Entergy Corporation (ETR) Q3 2017 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And welcome to the Entergy's Corporation Third Quarter 2017 Earnings Release and Teleconference. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program David Borde, Vice President, Investor Relations. Please go ahead.

Good morning and thank you for joining us. We will begin today with comments from Entergy's Chairman and CEO, Leo Denault; and then, Drew Marsh, our CFO, will review results. In an effort to accommodate everyone who has questions we request that each person ask no more than one question and one follow up. And just a reminder, with EEI only days away, today's call is scheduled for 40 minutes. In today's call, management will make certain forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Additional information concerning these risks and uncertainties is included in our earnings release, our slide presentation, and the company's SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the Investor Relations section of our website. And now I will turn the call over to Leo.

Thank you David, and good morning. Today, we're reporting a strong third quarter with operational earnings per share of $2.35 and utility, parent and other adjusted earnings per share of $2.15. We now expect to finish the year in the top half of our utility, parent and other adjusted earnings guidance range. Furthermore, we continue to execute on our strategy to achieve steady predictable growth at the utility, while managing risk and an orderly exit of our merchant power business as shown on Slide 3 with three quarters behind us, we've successfully completed most of the key deliverables that we set for 2017. Significant accomplishments we've made over the past several years position us well to achieve our financial outlooks in the coming years, which support our long-term dividend growth aspiration. As a result, today we are affirming our 2017 guidance and our longer term outlooks for utility, parent and other. With the EEI conference days away, we are keeping today's call focused on quarterly results as well as progress, updates on our key deliverables. We will defer questions on long-term strategy to EEI, while I will be giving a formal business update presentation. Now moving onto developments for our business since our last earnings call. First, Entergy Arkansas' formula rate plan proceeding, we reached an unopposed settlement agreement with the attorney general and the other members of the joint rate pair advocates. If approved, the settlement would resolve all challenges to the prudence of the nuclear costs included in the 2017 and 2018 test year filings. We also agreed to a process to review the costs associated with ANO's state or incident and placement in column 4 by the NRC. As a reminder these costs were not part of the 2017 and 2018 test year FRPs. The settlement agreement was included in a procedural filing with the Arkansas Public Service Commission last week. We are still engaging with all parties with the goal of reaching a comprehensive settlement of the FRP that may be presented to the APSE for review and approval. By November 1, we will either file a comprehensive settlement of the FRP or the settlement I just mentioned on the nuclear costs only. In August, Entergy Louisiana filed a request with the Public Service Commission to extend its formula rate plan for three years starting with the 2018 filing. As part of the filing, we did request some limited modifications to the current FRP framework, which we believe will further improve the timing of recovery of investments and provide greater financial flexibility to support the needs of our customers. Specifically, we are requesting a one-time reset of base rates to the ROE midpoint for the 2017 test year. A narrowing of the authorized ROE ban from a total of 160 basis points to 80 basis points and a forward-looking mechanism that would allow for more timely recovery of certain transmission related costs namely related to the MISO transmission expansion planning and critical infrastructure protection projects. We've requested that the Louisiana Commission consider this request by December 2017 to maintain the current cycle we're implementing rate adjustments. And finally, in Texas, the Public Utility Commission approved the Entergy Texas' DCRF settlement agreement to increase the rider recovery by approximately $10 million. The increase was effective September 1. Regarding our transmission operations, we are nearing the end of the MTEP process for 2017. The MISO Board is evaluating our nearly $1 billion plan for the next five years and will make it selections and give final approval to projects in December. In addition, in September we submitted over $500 million of additional projects for MTEP in '18 and we will work with MISO and stakeholders on the selection process for those proposals over the course of the next year. We are committed to ensuring that needed transmission is constructed to provide reliable service to our customers. On the distribution end of our business, after receiving regulatory approvals for the deployment of advanced meters in Mississippi and Louisiana, we continue to make progress towards similar outcomes in other jurisdictions, Entergy Arkansas and Entergy Texas each filed a settlement agreement in their respective jurisdictions and we are waiting approval in both jurisdictions, which we expect by year end. And in New Orleans, the procedural schedule remains suspended to enable settlement discussions. We are pleased with the progress we've made on the approval of advanced