Emera Inc (EMA) 2008 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Emera third quarter results conference call. Please be advised that this conference is being recorded. I would now like to turn the meeting over to Ms. Jennifer Nicholson, Director, Investor Relations, and Strategic Development. Please go ahead, Ms. Nicholson.

Thank you, Atlanta. Good afternoon, everyone, and thank you for joining us on our third quarter conference call this afternoon. Joining me from Emera are Chris Huskilson, President and Chief Executive Officer, Nancy Tower, Chief Financial Officer, Rob Bennett, President and CEO of Nova Scotia Power, Greg Blunden, Vice President Finance and Treasurer, Nova Scotia Power, and Heather Keilor-Hirschman, Emera Controller. Emera's third quarter 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.

Today Chris will begin with the corporate update, and a high level overview of the financial results. Nancy will then review the third quarter financial results in more detail. We expect the presentation segment to last about 15 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, where segment results are reported in US dollars.

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 webcast and now I will turn things over to Chris.

Thank you, Jen, and good afternoon, everyone. I'd like to start by saying we had a busy quarter and I'm pleased with what we've achieved so far this year. As expected, financial results were weaker in the third quarter; however year-over-year results continue to be higher and we expect to have a good year-end. Contributing to the lower earnings were the fuel challenges that we experienced in the quarter, as well as two accounting adjustments. Earnings per share were $0.05 for the three months ended September 30, compared to $0.37 for the same period last year. Nancy will go into more detail about our results later in her remarks.

The Nova Scotia Utility and Review Board Approved NSPI's settlement rate agreement in its entirety on Wednesday. The agreement allows for an average 9.4% rate increase and the implementation of a fuel adjustment mechanism effective January 1, 2009. As you know, we've been working towards a FAM for a long time and we're very pleased with this outcome. We also note that the UARB brought closure to the outstanding issues of OM&G spending and executive compensation. We appreciate that any increase in the price of electricity will be challenging for many customers. As our regulator pointed out in the decision, the world price of coal, which is the main fuel we use to make electricity is twice as expensive as it was when rates were last set. Certainty about rates for 2009 allows the Company to focus on reliability and customer service as well as the addition of new sources of renewable energy which will help with price stability over the long term.

The Brunswick Pipeline is approximately 90% complete, and will be ready for gas before year-end. We now have about 600 people working on the project as it nears completion. The biggest technical challenge of the project, the 1.3 kilometer directional drill under the St. John River, was successfully completed in September. All right-of-way issues have been resolved and we have a clear path to completion. We continue to expect the capital costs to be $465 million. In the quarter, we purchased 25% of Grand Bahama Power Company, through our acquisition of 50% of the shares of ICD Utilities Limited. GVPC is located on Grand Bahama Island, the second most popular island in the Commonwealth of the Bahamas, less than 85 kilometers off the East Coast of Florida. This acquisition is immediately accretive to Emera and we believe the utility has significant potential in a favorable regulatory environment. We continue to see opportunities in the Caribbean region and will seek additional investment there.

In light of these developments, the Board of Directors increased our dividend by 6% to $1.01 per share annually on October 20. This increase reflects the Board's confidence in our business. We continue to work on transmission development in New England. We have over $100 million of new projects underway and are actively looking for additional investments. We're also looking at infrastructure opportunities in Atlantic Canada. The increase in renewable generation in the region will require additional transmission. Among other opportunities, we're preparing for this by planning to acquire new rights of way.

Work with National Grid on the Northeast energy link project continues. We're going through a rigorous process to get the project in front of State governments and regulators and other New England participants, and an important element of success is identifying firm supplies of clean energy to use the project. In addition, further studies are being done to determine the best way to share economic benefits, potential routing alternatives, and the best method of deploying the DC technology to be used.

In addition, there are exciting developments at Open Hydro. Electricity to [Frobs] group, a energy leader, has recently selected Open Hydro and its innovative technology to build the first title turbine farm in Brittany, off the coast of France. One turbine will be operational by the end of next year and an additional four to 10 turbines will be operation in the 2010-2011 time frame. Open Hydro was selected by EDF among leading title technology developers according to a robust technical, environmental and financial criteria. Here in our region, Open Hydro was currently completing its turbine for deployment in the Bay of Fundy, and this machine will be ready for sea bed installation in 2009.

