that we've seen on the iQIYI side. And how much of this trend of continuing margin improvement can be built into the way we think of the rest of the year and potentially 2021. And the third is congratulations on the CNY460 million win for Apollo. I just want to understand how that's going to get booked. And also your perspective on when we can expect Apollo to start to penetrate the China domestic manufacturing automobile manufacturing base. If that's the way we should be thinking about it? Or should we be thinking about how Apollo penetrates the transportation network across China, the government side of defense?

[Robin Li:]

Okay. Herman will answer the first 2, and I'll answer the third one.

[Herman Yu:]

Yes, Piyush. So with regards to pricing, through our AI building block and through our marketing services platform, as we demonstrated specific cases in our call this time in the past few quarters, you can see actually, as advertisers switch over to our managed page, leveraging our AI capabilities and so forth, we're able to actually get the CPM to turn around. So in the third quarter, we actually saw a positive growth on a year-over-year basis. On a sequential basis, we'll continue to see CPM coming back. With regards to our margins, I think Q3 was pretty high with our EBITDA margin of 46%. Some of that was nonrecurring. So I think when you go into Q4, I would just estimate that you should see our cost of sales plus operating expenses growing probably in the mid-teens on a sequential basis. Part of it is because we've been trying to hire this year and it's been very hard to interview everyone that we want with the COVID-19 and so forth. And second is some of our marketing spend that we've been trying to spend, as I mentioned earlier, we don't have a lot of new handsets selling in the early part of the year. It's very hard to spend the money. But we anticipate the economy coming back, and anticipate that we'll be able to have an environment where we can spend more marketing dollars. And hopefully, that would help our traffic in the future quarters.

[Robin Li:]

Piyush, on the Apollo question, we can basically start – see Apollo as a full stack solution for smart transportation or it's a vibrate -- vibrant ecosystem that includes many of the stakeholders in terms of OEMs, the municipal government, the technology providers and other Tier 1 players. From a business model point of view, Apollo basically has 3 directions. The first one is technology provider for the OEMs. We sell DuerOS for -- although we sell autonomous driving technologies to the OEMs. And the second one is the smart transportation infrastructure projects. The CNY460 million project we won in Guangzhou belongs to this. We fundamentally believe that by building a smart infrastructure for transportation, China -- the Chinese cities can improve the efficiency of mobility significantly. And since transportation represents a large percentage of the total domestic gross production, it has a huge value, not only from this point of view, but also from the social point of view. People will be exempted from the congested traffic. And the third part is the level 4 and 5, fully self-driving vehicle. Eventually, this will be monetized just through a robotaxi. And like I talked about during the prepared remarks, we have been deploying robotaxi services in a number of Chinese cities, and we expect the unmanned testing as well as the commercial deployment sometime in the near future.

[Operator:]

Your next question comes from James Lee from Mizuho.

[James Lee:]

Two questions here, too. One on autonomous driving. Just curious, are there any new government policy supporting adoption maybe among the OEMs here? And how important is kind of OEM partnership to help you to achieve your business model here? And also secondly, a follow-up question on YY specifically. And maybe if you could, obviously, you just made the announcement, be a little bit more specific talking about the content strategy post the integration, kind of how do you plan to differentiate versus peers? And maybe talk about the synergy a little bit between Baidu and YY? And how do you plan to integrate Baidu's core content into YY?

[Robin Li:]

Can on starting question, so we'll answer by question. From a government's point of view, many local governments really are excited about working with us to provide better infrastructure for this kind of technological innovation. That's why we have been working with a dozen, more than dozen cities on all kinds of smart infrastructure, transportation infrastructure projects. And on the OEM side, we partner with many of the OEMs. We provide technology to them, and they will work with the local government to get whatever tax benefits or other investments from this kind of initiatives. So from that point of view, we interact beneficiary of the government policies.

