Atlas Air Worldwide Holdings Inc (AAWW) 2002 Q1 法說會逐字稿

just for sure and with me today is Douglas Carty, Atlas Air Worldwide Holdings Chief Financial Officer. We do apologise for doing this on a 2.30 on a Friday afternoon. As we tried to notify folks earlier, we have spent the last two weeks basically putting into place new auditors at Atlas Air for obvious reasons in terms of Arthur Andersen our former auditors, and it has taken that, all of that two weeks for auditors to get up the speed with respect to Atlas Air, and as a result of that they had asked us to postpone our normal earnings release until they had finished first work which they have done, and as a result of that they had obviously delayed our earnings release until today. We wanted to get it out as quickly as possible, but just because it was so late, otherwise coming what you know on a Friday afternoon, which would normally not be our practise. So, we are in time only and then I am assured by Doug and we are glad to be to get out through today. you and Rowe finish the results for the quarter, and I am going to make a few comments of my own and we will open up the lines for any questions that you may ask.

At the onset, we need to emphasise that certain informations discussed in today's conference call may contain forward-looking statements that involve a number of risks and uncertainties. These risks and uncertainties may cause actual results to differ materially from our expectations in the company's SEC filings various risks and uncertainties.

With that I will turn the call over to Doug.

Thanks Sir Rick, and let me also add my welcome to all of you on the phone. Thank you for joining us. We appreciate that. We appreciate it very much. Rick has covered off the fact that we have had new auditors, and we have also had a new Vice President and Comptroller, who basically joined the in the same day that Ernst & Young joined the property, so David is one of the officers required in as the company's Vice President and Controller, and he is with us as well. If there are any questions that I need help with, I am going to pass the question to him.

We have made the auditor changes Rick has referred to. I want to really welcome them to the Atlas team, and I also think it is appropriate for me to say on this call, thanks to a real partner Aurther Anderson over the years as most of you know Andersen audited us for several years and helped us grow into a public company. It is clear it is a difficult time for that enterprise and we wish our friends there well in Denver.

Now let's turn to the numbers. Briefly today we announced Atlas Air Worldwide Holdings first quarter results at sort of high-level base with our revenues of 246 million dollars. We have reached an operating profit 7.7 million dollars or 3 percent margin, and EBITDAR in our calculations would be operating income at depreciation less, but EBITDAR of a little of over of 76 million dollars with 31 percent of revenues. The after-tax loss came in as on the press release, with the of the press release of 6.6 million dollars or 17 cents per share.

Just a couple of things you'd read on the press release attachement, we'd settled it in a little bit more detailed and we have broken out the revenue in a bit more detail, I think that we have had in the past, contracted services to represent our ACMI and our Hub Frame Charter services. You know the revenue are primarily in military and charter, and also our , I think you know is modest right now, and finally scheduled we're getting corners for . We have also given a new stats . It is kind of new for us, and I'll attempt to give you the block hours by companies Atlas and Polar, and then we will each companies of a broad distribution of what lines of businesses those block hours are attributed to. As well, because of poor scheduled businesses with that difference we have given you for the key drivers there, which for those of you follow airlines more routinely than others know that that the key asset there are capacity, the utilization of that capacity, and year-end revenues. So this the beginning of giving you that data and we're hopeful it will be helpful to you as you study us and think about us going forward.

Our total consolidated revenue for the group was the 246.2 million dollars that we have spoken about it a moment ago versus 180 million dollars last year. Of course last year we did not have Polar. We only acquired that in early November season. Though the figures are inflated by the acquisition of Polar Air Cargo. The Polar revenues came in at a little bit under 100 million dollars. Still when you look at the increase of revenues from 240 to 246, you can say that Polar brought almost 100 million dollars and as a consequence Atlas was down. The last down of Atlas was really a continuation of the trend we have seen for the better part of the year as you know we are just continuing to follow-up.

What is a little bit different than the declines of last year is that revenues last declined at Atlas roll out the block that was the block hour decline. As you can see here, our revenue at Atlas was only down at about 16 or so percent and versus about 22 percent block hour decline. The reason of course is discussed to you at various meetings, investor presentations were set up is that these new lines of business in hub or in our charter business, the unit revenues are higher than our unit revenues in the ACMI business. As I know you know unit expenses are higher as well.

