3P Turbo—Cross Border Investment in Brazil
“Brazil’s Senate voted 61-20 to remove President Dilma Rousseff from office, finding her guilty of
breaking budgetary laws in an impeachment trial,” blared the CNN Money video headline that went across
the computer screen of Jason Stacks, the founder of 3P Turbo, on August 31, 2016. This news added to the
political turmoil rocking Brazil lately. Among recent events was the high-profile Petrobras corruption scandal
that had ensnared some of the country’s biggest political and business leaders. The political crisis came in
the midst of Brazil’s worst recession in at least two decades. As a country with economic growth tracked
very closely to commodity prices, more so than any other nation in the world, the tumble of commodity
prices and the Chinese economic slowdown had taken a toll on Brazil’s economy.1 The country was
experiencing a high unemployment rate of
10.2 percent, with ten million people unemployed in 2016 compared to only seven million a year ago.2 This
was compounded by high inflation and interest rates, and plummeting consumer spending. Its debt had
also been downgraded to junk status. The country’s economic hardship had led thousands to protest on
the street since the beginning of the year.
Back in the United States, Jason Stacks had been contemplating setting up a facility to manufacture
automobile turbochargers in the city of Itirapina, state of São Paulo, Brazil. He hadn’t been able to export
aftermarket turbochargers to Brazil, as the country only allowed the import of two categories of used car
parts:
(1) parts for antique vehicles, and (2) the remanufactured parts from the original manufacturers of the
vehicles.3 He had engaged with a consultant to gather some revenue and cost projections for the investment,
outlined in Exhibit 1. Even though the automobile industry had experienced severe contraction in the last
three years, and 2016 was projected to be a down year as well, Jason expected the trend to reverse in
2017. The political and economic fallout could possibly lead to a drastic reform that might turn the country’s
economy around. However, with all the uncertainties the country faced, he really needed to consider the
proposed investment very carefully.
Company Background
3P Turbo is a privately held turbocharger manufacturer based in the Midwest of the United States. It
manufactured aftermarket turbochargers which are powerful, precise, and of high performance, hence the
name 3P. Founded in 1992 by Jason Stacks, a former Honeywell engineer who had a passion for race cars
and their performance, 3P Turbo had expanded dramatically over the years, shipping to the entire U.S. and
around the world. It had a wide range of product lines ranging from high performance turbochargers to
products such as fuel injectors, wastegates, and heat exchangers, with thousands of SKUs for consumers to
choose from. Since inception, 3P Turbo had manufactured award-winning turbochargers for race cars, and for
original equipment manufacturers (OEMs) such as Fiat Chrysler. It provided full technical support for every
single product it sold. With its superior product quality and customer service, 3P Turbo became an
ISO9001:2008-certified company in 2013.
Turbochargers were once used only in sports and luxury cars built to deliver high performance. Today,
almost all vehicles, from compact cars to pickup trucks, could be equipped with turbochargers. A
turbocharger reuses hot exhaust gas to increase engine power in a small space, hence allowing smaller
engines to be used in vehicles without sacrificing power and performance. Smaller engines improve fuel
efficiency, helping carmakers move closer to the average gas mileage of 54.5 MPG by 2025, a target set by
the Environmental Protection Agency in
the United States. With the fuel efficiency made possible by turbochargers, some analysts argued
turbochargers had unintentionally slowed the adoption of alternative fuel vehicles.4
The widespread use of turbochargers in vehicles had resulted in an increased demand for products sold
by 3P Turbo. Sales of 3P Turbo went up three-fold in the last five years. With the regulatory pressure and
consumers’ love of power and fuel economy in their vehicles, the turbocharger industry was expected to grow
dramatically.
Brazil’s Business Environment in 2016: A Political and Economic Assessment
By the end of August 2016, Brazil’s economic and political situation seemed highly unfavorable for
investment. Economically, the country was doing far worse than it had in the relatively recent past. From a
growth rate of
7.5 percent in 2010, Brazil was now experiencing its worst recession in decades. Economic growth declined by
3.8 percent in 2015 and was projected to fall by at least another 3 percent in 2016. The inflation rate
surpassed 10 percent from late 2015 to early 2016 and had since subsided some (see Exhibits 3a and 3b),
and the budget deficit, which had reached 10.5 percent of GDP in 2015, seemed likely to remain almost as
high in 2016.5 Unemployment had risen to over 10 percent.
