EchoStar's CEO Discusses Q1 2012 Results - Earnings Call Transcript

| About: EchoStar Corporation (SATS)

EchoStar Corporation (NASDAQ:SATS)

Q1 2012 Earnings Call

May 7, 2012 1:30 pm ET

Executives

Deepak Dutt – Vice President, Investor Relations

Dean A. Manson – Executive Vice President, General Counsel and Secretary

Michael T. Dugan – President, Chief Executive Officer and Director

Kenneth G. Carroll – Executive Vice President and Chief Financial Officer

Pradman P. Kaul – President and Chief Executive Officer, Hughes Communications, Inc.

Mark W. Jackson, President, EchoStar Technologies L.L.C.

Analysts

Christopher K. Leung – Citigroup Global Markets Ltd.

Amy Yong – Macquarie Capital, Inc.

Kenneth Miller – Nokomis Capital LLC

Wayne Walden – Thornburg Investment Management, Inc.

Barry Kaplan – Maple Tree Capital Management LLC

Josh Rosen – Act II. Capital

Operator

Good afternoon, ladies and gentlemen. My name is Martina, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the EchoStar Corporation First Quarter 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

I’d now like to turn the call over to Deepak Dutt, Vice President, Investor Relations. You may begin your conference.

Deepak Dutt

Thank you, operator, and good day, everyone. Welcome to EchoStar’s first quarter 2012 earnings call.

I’m joined today by Mike Dugan, our CEO; Ken Carroll, CFO; Pradman Kaul, President of Hughes; Mark Jackson, President of EchoStar Technologies; Roger Lynch, Executive Vice President, Advanced Technologies; Grant Barber, CFO, Hughes; Dean Manson, Executive Vice President and General Counsel and Secretary; and Tom McElroy, Controller at Hughes.

As you know, we invite media to participate in listen-only mode on the call and ask that you not identify participants or their phones in your reports. We also do not allow audio taping, which we ask that you respect.

Let me now turn this over to Dean Manson for the Safe Harbor disclosure. Dean?

Dean A. Manson

Thank you, Deepak, and hello, everyone. All statements we make during this call that are not statements of historical fact constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by such forward-looking statements.

For a list of those factors and risks, please refer to our Annual Report on Form 10-K. All cautionary statements that we make during this call should be understood as being applicable to any forward-looking statements we make, wherever they may appear.

You should carefully consider the risks described in our reports and should not place undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements.

Let me now turn it back to Deepak.

Deepak Dutt

Thank you, Dean. We will start the call with comments by Mike Dugan. Mike?

Michael T. Dugan

Thanks, Deepak, and welcome everybody to today’s call. We’re pleased to have delivered a solid quarter and I’d like to highlight some important events from the quarter. First a few financial highlights. First quarter 2012 revenue was $765 million compared to $480 million in the first quarter of 2010.

Service revenue more than doubled $370 million and now represents $48% of our total revenue, which is consistent with our strategy of increasing the service content of our revenue. From a liquidity perspective, we ended the quarter in good financial shape with $1.7 billion in cash and marketable securities.

Now for a few recent highlights, we successfully launched the Hopper and Joey product line, with DISH network on which perhaps in public reviews have been very overwhelmingly positive. Our delivery plan has been on track to expectations. The hard drive supply problems due to flooding in Thailand has been well mitigated by our supply chain organization, which allowed us to meet the customer requirements.

We launched the new hard drive based STB for Bell TV, and will soon launch a new HD DVR set-top box offering for Bell TV. There again our team did a great job of mitigating supply issues with hard drives into the Bell TV film.

Dish Mexico subscriber count remains on plan approaching 2.1 million customers. HD TV growth is on the progress and continues to be focused on the high tier customer base. Several new tablet and mobile phone applications for Sling were launched in Q1, the iPhone, iPad, Sling app ratings are in all time high with four stars on iTunes and the Android app also has solo ratings of 3.5 stars on Google Play.

We continue to improve the user experience with DISH Network customers via Dish Remote Access and Dish Online. Both of our advanced data centers are now open and fully operational and are supporting our used cloud services and hosting offering. Our target customers will be requiring the highest level of enterprise security on fully managed and redundant networks, which we were fully build up for.

