Eagle Bulk Shipping Inc (EGLE) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Eagle Bulk Shipping Inc. reports fourth-quarter and full-year 2011 results conference call. My name is Ann and I will be your coordinator for today's call. As a reminder, this conference is being recorded for replay purposes. At this time, all participants are in listen-only mode. (Operator Instructions) We will be facilitating a question-and-answer session following the presentation.

I would now like to turn the presentation over to Mr. Sophocles Zoullas, Chairman and CEO. Please proceed, sir.

Thank you. Thank you and good morning, everyone. I would like to welcome everyone to Eagle Bulk Shipping's fourth-quarter 2011 earnings call. To supplement our remarks today, I encourage participants to access the slide presentation that is available on our website at www.eagleships.com. Please note that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance and are inherently subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. We refer all of you to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties that may have a direct bearing on our operating results, our performance and our financial condition.

Please note on slide 3 the agenda for today's call will be as follows. I will first brief you on our fourth-quarter and full-year 2011 results and highlights, proceed with an update on the Company, and lastly present our current views on the market. Alan will then give an overview of our financials before we open the call to questions.

Please turn to slide 5 for a review of our financial results. Eagle Bulk reported a net loss of $1.7 million, or $0.03 per share for the fourth quarter of 2011. Earnings for the period were primarily impacted by a continued weak rate environment caused by peak order book deliveries. Supramax spot rates averaged $14,500 per day for the quarter, down 16% year on year. Downward pressure on revenue from lower charter rates was partially offset by operating a larger fleet as compared to the year prior. Revenues for the fourth quarter net of charter commissions totaled $70 million, a decrease of 3% as compared to the same quarter last year.

EBITDA for the quarter amounted to $30 million. And fleet utilization, which is calculated as the number of operating days divided by the number of available days, remained in impressive levels nearing 100%. For the full-year 2011 Eagle Bulk reported a net loss of $14.8 million or $0.24 per share. Earnings were driven by a 36% decrease in Supramax spot rates for 2011 versus the prior year. And the incurrence of a $5.3 million bad debt expense related to a charter default. Overall 2011 was a challenging year for dry bulk as supply growth continued unabated. However, we were pleased that even during a challenging period for our industry we were able to generate positive operating cash flow. We believe this underscores the resilience of the Supramax asset class and our superior operating platform.

Please turn to slide 6 for a review of our 2011 highlights. On the strategic front we took delivery of our final eight new Supramaxes and have no CapEx expense going forward. Four of the vessels we took delivery of in 2011 are fixed on three-year charters at above market charter rates of $17,650 per day plus profit sharing. Total minimum contracted revenue is projected at over $69 million. On the S&P front, we sold the Heron, one of the oldest vessels in our fleet, a 2001-built Supramax, for $22.5 million net of commissions. On the commercial side Korea Line Corporation, a charterer to 13 of our vessels, filed for reorganization in February last year. As we have previously reported, Eagle Bulk quickly took back operational and commercial control of the affected vessels and successfully minimized the negative cash impact to the Company.

On slide 7 we discuss recent developments surrounding the KLC charters and our credit facility. As of December 31, 2011, KLC has not been performing in accordance with the restructuring agreement and owes us approximately $4.9 million. I would like to remind everyone that the 13 vessels affected by the KLC agreement continued to be employed on short to medium charters with a diversified group of customers. Also, any shortfall revenue from KLC is recognized only when collectability is assured. With regard to our credit facility, we continue to operate under certain waivers as outlined in the sixth amendatory agreement, and remain in discussions with our lending group on reaching an amendment to the loan.

Please turn to slide 9 where we depict our historical fleet growth. Since 2005 we have grown the fleet to 45 vessels, or 16,470 owned days. Representing a cumulative annual growth rate of 26%. It is also important to note that we've been able to maintain near-perfect fleet operationally utilization during this period. I believe this is attributed to our fleet's quality. And, of course, to the excellent work both by our technical and operations teams that work tirelessly to maintain our fleet in top condition.

