McKesson Corporation (MCK) Q4 2011 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the McKesson Corporation Quarterly Earnings Call. [Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Ms. Ana Schrank, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, Melissa. Good afternoon, and welcome to the McKesson Fiscal 2011 Fourth Quarter Earnings Call. With me today are John Hammergren, McKesson's Chariman and CEO; and Jeff Campbell, our CFO. John will first provide a business update, and we'll then introduce Jeff, who will review the financial results for the quarter. After Jeff's comments, we will open the call for your questions. We plan to end the call promptly after one hour at 6:00 Eastern Time. Before we begin, I remind listeners that during the course of this call, we will make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of McKesson. In addition to the company's periodic, current and annual reports filed with the Securities and Exchange Commission, please refer to the text of our press release for a discussion of the risks associated with such forward-looking statements. Thanks, and here is John Hammergren.

Thanks, Anna, and thanks, everyone, for joining us on our call. Our fourth quarter results wrapped up another solid full year financial performance. We finished fiscal 2011 with fourth quarter revenues up 8% to $28.9 billion and net income, up 21% to $422 million or $1.62 per diluted share. For the full year, excluding the AWP litigation charges in the second and the third quarters, earnings per diluted share from continuing operations was $4.86, which included $0.14 per diluted share of US Oncology acquisition-related expenses. Operating cash flow came in at $2.3 billion this year, and clearly, our strong cash flow creates additional opportunities for the company. So I'm extremely pleased that we exceeded our initial expectations for both earnings and cash flow. We very successfully executed near-record levels of capital deployment with a good mix of acquisitions, share repurchases, internal investments and a dividend increase. Fiscal 2011 was a big year, not just for McKesson but in the industry as well. Healthcare topics continue to drive debate in Washington and around the globe. We believe that there are issues of quality, access and cost that will remain at the center of all of the healthcare discussions. These discussions create opportunities for McKesson. Healthcare providers, manufacturers and payers are looking for broad solutions to drive improved financial, clinical and operational performance. We have the tools, services and resources to support our healthcare industry's transformation. Moving on to some of the specifics for our fourth quarter and full year. Strong execution in Distribution Solutions drove overall company results. Our team has a long history of delivering outstanding performance. This year's growth is particularly meaningful considering our excellent performance last year, driven by the H1N1 flu-related demand. Growing from last year's result was a difficult but important priority for the team. U.S.…

Well, thanks, John, and good afternoon, everyone. McKesson capped off another year of solid financial performance, and we're pleased that we exceeded our original EPS guidance for the year and have laid a good foundation heading into fiscal 2012. In my remarks today, I'll cover both the fourth quarter and full year results. As you know, we provide our guidance on an annual basis due to both the seasonality and the quarter-to-quarter volatility that's inherent in some of our businesses. In this context, an annual look at our financial results can provide more meaningful insights into some of the key trends. So I will focus more on the annual numbers than the quarterly ones today, and I will also comment on what these trends mean to 2012. Let me point out that my discussion today will focus on our full year FY '11 earnings per share from continuing operations, excluding adjustments of litigation reserves of $4.86, which you will see at the bottom of Schedule I in our earnings release. It is important to note, however, that this $4.86 includes $0.14 of US Oncology acquisition-related expenses. Let me begin with our consolidated results. For the full year, consolidated revenues increased 3% to $112.1 billion from $108.7 billion a year ago. We had strong revenue growth in the quarter of 8% to $28.9 billion, primarily driven by organic growth in both segments, as well as our acquisition of US Oncology. Gross profit was up 5% for the year and 11% for the quarter, this is a tremendous result, given the higher-than-average gross profits generated by last year's incremental flu end. Total operating expenses for the full year were up 7% to $3.9 million, and up 12% to $1.1 billion for the quarter. Our full year and fourth quarter operating expenses were…

[Operator Instructions] And our first question will come from Lisa Gill with JPMorgan. Lisa Gill - JP Morgan Chase & Co: I guess, just a couple of quick questions. In this quarter, in the fourth quarter, can you call out any incremental expenses above and beyond what you called out for US Oncology around selling, general, distribution and administration? As I look at it versus our expectations, it just seemed like a higher number. So if there's anything you could call out there. And then secondly, John, can you just talk about how US Oncology is going, I think, you made earlier comments that you were down visiting with them. Maybe update us on where you are on retention, as well as garnering new doctors into your program.