Operating expense for us, you can see, from the picture it is a little bit like the revenue story or from the chart I should say, a little bit like the revenue story, a little bit complicated or largely driven by the inclusion of Polar this year versus last year. Our total operating expenses increased to 238 million dollars just over that in 2001, a 164.9 million dollars or about or so million dollar increase. Atlas Air themselves, expenses were actually down from last year reflecting, you know the cuts we did last year in and then otherwise. This decline that comes from activity and last year, the inclusion of the settlement of profit sharing settlement amounts. So the Atlas numbers are down by increase in ground and fuel, as you know we have been describing that as we take on some of those expenses in our hub and charter planes. So a big part of the increase therefore or is obviously Polar. Just strolling down some of those expenses and sort of focusing on salaries and wages, they are up about 10 million dollars because of the cuts last year Atlas were down in this regard, the increase of Polar then brings it up.

Our rent, another big job on the that is exclusive Polar as the Atlas rent were relatively flat this year, and the big jumps on the that you can see really in ground and fuel, together combined to about 56 million dollars versus about 7 million dollars last year. So, a big jump, about 70 percent of that jump of 35 or 36 million dollars is only due to Polar additional Polar expenses. But the rest of is driven largely by the increase in costs of Atlas in hub and charter flight.

Other operating expenses which is a combination of travel and communications is largely driven by Polar as well. The company has been hoping to be in a position to file our at roughly the same time with as this release. That is our goal going forward, this longer process interrupted and our will be filed in the early part of next week, obviously have to be, and as you know we would be filing them for both the holding company, the public company and for the Air separately because of the they are standing.

A couple of other comments before I give it back to Rick here on liquidity and refer to the press release our total cash in short term investments totaled to 166 million dollars, and that is down from the year-end but largely reflecting the fact that we had pretty heavy debt in lease payments. A 40 percent of our total cash payments for the year are in the first quarter. That largely explains the reduction in cash from year-end.

Finally I think is on minds when we make a reference in the press release and negotiating the operating lease, the terms of fourth vision of economic line but we are narrowing the field down there, and from there we hope to be in a position to establish with our later in the year. Our position is one that we want late in the year as possible, with net results yet but I am confident we will resolve result would be acceptable and that difference . I guess plainly with respect to is primarily is to give you new outlook on block hours, a little. We had our annual call at our investors conference about a month or so ago. We have reason to believe the annual call is especially different yet. In the near term, the second quarters guidance will be relatively flat at both Atlas and Polar in second quarter. I will be happy to participate in the results in steadily.

In this order of obviously having loss is a given the for the first quarter operating . These results were not there and in fact there were a sort of positive aspect. One we continued to see good levels in military flying at both Atlas and Polar and activity which has provide a eventually return of the cargo market. This military activity will continue to constitute a relatively dependable level of ongoing revenues selectively . At the same time, we say a very signs of renewed air freight activity in March for the industry overall in the Air Cargo side. After many months negative comparison airlines such as KLM, Air France FA Pacific and Queen all recorded year over year traffic increases in March. Exports out of Hong Kong were actually up 13 percent from the prior year and up 5.5 percent in Taiwan. part of the trend typical tends to have a mini-peak in March followed by some lackluster April to May before ramping up again for the second half.

Again at this point most of the industry would have seen April probably has that pattern. It is still relatively and clear what the first quarter says about what may be in store for the rest of the year, but positive March numbers were certainly an encouraging life, but is otherwise been a pretty weak for the past year. our results certainly has been the performance of Polar Air cargo. As most of you in the fall we said at the time of the acquisition that we had drastically restructured the company's ongoing operating economics as a very integral part of the deal. Those changes are now clearly paying dividend for us. All these operations were actually profitable throughout the quarter and its coherent scheduled services were profitable in March even before the military flying and by frankly this are having the big way back in the financial achieved in the last . So we continued to expect good results from the Polar as year progresses. there is a reflection of these structural changes as well as the oriented marketing focus that we have put in place. At same time we continued to be very pleased that the early successes that we have seen is the partnership program marketing effort that we have started on the Atlas, unique program. series of strategic partnership with other major air cargo service providers designed around the only truly global independent cargo network that exist in the world. The two that we implemented last year in Miami and Belgium continued to develop nicely. Miami grew from one aircraft initially to three at present and four in summer. in first quarter cargo traffic increased by 9 percent starting from the first ACMI customer that we had there . We have also grown from three aircraft from one. More importantly now have some 9 or 10 customer airlines that are using . Most of our old customers are utilizing either our new fractional ACMI who are our partial ACMI products, Various enquiries in my product customer can contract for either a portion of the aircraft for certain number of six position or they can contract for all of the year aircraft, but for just a certain number of days per week. In a way the customer guarantees the usage of either a portion of the internal capacity or of the entire aircraft on a on use it or lose it basis and this commitment is for a fixed period of time with a minimum contract term of six months, and only when we have seen sufficient long-term commitments essentially on an aircraft. We actually that aircraft to the operation to the hub. This is an important distinction that I think needs to be emphasized.

