Andrew England - Chief Executive Officer Katherine Scherping - Chief Financial Officer Ted Watson - Investor Contact.

Eric Wold - B. Riley & Company, LLC Eric Handler - MKM Partners James Goss - Barrington Research Mike Hickey - The Benchmark Company.

Greetings and welcome to the National CineMedia first quarter 2018 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms.

Katie Scherping, Chief Financial Officer for National CineMedia. Thank you. You may begin..

Thanks, Melissa. Good morning, everybody. I'd like to remind our listeners that this conference call contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Act of 1934 as amended.

All statements, other than statements of historical fact communicated during this conference call, may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties.

Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filing with the SEC. All forward-looking statements are expressly qualified in their entirety by such factors. Further, our discussion today includes some non-GAAP measures.

In accordance with Regulation G, we have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release, which may be found on the investor page of our website at ncm.com. Now, I'll turn over the call to Andy England, CEO of National CineMedia..

Infinity War. Movie audiences can now play big-screen, interactive, augmented reality or AR games at the movies giving fans the chance to enjoy gaming experience like no other while waiting for the feature film to start at their local movie theater.

When you think about it, mobile phones are the ultimate game controller and the movie theater auditorium is the ultimate gaming environment. It is generating a lot of buzz and excitement not only with movie audiences, but with clients when we play the ARcade games with them on sales calls.

The Noovie ARcade app will feature a variety of game formats including shooting, catching, driving and tossing games and we're actively working with brands to develop sponsored games as part of our rollout of new games starting this summer.

Now, speaking of CinemaCon, our affiliate partnerships team and senior executives had a very busy and productive week meeting with our current and prospective exhibitor and studio partners.

We welcomed Pecan Pie Productions as an affiliate for national advertising with nearly 300 screens and approximately 8 million attendees joining our national theater network as of June 2018. Pecan Pie is the latest affiliate partner to become a part of the largest cinema advertising network in the US.

The addition of these new theaters in a wide geographic variety of small markets will be especially appealing to NCM's national brand partners who value broad national reach and high audience engagement.

In the past year, NCM has also welcomed 76 theaters with 540 screens and approximately 18 million attendees from top regional and local exhibitors, bringing our network totals to over 21,000 screens in over 1,700 theaters in 187 designated market areas, all of the top 50.

We continue to have ongoing conversations with many exhibitors as part of our ongoing efforts to make America's movie network the biggest and best it can be. Before turning the call over to Katie, I would like to reiterate that we are committed to our vision to be the connector between brands and movie audiences.

And I believe that as we continue to develop and enhance our core Noovie on-screen platform and its complementary Noovie digital ecosystem, we're making many positive strides in that direction. We believe there is no other medium that can match the reach we have with millennial and Gen Z audiences.

And based on the amount from advertisers, we expect brands to continue to use cinema to target our young, affluent, captive audiences for years to come.

While movie slates in box office are cyclical, if film studios continue to produce movies with diverse and original storytelling, incredible visual effects and strong production values, there will always be audiences who will pay money to go to the movie theater to see them.

I'm very pleased with our healthy top and bottom line growth in the first quarter and I expect this momentum to continue into the second quarter. So, with that, I will now turn the call over to Katie to give you more details about our Q1 2018 operating performance and guidance estimates..

Thanks, Andy. I'll walk through the results that Andy highlighted in further detail and discuss our thoughts on the quarter and our full-year outlook. For the first quarter, our total revenue increased 11.5% versus Q1 2017 to $80.2 million.

This was driven by a 23.4% or $10.4 million increase in national advertising revenue and partially offset by an 8.9% or $1.7 million decrease in local and regional advertising revenue and a 4.8% or $400,000 decrease in beverage revenue.

Total Q1 adjusted OIBDA increased 32.4% or $5.7 million versus Q1 2017 to $23.3 million and adjusted OIBDA margin increased to 29.1% from 24.5% over the same time period. The margin increase was driven by an increase in higher-margin national advertising revenue.

Partially offsetting some of the revenue growth was an increase in adjusted operating expense of $2.6 million primarily related to an increase in affiliate advertising payments of $1.8 million related to higher revenue as well as a 5.5% or 362-screen increase in the number of affiliate screens compared to the first quarter of last year.