[Herman Yu:]

Yes. And let me add a few things to what Robin just said. So the assumption here is that when you think about autonomous driving in the U.S., it's a standalone car. Our assumption here in China is with the support of the public sector, we can install, for example, V2X platform that would help, for example, power traffic lights, in the future, perhaps parking lots and so forth, that would help congested traffic, better air pollution, more traffic safety. At the same time, leveraging that V2X infrastructure to, for example, have connected integrated car and roll communication. So that way, our autonomous driving will be dependent on the infrastructure that we're helping public sectors build. So I think that gives us an advantage. So as we're trying to expand our smart transportation market, at the same time, that set infrastructure for us to roll out our autonomous driving, and will make per vehicle cheaper because of that ability to communicate between rolling cars.

[Dou Shen:]

James, this is Dou. Actually, Robin has already mentioned a few points about the -- about this deal. I can add a few more. So first of all, we have been doing this live streaming business on our platform for a while. And we do see that the rapid growth in terms of both the user interactions and revenue-wise. So considering, YY has like 10x more commerce than what we have now. And on the user side, we have like 100x more than what YY has now. So this is a great match. Since we have the demand from users and then YY has the strong supply for the performers, I think this is a great match. And secondly, Baidu, as a platform, short videos, is becoming also a very important media. And users can consume the short videos quite largely. So that said, the performance, they can create some videos and then distribute to our platform to attract more fans, attract more users for their -- for the performers. We have been doing this -- for the business we have conducted, and we see it is pretty effective. And what's more, live streaming is a special media -- media developed it applies to many scenarios. So we already saw the users and the lawyers, they communicate through live streaming on our platform and also the doctors and many other types of professionals. So live streaming is going to be a very important media through Baidu's platform to help the users and also help the professionals to connect them together. Clearly, the operational experience and also the live streaming technology from YY will significantly boost up this experience. And what's more, when I talk to the team in YY, they are pretty eager to get the traffic from Baidu's mining insight from the users because they have been working on this, have been instructing for traffic for a long while. Given what we have on the user side, we are pretty excited. In the meanwhile, the team in Baidu, we're also excited to get help from YY's team because of their excellent operational experience on the live stream on the performers. So when you put all those things together, I think this will be a great one, and we are looking forward to it.

[Herman Yu:]

Yes. So just let me summarize what Dou said and what we had in prepared remarks. I think several things to consider. Number one is, as we mentioned on the call earlier that this is an all-cash purchase. So I think as you guys know, we have -- Baidu Core has $20.4 billion on our books. To be able to use that, which we're not seeing the value being reflected on our stock, being able to buy a property that is generating a lot of cash, I think that would help -- that gives us the extra boost in cash. And then from a synergy perspective, as Dou mentioned, I think just being able -- in this day and age, it's been going to have a large content network, especially a content network of creators. So Baidu already -- we already have a lot of experience in terms of publisher accounts with Baijiahao and so forth. That gives us now better management and able to expand our overall creative network. So I think that's very powerful. And it becomes a synergy, when you think about all the offerings that we have at Baidu, the news feed that we have, the short video, now you have a live stream. So I think from a user perspective and also from an advertiser perspective, we can use these properties to help them monetize that better. And as we also -- Robin said on the call earlier that we hope to grow live streaming beyond entertainment. I think everyone sees live streaming as it is today on the entertainment side. But on Baidu's platform, we have content across many, many different verticals. And what we hope is that through the knowledge that we can acquire immediate to grow live streaming to go across different verticals because we think that going forward on content on the Internet, a lot of it is going to be rich media. So having the ability for short video as well as having live streaming across different information knowledge, that will be very critical. And to that, I think, ultimately, as user behaviors are trained to watch live broadcasting on our platform, we then can use live streaming as a way for our advertisers to be able to connect better with users and overall improved conversion. That's why we believe our early testing of information to social to purchase, that cycle is working on Baidu property today. But if we could strengthen that social part, people to watch live streaming and so forth, we can, in the future, use YY streaming as a tool for advertisers to better reach and manage the lifetime value of our customers.

[Operator:]

Your next question comes from Gregory Zhao from Barclays.