Politically, the country was in turmoil. Since early 2015, millions of Brazilians all over the country,
disgusted with what increasingly appeared to be widespread government involvement in the corruption
scandal involving Petróleo Brasileiro (Petrobras), had participated in demonstrations demanding that the
president of Brazil, Dilma Rousseff, either resign or be impeached. After a long investigation and trial beginning
in May 2016, the Brazilian Senate voted 61-20 on August 31, 2016, to impeach Rouseff. This meant that her
Vice President, Michel Temer, who, from the more centrist, business-friendly Partido do Movimento
Democrático Brasileiro (PMDB) party, but was also under investigation in the Petrobras scandal and very
unpopular in his own right, would replace her.6
Contributing to Brazilians’ overall frustration with the economic and political situation was that it
arose after Brazil appeared finally to be on the right track. The country had achieved relative economic
stability and sustained economic growth beginning in the mid-1990s, and had maintained those outcomes
for over fifteen years. During his time in office, President Fernando Henrique Cardoso (1995-98; 1999-2002)
made great strides in correcting many of Brazil’s economic problems. He significantly reduced Brazil’s chronic
budget deficits, and managed to stop the practice of financing those deficits by printing large amounts of
currency, the underlying cause of Brazil’s hyperinflation. These policies reduced Brazil’s inflation rate from
over 5,000 percent per year to under 5 percent per year. By the end of his presidency, Cardoso had
established what came to be known as the tripod of policies that created economic stability and sustainable
economic growth: fiscal discipline, inflation targeting (having a relatively independent Central Bank set a
target inflation rate, and raise interest rates to keep inflation in check if it rose above that level), and a
floating, market-determined exchange rate.
Cardoso’s successor, Luis Inácio (Lula) da Silva (2003-2006; 2007-2010), who had initially opposed Cardoso’s
policies as Cardoso’s chief opponent in the 1994 and 1998 presidential elections, later came to see that these policies
worked. They had ended Brazil’s high inflation rates, produced lasting economic growth, and created millions of
jobs. Seeking to maintain this success, after becoming president himself, Lula maintained Cardoso’s policies
(or as Cardoso said, he “rode the wave” that Cardoso had started). He even improved Brazil’s fiscal discipline
further, by enacting a reform that set a fixed retirement age for Brazilians to receive full government
retirement benefits (before, they had been able to retire with full benefits after only 30 years of employment,
no matter what their age at retirement). This reform contributed greatly to helping Brazil keep its budget deficits
at manageable levels (well below 5 percent of GDP), while Lula’s Central Bank president, Henrique Meirelles,
the former president of BankBoston, actively used inflation targeting to keep inflation below the target
level of 4.5 percent.
These pro-business policies, combined with rapid growth in China that significantly increased demand
for Brazilian exports of iron ore, soybeans, meat, tobacco, and coffee during the commodity boom of 2003-
2010, contributed to Brazil’s relatively high growth rates during Lula’s presidency, averaging over 4 percent
per year.
In addition to this sustained growth, Lula’s Bolsa Família program, which gave a small monthly stipend to poor
families if they kept their children in school and got them vaccinated, helped produce a dramatic reduction in
Brazil’s poverty rate.7 Having already decreased by 24.3 percent during the Cardoso years, the poverty rate fell
by another 27.7 percent during Lula’s first term alone.8 From 2003-2011, more than 35 million Brazilians left
poverty to join the middle class, bringing the middle class to slightly more than 50 percent of the population for
the first time in Brazil’s history.9 It was perhaps no surprise that Lula ended his second term with an unprecedented
80 percent approval rating.
However, things changed dramatically during the presidency of Dilma Rousseff (2011-14; elected to
a second term, 2015-18—but impeached in 2016). Rousseff’s policies were far more interventionist than
those of her predecessors, Cardoso and Lula. This may, in part, have been due to her very different
background and worldview. Although she grew up in a middle-class family, Rousseff became radicalized
during the early years of the military regime, and joined a leftist guerilla group committed to the overthrow
of the military government. She was later arrested and tortured by the military officials while she was
imprisoned. After leaving prison, she studied economics at various universities, worked in state government,
and eventually became Minister of Energy in the Lula Administration, and soon after that his Chief of Staff.
