11/10/2023

speaker
Conference Call Moderator
Call Moderator

Good afternoon, ladies and gentlemen. Welcome to Zhonghua Telecom conference call for the company's third quarter 2023 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, directions for submitting your questions will be given in the question and answer session. For your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within an hour after the conference is finished. please visit CHT IR website, www.cht.com.tw slash IR, under the IR calendar section. And now I would like to turn it over to Ms. Angela Tsai, the Director of Investor Relations. Thank you. Ms. Tsai, please go ahead.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

Thank you. I'm Angela Tsai, Assistant Vice President of Financial Department of Zhongha Telecom. Welcome to our third quarter 2023 results conference call. Joining me on the call today are our Chairman Harrison Guo, President Ivan Lin, and Vincent Cheng, our Chief Financial Officer. During today's call, management will begin by providing Chairman's message, our business overview, and followed by a discussion of our segment performance and the financial results. And then we'll move on to the question and answer portion of the call. Slide two, please read. the disclaimers and notes concerning forward-looking payments. Now, without further delay, I will turn the call over to our Chairman. Chairman Guo, please go ahead.

speaker
Harrison Guo
Chairman

Thank you, Angela, and hello, everyone. Welcome to our third quarter results conference call. Songhua Telecom has been committed to staying ahead in every aspect during the ongoing market consolidation. Before our business overview, I would like to highlight our dominant spectrum asset, one of our solid advantages to sustain our leading position and the growing momentum in post-merger landscape. Currently, we are the number one when it comes to the ownership of the mainstream sub-6 gigahertz spectrum. All of the 290 megahertz sub-6 gigahertz spectrum is in use to provide tested mobile speed for our customers outstanding earth in the industry. In addition, as we have the most mobile-based stations nationwide, we are also the operator acknowledged with the largest mobile capacity, and the widest coverage in Taiwan. On top of that, our leading capabilities have exclusively completed the two-carrier aggregation of 3.5 GHz and 2.1 GHz to provide fast 5G services. with theoretical peak speed of 2 gigabits per second, far beyond the industry standard. In terms of high band of 28 gigahertz, we are now with 600 megahertz at hand, which is next to the unsolved that can use for satellite services. As we are immediately ready for low Earth orbit satellite services, we will monitor the update of spectrum releases and is confident to make another consecutive spectrum at 28 gigahertz. Contributing to the always broadband connected environment, we commit to customers To sum up, we are confident to maintain our leadership going forward, giving our better spectrum assets and outstanding network quality. Another unique strength of ours and the significant highlight during the quarter was the expansion of our international footprint to Europe. We are proud to announce our strategic collaboration with Exatel Telecom from Poland. This partnership allows us to join exploring emerging business opportunities, develop network infrastructure, and assist our clients in expanding their presence. This step marks a significant milestone, not just aligned with our strategy to replicate Taiwan's success abroad, but also solidifying our overall success and the leadership in Taiwan's telecom industry. Now I would like to hand the call over to President Lin, the business overview in the third quarter.

