Tronox Holdings plc
Q4 2016 Earnings Call Transcript

Published: 22 Feb 2017

[Operator:]

Good day, ladies and gentlemen and welcome to the Tronox Limited Fourth Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the call over to Brennen Arndt, Vice President, Investor Relations. Sir, you may begin.

[Brennen Arndt:]

Thank you, Chelsea, and welcome everyone. As you saw in the press release we issued this morning, we’re very pleased to announce that Tronox has signed a definitive agreement to acquire Cristal’s TiO2 business. We also announced very strong fourth quarter 2016 results. Tom Casey, Chairman and CEO, will review both with you this morning. Joining us for the Q&A session will be Willem Van Niekerk, our Senior Vice President of Business Development and Strategic Planning; Chuck Mancini, Senior Vice President and Chief Integration Officer; Richard Muglia, our Senior Vice President and General Counsel; Tim Carlson, Senior Vice President and Chief Financial Officer; Jean-François Turgeon, President of Tronox TiO2; and Ed Flynn, President of Tronox Alkali. We’ll be using slides this morning as we move through the conference call. Those of you listening by the Internet broadcast through our website should already have them, and for those of you listening by telephone, if you haven’t already done so, you can access them on our website at tronox.com. Slide two, I will not read the forward-looking statement on this slide, but instead say that the statement applies in full to our remarks this morning. It’s now my pleasure to now turn the call over to Tom Casey. You’ll be hearing actually - Tom’s - for reasons that become - excuse me - readily apparent, Tom’s [indiscernible] (01

[Tom Casey:]

Thanks, Brennen. Those of you who know me will know that I don’t normally speak and I whisper when I’m talking to you, or actually when I’m talking to anybody, but I seem to have lost my voice at a very opportune time. So please excuse me. I’ll try to be clear, and if not, please follow-up in the questions. Thanks. Let me say that we are very pleased to make two significant announcements today. First, we are announcing very strong fourth quarter results. Specifically, we reported revenue of $548 million, adjusted EBITDA of $105 million, which is an increase over what is typically a seasonally stronger third quarter. Cash from operations was $88 million and EPS of $1 which reflects a major accrual reversed, which will be discussed later. For now, I just want to say that the global pigment selling prices continue to rise in the fourth quarter. Sales volumes were stronger than any fourth quarter since 2007. Our production plants continue to run at near maximum utilization rates and inventories up and down the supply chain remain tight as far as we can see. We are already seeing pigment selling prices increase in the first quarter, and we believe these results establish that the recovery in TiO2 is strong and durable, but we also want to announce what we believe is an even more important development in the creation of increased shareholder value for Tronox investors, and that is, the signing of a definitive agreement to acquire Cristal’s TiO2 business. Together, we will form the world’s largest TiO2 producer and we’ll be the most highly integrated pigment and mineral sands producer in the world. This is a highly strategic and synergistic combination that will bring significant value to our shareholders, our customers, and our employees. The acquisition is expected to be both substantially accretive and deleveraging upon closing. Let me be more specific. We expect to realize pre-tax run-rate synergies of over $100 million by year one and over $200 million by year three. We expect EPS accretion of more than 100% versus Tronox standalone in year one. And in the first three years, we expect EPS pro forma growth of 70%, compounded. We expect it will increase our EBITDA by 60% in the year one versus Tronox standalone, with pro forma growth of 30% in the first three years and free cash flow to increase by 90% versus standalone Tronox in year one, with pro forma growth of 60% in the first three years. The transaction will enable rapid deleveraging with no additional permanent debt being taken on. [indiscernible] (05

[Operator:]

[Operator Instructions] And our first question comes from the line Hassan Ahmed with Alembic Global Advisors. Your line is now open.

[Hassan Ahmed:]

Good morning, Tom.

[Tom Casey:]

Good morning.

[Hassan Ahmed:]

Look, obviously, a couple of moving parts with regards to the deal. So a few questions. First of all, on the soda ash sales side of things. I know that you guys are in sort of active negotiations and the like, but could you just give us a sense of how comfortable you are with regards to the deal being consummated? Meaning, are you in conversations with multiple parties, fairly advance stage - any sort of color you could give, obviously keeping in mind, the sensitivity of the situation, any further color?

