Eversource Energy (ES) Q2 2018 Earnings Report, Transcript and Summary

Welcome to the Eversource Energy Second Quarter 2018 Earnings Conference Call. My name is Paula [ph], and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note, that this conference is being recorded. I will now turn the call over to Jeffrey Kotkin, Vice President for Investor Relations. You may begin.

Thank you, Paula [ph]. Good morning and thank you for joining us. I'm Jeff Kotkin, Eversource Energy's Vice President for Investor Relations. During this call, we'll be referencing slides that we posted last night on our website. And as you can see on Slide 1, some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties which may cause the actual results to differ materially from forecasts and projections. Some of these factors are set forth in the news release issued yesterday. Additional information about the various factors that may cause actual results to differ can be found in our Annual Report on Form 10-K for the year ended December 31, 2017 and on Form 10-Q for the three months ended March 31, 2018. Additionally, our explanation of how and why we use certain non-GAAP measures is contained within our news release and the slides we posted last night, and in our most recent 10-K. Speaking today will be Phil Lembo, our Executive Vice President and CFO; joining us by phone for Q&A is Lee Olivier, our Executive Vice President for Enterprise Energy Strategy and Business Development. Also joining us today are Jay Buth, our VP and Controller; and John Moreira, our VP for Financial Planning and Analysis. Now, I will turn to Slide 2 and turn over the call to Phil.

