CVR Energy, Inc. (CVI) Q2 2011 Earnings Report, Transcript and Summary

Greetings and welcome to the CVR Energy Second Quarter 2011 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Finks, Director of Finance. Thank you, Mr. Finks. You may begin. Jay Finks – Director of Finance: Good afternoon everyone. We very much appreciate you being here for CVR Energy call this afternoon. With me today are Jack Lipinski, our Chief Executive Officer; Ed Morgan, our Chief Financial Officer; and Stan Riemann, our Chief Operating Officer. Prior to discussion of our 2011 second quarter results, we are required to make the following Safe Harbor statement. In accordance with Federal Securities laws, the statements in this earnings call relating to matters that are not historical facts are forward-looking statements based on management’s belief and assumptions, using currently available information and expectations as of this date and are not guarantees of future performance and do involve certain risks and uncertainties, including those noted in our filings with the Securities and Exchange Commission. This presentation includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures including reconciliation to the most directly comparable GAAP financial measures are included in our 2011 second quarter earnings release that we filed with the SEC yesterday after closing the market. With that said, I’ll turn the call over to Jack Lipinski, our Chief Executive Officer. Jack? Jack Lipinski – Chief Executive Officer: Thank you, Jay. Thank you all for joining us. From the results released last night, you can see we had a very solid second quarter. Consolidated net income was $124,900,000 million or $1.42 per fully diluted share on sales of over $1.4 billion. That compares to net income of $1.2 million in the same period a year ago on sales of just over $1 billion. Adjusted net income was $130,400,000 million or $1.48 per fully diluted share in the second quarter. Non-cash adjustments like FIFO and share-based compensation along with the few other items account to the difference, as Morgan will provide you more detail on that during his remarks. Today, I’ll first speak about our results and where we go from there. After that, Ed, Stan, and I will take your questions. Let me go first to the petroleum segment. If you joined us for last quarter’s conference call, that morning we had an issue with our CCR, aside from some reduced rates during the CCR outage. We are very happy with the quarter turned out operationally. Because of the CCR issue, we filed an 8-K indicating that we expected to operate about 108,000 barrels per day average for the quarter. We actually bettered that sum and averaged 109,500 barrels a day. Since then, our CCR has returned to normal operations and now we are running the plant at capacity above 115,000 barrels a day. The petroleum segment had operating income of $183.5 million as compared to $4.6 million for the same quarter a year ago. Adjusted EBITDA for the petroleum segment was $208.4 million versus $46.5 million a year ago. The continuing story for the second quarter is and was the Brent TI spread, which drove margins for all refiners with access to WTI base crudes. We are a 100% WTI-based refiner and we were able to capture this difference between Brent and WTI. The Brent-WTI relationship will continue to define our market at least – we look forward at least in the next two years. Today, that spread was $21.75 and it is moving around a little bit. This is a new number. This year so far we have seen it range from a low $30.29 to a high of $22.63 on July 14. In addition all indications are that we will continue to see our group cracks, our regional cracks at above historic levels. During the year, our crack averaged $26.71 versus $11.75 a year ago. Today, the NYMEX 2-1-1 stands a little over at $33 a barrel. We realized an average refining margin of $25.49 per throughput barrel compared to a refining margin a year ago of $6.70. It’s remarkable what difference a year makes. This quarter, we increased the amount of heavy sour crudes we ran to 21.2% of crude input, that’s up from 17.2% in the first quarter and also up from about 12% a year ago. We actually set a record of 24,600 barrels a day of heavy sour Canadian crudes process during the quarter. Western Canadian Select one of the typical marker heavy Canadians traded at $17.61 discount WTI for the quarter. While this is not a bond burning discount, we continue to maximize our runs of heavy sour crudes as long as these differentials continue. Final note on the petroleum segment, our gathering business set another record in June gathering more than 36,000 barrels a day. These fairly-priced barrels are an important part of our refinery economics and we are absolutely focused on growing this business. Let me turn to nitrogen fertilizers. The fertilizers segment had second quarter operating income of $39.3 million on net sales of $80.7 million for the second quarter. That compares to operating income of $16.5 million on the second quarter of 2010 on net sales of $56.3 million. Those of you who listened to the earlier CVR Partners call with CEO, Byron Kelley we are very pleased with their results. He reaffirmed IPO guidance of $1.92 in distributions per common unit during the four quarters ending March 31, 2012. The quarterly distribution of $0.40 cents per common unit announced last week covers the period with the effective date of the IPO on April 13 through the end of the second quarter. CVR Energy through its subsidiaries owns the general partner and 69.8% of the common LP units. CVR Energy receives proportional distributions with respect to our ownership. Recapping Byron’s call, the fertilizer business operated very well in the second quarter. On-stream stats for gasification were 99.3% on-stream times, ammonia 98.5% on-stream time, and the UAN plant ran at 97.6% on-stream time. Part of the story looking year-over-year is the difference in fertilizer prices, and again, we report fertilizer prices as net back to plant gain. This quarter we averaged ammonia sales at $574 a ton and UAN and again for those of you unfamiliar is urea ammonium nitrate solution, at $300 a ton. That compares to year ago of $312 a ton for ammonia and $205 a ton for UAN. Year-over-year, we are seeing significant improvement in net back prices. To kind of give you an indication, our UAN book this time last year was 295,000 tons of orders at $167 a ton. This year our book