Spire Inc (SR) 2013 Q2 法說會逐字稿

Good morning and welcome to the Laclede Group's second quarter 2013 earnings conference call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Scott Dudley. Please go ahead.

Good morning and welcome to our second quarter earnings call. We issued a news release this morning announcing our financial results. And you may access the release on our website at www.thelacledegroup.com under the news releases tab.

Today's call is scheduled for one hour and will include a discussion of our results and a question and answer session. Prior to opening up the call for questions, the operator will provide instructions on how to join the queue to ask a question.

On the call are Suzanne Sitherwood, President and CEO of the Laclede Group; and Mark Waltermire, Executive Vice President and Chief Financial Officer.

Also in the room with us are Steve Lindsey, Executive Vice President and Chief Operating Officer of Distribution Operations; Mike Spotanski, Senior Vice President and Chief Integration and Innovation Officer; and Steve Rasche, Senior Vice President of Finance and Accounting.

Before we begin, let me cover our Safe Harbor Statement and use of non-GAAP earnings measures. Today's earnings conference call, including responses during the Q&A session, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements speak only as of today and we assume no duty to update them.

Although our forward-looking statements are based on reasonable assumptions, various uncertainties and risk factors may cause future performance or results to be different than those anticipated. A description of the uncertainties and risk factors can be found in our Annual Report on Form 10-K, and our Quarterly Report on Form 10-Q, which will be filed later today.

In our comments we will be discussing financial results in terms of net economic earnings, a non-GAAP measure used by management when evaluating the Company's performance. Net economic earnings exclude from net income the after-tax impacts of fair value accounting and timing adjustments associated with energy-related transactions as well as costs related to our pending acquisition. A full explanation of the adjustments and a reconciliation of net income to net economic earnings are contained in the news release we issued this morning.

So with that, I will turn the call over to Suzanne.

Thank you, Scott. And let me add my welcome to those who have joined us this morning.

Earlier today we announced improved operating results for our fiscal year 2013 second quarter. We achieved growth in earnings both on a net income and net economic earnings basis. The gas utility drove the improvement and gas marketing continued profitable performance. But we also recognize a difficult market persists and earnings are trending down.

While achieving this solid financial performance, we continued onward with our strategic growth initiatives. So it's important to state our pending acquisition of MGE remains on track. I'll have more to say on this in a moment, but first let me hand it over to Mark to review our second quarter results.

Thank you, Suzanne. And good morning, everyone. I'll go ahead and jump right into our discussion of earnings and then provide an update on our balance sheet, cash flow and capital spending. And then finally I'll conclude with a brief update on our regulatory matters and financing of our acquisition.

In our news release this morning the Laclede Group announced second quarter net income of $30.2 million, up from $29.7 million last year. Excluding MGE-related acquisition costs and routine fair value accounting adjustments, we posted consolidated net economic earnings of $32.5 million, or $1.44 per diluted share, which is up 14% from $28.4 million, or $1.27 per share, last year.

These improved earnings were driven largely by higher net income from our gas utility segment. During the second quarter, pre-tax acquisition costs related to our pending acquisition of MGE totaled $2.7 million which impacted net income by $0.07 a share.

For the first six months of the year, total pre-tax acquisition costs were $6.3 million, or $0.17 per share. Exclusive of the direct costs associated with financing the deal, we expect to incur an additional $12 million to $17 million in acquisition-related costs up through the time of closing on the transaction. These costs are all reported in our Other segment.

Looking specifically at gas utility results, net economic earnings for the quarter increased to $30.2 million from $25.8 million due to improved weather, lower expenses and higher infrastructure replacement surcharge revenues. Let me cover each of those drivers in order.

Weather in this year's second quarter was much colder and closer to normal in comparison to record warm temperatures experienced a year ago. This more favorable weather resulted in increased sales volumes and higher sales margins at the gas utility.

On the expense side, we achieved lower operating expenses, namely lower employee benefit costs. Partially offsetting this improvement was increased depreciation and amortization resulting primarily from continued investment in our pipeline replacement program and upgrades to our IT technology and platforms.

The increased investments in our distribution pipelines also drove higher revenues related to ISRS, our infrastructure system replacement surcharge. This monthly customer charge enables Laclede Gas to begin recovering costs associated with mandated distribution system improvements and safety-related projects that we complete in between rate cases.

