美高梅國際酒店集團 (MGM) 2002 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the Mandalay Resort Group fourth quarter results conference call.

During the presentation, all participants will be in a listen-only mode.

Afterwards, we will conduct a question and answer session.

At that time, if you have a question, please press the one followed by the four on your telephone.

As a reminder, this conference is being recorded Thursday March 4, 2003.

I would now like to turn the conference over to Mr. Glenn Schaeffer, President, Mandalay Resort Groups.

Please go ahead, sir.

Thank you, operator.

Good afternoon.

We welcome you to Mandalay's fourth quarter conference call and results for the period and for our fiscal year ending January 31, 2003.

I have with me today Les Martin, our Chief Accounting Officer.

Before I begin, let me make the customary disclaimers.

Information that we provide on this call may include forward-looking statements within the meaning of section 27 a of the Securities Act of 1933 and section 21 e of the Securities Exchange Act of 1934.

They can be identified by the fact they do not relate strictly to historical or current facts.

On this call, our forward-looking statements will be based on current expectations about future events.

They will include statements related to the construction of our 1125 suite tower at Mandalay Bay; our recently-opened convention center; and the expected results from these projects; our anticipated capital spending levels for the coming year; expectations with respect to our retiring our equity forward agreement; as well as synthetic lease agreement; future capital markets transactions; the potential impact of additional competition; the status of the development of our permanent casino in Detroit; future share repurchase activity and expected levels this year of our interest expense.

These forward-looking statements involve risk and uncertainties which could cause actual results to differ materially from those expressed or implied by my statements.

Information concerning factors that could affect our future financial results is included under the caption by the same name in item one of our annual report on form 10K for the year January 31, 2002.

We undertake no obligation to publicly update these forward-looking statements, whether as a result of new information or future events however any further disclosures made on related subjects in our filings with the Securities and Exchange Commission should be consulted.

The forward-looking statements have been provided as permitted by the Private Securities Litigation Reform Act of 1995.

Welcome to the brave new world.

Also, I want to establish how we will modify our dialogue with the Street and how we will now report under new SEC guidelines.

As to our quarterly and annual earnings releases, we will henceforth provide a supplemental schedule that reconciles operating cash flow to GAAP-defined operating income.

We still hold at Mandalay that cash flow is a critical metric within this industry and for investors in the stock market as a whole.

This new step meets the Regulation G disclosure guidelines that will become effective later this month.

Also upon request, Mandalay will continue to furnish supplemental schedules of our quarterly revenues, and operating cash flow by property, along with quarterly room rates and occupancy results by property.

As to our investor relations practices, we will formally institute what we have already emphasized in our communications for sometime.

We will not any longer comment on specific earnings per share by period but we will fully indicate factors and trends that drive our future results.

We will not review or critique analyst spreadsheets or earnings models and in the two weeks prior to quarter's end, until we release earnings, we think of ourselves as being a quiet period.

We believe the strategic direction validated by positive trends of our results over a multi-year time frame is the course to building shareholder value.

It's the very basis on which we base our share repurchase plan.

We further believe Mandalay is on such a positive course as reflected in our purchasing power, brand identity, rising cash flow and climbing returns on capital apart from any momentary macro economic forces.

In our fourth quarter, the company generated $120 million in operating cash flow and that compares to $101 million a year ago.

After sorting out the nonrecurring items, earning per share on an operating basis was 15 cents versus a 10 cent loss in last years fourth quarter and this is in line with our recent announcements.

The strength in the quarter came from Mandalay Bay which earned $29.7 million in operating cash flow.

Again $16.8 million in the prior years fourth quarter.

After a relatively weak December, our January was a definitive upside month, mostly due to the new convention center at Mandalay Bay which hosted 65,000 show attendees in its first month of operation.

Also, it should be noted that the fourth quarter in the prior year was compared by a travel downturn in the aftermath of 9-11.

At Luxor, we generated $22.6 million in operating cash flow against $15.3 million.

This increase was spurred by a 35% uptick in REVPAR.

Excalibur posted $15.5 million in operating cash flow, against $13.5 million while CIRCUS CIRCUS Las Vegas reported $9.6 million in operating cash flow against $9 million.

At our 50% owned Monte Carlo we produced $19.3 million in operating cash flow against $13.2 million, another story of robustly better REVPAR comparisons quarter over quarter.

REVPAR at our five resorts on the Las Vegas strip rose more than 20 percent in the fourth quarter compared to a year ago.

