PNM Resources Inc (PNM) 2012 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the PNM Resources second quarter conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator instructions). As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, [Jimmi Lauter], Investor Relations Manager. You may begin.

Thank you, Kate, and thank you, everyone, for joining us this morning with the PNM Resources second quarter 2012 earnings conference call. Please note that the presentation for this conference call and other supporting documents are available on our website at PNMResources.com. Joining me today are PNM Resources Chairman, President and CEO, Pat Collawn; and the Chuck Eldred, our CFO, as well as several other members of our executive management team.

Before I turn the call over to Pat, I need to remind you that some of the information provided this morning should be considered forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995. We caution you that all of the forward-looking statements are based upon current expectations and estimates and that PNM Resources assumes no obligation to update this information. For a detailed discussion of factors affecting PNM Resources' results, please refer to our current and future annual reports on Form 10-K, quarterly reports on Form 10-Q, as well as reports on Form 8-K filed with the SEC. And with that, I will turn the call over to Pat.

Thank you, Jimmie, good morning, everyone, and let me add my thanks to Jimmie's for all of you joining us this morning. I'm going to start the presentation on slide 4 this morning and review our second-quarter performance and provide some Company updates. I hope you've all seen our news release issued earlier this morning reporting our second-quarter ongoing earnings of $0.33 per diluted share compared with 2011 second-quarter results of $0.20. On a GAAP basis, we finished the second quarter at $0.27 per diluted share compared with $0.04 last year. Both quarterly and year-to-date results represent continued improvement in the performance of both PNM and TNMP.

For PNM, performance was strong as a result of the retail rate increase that went into effect last August and our continuing efforts to align costs with revenues. In addition, this June was quite a bit warmer than June a year ago. TNMP has strong retail load growth of 7% but was tempered by a cooler start to the summer in Texas than compared with 2011. In terms of PNM's regulatory framework, we continued to make progress on several fronts and I will discuss those in more detail in a few minutes.

Turn to slide 5 for an overview discussion on load growth, economic conditions and unemployment. We continue to see modest retail low growth at PNM, 0.1% for the quarter and 0.4% year-to-date on a weather-normalized basis. Our rolling 12-month weather-normalized average sales growth rate for PNM is 0.8%. We have experienced slow residential customer growth for a while. It has been less than 0.5% for more than two years. Housing starts have been slow as a result of the weak economy. They are picking up over last year but still below pre-recession levels.

As we've discussed before, New Mexico's economy is closely linked to governmental activity that has historically moderated the peaks and valleys and economic fluctuations and we're starting to see some signs that the government sector is somewhat stable in our area. For example, the state of New Mexico recently announced that the tax revenue for the year is coming in at about 50% higher than anticipated. We're also seeing some job creation such as the Albuquerque metro region receiving $3 million in a job-training incentive program that has resulted in a $9.8 million payroll increase this past year. The city of Albuquerque also plans on adding new jobs. While there are some governmental agencies tightening their belts, we see the overall picture remaining steady.

For TNMP, the quarter resulted in strong load growth in each of the residential, commercial and industrial segments. However, while the nearly 25% increase in industrial load looks impressive, please remember that the non-transmission industrial load for TNMP represents a small portion of the total sales volumes and revenues. For TNMP, the rolling 12-month weather-normalized sales growth is 2.8%. The growth seen in TNMP's residential and commercial segments provide support that the Texas economy is one of the better, if not the best, currently in the nation. About 231,000 jobs were gained in Texas in June 2012 compared to the prior year. Single-family building permits were also up 21% year-to-date through May. I think this is further proof that the economy in Texas is performing better than most today.

TNMP's customer growth is also very strong at 0.7%. If we look at unemployment, Texas and New Mexico continue to fare better than the nation as a whole. And I'm sure you saw that this morning the unemployment rate for the US was changed from 8.2% to 8.3%, but in Texas they're at 7% and New Mexico at 6.7%.

If we turn to slide 6, I'll talk a minute about the regulatory updates. In early July, we announced a settlement in PNM's transmission case with FERC. The settlement has been filed with FERC and calls for a $2.9 million increase to transmission revenues. The FERC staff has filed comments in support of the stipulation and the administrative law judge has also certified the settlement to commission this week. This was a black box settlement, so we have an agreed on revenue number but no specific ROE. We await FERC approval of the settlement but do not have a time line for that action.

