Pinnacle West Capital Corporation (PNW) Q3 2008 Earnings Report, Transcript and Summary

Good morning, and thank you for holding. My name is Bernice and I will be your conference operator today. At this time, I would like to welcome everyone to the 2008 Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Ms. Hickman, you may begin your conference call.

Thank you, Bernice. I would like to thank everyone for participating in this conference call to review our third quarter earnings recent developments and operating performance. We know this is a busy time for you especially with the upcoming EEI financial conference. Today, I have with me Bill Post, our Chairman and CEO; Don Brandt, who is our President and Chief Operating Officer and also President and CEO of Arizona Public Service; and our CFO, Jim Hatfield. Before I turn the call over to our speakers, I need to cover a few details with you. First, I encourage you to check the Quarterly Statistics section of our website. It contains extensive supplemental information on our earnings variances and quarterly operating statistics. Second, please note that all of our references today to per share amount will be after income taxes and based on diluted shares outstanding. It is my responsibility to advice you that this call will contain forward-looking statements based on current expectations and the company assumes no obligation to update these statements. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements. Please refer to the caption entitled forward-looking statements contained in our Form 10-Q filed with the Securities and Exchange Commission this morning as well as the MD&A and risk factor section of our 2007 Form 10-K, each of which identifies some important factors that could cause actual results to differ materially from those contained in our forward-looking statements. Also, during the course of this call, we will refer to our ongoing earnings, which is the non-GAAP financial measure as defined by the SEC. Our form 8-K filed with the SEC this morning contains an area reconciliation related to ongoing earnings outlook. A replay of this call will be available on our website, www.pinnaclewest.com for the next 30 days. It will also be available by telephone through November 11th. Finally, this call and webcast are the property of Pinnacle West Capital Corporation, and any copying and transcription, redistribution, retransmission or rebroadcast of this call in whole or in part without Pinnacle West's written consent is prohibited. At this point, I'll turn the call over to Bill.

I would also like to thank you for taking the time to join us today. And before I turn the call over to Jim and Don to discuss the details of our financial results and operations, I would like to comment on two items: first, although it is Election Day, we don't have any preliminary data on today's Arizona Corporation commission race. Although this has been the most contested commission race in our history, no polling data is available. And second, as we explained to you in our last call we continued to expect that our consolidated ongoing earnings will be within a reasonable range of $2.50 per share with APS contributing substantially all of the earnings and SunCor's contribution being minimal. Now I would like to turn the call over to Jim.

