Mary Morrissey - Mark W. Marinko - Chief Financial Officer and Senior Vice President Jonathan W. Berger - Chief Executive Officer and Executive Director.

Andrew Kaplowitz - Barclays Capital, Research Division Blake Hirschman - Stephens Inc., Research Division Scott Justin Levine - Imperial Capital, LLC, Research Division Jonathan Tanwanteng - CJS Securities, Inc. John B. Rogers - D.A. Davidson & Co., Research Division.

Good day, ladies and gentlemen, and welcome to Great Lakes Dredge & Dock Corporation's Q2 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Mary Morrissey, with Investor Relations. You may begin..

Good morning. This is Mary Morrissey, and I welcome you to our quarterly conference call. Jon Berger, our Chief Executive Officer; and Mark Marinko, our Chief Financial Officer, will discuss the operational and financial results for the quarter ended June 30, 2014. Following their comments, there will be opportunity for questions.

During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations.

Certain risk factors inherent in our business are set forth in our filings with the SEC, including our 2013 Form 10-K and subsequent filings.

During this call, we will also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operating data.

I would first like to turn the call over to Mark Marinko, our CFO..

Thank you, Mary, and good morning to everyone joining us. As most of you know, I joined Great Lakes as CFO in late June, and it's been a great start. I've been very involved in some major ongoing projects that have helped me get up to speed on the business very quickly.

The company appreciates the excellent job Katie Hayes did as interim CFO and the assistance Katie has given to me during my transition. Katie is also joining us on the call today.

I also wanted to say -- want to say that I appreciate having -- already had the opportunity to introduce myself via phone to most, if not all, the analysts covering Great Lakes, and I look forward to meeting you and many of our shareholders in person in the months ahead.

Total company revenues in the second quarter were $184.7 million, an increase of 25.5% from the second quarter of 2013. Our dredging segment recorded higher revenues in the current year quarter across all domestic work types, including coastal protection, capital, maintenance and rivers & lakes.

Our environmental & remediation segment's revenue had a noteworthy increase of 168.7% to $29.3 million in the current year. Total company gross profit for the quarter increased to 14.2% compared to 9.4% for the second quarter of 2014.

Drivers of total company gross profit margin include improved dredging contract margin, which is attributed to improved project execution on several contracts, partially offset by an increase in plant expenses.

Environmental & remediation's gross profit margin was steady year-over-year at roughly 12%, with overall gross profit higher on the increase in revenue. Total company operating income was $10.3 million for the quarter down, $1.3 million from the prior year quarter.

Despite higher gross profit margin in this quarter, in the second quarter of 2013, we benefited from the $13.3 million settlement related to our loss of use claim for the dredge New York.

Operating income in our dredging segment decreased $3.6 million, from $14.6 million to $11 million compared to last year, again, with last year's quarter benefiting from the $13.3 million claim I previously mentioned.

The environmental & remediation segment experienced an operating loss significantly lower than the prior year quarter, with somewhat higher gross profit margin offset by higher G&A cost due to headcount additions.

The domestic dredging bid market for the 6 months ended June 30, 2014, totaled $576 million compared to $566 million for the first half of 2013. I'd like to remind you that the first phase of the PortMiami project was awarded in the first 2 quarters of 2013 at a value of $122 million.

In total, the company won 39% of the overall domestic bid market during the first 6 months of 2014, which is below our prior 3-year average of 46%.

Please remember that the variability in contract wins from quarter-to-quarter is not unusual, and the win rate for one quarter is not indicative of the win rate the company is likely to achieve for the full year.

In the first 6 months of 2014, Great Lakes won 26% or $78.9 million of the capital projects awarded; 76% or $43 million of the coastal protection projects awarded; 16% or $13.4 million of the maintenance projects awarded; and 72% or $91.7 million of the rivers & lakes projects awarded.

Contracted dredging backlog at June 30, 2014, totaled $456.4 million, compared to backlog at December 31, 2013, of $515.1 million. The addition of 2 coastal protection projects on the East Coast and the Delaware River deepening project helped to maintain this level of dredging backlog.

We also have $38 million of domestic low bids pending formal award, and additional phases or options pending on projects that are not currently included in the backlog. The majority of this $38 million is work -- in work is for a project in Louisiana that we expect to be formally awarded to us within the next few weeks.