Please turn to slide 10. Here we depict an updated list of our fleet which now totals almost 2.5 million deadweight tons and boasts an average fleet age of only 4.8 years as compared to an industry average of over 12 years. The Eagle Bulk Supramax fleet is one of the youngest and most homogenous in the world, second in size only to China's COSCO group. We believe our fleet's scale, uniformity and modern age yields commercial advantages for Eagle Bulk. Please turn to slide 11 for an update on chartering. Given the weak period charter market, Eagle Bulk has chosen to remain short in tenure until there is some normalization in rates. As of December 31, 2011 our chartering profile for the full-year 2012, is as follows; 33% of our fleet is fixed on time charter, or COA, business, 10% is indexed to the Baltic Supramax Index or BSI and 57% is open for charter.

On slide 12 we illustrate Eagle Bulk's cargoes for the fourth quarter. Our fleet carried almost 5.4 million tons of cargo during the quarter, an impressive increase of 34% year on year. For the full-year 2011, we carried approximately 18 million tons of cargo, an increase of 26% as compared to 2010. Growth in cargoes carried is attributed to the increase in our vessel capacity over the previous year. Minor bulks represented almost 70% of total cargoes carried during the fourth quarter, a sequential increase of 20% since the prior period. We attribute this major shift in cargo mix to the relative weakness in the minor bulk trade and to a pickup in our COA business. As we have said in the past, we believe the Supramax's ability to carry a diversified cargo mix gives it the most commercial flexibility, and hence less earnings volatility as compared to larger dry bulk asset classes.

Please turn to slide 14 for a review of the industry fundamentals. The dry bulk market for 2011 can be characterized by solid trade growth, but by even greater increases in vessel supply, leading to lower rates across the board. On the demand side, all major dry bulk trade categories, except for coal, posted solid year-on-year increases and generally met the market's bullish expectations. Coal trade, which reached approximately 930 million tons in 2011, grew less than expected as flooding in Australia earlier in the year impacted exports significantly. On the supply side, although we have large increases in the world's dry bulk fleet, actual increases were much lower than what was being projected at the beginning of the year. This can be attributed to a misstated order book, slippage and outright cancellations of orders. In addition record scrapping for the year totaled 22.3 million deadweight ton amounts, helping offset growth supply somewhat.

At the bottom of slide 14 we depict average annual spot rates for the three major asset classes. 2011 was a challenging year for dry bulk as a whole, with Supramaxes outperforming both Panamaxes and Capesizes. Supramaxes averaged $14,400 per day in 2011, a decrease of 36% over the prior year. Panamaxes averaged $13,900 per day in 2011, boasting a 44% decrease year on year. And Capesizes averaged $15,800 per day for 2011 a decrease of 53% as compared to the prior year. Supramax out performance can be attributed to better relative supply demand fundamentals. In addition, they are widely considered to be the most versatile dry bulk vessel for a variety of reasons, including its size, which is optimal for berthing at most global ports, and for best matching cargo stems and for its onboard cranes, which allow for the loading and discharging of cargo without requiring onshore equipment.

Please turn to slide 15 for a discussion on the current fundamentals. Market weakness intensified during the beginning of 2012 on the back of a flood of newbuilding deliveries hitting the water in January. Owners with orders nearing delivery late in the year are motivated to take the ship the following year. This phenomenon, which is called the January effect, allows for owners to market the ship as being younger by one year. Deliveries in January this year totaled 12 million deadweight tons, a monthly record. The market was also impacted in January by the timing of Chinese New Year which commenced two weeks earlier than usual, in effect, this led to very little business being conducted between Christmas and the end of Chinese new year.

Please turn to slide 16. Although the market remains at depressed levels we believe short-term dislocations are subsiding. For example, newbuilding deliveries for the month of February plunged by 57% month on month. Additionally, the global Supramax fleet disbursement appears to be correcting. Within the Supramax spot market, Atlantic round voyage rates have historically commanded a premium to Pacific round voyage rates. This is caused by both specific cargo movements or flows, and the inherent vessel oversupply in the Pacific due to newbuilding deliveries. On the top right hand corner of the slide, we depict the Supramax Atlantic versus Pacific rate ratios. This ratio dropped earlier in the quarter to a five-year low, as empty vessels in the Pacific ballasted towards the Atlantic for business. The correction in the misallocation of the global Supramax fleet is actually helping to explain the recent increase in Supramax spot rates.

