Good day, ladies and gentlemen, and welcome to the Third Quarter 2014 Hewlett-Packard Earnings Conference Call. My name is Leslie, and I'll be your conference moderator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Rob Binns, Vice President of Investor Relations. Please proceed.

Good afternoon. Welcome to our third quarter 2014 earnings conference call with Meg Whitman, HP's Chief Executive Officer; and Cathie Lesjak, HP's Chief Financial Officer. Before handing the call over to Meg, let me remind you that this call is being webcast. A replay of the webcast will be made available shortly after the call for approximately 1 year. Some information provided during this call may include forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including, but not limited to, any projections of revenue, margins, expenses, earnings, earnings per share, HP's effective tax rate, cash flow, share repurchase, currency exchange rates or any other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements concerning the expected development, performance, market share or competitive performance relating to products or services. A discussion of some of these risks, uncertainties and assumptions is set forth in more detail in HP's SEC reports, including the most recent Form 10-Q. HP assumes no obligation and does not intend to update any such forward-looking statements. The financial information discussed in connection with this call, including any tax-related items, reflect estimates based on information available at this time and could differ materially from the amounts ultimately reported in HP's third quarter Form 10-Q. Revenue, earnings, operating margins and similar items at the company level are sometimes expressed on a non-GAAP basis and have been adjusted to exclude certain items including, amongst other things, amortization of purchased intangible assets, restructuring charges and acquisition-related charges. The comparable GAAP financial information and a reconciliation of non-GAAP amounts to GAAP are included in the tables and in the slide presentation accompanying today's earnings release, both of which are available on the HP Investor Relations web page at www.hp.com. I'll now turn the call over to Meg.

Thank you, Rob, and thanks to all of you for joining us today. The third quarter of 2014 marks an important milestone in HP's turnaround. For the first time in 3 years, the company delivered top line revenue growth on a year-over-year basis. Revenue for the company was $27.6 billion, up 1%. As I've said many times before, turnarounds are not linear, and we face some tough comparisons in the fourth quarter. But overall, I continue to be very encouraged by the progress we're making. In the third quarter, we once again achieved our financial outlook. We delivered $0.89 in diluted non-GAAP net earnings per share at the high end our previously provided outlook and up $0.03 from the prior year period. In addition, we achieved very strong cash flow performance, delivering $2.7 billion in free cash flow for the quarter, a good sign of improved operations and financial discipline. Our year-to-date free cash flow now stands at $7.4 billion. As a result, our operating company net cash position is $4.9 billion. We also returned $881 million to shareholders in the form of share repurchases and dividends. We're seeing the benefits of the work we've done to get our Personal Systems and Industry Standard Server business back on track. Our Printing Supplies business and parts of our Software portfolio still face some challenges, but HP today is nimbler and better prepared than ever to respond to rapidly changing business conditions, so the leadership teams in both these areas are quickly addressing those challenges. On the Enterprise Services side of the company, we're making progress. The nature of ES with longer business cycles and lengthy contract periods make it tough to realize improvements quickly, but I believe the changes Mike Nefkens and his team are making are beginning to take hold.…

Thanks, Meg. Overall, we're pleased with third quarter results. Performance was driven by very strong revenue growth in Personal Systems, as well as growth in Industry Standard Servers and Networking. Performance in Printing, Enterprise Services and Software was mixed with good profitability but weaker-than-expected top line results. Total revenue for the quarter was $27.6 billion, up 1% year-over-year as reported and in constant currency. By region, Americas revenue was $12.3 billion, down 1% year-over-year or flat in constant currency. The U.S. was approximately flat on the back of double-digit growth in Personal Systems. Brazil was up moderately, while other countries in the region declined. EMEA revenue was $10 billion, up 5% year-over-year or up 1% in constant currency driven by some recovery in mature western economies, partially offset primarily by significant weakness in Russia. APJ revenue was $5.3 billion, up 1% year-over-year or up 4% in constant currency. We experienced solid growth in China led by a double-digit increase in the Enterprise Group, partially offset by weakness in Japan and India. Gross margin for the quarter was 24%, up 0.6 points year-over-year and down 0.2 points sequentially. The year-over-year increase was driven by rate improvement across most of the portfolio, partially offset by the strong revenue performance in Industry Standard Servers and Personal Systems. Total non-GAAP operating expenses for the quarter were $4.3 billion, up 5% year-over-year. The increase in OpEx was primarily driven by increased investments in R&D, as well as real estate gains in the year-ago period. Sequentially, OpEx was approximately flat and in line with normal seasonality. Non-GAAP operating profit was $2.3 billion or 8.5% of revenue, up 2% year-over-year and flat sequentially. We recorded $145 million of expense on the other income and expense line. With a 22.5% tax rate and a weighted average diluted share…

[Operator Instructions] And our first question is from Katy Huberty with Morgan Stanley.

