Algonquin Power & Utilities Corp (AQNU) 2007 Q3 法說會逐字稿

Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Algonquin Power third quarter conference call. At this time all participants are in listen-only mode, following the presentation we will conduct a question and answer session, instructions will be provided at that time for questions. (OPERATOR INSTRUCTIONS). I'd like to remind everyone that this conference call is being recorded on Friday, November 9, 2007 at 10 am eastern time.

I'll now turn the call over to Dave Kerr, Executive Director. Please go ahead.

Good morning everyone. My name is Dave Kerr and I'm an Executive Director of Algonquin Power. I'd like to welcome you to the Algonquin Power third quarter 2007 conference call. With me here today is Chris Jarratt who is the Executive Director of the Fund. Luisa Paniconi-Read who is the controller. Kelly Castledine our Manager of Investor Relations, and I would like to welcome and introduce David Bronicheski, Algonquin Power's newly appointed Chief Financial Officer. As a housekeeping issue, Kelly will quickly review our forward-looking statements disclaimer.

Certain statements contained in the information discussed today are forward-looking, and reflect the views of the Fund, and Algonquin Power Management, Inc. with respect to future events. Such forward-looking statement address future events and conditions by their very nature. They involve inherent risks and uncertainties.

Forward-looking statements are not guarantees of the Fund's future performance or results, and are not subject to various factors including but not limited to; assumptions such as those relating to the performance of the Fund's assets, commodity market prices, interest rates, and environmental and other regulatory requirements. Although the Fund and its manager believe that the assumptions inherent in these forward-looking statements are reasonable, undo reliance should not be placed on these statements.

Thank you, Kelly. Today we will provide with you a review of the overall results of the third-quarter 2007, a discussion of the divisional results, and I will provide some information about recent announcements made by the Fund.

First, a review of the Q3 2007 results for the Fund. Revenues for the quarter were $46.5 million. Distributions to unit holders were $17.5 million. Cash available for distribution was $18.5 million. And on a per unit basis, cash distribution to unit holders was $0.23 per unit, while the cash available for distribution was $0.24 per unit.

During the third quarter, fund experienced production equal to 85% of long-term averages in the Hydroelectric Division, production in line with expectations in the Cogeneration Division, and production in the Alternative Fuels Division that was consistent to the same period 2006. These results show successful a third-quarter for Algonquin Power in line, with overall expectations for the quarter.

Now we will discuss some divisional highlights for Q3 2007. In the Hydroelectric Divisions for the third quarter of 2007, the fund's hydro assets generated electricity equal to 85% of long-term averages compared to 91% for the third quarter 2006. During the quarter the fund's Hydroelectric assets experienced below long-term average hydrology in all regions where the fund operates hydro assets. Operation expenses decreased when compared to the same period in 2006, due to a decrease in repair and maintenance projects, and decrease of variable operating cost directly related to energy production.

In the Cogeneration Division, third-quarter production decreased compared to the third quarter of 2006, mainly due to the loss of 8,000 megawatt hours of production as a result of the closure of the Crossroad facilities in December 2006. This was partially offset by increase in production at the Windsor Locks facility. Revenue from energy sales in the Cogeneration Division decreased compared to the same period of 2006, due to the closure of Crossroads and a stronger Canadian dollar. This is partially offset by increased revenues at Windsor Locks. due to increased production, and increased energy rates resulting from higher yield costs that are passed on to customers in the energy price.

In the Alternative Fuels Division production remains consistent with the same period 2006. Production and through put at the Energy-from-Waste facility was consistent with the same period of 2006, while reporting energy sales from the U.S. operations was lower, due to the stronger Canadian dollar. This was partially offset by the inclusion of production from the St. Leon Wind Energy Facility. At the fund's Energy-from-Waste facility, 30,000 tons of waste was processed in Q3 2007, which is in line with the same period 2006, and represents a significant improvement over the second-quarter 2007, when 24,000 tons of waste was processed.

In the Infrastructure Division, at the end of the third-quarter 2007, the fund's wastewater business showed a year-over-year growth of 3%, and the water distribution grew 7.5% since Q3 2006. Although the division has still experienced growth in both the water distribution and wastewater customer, there is a trend toward slowing growth in the area serviced by the fund's facilities. Revenue in the division was slightly lower than the comparable period for 2006, mainly due to a stronger Canadian dollar. During the quarter the fund began charging customers at the Gold Canyon facility, according to the new approved rates, resulting in a 73% increase in wastewater rates for the facility.

