Tidewater Inc.
Q4 2015 Earnings Call Transcript

Published: 27 May 2015

[Operator:]

Welcome to the Fiscal 2015 Fourth Quarter Earnings Conference Call. My name is Laura, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Joe Bennett. Mr. Bennett, you may begin.

[Joseph M. Bennett:]

Thank you, Laura. Good morning, everyone, and welcome to Tidewater's fourth quarter and full fiscal year 2015 earnings results conference call for the period ended March 31, 2015. I'm Joe Bennett, Tidewater's Executive Vice President and Chief Investor Relations Officer, and I want to thank you for your interest in Tidewater. With me this morning on the call are our President and CEO, Jeff Platt; Jeff Gorski, our Executive Vice President and Chief Operating Officer; Quinn Fanning, our Executive Vice President and CFO and Bruce Lundstrom, our Executive Vice President, General Counsel and Secretary. We will follow our usual conference call format. Following these formalities, I'll turn the call over to Jeff for his initial comments to be followed by Quinn's financial review. Jeff will then provide some final wrap up comments and we'll then open the call for your questions. During today's conference call, we may make certain comments that are forward-looking and not statements of historical fact. I know that you understand that there are risks, uncertainties and other factors that may cause the company's actual future performance to be materially different from that stated or implied by any comment that we may make during today's conference call. Additional information concerning the factors that could cause actual results to differ materially from those stated or implied by the forward-looking statements may be found in the Risk Factors section of Tidewater's most recent Form 10-K. With that, I'll turn the call over to Jeff.

[Jeffrey M. Platt:]

Thank you, Joe, and good morning to everyone. Earlier this morning, we reported a fully diluted loss per share for the fourth quarter of our 2015 fiscal year of $0.19, which includes a $4.1 million restructuring charge, $6.4 million of asset impairment charges and a $23.8 million non-cash adjustment to deferred tax assets, collectively impacting earnings per share by approximately $0.69. Our fourth quarter's results brought our fiscal 2015 full-year diluted loss per share to a $1.34, which included the $284 million goodwill impairment charge recorded in our third fiscal quarter. Adjusting for the goodwill and other asset impairment charges and our deferred tax asset adjustment, our fiscal 2015 fully diluted earnings per share would have been $3.82. Our March quarter's per share results were substantially below the adjusted earnings we reported for the December quarter and reflect the dramatic shift in oil market fundamentals that began last November, and continued throughout the just completed March quarter. As we had warned during our previous earnings call, we expected revenues, vessel utilization and average day rates to decline in the March quarter as a result of our customers announced reductions in their 2015 capital spending plans and decisions to delay and defer certain offshore projects. Lower activity levels were to be expected given the backdrop of weaker customer demand. The pace and magnitude of the decline, however, is nearly unprecedented, reflecting the aggressive cost reduction initiatives that many of our customers implemented in response to lower commodity prices. The restructuring charge we took in the March quarter related primarily to our organizational adjustments made to our Australian operations in light of various vessel contracts ending and few opportunities to re-contract those vessels in that market. In addition to these organizational adjustments in Australia, in the March quarter, the company began implementing cost-cutting initiatives globally that resulted in vessel operating and G&A cost for the quarter that were below previous guidelines for these line items. Our cost-cutting initiatives will continue throughout the coming quarters as we adjust our active vessel fleet to the evolving global demand, recognizing that in a weakened market, our stacking of underutilized vessels will have the greatest impact on vessel operating cost and vessel operating margin. Along with our vessel operating and G&A cost-cutting initiatives, the tightening of our belts also came in the form of some changes to our vessel newbuild program. In April, we canceled three-vessel construction contracts in response to poor shipyard performance. And in May came to an agreement with another shipyard that is in the process of constructing two deepwater PSVs for us that the company would now have an option to take delivery of one or two of the vessels at any time prior to June 30, 2016. We'll receive the return of installment payments made to-date at the end of this period. These are two recent changes to our newbuild program. But we will continue to evaluate our options with respect to other vessels we have under construction. Quinn will provide you with more details on these moves made post-fiscal year-end in just a moment. Just as in our last earnings call, I will focus the balance of my comments on the broad trends impacting our current business along with assessing our current position, how we see the future of our market and how we intend to conduct our business. I'll leave it to Quinn to provide you with the detail of the quarter's financial performance and our financial outlook for the near term. Comparing our March quarter's performance to that of our December quarter, we saw revenues decline 16% due to reductions in average day rates and lower utilization. A number of our customers have terminated offshore drilling rig contracts early and many are deferring other offshore work. While lower exploration and development activity has most directly impacted overall demand for offshore support vessels, continued growth in the offshore vessel fleet has also suppressed vessel day rates and utilization. In our view, a reversal in the currently negative supply demand dynamic will likely require a stable outlook for commodity prices, well north of current strip pricing, more vessel demand and less vessel supply and a recovery period of at least 12 months to 18 months from today. As a result, we expect the OSV market to remain weak until at least the second half of 2016. Given the more challenging operating conditions experienced during the March quarter, as was the case with other market participants, Tidewater's financial results were weaker than in previous quarters. We are comfortable, however, with both Tidewater's market position and its financial position as we work through the current market turmoil. The OSV market has clearly softened. Our absolute and relative positioning however remain good. We continue to maintain a strong balance sheet and a healthy liquidity position. Today, our net debt of approximately $1.5 billion represents 37% of our net book capitalization. Importantly, our fleet reinvestment program is winding down as we have largely completed the transformation of our fleet from one dominated by older, smaller vessels to the industry's most modern and diverse fleet that is capable of operating globally in all water depths