This is another great quarter of cash flow, but we're not seeing the EPS upside that I think people are hoping for given higher revenue and more restructuring savings. What levers do you have to show more operating leverage going forward? Or is it as simple as meeting a revenue recovery that's not just PC driven?

So Katy, over the longer term, and when I think of that, I think about fiscal '15, I think one of the real upsides for us that is not revenue directly related and that's really in our Enterprise Services group. The fact is that we have made really good progress this year, and I believe that Q3 is a great proof point at delivering operating profit of 4.1%. The fact that we reconfirm that we're going to be in the 3.5% to 4.5% for '14 is also setting us up really well for '15. We are taking the -- we're making the investments that we need to make to get the cost out of that business. We are improving our underperforming contracts very materially, and that's going to set us up very well for '15 to improve EPS without strong revenue performance.

And Katy, this is Meg. I would just add one thing, is that we have taken out cost apace with a pretty significant revenue decline in '12, '13, and up until this quarter, we still had declining revenues. And now if revenue stabilizes, we have more cost to take out. There's operational improvement opportunities across the board. If we can stabilize revenue, then I think you'll start to see the EPS uptick that you're looking for.

Next question is from Toni Sacconaghi with Sanford Bernstein.

Meg, you just mentioned that if revenues stabilize, you could really start to see some impact and benefit on EPS. I was wondering if you could just try and address that a bit more broadly. I mean, this quarter was clearly a lot of disparate revenue growth of the company. If PCs grew at 12% and the rest of the company grew at minus 3%, so I'm wondering if you can comment around -- I know you don't like commenting specifically about revenue growth, but particularly around PCs, how do you envision market growth over the next year or 2? And secondly, if we think more broadly about revenue growth given that 12% may not be sustainable and given that comparisons are a lot tougher, which you noted several times in your prepared remarks, is it really realistic to think that revenue growth can remain stable over the next year or 2?

So let me address PCs first. The PC market -- and when I say PC, I mean right up through tablets, not including, obviously, smartphones. The PC business is flat to declining slightly, and we think that, that will continue. However, what we do believe is we can continue to gain share in a relatively flat market, and that's because we've got a terrific product lineup. We've got a great go-to-market. Our relationships with partners is better than it has ever been. So while the XP refresh is largely done, we're seeing good growth and continued growth in the commercial side. And by the way, our consumer business grew 8%, which we haven't seen that in many, many years. So I feel like the PC business has some wind beneath its wings, and I think for the foreseeable future, we'll be in a pretty good shape there. Overall revenue growth for the company, we still have a portfolio that has some declining businesses, some flat businesses and some growing businesses. And as those growing businesses get stronger and the declining businesses, like Business Critical Systems, I mean, that eventually will be a 0 there on the UNIX business, and therefore, you'll start to see accelerating growth. So it's a portfolio management issue. And again, servers grew this year for the first time. 3PAR returned to double-digit growth. Networking had pretty good growth. Graphics, which we don't talk a bit -- a lot about is now a meaningful growing business, Managed Print Services, security, strategic Enterprise Services. So we've got real pockets of growth, and we've just got to balance out that portfolio to bring ongoing stabilized revenue.

Next question from Rod Hall with JPMorgan.

I just had a couple. I wonder -- Meg, can you talk a little bit about PC strength regionally? In other words, where was it strong? Where is it weaker? I know you guys called out Russia and China as weak points from a macro perspective, but I'm just wondering if there are -- what you're seeing in the emerging markets, for instance, where Cisco called out some weakness, and just if you can give us a little bit more regional color there will be helpful. And then I also wonder, do you guys ever -- are you ever able to quantify the impact of the XP expiration, particularly in fiscal Q3? Was it a material impact in fiscal Q3 that we should see rolling off in fiscal Q4? Can you just help us understand how that progresses over the next few quarters?