You should not think of our hub network as the departure from our core is not business model both for hub and our new product line are at simply to the ACMI product. One thing which never rather than just one. Take the marketing risk with each of them guaranteeing Atlas's certain level of ACMI type usage for a long term contractual period and again we do not start flying aircraft in hub operations although we have those contractual commitments, overall it is proved to be a very effective marketing tool particularly in the current environment and it is already seeing success when it does not attract ACMI model. We really are happy with the success we are seeing now. Now the traditional side of the ACMI business even despite the severe market conditions that we have been seeing for the past year that actually signed up three new ACMI customers so far this year and our pure ACMI services represents fully two-third's of Atlas Air's first quarter block hours. and in combination with ACMI-derived hub services they were almost 80 percent of Atlas's hours. We think it is a pretty decent outcome in a bad environment. Apart from these process what do we see from the rest of the year. A economic recovery is clearly in full swing. We believe that air cargo market will continue to be depressed earnings. suggest that second quarter probably not going to look off from the first quarter in my regard.

So believe that in the real rebound we will clearly not occur into a for the second half of the year and as a result our focus continues to be on being as well positioned as possible in both financial and marketing point of view as we await the inevitable return of the economic and the air cargo market.

From the sales and marketing perspective we believe that we vitalize all of the subsidiaries and the atmosphere partnership program positioned us extremely well for the future growth potential of the market. Now on the financial side first quarter ending cash balance of 256 million dollars that leading to more through the last of this current economic , fully 40 percent of our fixed cash obligation for the year for by the end of the first quarter, leading us in a cash mutual mode for the remainder of the year. The last remaining cash will also be resolved and we are working out . Under that proposed agreement has already now deferred one of the four new 747 originally scheduled, we delivered the Atlas this year next year and to push the remaining three deliveries until as late in the year as possible. under the proposal the aircraft may due come become .

That turns out the scenario than no additional cash outlay should be required. We continued to be confident of our prospects. We obviously like the market to recover, the sooner the better, but as we all we really do believe that we are well positioned for the foreseeable future. Now with that we will open up the lines for any questions that we have.

Thank you sir. If you would like to ask a question on today's call you may do so by pressing star 1 on your touch-tone telephone. . We will take our first question from Alex Brand with BB&T Capital Markets.

Thank you and good after noon.

I guess you didn't make it the

There is no today.

I appreciate to finally afternoon to rely it. I wanted to start by asking you gave the guidance for 15 cents after March had finished, there is something that cause 2 cents of ?

First is the mostly to do with fuel. We are in a sort of finalizing the , which was higher than we guessed. .

Okay.

A little bit new to say that the fuel game as you can appreciate, as we have not to the cracking fuel price . We will work on the fuller side of the operation.

Okay . Again a couple of questions together. In the press release mentioned your comments polar profitable in March and I guess some clear if what is your statement is that polar is in ongoing profitable entity manner or just because March had a and as part of the bigger question, I am still free as if you feel like you are at or near the point where you can miss environment, you can operate the company at a break even level, the whole company?

Yeah. The answer is that Polar offices for the entire quarter and even when you take out the military activities from March, is probably take up as it is forced to take certain operations with profitable as well dealing that restructuring that we did in terms of inside marking the asset market particularly aircraft and leases and that player thing that were part of what we did back to where it should be in a long that is a good indicator, what is it happened for the rest of the year. It is only because of noting else. .

And what about to where you are relative to break-even first Atlas that are worldwide in this environment?

Well we stay in this environment, if you are literally were looking at it today and say that there are currently taking a than I think could be the case that is in pretty good March. That is the indicator better than what we had. the current environment is what I give .

Okay and with what perspective, is what is your guidance is going forward? Is it a fair statement to say that you have got basically unchanged from when you what is your return of the early conservative to base same guidance today, but there is ?

We don't have to represented by you still need, earlier in the year than we need them.

Great. Thank you.

Thanks.

Okay, the next question from with management.

moderate litigate a highest .

Let's take .

wonderful question for union negotiation, can you give us kind of an update on that, it sounds like things or kind of restart when the new union management team leadership and want to get a sense of whether looks like the negotiations in the here or right the beginning of negotiating all the cause that you whether you are going to going to kind of pick up for your last or tend to negotiate on one or two causes that were earliest taking point?

I think it is perhaps be the latter impact or there are extremely good indications. That is the case that we will indulge in work at two to three items and those in the way which is going to be satisfactory on the saleable side and then going on, retail sales look that ways because we literally have only one very very short negotiating session of variety if different reasons that most likely having to do just the and we are not actually scheduled to beat again until next week. We kept in that and then will know some but I think it is a fear that you will wind up focusing on that small number of issues getting resolved.

Okay. If you look at the charter serves and other revenue, 87 million, I think you said that Polar had about a 100 million revenues. So is it fair to say that roughly 50 of that pieces is what Polar flew for the military?

Our total charter line of 80 million dollars that had in this, it's about 80 percent on a consolidated basis the rest charter and Polar is almost exclusively military in charter activity.

scheduled service that was Polar?

Yes.

But when I that Polar overall added a 100 million?

I think that's the 100 million dollars.

Rest of that piece was military for Polar?

Most of that was military and other charger and just a few others are in other revenue lines that most of the rest would be the military.

As restructuring act is going forward, what should we look at it in for military block hours or number of planes for both Atlas and Polar as we go out with a fair number?

There is a but I can say that right now is that for the month of May expect same levels of than what we saw in March, but the military as you can expect is at very very limited visibility on how much flow is going to do or obvious security reasons. We have taken a month at a time, because that is the way the military takes it. At this point the allocation that before participant the allocations that are given before of this point and that changed to be grateful .

How about of we go back since we started doing the place of number? When was the and where March and April versus there?

I would guess that December was following the back in and verify we might guess and you would explore the peak of year .

And roughly have any plans now in April or May at both Polar and today?

I don't have that count. We will get that pretty offline. We would have tried it, necessarily keep track because again military cause the in advance as US able to take this .

Your bottle has similar type of revenue dollar going forward. There is no seasonality. I would guess it is . Is that fair going forward nicely ?

No there is no seasonality in military assets. It is fair that it relative to market. We will allow the begin to .

the 8 million go up because of the chart of these as we go up ?

Definitely will be at the fourth quarter and we swill started and he does very nicely in the .

One particular question on the customer side, I guess you mentioned the Miami hub and you got three aircraft there. Can you tell me which customers are using and is that at AGI or other additional customers there?

AGI has the main customer there. We got different available customer for using AGI.

You meant three new ACMI customers ?

It was in the presentation that we gave you that is TNT, , and InStone.

One more last, one last share count on our ?

I want to say 38, 208. You got that.

Yeah. Thank you.

Thanks .

We will take next question from Jordan Alliger with Goldman Sachs.

Hai, couple of questions one, can you talk about the issues or nonissues as they maybe in terms of running or integrating the new regional partnership program, in other words is there a different management set that you guys are developing or still need to deploy to make sure the logistics of that all come together?

There are different management skills associated with that and your question is a very good one. We have some of those skills. Our VP of operations is a former FedEx VP with good qualifications on hub networking. Reaching outside the organization to bring in folks with more specific skills. Actually from our partners in TNT. TNT is obviously already is a master of running hub, given the partnership we have with them. They are already providing a lot resource to make sure that this is being done right. So we are trying to make sure we all got right, including place to do. There is no capital investment required. We already have the systems in place either at Atlas or more specifically at Polar. All these operations have always been federal service operation that requires distinct type of scheduling to go ahead at Atlas. So between the systems we have at Polar and already in place in Atlas, we are not going to do anything there. It's really a people issue and I think we will get affiliate once in place.

Assuming that your successful moving Boeing deliveries, and three remaining with a sort of a late in US possible, is there any early sense of what you may do, I mean with those planes? Could you go right into the hub concept or is that on short?

Well, I got to tell you the reason that we would easily like to move them back is possible because you're entering into the peak season where you have a kind of other possibilities where we have operated in the past for others. We are successful. And would be quite in to the peak season. Beyond that obviously we expect to put them in hub operations or I guess put the aircraft into as we have got customers and contracts for it. From your perspective and certainly from our perspective, I think we have early part of next year as well as the more appropriate time to be concerned about where aircraft going to go. We are concerned about this.

Great. Thank you very much.

