Q1 2010 Earnings Call
May 05, 2010 5:30 pm ET
Anthony Thomas - Chief Financial Officer
Brent Whittington - Chief Operating Officer
Jeff Gardner - Chief Executive Officer, President and Director
Robert Clancy - Senior Vice President of Investor Relations and Treasurer
Christopher King - Stifel, Nicolaus & Co., Inc.
Michael McCormack - JP Morgan Chase & Co
Michael Rollins - Citigroup Inc
Simon Flannery - Morgan Stanley
Jason Armstrong - Goldman Sachs Group Inc.
Good day, ladies and gentlemen, and welcome to the Q1 2010 Windstream Communications Earnings Conference Call. My name is Peggy, and I will be your conference operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Robert Clancy, Senior Vice President and Treasurer. Please proceed.
Thank you, Peggy, and good afternoon, everyone. Thank you for joining us today. Today's conference call was preceded by our first quarter 2010 earnings release, which has been distributed on the newswires and is available from the Investor Relations section of our website. Today's conference call should be considered together with our earnings release and related financial information.
Today's discussion will include certain forward-looking statements, particularly as they pertain to guidance and other outlooks on our business. Please review the Safe Harbor language found in our press release and in our SEC filings, which described factors that could cause our actual results to differ materially from those projected by us in our forward-looking statements. Today's discussion will also include certain non-GAAP financial measures. Again, we refer you to the IR section of our website where we have posted our earnings release and supplemental materials, which contain information and reconciliations for any non-GAAP financial measure.
On February 8, Windstream completed the acquisition of NuVox. To assist investors, we have revised our pro forma results to include the results of NuVox for all periods shown. These supplemental financials also include D&E Communications and Lexcom, and exclude our former non-affiliate product distribution business.
As part of our integration process, we reviewed and updated our methodology for counting and reporting key customer metrics. As a result, we are now providing several new operating metrics which align to the specific revenue categories by type and provide better transparency into our operations. Specifically, we are now disclosing voice access lines, special access circuits and advanced data and integrated solutions, which are generally connections that provide integrated voice and data services. These connections aggregated together will be reported as total access lines, which is consistent with our historical presentation, as well as our peer group reporting.
We also updated our supplemental schedules to enhance the revenue and operating metric transparency by channel and customer type. Finally, we are providing pro forma adjusted free cash flow, defined as adjusted OIBDA, excluding non-cash pension expense, non-cash stock compensation expense and restructuring expense, which is the framework used to provide our annual free cash flow guidance in February of this year. We will make references to these pro forma results including the year-over-year comparisons during our call.
Participating in our call this morning are Jeff Gardner, Windstream President and Chief Executive Officer; Brent Whittington, Windstream Executive Vice President and Chief Operating Officer; and Tony Thomas, Windstream Chief Financial Officer. At the end of the call, we will take a few questions. With that, here is Jeff Gardner.
Thank you, Rob, and good afternoon, everyone. This afternoon, I will make a few comments about our performance and provide an update on our strategic initiatives. Brent will then discuss our operating results, and Tony will review our financial performance.
First, I am very pleased with our results for the first quarter. We continued to make improvements in many key operating metrics and delivered very solid financial results, with improving revenue trends, which is very important to sustaining cash flows over the long term.
Additionally, our teams are progressing extremely well with our integration efforts, which all remained on track and in line with our expectations. During the first quarter, we completed the NuVox acquisition, acquiring approximately 104,000 business connections in complementary markets in 16 states.
NuVox is a great strategic fit for Windstream. As this transaction bolsters our strategy to focus more on the business segment, which offers better growth prospects going forward. We are very excited to have the NuVox team on board, and look forward to the future opportunities that this transaction creates for our combined company.
Additionally, we are progressing nicely with the approvals required to close the acquisition of Iowa Telecom. During the quarter, the Iowa Telecom shareholders approved the transaction. And just last week, we obtained the remaining state approvals necessary to proceed with the closing. Thus at this point, we are only waiting for FCC approval. It is our expectation that this transaction will close by the end of the second quarter.
Turning to the regulatory front. We were encouraged by the FCC's National Broadband Plan. Released in March and believed the plan appears to be focused on the right issues, while acknowledging reforms need to be manageable with appropriate time to transition. The plan was a positive first step and now the challenge will be working through the rule-making process to ultimately implement the recommendation.
