Avista Corp (AVA) 2003 Q2 法說會逐字稿

Welcome to the second quarter earnings conference call. Your lines have been placed in a listen-only mode until we open up for questions and answers. Be advised this call is being recorded. If you have any objections, please disconnect at this time. I will now like to turn the call over to Mr. Dave Brukardt. Sir, you may begin.

Good morning, welcome to Avista's second quarter 20 appoint earnings conference call. Avista's earnings were released pre-market this morning. With me here today in our offices in Spokane, Washington are Avista Corporation's Chairman, President, and Chief Executive Officer Gary Ely. Senior Vice President and Chief Financial Officer Malyn Malquist, and Vice President and comptroller Christie Smith. As we begin the call, I will caution you that during today's conversation we will be making forward-looking statements that involve risks and uncertainties which are subject to change. I will direct you to Avista's latest forms 10-K and 10Q filed with the SEC for reference to the various factors which could cause actual results to differ materially from those contemplated to the extent these factors are not discussed in this call.

It's appropriate at this point to take a moment to thank you for the kind -- time and interest you have shared with us, particularly over the past few months. As we met with many of you and shared the progress Avista is making in returning to financial help, we have also listened. In working to simplify and be more direct in our communication regarding our company and its performance and we're taking the same approach in our business, continuing to strategically focus on what we do best, being an efficient and financially stable northwest financial utility. On behalf of Gary and Malyn and Scott Morris and Dennis Fermilian, we welcome your candor and interest over the last couple months.

Two housekeeping notes. First, to simplify reporting and make the information as clear as possible we have made changes to a few segment names. We renamed the energy and trading marketing business segment. It's now called Energy Marketing and Resource Management to better reflect the sources that Avista Energy, the primary component of the segment, provides. We've also changed the name of our Information and Technology segment in our reporting to reflect the divestiture of Avista Labs. The segment is now Avista Advantage and includes only that business.

Second, for those of you who may be interested, we have added several Powerpoint slides to the webcast site to help illustrate some of the comments that will be made during the conference call. Now I will turn the call over to Avista chairman, president and CEO Gary Ely for his overview and highlights of Q2.

Thanks, Dave. Good morning, everyone. We are continuing the progress we reported to you earlier in the year. As our first slide shows for the second quarter of 2003, we're reporting net income available for common of $8.4 million and earnings of 17 cents per diluted share. For the year to date we're reporting $24 million of net income available for common stock and earnings of 50 cents per diluted share. This is after the charge for the divestiture of Avista Labs. I'm pleased it's on target with our internal budgets for the year and we are on track to deliver our earning estimates.

As most of you know, last week we announced an investment by a private equity group and a new entity named ABLB, which acquired Avista Labs' fuel cell business. Avista Corporation is a minority owner with a 19.9% interest in this new entity, which will continue to do business under the name of Avista Labs for up to 24 months. The investors have raised $17.5 -- $7.5 million in funding to date, including a commitment by Avista Corporation to provide additional future funds of up to $1.5 million under certain circumstances. A reduction in our ownership interest in this business results in an impairment charge of approximately $2 1/2 million net of tax or 5 cents per diluted share during the second quarter of 2003. The year-to-date loss, including impairment estimates our budgeted loss for the entire year. With this move we've eliminated the on-going quarterly losses from Labs, while retaining some future upside potential for our shareholders. Importantly, we have taken some of the execution risk and earnings drags out of our income statements.

We have partnered with firms that we believe can help Avista Labs achieve success. They include Wall Street Technology Partners of New York, Burke Craig Victor LLC of Seattle and Crystalex Energy LP of Vancouver, BC, a private equity joint venture, including Boeing Company, Duke Energy, Mitsubishi Corporation and Ballard Power Systems, to name a few. Each of the partners brings opportunities to develop relationships and markets for the Pam fuel cell. We believe there's a great future in the fuel cell industry and the hydrogen-based economy and we're pleased that Avista Labs will continue to be a leader in this technology.