Thank you, Bill. For our third quarter, we reported consolidated net income of $152 million or $1.50 per share as compared with $209 million or $2.07 per share in 2007 third quarter. Net income was down $57 million or $0.57 per share, with APS comprising a substantial majority or $0.45 of the total variances. Lower results of SunCor made up the remaining $0.12 of the difference. Earnings for the third quarter of 2007 included tax benefits related to prior years of $10 million or $0.10 per share that did not repeat in this year's third quarter. Now, I'd like to provide some detail on the consolidated variances. On a positive note, APS retail sales growth added $0.06 per share. In the third quarter of 2008, APS customer growth increased 1.2% as compared to 3.2% a year ago. As expected, the decline in Arizona's economic conditions mirrors to a large extent what is happening in the national economy. But despite the recessionary climate, our customer base continues to grow albeit at a much slower pace than in the past. We currently expect customer growth to decline to about 1% by the end of the year. Of course, it's difficult to determine the extent or severity of this economic downturn. But we currently do not anticipate a meaningful turnaround prior to 2010. Going forward, we remained confident of the long-term fundamentals of Arizona's economy and we expect to see customer growth return to the more vibrant levels as a national and state economic environments improve. Transmission rate increases under the transmission cost adjustor approved by the ACC, improved our quarterly earnings $0.07 per share. Their earnings improvements were more than offset by several factors. First, weather reduced earnings $0.14 per share. This year's third quarter was relatively normal as compared to hotter than normal weather in 2007. To illustrate, cooling degree days were 6% less than 2008 as compared to the 2007. Additionally, non-cash mark-to-market valuation of APS's fuel and purchase power hedges, net of related PSA deferrals reduced earnings $0.17 per share. As a result, precipitous decline in natural gas prices in the third quarter from the steady increases we had seen in the first half of this year. The mark-to-market gains previously recorded this year through June 30 were completely reversed in the third quarter. Higher O&M cost decreased earnings $0.20 per share related cheaply to higher customer service and maintenance cost for our distribution system at power plants. About $0.03 per share of the increase is related to renewable energy programs. In addition, we recorded severance cost of $0.04 per share, primarily related to head count reductions associated with turning back certain construction related activities as a result of lower customer growth. As Don mentioned on last quarter's call, the ACC approved APS's 2008 implementation plans for the state's renewable energy standard or RES, which provides up to $34 million for APS's renewable energy projects and customer incentives. These expenditures are recorded mostly in O&M expense, but are offset by revenues collected through a renewable energy surcharge. In 2008, through September 30th, the RES related O&M was $18 million pre-tax. The decrease in SunCor's results was inline with our expectations in light of the current distressed national real estate and credit markets. SunCor recorded a loss of $0.06 per share in 2008 third quarter compared with earnings of $0.06 in 2007. SunCor's third quarter of 2007 results included to sell the large commercial property. On last quarter's call, we discussed the review of our capital expenditures that was underway. Our goal was to reduce our CapEx for the next three years by more than $500 million, on top of the $200 million reduction announced since January. We have completed the review and are in process of implementing the reductions. We are further reducing our capital expenditures by some $720 million for the three year period 2009 through 2011. Approximately 80% of these reductions relate to continuing slowing of customer growth, while about 20% relate to delays of projects. As a result of these capital expenditure reductions, we expect the related line extension payments collected from new customers to decrease over the period by approximately $200 million. Net of these line extension effects, the additional capital reduction sold $520 million. The projected capital expenditures have been reflected in our third quarter 10-Q, which was filed this morning. Now I'll provide an update on liquidity and pensions. As you know, the credit and liquidity markets experienced significant stress beginning in the week of September 15th. Pinnacle West and APS have been able to access existing credit facility, ensuring adequate liquidity. Cash on hand is being invested in money market funds, comprising primarily at U.S. Treasury Securities. Pinnacle West has a $300 million revolving credit facility that terminates in December 2010. APS has two revolving credit facilities totaling $900 million that terminate December 2010 and September 2011. Additionally, we have no maturities of long-term debt until 2011. Our $1.2 billion of revolvers included combined credit commitments, totaling $51 million from Lehman Brothers that are no longer available to that of bankruptcy filling. Therefore, our capacity into the combined revolvers was approximately $1.15 billion at September 30. On that date, Pinnacle West had approximately $167 million of short-term debt and APS had approximately $200 million of short-term debt outstanding. And Pinnacle West and APS had approximately $95 million of cash and investments at the end of the quarter. As a result Pinnacle West and APS collectively had over $800 million in available credit capacity and cash at September 30th. Conversely, SunCor's ability to consummate transactions in 2009 may be impacted by the lack of counterparty liquidity as they continues. As a result of significant declines in a capital markets recently, several analysts has estimated the effects on corporate pension plans and the result and expense of primary requirements. In light of investor concerns, I'll provide some information related to our plan. At the end of 2007, our plan was 82% funded compared with our projected benefit obligation or PBO. During 2008, we made a $35 million contributions. Adjusted for this contribution, our plan was 94% funded on a cash funded basis at planned year 2007, which is 2% over the minimum cash funded status required by Federal Law. Actuarial evaluations of a period early each year which includes the prior year end results. If the funded status were to fall below the required threshold, we could elect the seven year amortization period to meet the funding requirements. Not surprisingly, our pension fund asset values have declined during 2008 as have most planned funds. In addition to fund asset vale changes, the discount rate used for the actuarial valuations is updated each year based on the prevailing interest rates, which have increased. An increase in the discount rate would mitigate a significant portion of any decline in the fund asset value. We expect to know the impact of the 2008 market activity on our 2009 pension expense and funding reference early next year after the net actuarial evaluations being completed. Lastly, while Bill mentioned 2008 guidance, I would like to touch upon the timing of 2009 guidance. We anticipate providing 2009 guidance when we held our fourth quarter earnings conference call. At that point, we'll have more clarity on 2009 pension expense, and we will have received the ACC decision in our interim rate case, which we expect by year end. That concludes my prepared remarks. I'll turn the call over to Don. Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Thanks, Jim. I'll begin with the regulatory matters. We have two significant matters pending before the Arizona Corporation Commission, both of which are critical to meeting the needs of Arizona's energy future. We have a general retail rate case pending at the ACC. We updated the filing on June second to reflect the test year at December 31st, 2007. The filing request and net increase in annual retail revenues of $278 million to become effective on October 1st of 2009. The filing includes several proposed methods to reduce regulatory lag in resulting earnings attrition. We are currently into discovery phase of the case responding to data request. The next major procedural milestone will be the December 19th filing of initial written testimony on revenue requirement by the ACC staff and other interveners. Thereafter, several sets of testimony will be filed by the parties to the case. The hearing on the general rate case is scheduled to begin next spring on April 2nd. Although, progress is being made in the general rate case, we simply cannot wait until late next year for a decision on that filing, as you already know to address APS's financial condition during the intervening timeframe. We filed a request on June 6th with the ACC for an interim phase rate increase until permanent rates become effective under the pending general rate case; the interim rate relief which provide critically needed cash flow and be a significant step towards showing up our credit metrics and our earnings. The interim request as for rate increase of 4%, which would increase annual pre-tax revenues by $115 million, the amount would be subject to refund depending on the eventual outcome of the general rate case. It is essential that the ACC grant this request to provide financial stability for APS and to assure our investment grade credit ratings. Loss of APS's investment grade credit ratings would result in hundreds of million of dollars of needless additional financing cost that would ultimately be borne by our customers. The hearing on the inner request was conducted in the week of September 15th. The positions of the ACC staff and interveners can be summarized as follows: first, the ACC staff consultants generally do not recommend that the commission grants and interim increase. However, if the commissioners choose to grant an interim increase, the staff consultants recommend that they grant an increase in annual pre-tax revenues of $65 million. This amount was calculated based on the change in traditional rate base between September 30th, 2005 and December 31st, 2007. The test year end dates in the last rate case and the current case. Although the staff consultants initially recommended that an equity infusion from Pinnacle West in the APS should be required part of such an increase becoming affective. Based on evidence we presented during the hearing, staff determined with such a pre-condition was no longer appropriate. The residential-consumer advocate RECO does not support an interim increase. A group of large commercial and industrial customers known as Arizonans for electric choice and competition recommended a $42 million annual interim revenue increase beginning in January 2009. The Arizona investment council and an intervener group of merchant generators both support APS's entire request. The final post hearing briefs were filed on October 8th and we are waiting the recommend order from the administrative law judge. After the ALJ issues for recommendation, there is typically a 10 calendar day period for filing exceptions. The commissioners will consider the matter in an open meeting sometime after the exceptions have been filled with the decision expected before year end. As of September 30th, APS had $58 million of accumulated PSA deferrals. We expect about half that balance to be collected by this year end. With the strong enhancements to our PSA that were approved by the ACC last year, we are in a much better position with respect to fuel cost recovery than we have been in past years. With regard to transmission rates, I mentioned on our last call that Federal Energy Regulatory Commission approved APS's transmission rate settlement, including formula rate making. As such, we are well-positioned that the federal and state levels to implement annual changes to our wholesale and retail transmission rates. The wholesale rates will be adjusted June 1st of each year, and we expect the retail rates related to transmission charges to be adjusted correspondingly a short-time thereafter through our retail transmission cost adjuster. Now, I'll turn to our recent operating performance. The Palo Verde units have been running very well. The combined capacity factor for the Palo Verde units was 97% during the third quarter, up from 89% in last year's third quarter. Currently, units 2 and 3 are operating at 100% power. Unit 1 is in a planned refueling outage, which is expected to be completed in the next week or so. As most of you know Palo Verde has two refueling outages each year, the next refueling outages were unit 3 next spring and unit 2 next fall. We're making substantial progress on our site improvement plan, and we are working closely with the Nuclear Regulatory Commission at various levels to ensure that all issues are addressed. We are committed to returning Palo Verde to sustainable first quartile performance. We currently expect the NRC confirmatory action letter to be cleared and unit 3 to be moved out of column 4 of the NRC's oversight metrics by the end of next year. Our coal-fired plants continued to operate exceptionally. In the third quarter, the units operated at an 94% capacity factor, which was essentially the same as a year ago. Our coal-fired plants have consistently performed at a level that is substantially above the industry average, and we expect them to do so again this year. Our strong commitment to renewable resources continues. In September, the ACC approved our participation in the Solana generating station. Additionally, Congress approved the extension of the federal tax credits for solar and wind generation. These steps moved the 280 Megawatts Solana plant closer to construction and lead the way toward future opportunities. Employees throughout our organization are focused on operational excellence. Over the Labor Day weekend, the metropolitan Phoenix area experienced several storms that unleashed heavy rain, hail and winds comparable to a category three hurricane. No greater storm has hit the hard of Phoenix in the past 40 years. Initially, 80,000 APS customers were out of service. The APS crews response to storm exemplified customer service excellence, which garnered a very public thank you from the Mayor of the City of Phoenix in the largest news paper in our state. We have worked hard to maintain top notch customer service and continually strive to raise the bar even higher. That concludes our prepared remarks. Operator, at this point we will be pleased to take any questions. Question And Answer