A $1.3 million increase in personnel-related expense due to a decrease in capitalized internal labor costs and $300,000 in professional fees for the first quarter 2018 compared the first quarter of 2017.

Also included in the first quarter is a non-cash impairment charge of $375,000 related to an investment made in prior years compared to a $1.4 million impairment charge in Q1 2017. Our Q1 2018 advertising revenue mix was 68% national, 22% local and 10% beverage versus Q1 of 2017 that was 62%, 26% and 12% respectively.

For the first quarter, national ad revenue was $54.8 million, a $10.4 million or 23.4% increase versus Q1 2017, driven by a 21.8% increase in impressions sold and a 2.3% increase in CPMs.

The increase in impressions sold was due to strong demand in the scatter market, driving inventory utilization to 95.2% in Q1 2018 from 76.2% in Q1 2017, partially offset by a 2.5% decrease in network attendance.

Overall, CPMs increased due to an increase in scatter CPMs as well as heavier weighting of scatter revenue versus the first quarter last year. From a category perspective, we experienced strong growth in several categories including the government sector, telecom, Internet technology, apparel and insurance in Q1 2018 compared to Q1 2017.

Q1 local and regional advertising revenue was $17.4 million, a decrease of $1.7 million or 8.9% due to a 10.5% decrease in total contract volume and in particular a 30% decrease in contracts greater than $100,000. As Andy mentioned, at the end of Q4 2017, we reorganized our local and regional sales team.

We believe we are now through the transition period and we're seeing the benefits take hold as we enter Q2.

Q1 2018 beverage revenue was $8 million, a decrease of 4.8% or $400,000 versus Q1 2017, driven by a 4.1% decrease in founding member attendants, partially offset by a 1.1% increase in beverage revenue CPMs in the first quarter 2018 compared to the first quarter 2017.

At the beginning of 2018, we adopted a change in accounting principle related to our accounting for the payable to founding members under the tax receivable agreement. The change had no impact on revenue or operating income.

More details on the change and the impact of non-operating expenses, net income and EPS are included in the first quarter 10-Q, which is expected to be filed tomorrow with the SEC. For the first quarter, we reported GAAP diluted EPS loss of $0.03 versus a loss of $0.02 in Q1 2017.

The Q1 2017 EPS loss has been recasted to include the impact of an error in our accounting for income taxes that we disclosed in our 2017 10-K and the change in the accounting principle from $0.08 previously reported to $0.02 included in the corrections and change.

Our capital expenditures were $3.5 million for the first quarter 2018 compared to $3 million for Q1 2017, with the increase driven primarily by our investment in our digital infrastructure. We estimate that our full-year 2018 capital expenditures will be in the $19 million to $21 million range or approximately 4.5% of revenue.

The increase in CapEx over 2017 is related to approximately $8 million to $9 million that will be invested in our newly digital platform and approximately $2 million related to our headquarter move.

We will receive $1.1 million of tenant improvement allowances to be paid by the landlord, which will reduce our rent expense over the 10-year life of the lease.

Excluding the digital capital investment and move-related costs, our capital expenditures would be $9 million to $10 million or approximately 2.5% of revenue, which is slightly below our historical levels of investment.

Now, moving on to our balance sheet, our total debt outstanding at NCM LLC at the end of Q1 2018 was $953 million versus $950 million at the end of Q1 2017. Our revolver balance at the end of the quarter in 2018 was $33 million compared to $30 million at the end of Q1 2017.

Our average interest rate on all debt was approximately 5.4% at the end of Q1, including our $270 million floating-rate term loan bank debt and revolving credit facility that had a rate of approximately 4.4%. Excluding revolver balances, 68% of our total debt outstanding at the end of Q1 2018 had a fixed interest rate.

Our consolidated cash and investment balances as of Q1 2018 was $81 million, in line with Q1 2017, with $78 million of this balance at NCM, Inc. We announced today that our Board of Directors have authorized the company's regularly scheduled quarterly cash dividend of $0.17 per share of common stock.

The dividend will be paid on June 1, 2018 to stockholders of record on May 18, 2018. The dividend level was determined based on our plan to invest in the business over the next few years while providing financial flexibility.