During the quarter, a $4.8 million increase to this surcharge was approved by the Missouri Public Service Commission, bringing our total annualized ISRS recovery to $14.8 million.

Turning to gas marketing, net economic earnings for the quarter were $2.4 million, down slightly from $2.5 million earned last year. LER continues to be profitable but its results are starting to trend lower.

Market conditions remain difficult as natural gas price volatility remains low. LER has been able to manage relatively well through the challenges in its business. However, they have started to feel the impact from the expiration of a favorable gas supply contract.

LER was able to counter most of these impacts by realizing seasonal storage spreads in the second quarter this year. As I did last quarter, I would point out that gas marketing's operating revenues and expenses are substantially lower year over year.

The small basis differentials in the marketplace have resulted in a greater percentage of LER's transactions being reported as trading activities where the margin on the sale is recorded on a net basis in revenues rather than as gross revenues and gross costs. While this has no impact on earnings, it does affect the comparability of LER's revenues and expenses across periods.

In addition to Laclede Group's higher earnings, cash flow has also increased. For the six months ended March 31st, net cash provided by operating activities was $142 million, nearly double the level from a year ago. This increase is primarily due to the timing of gas cost recoveries under our purchased gas adjustment clause and lower pension funding.

Excluding these and other changes in working capital requirements, operating cash flows were $79 million, up about $5 million from a year ago. Strong cash flows continue to support our capital expenditures, which totaled nearly $63 million for the first six months of our fiscal year. That's up $22 million compared to the same period a year ago.

As I touched on a few moments ago, this increase reflects higher planned spending for the ongoing replacement of our distribution pipeline and for upgrading our information technology platforms. Overall, our capital spending remains on track and we expect to finish the year at approximately $115 million.

Turning to the balance sheet, at March 31, our equity capitalization remained strong at almost 58%. This is down from around 63% at the end of December due to expected debt issuances under private placement commitments we made in fiscal 2012.

Under those commitments, Laclede Group issued $25 million in 10-year notes last December and Laclede Gas issued a combination of 10-year and 15-year notes for $100 million in mid-March of this year.

All of this debt was issued at attractive rates between 3% and 3.4%. We did not have any short-term debt outstanding at the end of the second quarter of this year or last.

Now, let's turn to a quick update on regulatory matters. As we have previously reported, Laclede Gas filed a general rate case last December, its first rate case filing in three years. The net increase in revenues in our rate case filing is $43.6 million, which is net of the $14.8 million in annualized ISRS revenues I mentioned earlier.

As a reminder, the Missouri Public Service Commission must render a decision on our rate request within 11 months from the date of filing. Although in the past we have been able to settle our cases in a shorter timeframe.

I will conclude my remarks this morning with an update on the financing for our acquisition of MGE. As we have discussed before, the closing of the transaction is supported by a bridge facility with Wells Fargo. That bridge facility is fully syndicated to nine financial institutions that have deep experience in equity and debt offerings in the utility space.

We have begun working with these institutions on specific plans for raising the necessary capital to support the acquisition. We are evaluating the timing and respective amounts of equity and debt we will issue as we consider market conditions and progress on gaining regulatory approval.

We continue to target a balanced capital structure post-closing of the transaction. Given Laclede's current capitalization of nearly 58% equity, we would expect to issue more debt than equity to finance the acquisition in order to achieve an approximately 50-50 mix.

So to summarize, we reported growth in earnings and solid cash flow for the quarter and maintained our strong balance sheet. The MGE acquisition is on track and our financing plans are well under way.

So now let me turn it back to -- the call back to Suzanne who will update you all on our growth initiatives. Suzanne?

Thank you, Mark. Now I want to discuss our growth initiatives, including the MGE acquisition.

I'm proud to share we continue to make excellent progress. And just as a reminder, we are pursuing growth initiatives, four of them -- one, developing and investing in emerging technologies; two, investing in infrastructure; three, acquiring gas companies; and, four, leveraging our competency.

With regard to investing in emerging technologies, as you may recall last quarter we announced the launch of initiative to invest in compressed natural gas fueling solutions. That solution is Spire. We are teaming with Siemens to bring its expertise in design build and engineering. Siemens complements our 30 years of NGV experience and our more than 150 years of natural gas experience.