Thank you, Jeff, and this morning I'll summarize our second quarter and year-to-date results. I'll recap recent regulatory proceedings; this has our updated capital plan and affirm on long-term growth rate. So overall, we're very pleased with the results through the first six months of the year, our media results are consistent with our expectations and we continue to target full year EPS of between $3.20 and $3.30 a share. We made good progress on a number of our initiatives and our regulated businesses that will enhance service to customers and support our 5% to 7% long-term EPS growth rate. I'll provide more specifics on those initiatives shortly but I'll start with Slide 2 and a review of our financial results. We're here in $0.76 per share in the second quarter of 2018 compared to $0.72 in the second quarter last year. Our electric distribution business earned $0.32 per share in the second quarter of '18 compared with earnings of $0.38 per share in the same quarter of '17. And just a reminder, that historically we reflected both, our distribution and our public service of New Hampshire generation in this electric distribution segment, so year-on-year comparisons will be impacted by the divestiture of these assets in January. So the quarter decline was expected and primarily due to lower electric distribution margins, I'll talk about that in a minute, as well as the lower generation earnings in New Hampshire generating assets, also had some higher property tax expenses in the quarter. Together those factors more than offset the benefits of distribution rate adjustments in Connecticut and Massachusetts. The lower distribution margins in eastern Massachusetts, primarily reflect the timing of revenues through NSTAR Electric's new decoupling mechanism that was approved in the recent rate proceeding. This mechanism is more reflective of a seasonal usage pattern in NSTAR Electric's former last state revenue recovery mechanism which was reflected radically [ph] over the years, so the new mechanism is more seasonal, the old mechanism was radical over the year. As a result, compared with past years we'll see higher revenues in the peak usage quarters, in other words really the third quarter and lower revenues in the other quarters. So simply put, the electric distribution segment is impacted by the generating asset sale and timing of the new decoupling mechanism, both as expected. Our electric transmission business earned $0.35 per share in the second quarter of '18 compared to $0.30 per share in 2017. Improved results growth -- we do largely to increased level investment in our transmission facilities. Our natural gas business earned $0.02 per share in the second quarter of '18 compared to about $0.01 to $0.02 a share in the same period of '17. Improved results were due primarily through much colder weather in the month of April resulting in increased heating related sales at Yankee Gas which is not yet decoupled. Our new aquarium water company subsidiary earned $0.02 per share in the second quarter consistent with our expectations. And finally, our parent and other segment are on $0.05 per share in the second quarter of '18 compared with $0.03 in the second quarter '17. And earnings in both years benefited from investments we've made in certain renewable energy facilities that we've discussed in the past, the impact of which is recorded in the second quarter of each year. Turning to year-to-date results, we earned $1.61 per share in the first half of '18 compared to $1.54 in the first half of '17. Our electric distribution business earned $0.65 per share in the first half of '18 compared with $0.74 per share in the same period last year. Again, lower results were primarily due to our New Hampshire generation event this year, as well as the timing of decoupling revenues versus the previous loss based revenue methodology. Our electric transmission business earned $0.69 per share in the first half of '18 compared with earnings of $0.60 in the same period of '17. This was also due to a higher level of investment in our transmission facilities. Natural gas segment earned $0.20 per share in the first half of '18 versus $0.17 in '17, the primary driver were higher sales resulting from colder weather in the months of January and April. As for our natural gas sales were up about 6.6% year-to-date compared with the same period in 2017. Our water distribution business earned $0.03 per share and our parent and other earned $0.04 per share in the first six months of the year. I should note that the most profitable quarter for [indiscernible] typically, the third quarter since water usage peaked during the summer time period. From results I'll turn to Slide 3 and some recent regulatory developments; regulatory decisions for our core business have been constructive and supportive of our utilities capital plans, designed to meet the ever increasing expectations of our customers. We've increased the rate of infrastructure investment to modernize our electric grid, enhance electric reliability, accelerated the replacement of older natural gas and water distribution pipes, and increased investments to meet our states environmental and clean energy goals. On May 1, our Connecticut Light & Power's new three-year rate plan took effect with an initial distribution rate of adjustment of about $64 million. Two smaller increases will follow in May of '19 and May 1 of 2020. In addition, the base rate adjustments we see CL&P, regulators approved the capital tracker for investments at our system above a base amount of $270 million per year, and these investments are aimed at making the grid more resilient such as smart switches, enhanced tree trimming [ph], upgrades to our polls and their integrity, and substation security. And these totaled about $75 million a year, recovery of these costs associated with these investments will go through the reconciliation mechanism. Currently a pure responsive process for identifying top priorities for grid modernization is underway, and we expect to file a separate grid modernization plan before the end of this year. We have not yet reflected any potential Connecticut grid modern [ph] investments in our distribution capital forecast. I believe our proposal could be meaningful as we work to enhance grid animation and two-way communications with our customers about real-time grid conditions, as well as consider investment in electric vehicle infrastructure and battery storage. Shortly, after we wrapped up our CL&P rate review in Connecticut this spring, we filed our first Yankee Gas rate case in about eight years. Hearing in the case are scheduled to begin this month with the draft decision due on November 14 and a final decision on December 5. The new rates would take effect in January of 2019. The rate application includes a proposal for revenue