Windstream shares the core goal of making robust broadband available to everyone and the National Broadband Plan's recognition that this goal cannot be achieved without effective reform of universal service and intercarrier compensation. In March, we applied for $238 million in federal stimulus grants to expand broadband availability and offer faster broadband speeds to more than 500,000 homes and 80,000 businesses in the rural areas of 16 states.
The federal grants offered by the RUS cover upto 75% of the cost, and greatly improved the economics for deploying broadband to the areas addressed in our stimulus applications. If granted, Windstream would provide $80 million in funding, which would affect our capital spending in 2011 and 2012.
Windstream has already invested hundreds of millions of dollars to deploy broadband services across our markets, covering approximately 89% of our footprint. And we believe that our networks offer the most reliable and the best alternative for expanding high-speed Internet access to unserved rural communities, given both our experienced and track record.
Looking forward, I am confident in our business and the sustainability of our cash flows. Given the shift in our revenue mix, with now over 53% of revenues coming from broadband and business services, the improvement in our consumer operating metrics and the acquisitions and their related synergy benefits, we are delivering on our strategy to build a next-generation telecom company focused on creating shareholder value for years to come.
We believe that we will have further opportunities to continue to grow through M&A, and our acquisition strategy remains consistent. We will pursue well-run businesses that are free cash flow accretive and do not significantly change the risk profile of Windstream.
Now let me turn the call over to Brent to discuss our operational results.
Thanks, Jeff, and good afternoon, everyone. On a pro forma basis, we added approximately 36,000 new high-speed Internet customers this quarter, bringing our total customer base to 1,168,000, an increase of 10% year-over-year. Our overall broadband penetration is now at 40% of voice lines.
In the Consumer channel, residential high-speed Internet customers grew almost 11% year-over-year, and penetration is now approximately 57% of primary residential lines. During the quarter, we continue to see success with our Price For Life initiative, which bundles high-speed Internet, unlimited local and long-distance voice and other features for a fixed price for the customer life.
In addition, we continue to focus on selling complementarity Internet services, such as a Security Suite, Identity Protection, Home Networking and Online Data Backup to improve both customer ARPU and retention.
In the Business channel, high-speed Internet customers grew by 4% year-over-year. Additionally, advanced data and integrated solutions, which are largely connections providing both voice and data services, was up almost 2%, largely a result of the continued growth we've seen in the former NuVox markets.
This quarter, we added over 12,000 digital TV customers, bringing our total customer base to approximately 382,000 or 21% penetration of our primary residential customers. And during the quarter, we announced a multiyear extension to our agreement with DISH to resell their digital TV service. This continues to be an important business partner for Windstream, enabling us to deliver a triple-play bundle which provides value to our customers and lowers churn.
Total access lines declined by approximately 23,000 during the quarter, resulting in a year-over-year decline in access lines of 3.9%. This year-over-year loss rate improved by 50 basis points sequentially, and was the lowest percentage loss that we've reported as Windstream. More specifically, residential voice access lines declined 3.7% year-over-year, an improvement of 90 basis points sequentially and a result of our Price For Life program, improved service levels, expanding sales distribution channels and a stable competitive environment.
Business voice lines declined 5.1% year-over-year, an improvement of 20 basis points sequentially. And importantly, special access circuits and advanced data and integrated solutions each grew approximately 2% year-over-year.
As we have mentioned before, we are managing the business channel from a revenue and profitability perspective, and we are encouraged with the growth in higher ARPU services which is helping to offset the revenue from the declining business voice lines. From an integration perspective, all of our efforts are progressing as expected. And as reminder, D&E has been fully integrated.
For the remaining acquisitions, we expect to have all systems integrated, including Iowa Telecom by the end of 2010. Our teams have a great deal of experience integrating companies, and I remain confident that we will successfully integrate these businesses according to our expectations. As a result of the NuVox integration, a major rebranding and repackaging of Windstream's business products is underway, which will result in improved business product portfolio including advanced data and integrated solutions, which will be available throughout the Windstream footprint.
We are very excited about the strides we are making in the business channel, which has certainly been accelerated by the best practices and advanced offerings gained through the NuVox transaction. Business is now our largest channel, representing 43% of total revenues. And we believe that we're well positioned organizationally as well as from a network and product perspective to capitalize on future business growth opportunities.