[Quinn P. Fanning:]

Thank you, Jeff. Good morning everyone. As Jeff mentioned, we issued our earnings press release this morning. We expect to file our Annual Report on Form 10-K through the EDGAR filing service by the close of business on Friday. Turning to financial results, as Jeff noted, we recorded loss per diluted common share of $0.19 for the March quarter, and a loss per diluted common share for the fiscal year ended March 31, 2015 of $1.34. Results for the March quarter included a $0.07 per share after-tax restructuring charge, non-cash asset impairments totaling $0.11 per share after-tax and a non-cash adjustment related to the valuation of deferred tax assets, which is included in income tax expense of $0.51 per share. Results for fiscal 2015 included a non-cash goodwill impairment charge of $4.43 per share after-tax, non-cash asset impairment charges totaling $0.24 (11

[Jeffrey M. Platt:]

Thanks, Quinn. Current trends in the commodity arena and the offshore market appear to be diverging. Almost coincidentally with the ending of the March quarter, we have seen a nearly 25% rise in oil prices, which has led some to speculate openly that the industry may have seen the bottom in oil prices for this cycle. We certainly hope this is the case, but in our view, it is premature to believe that we have experienced the worst of the cycle's downturn in terms of commodity pricing. Yes, global oil prices are higher, but they are still well below where they were a year ago, and offshore market conditions remain difficult, despite the recent optimism in the commodity markets. So what do we know about the outlook? With lower oil prices, our clients are responding as they have in every other similar period

[Operator:]

Thank you. We will now begin the question-and-answer session. And our first question comes from George O'Leary from Tudor, Pickering. George, your line is open.

[George O’Leary:]

Good morning, guys.

[Jeffrey M. Platt:]

Good morning, George.

[George O’Leary:]

You guys talked a little bit about needing to see supply come in as well as demand pick up. So you've certainly done your part. What are you seeing on the part of your competitors in terms of stacking vessels, and to-date have you seen anyone out there willing to go ahead and scrap vessels? Just given your broad footprint, I think it would be good to hear your thoughts?

[Jeffrey M. Platt:]

George, certainly, the older vessels, I think that's a continuing scrapping issue that's going on. It's hard to put a number on how many vessels are exiting it. Others have reported in their earnings calls certainly here domestically of stacking of new and newer equipment, so we're seeing that. Certainly others of our major competitors we're seeing that in the North Sea there's been some stacking of vessels reported. So I think everybody is looking at the same operating environment and where it certainly makes sense for one company that certainly applies to others as well. So can I quantify it with a number? Don't see it, but I think certainly the longer this progresses to the depth that it has, you'll see some additional stackings, and as Quinn and I have laid out, Tidewater will not be exempt from that. We'll certainly look at underutilized vessels and again do our part to make the right decisions for Tidewater and I think overall the industry will do the same.