The environmental & remediation segment's backlog was $52.1 million at June 30, 2014, $23.7 million higher compared to year end backlog. This increase was primarily driven by the award of a new phase of a remediation project in Michigan during the first quarter of 2014.

Through the first 6 months of the year, our working capital and debt levels remained level when compared to the 6 months of 2013. We spent $49 million in capital expenditures through June 30, 2014, of which approximately $25 million was for the ATB.

The ATB expenditures are partially offset by the $10.5 million payment we received in the first quarter related to the settlement of the contract with the shipyard that we originally planned to build the ATB.

Regarding financing the ATB, we are still in the process of finalizing a structure that will allow us to fund the remaining construction of the vessel and provide long-term financing upon completion. We expect to have the financing completed by the end of the summer.

Management of working capital and cash flow continue to be key priorities for us as we move into the second half of the year. Next, I will turn the call over to Jon Berger, who is going to discuss some of the highlights of the quarter, as well as considerations that may affect our business for moving forward..

Thank you, Mark. As you mentioned, you've only been with us for a short time, but it is clear that you are a wonderful addition to Great Lakes. We are pleased and excited to have you as a member of our team.

I'd also like to point out how all the work we did in succession plannings and the depth of our financial management team made the transition of CEOs so smooth. As we discussed, when compared with the second quarter to the same quarter in 2013, we had a very solid performance.

Moving into the second half of the year, we expect the positive momentum to continue. Let me start with the dredging segment.

As Mark mentioned, our domestic dredging segment recorded higher revenue in the current year quarter with increases across all work types, particularly the maintenance dredging and rivers & lakes dredging compared to the prior year quarter.

In addition to the 2 maintenance projects -- to the maintenance projects, we have been working on several coastal protection projects on the East Coast and 2 major deepening projects in New York and Miami. As noted during our last earnings call, we expect bidding activity to pick up in the second half of the year.

In addition to the normal fall bid back -- bid markets that we experience, we expect to see an uptick with some of the coastal protection work under the Hurricane Sandy appropriations. As discussed previously, much of this work will consist of larger scale engineered projects to better protect the coast.

We are also tracking more activity with the maintenance projects that we expect to be put out to bid in the second half of the year. The Corps' increased budget has more funding for navigation projects than ever before and is a major driver of the anticipated increase in maintenance dredging tenders in the second half of '14 and beyond.

In early June, President Obama signed the Water Resource Reform and Development Act into law. As everyone of you know, we've been talking about this for 4 years, and it's a great accomplishment for the maritime industry. I'm sure most of you remember, the Harbor Maintenance Trust Fund is the cornerstone of the WRDA bill.

The language calls for full use of this fund for its intended purposes for the maintenance of ports and waterways within 10 years. The funding will occur incrementally each year until the total amount of the fund is used maintaining our ports and waterways.

It is important to point out that additional funding still depends on appropriations, but we are confident that the people in Washington will continue to appreciate the economic importance of properly maintaining our harbors and continue to increase the Corps' navigation budget as they have done over the last 5 years.

In addition, WRDA also impacts major projects like port deepenings. It authorizes over $12 billion for 30 projects. Ports included in this bill include the Savannah Harbor Expansion Project, Jacksonville Harbor, Freeport Harbor in Texas, and the Boston Harbor, to name a few.

As we saw with the maintenance -- the Miami project, these ports can be slow to come to our market, but each project has its own story. We expect Savannah to be put out to bid by the end of the year, and the rest of the projects are longer-term opportunities although one or more of the important components of WRDA is the Corps of Engineers reform.

Unlike other attempts at Corps reform, this bill actually helps accelerate project delivery and streamlines environmental reviews, which is encouraging news considering the amount of work that needs to be done to the water infrastructure in the United States and has already had a positive impact.

We are encouraged that WRDA has signed into law, and we are hopeful that project delivery will be accelerated. We expect to benefit from WRDA's positive impact on the dredging industry as we move forward. An important component, for us, specifically, is -- was the driving force in us building our new ATB.

And we'll be cutting steel for the new ATB in the third quarter, both for the tug and the barge sections. This is in line with our revised schedule, and things have been moving smoothly since we switched construction yards in 2013.