This is the metric to which our company's operating cash flow, free cash flow and earnings are most sensitive.

Elsewhere in Nevada, we compared $1.1 million operating cash flow as CIRCUS CIRCUS Reno against $1.5 million a year ago and at Silver Legacy the cash flow was $6.1 million versus $7.4 million.

We own 50% of Silver Legacy.

Reno, unlike the Las Vegas strip, was not much affected by 9-11 a year ago but appears more prone to economic lull in California and the expansion of Native American gaming in that state.

Laughlin results, likewise fell behind quarter a year ago, we compared $1.9 million against $3.8 million in operating cash flow.

In Illinois, our Grand Victoria posted $23.8 million in operating cash flow versus $34.7 million.

We own half the boat.

Reflecting the substantially higher tax rate on casino revenues that was imposed last July.

In Detroit, MotorCity casino generated $27.9 million in operating cash flow against $30.8 million while in Tunica, Mississippi, our Gold Strike produced $4.8 million in operating cash flow versus $3.8 million in fourth quarter last year.

We are one month into our 2004 fiscal year.

Our $235 million convention center at Mandalay Bay has begun well.

We have booked approximately 60 shows for this year which will deliver an average room rate of $175 on 18% of our projected room nights which essentially doubles our convention-booked rooms at Mandalay Bay year over year.

The REVPAR trend on the Las Vegas strip for the month of February was positive and for our company, it was up almost 10%.

While I frequently cite March as one of the most representative months of the year, the Iraqi conflict will not help us any time soon.

Plus last year, the valuable Con-Agra show filled rooms up and down the Las Vegas strip at higher rates and is not in this year's mix.

Training for war, for a town filling convention is a negative but bookings, and this is somewhat striking, otherwise are holding up relatively well in light of the war drums.

If our reservations are any litmus, the American consumer believes that the coming conflict is to be short and swift.

I know history is not a strong suit on Wall Street, but in the two prior disruptions concerning our country's enemies in the Middle East, the securities of our industry were remarkable rebounders in a hurry.

After 9/11, our company shares went down to $14 and back to $37 in six months.

In 1991, our company shares doubled in value in the six months after the shooting.

Our Board has authorized us to repurchase as much as 10 million shares or approximately 17% of our float.

By the end of this month, our total outstanding shares will be 59 million.

One of our targets is to distinctly increase free cash flow per share and in a stock market plagued by vaporous earnings and wiggley promises, there's nothing like cash.

It is the real thing and not everybody has it.

We believe that between our top-line growth, mainly by REVPAR improvements in the next year or two, and our continuing systemic recap of this company, we can surpass $6 free cash flow per share while also improving our credit statistics.

It would be unusual in the consumer sector for a franchise player like Mandalay Resort Group to remain selling at these level of share prices with this kind of free cash flow yield.

Looking ahead for this year, we can give you pretty definitive readings on the non-operating or expense categories.

Our interest expense should be between $200 and $210 million which, by the way, is a figure below last year, even as we will have reduced shares outstanding by more than 10 million year over year.

This has a significant bottom line benefit as to earnings per share.

We have refinanced some debt at lower rates and have adjusted our floating to fixed rate ratio in terms of our debt mix to take advantage of historically low interest rates.

On the depreciation front, you should expect a figure between $155 and $160 million.

The math becomes rather compelling if REVPAR can rise on this trip this year.

There's never been two down years consecutively in this city's long history and seldom any down years at all.

Whatever the REVPAR comps are on the Las Vegas strip in the coming year, Mandalay will outperform its Las Vegas competitors because of the presence of the convention center which is, by the way, the largest privately controlled meeting space in the world.

Our tax rate for the fiscal year ended 2004 will be around 36%.

This past year, it was closer to 40% and the catch-up effect came in our fourth quarter.

We will open 1125 suites at our new tower at Mandalay Bay in November and that's a $230 million project.

This year, our Cap Ex should run close to $350 million, most of which can be covered by our free cash flow.

Apart from any additional share repurchases, we will be net borrowers below a figure of $100 million.

In future years, from what we can see today, this company will be a decapitalizer, both equity and debt, even as our earning power rises.

Free cash flow, free cash flow, free cash flow.

As for what mild topline increases can mean, a 5% improvement in revenue for this company now magnifies into multiples of that percentage in EPS due to the positive operating profit leverage and our financial leverage.