is approximately 300,000 tons of orders with an average net back over $300 a ton. All right, looking forward, this fall we’ll begin a bifurcated turnaround of the refinery with approximately two-thirds of the work being done in the fourth quarter this year. The remainder of the turnaround work will be completed late in the first quarter 2012. Because of the way the work is scheduled, we’ll continue to operate even though we’ll be at reduced rates during our turnaround period. On average, we expect to run between 110,000 and 115,000 barrels a day in the third quarter and looking forward between 90,000 and 95,000 barrels a day in the fourth quarter when we’re in turnaround. You should all remember that we expense our turnaround cost as they are incurred. So, when you look forward to our fourth quarter, we’ll not only be running fewer barrels, but will have increased expenses at the refinery. As of this morning, our consolidated businesses had approximately $810 million in cash and cash equivalents on hand and cash investment and excess working inventories of an additional $42 million. For the quarter, we had operating cash flow of $179 million. Cash on the balance sheet has increased more than $100 million since our last conference call. We remain net debt free, but we expect our current cash position to decline as we reach the end of the year, because of turnaround expenses, tax payments, and capital expenditures. With that, I’ll turn the presentation over to Ed. Ed? Ed Morgan – Chief Financial Officer: Thank you, Jack and good afternoon everybody. Just a recap of few points, at the consolidated level, the net income was $124.9 million or $1.42 per diluted share versus $1.2 million or $0.01 per diluted share in the second quarter last year. However, adjusted earnings per share were $1.48 versus $0.22 per diluted share last year. I just remind everybody, we do believe that adjusted earnings is a meaningful metric for analyzing our performance as it does eliminate the impact on our accounting for major turnaround expenses and non-cash accounting matters providing for better comparison to market expectations. In the second quarter, we adjusted for share-based compensation FICO inventory accounting and a few other items, so let me briefly walk you through the adjustments and provide some brief color. First, share-based compensation in the second quarter, that was $1.3 million after-tax or $0.01 per share. With the exit of our private equity share holders during the second quarter and our share-based compensation expense is projected to be approximately $6 million over the next two quarters or approximately $3 million per quarter on a pre-tax basis. The second adjusted to net income is the increase or decrease in inventory value that we realized under first-in first-out or FIFO inventory accounting. In the second quarter of 2011, we realized an unfavorable FIFO impact of $2.5 million after-tax or $0.03 per share. The other after-tax adjustments to the income include a loss on extinguishment of debt, a loss on disposition of assets, and expenses associated with the upcoming refinery turnaround. In total, these three items represented an add-back of $1.7 million after-tax or $0.02 per share. Turning to liquidity, we ended the second quarter with a liquidity position of just over $1 billion, which is comprised of $748 million in cash and cash equivalents, $42 million in excess inventory, and $243 million available under our working capital facilities. The significant events driving this increase in cash with the completion of the IPO and the net term loan financing on April 13 which added $419 million from the IPO and $179 million of operating cash flow during the second quarter. As of June 30, our current debt-to-capital was 35% versus 43% the same period a year ago. Our long-term target to our debt-to-capital is 25% to 30%. Our total debt position at the end of the second quarter was $595 million, and as Jack mentioned, if you net out our cash on hand, we were in a cash positive position of $153 million. In connection with the successful completion of MLP IPO, we were required to offer to redeem a $100 million of our first and second link notes at price of $103 million. As a result of this offer, we did receive acceptance for $0.5 million of the first link notes and $2.2 million of second link notes. Now, moving over to capital expenditures, the second quarter 2011 they totaled $13.6 million versus $5.4 million for the same period in 2010. Our 2011 total capital spending forecast is still expected to be $144 million, of which $38 million is related to our UAN expansion. Of the total, $92 million is budgeted for the petroleum business, which includes $23 million to complete the Cushing, Oklahoma Tank Farm project. We do expect to start inputting crude oil in the new Cushing Tank Farm at the end of the first quarter 2012. We also expect to spend in 2011 approximately $54 million at the refinery in connection with the turnaround the fourth quarter this year. As a follow-up to Jack – what Jack mentioned earlier, for accounting purposes we will expense these turnaround costs as they are incurred. From a tax perspective, our effective tax rate for the quarter was 36% and we do anticipate our full year tax rate will be 36% as well. With the recent completion of the public offering for the fertilizer business, we will continue to consolidate the full pre-tax earnings of CVR Partners. All income attributable to the non-controlling interest of our MLP will represent a permanent non-taxable adjustment for CVR Energy and will effectively act to lower our effective tax rate on a go-forward basis. With that Jack, turn the call back over to you. Jack Lipinski – Chief Executive Officer: All right, thanks, Ed. As you know, we operate in a very volatile industry. For WTI based refiners, the sky is blue and the seas are calm right now, but it’s not always that way. A year ago in February, we saw group three crack spreads as low as $4 a barrel. We’re now seeing group cracks over $30 a barrel. I am not expecting any returns in these low levels, but those who don’t study history are doomed to repeat that. While we have a very substantial cash position right now, we intend to manage it conservatively. I am in discussions with our Board. They clearly understand our situation and fully intend to do the right thing to ensure – to enhance shareholder value as we move forward. With that operator, we’re ready to take questions.

