Emera Inc (EMA) 2005 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Emera first quarter results conference call. I would now like to turn the meeting over to Ms. Judy Steele, Director, Investor and External Relations. Please go ahead, Ms. Steele.

Good afternoon, everyone, and thank you for participating in our call today. Joining me from Emera are Chris Huskilson, President and CEO, Randy Henderson, SVP and CFO, Ralph Tedesco, COO of Nova Scotia Power, and Ray Robinson, President and COO of Bangor-Hydro.

Emera’s Q1 2005 earnings release, financial statements, and management’s discussion and analysis were distributed earlier in the day via newswire. These documents are also available on our website at www.emera.com along with speeches from our annual meeting which was held this afternoon.

Today we will have Chris begin with a corporate update. Randy will then review the first quarter financial results in more detail. We expect the presentation segment to last about 10 minutes, after which we will be happy to take questions from analysts and investors. Please note that all amounts are in Canadian dollars with the exception of Bangor-Hydro Electric with segment results reported in U.S. dollars for that subsidiary.

I will take a moment to remind you that this conference call may contain forward-looking information which involves certain assumptions and known and unknown risks and uncertainties that may cause actual results to be materially different from those that are expressed or implied by the comments. Those risks include weather, commodity prices, interest rates, foreign exchange, regulatory requirements and general economic conditions. In addition, please note that this conference is being widely disseminated via live web cast. And now I will turn things over to Chris

Thank you, Judy, and good afternoon, everyone. Emera's consolidated net earnings were $48 million for the first quarter of 2005 compared to $46.5 million for the same period in 2004. Quarterly earnings per share were 44 cents compared to 43 cents in 2004. It is important to highlight that we have deferred $15 million of income and other tax expense in the first quarter. You may recall that we had asked our regulator to allow that until new rates intended to cover new taxes came into effect. That happened effective April 1st, so NSPI will not be deferring additional taxes going forward. Randy will speak more about the financial details in a moment. With respect to NSPI’s rate decision, we presented our compliance filing last week and are awaiting the final rate order from the regulator that will mark the last step in the rate application process for 2005. We are satisfied with key elements of the decision, specifically the full recovery of our pre-2003 taxes and an increased common equity component. As well, our operating, maintenance and general expenses, a source of considerable discussion in previous rate applications, were accepted as filed.

Overall we consider the tone of the decision to be an improvement over 2002 which reflects well on the work that we’ve done over the past 3 years to improve the regulatory relationship. We are taking steps to comply with the process requirements the regulator has provided in its decision, especially as it relates to fuel. And we will also be asking for confirmation as to what will constitute the appropriate fuel procurement strategy so that in future, we can be assured of full recovery of fuel expenses. We will continue to look for ways to work productively with the Nova Scotia Utility Review Board. For example, we believe the idea of negotiated settlements is a good one. It works well in other jurisdictions, reducing the time and cost of regulatory proceedings. Accordingly, we will continue to work with the regulator and the stakeholders to incorporate this element into rate regulation in our environment.

Meanwhile 2005 will be a challenging year for the company. Nova Scotia Power is expected to earn below its allowed rate of return this year. Looking forward into 2006, commodity prices remain high. We are currently refining our forecast and assessing our options. This circumstance highlights the importance of Emera’s efforts to find profitable opportunities for investment to grow our business in the northeast. We’re in the process of closing our recent hydro acquisitions in Massachusetts and Vermont and we continue to look for opportunities to capitalize on our skill sets and meet our risk profile. And of course, we remain committed to our dividends and we will live with the temporary up tick in our payout ratio as we work through these earnings challenges. With that, I’ll turn things over to Randy for a financial update.

Thank you, Chris, and good afternoon everyone. As Judy mentioned, our first quarter financial results were released earlier today and are on the Emera web site. I’ll take a few minutes to review them with you now. Emera’s consolidated net earnings were $48.3 million in the first quarter of 2005 compared to $46.5 million for the same period in 2004. As Chris noted, we have deferred an estimated $15.3 million of income and other tax expense in the first quarter which eliminated the negative financial impact of the fact that we did not have new rates in place until three months into the year. Ultimately that regulatory asset will be recovered but please note that the amount and the recovery period are still subject to approval by the URAB.

