NiSource Inc (NI) 2012 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to your Q2 2012 NiSource earnings conference call. My name is Delue and I will be your operator today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference.

(Operator Instructions)

As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Glen Kettering, Senior Vice President, Corporate Affairs. Please proceed, sir.

Thank you, and good morning. On behalf of NiSource, I would like to welcome you to our quarterly analyst call. Joining me this morning are Bob Skaggs, President and CEO; Steve Smith, Executive Vice President and Chief Financial Officer; and Randy Hulen, Managing Director of Investor Relations.

The focus of today's call is to review our financial performance for the second quarter of this year and to provide a business update. We will then open the call to your questions. At times during the call, we will refer to the supplemental slides available on our website at www.nisource.com.

I would like to remind all of you that some of the statements made on this conference call will be forward-looking and these statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning those risks and uncertainties is included in the MD&A and Risk Factors sections of our periodic SEC filings.

And now I would like to turn the call over to Bob Skaggs.

Thanks, Glen. Good morning, and thanks for joining us.

Today's agenda is focused and brief with plenty of time for questions. We will first review our second quarter earnings which at mid-year continue to be solid, sustainable and on track with our 2012 outlook. We will then touch on key achievements across each of our business units. We will next provide additional color on our gas transmission system modernization effort, as well as our significant midstream projects in the Utica and Marcellus Shale regions. And then we will open the lines to your questions.

Let's start with a few key second quarter takeaways which you will find on slide 3 of the supplemental deck posted online this morning. As you can see, each of our three business units continues to deliver on a robust combination of infrastructure, modernization, growth , and regulatory initiatives that together deliver significant benefits for our customers and solid value for our shareholders.

Here are a few highlights. First and foremost, we advanced several key gas transmission and midstream initiatives. We also saw steady earnings growth from our ongoing industry-leading system modernization and regulatory initiatives. To date, those efforts have focused primarily on our gas distribution business, but we are now expanding that scope to include our gas transmission system.

During the quarter, we also took steps to reduce our financing costs and strengthen our financial foundation. This disciplined financial strategy provides us with the flexibility to support our deep and growing inventory of earnings accretive capital investment opportunities. For 2012, those investment opportunities total over $1.4 billion. We also continued to build shareholder value when our Board announced a 4%-plus annualized increase in NiSource's dividend, great news for shareholders, particularly when coupled with our ongoing earnings growth. And finally, as I noted earlier, our teams' continued strong performance enabled us to confirm that half of the year, we are on pace to achieve our 2012 non-GAAP earnings guidance of $1.40 to $1.50 per share.

So with that backdrop, let's take a closer look at our second quarter results, starting with our financial highlights on slide 4. As you can see, NiSource delivered net operating earnings non-GAAP of almost $67 million, or $0.23 per share for the three months ended June 30. That compares with about $47 million, or $0.17 per share, for the second quarter of 2011. Our operating earnings for the quarter increased from about $164 million to over $202 million.

On a GAAP basis, our income from continuing operations for the quarter was about $71 million compared to about $41 million in 2011. Schedules 1 and 2 to our earnings release shows the GAAP to non-GAAP reconciliation.

Let's turn now to our individual business unit results, starting with our NiSource Gas Transmission & Storage operations, highlighted on slide 5. Needless to say, it was an extremely busy, productive quarter for CEO Jimmy Staton and the entire NGT&S team. And that progress has continued into the third quarter.

From a numbers perspective, NGT&S had a solid quarter generating operating earnings of nearly $92 million compared to about $85 million for the same period last year. The primary revenue drivers were growth projects placed into service, as well as increased equity earnings from Millennium Pipeline. The team also continued to develop and execute infrastructure investment opportunities in existing and new markets, including midstream projects to serve the Utica and Marcellus Shale regions. Most notably, we recently announced two expansive ventures with affiliates of Hill Corp. Energy in the heart of the liquids-rich eastern portion of the Utica. One arrangement is focused on developing and midstream infrastructure and the other is focused on hydrocarbon development.

Now prior to discussing the dimensions of the Hill Corp. deals, I need to provide a caveat and make a pitch. The caveat is that because Hill Corp. is fully engaged in the very competitive acreage acquisition mode, we simply cannot provide extensive detail. However, this morning we will certainly provide meaningful highlights and a bit of color around the deal's key elements. And that leads to my pitch.