decoupling which we expect pure to implement since Yankee Gas is the only one of the Connecticut utilities without a decoupling rate structure. We've also proposed to increase capital expenditures, particularly investments related to replace one of our cast iron and unprotected steel pipes. The acceleration of these important capital projects will provide great service reliability and safety, as well as continuing to improve the performance of leak-prone [ph] infrastructure. Fuel leaks [ph] are good to the environment and will help to lower O&M cost ultimately benefiting customers. In our rate application we highlighted the significant improvement in key performance metrics over the past four years with no increase in base distribution rates. This includes a 45% reduction in Class 2 leads since 2014; additionally Yankee Gas's actual non-fuel O&M in 2017 was 3% lower than it was seven years earlier in 2010, another excellent story for customers. Turning from Connecticut to Massachusetts; we continue to move forward with resiliency investments at NSTAR Electric. This past spring the DPU approved $133 million of additional grid modernization investments for NSTAR Electric over the next three years. This is in addition to the $100 million authorized by the DPU in 2017 for two battery storage initiatives and initial electric vehicle infrastructure. As a result, we'll be investing a total of $233 million in grid modern projects which will be recovered through a capital cost recovery mechanism. In addition, the DPU instructed NSTAR Electric to file a three-year rate plan for continued grid modernization efforts for the years 2021 through 2023. We expect to file that plan sometime in 2020. Turning to Slide 4; I just want to pause a minute to discuss our capital forecast. Every year this time we commence our process for updating our long-term operating and capital plan. This effort concludes at the end of the year with the subsequent years operating plan, the earnings guidance that we've provided to you in February, as well as the long-term capital investment forecast we include in our 10-K. Since we published our most recent forecast, we've seen continued focus by state energy policymakers to enhance the electric grid, accelerate the replacement of aging infrastructure and construct facilities to meet the growing customer needs. We will provide you with a full update again in February but this time we believe that our capital expenditures in the next three years and that's the period 2019 through 2021 we'll increase by a total of $600 million. This brings our total core business CapEx to $7.1 billion from the previous estimate of $6.5 billion. This incremental capital will be split between $300 million for electric transmission, $200 million for electric distribution, and $100 million for natural gas distribution infrastructure investments, all to benefit our customers. The primary driver of this increased level of expenditure will be investments in resiliency and reliability that will allow us to continue to enhance our customer's experience. And as I said, this $600 million of expected increase in CapEx does not include any potential initiatives that may emerge from the grid mod reviews in Connecticut or Massachusetts. Our electric operations, you know, we need to accelerate resiliency investments and this was underscored by the very harsh March and May whether we referenced in our news release. To be more specific, on the electric transmission system we now plan to accelerate the upgrades of ageing wooden transmission structures and expect to replace thousands of them with new steel poles over the next several years. We're also focused on upgrade to certain substation equipment. On the electric distribution side we're seeing additional customer growth in the immediate Boston and Cambridge area which was resulting in the need to upgrade several key substations to accommodate this ever increasing demand. On the natural gas side, most of the additional spending is at NSTAR Gas as we accelerate the replacement of lead-prone beer [ph] steel, cast iron and unprotected code of steel pipe which accounts for about 33% of our mains. We are now also planning additional upgrades at our Hopkinton LNG facility which is critical to maintaining adequate supplies of natural gas for our customers during extended cold spells like the one our region experienced this past winter. At this time we're not anticipating incremental investments in our water segment beyond what we disclosed in February, and Slide 5 shows that our current forecast envisions average annual rate base growth for Aquarion of greater than 7% through 2021 compared with about 3% during the periods prior to our acquisition; and this estimate is only from organic growth projects. Turning to Slide 6; so relating to -- that relates to our CapEx revisions, these investments -- the $600 million combined with our normal struck [ph] cost management focus will continue to benefit customer through improved reliability and service. We are confident that we'll be able to achieve our long-term earnings growth around the midpoint of the 5% to 7% growth rate and that's without the Northern Pass access [indiscernible] or offshore wind projects or without any share repurchases for that matter. To be clear, assuming we're successful and we execute our current capital plan, continue to manage our O&M cost where we've always exceled, or caution [ph] we can grow earnings around the middle of our 5% to 7% projected EPS growth rate, even without the large projects. And I should add that our forecast does not assume that any of our states move forward with widespread advanced metering technology, we'd provide customers greater information for managing their energy consumption and which could involve substantial capital investment. In our grid modernization decision earlier in the year, Massachusetts said -- regulator said that the advanced metering technology was not yet timely for our implementation but they did express a commitment to reviewing advanced metering as a means to meet grid modernization objectives and intend to kick-off this project to evaluate the next steps for cost effective deployment. Additionally, Connecticut regulators are considering advanced metering component in their grid modernization review I mentioned earlier. As we've done in the past, we provide you with a new year-by-year capital investment forecast when we report year end results in February. We're confident in our ability to operate, maintain and invest in our core business to provide the reliable response of cost effective and technologically advanced service, there are nearly $4 million customers expect and deserve from us. That concludes my remarks. As Jeff mentioned, Lee is offsite this morning but joining for the Q&A and I'll turn the call back to Jeff.