In summary, I am very pleased with our results this quarter. Our focus on execution, successful marketing programs and exceptional customer service continues to produce improvements in many of our key customer metrics. We believe that these improvements, coupled with our strategy to focus on broadband and business, will better position the company for the future. I really want to thank the entire Windstream team for delivering another exceptional quarter of operational results.
Now let me turn the call over to Tony to discuss our financial results.
Thank you, Brent, and good afternoon, everyone. For the first quarter, on a GAAP basis, Windstream achieved consolidated revenue of $848 million, operating income of $247 million and $0.17 of diluted earnings per share. Our GAAP results include $14 million in after-tax, merger and integration costs, which lowered EPS by roughly $0.03 this quarter.
Turning to our pro forma results. Windstream achieved revenues of $905 million, a decrease of 2.8% year-over-year. Looking at revenue by channel, consumer revenue, which includes the residential portion of voice, long distance, high-speed Internet and other miscellaneous revenues declined by $18 million or 5%, driven primarily by fewer voice customers and lower feature revenues resulting from our bundled pricing strategy.
Business revenue, which is comprised of business-related voice, long distance, data and integrated solutions, special access and product sales revenues declined $3 million or less than 1% driven by fewer access lines offset by growth in Data Integrated Solutions and Special Access.
Wholesale revenue, which primarily includes Switched Access and USF revenues was down $3 million or 2% year-over-year, primarily the result of fewer access lines. Specifically by category, voice and long distance revenues declined by $34 million year-over-year or 9%, driven by fewer access lines and the pricing programs I just mentioned.
Data and Integrated Solutions increased $11 million or 4% due to the growth in high-speed Internet customers and next-generation data products, as well as growth in integrated solutions, largely driven by the former NuVox markets.
Special Access revenues were up by $4 million or 5% due primarily to circuit growth. Switched Access and USF revenues declined $2 million year-over-year or 1%, driven by a number of factors. Within Switched Access, revenues declined by $7 million year-over-year related to fewer access lines and decreased usage. Within USF, revenues improved by $5 million year-over-year, a result of flat USF receipts and higher end-user surcharges due to an increased federal contribution factor, which is OIBDA neutral. Miscellaneous revenues declined by $3 million year-over-year.
Total product sales were down $2 million year-over-year, driven by fewer business sales which partially offset an increase in consumer home networking sales. Sequentially, revenue declined by $13 million, largely due to lower voice and long distance and Switched Access revenues. Additionally, our fourth quarter results included a favorable USF cost study true up.
Importantly, we are seeing improving sequential consumer revenue trends as our marketing programs have driven better voice and long-distance trends and continued growth in consumer broadband, which increased $3 million sequentially.
Let me turn to expenses, which exclude depreciation and amortization. This quarter, expenses were lower by $27 million year-over-year, excluding the non-cash pension expense which declined by $70 million. Expenses were lower by $20 million or 4% year-over-year.
Specifically, cost of services was down $16 million due to $8 million lower pension and benefits expense. Lower costs associated with our recent reduction in force, and lower bad debt expense. Cost of products sold improved by $3 million year-over-year due to fewer business product sales, offset somewhat by higher consumer home networking sales.
Within SG&A, expenses decreased $8 million or 6% year-over-year due to the realization of synergies with our recent transactions, the reduction in force I just mentioned and lower pension expense. Sequentially, total expenses decreased by approximately $15 million due to $9 million lower pension and benefits expense, incremental synergies largely from D&E and lower restructuring expense.
For the quarter, OIBDA was $438 million, flat year-over-year, largely the result of lower non-cash pension expense. Adjusted OIBDA was $457 million, lower by 2% year-over-year. Our adjusted OIBDA margin improved 60 basis points year-over-year to 50.5%. Operating income for the quarter was $273 million, up 1% year-over-year.
For the quarter, we spent $64 million in capital expenditures from a balance sheet perspective we ended the quarter with $580 million in cash, down from the end of the year due to the payment of roughly $480 million in cash to close the NuVox transaction. $26 million in merger and integration costs and $21 million in previously scheduled deferred compensation payments.
We ended the quarter with almost $500 million of revolver capacity, and our pro forma net leverage ratio was 3.1x. As Jeff mentioned, we expect to close the Iowa transaction by the end of the second quarter and at this time, plan to use existing cash and our revolver to complete the overall cash required for this transaction. For the quarter, pro forma adjusted free cash flow was $216 million, resulting in a dividend payout ratio of 51%.