On another note, we're happy to report that FERC Chief Administrative Law Judge Curtis Wagner Jr. granted theFERC motion for reconsidering of his earlier decision. He has now certified our resolution agreement to the FERC commissioners to make a determination on the merits of that agreement. In his order, Judge Wagner reaffirmed the conclusion by trial staff that there was no evidence that Avista had knowingly engaged in or facilitated any improper trading strategies. That Avista had not participated in efforts to manipulate Western Energy markets and that we had cooperated fully with the staff investigation. Judge Wagner further stated in the order that there are no unresolved issues of material fact remaining, and in certifying the agreement he noted that the proposed agreement disposes of all issues set for hearing in the proceeding, and that it is just, reasonable, and in the public interest. This issue has been an overhang for Avista for over a year, and we're looking forward to successfully resolving it soon.

We are pleased to say that our core energy business, Avista Utilities, continues to regain financial strength. The Coyote Springs 2 generating plant, a 280-megawatt facility which we have a 1/2 interest, successfully came on-line for commercial operation on July 1st. It's been a long and sometimes frustrating process, due to equipment failures, but we're very pleased that the unit is now up and running. The addition of our 140 megawatt share of the output from Coyote Springs 2 to our resource base fulfills our goal to own or control resources to meet our native retail load under a broad range of operating conditions. Avista equally shares the cost and output from Coyote Plant with merit.

In light of the warm weather this summer, with average temperatures 2% to 3% above normal, our customers in our regions have needed the power. Also of note is the lack of significant precipitation in the region since May. We understand that this is the third driest July in 122 years and this has affected our hydro generation, taking it to about 8% below normal. We're glad to have the benefit of Coyote.

Turning to Avista Energy, once again the team delivered another quarter of positive earnings. Their 13th consecutive, positive quarter. Our strategy for energy continues on track. This business partners with asset owners and managing approximately 3,000 megawatts of generation resources using the expertise and experience of our employees. As you can see from the next slide on the website, this partnership allows Avista Energy to market and manage the output of combustion turbines and hydro facilities owned by others, capture price differences between commodities by converting gas into power, purchase and store natural gas for sale during higher demand periods, moving energy from between locations by transporting it to higher-priced markets, and taking advantage of our thorough knowledge and experience in the northwest energy markets, take positions on future price movements. It's a business model we believe works well for Avista Energy.

One other positive accomplishment for energy is the recent renewal of its bank line, which is now a committed facility. The first such facility for Avista Energy. Malyn will talk more about this in a minute. Looking at Avista Advantage, we have provided another slide for your reference. We're seeing some real progress in this business and we'd like to share a couple of key improvements with you. Advantage has increased the number of customers build year-to-date by 17% over the same period last year. Revenues are growing, with a 25% increase year-to-date over last year, and we're making headway on the cost side of things too with a 36% improvement in total cost per account so far this year over the cost in the first half of 2002. And we expect additional improvements in the second half of the year.

Overall, I'm very pleased that we continue to make progress on our plans to return Avista to financial health and that we've obtained many of the goals that we've set.

Let me take a moment to talk about the future of Avista. Our top priority continues to be restoring the financial health of the company. We are making good progress. As we've taken a closer look at the longer-term strategies that we need to employ, we've worked with experts who have helped us benchmark our skills and capabilities against others in our industry and the business world at large. And we've learned that we have several best of class competencies inside our business. One of these, for example, is managing and operating hydro systems. One strategy we are pursuing is to apply these strengths on a broader, regional basis, looking to partner with others who have the capital resources and perhaps an interest to acquire and manage other assets that may become available.

Again, we clearly know that our first objective is to regain Avista's financial health, and we're on track to accomplish that. But we're also looking forward to the future. Now I'd like to turn the call over to Malyn Malquist to discuss the financial highlights of the second quarter. Malyn?

Thanks, Gary, and good morning, everyone. I add my welcome to Dave and Gary's. As the next slide on the website shows, today we are reporting second quarter consolidated revenues of $218.6 million and earnings of 25 cents per diluted share for continuing operations. Including the results for the discontinued operations of Avista Labs, our earnings per share for Q2 are 17 cents per diluted share. We've continued to reduce our debt and associated interest expense by re-purchasing and retiring outstanding debt securities, totalling $27.2 million in the first half of 2003 and another $15 million in July.

Our debt to capitalization ratio is getting closer to our goal of achieving a 50% level. At the end of Q2, our debt ratio stood at 35.2% compared to 55.3% in Q2 of last year. From a cash standpoint, the retirement of debt resulted in an interest expense for the first half of 2003, being approximately $8.8 million less than for the first six months of last year, that's $.million less. Our cash flow remains strong and we don't need to finance any securities to finance the company's operations. However, with today's low interest rate environment, we are considering the issue of new debt that would be used to lower the company's overall costs through the re-purchase of higher cost debt and replacing maturing debt.