And I'll turn the call back to Paula [ph] just to remind you how to enter questions.

[Operator Instructions]

Our first question this morning is from Sharp [ph] of Guggenheim.

So just a couple of questions on CapEx here. So obviously somewhat of a fairly healthy jump in CapEx; just as far as we think about recognition, should we assume the spend was sort of incremental to plan or more sort of a pull forward of spend?

No, this is incremental to plan. As I said, we identified a lot of this just as a result of the harsh winter and the storms that occurred in the region over the first part of the year that really highlighted the need for incremental investment in our infrastructure.

And then obviously, you've displayed a very strong level of confidence in sort of your growth trajectory without these binary risky projects. Is there any reason why we shouldn't assume sort of that same level of confidence as we move beyond your current trajectory of 2021?

There is no reason you shouldn't expect the same level of confidence.

And then just lastly, on sort of the grid mod; you guys sort of -- you're in the midpoint of your range as we think about your base spend, is -- is sort of as you think about grid mod, would -- assuming a fair outcome or sort of a base outcome is that enough to get you sort of to a top end of your range or is -- will that sort of clearly still support the midpoint?

It's difficult to speculate because proceedings are just -- in Connecticut sort of just beginning as a smaller docket or another docket in New Hampshire -- they are all sort of at the beginning phase and beyond our current grid mod in Massachusetts since I said we're filing another three-year plan but that's not going to be for another year. So it really -- it would be difficult to speculate how much or what kinds of initiatives we would be expected to focus on, so I need a little bit more clarity before being able to put you in that point in the range.

And then just on buybacks; just obviously given the higher capital outlook today and then sort of incremental upside we're going to likely see around grid mod. Are buyback sort of off the table at this point?

Well, as I said, their growth rate -- the confidence we have in the mid-range of that growth rate does not assume any share repurchases.

Our next question is from Angie [ph] from Macquarie.

Two questions; so the updated growth plan does look strong, and so in the context of that could you comment on how should we think about your continued interest in water M&A? And also separately, what happens with those bulky projects like northern part, like offshore wind -- should we assume that you will continue to work on these or are these basically now completely canceled? Thank you.

Yes, on the second point it's certainly activities that are going on on the project in terms of either siding or analysis to position us for success in the future; but as I said, there is nothing in the existing forecast period for significant investments or projects in that time period. In terms of water, again, we're interested in pursuing the Connecticut water transaction, we feel that we have a superior and compelling proposal that benefits customers, our communities, shareholders, employees, it's really highly complementary, and it's locally situated, it's in a territory of familiarity with us in terms of the region, we feel that the transaction will be accretive in the year -- in the first year of any kind of transaction; so that's the transaction that we're interested in at this time.

I mean that transaction still has to be EPS accretive in the first full year after the closing, right. So this is basically the -- that's the flexibility across any potential high offers for Connecticut water that it has to be accretive?

That is correct, we believe our proposal is of full and fair proposal, and it's -- it would have to be accretive in the first year.

And lastly on Aquaroin; so the 7% rate base growth is actually already pretty healthy but when is that all can we expect any updates to your growth plan for that business?

I would expect that we would pull -- that would be pulled into our normal operating and capital plan update, and if there is any change or an update we'll provide you that information in February when we give our full update.

Next question is from Mike Weinstein from Credit Suisse.

It's actually Shank [ph] for Mike. I just wanted to see if any update is on the full ROE complain at this point given the recent commission of departure?

Unfortunately there is no update at this time; really we're in the same situation that we were at the end of the first quarter.

And so can you remind us on the inter-Connecticut work, just now you mentioned a couple of filings -- it was the second half of this year, and these are all recovered through writers mechanism?

Yes, a few things that I mentioned that's going on in the regulatory arena in Connecticut as we filed for new rates at our Yankee Gas subsidiary first time in seven years. So that process is going on, I also discussed in Connecticut that there is a grid modernization, so this has been initiated by the Connecticut regulator to look at what types of activities in terms of resiliency and other clean energy objectives could be implemented in the state and that process would be ongoing through this year and possibly ending this year or early next.

Next question is from Praful Mehta from Citi.

Thanks for the clarity on the CapEx; it was really helpful to see the organic kind of CapEx plans. And really just a question on that which is, is this a real change of heart in terms of how you pursue growth and look at growth given the difficulty you've had with the larger projects? Is that what we should expect now as the new normal -- the majority of your growth would be driven off of these kind of more stable internal kind of driven projects, and then you have the potential for bigger projects but that's outside your five to seven; is that how we should think about it longer term as well?

Yes, I think our focus has always been on providing outstanding service to our customers and running, operating, growing our core business. And the strategic projects are related -- relate to energy policies that exist from time to time in the various states but our core growth, our focus has been -- and as that will be on our core business running that successfully and providing great service.

And I guess in the context of those kind of strategic initiatives on the offshore range side; as of now you've not had the RFPs kind of going your way, where do you see the gap from your perspective in terms of the offshore wind out of speeds and where do you think it takes and do you actually see this as a big opportunity, as an upside opportunity for your growth story longer term or how do you kind of see that offshoring wind thing?

Lee, you want to answer that?