I'd like to take a moment to welcome Don Tether to the Emera Ford of Directors. Don is the former Chair of Defasco,. Inc. Prior to his position as chair, he was President an Chief Executive Officer of Defasco. Don's extensive business experience acquired over his 36 years with Defasco will be a great benefit to Emera's Board and leadership team. Welcome, Don.

Lastly, Nancy, Jennifer, and I will be heading out next week to meet with investors across Canada and throughout the US. We hope to see many of you over the next month or so. With that, I'll turn things over to Nancy who will give you a more detailed update on our financial results for the third quarter. Nancy?

Thank you, Chris, and good afternoon, everyone. As Jennifer mentioned, our third quarter financial results were released earlier today and are on the Emera website. Emera's consolidated net earnings were $6.5 million in the third quarter of 2008 compared to $40.9 million for the same period in 2007. As Chris mentioned, quarterly earnings per share were $0.05 compared to $0.37 in 2007.

Two accounting adjustments had a significant negative impact on earnings in the quarter. Excluding these adjustments, earnings per share would have been $0.22. First, mark-to-market accounting losses in Bear Swamp reduced earnings per share by $0.07 in the quarter. In addition the valuation of a long term receivable in Nova Scotia Power decreased in the quarter, causing a further $0.10 reduction in earnings per share. This contract requires Nova Scotia Power to use a combination of historical and future natural gas prices in the valuation. Changing future prices caused a change in the value of this receivable. High forward prices at the end of Q2 caused a spike in value, lower prices have essentially reversed that in Q3.

Year-to-date, earnings were $118.8 million for the first three quarters of 2008, compared to $114.7 million for the same period in 2007. Earnings per share were $1.06 for the nine months ended September 30 compared to $1.03 for the same period in 2007, all-inclusive of mark-to-market accounting changes. Nova Scotia Powers earnings were $2.3 million in Q3 compared to $25 million in Q3 2007. Fuel costs increased in the quarter as expected. Two additional factors contributed to the quarter-over-quarter change in Nova Scotia Power. As I mentioned, the decreased valuation of a long term receivable reduced earnings by $10.8 million in the quarter. Excluding the effect of a long term receivable, NSPI's earnings would have been $13.1 million. As well earnings were also higher in 2007, due to a 10.8 million tax recovery in the third quarter last year, and NSPI 's outlook for the full year 2008 is to earn within its allowed range of rate of return.

Bangor Hydro contributed 6.5 million to consolidated net earnings in Q3 2008 compared to $9.1 million in Q3 2007. This decrease relates primarily to the capitalization of costs in 2007 related to the construction of the Northeast reliability interconnect transmission line. Emera's other Operations had a net loss of $2.3 million in Q3 compared to a contribution of $6.8 million in Q3 2007. This decrease relates to mark-to-market accounting changes in Bear Swamp offset by lower income taxes.

I'd like to take a moment to address the current financial market conditions. In these challenging times, it is worthwhile mentioning that we have sufficient capital available to us to meet our needs. We have approximately $500 million available on our credit facilities to access as required. We recently obtained $200 million in bridge financing for the Brunswick Pipeline project. We will obtain permanent financing for the pipeline likely early next year. We are evaluating our capital program as we always do, to insure we remain in the strong financial position for as long as this market disruption continues.

That's all for my financial overview. Thank you, and I will turn the call back to Atlanta, and we'll be happy to take your questions.

Thank you. (OPERATOR INSTRUCTIONS). The first question is from Linda Ezergailis from TD Newcrest. Please go ahead.

Thank you. Just some clarification, Nancy, on utilized credit facilities. In your notes, in your financial statements on Page 30, you said that there was an unused capacity here it says unused capacity of $400 million, and then somewhere else there was the $200 million with secured on October 3rd, post the quarter. And then I'm guessing that the $500 million would be netted that you cited would be netted of commercial paper or what's been used in the month of October or quarter to date?

Yes, it's really quarter to date but it is, we haven't drawn all of the $200 million obviously.

Yes.

So it's a combination of the number that we quoted in the financial statements as well as the undrawn portion of the $200 million which is around $500 million.

Okay, so the 500 million is netted of any sort of commercial paper you have outstanding?

Yes. It would be.

Okay. That's helpful. Now, can you just give us an update on your latest thinking of what your major capital projects would be and what your CapEx requirements are in Q4 of this year and in 2009 and 2010 at this point?