We've told you that part of our strategy to rebuild our financial health is to work toward earning our allowed rates of return in the states that we serve. Our filing of a general gas rate case in Oregon is one way we're meeting that need. We requested $7 1/2 million in annual revenues and we're pleased to have accomplished what we view as a reasonable resolution of the complicated issues aassociated with the cost of capital and return on equity elements of the case.

We've prepared a slide that shows how the numbers work out. Let me walk you through them. We based our Oregon request on an 11.75% return equity and a 42.25% common equity ratio, yielding a rated cost of equity of 4.96%. A proposed settlement among all parties would grant us a 10 1/4 percent ROE, but at a much higher higher common ratio of 45.25% for a weighted cost of equity of 4.95%.

As you can see, the settlement, if approved by the commission, would yield a weighted ROE comparable to that originally requested by the company. At the same time, the agreement would reduce our cost of debt below the requested amount, resulting in an overall rate of return of 8.88%, versus the requests 9.86%. We believe this is a reasonable outcome. The settlement still requires approval by the Oregon commission. A settlement would reduce our requested revenue increase from $7 1/2 million to just under $7 million. Settlement discussions regarding other elements of the case begin next month and we continue to believe that our requests for higher general rates, a first request for an increase since we bought the Oregon properties in 1991, is well-founded. We will continue to work toward a positive resolution of this case.

Also, with the higher natural gas commodity prices that all utilities are facing, we are planning to file purchase cost gas adjustments, or PGAs, in Washington, Idaho, California, and Oregon very soon. During our Q1 report we talked about the significant difference between Avista Energy's economic results and how they were reported under GAAP accounting rules. The difference in Q2 was not as significant, and as we proceed toward implementing hedge accounting in Q3, we expect those differences to be further reduced.

On the banking side of our business, we have completed the renewal of credit lines for both Avista Corporation and Avista Energy. In May, Avista Corporation entered into a $245 million committed line of credit, which is a $20 million increase over the previous facility. Even though we don't anticipate the need to draw upon the additional credit, we consider this to be a positive indication of the bank's commitment to Avista and the progress we made toward restoring our financial health.

Avista Energy has just completed a separate $110 million committed line of credit, the first-ever committed facility for this subsidiary and we were able to lower the cost of the facility by more than 20%. This demonstrates that Avista Energy is truly seen as a stable company with a strong track record and a strategy which manages its business risk.

Now, as for our earnings outlook, we are advising our consolidated corporate earnings for 2003 upward to be in the range of 85 cents to $1.05 per diluted share, primarily due to the strong performance of Avista Energy. This guidance is prior to any adjustments related to the accumulative effects of changes in accounting principles, and includes a range of 60 to 80 cents per share for Avista Utilities and a range of 35 cents and 55 cents a share for the Energy Marketing and Resource Management segment. The guidance also includes the 10 cent loss from discontinued operations for Avista Labs and very minor quarterly losses from Avista Advantage.

Looking to 2004, our preliminary forecast leads us to project consolidated earnings above a dollar per share, including continued improving performance at Avista Utilities, and 20 cents to 30 cents per diluted share from Avista Energy. We will be more specific about the components of this projection as we get closer to the new year. Our unwavering focus remains improving cash flow and earnings, decreasing debt and interest costs and working to restore our investment rate bond rating. I'm encouraged by the progress we've already made on executing our strategic plan and the momentum we're gaining. With that, I'll hand things back to Dave Brukardt.

Thanks, Malyn. We will now open the call to analyst and investor questions. I would like to remind any members of the media who have questions to please contact Jesse Wirst (sp?) at 509-495-8578. Now we are ready for our first question.

Our first question is from Douglas Fischer. Please state your company name.

Yes, AG Edwards. Good morning. Okay, just two questions. Number one, in terms of your guidance, clarification, are you saying that your guidance includes the cumulative effect of the accounting change, or excludes it?

It excludes it.

Okay. And then, can you give us a little color -- Energy Marketing and Resource Management was down versus the prior year quarter. Give us some color on what drove that, and it's about flat for the six months versus the prior year's six months, and you raised your guidance for the year. Maybe you can give us a little color on that.

