OGE Energy Corp (OGE) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth quarter 2014 OGE Energy earnings conference call. My name is Katina, and I will be your coordinator for today.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Todd Tidwell. Please proceed.

Thank you, and good morning, everyone, and welcome to OGE Energy Corp.'s fourth quarter 2014 earnings call. I'm Todd Tidwell, Director of Investor Relations. And with me today, I have Pete Delaney, Chairman and CEO of OGE Energy Corp; Sean Trauschke, President of OGE Energy Corp; and Steve Merrill, CFO of OGE Energy Corp. In terms of the call today, we will first hear from Pete, followed by a regulatory update from Sean, and an explanation from Steve of year-end and fourth-quarter results. 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 at our website 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 would also like to remind you that there is a Regulation G reconciliation for gross margin in the appendix, along with projected capital expenditures, and more detailed assumptions around 2015 guidance.

I will now turn the call over to Pete Delaney for his opening comments. Pete?

Thank you, Todd. Good morning, everyone, and thank you for joining us on today's call.

Early this morning, we reported 2014 consolidated earnings of $1.98 per share, compared with a $1.94 in 2013. For the fourth quarter EPS was $0.29, in line with the fourth quarter of 2013. The utility reported earnings of $1.46 per share, with mild summer weather that we discussed in the last call impacting our earnings by about $0.07. Looking back, 2014 was the end of a productive five year period for OG Energy, marked by the IPO of Enable Midstream Partners, and OG&E's, the successful completion of major infrastructure investments, while significantly improving key operational metrics that position the Company to be successful as we move forward.

Commodity prices have been receiving a lot of attention recently, with good reason. As we know oil and gas sectors are subject to inevitable commodity cycles, and the recent downdraft has been more precipitous than most, and energy companies have responded in kind. Some energy companies here in Oklahoma have announced layoffs that will be expected to increase our unemployment rate, which I remind you the latest economic statistics still put at below 4% for Oklahoma City, and near 4% percent for the state. So we have continued to experience strong economic growth here in Oklahoma.

Fortunately, at least compared to some of the past cycles, the state and local economies here are more diverse than they have been. We are experiencing job growth across industries outside the energy sector. I'd point to Tinker Air Force Base, which employs more than 26,000 civilian and military employees, continues to grow with the recent $500 million expansion soon to be underway to serve - that's really to serve the new Pegasus supertanker maintenance repair contract that was awarded to Tinker, and that will have a major economic impact on the state for years to come.

More than 6,500 new jobs were added in the Oklahoma City metro region in 2014. These new additions, were from a [diversity] of businesses, from aerospace, insurance, research and development, and retail. Bottom line, we still anticipate customer growth near our historical rate of 1% per year.

I mentioned at the beginning of my remarks, 2014 marked the end of a period of some important initiatives. One of those, is our five-year $1.5 billion transmission expansion program. Of course, part of this transmission expansion was to support wind production, as we reached our initial goal during this period of 780 megawatts of wind in our system, with our last project completed in 2013.

Another important initiative for OG&E, enabled by infrastructure investments, is our goal of deferring the need for additional generating capacity until after the year 2020. We are on track to accomplish that goal, due in large part to demand reduction realized with our Smart Grid deployment. That three year deployment was completed in December 2012. Not only on budget, but with also key functional capabilities in place such as remote billing, remote turn off and on, and providing near real-time hourly energy consumption information. Our voluntary SmartHours program, which utilizes that Smart Grid platform now engages over 130,000 customers, and that provides the majority of our generation deferral allowing us to accomplish our 2020 objective.

In addition to cost reduction of the long-term through improved capacity factor of the system, this program reduces our customer's current monthly bills as they shift consumption from the peak hours, and that provides headroom for future environmental costs. This level of customer engagement from SmartHours has improved customer satisfaction. We believe this has been a factor in our number one J.D. Power residential customer satisfaction ratings for a couple years running now. This initiative has been a win for our customers on several counts.

As we look forward, the Smart Grid platform lies at the center of our efforts to improve value of our service to customers. With much greater transparency of our distribution system operations, with information from smart meters, and the growing number of other embedded communicating sensor and control devices, we expect to be able to restore power faster, reduce the frequency and duration of outages, improve information flow to the customer among other things, all at a lower cost than previously thought.