Increased fuel expenses in Nova Scotia Power influenced quarter over quarter results. As you are aware, gas resale margins are lower because of changes to the pricing structure in our gas supply contract currently in arbitration. Commodity prices, most notably coal, are higher in the first quarter of 2005 compared to the same period last year. Earnings per share in the first quarter were 44 cents compared to 43 cents in 2004. Nova Scotia Power’s contribution to consolidate net earnings was $40.8 million in the first quarter of 2005 compared to $38.8 million for the same period in 2004. The quarter over quarter change primarily reflects the tax deferral net of the increased fuel expenses that I mentioned earlier.

It’s important to highlight that the financial results reported in Nova Scotia Power for the first quarter of 2005 are not representative expectations for the remainder of this year. Although we have the benefit of the 5.3% average electric revenue increase effective April 1st, the projected fuel expenses are such that the increased revenues will not be sufficient to offset them. As Chris noted, we expect that Nova Scotia Power will earn below its allowed rate of return in 2005 and specifically as noted in our disclosure documents, we have revised our financial forecast and anticipate 2005 earnings to be approximately $22 to $27 million below 2004 levels.

Turning to Bangor-Hydro, first of all, I highlight that we have made some changes in our reporting format this quarter based on your comments, by presenting Bangor-Hydro’s operating results in U.S. dollars and converting the net income amount to Canadian. This is intended to improve investor’s ability to assess Bangor’s operating performance separately from the foreign exchange implications. Our U.S. subsidiary’s contribution to consolidate net earnings was $3.3 million U.S. in the first quarter of 2005 compared to $4.4 million U.S. in the same period last year. The lower earnings were primarily a result of electric sales mix differences with a lower proportion of sales to residential and commercial customers.

In addition, operating, maintenance and general expenses were slightly higher as less was absorbed by capital projects. As anticipated, Bangor-Hydro received an order from the Maine Public Utilities Commission approving the changes to its stranded cost rates for the next three years. As discussed in our last investor call, the annual revenue requirement for stranded costs is approximately 37% lower as a result of the completion of a major regulatory amortization. The new rates were effective March 1st and have corresponding reductions in regulatory amortizations and rate based carrying costs including et earnings. The reduction in the stranded cost rate base is anticipated to reduce net earnings by approximately $200,000 annually over the next few years.

Other operations, which include corporate costs and businesses outside of our regulated electric utilities, contributed $3.4 million in the first quarter of 2005 compared to $1.9 million for the same period in 2004. Energy marketing margins were lower as expected but so was interest expense. And also last year we had a large write off related to Grey Hawk gas storage. So together, all of these changes net into a considerable improvement in results for other operations in Q1 2005.

Equity earnings from our investment in the Maritimes and northeast pipeline were $1.8 million in quarter one, 2005 compared to $2.1 million in Q1 last year. Increases in the tolls collected for its U.S. operations were more than offset by lower volumes and a stronger Canadian dollar. The quarterly reported equity earnings and associated energy marketing margin from our energy services business include an estimate of amounts potentially refundable to customers based on the final outcome of the regulatory approval of new pipeline toll rates which we expect later in 2005.

Consolidated net cash provided by operating activities was $18 million in the first quarter of 2005 compared to 55.7 million for the same period in 2004 reflecting higher fuel costs in NSPI and increased working capital. You may have noticed we’ve also changed the reporting in the statement of cash flows back to our old method based on feedback which told us that our attempts to be on the leading edge of cash flow presentation was not particularly helpful. That’s it for my financial overview. Thank you and now we will be happy to take your questions.

[OPERATOR INSTRUCTIONS]. Our first question comes from Linda Ezergailis, TD Newcrest. Please go ahead.

Thanks. Can you provide a little bit more color with respect to your game plan to address the regulator’s issues in the 2005 decision and maybe lay out some sort of a timeline as to when you might get some direction from the regulator and what you are, I guess, specifically recommending to them? And I guess to just provide you some more context with what I’m trying to figure out is - - are you waiting to file a rate application for 2006 until you can get all these issues resolved or would there be the potential to file a rate application for 2006 prior to getting all of these questions addressed by the regulator?

Ralph Tedesco here. As Randy and I think Chris may have touched on, we have filed our compliance filing and we are seeking recovery of the tax deferrals. And those two items are pending right now before the board. As we look forward, we are in the process of updating our financial forecasts and rather - - I don’t want to underestimate the challenges of 2006. Having said that, we’ve not made any final decisions at this point what our plans are on a go forward basis.