speaker
Ivan Lin
President

Thank you, Chairman Guo, and hello, everyone. Now, please flip to page five for the update of our performing mobile business. In the third quarter, we successfully achieved a remarkable milestone by acquiring more than 14% of the revenue share in the Taiwan mobile market. and widening our leader against our peers. At the same time, our subscriber share also outperformed in the industry by increasing to 13.7.1%. The incremental exit revenue share about our subscriber share reached three percent. We are... competent in accelerating our lead in the consolidation landscape due to our better revenue generation capabilities and healthier and custom structure. Let's go back and review the outperforming matrix of our mobile business in the third quarter Our mobile service revenue delivered about 7% year-over-year. Increase in maintaining growth for 13 consecutive months. Owing to the upsell result from the 5G migration, international roaming recovered and the increase of the postpaid subscriber numbers. In addition, the postpaid are report a 5.1% year-over-year increase. Continually, it's a consequent tip and growth for the 10th quarter. For customers who migration from our 4G to the 5G, we observe and averaged a 14.4% uplift in the mobile monthly fees, maintaining an inspiring trajectory. Let's move on to slide six for an update of our fixed program business. In the third quarter, we are glad to see the positive performance in the fixed broadband sector. It's the revenue and up who increased by 2% and 1% respectively. And on year-over-year basis, many attribute to the increase of the higher speed of service adoption. In the third quarter, and since after for our service of the 300 megabits per second over high load, which is currently the mainstream among all the speed mix. And maintaining its high growth rate of the 14.1% year over year. In addition to stable growth of the high speed service adoption, we want to set up the speed upgrade of the lower service subscription to optimize our service profile. We roll out an attractive incentive during the quarter and the successful encourage custom with the speed below the 100 megabits per second to transition to the higher speed above the 100 megabits per second. As a result, we achieved and 11% year-over-year increase in size of fit-for-service at 100 megabits per second or higher. Now, let's move on to the performance of our custom-centric business group. Slide 8 presents the performance of our CBG group. In the third quarter, the total CVG revenue increased steadily by 2.8%. Year-over-year, mobile service revenue goes by 6.8%, prepared by stable 5G migration and the increase of the postpaid subscription numbers. In particular, international low-minus revenue continued to recover and brought in contributions. Fixed light service revenue decreased 0.7% due to the voice decline. And while fixed broadband revenue growth by 2.7% year over year, the sense to effective promotion. In addition, by the end of the third quarter, the population Popular iPhone 16 series demonstrated 27% increase in sales volume compared with iPhone 14 series. And the CBG sales revenue in the third quarter increased by three year-over-year. Dispriced CBG revenue increased about three percent year-over-year. is the income before tax kept flat because of the higher base of the recognition of the government and the subsidies in the same period last year, as well as the increase of the manpower and electricity expenses and purchase of renewable energy. Line 9 further presents our consumer business group highlights. In the third quarter, our multiple player package continued to be well received. The subscriber number of the mobile broadband and Wi-Fi service altogether demonstrated a 16.4% quarter-over-quarter growth. Home Wi-Fi subscription numbers increased by 13.4% year-over-year. along with the fixed broadband promotion package blowout during the quarter. In addition, our video subscription boost and delivered 5.8% year-over-year increase, mainly due to broadcasting of the existing Asian games on both MOD and Harmony videos. which also brought in revenue injection. As Harrison said, we will continue to invest in producing quality content and things up with the local content industry and major international production companies with the goal to strengthen our content assets, expand our and a video platform and prepare Taiwan's content industry onto the global stage. Moreover, we also invest in the KK Company technologies for innovative business models and services to further expand the digital ecosystem. Please turn to slide 10. for an overview of our enterprise business to the performers. In the third quarter, EBG report 11.8% year-over-year decrease of its income tax before, mainly due to fixed voice decline of the enterprise cars and clients. and a higher based result from the recognition of the government's subsidies in the same period of last year. Those factors also resulted in a 4.4% year-over-year decrease of the total revenue of the EDG. In spite of revenue and other revenue decrease in the third quarter because of higher basis had a base of the recognition of the largest smart energy projects. The mobile service revenue continued to increase attributable to the 5G upselling and the recovery of the international low-maintenance revenue. The revenue slightly decreased year over year, mainly due to the voice of the client, as mentioned above, where data communication revenue and broadband revenue continued to grow as expected. Despite the above decrease this quarter, we maintain carefully the optimistic outlook on our enterprise business performance throughout 2023. Slide 11. present our enterprise business highlights. In the third quarter, our IDC and cybersecurity business still demonstrated robust growth. Where the total emerging enterprise business revenues of our major application decreased by 6.8% year-over-year due to higher basis relative to smart energy and smart health project revenue recognition last year. In terms of the details, IDC business in particular achieved 13.7% goals, only two goals Growing project numbers and long-term pay and recurring revenue injection. And revenue from the cybersecurity also achieved 7.4% growth due to increase in the demand from our enterprise clients. Furthermore, despite our car service revenue decrease on a year-over-year basis due to one-time Smart Health Project recognition last year, we are great to see that our recurrence revenue from the international public car service continued to grow strongly by about 20% within increasing and demand the same kind. As we continue to invest in developing the 5G private network, we acquire national cultural project to speed AR, VR technology in immersing a performance and expand an opportunity in offshore wind power field construction and application. In addition, we continue to expand our IDC with the high quality to cater to increase the demand, which further drives up the recurring revenue contribution to reflect our leading ICT capability. And slide 12 presents our international business performance. In the third quarter, income before tax of the IBG decreased by 3.6% year over year, only to the non-operating expenses, such as the foreign currency, the variation, the loss, and the increase of the utility expenses. Is putting the impact IBG continuing to experience positive while year-over-year growth in profit. Total revenue of the IDG increased by about 13% on year, mainly driven by the growing and emerging business, including IDC and car service from global clients and recovering revenue for the international business highlights. We are delighted to share our footprint expansion in Europe and Thailand in July. We signed MOU with ExtraTel and Telecom from Poland. The corporation will be focused on emerging business, including 5G and private networks and smart city solutions. In September, we also signed an MOU with the Overbrook Hospital in Thailand for the cooperation of the telemedicine. We expect our service offering in the overseas market include the U.S., Japan, Southeast Asia, and Europe, and continue to spread. Now, I would like to turn the call to Vincent for our financial highlights.