I know that you are eager for more information on our midstream progress along with our other growth initiatives. I ask you to please stay tuned. We're looking forward to sharing additional details, un-peeling the onion, if you will, at our upcoming investor day. That will be on September 12 in New York City, with an online simulcast. So now back to Hill Corp.

Hill Corp. is one of the nation's leading independent oil and gas producers with an outstanding track record of operational success, including deep experience in shale development and with notable financial strength. For us, an absolutely great fit. Our infrastructure JV, called Pennant Midstream, will invest about $300 million in its first phase with in-service during the second half of 2013. In the 50/50 partnership, NiSource will construct and operate facilities and contribute half of the required capital.

Once construction of the first phase is complete, the system will provide about 400 million cubic feet per day of gathering capacity and approximately 200 million cubic feet for per day of processing capabilities. I'd note that although the first phase of the gathering system is anchored by Hill Corp.'s production, the network is being engineered and built with expansion in mind. This includes additional processing capacity and pipeline facilities as producer demand in the area evolves. To that point, we are actively marketing that capacity. Ultimately, we expect the total Pennant investment opportunity could easily exceed $1 billion.

Directly tied to the infrastructure JV is a separate joint arrangement with Hill Corp. focused on developing the hydrocarbon potential on a significant combined acreage position in the Utica. NiSource contributed roughly 14,000 acres of mineral rights in northeast Ohio. In return, we are receiving up front cash and a carried interest to help fund our interest in the total combined acreage position. In effect, the arrangement provides for a self-funding, non-operating working production interest plus royalties.

All told, these interests could amount to over 5% of the combined acreage, plus the joint arrangement provides for a multi-year drilling program that is already underway with significant base case production building in 2013. And last, but perhaps the most compelling strategic value, that I suggested a moment ago, the entire multi-county area of mutual interest is dedicated to the Pennant infrastructure JV. So to say the least, both of these agreements are significant for NiSource. They provide a near- and long-term earnings growth opportunities via core infrastructure investment, as well as leverage our strategic mineral interests. They also provide a model of what we hope to accomplish across our remaining acreage position as delineation, development and producer activity in the Utica region continues.

One final midstream update. Work is continuing on the $150 million Big Pine Gathering System in western Pennsylvania. Anchored by a long-term agreement with XTO Energy, this project is expected to be in service this December.

In addition to our midstream progress, NGT&S continues to build an inventory of customer-focused expansion opportunities along our existing system. For example, Columbia Gas Transmission and Columbia Gulf Transmission are moving forward with our West Side Expansion project which will help address changing supply and market demands by reversing a part of our system. The change will enable us to transport about 500,000 dekatherms per day of Marcellus production originating in southwest Pennsylvania and north central West Virginia to Gulf Coast markets. That is an approximately $200 million project with in-service targeted for late 2014.

Development is also continuing on our East Side Expansion project, which I mentioned on the first quarter call. That project would also help address changing supply and demand dynamics in the highly competitive and capacity constrained Eastern markets. As a reminder, to help you track these projects, we have a map and project slide on page 9 of the appendix in our supplemental slides.

Before moving to our other business units, one final update. That is progress on the Columbia Gas Transmission modernization program. As you know, we have been engaged in a series of discussions with our customers regarding a comprehensive long-term infrastructure modernization program.

Similar to the programs that our gas utilities, we view this as a win-win from a customer and public policy standpoint. It will enhance the reliability and flexibility of our pipeline system and ensure continued, safe and reliable service. It will also generate jobs, fuel economic growth, and position our system well in advance for anticipated regulatory requirements. In total, we expect the plan could involve an investment of about $4 billion over a 10- to 15-year period.

Our discussions with customers are covered by nondisclosure agreements, so I can't say much at this time, other than they are advancing and we hope to have news to share with you by investor day. As I have noted on prior calls, our goal is to reach a comprehensive agreement with our customers and other stakeholders, and submit it to the FERC for approval by year's end. So as you can see, our Gas Transmission & Storage team continues to aggressively advance a broad array of initiatives to enhance customer service, assure continued system reliability, and leverage our unparalleled strategic position in shale production regions.