We are taking the next question James with Miller, Tabeck and

For Atlas Inc., could give you revenue and operating expense line items, at least AR?

I have only holding in front of mine. We filed a . On the revenue line, I want to say was 150. But I don't actually have any data .

Fine. Thank you.

We will take the next question from Greg Burns from J.P. Morgan.

Hai,

A couple of follow-ups, on the three customer contracts you highlighted what was the length of time of those deal?

Long term. The shortest is one year, the longest is at least three or five years, I think three.

Excluding the one-year contract, which is shorter than your historical contracts that seem to be structured, or they look different?

One has more variable minimums ACMIs. The other two are exactly the same, as more contracts would like. But one does have more variable ACMIs.

And just on the subject of customer renewals come up on the traditional ACMI business, anything of note coming up in later this quarter or third quarter? And I guess as a part of that what is the impact of customers who under-utilize the fleet? It sounds like pressure that to take aeroplanes sooner or later. What is that due for ACMIs demand from your standpoint?

The answer for the question, I think there is nothing at all. The market is driving the demand levels. There are some cargo aircraft that are being delivered this year, and none of that would be some how displacing ours in terms of guaranteed hours. So I don't think that is an issue. You know pulling out of the hedge; I don't think it has any impact as for this year. Quite frankly, yes, it becomes an issue in following this because it is our . As for as contract renewals, we'd recalled at the investor conference three or four weeks ago, we indicated that it would have been brought back probably on USA. We are going to see and getting little softer. It has increased the indication that in the second contract would actually get renewed, so we are actually feeling somewhat better out there. In any events, none of that happens until the end of the quarter.

All right great, and a question on ACMI business are looking for flat block hours? Are you referring sequentially from the first quarter or versus?

Yes, sequentially basically and I meant that for the total block hours for both companies, just to clarify that. That is common. In the second quarter we expect relatively flat to the first.

Thanks very much.

Our next question from Robert Ryan with Bank of America Securities.

Looking at Atlas Inc. and covenant levels, I guess, on the leverage tests max leverage was 6/7 at end of March. Where were you under that test?

We were inside all the covenants in March. We were well inside in near term, and March when we will get supportive, and don't see any difficulty going forward. And to add anything little tighter at Q3 and much easier at Q4, simply because the EBITDA growth in the first quarter was at peak.

Okay as far as the step-down from September to March and it goes to quarter to quarter?

Remember, when we came out of summer and knew we had a year-end covenants problem in the bank, we chose to do this on a one-year basis to get covenants grew 2002. We always said that sometimes in the second half of the year, we would go back and talk little about loan. We have called the where we have pretty lot of trans going on, a slow down going on. We felt better relationships with management and the banks all the time. We also know we will come back to the banks later in the year and they have been pretty good for us. Frankly we got convent relief post 9/11. I would expect that we get more confidence in evolving business.

Why is that the cash at Atlas Air Inc. headquarters compared to $200m test?

We have 266 total, what I guess is 225. So we cleared it 10 or 12%.

And how do you feel about that cushion going forward?

It improves a little bit through second quarter. We don't have a lot of reduced cash and demand out of the ownership cost in the second quarter. We're always a bit nervous about the third quarter on how the shares are and we are talking with the bank about.

And if you look at your core ACMI business during the first quarter within Atlas Air Inc., how many of your planes, I guess your 36 over ACMI?

Well, it is two-thirds of block hours there is race in block hours. Few block hours and then if you add the hubs flying to that which is ACMI but any how 80 percent of your block hours.

But that include hub.

Yeah.

Thanks.

Just fractionally .

I am just wondering what are you talking about seeing some signs of firming and perhaps an upturn. Just refresh my memory if you would your guidance for the year was roughly breakeven for EPS?

Yeah. That is what we talked about and on the first question asked now we are changing our guidance . It still have all favorites out there that we our investor meeting including rate of the aircraft recovery and boeing as we haven't changed anything .

But if status quo persists, chances are the company won't be breakeven?

If status quo persists, if you had absolutely no recovery lose a ton of money economy lose a little bit of money.

How much would you expect to earn in a quarter where the economy expanded by 5.8 percent?