We don't have anything major, I'm looking at Ralph here, we don't have anything major in Nova Scotia Power in Q4 of 2008.

That's right. Nothing in Q4 of 2008 and next year is essentially a normal capital program with the exception of some work that we're doing in our Toughs Cove 6 project and some investments that we'll make in a new head office facility as well as some expenditures for mercury emissions compliance.

Okay. So then in Q4 of this year, will it be around $200 million or is that a high number?

No, sorry, Nancy.

Go ahead.

That's a high number. We'll finish the quarter with 50 or $60 million.

So 50 or $60 million in Q4 08? Okay. And then 2010 would be similar to 2009 normal plus some smaller projects?

That's correct.

Yes, in Nova Scotia Power.

Okay.

Bangor Hydro, again, I don't know the number specifically for Q4, Linda, but they've had a capital program running around absent the NRI it's been running around $50 million, and so probably a quarter of that would be a good estimate in terms of what their capital project would be and then we have some additional expenditures for Brunswick pipe, as we finish up that project.

Sorry, so the Brunswick Pipe would be what in Q4 08?

I'll take a look and try to get you that number and we'll come back to you with it.

Okay, that would be helpful. So in terms of I guess another comment in your write up, was discussed and I agree with it that you have access to the debt preferred and equity markets, can you give us an update on your financing plans beyond just terming out the debt on the Brunswick Pipeline?

We had the debt maturity in Nova Scotia Power this year which we didn't refinance and we have another one coming due through 2009 and we would look at refinancing those, Linda, once the credit markets settle down a bit. So I guess my point in terms of if we have adequate credit facilities that is obviously without accessing, we would be planning that without accessing the public debt markets. But certainly, our plan would be to do that later this year or in 2009, depending on what the market conditions are.

Okay, and then press and common?

So we have one of our issues coming due, and we're currently in the process right now of looking at what we do with the preferred shares, whether we go back into the market in 2009 with preferred shares or whether we refinance that with debt, again, will depend on what the market is telling us at that time.

And common equity there's no need for that, any external common equity at this point?

What we've said is we can finance Brunswick Pipe on our balance sheet and to the extent that's the only thing we do, we have no need for common equity.

Okay, that's helpful and final clean up question. Dividend policy of the Board, there's a bit of a jump up which is a good thing and I'm just wondering what we might think in terms of pay out ratio, et cetera, Going forward.

I think consistent with what we've said in the past 70 to 75% pay out ratio was really what we're targeting.

And that can be reviewed either annually or periodically when projects are progressing or whatever?

Yes, I would say so.

Okay, great. Thank you.

You're welcome.

Thank you. The next question is from Andrew Kuske from Credit Suisse. Please go ahead.

Thank you, good afternoon. If you could just give us a little bit of clarity on your strategy in the Caribbean and really what you're trying to accomplish over the short duration and then also over longer duration?

Andrew, it's Chris. Thank you for that question. I guess first of all, we've entered the Caribbean region primarily because we see it as an area that has some very high growth. It has some very healthy returns and it also has in our view a need for some of the skills that we bring to the table so those things are more or less the strategic fit from our perspective for that region. The other thing I think you can't ignore about Eastern Canada and the Caribbean is that theres a long relationship there. Hundreds of years in duration where a lot of business has been done between Eastern Canada and the Caribbean so all those things actually factor in. A lot of the people we meet down there have gone to school in Nova Scotia or somewhere in the East so it's a very familiar kind of relationship.

What we've told the markets is that over the next say three to five year kind of time frame we would like to deploy somewhere between 250 and $400 million of investment in that region. It's not a huge part of our total investment but it is the kind of investment that we think can be deployed over that period of time. So at this point, we've bought into the St. Lucia utility, now bought into the Grand Bahama Utility, we see those as key starting points for us and as what they do is they allow us to get a much better understanding of what's going on in that market and also where the opportunities are emerging and as we start to see that one of the things that we see is there assist real need for changes from a generation perspective in that marketplace so in St. Lucia as an example they now have a need to put a newer type of technology in place, things like renewables as a starting point but also some more base load facilities, so our skills are helpful to that business and in fact they see us as a strategic partner. We see the opportunity to invest from that perspective. We're just getting into Grand Bahama but I suspect some of the very similar kinds of things are there and those are the kinds of things that have lead us down this path and would allow us to continue I think to invest.