But our future is more than providing that same service at greater value. It also entails providing new products and services using the Smart Grid infrastructure as our platform. We will be taking steps to evolve our distribution system into a platform for integration and optimization of devices on our system, regardless of their ownership.

Looking forward to the next five years, we will be ramping up some new infrastructure investments, as we continue to leverage the build-out of our Smart Grid platform. Our generation plans have been on hold, as we chose to litigate with the APA, as opposed to complying with their federal implementation plan in the state. Our plan to position the generation fleet for the future is now underway, however. It entails a fleet more responsive to intermittent power, by adding new CTs in place of our obsolete 65-year-old Mustang plant; secure additional renewables, and we have already started having solar to our portfolio; converting coal plants to burn natural gas; and scrubbing coal plants to maintain fuel diversity.

Of course, the largest investment is the scrubbers. Much work has progressed and equipment has been secured, and the environmental filing occurred last year with hearings is scheduled for next month. Sean will give us an update in a minute.

On the last call, I discussed changes to our approach to determine the appropriate dividend growth rate going forward. With the structural changes associated with the Enable MLP IPO, our recommendations are based on the utility EPS and Enable's cash flow distribution growth rates, not consolidated earnings as in the past.

Our financial guidance for the next five years reflects this change, and with a [3.25]% utility earnings growth rate which is unchanged from our previous five-year guidance provided in 2009, and a 10% dividend growth rate. We reiterated our 10% dividend growth rate earlier this month, concurrent with the news that Enable will likely be lowering their distribution growth rate for 2015. Enable cash distributions were $144 million to OGE Energy in 2014, and we expect growth of 6% to 8% off of MQD in 2015.

Our value proposition remains, that we believe to be a first quartile total return of 13% to 15% in 2009. Over the last five years for comparison, our total return was 13.3%, which was at the 80 percentile of our peer group.

I believe we've been consistent in our managing to the long-term, which has provided us with the financial stability to continue to execute our business and capital plans through various investment and commodity cycles. As a result, we been able to deliver consistently on our long-term dividend growth and earnings growth targets.

Now I'd like to turn the call over to Sean.

Thanks, Pete, and good morning. First, I want to convey that we're on plan with regard to the schedule to be in compliance with our environmental ruling. As Pete mentioned, the hearings on our environmental compliance plan begin next week, and we hope to receive an order shortly thereafter. In addition, we will file for recovery with the Arkansas Commission and begin recovering the low NOx burners, which are already in service in April.

I will provide you with an update on our progress, and you'll recall that our plan is for regional haze and utility MATS compliance. Regarding the ACI systems for MATS compliance, we expect to finalize installation contracts in the second quarter of 2015, and the construction will commence in the second half of this year to meet the April 16 compliance deadline.

Turning to regional haze compliance plan, we have completed the installation of three of the seven low NOx burners. The fourth will be completed this spring, and we are in the permitting process for the remaining three units at Seminole to be completed each of the next three years. The equipment and installation vendors for the two dry scrubbers at Center have been selected, and the schedules and budgets are on plan.

Engineering studies for the conversion of the two gas plants at Muskogee -- conversion to two gas plants at Muskogee from coal, are ongoing and expected to be complete by the middle of this year; with permit applications submitted to the Oklahoma Department of Environmental Quality in the second half of 2017. Recall, our plan is to continue to run these coal units as long as possible to maximize the benefits for our customers.

Bids for the Mustang plant turbines have been received and we are in selection process. The turbine selection is important, because it is needed for the air permit application we plan to file in June. And we're really excited about the opportunity to utilize the existing sites with access to transmission, and as well as water and gas supply. And it should be noted, that we also have a great inspired operating team already on the ground there.

I wanted to remind you that once we receive an order from the Oklahoma Corporation Commission on our environmental plan, we will follow up with a general rate case in Oklahoma for several important reasons. There is a requirement under House Bill 1910 to file a rate case within 24 months of an order for the environmental plan, and we plan to satisfy that requirement with this rate case. We also need to recover the cost associated with the termination in June of a 300 megawatt wholesale contract we've discussed previously. And lastly, we need to recover the Oklahoma retail portion for the remaining five SPP transmission lines, and additional plant placed into service.