In recent news, it was reported that Indian iron ore rail freight charges have been lowered in order to spur exports, which have been severely impacted by tariffs imposed in 2011. Although we do not expect Indian iron ore exports to get back to their 2010 levels, this recent news has led to some optimism in the charter markets. Also, the Chinese coal stockpiling trend appears to be reversing on the back of increased consumption. Inventories dropped by 16% in February. Separately, a planned annual maintenance on the coal-focused Daqin railway is expected to affect approximately 6 million metric tons of domestic supply in April, leading to increased imports. On the bottom right-hand corner chart, we depict the one-year Supramax forward curve. It is interesting to note that the curve, which typically tends to trade in backwardation is now in contango, reflecting the positive market expectation for rates.

Please turn to slide 17 for a discussion on the near-term fundamentals, which we continue to view as mixed. Global GDP growth estimates for 2012 have been revised down to 3.8%, reflecting weaker economic climate in the Euro area and lower growth expectations for emerging markets. To counter the effects of a potential slowdown in growth, China has lowered its deposit reserve ratio twice already during 2012, adding approximately $125 billion in liquidity into the local markets. Dry bulk trade growth for 2012 is projected at 6%, but fleet growth, although past its peak, is expected to remain at elevated levels. Overall, we believe 2012 will be another challenging year for the dry bulk market, with supply-demand fundamentals getting more in balance from 2013 onwards.

Please note on slide 18 we will do a quick review of the agricultural and minor bulk trades. Trade demand in agricultural products is expected to remain flat in 2012, to total 352 million metric tons. US exports are expected to face increased competition from the former Soviet Union republics this year and export restrictions are no longer in place. The recent drought in South America has reduced the projected soybean crop by 10% for the year in that region, helping to keep US exports to Asia robust. On the top right-hand corner chart we depict the top 10 destinations of US grain products, with China and Japan representing over 50% of exports. Overall, we believe it will be another solid year for the grain and agricultural trade with ton miles remaining flat.

Miner bulk demand remains firm. Seaborne trade is expected to surpass 1.2 billion tons in 2012, amounting to one-third of total dry bulk. Chinese miner bulk demand remains robust, with 2011 imports reaching 253 million tons, representing an impressive increase of over 150% since 2007.

On slide 19 we discuss long-term demand for coal and iron ore. Our thesis has not changed and we continue to view the fundamentals as strong, especially for coal. Global steel production is projected to increase 40% by 2020, leading to increased demand for iron ore and coal. New iron ore supply from Africa, specifically Guinea, Sierra Leone, Liberia and the Republic of Congo, is projected to reach over 250 million tons by 2020, increasing global ton mile demand. In fact, just a few months ago Eagle Bulk carried Sierra Leone's first iron ore shipment which was destined to China.

Over 350 gigawatt's of new coal-fueled power capacity is expected to come online by 2016, mostly in Asia. The incremental coal requirement will primarily come from Indonesia and Australia. On the top right-hand corner chart we depict historical Indian and Chinese coal imports, the scale of growth in this trade is massive. Combined imports is projected to reach almost 600 million tons by 2016. On the bottom right-hand corner chart, we depict 2011 Chinese coal imports by origin, which totaled 200 million tons. Almost 50% of all imports were sourced from Indonesia, which tends to be a Supramax dominated trade.

On slide 20, we review the current supply dynamics. Newbuilding supply growth remains at high levels, but deliveries are past their peak and the order book continues to shrink. New orders in dry bulk are down 66% year on year. And the order book as a percent of the fleet outstanding has come off over 60% since peaking in 2008. Slippage and cancellations for the sub-Capesize segment remain at significant levels of 35%-plus.

As we have said in the past, it is widely believed that slippage and cancellation rates will continue going forward. Primary reasons for this are shipyard and financing issues. Shipbuilders continue to struggle with rising costs and a strengthening domestic currency. Thin margins are forcing shipyards to enact strict cost controls and pushing others, such as NanTong KHI Shipping Engineering, Hougang Shipbuilding and SAMHO Shipbuilding out of business. Almost 1,600 vessels are over 25 years of age and will eventually need to be scrapped.

As we have said in previous calls, scrapping acts as a safety valve that will continue to assist in curtailing vessel growth and improve the supply-demand fundamentals going forward. On the bottom right-hand corner of the slide we depict the current profile of the dry bulk fleet age by asset class. The sub-Panamax segment is by far the oldest in terms of number of vessels and as a percent of fleet, which is around 20%. Scrapping for the month of January and February 2012 has amounted to 4.6 million deadweight tons. If this pace continues it will be another record year for demolition in dry bulk.

I will now turn over the call to Alan, who will review our financial performance.

