Suburban Propane Partners LP (SPH) 2004 Q3 法說會逐字稿

relating to the Partnership's future business expectations and predictions and final conditions and results of operations. Involve certain risks and uncertainties. Important factors that could cause actual results to differ materially from those discussed in such forward looking statements cautionary statements include among other things the impact of weather conditions on the demand for propane, fluctuations in the unit cost of propane, the ability of the Partnership to compete with other suppliers of propane and other energy sources, the ability of the Partnership to retain customers, the impact of energy efficiency and technology advances on the demand for propane, the ability of management to continue to control expense, the impact of regulatory developments on the Partnership's business, the impact of legal proceedings on the Partnership's business and the Partnership's ability to implement its expansion strategy and to interrogate acquired businesses successfully. All subsequent written and oral forward looking statements attributable to the Partnership or acting on its behalf are expressly qualified in their entirety by such cautionary statements.

Ladies and gentlemen Thank you for standing by. Welcome to the third quarter 2004 financial results conference call for Suburban Propane. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will be give at that time. If you should require assistance during the call, press star then zero. As a reminder this conference is being recorded.

I would like to turn the conference over to Mr. Robert Plante. Please go ahead sir.

Thank you very much Andrea. Good morning everyone. Welcome to Suburban's third quarter fiscal 2004. I'm Bob Plante, Vice-President and Chief Financial Officer at Suburban. Hosting our call this morning is Mark Alexander, President and Chief Executive Officer. Joining us is Mike Dunn, our Senior Vice-President of Corporate Development. The purpose of today's call is to review our third quarter fiscal 2004 financial results along with our current outlook for the business. As usual, once we've concluded our prepared remarks we'll open the session up to questions.

Before we get started I'd like to remind you that statements made in the course of the conference call that relate to the Partnership's or management's expectations or predictions are forward looking statements. The Partnership's actual results may differ materially from those projected in such forward looking statements. Additional information that could cause actual results to differ materially from those discussed in forward looking statements is contained in the Partnership's SEC filings including its form 10-K for the fiscal year ended September 27, 2003 and its form 10-Q for the quarter ended March 27, 2004. Copies of these filings can be obtained by contacting the Partnership or the SEC.

Certain non-GAAP measures will be discussed on the call as well. We've provided a description of those measures as well as a discussion of why we believe this information to be useful in our form 8-K, which was furnished to the SEC this morning. The form 8-K can be accessed through a link on our website at suburbanpropane.com.

At this point I'd like to get started and turn the call over to Mark Alexander. Mark.

Thanks Bob and thank everyone for joining us this morning. While seasonally a slow period, our results for the third quarter were well within our range of expectations and are consistent with the guidance provided to you on our conference call last quarter. Weather, which is typically a factor in the early part of our fiscal third quarter, was unseasonably warm throughout the country. In fact, heating-free days were at 80% of normal for the quarter compared to 102% of normal in the prior year quarter when the month of April benefited from cooler temperatures in our areas of operation. Despite the weather, we continued to successfully control retail margins and maintained our prudent expense controls throughout the quarter. In a few minutes Bob will discuss our quarterly results in more detail.

Moving to the Agway acquisition, we continue to make excellent progress with our integration activities. A little later in the call, Mike Dunn will update you on the overall status of that integration. Suffice it to say that we are very pleased with the progress to date. We are on course to achieve the integration plans we have in place for the balance of this fiscal year. Because of our confidence in the earnings potential and the financial strength of Suburban, we have this morning declared our ninth increase in our quarterly distribution. I'll have some additional thoughts on our quarterly distribution as well as the outlook for the remainder of the fiscal year a little later.

At this point I'll turn it back over to Bob to discuss our third quarter results. Bob.

Thanks Mark. As we discussed, our results for the quarter to be consistent with our reporting for previous periods, I'm excluding the impact of an unrealized non-cash loss of $800,000 from our current quarter results applicable to FAS 133 accounting. That compares to a $100,000 gain in the prior year quarter. In addition our results for the third quarter were impacted by several significant items of a non-recurring nature including a $3.2m non-cash charge for impairment of goodwill applicable to a small acquisition that was completed several years ago, a non-cash charge of $700,000 from the settlement of futures contracts acquired in the Agway transaction - which were mark-to-market in the opening balance sheet on the purchase accounting, as well as a $200,000 restructuring charge associated with Agway integration. These one-time charges were partially offset by a $600,000 gain from the sale of some non-strategic assets during the quarter. On a net basis these items had a negative impact of $3.5m on the year-over-year comparison of EBITDA for the quarter.