[Tom Casey:]

Well, first of all, we are not in conversations with anybody. With the announcement that we made this morning, we will initiate a process, and we’ll go through a process where bankers will assist us. Credit Suisse is working with us on this. We’ll issue a information memorandum. The last process that we participated in was very robust, and had multiple bidders, and we expect that it will be robust again. So, we’re not talking to anybody now. And so, I want to clarify that. But we expect that this will be a very robust process. And we have every expectation that we’re going to get satisfactory bids for that business. It’s in very good shape. The market is clearing, we think, and so we’re optimistic about it.

[Hassan Ahmed:]

Understood. Now, again, deal related sort of two parts. One is a relatively simple one which is, any commentary about any breakup fees? So that’s part one. Part two is, you guys did a very good job at laying out the sort of medium turn EPS, EBITDA and free cash flow sort of accretion numbers. If you could just give us some sort of guidance around what sort of titanium dioxide and ore pricing assumptions you have behind those numbers? Again, not looking for absolute pricing, but just some sort of commentary about -are those numbers being backed by significant improvements, moderate improvements, any sort of directional guide would be appreciated?

[Tom Casey:]

Okay. With respect to the breakup fee, there is a $100 million breakup fee that applies only if we are unable to obtain financing. In any other case, that the deal doesn’t close for any other reason, there is no breakup fee. So it’s important to recognize that point because I think that’s positive for Tronox. There is, if I think - there is one provision that if the shareholders of Tronox come forward to approve the deal, we will reimburse Cristal for a capital level of expenses, and I think that cap amount is $15 million. If the deal doesn’t close for any other reason, there is no payment by Tronox to Cristal. So that’s the first. With respect to the accretion and the growth rates, again, it’s important that when we talked about the growth rates of EPS accretion of over 100% for example or EBITDA by over 60%, those were not mid-term or long-term forecasts. Those were year one forecasts. That’s basically 2018 forecasts for us. So, short-term accretion, short-term increases in growth. And the prices we assumed to get to those numbers are very similar to the major consulting firm’s middle range price, not their high price, not their optimistic price, not their peak price, but sort of their middle of the road price, which we believe, at least for the short term, it’s very close to what we are forecasting for our own internal purposes.

[Hassan Ahmed:]

Very helpful, Tom. Thank you so much.

[Tom Casey:]

Okay.

[Operator:]

Thank you. And our next question comes from the line of Roger Spitz with Bank of America Merrill Lynch. Your line is now open.

[Roger Spitz:]

Yeah. Thank you, and good morning.

[Tom Casey:]

Good morning.

[Roger Spitz:]

Just to be clear, sorry about my voice as well. Are you purchasing all of Cristal including the Australian Mineral Sands business, but excluding the Jazan, Saudi slag facility?

[Tom Casey:]

Yes, that’s exactly right. All of the pigment plants, all of the mineral separations, all of the mineral sands.

[Roger Spitz:]

Okay. And what - one minute, sir.

[Tom Casey:]

Yes.

[Roger Spitz:]

And when is Jazan slag plant expected to be online?

[Tom Casey:]

It’s not clear. They are commissioning that facility and we are in negotiations with them to purchase it. But until we see what happens with respect to the commissioning process. Of course, we don’t have to make a decision on that, and we won’t. but you are right about the Australian mineral sands assets and all the other TiO2 assets of Cristal, we are buying.

[Roger Spitz:]

What is Cristal’s 2016 EBITDA? You’ve given the five-year average. Is it possible to provide us with the 2016 EBITDA?

[Tom Casey:]

I cannot because Cristal is a private subsidiary of a Saudi public company, and they have not released their 2016 results yet. So while we obviously - we have access to the number, I am prohibited by confidentiality from releasing it until and unless they do.

[Roger Spitz:]

Thanks. And my last question is, didn’t [indiscernible] (34

[Tom Casey:]

Yes, it’s still active. It will run for another 18 months or two years or so, and then there is some surplus inventory that will continue to supply that plant. After that for probably about four years. And then, as I said in the main presentation, we have a very substantial mineral sands reserve that if we want to we can easily fund to supply that. So, that’s yes, that’s the answer to that question.

[Roger Spitz:]

Thank you very much.

[Tom Casey:]

You’re welcome.

[Operator:]

Thank you. And our next question comes from the line of James Finnerty with Citi. Your line is now open.