Although she had never held elected office before, Lula’s strong endorsement virtually guaranteed her
victory in the 2010 presidential campaign.
Rousseff initially said that she wanted to maintain the fiscal discipline and pro-business approach that Lula had
embraced. From the beginning of her presidency, however, she favored a more interventionist approach to
economic policy. In response to slower growth in the early days of her first term, she implemented various
government stimulus plans and other initiatives that called for large increases in spending. She
significantly increased funding for the Banco Nacional de Desenvolvimento e Social (BNDES), Brazil’s
development bank, which made loans to large corporations in Brazil at very low subsidized rates of interest.
Some analysts argued that a further problem with BNDES financing was that it crowded out private-sector
lending, and most of the loans went to large, politically well-connected corporations.10
In addition to abandoning the fiscal discipline that Cardoso and Lula had maintained, Rousseff appointed a
more activist president of the Central Bank, Alexandre Tombini, who sought to increase growth by lowering
the Central Bank’s interest rate from 14.5 percent to 7.25%. As inflation increased above the previous 4.5%
target the Central Bank had maintained before, Tombini did not immediately raise rates. Instead, Rousseff
attempted to control inflation by actively intervening in various industries, insisting that companies reduce
the rates they charged consumers. For example, in 2012, Rouseff demanded that electricity companies with
concessions from the government reduce their prices or lose their concessions. She also required Petrobras
to reduce the price consumers paid for fuel, a subsidy which cost the Brazilian government billions and
was a major factor behind Petrobras’s $44 billion in operating losses in Rousseff’s first term.11
However, Rousseff’s government stimulus plans and subsidies did not spur Brazil’s economic growth
rate in 2016; in fact, growth continued to decline. And even after the Central Bank began raising interest rates
again, Rousseff’s efforts to control inflation failed to prevent it from staying above 9 percent. While these
factors alone would be enough to cause her public approval to fall, the government’s involvement in the
Petrobras scandal helped bring her approval rating down to a low of 8 percent by mid-2016.
Rousseff was not specifically accused of enriching herself in the bribery scheme, as many other
politicians had done. Nevertheless, as Lula’s Minister of Energy and later Chief of Staff, she had been chair
of the Board of Directors of the state-owned Petrobras during 2003-2010, when several members of the
Board were accused of accepting bribes. Construction companies paid these bribes to the Petrobras directors
in return for generous contracts, often far in excess of actual costs for the construction projects involved.
Since the Brazilian Federal Police began the investigation in early 2014, more and more evidence had
surfaced that members of the Board, many of whom were affiliated with Lula’s (and Rousseff’s) socialist
Partido dos Trabahladores (PT, or Workers’ Party), had used millions in dollars in bribe money to help finance
PT electoral campaigns at all levels, possibly including Rousseff’s presidential campaign.
Because no solid evidence of Rousseff’s direct involvement had surfaced yet, Rousseff’s opponents in
the National Congress sought to impeach her on other grounds: a charge that she had used accounting
tricks to mislead the public about the true size of Brazil’s budget deficit when she ran for re-election in 2014.
Nevertheless, most Brazilians believed that given her role as chair of Petrobras’ board, Rousseff must have
been involved in that scandal as well. After Lula himself was arrested briefly in March 2016, and accused of
receiving bribes from some of the construction companies involved in the scandal, Rousseff attempted to
give him immunity from prosecution, at least temporarily, by appointing him to her Cabinet, a move that was
blocked by Brazil’s Supreme Court. This only contributed to the public’s negative view of the president.
In assessing the political and economic turmoil in 2016, some business executives considered waiting
to invest in Brazil until after the congressional and presidential elections in October 2018, when it seemed
likely that Brazil’s growing middle class, fed up with the widespread corruption scandal and poor economic
performance of the current government, would elect new leaders with a more orthodox, business-friendly
approach. Aécio Neves of the centrist Partido da Social Democracia Brasileira (PSDB) party (the same
party to which Cardoso belonged) had seemed to be a likely candidate to win the presidency in 2018,
given that he had lost the 2014 presidential election to Rousseff by a very narrow margin. However, recent
allegations had surfaced that he, too, was involved in the Petrobras scandal.