Yes. With regard to PC strength regionally, this was broad based across all regions. Americas and EMEA, in particular, had good quarters. China was a little weaker for us in PCs. Russia was tough for us across the board. But what I will say is China for HP as a whole was actually a pretty good performance. Servers did very well. Our Printing business did very well there. Our Software business did quite well there. So China was only a weak spot in the PC area. Cathie, do you want to talk about quantifying the XP impact? It's a little difficult to do. I would say, the XP impact was even more in Q2 than it was in Q3. A country like Japan, which is a very significant Microsoft market, they went fast to XP, but maybe you can give a little more color.

Sure. So it is very difficult to quantify the impact of XP because you also have the impact from the older, aging installed base, and the fact of the matter is that people realize that there are certain things they need to do, they need to do on notebooks or laptops -- I'd say laptops or desktops, and so they really need a PC. And so it's really difficult for us to quantify what's going on there. To Meg's point though about Japan, if you look at kind of the local currency growth year-over-year last quarter, it was in the mid-single digits. Even this quarter, it's up in the high-single digits, but it has obviously moved very quickly from XP to Windows. Let me also just give a little bit more color on the regional. So if you look at PCs in Americas, up in local currency double digits, that was led by very strong performance in the U.S., again, double-digit performance. EMEA had double-digit performance growth as well, and that was heavily led by the U.K. with double digits; Germany, double digits; and to a lesser extent, Italy. And then APJ was up high-single digits. So we really had broad-based performance -- strong performance in PCs.

And even in China, commercial PCs did well.

Yes.

Consumer, not so much but commercial, pretty good.

Yes.

From Jim Suva with Citigroup.

A question for Meg and then one for Cathie. Meg, when you look at your services that declined, I think, it's a little bit concerning year-over-year and eventually [ph] EMEA [indiscernible]. Is it solely attributable to EMEA that the [indiscernible] new incremental items causing you to be more cautious? And then for Cathie, if you can just talk about cash flow, I mean, Meg talked about more of a stable revenue [indiscernible] what we're hoping for. So if that happens, your cash flow has been about $9 billion the last 2 years in a row. Should we expect some changes to that, as I had assumed inventory work down has helped to offset [indiscernible] cash flow? Or how should we think about the cash flow in a more stable environment versus the past few years of revenue decline?

Sure. Let me first address your question, though, on the EMEA weakness and the Enterprise Services. That was really pressured by probably 3 things. The first is that we did see weakness in public sector spending in the Enterprise Services group within EMEA, mostly in Western Europe. We saw some general runoff in the region, and then we were also impacted by the geopolitical instability in Eastern Europe. And so those were the big impacts in Q3, and we actually believe that we're going to continue to see those pressures in the near term. Turning to cash flow, what we've talked a lot about is that our free cash flow is highly correlated over time to our non-GAAP net earnings, and we continue to believe that's the case once we get to a more stable spot with the cash conversion cycle, and so that's how you should think about our free cash flow going forward.

And I will say, the organization deserves a lot of credit for this cash flow performance because, remember, this is about inventory. This is about SKU and platform management, payables, receivables and making sure we have the least amount of inventory and yet, satisfy our customer demands. And it's been a really significant improvement since the fall of 2011. So we're getting really pretty good at this.

We are.

So I wouldn't say you're going to see a decrease beyond 8 days on the cash conversion cycle. In fact, if PCs slow down a little bit, the cash conversion cycle is going to go up because, as you recall, we have a negative cash conversion cycle on our PC business.

So to quantify that, the PC, the strength in the PC business relative to the rest of the portfolio and then also the fact that the ES business was weaker, we basically had a cash conversion cycle for PCs, which is in -- quite negative, which is good. And that is -- and we had higher mix of that, and then we had a lower mix of the Enterprise Services, which has a higher cash conversion cycle. Those need to normalize over time. So as you think about the future, think about -- we don't believe that PCs continue to outgrow the rest of the portfolio, and that'll put upward pressure on the cash conversion cycle.

Benjamin Reitzes with Barclays.