[George O’Leary:]

All right. That's helpful and then we've seen Saudi in particular negotiate lower some day rates in the jackup market in your Middle East, North Africa region. Are you experiencing any of those same pressures from that customer?

[Jeffrey M. Platt:]

George, I don't want to talk about individual clients. I can just say that this downturn is – there's no place to hide, and we have those negotiations ongoing and have had those with lots of clients. I don't want to get into particulars on it, but again, it's pretty broad based as everyone I think understands.

[George O’Leary:]

And then maybe sneaking one more if I could. Given the magnitude of the downturn and your comments in maybe a place like the North Sea you're starting to see day rates approach cash operating costs. Is this a time when you expect to see some industry consolidation and how do you maybe envision that playing out for Tidewater? Are you a consolidator here as the newbuild program ramps down?

[Jeffrey M. Platt:]

Well, again, we've made comments. I think we like our relative positioning both from the operating side, our fleet side, our fiscal strength. I would say that you would have to look from the characteristics that if there are to be consolidators, I think Tidewater has the right attributes for it. How it plays out? I don't want to hazard a guess on that. Certainly we're looking at opportunities as we always do look at opportunities, but I do think when you have this type of market turmoil, this does present some unique opportunities and the window for that, Lord knows how long it's going to be open for. Again, I'm not hoping for an extended downturn, but a little bit of consolidation wouldn't hurt the industry, but I'd also caution that ours is a very fragmented industry. So consolidation is not going to be the magic answer to turn around what is a pretty highly fragmented industry.

[George O’Leary:]

Thanks for the color, guys.

[Jeffrey M. Platt:]

Thank you, George.

[Operator:]

And our next question comes from Matthias Detjen from Morgan Stanley. Matthias, your line is open.

[Matthias Detjen:]

Thank you. So I have one question about the dividend, so you talked a bit about it earlier and I was wondering how secure you see it given your current outlook and if you think you're actually going to – or if you're committed to it and want to sort of like continue paying it even given that we're going into this downturn, if you could maybe give us some color on that.

[Jeffrey M. Platt:]

Well, the only thing I found in life that are absolute are death and taxes. With that being said, I'd just ask you, as we pointed out, the history of what Tidewater has done and I would say that again we're not new to the game. Some people have jumped in in the last 12 months and had to pull the dividend back. That's certainly not Tidewater. We've been a long-time player and we look at the value repayment to our shareholders as something that's very much part of what we're doing. So with that I'll just ask you to look at our history.

[Matthias Detjen:]

Okay. And then I have one question regarding the ROV segment, so what effect has the weaker oil price environment had on your outlook for the ROV and the Subsea segment. Has that changed since you like initiated the program there and if you could maybe give us some color there?

[Jeffrey M. Platt:]

No, again, I think the subsea work, especially the market that we are looking at and what we're into currently, I don't see a major pull back. Certainly for us, it's a very small number of ROV fleet that we have. But again, the whole industry is seeing the retrenchment. So certainly the ROVs that are tied to the drilling rigs that's a much different story. That's not the Tidewater story, but obviously with the reduction in the deepwater rigs that you've seen, that affects ROV utilization as a whole. But with respect to the subsea and the construction, I don't necessarily see a big pullback in that. And for us, again, it is a growth part of our business. I think also it is a learning part of our business that certainly opens opportunities for us as we've talked about growth initiatives in the future. And again, the overall retrenchment, there may be investment opportunities in that direction as well as in our core OSV side.

[Quinn P. Fanning:]

I guess the thing I'd add is, part of the reason that we found the ROV and subsea space interesting is that it would increase our exposure to the production side of the business. As we've talked about on prior calls, probably 60% of our activity is driven by rig activity. The balance is production, construction, seismic, et cetera, and we would like better balance in the business, and we think exposure to the ROV segment and the vessels associated with IMR work is helpful in that regard. I think it's fair to say that if we have a excess supply issue on the OSV side of the business that excess supply is probably also real on the subsea vessel side of things. And as we highlighted, maybe the downturn creates opportunities for us to consolidating the OSV space. It may also create more attractive entry points or price points on the subsea side. But at least in my view, really attractive investment opportunities will take at least a couple of quarters for potential counterparties' valuation expectations we calibrate. So in the near-term we're focused on managing our costs, managing our capital program and if with the passage of time opportunities are created, we'll be prepared to act on them and think we have an absolute and relatively strong financial profile that would allow us to do that. Others probably don't have that characteristic as, Jeff put it.