Sure, Doug. First off, as you know, we've continued to take and focus around managing other assets, so we have a more reliable stream of revenue from that business, and moving further away from taking positions. We still do take positions, but the fact of the matter is we're becoming more alike, as I said in the last conference call, that's kind of our unregulated utilitiy versus our regulated utility. So we have more stable earnings than in that business, but in fact, then. that also -- because of the less risk -- it also means that our margins aren't as large, and that's where we'll be focusing through the future.

Gary, I might add one other piece of color for Doug. If you recall last time, Doug, we talked about the difference between what we considered economic earnings from Avista Energy and GAAP. Because we aren't currently hedge accounting, we're not able to perfectly hedge all of the transactions we've put in place, and we've disclosed in the 10Q last quarter about $12 million of GAAP earnings that didn't necessarily reflect the economics of the transaction. In other words, we're reporting more earnings than we really thought the economics of the transactions we put in place would justify.

In the second quarter, that number that will be reported in the Q is about $8 million. So a reduction of about $4 million, and that is partially turning around, as we said would happen, that difference. And it's partially a result of new transactions that we put in place during the quarter. So, in other words, the opposite happened, is what happened in the first quarter, in that our economic earnings actually were a bit higher than what our GAAP earnings would have reported.

Okay, and then any comment on the balance of the year? Because you're looking for -- can you recall what Avista Energy earned in the second half of '02?

The earnings for the year, Doug, were I think 49 cents. I don't remember exactly.

So they were 49 cents for the full year?

Right.

Okay. And then just finally, the utility earnings were down slightly and electric sales were up -- unit sales -- and gas unit sales were down. What was the prime driver in the 3-cent decline at the utilities?

Our operating costs are up a bit, driven primarily by pension and insurance expenses. In addition, I think our sales were actually a little bit lower than what we had forecast, due to a little warmer weather than normal, particularly in the first quarter, but even in the second quarter we saw that margins were a little bit different.

The other thing too, Doug, you need to remember that we've had something like 46 days without measurable precipitation, and in fact very little precipitation since May. So our hydro generation is down by about 8% below normal, where as I think in the last conference call we were thinking it would be close to normal.

And so, we've run higher cost generation. We've got the generation, but we've had to buy gas to run it, versus using hydro. That change of course gets tracked through our ERM, but we still have about 10% of it then that is shareholders' responsibility.

What you said earlier was generation was 8% below normal?

Yes.

Not hydro conditions, but actually first-half generation?

Not first-half generations - that's the forecast for the entire year.

Okay. It's expected to be 8% below normal for the entire year?

Right, because we're already buying -- you know, for instance, we're buying gas or generation for fourth quarter. So we know -- we have a pretty good indication. And it doesn't affect, you know -- although we've had no rain for 46 days, July and August are very low precipitation months normally. They're also fairly low hydro generation months, so it doesn't have the impact it would have if that would have occurred earlier in the year, because we did get all that snow, if you remember, in March and April, but since May we really haven't had anything.

Okay, thank you. I might have a follow-up later.

Okay, Doug. Thanks.

Thank you. Your next question comes from David Thickens. Please state your company name.

Deep Haven Capital. Good morning, everyone.

Good morning, David.

Doug asked a number of my questions, but can you give me a little bit more insight into exactly what is in the guidance this year for marketing and trading? I want to make sure that does include the 10-cent benefit that you talked about in the first quarter from the Enron debt - or I guess you never said it was Enron, but we're just assuming it was Enron.

We never said, David.

Whoever it is!

David, yes, it does include the 10 cents, and you notice we revised upward to 35 cents to 50 cents. 35 cents won't be heroic since we're already at 35 cents for the year, but one would expect -- we expect that that segment would normally earn in the 5 to 7-cent range per quarter.

Having said that, at some point in the future they're going to probably not be able to produce positive earnings. We're not expecting that, and you know, we are hoping for that 5 to 7 cents, and actually, their internal goals are quite a bit higher that. But we felt we wanted to be conservative and we would really like to be sure we meet our targets. So we felt the 35-to-50-cent range was an appropriate range for us for the second half of the year.

David, it might be appropriate to maybe comment on something else, because with third quarter coming up for guidance, one of the things that I think a lot of people forget -- and since the markets and certainly our earnings have been so screwythe last couple of years that people forget -- but I've been here 37 years and almost every third quarter for as long as I've been here, the utility usually has negative earnings because we don't have the hydro generation that we would have otherwise, and we usually end up having negative earnings in the utility. And since Avista Energy is looking much more like a utility, it will have a similar effect on them. Now, we don't expect them to be negative, but just so you know that our third quarter will probably always be our bad quarter going forward.