[James Finnerty:]

Hi. Good morning, Tom.

[Tom Casey:]

Good morning, James.

[James Finnerty:]

On the 4.4 times net leverage at closing, can you give us an idea of - I would assume that pro forma ex-synergies, the company at that time will have around $700 million of EBITDA?

[Tom Casey:]

It assumes at closing that no synergies have been captured. And it assumes that we did not need to incorporate a bridge financing on any of the asset sales that we anticipate for funding the cash component.

[James Finnerty:]

Okay. So you can do the math after that.

[Tom Casey:]

So then you can do the math after that.

[James Finnerty:]

Okay. And then on - in terms of the sale of the soda ash business, the previous process that took place in 2015, was that more strategics or more private equity or a combination of both?

[Tom Casey:]

It was both. There were some strategics and there were some sponsor bidders and there were multiple items. I don’t obviously know the exact number, but it was a very robust process.

[James Finnerty:]

And if for any reason you’re unable to sell the soda ash business, you still intend to go ahead with the acquisition of Cristal and get bridge financing, et cetera?

[Tom Casey:]

Well, we haven’t committed that. Obviously, there is a $100 million breakup fee that we can pay if we don’t get financing. So, I don’t believe that unless the market turns very suddenly that we will have - we’ll be unable to sell the Alkali business at a satisfactory price. But we don’t have to make any of those decisions now because there are also other non-core assets. For example, like we mentioned in the main presentation, that we are going to have a very substantial mineral sands deposit portfolio, both active mines as well as deposits that we have the right for. We have, we’ll have some choices and - but I don’t - I believe that’s all somewhat academic because you can, unless the market changes significantly, I think the Alkali sale process will be very robust.

[James Finnerty:]

Okay. Thank you. And I hope you feel better.

[Tom Casey:]

Thank you very much.

[Operator:]

Thank you. And our next question comes from the line of Brian Morgan with Morgan Stanley. Your line is now open.

[Brian Morgan:]

Hi, Tom. Thanks for taking the call even with your voice as it is. Could you just give us an idea of where these plants that you’re buying sits in the cost curve currently and where you think they’ll end up once you’ve got all the synergies in place?

[Tom Casey:]

Yes, the plants are actually quite good in terms of the quality of the assets and the automation of the operation and management. I think they’re extremely good on those course. I think some of the operational excellence initiatives that Jean-François and the team have introduced into our TiO2 portfolio will help on the Cristal portfolio. I also think that some of their automation, and some of their practices can be applied to our plants. So I think that it’s there - they’re pretty good now in terms of costs, particularly in terms of the asset production costs, bring aside the staffing levels and so on. But even on the staffing level, they have significantly reduced their staffing costs last year. And so I think, they’re pretty good. I think there is room for improvement on their performance, just as there’s room for improvement on our performance. And we’ll be going in that way. One of the plants that we are particularly optimistic about improving is the Yanbu Plant in Saudi Arabia. Because the assets in Yanbu are basically obtained under license from our predecessor company. And in essence, are the same assets that we have in Hamilton, Mississippi, except the production of Yanbu is not the same as the production out of Hamilton. So we believe that the team that runs Hamilton will be able to help the team members in Yanbu to very quickly improve the performance of that plant.

[Brian Morgan:]

Thanks, Tom. So was Cristal’s EBITDA margin, let’s say, in 2016, higher or lower than Tronox’s Titanium Dioxide?

[Tom Casey:]

Lower.

[Brian Morgan:]

Lower. Okay, cool. Thanks. Thanks very much.

[Tom Casey:]

Yeah.

[Operator:]

Thank you. And our next question comes from the line of Tarek Hamid with JPMorgan. Your line is now open.

[Unidentified Analyst:]

Good morning. This is [ph] Nate (41

[Tom Casey:]

Yes.

[Unidentified Analyst:]

Care to elaborate on that at all?

[Tom Casey:]

What, you asked a simple question. Would we payoff additional debt. The answer is yes. We expect to be substantially cash generative and we think that taking the surplus cash over our operating needs that we - and assuming that we fund the cash proceeds, the cash consideration, as we anticipate doing with the sale of Alkali. Then we would be below one time - we could be below 1 times leverage by 2021, whether or not we choose to run the business at that level, I don’t know yet. But we would certainly plan to reduce the leverage ratio from even where we are at closing, which, as I said, we assume will be 4.4 times. I said in [ph] my (42

[Unidentified Analyst:]

All right, great. Thank you. And then, can you just go over why the decision not to secure bridge financing?