Nevertheless, by August 2016, another PSDB candidate, Geraldo Ackmin—widely perceived to be a
highly competent, completely honest, and very pro-business governor of the state of São Paulo—had
emerged as a frontrunner in the 2018 presidential election. Brazil’s economy seemed likely to improve in 2018,
and could possibly begin to improve as soon as 2017 under the more business-friendly government of
President Temer, who would serve out the remainder of Rouseff’s term. After all, Temer had made clear that he
intended to reduce Brazil’s budget deficit, appointing moderate, centrist cabinet ministers who would be fully
committed to scaling back Rousseff’s interventionist policies and restoring sustainable growth with low
inflation.12 The question was, should Jason invest now, while the Brazilian real was still relatively weak and his
competition was unlikely even to consider Brazil, or should he wait it out until after the election in 2018?
Brazil’s Auto Industry
Despite the political and economic uncertainty in Brazil, the situation in the auto industry seemed to offer
great potential. From the 1950s onward, the Brazilian government actively sought to promote car
manufacturing in the country with high tariffs on imports and other policies, such as local content
requirements, that encouraged foreign investment. Because of these policies, Brazil developed a sizeable
manufacturing capability, not only for cars themselves—the segment of the industry dominated by foreign
manufacturers—but also for auto parts, where local manufacturers prospered.
Because of this strong government support and its own large market, Brazil became one of the top
manufacturers of cars in the world. In the last 20 years, however, countries such as China, India, and even
Mexico had begun outpacing Brazil’s production. In 2015, Brazil was the 9th largest producer of cars in
the world, according to statistics compiled by the Organisation Internationale des Constructeurs
d’Automobiles (OICA). In 2014, the main players in Brazil, in terms of market share, were Fiat-Chrysler
Autos (21.3%), Volkswagen (17.7%), General Motors (17.4%), Ford (9.3%), and Renault-Nissan
(9.3%).13 However, Honda, Hyundai,
Tata (from India), and Chery (from China) were expected to pose increasing competition for market share
for these firms.
Significantly enhancing Brazil’s attractiveness as a location for foreign automakers was its membership
in the Mercado Comúm do Sul (Mercosul in Portuguese, or Mercosur in Spanish) customs union, which
went into effect in 1995. The Mercosul trade pact initially included Brazil, Argentina, Paraguay, and
Uruguay as full members (Venezuela joined as a full member later), while most other South American countries,
including Chile, Bolivia, Peru, Colombia, and Ecuador, were associate members.
At least in theory, anything produced in any of the full or associate member countries of Mercosul
could be traded at zero tariffs within the customs union. This meant that firms manufacturing in Brazil had
access not only to the Brazilian market, but essentially to the entire South American market, with zero tariff
barriers. (In practice, there were often exceptions to this rule.) The difference between the full members of
Mercosul and the associate members, however, was that the full members shared a Common External Tariff
(CET) that averaged 14%, while the associate members were allowed to set their own external tariff rates.
In some sectors, such as automobiles, the CET was much higher, to further encourage domestic
production in those sectors.
When President Rousseff increased Brazil’s tariffs on automobiles from 25% to 55% in 2012, and imposed
a quota on imports from Mexico—which had previously been granted Mercosur status for this sector—
without consulting other Mercosul members, she violated the rules of the pact. At the same time, however,
she made the possibility of exporting cars or car parts to Brazil even more difficult. As Jason knew, the
only realistic way to succeed in this sector was to manufacture the product in Brazil.
Local manufacture created the opportunity for government incentives, usually in the form of reduction in
specific taxes at the state or local level. For instance, states in Brazil could offer exemption from the ICMS
tax, a state value-added tax on sales of goods and services that varied by state and product or service, but
averaged about 16%. The highly developed state of São Paulo, which had little difficulty attracting
investment, offered no exemptions on this tax whatsoever, while poorer or more remote states might offer
complete exemption from the ICMS tax for a specified period. As part of her efforts to intervene in the
market and encourage more local production, Dilma Rousseff had created a new federal tax incentive in
2012 specifically for the auto industry called Inovar Auto, which provided specific tax breaks for firms in
the auto industry that invested locally in innovations that produced more fuel efficiency or carbon reduction.