meters in each of our jurisdictions and the positive feedback we continue to receive from our stakeholders, especially in light of the benefits this technology will provide to our customers. With respect to our large generation projects, the St. Charles, Lake Charles and Montgomery County power stations are underway and we are on target to complete them on time and on budget. Construction is ongoing at the St. Charles project and we have commenced site work on the Lake Charles project. We are on target to issue full notice to proceed on the Montgomery County project. Turning to our merchant nuclear operations, as you know we now plan to continue to operate Palisades until spring 2022 under the current power purchase agreement with Consumers Energy. While we certainly appreciate the merits of terminating the PPA early, any termination must appropriately compensate us for the value of the above market contract. This decision to continue to operate the plant will preserve value for our owners, while extending our exit from the merchant nuclear business by only a year. In light of this decision, let me be clear that our strategy to exit the merchant business and become a pure play utility remains unchanged. This quarter, our service territories endured Hurricane Harvey, which made landfall as a category four storm near Rockford, Texas. Harvey's torrential rains produced historic flooding and approximately 250,000 of our customers in Texas and Louisiana were left without power. More than 3,300 workers from our own ranks as well as those of other utilities and contractors worked to restore power as quickly as possible. I applaud our employees and mutual assistant partners for their tireless efforts. I also thank our customers as well as state and local agencies for their support as we worked together to recover from this event. I am always amazed by the dedication of our people to return power to customers as safely and quickly as possible in the toughest conditions. In addition to the sacrifices our employees make to do their jobs, their dedication goes well above and beyond when you consider that many sustained significant damage to their own homes. Yet they put the needs of their communities first before responding to their own circumstances. Of course we recognized that many of our customers also endured hardships beyond power outages. Our commitment to our communities continues after we get the lights back on and we are making a contribution of $400,000 to help rebuild communities across Southeast Texas. Shortly after Harvey, Hurricane Irma made landfall in Florida. Hundreds of Entergy employees headed out to help other utilities restore service to their customers. The mutual assistance provided by our industry is unique as are the employees who take tremendous pride empowering lives and communities across the country. In many ways, hurricanes such as Harvey and Irma are important reminders of who we serve and what we do best. Finally, during the quarter, we were recognized through a number of awards that exemplify our values of diversity and inclusion and also our commitment to the success of our communities through education and economic development. In August, the Disability Equality Index, a joint initiative between the American Association of People with Disabilities and the U.S. Business Leadership Network classified Entergy as one of the best places to work for people with disabilities. We are proud of this recognition as our inclusion practices are cornerstones of our culture and our company is stronger from these practices. Also Site Selection Magazine named Entergy as one of the nation's top ten utilities in economic development in 2016. This is the tenth consecutive year that we've been named in the list recognizing our integral role that has resulted in more than $25 billion of capital and investment and the creation of jobs in our service territories. We know that economic development is important for our customers across the region and it's also good for business. We will continue to work with our state agencies and local communities to promote growth across our service territories. And finally, Entergy was named to the Dow Jones Sustainability Index for the 16th consecutive year. It's an honor to be included in this highly regarded list, which signals to our stakeholders that our company has operated responsibly planning for the future providing excellent service to our customers and building and maintaining a thriving workforce. We earned perfect scores in the areas of climate strategy, labor practice indicators, biodiversity and water related risks. In conclusion, 2017 has already been another year of significant accomplishments that position us to deliver on our financial commitment. As a result we are forming both our guidance and our outlooks. With good clarity on our strategy, we continue to successfully execute and make significant progress to invest in our core utility business for the benefit of our customers and reduce risk including the orderly wind down of our merchant power business. As I mentioned at the outset we will defer questions on our long-term strategy to EEI, but I'll be giving a formal business update presentation that will be available by webcast. We hope to see many of you at the conference and if you can't make it in person, hope you'll get the materials from our Investor Relations website and listen to the webcast of our presentation. We'll now turn the call over to Drew who will provide a more detail on our financial results and also an overview of the disclosures we plan to provide at EEI.