Okay. Can you also talk a little bit about the other segment and kind of more about what's in there and how it fits into the annual guidance?

The other segment is made up of a couple of items, and we haven't actually given guidance on the other segment, but we would expect the utility and the energy segment to make up for those and coming up to the consolidated earnings that we have. So the consolidated 85 cents to $1.05 includes whatever we might have in the other segment.

Yeah, Dave, one of the things we have in there is kind of the dogs and cats that we still haven't got all cleaned up. If you remember, we added Avista Ventures that had some of the venture funds in it. We still have some obligations to put some cash into that. And of course, in the first of the year, we recorded some losses there because of the market related to those. Also on the other, I believe - and Christie's here to correct me if I'm wrong - but we have our metal manufacturing company in that business. So there's just some dogs and cats in there that have not been cleaned up yet, but we're still working on it.

I would say we have made good progress on those particular issues. For example, we had a lawsuit related to a Pentzer company that was sold a few years ago, and that has been settled this year, and settled within the reserves that we had established for that. We did have some legal expenses that were showing up in the other category.

I think we've worked our way through most of those, and I believe that the assets that are still there are reflected at appropriate levels, at market levels. We may have some continuing small earnings drags, but we don't expect any significance surprises, and we expect those to basically go away over the next few quarters.

Okay. I guess, finally, you said that, you know, you have no need to issue any securities. We've kind of' seen your liquidity and cash flow projections in terms of restoring the company's financial health, getting the balance sheet back into position that you can get an investment grade, get back to investment grade. But at the same time, given the strength of your equities securities over the past several months, maybe moving in that direction faster, potentially through issuing equity, becomes much less dilutive potentially than it was in the past. I mean, where do you stand on that?

Well, we don't have any plans, David, to issue new equity. In fact, one of the plans that we have outstanding are for our 401K investment. We converted to market purchase from original issue because over the next few years, as we regain our health, we actually see the equity ratio getting larger than we would like it to be. So, if we look out a few years, we get there anyway, and we're still selling below book value. We just don't see a reason to raise equity when our cash flow is this sfrong.

All right, thank you.

Thanks, David.

Thank you. Your next question is from Paul Risdon. State your company name, please.

McDonald Investments. Could you give a forecast to when you're thinking that advantage can have break-even? And then just looking for more detail. You talked about partnering on some hydro projects. Just kind of -- just more flavor of what your thought is there?

Okay, Paul. I guess first off, break-even, at advantage from a cash flow standpoint, I said we'd achieve that in the second half of the year. They've done well and have been positive cash flow for the past three months, so we're very pleased with that there. Expect that to continue. From an earnings break-even standpoint, we could expect that next year, and they're on target to get there. I'm very pleased with the team they have down there and what they're accomplishing.

In regard to the partnering, I would say that I just wanted to give that at as a highlight of some of the things we're looking at for the future. A very preliminary discussion with some folks that would like to enter into this industry segment that have the capital and are looking for someone to partner with that has the skill set to take, whether it be manage hydro or manage even combine cycle generation or whatever. We would be focusing only on the West Coast in our area where we know what we can do, but all I would say is that's very preliminary at this point, but I did want to give you a head's up on it.

These partners would be financial partners? Would they bring in assets or just cash capital?

It could be either, but most are financial partners that are looking at purchasing assets.

Okay, thank you very much.

Thank you. Once again, as a reminder, if you wish to ask a question, please press star, followed by 1 on your touch-tone phone. Your next question comes from Brian Tadao. Please state your company name.

Bank of New York. Thanks for taking my question. Real quickly, just wanted to see if you could give an update with regards to where you stand with liquidity, as well as looking at the cash flow for the quarter, and just sort of your outlook for the rest of the year, where you think you'll be at the end of the year.

Good morning, Brian. I'm gonna let Malyn and Christie handle that.

For the quarter, Brian, the third quarter, as Gary mentioned, is historically a quarter where our revenues are down a bit, because the first and fourth quarter are our strongest quarters. So our cash flow is usually not quite as strong, and we do have some debt that is maturing in September and November, as I recall. We have already retired a good chunk of that, but my recollection is we have -- Christie, do you have that? - another $45 million of debt that's on the books that needs to be retired. Having said that, our bank lines are fairly close to zero still, in terms of drawn, and our intention was to simply draw on the bank lines to be able to refinance those.