In summary, we are very pleased with our results for the first quarter. Our strategy to deliver industry-leading operational results, coupled with expanding our business and broadband presence, is leading to improving revenue trends. When combined with our selective acquisition strategy, we believe Windstream is well positioned to continue delivering solid and sustainable free cash flows into the future.
With that, we will now take a few of your questions. Peggy, please review the instructions, and open the call to questions. Thank you.
[Operator Instructions] And our first question comes from the line of Simon Flannery with Morgan Stanley.
Simon Flannery - Morgan Stanley
The line-loss numbers continue to really impress. Can you talk a little bit about -- obviously the promotional and the bundling is helping a lot. But dive down a little bit more into things like the economic impact, particularly on the business side, the impact of sort of cable competition. Are you seeing the improvement on the adds or is it on the churn side? Anymore color you could give around that? Is it realistic to see significant improvement from here? Or do you think it's going to start to level out at these sort of levels over the next several quarters?
Simon, this is Brent, I'll take that. And yes, we've been real pleased with the improvement that we've seen. The Price For Life initiative that I referenced is definitely making a difference. And we've really hit on something that, for customers, has been an irritant in terms of increasing price. And if you couple that with the improvements we've made in service, we just think it's working for us at the right time. So that's a big factor for us. If you look underlying -- just the trends overall in terms of what's going on in the residential side, we're predominantly seeing fewer competitive disconnects. Sales and gross adds have remained strong, but we're seeing declines from competitive disconnects. It's hard to chalk all that up to any kind of economic activity, but we do think it's a successful promotion for us. It's working well. So that's the biggest thing. There's really been no new entrants in terms of competition in our market as all. So as I indicated the competitive environment over really the last couple of quarter has been pretty stable. As to where things can go from here on residential, I don't want to get into predicting the future but I like where we are positioned right now and the momentum we've had. Our challenge this year is to keep that promotion fresh and to keep driving and improve results. And that's what we're going to try to do. As it pertains the business side, I'd say that section of the business is probably where we're still seeing some economic softness. Specifically, as it pertains to gross adds and sales and new business startups remain soft. However, you did see some improvement sequentially in our access line loss there, most of which we chalk up to reductions and disconnects. I think businesses are kind of through the cycle of trimming payrolls and as a result lines on our side. So that's probably the biggest thing that's driving results on the business side. Encouraged with what we're seeing right now, though, operationally.
Our next question comes from the line of Michael Rollins with Citi Investment Research.
Michael Rollins - Citigroup Inc
I was wondering if you can give us an update as wireless becomes more capable on the broadband side, have you been revisiting your options on that front to give your customers a more complete bundle with that option?
Michael, this is Jeff. As it relates to wireless, it's pretty clear that -- it's always been our view that the wireless broadband out there today is a complementary product for our broadband product. And that it's incumbent upon us to continue to improve the value proposition to our customers. That's why we've been working so hard on looking at increasing our speeds and with making investments in our network. We did that with ADSL2+ and we have future plans with DDSL that will allow us to continue to take advantage of that natural advantage that landlines will always have. With respect -- at this time, we continue to press on wireless technologies. We still haven't seen anything that's terribly interesting to us. But we're very focused on the fact that we have a competitor there that's becoming more and more viable. But even with that, if you look at our churn, and this is by the bundling that Brent talked about is so important, we continue to focus on improving our broadband churn, and that's getting better all the time. So we were very pleased with our broadband number this quarter. We're obviously very competitive in the markets that we serve and wireless is out there today. So we'll continue to be aggressive there.
Our next question comes from the line of Mike McCormack with JPMorgan.
Michael McCormack - JP Morgan Chase & Co
Can you just make a quick comment maybe on how important the video bundle is with respect to your improving line loss? And then secondly, you had a little bit of a discussion about M&A. Can you give us a sense -- I know you talked about characteristics regarding cash flow, but maybe your thoughts on characteristics regarding the demographics to the line. I know your peers have obviously been acquiring more urban markets. Just your updated thoughts on whether or not that's the strategy you might pursue and maybe attached to that your thoughts on the CLEC acquisitions as well. Obviously, you just finished NuVox.