Now looking out to Q4, 2007 and beyond, in the Hydroelectric Division, the fund's hydro facilities are expected to perform based on long-term average hydrologic conditions anticipated for the remainder of 2007. The finances anticipates occurring about $600,000 over the remainder of 2007, and into 2008, to complete the required technical assessment of its owned or leased dam structures associated in its Quebec region hydro facilities. Following these assessments, a plan will be made regarding any remedial work that may be required to comply with the legislation. We have initially identified remedial measures, estimated at approximately $8.9 million, and we are exploring cost sharing with other stakeholders, and potential revenue enhancements that can be achieved with these modifications being made.

In the Cogeneration Division, management expects both the Windsor Locks and Sanger facilities to meet managements performance forecasts for the remainder of the year. The Sanger repowering project will continue throughout the year, concurrently with regular operation, and is on track for completion by the end of 2007.

In the Alternative Fuels Division, the fund will continue to focus on operational improvement projects, and equipment availability at the Energy-from-Waste facility. Operational improvement projects were completed in the first half of this year are expect to provide increased availability for the remainder of 2007. The fund continues to move forward with the steam sales project at the Energy-from-Waste facility, with an expected completion in January 2008. The St. Leon Wind Energy Facility is expected to meet management performance forecasts for the remainder of 2007. During the fourth quarter, the fund will continue to pursue additional wind opportunities in Quebec, Saskatchewan, and Manitoba. The fund will continue to wait, to hear results of four separate projects, totaling 463 megawatts under the Manitoba Hydro RFP. And the four separate projects totaling 240 megawatts submitted on the Quebec RFP.

In the Infrastructure Division, the organic growth rate experienced recently in the division, is expected to be maintained through the remainder 2007, and the division expected to continue contributing to the strong overall performance of the fund, in part because of the division services in one of the fastest-growing counties in the United States. The fund anticipates initiating rate cases at its Litchfield Park service company, Black Mound and Bella Vista facilities during the next two quarters, and a rate case at both Sunrise facilities, in the second quarter 20089. It is anticipated that the regulatory review of the rates and tariffs for these facilities will be completed in the second half of 2008. Capital projects are planned in the Litchfield service area during the remainder of 2007, and into 2008. In particular, these projects are expected to increase the water distribution capacity, and wastewater treatment capacity within utilities jurisdiction, in order to meet the demand of existing customers, as well expected growth.

As an update of the fund's U.S. currency position, the fund-- part of its risk management strategy, has a formal hedging policy for it's U.S. dollar cash flow exposure. At November 1, 2007, the fund effectively hedged 97% of its remaining expected U.S. dollar cash flow at $1.35. It has hedged 89% of its expected 2008 U.S. dollar cash flow at $1.22. And it has hedged 41% of expected 2009 U.S. cash flow at $1.19. The fund has a total forward contract to sell U.S. dollars for fiscal 2007 to fiscal 2011, totaling U.S., $78.4 million carrying an average rate of $1.19. The fund's policy is not to utilize derivative financial instruments for trading or speculative purposes.

I would like to finish off today with some further information about two announcements recently made by the fund. On September 18, 2007, the Commercial Operation Date or COD, under the Turn-key Construction Contract or the TCC, with Investment Canadian Win Technology, Inc. was achieved at the St. Leon Wind Energy Facility. The COD marks the date when a project is substantially complete, and ownership is formally transferred from the contractor, to the owner of the project. This also marks the commencement of the warranty period with Vestas, when liquidated damages cease, and energy sales commence to be earned by the facility. The agreement with Vestas establishes COD, and provides the same work and timing, under which Vestas has agreed to resolve the facilities outstanding issues under the TTC. Vestas has completed repairs to the turbine blades as of November 2007. Under the terms of agreement, Vestas is required to resolve the outstanding issues by certain dates. As management believes, the agreement resolves the potential issues that might have limited the overall protection of the facility. The fund continues to hold financial security posted by Vestas, and respect its obligations under it's agreement. It is management's belief that such financial security is sufficient to rectify the outstanding issues in the event that Vestas fails to complete the neccessary work.