Linda, it’s Chris. I think the other thing that we’re going to do is sit down with the regulator and make sure that we’ve got a very good understanding of what the findings are trying to achieve and insure that we have a good dialogue, good interaction with them and to make sure that as we begin to operate this year and moving forward, that we’ve actually got a good understanding and that they understand we’re working with them.

And what else do they have on their plate in terms of other regulatory activities? I mean, can this be expedited at all given that your any sort of future rate increases or adjustments are unlikely to be retroactive?

Well, I think very much so. I mean, certainly we would currently have an open access tariff hearing occurring this month, but this kind of discussion is, I think, something that can be an ongoing discussion and something that actually, I think, with this kind of dialogue going on and with getting some definition and confirmation from the regulator as to what the findings are hoping to achieve, I think that helps us go forward.

Okay, and with respect to another discussion you’re having on your gas contract arbitration, can you give us a sense of what the issue is in terms of why it hasn’t been resolved? It is a disconnect in terms of prices, in terms of applicable indices or processes? Or can you give us some more color on what’s going on there?

Without going too far down the road, because again, we are in arbitration, certainly and perhaps somewhat obviously, the key issues are volume, price and deliverability. And those are the items that we’re seeking to sort through with the arbitration panel.

Have there been any preliminary discussions and where is the biggest disconnect?

Well I think at this point it’s very early in the arbitration. I think there has been a meeting held with certain rulings rendered as to what information each side has to provide. And at this point, again, at a very early stage, we’re exchanging that information, Shell with us and us with Shell.

Great, thank you.

Thank you. Our next question comes from Fi Lee, RIBC Capital Markets. Please go ahead.

Thank you. I just want to follow up on a couple of questions that Linda asked and just ask one other additional question. With respect to NSPI and their regulator, in terms of they’ve directed you to, I guess, implement new procurement practices and I’m just wondering what your plans are with respect to executing the regulator’s order and do you think that’s going to play a role in the timing of when you decide to file your 2006 application?

For sure, the regulator has raised issues as to how the company’s fuel procurement organization is arranged and we have subsequent to the order made adjustments. As well, we have already supplemented our in house, supplemented our expertise in particularly coal procurement and we’re also looking right now to add additional expertise in terms of the international coal markets. So in that sense, we’re certainly being sensitive to what the regulator had to say. But most importantly, this is a point that I would say we respectfully disagree with the regulator’s decision. Nonetheless, we are making these adjustments.

And will that, does your 2006 filing hinge upon the regulator deciding whether your current practices are acceptable or not?

We’ve made no decision with regard to 2006 or anything of that sort.

Okay, but is it something that you’re taking into consideration?

Well, we’ll certainly be taking into consideration our view of fuel markets and have that roll up into our expenses.

Okay. And with respect to the natural gas supply contract that Linda referred to, in terms of your current assumptions that you’re reflecting as part of your financial statements, are you basing the pricing on market pricing for the contract? Or what are your assumptions regarding the contract price that’s reflected in your financials?

Again, because this is in arbitration and obviously that information is rather sensitive, we probably wouldn’t be in arbitration if we could come to agreement on that, and I’ll take a pass on that one.

All right. And there’s a reference to, I guess, a price adjustment clause in page 5 of the MD&A and it refers to one third of your volumes, I guess, will be at some fixed price and I’m just wondering what exactly the fixed price is or how that’s determined relative to the future contract price?

Well again, this again another component of the contract where our view may not be Shell’s view and this is again another point of discussion.

I think Fi, It’s Chris. There is a clause in the contract that actually outlines a floor and a ceiling for that one third volume, but we haven’t disclosed the details of that at any point in the past nor would we in the future. So that’s all part of how the arbitration process will work, but we’re in that process now.

Okay. And I’m just wondering about Bangor-Hydro. Your expectations for the year given the first quarter results were, I guess, declined on a year over year basis and where you expect to sort of end up at the end of the year? On a U.S. dollar basis, sorry.

On a U.S. dollar basis, we would see pretty flat sales year over year. The volumes just are not there and it’s quite flat, and we’ve also taken a rate reduction compared to last year, so on the top line our revenues we don’t see any increases, so year over year, I don’t see any improvements, so I would say flat.

Okay, thanks.