Thank you Leo, good morning everyone. I'd like to start this quarter's financial review with the key takeaways on Slide 4. As you can see, Entergy's operational earnings are up from last year driven by higher utility, parent and other adjusted earnings and higher EWC operational EPS partially offset by $0.25 of negative weather. We're also affirming our 2017 guidance ranges for consolidated operational EPS for utility, parent and other adjusted EPS. In the utility, parent and other results summarized on Slide 5 you can see weather was negative in the current quarter compared to positive a year ago which accounts for $0.43 swing in the operational earnings. Across our system, cooling degree days reflected in our build sales were 16% lower than normal this year compared to 14% higher last year. On an adjusted view, earnings were $0.17 [ph] higher than third quarter 2016 driven by higher net revenue excluding the effects of weather. This reflected positive build retail sales growth and new base rates and riders to recover productive investment to benefit customers. For the industrial group, we saw solid sales growth from existing as well as new and expansion customers, largely from primary metals and chloro-alkali sectors. Partially offsetting the net revenue benefit were higher operating expenses including non-fuel O&M, depreciation and taxes other than income taxes. Last year's DOE award which reduced expenses in that period was also a driver. Turning to EWC's results on Slide 6, operational earnings increased $0.26 from third quarter 2016. The sale of Fitzpatrick affected variances for multiple line items but had a small impact on the overall variance. Excluding Fitzpatrick revenue from nuclear plants increased due largely to higher capacity prices. And EWC's nuclear fleet ran strong this quarter at a 98% capacity factor. Nuclear fuel and refueling outage expenses were also drivers as these were lower due to previous impairments. EWC also recorded higher income from realized earnings on decommissioning trusts. On Slide 7, operating cash flow from the third quarter was $893 million, approximately $100 million lower than a year ago. This decline is due partly to the $54 million of DOE litigation proceeds received last year. Effective weather on utility sales also contributed to the decline, but were partially offset by positive weather adjusted sales growth. Before I leave the quarter, I'd like to briefly touch on the financial implications of Hurricane Harvey summarized on Slide 8. Progress today points toward the lower end of our preliminary range of $85 to $129, the bulk of that being in Texas. We're still early in the process. We will work with our regulators to determine the best path to recovery of those dollars. You should note that because we are confident in our storm recovery mechanisms, signatures for storm restoration did not affect the income statement, but rather collect on the balance sheet. However, we did experience some lost revenue due to customer outages, we estimate those around $3 million to $5 million, about half of which is in unbilled revenue this quarter. Now Turning to Slide 9, we are affirming our consolidated operational guidance range. As I noted earlier weather adjusted sales growth was strong in the quarter. Year-to-date we are ahead of our expectations on O&M at the utility. EWC also had higher than expected realized earnings on its de-commissioning trust as small benefit from Palisades no longer being impaired. This strong performance would be enough to position us near the top of our earnings expectations range, but for $0.50 of negative weather in year-to-date results. But given the effects of weather, we expect year-in consolidated operational earnings in the lower end of the range. We're also affirming our utility, parent and other adjusted EPS guidance. Just a reminder this metric normalizes weather and income taxes. With strong weather adjusted sales growth this quarter, we now expect full-year UP&O adjusted EPS to fall within the top half of the guidance range. Our full-year sales growth expectations now sit near or a little above our assumption at the beginning of the year. Moving to the long-term view on Slide 10, our earnings expectations continue to firm up as we execute on key deliverables while extending our adjusted UPO outlook one year through 2020. 2018 our expectations remain constant despite conservative flat sales growth estimates including industrial sales and a 4.25% pension discount rate, which is 25 basis points lower than where we were last quarter. Our outlook through 2019 is unchanged and you will see that 2020 is the same as presented in June of last year at our Analyst Day. We do expect industrial sales to pick up again in 2019, but we anticipate residential and commercial sales to continue to be flat to negative in the foreseeable future. We're also updating our EWC EBITDA outlook on Slide 11 and we're now extending that outlook through 2022, the end of our merchant nuclear operations. You can see that our EBITDA estimates have increased since last quarter due to our new plans to operate Palisades until spring of 2022 under the existing PPA. This change also means that going forward we do not expect that plant to be impaired from a GAAP perspective. Therefore future fuel expenditures and refueling outage costs will be put on the balance sheet and expensed over their remaining useful lives in a more normal fashion. This will increase operational fuel and reviewing outage expense starting with the next outage in late 2018 and decrease impairments which are considered special items from what we previously expected. Capital spending will also be reported to the balance sheet and depreciated over its remaining useful life. But depreciation expense will not affect EBITDA, but it will affect operational earnings. We have summarized these changes on Slide 38 in the appendix to help you understand how this will affect results in the future. These estimates also reflect our updated hedging profile. Excluding Palisades we have increased our contracted position since June 30 by approximately 8.6 terawatt hours over the next four years. This reduces cash flow risk as we exit the business. But also takes away some potential upside should practice increase. Finally, with our Palisades decision, we've made good progress towards our cash neutral goal for EWC including any contributions - including any contributions to the decommissioning trust. We are currently short of our goal by only approximately $100 hundred through 2022 which includes our preliminary assumptions for decommissioning trust contributions and we continue to work down a path to exceed our goal. Our cash and credit metrics are shown on slide 12. Our parent debt to total debt ratio is currently 20.9%. As we look ahead, the effect of our decision to run Palisades will be positive to cash flow and ultimately parent debt. But there will be timing differences, considering we won't receive the $172 million PPA termination payment next year and positive cash flow will be spread out over remaining operations of the plant. Debt to EBITDA is slightly above our target, while debt for construction expenditures are incurred in advance of recovery from customers. And our FFO to debt metric has been affected by the operating cash flow drivers previously discussed, including the negative weather incurred through the third quarter of this year and an unusually large number of nuclear refueling outages in the first and second quarters. We expect to finish the year stronger, well within our targeted range. As noted on slide 13, we will have additional details at the EEI Financial Conference, where we will continue the discussion of our business strategy, longer term views, 2018 drivers and other important topics. As has been our practice, we anticipate that we'll provide earnings guidance for 2018 and our detailed three year capital plan on our fourth quarter earnings call. I look forward to seeing many of you at the conference and now the Entergy team is available to answer questions.

[Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith from Bank of America. Your question please.

So just wanted to follow up, first off, congratulations on Arkansas. I wanted to just see if - what your latest thoughts were about earning your ROE there. Obviously, you want to delay some of the conversation, longer term strategic thinking until EEI, but at least right now, what are you thinking your trajectory is towards earning your ROE again, assuming the current settlement stays. Obviously, there could be some shift still, but the status quo expectations.

Julien, this is Rod. Good morning. I think our point of view hasn't changed in terms of what we've stated in the past and that is, we've reflected both the rate case and FRP settlements in Arkansas, the operation of the - both the cap and the true up mechanisms, such that by '19, we expect to approach our allowed ROE in Arkansas. And so all of that is reflected in our existing outlooks.

Right. Absolutely. But '18 is still something of a transition year.

I think that's fair.

Okay. Excellent. And then turning to Louisiana, obviously, I'm looking for action here pretty shortly. Can you talk about what the specific impact on the transmission tracker you're talking about there, what would that mean in terms of your ability to earn and how meaningful is that within the scheme of what you're talking about there across the various points?

Yeah. When you think about the - what we're seeking in the FRP renewal, that transmission tracker is really for us a recognition that the lion's share of the transmission spend that we have line of sight on is in front of us and a forward-looking mechanism would reduce the likelihood of a lag for us and our expectation is that that would allow us to earn and sustain our ROEs over the period. And so, we're in the middle of negotiations with the parties in Louisiana and they have the same line of sight that we do on our capital outlook and we're hopeful that they'll respond favorably to the approach.

Excellent. And very quickly on the decommissioning trust true-up or to the extent it's necessary, what's the timeline do you think that you could actually get this resolved in terms of thinking about any kind of bigger arrangement to deal with that? Is that, shall we say, nearer term opportunity, if you could kind of summarize that, apologies if I didn't hear it clearly in the remarks.

Hey, Julien. This is Dew. I don't think I put a specific timeline out there in the remarks and with the movement of Palisades to 2022, it gives a lot more room to finalize that. We are moving forward on Vermont Yankee, so that piece of it will be finalized hopefully next year. But the other parts on Pilgrim Palisades and Indian Point might take a little bit longer. That doesn't mean, we won't make progress on it though. We are continuing to, well, I'm talking about longer it could be, longer for a transaction or something of that nature. But we are making progress on our own sort of go it alone strategies and other things around how we're going to de-fuel the plant and things like that. Expectations around those things, we could firm up as early as next year. We can continue to make progress on our overall objective.