As to our financial leverage, we're in a comfortable zone.

We could achieve 3.5 times coverage of EBITDA to total debt service this year which is pretty much BBB status in most industries.

We will put in place a $300 million term loan facility with a consortium of our banks within the next month or so, which is sufficient to cover any debt repayment for the year.

Meanwhile, when prices beckon we will term out some debt in the senior notes market.

So with that overview of what's behind and what lies ahead, I would be pleased to entertain questions.

Operator?

Ladies and gentlemen, at this time, if you would like to register a question, please press the one followed by the four on your telephone.

You will hear a three-tone prompt to acknowledge your request.

If your question has been answered and you would like to withdraw your registration, please press the one followed by the three.

If you are using a speaker phone, we ask please lift your handset before entering your request.

Our first question comes from the line of Lawrence Klatzkin from Jeffries.

Please proceed with your question.

Hi, Glen.

Hi.

A couple of things.

I wonder, could you just do the Cap Ex for the fourth quarter?

The fourth quarter Cap Ex was - I think $83 million and capitalized interest --.

It was about $4 million, Larry.

And your cash on hand?

$148 million.

$148 million, I could live on that.

As far as Elgin goes, could you just give - if you take out the taxes, how did it actually do apples to apples?

We would be comparing straight up.

Yeah, what is that?

It would be straight there.

Basically the same number we had a year ago.

It would be flat, okay.

And you guys see yourselves looking at any of these riverboat markets or any kind of expansions in other jurisdictions ?

There is not much presenting itself as an opportunity, certainly we would have interest in that tenth and final license in Illinois if someone would express how to apply.

Other than that, we think we can make more money for the shareholder buying low price shares right off the free cash flow yields.

Okay.

And as far as the convention business goes, how are your bookings for next year going?

Stronger than expected.

One thing that is working in our favor all the more is positive word of mouth.

Okay, and what is long-term debt at year end?

At year end, our long-term debt sat at 2.763 million. 2 billion 763 million.

Alright, thanks, Glen.

Our next question comes from the line of Joyce Minor from Lehman Brothers.

Please proceed with your question.

Hey, Glen.

Can you talk about any kind of breakage that you found in February?

Was convention attendance in line with your expectations relative to early bookings or did Iraq effect that at all in February?

Iraq is having no effect on our convention attendance and I don't think in this town, it may in other cities.

Our early experience with the convention centers, not only are people pleasantly surprised with what they purchased but the show promoters are making more money, attracting more vendors, and higher dollar accounts than they promised.

Hmmm.

Okay.

And then I think that fourth quarter is typically your seasonally your strongest.

Could you characterize for us what kind of utilization that you would expect to get from the convention center in first quarter and then sequentially how you would expect to see that decline in the balance of the year?

The strongest two quarters for the convention center will be first and third.

In 17 of those 60 shows are first quarter shows.

March, as I indicated in my preface, March is typically one of the more indicative months of the year.

What makes this March a little different, so we get an asterisk after it, is the fact that we had a Con-Agra show, which basically filled everybodys' rooms on the strip at very high prices in the middle of the month last year, this year we have the Iraqi war.

So that will not make comparisons easy for this particular month.

Absent that particular issue, REVPAR trends on the strip are positive, and I would expect even with that issue, unless there is misplay in Iraq, that we would be positive REVPAR in this company on the strip in the first quarter.

Okay.

And how many shows in the second quarter?

I don't have the number of shows in the second quarter, Joyce.

If you can call Les, we'll give you the schedule.

Okay, thank you.

Next question comes from the line of Joe Greff of Fulcrum Global Partners.

Please proceed with your question.

Hi, Glen.

Hi, Les.

Hey.

The new share repurchase authorization, does that include the equity contract?

The Ford equity contract?

No, it is beyond the equity contract.

We will close that contract on March 29th at which point we'll have 59 million shares outstanding.

As to when we buy the next 10 million shares, that would bring us to 49 million shares.

And that 59 million share count, Glen, that you're talking about - that's basis shares, right?

Yes and the diluted number won't be much different.

Great, and just to clarify, you mentioned the company-wide REVPAR is up 10% on the strip?

Yeah, close.

A good step up from February a year ago.

How much stronger was Mandalay versus Excalibur and Luxor?

Mandalay was the biggest strength without question.

I mean, Mandalay was up considerably from where it was in February a year ago and it was driven by the convention center.