Yes, in terms of offshore wind, we see the potential over the next seven to eight years for probably somewhere between 5,000 to 7,000 megawatts of additional offshore wind between the [indiscernible]. We see the long-term offshore wind become a major component of the bulk power inside of New England. So you've got -- in Massachusetts you have additional 800 megawatts of authorization, that will likely come into -- in our opinion early next year. We will participate in that, you've got a bill in the Massachusetts legislature that would authorize another 1,600 megawatts of offshore wind; and so we see the potential for offshore wind to be large. Yesterday there was a kind of a zero carbon RFP that was issued in Connecticut, the RFP has the authorization for 12 terawatts of clean energy; so it could be Class 1 energy but also could be existing nuclear and hydro, so we see that as a potential opportunity for offshore would have been bid into as well as [indiscernible] they have authorized essentially 2,400 megawatts of offshore wind that's kind of a specific RFP to offshore wind and probably the first 800 megawatts will come up in late this year or early 2019. So we do see offshore wind as a great potential investment. Clearly, we were not successful inside of the Massachusetts RFP, I believe we put in a very compelling bid with the world's premier builder of offshore wind, we've stood -- we have told you very consistently we would not dilute the earnings of the company in wind for the sake of winning, we've put in a compelling with returns that were consistent with the current returns we have in transmission, and that was risk-adjusted. Now clearly others took a different view of that, perhaps took more risk and lower returns but that's -- we're not in this thing to win for the sake of wining, we're into win for providing shareholder value as well as the certainty around signing on with a company like we should never source to get this wind build on-time and on-budget and delivered to customers.

Next question is from Paul Patterson from Glenrock.

I apologize if I missed this, crazy morning; but the Massachusetts legislation that I think passed yesterday?

Yes.

Then net metering -- I think that was taken out, it wasn't taken out, excuse me -- well, the provision was left in that so if took out how the DPU treat -- could you go over that a little bit in just how you see impacting it?

I think -- to be honest, I think they finished at about one o'clock this morning, so some of the information is filtering out today. But I think the overall assessment is that you know, what came out of the legislature is kind of mutual, I think there is nothing in it that is really problematic or from that standpoint, is some increases in RPS provisions but some of the other details, I think we still have to go through line-by-line to assess what's in there.

And then over the -- just if you could sort of update to sort of what are normalized numbers for the first half of this year? And over -- what you project them for being for the 2019 through 2021 period?

Well, before I answer that I will say that most of our subsidiary is now quality coupled; so whether another -- most of our subsidiaries are now decoupled and as I mentioned early, Yankee Gas, when it emerges from the current rate proceeding that is -- it's sand will be decoupled. So really -- public service at New Hampshire would be the only subsidiary that is out there that's not decoupled. So weather impacts are less and less on us; so for '19 [indiscernible] last question, first, I would expect minimal impact because essentially we'll have fully decoupled rates across our companies. Specifically to answer your question, we had -- for weather normalized sales on the electric business; for the quarter we're down about 1.5% and same year-to-date for gas, weather normalized sales were up just over 10% and 8.3% year-to-date.

So, when we're talking about the Ford outlook, I understand that you guys are decoupled, mostly. But I guess I'm just sort of wondering in general when we're looking at the sort of full demand picture and [indiscernible] I'm just sort of trying to get a sense as to -- I mean, I realize that a lot of this has nothing to do with demand media, that's got to do with grid modernization etcetera. But I'm just trying to get a sense as to what you see sort of just underlying fundamentals in terms of electric demand or over the next three years. Do you guys have that?

Yes, I think that -- you know, I'll start by saying we're the number one utility in the U.S., number one rated for energy efficiency programs, and really our energy efficiency effort have really removed a lot of the energy demand, and peak demand from the system. So our programs are very effective helping customers lower their energy cost including lower REIT demand. In terms of general outlook, we see sort of sales being flat, in our region over the next few years, you know, the Boston area of this, you've probably been into the city, see all cranes and -- so we expect pockets. I think the best way to look at it as when I talked about our capital plan, there is pockets of growth that require investment, so you know I mean I'd be that the overall system growth is there but certain areas of the city are growing significantly and require investment. So I think let's move on a pocketed [indiscernible] that we see the big growth but overall it's probably flat over the next two to three years.

Next question is from Andy Levy [ph] from Exodus Point.

I think I'm all set but just to make sure that I understand; so you're basically saying that your firmly in the 6% growth range, is that correct?