Let's now shift to Indiana and our electric business as summarized on slide 6. Our NIPSCO Electric team is celebrating its 100th anniversary this year by executing on a historic level of environmental investment, customer focus, and community and economic development. NIPSCO's quarter was solid and squarely in line with our plan. Operating earnings came in at about $60 million compared to about $38 million for the same period last year.

Revenues were up about $30 million due to increased margins as a result of regulatory initiatives, and the expiration of several large customer contracts now subject to current rates. Operating expenses increased about $8 million, largely due to higher depreciation costs associated with our Sugar Creek Generating Station that were deferred prior to the resolution of our electric rate case.

During the recent wave of sustained high temperatures and severe southern storms, NIPSCO's operating electric infrastructure has performed exceptionally well. In fact, the Company reached an all-time peak load in June, exceeding 3,700 Megawatts. One note on those summer storms, although we certainly have had our share, NIPSCO's operations and customer service teams have responded with solid efficiency, safety and concern for our customers.

We have also had our share of restoration and storm repair costs, but those costs are within expectations. They are not expected to significantly impact this year's earnings. Tremendous work by our team.

On the customer front, NIPSCO requested Indiana Commission approval of a green power rate pilot program. The program would allow customers to designate a portion or all of their monthly electric usage to power generate by renewable energy sources.

And, of course, the cornerstone of NIPSCO's business agenda is executing our $500 million investment in new scrubber equipment at our Schahfer Generating Station. That project, which remains fully on track, is part of $850 million in environmental investments that we will make at NIPSCO through 2018. A footnote, we are expecting Indiana Commission approval of a separate scrubber project at our Michigan City Generating Station within a matter of months.

On another positive note, we have an encouraging update on NIPSCO's 100-mile to 340-KV transmission project. On July 19, we received FERC approval for construction rate incentives and cost protections. As we've mentioned previously, this project is part of MISO's broad ranging system improvement initiative, and scheduled to be in service during the latter part of the decade.

Before moving to our Gas Distribution business, I want to note that several NIPSCO employees, including CEO Jimmy Staton, will be ringing the closing bell at the New York Stock Exchange tomorrow to commemorate NIPSCO's 100th anniversary and our 50th year listed on the Exchange. It is another great opportunity to recognize the proud history and incredible progress made by our team.

Let's now turn to our Gas Distribution operations discussed on slide 7. Our Gas Distribution team, led by our new group CEO Joe Hamrock, continues to deliver strong, steady and predictable results from our well-established strategy of aligning long-term infrastructure enhancement programs with complementary customer programs and rate design initiatives.

For the quarter, Gas Distribution net revenues were up $8 million, primarily reflecting regulatory and infrastructure programs. Going forward, the team continues to execute on our deep inventory of infrastructure enhancement projects spanning nearly all our Gas Distribution service territory. These initiatives are part of a long-term investment program that totals at least $4 billion and, frankly, there could be even greater investment opportunities going forward. Again, stay tuned for our September 12 investor day.

On the regulatory front, we remain on track with the Columbia Gas of Massachusetts base rate case which is scheduled for a decision in late October. That case is designed to support the Company's infrastructure modernization and replacement plans with timely investment recovery. Columbia Gas of Pennsylvania also is on track to file a rate case later this quarter to reflect the new Pennsylvania "Act 11" regulatory enhancements that will support our well-established infrastructure modernization program in the Commonwealth.

And on the legislative front, Columbia Gas of Virginia played a key role in advancing that state's natural gas infrastructure expansion for economic development, or the [neadla] legislation which also provides gas utilities to defer costs associated with infrastructure expansion for recovery through future rate cases. So across the board, our Gas Distribution companies continued to deliver innovative programs to customers and solid financial performance for shareholders.

Before moving to your questions, let me briefly touch on the status of our core financial commitments and solid financial profile. As I noted earlier, NiSource remains on track to deliver net operating earnings in line with our full-year outlook of $1.40 to $1.50 per share. We are also staying true to our disciplined financial approach and our commitment to maintaining a solid investment grade credit rating.

During the quarter, we took a number of actions to reduce borrowing costs and support our robust capital investment program. This included extending our $1.5 billion revolving credit agreement through 2017, completing a $250 million bank term loan, and issuing $750 million in long-term debt at historically attractive rates. We also remain on track to draw on our 2010 $400 million forward equity sale in September.