One of the most important aspects of this settlement is the fact that the parties agreed not to oppose the concept of a formula-based transmission rate filing as long as we make that filing within a year of the pending case's approval by the FERC, and we will make that filing. The formula-based rates will be key in helping PNM fully achieve a reasonable FERC transmission return on equity. Please note, as permitted by FERC rules, in June of 2011 PNM began billing at the higher rates associated with the transmission case. Those rates are subject to refund.

Revenues recorded by PNM have been aligned with the agreed-to annual increase which was included in our 2012 guidance. The FERC generation case with the Navopache Electric Co-Op is also continuing toward a settlement. PNM and Navopache are making positive steps towards a resolution, and we have reached a settlement in principle. The terms are confidential, however, until we file the settlement, so we hope to be able to share those results with you in the near future.

Regarding the renewable energy rider, we have seen a positive response from interested parties. A hearing examiner has issued a recommendation that is designed to approve that rider, and we await the commission's action. We have proposed an August 8 implementation date for that rider.

Likewise, we have had a positive response to the 2013 renewable energy plan. This plan says that in 2014, when all of the plan's components are in motion, PNM expects to achieve full quantity and diversity compliance with state mandates and still be below the reasonable cost threshold. A hearing on this has been set for September 4.

Regarding the potential for a decoupling tariff in New Mexico, in May the commission issued a notice of proposed rulemaking for an amendment to its energy efficiency rule that would include decoupling as a mechanism for removal of disincentives associated with the implementation of energy efficiency programs. The commission closed that docket on July 26 and opened a new one to consider decoupling. This NOPR establishes a workshop process to develop the new rule and the first workshop is scheduled for August 24.

And, finally, regarding the future test year rulemaking for New Mexico retail cases, the commission issued an order closing the record on the rulemaking and the anticipated next step is for the commission's general counsel to draft an order that establishes clear rules for utilities to use when filing future test year cases. We're looking forward to the commission establishing ground rules for future test year filings, but we still have the ability to file a future test year even if the rulemaking is not completed in a timely manner. You will recall that principles were agreed to in our 2011 generally case settlement, and we would follow those principles of the rulemaking is not completed at the time of our next rate case filing.

Let's turn to slide 7 for a quick update on the BART situation at our San Juan power plant. The Environmental Protection Agency issued a 90-day stay after Governor Susanna Martinez requested time to try to find a middle ground on this issue. It is important to note that, although the EPA has issued a stay, it does not impact the final compliance date of September 21, 2016. The EPA states that it intends to conduct a formal rulemaking process to either extend the compliance date or to accommodate the promulgation of a possible alternative. The New Mexico Environment Department kicked off a public process designed to identify possible alternatives at the San Juan plant that could meet the Clean Air Act's regional haze rule. The Environment Department is trying to break an impasse between the federal and state plan regarding best available retrofit technology at San Juan. This is a federal implementation plan versus state implementation plan issue we have been discussing with you for quite some time.

This public process started in late July and is expected to go through mid-September. The first public comment was held early last week in Farmington. About 100 people attended and 29 people provided oral comments. During the public meeting last week, the New Mexico Environment Department made it clear that a viable alternative must comply with the requirements of the Clean Air Act and any alternative that does not comply with it would likely be turned down by the EPA.

An EPA official at the meeting reiterated that the final plan also needs to meet the Clean Air Act standards and will need EPA approval, but the Clean Air Act intends for the states to develop those plans. Concurrently with the public comment meetings will be working group sessions in which key stakeholders will provide the New Mexico Environmental Department with technical assistance to evaluate and develop a viable alternative to the federal plan and the state plan. From our perspective, any viable alternative has to be one for which we get appropriate cost recovery.

We are also moving forward on litigation in the 10th circuit court and oral arguments are scheduled for October 23. We will keep you posted on this issue as it continues to develop.

With that, I will turn the call over to Chuck for the financial details.

Thank you, Pat, and good morning, everyone. We will start on slide 9. As Pat discussed, ongoing earnings were $0.33 for the quarter, which was $0.13 increase year-over-year. The majority of the improvement came from PNM with a $0.13 improvement that was largely driven by rate relief. TNMP continues to perform well and was up $0.02 for the quarter. Corporate and other was also $0.02 higher, and First Choice and Optim were combined $0.04 decrease.