In fact, we placed over $800 million of plan into service in 2014. This has resulted in a projected depreciation expense increase of approximately $27 million in 2015. Approximately half of that increase is due to this base capital expenditures, and the other half resulting from the additional transmission placed into service.

With that, I'll turn the call over to Steve who will discuss 2014 results and the 2015 outlook. Steve?

Thank you, Sean. For fourth quarter earnings were comparable to 2013, with net income of $58 million or $0.29 per share for both periods. The contribution by business units on a comparative basis is listed on the side. And for the full year 2014, we reported net income of $396 million or $1.98 per share, as compared to net income of $388 million or $1.94 per share in 2013.

As you will recall, the loss at the Holding company in 2013 was primarily due to the costs associated with the formation of Enable Midstream. At OG&E net income for the quarter was $37 million or $0.19 per share, as compared to net income of $29 million or $0.15 per share in 2013. For the quarter, gross margin came in stronger as we saw an increase of approximately $13 million or 5%, primarily due to transmission revenues, higher average prices, and new customer growth; partially offset by mild weather. Heating degree days were 14% below last year, and 3% below normal.

Now looking at other key drivers, O&M improved $11 million, driven in part by the timing of ongoing maintenance at the power plants. You will recall on the third-quarter call, O&M expenditures were above the prior period due to this timing issue. What's important to note is that the Company remained on plan for the entire year. Depreciation increased $10 million primarily due to four large transmission lines that were added in 2014. Income tax expense increased $5 million due to higher pre-tax net income.

Now turning to the full year, at OG&E net income for the year was $292 million or $1.46 per share, as compared to net income of $293 million or $1.47 per share in 2013. Gross margin for 2014 came in stronger, as we saw an increase of $50 million or 4%, which I'll discuss on the next slide.

Looking at some of the key drivers for 2014, our O&M costs increased $14 million or 3% for the year. We experienced lower storm activity in 2014 as compared to 2013, and labor costs associated with storm restoration are mostly capitalized. Depreciation was $22 million higher this year, primarily due to the addition of four transmission lines. And finally, interest rate expense increased $12 million or 9%, primarily related to the $250 million debt issuances that occurred in March and December of 2014.

Utility margins were up for 2014. There were three primary drivers impacting gross margin. First, our SPP transmission projects increased gross margin by $44 million. Second, growth from new customers added an additional $14 million in gross margin. We added over 8,000 new customers to the system compared to 2013.

All of this growth was partially offset by milder weather compared to 2013. On a weather normalized basis, megawatt hour sales grew consistent with our guidance at 1.5%. Looking closer at weather, the impact from the mild summer as compared to 2013 translated into $15 million of lower gross margin. Compared to normal weather, margin was reduced by $21 million in 2014. Overall, utility margins were up for 2014, despite a weather impact that was significantly lower than 2013.

In 2014, Enable Midstream made cash distributions of approximately $144 million to OGE, and contributed earnings of $102 million or $0.51 per share, compared to $100 million or $0.50 per share in 2013. The key takeaway from this slide is that cash distributions per unit have been growing since the IPO, and are projected to continue growing even in this low commodity price environment.

Turning to 2015 guidance, at the utility and assuming normal weather, we are projecting earnings per share to between $1.41 to $1.49 per share. And for the Midstream business, we are projecting to receive approximately $140 million in cash from distributions, and for Enable to contribute $0.35 to $0.40 per share to consolidated earnings. We are projecting consolidated earnings between $1.76 and $1.89 per share.

Before moving on to projected cash flows, I did want to mention a couple of key points. Our 2015 outlook includes the expiration of a wholesale contract in June of 2015, that both Pete and Sean have mentioned, and also the unrecovered investment of the retail portion of the SPP transmission lines that were placed into service in 2014. This is why we are filing a general rate case required in Oklahoma after receiving the environmental order, and we don't anticipate recovery of these items until the end of 2015.

The second point is that distributable cash flow is projected to grow at a 6% to 8% compound annual growth rate in 2015 from the initial MQDs, even though our earnings from Enable are projected to dip due to the drop in commodity prices.