Thank you. Our next question comes from Karen Taylor, BMO Nesbitt Burns. Please go ahead.

Sorry, I’m going to have to ask you these questions, and I don’t mean to beat a dead horse, but I’d like to come back to the regulator. So we had a significant amount of fuel cost disallowed in 2005. So the regulator was quite specific in terms of the nature of the hedging strategy that they wanted you to have on with mixed contract terms, various sources and so on. So has that or has it not yet been implemented?

Well we believe it’s been implemented and with regard to the disallowance, you may be familiar, Karen, that the regulator actually pointed to a single transaction that the company chose not to undertake either in late 2002 or early 2003 that at the time was out of the market but which in retrospect appeared to be a favorable deal. Having said, again we’ve sought to modify our procurement to be consistent with what we believe the URAB is looking for.

Okay, now I’m going to have to come back and I’m going to have to ask you again. So you said you believe you’ve implemented it, you believed you implemented it before, you believe that you’re doing things the way they want. This is an issue for going into 2006 - - the amounts that were disallowed, unless you’ve got significant cost savings elsewhere in the O&M cost structure in the 2005 rate structure, you’re going to have to go back and apply for higher fuel costs. So what I need to understand when I’m trying to assess the earnings risk for 2006, is whether or not the board, the URAB, has clarified with you exactly what it expects and whether what you have implemented to date meets those expectations? Because we’re not interested in another regulatory decision like this for next year. So can you help me out?

I think one of the things that we will certainly be doing in the short term is confirming with the board that the changes that we have made are indeed what they had in mind. Further, we plan to work more closely with them and provide additional information with regard to fuel costs on a going forward basis. So we think the combination of those 2 factors should help provide more certainty.

And will that confirmation come in the form of a publicly releasable disseminated document?.

That I can’t answer.

Is it something that you will ask for?

Well we’ll certainly ask for confirmation that the board feels that the changes we’ve made are consistent with their order.

The other aspect of the decision that I was not clear on, and you mentioned the word retrospect, so it’s your word not mine, is this notion of the portfolio they’ve asked you to put in place may yield different results from simply procuring short or in the prompt year if you want to use that term. Have they, and will you seek confirmation of the costs that this portfolio as they’ve requested that you implement it, if that should result in costs being somewhat higher than prompt year hedging, are you going to obtain confirmation that that is in fact an acceptable application of the 2005 decision?

Well, I think, Karen, yes, that is right. Our interpretation of what the findings actually say would be that the URAB would like to see us have a portfolio of contracts not just in some of the commodities we have it in. So we would have it in petroleum coke, we would have it in gas and other various commodities, but also in low sulfur coal. And so I think what Ralph is referring to is that we are going to put a portfolio in place for low sulfur coal and as we move that forward we will be actively talking with the regulator about what we’re doing and how we’re moving that forward. So we believe that that’s reasonable action and we’ll comply with what they’ve asked us to do.

And just one more question before I move onto the gas arbitration issue. Did you not have these similar types of conversations with them around 2005? You knew that the arbitration on the gas was coming. You knew a bunch of other things about coal costs. Were you not in discussions with them? My understanding was that you were and that you had a very proactive, open dialogue with them.

Well, I think the issue for, if you look at 2003 and 2004, we were still in a position where we were changing our capacity to be able to go to broader markets. And so I think some of the issue for us was whether or not we would tie up longer term contracts with those American suppliers, for example, as opposed to with our new peer in service being able to go more broadly to a wider market. And so, when we looked at that issue we said yes, we will move to a portfolio over time but we don’t want to do that too quickly, because we may be missing opportunities to look more broadly at the market. And I think that’s probably where the issue was, was that the regulators saw that as not moving quickly enough. We certainly had an approach that we believed was an appropriate approach for the time and for the situation. But we’ll definitely become more interactive with them over this next period.

Can I just come back to the gas fuel? I know Linda asked and I now you’re in arbitration, but can you give me some idea - - and I’m particularly concerned about the first paragraph on page 5 underneath the fuel reconciliation. That basically says you’re booking your best estimate at the new contract price and the difference between the outcome and – you’re your best estimate in this old price is being stuck into an accounts payable or an accrued charge? Can you just tell me the magnitude of this amount and what happens to it if your expectations are materially different from the outcome of the process itself and will this then all be charged against earnings through the balance of 2005 and how much are we talking? So if Q1 is not representative of the rest of the year and I can deal with that, what are we looking at here in terms of a potential problem or a cost that we’re deferring?