This is probably a good time to mention the recent appointment of retired Major General Michael Walsh to our board and the company's Compensation Committee. General Walsh held command positions at all levels of the Corps, including the district, division and headquarters.

Mike is as much experienced in the civil works side of the Corps of Engineers than probably any other Corps leader. He has a great deal of experience relating to water resource issues, including dredging, as well as military construction issues.

As a board member, General Walsh will truly be able to add knowledge and experience for a very important part of our business and our largest customer, and we are looking forward to having him on our board.

The only downside is that Mike is a Yankees fan, and as many of you know, I'm a Mets fan, but since neither one of them are probably making the playoffs this year, not a big issue, but I'm sure we'll work through it. On the rivers & lakes, turning back to our dredging segment.

I'd like to highlight that we have started work on the $89 million project in Illinois. It's been slow to start because the frozen ground and wet spring delayed our environmental & remediation business from starting the groundwork on the Oakley Sediment Basin as scheduled. So we expect to start dredging, instead of early July, now September 1.

As a result, some of the revenue expected to be recognized in the second quarter has been pushed out to the third quarter and beyond. Given the scope of this project, we expect to be able to make up time and maintain our schedule over the life of the project.

We recognize the value this project has to the community and appreciate the local city leaders who have worked to get this important project to the construction phase. We are pleased to be working with a primarily locally sourced workforce to make this investment in the region.

During the second quarter, we were selected as contract manager for a lake dredging project in Ohio. We consider this an important and strategic opportunity as the contract is the first of several Muskegon watershed dredging projects that will come to market. In fact, 9 of the 16 reservoirs within the watershed need to be dredged.

We'll begin on this project in October. I'd like to turn to our foreign division. During the second quarter, we executed jobs in Brazil and Saudi Arabia, as well as our big Wheatstone Project in Australia. Wheatstone is going well, and we expect it to continue into early 2015.

The projects we have completed in Brazil have been successful, and we continue to see and pursue opportunities in this attractive market, and our thesis of getting a clamshell dredge down there has proven correct. In July, we were awarded a $35.5 million land reclamation project in Bahrain.

This is one of the opportunities that we identified during our last earnings call. The value of the contract is lower than expected because the Ministry of Works decided to award the contract in phases. We have been awarded the contract for the first 2 phases, and we will have the opportunity to bid on the third phase.

I'm pleased that we have this contract in hand, and it provides work for 4 of our vessels of the Middle East through the remainder of the year. We consider this win in interim solution while we continue to diligently develop our long-term international strategy.

Finalizing this project was a key focus for the second half of the year for our international division. I'd like now to turn to our environmental & remediation segment, which had an impressive 168.7% increase in revenue in the second quarter compared to the same period in 2013.

Much of the revenue increase was driven by additional work on the Enbridge oil spill up in Michigan. Terra first started working on the Enbridge remediation project in 2010.

Terra's track record of success has enabled it to be a repeat contract on this choice of work on additional phases of the cleanup, which, I think, speaks highly of Terra's ability to execute as it continues to grow its presence in the environmental & remediation space. I'd like to spend a moment talking about the G&A in this division.

Headcount additions were one of the key drivers of higher G&A in the segment during the quarter. Certainly, we want to be fiscally responsible and keep an eye on our G&A, but as we grow this division, it's critical to ensure that sufficient and qualified staff members are in place to successfully execute on projects and responsibly grow the business.

Senior management at Great Lakes takes this very seriously. I do not want us to get ahead of ours skis as we continue to grow this division. Despite posting an operating loss for the quarter, Terra made a dramatic improvement compared to the second quarter last year.

As we continue to grow in this market, one of our goals is for this segment to smooth our earnings out on a quarterly basis as we work -- as our work is currently very seasonal.

To this end, we've established an office in Texas, supporting work we have in the region, and are looking to establish an office in the mid-Atlantic, most probably Jersey or Pennsylvania, to support work we have in the region and people we have in the region, and to balance out our seasonality.

As part of our growth strategy, Terra made a small asset acquisition during the second quarter. Some of you may have noticed in our earnings release that we have recorded a non-cash bargain purchased gain. It was related to this acquisition.