So to close out, the NiSource team is continuing to execute on a proven and promising business strategy. That strategy provides for near-term earnings growth, as well as a broad and deep portfolio of long-term investment opportunities. Add to that our commitment to a solid investment grade financial foundation providing flexibility to fund our infrastructure investment program. And top it off with a secure, attractive and growing dividend and a recent track record of providing industry-leading total shareholder return. That is a compelling investment proposition in anyone's book.

As we open the line to questions, I want to plug one more time our investor day on September 12 in New York City. At the meeting and VA Internet simulcast, we will share additional updates and details on our growth plans. And as always, we will communicate with you and all our stakeholders in a transparent and timely manner through our analyst calls and news releases posted on NiSource.com.

Thank you for participating today and for your ongoing interest in and support of NiSource. Delue, let's now open the call to questions.

Thank you.

(Operator Instructions)

And the first question comes from the line of Stephen Maresca of Morgan Stanley. Please go ahead.

Good morning, Bob, and everybody.

Good morning, how are you?

I'm doing well. Hope you're well also. Thanks for all the detail. I will try and very much abide by your orders there.

(laughter) Hey, you are the first one, so thanks.

But just hoping, or maybe from a bigger picture, on the joint venture, can you discuss at all any sort of commodity sensitivity that you would have around some of these joint venture arrangements? Or is that something that you can't talk about right now?

Well, again, in the spirit of big picture, 50,000 feet, the exposure to commodity is nil, if any. On the infrastructure side, we have the dedication of the entire multi-county area of interest. So that is going to be supported by that drilling program and production. It is not a percentage of proceeds or anything like that. It is going to be fee-based. Our working interests, royalty interest, again, at 50,000 feet, it's relatively small in the big scheme of things.

Okay. And you said you contribute on the developing of the hydrocarbon potential. You're contributing 14,000 acres. So how much more acreage do you have to contribute? Could you replicate this? Or is there other acreage automatically go towards something with Hill Corp?

The other acreage is standalone. It is not dedicated or pledged or contracted to Hill Corp. So in the western portion of the Utica window, that acreage is NiSource's. We mentioned in the past that we're waiting for that area to be delineated, further defined. So while that activity unfolds, we continue to hold that acreage.

Okay. And then on the back haul that you are doing, is there anything that needs to be done to your system? And do you see more of this happening as the Marcellus grows?

Again, in the big scheme of things, the engineering is very manageable. It is relatively modest. For the entire project, both the Columbia Gas Transmission work and the Columbia Gulf work, the total is roughly $200 million. The work on Columbia Gulf is, for the most part, compressor station valving. And I would add, it is not a backhaul per se on Columbia Gulf.

We are going to render one of our three Columbia Gulf legs bidirectional. So one leg would become fully bidirectional and so this gas would, in fact, move south. The other portion of your question, could we see more of this occurring and the answer would be yes. That is a possibility. First things first. We will proceed with this project that was warmly received, well-received by the marketplace and we will look at the other two legs as interest develops.

Okay. Thanks, that's all for me now, See you September 12.

Yes, look forward to seeing you.

Thank you. And the next question comes from the line of Paul Ridzon of KeyBanc. Please go ahead, sir.

Good morning.

Good morning, Paul.

Just on the Hill Corp, you mentioned a $1 billion potential. How many years do see that unfolding over? Or is that going to be something we need to wait for September 12 for?

Well, I think it is sooner rather than later. As I suggested in my prepared comments, the agreement does include drilling program, outlines a drilling program. We would say that the drilling program is aggressive. Hill Corp has a well-established record of going at this at a pretty good clip, and I think if you look at their track record in the Southwest, the Eagleford, for instance, you will see a production track that looks pretty aggressive. So we see this occurring over the next five years or so.

Great. And you kind of broke up on the call, I'm sorry, but you said with regard to the modernization project you expected to file something by year end. Could you just kind of -- I missed the details there, sorry.

Yes, there were not a lot of details because we are working under a confidentiality agreement, a non-disclosure agreement with customers. But we have said, gosh, Paul, for now the better part of the year, that our game plan was to deal with this in 2012. And our hope was to have FERC action, approval of an arrangement by year end 2012.

And currently, the rate structure on the pipes is a postage stamp tariff as opposed to a pancake. Is that correct?

Well, Columbia Gas Transmission, and modernization applies to Columbia Gas Transmission. So it is the market area grid pipeline, and you're correct. That rate on Columbia Gas Transmission is a postage stamp rate.