Thank you, Soph. Slide 22. I'd like to offer a brief recap on our fourth-quarter and full-year results of operations. I want to emphasize up-front that Eagle Bulk posted positive operating cash flow during all four quarters of 2011, while we continued to navigate through one of the most volatile periods in the history of the dry bulk market. Net revenues for the quarter were $70 million, compared to the fourth-quarter '10 figure of $72.3 million. Revenue shortfall was due to lower charter rates, offset by the operation of a larger fleet as compared to the prior year. During the quarters of the year, the fleet was on a mixture of voyage charters, short- and long-term time charters.

Operating income for the fourth quarter was $9.2 million compared to the fourth quarter of 2010 figure of $14.8 million. EBITDA, as adjusted for exceptional items under the terms of our credit agreement, was $30 million for the fourth quarter compared to the fourth quarter '10 figure of $32.9 million. Net loss was $1.7 million, or $0.03 per share for the quarter. Net revenues for the year ended December 31 were $313.4 million, compared of the prior-year figure of $265 million. Operating income for the year was $31.7 million, compared with the prior-year figure of $75.7 million. EBITDA for the year was $108.8 million, compared to the prior-year figure of $148.7 million. Finally, our fleet utilization continues to be a superior $99.7 million for the fourth quarter, and 99.4% for the year.

Slide 23. Just a few comments on our balance sheet. This is the first investor presentation since the third quarter of 2006 not to reflect advances for vessel construction, in between we took delivery of 27 vessels. We will also note for the first time that we are showing $32.1 million as the current portion of our long-term debt. Finally, total cash at year-end was $25 million.

Slide 24. We are rolling out our 2012 estimated cash expense slide. Our estimated daily vessel operating cost is $5,103. Technical management fees paid to our vessel managers are estimated at $319 per vessel per day, this is in line with last year. Our vessel estimated cash general and administrative expense for 2012 is $1,214 per vessel per day. Based on our current interest rate swap profile, we estimate our interest expense, net of interest income for 2012 as $2,728 per vessel per day, this figure is lower than last year as a result of higher interest rate swaps rolling off. Finally, we are forecasting $1.65 million of dry-dock costs in 2012 and this equates to $100 per vessel per day. We expect that our estimated cash cost of $9,464 per vessel per day remains one of the lowest in the industry.

With that, I will turn it over to the Operator to open the line for questions.

(Operator Instructions) Natasha Boyden, Cantor Fitzgerald.

I wanted to just delve in a little deeply into those 13 charters that I think that last quarter in the presentation had their latest expiry at 2019. And they were at about $17,000 a day. I'm assuming those are obviously the KLC charters. Is that correct?

Yes, that's correct.

So, looking at the new numbers, it looks like they are expiring this year, and they are on a much lower rate. Can you just give us some more detail about what is going on there, and what you expect to do with those ships?

What we have done, Natasha, we have taken a pretty conservative posture in how to handle those charters. And the switch has been the following. Since KLC filed for reorganization last February, we took over all operational and commercial control of those vessels. As a result, as of the end of 2011 we have changed the character of those charters, so we only recognize the revenue of the charters when in fact we get it.

Also what we have done is, on our charter list for our ships, we now put on the charter rates that we recognize in the market and not the, call it, the Korea Line charter rates. So, that is what you're picking up.

Okay. Given the state of KLC's bankruptcy and non-payment at this point, how hopeful are you that you will be able to get anything out of them?

We continue to be in talks with them, including having been to Seoul earlier this year. But as I mentioned, we are choosing to take a more conservative position with regards to revenue recognition on those charters. But on the flip side, we continue to be in talks with them. We will advise the market as those talks develop. And that's been happening since February of last year. We've been chartering our own ships for over a year, and that's just going to continue. And the character of the charters is now going to be that we are just going to report the charters that we do rather than the Korea Line's rates.

Given the fact you're now reporting what you get, and that you've been in talks with K Lines, have they given you any idea of timing as to when you might receive the old revenue, or is it still up in the air?

They're hopeful that they are going to continue to perform under their obligations. We could have chosen to keep recognizing the revenue or reporting the charters as $17,000 charters. And we thought it would be more appropriate to report the charters to the market and to everyone as what we do commercially, which is what we've done. And we are going to maintain for 2012, until there is a material change in KLC, that profile.