Our business model targets the needs of regional and national return to base fleets. However, our first project is local with the announcement of the new NGV fueling solution at Lambert-St. Louis International Airport. This station will serve both commercial fleets and the public. Laclede will own, operate, maintain and provide the fuel and Siemens will design and build the station and provide engineering support.

Regarding organic growth, as noted and as Mark shared, we've invested $63 million of capital in the first half of 2013. About $30 million is ISRS, which is recoverable through the tracker.

There will be additional CapEx in the second half of 2013 for completion of the three-year IT upgrade project, referred to as newBLUE. and distribution pipeline replacement to improve reliability and efficiency.

Lastly, I'm pleased to say the MG acquisition is on track. I'm confident in our ability to obtain approval, to secure financing and successfully integrate MGE. We continue to expect to close the transaction by the end of fiscal year 2013.

And the regulatory approval process is well under way in both Missouri for MGE and Massachusetts for Algonquin's purchase of NAGASCO.

We also look forward to welcoming MG employees to Laclede. Several MG employees already have been hard at work on integration under the leadership of Mike Spotanski, our chief integration and innovation officer. He's organized a dozen teams comprised of Laclede and MG employees and they are well on their way.

The teams have completed initial baseline assessments to understand the lay of the land at each company. And the next step in the process is designing the details of the combined company, including implementation planning.

We continue our efforts with Booth & Company at our side to validate our due diligence and identify synergies for the combined company. We're confident we'll get to the right cost structure while continuing to focus on safety and system reliability and quality of service for our customers.

So, overall a good quarter with earnings growth and continued solid financial performance. And we are very pleased with the progress on growth initiatives, especially the MGE acquisition being on track.

So with that I think we're ready for questions and so I'll turn it back over to the operator. Thank you.

We will now begin the question and answer session. (Operator Instructions) At this time we will pause momentarily to assemble our roster. Our first question comes from Vedula Murti of CDP Capital. Please go ahead.

Good morning.

Morning.

Morning. Hey.

Let's see, I came in just a little bit after the opening remarks started. And when Suzanne was going through her opening remarks she mentioned something about some earnings pressure or declining earnings. I just want to make sure I understand what context that was in relation to, whether that was for some of the nonregulated operations or -- and also to what degree or magnitude was being communicated.

Yes, thank you Vedula and welcome. Yes, I was referencing LER, the gas marketing segment. And then Mark, when he was going through his remarks, he gave you a little bit more color as to what was driving that. But that is in the gas marketing area, yes.

Can you give us a sense of any type of magnitude that we should be thinking about?

Yes. That nonregulated side of the business hasn't really been immune to the marketing pressures that others have seen. And as we look at it right now, we're probably looking at probably the low end of where we've been the last couple years. Which I think if you look at that part of the business, that puts your -- in the $0.40-ish range where they finished a couple years ago, is what we would expect at this point.

And just so I'm thinking about the magnitude here, that would, say, compare to, if you can remind me of what that number was for last year's fiscal year.

$0.55.

Okay. Secondarily, in terms of the financing, do you have an SEC-approved shelf for the equity component of the financing?

Yes, Vedula, this is Steve Rasche. Yes, we do, actually. We have an active shelf [at] group right now that would cover the equity component.

Okay. And in the past I think when we've spoken or whatever you've indicated that you've needed -- you were hoping to achieve certain milestones with regards to regulatory approvals prior to commencing the financing. And it was -- been my understanding that you would seek to do that prior to the full completion of the merger. And this would not be something where the bridge would be exercised in com -- in totality. And then we would wait until after the merger closed.

So if you can just kind of refresh me on that as to how you're thinking about this.

Yes, great question. And you are right. The ultimate securing of the permanent financing is really predicated on three requirements. One is securing all of the required SEC documentation and we're well along the way and on track from that perspective. And while we have an active shelf, we would certainly have to file a prospectus supplement that would have significant additional information. And that's pretty standard fare for a permanent financing of this magnitude.

Certainly another key component is the capital markets. And both the equity and the debt markets seem to be fairly strong right now. So I think we at least right now can tick the box on that.

And then thirdly is regulatory approval. And so we continue to have discussions with the regulators in both Missouri and Massachusetts because we're certainly moving both toward a successful completion during this fiscal year, which is still our target on both transactions.