And then Michigan City environmental, is that incremental to the $850 billion?

Excuse me?

You mentioned something before the Indiana Commission with regards to Michigan City environmental. Would that be incremental to the $850 billion of environmental CapEx that you've outlined before?

It would be included in the $850 billion.

Okay. Thank you very much, and congratulations on a solid quarter.

Yes, thanks so much, Paul.

Thank you.

Thank you. The next question comes from the line of Faisel Khan of Citigroup. Please go ahead, sir.

Good morning, it's Faisel from Citigroup.

Hey, Faisel, how are you?

All right, Bob, how's it going?

Good.

Okay.

Feel good about the quarter.

Sounds good. I just wanted to clarify some of your prepared remarks on the hydrocarbon joint venture. I think you said you have -- the way the joint venture works is that you have contributed your 15,000 acres and you have a carried drilling interest and after this you will have a non-operated 5% working interest in the 15,000, roughly, acres. Is that correct?

No, the acreage contributed is roughly 14,000 acres.

Okay.

We are going to combine that with acreage that Hill Corp has and acreage that Hill Corp is acquiring in an area of mutual interest. For the entire combined Hill Corp/NiSource acreage, we will have a 5% working interest plus an overriding royalty interest in the entire combined acreage position.

Okay, and all you had to do is contribute this 14,000 acres to get this working interest in the entire mutual area?

Effectively, that is how the arrangement is structured.

Okay. And you already received the cash on this deal, I take it?

We will receive -- in return for the contribution, we will receive a portion in cash up front, we will receive the other portion as a working carry, if you will. A carried interest.

Okay, got it.

Again, I would remind you, just in the spirit of clarity, the entire combined acreage, the mutual area of interest is then dedicated to the Pennant infrastructure joint venture.

Right, okay. Understood. And then on the Big Pine Gathering System, the 425 million cubic feet per day. How does that ramp up? Does that kind of slowly ramp up over time? Or is it kind of immediately at 425 million cubic feet per day?

It ramps. And the key to the ramp is XTO's drilling program. So at the outset, they are the primary driver for the ramp-up in throughput. We're in the process of marketing additional capacity on Big Pine. So number one, we need to place the capacity, and then those producers, like XTO, need to execute on their drilling program.

Okay, got it. And then on the pipeline side also, Columbia Gulf, it looks like volumes were down about 10% over last year. Can you kind of describe what is going on over there?

Yes, the second quarter weather. I would just remind you that the second quarter is really a shoulder off quarter for us. So I would not read too much into the volumes on Columbia Gulf, or for that matter, anywhere.

Okay, fair enough. So it's not that there is some sort of volume degradation from the Gulf Coast?

No. I would not read that into it

Okay. And then last question for me on NIPSCO. As you put these scrubbers in place, how does that change your coal buying sort of volumes? Are you going to shift more to Illinois Basin? Or how is that going to shift your coal purchasing behavior going into the --?

At the margin, we will be in a position to buy a bit more Illinois Basin coal. But I would say, again, very macro, very 50,000 feet, it is not going to radically change our buying patterns.

Okay, understood. Thanks, guys.

Okay, thank you.

Thank you. And the next question comes from the line of Carl Kirst of BMO Capital. Please go ahead.

Thanks, good morning, everybody.

Hi, Carl.

Just a few clean-up questions, maybe if I could, and the first on the Pennant JV. And recognizing that we are kind of marketing here, but is it possible to say how much of the capacity is going to sort of the Hill Corp anchor? I'm just trying to figure out how much additional you guys can remarket, meaning how much more icing might there be?

I don't want to get over my skis at the moment on that, Carl. Again, stay tuned on the 12th and hopefully we will be in a position to give you a little bit better sense on how much, as you would say, additional icing there might be.

Okay, fair enough. And second question, I apologize, Bob, if you said this in the prepared commentary, but on the West Side expansion, is that something that is -- are those volumes long-term contracted? Or is this something that we should think of as basically addition to rate base and eventually you'll go to a rate filing on this?

Well, there is a long-term arrangement. So the investment is supported by long-term agreements with shippers. So from our perspective, it is long term and it is firm as any other core system growth project that we deal with.