The seller, Team Services, LLC sold the assets of their Trucking and Field Services Division in order to focus on expansion of their Rig Servicing division. We have a very strong relationship with Team, and in fact, are continuing to provide ongoing services and support to Team's Rig Services division.

But more generally speaking, this small acquisition enables Terra to establish a deeper foothold in the Northern Michigan energy market, which is the center of Michigan's oil and gas industry. It integrates well with Terra's existing service portfolio and broadens our capabilities into this market.

The addition of oilfield service capabilities will further introduce other opportunities to offer Terra's existing service line to a well-established set of customers within the oil and gas market. We used a 30-, 60-, 90-day integration plan, which was a success, and the team is now focused on growing profitability.

On a final note, as we reported, we sold the historic demolition business in April of this year, with a right to collect any whip receivables and claims. We've collected on some of those items and continue to work with a buyer to collect outstanding items. With that, I will open up the field to any questions..

[Operator Instructions] Our first question comes from Andrew Kaplowitz with Barclays..

So Jon or Mark, your gross margin has been slowly creeping up over the last few quarters, and now you're talking about strong utilization the back of the year.

Is there anything stopping you from reporting continued higher sequential margins in the back half of the year, assuming weather cooperates? And how are -- how do we think about the lower margins from your international business coming in here in the second half of the year? In the Middle East, I assume utilization is better than -- that should help, not hurt the margins in the second half..

Yes. And I think that -- I think you've absolutely got it right. I mean, margins should be creeping up. Don't forget our environmental business is a very seasonal business right now, and we have a significant amount of backlog, more backlog than we had last year.

So we expect it to have a very strong second half of the year, so margins will creep up there. Certainly, international, we -- our margins have been hindered, not because the work we have is not good work, it's -- we've had just underutilization of our equipment fleet in the Middle East.

And as we've talked about, it was critical for us to win that project in Bahrain, which we did. So as we talked about, we'll have 4 major dredges that will be working for the rest of the year, and so we should expect to see margins ticking up there..

Okay, that's great. And then in your coastal protection business, you previously mentioned that you thought you can maintain or even grow backlog. It was down a little bit in 2Q. I know you had a good award in there. You talked about some more awards in your prepared remarks.

Do you still -- I mean, has your confidence level actually increased in the ability to grow backlog here for the rest of the year in that business?.

We do think that there's some nice chunky projects coming out in the second half of the year, especially on the coastal side, for coastal protection. And we expect the first part of the Savannah Project to probably bid in the fourth quarter.

So with that, we think margin -- we're assuming [ph] -- we think the backlog, we should historically earn our percentage. So as long as the market continues to grow and the advertised work list comes to fruition, we'll feel good that we'll have a very strong backlog..

Okay. And then just one more for me. Like, can you talk -- maybe just step back and talk about the health of your state and local government that you're dealing with. They seem to be in recovery mode, but if I look at sort of my group broader space, they seem like they're being very careful with their spending at times this year.

So can you talk about what you're seeing with those customers?.

Yes. And I think that's very good observation. I think they're tentatively more positive. Certainly, the Illinois project was a very big project, and that was driven on very local dynamics. I think Ohio that we talked about on the Muskegon watershed is just really a requirement that they have to do that for water for both industry and drinking water.

So essential projects are getting done. There is a project we're tracking in Miami on the environmental side that looks like it may have some legs. But I think the state and local governments, effectively, as the economy increases, they start seeing tax revenue increases and essential things are getting talked way more about.

And certainly on water, that's important. So we are seeing some uptick in discussions, and we're cautiously optimistic on some of those things..

Our next question comes from Trey Grooms with Stephens Inc..

This is actually Blake stepping in for Trey this morning. Just one question. The pricing environment sounds like it's improving some.

Should we expect that to continue with your outlook for improved bid opportunity in the second half?.

Pricing is always a wildcard. We have 3 or 4 competitors. There's always someone that might chase something. But I think, as a general rule, as the volume of projects increase, which we expect in the second half of the year, we don't -- we have not chased projects. We think there's enough work out there for us to command a fair price for equipment.

So we're not chasing things down the bottom line..

Our next question comes from Scott Levine with Imperial Capital..