So then just a couple follow-ups related to the first question. Are you inclined to look at fully integrated utilities, generation through all the way through distribution versus just AT&Ds and then your ownership positions that you look for, will you be looking at majority or complete control of some utilities or are you happy with like you have in St. Lucia, just a small stake?

Well I think it all depends on the markets that we're actually working in and how the particular society or government actually sees this kind of investment so I guess first of all, integrated utilities are strengths so in fact if we can invest in a fully integrated way that's a good thing. Wires businesses and/or generation also fit, so for instance, putting some renewables in place on one of those islands is something that we might do separately as an example, and some of the islands are beginning to look at how that might happen. The other thing just when it comes to control or lack of control, what we always want to see is that the particular utility we invest in sees value in our investment and we won't invest unless the utility that we're working with sees value in that, so in the case of St. Lucia, clearly, the current Board and the current Management team see our relationship as a strategic relationship, and so it does allow us to influence and to help in ways that help their business and our business, so that's really the way we look at it. We don't necessarily look at whether it's control or not control. It is about influence from our perspective.

And then one completely different question, just as it relates to Brunswick, what exactly do you have left as far as the construction, you're coming close to the point of targeted date for completion.

So, well, I think there are still a few kilometers, I think less than 10, that are currently under construction from just a main line perspective and so that work is going on. As well we have about 200 different connection points that may need to be made and so those are beginning to happen, which would be the various tie-ins that have to happen across the system and then lastly there are a couple of critical road bores that are still going on and those are happening as we speak as well, so put that all together that actually gets the pipe into one piece and then we need to move into testing and then finally we would move into actually putting gas in the pipe. We're expecting that the mechanical completion will be sort of in the mid December kind of time frame and then we'll put gas in it either before or slightly after Christmas just depending on how that goes, and that will put us in a position where we're ready to receive gas from the customer.

Will you be doing hydrostatic testing or not ahead of putting gas in?

Oh, yes, absolutely. So the hydrostatic is a part of the process we go through as we're getting the pipe ready and then it will go through, it will be putting testing devices through the pipe as well and then the gas will go in.

Great. Thank you very much.

Okay, thank you.

Perhaps I'll take the opportunity to answer Linda's question which was what was the capital spending expected in Q4 which is about $100 million.

Thank you. The next question is from Matthew Ackerman from Macquarie. Please go ahead.

Thank you very much. On the Brunswick Pipeline, is the interest expense on the permanent debt a flow through to the customer or not?

Well, where we are right now, Matthew, is we have an AFUDC relationship built into the contract so the allowance for funds used during construction and also a return on those funds is actually built into the capital cost and at this point, with the amount of capital we've spent, it's sitting somewhere between 3 and $4 million a month now and so that all is going into the project.

I know but on an ongoing basis on a cost of service basis once it's in service, is the interest expense on the actual debt you issue for the project passed through to the customer? Because interest costs, cost of debt has gone up lately.

Well so let's just, that particular project is a contracted project based on capitalization rate and so on, so interest is something that we will raise the money and we would have had a projection of what that might cost when we did the business case in the first place, and at this point in time, the things look favorable to those numbers so we're in good shape right now.

Oh, so you still expect to earn sort of the solid double digit ROEs on the project that you anticipated initially?

Yes, if you go back to that we would still say the same thing about the project and one of the things we'll be doing is looking at how we'll report that next year as it begins to come in service.

What do you mean by "That"?

Well just as I expect we'll report it as a separate unit. Nancy may want to?

Just from a financial statement and MD & A perspective Matthew whether it looks like Bangor Hydro or whether it is in with our other Operations, I think my preference is to make it look more like Bangor Hydro and have it reported on a net income basis.

Okay, thanks. Another question on transmission but this time on electricity. There's been a little bit of noise and turbulence around ROEs in New England on transmission and I'm just wondering whether that's affecting your growth plans in that area of your business.

I'm not sure that I would characterize it as a lot of discussion around ROEs. I think the biggest discussion in New England has been about the cost of transmission projects and whether or not those costs are under control. I think that's been the part of the discussion that we've primarily been participating in and so I think that is causing everyone in New England to take a good hard look at transmission plans and so on. As we said earlier, I said in my remarks we still have about $100 million of transmission that's under construction. We're pretty comfortable with the way that's proceeding. We have in most cases, we actually have revenue requirements identified and approvals for those to go forward, and their returns are something that FERC will review over time as they always do, and we'll be comfortable with that when it goes forward.