Thank you, sir. [Operator Instructions]. Our first question comes from Paul Ridzon, Keybanc. Your line is open, sir.

Thank you. The $720 million of CapEx cuts I was a little unclear, is that the 500 plus the 200 in January, an incremental 20 or is that an incremental of 220?

No. Paul, let's be clear about that category question. Gross CapEx cuts were $720 million, but because some of [Technical Difficulty] collect less from customer charge, the net impact CapEx reduction was $520 million.

Can you hear me?

Yes. Can you hear me?

Yes. So is it 920 less 200 of --

Previously, now $200 million.

Hello?

I'm sorry, is it 920 less 200 of line connections?

No, it's 720 less 200 of line connections for a net CapEx reduction of 520. And that would be an addition to the $200 million that was announced late last year or early this year.

Okay. It's an addition to the 200?

Yes.

Where does that given that you've materially exceeded the 500, where does that put you with regards to flexibility on your equity issue?

Well, I think again part of our plan was the these reductions in conjunction with interim relief and rate relief as requested at the ACC. So, I think we're certainly not looking at the need for equity this year. And I certainly, probably not in 2009 or we won't get an order until late in this year, which was ultimately determine what if anything we need to do.

Okay. So, we could be looking in at '10 issuances?

At the earliest would be 2010.

Thank you.

Your next question comes from Dan Eggers from Credit Suisse.

Hey, good morning, afternoon while I guess depending on the time zone. Just following up on Paul's question, the 520 was 910 and 11 CapEx right?

Correct.

Okay. And so, are you all going to give you 11 CapEx numbers at your Analyst Day since the Q only goes through '10?

Yes.

Okay, got it. How are you guys... as you think about a slowing customer account usage trends, what do we think about for O&M cost inflation of next couple of years? Do we see that come down as customer growth comes down or can you guys manages that dynamically?

Well, I think obviously, with a reduction in customer growth that's going to drive some reduction in O&M related if nothing else just as the reduction in customer growth, I think if you think about O&M going forward, you have obviously what happens to pension, what happens to consumables, we'll all be into the mix in terms of where O&M ultimately ends up going forward.

Okay. So, that's still a work-in-progress?

Yes, right.

Okay. I guess you talked about a less environment backdrop for recovery, how do we think about customer growth, how do we think about usage patterns in 2009, 2010?

Well, I think right now we're still looking at... we think will be decelerated down to about 1% customer growth in the year. I think that is the trend we see for '09 and '10. Right now, we're really not seeing any sort of degradation of per customer use. If you look at the third quarter, residential customer use weather normalized. It was seven tenth to 1% increase for customer. So, I think what is really seeing it more on the aggregate customer account than we are seeing on the usage side.

Great. Thank you.

Our next question comes from Jonathan Arnold, Merrill Lynch.

Good morning guys or good afternoon, excuse me. I'd like to ask on SunCor. I apologize I have been in and out, but I believe that the loss was $0.06 for the quarter. And you've talked about having minimal contribution. Is $0.06 a quarter kind of where the business is tracking on a run-rate type basis and you sort of make up the difference through some lumpier sales during the course of a year or how should we think about that and how does it relate to sort of way you expect it to be at this point? How much more can you do I guess to trim those ongoing losses? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Yes,we had, Jonathan, let me talk about what we've done on the G&A front. And we've substantially reduced staffing and expenditures down to compared to this year, next year we'd expect about $2 million a quarter less of G&A. But with that said is one impact we're seeing is the liquidity in the market and their ability, SunCor's ability to transact. We had a large transaction in the second quarter. In office building, we don't have anything like that planned, but we do have plans for call it more normal run rate type of transactions that early indications are the lack of liquidity in the market is going to constrain the ability to... for buyers to close on those transactions. And that could have a negative impact next year.

Does the $0.06 from this quarter includes so that having trimmed by G&A by $2 million? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Yes.