Under this program, automakers who commit to a 12 percent reduction in fuel consumption and 18.84
percent reduction in carbon emissions would get tax reduction incentives.14 Despite the benefits this
program provided, Jason had some concerns about it. For one thing, although Rouseff had plans to extend it,
the current scheme was scheduled to last only until 2017.15 Also, both the EU and Japan had launched trade
disputes against Brazil in the World Trade Organization (WTO) over the program, arguing that it unfairly
favored local content over imports.16
Because Brazil had such a long history with auto manufacturing, there was a highly skilled, capable
work force in this sector in the country, at least in some states, such as Minas Gerais, Paraná, and São
Paulo. Brazil was notorious for its high costs of doing business, known as the Custo Brasil or Brazil Cost,
which referred to Brazil’s complex, burdensome tax system, red tape, rigid labor laws, and poor
infrastructure (especially in the northeastern part of the country). But Jason knew that in São Paulo he
would have no difficulty finding the skilled workers he needed for his manufacturing plant.
Analysis of the Brazilian Investment Proposal
Jason examined the costs and revenue data in Brazilian real (R$) shown in Exhibit 1. The project required
an immediate cash outlay of R$130 million, of which R$10 million were to be used for training local
employees, R$20 million for site preparation and improvement, and the other R$100 million for equipment
purchase. Jason
14
“2016 Top Markets Report—Automotive Parts,” International Trade Administration (ITA).
15
Roger Stansfield, “Brazil: Stimulating or Stifling Automotive,” Automotive Manufacturing Solutions, September 9,
2014 (http://www.automotivemanufacturingsolutions.com/focus/brazil-stimulating-or-stifling-automotive>, accessed
October 31, 2016).
16
“Brazil: Auto Sector Faces Uphill Battle,” Oxford Analytica Daily Brief Service, April 14, 2016.
A06-16-0013 5
often sourced the equipment for production and assembly from a vendor in Germany. Due to the superb business
relationship, the vendor had agreed to provide seller financing up to 90 percent of the equipment cost at a
very attractive interest rate of two percent per annum. This rate was much lower than what Jason could
borrow from a German bank, a U.S. bank, or a Brazilian bank. The bank rates comparison was as follows:
Loan Rates Secured by the Equipment and 3P Turbo’s U.S. Assets
German Vendor German Bank U.S. Bank Brazilian Bank
2% 6% 8% 15%
The seller financing agreement required 3P Turbo to completely pay off the loan, both principal and
interest, over five equal installments in Euros as outlined here:
Calculation of Loan Payments Based on 2% Annual Rate
Loan Amount R$90 million or Euro 22.5 million
Spot Exchange Rates 4.00 R$/Euro 3.56 R$/USD
Forward Exchange Rate 4.20 R$/Euro 3.74 R$/USD
(in Currency Swap)
Vendor Loan Rate 2%
2017 2018 2019 2020 2021
Loan Payments (Euro) 4,773,564 4,773,564 4,773,564 4,773,564 4,773,564
With R$90 million of seller financing, the debt to equity ratio of the capital expenditure was 3:1. This
was a concern as 3P Turbo liked to maintain a much lower debt equity ratio for the company, typically
about 1:1. Unless 3P Turbo changed its desired debt equity ratio at the corporate level, future projects
would need to be financed with very little debt.
Similar to previous investments, site preparation and equipment costs were treated as capital
expenditures depreciable over five years on a straight-line basis. Training costs were expensed off in the same year
the expenses were incurred. Due to equipment becoming worn and technologically obsolete, the consultant
estimated a salvage value for the site and equipment of R$30 million at the end of the fifth year.
Like any sizable entity doing business in Brazil, 3P Turbo would be subject to a total tax rate of approximately
34 percent on the profits made each year.17 While the tax rate on corporate profits remained unchanged
over the last ten years, the capital gains tax rate had just been increased from its previous flat rate of 15
percent and 25 percent for entities from non-tax-haven and tax-haven countries, respectively. Starting
January 1, 2016, the Brazilian government imposed a tiered capital gains tax rate on all individuals and
entities, domestic or foreign, based on the following:18
Capital Gains Tax Rate in Brazil for All Individuals and Legal Entities
Tax Rate Capital Gains Amount
15% Up to R$1,000,000
20% > R$1,000,000 and <= R$5,000,000
25% > R$5,000,000 and <= R$20,000,000
30% > R$20,000,000
While the Brazilian real (R$) cash flows numbers looked promising, the risks of investing in Brazil had to
be properly accounted for to determine if the investment would create value. The cost of capital of 10 percent
used for similar projects in the U.S. would be inappropriate for this investment. Brazil had a much higher
inflation rate than the U.S. and the trend was expected to continue. The R$ revenues and costs reflected a
9 percent inflation rate every year for the next five years. In contrast, the U.S. inflation rate forecast was at
2 percent per year during the same period.