Okay, great. Thank you. And then just moving on to a different topic entirely. Maybe, Alan, you can chime in on this. Will you need to build up restricted cash again to comply with the minimum liquidity requirements? And I'm just looking at the fact that you currently have $25 million of cash on the balance sheet right now, and it looks like you need about $36 million by the end of April.

The short-term portion of the long-term debt is $32 million. So, will be working up to $32 million. But I do want to emphasize that we are in current dialogue with the bank looking to achieve a long-term restructuring solution.

Okay. And then, just lastly, how much of your debt has interest rate swaps associated with it now? And what are those expirations? I think you may have mentioned something in the presentation, but I'm just trying to get at would drove the lower interest expense quarter-over-quarter.

We have just about $200 million of swaps remaining, which expire later this year and into early of '13. We had almost $400 million-odd of swaps this time last year. The average underlying rate on the swaps in place was 4.2% above LIBOR. And today, labor is 60 bps, so it was quite a significant drop.

Okay, thank you very much.

Michael Webber, Wells Fargo.

I just wanted to jump back in and talk actually about your conversations with your auditors around your debt. And maybe outside of the collateral maintenance waiver issue that's been going on for a while, about how it's being classified, can you give a little color about what those conversations are like? As you get closer to waiver expiry, are they pushing back in terms of how you're classifying that debt being current or long-term? And since we are looking at unaudited numbers within the press release, is there any risk that when you guys put out your --?

No, the only reason it is unaudited, Mike, is because the financial statement will be filed later today, and then it will say audited on it. There will be no difference in between what is being presented now and what will be in the 10-K and 405.

Okay. Maybe just a little bit of color in terms of how those conversations -- are you in active dialogue with your auditors, as well? Are they requesting a long-term plan before they let you classify that as current? Is that the right way to think about that?

I don't think that's anything that we are going to discuss. I think the important thing is to simply reiterate that we are in discussions with the lending group towards a long-term solution.

Got you. That's fair enough.

Soph, I wanted to jump back to KLC, and you talked a bit about it briefly. And forgive me if you've already said this. But have you given a year-to-date KLC number in terms of what's past due, relative to what you guys have been able to earn on the spot market?

We gave for 2011. The year-to-date, we haven't. And what we've earned in the spot market we actually put out vessel-by-vessel on our fleet list in the press release last night.

Okay, so we can back into that number. Any other counterparty issues right now outside of what is going on with KLC?

Yes, we had one other charterer, Allied, which has been in the shipping press. They are having financial trouble. There is one vessel affected with them.

So, just one additional vessel, though, outside of KLC, but nothing more widespread?

Correct.

Alan, [Euro's] G&A came in sequentially lower, which fits your seasonal pattern. I'm just curious -- typically we see a bump in Q1. How should we think about that in terms of a run rate for the first quarter?

We are not big on giving guidance, but we are going to be giving G&A guidance today of cash G&A of $20 million for 2012. And for now, let's just assume it's straight line across the year. But the answer to your question is, in Q1 you've got us working on the proxy [annual] report, but that's about it. But $20 million cash G&A for 2012, which is what equates to your pie chart of $1,200 a day.

Yes, that's helpful. And then, Soph, last quarter you talked about not taking as many charterers into the trading operation and winding that down a bit. And obviously you're throwing some of your own vessels in there as they roll off. Can you talk about how we should think about that trading operation over the next year? Are you doing much outside of trading your own vessels here? Maybe a little bit of color about how you see that trending over the next year.

Yes, we did exactly what we told people we were going to do. What we have done is we have basically run down the third-party charted in-tonnage, which you can see reflected in our numbers. We have focused on some lucrative COAs. And we've elected to use the COA cargoes as employment for the Eagle-owned tonnage.

And the last point, which you may or may not be able to glean, is we have no current FFA exposure. So, what we have done is, I would say, just refocus it. The cargos we take in, we put as employment on our ships. No derivatives exposure and no exposure to third-party ships.

Now, should we take that nil exposure or presence -- you guys are not taking additional risk throughout the year? It's probably off the table, and you guys are going to be focused on just employing your own ships? Or how should we think about that?

I think we will look at it opportunistically. But right now, with a 45-ship-strong fleet, we have a lot of flexibility in the market. And with building a couple of key relationships through our Singapore office, we feel that's the prudent way to proceed right now. If the market changes, our view may change, but that's our view right now.