speaker
Vincent Cheng
Chief Financial Officer

Thank you, President Ivan. Good afternoon, everyone. I will now provide a financial summary of our third quarter results. Let's begin with slide 14, income statement highlights. During the third quarter, total revenues increased mildly compared to same quarter last year. The main reason is growing mobile service revenues offset decreased voice revenue and the recognition of a one-time government grant income from same period last year. Income from operations and net income decreased by 5.9% and 2.9% on-year, respectively, mainly due to an increase in electricity expenses and manpower costs. Overall, for the first nine months of the year, total revenues increased by 2.6% year-over-year, primarily fueled by strong growth of our mobile, ICT, and broadband services. which offset declining voice revenue and the recognition of a one-time government grant income. Net income grew by 2.1% on-year, mainly due to our growing ICT business. EPS rose by 2.1% on-year to 3.69%. The growth of EBITDA remained in positive trajectory, and EBITDA margin remained at about 40%. Now move on to page 15 for balance sheet highlights. As of September 30th of 2023, total assets compared to the end of 2022 decreased by 2.1%, mainly due to the decrease in current assets, PPE, and intangible assets, which offset the increase in other financial assets. Total liabilities decreased by 2.7%, primarily attributable to the decrease in accounts payable. Additionally, debt ratio decreased slightly and net debt over EBITDA remains zero. Taken together, these debt-related ratios demonstrate the robustness of our balance sheet. Page 16 provides a summary of our cash flows. Our cash flows from operating activities remain robust. which increased by 5.7% a year. Capital expenditures decreased by 6.6% compared to the same period last year, of which mobile-related CapEx was reduced by 28.4%, whereas non-mobile CapEx increased by 12.9%. The latter was primarily attributable to greater IDC investments. On top of that, free cash flows was up by 14.9% on-year. Collectively, our strong operating cash flows along with the robust balance sheet enable us to be future-ready and create sustainable and long-term value for our shareholders. On slide 17, the table presents financial results against management guidance. During the third quarter, Revenues slightly fell short of our expectations due to declining ICT business revenues, while net income and EPS meet our expectations, mainly driven by strong performance of mobile and broadband services. For the first nine months of 2023, all revenue and profit majors beat our forecast as a result of outperforming core and emerging businesses. That concludes the overview of our Q3 financial results. Let me turn the call over to Chairman Harrison.

speaker
Harrison Guo
Chairman

Thank you, Vincent. On slide 18 is our awards and the ESG recognitions received in the third quarter. In October, the assets are widely recognized business news and the research organization announced that we won the JET Award, the highest level of the asset ESG corporate award for the third consecutive year. We are the only company in Taiwan to stand out from the cross industry and the cross country selections for our extraordinary ESG effort. Moreover, We are glad to share that our efforts in ESG are widely recognized and received by investors as we are the only telco to include as one of the top ten constituents by Financial Times' SE for Good Taiwan ESG Index. Meanwhile, We were honored as the most outstanding company in Taiwan within the communication services sector by Asian Money, reflecting our high-quality telecommunication services, excellent governance, and great ESG initiatives acknowledged by global investors. This concludes our prepared remarks. Thank you for your attention. At this time, I would like to open our conference call for questions.