Well leverage of our business is one of the things that we actually talked about again at the investor conference and something like 60 percent of our costs are the fixed natured and once you have covered those and revenues starts to come back little you have to do in order to , in order to generate that revenue because quite frankly we've got the planes there. Again, 36 aircrafts in our fleet, only 30 are operating and by now we have got six parked in the desert. first dollar of revenue that comes back to because aircraft service, there is no additional ownership costs associated with little, if other costs associated will bring back to us an enormous leverage associated with any kind of economic rebound that is flat. Another point that I would make is that, you know to your question, it has got no better present today, 6 million dollars in the quarter. There is seasonality in any of these which is always going to be there even if the current economic environment is as it is which was evidenced by last year's fourth quarter for the loss that you would see on a quarter basis a year ago it is pretty good fourth quarter, I guess . That kind of environment 6 million dollars I won't think kind of debt. When you look at the hundreds and hundreds of millions of dollars realize or losing.

What is your pattern about EPS in the military business?

I don't have that number. I really don't calculate them. But before you leave, do not make the mistake of thinking that military work is going to go away. First of all, military activity is continuing and number 2, by the time we get to the second half of the year at least you will have becoming full-fledged number in the program. So that is where it is now, which gives you a guarantee level of military and that is something that we never had before. . We actually feel there is much when we have guaranteed level of military revenue but the return of the market.

How do those guaranteed levels compare to run rate in the first quarter?

You don't know that. I would love to be able to answer the question for you. What happens is that every October, actually it is done before but it is announced in October, the military announces what they call their fixed contractual buy for the year is. Those carriers participate in the program. And that is typically hundreds of millions of dollars, because there are always troops movements and always supplies movements and so forth that military doesn't have to with which to do it. Atlas never participated in that in the past. We have always had our aircraft for the small use and benefit of our ACMI customers and when we participate in the craft program you have to be prepared to take those aircrafts and use it in the military. We never wanted to take them away from our customer. So we have never been a participant before and between Atlas and Polar we will now work . We will be on in the second half of the year represent fully 50 percent of military flying and there will be a guaranteed level of military revenues associated with that. We will now begin to come to not only to Polar but also Atlas Air.

Okay fine. What was the gap from gap investing cash flow?

I am sorry.

Operating cash flow, gap operating cash flow statement?

We are sitting here going through financials and we call you back with that number.

If you have it may be you could give me a call later.

Yeah. If we can do it before our call is over, we will do that. Yeah, people can calculate that .

Just how you talk about the cash?

Well . If we are not yet ready to file the Q, so we don't have all those put together. That's what we will be doing, I am looking at . If we by at the end of the call, we will .

Thanks.

Thanks.

We will take our next question from Clark with KDP Investment Advisors.

Oh, hi. I just wanted to go back to the discussion about the Boeing deposits, there is a bunch of deposits with Boeing I believe. At this part of the deal do you think you are going to get those back or are you going to those in buy down the..?

We'll see what happens with those. Ultimately the Boeing negotiations obviously our position is we're due deposits back. Boeing would like us to keep some skin in the game but we will end up somewhere in a position where my guess is we'll get a good portion if not all back. There are a lot of trades involved--if you get a low enough lease rate, as an example, we might choose to leave some cash in .

I was just wondering that the investor call that you did each of those planes costing a million a month each, I would think would stretch your cash flow?

Let me just flag at it, the cash deposits stays there and with financing, I think we are used to a part of a million dollars a month for an aeroplane. it's the cash flow very well.

talking about $9m, it becomes an 03 issue and presumably market is better then.

I guess there is a question on the pilot contract. Are you guys accruing for that now or not?

By our accounting standards you simply can't do that until an agreement is reached. there is nothing you can do. There is no retroactive for which sit with today just can't do it.

Can you tell me what the balance for the year what is your remaining principal payments are in your debt?

IN our well but..

You said you made some payments in the first quarter right?

I will tell you what we are saying the total cash requirement, cash associated with interest, and the cash associated with that is about 40 percent. I think our total principal pay as I have disclosed before is 70 million dollars, the amount we paid in the first quarter against that would be I guess much from Polar because much of the cash payment in the first quarter had to with our EETT and the leases on the . So, we have just shown you 15 with the 55 that was scheduled for the year. So, I am just going to hold on just there. Instead of the total cash requirement for the year, our principal interest and rate in the first quarter 55 million on the schedule about 15 .

Thank you very much.

There appears to be no further questions at this time. I would like to turn the call back over to you for additional comments for closing remarks.

Thank you all for joining us. We appreciate it and again sorry for doing rather than keep the suspense going with the today and a great weekend and we will talk to you on the next quarter conference call. Thanks.

This now concludes today's conference call. At this time you may disconnect.