Sure, Lisa. If I've got your question right, the $0.04 that we called out of acquisition-related expenses, which is integration and relocations and severance and things like that all flowed through the operating expense line of Distribution Solutions. And I think it's fair to say that's really the only one-time in nature kind of cost that we incurred in the March quarter. You, of course, have the full run rate of the normal operating expenses of US Oncology that do appear in that line. Lisa Gill - JP Morgan Chase & Co: Was there anything else? So, Jeff, fuel costs or anything else that would impact those costs in the quarter?

No, not really on the operating expense side, Lisa. Lisa Gill - JP Morgan Chase & Co: Okay.

Yes, and Lisa, when we looked at the numbers, clearly at first blush before you realize that US Oncology is in that run rate, it looks like it's expanded quite a bit. But when we normalized it for the one-timers and the inclusion of US Oncology, it was right in line with what we normally would expect the run rate to be in Distribution Solutions. So there was nothing unusual or alarming by what we did there unless for some reason, we missed something. But it looked pretty normal to us when we did that reconciliation. As to US Oncology and the integration, we are very pleased with the progress we've made there. It's generally in line with the plan that we had made as an assumption in the acquisition case, if not a little bit ahead in some cases. And our management team has pulled together as I've mentioned, we reorganized and set the leadership in place from a go-forward perspective. We've met with the main constituents on the customer side and reorganized our sales force as well. So, I think, that we feel really good about the progress we've made. As to retention, I don't know of any customer losses as a result of this merger or frankly, at all. Although I'm sure there is some in the normal course. And as you know, the US Oncology physicians in particular have very, very long-term relationships with us. And if anything, the McKesson customer base is looking forward to understanding more about the services and capabilities that we can now make available to them as component parts to the US Oncology offering as well. So as you know, we plan to continue to be just a world-class distributor for those customers, who want to continue to use us in the fashion of pre-US Oncology. But we also want to allow our customers the opportunity to explore additional services that we would not have had available to them as simply McKesson. So we're pleased with where we are. Lisa Gill - JP Morgan Chase & Co: John, as a follow up there. You said you were ahead of plan, is that timing or margin expansion or something else? Can you just expand on that a little bit?

I think it's not really financially related. It's more organizational related and sort of momentum related. I think the teams are getting after the plans even more rapidly than we would have expected. I'm not trying to make a financial statement here. It's really a qualitative rather than quantitative statement about our progress.

That will come from Tom Gallucci from Lazard Capital Markets.

Jeff, I just wanted to make sure I heard something right first. The adjustment, the way you're reporting numbers now for fiscal '11 on the drug segment or was it Distribution segment, that increases the margin by 10 basis points roughly last year? So you get the 2.04%, is that it?

Yes, exactly. And roughly speaking, probably 6 or so of those basis points in FY '11 are from amortization and 4 are because you've got the $0.14 of acquisition-related expenses from US Oncology mostly flowing through Distribution Solutions.

So the amortization alone is somewhere around 6 basis points?

Right. And then of course, that would grow significantly next year probably to 8 or 9 basis points, where the acquisition-related expenses go way down.

Right. Okay. And then obviously, you're talking about a higher goal in terms of operating margin expansion in that business. Obviously, a lot of generics in the next year or 2. As you think about sort of the longer term, can you maybe just discuss the sustainability of related profitability on generics, as well as any other sort of key drivers as you think about expanding that goal?

I guess, Tom, this is John. I think we believe strongly that this is going to be another very good generic year for us, and we're very optimistic about what fiscal '12's results will be from a generic perspective. The pipeline is expanding. Our sell-through to our customers continues to improve. The customers, we've been bringing value to it, and our ability to continue to source and do a good job of purchasing on behalf of our customers are all helping to fuel this. And then obviously, the schedule of launches is very attractive. And I would imagine the next couple of calendar years are going to experience that same kind of phenomenon. For our fiscal '12 though, I would say, the company is not carried entirely by generics. The rest of our business is going to perform well, and we expect that we will continue to be able to enjoy margin expansion, not attempting to put long-term guidance on us here. But we would not have come forward with a 200 to 250 basis point target range for our Distribution Solutions segment if we didn't believe that margin expansion over a long haul wasn't part of our plan. So is it possible that we'll have a year that's better than another year? Yes, maybe, but I think as we see it now, we expect to continue to grow, and I wouldn't expect at least certainly on here that we're going to have any real abnormal things other than continued strength in our business.

And we'll now go to Larry Marsh with Barclays Capital.

My question really is just on the follow-up on the generic question, which is maybe more specifically on OneStop. If you think about sort of one of your expert advantages as your ability to source, globally, as you talked about, how are you thinking about OneStop specifically in helping to drive that margin expansion? And how fast is it going to continue to grow for you as you think about increasing your penetration? And then just to follow on, I think the move to adjusted earnings makes a lot of sense. I just want to be clear. Is your message, it seems like your message for the fourth quarter was a little disappointing on Technology Solutions. You're saying first priority get customers to Meaningful Use. So in your messaging, it sounds like you're adjusting your expectations down a little bit from what you would have thought 6 months ago in Technology Solutions. Am I hearing that correctly or is there something else there that's going on?

Well, let me start with Technology Solutions. I think that our view is that we're quite pleased with the progress of the organization, and you know we've made many changes in our leadership team there. And frankly, if you go into the organization, we've made great progress in our development organizations and our implementation team. So I think we're doing, frankly, a great job of getting after the issues that we would have faced 2 or 3 years ago that are now rapidly behind us. I think from a go-forward perspective, the clinical products are going to be a little less profitable than we had expected primarily because of the work required to make sure that our customers got them installed, got them installed quickly and are getting to Meaningful Use. And the compression of the buy cycle and the compression of the implementation installation cycle required by Meaningful Use, requires that we apply resources perhaps in a way that's less efficient than we would have otherwise experienced had we been able to do this in a more kind of normal course of business way. So that compression was felt in the fourth quarter. We had to use good judgment in applying resources to meet the requirements that we felt were appropriate with our customers, and to make sure they are successful and that's why, frankly, we underperformed a little bit there from a margin perspective. So I don't think you're going to see a big "recovery" or bowl of this going into the next quarter. I think you're going to see the general trends continue and what we talked about was revenue growth kind of in line with the markets and margin expansion in that business, which is sort of the typical speech we give on that business, and we would expect that to happen next fiscal year as opposed to some big bowl of success. As it relates to OneStop, yes, it is a very successful program for us. It continues to grow nicely and we're continuing to gain opportunities and penetration. And clearly, global sourcing is an important point in that. One of the things I think that we are beginning to experience is that our customers are not only signing up for OneStop, but in some cases, they may be willing to, especially some of the larger customers, source a product or 2 from us as opposed to the entire portfolio. That's also provided us an opportunity to fuel our growth, where they might have otherwise gone into the market, they'll come to McKesson because of our sourcing power. And as you mentioned, I think, penetration continues to improve as well. So we're optimistic in where we stand with generics. I think the Technology business, the most difficult days are behind us. But it's not going to be sort of gravy going forward, it's going to be a lot of hard work, and we'll get after it.

Our next question will come from Glen Santangelo from Credit Suisse. Glen Santangelo - Crédit Suisse AG: Jeff, I just want to ask you a quick question on margins. I just want to make sure I heard you correctly. So you sort of suggested for this fiscal year that you basically expanded your op [operating] margin in Distribution Solutions by 22 basis points to 194 basis points. Did I hear that correctly?

Right. And just to be very clear, Glen, if you go back last year, what we talked about year ago on this call is that if you pull out the extraordinary H1N1-related profits we experienced in FY '10, our margin in Distribution Solutions last year was 172. So you would compare that to the 194 this year and just to say it, if the 194 does include a big chunk of those acquisition-related cost from USON, if you would have stripped those out, you actually be up at 198. Glen Santangelo - Crédit Suisse AG: Right. So just to follow-up on that, so it kind of sounds like you're forecasting pretty conservatively here, only about mid-single digit basis margin improvement. And as I think about the generic launch calendar falling very heavily in your fiscal third and fourth quarter you sort of, and I know you don't want to get in the business of quarterly guidance here, but should we assume less margin expansion in the first 2 followed by much more margin expansion in Q3 and Q4?

Right. I think it's probably fair to directionally look at it that way, Glen. In particular, when you look at the generic calendar as we see it and we're going to be more back-end loaded and if you just take a product like Lipitor and my public comments about our expected launch date, we're going to get a little less than 2 quarters' worth of value out of that. And so when you think about our industry, the players in the industry with different fiscal years are going to experience perhaps different dynamics related to these generic launches. But I think that we believe we can get margin expansion again next year. We had a terrific year this year and as these things play out, we should have momentum as we move into fiscal '13 as a result of the calendar of these launches. Glen Santangelo - Crédit Suisse AG: John, can I just ask one follow-up question on HCIT. So it says in your press release that your margins were impacted by continued investment in the Horizon product line. So if I heard your comments correctly, it's not that you're investing in the technology of the product, is that you're investing in your customers basically with additional consulting services that are not billable. Am I hearing that correctly?

Yes, I think that's generally correct. R&D investment is up slightly, and we are expensing the R&D associated with our revenue cycle product, AGRM, [ph] when we had that write-off, we're continuing to invest in that product, so that when customers come back around the buy cycle, we'll be ready for them. But I'd say that the thing that was probably a little bit more of the surprise in the quarter versus what we normally would see in development expenses, et cetera, was the manpower investment that we did make and are going to continue to make, to make sure that our customers are successful in this implementation. In our view, it's really critical that McKesson customers get to this Meaningful Use as fast or faster than their peers and that we build this solid base of customers, so we have a go-forward platform that continue to add value to them and to our business over time.

And we'll now go to Helene Wolk from Sanford Bernstein. Helene Wolk - Sanford C. Bernstein & Co., Inc.: Just to start with on the fiscal '12 guidance for generic pricing trends, can you tell us a little bit about what you saw in the quarter and what you expect in terms of sustainability going into fiscal '12?

Well, Helene, I think that we -- this is obviously a comment on McKesson's view of generics and our portfolio of mix of business and how we look at the market. I'm not sure that I'm not intentionally not making an industry comment. But as it relates to pricing trends, we see that they will be similar to what we've experienced in the prior year from a trend perspective and that we should see nominal deflation as opposed to what it had historically perhaps happened. So we have a pretty positive view on that component of what drives the business for us from a generic perspective. Helene Wolk - Sanford C. Bernstein & Co., Inc.: And does that include any comment on supply availability or supply disruption going forward?

Well, it's difficult to obviously break this apart and answer the question, what are the drivers to the stability or to our view of pricing. Clearly, availability plays a role in where people set their prices, as well as what the market's willing to pay for the product that is available. So I think that a combination of forces including market or manufacturer strategy and behavior have an impact on our view of pricing. Helene Wolk - Sanford C. Bernstein & Co., Inc.: Okay. And then just last question on the technology side around the investment in the Horizon Clinicals, is that something that you think of or seeing from an industry perspective, this is what all vendors need to invest in, in order to meet Meaningful Use or is this McKesson specific?

I'm not really inside their businesses, so it's very difficult for me to comment on what investments they're making and how they're making the investments and the timing of those investments. But I just think from our perspective it's a priority for us to make sure that our customers have got these tools up and running, and we're making those investments. So it's just impossible, Helene, for me to comment on other's peoples P&L's especially at the levels that we would see them. Helene Wolk - Sanford C. Bernstein & Co., Inc.: Okay, I appreciate that.

And that will come from Robert Jones from Goldman Sachs.

Jeff, just to go back to the quarter, quick housekeeping. So the tax is clearly a big swing factor, I'm getting $0.20 plus in the quarter. Can you just go back and give a little bit more detail on what exactly that was?

Well, one of the things you hear me say pretty much every quarter is there's always some quarter-to-quarter volatility in the tax rate, Robert. I'd point out that we went into the year, 12 months ago, with a tax rate assumption for you of 32% for the year, and we ended up at 31%, which is pretty close. But in between, we had some ups and downs. In this quarter, I guess I'd point 2 things really. One you've got ongoing discussions we are always having with tax authorities around the world and when you reach certain points in those discussions, you make adjustments to your tax reserves, and we had some positive adjustments on that front this year. The other thing is you do things in the business that cause you to reflect correctly that your estimate of future tax liabilities changed. So for example, we made some decisions about where we put distribution centers in the U.S. that actually will have a pretty meaningfully positive future benefit for us in terms of all of our state tax liabilities. So those are really the 2 things that drove the March quarter change. But, I guess, I'd finish where I started, which is for the full year at 31% versus our 32% plan, we were pretty close to what we thought at the beginning of the year.