And we continue to have those discussions. So from that standpoint that continues at pace. And it's not unusual in rate regulated industry acquisitions such as ours that the regulatory approval process is usually the pacing item that most companies look to at some point in the transaction before they decide to go out for permanent financing.

You are right in your comment and assessment that there's a history in the industry and in the market of going out to market for permanent financing in advance of getting final approval of the transaction.

But every company makes those decisions in contemplation of where they stand in the regulatory approval process and in discussions. And for us that would largely be the discussions with the Missouri regulators whom we know well. But they have to do their due diligence and we have to give them a level of comfort in all the areas that they are concerned about. And those discussions continue at pace.

To go back to the first point, though, in terms of the additional incremental information and everything like that, when do you anticipate that that would be done? Because that implied to me that if you wanted to access the equity markets today because you liked the market conditions and everything like that, in fact you would not be able to do so.

No. I didn't say that.

Okay.

What I said is that the SEC has very specific requirements on information that is required for a deal, especially one of this size and magnitude. And those requirements were well known as we approached and as we announced the deal. And we've been working to get those completed. And at this juncture we have no concerns.

In the purchase and sale agreement itself was a deadline of March 31st for the three years historic financial statements for the two LDCs. And we have received that information and it's under review right now. So that was the biggest piece. And, again, I think we have a high level of comfort that from an information standpoint we have everything on track.

One last question. In terms of given where the balance sheet is and kind of what you're targeting, would it be reasonable to assume, then, on debt financing -- debt equity mix that the equity component would probably be somewhere around $400 million, give or take?

I'll let you run the numbers on how you get to the answer. We've been fairly specific that we would expect to exit the transaction with a more balanced capital structure. And as Mark mentioned in his prepared remarks, that would mean that we would lean more heavily into the debt capital markets for this permanent financing race.

Okay, thank you.

(Operator Instructions) Our next question comes from Spencer Joyce of Hilliard Lyons. Please go ahead.

Good morning, guys. Nice quarter.

Good morning. Thank you.

Just a couple of quick questions here. First wanted to touch on the expenses at the utility. Looks like a pretty significant decline year over year there, almost $3 million. I know you mentioned a few payroll type items that contributed to that decline. How much of that also may have been capitalizing some of the IT expenses, kind of as we had discussed there?

Spencer, this is Steve. And welcome. For the quarter, the capitalizing of expenses really didn't amount to much. It was an immaterial part of the difference between this year and last.

The biggest single mover from a positive perspective was the employee benefit cost, as Mark mentioned in his prepared remarks. And we have to go back a year ago. And a year ago we had some nonrecurring pension, OPEB and employee benefit costs that occurred in our fiscal second quarter of 2012 that did not repeat. And it was really tied to a number of retirements and transitions that happened during that quarter. And, again, we didn't see that kind of movement this year.

Okay. Yes, thanks for that color. That makes a lot of sense. Second other small question, can you all talk a little bit about any either strengthening or weakening you may have seen at MGE, or just in general how operations there have gone since you announced the deal? I think, didn't they file either for an ISRS or possibly a rate case there? Just sort of any color on operations there sort of ongoing.

Spencer, MGE has not issued any financial statements that I could point you to. Although, obviously as I mentioned in the previous caller's questions, there'll be a lot of information that will flow out as we get closer to permanent financing.

MGE clearly has benefitted from the weather that has benefitted us and other LDCs during this year. We saw 80 degree weather in March of last year. We didn't see anything anywhere near that this year. I think we're reverting more to the mean. And we saw that in Kansas City. And Kansas City also had a number of snowstorms during the quarter. So I suspect that from a weather implication standpoint that they will have benefitted greatly.

You are right that MGE did file for its latest ISRS. And that is in the process of being reviewed by the Public Service Commission currently.

Okay. Thanks for that. I didn't think about you all having all that insider stuff there when I came up with the question. But --

No problem. No problem.

That's all I had. Thanks for taking my call.

Your next question comes from Brendan Naeve of Levin Capital. Please go ahead.

Yes, hi, it's actually Neil Stein from Levin Capital. Good morning. Had a couple of questions. First, can you just update us on where you stand in Missouri? I haven't been updated on this case. Are you -- have you filed testimony? What are you proposing to do with the sharing of synergies?