Secondly on October 23, 2007, the fund announced that a definitive agreement has been signed between Algonquin Power and Four Star LLC regarding the sale of six landfill gas facilities, and other related gas landfill assets owned by the fund for U.S. $11.7 million. The facility represents approximately 18 megawatts (inaudible) generating capacity with five facilities in California representing 15 megawatts, and one facility in New Hampshire which represents three megawatts. These facilities were no longer considered strategic to the ongoing operation of the fund, and the result-- the operating results from these facilities have been excluded from the Alternative Fuels Division and have been classified as discontinued operation in the quarterly financial statements. The sale of these assets are expected to close during the fourth quarter 2007. With that we'll open the lines up for questions.

Thank you. Ladies and gentlemen, we will now conduct the question and answer session. (OPERATOR INSTRUCTIONS). Your first question comes from Tony Courtright, with Scotia Capital. Please go ahead.

Thank you very much. Can you recap the balance of Cap Ex budget for Q4 '07, and perhaps if you have any guidance for 2008?

I think David will answer that question for us

Sure. Good morning. Right now we are expecting to have $17 million of CapEx to be able to spend in Q4. That will bring our entire 2007 CapEx spend to approximately $45 million, and as far as looking into '08, I think what we can say at this point is, if you were to take out the effects of the Sanger repowering and the BCI CapEx spends that were in the CapEx spend in 2007, that will get you close to the CapEx spend for 2008.

So Sanger and the other, how much are they identified as?

That is about $17 million.

David calls the steam cell project BCI, that's our internal name, but that is steam cells project appeal.

Those two in the-- within the 45 budget for '07 represent about 17?

That's correct.

Okay. Can you enlighten me as to what your current headroom is under your credit facilities?

Yes. Our entire credit facility is $175 million as you are probably aware. We to date, have drawn $104 million, and have $40 million (inaudible). So we have about $31 million remaining on our line of credit.

And it matures when?

Next summer.

August '08.

Yes.

All right. And then finally, I noticed in the disclosure of the distributable cash-- and I am trying to flip to the appropriate page here. I got confused. There is a departure from how you've disclosed in the past, or there is an addition, put it this way. You have traditionally arrived at a calculation of distributable cash where you are amortized. Where you-- where you indicate maintenance capital expenditures, which is is essentially a amortization of previously incurred expenditures. And then this quarter after you get this cash available for distribution, you have this new line item "growth and maintenance CapEx." And I am wondering if you could explain what's going on here?

Certainly. The new disclosures for cash available for distributions arise from a new requirement that the OSC is asking income trusts to put into their disclosures. And so the disclosures you see in this MD&A reflect that. When you go down and under that cash available for distribution liquidity, we come to a subtotal cash available for distribution, and that's the normal cash available for distribution that everybody is used to seeing. But what the new disclosure requirements ask, is that we also show the effects of all of the CapEx spend, and bring that down to another subtotal. So this is simply meeting the new disclosure requirements from the OSC.

I see. All right. Thank you very much.

Thanks, Tony.

Your next question comes from Bob Hastings, from Canaccord Adams. Please go ahead.

Hi, Bob.

Hi, thank you. The Vestas money that you have in hand. Can you sort of tell us how much that is, and how that-- sort of the timing of that goes back, and sort of the impact on your cash flows? You have been making a little money on that, while you have been holding it.

Yeah, this is Chris Jarratt. Trying to answer your questions, one at a time. First of all, we receive probably about just over $2 million in '07 associated with the Vestas agreement, and that came from them reimbursing us for operating expenses that we had paid prior to commercial operations which were under the construction agreement of Vestas' responsibility. The other component was, Vestas had not paid liquidated damages because they were disputing whether or not COD had occurred. It has been deemed to have occurred on September 18, and therefore they reimbursed us for interest on those funds. So that is what we have taken in, in '07.

What was the total you held of their money, because of the liquidated damages?

The total we that held-- we didn't really hold their money. We were gathering at the same time also, the revenues, which under the turn-key construction agreement flowed to Vestas, the lion's share anyway flowed to Vestas prior to COD. There were some milestone payments that had not been reached, and I think there is one more milestone final completion that is left to be paid.

Okay. Going forward when we look in 2008 verus 2007 on your wind operation in Manitoba, we are not going to see any funding discrepancies year-over-year just because of the timing of payments, et cetera?

I don't think because of the timing of payment. The-- there was a payment that was owed to Vestas and paid to Vestas on commercial operation, which equivalent to substantial completion, but they also, as I said before, owed us unpaid LDs. And those two payments were virtually equal.