speaker
Conference Call Moderator
Call Moderator

Thank you Chairman Guo. And ladies and gentlemen, we will now begin our question and answer session. If you have a question for any of today's speakers, please press star 1 on your telephone keypad and you will enter the queue. After you are announced, please ask your question. And when you are speaking, please be louder or closer to the microphone. If you find that your question has been answered before it is your turn to speak, please press star 2 to cancel the question. And you are also welcome to send questions via chat box on the webcast page. We will begin with the questions from telephone line and then move to the queries from the web page. Thank you. Now please press star 1 on your telephone keypad to ask the question. Thank you. And our first question will be Neil Anderson of HSBC. Go ahead, please, Neil.

speaker
Neil Anderson
Analyst, HSBC

Thank you. Good afternoon. I have a question relating to the government subsidies in the third quarter of last year. Is it possible to give the amounts that were booked? It looks like they were booked in both the consumer business group and the enterprise business group. I'm just trying to work out the pressure on profit from that, because you also mentioned some other cost increases, electricity, et cetera. Thank you.

speaker
Vincent Cheng
Chief Financial Officer

Okay, so regarding the government grant income, so that's because of the satellite subsidy. So the amount is about $0.4 billion. So for this quarter, actually, last year, same quarter, because we record this amount, So that will affect our income, our bottom line for this quarter because of the higher base.

speaker
Neil Anderson
Analyst, HSBC

Thank you. And that split between the consumer and the enterprise business group, is that correct? Are you able to give any detail on the split?

speaker
Vincent Cheng
Chief Financial Officer

Yes, because the customer is mainly for the enterprise customer. So it affects heavily on the EBG performance. And this is a one-time effect. Yeah.

speaker
Neil Anderson
Analyst, HSBC

Great. Okay. Thank you. If I could follow up, though. So in the press release and also in your presentation, you mentioned in the enterprise business group, there was a decrease of fixed voice after the pandemic. So could you give a little bit more detail on that? What's happening there? Are people moving to IP-based services or businesses, I should say, moving to IP-based services? And that's resulting in In lower revenue?

speaker
Vincent Cheng
Chief Financial Officer

So basically during the pandemic period, so the people stay home, so they use more voice call to connect with their relatives or their customers. But in the post-pandemic period, the people return to work and they are out of their home, and so they use more on the wireless or the broadband. Yeah. So during the pandemic period, so at that time, the voice revenue actually is still declining, but the rate actually is lower. It's about like 0.5%. But now in the post-pandemic, actually the declining rate is greater. So that affects our revenue and also our income, yeah.

speaker
Neil Anderson
Analyst, HSBC

Got it. Thank you. Perhaps just finally on the deal with the Polish operator, I think Exitel. Is that to support Taiwanese businesses in Europe? Could you give a little bit more detail about how large or the geographic scope for that business? Is it Poland specifically or is that the European partner and you're aiming to the services business more broadly.

speaker
Vincent Cheng
Chief Financial Officer

Okay. So we are still in talks with our counterpart, our partners, and we may collaborate in various areas. It's not only in the ICT or maybe extend to other areas. And we don't rule out the possibility to extend the collaboration to other areas. regional partners in Europe. We will keep you posted once we have more details and when the deal is more confirmed.

speaker
Neil Anderson
Analyst, HSBC

Understood. Thanks very much for your help. Thank you.

speaker
Vincent Cheng
Chief Financial Officer

Thank you.

speaker
Conference Call Moderator
Call Moderator

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. Thank you. If there's no further questions at the moment, then I'll hand the call over to the management team to take the questions from the webcast page line. Thank you.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

Okay, now we see A question from the webcast. It's about the Zhonghua's latest developments of their low-Earth orbit satellite services. And is there any cooperation playing with specific operator? Thank you.