[Tom Casey:]

I’m sorry, not to what?

[Unidentified Analyst:]

Secure bridge financing?

[Tom Casey:]

Share, I don’t - I can’t hear you. I’m sorry.

[Tim Carlson:]

Why did we decide not to do share [ph] but (43

[Tom Casey:]

Because we think that there are assets in the portfolio that are either redundant or that are not as value-creating and rather than lever the balance sheet further, we would rather replace those assets with assets that we think are more value creating. If the timing of transactions doesn’t work out simply because of closing on assets then we’ll bridge that. And we’ve talked to our bankers, and we believe that that will be possible assuming the market conditions obviously are appropriate. But we don’t need - we don’t think we need that. That’s not our strategy.

[Unidentified Analyst:]

Great.

[Tom Casey:]

Our strategy is to replace lower growing assets with higher growing assets.

[Unidentified Analyst:]

Great. Thank you.

[Operator:]

Thank you. And our next question comes from the line of James Oberholzer with Macquarie. Your line is now open.

[James Oberholzer:]

Thank you for struggling through Tom, and I hope your voice [indiscernible] (44

[Tom Casey:]

Thank you, James.

[James Oberholzer:]

And two questions from my side. The first is just on the proposed share issue. So will this be a new issue or could this potentially offer a mechanism for existing shareholders to dilute and has Exxaro intimated any intentions to that effect?

[Tom Casey:]

The two new shareholding - excuse me - new share issuance, as you might know from Australia law, it’s not possible essentially for an Australia Corporation to buy back shares from individual shareholders. So this will be a new share issuance. Exxaro, as you know, I assume their standstill agreement expired in June of 2015. And since that time, they have repeatedly said that they consider their position from time-to-time. And when they have something to say, [ph] soon (45

[James Oberholzer:]

Thank you. And then could you also just remind me how the transaction may facilitate the usage of your existing tax attributes and how those are ring-fenced?

[Tom Casey:]

Yes, we have. As you know, we have NOLs that we presently apply on U.S. [ph] taxable income (45

[James Oberholzer:]

Great. Thank you.

[Operator:]

Thank you. And our last question- I’m sorry - we have a question from the line of Richard O’Reilly with Revere Associates. Your line is now open.

[Richard O’Reilly:]

Okay. Thank you. Good morning. I have several questions. And, Tom, if you want to let others answer to save your voice, that’s fine. It looks like on the first year’s savings, about half of that is from SG&A. And is Cristal’s headquarter still located in the Baltimore area?

[Willem van Niekerk:]

It’s Willem van Niekerk. Their U.S. head office is still in the Baltimore area. I believe they have sold their [ph] Kingdom (47

[Richard O’Reilly:]

Okay. So that would account for a large part of the SG&A savings the first year, the corporate stuff?

[Willem van Niekerk:]

Yeah. There is a lot of corporate savings that we need to look at including offices as well as R&D, et cetera. So we think there’s a number of potential SG&A savings.

[Richard O’Reilly:]

Okay. Second thing, some of us are familiar when Cristal bought the business from the old Lyondell; the Lyondell - and I even remember an SCM Corporation many years ago. Can you quickly give us an idea of what Cristal has done strategically with their business since we may have last known it as part of Lyondell unless that’s too complicated of a question?

[Willem van Niekerk:]

Yeah. I mean may be some of my colleagues can jump in here, but basically they still have all the SCM facilities and then added all of that to the Saudi facilities and then they’ve also acquired - they were a shareholder in Bemax and then about four or five years ago I think that they acquired all of the shares in Bemax and took that company private, that’s the mining assets in Australia. And then recently a year or two ago, they acquired a pigment facility in China. So I think that, in a nutshell, represents - then that closed one facility, Le Havre many years ago.

[Richard O’Reilly:]

Okay. Good. And then my last question. This is for Ed. As a Rutgers grad - fellow Rutgers grad, how do you think your business is going to feel going through this process again for the second time in two years? I mean just anything you can say.

