Following is the transcript of the announcement of MeadWestvaco Corporation (NYSE:MWV) to fully separate its Specialty Chemicals business from the rest of the company made on Thursday, January 8, 2015, 9:00 AM ET. The separation, expected to be executed by a tax-free spin-off, is expected to be completed by the end of 2015.
MeadWestvaco Corporation (NYSE:MWV) is an American packaging company with global presence. The company has a network of 125 facilities and 16,000 employees spanning several countries, serving customers in over 100 countries. The company is a leading producer of packaging, specialty papers, consumer and office products, and specialty chemicals.
Host:
Jason Thompson – Director of Investor Relations, MeadWestvaco Corporation
Company Representatives:
John Luke, Chairman and Chief Executive Officer (CEO), MeadWestvaco Corporation
Robert Beckler, Executive Vice President (EVP) and President, Packaging, MeadWestvaco Corporation
E. Mark Rajkowski, Senior Vice President (SVP), Chief Financial Officer, MeadWestvaco Corporation
Analysts:
Mark Connelly – CLSA
Ghansham Panjabi – Robert W. Baird& Co.
Adam Josephson -KeyBanc Capital Markets, Inc.
George Staphos – Bank of America Merrill Lynch
Mark Wilde – Bank of Montreal
Mark Weintraub – Buckingham Research
Gail Glazerman – UBS Investment Bank
Chip Dillon – Vertical Research Partners
Operator
Ladies and gentlemen, thank you for standing by and welcome to this morning’s MWV Conference Call. I would like to turn the conference over to Mr. Jason Thompson, Director of Investor Relations. Please go ahead, sir.
Jason Thompson, Directorof Investor Relations, MeadWestvaco Corporation
Thanks, John and good morning, everyone. John Luke, Bob Beckler, and Mark Rajkowski are here to discuss the announcement we made this morning. The notification for this call was broadly disclosed and it has been webcast at mwv.com. Results are also available. Our results in commentary are presented on a continuing operations basis and are correct as of today, but could conclude time-sensitive information that are subject to change. In addition, any statements that are forward-looking are subject to known and unknown risks and they are not guarantee to the future performance. We are allotted about half hour for today’s call so I will now turn it to our Chairman and CEO,John Luke.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Jason, thanks very much and good morning to all of you. Thanks for joining us in short notice to discuss an exciting next step in value creation for MWV shareholders. I will briefly summarize the news that we shared this morning and what it means for our company,both now and in the near future. Following this, Bob Beckler will comment on the strategies for both Specialty Chemicals and packaging going forward. After which, Mark Rajkowski will discuss relevant financial items. We will then turn to you for your questions.
For some time, we recognized the potential value of our market leading Specialty Chemical business, having doubled the business in the last five years to a billion dollars and significantly improved profitability. This progress has provided a real opportunity for us to evaluate an appropriate path forward, taking into account a variety of factors that impact value creation for our shareholders. That path is clear today and we will pursue, that is where we spin off Specialty Chemicals this year. This will position both Specialty Chemicals and our packaging business as strong successful independent companies. It extends our record as strategic shareholder friendly actions.
This is an opportunity born of our success in building MWV’s businesses and the leaders in packaging and Specialty Chemicals markets around the world. Each of these businesses has a strategy that differentiates it in the marketplace. Each has outstanding profitable growth opportunities and each will have greater operational flexibility and optimal capital structures. Our shareholders will benefit from owning votes of this focused, agile, and strong companies.
In the meantime, we will continue to serve the customers of each business. Further building on our commercial progress, innovative product lines and high quality service possessions. In addition, in our packaging business, we will be pursuing specific actions to accelerate growth and improve margins consistent with our stated goal of achieving industry meeting profitability. The strategic steps we have announced today reflect the strong commitment of our management team and of our board of directors to create value for our shareholders, having returned $4 billion over the past decade. It also reflects our confidence and the strength of each of these businesses and in our ability to continue to create value for our shareholders by profitably growing our packaging businesses.
I will now turn the call over to Bob Beckler. Bob?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Thank you, John. I just like to begin by reinforcing how excited we are in bringing forth this unique opportunity to maximize value for shareholders. It is a decision we are confident will catalyze even greater momentum in growth and profitability of two great businesses as they stand on their own.
Let me just take a few moments to outline why we are so confident in the value the separation of MWV Packaging and Specialty Chemicals will create.
First, our packaging business today is on strong footing with a very bright future. We are delivering strong top and bottom line growth enabled by five key elements. First, our highly focused market participation strategies in food, beverage, home and garden, healthcare, beauty, and premium coordinated packaging. Second, innovation, strengthening our mix, profitability, and competitiveness around the world. Third, disciplined operational focus to get the most out of our world class asset intensity. Fourth, our growing global market reach. Fifth, a talented team with a strong sense of excitement and the urgency for maximizing value through all avenues, pricing, mix, volume, cost, and productivity.
In the future, as a focused packaging company, MWV will be able to accelerate this momentum and drive further value for shareholders. In addition to the five key elements underlying our performance, with today’s announcement, we intend to accelerate our packaging strategy in a number of areas and I would just like to site three examples here.
First, there is tremendous upside in food and beverage, being driven by global market dynamics where our customers require increased quality and a broader range of performance capabilities in packaging forward. In food, for example, this is driving a shift in the forms of packaging for pleasure, healthier, and more convenient products. In beverage, customers around the world are recognizing and moving some multi-pack formats to distinguish their products through better graphics, more customization, and greater flexibility for innovation. In all of these areas, we will be increasing our leverage of our strong material science capabilities along with their packaging insights to capture maximum value in the shifting markets.
Second, in home health and beauty, the dispensing systems market is one of the most attractive parts of the packaging landscape and our business has significant upside as it realizes its full market potential. We have seen significant progress this year as the team has driven strong growth in high margin areas based on the performing business lines and executed well in improving its cost structure and margins while continuing to drive great quality, service, and innovation for our customers around the world.
We see continued opportunities as we drive additional efficiency and sustain growth through exciting new innovation and targeted investments in attractive areas like fragrance, healthcare dispensing and other product lines around the world. Third, we will continue gaining increased leverage from recent productivity and growth investments that range from expanded platforms for corrugated packaging in Brazil and India through our domestic mill system. These investments are on track and the productivity and capacity [inaudible] ahead of us are our controllable.
Now, turning to Specialty Chemicals. As an independent business, Specialty Chemicals will be strongly positioned to grow even faster as a leader in pine chemicals and activated carbon technology. Through our strategy focused on chemical markets aligned with global mega trends such as infrastructure, transportation and energy development, this business has built tremendous strength in highly differentiated products, flexible assets with global reach, deep market insights and applications expertise and world class talent and leadership.
As with packaging, the strategy of Specialty Chemicals has been supported with investment that sets the stage for substantial future growth. As one example, we continue to expand our activated carbon capacity and capabilities around the world to serve the growing automotive market driven by vehicle minute growth and increasingly stringent government regulations in the U.S., China, Europe and elsewhere. Together, the opportunities we see in carbon, asphalt, adhesive and other fine chemical applications give us a line in sight that the business can double again in the next five to seven years while continuing to be one of the most profitable participants in the global specialty chemical sector.
Before I pass off to Mark, I also want to note that the pending separation of Specialty Chemicals has given us an opportunity to realign resources across the enterprise of the MWV to fully capitalize on the formation of two standalone companies. We have begun a comprehensive organization redesign in packaging that will accelerate execution of our profitable growth strategy and our path market leadership. We are working with a leading global consulting firm to design an organization capable of executing on our strategy with an appropriately sized support structure that will increase the competitiveness of our repackaging company and deliver attractive total returns to shareholders.
Now, I will turn it over to Mark.
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Thanks, Bob. I will quickly review the structure of this separation, our initial costs on capital structure for each new business and finally, the expected timing of the separation and immediate next steps.
We have been carefully evaluating all of the options for separation of Specialty Chemicals with the focus on value maximization. While we remain open to other alternatives during this process, we have determined that a spin-off in which the business would be a new publicly traded company that is 100% owned by MWV’s then current shareholders will likely best capture the substantial present and importantly, the future value of this business. The transaction is expected to be tax free to our shareholders in the company.
In terms of capital structure, as independent companies in different industries with different strategic priorities, growth profiles, and asset intensity, there are a number of factors to consider to ensure that each company’s capital structure permits long-term financial success and optimal shareholder returns.
With MWV’s packaging business, economic access to capital to all business cycles is critical giving the asset intensity and annual maintenance requirements of the business. Dividend yields in growth also are important to ensure we provide strong in-growing returns to our shareholders. Therefore, we expect to maintain MWV’s investment grade credit writing as well as providing a strong dividend for our shareholders.
For the Specialty Chemicals business, the key priority is providing sufficient access to capital for growth as Bob mentioned. We expect the business to double in size over the next five to seven years. As such, we don’t want to constrain the business with excess leverage or substantial dividend payout on separation. We expect to lever the Specialty Chemicals business around two times EBITDA which will provide cash to MWV of approximately $500 million. This will enable us to maintain MWV’s investment grade credit rating while at the same time, providing the Specialty Chemicals business with sufficient capacity for future growth capital.
In terms of timing, we are working towards completing the separation by the end of 2015. The immediate next steps includes finalizing our filings for a tax re-ruling and preparing the Form 10 with audited financial statements for the Specialty Chemicals business.
With that, I will turn the callback to John.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, Mark. Let me summarize by saying the spin-off of Specialty Chemicals will establish two strong companies, each with great strategies and very exciting opportunities for profitable growth. This action reinforces our strong commitment to creating value for our shareholders and we are clearly excited about the future for both businesses.
With this, we now like to turn to you for your questions and as we transition, I will just remind you that we have roughly 15 minutes or so left in the call and we will look to get as many of your questions answered as we can, but I would also note that we will have ample time for discussion with you over the next couple of weeks, and certainly, we have our Earnings Call on the 28th of January where we, I’m sure, will have more fulsome discussion of this topic as well.
Question and Answer Session:
Operator
(Operator Instruction) First, we go to Mark Connelly with CLSA, please go ahead.
Mark Connelly, CLSA
I will be quick, two questions. First, you have talked over the years about having dividend growth aspirations for the packaging side of your business. Is that still your focus or do you think we are going to be looking at more of a balance of buybacks and other stuff? The second question is, does this materially change your predilection to doing M&A on the packaging side?
John Luke, Chairman and CEO, MeadWestvaco Corporation
Let me comment and I will turn to Bob and Mark to comment as well, Mark. We have, as you gathered, at a very high level and we will obviously get more into it as we move forward, great aspirations for a profitable growth in the packaging business and we would expect it overtime that would include first and foremost, organic growth of the sort that Bob Beckler outlined, but clearly, there will be opportunities as we identify profitable potential around the world, consideration of inorganic opportunities as well. As we proceed with the achieving of those profitable growth objectives, the opportunity for return of capital in a variety of forums to shareholders will be very much as before. Mark?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yes, John, I would add that relevant to the dividend, that is our objective and that is a function of increasing profitability, increasing free cash flow with the objectives and the focus that we have announced today that certainly are expectation. We will be able to meaningfully grow the business, expand our margins, increase our cash flows and that will enable us to continue to increase our returns to our shareholders with strong dividend.
Mark Connelly, CLSA
That is great. Thank you. I am happy to hear that you are sticking with the strategy.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, Mark.
Operator
Our next question from Ghansham Panjabi with Robert W. Baird. Please go ahead.
Ghansham Panjabi, Robert W. Baird& Co.
Hey guys, good morning and Happy New Year. Just curious, why only two times net at EBITDA for Specialty Chems? It looks like the business puts up a fair amount of cash flow, so why not a higher leverage profile? From your perspective as a business, do you think it could not support a higher leverage profile?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
I think Ghansham, I mean, it is a fair question. We are really excited by the opportunities that the business has to grow. As we mentioned on the call, we think we certainly have an expectation that over the next five to seven years, we can double the size of that business and that is going to require capital for growth and we do not want to constrain those opportunities. Ultimately, that will be the decision of the board, but we think as we look out, the opportunities are fantastic for that business. It is important that they do not get over burdened by death.
Ghansham Panjabi, Robert W. Baird & Co.
Okay, I will turn it over. Thanks.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, Ghansham.
Operator
We go to Adam Josephson with KeyBanc. Please go ahead.
Adam Josephson, KeyBanc Capital Markets, Inc.
Good morning, everyone. Happy New Year as well. Just on the capital structure issue. Mark, you are putting about 550 million of debt on chemicals that leaves by my numbers about 800 million for packaging that would be about a little over one times EBITDA, do you expect to bring a leverage ratio higher than that for packaging or what is your target leverage ratio for the remaining entity? You talked about using the proceeds primarily to pay off debt, but given that low leverage ratio, I would think you might consider other alternatives such as a buyback. Can you provide thoughts along those lines?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yes, well, I think the focus is taking the amount of cash that we need to get our debt levels in line that ensure that we will maintain our investment grade credit rating. Likely, when we look to pay those levels of debt down, they are creating that pretty substantial premiums, so there are some premium cost in there as well, but we are not going to look to under lever the business. We want to maintain an appropriate target leverage ratio. That will do enough to maintain our investment grade credit rate?
Adam Josephson, KeyBanc Capital Markets, Inc.
Thanks a lot. I appreciate it.
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yes.
Operator
Our next question is from George Staphos of Bank of America Merrill Lynch. Please go ahead.
George Staphos, Bank of America Merrill Lynch
Thanks. Hi everybody. Good morning. Happy New Year. Good luck with the rest of transaction. Two questions here quickly. The consulting study we are looking at, you have not yet gotten back the results from the study,because you have not even gotten it yet. Do you anticipate that the – here, I am paraphrasing – the right sizing of the business structure will lead to further cost reduction. Is there anyway initially to size that? Then within packaging – you have actually had a pretty good year of catching up to your peers from a profit standpoint. Can you quantify or articulate what is left from your vantage point within home, health and beauty, within food &beverage, with an industrial temporary margin from here. Thank you.
John Luke, Chairman and CEO, MeadWestvaco Corporation
George, let me make a couple of points at the outset and I will turn to Bob and Mark. First of all, this consulting work has begun and we are hard at work during all of these and our focus clearly is on identifying opportunities to achieve greater efficiency as well as define ever further the right approach and the right capabilities to ensure, as Bob noted, the profitable growth strategies that we’ve got for packaging and about which we are very, very excited. As we reinforced over the course of the past year and in this call as well, our focus is not just to catch up, but our focus is to lead the industry with our margin profile as we are putting points on the board with profitable growth, and that’s the nature of this work as well.
Mark? Bob?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Oh, that’s wellput, John. I would just punctuate the aspect of taking this as a really unique opportunity to step back and look at the organization, design, capabilities, resources, and processes that are required from a stand-alone packaging perspective, not only to continuous on the path that John described for market leading margins in each of the sectors, but actually accelerate our progress. Mark?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
I think you guys captured it well.
George Staphos, Bank of America Merrill Lynch
Okay, so will you be able to quantify future goals, cost-reduction programs, etc etc, on the next earnings call or by what point on should we expect it? Thanks and good luck.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, George. I will turn this to Mark to make the commitments here, but I think you know, George, and others on the call, that we have a very good track record once we’ve got our homework and let us find outwith laying out targets and then reporting progress against them and that is what we would certainly look to do here. Mark?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yeah, we are in the early stages. We are moving quickly and as that work comes together, we will be reporting out to you on our expectations and what that means for the year ahead.
George Staphos, Bank of America Merrill Lynch
Okay. Thank you.
Operator
Next, we go to Mark Wilde with Bank of Montreal. Please go ahead.
Mark Wilde, Bank of Montreal
Good morning and Happy New Year.
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Hey, Mark.
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Mark.
Mark Wilde, Bank of Montreal
A couple of questions. One, I wondered if you can give us any color on leadership team on the two businesses? Then the second question I had is, within performance chemicals, you have given us some geographic breakdown for each of those three businesses, but I wonder if you could just help us size oilfield chemicals within that overall performance chemicals mix.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Yes. Mark, let me just comment on the leadership question. I think first of all, it is fair to say that with the confidence we have and the strategies, and the fact that we are going out with this right now, that we have great confidence in both the folks leading our packaging business as well as the chemical business. In the chemical business, in particular, we have got a very strong leadership in place that is supported by an organization that has truly world class expertise. That is reflected in the outstanding progress we have made and we have got great confidence in their ability to take the business forward. Likewise, the progress that George referred to that we have made, particularly over the past year in our packaging business gives us similar confidence in the capabilities that we have and importantly, the leadership that is driving the articulation of the strategies.
Mark Wilde, Bank of Montreal
Okay. Would you expect to kind of lay out the leadership team for the two businesses like in the next three months, six months? What will be the time frame?
John Luke, Chairman and CEO, MeadWestvaco Corporation
I think we will do that as soon as we have got good clarity in both in that of the structure and the people. We will be happy to address that as we go forward.
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Mark, on the question around oilfield, this is Bob. Roughly speaking, the business is about 10% of Specialty Chemicals and it is a rapidly growing sector for the business, much is in the market today, obviously, about movement in oil production, but it actually creates an interesting dynamics for us and that is a very resilient part of our business and so we see continued growth in that sector.
Mark Wilde, Bank of Montreal
Okay. Bob, just on this whole issue of oil falling and what impact that may have for the business. Does it create any additional pressure in Specialty Chemicals just from maybe competing products, seeing lower costs, kind of we are playing through from oil?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Yeah, it creates a lot of dynamics. But overall, Mark, we really do not see it having a material impact on the overall business. Historically, the business has performed very well through these kinds of dynamics where there are a lot of moving parts andthe team is very skilled and experienced in managing through this kind of an environment.
Mark Wilde, Bank of Montreal
Okay, that’s all. Thanks, Bob.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, Mark.
Operator
Next, we go to Mark Weintraub with Buckingham Research. Please go ahead.
Mark Weintraub, Buckingham Research
Thank you. First, on the doubling of the business of Specialty Chemicals over the next five to seven years, I assume that’s a reference both to revenue and EBITDA, etcetera. How much in the way of capital do you think will be required to achieve those types of targets?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
This is Bob. On the doubling of the business, it is really going to be multidimensional. It comes from volume and mixed growth that still exists in the capacity structure of the business today. We have made some good investments there that we’re continuing to unlock. We are continuing to extend our global reach through both marketing efforts and our investments globally. I would just get a little bit more granular for you, I mentioned in the prepared remarks around the carbon business, this just continues to be a very attractive and rapidly growing sector of the business for us around the world where evaporating fuel emissions from vehicles are a very significant source of pollution in parts of the world, particularly in the developing markets like China. Even within the U.S., the government is taking steps to further raise the bar that is creating really interesting and in value creating opportunities for us that donot require a lot of capital here in the U.S.
Then, I can give you similar remarks around asphalt, oilfield, and adhesives, which will just require incremental investments as we go forward in our ability to derivatize from the pine chemicals refinery base. The final remark I would make is that this business historically has done a really nice job with incremental inorganic investments to build out the platform, and we see that continuing. Just another reason,back to Mark’s earlier remarks, why we want this business to remain wellfunded for its growth.
Mark Weintraub, Buckingham Research
Very helpful, all makes sense. I realize it is premature to be overly specific, but are we talking order of magnitude, one-and-a-half times the DDNA or is it three times, in any way you can kind of frame or quantify a little bit for us what type of capital would be underwriting the growth?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
I think Mark, it’s a little bit premature to get into that. Certainly there will be some details relative to path, forward capital requirements included. That will be laid out in the Form 10and it will be an evolving story, but what we do know is that to Bob’s point, one, there are substantial opportunities for us to continue to grow organically, but it will require a capital for capacities. We do see some opportunities for inorganic growth as well, but more common in all that.
Mark Weintraub, Buckingham Research
Okay. Lastly if I could, we can see what the segment EBITDA for Specialty Chemicals is, can you help us understand a little bit what type of other entity costs there might be, as you separate the business? How that segment EBITDA is going to translate into the new company’s EBITDA generation, that kind of backward looking even. How about that?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yeah Mark, great question. We’re in the middle of our work right now in terms of being very specific in terms of what it is going to take to stand SCD up as an independent public company and what I can tell you is that those margins will remain very attractive, but again, that will be work that will become more clearer as we file our Form 10.
Mark Weintraub, Buckingham Research
Okay, thank you.
Operator
We have a question from Gail Glazerman with UBS. Please go ahead.
Gail Glazerman, UBS Investment Bank
Hi, good morning.
John Luke, Chairman and CEO, MeadWestvaco Corporation
Hello, good morning.
Gail Glazerman, UBS Investment Bank
I know it hasnot been that long since you have been publicly talking about looking at alternatives for chemicals, but I am just wondering if you could give us any sort of perspective on the level of interest and maybe some of other alternatives that you might have had other than pursuing a spin-off?
John Luke, Chairman and CEO, MeadWestvaco Corporation
Mark, do you want to comment on that?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yeah, sure. Well, as you would imagine, Gail, certainly with the growth profile, margin profile of this business, it does attract attention. The key issues here are really around the impact of taxes. If you thought about an outright sale, it would have to be one incredible multiple to offset the impact of taxes that we would end up paying. Also, as you look at potential partners in a tax-free structure like the Reverse Morris Trust, there are certainly companies out there that may have interests, but we have to work through a lot of issues including valuation and certainly we have got just great confidence in our ability to continue to grow this business and we want to make sure our shareholders benefit and get the optimal value from that future growth.
Gail Glazerman, UBS Investment Bank
Okay, thank you.
Operator
Our final question would be from Chip Dillon with Vertical Research Partners. Please go ahead.
Chip Dillon,Vertical Research Partners
Yes, thanks very much. Two quick questions. One, do you still expect to reallocate the corporate expense numbers, some of them at least, among the segments as you have talked about earlier. Secondly, could you just update us as of maybe the third quarter as you tally the 200 million ultimate savings, how far along we are just so we can sort of model out the remainder.
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Chip, let me take both of those. Yes,we are intending to have a more fulsome allocation to our segments reflecting the level of service that is required to support those businesses. We will be getting into that in more detail as we move forward. We will provide more information and update where we are at on our cost program, but as we reported at the end of the third quarter, we are tracking extremely well to achieving those objectives.
Chip Dillon,Vertical Research Partners
Got you.Just a quick followup, do you think the recasting of the corporate expense will significantly impact or even reporting the EBITDA to be in chemicals or could it be more than say $15, $20 million annually or would you think that would be a high number?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
You will get to see all that in short order, Chip.
Chip Dillon,Vertical Research Partners
Okay. Thank you.
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
You are welcome.
Jason Thompson, Director of Investor Relations, MeadWestvaco Corporation
Okay, everyone. Well, thanks for joining us and we will be talking with you in about 20 days on our Fourth Quarter Call. Have a good day.
Operator
Ladies and gentlemen, this conference is available for replay. It starts today at 11 AM Eastern, will last until February 8th at midnight. (Operator Instruction). That does conclude your conference for today. Thank you for your participation. You may now disconnect.