I wanted to ask you about cash priorities with the cash flow at $9 billion plus for the second straight year. What are you leaning more towards in the upcoming quarters, buybacks, dividends or acquisitions, Meg? And obviously, during the quarter, you had a material nonpublic event, and so you were, obviously, contemplating a potential material nonpublic event, and you were contemplating, obviously, it was probably a major acquisition. So how are we supposed to just reconcile the cash priorities with such great cash flow? What are you going to do in the future? And how should we reconcile that comment as well?

Sure. So our capital allocation strategy remains the same, and we have said that we will return at least half our cash flow to shareholders in the form of dividends and repurchase. And despite the fact we were not buying shares in the third quarter, we intend to return to buying shares, and we believe we will meet that commitment by the time we get to the end of '14. So the first thing is to just reiterate our capital allocation strategy. With regard to M&A, now that we have repaired the balance sheet, as I have said before, I do think M&A will be a part of our strategy. But let me assure you that this will be returns based. It will be focused on only things that we cannot do organically. And given the choice, I would rather invest organically. This is the heritage of Hewlett-Packard. We do core R&D better than anyone else. So I think M&A will be a part of our future, but I want to reassure you on capital allocation strategy and also the returns-based approach we're taking. And Cathie, I don't know if you want to comment between dividends and share repurchase.

I think the only thing I would say there and we've said this a few times, is that at the current stock valuation, we think that our shares are very attractive, and therefore, our bias in the mix is to buying back shares.

From Maynard Um with Wells Fargo.

I had a question just on the server side. And I'm wondering how big the opportunity is for HP as we look forward on the Windows Server 2003 expiration. I think some people have sized or upsized it somewhere in that 10 million to 14 million units of servers that are out there that need to be upgraded, which I think is fairly significant. But how do we think about -- or I guess, how does HP think about that? And then relative to that, what do you expect from a competitive level dynamic to be? Would you expect that people will get more aggressive in pricing? Will we see more pricing pressure as people drive after that opportunity?

So we agree with you. We think that the Windows Server 2003 upgrade is an opportunity for us. There's a significant number of servers in the installed base, and they are going to have to upgrade. So there is some similarity between the XP upgrade and the Server upgrade, but -- and so we are following the same program from a marketing perspective. So we are organizing ourselves to go after this. It will be a competitive market, but I think we've got a really good -- we've been thoughtful about this, and I think we've got a really good shot to gain more than our fair share of that refresh.

Let me also add that we recently announced a new program with Microsoft to actually capture some of this end-of-life opportunity that really is around channel-optimized IT solutions, the services, the training and the financing, as well as the support to help our partners actually drive the growth and capture the opportunity.

Next question is from Shannon Cross with Cross Research.

I had a question on your Printing business. You talked about making adjustments in go-to-market. Can you talk a little bit more about what the issues are, how you're thinking about what's going on within the channel and usage and that? And then based on your models, when do you think supplies might grow again? I mean, I think InkJet is doing pretty well, but clearly, laser is under pressure.

Yes, let me step back and give you the perspective on our Printing business. This is one of the great HP businesses, and let me just break it down for you in terms of where we are on laser and ink. Laser is a business where we're recovering from a weaker installed base that goes back a number of years. And the planned decline in hardware was very deliberate. We are focusing on high-value profitable units that have an annuity that -- of toner that makes sense for us. So we think the laser business, toner, we're seeing some signs of recovery in other areas, particularly in Europe, as we rehabilitate, if you will, and upgrade the user base. For example, we're the leader now in MFPs, which is quite remarkable since we really weren't a player in that business 3 years ago. Ink, you heard Cathie say in her remarks that ink, what we saw was some consolidation at retail, some channel loading up last year in advance of the price increase, but the real opportunity in ink is Ink in the Office, to basically take ink up into the small- to medium-sized enterprise in a more profitable way, in a way that is twice the speed, half the cost per page and more profitable for us. So we think ink will recover over time. We're bullish on that, but we are going to have to correct ink channel inventory as we go into Q4. But what's exciting about ink is we have -- or exciting about Printing is we've got innovative business models. We've got some incredibly innovative products. And the go-to-market change was simply just dial up our specialists. So when we put Printing and Personal Systems together, which, by the way, I think was absolutely the right thing to do. We've gotten tremendous channel leverage from then just go-to-market leverage, we probably overcorrected to more generalists on account management and partner management, and so we're adding back print specialists in the go-to-market.