But there is controversy over the ROE kickers on some of these projects, and I'm just wondering whether you feel comfortable you'll earn your hurdle returns on these project s if you're going to build them.

Well, we have been earning it and we have been comfortable that FERC has seen the benefit of doing that and in most of the market conditions they've seen the benefit as well, so I think the projects that we build are very solid projects, the Northeast reliability project as an example has made a real difference to that part of the market. It has brought 300 megawatts of new energy and capacity into that marketplace and hydro Quebec signed up for that right off the bat. I think that will be very helpful to that market so I think those kinds of things are still positive but at the end of the day it's a regulated investment. The regulation is under FERC's jurisdiction, and they will make their decisions as they make them. We're comfortable at this point that we're at the right place.

Okay, thanks, I just have one last question in a different area. You guys have been looking at moving more toward renewables and there's probably a lot of renewable assets that are for sale now, and RFPs are widening open I guess or opening up for new participants as some of the smaller cap companies, less well capitalized are more troubled, so is that an area where you think you now have an interesting opportunity to expand and earn better returns than you might have before?

Well I think as I said earlier we certainly see opportunities on the renewables front in the Caribbean. We think that's an area where there will be good returns. The fact that they are still burning oil as their primary source means that there is a pretty good return on a renewable investment there, so that's an area where focused on. As we look at this market, we're focused on renewables, acquiring renewables so that we can push more transmission into the region and if that ultimately means we find some good business opportunities then we would follow that path as well but we're still very cautious on that side because as you know, it's been difficult to make money in that area. I think one of the things that has to happen is that the suppliers have to begin to get a little more realistic about the cost of that equipment and I think if that starts to happen and the demand gets to a closer balance, then there could be some money to be made, but we're walking carefully and slowly.

Okay, thanks very much. Those are my questions.

Thanks, Matthew.

Thank you. The next question is from Robert Kwan from RBC Capital Markets. Please go ahead.

Good afternoon. Nancy, when you were talking about you financed Brunswick off of the Balance Sheet, I guess as you go forward here, what do you see after your normal CapEx program? What do you see as your annual acquisition capacity based on your cash flow and anything less that you think you can lever off the Balance Sheet?

I'll try to answer your question, I think I've understood it, Robert. What we've said really in the very next acquisition we do after Brunswick Pipe or the next Greenfield, we will have to finance with equity. Assuming though that we didn't do anything for some period of time, we would, cash would come back in and reduce some of those credit facilities, so I think that's really the way to look at it.

So is there a sense that you may be a little stretched on the balance sheet and you need '09 free cash flow to bring it back into line and maybe by 2010 if you do nothing you'll have some acquisition capacity?

Yes, Robert I'd say it a little differently and that is that we've got a lot of organic investments within our existing businesses that's taking up our free cash and that's really what's happening right now. We're spending as Nancy said 50-60-$70 million annually in Bangor on new transmission. We're spending a fair bit in Nova Scotia on environmental upgrades and as Ralph mentioned earlier an investment in Toughs Cove 6 so a new capacity and efficiency project, so we're having lots of projects within the business and that's really consuming our cash and so that's why at this point anyway if we went outside the business for another investment we would need to raise some debt and equity and I think that's where Nancy is. I think after the end of the decade we'll have some more capacity again and we wouldn't have to issue equity if we're out there.

Great.

Robert, just maybe to just say one more thing, we're well within our ratios in terms of bond rating agencies and certainly, covenants and all that sort of thing. I think what we really tried to do is not issue equity over the past number of years, and finance these on our balance sheet to the extent we could, so we feel very comfortable but that's the situation.

Okay, and then for NSPI given I think you answered, you gave the color last quarter that the receivable will be included in the UARBs ROE calculation. Is that also the same for the prior year tax recovery?

Yes.

And then last quarter, you made a statement I think it was on the call, not in the MD & A but that you expected to be at the top end of your range. Do you still feel that way?

We do still feel that way.

And then just my last question is on the AFUDC for Brunswick. If you look at the other section, I think it was 4.4 and then there's another number, 6.2 in the financing charges section, how do those two numbers reconcile? Is one just in equity?