We intend to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board of Directors consistent with our intention to distribute over time a substantial portion of our free cash flow.

The declaration, payment, timing and amount of any future dividends payable will be at the sole discretion of the Board of Directors who will consider general economic and advertising market, business condition, the company's financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant.

Our annual dividend yield is currently 12.2% based on Friday's closing share price of $5.58. Our pro forma net senior secured leverage at NCM LLC as of Q1 2018 was approximately 3.1 times trailing four quarters adjusted OIBDA, which is well below our senior secured leverage maintenance covenant of 6.5 times.

You should also note that while we have no NCM LLC total leverage covenant, our total leverage at NCM LLC, net of cash balances, was approximately 4.2 times at the end of Q1 2018 and in line with Q1 2017.

During the first quarter, we recorded $2.2 million of AMC and Cinemark integration and other encumbered theater payments for Rave and Carmike Theaters Raven versus $400,000 in Q1 of 2017.

You should note all integration and encumbered theater payment are added to adjusted OIBDA for debt compliance purposes, but are not included in our reported revenue and adjusted OIBDA as they are recorded as a reduction to net intangible assets on our balance sheet.

We expect to record approximately $21 million to $23 million of integration and other encumbered theater payments from our founding members during 2018. Now, I'll share with you our guidance for full-year 2018. As Andy noted earlier, we had a strong first quarter and the second quarter is off to a good start as well.

Taking this into account, we are reiterating our revenue guidance, flat to up 4.5% versus 2017 or in the range of $425 million to $445 million and adjusted OIBDA of down 2.5% to up 4.8% or in the range of $200 million to $215 million.

Turning now to our available cash calculation for 2018, starting with our adjusted OIBDA of $200 million to $215 million, you'll add the following as a build to available cash. Integration payments of $21 million to $23 million. Two, cash payments from the Fathom net receivable of approximately $4.5 million.

As a reduction to available cash, you will subtract the following. One cash interest expense of approximately $52 million to $53 million. Two, capital expenditures of $19 million to $21 million, net of $1.1 million to be reimbursed from the tenant improvement allowances. And three, non-cash stock comp for inc.

employees of approximately $6 million to $8 million. These are the components that will allow you to arrive at a projection for available cash at NCM LLC in 2018, which is paid to the four members of the partnership quarterly based on their ownership at the end of the quarter.

This concludes our prepared remarks and we would now like to open the line up for questions.

Melissa?.

Thank you. [Operator Instructions]. Our first question comes from the line Eric Wold with B. Riley & Company. Please proceed with your question..

Thank you. Good morning. Two questions for you guys, if I may. One, I guess, Andy, you mentioned at the beginning, the strength in the quarter was due to scatter ad demand and advertisers and brands spending closer to their campaigns.

Do you get a sense that this is a trend in general or is this something you're seeing now more specific to strength in Black Panther or possibly see that with Avengers as well as people are seeing stronger films and getting a little more positive on kind of box office trends for this year or you think that's a – the desire to spend closer to campaigns is something that is impacting other windows besides just in-theater advertising?.

Good morning, Eric. Thanks for the question. I do think this is a trend that we are seeing more, the idea of advertisers spending later, I don't know if that has anything to do with the slate, however, my personal view is it has more to do with the general shift in ad spend towards digital, which is just such a different animal the way it's done.

TV has historically, as you know, been booked a long time in advance. Upfront is a big part of the TV world, and even with scatter, people are buying significantly in advance. Whereas digital, if you want to reach out to Facebook and programmatically buy advertising for this afternoon, you can do that.

And so, I think as advertisers get more digitally driven, I think their expectations are more that they can be more flexible about when they commit. So, I think we're just a collateral – or this is a collateral result of that, I think, that people are booking later, which is fine.

It makes our business less predictable, but, nonetheless as long as people spend, that's fine, and I think that's the overall driver.

I do think the strength of the box office is just generally encouraging, particularly to local advertisers particularly given the – just the broad plethora of articles last summer, in particular, about movie theaters are dead, it's all over. It’s like, well, no, actually.