The primary driver for PNM was a rate increase that was implemented in August 2011, which was $0.12 for the quarter. There were a number of other drivers that also contributed positively to PNM. Weather account for $0.03 improvement due to the high temperatures in June. Cooling degree days for PNM were 32% higher than normal in the second quarter 2012. The PNM Resources share repurchases for last year improved the PNM results by $0.03. The expected O&M reductions to line costs to our rate structure are also $0.01 improvement. Outage costs contributed $0.01. The planned outage for San Juan Unit 2 was shorter than expected and PV3 had one of the shortest plant outages in the history of Palo Verde. As expected, lower Palo Verde 3 prices were a negative driver, causing $0.01 decrease compared to 2011.

Interest expense increased due to the debt issuance of PNM in October 2011 for a $0.01 change. The Nuclear Decommissioning Trust realized fewer gains in 2012, resulting in a $0.04 impact. TNMP was up $0.02, as Pat mentioned. TNMP is experiencing good loan growth, contributing $0.02 from last year. The share repurchase improved TNMP's results by $0.01. The mild weather through June of this year had a negative impact of $0.01.

Now turning to slide 11, we are affirming our 2012 guidance today of $1.20 to $1.32 for the year. We continue to expect 2012 to end solidly in the middle of this guidance range. The settlement of the FERC transmission case this quarter falls in line with the guidance that was issued, so there is no change for that. When we originally issued 2012 guidance, you will remember that we expected a decrease of $0.03 to $0.04 year-over-year for Palo Verde Unit 3 market prices. At our Q1 call, we updated this to include another $0.015, making the total a $0.04 to $0.06 decrease year-over-year. We continue to expect this result for 2012. Based on the full year, we have fixed 90% of Palo Verde's output at an average price of $31 per megawatt hour for 2012, and we do not expect price volatility for the remainder of the year to have a material impact on our earnings.

And we have a number of other small items that are mostly positive than we had anticipated. One of these is our plant outage expense. We saw better-than-expected outages in Q2, although two major plant outages in 2012 at San Juan. We do expect the total year plant outage expense to be up compared to 2011.

Although we are seeing slightly lower than expected load growth at PNM this year, as usual, we continue to manage our business to mitigate any negative impact this may have. We're also doing this with various contingency improvement and cost control efforts. As we discussed last quarter, we are also seeing an increase in AFUDC, resulting from a higher capitalization rate primarily due to lower short-term debt balances at PNM. We expect all of these items to balance out and we are confident that we will end the year in the middle of our guidance range.

With that, I'll turn the call back over to Pat for closing remarks.

Thanks, Chuck. We'll wrap up today's call with a checklist for 2012. The settlement in the FERC transmission case provides the latest example of how we're making progress towards our goal of earning our allowed returns. Our efforts to seek proper cost recovery coupled with controlling expenses continues to pay off, and we will continue on this path of matching cost with cost recovery.

As we discussed earlier, we are in the earlier stages on the other regulatory matters and are making progress. We're also seeing strong reliability in power plant performance, and as Chuck has detailed, we are effectively controlling our costs.

Operator, we can start the question-and-answer portion now.

(Operator instructions) Paul Fremont, Jefferies.

Thank you, a couple of questions. One, if the state and the EPA move towards a possible shutdown of one or more units of San Juan, would you consider offering Palo Verde 3 as -- or the rate basing of Palo Verde 3 as a possible source of replacement power?

It's too soon to think about those kinds of alternatives, Paul. One of the things that we said we would do is we would look not only at the environmental performance of the plan, we would also take a look at the economic piece of it. So that includes both the cost to ratepayers and impact on jobs in New Mexico. So there may be pushes for that if you wanted to build some new gas generation in New Mexico. So it's really kind of, I think, too soon to tell until we start getting these technical work groups together offering alternatives.

And then what is the time under which you need to inform lessors for Palo Verde Units 1 and 2 about what your intention is, come the end of the lease term?

We do have to give notices for both Unit 1 and Unit 2, which, as you know, the total 178 megawatts that are under lease payments. The first notice will be January 2013 for Unit 1. That's actually our second notice. The first notice was when we indicated that we have an interest to continue to have ownership in the asset. The second notice will really be an indication of our interest in either extended-release or making a decision to purchase the leases that are outstanding.