speaker
Harrison Guo
Chairman

Thank you for the website questions. The development of low-Earth orbit satellites Finally, complement ground communication networks, aiming to expand overall communication network coverage and enhance network resilience. We adopt an open approach, actively exploring cooperation opportunities with multiple international low-orbit satellite operators. And we're willing to participate in domestic proof of concept projects. However, due to non-disclosure agreement, specific details of the collaboration cannot be disclosed at this moment. We have obtained licenses for geosynchronized orbit satellite this year, one for medium Earth orbit and one for low Earth orbit. In addition to ongoing negotiations with satellite system operators, we are actively preparing for applying commercial frequency license network setup, and et cetera. In accordance with regulation, our goal is to introduce commercial services for low-earth orbit satellites in Taiwan as soon as possible. For OneWeb, we have NDA. There is not much to share for now. Two announcements as the agreement is finalized.

speaker
Conference Call Moderator
Call Moderator

Ladies and gentlemen, we are now in question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. Thank you. And you also could submit your questions via the chat box on the webcast page. Thank you. And on the call, we have the next question. It's from Rajesh Banjwani, JP Morgan. Go ahead, please.

speaker
Rajesh Banjwani
Analyst, JP Morgan

Hi, thank you for this opportunity to ask this question. I think you, when Neil asked this question, I think you answered it, but I couldn't properly get the figures. So can you, the government subsidies project, because of which the revenues were lowered this quarter versus last quarter, can you just repeat How much was the amount impact on both revenues and operating profit because of that?

speaker
Vincent Cheng
Chief Financial Officer

Yeah, the amount is $0.4 billion. It's about $0.4 billion.

speaker
Rajesh Banjwani
Analyst, JP Morgan

Okay, and this is a revenue impact?

speaker
Vincent Cheng
Chief Financial Officer

Yes.

speaker
Rajesh Banjwani
Analyst, JP Morgan

Okay.

speaker
Vincent Cheng
Chief Financial Officer

Because it's a subsidy. So basically, the revenue is mostly on the profit.

speaker
Rajesh Banjwani
Analyst, JP Morgan

Okay, got it. Got it. Thanks. And the second question is, in general, there is further consolidation going on in the industry, but do you expect that your competitors will become relatively stronger going forward? as they, you know, add to more base stations, more spectrum. Are you concerned about that going forward?

speaker
Harrison Guo
Chairman

Yeah, we recognize NCC's conditional approval of the mergers. among our peers, as the resulting change is expected to be positive to the overall mobile market development in Taiwan. We welcome the regulators' decision to require our peers to dispose the excess bandwidth acquired with the mergers, which upholds a fair market competition and in line with the original policies and the rules made during the course of the Spectrum auction. Our goal and the position are not only to shape ourselves as the enablers to perform and expand digital ecosystem, but also to expand overall value for customers, shareholders in the ecosystem, and us. For example, to upgrade, migrate our customer services to higher speed bandwidth services. And as I mentioned earlier, we have the most base stations nationwide in Taiwan. So we have confidence to lead in Taiwan's telecom industry.

speaker
Vincent Cheng
Chief Financial Officer

So if I may add, so let me provide some financial numbers to show we are quite confident that we will still remain our lead in the post-merger markets. If we look at the mobile markets, right, So for the mobile service revenue, our annual growth is around 6% to 7% in the past nine months. If you look at our peers, their growth rate is about 3% to 5%. So it kind of shows our strategy is quite correct. So that we can remain to acquire clients, and also we can grow our mobile service revenues And for our broadband services, so if you look at, after we roll out this speed upgrade promotion, so our broadband service revenue also maintain a very healthy growth trajectory. So for the year, so our broadband service revenue, the growth rate is about 2% to 3%. and actually our, the subscriber has been increasing. And if you look at our ICT business, so for example, our emerging application services. So if you look at the IDC cybersecurity and also have been doing very well, also for the 5G network, the AIoT and for the, and other, emerging applications, they have been done very well. And most importantly, if we look at the ICT profit margin, actually it has been steady, goes up. So we think these are the good signs. And looking forward, because we see, you know, the market has turned positive, and the medical condition is getting better and better, and we also know the digital demand has been growing, so we believe our ICT business has good potential to grow. Yeah, this is what we see. And because we have a very good network and we provide very good quality to customers in a consistent manner, so we are quite confident that our customers will stay with us and actually found a strong rate. We are the lowest. among our peers, and it's as low as 0.4 percent. And we are quite comfortable about this number, and we believe we can further improve it. And we also have a research lab with a team of 1,000 staff engineers. They actually provide excellent research support. So that's why we can, as I just mentioned before, that's why we can support our expansion in our ICT business, because we can focus on high-value added application services. So that's the supplementary information provided from me.