Decision Time
Given the size of the automobile industry, Jason was confident there would be a big market for
turbochargers in Brazil. However, there were also many local manufacturers competing in the same space.
Would 3P Turbo’s
17
This 34% rate can be broken down into: 15% base rate, 10% surtax for income surpassing R$240,000, and 9%
social contributions. Source: “Corporate Tax Rate 2015,” Deloitte, August 2015.
18
“Brazil Changes Capital Gains Tax Rate for Non-Resident Entities,” Tax Insights, PwC, October 13, 2015.
6 A06-16-0013
superior quality, high-performance turbochargers have a competitive edge in Brazil? Would Jason be given
the opportunity to supply turbochargers to FiatChrysler for its vehicle production in Brazil, given his previous
business relationship with them? Could he get new businesses from other automakers? Quite a few foreign
automakers had set up production facilities in Brazil in recent years, partly due to the Inovar Auto program
introduced by the Brazilian government in late 2012 aiming to increase investment in Brazil and localize
production. If 3P Turbo could help OEM companies attain these thresholds with its turbochargers in a cost-
effective way, it could potentially become a preferred supplier to the automakers in Brazil. That would
drastically improve the cash flow forecast of this project as the current estimates provided by the consultant
only accounted for turbocharger sales in the aftermarket.
Besides financial viability of the project, Jason also wondered about the timing of starting this project.
From a strategic view point, would entering Brazil during this turbulent time give 3P Turbo first-mover
advantage? Should Jason wait until the automobile industry in Brazil showed signs of recovery? What about
global commodity prices and the Chinese economy, which impacted Brazil’s economy in such a big way?
Would those conditions persist and drag down the Brazilian economy further? Among all these uncertainties,
Jason also wondered how easy or difficult it would be to negotiate for government incentives under such a
chaotic political environment.
A06-16-0013 7
Exhibit 1. Brazilian Investment Cash Flows Forecast (Price and Costs Increased by 9% Each Year)
(thousands of R$)
Year 2016 2017 2018 2019 2020 2021
Projected Volume (000) 28 30 38 44 50
Price Per Unit (R$) 2,400 2,616.0 2,851.4 3,108.1 3,387.8
Production cost Per Unit (R$) 1,050 1,144.5 1,247.5 1,359.8 1,482.2
Selling Cost Per Unit (R$) 300 327.0 356.4 388.5 423.5
Administrative cost Per Unit (R$) 100 109.0 118.8 129.5 141.2
Revenue 67,200 78,480 108,355 136,755 169,390
Production Cost (29,400) (34,335) (47,405) (59,830) (74,108)
Gross Profit 37,800 44,145 60,950 76,925 95,282
Selling Cost (8,400) (9,810) (13,544) (17,094) (21,174)
Administrative Cost (2,800) (3,270) (4,515) (5,698) (7,058)
Depreciation (24,000) (24,000) (24,000) (24,000) (24,000)
EBIT 2,600 7,065 18,890 30,132 43,050
Taxes on Profits (34%) (884) (2,402) (6,423) (10,245) (14,637)
After-tax Profit 1,716 4,663 12,468 19,887 28,413
Add Back Depreciation 24,000 24,000 24,000 24,000 24,000
Total Operating Cash Flows 25,716 28,663 36,468 43,887 52,413
Cost of building and equipment (120,000)
Cost of Training After Tax (6,600)
Salvage Value 30,000
Source: Casewriters’ estimates.
8 A06-16-0013
Exhibit 2. Brazilian Real per U.S. Dollar Exchange Rate from October 1996–September 2016 (R$/US$)
Source: Trading Economics. http://www.tradingeconomics.com/brazil/currency.
A06-16-0013 9
Exhibit 3a. Brazil Inflation Rate from October 2015–September 2016
Exhibit 3b. Brazil Inflation Rate from October 1996–September 2016
Source: Trading Economics. http://www.tradingeconomics.com/brazil/inflation-cpi.
10 A06-16-0013