On the first part of the question, my perspective on that, if you look historically at our video penetration, it's been far superior to most all in our industry. There's no question I believe that, that definitely helps in terms of one of the contributing factors as to why our line loss looks different from many others. We continue to make that a primary part of our discussion with all customers in all of our sales and service centers. And by having that as part of our focus for, darn, near five years now, there's no question it's helping. And it remains a viable part. We just renewed our agreement with DISH and remained committed to that part of our strategy.
On M&A, we believe that we will have further opportunities to continue to grow through M&A. Our acquisition strategy remains consistent with what it's always been. We want to acquire well-run businesses that are free cash flow accretive do not significantly change our risk profile. We are doing very well, as Brent reported, with regard to our integrations. I don't think we have a large amount of risk there. We've made great progress over the course of the quarter. And as Brent said, D&E is already complete. At the same time, we've been able to -- as we're doing these deals, we've been very focused on not taking any focus off of our core products. And that's why you're seeing operating metrics like 3.9%, 36,000 broadband customers, et cetera. Our focus has always been, our preference has always been more rural lines. And on the CLEC side, the reason that NuVox was so attractive to us, it was in the second, third tier cities. It fit very well with us. It was a very unique CLEC from that perspective and one that we still feel very good about. As it relates to some of the more urban-based acquisitions had been announced lately, without mentioning it specifically, I think what it does for us is it further separates Windstream strategy from our peer group, making us really the largest RLEC. We are totally focused on the rural space, we have 19 access lines per square mile. We like how we're positioned. In attractive markets with significant exposure to two areas of business that we think are going to grow over the long run, Broadband and Business. And we continue to generate best-in-class operating metrics. So we like where we're at. It should be more clear than ever that we have a much different risk profile than the others in our space. And what it's about for us is about total shareholder return. And if you look at our total shareholder return from July of 2006, when we separated, we are by far the leader in the industry in that regard. And I think it's because we focused on a very tightknit business strategy buying low-run companies that we're integrating very successfully.
Our next question comes from the line of David Barden with Bank of America.
Because you're the first carrier we have a chance to speak to, you guys may have seen the articles coming out this evening that tomorrow the FCC will move closer to a Title II classification for Internet regulation. I was wondering if you guys might have some initial thoughts about what you think the ramifications of the issue are for a company like Windstream and the rural carriers generally. And I guess just following on that theme, with the integration of all the businesses now, could you kind of give us an update as to what the exposure is now from an intercarrier comp and USF standpoint, from a revenue contribution perspective would be helpful.
As it relates to Title I and Title II, I got that note about five minutes before we got on this call. So I'm not clear. Obviously that's a big issue with respect to regulation of broadband going forward. And I don't know how that's going to play out at this time, David. But it's something that we are watching very carefully. Our thoughts on the issue have always been the same. We believe that less regulation is better than more, and that what ultimately happens, we want parity across all technologies. And so we'll continue to push for that. When we look at what happened with the National Broadband Plan, we are very encouraged that, that plan was measured in careful and was taking the right look at how that National Broadband Plan affects our industry, specifically midsized carriers, so we were encouraged by that. I think that broadband team worked well with the industry. And specifically, Windstream, we spent a lot of time with Blair Levin and his team. And we do share a core goal ultimately of reforming USF to be more centered on broadband and intercarrier comp to move to a unified rate. So the Title I to Title II stuff is important, obviously, but I don't have enough information on that to comment on it right now.
And David, this is Tony. In regards to our exposure to intercarrier comp and USF revenues, as you could tell in our investor supplement we had $151 million of intercarrier comp and USF. And as a reminder, $17 million of that is a federal USF pass through end-user charge. So obviously, we still have a significant exposure but as Jeff alluded to, international broadband plan, and other discussions there's going to be an extended period of implementation, probably a 10-year time frame.
Could you just break that down for us Tony? Is it possible?
At this point, David, we haven't disclosed any further details. Really, $133 million of just aggregate intercarrier comp in USF revenues.
Our next question comes from the line of Jason Armstrong with Goldman Sachs.
Jason Armstrong - Goldman Sachs Group Inc.