I mean, check out Black Panther and Avengers and the slate in the second quarter is just a very, very strong slate of movies and it demonstrates that people will come to the theaters. So, I certainly feel good about where the box office is and I feel good about where our advertisers are. But whether those two are related, I'm not sure. Hard to say..

And then, obviously, it's somewhat of a negative on your visibility if they spend closer. But I've got to assume it's going to have a nice – if this trend continues, that's a positive underlying benefit for CPMs..

Probably. As you know, Eric, when we sell inventory in upfront, we tend to sell larger amounts of it at lower CPMs, and scatter tends to be at higher CPMs. So, if that business moves more towards scatter over the short to medium-term. That would be healthy for CPM certainly..

And the last question, I know it's very early. Given it just kind of launched, and Avengers is kind of the first kind of big test of it, but any initial read or data or anything you can provide around kind of the digital launch on the ARcade games and all that in the theater in terms of engagement, downloads, anything you saw on that front..

Yeah. Thank you, Eric. I think we've decided not to, at this point, issue any metrics. We are following key performance indicators ourselves obviously, and we feel very good about the downloads, the engagement of the audience in these games, the ratings on the Google and Apple stores and just the sort of general interest level.

And added to which, by the way, when we sit down with advertisers, and I mentioned in the script that we've sat down with advertisers and I've got lots of photos that people send of this agency buying group or this client group playing ARcade in their office because we can make the game happen in their office too. So, we feel very good about it.

We walk out of those meetings with ideas about other games and what might be particularly interesting to certain advertisers as well. So, it's early stages, but we feel very good about it, in particular Noovie ARcade, but FML is making nice progress as well..

Perfect. Thanks, Andy..

Thanks, Eric..

Thank you. Our next question comes from the line of Eric Handler with MKM Partners. Please proceed with your question..

Yes. Good morning. And thanks for the question. Two questions actually. First, a follow up-on on Eric Wold's question about the strength of your national business. Utilization was particularly notable in the 90s. I think you've only had one other first quarter before in the 90s and that was back in 2015.

Was there anything that you are seeing, maybe some carryover because of just not a lot of impressions for TV or was there something else that helped demand in the quarter?.

Thanks, Eric. Hard to say. I mean the one thing I'll point to, obviously, is the strength of the scatter market. Our national team did very well in the scatter market and it's really – it was those sales that drove up our utilization.

I think we were aggressive where we needed to be from a price point of view to bring in advertisers who don't necessarily always advertise with us. So, I think I'd give our national team a lot of credit for being scrappy in the quarter.

But, nonetheless, to your point, it is a very encouraging utilization number for a first quarter where we tend to be, to your point, underutilized.

But I think it really does boil down to scatter and it's – and as you know, as I've said on multiple occasions, we have very much a demand-driven platform, not a supply one – and not a supply-driven platform. So, in my view, it has less to do with the slate and more to do with advertisers being out there, looking for eyeballs..

Great. And then, one for Katie. You touched very quickly on some costs and expenses. The administrative line of $12.6 million was up substantially from pretty much any quarter last year.

And I'm just curious were there some of the one-time items that drove that increase or is that something that we're going to see in subsequent quarters?.

Well, one of the things that's in there is the impairments in selling and administrative. So, what you're going to see in the admin is the capital – typically, we'd be capitalizing labor as an internal labor. We don't have a lot of development costs that were in the first quarter that will be coming later in the year.

So, those costs are hitting the OpEx as opposed to CapEx line. And then, we also have larger bonuses that we're accruing for this year versus what we were accruing for last year. So, those are driving some of the admin costs as well..

So, will those – the capital labor costs won't hit us hard in 2Q you're saying? And the accrued bonuses, I imagine , that's a step up that we'll see in subsequent quarters?.

Right. The bonus will be continue on, but capital labor will start to come down. Or cap labor will start to go in capital as opposed to OpEx later in the year..

Got it. Okay, thank you..

Thank you, Eric..

Thank you. Our next question comes from the line of Alexia Quadrani with JP Morgan. Please proceed with your question. Since Mr. Quadrani dropped from queue, our next question comes from the line of Jim Goss with Barrington Research. Please proceed with your question..

Okay. Good morning. .

Good morning, Jim..

Hi. How are you, Andy? One final question on this national.

What sort of CPM levels are you building into the other several quarters since the first quarter gain was pretty significant?.

Hey, Jim. It's Ted. From a CPM perspective, overall, we're forecasting CPM to be up low-single digits for the year. And again, most of that is just driven by the weighting of the scatter market..

Okay. And then, a question on the on-screen game experience. When is it positioned relative to the timing of the movie? What is the share of participation so far? Probably not much since you're just starting.

But what do you expect will happen? And what do you think would be the effect on the rest of the audience, the non-participants?.

Yeah. Thank you, Jim. So, the way it works right now is that – and I don't want if everyone's familiar with how our preshow is laid out. But we essentially have four segments and then finish with a poke spot. And we finish the overall show at show time, as you know. So, the majority of our Noovie ARcade is actually in segment four.

And we've put in segment four for a couple of reasons. One is because, obviously, the value of the inventory there is relatively low. So, as we're getting the name up and going, it's relatively low risk to put in segment four. So, what it has is whole segment encouraging you to download the Noovie ARcade and that the game is coming up, et cetera.

And then, there's is a longer segment of the game. And then there's a short segment of the game in segment two as it exists today.

And, obviously, we've debated long and hard whether we should have an absolutely consistent timing for the game, so when people know when to play it or whether we should be flexible based on the value of the inventory and our utilization.

And we frankly have favored the latter because, obviously, if we can sell inventory, we're always going to do that first. Now, that's notwithstanding the idea that we fully intend to get these games sponsored down the line.

So, what we've discovered in general is, not surprisingly, we have more people playing the game in the segment two rather than segment four because there are, as you would expect, more people in the audience at that time.

One of the critiques that's come back is that the game period in segment two is too short, which is a high-class problem when people want to play it for longer, right? But, overall, we found the engagement as being really high and people are enthused by it and we've had a lot of incoming calls from other types of companies about their particular interest in the arcade game and whether we can share it with them.

So, it's frankly all very encouraging stuff.

Does that answer your question?.

Yeah. Well, partly. Two, the everybody else part of it, what will they be seeing during this event and will they be annoyed that they're sort of left out as part of it or maybe didn't even want to be a part of it? This would really segment your audience, I would imagine, if you doing this augmented reality..

Well, it's an interesting question, Jim. So, what they basically see is they screen, like if you have – there's a game we have called Cinevaders. So, if you're sitting in the movie theater where people are playing Cinevaders, what you're seeing is frankly a screen that looks like deep space and you're seeing people around you playing the game.

And so, is that an ideal experience for someone who is not playing? Maybe not. But on the other hand, we have – what I would tell you in general about our preshow is that people are generally either neutral or positive. They're either like I don't care whether there's a preshow going on or not or they actively like it.

And by the way, all the research we've done would suggest that they are more likely to actively like it now that we have the Noovie preshow, which has more engaging material in it, et cetera.

So, we certainly haven't received complaints or at least I'm not aware of them around the around the lack of activity on the screen for those who aren't playing the game, but it's certainly something we're watching out for..

Okay. One last question. We've all been trying to read the tea leaves for several years as the move to reserve has occurred. And I would imagine your local ads would be most affected by the timing of arrival since they're the furthest ones away aside from the games you're mentioning.

Is there any update on those trends in terms of timing of arrival and the value of your local inventory as a result?.

So, Nielsen continues to – our read from Nielsen is that the arrival times are not materially changing. So, that's the best third-party data that we have. I think I wouldn't read too much into the performance of our regional and local team. And I say that because, obviously, there was a difficult fourth quarter.

The first quarter was better, but still not great. But as we mentioned in the script, we feel much better about where we are in the second quarter and going forward. And it's our view that we have the changes that we've made in our regional sales lineup, from an organizational point, are very helpful from that point of view.

We've put a real emphasis on regional. The regional team is being helped by Mediaocean and STRATA.

I think also the regional and local team have access to a 30-second spot in segment one throughout the year, and so we believe that we've made the moves necessary to strengthen the team and give them the tools they'll need along with digital, by the way, to grow the business. So, we'll, obviously, be reporting on that on a quarterly basis.