Thank you. We’ll be now conducting a question-and-answer session. (Operator Instructions) Thank you. Our first question comes from the line of Jeff Dietert with Simmons. Please proceed with your question. Jeff Dietert – Simmons: Good afternoon.

Hey, Jeff, how are you? Jeff Dietert – Simmons: I’m well. You talked in your intro about your gathering system volume rising to I believe 36,000 barrels a day and maximizing your Canadian heavy purchases as well. Can you talk a little bit about the remaining portion of your feedstock and where the most attractive barrels are being sourced, is it Midland, is it Cushing, is it Bakken coming into Cushing, I don’t think that would be it, but where are you seeing the most attractive barrels for the balance of your feedstock portfolio?

Basically, it’s WTI out of Cushing. If you take a look, WTS, West Texas Sour has a pretty thin discount to WTI. And frankly, in our view doesn’t quite actually, it doesn’t value out. We’d rather won the WTI and certainly Bakken today is trading at $6 over WTI. If you just take a look at where the spreads are and that’s up in Clearbrook. So, our true choice is WTI. It’s the heavy Canadians gathered barrels and then it’s WT items. Jeff Dietert – Simmons: What’s driving the WTS weakness or excuse me the strength the limited discount, what’s driving that away from being an attractive credit?

Well, I think there is a couple of things that happened. There were some pipeline issues and maintenance that has taken place, which limited the amount of heavy Canadian that could come down in (indiscernible), which then drove people to look for the next cheapest source. Secondly, in this kind of environment if you could run domestic crude you are getting you are actually gather – I am sorry I am stumbling over my words, you are capturing that Brent/WTI spreads that it doesn’t really matter if it’s need or sell. Jeff Dietert – Simmons: And as you work on your gathering system, what’s drilling activity look like? What pace of increase are you expecting as far as for their benefits of the gathering system?

Well, we are seeing – we are expecting fairly substantial increases in Oklahoma for production as we move forward. We continue to look for gathering opportunities, whether it’s the Bakken or the DJ Basin or the Eagle Ford, we are always looking to expand there, but some very interesting opportunities are starting to crop up with increased drilling in Oklahoma, which is our backyard, where we can gather those barrels and bring them home. Jeff Dietert – Simmons: Thanks for your comments.