The second period for Unit 2 will be January 2014, which again will be the second notice to indicate a decision to either extend the lease or purchase the option. So in either case, we haven't made a firm decision as to what our plans are. We still have a few more months to work through this. Ultimately, our goal and desire is to have ownership of those leases in Palo Verde within rate base. And to our view, it's really more the timing of how we can work through a decision to ultimately get regulatory treatment and recovery of the investment and ownership of Palo Verde (multiple speakers).

And can you tell us, what is the current revenue requirement that's built into rates to recover the lease expense?

Currently the payments per year are around $57 million.

Okay, so that's roughly the equivalent of what you're collecting from customers right now?

Dollar for dollar, yes. We treat it as an O&M expense.

And I guess my last question would be, when we think about your equity ratio and targets, can you give us a sense of what you are targeting both at the utility and at the holding company?

Yes, we target for PNM a 50-50 cap structure, and at the holding company, we maintain a range of between 50-55, roughly around 52 would be -- probably 52-53 is really a pretty good medium range for that.

And that's 52-53 debt?

That's right.

Thank you very much.

Justin McCann, S&P Capital IQ.

Good morning, congratulations on a great quarter. Despite the strength of this quarter, you are staying within the mid range of your guidance. Despite the impact of Palo Verde, could you still approach the high end of your guidance?

At this point, we are really comfortable being at the solid point of the midpoint of the range. We mentioned a slight decrease in load, so there's some impact there. We are using the cost efforts to really offset that, and the impact of Palo Verde -- we're really comfortable where we are right now. But I think it's probably -- we are very comfortable and we are confident in the midpoint of the range. To that degree, anything beyond this point would be, certainly, an upside to that midpoint.

Okay, thank you.

Ali Agha, SunTrust.

A couple of quick questions -- first, on Palo Verde 3, Chuck, can you remind us how much of that output is hedged in 2013 and perhaps in 2014 right now?

We haven't really talked about that, Ali. We've talked about that we continue to use a rolling 12 months to keep a hedge position. We are 90% hedged through this year. Certainly, we are hedging positions out in 2013, but we haven't disclosed what our final position is at this point. And we're trying to keep the flexibility that we talked about before of any upside potential in the market to capture that, given the fact it continues to be a negative impact to earnings, trying to capture some -- hopefully at some point, some increases in power prices that would turn that around.

Okay, but just actually less than half is a fair way to think about it?

Yes, we really haven't talked about it, Ali. So I think at this point, it's fair just to say that we are 90% hedged for this year. We certainly are beginning to hedge some in 2013, and that's about as far as I think I can go at this point.

Okay, secondly, Pat, going back to the BART issue, etc., just remind us, with all these parallel parts going, the 90-day stay, the court, etc., just working backwards, if that deadline does not change, what's kind of a drop-dead date for you guys to start that investment and still meet the deadline?

Well, the 90-day stay technically would be up in mid-October of this year. And what we are doing now is working with the different vendors that have put in bids on the SCR project to determine if there are ways that we can move spending back so we don't have to start any spending, significant spending until we get through this process and know if there's an alternative. So we don't have a definite plan yet. But as we disclosed in the Q, we're looking to not have to spend the amount of money we thought we would and working with vendors to coming up with alternative plans.

But we will know when this public process is over by mid October, I think, whether not there could be a viable alternative or we're going to have to go ahead with the SCRs.

I see. And also, is the plan at PNM to file the rate case by, what was it, fourth quarter? What's the latest on the time line there?

Yes, our current plan was that we would file rate case in December of this year.

Okay. And last question -- remind us again, when we look at your base CapEx numbers that you have in your forecast, what does that translate into from an annualized rate base growth? And what is baked into the rate base growth to go back to that 10% to 12% total return you talked to us about?

The annualized rate base growth that was built into the capital budget was about 2%.

Okay, but to get (multiple speakers). Okay, but to get to the 10% to 12% total return, if I recall, the rate base growth needs to be higher. Correct?

Yes. And Ali, the other piece that we talked about, anywhere from 4% to 6% that would be considered with the other potential capital we have relative to whether we put SCRs on or some alternative to how we pursue solving or providing some solution to the San Juan.

Because that 2% was base capital (multiple speakers) yes.