Consistent with the seasonal nature of the propane and fuel oil businesses, EBITDA for our third quarter ending June 26, 2004 was a loss of $4.1m compared to income of 3.1 million for the same quarter a year ago. Our net loss for the quarter totaled 23.5 million or 75 per common unit, compared to 12.1 million or 47 cents per common unit in the prior year. Retail sales of propane during the quarter totaled 99.5 million gallons. That is an increase of 9.9 million gallons from a year ago. Sales of fuel oil and other refined fuels amounted to 51.5 million gallons for the quarter. As Mark indicated, although volumes were negatively impacted by the warmer-than-normal nationwide weather conditions early in the quarter, the inclusion of the Agway operations clearly overshadowed the effect of warmer weather.

Free days for the quarter were 22% warmer than in the prior year. Despite these conditions, revenues for the third quarter increased $139.6m, or just about 100% to 279.7 million from $140.1m in the third quarter of fiscal 2003. This increase is attributable primarily to sales generated by the Agway Energy business lines. Propane prices for the quarter ending June averaged 65.25 cents per gallon [basis amount Bellevue] versus 53.5 cents per gallon for the same quarter a year ago. That is a 22% increase in base product costs year-over-year. Propane prices continue to work higher and are offered today for spot delivery at about 72.5 cents per gallon [basis amount Bellevue].

Gross margin of $107.1m for the quarter was 37.5 million or 54% higher than in the prior year quarter. That is due principally to the inclusion of the Agway activity. Combined operating and general and administrative expenses of 107.7 million increased 42.3 million from a year ago principally as a result of the addition of expenses associated with the Agway Energy operations as well as the anticipated increases in marketing, professional services, and travel expenses all associated with integration activities, which amounted to $1.7m for the quarter. In addition, expenses as compared to the prior year quarter reflected anticipated higher insurance, pensions, and payroll-related costs.

Given our solid performance in the first nine months of the fiscal year, our distribution coverage remained very strong at 1.48 times as of the end of June. Capital spending during the third quarter totaled 6.3 million of which about 1.8 million was deemed maintenance related.

Turning to our balance sheet, we ended our third quarter with a cash balance of over 115 million. As planned, we used $42.5m of this cash to repay the current installment due on our senior notes. This is the second consecutive $42.5m maturity on our senior notes that we have repaid from available cash further improving our credit statistics and the overall strength of our balance sheet. In addition shortly after the close of the third quarter we made a $15.1m voluntary contribution to our defined benefit pension plan. You may recall that we made a voluntary contribution to this plan at this time last year as well. As a result, although we were not required to do so, we have contributed over $25m to our defined benefit pension plan over the past year to address proactively future anticipated funding requirements. Both the repayment on our senior notes and our voluntary contribution to our pension plan are consistent with our objective to strengthen continually our balance sheet when opportunities present themselves.

Now I'd like to turn it over to Mike Dunn to update you on the status of the Agway integration. Mike.

Thanks Bob. As Mark mentioned earlier, we are very pleased and excited with the progress we are making in integrating the operations of Agway Energy with Suburban's operations in the Northeast. To date, in addition to completing a very thorough evaluation and reorganization of the management structure for our Northeast operations, we have begun to work in earnest to complete the merger of 37 overlapping marketing areas. Our people are working very hard to complete as many of these mergers as possible before the start of the next heating season. Finally, we've successfully completed the necessary steps to integrate our central support activities to meet the June 30 expiration of our [trans issues] services agreement with Agway Inc. In summary, we are very pleased with the progress we have made.

As Bob indicated our current period results reflect a portion of the expenses associated with achieving the anticipate synergies. As expected, we will be incurring additional one-time costs in our fourth fiscal quarter to position ourselves properly to take full advantage of these synergistic opportunities. However, as we pointed out on our last conference call, we will not see the full favorable impact of these activities until the first quarter of fiscal 2005 and beyond.

In addition to the progress we are making with the integration activities, we have completed our analysis of the Agway retail gasoline business and have concluded that we should move forward to complete an orderly exit from this business. Communicating this decision to our customers is already underway. We expect that the exit process will be substantially completed by the end of this fiscal year. Mark.