So following up on Army Corps lettings and the maintenance activity, you indicated that maintenance award activity and biddings should pick up in the back half. I'm assuming that does not reflect the Harbor Maintenance Trust Fund. Maybe it does.

If you can provide a little bit more color with regard to the implications and timing of that, and what we might expect in 2015, associated with increased spending there..

Yes, yes. Fair question. The maintenance work this year doesn't include, in our mind, that increase. What we expect in '15 is probably a 10% increase, plus or minus, from the harbor maintenance. I think it's going to be that gradual uptick every year. I don't think it's going to be a watershed huge amount coming in.

I think it was a grand bargain struck with the appropriators. And it's going to have to keep up over time. But it certainly -- as we look out 2, 3 years, I think where we'll see some more work is -- there is, certainly, the Army Corps will let out some -- a capital project for sure, we believe next year, for '15.

We think it will come in Savannah late this year. And there is discussions with some of these ports about doing some things privately. Don't forget that even though there are $12 billion and 30-plus projects appropriated -- authorized, excuse me, you still need to get them appropriated.

And I think the dynamic you're seeing is the same dynamic you've seen in Miami and the same discussion we're having in Savannah, where the states are appropriating their own money and pushing the Corps to let out based on state monies first.

And I think you'll continue to see the states and the port authorities pushing the Army Corps with state appropriations and forcing the federal government's hand on that stuff. And I also think you will see -- and I know you didn't ask this question, because you asked Army Corps, I do think you will continue to see private projects coming out.

I think we will see LNG ports coming out in the Gulf, so that will also entertain -- help our market..

Got it. And one follow-up as well on the international side. Maybe a little bit more color -- you talked about this international strategy, and the Bahrain contract is maybe an interim solution. But maybe a little bit more detail behind your thoughts there.

And the second phase of that, I don't know if you can give us a rough indication of size, a comparable to what you've already won or Phase 1, or any additional detail there would be helpful..

Yes. There's really -- it was Phase 1, Phase 2. We actually think Phase 3 will be bigger. Phase 1 and 2 were for a project that is off the ground that they needed to get the land there quickly.

There's -- in the Middle East, especially in Bahrain, there's been some funding issues largely associated -- and I think we talked about it before, in Abu Dhabi, government-owned dredging company that has been kind of playing havoc with the market. The market is actually -- we see more opportunities than we've seen in a while.

We certainly expanded our window and where we're looking for work because we've been unhappy with the economic dynamics that have happened with this Abu Dhabi funding. We do think it will shake out, because we don't think that they can do all the work they're bidding on. We don't think they have the full scope of capabilities.

But we can't -- we have a large suite of equipment there and we can't just sit there and let -- wait for the market to turn around. So we've been spending a lot of time broadening our search for opportunities, thinking about the things we can do to keep control of that. So we're still working through that.

When we have a more definitive plan in place, we'll certainly articulate it. But as we've talked about in other earnings calls, that was a grave concern to me. And at least through the end of the year, we have those 4 pieces of equipment working, and we have some other opportunities.

But we've got to get a better long-term strategy, and we're working on that..

Our next question comes from Jon Tanwanteng with CJS Securities..

Nice to see the SG&A getting back down to a more normalized level.

Is that the run rate we should be using going forwards? Or if not, what should we be thinking about there?.

Yes. Certainly, for this year, we have -- we've spent a lot of time internally as a management team focusing on G&A. We still have some work to do. We're still in the collection mode and working through the last of our demolition business litigation. So we're driving that down, which will take a little bit of time.

And then associated with the reinstatement, we still have some legal work to do there. So I would -- for the short term, through the rest of the year, I would probably keep a similar number. But it is clearly our management team's goal to drive that down in '15 and '16 back to more historic levels..

Okay, great.

And then just on the Terra business, I understand the growth expenses you have there, but do you expect that to actually be profitable in Q3 and Q4 on an operating basis?.

Oh, yes. Oh, absolutely. Absolutely. We have high expectations. I think they did -- before corporate overhead, I think they did $5 million or $6 million last year, and it'll be up substantially this year. The backlog's all in place, the contracts are in place. The work is there. It's -- yes.

The problem we deal with there is it's a very seasonal business right now. And that's why we are pushing them as we continue to get market presence to drive into Texas, the mid-Atlantic, Northeast markets where you get unaffected by weather as much during the early part of the year..