EchoStar-17/ JUPITER, our Ka-band satellite under construction Space Systems/Loral has successfully completed the final major test phase. The satellite is now in the final assembly and checkout phase in preparation for shipment to French Guiana for the launch. Recently Arianespace completed their vehicle readiness review and approved the commencement of the final assembly of the Ariane 5 launch vehicle that will launch EchoStar-17. Crossing these major milestones paved the way for the plan launched in late June 2012.

These new order import continued a strong pace in Q1, submits orders in our North American enterprise business included T.J. Maxx, J.C. Penney, Bartlett National Stores, Government Enterprise Training Network and key international orders both from [UNSEB], Telemar, [Renner], RTcom, [Yasa] and Vodafone.

Key orders from the telecom systems business were DBSB and Boeing MEXSAT. This strong order activity resulted in the substantial new non-consumer orders and backlog of over $1 billion as of the end of the first quarter of 2012.

In addition we have another $1.9 billion of contracted backlog in our Satellite Service business from satellites in order and under the construction, continuing our strong visibility into future revenue. Hughes also ended the quarter with approximately 634,000 subscribers. The Echo-16 spacecraft remains on track with completion at Space Systems/Loral by mid summer. The launch is scheduled for the second half of 2012 aboard a Proton M/Briz-M rocket from the Baikonur Cosmodrome in Kazakhstan.

The team is currently completing a dynamic and lineup phase of the program and has put current disparity compact antenna test range phase. This spacecraft design with three spot beam antennas and one CHRONOS antenna. Our Brazilian subsidiary was awarded order slot in an auction conducted in August last year by Anatel, the Brazilian telecom regulator which has been in the specials Anatel on April 17, 2012, we received notification from Anatel to proceed the formalities to act according to the license agreement for the 45 degree west slot, which is completed the pre-requisites including the required 10% on payment and expected further license agreement rights soon. We’re looking forward to expanding our business in one of the fastest growing regions in the world.

Finally, we continue our integration efforts between Hughes and EchoStar and continue to make good progress. We just, as the counting has been fully transitioned to the FAP system and the legal and HR functions are integrated now under new announced leaderships. The use of EchoStar’s fleet by user is increasing.

All the above exciting technology and service announcements position us very well for revenue and margin expansion in the near and longer time. I think we’re now ready for the question and answer part of the call, and I’ll turn the call back over to the operator.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Jason Bazinet from Citi. Your line is open.

Christopher K. Leung – Citigroup Global Markets Ltd.

Hi, good afternoon. This is Chris Leung on behalf of Jason. Two questions, first, as we look at the current satellite fleet, just wondering if you could comment on the potential for any incremental satellite CapEx for satellites approaching the end of their estimated useful life. I understand that Echo 16 is at the launch in the second half of ‘12, but just wondering if you can foresee any additional satellite CapEx beyond Echo 16 and 17? And I have a second question on set-top box.

Michael T. Dugan

Well, as far as satellite, we continually work with our major customer, Dish Network to look at their future requirements both on a bandwidth standpoint and also satellite help and life issues. I would say right now we don’t have any thing that we’re ready to go away now. But we certainly – once we get the license in (inaudible), we will working to our plan to support that with existing assets and probably another satellite build there. So certainly we’re a satellite company and you could expect us to continue to invest in satellites going forward.

Christopher K. Leung – Citigroup Global Markets Ltd.

Great. And just a second…

Michael T. Dugan

(inaudible).

Christopher K. Leung – Citigroup Global Markets Ltd.

Right, and second question on boxes. Yeah, there was sort of lower set-top box revenue in the quarter year-over-year and just wondering about my view related to the launch of the Hopper and Joey boxes of dish?

Michael T. Dugan

Well, certainly we’ve talked about it in several calls, the new architecture that was developed by ATC is much higher performance but also was targeted to lower the requirement for multiple HD installations and as dishes mix goes heavily HD, they’ve got a better solution now which is more cost effective. So certainly there has been the number of units continue to go up, certainly the new technology is affecting the total revenue stream and we do believe Hopper and Joey will become much more successful after team summit. They’ve got a big push going on this week with all the dealers and distributors and the reviews have been just outstanding on the product.