Okay. Thank you for that. As a general question. You've mentioned in your release that you-- you filed for-- or have put in for some new wind projects in a couple of provinces. They add up to a fair amount. You are looking at some new ones to submit as well. And also, I think on the hydro side. So you are looking at a significant development project, which is probably a good thing, but the question is, how do you handle that in existing framework of the trust. And how do you plan on financing that?

Bob, it is kind of early days for that. We kind of have our proposals under the Manitoba and Quebec RFPs. Once we can see our way through-- our first contract and with timing I like, I think we can-- we will structure the financing once we have that information.

I guess I am wondering will it come through the Algonquin Power Income Fund, and therefore as you are building this will be a drain on the cash, or will you be financing it as did you with the first project, through the venture side?

We always have our eye on cash impact to the fund. So we would look at ways not to do that, and mitigate any impact to the fund. The air source financing was very successful. It may be a model, but we are not committing to anything right now.

You saw that First Energy Axis getting a company out there getting a company to help fund its projects. I just didn't know if you had considered any new structures going forward?

No nothing yet Bob, no.

Thank you very much.

Thank you, Bob

Your next question comes from Bill Cable, from TD Securities. Please go ahead.

Hi, guys.

How are you doing, Bill?

Good. Couple of questions here. Can you talk about the cost and timing of the feasibility study you mentioned on the Energy-from-Waste facility?

We are starting that process right now. We have obtained a environmental consultant, and an engineering consultant, and we're proceeding with discussions with the MOE, and doing the both some envionmental feasibility work and the engineering feasibility work. It is fairly early days, but we have committed to moving ahead with the feasibility study.

Do you know is it-- do you know multiple millions of dollars that you should have to spend to figure this out or--

No, no, at this stage we are controlling the costs. They are quite minimal.

Okay. On the Vestas thing actually-- to go back to Bob's question. I could have sworn you implied there was a final payment that was being withheld until they absolutely finished correcting all the issues that were outstanding. Is that not the situation?

There is a final payment which is-- which is due on final completion.

Right.

But I think that the main component of the agreement we have with Vestas is-- there are a couple of outstanding items which will get repaired, but may take some time.

Right.

So what we have done is, we have a security from Vestas in the form of a letter of credit, and we have dates and a time frame for what they have to do, by those dates.

The amount you have in this letter of credit is enough, that if Vestas balked on doing the repairs themselves you would be able to finance that with a third party. Is that the takeaway?

Yes, that is absolutely the takeaway. As I said they have dates by which they have to accomplish this, and if they don't, we have the right to step in and spend their money.

All right. And now the issues that are outstanding, you said you had the blades repaired. The other issues, are they limiting availability or generation in any fashion? I understand the wording says they could in the future, but are they currently doing-- limiting anything?

No, they are not. The other component is-- after COD was obtained, we kind of moved into the operations phase, and Vestas has provided a warranty, and availability guarantee. That availability guarantee is at 97% of expected output. In some respects, if there is a problem which we don't expect there to be, but if there would be a problem, Vestas has guaranteed us to the tune of 97% of availability.

Is your relationship with Vestas like-- is this likely to work? Are there issues with those guys?

Yeah-- I am not sure if I will get a Christmas present this year. But it is a good relationship with them.

Okay. And last question on the $8.9 million estimate of work in Quebec, on the compliance of the dams. You said the possibility of cost sharing and such, can you talk a little more about that?

That comment was primarily in relation to the Donnacona project. Just by way of background, that project has a 100 year old wooden dam.

Right.

That is the one we anticipate experiencing significant modification. And what we see there happening-- right now there, because of the 100 year old wooden dam, there is a fair amount of water leaking through the dam, and not being used for power production. So we anticipate that once this dam is repaired, that will help to increase the revenues from that plant. The other thing is, at the same time we might increase the head of the dam. We are going to investigate that.

Okay.

And lastly, there are other stakeholders on the (Inaudible) water course, which we will certainly talk to them about-- about sharing some of these costs.

Why would they share the cost though? Why would they want to do that?

Well because as I said, they are stakeholders.

Okay.

In that-- on that watershed.

Okay. Thank you very much.

Thanks, Bill

Your next question comes from Michael McGowan, with BMO Capital Markets. Please go ahead.