Thanks Mike. As announced in our press release this morning, Suburban has declared another increase in our quarterly distribution to 61.25 cents per common unit. This distribution, which equates to an annual distribution rate of $2.45 per unit, represents our ninth distribution increase since our recap in 1999. The distribution will be paid on August 10 for our third quarter ended June 27.

Looking forward to the balance of fiscal 2004, we are very encouraged by the significant progress that we are making on our Agway integration activities. Our field personnel in the Northeast are very focused on driving the operational efficiencies available on the combined entity. As Mike and Bob have indicated in addition to the costs reflected in our third quarter results, we will incur additional restructuring and other integration costs during the fourth quarter to position the company to achieve the expected synergies. Therefore, as we indicated on our call last quarter, it is important that you consider this as well as the more pronounced seasonality of the fuel oil business when projecting our results for the balance of the fiscal year. As we've discussed with you for quite some time, our focus on net customer growth remains a top priority. We've maintained the positive net customer growth to date in fiscal 2004 and we remain committed to continue this trend throughout fiscal 2004 and beyond. As Bob indicated our balance sheet remains solid and we are in a strong position to entertain additional acquisition opportunities as they arise as well as for the debt reductions if they do not.

As always we appreciate your attention this morning and would now like to open the call up for questions. Andrea, if you could help us out please, I'd appreciate it. Andrea?

Thank you sir. Ladies and gentlemen if you wish to ask a question, please press star then one on your touch-tone phone. You will hear a tone indicating that you have been placed in queue. You may remove yourself from queue at any time by pressing the pound key. Once again if you have a question, please press star then one at this time. Our first question comes from David Maccarrone. Please go ahead sir.

Thank you. Mark, I was hoping you would go into the positive net customer growth comments and be more specific about what level and also characterize the customer churn within the acquired businesses.

With respect to our net customer growth, the best we talk about and the most detail we say is it's positive, which is a change from the past when we arrived here nine years ago at Suburban. We're making progress. We're not where we want to be. We've been fairly blunt about that. It's all about organic growth for the most part, supplemented with acquisitions. We're doing a lot of things internally, although I can't be specific, to improve our net growth rate. In some of our pockets-some of our markets we're there and our growth rates are higher. On average throughout the country, it's not where we want them to be yet. With respect to churn rates, particularly in the Northeast, it's certainly a concern any time when you are in the middle of integrating a sizable acquisition. To date, I'm happy to say that we're not seeing any change in our churn rates. I still think it's too early to pop champagne for that because we're physically integrating operations as we speak. Right now, both from a people perspective-and people drive our company, and from a customer-count perspective in turn, we're not seeing it. I have my fingers crossed. I think that is certainly a good early indicator. But we're still all over this situation and time will tell.

I was also hoping, Mike, you could review with us your strategy for supply in both propane and fuel oil going into next winter's heating season. And also comment a little further on that divestiture you had mentioned.

OK. With respect to the supply scenario, I really don't foresee anything changing with our basic philosophy. That is to ensure that our operating units are wet throughout the peak season. We're not inclined to take any price positions at these high levels. We're basically contracted on a to-be-fixed basis against common and liquid basis points.

As for fuel oil, to be quite frank with you, we're sticking to the basic programs that Agway had followed with the same list of suppliers. We may have added a couple just to give us some flexibility. You are looking at an environment that is principally priced almost off the spot marketplace.

With respect to the disposal, that was an operating CSC in Tappahannock, Virginia that certainly didn't provide any real return basis-the goals that we've set for some of our operating units.

Is there a book value or EBITDA associated with that?

It's about a breakeven on an EBITDA basis. It is certainly more valuable to the person that we sold it to than it is to us. It's away from the rest of our operations.

OK, and then finally Bob, just to follow-up with you - how would you suggest that we analyze these financials to parse the-or to monitor or quantify the progress of the core old Suburban propane business versus Agway? Is there any way we can look at that in areas like Other, which seem to jump around a bit, for example.

I think I would direct you back to the pro forma that was publicly released that basically said this combined entity is $150m a year EBITDA entity. That we look at as the floor-very comfortable with that number going forward. Quite frankly, we're merging these things together. We're not attempting to evaluate old Agway versus old Suburban. It's one company going forward. As the integrations proceed, we're going to evaluate on a total basis.