[Matthias Detjen:]

Well, great. Thanks for the update, gentlemen.

[Jeffrey M. Platt:]

Thank you.

[Operator:]

And next we have Greg Lewis from Credit Suisse. Greg, go ahead. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Yes, thank you and good morning. Hey, guys, I hope you're managing through that flood down there. It looks pretty nasty on TV. Anyway, I have a couple questions. I guess first, as we kind of look at the utilization in the deepwater segments, it looks like the Americas and Asia/Pacific is – and I realize Asia/Pacific is down a lot over the last two quarters, but it look likes those were more flattish than the Middle East, North Africa and West Africa regions. Is that just a function of timing or is it the nature of contracts. I kind of thought that the West Africa market was more of a term contract, so if you could provide any color around that that would be pretty helpful?

[Jeffrey M. Platt:]

Yes, Greg, let me give this a shot. First of all, when you're looking at Asia/Pacific, we're in a cycle in Australia. So most of the active drilling programs are pushing to the right, so that utilization for deepwater PSVs have softened. However, there are some bright spots in Asia/Pacific, specifically places like Myanmar, whatnot, where we have some upcoming expiration activity. In terms of the Gulf of Mexico with contracts that we've had, we have many long-term contracts in the Gulf of Mexico, so that utilization is holding there. In terms of West Africa, we do have a large spot market that we do play on the West Coast, but we also have a real healthy mix of long-term contracts in places like Angola. So you really can't put your finger on anything. It's really from a perspective of a balance of moving from our longer-term contracts and working spot. And the deepwater PSV market is strong in both of those areas. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay, great. And then just shifting gears. Clearly, you're having conversations with shipyards. You addressed those five. It sounds like those were more just a function of the shipyard failing to perform. I guess, a two-part question. One is, are there other vessels in the order book that are potentially going to run into issues where we could see maybe the order book for Tidewater change a little bit. And you mentioned Bank of China was providing the refunding guarantees on the three towing-supply boats. Is the Bank of China also providing the refund guarantees on those PSVs?

[Jeffrey M. Platt:]

The answer to that question, Greg, is yes, they were. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay.

[Jeffrey M. Platt:]

I don't really want to go to the hypotheticals of our construction queue. I'll just say that we're certainly mindful of what we have on order. We expect our counterparties, the shipyards to deliver the quality product on time. And you're right in your assessment that the result of certainly the three cancelations, that was a direct result of the yard not being able to meet their contractual performance. Had those vessels been delivered and the time that they were contracted for was a much different market in the OSV side, our market. So, again, we will continue to be mindful of our assets under construction and certainly we'll preserve all the rights that we're entitled to. Our intention is not to cancel the vessels. I've said that before. We like the vessels we spec out. It makes sense for the long term. But when the counterparty in that business transaction doesn't meet their obligations, then we really have to defend certainly our rights and continue to do so. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay. And then I know you guys...

[Quinn P. Fanning:]

And Tidewater plans to meet its contractual commitments and our expectation is that our counterparties will do the same. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay. And then I know you guys don't want...

[Quinn P. Fanning:]

We will evaluate the situation based on the facts and circumstances around that situation. But we have no plan to walk away from contractual commitments, but we expect others to do the same. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay. And then I know you guys don't like to comment on competitors or suppliers, so just keeping it very general. As you're in the marketplace and talking to customers, competitors and the shipyards, do you get a sense that this is something that's more widespread or do you get a sense that it's something specific to Tidewater where it's maybe one or two yards that are potentially having an issue or is this something that is, like I said, is it more widespread across the industry and I'm focused more on the order book?