[Ed Flynn:]

Well I mean, I think fundamentally the folks in Alkali understand that they have a strategic competitive advantage against 75% of the synthetic production in the world. And so they understand it’s a good business. They like working for Mr. Casey, but they’ve been through this movie before and they saw how it turned out. So I think folks in Alkali will be fine.

[Richard O’Reilly:]

Okay. Good Okay. Thanks a lot, guys.

[Operator:]

Thank you. And we have a follow-up question from the line of James Finnerty with Citi. Your line is now open.

[James Finnerty:]

Hi. Just a follow-up on the tax attributes. Just to be clear, all the tax attributes will stay with Tronox. The plan is not to take any attributes and send them off with the soda ash business?

[Tom Casey:]

That’s right.

[James Finnerty:]

Okay. Just wanted to be clear on that. Thank you.

[Tom Casey:]

Yeah. Speaking of tax though, I think Duffy Fischer is next in line, but let me interrupt if I may. I said in the main presentation that we had an accrual that was a significant contributor to Q4 EPS results. And I want to - I said we’d talk about it later and we haven’t. So I’d like Tim Carlson, our CFO, to explain that just so you all understand that. Tim?

[Tim Carlson:]

Yeah. Thanks, Tom. During 2016, we initiated a corporate restructuring program to simplify our corporate, our finance, and our legal structure which allowed us to streamline operational, administrative and commercial activities. As part of the restructuring program, we also revised our intercompany financing structure to better align our cash flow needs. These changes eliminated withholding tax obligations that are under company debt, which resulted in $139 million tax benefit plus $2 million FX loss on the transaction.

[Tom Casey:]

Okay. Thank you.

[Operator:]

Thank you. And our next question comes from the line of Duffy Fischer with Barclays. Your line is now open.

[Mike Leithead:]

Hey guys, this is Mike Leithead on for Duffy. I guess, Tom, just wanted to check on your level of comfort, I guess, around the regulatory approval process. I know a peer transaction in the industry a few years ago took a bit longer than initially thought. Can you just talk about your level of comfort there?

[Tom Casey:]

Sure. We have done an extensive, an analysis of all of the regulatory requirements obviously and we’re very comfortable that we’ll get through that process. Well, I mean, we know from competing every day that this is a global market. We see product from all over the world in every market that we do business in. Our total combined production share is probably 15% of the global market. It’s about comparable to the other largest producer in the United States. We’re second combined on a pro forma basis. We will have the second largest volume. So we don’t think we’re dominating any market. We don’t think that given the dynamics of global markets and the various products that we compete in, there will be any market power that we accumulate through this combination. As you pointed out, there was a lengthy review in Europe on the Huntsman Rockwood transaction. We have small presence in Europe. We have Botlek which is a 90,000 ton plant. They have - Cristal has Thann in France which is also a relatively small plant that makes largely anatase and specialty material. So we don’t think that Europe will be a problem. We don’t think that North America and the United States will be a problem. We’ve done all the antitrust analysis and we expect to be able to make our case to all of the regulators, that this will promote competition and promote customer service, [ph] not disserve it (54

[Mike Leithead:]

Great. And then just a follow-up, I guess, going from the number six producer in the industry to number one in terms of capacity. Does that change at all how you think about kind of operating in the industry either in terms of supply discipline or your pricing initiatives?

[Tom Casey:]

Well, look I think we have tried to be economically rational over these last several years. If there was surplus supply in the market, we slowed down our production, and we did that with respect to pigment. We also did it with respect to mineral sands. You remember over the last couple of years that we shut down about 75,000 tons of pigment production when we felt that all we were doing was adding supply to inventory levels. And we shut down two of our four slag furnaces. I believe, in running the business to produce returns for the owners and one of the benefits of this structure is that at the size that we are at now within this new Tronox combination that we will be able to run our assets more fully, more of the time, and still balance our supply with demand. So you can assume that we will try to run the business for returns to the shareholders whatever that is at any given moment.

[Mike Leithead:]

Great. Thanks, Tom. Feel better.

[Tom Casey:]

Thank you very much.

[Operator:]

Thank you. And our next question comes from the line of Rich Bourke with Bloomberg Intelligence. Your line is now open.

[Rich Bourke:]

Yeah. So, along the regulatory approval that you’ve talked about in addition to Europe and U.S., is there any other jurisdictions, and also, what about customer overlap?