Okay, and I appreciate the clarification. And then lastly, if I could, just trying to get a little bit more understanding of this long-term NIPSCO transmission project, the $270 million transmission project. Is this something that we should think of as perhaps being five to seven years in the making as far as a $25 million to $50 million spend, or is this something that once it is engineered and gets going, we will just have the spend all happen in 2016 or 2017, for instance?

I'd say the bulk of the spend would be back-ended. We will be spending money for engineering, right away work, that sort of thing. But the bulk of the dollars would, in fact, be in the time period you mentioned. Again, 100 miles, about $270 million is the total investment in the project.

Great. That's what I was looking for. I'll see you guys on the 12th.

All right, thanks, Carl.

Thank you. The next question comes from the line of Charles Fishman of Morningstar. PLease go ahead.

Good morning. On the electric transmission project, you have MISO approval, you have FERC approval. What is the next milestone we should be looking for?

I think that is about it in terms of what we would call regulatory milestones. Again, I mentioned, we have a lot of work to do on the local front for permits, right-of-ways, engineering, that sort of thing. But the key regulatory steps have been taken.

That was it. Thank you.

Thank you.

Thank you. (Operator Instructions) Thank you, and the next question comes from the line of Jay Dobson of Wunderlich Securities. Please go ahead, sir.

Hi, good morning, Bob.

Hi, Jay, how are you?

Very well, thanks. Three questions if I can. First starting off --

Oh, man, three.

There we go. On the acreage, so the piece in addition to the 14,000 you have committed to the Hill Corp JV, I know some of that is still being shored up and understood. But as we think about that going forward and understanding you will have a lot more on this on the 12th, should we think about another process that would bring about potentially another JV like Hill Corp? Should we think about Hill Corp as sort of being in the driver's seat? That you'd sort of like to, though you are not contractually obligated to commit acreage to another agreement with them? Just maybe a little color around us for how we should be thinking about that going forward?

I think going forward, if you think about our acreage in the western portion of the Utica, we hope that the structure that we've developed we think could be a model. Could be a model or could be a template. In terms of counter parties and direction and that sort of thing, way too early to opine on that, Jay. And in fact, what I'd go back to is we have got to find out whether there is anything over there on the West that is commercial. That is step one. So we're continuing to watch very closely, Devon and other folks, that are reportedly drilling test wells in that portion of the world.

Okay, fair enough. Switching then to the pipeline modernization, just kind sort of harkening back to the last couple of calls. You historically have had sort of a balance, we are talking to our customers. And if that fails, we will file something at FERC. And I'm trying to probably parse your words more than you would like me to, and respecting that you have NDAs in this process, but it sounds like you're a little more optimistic you are going to be able to get a settlement with customers. Is that a fair read of sort of the state of play, understanding that we have no solution yet, so there is nothing guaranteed?

The discussions have been constructive, ongoing and stay tuned.

But you wouldn't say that the absence -- because I think, if I sort of listened carefully, and I did, you didn't actually bring up the idea of just filing something at FERC in the absence of customer agreement?

You're absolutely correct. I did not mention that. That continues to be the option, the plan B, if discussions with customers don't cross the finish line.

Okay, fair enough. And then lastly, just on the earnings guidance, if I'm doing the math right, you are at about $1.42 trailing 12 months. So should we think of you, sort of now sort of looking towards the higher end of guidance, and sort of, if not, what am I missing in the second half of this year that maybe isn't obvious?

Well, I think you hit the nail on the head, we still have half a year to go. And so we have got a lot of initiatives underway, as we have noted. We're still in the midst of the summer season that can continue to bring storm restoration challenges. So at this point, I think the most prudent realistic view is we're between $1.40 and $1.50.

Great. Well, I appreciate the clarification. And, again, congrats on the quarter.

Right. Okay, thank you.

Thank you. We do have another question from the line of Faisel Khan of Citigroup. Please go ahead, sir. Mr. Khan, your line is live, please go ahead. I'm sorry, we are getting no response from Mr. Khan. Thank you. I will now hand it back to Mr. Bob Skaggs for any closing remarks.

All right, Delue. Thank you so much and, again, thank you to everyone that has participated on the call. We appreciate your interest, your support. And to everyone, we look forward to seeing you on September 12, either in person or virtually. Thanks, have a good day. We appreciate your interest. Thanks.

Thank you, ladies and gentlemen, for today's participation. You may now disconnect. Enjoy your day. Thank you.