Sorry, the Brunswick Pipeline, the 4.4 would be largely AFUDC before any interest.

Okay.

And your other, sorry?

The 6.2, is that more so just across all of the businesses?

Oh, that's in the financial statements?

Yes, it's in Note 6.

Just let me find that. So the 6.2?

Yes.

Yes, that's probably, that would be in I think Nova Scotia Power and Bangor Hydro where we call it financing charges.

Okay, and so there's no amount that you're capitalizing, there's no double leverage at Brunswick? Or there's no capitalized amount for double leverage?

Not sure I understand your question. We're capitalizing AFUDC which is the revenue source if you will that you see in the other.

Right. But for the equity component, you've used the Balance Sheet.

Yes, that's right. It's actually the capitalization at Brunswick is a prescribed rate in the contract.

Yes, I think it's -- It's 8.7% is the AFUDC rate, so it was an agreed number in the contract.

Okay, and is there any amount of interest being capitalized against what you've funded the equity component?

No. Is theres nothing else being capitalized other than the 8.7% AFUDC.

That's perfect. All right, thanks guys. Thanks Nancy.

Yes.

Thank you. (OPERATOR INSTRUCTIONS). The next question is from Bob Hastings from Canaccord. Please go ahead.

Thank you, I thought I got lost there. Just a couple of clarification questions maybe at this point. Is the, you had expected your ROE at NSPI to hit the top end of the range and you still do but is that $3 million, did you know that before and because I thought that was sort of a new item?

In terms of the tax amount, Bob?

Yes.

We've been working on that for some time, and we had some sense of it earlier on in the year, and but yes, so I would say that we did factor that in.

Well and the other thing Bob, you have to remember that we have a Settlement Agreement from the previous rate settlement that would say that anything we would earn above the return on equity cap would in this case, we don't have a normal cap but in this case we agreed to a cap and anything that we earned would go into paying back things like Section 21, so we're in a position where that's the number as far as from a settlement perspective.

Right, and I just wondered if there had been maybe a little degradation in the business that the 3 million sort of talked you up on but that's not the case?

No.

Okay, and no change in outlook for next year then at this point?

No, with the rate settlement, we're happy with that and could expect earnings in the allowed range.

That's right.

Okay, and you've talked about your basically if you're going to do another acquisition or make an investment in something new beyond Brunswick Gas for the next year or maybe two, you probably need new equity, so just given the kind of things you've been looking for and given the kind of market that we've been in, what kind of hurdle rates would you be looking at these days? Has that changed at all given the capital markets and that you might now actually need to raise equity?

Well, we've always kept at this point anyway the same hurdle rates. Now as you can imagine, with these markets, we're continuing to be aware of what's happening and making sure that we understand the cost of debt and we have a view of the cost of equity in this case, but any time we do a transaction or make an investment, we test it against our equity or our balance sheet, so we would look at 60/40 or so, so that we're not testing it against the debt number or a pure equity number. We're testing it against our balance sheet, and then the other thing is risk adjusted, so if we're doing business in the Caribbean we would have a much higher hurdle rate than if we're doing business in Nova Scotia Power and so we continue to look at those various risk adjusted rates. As Nancy said earlier, we will start to approach the market over the next little while and we'll get a better sense of what the cost of debt is and that will go into our thinking about these things.

Okay, and to be clear on looking ahead if you were going to raise equity, that would you be looking at you say your cash accretiveness or earnings accretiveness to the acquisition to be moved forward a bit, meaning there might be great investments but they may not make you any money for the first couple years?

Well, our test right now is that anything we do must be accretive to our business, and so if we were ending up issuing equity as a result of a transaction if it isn't accretive we won't be doing it so that's the discipline we've put on ourselves for the past number of years. We've felt good about it. It's worked for our business and will continue to be there.

And you mean accretive immediately?

That's been the test we've used.

Okay, great. Thank you very much.

You're welcome.

Thank you. There are no further questions registered at this time. I would now like to turn the meeting over to Mr. Huskilson.

Okay, well thank you very much for that and thank you for your participation on the call today and your interest in Emera. We look forward to seeing many of you over the coming weeks as we're out seeing investors and analysts and I hope you all have a great weekend. Thank you, very much.

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.