[Tom Casey:]

I think, if we have the number correct, there’re nine countries where we file regulatory applications of different kinds, the United States, China, Australia, Europe and then a variety of others. So that’s the answer to that question. There is some customer overlap. We think that we will be able to provide better service, more responsive service and preferably more attractive service to all customers everywhere in the world. So there may be some customer shifting, but we’re confident that that won’t net diminish our sales. If we lose customers in one place, we’re confident that we can pick up customers in another. So we looked at it, but we don’t feel it as a big threat or big negative.

[Rich Bourke:]

How about that as an opportunity to maybe shift on production and cost cutting along those lines?

[Tom Casey:]

As I said in the answer to the prior question, if we’re going to run the entire portfolio in order to enhance returns, given the conditions in the marketplace but we will have hundreds of millions of dollars of synergies that we have already identified and which by the way have been validated by one of the big four auditing firms who do this kind of work. They came in with us, looked at the synergy numbers that we have given you and have validated those numbers. So we’re very confident that we will have a good cost position and that we’ll be able to share our benefits with the market, but we’ll always run further to produce returns for the shareholders, whatever that is, given market conditions at the time.

[Rich Bourke:]

Thank you.

[Operator:]

Thank you. And our next question comes from the line of Brian Lalli with Barclays. Your line is now open.

[Brian Lalli:]

Yeah. Thanks for the time guys. Just if I may, just following up on some of the previous questions from the fixed income crowd. I appreciate Tom that you may or may not be able to give LTM financiers for Cristal, but just if I could may be trying to square up this, again, this 4.4x net leverage metric. Certainly correct me if and where I’m wrong on this, but if we remove the Alkali EBITDA and add in some amount of the five-year average for Cristal without synergies and without any assumption of bridge that as you said, I think the numbers would imply that at least size of LTM, you’re still well above that mid-4xs target. I guess one is that, is that true and is that leverage metric, again, assume that you’re going to get this continued recovery as we’ve seen in TiO2 EBITDA as we get towards that mid - or excuse me, 1Q 2018 closing that you mentioned in your slide. I think that’s what you guys are trying to figure out this morning. Thanks.

[Tom Casey:]

Sure. That’s a fair question. We too assume, when we kept a 4.4x, that there is no incremental debt [ph] and so additional (59

[Brian Lalli:]

Great. That’s really helpful. And one more if I may and I apologize if I missed this before. As you look to sell the Alkali business, there’s obviously a large amount of corporate costs at Tronox. Have you thought about or could you give any guidance around sort of what maybe is stranded, again as we sort of think around what that last piece is of the consolidated amount of EBITDA, as we get towards, again closing and the Alkali business being theoretically gone.

[Tom Casey:]

Yeah. Let me say that and I’ll let Tim answer this, with respect to the aggregate level of corporate costs, but when we purchased the Alkali, we essentially ran that business as an independent standalone entity. And Ed Flynn and his team basically continued to run it. So we didn’t have a huge amount of corporate costs just for that purpose. I don’t know, Tim, would there be...

[Tim Carlson:]

That’s exactly right, Tom. There’s a couple of million dollars that’ll be stranded, but that’ll be taken care of easily with the synergies we’ll generate.

[Brian Lalli:]

That’s great. Thanks for the time, guys. Appreciate it. Feel better, Tom.

[Tom Casey:]

Thank you very much.

[Operator:]

Thank you. And I’m not showing any further questions at this time. I would now like to turn the call back to Mr. Tom Casey, Chairman and CEO for closing remarks.

[Tom Casey:]

Thank you very much. And for those of you who are still on the line after an hour-and-a-half, I appreciate you listening to me whisper to you for this period. I hope I was able to make myself clear, and I can tell you that we are very excited about the creation of value for shareholders and the deleveraging and de-risking of the new business that this creates for all participants, lenders, customers, employees. We think this is a great transaction. We think that 2016 ended on a very powerful note and the combination of the two developments means that our future is looking very, very bright. We’re going to go back now. We’re going to work hard on the integrating, developing an integration plan. We’re going to work on getting through all the regulatory environment. We’ll keep you posted on progress as we move forward. I appreciate your support. Thank you very much. Goodbye.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.