Thank you.

Thank you. Our next question comes from the line of Ed Westlake with Credit Suisse. Please proceed with your question. Ed Westlake – Credit Suisse: Yeah, congrats on the quarter.

Thank you, Ed. Ed Westlake – Credit Suisse: I guess, I should listen to the fertilizer call, but if I look at spot UAN prices, I mean they are have exceeded $300 a ton. So, presumably that just start to flow-through in the second half of the year into the UAN earnings?

Yeah. Let me tell you and just those of you who listened to comments before, there is two or three distinct fertilizer seasons in a calendar year. In season price as usually ends in June and then when you get into the July to December timeframe, the producers take large volumes of orders to carry them through the end of the year, when the producers produce and actually deliver into third-party storage. And the prices drop very significantly from in-season and then they kind of creep back up. So, early in the fill season we were seeing numbers in the high 200, say 290. Today, those number are close to the 350. So, if you take a look at our book and say there is a large number of orders taken in the beginning to show to ourselves that we had outlet and then we slowed down our order book and captured more and more of a higher priced tons. I said over 300, I am not going to go anymore detail, but it is over $300 a ton. Ed Westlake – Credit Suisse: Okay. And just on the refining, I mean, 20% to 24% of WCS, I mean, obviously the discounts are necessarily wide enough, but I mean, if you were to think of WCS and maybe WTS in terms of what’s the maximum sour barrel that you can get through?

I think we are there. What we do is it’s pretty much on-stream. We run to a blended sulfur limited between 1.2% and 1.3% at the refinery and we could run pretty much because of our configuration with two crude units. We can run anywhere from 28 or 37 ABI crudes. So, what we do is we balance running WCS or cold lake as the discount accrued with WTI to fill out as much as the downstream unit capacity as we can, without running over 20% heavy Canadian crude, that’s pretty much all we could run. The WTS, West Texas Sour, doesn’t impact us as much actually drives our sulfur more than the refining value does simply because right now we are doing pretty good processing WTI. Ed Westlake – Credit Suisse: And then final for me, you mentioned doing the right thing by shareholders and discussing that with the Board, obviously, we saw special from Holly last night and I think they are moving in that direction as well. With the excess cash, I mean, in prior thought prices, it had been that you would think about returning cash, I guess, after the turnaround has been completed, is that still full pressures?

Well, again, has had many discussions with the Board. We would certainly want to see where we are before the end of the year, we have lots of option available to us including reducing our debt and certainly other options available. Right now we are taking in considerable approach. You can see the shape of the economy right now. Certainly, the Board has absolutely focused on enhancing shareholder value. We think we have done pretty good job over the last year, 18 months and we believe we will continue to do so. So, right now all options are on the table. Ed Westlake – Credit Suisse: Thanks very much.

Thank you. Our next question comes from the line of Paul Sankey with Deutsche Bank. Please proceed with your question. Paul Sankey – Deutsche Bank: Thanks. Hi Jack. Jack talking of all options, you mentioned the sun is shining and the sea is calm. We've seen quite a good valuation come in on superior. I’m wondering how you now perceive the M&A market to be whether or not you would consider this to be, not the optimal time for looking to buy stuff, whether you believe that value is not reflected in the earnings.

The superior deal it was not outrageous. It is quite a bit of money for 35,000 or 37,000 barrels a day refinery. Right now I don’t see very much M&A in the market. I think if you own mid comp refinery you like what you're getting. I’m not interested and I said it before. I’m really not interested in moving to the coast. I like the WTI spread, but we'll just have to see where that goes and one of our focus is, it’s going to be on growing our MLP. And the other focus is obviously in our gather business, which ultimately can provide a significant amount of enhanced value for our shareholders. Paul Sankey – Deutsche Bank: Yes, but I guess within the context of your cash position does not dramatic acquisitions are they?