Okay, great. And then you had mentioned just that 10% increase in maintenance.

Is that industry-wide or is that incumbent on your own portion of that business?.

I think that was more about the Harbor Maintenance Trust Fund, that we expect that to route up about 10% a year, plus or minus..

Okay, got it. And then one quick final one. You mentioned some work pushed out into Q3.

Did you have a relative magnitude for that business?.

The dredging on the rivers and lakes, we expect it to start July 1, but the -- on the Decatur project, but because of the frozen land and all the work we had to do on the sediment. And don't forget, all that land work is being done by Terra. We won't really start dredging there until probably September 1. So that's what got pushed out.

Small amount -- for that division, we expected to have the dredge working July 1, and it really won't be working until September. So August is -- so it's really 2 months for them for a reasonable dredge..

[Operator Instructions] Our next question comes from John Rogers with D.A. Davidson..

A couple of things -- Jon, you talked about margins presumably getting better, I guess, in both segments in the second half of the year and then -- on better utilization rates in dredging.

What are you seeing in the pricing markets? Still stable?.

Yes. I mean, the pricing -- the first half of the year, the market was -- the bidding market was not as tremendously robust. We think the third and fourth quarter, it will be more robust. So one of the things we did not do is we did not chase pricing down. And that's why we had a 39% win rate as opposed to our traditional 46%.

And we've seen this before and we've discussed this before. When we think the market has some real legs in it and has a good set of work to come out, we don't want to take our big earning assets and chase down lower margin. So we think the margin will tick up for us personally in the bidding work that we're going to bid in the second half of the year.

Because as we've seen, some of our competitors bid at prices that we didn't want take it at. And we think that what happens in a relatively balanced supply and demand, they'll be out of the market, and we'll have a little freer opportunity to tick up on margins..

Okay.

And then secondly, can you just remind us of the -- with the new dredge coming on, when we start to see the cash impacts of that?.

Yes. Well, you're seeing the cash impacts now because we haven't put the financing in place. We probably, off of our own balance sheet, put in about $40 million for preorders, for deposits on that. As we start cutting steel in August, September, 30 days from that or whatever, we have to start -- you'll have incremental payments.

That's why we're putting the financing in place over the next month or so, so that we'll stop financing it off of our own cash flow. But we've got probably -- we probably have put $40 million in ourselves off of our own cash flow..

And then so -- I'm sorry, when does the financing going to place?.

We're, right now, in discussions. My guess is we'll have it in place in the next 45 days..

Okay.

And then you'll capture that cash back?.

We're still looking at it. We may just leave it in there and just finance less, just to keep the discipline within the shop..

Okay.

And the schedule for that dredge to come online?.

By the third quarter to the fourth quarter of '16..

And our final question comes from Larry Callahan with Wheelhouse Securities..

I'm a new shareholder and I wondered if you ever put out capacity utilization numbers? And if not, how I can best get a handle on that?.

Yes. Larry, we historically have not. And welcome, good time to get in, I think. But we've historically not, because it's not like a hotel room to a certain extent. The same dredge, depending on the project, can have a significant amount of different financial implications, whether it's a big project that has a lot of support equipment.

So we've historically not given kind of -- we're at 70% utilization, we're at 60%. But probably the better thing to do is take it offline with Mary, and she'll kind of walk you through and help you walk through the model and how you think about it..

But you say you have a significant unutilized capacity right now?.

We certainly have -- longer term, we certainly have capacity to do more revenue for sure. And we have certain vessels in the Middle East that could come back. So yes, if another -- the Savannah deepening came up as an example, we feel very comfortable we have the equipment to do that.

So we don't think on a broader spectrum on all markets, we're capacity constrained. But there are short-term situations where our vessels are bid out for the next 6 months. But don't forget, we have many different types of dredges, and it differs by dredge type also..

And I am showing no further questions at this time. I would like to turn the call back over to management for further remarks..

Thank you, everyone, for joining us this morning in our discussion about the second quarter results and important initiatives in our business. We appreciate the support of our shareholders, employees and business partners, and we look forward to speaking with you during our next earnings discussion in November. Thank you..

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect..