OGE Energy Corp (OGE) 2009 Q2 法說會逐字稿

At this time, I would like to welcome everyone to the OGE second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker res marks, there will be a question-and-answer session. (Operator Instructions). Thank you. Mr. Tidwell, you may begin your conference.

Thank you, good morning, everyone, and welcome to OGE Energy Corp. second quarter 2009 earnings call. I'm Todd Tidwell, Director of Investor Relations and with me today I have Pete Delaney, Chairman, President and CEO of OGE Energy Corp.; Sean Trauschke, Vice President and CFO of OGE Energy Corp.; and several other members of the management team to address any questions that you may have.

In terms of the call today, we will first hear from Pete Delaney followed by an explanation of second quarter results from Sean and finally as always we will answer your questions. I would like to remind you that this conference is being webcast and you may follow along on our website at OGE.com. In addition the conference call and accompanying slides will be archived following the call on that same website.

Before we begin the presentation, I would like to direct your attention to the Safe Harbor statement regarding forward-looking statements. This is an SEC requirement for financial statements and simply states that we cannot guarantee forward-looking financial results but this is our best estimate to date. I will now turn the call over to Pete Delaney for his opening comments. Pete?

Thank you, Todd, and good morning, everyone. Welcome to our second quarter earnings call. As is our custom I will discuss our recent accomplishments, important initiatives, and our outlook for our businesses, and Sean will review our financial results in more detail. My comments won't vary much from the theme of the last few calls. While that may be somewhat repetitive it is one confirmation we are on track achieving our milestones and executing our business plans.

Our second quarter results were good, coming in at $0.72 per share up $0.10 compared to $0.62 last year. We have also reaffirmed our 2009 earnings guidance, to $2.35 to $2.60 per share. This quarter the utilities margin benefited from the Red Bud Rider, which started last fall and Arkansas rate increase effective this June and slightly warmer weather. Enogex while down year-over-year due to a climb from the $7 record processing spreads realized last year, remains on track with growth and gathering volumes for the year in line with earlier expectations.

Overall our outlook for continued earnings growth remains positive for both businesses even as we navigate through this difficult economy. At OG&E, residential and commercial customer growth continues at a rate more or less in line with historical levels, with overall customer growth coming in at nine-tenths of 1% year-to-date. Industrial sales continue to be down significantly from last year following the pattern we have seen since the beginning of this year. However, the margin from industrial sales were $29 million year-to-date up 5% from last year the result of higher rates and tariff structure. 49 megawatts of load from new industrial projects is still expected to be in service by year end 2009. These projects are heavily weighted towards the back of the year offsetting only a part of the decline industrial sales expected this year.

Relative to the rest of the country our economic situation remains positive. Unemployment in Oklahoma continues to hover around 6%, still well below the national average and housing prices have remained relatively stable, not a large change from our economic outlook on the last call. We continue to actively develop renewable energy assets through your wind generation and transmission build out. This will continue to drive a large part of our growth at the utility and we have two important wind generation projects underway in 2009.

First the 100 megawatt OU Spirit wind farm is on track to be in production by the end of this year. This project is supported by a long term sale out of renewable energy credits to the University of Oklahoma, that cover, that will cover 100% of their energy requirements in the future. We filed last Thursday for regulatory approval to project and hope to have an order by year end. The other important renewable initiative is our wind RFP that was completed this quarter and that resulted in 430 megawatts being short listed. We are in the process of negotiating with three different developers, two are purchase power agreements and one is build transfer by the developer. If successful the additional wind generation should be available in our system by the beginning of 2011. These two initiatives will put our wind generation at 700 megawatts which represent more than 10% of our total generating capacity by the end of 2010.

Our transmission projects continue on pace, the Oklahoma City to Woodford, 345 KV line is scheduled for service in early 2010, the cost around $218 million. The recovery of this line has been approved by the Oklahoma Corporation Commission, and will add much needed transmission capacity to support wind development. In addition, the Southwest Power pool has issued to OG&E notices to construct several transmission lines for system reliability known as portfolio 3E projects. These lines require approximately 300 million of capital investment over the period of 2010 to 2014. Recovery of these, the recovery of the costs of these lines will be spread throughout the southwest power pool and is anticipated that OG&E customers will be responsible for around 14% of the revenue requirement.

Our total investment in these transmission projects is projected to be around $700 million upon their completion in 2014. Beyond these known and committed projects, additional 345 KW and/or 765 KW projects are being considered by the southwest power pool, again, to support the expansion of wind generation on the system. Of course our ability to continue to invest is directly tied to our ability to earn on our investments.

I'm pleased to say we reached a $48 million rate settlement with intervenors and received a 3 to 0 vote approving the settlement for the Oklahoma Corporation Commission. We believe the settlement bounces our concerns over increasing prices to our customers in a tough economic environment, with keeping our financial footing strong to support our operations and capital program. Roughly $44 million is associated with an increase in the fixed monthly customer charge that moves our tariffs in the direction of reducing our reliance on volumes. These rates were effective August 3 and overall it works well for us. As part of the rate settlement, the Oklahoma Corporation Commission also approved an additional 20 million of capital and O&M for our smart grid program for one of our largest communities. We expect to have the program completed by the summer of 2010, which includes not just the installation of smart meters but provides for some home networks as well.

Demand response is one element of meeting our goal deferring the need for new fossil fuel generating capacity until 2020. This will be an invaluable tool in helping us understand our customers response to pricing, as well as to verify other aspects of our business case. We have also requested $140 million of stimulus funds from the federal Government to expand our smart grid deployment across the system. We also continue to focus on improving our work processes and exerting tight control over our cost. The $13 million of O&M recovers through various regulatory our O&M for the year is expected to be relatively flat to last year.

On the natural gas front, Enogex continues to do well in the low price environment with gathering volumes up 14% year to year, and a focus on cost control. We are well positioned in the prolific Granite and (inaudible) Wash areas and in the Cana and Woodford shale areas. These are unconventional plays resulting in much higher initial production rates than associated with our conventional wells. Volumes are still expected to grow 10% this year despite the much lower well connects in the second quarter reflecting the shift from conventional to unconventional wells. Recently we've seen evidence that producers may be planning to increase their activity in these areas in the near future. We are well positioned should they do so.

Enogex' transmission margin is increasing with the addition of the Mid Continent Express and Gulf Crossing pipeline coming on the line this summer and providing for long term fee based margins. In the processing business we are making progress towards our goal of shifting our process and portfolio to a more fixed fee basis. We have successfully negotiated one of our large keep/hold processing arrangements to a fixed fee contract. This will double the percentage of fixed fee volumes as a percentage of total inlet volumes from 10 to roughly 20%. Enogex also successfully prefunded a part of its $400 million senior notes that are due to mature in January of 2010, with a $200 million senior note offering in June at a coupon of 6 and 7/8%. We are also successfully closing a tender -- successfully closed a tender for $111 million of existing 8 and 8 debt minimizing a negative earnings effect in 2009. These transactions eliminate our refinancing risk as our liquidity is sufficient to fund the remaining principle maturing in January. This refinancing should be accretive to earnings in 2010 as well.

We believe Enogex business had solid cash flow and is earning a good return for our shareholders. While we are pleased with our actual and projected results for 2009, and we continue to prepare for future challenges, environmental uncertainty looms with the RPS and CO2 climate legislation under consideration in Washington, we continue to prepare for such legislation with our renewable energy build out, our smart grid deployment and demand site management initiatives all of which contribute to our goal of no new generation until 2020 or after. We recognize that these steps may not be enough to fully offset any global -- the impact of any global warming legislation, and we continue to evaluate numerous alternatives to address the Waxman bill as well as our existing regional haze regulation. Ever mindful of the need to mitigate financial impact on our customers.

We are fortunate that here in Oklahoma by law we can recover environmental costs at the utility associated with complying with state and federal environmental regulations however we clearly recognize our obligation of ensuring whatever we do is in the best interest of our customers. Now Sean will review our financial results in more detail. Sean?

Thank you, Pete. For the second quarter we reported net income of $70.5 million or $0.72 per average diluted share as compared to net income of $57.1 million or $0.62 per average diluted share in 2008. The contribution by business unit on a comparative basis is listed on the slide.

At OG&E, net income for the second quarter was $56.4 million or $0.58 per share, as compared to net income of 39, -- $30.9 million or $0.33 per share in 2008. Some of the primary drivers are as follows. Gross margin on revenues increased $29 million, r 14%, I will provide more details of gross margin in just a minute. Operation and maintenance expense decreased $7.9 million primarily due to lower labor and contract labor costs and an Arkansas regulatory settlement for pension costs partially offset by higher employee costs and higher costs from materials and supplies.