And your early read on April, notwithstanding that it is kind of difficult to kind of look at March, what is your sense of --.

Well, Joe, you still have short window booking in this business, however and anyway it is fragile, it is gonna be - this can be prone to news coverage.

But consumers at the moment, as I said, are behaving as if this is going to be a short, swift event and April looks like it is shaping up pretty decently.

One thing you have is you have the Easter holiday that matters to us falling in April this year as opposed to March of last year.

The next question comes from the line of Jeffrey Logsdon from Gerard Klauer.

Please proceed with your question.

Hi, Glen.

Hi, Jeff.

The Detroit marketplace, there's been the legal wranglings, the sixth circuit court, any update on the Lockheed drive and what's happening there?

Nothing to report yet.

It is clear that probably a view from both sides, although I can't speak for them, from our side which is the Street casino operators in the city, that we would like to move ahead and do that through some form of settlement.

It certainly is in the city of Detroit's interest if they want hotel rooms in enough number to properly host a Super Bowl in January' 06.

If we made the presumption that could be settled sometime this year, how would that affect Cap Ex in fiscal 2005-2006?

Well, it is not our Cap Ex.

It would be a partnership responsibility and we'd do it between free cash flow coming from the property itself and we would most likely increase our bank facility.

So your capital contribution would be diminimus?

Diminimus to nothing.

Producing the free cash flow then some borrowing under our bank facility.

Okay, great, thanks, Glenn.

The next question comes from the line of Robin Farley at UBS Warburg.

Please proceed with your question.

Can you talk a little more about [INAUDIBLE] issues in the quarter versus last quarter to get a sense of what the contribution was from the last quarter?

There was not a significant variation from one quarter to the next.

There are some months that [INAUDIBLE] to each other.

We ended up with a pretty normal percentage at Mandalay despite the luck of some Chinese gamblers the last five days of December in the quarter we just ended.

I think that last year you had said that [INAUDIBLE] costs for Mandalay --.

Yes, typically somewhere between 17-21%.

Last year, we were probably a little below where we were this year.

And let me explain.

The number that happened here was because of REVPAR comparisons.

More and more, this is a hospitality company.

If we also wanted to get a sense of the shift with the Super Bowl shifting from February back to January this year with the Chinese New Year being half the impact this year being in January instead of February, just to figure out what we can expect of the April quarter --.

Not meaningful.

What?

Not meaningful.

There was not a meaningful --.

This convention center driving these room rates and food and beverages revenue is the explanation.

There is nothing in the last ten days of the quarter that will talk about the April quarter in a few months that will affect comparisons --.

I can tell you February was a lot stronger compared to February a year ago.

That January was to January and they were both huge comparisons because we have the convention center filled out there.

And just in terms of housekeeping items, can you give a little guidance for rent expense and also where your interest rate is right now?

You mean average interest rate on our debt?

Yeah, sort of going forward.

I think that we're going to be probably -- we'll be, by the end of the year, right around 7% in terms of our average blended cost of debt in this company.

7% by the end of fiscal' 04.

The one we're in and will probably take another 15 - 20 basis points off our cost of debt this year.

And the guidance of rent expense?

That should be somewhere around $30-$32 million.

Okay, great.

And then last question is, with the property rates.

It looks like in three of the last five quarters you've written down some of the properties, is this an ongoing process or are you at a point where you have evaluated all the properties at this point --.

It is really the smaller properties that have felt the effect of Indian gaming in California.

So Les, where do you think we are?

I agree, Robin, I don't think there's anything else written down.

We do have goodwill still on the books but it is not a situation where it would - be considered to be possibly imperative in the near future.

Okay.

Great.

Thanks very much.

Next question comes from the line of David Anders, Merrill Lynch.

Please proceed with your question.

Okay thanks.

Just a clarification on the share count.

Are you at 59 right now or you will be at 59 million shares on a basic basis on 3/29?

I missed that, I'm sorry.

The latter part.

On March 29th, on a basic basis we'll have 59 million shares.

Okay.

And that will go up to pay for those --.

$100 million.

Got it.

Thanks.

Ladies and gentlemen, as a reminder to register a question, press the 1-4.

Our next question comes from the line of David Lebowitz from Burnham.

Please proceed with your question.

Okay.

Congratulations on some really great numbers and the outlook makes it sound better.

Briefly, Glen, you indicated that when you work through the numbers, we have a goal of $6 per share free cash flow?

Yes.