We have filed our application, certainly. And it's under review at the Commission, or with the staff itself and the various interveners. At this point in time, the interveners and the staff have not filed any positions with us. We're still responding to DRs and actively engaged in that dialogue with them. I think broadly speaking the exchange has been positive and constructive between the parties.

And at this point, like Steve said earlier, we're tracking along at kind of the way we would have expected at this point in time. But really can't comment yet on what the final positions will be until we get something in writing from them.

So in your application you haven't made any proposal with regard to what you do with the synergies from this deal?

No. In our application, in our testimony we did not. We certainly in -- also did not ask for recovery of transaction costs, either, in parallel with that. So we tried to make this a very straightforward process.

Eighteen months ago ET bought Southern Union and these properties. We went in with our filing and said we would accept the terms and conditions that they had at that point in time. That was acceptable to us and we're trying to -- given that this was approved 18 months ago, get it under the same type terms.

Let's see. And have the interveners filed any testimony?

No, there's been nothing filed yet from anybody on the other side.

Okay. And I guess to the extent you're not proposing anything with synergy sharing, is -- I guess by default your position is you want to keep all the synergies.

Well, the way it works is you capture the synergies and in your next rate case you give them back. So over a period of time if you look at the -- how we file and the timing of the MGE filing and et cetera, every time we file a rate case. We're in right now with one -- a rate case at Laclede Gas. MGE will be filing one certainly coming up, so in the fall almost by definition under the ISRS statute.

So over time as we accumulate and achieve these synergies we will be having them for a while and then building them back into the rate structure.

And just -- this is Suzanne. Just one follow up point to Mark's. As you know initially, which is why we say we'll be neutral year one and accretive year two and three if we have all the transaction cost up front.

So out of the gate that's where we start. And then we start working on creating more efficiency. but at the same time making sure we've got our eyes focused on the safety and reliability of our system as well as our customer service metrics, because we will not [fail] on those.

And then is it conceivable, since you would, I guess, propose to keep the synergies until the next rate case, that you would I guess prior to that next rate case be able to earn in excess of your allowed return?

Well, again, in the early years here we're going to have costs to achieve that will offset any synergies we get, which was back to Suzanne's point that we'll -- you know, we're kind of communicating to everybody, or we have communicated, is we're going to be neutral with our first year earnings and then accretive thereafter. But --

And, Spencer, you may know this, but the way that --

Neil.

-- the way that ISRS statue works, we have to file a rate case at least every three years. And so there is a showing. So when you look at that three year period,as I've shared with you we will be, quote, neutral year one and accretive year two and three. And we're in essence back in for a rate case.

And we've made quarterly filings with the Commissions and so forth. So they watch that and we watch it as well. And in fact I'm not sure -- not everybody necessarily understands that we have to file a case. So --

And then -- well, the other question I had is at Laclede Gas I guess you filed with an equity ratio -- proposing an equity ratio of 56.7%. But then I guess with this acquisition financing you're going to take your consolidated equity ratio down to 50%.

So I'm wondering, I mean, ultimately won't this get trued up so when a final decision is made around that time you'll be at 50% equity. I mean, how do you expect that to be dealt with, I guess?

Well, certainly the timing -- the two cases stand alone and have different timing and pacing. And the rate case, we did file for that. It will be updated through the March 31st period for cap structure, is the current plan.

And depending on the timing of when we get an approval out of the Commission for the acquisition will impact that observation that you made.

What I can tell you is regardless of what we have, if we come back in in the next rate case, everything resets. So it's 50-50. So it's a matter of the timing and when these things come to conclusion is probably the best way I can answer that question for you.

Well, I guess how -- I'm trying to think exactly what would cause the final decision here to be based on a trued up equity ratio of 50%. You know, how soon could you -- or how late could you issue equity and still have that happen? Or how soon could you issue equity and not have that happen?

Neil, this is Steve Rasche. To answer your last question, the transaction is supported by a bridge facility that's fully syndicated. So we don't have the absolute need to issue any equity before the transaction would close.

But, as you know, bridge financing is financing that isn't structured to be permanent. So we would definitely be out in the markets post-close if that were the right answer based upon the facts and circumstances at the time that we reached that conclusion.