I would like to provide more detail in regard to our cash flow. The slide shows our strong cash position for 2015. As we've mentioned many times before, Enable has transitioned from a user of cash to a provider of cash. Projected sources of cash for 2015 are approximately $860 million, while uses are just under $750 million.

I want to point out that while our cash flow projection for 2015 is positive, our excess cash will be utilized going forward to fund increasing capital expenditures, and for cash taxes. We expect to be a full cash tax payer by 2018, as our net operating losses associated with bonus depreciation are utilized. This strong cash flow position is key to our value proposition, which is growing utility earnings per share, and utilizing our cash flow received from Enable to fund our capital expenditures, and grow our dividend at 10% annually.

This concludes our prepared remarks. We will now answer your questions.

(Operator Instructions)

Your first question comes from the line of Neal Mitra. Please proceed.

Hi, good morning.

Good morning, Neel.

I had a question on the O&M outlook for 2015. It looks quite a bit higher than 2014, and correspondingly, the Utility earnings seemed to decrease year-over-year. Could you maybe talk about the drivers behind the Utility earnings in 2015?

Sure, the key driver is really O&M is only up modestly from 2014. The real key driver that's impacting results for 2015 are a few things. It's the increased depreciation associated with new plant in service, that's about $0.07 to 2015. We have got that expiring wholesale contract in Arkansas that's about 3% -- $0.03 lag on 2015. And then that retail portion of the transmission that we need to recover, and associated depreciation and property taxes with that is about 4%.

Got it. So when you file for the rate of change, you expect all this to be trued up?

We do, yes, at the end of 2015.

And to be clear, the rate case is going to be filed this year or next year, or you haven't decided yet?

Neel, we'll file that as soon as the rider is in place for the environmental compliance plan, and we expect to file that this summer.

Okay. And then for the rate case, what test year is going to be used, is it 2015?

We have the -- we will use the 2014 year end test year, and we have the opportunity to utilize a six-month look forward. I will tell you if the rider goes in place later in the year in the summer, we will look to update that with the most current quarter. So we could actually move that up and include Q1 of 2015.

Okay. So just to be clear, so kind of the $[0.14] you outlined as drag between 2014 and 2015, can not all of that be recovered, if you use 2014 as a test year? Or how would you plan to recover?

(Multiple speakers) No, it will all get picked up. It will all get picked up, regardless of the test year we use.

And then -- (Multiple Speakers) -- sorry, go ahead.

No, go ahead.

So I think in the past you guys have guided towards Utility growth rate, kind of around 5%. Have you updated that, or is the earnings kind of back-end loaded versus front-end loaded? Can you just comment on that?

Yes, so historically we had a consolidated growth rate of 5% to 7%, and that included our business Enogex. SInce we've -- as Pete was talking about in his comments, since we've moved Enogex to Enable and it has become a standalone MLP, we are really communicating a 3% to 5% growth rate at the Utility. That is actually consistent with what it was previously.

Where we were previously, is we had a 3% to 5% growth rate at the Utility, and then Enogex was the -- really the growth engine that got us to a consolidated 5% to 7%. As we look forward to this 3% to 5% growth rate -- you can look at our CapEx table. We have a large percentage of the capital expenditures related to the environmental plan are towards the back-end of this period. And that was done intentionally, Neel, to really mitigate the impact to customers.

Got it. Okay, great. Thank you.

Your next question comes from the line of Matt Tucker. Please proceed.

Hey, guys. Good morning.

Good morning.

Just first question on the dividend CAGR target. It seems like Enable is kind of -- at least temporarily suspended their longer-term guidance. So I am just curious, what gives you confidence in maintaining that target? And are you willing to up your Utility payout ratio if you need to support that?

Matt, when we as -- actually talked about this a little on the last call, and the work that we went through when we established our guidance of when we did our 11% increase in September of last year, and we gave our 10% dividend growth rate. We, of course, looked at a myriad of scenarios, and financial scenarios and looked at our financial flexibility.

We recognized and have always recognized that we have cycles, investment cycles and commodity cycles. Investment cycles in the utility business and commodity cycles in the other business, in the Enable business. When we gave our guidance of 10% per year on dividend growth rate, we did that with a -- I guess, a high level of confidence in our ability to meet those objectives.