[Gregory Zhao:]

Congratulation on the solid quarter. So first question is a very fundamental question about your product design and the algo development. I think it might be a relatively old question. I know currently, your feed product, the short video are both based on the recommendation algo to cater users interest and hobbies. And I assume going forward, your acquired YY streaming services should also be some this kind of product and concept. As we know previously, our search services would mainly rely on users to proactively approach you for the search result. So is there any difficulty in the past several years when your R&D team changed the mindset from the search engine product to the recommendation framework? So the second one is a quick follow-up. Do you have any visibility of the marketing revenue growth in 2021?

[Robin Li:]

I'll just take the first one, Gregory. So news feed and search, actually, they are 2 different type of products, but they are strongly connected. As, actually, I mentioned before, in this type of case, the users, they are -- for the search users, they come to Baidu proactively with certain task in their mind. So search itself is just a single point for their whole decision journey. So we can do much more to help the users achieve what they want. And while for news feed, the users are being fed possibly. It's relatively hard for them to jump from passive behaviors to proactive behaviors in terms of the user behaviors. So it is relatively easier for search engineers. They change their mind to expand their service to cover more user need. That's why you can see the new speed growth in the past few years is actually pretty quickly. On other side, other players, when you switch from news feed to search, it's relatively harder actually. For sure, the YY deal, so -- which brings the live streaming ecosystem and also technology into Baidu will significantly improve our capability to serve the user better, not only through feeds, but also through search. Because as I mentioned earlier, because live streaming is also becoming a fairly good tool to help us to satisfy the users' need even in the search scenario. Okay commenting on the second one? Marketing revenue outlook for 2021.

[Herman Yu:]

The marketing revenue outlook for 2021. I think right now, as you have seen, we've been achieving higher growth than sequentially for the last 2 quarters, and we see that into a fourth quarter. But I think it's fair to say that, assuming that you have COVID-19 continue to be under control as we go into Q1, Q2, we should see a pretty good half, first half of next year. So I think right now, we don't have a full visibility. What we do know is that when you look at the top dozen or so industries that we have, a lot of -- half of them have turned positive, and we think that there is more legs to go as the economy recovers. So I think we're at a good point where as all these industries are growing faster. And some of those that are growing negative are turning around. We're at a good point to benefit from that turnaround. So we'll see how this goes in the quarter and we'll be able to give you an update at our next call.

[Operator:]

Your next question comes from Tian Hou from T.H. Capital.

[Tian Hou:]

Congratulations on a good quarter. I have 2 questions. One is related to Baidu Core search. So if we look under the Baidu Core search, we see the management page, the revenue from that's growing really rapidly and almost 100% year-on-year basis. So one thing I do realize, the coronavirus, even though they a great deal in China advertising market. However, they're really pushing the business from online to the cloud. So online is already past tense. To the cloud, it's become a new thing. So Managed Page is in that field or in that direction. So I wonder in the future, under the Baidu Core, how much will come from Managed Page? And how much will come from traditional search? That is how the company are planning to further develop the Managed Page. And I like it a lot. I feel like it's one -- it's the total solution for merchants, for the company. The second question is related to the YY. The live streaming in China market has already reached the peak. And certainly, YY, as the leader, has a lot of uniqueness. However, the growth-wise is not that great. So I wonder how Baidu is going to rejuvenize this unique YY to make it much bigger than today's YY so as to utilize the synergy between the 2. So that's the 2 questions.

[Dou Shen:]

Tian, this is Dou. I'll take the first one and second one, and Robin will answer more. So for the Managed Pages, it is part of the building blocks of the whole ecosystem. So in the very first beginning, we hope Managed Pages can improve that user experience by filtering out the fit information and all other potential bad experience for the users. And later on, we add more and more functions to Managed Pages to help the customers to manage their users to do business with their users directly over the Managed Pages. And then later on, Managed Pages is becoming one -- important component of the whole cloud service to help the customers to do the indi, the full cycle of their user life values. So that then, clearly, we are going to improve the percentage of the Managed Pages as high as possible, up to 100%, because this will both benefit the users and the customers and our small business owners. So for the YY part, for sure, it is a mature business if we see the scale as of today. But actually, we are thinking in a very different way. We think live streaming is just a new start for -- as a new media tech. Especially for Baidu, we like has 300 million users in Baidu actively every day. So we are using live streaming as a very strong tool or very effective to help them to connect the users and commerce and the professionals. I think this is just a start. So also, as we mentioned, the penetration rate for the users watching live streaming in Baidu's platform is not high at all yet. It's far from being in the same level as other platform. So that's why we think we can convert quite a lot of users today from tech and short video users to the listening users will greatly lift the scale for the live streaming.