Finally, we had a little bit of an impact in Q1 to some of the customers on the hard drive shortages, that’s been pretty much resolved and most of those mix shipments – pretty much have been made up either last month or it will be made up by the end of this month. So that affected us slightly.

Christopher K. Leung – Citigroup Global Markets Ltd.

Great, thanks very much.

Operator

(Operator Instructions) Your next question comes from the line of Amy Yong from Macquarie Capital. Your line is open.

Amy Yong – Macquarie Capital, Inc.

Hi, I just wanted to ask a question on the Brazil orbital slot, now that you’re eminently going to be awarded the slot this month. I was wondering what the next steps are from this point? Hello?

Kenneth G. Carroll

Well, I think – this is Ken, I think, as we move forward with this, obviously the key hurdle is to get the finalized agreement with Anatel, which we do anticipate coming pretty quickly. Second to that is we are in process today, looking at the long-lead items that we need to bring the service to fruition in Brazil. And then third, as we’ve mentioned before we are in discussions with a number of potential partners down in Brazil. So I think, we are looking to build – to get the infrastructure up and going, and set to deliver service into Brazil and we are looking to get the right partner to assist us in bringing that service into operation into the Brazil market.

Amy Yong – Macquarie Capital, Inc.

Do you have any – sorry, just a follow-up, do you have any timing expectations on this or?

Michael T. Dugan

As we do at DISH and EchoStar, we always move very, very quickly. It would be premature to try to give you a specific answer on that. I expect that you will hear a lot more in the next couple of months as issues progress and depending on the partnership and who we would end-up partnering with or going it alone, it could change very significantly. So we are just not ready to speak to that right now.

Amy Yong – Macquarie Capital, Inc.

Okay. And just one more on the – I’m sorry, you already commented on the set-top box business, but I wanted to maybe get more color as far as – I mean, DISH recorded year-over-year cost increases due to set-top boxes and I was wondering how did that not flow through to you guys?

Michael T. Dugan

Well, I’m not exactly sure of the question. Again, I think it’s fair to say that – I didn’t hear – didn’t listen to the DISH call, but we certainly know that they have a lot of inventory, and we think that they’ve also accelerated their reman stuff. So, I can’t speak directly to their numbers. Our numbers – they certainly have transitioned a lot of their new buy to the Hopper and Joey line, and that provides a lot lower second and third TV installation solution for them going forward. So as that mix changes, you will see that going more and more. I do believe that you are going to see a big uptake in unit sales from them, but we will just have to see how – what the outcome is of their latest marketing and sales.

Amy Yong – Macquarie Capital, Inc.

Great. Thank you.

Michael T. Dugan

The product itself had great reviews.

Amy Yong – Macquarie Capital, Inc.

Great. Thanks.

Operator

Your next question comes from the line of Kenneth Miller from Nokomis Capital. Your line is open.

Kenneth Miller – Nokomis Capital LLC

Hello, thanks for taking my question. I wanted to ask a little more about the set-top box business, you were down pretty significantly year-over-year with DISH, off a pretty significantly negative comp. And you indicated in your MD&A, you were shipping a higher volume. DISH talked a lot in their call about how they thought the Hopper and the Joey were the most technologically advanced products on the market, and the best [HD] DVR system. Do you expect that to lead to a resumption of growth in your sales to DISH, or is the lower ASP going to more... the lower ASP... growth and you sell to DISH or is the lower ASP going to more than obviate the increased volume?

Michael T. Dugan

I couldn’t hardly hear his call --?

Kenneth G. Carroll

I think the answer to your question is that, we expect our sales, but at the same time cost of the unit is lower. So fundamentally, they will probably even themselves out. But we haven’t done the analysis to say that for sure.

Kenneth Miller – Nokomis Capital LLC

Well, it seems like you are sort of innovating your way to lower profits that way, I mean usually when a technology company provides the most advanced system in the market, they either charge, get a higher ASP for it, or higher margin. It seems like your contract with DISH means your margin is relatively fixed. So, when you deliver a better system for a lower cost, it’s kind of resulting in lower profit instead of higher?

Michael T. Dugan

I think the recent events with the car companies in the U.S. indicates that if you stop innovating and you stop addressing the marketplace needs, you end up in serious financial situations. I think we are well ahead of that. We are doing exactly the right thing to remain competitive in the set-top box business and we really believe that the new architecture is going to allow DISH to service twice or three times the number of TV sets they did in the past because they brought a very cost-effective solution, plus, we think that the features that have been integrated are very, very important as well.

Kenneth Miller – Nokomis Capital LLC

It does seem like a fantastic system, but it seems not as good for your company, if it’s not resulting in higher profits. Do you have the ability to sell this same type of system to other service providers, or does DISH have exclusive rights --?

Michael T. Dugan

Certainly, we provide it to Bell; we provide similar systems to DISH Mexico, everybody is starting to look at the architecture of the DISH Hopper and Joey that we developed. So I think you’ll see additional customers be very interested in the feature set.

Kenneth Miller – Nokomis Capital LLC

Okay. I wanted to ask about the launch insurance on the Jupiter satellite. Could you give us a little more detail on what that covers, whether it’s the full construction cost or only a portion, maybe a little more color on that?

Michael T. Dugan

Would you restate the question? We’re really having a hard time hearing you here?

Kenneth Miller – Nokomis Capital LLC

Sir, I’m sorry about that. I was asking for additional details around the launch insurance of the Jupiter satellite. Whether it covers the full construction cost of the satellite and what the terms of the insurance are? Trying to figure out what the – how much your risk exposure to a failed launch is?

Pradman P. Kaul

Yeah, hi, this is Pradman Kaul. Yeah, I think the – I don’t have the final numbers here in front of me, but I think we finally covered insurance for a value of up to about $330 million. And that obviously covers, doesn’t cover the full value of the satellite and the launch and the insurance, but it covers – it made sense from in terms of what the market was willing to sell us at a reasonable price.

Kenneth Miller – Nokomis Capital LLC

Okay. That’s helpful. I appreciate it. My last question is a general question about your balance sheet. It’s pretty obvious that the – right now, the cash and short-term investments on your balance sheet are earning significantly less than the interest you are paying on the debt. Are there any thoughts to making balance sheet more efficient by either buying back stock or reducing debt or do other things, obviously, you are going to have some future satellites to construct, but it seems like with your strong operating cash flow, you will be able to largely fund that operating cash flow instead of needing to keep $1.8 billion in cash and short-term investments. So can you just help me understand how you are thinking about your balance sheet, I don’t know if you are waiting for the next financial crisis to buy more distressed debt, or if there’s other reasons you are carrying so much cash?

Kenneth G. Carroll

Yeah, so, this is Ken again. So I think we are constantly looking at operating more efficiently from a financial perspective. I would say at this moment in time, we have a number of activities going on that we are looking at from a strategic standpoint. So I think we are kind of weighing those out versus, to your point, looking at the cash on the balance sheet and looking at opportunities to become more efficient. We do have the ability to do a stock buyback, that’s been approved by the board, we’ve not utilized that at this point in time and don’t anticipate doing that moving forward. But – so I think right now we are looking at those things, but no action is planned.

Kenneth Miller – Nokomis Capital LLC

Okay.

Michael T. Dugan

Next call operator.

Operator

Your next question comes from the line of Wayne Walden from Thornburg. Your line is open.

Wayne Walden – Thornburg Investment Management, Inc.

Hi, good morning. Regarding the Jupiter launch, could you give us your latest thinking on the timing of the launch and then what the key milestones or next steps would be from there?

Michael T. Dugan

Well, again, we’re hoping to launch in June – toward the end of June. If all goes as planned as you know there is a lot of steps that go forward from now. The satellite is being packaged, and then it will ship and it’s got to be unpackaged, mated to the launch vehicle, and there is a lot of steps in there, but everything’s on – very much on schedule, if not a couple of days ahead of schedule as of this moment. Obviously, launch takes place, then we have orbit rising, then we end up starting our in-orbit test, which we’re doing our best to work with all resources between EchoStar and Hughes to ensure that that test is thorough and as quick as possible, we’ve done a lot of that, we have a lot of history there. And then finally, the launch of the high speed service, which includes a new outdoor unit and new indoor unit, which they are finalizing the approval testing on those parts in parallel to the spacecraft, and building the first production runs of all that equipment right now. So I don’t want to give you specific dates right now because we want to announce those publicly but you know certainty by the end of this summer and you’ll see some exciting things we hope.

Wayne Walden – Thornburg Investment Management, Inc.

Yeah, and then regarding just broad commercial availability would that be a this year event generally?

Kenneth G. Carroll

Yeah, we hope to launch first service to customers this summer, the end of summer.

Wayne Walden – Thornburg Investment Management, Inc.

Okay. Great, thank you very much.

Operator

Your next question comes from the line of Barry Kaplan from Maple Tree Capital. Your line is open.

Barry Kaplan – Maple Tree Capital Management LLC

Hi, good afternoon. Just two questions, one is, could you give us any kind of an update on Mexico, what’s happening with Dish Mexico operationally? And then, the second question is just with respect to Sling. How were you guys thinking about some of these potentially competitive services like Nimble TV and how Sling might position itself going forward against them?

Michael T. Dugan

Now, I’ll let Mr. Jackson answer both questions, BTC is a major subcontractor to the Dish Mexico JV and then he we’ll talk about Sling as well.

Mark W. Jackson

We’ve been very happy with the Dish Mexico and the progress that business is making in Mexico, they are north of 2 million subscribers. They don’t give out the exact count that, but they were one of the fastest growing TV services there. We’re looking to transition in to more higher end product with Dish Mexico and the [A&D] markets with the high debt offerings and there is some future plans that we hope will really help us grow in that area.

On the Sling side, a lot of these competitive products we think little differently, which I think they’re going to have a lot of legal issues. We are working very hard to work with everybody and make sure we don’t cross over that line. And to that end, we’ve been licensing a lot of the SIP manufacturers to help us with that. And I think we’ll see more and more people want to use Sling as the right still stay with the programmers that the rights going to go away from the programmers and they license without, do the streaming more and more optimistic the need for Sling going down but right now we haven’t seen that happening and we’ve got some pretty good major engagements with big operators and then we are also going to refresh the retail product lines this fall.

Barry Kaplan – Maple Tree Capital Management LLC

Okay, just going back to Mexico, can you make any kind of comment on the profitability there or like there are over prospects?

Mark W. Jackson

No, I think the venture itself, would have to comment on that we could not do that.

Barry Kaplan – Maple Tree Capital Management LLC

Okay, thank you.

Operator

Your next question comes from line of Josh Rosen from Act II. Capital. Your line is open.

Josh Rosen – Act II. Capital

Hi, thanks for taking the question. Just I had two, one, could you give us any color around the discontinuation of the Aria line. And then second on Jupiter, is there anything you can share in terms of distribution partnerships, pricing and then also the strength you are seeing in the broadband business around churn, and any impact of why is that one?

Mark W. Jackson

I’ll take the first one and I’ll hand the second one off to Pradman and his guys. On Aria, the bottom line is that, yeah, as we work with Tier 2 and Tier 3 cable operators, we have to come to a realization they not only want us to buy set-top boxes but they needed additional services and needed support to operate those for an extended period of time once you made the first product sale. And when we ran the math at the lower volumes that those types of entities would take and the amount of month-to-month and year-to-year support just wasn’t something that we thought would give us the right ROI. So we’ve decided to move back into the areas that we’re more familiar with, which is the DBS business in the Brazil activity, and we’re going to continue to drive a lot of the used space line as well.

So it was strictly return on investment decision, and had a great product. But we really thought that, the volumes that customers will want to commit to were too low to continue the business.

So second question, I’ll let Pradman answer.

Pradman P. Kaul

We’re continuing fundamentally with the same distribution strategy that we have with HughesNet today, then we introduced JUPITER and Gen4, which will be a new high speed offering. So we have both direct and indirect distribution channels. On the direct we’ll continue with our direct mail and television commercial campaigns that we used in the last five years very successfully.

Indirectly we have signed up on an exclusive basis, six of our top sales agents, and so they’ll be selling our products exclusively. We’re also negotiating a wholesale arrangement with DISH and one other carrier which we hope in the next few weeks to close. So that will be an additional distribution channel from what we have today.

So all-in-all, I think we’re in very good shape. All our distribution channels are lined up, ready first satellite to be launched and ready to go after that.

Josh Rosen – Act II. Capital

Okay, great. And just any comments you can make around [churn], gross adds. The impact of ViaSat-1’s offering?

Mark W. Jackson

Yeah. No, we’re not seeing any negative impact from ViaSat-1 so far. We’ve always been concerned that we’ll have the gap between the time ViaSat-1 is launched and Echo-17 is launched. But so far our gross add is pretty close to what we normally experienced in the different cyclical time period. And our churn is staying in the same range that it has in the past.

Pradman P. Kaul

I think it’s fair to say that we’re very pleased with the sales agents, that ViaSat-1 online are doing great job of continuing to sell the product, and we’re optimistic.

Josh Rosen – Act II. Capital

Is there anything you could share around how you’re going to price the JUPITER product versus the current used product and ViaSat, I guess changed the kind of investment (inaudible) anything you could say about that?

Pradman P. Kaul

No, we’re maintaining the HughesNet brand, it’s a powerful brand. Its service growth will differentiate the new service by calling it HughesNet Gen4. But fundamentally, the HughesNet brand will be a continuing brand, which is different from what obviously what ViaSat did.

Josh Rosen – Act II. Capital

Okay, thank you.

Operator

Your next question comes from the line of Amy Yong from Macquarie Capital. Your line is open.

Amy Yong – Macquarie Capital

Yes. Hi, thanks for taking my follow-up. Just had a quick question on your Satellite Services segment. Particularly just that KevSat satellite, I understand you were thinking about recasting it or just delivering it for DISH, I was wondering where are you on that, and has it been repositioned?

Michael T. Dugan

Well, it’s KevSat. I know it’s difficult – I can’t pronounce it, and I can barely spell.

Amy Yong – Macquarie Capital

Sorry about that.

Michael T. Dugan

KevSat. And to be honest with you, the great success we’ve had with the Brazilian auctions and that’s now given us a lot to consider as we look at the entire fleet. And as the previous question asked, as we look at satellite life and so on. I expect to have more definitive decisions on KevSat here in the near-term, but right now we have not decided whether to use it at any specific location, and we’re looking at three or four different alternatives missions for it this time.

Amy Yong – Macquarie Capital

Okay, thanks. That’s all I have.

Operator

(Operator Instructions) Your next question comes from line of Josh Rosen from Act II Capital. Your line is open.

Josh Rosen – Act II Capital

Hi, I just had one follow-up. In the Q, I think you guys – there’s a couple of more satellite anomalies. Any concern around capacity for DISH or anything else in terms of reducing your least earnings?

Michael T. Dugan

Well, I got to tell you; one of the most enjoyable part of my job is building satellite at normality. And Ken and I really had a lot of experience with that, and we really enjoy it. But the good news is that, although we’ve had some minor power reductions on one or two solar panels, and we have to disclose those, there is nothing right now that causes us imminent or serious to concerns at this moment.

I would say that, this business is tough; we’re continuing to look at every parameter, that’s part of why we’ve built our own team that does most of our own coulometry and our own decisions about how we fly the spacecraft, worries about fuel and all that stuff. We are probably the most involved of anybody that has a business relying on satellite.

But right now, I’d like to do green, yellow, red here, and it’s real simple for me when somebody comes to me with a problem, I asked for rating. Right now, I’m pretty happy with all our satellite, and so I think we’re generally in the game.

Josh Rosen – Act II Capital

Great. And just lastly, any progress on selling on set-top boxes outside the U.S. and anything more to Liberty or any other potential customers?

Mark W. Jackson

Yes, our relationship with Liberty continues to grow, they’re doing very well by them than by us. So they’ve picked up quite a bit on the business there. We are also selling a lot of digital terrestrial and free sat products that are particularly in the UK. That business is picking up, and we have a couple of new opportunities that we’re pursuing in Europe. So Europe is still much better for us this year.

Josh Rosen – Act II Capital

Thank you.

Operator

There are no further questions in the queue; I’ll turn the call back to Mr. Dutt for closing remarks.

Michael T. Dugan

Thank you, operator. Dutt?

Deepak Dutt

Thank you, operator, and I think this brings us to the end of the call since there are no more questions. So thank you for taking the time to attend the call today. So at this time we’ll close the call.

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