Any sense for how much weather hurt you in the quarter-EBITDA-wise or gallon-wise?

It's tough to quantify. You know it has an impact, although the third quarter is not a big weather quarter. When you have 80% of normal, it's got to have an impact. It certainly did impact volumes in April. It's tough to quantify, quite honestly. It is a factor. To try and quantify it in terms of EBITDA would be very difficult.

It also has a pretty quick negative impact on the fuel oil business where it literally falls off the edge of the cliff-the volumes - once it gets warmer. That happened a lot sooner than normal.

OK. Thanks for your answers.

Our next question comes from Yves Siegel. Please go ahead.

Thanks. Good morning. A couple of questions. One is, can you review again what the charges that you've taken related to the integration of the merger have been and what you anticipate the total amount will be when all is said and done?

I think, yes, I can give you an approximation what you're looking at the year-to-date numbers is something in the neighborhood of $4m to $5m. From the standpoint of what we anticipate in total, I would direct you back to the pro forma that was in the prospectus because it seems to be tracking well. From a timing standpoint, you are going to see the fourth quarter include integration costs and perhaps a little bit in the first quarter of 2005. That is when we will start to see the benefits, quite honestly.

OK. Where do you intend to close the duplicate facilities and stuff like that? Does that relate back to what you just said? Do you think it might be into the first quarter?

Of the 37 markets to date we physically merged only a few, look to have-Mike said earlier - look to have most of them done by the heating season, which means our fourth quarter and first quarter of fiscal 2005. We're a very impatient group so we would-we are in a hurry to get that done. The reason for possibly a few not being able to be completed by our heating season is permitting issues. That is really beyond our control. So, depending on the local municipality, our ability to obtain permitting for storage will slow the physical integration down. As far as getting our people together, most of that if not all of it, will be done by the heating season.

Is there potential for any real estate sales or any type of thing that you can sell from Agway that you don't need.

Yes, there are. We haven't quantified it nor are we banking on it. We consider it gravy. There is some of it, yes.

Bob, can you go back to the defined benefits plan? Where exactly are you on funding today?

You will recall a year ago-you won't recall, but I'll remind you. A year ago we were about $53m under-funded. We made a $10m contribution in 2003. That combined with investment performance, etc., reduced the under-funded liability to about 42 million, which is where it was at the beginning of this fiscal year. We've now made another $15m contribution, which obviously will have a favorable impact on that number. I can't give you an exact number yet because typically we have the actuaries do their calculation as of the end of the fiscal year and take into consideration all of the other factors, particularly investment performance. Clearly it will be something less than 42 million. I might point out these are voluntary contributions. We weren't required to make them. The actuarial calculations indicated we would probably not be required to make a contribution until 2006 or 2007. We're very focused on getting this accomplished as quickly as possible. Every time we make a contribution it pushes off the timing for actual required funding.

Have you given thought to changing that plan to [inaudible] the defined benefits to just a contribution so that----

We do have a defined contribution plan as well, which is our primary retirement vehicle. This defined benefit plan has been frozen to new entrants for about four years.

We've made all those changes in that plan to limit any growth in the liability.

OK. If I could, just a couple more. One is on the G&A expense side, is this a good run rate? In the press release you alluded to some higher compensation expenses and stuff like that.

I think it is probably reasonable to use it as a run rate for now, at least-for the next several quarters because we have-included in there are some integration costs. You should expect to see it come down after that.

OK.

We understand that dilemma. It's difficult with all the pluses and minuses that we have during the integration process with Agway. It's going to be tough to really see. We look-we're studying the same thing. We're very confident that-what we're finding in Agway-that the synergies are greater than we anticipated. We're even more optimistic about that pro forma number being an absolute floor regardless of weather patterns. Our feeling is very good about the transaction. We're very careful and conservative. Time will tell, but we're feeling better about it everyday.

Great. My last question is, Mark, maybe just qualitatively if you can describe what you are seeing in the acquisition market in terms of number of deals that you're evaluating or that are coming to you. Within that context, what is the likelihood that maybe you do heating oil before you do propane. Given the high multiples that are being paid for midstream, is that something that still might come to fruition?