Depreciation and amortization expense increased $9.1 million primarily due to the Red Bud facility being placed into service and the amortization of the Oklahoma storm regulatory asset. Other income and expense created a positive variance of $17.7 million in part due to $9.2 million of write downs in 2008 and higher allowance for equity funds used during construction in 2009. Interest expense increased $6.2 million primarily due to higher levels of long-term debt that were issued in 2008 partially offset by lower short term interest borrowings and higher levels of AFUDC.

Now turning to the drivers for the increase in gross margins, new revenues from the Red Bud facility increased gross margin by $19.1 million. Warmer weather primarily in June in our service territory compared to 2008 added $4.2 million to gross margin. Compared to normal, weather has added $5.5 million to gross margin year-to-date, and $2.2 million for the second quarter. Growth and price variance due to sales and customer mix increased the gross margin by approximately $3.2 million. We have seen a 16.6% decline in industrial volumes year-to-date versus last year. But rate increases have increased industrial margins by nearly 5%. As Pete mentioned earlier we still plan on adding 49 megawatts of new industrial load towards the end of 2009 to help offset the industrial sales decline.

Other revenue items including the Arkansas rate increase and the Oklahoma storm cost recovery rider added $2.5 million to gross margin compared to 2008. We continue to see customer growth on the system, in line with our expectations and slightly below our historical customer growth rate of 1%. Year-to-date, we have added just over 3300 customers, primarily in the residential sector.

Now turning to Enogex, net income decreased $0.17 per share in 2009 compared to 2008. You can see the impact record commodity spreads had on Enogex earnings in 2008. Some of the primary drivers are as follows. The largest variance was gross margin which decreased by $27.8 million, I will discuss those details on the next slide. Operation and maintenance expenses were $4.7 million lower in 2009 primarily due to lower labor costs compared to the same period of 2008. Depreciation and amortization expense increased $2.3 million primarily due to higher levels of depreciable plant associated with system growth. Interest expense created a positive variance of $2.1 million from 2008 primarily due to an increase in capitalized interest associated with construction projects.

Now looking at the drivers, for gross margin. Transportation and storage margin increased $5.7 million primarily due to higher cross haul revenues and increased demand fees partially offset by operational storage hedge losses and an increased natural gas imbalance liability. Of note, MEP and Gulf Crossings began operation in June and added $1.4 million to gross margin. The main driver for the drop in margin was in the gathering and processing business which decreased by $33.5 million. The decrease was all in the processing area, where realized commodity spreads fell from $7.18 per MMBTU to $3.50 per MMBTU, and average liquids prices decreased from $1.55 per gallon to $0.66 per gallon quarter over quarter. Gathering margins were slight year over year, while volumes did increase by 12% quarter-over-quarter, margin gains were primarily offset by lower natural gas prices. For more detailed variance explanations please review our second quarter 10-Q filed with the SEC this this morning.

I would like to spend a few minutes updating you on new developments in our transmission arena. You have heard us refer to transmission expansion as one of the key growth opportunities for the Company. Previously we discussed the notice to construct issued to OG&E by the SPP for portfolio 3E projects for additionally system reliability. We are pleased to announce that OG&E has issued a letter of notification to the SPP of our intent to build these lines. The projected capital costs of these projects is approximately $300 million, and you can see them circled on the map along with the projected capital spending. The good news is our Oklahoma customers will pay only 13.5% of these costs. Construction will begin next year, with the projects coming on line between 2012 and 2014.

I wanted to take a minute to discuss our capital spending plans. Our capital spending plans have increased by approximately $400 million between 2009 and 2014. I want to talk specifically about two projects which represent the majority of the capital changes. First are the portfolio 3E projects mentioned on the previous slide, which are projected to cost approximately $300 million. Over the next six years we have plans to spend over $700 million on these transmission growth projects. Second, at Enogex where we have a $60 million aid and construct pipeline project to serve in new power plant for an electric co-operative. The key point to remember here, is that the customers funding that project in advance of any dollars we will spend. We are committed to our ratings and any additional capital projects that might require equity issuance would be accretive to earnings and support our long term growth plans. We've had two solid quarters despite the challenging economic environment with a continued focus on controlling costs and normal weather for the remainder of the year, and ending our other key assumptions set forth in our Q we would expect to end the year around the midpoint of our original guidance. Now I will turn the call over to Pete for Q&A.

Thank you, Sean. Operator, we are ready for questions.

Operator Instructions). Your first question comes from the line of Brian Russo. Your line is open.

My first question in terms of guidance, I think previously you were assuming you would be at the low end of the range and now you are assuming the middle end of the range. I am just wondering what the driver is for that?

Sean?

Hi, Brian. Really when we look at this we are looking at the utility is slightly ahead for the year and going forward, as we look through this from a utility standpoint now that we have the Oklahoma and Arkansas rate cases behind us we feel very confident that we will be right there in the middle of our range, and again I think a key variable here though is we are expecting normal weather, principally in the third quarter.

Okay. And in your Q when you outline some of the guidance assumption it looks like margin expectations on the transmission -- transportation storage as well as gathering and processing has come down a little bit. What's the driver for that?

On the transmission and storage.

Yes, on the gathering and processing, I think it is 180 million to 190 million versus 190 million to 220 million?

On the gathering processing?

Yes.

Really I think what Pete mentioned earlier, we were very pleased with the idea that we have converted a large number of our -- a large percentage of our keep/hold volumes to a fixed fee contract. That's actually a ten year fixed fee agreement. So we think that is a good value for our customers. So we've removed that commodity exposure for the balance of the year.

When will you guys convey 2010 guidance?

Pete and I have not discussed this but I would expect that it would be toward the end of this year or early part of next year. I think we certainly would like to have a little more information around the economy and where spreads are at. But in particular what I would like to see is we mentioned we would be filing for the OU Spirit filing. I would like to get that behind us and we could lay out exactly what our capital spending plans are and our financing plans for you. So I would anticipate later this year, early next year.

Okay. And when I look at your CapEx spend, for '09 and (inaudible) how should we view the means to finance that both with internal cash but also any external capital needs?

I think as you think about the remainder of this year and the beginning of next year, we feel very comfortable with our financing position now. We have close to $600 million of available liquidity forecasted by the end of the year, and our credit facilities. We will refinance the maturity of Enogex. We may look at terming out some of the short-term debt. But we don't foresee any equity issuances for 2009, 2010 beyond what we are issuing through our drip program.

Okay and then in terms of Enogex, I think volume growth you said 10% for the year but it is 14% the second quarter. So should we assume somewhat of a decline in growth profile through the end of the year?

That's a good question. Just keep in mind we are forecasting 10% but that's not a deterioration in volumes by any means. Recall in fourth quarter of 2008 we saw a significant increase in our gathering volumes. That's why we're sticking to the 10% but we did see a significant expansion our gathering volumes in the fourth quarter. So when we think about it in terms of a full year of 10%, that's incorporating a big increase that we saw in volumes in fourth quarter of 2008.

Okay. And then lastly, when we look at 2010, what projects can we assume will be -- will get AFUDC or a rider some of these pending projects that you have?

Well, I think the way to think about that I think OU Spirit would be certainly one, that we would be requesting a rider for. The other projects such as WindSpeed, we already have a rider in place. So the other item there on our wind RFP and to the extent tat we are able to secure something favorable to our customers, some of those may be incorporated into some sort of rider structure.

Okay. Great. Thanks a lot.

One other thing, Todd just wanted out. We would expect to get AFUDC on those portfolio 3E projects as well.

Okay. Thank you.

Thanks, Brian.

Your next question comes from the line of David Frank. Your line is open.

Morning guys.

Morning.

A question for you, you guys rattled off a lot of wind and transmission numbers today, and I, my memory's a little slow this morning. Could you just tell me, any of these numbers incremental to the investment numbers you highlighted on your last quarter or official update for the Company?

David, last, on the last call we went through pretty much a lot of the same numbers and talked about the same projects. The last call, the RFP wasn't as far along and we hadn't selected the short list at that point in time. And we, the big change that sean pointed out is the 3E projects last call we knew about them and they had been -- we knew that they were being approved by the Southwest Power pool. I don't think we had gotten the notices to construct and we had not officially notified them that we would construct. So that we were not officially obligated for construction of those lines. We have now done that and that $300 million of capital for the 3E projects is now moved into our known and committed projects. So now it moves into our financing plan, our earnings forecasting from that standpoint. So we identified it before, and now it is we are just moving again down the milestones and moving that more into operational planning.

So the $300 million for the transmission, and then as far as the wind RFP you have out there now and are working on the short list, do you have an update as to when we would hear -- get a final outcome on that and if you would be somehow participating or contracting it out?

Right. Two of those, you know, the 430 short listed, two are PPAs, purchase power agreements that covers around 280 megawatts of that 430. So of course they would be just expensed and recovered. Then we of course will not enter into those PPAs without regulatory approval. The third is 150 megawatts is the build and transfer, we would then be owning that unit, that farm, and we would again, not do so without regulatory recovery, clear regulatory recovery before we do that. So that's the way it's shaping up. We still -- we still are not done negotiations so they're not done transactions but we are, they're moving well, and we do believe that at the prices that it is good value for our customers, again from a natural gas hedge and again lowering the CO2 footprint and anticipating that we may get some sort of legislation out of Washington.

Okay. What would the -- if all goes well and according to plan, what would the investment be for that 150 megawatts and I assume that's currently not in any projected CapEx plan?

I don't know if we have disclosed that, but roughly it is 25 to 50. 2500 for KW my rough number, I look back t what Centennial was and it is probably a good assumption to use, but we haven't really disclosed that. We are still in negotiations until probably not -- going in that direction right now.

Okay. And I guess my last question is you guys are talking about customer growth at the utility this year. What, I guess you're probably one of the only utilities in the country experiencing growth. Do you have any, anything you could attribute that to?

I mean, we look at that -- our residential commercial is pretty much in line, we actually probably planned on it down a little bit. Our industrial is down 2%, in term of customers, but commercial and residentials, our biggest driver, and about 6,000 customers year to year, and about 5,000 of that is from residential and commercial. It is, our economy, we still have some businesses growing. I think it is reflect of the fact that we have got a large military presence here. We are, we have got a large, the seat of Government is here. Aviation, and we just haven't seen the collapse in the housing prices. We haven't seen financial institutions laying off here. We avoided that whole run off in assets, run up excuse me, in assets. I think inflation that they had in other areas, so and unemployment while up is, probably not, if you look back three or four years ago, 5% or almost 5. So we are at 6. So we just haven't seen that big of an impact that we have in other areas.

Okay. All right. Well, thanks a lot.

Thank you, Dave.

Your next question comes from the line of Jay Dobson. Your line is open.

Hey. Thank you. Good morning. Sean or Pete, I was wondering if we can get a little more granularity on O&M, when I look at if we are down in the quarter, we're down year-to-date. I think in your comments you suggested flat. I sort of see in the Q when you go into some granularity around your estimates for the full year, that you're trending up at OG&E, and down at Enogex, should we expect that that's sort of the the third and fourth quarter, you sort of equally balanced that O&M make up to flat or just give us a little granularity, and particularly to the second quarter if you were deferring any of that O&M into the third quarter if that was just sort of flat or sorry, down on just a cost cutting basis?

Sure. Sure. Jay, this is Sean. I do think just to echo Pete's comments, we have done a very good job of monitoring our costs and controlling those for the first six months of the year and we would anticipate that to continue. I think in the quarter specifically, I mentioned in my comments as a result of the Arkansas settlement, we reversed a previous pension expense of $3.2 million. That was a big to addition to controlling our costs for the quarter. The second thing I would say with regard to O&M, we have a number of regulatory riders. So you will see the revenue impact in the revenue line and you will see the O&M impact in the O&M line. And so what Pete was saying there is that you if adjust for those O&M expenses that have a revenue offset we are going to be pretty close to flat to the previous year. Does that help?

Yes. No, that's fantastic. I appreciate that. And I don't know if I missed this, but on the, the wind RFP, the build and transfer, I mean the PPA and the build and transfer, what's the timing on that announcement there? Is it still by year end obviously the build and transfer comments sort of new as of this morning.

Well, what that is, is we would expect as we negotiate each one of these and we get to the point we think it is a good economic value for our customers, we would file this with the commission, we would hope to file those sometime later this year in the third quarter. And then on the build to transfer, just to be perfectly clear as Pete said we are not going to proceed with any expenditures until we receive that regulatory approval.

Got you. Nope that's perfect. Lastly on Enogex, just to sort of maybe update us on hedging, I know sort of NGL prices were a little better and fracs continue to improve a hairs bit over the second quarter relative to first and just didn't know if you had come out of here anymore hedged or significantly hedged. So and then maybe just update us on '10?

We are about the same for both a '09 and '10 Jay. Just keep in mind though as we mentioned earlier we were successful in converting some of these keep/hold volumes to fixed fee has been our strategy. So as a result of that we had fewer peephole volumes that were -- that needed to be hedged. So we did unwind some of this. So our hedge percentage is roughly the same for both of those years.

Got you. Got you. Perfect. Thank you so much.

Have a good day.

(Operator Instructions). Your next question comes from the line of (inaudible), your line is open.

Good morning.

Good morning.

A couple of things. One, can you remind us part of the rate settlement if you're -- when you'll be permitted or if you're required to file your next rate case?

Are you referring to Oklahoma.

Yes.

Certainly. In the agreement there we certainly have the opportunity to come back in 20111. And we would look at that as far as what our cost structure is and certainly look at our additional capital spending tat we have incurred between the settlement and 2011. The text year for that would be 2010, and I think the stipulation requested us to come in by July 1.

Is that a requirement or is it voluntary?

Is it is really a requirement.

Okay. And, I mean do you anticipate that given the riders that are available for several of the capital projects you described that you would, you really be under earning your authorized return by any material amount at that point in time?

Well, I think the way I would answer that is with the riders, we feel like we are reducing our regulatory lag. I think the other thing to keep in mind though is that we are spending additional capital to investing in our business, in the utility business, and so we would have to look at the capital spent between the close of the last case and where we are in 2011, whether that was material and we needed to look to recover that.

Lastly, can you discuss the stimulus dollars that you have applied for and it would appear that could very well help offset any equity requirements going forward to the CapEx program?

Go back to our known and committed project we have our-- we don't have anything beyond the $20 million really in our capital numbers. We, as I said, our program is, we had a pilot earlier this last summer, where we had our home networking in and saw some very encouraging results from that in terms of demand response from our customers. We have talked a lot about our goal of deferring and the need for any new fossil fuel generation, of 2020 and we think that, getting the home networking in as well as automating the system is really going to help us at least on demand response side. We feel pretty good about our approach. It may be a little bit different than others.

So of course as you are well aware, the federal government under the Department of Energy and the grants that we think it is a compelling value for our customers based on the business cases that we have and of course, the normal pilot as part of a 45,000 customer deployment which will help verify what we have seen to date but we thought it is compelling value for our customers if we can I think, the total cost of my recollection of the implementation systemwide is around $400 million I think so 300 million to $400 million. So this would -- I think it is 130 actually that we might have applied for. Will cover a nice part of the overall capital requirements that we have to spend over a couple of years to comply with the grant. So of course that would be again a significant contribution to the whole system deployment, reduce our rev requirements from our customers, as you say reduce our financing requirements, debt and equity, so we are very hopeful that we do get some dollars from the federal government to leverage our deployment.

Thank you very much.

Your next question is from Brian Russo.

Can you remind us how your Enogex hedges are structured and what your margin sensitivity is to changes in the frac spread?

Sean.

Sure. So I will let Todd get to the detail of it, hedge detail but with the addition or conversion of this -- some of the keep/hold volumes to this fixed fee contract. For the remainder of the year we really have $16 million of margin that's actually exposed to the commodity prices for the remainder of the year. So certainly down, and as we look at this for the sensitivity plus or minus the 10% move and spreads for the entire year it is roughly $1.4 million of net income off of $2.90 spread. Does that help.

There are no further questions at this time.

Thank you. In closing I would like to say from an operational, regulatory and financial standpoint we are pleased with our performance the first two quarters. Certainly the approval of the $48 million Oklahoma rate settlement was a noteworthy accomplishment and positions us to deliver financial performance for our shareholders and reliable service for our customers. We are excited about the approval of our smart grid roll out, our growth opportunity to both businesses and the overall direction of this Company. Based on the first six months and our outlook for the remainder of the year we are reaffirming our earnings guidance. We do not foresee any change in our fundamentals at this point in time that would cause us to re-evaluate our business plans and long term growth objectives. As I look back on our accomplishments over this past few months, I would like to thank our Company members for their hard work that is delivered the results. Thank you for your interest in the Company and have a great day.

This concludes today's conference call. You may now disconnect.