Did you put a time on that?

Yes, sometimes -- sometime in the next fiscal year.

Fiscal '05, excellent.

Thank you very much.

The next question comes from the line of Jake Cogan from Banc of America Securities.

Please proceed with your question.

Hey.

Good afternoon, Glen.

A couple questions for you.

First on the buyback.

I just have a question on what kind of leverage are you guys comfortable going with over the next year or so if you do aggressively go after the new $10 million authorization?

And on the convention center side, you mentioned F and B and I was wondering if you could talk a little bit more about what the increased traffic is doing to food and beverage throughout the facility and on top of that, could you talk a little bit about service levels and how they have been relative to expectations?

Well, on the first part, we're improving credit ratios apart from any share repurchase.

We would have -- and we only have two governing covenants in this company and then the bank covenants.

And as we indicated a few weeks ago, they have been widened on the part of - by the hand of our banks but we should be in the low -- we would otherwise be in the low fours in terms of total debt to EBITDA.

And on the second one.

Which is a coverage of total debt to service, EBITDA coverage.

We should be about 3.5.

I would say that those are comparable to our competitors in this space who have investment grade credit ratings.

We have been, you know, because we are a systematic share repurchaser, we have been a notch underneath them but our credit ratios are quite similar.

The second question on food and beverage revenue, higher than we anticipated.

We will make more profit at Mandalay Bay in food and beverage than we anticipated and this is not a huge number but several millions of dollars and it is clear quite early on, we need more restaurant seats and more lounge seats at Mandalay Bay so you will see that happening as the year plays out.

Third, service levels, you have to ask me.

I am seeing comment cards from people breaking in to a business in a very big way that we have not traditionally been in, but we should be getting quite favorable responses to the quality of experience that the delegates and the show sponsors are receiving.

Let's put it this way, I guess, with respect to service levels, are you having any issues where you have had early convention groups come into the facility and say, you know, the service is so bad we're not going to book going forward or have you heard the opposite?

I haven't heard that.

Have you heard anybody say that?

No, I haven't.

That's why I am asking.

[ laughter ] I thought you were gonna lead me into something.

No, we see the opposite thing happening.

The hardest time to sell convention space is before you have opened it and people have experience or sampled it.

The community of show sponsors and meeting planners is not all that large.

We understand that our word of mouth is quite strong and convincing and, in fact, it's getting easier to sell shows in next year and the year after given the early experience reports of people who have actually sampled the product.

Alright.

Thank you.

Yes.

The next question is a follow-up question from David Anders, Merrill Lynch.

Please proceed with your question.

Hi.

Glen or Les either one.

When you guys made the comment that your 15 cents in the quarter excluding one-time items, did you make any adjustment to the tax rate with that scene snare.

We knew we had some catch up to do with audit years and we knew that was coming in the fourth quarter.

I suspect - if your question is - if you just had the normal tax rate in the quarter, would the operating earnings have been higher, yes.

Thank you.

Our next question comes from the line of Daniel Davila, from Hiburnea South Coast Capital.

Please proceed with your question.

Thank you.

Good afternoon, Glen.

Hey, Danny.

First, I just want to make sure I heard you correctly and I am not leading you down the path.

Well, I need to you lead so be careful.

With 59 million shares outstanding - basic shares outstanding at March 29, would it be safe to say that a year from that point you will be at 49 million shares outstanding?

I can't make that prediction altogether, Danny.

It is gonna depend on where stock prices are.

I will say, given the point of view we have on free cash flow per share in this company and the kind of yield we have, if you look at the relationship of the stock price and the free cash flow, this is the best we've seen.

And we bought last year and through the fourth quarter, we bought 7.5 million shares in the last year.

We bought 4.5 in the fourth quarter.

That is a good segue because maybe you could comment on whether or not you are gonna buy somebody else's shares via acquisition or contemplating that at least?

We like ourselves.

We do see the fact that we're able to grow earnings per share and free cash flow per share at above average rates.

Whatever you think the S&P is going to do, this company is going to do better in anything like a normalized consumer environment and our consumers are acting more normal than not right now, so with that much said, the easiest, you know, return, we think, in terms of being in the market is buying our own shares.

Lastly, you mentioned that your 60 shows for the convention center, is that a contracted rate, the $175?

Yes.

That is for Mandalay Bay?

Mandalay Bay.

Do you have contracted rates for Luxor and Excalibur?