And so, we -- as you -- as I think I mentioned in my remarks, when they lowered their guidance for 2015 on cash distribution, we came out quickly and reiterated that that is not going to change our plans to grow our dividend at a 10% annual rate for the next five years. Our current plans are to continue to recommend that to the Board of Directors. We seem to, from our standpoint, have the financial flexibility to continue to do that, and still invest in our Utility.

We talked about the generation portfolio, what we are doing there. We plan to be able to accomplish that, continue to build out our Smart Grid platform, and not have to go to the equity market. So, yes, we do continue to plan on that 10% dividend growth rate.

Okay, great. That was helpful. And then just in the recent past, on past calls, you have talked about SPP per quarter 1000 transmission opportunities, I believe they came out with a long-term plan around year end. Could you just talk about maybe what opportunity you still see there, and how that compares to what you were thinking previously?

Sure, so Matt, this is Sean. When the SPP came out with the recent plan, there were not a lot of new projects out there. There certainly were not many, what we would consider competitive projects. To be honest with you, that's what we expected.

We expected with the significant of transmission that has been built over the previous five years, a lot of that was built by us. We thought that there was a bit of digestion that was going to go on in the SPP, and that's what's occurring. We do have some Notices to Construct for two lines that occurred at the beginning in 2017 and 2018. We will build those. We are active in continuing to evaluate opportunities, but at this time there is nothing on the horizon that has not been previously disclosed.

Okay, thanks. Apologies if you just said this. I missed it. But with the Utility growth target, should we be thinking about 2014 as a base year, or 2015? Could you just comment on that please?

Yes, you can use either one. (Laughter).

I guess, I was thinking if you are using 2014, and 2015 ends up kind of flattish like you are guiding to, that implies kind of a stronger, maybe towards the high end of the growth rate, or after to kind of catch up? Is that how we should be thinking about that?

Sure. But I just think for the sake of simplicity, you can use 2014.

Okay, thanks, guys. I will jump back in the queue.

Okay.

Your next question comes from the line of Ashar Khan. Please proceed.

Good morning. I guess, my question was -- I was trying to find out what should be the baseline for the growth of the utility. So I guess, we can use 2014 as that baseline, right?

Sure.

Thank you.

Your next question comes from the line of Anthony Coldwell. Please proceed.

Hey, good morning. It's Anthony from Coldwell Bankers. (Laughter).

Hey, good morning, Anthony. (Multiple Speakers). (Laughter).

It's a tough market right now with this weather, not many homebuyers. Just some quick housekeeping first. What's a good tax rate to use -- at the corporate level here when -- I think of the distributions coming in, OG&E earnings, what's a reasonable tax rate to use at the corporate level?

Yes, at the corporate level, about a 30% effective rate.

Okay. And you may had said this earlier in your remarks, and I missed it, just you've given a growth rate at the Utility -- I know with Enable, have you given a growth rate at the consolidated company, or thoughts on giving a growth rate?

We had. We are really trying to move away from that, because what's important as articulated on the call, is the cash that's coming in from Enable So we will put a growth rate around that, but we are really just moving towards a Utility growth rate, and then the increase in cash that's coming in from Enable.

Okay. And then, I guess lastly, I guess, it was new from maybe the third quarter call or even at EEI. I guess, with the extension of bonus depreciation -- you guys have said, you're not going to be a taxpayer -- a cash taxpayer, I guess until -- if heard correctly 2018. I guess, that's new from I guess, previously, I think you were not going to be a cash taxpayer either end of 2015 or maybe 2016 it was?

That's correct. That's correct. I mean, the bonus depreciation really had a significant impact on us. That is about $140 million worth of cash to us. So that really pushed our full cash taxpayer status out.

It doesn't look like CapEx is really changing. Your CapEx plan has stayed the same, and you now just have an extra $140 million of cash. Any plans you have for the $140 million?

Well, it's going to be to fund -- I mean, our CapEx, while it doesn't ramp up significantly until the tail end, we do have significant CapEx for next year. And then, we will also be funding our dividend growth. So I think I went over the cash flow slide for 2015. We have about $115 million of excess cash that's available in 2015.