Nothing, right now there is not a lot that’s those of you have been on this call for a couple of years with me, we kick and retire that’s after. But we are also very conservative in the way we are approaching. So, you are not going to see us going out over our fees to pay any multiples or any assets right now. Paul Sankey – Deutsche Bank: We can see some reasons here Deutsche, why (indiscernible) which aspect actually widen in the coming month. You seems to be saying and those would be things like restart as Canadian, various Canadian production (indiscernible) using, the potential for WTI using refineries to go down just other bits and pieces that might widen up spread. Are you seem to be saying anything where to peak here and will likely to narrow, which I guess is in line with the future strip. What would you add on your views on that?

Again, I'm reading the strip and I wish I have a crystal ball because we will be certainly in the market my crystal ball was right. We believe they will stay at these kinds of levels certainly and until pipeline capacity comes to remove some of the congestion in Cushing efficient. I do not believe Cushing congestion is the only story. I really believe that we can see prolonged or even higher spread just simply because crude is near $100 a barrel. There are new technologies you’re going to see shale oils, you’re going to conventional drilling, you are going to see everything increased. And my view is ultimately I think long-term the Brent/WTI Spread will remain at pretty significant levels. I’m not sure, I’m smart enough to suggest that it’s going to flat $30 or $40 or drop to $10. But what we are seeing right now, we are seeing increased production. We are seeing increased interest in enough gather barrels for numerous parties. And what that tells me is production increase. So, it depends on how many pipelines will get dealt in. Everybody in their job wants to build the pipeline to take Cushing crude to anywhere else other than cush. So, at some point some of those will get both eye have a feeling that some of these peripheral projects will not be subscribed enough to justify spending a lot of money to build the pipeline from Cushing to anywhere else. So, I’m not saying in my comments, I know where we are at today. I believe we are going to stay this way probably for two years. My crystal ball doesn’t go on any further talk to me next year on this conference call have a better review. Paul Sankey – Deutsche Bank: Sure I will. And I guess what you are seeing there is you are not going to hedge or do a big swap for example.

No. We have a very small amount of spread around our turnaround in the low $20 barrel range, but there are significant. We did that just as a way. I think it’s about 15% for the non-turnaround months. Jut to put a floor underneath the turnaround periods. We are not hedging anything beyond that. Paul Sankey – Deutsche Bank: I understood Jack. Thanks.

Thank you.

Thank you. Our next question comes from the line of (indiscernible). (Operator Instructions)

Hi gentleman, good afternoon. It seems like the turnaround expense for this fourth quarter went up was it $54 million or with that would you mention it seems like it was $45 million last time what changed?

Actually the turnaround for the year will be incurred for the entire will be $54 million. Last quarter we gave some guidance over the course of the quarters and the year that between $46 million in the fourth quarter only. Just a couple dollars shifted here and there, but in total nothing has change on the turnaround cost. It still will also be $70 million, when you include the six new plants been in the first quarter of '12.

Got it, okay.

Okay.

And Ed just from a policy standpoint, what you include turnaround expense in your special items and adjust that out?

Try to make you more comparable to with the peer group does [chase] know most of the group historically has capitalized and amortized those costs over 4 or 5 year term.

Okay. So in the fourth quarter we would expect that $46 million kind of show as an adjustment then?

That is correct.

Okay. Second question here looks like your diesel yield is very high. You got a nice split between gasoline and diesel any thoughts going forward on trying to kick that yield might be higher on diesel?

We are running pretty solid. What you saw a little bit in the quarter primarily, which were the running a little heavy crudes running through the (indiscernible) and we ran fewer outside feedstock, which is typically gasoline natural gasoline. That’s why we always use a 211 as metric by which we judge ourself and don’t forget we also have our CCR down for a period and there was reduced gasoline out put.

All right.

So all in all from crude, we don’t why make 50-50, but its pretty close to make 50-50 diesel out of crude now we have other feedstock and like.

Yes, so any project you are maybe contemplating, are you going to boost that even higher going forward?

We are going to be doing some work during the turnaround some improve fractionation on certain units, improve feed recovery, improve pump and housing and the like, which is directly increased distillers recovered.

Okay, great. Thanks Jack. I appreciate it.

Thank you.

Thank you. Our next question comes from the line of Steven Carpel with Credit Suisse. Please proceed with your question. Brian – Credit Suisse:

Well. As you aware we have the opportunity to repay 10% of our first lane in December I think could be a fair statement to say that we will make that payment coming into the year beyond that I would be discussion with our board everything things on the table so its nothing its been nothing its been trick and captain shown what we are doing as we are just looking at the options available to us, they could lead the company is paying to start at 10% interest on the sales. Brian – Credit Suisse: On bonds.

On to our bonds, yes sorry, on to our bonds. It just something that you have to look at it. Brian – Credit Suisse: I appreciate it. Thank you very much.

Thank you

Thank you. Our next question comes from the line of Kathryn O'Connor with Deutsche Bank. Please proceed with your question. Kathryn O'Connor – Deutsche Bank: Hi.

Hi O'Connor. Kathryn O'Connor – Deutsche Bank: I’m just wondering do you know of the toper had what there was restricted payments capacity have right now?

Yeah since approximately $200 million. Kathryn O'Connor – Deutsche Bank: 200 million and so I guess as your taking into account all the different user of cash I mean how do you think about using that restricted payment capacity before doing the refinancing or then observe today what I guess would be to do refinancing and then curve out a certain amount or keep the certain amount of restricted payments, to ask to reduce pay special dividends going forward. So, how do you think about that in terms thinking about the strategy for the refi along with strategies for the cash?

I mean all of this is up in a year. Certainly the only place, where we could pay dividends would be from the RP basket. So, that’s started out $13 million when we closed on the bonds and it increases by 50% of the income, going forward. So, as far as refinancing and like frankly that just all part of the multiple discussions that we are going to be addressing with our board and I’m not saying we are doing it. We may now.

We also taken a consideration the make-whole premiums within the bond to trading right now and those can be pretty substantial depending too close to, I mean all of that is going in to mix and looking at the best return on yield. So, it’s big. Kathryn O'Connor – Deutsche Bank: You guys are talking about the make-whole, I mean think you by next year you will be able to call the first-lien paper, but you would start the way to do second-lien paper. Did you guys consider doing sort of a blended thing where you look at taking out the first-lien at first call and then maybe doing a tender for the second-lien so you can redo the cap structure at the same time so it would be more efficient?

That’s great idea. We will certainly add to our list Kathryn. Kathryn O'Connor – Deutsche Bank: Okay. And then can you just update us on what the cost of the storage tanks, are you going to at Cushing?

At Cushing it just below $25 million and again the first time you build you got the infrastructure piping comfortable like. The acreage that we have also reported up to 6 million barrels of total storage, I’m not saying we are going to do that. But just for clarity its we are not limited to the million barrel. But the first million cost more than the subsequent storage with. Kathryn O'Connor – Deutsche Bank: So, I guess are you trying to say that you can do more than that. So, if you wanted to do say like another, say if you want to double it another six would that cost you?

Probably $21 million to $22 million. Kathryn O'Connor – Deutsche Bank: Okay. And then just the last thing is just around the gathering again, I mean you have been able to increased it quite a bit and it seems like the new opportunities are sort of opening up with the high end of the range could be for gather. I mean in your mind how quickly, I know, you are saying just focus, but in reality based on the new source of crude that you are doing seeing locally. How fast could it grow and could you eventually supplier. Your entire feedstock from right around you or?

I don’t know if we ever get there, but certainly I would expect us to be able to build this business by 3000 to 5000 barrels a day per year. If certainly new fields come on it could even grow faster than that and ultimately I think somewhere between 45,000 and 50,000. Therefore we have to build one in to our existing infrastructure, but what we are effectively doing when we get into the Oklahoma barrels, these are WTI look like. They are actually better quality than WTI. And the whole goal here is to bring in crude that have some discount on our over finding value. So, that’s our goal. I’m not sure we will ever 100% cover all our needs. Kathryn O'Connor – Deutsche Bank: And if you talk about that 45,000 to 50,000 level and you have to spend money to increase your gather lines. What kind of order magnitude will that be a significant expense?

Again it’s slim pipeline 40 or 50 miles of territory. I’m not sure at the over covering expense, but we take a once step at a time. When we get close to next plateau that’s where we are going to start focus on. Kathryn O'Connor – Deutsche Bank: Okay, great. Thanks a lot.

Thank you, Kathryn.

Mr. Jack, there are no further questions at this time. I would like to turn the floor back over to you for closing comments. Jack Lipinski – Chief Executive Officer: Thank you everyone for joining us this afternoon. If you have any further questions don’t hesitate to give me a call. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.