Karen, it’s Randy here. We can’t give you that number. We have made our best estimate of what an outcome of arbitration might be. And we’re not prepared to state publicly what that is for the obvious reasons.

I’m not interested in a price. How big is this amount that we’ve deferred in the first quarter?

Well you can take the amount and divide by a volume and come up with a price. And so I don’t really want to provide any piece of the equation.

Is this factored into your guidance for the year at the estimated best or whatever your best guess is for this amount?

Yes.

And then if we could just quickly go to the Maritimes and northeast amounts, we’ve got again a best estimate of $2 million in equity earnings in Q1 ‘05. Can you just explain what that is and again, the same sort of question will arise. How big is this best guess and how big is it different than what you could possibly get out of the process?

The best guess around Maritimes is because they are in the middle of a rate case around the Phase III costs and our understanding is that there are settlement discussions going on and we have made our best estimate of what we believe the likely outcome will be of those settlement conversations. And in terms of how far out could it be, I would not anticipate any material difference in our financial statement that would come from the outcome of that settlement conversation.

Great. Thanks very much.

Thank you. Our next question comes from Andrew Kuske, UBS. Please go ahead.

Thank you. Good afternoon. You’ve mentioned that you disagree with a lot of the judgment that came out about a month ago and disagree with the regulator’s view on your prudency essentially and really that’s what’s at issue. So how do you proceed from here? Do you decide to take a bit of an adversarial tone or do you decide to be very accommodative and try to work with the regulator and develop a more progressive environment?

Well, I think first of all, it’s important to us for the regulator to understand that we’re listening to them. That’s a very important step and I think there may have been some views expressed by the outcome of this that they didn’t think maybe we were listening to what they were trying to achieve here. And so I think it’s important for us to make sure that it’s clear that we’re listening. And then lastly, getting into confirmation, because we need to get a much tighter understanding of exactly what’s expected, and so we will interpret what we think it is, we’ll put that forward as an approach, we’ll go to the regulator, sit down and talk it through with them and get confirmation that we’re moving in the right direction and then move forward. And I think - -but from my perspective, the biggest issue is making sure that they understand we’re listening.

So it’s fair to say that you’re not going to really seek any legal recourse as to the fairness of the decision itself?

No. There are no plans to do that.

Okay. Then if we just sort of shift gears, this year is definitely a challenging year for you but if we look out into the future in a strategic sense, how would you see your regulatory environment, being really one that’s suited to your risks and the reality that you live in in Nova Scotia as far as relatively low growth in the market place and predominantly coal fired generation? What would you really like from a regulatory framework?

Well, I think if you look over the last few years, you’ll see that for sure the tone of the regulator towards the company we believe is clearly improved. And we also think that being coal fired is no bad place to be in this environment. Having said that, obviously there is volatility in the markets and we’re doing what we can to manage that through investments such as the international coal peer.

So what would be your ideal regulatory structure? Do you want to get away from really the cost of service type approach? A move to incentive mechanism? What would you really like to see in the coming years?

I think for the company for the near term right now is going to be working through on, I’ll call it a relatively traditional basis. And the point that you raised with regard to going forward is an important one that we intend to have conversations with our regulator around.

Okay, thank you.

Thank you. Our next question comes from Matthew Akman, CIBC World Markets. Please go ahead.

Hi. A question around the fuel budgets and how they look for the rest of this year and ’06 relative to what you had forecast.

Well, as we look at our various commodity positions, virtually we’re 100% hedged with either physically or otherwise for ’05 and we’re expecting that the increase in fuel cost, as Randy mentioned in his opening statement, will be reflected in substantially lower earnings for overall for Emera and specifically at NSPI

And what are you seeing for 2006?

Well 2006, again, at least at this point we’re in the process of updating our forecasts and really are not prepared to offer specific guidance just yet.

Not one way or another higher or lower? We’re kind of almost half way through the year.

Well certainly you look at, depending upon the market, you can see upward pressure in some markets and perhaps some softening in others, so a little difficult to say, but perhaps a little bit upward pressure overall.