First, Jeff, just sort of taking the other side of the M&A logic. When you talk about well-run businesses, free cash flow accretive, not changing the risk profile. As we look at it maybe the big opportunity for your business out there may actually be the poorly-run business at this point were you can get it at a discount and really move the needle from a revenue and cost perspective. So why are you ruling this type of opportunity out? I mean, secondly, on the broadband plan you talked about supporting it and really working with them on it. Now the risk here obviously is that it increasingly goes wireless as it relates to USF allocations. So how are you comfortable that this is a revenue-neutral or positive then for you?
I didn't mean to rule anything out specifically. Our strong preference is for rural assets, and we're always focused -- I think you raised a good point on where we can make a difference in terms of managing those markets. We've done better in rural market than we have in urban markets. That's just a fact. And so as we think about these opportunities, we tend to be focused more on the rural assets. And I think it served us well to date. And I think we're going to have plenty of opportunities there. And we're not really excluding anything. We're just being very disciplined with respect to our acquisition criteria and consistent. As it relates to the broadband plan, absolutely, we're concerned about wireless and how that's going to impact. But what I said earlier, we really believe, that we have a tremendous opportunity today to continue to build on our advantage there. We're doing very well versus the wireless guys today in terms of viewing their product as a complementary type of service. We're continuing to improve the speeds of our network, investing in our network every quarter. And so given that and the fact that we also recently filed for stimulus money to get to that last 11% of our customers in the most rural areas, we think there's going to be some opportunities out of the Broadband Plan. But it's incumbent upon us to market aggressively. Brent talked about the Price For Life and what that's doing. Broadband is an important part of that.
Jason Armstrong - Goldman Sachs Group Inc.
What percent of your residential base is on Price For Life right now?
We only started selling that, just as a reminder, in the third quarter of last year. Not a huge number.
Our next question comes from the line of Chris King with Stifel, Nicolaus.
Christopher King - Stifel, Nicolaus & Co., Inc.
Looking forward, how do the -- I'm sure you've answered this previously actually but how did the NOLs for, that you are acquiring from Iowa Telecom get used? In other words, how should we think about the cash tax rate, assuming that the deal does close? Kind of wondering about June 30. How do we think about your cash tax rate for the back half of the year and beyond?
Chris, this is Tony. Iowa, as you alluded to, have significant tax assets, $130 million of net present value in tax assets. And those tax assets will be subject to an IRS limitation referred to as Section 382. We haven't -- at this point, Chris, we haven't given our updated view on guidance with Iowa. We'll evaluate doing that next quarter. But I think as you alluded to, it's important as you evaluate that Iowa transaction, to remember we attributed approximately $130 million of value to those Iowa NOLs. So they'll probably likely be utilized over a four to five-year period generally.
Our final question comes from the line of Jonathan Levine with Jefferies.
I just wanted to follow up really on the integration of your acquisitions. Can you talk a little bit and give us a little more color in terms of where you stand in terms of the synergies, and what you're expecting for 2010 of those synergies to kind of roll in and how we should think about it rolling in 2011 as well?
Jonathan, this is Tony. I'll give you a quick update on the synergies. Importantly, we remain on track for our synergies. We realized $8 million in synergies in the first quarter of 2010, primarily from D&E. And as we look to, in terms of timing of realizing the other synergies, I think we've stated we expect to realize roughly half of the NuVox synergy in 2010 as well as half of Lexcom's synergy in 2010 and the majority of Iowa's $30 million synergy will be realized in 2011. But we will realize a more than insignificant piece in 2010. And we remain well on track to achieve those expected synergies.
In terms of, I guess, the breakout between the OpEx and the CapEx, when you talk half of NuVox in '10 and half of Lexcom in '10, should I just think about that an equal split between kind of the OpEx and the CapEx?
No, Jonathan. It's much more weighted towards OpEx. In D&E, for example, we had $25 million in expected OpEx and $2 million in CapEx. Lexcom was $5 million principally of OpEx NuVox was $25 million of OpEx and $3 million or $4 million of CapEx. And then on Iowa, we had $30 million expected synergies on OpEx and $4 million in CapEx, to give you the granular details there.
I was more referring to kind of the timing of should we assume that half the CapEx is realized this year and half next year or is it heavily weighted?
No, Jonathan, I think that's probably reasonable expectation that it will be half this year and half into next year on the CapEx.
We'd like to thank you for folks for joining us this afternoon. We appreciate your interest and support. Mary Michaels and I will be available this evening for additional questions following the call. So feel free to reach out to us, if you'd like. And again, we thank you for joining us.
Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.
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