And let me address -- I think you followed up on that with, and when do you expect supplies revenue?

Yes, good.

And so we expect supplies revenue to stabilize in fiscal '15. We've got a number of strategic initiatives, most of which you know about, that will take -- that are relatively early in their maturity stage, and they will take some time to show up. But that's where we start to see it in fiscal '15. We did see some softness in demand this quarter, and we are actively managing that to see whether or not this is going to be a trend. And then the other data point that I think is important is when you think about supplies mix over the longer term is that it's probably in the mid-60s type range.

Yes. And the only thing I'd add is the other thing we're excited about is Managed Print Services. And as I said on the call, Managed Print Services, first of all, it's a growth part of the market. We had terrific bookings, and we get 100% of the aftermarket on that business. So listen, we feel -- notwithstanding the results this quarter, we feel really good about the Printing business. We got some things we need to improve execution on a number of dimensions, but we feel really pretty good about this business.

And if I could throw in one more data point on the TCV and Managed Print Services, up strong double digits year-over-year, so we're making really good progress on the signings in that space.

Next question is from Steve Milunovich with UBS.

Along the same lines, I wondered if you could address the go-to-market challenges in Software, specifically what that means. And then also, there are some signs that Europe might be taking a step back economically, and you guys are a bit overweight in Europe. Are you concerned about that looking forward?

Yes, with regard to go-to-market in Software, we've got a very broad Software portfolio. We've got Big Data, security and our IT performance management suite across 3 major regions in many, many countries. And again, we're doing the adjustment, the specialists to generalists, which of these businesses need their own sales force, which can use leverage of the global software sales force and frankly, which can use the global HP sales force. So Robert Youngjohns is looking very carefully at market segmentation, the alignment of the sales coverage resources and the opportunity for better attach with the rest of the HP portfolio, so for example, tipping point with Networking. So we've got some work to do on our go-to-market. And we're basically doing the same thing. We've done a lot of work on go-to-market in EG. Mike Nefkens has done a lot of work on go-to-market on our Enterprise Services, and we're running that same play now in Software. The challenge in Software is there is a fundamental market dislocation here, which is traditional license is moving to SaaS. And as that happens, it will create a stronger, I think, longer-term revenue stream as an annuity, but it will create some dislocation in the near term as that market shift gets underway or continues to be underway.

And to address your question on EMEA, that's -- we're not really seeing that in EMEA. So our results from an EMEA perspective, if you look at the top 3 countries in the EMEA region, basically, Germany, UK&I and France, they're growing mid- to high-single digits; and in the case of one of them, double digits. Where we are seeing softness in EMEA is in Russia.

Yes.

Next question is from Bill Shope with Goldman Sachs.

Could you comment on how gross margins are trending in the Industry Standard Servers segment, particularly as the mix continues to shift towards hyperscale? And perhaps, provide some more detail on how your cost structure is evolving with the changing market dynamics. Obviously, you've regained plenty of momentum on the market share side, but I just wanted to dig a bit more into the margin structure, how you're thinking about that as well.

Sure. We actually had a good quarter in Industry Standard Servers, not just from top line perspective but also from a profitability perspective. And what you see is our AUPs, our average unit prices, grew significantly double digits year-over-year, high-single digits quarter-on-quarter, really on the strength of our very strong option attach. We are also doing a really good job of segmenting the market and figuring out where growth is and good profitable growth. And so that's really helping with margins. We also saw much improved discipline around discounting, and we're driving very strong savings in supply chain. So all of that is really contributing despite the competitive pricing environment contributing to improving margins in Industry Standard Server.

Next question is from Amit Daryanani with RBC Capital Markets.

Just had a question on the free cash flow guidance for the full year for fiscal '14. Cathie, if my math's right, it sounded like you had about $1.6 billion of free cash flow in Q4. I'm curious with the uptick in net income that you're expecting in Q4, why do you expect the degradation of almost $1 billion in free cash flow in Q4?