Good morning.

Hi, Michael.

Hello. I was wondering, can you say what does have to be done at St. Leon in order to have it fully constructed?

Yeah, they have an issue-- this is Chris talking. There are a couple of outstanding issues. One is the-- there are some bearings in the main turbine shops, which have experienced some premature wear. They are still fully functional, and we don't really have an idea for how long they would last, but we certainly know it's many years. But not withstanding that, from our perspective, it is a brand new plant. We want brand new bearings in there. So Vestas has committed to making a couple of modifications to the lubrication system, which has been identified as the cause of the premature wearing, and they also committed to replacing each and every bearing. So the problem from Vestas' point of view is that takes some time, and they have some time under the agreement with Vestas.

So that was the main one. I think there are a couple others which are relatively minor and are almost fixed now. One of them was the collection system, and the other is something called the turbine accumulators, and as I said they are fairly minor.

Okay. Your warranty agreement with Vestas, is that a five year agreement?

Yes, it is, a five year warranty agreement.

Would they have up to five years to replace these items?

No, they don't have that long. They have a couple of years.

That was all outlined in the agreement we spoke of.

Okay. Now you've achieved commercial operations there, but have you met all the milestones required under your credit agreement? I believe there were certain events that had to happen, you were in discussions with your lenders, there was some of those in financial statements past quarters?

Yeah, outstanding issues on that, but we anticipate resolving those. They are fairly minor. We have reached term conversion with our lenders.

Right.

And so some of the-- I guess the effective-- the agreement with Vestas has to be baked into the credit agreement. But our lender has been on site right from the start with the agreement with Vestas.

So there are still certain things that need to be done in order for the lender to fully bless the agreement?

Yes-- not fully bless the agreement, but just fully incorporate how the thing is going to work between here and when Vestas is completed.

Sorry, I am not quite sure I understand. In terms of receiving final payment, or interest, or were there covenants?

Can you just ask me the question-- I am a little unclear as to the question you are looking for?

Just in your past-- some of your past financial statements, I think there was disclosure surrounding covenants that you would have to achieve commercial operations by a certain date, or the lender could--

Right, right. And we have achieved-- that date was October 31.

Yes.

So we have achieved commercial operation by September 18.

Okay.

Or on September 18. So, that is not an issue. I think what we have to deal with our lenders, is these outstanding issues, and how they get resolved with respect to-- with Vestas. It is not a big deal to incorporate these into the credit agreement.

Okay, no I just--

And our lenders have reviewed the amendment, and are totally on side with us.

I just thought there was a date coming up. I wanted to make sure that all the milestones were achieved.

Yes.

I guess the last question is, you sold you landfill gas facilities, you announced the sale there in November. Are you going to book any gain or losses associated with that?

We are going to be booking a gain on that sale.

Have you figured out how much yet?

No, we haven't yet, Michael, no.

Okay.

The transaction site hasn't closed yet.

Okay. Those are my questions, thank you.

Thanks, Michael.

Your next question comes from Alda Pavao, from CBIC world markets. Please go ahead.

Hi Alda, how are you doing.

Good, thanks. Just a small clarification question as your license disclosure round, your capital expenditures. When I look at page 16, in terms of the detail segments CapEx, and specifically on maintenance CapEx line of $1.1 million. It is slightly higher than what is flowing through the distributor cash flow calculation. Can you reconcile what the difference is for me?

I believe what you see there is the gross CapEx spend, as opposed on the distributable cash side what you see is the amortized effect of the maintenance CapEx.

Okay. Then more a more broader strategic question as it relates to your wind power opportunities. You talk about looking for further projects in Canada. I am just wondering if you thought about, or have interest in looking outside of Canada into the U.S. given your positioning in-- especially the northeast region?

Yeah, we look at-- we look at opportunities all the time. Right now we have hard opportunities in Quebec, Manitoba and Saskatchewan but we are looking outside of Canada as well.

Would you look to potentially pursue these projects on a merchant basis, or more on a shorter-term contract basis?

No I don't think we will look at a merchant plan. That doesn't fit with the profile of the fund, and the risks we take in terms of revenue.

Okay. Thank you. Those are my questions.

Thanks, Alda

Your question is a follow up from Bob Hastings, of Canaccord Adams. Please go ahead.

Just a couple of little points here. What was the wind utilization in the quarter and year to date?