Okay, just shifting gears on acquisitions. I guess this is for Chris. Given the state of the company and the regulatory situation and the earnings picture this year, does it make sense to sort of put acquisitions on the back burner for now and kind of get the house in order and then deal with that stuff later? Or are you still going to be aggressive on that front?

Well, thank you for that question because I think that’s an important issue for us. Overall, the investments that we’re looking to make right now in Massachusetts and Vermont we think still fit very nicely and we think are a good step in that direction. You know, we’ve said all along that we’re talking about singles and doubles, we’re not talking about huge investments here. But we believe that continuing in that kind of vein is still appropriate with where we are right now. I think we have a bit of a short term issue for 2005, but we believe that this will turn around as we go forward. And so with that same philosophy we think we should keep moving as we have been.

Okay, thanks. Those are my questions.

Thank you. Our next question come from Fi Lee, RIBC Capital Markets. Please go ahead.

Hi, I just want to follow up, sorry to keep hammering away at this, but back to the regulator again - - in terms of the most recent decision, I believe there was sort of two issues that seemed to come to mind. One was that you didn’t have long term contracts in place or rather that you didn’t react fast enough when you had an opportunity to sign some long term contracts And there seems to be a bit of second question going on by the regulator in its decision. I’m just wondering what is your strategy going forward to prevent the regulator from second guessing any future decisions you make and at the same time, I know you plan on consulting with the regulator and having discussions, but how do you at the same time balance that with reacting fast enough but at the same time having some sort of regulatory certainty that if you’re reacting fast, that you’re not going to get second guessed again?

Well it’s a very important question and part of what I had mentioned earlier in terms of more regularly reporting information to the regulator we think is an important step as well as perhaps giving consideration to a more, I’ll describe as prescriptive, fuel procurement mechanism that we might all agree on.

And has the regulator reacted to any discussions you’ve had so far in terms of what you’re doing?

At this point we’ve just had very, very preliminary conversations, so nothing I could tell you of substance.

And just I think it’s important to understand that in the sequence that we’re in right now, we’ve had the findings and the decision. We’ve now filed the compliance filing. We’re still awaiting an order and until we really have the order, then it’s hard to do much around this aspect. But I think it’s very important to reinforce what Ralph just said and that is that regularizing our procurement, regularizing when we’re in the market and regularizing and extending the length of time that we actually buy coal, is all part of what we’re going to do. We think that fits quite well with what the regulator has asked us to do.

Okay. And just turning back to Bangor-Hydro, it sounds like your sales volumes are going to be flat this year and that you had a price decrease so revenues will be declining this year. I’m just wondering - - but you expect earnings still to remain flat on a year over year basis for the whole year, I believe. How are you planning on offsetting the decline in revenue that’s through lower O&M, because O&M was up I guess in first quarter, but your MD&A talks about being declining over the year.

Yeah, I think over, through the course of the years, look at O&M last year compared to this year, it will not be up compared to last year. If anything, there might be some opportunity for reducing it as well. So that would be an attempt to both offset the reduced revenues to keep things flat.

All right. Thank you.

Thank you. Our next question comes from Karen Taylor at BMO Nesbitt Burns. Please go ahead.

Please, I just have a quick question regarding the new coal receipt facilities and whether any decision has been taken as to whether or not to put that in the rate base or continue to have it outside?

I think at this point, Karen, it’s Randy here. It forms part of the financial forecasting process that Ralph mentioned earlier that we’re certainly looking at the stuff very carefully and assessing what our options are for next year and we’ll be making decisions in the very near term on that.

So is that a no?

No it’s a yes. We’re looking at it as part of our financial forecast and what might be the best place for that asset.

So we don’t know yet then, is that what you’re saying?

No, but we will very soon.

Okay, thank you.

Thank you. Again, please press star one at this time if you have a question. And there are no more questions registered at this time. I would like now to turn the meeting back over to Mr. Huskilson. Please go ahead, Sir.

Thank you very much. Before we sign off, I want to thank everyone very much for their participation today and for their interest in Emera. And I want to leave you with this thought. Emera’s electric utilities are the foundation of our business. We will remain sharply focused on running them well for the benefit of our customers and our investors alike. We will continue to look for solid opportunities for growth in the northeast North America, to build on our expertise in electric generation, transmission and distribution. And I’d like to thank you very much and I hope you all have a great evening.

Thank you, Sir. The conference is now ended. Please disconnect your lines at this time. Thank you for your participation and have a nice day.