Yes, in the middle of the 5% to 7%.

So basically 6%, and just understand whether it's the poll replacement or AMI or some other CapEx opportunities that's what would get you above the 6%?

You know, there is a lot of factors obviously, one of them is control of costs; O&M is the driver of moving in the range one way or the other, constructive regulatory decisions is another factor that may move you in the range one way or the other, and more CapEx is another factor. So there is probably a few factors that could move you around in the range a bit but certainly if there is incremental CapEx that comes out of the grid modernization or dockets that I alluded to that could enhance that number, correct.

Next question is from Joe [ph] from Avon Capital.

Actually my offshore wind question has been answered, thank you, Phil. Since I get you here, just a follow-up on Andy's question, just to clarify; on your long-term EPS guidance the 5% to 7% based on the '17 actual or midpoint of '18 guidance?

No, '17.

Next question is from Julien Dumoulin-Smith.

So, I just wanted to follow-up, in terms of the 6% that you guys are talking about, how do you think about the earned ROEs across the subsidiaries maybe from today through that forecast period, just -- or versus the baseline year; I just want to understand how much of that is capital versus ROE improvement and piecing it out? And then secondly, just to go back to an earlier question on the grid -- grid mindset of the equation for Connecticut, can you give us a sense of the magnitude of the capital contemplated and maybe the low and high point there? I know it's early on -- I know it's difficult to comment earlier but maybe just follow-up on that.

In terms of the ROE as you know we've just come from two very constructive rate reviews in Connecticut and in Massachusetts for the elective business. So those I contemplate that will be earning at those allowed returns and then Massachusetts, at NSTAR Electric and CL&P, the -- we are in for a rate review at Yankee Gas, we're below -- we're earning below our allowed return there that's creating the need to go in, as I said, we've spent seven years plus since we've been in for new rates there, so probably not a surprise. So I see that we could have some uplift there to get to a new allowed return level, and same in New Hampshire, we haven't been in for rates in New Hampshire and as you know, we've divested off our generating assets there, and with -- you know, kind of a little different business model in New Hampshire, so we're now in a position to move into New Hampshire for a rate review and expect to do that later this year, and again, it's another one of the subsidiary that's under earning, it's a loud [ph] return. So I think this ROE uplift from those two subsidiaries, the others are off of recent rate reviews and expect to be earning at/or their allowed rate of return -- ROE levels. In terms of grid-mod, as I said, it really is hard to say, it could be a few hundred million, it could be more than that depending on the extent to which the regulator wants to advance the infrastructure or storage technologies. So it depends on sort of what the basket of initiatives would look like that would advance what the state is looking for -- but I'd say it would be a few hundred million anyway.

So maybe just to clarify the timing on the grid mod here in Connecticut relative to your usual planning process; I mean should we be basically interpreting this mid-year update as pretty much a draft version of the 4Q update? So perhaps borrowing a meaningful update in grid-mod in Connecticut it should be largely similar or I don't want to put words in your mouth here either?

No, I don't think you should look at it like that at all. I think that what we've been trying to do over many years is that as new information becomes available to us and we identify changes to our plan that we would let you know so that I would look at this more as an ongoing process that we're just at the beginning stages of. And we still have another several months in our operating plan review to go, so I would say that likely, you will see other items included in that by the time we get to February.

And sorry to just clarify -- clean up a little bit on Angie's [ph] question earlier on the water side just to clarify real quickly; your commitment to a cash and equity deal -- does there need to be a stock component here ultimately? And B) just to go back to make sure I heard this right, it needs to be accretive in the first full year, well whatever the composition is of leverage and I suppose share for share exchange?

To answer the second part of your question, absolutely. We have and we continue to have a disciplined approach to looking at transactions I could highlight the previous deals that we've done in terms of Aquarion or the NSTAR and new deal or previous deals, all accretive in the first year and that's -- that would be the focus. The shareholder can elect cash or other -- you know, that's -- it's sort of an election in the offer to the Connecticut water at this stage.

And you're committed to keeping that election open?

That -- the poll is on the table, yes.

We don't have any more questions this morning, so we want to thank you very much for joining us. Good luck with the other calls this morning. If you have any follow-up questions, feel free to send me an email or give me a call. Take care. Paula [ph]?

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating, and you may now disconnect.