[Robin Li:]

Yes. Let me just reiterate the rationale for the YY acquisition. I think many of you have pointed out correctly, YY is the pioneer in live streaming, but the growth rate have significantly slowed down in the past couple of years. If you notice that the larger mobile eco platforms all started live training feature or function much later than YY, but they were able to grow that business much larger. That basically demonstrated that the live streaming, as a standalone, is not going to have a lot of growth going forward. But as a part of a much larger ecosystem, it just fits naturally and can have a lot of synergy like Dou pointed out during the earlier conversation.

[Herman Yu:]

Yes. And let me supplement a few points. Just to clarify on hosted -- on Managed Page, what Dou talked about, when people buy advertising for a Managed Page, they still buy search traffic. The difference is that in the past, they buy search traffic and direct it to their own website, whereas the managed page business only don't have to maintain the website anymore, they can just move the content and services on to managed page through a wholesale marketing platform. And you just log in with an account. And then when you buy search traffic, it would land on that account. So therefore, we will see what the users do after the landing page. And because of that, because it's landing on our platform, we can leverage our AI to help the merchants be able to improve their ROI and do lifetime value management. And the second thing about what Robin talked about with live streaming. I think one is the synergy that we have because we're a large platform. We have an MAU of -- just Baidu app alone, we have an MAU of 0.5 billion, and then we have many other property. I think that's one thing. The thing that we have to look upon is whereas seems on the call, a lot of your analysts think that YY is something that has been existing for many years. But we think beyond 3 to 5 years, where do we think of media is going? If you think about over the last 9 to 10 months, with COVID-19, Zoom is one of the more popular accounts that have just skyrocketed. That's really streaming, too. So all we're saying is that we think that having a good know-how in live streaming, which sure isn't entertainment, Baidu have such strong verticals in all different things, we think that the future is all going to be streaming. And then if we learn how to do live streaming, if we learn how to manage creators of live streaming and so forth and use it across different verticals and so forth, we think it's going to flourish and make us even stronger within terms of information and knowledge. So I think the short term is trying to get the upside from the synergy, and the long-term is to leverage the know-how that the content management of the network providers and so forth, and to have just rich media across the verticals on our platform. So I hope you guys understand our strategy is twofold, not just live streaming as is with YY, but the potential that we have licensing across our platform over a different type of available content.

[Operator:]

Your next question comes from Elinor Leung from CLSA.

[Elinor Leung:]

Congratulation on the solid quarter. My first question is that, can you help me -- give us an update regarding the recovery progress of each of the advertising verticals, which has been already returned positively year-on-year growth, which one is still negative year-on-year? And what do you think the progress going forward? And second is that when we integrate with YY, is YY management still stay or we are going to change the management with our own team?

[Herman Yu:]

So the question on industry. The ones that we see done well, turning from negative to positive, as we mentioned on the call earlier, is health care, it's education, it's auto, it's software, it's lifestyle. So those that have done well. And the one that we think that there has been potential -- there could be potential for doing well, it will be things, in addition to the ones I mentioned, things like, for example, real estate and a few others. And then we continue to see, for example, e-commerce and retail that do well.

[Robin Li:]

Okay. I met with the management team and other -- a few other members of You team. This is one of the greatest teams I ever met actually. So they have very good experience for this whole live streaming operations. They will stay intact for -- to continue to operate this business. In the meanwhile, we are adding more resources and including our team members into this new team to help them better explore the opportunities within Baidu and to integrate the service into Baidu's platform. So in short, this team is great, and they will stay as of now it is.

[Operator:]

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect your lines.