So we don't typically update our free cash flow. We went out on a limb again this quarter to do that because we are making such progress. And the progress in the free cash flow is really on the strength of the working capital improvement that you saw. We saw the cash conversion cycle at 8 days basically improve to 10 days year-over-year, improvement across all the metrics, but obviously the strongest and better than expected was in the DPO space where we had an 8-day improvement. We continue to stay focused on free cash flow and drive that hard. And we'll see how we end the year.

Is from Sherri Scribner with Deutsche Bank.

You guys had very strong results in terms of operating margins for the PC business this quarter. I just wanted to get a sense of how sustainable these margins are in the Personal Systems segment. And what types of margins do you expect in this segment going forward?

So let's talk a little bit about what drove the improvement in margins in PCs, and then we can talk about sustainability because you can get a read through a bit. So the profitability improvements were driven by, obviously, the volume, the strength in the top line but also, operational cost reductions around warranty, logistics. We also got a bit of a mix benefit in the material cost space. Obviously, we're continuing to see a very competitive pricing environment. At its core is that we are doing a great job of segmenting the market and figuring out where the market opportunities are, where you can grow and grow profitably. Make no mistake. We're still very focused on profitable growth. We saw some of that improvement in consumer. Consumer was up 8% year-over-year on the top line, and we also saw improving profitability. So that maniacal focus on making sure that we've got a very efficient, lean organization, as well as the segmentation on where the market opportunities are, I think, are sustainable.

Yes, I agree with that. I would also say that our product lineup continues to be very strong. And in the end, you have to lead with great product, whether it's for the commercial space or the consumer space. So I feel good about the work we've done around supply chain and all the work that Dion and his team has done but perhaps, most importantly is the strength of the product lineup.

Is from Keith Bachman of Bank of Montréal.

I wanted to go back to Services if I could. In the past, HP said that the book-to-bill would be about 1 this year. I know you took revenue guidance down. Is it still possible for the book-to-bill to be 1? And if it is, let's say it's about 1, so signings -- would it suggest that signings will be down 6% to 7%. Can you grow revenues in FY '15 with signings down so much? And can you grow pretax income -- or excuse me, operating income dollars in Services with signings down so much?

So as I talked about, I think, at the very beginning of this call, I do think the opportunity to improve the EPS at the HP level is without revenue growth, is, in fact, in the Enterprise Services space where we have a lot more cost that still needs to come out of that organization. So I do think that you can get the EPS improvement that we were talking about. In terms of the book-to-bill, we'll talk a lot more about this at our security analyst meeting, but we do expect to end the year with a book-to-bill of approximately 1 in that business.

From Aaron Rakers with Stifel.

I want to go back to the free cash flow story a little bit. When we started the year, you guys talked about 20 to 22 days of cash conversion cycle. Now we're at 8. I'd just like to understand, on a normal basis, how you're thinking about that. And then on top of that, can you just quantify the impact of factoring and what that had this quarter and whether you anticipate that to continue going forward?

Sure, let's start with that. The factoring impact in the quarter over a year-over-year basis was roughly the same as last quarter, 1 to 2 days. Sequentially, there wasn't a material impact from factoring in our DSO or in the cash conversion cycle. In terms of kind of what is the sustainable level of the cash conversion cycle, we definitely believe that we're below our sustainable rate at 8 days. We certainly got a big benefit from the mix, the revenue mix on PSG. That was approximately 2 to 3 days. And so as you look at it long term, that mix is going to come back down. We do not expect that the PC business or the Personal Systems business will outgrow the rest of the company over the long term. And then also, just keep in mind that cash flow can swing quarter-to-quarter in -- for DSO and DPO based on the linearity of the business in the quarter. And we'll talk a lot more about our working capital and our forecast for '15 at our security analyst meeting.

Great. Well, thank you all for joining us today. I think Cathie and I and the rest of the senior management team continue to be very encouraged by the progress of the turnaround that we are making. You can see it, every day we're out with customers, and the partners and the customers can see an enormous difference in our team members, in our product, in our innovation and our will to win. And I'm pleased because the organization is much quicker to recognize the opportunities and much quicker to jump on the challenges that inevitably will come our way in a market that's changing as fast as this. So thanks very much. Progress, more work to do.

Great. Thank you. Thanks, everyone, and with that, we'll close the call. Thanks very much.

Ladies and gentlemen, this concludes our call for today. Thank you.