Thank you. Our next question comes from the line of Jonathan Arnold from Deutsche Bank. Your question please.

I have a question about the number you gave for weather and the $0.25 negative versus $0.18 positive and I think if I heard you right, you said the cooling degrees across the service territory was 16% below normal. My question, when we look at the sort of raw cooling degree data, it just looks much closer to normal than that. So I'm curious, are you showing an index that includes humility or other factors or just what are we missing there.

No. That's weighted on our specific - different city than our service territory, Jonathan. It is just raw cooling degree data, we're not factoring humidity or other things in there at this point.

Okay. That's helpful to know. So just pure CDD. That was my question.

Yeah. But it is weighted by the various cities in our jurisdiction and relative size of those loads in the area.

Thank you. Our next question comes from the line of Praful Mehta from Citigroup. Your question please.

So firstly on sales growth at the utility level, just clearly you have had some improvement. So wanted to understand that you're tracking now above the plan. Does that mean that 2018 will be benefited by that? Is that benefit going to flow through to 2018 as well or do you see that more as a 2017 impact in terms of retail sales.

Praf, this is Rod. Good morning. I don't believe that the volatility we're seeing, whether it be positive or negative in '17 changes our point of view. At the end of the day, we still see, as Drew alluded to earlier, our growth driven by industrials with residential sort of being flat, flat to negative. So I think the short answer is no. We don't see that as changing our point of view.

And then on slide 35, on the EWC side, the hedging price has obviously gone up, but I'm assuming that's purely because of the PPA of Palisades, is that right?

That's correct, Praful.

So - and the EBITDA impact that you also mentioned from EWC, which has also gone up from a guidance perspective, that increased looked quite substantial in the 100 million range, is that also just Palisades or are there other impacts there as well that impacted your guidance for EWC?

No. That's primarily driven by Palisades. There are other minor things going on at the other plants, but what you're seeing, the effect that you're seeing is Palisades.

And just finally just clarifying on the decommissioning side, you mentioned that your goal still is to be cash neutral on the EWC side through the wind down through 2022, incorporating some contributions that you expect on decommissioning. Just wanted to understand, have you talked about what you expect to be contributing into decommissioning at this point and what is the whole you expect to be for that?

So we haven't disclosed that yet, Praful, since we're in ongoing commercial discussions with third parties on the potential decommissioning of those facilities. So we haven't disclosed those, but we did change the number that we put out this time slightly before we had - we've just sort of given you a general idea of where we were relative to our goal and this time, we gave you a more specific number, we're about 100 million out. And so we are continuing to work that down and we are making progress and I think we probably do have line of sight to close the gap, we just haven't been able to do that in our financials just yet. And when we do that, that will be cash that should be available to the parent and be able to reduce some of the parent debt or be reinvested in to the utility business.

Thank you. Our next question comes from the line of Stephen Byrd from Morgan Stanley. Your question please.

Congratulations on the progress in Arkansas. I wondered if you could just speak a little bit further. Leo, I know in prepared remarks, you talked about the scope a little bit, but I wasn't completely clear on the exact scope of this recent settlement. Could you just speak to that in terms of new costs particularly?

Sure. It's Rod. Good morning. When you think about the settlement, what we reached a settlement on, with the AG and the other interveners was solely around the NSP costs. If you think about the 130 or so million that it was a subject of our '17 filing with the '18 forward-looking test year, the nuclear cost represented about 53 million of that. And so we resolved with the parties on the settlement of just the NSP or the nuclear related spend and we also got the testimony from the APSC staff. And so that portion of the FRP, at least as it relates to the interveners is resolved with no outstanding issues. What remains is the rest of the non-nuclear spend component of the formula rate plan. By the way, we also resolved with the parties the prior year's settlement that was already in rate. So that's really not anything incremental since we were already recovering that prior spend in rates. And so between now and November 1, our objective is to resolve the remaining non-nuclear aspects of the formula rate plan and those issues are what we would consider to be normal and expected inquiries and debates around timing of spend, certain assets being used in useful, known and measurable for purposes of the cap, but at the end of the day, all of those issues will be resolved between now and November 1 and ultimately be resolved in the true-up mechanism next year, to the extent that it's above that 4% cap. And so, nothing out of the ordinary. This is a significant resolution with the nuclear spend and everything else is what we consider to be the basic blocking and tackling of closing out the FRP.