[Jeffrey M. Platt:]

Yes. I think there's a large contingent of vessels ordered primarily in Asian yards. And when you look at who the owners or prospective owners would be, there's a pretty good question as to whether those owners will actually take delivery? I think we've mentioned that in previous earnings calls. I don't have any numbers to put in front of you, just say that there is, we think, a meaningful number of OSVs currently under construction that most likely will not see market. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker) Okay, guys. Hey, thank you very much for the time.

[Quinn P. Fanning:]

And the other thing I'd probably point out to you is that we believe an underappreciated portion of the order book is actually vessels that are potentially being constructed for the yard's own account and obviously the market today probably makes a speculative newbuild to keep the yard busy probably a less attractive proposition than it was 12 months or 18 months ago.

[Operator:]

And our next question comes from Mark Brown from Global Hunter. Mark, your line is open.

[Mark Brown:]

Thank you. Just curious on the vessel operating margin guidance, I think you said 36% to 40%. Do you think that's a level you can hold even if we see a continuation of the downturn for the next few quarters? It seems like in the past you've been able to take steps to reduce cost or stack vessels if necessary. Do you have any sense in terms of how we should think about margins going forward?

[Quinn P. Fanning:]

Sure. I mean, obviously it'll be impossible to maintain margins if day rates and utilization remain weak and we don't take mitigating steps, which is why, as we talked about on our last call and we talked about today, we're trying to focus on the things we can control and attacking our cost structure is first and foremost in our minds. But we've gone through a budgeting process, which is certainly more difficult in the current environment than it is in a more stable environment, but the guidance that I gave you recognizes that rates, utilization are different than they were 12 months ago and we're taking the needful steps. So the guidance I gave you is based on our best view of revenue outlook and the steps we're taking in order to offset what otherwise would be significant margin pressure.

[Mark Brown:]

Thank you. Thank you. That's helpful.

[Quinn P. Fanning:]

(51

[Mark Brown:]

That's helpful. In the North Sea, clearly there is an oversupply there, your vessels that you acquired from Troms can work in many different cold water environments, are you looking to move any of those outside of the North Sea or are they on contracts or in situations where you want to keep them stay put?

[Jeffrey M. Platt:]

Mark, first off the Tidewater view of the world is where we don't have a bias towards one market or another except to the fact of what is the most beneficial use of that asset. So yes the Troms fleet when it was joined into Tidewater, it's part of that worldwide pool and we look at every vessel and we look at every market and every contract that possibly comes up for it and we try to make the best fit. So no, we're not going to say that those are carved out and those will stay at all costs in the North Sea. We do have some contractual commitments up there, which we will obviously meet those contractual commitments and we quite honestly are not going to cede the North Sea. We're not going to pull everything out of it, but again we're looking at a relatively small number of vessels in the Tidewater fleet, but it is part of the worldwide fleet of Tidewater and we will look to best employ those assets.

[Quinn P. Fanning:]

And the subset of the Troms fleet does have term contract coverage.

[Mark Brown:]

All right. Well, thank you very much.

[Jeffrey M. Platt:]

Thank you, Mark.

[Operator:]

And we have Cole Sullivan from Wells Fargo. Cole, your line is open.

[Coleman W. Sullivan:]

Thanks for taking the call.

[Jeffrey M. Platt:]

Hi, Cole.

[Coleman W. Sullivan:]

Hi, how are you? The question I had was you talked about breaking sessions, you guys are willing to do that if it makes sense for the term side, kind of give and take there. To what degree have you guys seen that in first quarter of the year and then in what regions have we seen that? And then where do you expect to see more of that going forward? It's kind of been discussed across the industry by your peers and the rig contractors, just wanted to get a little bit more color on that.

[Jeffrey M. Platt:]

Cole, this downturn is worldwide. As I said there's no magic geographic market that you can go to that somehow is exempt from it. So, those discussions, to answer your first part, those discussions are occurring with many clients in probably every geographic market we're in. So, it is broad-based and everyone is having those discussions and every one of our competitors I can tell you is having the same discussions as are any of the service providers in the oil and gas segment. So, it is broad brushed and it will continue to go until we truly see the market turnaround. We've kind of weathered I think the first kind of volley from our clients, we have gone through that. But there will be continued pressure depending on the commodity pricing. As the commodity pricing rebounds, it will lessen. As more rigs go back to work and activity loosens up, it will lessen it, then it will probably would turnaround. But at this point where we're sitting, I would expect to have more of those discussions on an ongoing basis across the board.