speaker
Rajesh Banjwani
Analyst, JP Morgan

That is very helpful. Can I ask one more question on your overseas foray? You're doing this in Poland. Will this focus primarily be on ICT and enterprise services, or would you also look at investing in the networks, and would you be open to taking stakes in telcos outside Taiwan?

speaker
Vincent Cheng
Chief Financial Officer

So basically, for now, As we just mentioned, we collaborate with our Polish partners in various aspects. So ICT Enterprise are the main business collaboration we are talking about now. And we may collaborate in other dimensions. But for details, we will reveal as soon as the thing is getting clear.

speaker
Rajesh Banjwani
Analyst, JP Morgan

Thank you very much.

speaker
Unknown Participant
Webcast Participant

Thank you.

speaker
Conference Call Moderator
Call Moderator

Thank you.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

Okay, now we have three questions.

speaker
Conference Call Moderator
Call Moderator

Go ahead, please.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

Now we have three questions from the webcast. The first is will EBG revenue decline again, year-over-year decline again in the fourth quarter?

speaker
Vincent Cheng
Chief Financial Officer

So for the EBG revenue, basically it's affected by the decline of the voice revenue. Because in the post-pandemic period, the people's behavior and the customer behavior has changed back to normal. So they use less voice services. And the other key reason is the one-time government grant income. So as I mentioned, because last year, during the same period, we recorded $0.4 billion in revenue, also profit. So that heavily affects our revenue and our bottom line. And on top of that, also the electricity expense, because early this year, because there's Electricity, there is a rate raise in electricity. So that also affects our income. So these are the reasons that mainly affect the revenues and the income in the EBG segment. But as I just mentioned before, in terms of the business outlook and the current undertaking we have, So basically, we are still very confident that the EBG performance will perform in line with our expectations. Thank you.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

Okay. The second question is, what is the 5G penetration rate? Wow.

speaker
Vincent Cheng
Chief Financial Officer

So currently for the 5G subscribers, so now it's over 3 million subscribers. And actually the growth rate has been quite steady.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

The next question is, is there a 5G penetration target for this year?

speaker
Vincent Cheng
Chief Financial Officer

So actually for the 5G penetration, as I just mentioned, actually the growth rate is quite steady and we are quite comfortable with the number. And in terms of the 5G, the migration, the uplift is over 40%. So we think the growth pattern is good, is healthy, and that's what we care about and in line with our expectations.

speaker
Conference Call Moderator
Call Moderator

Ladies and gentlemen, we are now in question and answer session. You can press star 1 on your telephone keypad to ask a question on the call, or you may submit your questions via the chat box on the webpage. Thank you.

speaker
Angela Tsai
Assistant Vice President, Financial Department / Director of Investor Relations

And now we have another question from the webcast. The question is that what percentage of EBG revenue is from voice?

speaker
Vincent Cheng
Chief Financial Officer

So for the voice revenue, it accounts for about 20%. of the revenues in the EBG performance of the fixed voice, fixed line. For the fixed line revenue, for the voice, it accounts for 20% in EBG.

speaker
Conference Call Moderator
Call Moderator

We're now in question and answer session. If you would like to ask a question, you may press star one on your telephone keypad, or you may submit your questions via the chat box on the webpage. Thank you. Okay, if there are no further questions at this point, then I'll turn the call over back to the Chairman Guo. Thank you.

speaker
Harrison Guo
Chairman

Thank you for your participation. Goodbye.

speaker
Conference Call Moderator
Call Moderator

Thank you, Chairman Guo. Ladies and gentlemen, we thank you for your participation in Chongha Telecom's conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw under the IR calendar section. You may now disconnect. Thank you and goodbye.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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