And so we take the other capital potential, we have the renewables, we continue to feel comfortable that the 10% to 13% over the next five years with 2012 being a base year, we are confident we can provide results to meet those expectations. And of course, as you know, that also includes dividend yield, which we address every February with the Board.

Right, but just to be clear, Chuck, so 4% to 6% is kind of the implied rate base growth that kind of supports that target?

You know, that's probably a reasonable expectation with knowing that we are going to have to spend that potential capital. We're just not sure exactly what we will be spending it on, other than SCRs, at this point.

Got it, thank you.

Brian Russo, Ladenburg Thalmann.

Most of my questions have been asked and answered. I'm just curious, could you just remind us of your dividend policy and the timing of when the Board reviews the dividend?

Yes, our long-term target on our dividend is 50% to 60% of consolidated ongoing earnings. And the Board continues to evaluate it every year in February.

Okay, every February. Okay, and then also remind us that the $143 million of 9.25% parent debt that I believe expires in 2015 -- is there an opportunity to take that out or refinance that earlier? Or you will just let that roll off when it expires in 2015?

Yes, the plan right now is to let it expire. We'll pay it off at the -- when -- that date in May of 2015. Now, because it's not callable, there's no way to take it out unless interest rates were to change dramatically, which I don't think any of us expect to happen.

When we recapitalized last fall, we bought some of it back, but we paid a hefty premium for it, so we don't really want to do that again.

Okay, and lastly, these alternatives that you referenced in terms of the San Juan BART EPA situation -- I'm just trying to get a feel. I think, from your perspective, or at least from the state and the Governor's perspective, the best alternative would be the lowest cost. And I'm just wondering, in the $700 million of potential CapEx, given any sort of settlement with the EPA, it looks like that $700 million could be considerably less. I'm just trying to figure out how you backfill that to maintain the $700 million which supports the 10% to 13% total return target.

A couple things on that -- on that $700 million, that's the total plant, and our share of that is about 46.3%. So I'll do easy math; it's about $350 million for us. If we ended up doing the SNCRs, that's about $77 million; half of that is ours. So there's a little over $300 million delta. Of course, I don't think that we are going to be able to get to four SNCRs on that unit. I think that was the state plan, and the EPA has rejected that. But if we come up with a lower-cost plan, we can still fill in with other renewables. We would like to own more renewables as opposed to doing a PPA. We can build a gas peaker, we can build some generation. So we have lots of opportunities to fill in that gap for a cheaper alternative.

And Brian, to add to Pat's comment, we update the capital budget in December of each year, so what we project and look at the infrastructure of the business, and given whatever solution we determine, there may be some capital that we can allocate, both to PNM and TNMP that would help support that as well.

All right, thank you very much.

(Operator instructions) Maury May, Wellington Shields.

Good morning, folks, and congratulations on a great quarter. The story is really intact. I've got a couple questions this morning. First of all, going back to one of the first questions, if you are speaking to the midpoint of guidance for 2012, it indicates down quarters in the third and fourth quarter. And how is that possible?

I'm not sure -- when you say down quarters, the third and fourth quarter?

Well, just mathematics. If you take the 17 and the 33 and look at the 61 and 22 last year, we are looking at third and fourth quarters that are down from last year.

I might want to take that off-line to reconcile numbers with you, but we wouldn't necessarily see it that way. But I think it's probably better to just discuss numbers off-line to see if we --

Okay.

And just call Jimmie, and we'll be sure. But we are very confident with the third and fourth quarter. And frankly, we'll -- typically going to have a stronger third quarter.

Okay.

And remember, there was a lot of weather last year in the third and fourth quarters in both New Mexico and Texas.

Okay, okay. Yes, next question has to do with the regulators in Santa Fe. There are a couple of open seats this year in districts one and three. I just wondered if you could give us some color on the elections as they unfolding.

Yes, sure. In the district that's Commissioner Howe's current seat, Valerie Espinoza won the Democratic primary up there. She is unopposed. She will be the next commissioner there.

I'm sorry; what was that name again?

Valerie Espinoza.

Okay.

She will be the next commissioner there. She has a good relationship with some of the other commissioners are staying on the commission. She has been very interested in learning the business. And even those she's unopposed, she's still working very hard to get that seat.