We will start paying some cash taxes. We just aren't full payer until 2018. But it does ramp up.

But I guess, I am looking at slightly differently that at third-quarter call, in EEI you guys -- you were funding all this great CapEx with no equity. You announced a dividend. I believe, the dividend growth was announced prior to the extension of bonus deprecation -- or I may be wrong on that. So I am thinking -- that this $140 million is incremental to funding a dividend and CapEx? Is that fair?

I mean, it is. That's primarily what it is. The cash taxes, while it will change a little bit, what it really does is just smooth out our cash needs over that period of time. It would push out a little bit of financing needs that we would have in later years.

Great. Thanks for taking my question, guys.

Thanks, Anthony.

Your next question comes from the line of Brian Russo. Please proceed.

Hi, good morning.

Good morning, Brian.

Just on the 3% to 5% EPS CAGR at the utility, should we use weather normalized 2014 as a base?

Yes.

Okay. And just to reiterate what you said earlier, it looks like you are experiencing some regulatory lag in 2015, which would be captured in this upcoming rate case. When would you expect new rates to go into effect?

Early in 2016.

Okay. And is that a statutory deadline? Because if I recall in the past, you've experienced delays in final outcomes in your rate cases?

Right. No, there is -- we do have the opportunity to begin implementing rates within 180 days, but depending on when we file the case. And that's why we said beginning of 2016, end of 2015. But that's what our expectation is. I don't think we will have a long protracted process.

Got it. Any thoughts on what you earned ROE is at midpoint of your Utility 2015 guidance?

So let me answer it this way, Brian. If we thought about -- at year end 2014, we're probably earning around 10% in Oklahoma. Obviously, Arkansas is much lower than that. And then, on the FERC transmission, we're earning our allowed 11.1%.

Okay. All right.

And so, with -- so to your point with the lag going down, you'll see the earned ROE in Oklahoma decline, from what year end 2014 was.

Okay. Great. And how confident are you in the continuation of your 1% customer growth? It's hard to believe that you won't experience some impact from all the layoffs in the energy sector, and the ancillary services in your service territory. So if you could elaborate a little bit a little more as to what you're seeing today, and what you expect to see a year or two from now?

Brian, so we've seen some of the core service companies throughout Oklahoma close some offices. Some of the -- there has been some decline in employment in some of the companies based here -- oil and gas companies based here. Not the big ones per se, but some of the smaller ones. We continue to -- I mentioned Tinker. We've got GE whose moved -- is building worldwide oil and gas research here, and that's ramping up.

Boeing continues to move people, research here. Tinker has got this large mission that's going to go on through the next 40, 50 years out there. And so we do see -- away from the oil and gas sector areas of growth in Oklahoma.

We see -- we have a lot of construction still funded in Oklahoma City by the [masses], the $800 million tax that was put in for seven or eight years. So there is still a lot of construction here. So we see -- and again, we still see, as you know from probably Enable's call and some other calls, we still see growth in production in Oklahoma. However, it's not at the same rate it was in parts of Oklahoma, and there's still a lot of CapEx being spent here.

So it's always hard to predict. So it's a mixed bag, because we've got pluses and minuses. Of course, it's not going to be as strong as it was, looking at 2015. Of course, we'll see where commodity prices go. That's anybody's guess at this point in time.

But we do have other areas that, in Oklahoma City is attracting a lot of new businesses. So it's -- we have -- we see no reason at this point, everything that we are seeing going on in the communities, that we would back off our 1%. That seems to be -- been very consistent I think, for the last 5, 10 years or so. I mean, we -- sort of [0.9%] to [1%], it's been very consistent. We're not -- well, I think we are still, from a planning expected, expecting that at this point.

All right. So you are at the midpoint of your 2015 guidance, that encompasses the 1% to 1.4% with weather normalized load growth?

1%.

All right. Great, thank you very much.

You're welcome.

There's no further questions at this time. I would now like to turn the call back to Mr. Peter Delaney for any closing remarks.

Well, as always, I would like to recognize our members whose hard work and commitment have driven our results, our ability to deliver these results. Again, I want to thank all of you for your continued interest in OGE Energy. Have a great day.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.