Okay. What's your estimate, I guess, of what sort of liquidity you need to run the business at this point?

While Malyn's thinking about that, what I would say that the way we're currently set up is that we cover all of our needs in the business through self generation. And Malyn, if you have more to add?

We have about $220 million of cash and cash equivalence on the books. I think, Brian, the one issue that we're trying to address -- and the new bank facility in Avista Energy allows us to address this a little better than we have in the past -- is energy requires a fairly significant amount of cash on its books to be able to do its business. And in fact, we are not earning the return on equity that we'd like to be able to earn there because we're required to maintain fairly significant cash balances.

The new bank facility will allow us to invest that capital at more attractive kinds of returns in different kinds of instruments than what was a very restricted facility. It also will allow us to essentially transfer some capital between subsidiaries on a loan basis from energy and yet still be able to show that cash, basically, to finance their business. And it will allow us to more efficiently deploy our capital and earn a higher return on energy and throughout the entire company. It may be a long answer to your question, but we're trying to get more efficient. We really don't need any outside additional capital to run the business because we're drawing down the balances on our deferred energy accounts over time and generating strong cash flow at the utility.

So if I understand, if you have the bank lines that you have, plus $200 million or so in cash, it's a pretty appropriate level for, you think, to run the business?

I think so.

Thank you very much.

Thank you. Your final question comes from David Thickens. Please state your company name.

Hi, Deep Haven Capital. Just a follow-up on your statement that the marketing business is going to start looking a lot more like a utility in terms of its earning profile. In the past we kind of always saw a counter cyclicality between the utility and what we knew as Avista Energy. When the utility was down, the marketing trading business tended to be up and vice versa. Are you saying that, you know, on a going-forward basis, as a generality, they will perform more like each other?

That's a good question, David, and the answer to that is somewhat. The risk- they will perform a lot more from a risk standpoint like the utility, only in the sense that we're managing other assets. And so as we manage other people's assets, for instance, the hydro assets and stuff we manage, we will have you know, an impact on that business. But on the other hand, because they are able to take positions and such in that, if the market becomes more volatile, then you will continue to see a increase in that.

And just a reminder on the utilities side, the actual regulated side, we do have our ERM, our Energy Recovery Mechanism, which takes out almost all of the volatility, or a lot of it on that side, and reduces the risk to our shareholders. It also takes away some of the upside in good times, but we have that $9 million dead band in there that we filled this year and we will fill again next year because of those gas contracts. But after that, there's $9 million that we will either have available to us or will be exposed to on a utility. But that's a much smaller piece than we ever hadin the utility in the past, because in the past it was from zero to whatever it ran to.

What do you envision happening at the2005i, when this mechanism ends? Do you think there will be something similar put in place again or --

David, the mechanism doesn't end. What happens is the high-priced natural gas contracts that we entered into in the middle of the energy crisis expire. Their terms will be up, and then the question becomes how close are our rates to the energy costs that are in place at that point in time. We hope that we're basically able to benefit from the fact that those high-priced contracts are rolling off, such that our starting point is a lot closer to where our energy costs are.

No, I understand that automatically getting slammed, the outside of the dead man goes away, but when does that mechanism expire? I was under the impression it maybe ran through the end of '05?

It goes to '06, David, at which time we would anticipate it would be renewed and extended.

Great, thank you very much.

Thank you. This does conclude today's question-and-answer session. I would now like to turn the call back over to the speakers for closing remarks.

Thank you, Laura. Ladies and gentlemen, thank you again for joining us today. If you have any other analyst or investor questions, please contact us through Angela Teed at 50-495-2930. Media questions may be directed to Jessie Wirst at 509-495-8578. An instant replay of today's conference call also will be available soon and will remain accessible through 8:00 p.m. Eastern daylight time this Friday, August 1. Call 402-220-5090 to listen to the instant replay, and a webcast of today's call will be archived for one month through 12:00 a.m. Eastern daylight time on August 29th. To access the webcast archive, please go to the Avista Corporation home page. Again, thanks for joining us and have a great day.

Thank you. This concludes today's Avista Corporation conference call. We thank you for your participation. Thank you for your