But I certainly feel from what Nielsen says that we're in good shape from the audience build and from the trends I'm seeing at the local and regional side that we're in good shape..

All right. Thanks so much..

Thank you, Jim..

[Operator Instructions]. Our next question comes from the line of Mike Hickey with The Benchmark Company. Please proceed with your question..

Hey, guys. Andy, Katie, congrats on a solid quarter..

Hi, Mike..

Hey, Mike..

I'm sorry if I repeat a question here. I got dropped. So, cross our fingers here not to ask again something that's been asked. But definitely strong Q1; 2 looks like it's tracking better than expected and or at least you're saying it's solid, which is good. Beverage, your local up. Nice to see that.

Second half, it looks like you have more visibility given the upfront monies and content partner spend. So, just curious, with all that, why we're not seeing you pick up your 2018 guidance..

That's a fair question, Mike. Obviously, you've seen Q1. We feel good about where we are in Q2. I'd point out a few different things. Firstly that the first half last year was weak. So, we're lapping weak first half numbers, while the second half of last year was significantly stronger.

So, as we look to forecast this year, that's obviously why we – we certainly were hoping and expecting that we would have a better first half of this year, and that's certainly how it's looking. The second half is a little harder to predict. The second half is large for us, as you're no doubt aware. The Q4 is by far and away our largest quarter.

And by the way, December is by far and away our largest month. So, it's always a little challenging to have real confidence until we get to the real end of the year. As was previously talked about, people are – particularly when it comes to scatter booking later, so that doesn't help our visibility.

So, when you add it all up, I would tell you that we are just cautious because we just don't have enough visibility into the back half of the year. But, nonetheless, as mentioned, we feel good about how we're doing so far..

Okay, good. Q2, I think, consensus is $106 million, $47 million OIBDA. Just curious your comfort level with that and any other data maybe you could give us from a guide perspective for the quarter. I know you've said you expect local to grow. But any additional commentary would be appreciated..

Yeah, Mike. Nothing additional. We avoid quarterly guidance, as you know, for various reasons and the volatility of our business is the primary one. Q2, we said we're off to a good start in the quarter. We just finished April. So, we felt confident that we're looking sharp for Q2. But beyond that, that's about all we're going to comment on..

Okay. Last question, you said your local business out in Q2 – no, the slate is, obviously, very rich in Q2 and I think your local, regional business is more correlated to buyers' perception of the movie slate. And so, when you think about Q3, Q4, I think you were also optimistic.

I was sort of curious how you sort of balance the power of what should be a record Q2 of all time, driven by the slate versus some of the changes you've made internally? Thank you..

Yeah. Thanks, Mike. It's hard to say. I think Q4 of 2017, one could argue, given the slate with Star Wars and everything else should have been a good quarter for our local, regional, but it just wasn't. It was down nearly 20% on the revenue side.

But that was the quarter when we made substantial changes to the way that our regional and local team is structured. We have them really focused separately in three areas. One is local. One is regional which is really spot in many ways. And the third is digital. We have them focused up against those areas.

We have the right people in charge of each of those areas. I think they have the right tools and they have the right focus. And I think their improvement – their sequential improvement from Q4 of 2017 to Q1 of 2018 to Q2 2018, I think, is very encouraging.

And it's not lost on me – I can't remember what they're lapping in Q3, but Q4 they're going to be lapping very weak numbers. So, it's my guess and belief that that team is going to continue to improve performance as we go through the year..

All right. Thanks, guys. Best of luck. Appreciate it..

Thanks, Mike..

Thank you, ladies and gentlemen. We have come to the end of our time allotted for questions. Mr. England, I'll turn the floor back to you for any final comments..

Great. Thank you so much. It's been a terrific start to 2018 and all trends are pointing to solid growth for the year. We continue to attract new and returning avatars to cinema and particularly pleased with our digital progress and the launch of the first app in our Noovie digital product ecosystem, Noovie ARcade.

By bringing interactive augmented reality gaming to the big screen, we're enhancing the moviegoing experience and giving audiences a reason to arrive early to discover what's next in entertainment, which is good for NCM, exhibitors, consumers and brands. Thank you for participating in our Q1 2018 earnings call and I'll see you at the movies. .

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..