Well, that's great progress, Rod. And just if I can understand the, so staff was the party for this settlement, their testimony, I view it as constructive, but can you help me understand the intersection between staff and the settlement.

Sure. The staff was not a party to this specific settlement. Staff, of course, representing their point of view to the commission. And so both the settlement that we've reached with the AG and the JRA, I know them as the interveners. So the AG in the hospitals and industrials, that will all be presented to the Arkansas Public Service Commission who is the ultimate arbiter of all of the settlements. And so the staff is one voice and certainly a significant one from our vantage point that gets presented to the commission, essentially identifying any outstanding issues that may remain. From our point of view, resolution with the interveners, with the support of testimony from the staff gives us confidence that we provide a pretty strong case for settlement to the APSC.

Thank you. Our next question comes from the line of Steve Fleishman from Wolfe Research.

So just on the 2018, you mentioned that your forecast assumes conservative assumptions, including flat sales. Is that flat overall sales and are you just being conservative or is there a reason that you think they'll be flat overall sales.

Hey, Steve. This is Drew. A couple of things there. One is, we haven't really changed our outlook for 2018 all that much. We had previously seen industrial sales kind of move out. So we weren't anticipating much in terms of industrial sales. So that's kind of flat and we're anticipating overall flat as well. But our residential and commercial hasn't really changed. It's been - '17 has caught up a little bit and so it's tracking, as we said, back where we were anticipating it previously at the beginning of the year. So now that our sales in 2018 for residential and commercial are the same, but starting point has changed from '17. So it's basically flat, residential, commercial, industrial and total.

Thank you. Our next question comes from the line of Michael Lapides from Goldman Sachs. Your question please.

Just on Entergy Louisiana, you're filing for the formula rate plan reset and when would those new rates go no effect, is it still kind of the September timeframe or would it be before that in 2018?

Mike, it's Rod. You're right. It's September '18 and that's just the reason why we're seeking to get the settlement. If we're going to reach a settlement to get that issue resolved by the December, early first quarter of '18, so that the Public Service Commission and their staff has the ability to review, approve and comment on, so that rates could go into effect by September '18. That's the normal rate making path that I think Leo made reference to in his comments.

And then the current FRP filing where you didn't request to change, that's because you aren't within the ROE band. I'm just trying to think about whether you would anticipate needing a sizable rate increase to get to the midpoint or are you kind of already close to it there when you think about your 2017 expectations at Entergy Louisiana?

Well, we certainly have a request for an increase to the midpoint. That number is not public. But we do have a point of view that the interveners are working through on getting to the midpoint. But Michael, it's not public at this point.

Thank you. Our final question comes from the line of Shar Pourezza from Guggenheim Partners. Your question please.

Most of my questions were answered. Just, Drew, one thing I'm not clear on is on the sale of the decommissioning trust funds, what's sort of driving the complexity that's causing sort of the sales to get somewhat pushed out, especially since you've got sort of a benchmark deal already with Vermont Yankee? And then just a follow up is can you confirm if there is any other buyers out there outside of the NorthStar JV.

Yeah. So, Shar, those are good questions. So, a couple of things are driving the timeline. One is it's first of a kind. And so it - any kind of first of a kind transaction is going to take you a little longer. But second, we're working on creating a market here. And so you alluded to any other buyers outside of the NorthStar JV and yeah, the answer is yes. There are a few. But it's taken a while to get everybody up to speed and give them access to materials, give them access to plants to make sure that they have a good sense of what they're trying to accomplish and so forth. And so, as we are going through this first of a kind transaction, we're trying to build a market for us to sell into. So it's taking us a little bit longer than we anticipated. But having said all that, we are finding some robust interest. I mean I'm not saying there is 10 buyers out there, but there's 4 or 5 people that have serious capabilities and serious interests that we are looking at. And so, the market is coming along, but it is taking us a little while to get it all together.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to David Borde for any further remarks.

Thank you, Jonathan and thanks to everyone for participating this morning. Before we close, we remind you to refer to our release and website for safe harbor and Regulation G compliance statements. Our annual report on Form 10-Q is due to the SEC on November 9 and provides more details and disclosures about our financial statements. The events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. This concludes our call. Thank you and we'll see you all at EEI.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.