The deal flow increases everyday - the list of potential transactions we review. I remind us-and I know no one likes this answer. I believe the best way to approach this arena is, you never know. Just because the list of transactions that you're looking at is increasing, truly it isn't an indication of whether a deal will get done or not. You could do something tomorrow. Something we're hot on today could die tomorrow. I think that is the right way to go about it. Remain disciplined. If it makes sense, fine. If not, we're not going to do it. We're active. I don't know if I've said this before on calls, I would have thought that following the Agway transaction, we would have rested for a period of time. I think, based on the status of where we are with the integration, we are ready for another transaction. We've been ready for a bit. We're right back in the hunt. With respect to propane versus heating oil, I'd say, yes. You could see us-it's logical to expect us to do a fuel oil deal or a heating oil deal mainly maybe in markets-well, let's put it this way. The reason for that is fuel oil multiples are lower than propane multiples. So it might be a cheaper entrance into a particular market. That is a possibility. We're looking at some of those things.

On the midstream side, yes, multiples are high. Prices are high. But there is more activity on the midstream side. If you are seeing it anywhere compared to propane, heating oil or midstream, you see more activity in the midstream deal. We constantly look. We are a bit disadvantaged because we don't have synergies going in whereas other bidders might. It's tough breaking into that arena, but we continue to work hard at it.

Thank you.

Thank you. We appreciate your call-or questions. Thank you.

If there are additional question, please press star followed by one on your phone at this time. David Flessy, [ph] your line is open.

OK. Mark, two things if I can fit around what Yves and David just asked. First, maybe this is a Mike question. I'd love to hear your thoughts on retail margins, which you said, Mark, had been holding. You've been able to control, manage so far. My question to you is, what is the discipline in the marketplace? What is going on now Mike in the marketplace? What is your confidence in being able to maintain these good margins through the next fiscal year?

We've only said-or at least we've said in a rising market that it's easier to maintain a margin goal in a higher market than it is in a lower market for whatever crazy reason that is. The benefits, of course, that we have - as do our peers is that you're long inventory. So in a rising marketplace, if you are keeping pace with the price changes, your margin targets should be easily achievable because you have the benefit of a lower cost base in a rising marketplace. I find it difficult to believe that we are going to continue at a $40, $41, $42 a barrel price for crude oil and the 70- cent or 75-cent price for propane, $1.10 price for heating oil indefinitely. At some point in time, the base fundamentals of the marketplace should take hold. The question is going to be timing. Does that happen in the winter, before the winter, or after the winter? The market-I don't want to use the word collapse, but I could certainly see a 15% to 25% change in the price structure rather quickly. The market seems to be at this particular point in time being supported by the hedge funds. There is a lack of liquidity from the base players in the market-the fundamental players in the marketplace. The hedge funds with no other place to put their money at this stage, are strengthening positions in some of the commodities. It's a long answer to your question with respect to margins. I think I started it out by saying in a higher rising market, it is certainly easier to maintain your margin targets. What I did way was, we don't think that the price environment is going to continue with the up arrow. It may become a little bit difficult. It is going to be a timing issue.

Is there any logic to shorting some crude or, if you can, propane on a short-term basis as a offset believing that in a rising market you can cover that with better margins. In a falling market you'd have that benefit?

It is timing. If you can tell me when the Iraq situation is going to settle down and assure me that there isn't going to be another popup in that part of the world, then I could agree with you. When you are looking at 65-plus-cent margins and the opportunity to speculate in the marketplace-the risk/reward doesn't seem to measure up, to be running a position on a short basis at this stage.

One could argue that you are speculating just being in the marketplace. I am not sure putting on hedges to offset your inventory would be called speculating. I suppose you could look at either way.

Yes, I suppose you could. But when you look at the storage capacity and what the length of our long position is, if you measure it in terms of days, you're probably less than a week. So that speculative basis isn't really all that deep.

Let me ask a separate different question on the acquisition side beyond what you've mentioned-you've talked about. We've seen, particularly in the recent months, the price for midstream assets, Mark, go up a lot. We're looking at over 10 times EBITDA multiples for some recent packages of midstream assets. You've talked in the past about wanting to get in the midstream side in different ways-different possibilities. As we look at the various-you mentioned propane and fuel oil as areas, clearly, that you'd be looking at currently, where you are currently. My question to you, as you step back as a big picture guy and try to think of where you want to be and where you don't want to be in this market, how do you trade off those different areas also realizing that you have this 15% maximum [inaudible] lower cost of capital, lower cost of equity capital than others. Maybe that can give you an advantage that is offsetting, or even more offsetting than some of the synergies that might exist.