[Coleman W. Sullivan:]

(55

[Coleman W. Sullivan:]

Okay.

[Quinn P. Fanning:]

So the original question is to what extent has it been reflected in actual financial results? Tough to put a percentage on it, but it has certainly impacted results from a utilization perspective. Again my view at least is that utilization will rebound, but average day rates will continue to fall and ultimately that's what got dialed into the guidance that I provided.

[Coleman W. Sullivan:]

Okay. Thanks for that. And then on the backlog you guys have historically kind of held around 50% kind of across the fleet, how does that stack up today and any color there?

[Quinn P. Fanning:]

I think that's moved materially I think the forward contract cover on available days basis is still in the mid 40%s or so, honestly, I think that's a less relevant statistic today than it used to be only because customers aren't shy about renegotiating the existing contracts. So we take no comfort or find no safe harbor in contract cover, obviously it helps utilization and gives you seat at the table on a negotiation, but it's not going to insulate you from falling day rates as a result of renegotiations, hopefully we get something in the bargain, but those are ongoing conversations, we expect them to continue to take place until you see a market rebound.

[Coleman W. Sullivan:]

Okay. Thank you. Then I'll turn it back.

[Operator:]

And our last question comes from Turner Holm from Clarksons Platou. Turner, your line is open.

[Turner Holm:]

Hi, gentlemen, thanks for taking my call.

[Quinn P. Fanning:]

Hi, Turner.

[Turner Holm:]

Just a follow-up on the last remarks, I was curious if you could give us just sort of a rough ballpark of where you think, a mark-to-market day rate on the fleet would be now and I appreciate that it's difficult to make a forecast, but you guys were what, just shy of $18,000 in the March quarter, if you kind of thought about where all those vessels would re-contract today, roughly where might that land?

[Jeffrey M. Platt:]

Turner, I think that question we got too many geographic markets that have sort of unique cost structures in them, just to give you an example, in a normal market the day rates in Australia versus the day rates in West Africa, it's two different day rates and you've two different cost structures. So to tell you what that normalized would be, I just think we would be hazarding a guess that really would be misleading more than anything else.

[Quinn P. Fanning:]

And magnitude of it (59

[Jeffrey M. Platt:]

Yeah.

[Quinn P. Fanning:]

And what's working and what's not.

[Turner Holm:]

Right. Okay. So, one more thing on the cost, I was just curious to what extent you might be able to further reduce ongoing operating costs, sort of what the trajectory of that might be beyond just on stacking, is there more to go after the June quarter or what is kind of the trajectory of cost reduction look like through the fiscal 2016?

[Jeffrey M. Platt:]

Well, the biggest move on that would be further reduction of underutilized assets. Okay? So, as the market would continue, if it's continuing to pull back, we would look at doing that. But then when you look at certainly crew wages and routine maintenance and repairs, again, we are going to provide a level of service that we're not going to cannibalize those things in the short run to try to reduce cost that way, we're not going to do that. But I'll tell you that we are scrubbing every cost item and we will continue to do so. And we will continue to wring out efficiencies wherever we possibly can.

[Quinn P. Fanning:]

And then in regards to offshore and onshore costs and as I mentioned, we've taken initial steps in regards to wage and staff cuts and we're continuing to take a hard look at that. Just like our customers are doing, we're in active dialog with our vendors in regards to negotiating reductions in costs and I think that's going to play out over time, and hopefully you'll see the benefit in both G&A and OpEx, but it's a daily effort and one that we won't let up on until the market rebounds.

[Turner Holm:]

Okay. Thank you very much. If I could sneak one really quick one in, the Angola (1

[Quinn P. Fanning:]

That still is our expectation and it's a daily effort.

[Turner Holm:]

All right. Thank you very much. I'll turn it back.

[Quinn P. Fanning:]

(1

[Operator:]

And we have no further questions at this time.

[Joseph M. Bennett:]

Thank you very much, Laura.

[Operator:]

Thank you, ladies and gentlemen.

[Joseph M. Bennett:]

Thanks to everyone for (1

[Operator:]

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for your participation. And you may now disconnect.