Okay. That makes sense. So on the full year number, excluding the $0.14 from USON, that's $5 number that compares to the most recent guidance of 42 to 5 02?

Yes. Alexander Draper - Raymond James & Associates, Inc.: Okay, and just the last question I had just on the new long-term operating margin expansion guidance for the Distribution Solutions. Can you talk a little bit more specifically about how Specialty plays into that? I know obviously the old band did not have the contribution from USON. Can you maybe just talk a little bit about how USON plays into that expansion goal?

Well, I think it's probably fair to say that the more value and service we can provide to a customer, the higher likelihood there is that we'll have a margin to reflect that effort, energy and investment. So I think the US Oncology business is accretive to our overall margin structure. So just the additive nature of bringing them into McKesson's financial statements has a positive lift on our business. I think furthermore, the comment we made around adjusted EPS, if you don't have to put the amortization of the intangibles associated with this in there, which we think artificially depresses sort of a cash view of this, that the business actually is nicely accretive to our company and to our margin structure. So I think that, overall, we think it's a good place to invest, and we'll get a return on that investment that's above our cost of capital.

[Operator Instructions] And our next question will come from Robert Willoughby from Bank of America Merrill Lynch.

Jeff, quickly just to step up in CapEx, is that all US Oncology related or is there's some other project going on? And then the second one maybe for John, we've never been an advocate of splitting the business, the 2 businesses. But a critic might say that the provider technology shortfall isn't much different than giving up margin to get a retained business. If you can get forward multiples that are out there for some of these competitors, when do you have to go back and revisit your strategy, particularly if that profit trend isn't going to be there for you as you expected?

I'll let Jeff talk about CapEx, while I think about my answer.

Mine is easy, John. So CapEx, you're correct. There is the addition of US Oncology. There's also a little bit of a step up in our spending around distribution centers tied a little bit to some of the tax comments I made a minute ago.

On the multiple question. Clearly, our focus is really on making sure that our customers are going to be successful and that our team isn't distracted in the process of fixing the business on several dimensions. So our challenges there have primarily been in the McKesson provider technology portion of McKesson Technology Solutions. So it's in the subset of the business, and I believe that our focus has been appropriate on making sure that the business is running the way we need to have it running before we sort of revisit the question of, "Where does this business reside?" Like always, I think it's our responsibility to look at our portfolio of companies, whether we're buying or selling we've shown evidence of our willingness to address those issues on an ongoing basis, and I think we'll have to continue to. But right now, our job is to focus on the business to make sure we're delivering for our customers.

And we'll now go to A.J. Rice with Susquehanna.

Two questions about Technology Solutions, I guess, [indiscernible]. One is, obviously, you laid out the long-term goal for profitability there. What are some of the hurdles between where you're at now, what you need to achieve sort of gating factors to get to that higher end of your target range there? What do you have to accomplish? And then can you just remind us, how do you see meaningful -- I know that's one factor in Technology Solutions, but how do you see the layout of Meaningful Use impacting the business over the next year or 2? I mean, when do you think you sort of get to the peak benefit of that and when does the benefit of that from your perspective sort of start to taper off?

Well, I think what's good about our business is that it's a portfolio of businesses. As we've talked about repeatedly on these calls, the RelayHealth business is a Connectivity business that largely is a transaction business that has pretty steady and visible levels of income. Our payer business has grown in a steady way, and our technology business in provider facing technologies, where this issue is most acute has been focused really on buying clinical products for the sole purpose of accomplishing Meaningful Use. And as that focus went in that direction, frankly, some of the purchasing that would have taken place in other of our products that might have even carried higher margins has diminished. And so I think we have the benefit of having the portfolio, which means that we have steady growth in our business hopefully over time. The downside on that is we're not a clinical hospital-only company, where the benefit of stimulus is going to catapult us to some level of record achievement and then we're going to face this issue of falling off that cliff going forward. So I think we should expect this business to just perform steadily over time.