Well, I can't quote them off the top of my head. [INAUDIBLE] we'll sell 18% of our room nights and let's just say [INAUDIBLE] 35% of the room nights at Mandalay Bay will have been sold to the convention segment.

By next year - well, by '05 calander year, the third year we're in business in the convention center, inclusive now of the 1125 all-suites in the tower, we will be running 45% of our room nights at this property in the convention segment.

So whatever the growth rate is on the Las Vegas strip in REVPAR, our company, mainly because of Mandalay Bay, will be at least 200 basis points faster and that goes right to the bottom line.

Okay, and I get one last question.

So head fake here.

Your expenses came down -- I mean I think that is probably unexpected.

I mean, is there a reason for that?

Which line?

The cost of expenses came down relative to last year's levels.

The staffing, is that staffing?

Yeah, it is the staffing because we made permanent savings from the layoffs we did post 9-11 and then the other thing, keep in mind the depreciation which was part of that is quite a bit lower this year versus last year.

You had Detroit change to a normal depreciation --.

It changed from a temporary facility to a permanent facility.

And goodwill amortization disappeared, et cetera and those types of things.

Okay.

Thank you, gentlemen.

The next question comes from the line of Ray Cheeseman from Jefferies& Company.

Please proceed with your question.

Congratulations on some very nice results, Mr. Schaeffer.

I have two questions for you.

The first was, would you give us your outlook for the way you think the tax discussions in your home state of Nevada may shake out this year?

Well, you learn something new when you pick up your paper in the drive but the idea is there would be a broad based tax in the state of Nevada may shake out this year?

Well.

If you learn something new every morning, you pick your paper up in the driveway.

But the idea so far is that there be a broad base tax business, aimed tax, in the State of Nevada.

Not quite the sole but certainly the principal payer of tax in this state has been our industry and the proposal on the table - proposal from a joint tax policy committee appointed by the governor is that we would have a 25 basis point increase in the gross casino revenue tax.

That, for us, as described in that recommendation would be a few pennies per share on an annual basis.

The second question would be there are two legislators trying to pry open the door to get you more positions in Illinois.

Do you perceive them to have a reasonable chance of success?

We welcome all hands toward that act of liberation.

We'll see.

Certainly in the closing moments of last year's legislative session in Illinois, there were gestures made to the industry and, look, there's a motive for the state of Illinois to allow to us generate more revenue.

Because on a vessel like ours, they get 50 cents out of every dollar we make here.

So more positions or the ability to serve more customers is clearly in the state's best interest.

You also mentioned during your comments, if I may, I have just one last question, that some of your properties were being, the smaller ones, were being impacted by California tribal capacity growth.

What do we see for Reno going forward?

I think Reno is going to have its challenges this year particularly in the back half when the Auburn facility, which is going to be managed by Stations, which is right in the market sound of Reno opens.

It will have only a certain number of machines and the issue is the pressure it puts on some of your mid-week business, not the weekend business.

But if I look at all our non Las Vegas assets in the state of Nevada and look at are expected EBITDA, the delta if you will, from what Indian gaming would mean to those border towns, [INAUDIBLE] operations would be- would not be as much as 1% of our total EBITDA.

Okay.

Thank you very much and congratulations on the successful opening of your big center.

Thank you.

The next question is a follow up question from the line of Robin Farley, UBS Warburg.

Please proceed with your question.

I just want to clarify a comment.

It sounded like earlier somebody was asking about operating expenses and you said they had gone down but if you back out -- I am not seeing that and maybe it is just the way it is broken out in a couple of different places but outside of depreciation it, looks like expenses were up maybe up slightly.

Is that a fair statement?

Yeah, it would.

Not too much of which is revenue.

Okay, thank you.

If there are no further questions at this time.

I will now turn the conference -- my apologies, the next question is we do have is from the line of Edward Barr from ES Barr and Company.

Please proceed with your question.

Glen, just some quick clarification.

On the $6 of free cash flow per share, is that pre maintenance Cap Ex or after-maintenance?

After maintenance Cap Ex using a number like $75 million per annum.

Thank you.

Ladies and gentlemen, as a last reminder, to register a question, please press the 1-4.

I am showing no further questions at this time.

Mr. Schaeffer, I will now turn the call back to you.

Thank you very much.

Les Martin and I will be available for any further questions.

Ladies and gentlemen, that does conclude the conference call for today.

We thank you for your participation and ask that you please disconnect your line.