From a capital structure standpoint, and especially in the State of Missouri, Missouri's long history in general rate cases is that there's a cadence and a process to the general rate case. Generally there is an agreed upon true-up period at which point the capital structure is fixed. And under a normal schedule filing in December that would be a March 31 true-up period. So at March 31 our consolidated capital structure, because Missouri always looks to the parent capital structure, would be 57.9% equity in the long term capital structure and no short-term debt.

So that's the cadence and process that Missouri normally goes through when they look at a rate case. And certainly we expect and plan that that's how it will work out. I can't, as we sit here today, think of a scenario where Missouri would reach forward to a capital structure that isn't yet in the books, so to speak, because a lot of things can happen in the markets that would change that targeted capital structure that we have as we actually decide and go to market.

Got it. Okay. So your position would be to the extent at March 31st you had 56.7% based on past precedent it wouldn't -- they're not going to do any other sort of hypothetical adjustment even though you're saying you are going to be at 50% probably in a few months.

That is definitely the precedent. And again, I would say that Missouri looks to the consolidated group capital structure, not the Laclede Gas capital structure. And that number on an equity side would be 57.9%.

Missouri's pretty much a historical test case -- test period type.

But it'll also be the consolidated capital structure that does go to 50% post the acquisition financing. At least, that's the plan today. Right?

Yes, sir.

Okay, got it. Okay. Now I understand everything. Thank you very much.

The next question comes from Selman Akyol of Stifel Nicolaus. Please go ahead .

Two quick questions. First of all, going back to the refueling stations with Siemens, has there been any additional interest struck up? Has anyone else reached out to you? Have you done any further development plans since you've announced it and kind of had it out there for a little while now?

Yes, thank you for the question. And actually I have Mike Spotanski here who leads the charge. So I'm going to say a couple of things and then let him add any color if he'd like to.

But basically between Siemens and the Laclede team we've got other interested parties in the funnel, so to speak, in what I call the sales cycle. And so, more to come on that. Of course, we don't want to talk about those particular customers and contracts until we get those deals inked. But so with that I'll -- if Mike wants to add anything.

I think, Selman, we've seen -- good morning. How are you? It's good to talk with you again. I think we've seen a lot of interest in regional and national trucking firms primarily and transits are a couple of the key markets that we're focused on right now. But, again, as Suzanne said, nothing specific at this point that we can talk about.

Fair enough. And then if I could, just one follow up question. When you talked about the sales cycle can you sort of set an expectation? Is the sales cycle a year, is it 18 months, is it 6 months?

You know, Selman, it depends upon the customer. These stations are very customized, depending upon obviously number of vehicles, volumes, fill cycle requirements, and a number of other factors. So there's a process of learning what the customer's needs are, exploring what the options are, going through the engineering to price it and become the most -- or determine the most efficient and effective overall station design.

So I guess where I'm at is it can vary depending upon the customer and on their readiness to move forward. Early on in this process the discussion was more around -- is CNG a viable alternative? And that discussion has changed in large part to -- is it right for us?

So, again, the cycle will vary depending on the customer and their readiness.

All right. Thank you very much.

(Operator Instructions) The next question comes from Tim Winter of Gabelli and Company. Please go ahead.

You guys talked a little bit about a declining earnings trend at LER, though it is still positive.

Right.

Is there any evolution in how you think about LER, where it fits in with the Company? And what is your sort of long term outlook there?

Yes, Tim, this is Mark. LER -- we are -- obviously they are not unaffected like the rest of the marketing people that are out there, like I mentioned before. And certainly we are looking at other ways to derive value from that organization, however it is. I mean, the key is that they're able to find value in [sale] assets that are out there and where would we best position them to be able to do that.

Certainly in the immediate term we know that their -- and we've talked about this before. Their customers are power generators and we're looking at producer service type opportunities to continue to build that group.

The acquisition of MGE will more than likely offer us some opportunities to learn some new assets and do some marketing in another geographic area. But overall it's about the, you know, how do we look at the entirety of the assets that we have available to us and how we derive value. And certainly we look at that all the time and even more so now in this period of time.

Okay, thank you.

This concludes our question and answer session. I would now like to turn the conference back over to Scott Dudley for any closing remarks.

Okay, thank you. And thank you all for joining us today. If you have any follow ups, feel free to give us a call today. Thanks so much.

The conference is now concluded. Thank you for attending today's presentation . You may now disconnect.