Here in the Albuquerque district that Commissioner [Marx] currently holds, there is an opposed race here. The Bernalillo County Clerk or, excuse me, Assessor, Karen Montoya, is the Democratic candidate. She won a pretty tough race, a three-way race, and she is up against a Republican who is a lawyer who has been pretty low profile. We haven't seen much going on in that race yet. The airwaves here, as you can imagine, have been taken over by the presidential candidates. I think Karen may be the favorite in this district because we she's got such good name recognition from her years as an assessor, even though the district here is pretty evenly split 50-50 in Republican and Democratic. But Karen has been a very good county assessor. She has made tough decisions and she is, again, also very interested in the business and learning.

So I think whichever one of those two wins, we would be pleased with the outcome. And we are pleased with Valerie coming in. And she is the Santa Fe County Clerk, so she also has -- Valerie has elected official experience.

Okay, and last question -- the rate case that you're going to file in 2012, can you give us some color on that -- what investments you need to get in, what O&M costs need to get recovery of?

No. I've learned long ago, Maury, to never talk about rate cases before you actually let the regulators know what's going to be in them. So --

Okay, fair enough, Pat. Thank you very much.

Terry Shu, Pioneer Investments.

Just in looking at your guidance and also your page on your allowed returns on capital structure, just looking at the run rate earnings, your guidance, am I right that the implied or the ROE that you are going to earn in 2012 is somewhere in the low to mid 9s? So a bit of regulatory lag, but you've closed the gap a lot? Is the calculation roughly right?

Well, definitely have closed the lag. And with PNM, we are really going to earn our allowed return.

Right.

And the same with TNMP. So both those businesses are earning --

Close to 10?

At least to 10% level.

Okay, okay, because I was just using the information on the regulatory page. So for 2012, you are already at that level. And I was looking at some of your older presentations and your capital spending forecast sheet. Have you given, in the past, a rate-based growth forecast? I don't recall seeing it, or maybe I missed it.

We did, actually. If you go back, and if you will call Jimmie Blotter, she will share the presentation we did on guidance back in December that show some information on rate base growth.

Okay, and what would that be for the next, let's say, three to four years?

Well, we broke that down in two components. One was just the core capital structure, which is around that 2% we talked about earlier, and also the 4% to 6% additional capital that would be supportive of PNM for investing in either SCRs or other alternatives that might be considered. And then we update the capital in December of each year, so we will, at that point, determine if there's any --

So if you put it all together, is it in the mid-single digit area?

Yes, that's probably a reasonable expectation (multiple speakers) --

Right, so really going forward, you are at your allowed return and you have mid-single digit revenue or mid-single digit rate base growth. So, presumably, earnings or utility earnings will track that, and you have some holding company interest expenses. Is that right, more or less?

I just want to clarify. We are earning the allowed return at PNM retail.

Right.

So still you have the transmission, the FERC transmission, the FERC generation and the Palo Verde business (multiple speakers) which is not earning that.

Right, right. When I talked about the ROE, I was adding everything up, so the cumulative, excluding holding company interest costs. Does that sound about right?

Well, PNM retail rate base is (multiple speakers) 10% and then you have the FERC or PNM generation, which we have (multiple speakers) --

Right, right, right, right, which is a drag, right, which -- right. And have you commented on dividend policy, either in recent meetings -- I don't recall.

Our dividend policy is that we strive for a 50% to 60% payout, and the Board looks at that strategically and long-term. They revisit that every year in February. We had a dividend increase this last February, and what the Board is looking for when they make that decision is where our capital spending is going to be when we have some clarity around San Juan and what those options are. So we will update again in February.

Right. Right now, you are at the low end or even a little below that, so -- as each year or each meeting goes by, each time period, you will give more color on whether -- the trajectory? Is that right?

That's correct. But we did message clearly that, given where we are in the payout ratio, below 50%, we would very likely be above average dividend growth.

Right, right.

(multiple speakers) comfortable with that projections, and that message (multiple speakers) --

Right, so is that --

(multiple speakers) above industry average, yes.

Right, okay, thanks so much.

I'm not showing any further questions in the queue at this time. I would like to turn the call back over to Pat Collawn for closing remarks.

Thank you, operator, and thank you all for joining us on this beautiful summer morning. I hope you are all enjoying the Olympics, and we look forward to talking to all of you on our third quarter call. Thank you, operator, we're done.

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone have a great day.