And we'll now go to our next question from Eric Coldwell from Robert W. Baird. Eric Coldwell - Robert W. Baird & Co. Incorporated: Mostly covered here. I just wanted to do one final clarification. You certainly would have, I assume, some tail of amortization from prior acquisitions before US Oncology. Are we to assume that you're also going to pull out all prior amortization from previous acquisitions? Or are we simply starting with US Oncology? And then as a follow on, if you do additional tuck ins through the course of the year, would you additionally call that out or do they have to meet some kind of hurdle for materiality?

Two good questions, Eric. So our intention is to be completely consistent. So we will pull out all amortization related to any acquisitions including some as you point out that are quite old, where it's actually running off. And just for perspective, the total amortization in FY '11 was $0.31 as compared to the $0.44 that we see in FY '12. Similarly, even when we do small acquisitions, we will track all of the amortization or their acquisition-related expenses, and to the extent it's material enough to even round to one on our financial statements, we will always show that to you.

And we'll now go to Steve Halper from Stifel, Nicolaus. Steven Halper - Stifel, Nicolaus & Co., Inc.: Could you do a sort of walk through the delta between the 2011 operating cash flow, what you reported and the guidance for 2012? What were some of the positives in 2011 that might not repeat in 2012?

So, Steve, just to level side everyone. So this year in FY '11, we had $2.3 billion in operating cash flow and our guidance is roughly $2 billion for next year. As some of you have heard us talk about and Steven, you and I have had this conversation, it's remarkable in our U.S. Pharmaceutical Distribution business in that the day of the week the year ends on, can mean a swing several hundred million dollars year-to-year just because of the pattern of when we bill customers versus when they pay. And so that really -- that's change in working capital in '12 versus '11 accounts for pretty much the entire difference between what happened this year and what you see next year. It's also why in many ways, when you look at our cash flow performance, I always encourage people, and in fact, I usually try to show in investor discussions the cash flow on a multiple-year basis because any 12-month period can really get skewed by that last day of the year.

That question today will come from George Hill from Citigroup.

Maybe, Jeff and John, can you talk about as we think about your fiscal third quarter and your fiscal fourth quarter generic Lipitor will come on, you talked about it coming on from 2 sources. Do you mean that by 2 generic sources or Pfizer and one other manufacturer?

Two generic sources.

And then, I guess, can you talk about, how do you expect the pricing for that product to look as you think about it? And the third and fourth quarter will be -- do you expect to be typical rapid falloff in the acquisition in the A to B pay or do you expect it to be more -- to retain, to stay at a higher level given the 2 manufacturers.

I think it's impossible probably for us to forecast what will happen with pricing. A lot of it will depend on how those 2 manufacturers decide to go to market, so I'm reluctant to guess.

Okay. I only asked because I figured that's probably got -- I mean, that's probably $1 billion or so on how you model the year, depending upon which way that goes.

Well, I think that -- Lipitor is important to us, but I think, as we said in the past even with Lipitor, we have a portfolio of generic opportunities. And I don't think our business is as sensitive to the pricing of Lipitor, the month it launches as much as it is to in aggregate that our team understands what we're buying in aggregate, what it's likely to sell for and that we get our customers on our program. So I don't think that our earnings guidance range is that sensitive to some of the nuances associated with the Lipitor launch. It's clearly important to us. I'm not trying to downplay it. It will help make FY '12 even stronger than FY '11 from a generics perspective, but it's not the sole driver of that success. Operator, I want to thank you for time today. I want to also thank all of you on the call for your time. We have terrific customers, a great team and a solid plan. And I'm confident that our current solution portfolio, coupled with our balanced capital deployment will deliver solid annual earnings growth in fiscal 2012 and beyond. This is a great business in a terrific industry. So thank you again for your time. Ana?

Thank you, John. I have a preview of upcoming events. We will participate in the Bank of America Merrill Lynch Health Care Conference in Las Vegas on May 10, the Bernstein Strategic Decisions Conference in New York on June 1 and the Goldman Sachs Healthcare Conference in Rancho Palos Verdes on June 7. We will release first quarter earnings results in late July. We look forward to seeing you at one of these upcoming events. Thanks, and goodbye.

Thank you for joining today's conference call. You may now disconnect, and have a good day.