That makes a lot of sense. Thanks for the time, guys.

Christian Wetherbee, Citi.

This is actually Seth Lowry in for Chris today. If I could just start of with KLC, just a point of clarification. There is a minority of vessels that had short-term duration charters that were expiring in January and February. Were those with customers who are not KLC? Or were those still on employment with KLC rolling off in the early part of this year?

We have some that were with KLC. I would say it is a mixture of both, if I understand your question correctly.

Out of the 13 vessels, there were a few that had quoted day rates on the fleet portion of the press release that were lower than $17,000. I was just wondering if those were different, with different customers.

Seth, I apologize. We took back control of all of the KLC ships in February of '11. So, every charter on the charter page that you see is with an unrelated third-party charterer, not KLC.

Okay. And then, along the same lines, do you feel that the KLC situation gives you any added leverage in coming back to your lenders with flexibility on debt amortization? Do you foresee them giving you any forgiveness or --?

I'm not going to respond to that, Seth.

Okay. If I could just switch to demand, then. Just based on your comments, it seems like things were a little bit slow before the Chinese New Year, and things have picked back up a little bit. But I was just wondering if you could give us your sense of how things have trended post the holiday? Have they been in line with your expectations? Have things fallen off a bit since the holidays have resumed?

I think two things have happened. Specific to Supramaxes, charter rates have doubled. And also, we are seeing charter inquiry going from, say, trip charters to more longer-term charters. And both those factors are positive. So, the market, I would say, has bounced back. We are seeing charter rates at $10,000-plus levels. And certain trips you can see -- there have even been trips in the $15,000 range that have been done out in the Pacific in the last week.

Okay, thank you.

Justin Yagerman, Deutsche Bank.

This is Josh Katzeff on for Justin. Just starting off with Korea Line. Is there anything operationally that would prevent you from entering long-term charters on those Korea Line ships? Or are there any kind of constraints because they were on charters that are now in dispute that would prevent you from fixing those out on different periods?

I think if there was a market opportunity, and we thought it was appropriate to take one of the former KLC ships and put it on long-term charter. There was a provision where they were going to take the ships back from us. So, we would have a dialogue with them because we are having ongoing discussions with KLC. But I don't think they would block us from putting on a long-term charter if we thought it made commercial sense. Because, if we liked it, it would make sense probably for them to like it, too.

Got it. And along those lines, under the original framework, you were supposed to return those vessels to their commercial control this month? Is that correct?

Yes, that's correct.

So, I assume that's no longer going to happen. You guys are going to continue --.

Yes. But from our point of view, it didn't change anything because we've been operating the ships since February on our own anyways. And in one sense, the commercial set-up that we started in Singapore in 2010, and the trading platform that we started in 2010, has paid off hugely with regards to being able to easily manage the 13 Korea Line ships, which has been very positive for us.

And continuing on employment, historically you guys have said that a lot of your vessels are located in the Pacific. You mentioned that the differential between Pacific and Atlantic rates have narrowed. Is that still where most of your open ships are located, in the Pacific and Asia?

Yes, that's correct. And right now it's interesting because there's parity between the two basins, and usually you don't see that. But it's a nice boost for the ships in the Pacific.

Yes. And switching to your debt. There's about $21 million or so of availability on your revolver. Is there anything that prevents you from drawing that down right now if you were to want to?

To do what with it, Josh?

I'm just saying -- can you freely draw that down right now?

Josh, our goal is to repay debt, and we are in active dialogue with the bank.

Understood. And then, maybe to press you, you said you were in discussions with your lenders for a long-term solution. I assume that is more than just covenant waivers. But maybe some sort of amortization restructuring? Can you comment?

I think we have a good track record of getting deals that work both for the lenders and for Eagle. As I think Alan mentioned, we are on our sixth amendment with this lending group. So, the track record of us reaching good amendments with our lending group has been good. And we are in an active dialogue with them currently.

Got it. That is all I had. Thank you for your time.

Ladies and gentlemen, with no further questions in the queue, this concludes today's question-and-answer session. I would now like to turn the call back to Mr. Sophocles Zoullas for closing remarks.

Thank you. And I would like to thank everyone again for joining us for our fourth-quarter 2011 earnings call. And we look forward to keeping you updated of new developments in the future.

Ladies and gentlemen, we thank you for your participation in today's conference. This concludes the presentation, and you may now disconnect. Have a good day.