Say that again.

The wind utilization in Manitoba. What you achieved in the quarter, and year to date?

I don't have that at my fingertips. I can tell that you on an overall plant basis, it was probably down from what was expected, and that was because over the quarter we had some issues-- Vestas had some issues with the plant, and there were a fair amount of turbines down during the quarter. But on a per turbine basis. We are actually quite happy with how the thing is working out. We originally anticipated a 40% capacity factor, and on a turbine basis. That is what we are seeing.

I think you made the comment in the notes that you-- as I madly flip to it. But didn't they hit your expectations for the period?

What, the wind turbines?

Yes.

Well, I think Chris answered that, by saying that it was a little below our expectations, but on a wind turbine basis we are finding that the wind regime is there, the wind resource is there according to our expectations, but I think because of construction and repairs, we didn't meet our expectations.

Okay, no-- okay. Fair enough. The hydro, what was the financial impact of the-- from not hitting certain normalized or long-term averages?

On a dollar basis?

Yes.

Well we are 85% of target.

Right.

Do we have that number handy?

The lower hydrology accounts for virtually the entire decrease in revenue year-over-year in the hydro division.

Okay. So there was nothing else-- no other moving parts in terms of rates or anything?

No, no, it was just resource.

Because do you have flowing market rates in some of those facilities, right-- some of those facilities?

Yes, we do. But the market rates remain strong.

Okay. And the-- you mentioned that you are still looking to do some mitigation on the dam work that needs to be done, the $8.9 million. Can you give us a little more of an update on what that is, and the timing?

Yeah, I think I just answered that question a little earlier, Bob, on what that is. We anticipate with the dam work at Donnacona, we would capture more of the water, and at the same time, we will increase the hit on that dam, which would help to boost revenues, and help to offset some of those costs. For Donnacona, we are expecting that cost to be in the $4.5 million range.

The process, Bob, is that we have to do an engineering report on our dams, submit it to the provincial government, and enter it into a plan of remedial work. We estimating that will cost us in the $4 million range at Donnacona.

Okay. Thank you. The last one is the-- on the infrastructure division, you had some rate increases, and you just put in some new ones. Can you give us some kind of impact of what the rate increases are on an annual basis, and what you expect year-over-year when you look out to '08?

It's difficult for us to give you any guidance on the rate cases that were premium in 2008 at Bella Vista, Litchfield, Black Mountain. We have included the rate increase of 73% on Gold Canyon, which was awarded to us in July of this year, but we don't have any view right now of what the rates will be for next year.

No, I meant-- sorry from the rate increases that you have received. What does that equate to in millions of dollars, or hundreds of thousands of dollars, when we look out to '08?

I don't think we have that broken out. Do we have Gold Canyon?

We don't separately disclose that in the financial statements.

We have increased our rates for wastewater teatment in Gold Canyon by 73%.

Okay. No, I was just hoping given that would be a public number you might be able to say what that might add up to-- fair enough.

Right now we haven't reported that number, Bob, sorry.

Okay, thank you.

Thanks, Bob.

(OPERATOR INSTRUCTIONS). Your next question is a follow up from Tony Courtright, from Scotia Capital. Please go ahead.

Just following on the water infrastructure in the rate cases. Can you characterize those that have been decided upon as meeting your expectation, exceeding, or falling short of what you had applied for?

In terms of rate increases?

Well, in terms-- you don't apply for a rate increase-- well, if your revenue requirement in your ROE that you are looking at. Are they meeting your targets in that sense?

Yes, they are.

And generally your targets are at a level above your distribution yield?

I am trying to think now what it was. I don't have that information on my finger tips, Tony, I am sorry.

Because what we hear is that you are applying, you are applying, you are applying. I want to make sure the feedback is, yes you are getting what you are asking for.

Yes, in the Gold Canyon we were happy with the rate increase.

Litchfield is a big rate case, because you have a lot of investment there?

Yes. And we're making some more capital expenditures there, but we haven't really decided how we are going to go in terms of capital expenditure, or how we are going to deal with the capital expenditure, so we really can't give any direction on that right now.

Okay. Great. Thanks very much

Mr. Kerr there are no further questions at this time. Please continue.

Thank you, Kevin. I want to thank everyone for joining us this morning, and we look forward to informing you about the future performance of Algonquin next quarter. Thank you very much

Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation and please disconnect the line.