I go back to my roots. It's a disciplined approach. What I'd like to do and what we're able to do sometimes aren't the same thing. I'd love to buy midstream fuel. If it doesn't make economic sense, if prices are pushing the envelop, it's not worth the chance. You're only as good as the last deal you did. We don't want to make a mistake. If there is something in midstream that makes economic sense for us, sure. Based on the characteristics of the earnings maybe we can stretch a little more than we might in the propane arena, but only to a point. If that means we stay in downstream assets like propane and heating oil, so be it. It may not be the popular answer, but it's the answer we've given from day one. Whatever makes economic sense, we'll do. If it doesn't, we're not going to fall in love with doing a deal. That has always been my philosophy. It's the discipline. It has served us well. Unfortunately it's boring. But it is what it is. I think it certainly serves in the long run. It serve our unit holders as well. As far as the high split is concerned, yes we do have an advantage in the cost of capital. But I really think that a bigger advantage from our perspective with our unit holder hat on, is that we're not running to do a transaction to jack up the value of the GP interest. If we're going to do a transaction, it's for the benefit of our unit holders. I think that is where our responsibilities lie. I think that's a significant advantage. We'll stick to that credo, whether people think we're naïve or ultra-conservative. It is what it is. We'll stick to our niche. It has worked well. Our unit holders have enjoyed a nice, steady, solid total return. We look to continue that for an awfully long time to come. I'm still pretty young. So are you.

OK. Let me ask a third question, if I can. You talked a fair bit about the Agway acquisition and integration. One of your answers, not surprisingly perhaps, was that you are looking at it as part of a joint company. It isn't in David's background I was trying to understand - Agway versus targets in the past. Your saying part of it is a joint company. I understand that. Yet that creates a problem for you and also for us in how we're measuring and how you're measuring success and accomplishment as you integrate those assets. I am wondering how you measure success when it's an apples and oranges comparison. You set target originally. I am wondering what you can tell us about these future benefits. You've had some months to study the operations and understand them better. I'd love to know what you're expecting in the synergies going forward versus what you've said before and what you've learned about the operations that you didn't know before and any updates, even anecdotal, could be helpful to us.

As you realize, as you merge locations you lose history, at least from a separate standpoint. It's not that we don't look at it that way, it's impossible to look at it that way. We're frankly, unable to track stores separately. It wouldn't make much sense anyway. We do know the results of the individual stores going in. We'll pro forma them historically and look at an honest and real comparison going forward. What we've said as some guidance-again, it's more conservative. We looked at Agway making 40 million or 41 million coming in. That was in a cold weather scenario. We publicly said that we see on a sustainable basis, based on average weather, something in the low 30s. We thought the synergies would get us back to 40 on a base level of earnings for Agway under any weather scenario. We're feeling like that 40 is going to be higher. You're going to ask me how much higher. I can't answer that. When I said to David and Yves that we're feeling better about this transaction, we're feeling like our base level of earnings, regardless of weather, is higher than 40 or 41. Because we 're seeing more synergies. What we're seeing is the benefits of merging larger stores. The opportunities in those markets where we're merging two large stores and our multiple energy services approach. It helps with our cost base. It helps with the total value that we offer to our customer base. It's exciting, at least in the Northeast. It has proven to be more accretive than we actually even thought. It's nothing but upside.

I guess I'll have to ask the question again in a year. OK. Thanks.

I would like to turn the conference back over to our panel.

No more questions, Andrea?

No sir.

OK. Thank you everybody. We appreciate your support and attention this morning. We're delighted to have another distribution increase. Look for more of them as it's justified with our strong balance sheet and our view towards a balance of return to our unit holders and maintaining a solid financial base. We're excited about the future, as we said. Even though we haven't been able to be as specific as some would like with respect to the Agway acquisition, it's better than we expected. That is nothing but good news. We appreciate your support and look forward to talking to you again next quarter. Thanks very much.

Ladies and gentlemen, this conference will be available for replay starting today at 4:00 pm eastern through July 23 at midnight. You may access the AT&T teleconference replay system at any time by dialing 1-800/475-6701 and entering the access code 738278. That number again is 1-800/475-6701 and access code 738278. That does conclude our conference for today. Thank you for your participation and for using AT&T executive teleconference. You may now disconnect.