I mean is there any kind of reason we wouldn't assume $0.20 or so loss next year? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: We'll address that when we do guidance in January on our fourth quarter earnings conference call. But, I don't think the $0.06 because it's in this quarter is representative of what we'll see necessarily represented of going forward next year. Again, the core release with SunCor tend to vary on what transactions we have in each quarter, they tend to be lumpy. We don't expect it to be as lumpy next year as it was for instance in the second quarter from a positive perspective. But --

All right. Thank you.

Our next question comes from Paul Patterson, Glenrock Associates.

Hi, good day guys. How are you?

Hi, Paul.

The O&M increase, I just wasn't clear, it looks like it was because of our customer service expenses? And I think you were addressing this earlier, I guess it has been a completely get at with the customer growth really being as low as it is for you guys I mean 1% it seems, I think historically very low. Why is O&M increasing for customer service expenses and what's driving this?

Well, I think you have... if you think about just some of the abnormal drivers this quarter, you have the severance that we talked about, which is $6 million and that's really related to the CapEx reduction growth. You have about $3 million in strong related costs as Labor Day requirement that Don mentioned. We have an increasing collectibles and then we have this some consumable cost increases. So, I guess I would say that of that you have some that's more impacting the quarter than would be normally from a comparison perspective.

Okay. So, customer service I guess is a pretty broad area, isn't?

Yes. And that includes the collection billing, call center to the wires businesses as we call it.

Okay. And then the trading and marketing, the margins go off a bit there. Anything more you can elaborate on that?

Nothing specific related to marketing and trading. As you know, it's not a big focus for us.

All right. And then, I'm sorry if I missed it. You guys mentioned it, when do you expect ALJ to come out with their ruling on the interim rate case? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: We were waiting for that now. We would expect it in the not too distant future. And as I mentioned, we would expect the open meeting to occur in a commission decision before year end.

Okay. Not there any time now I guess? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Yes.

Okay. Thanks a lot.

[Operator Instructions]. Our next question, re-question comes from Paul Ridzon.

Did SunCor include any severance costs?

No. The severance I have mentioned was totally related to APS.

Okay, okay. Is there any severance opportunity at SunCor or have you scaled that back already? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: We've been scaling it back over the last 18 months almost two years, so there is severance built in there, but it's been not in any one particular quarter.

Thank you.

Our next question comes from Ed Heine, Catapult Capital.

How are you doing?

Good. How are you?

Good. Just a quick question on the O&M tracking for the year, I think at the beginning of the year Don you said $40 million. And I know that there is the renewable's things running through there too. But I think even if I back that out, it looks like you're still at over $50 million for the year so far. Is there going to be a reversal on the fourth quarter, kind of is there a less plant maintenance or -- Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: No,the fourth quarter be essentially flat. We say about 50, and what Jim mentioned the severance cost should be about $6 million to $7 million ours and the storm cost were about $3 million in the third quarter and uncollectibles charge-offs and that's much of a reflection of the economy about $2 million to $3 million. So, that's basically this difference you are seeing Ted compared to 40 that I talked about earlier in the year.

Okay. So couple of cats and dogs, year-to-date and that should be flat for the rest of the year? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Yes, exactly. The fourth quarter is literally flat, as we see it now.

Got you. And just a clarify on the CapEx again, I'm sorry, I got a little mixed up there but... so at the beginning of the year, you guys announced the $200 million reduction. And then on the second quarter call, you said you were aiming for 500 plus. So, what's the net impact for the entire year now? Is that net impact of the 720? Is that right?

Well, the 200 was looked at earlier this year began to put in place. I think that was reflected in the queue earlier this year. Second quarter call, we talked about our goal to reduce additional $500 million. We ended up getting $720 million growth. $200 million of that is also going to be a reduction of impact fees from customers. So, net additional reduction CapEx is 520. Those numbers are 2009 to 2011.

Okay. And how much with that's falling into the 11 timeframe versus 10 and 11 or 9 and 10, you said you are going to about that?

We'll talk about that Friday. We'll take that by year.

Got you. Okay. Thanks a lot.

Our next question comes from Yiktat Fung, Zimmer Lucas Partners.

Good morning.

Good morning.

Good morning. Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: Good morning.

Just a quick question about pension expense. How much of your pension expense is at the utility and are these expenses recover moving rates?

Your first question was how much, it's like 94% of total pension is really at APS. Of the pension expense, about 50% is ultimately capitalized in the plant. The rest has typically been recovered in rates.

Okay. That's all my questions. Thank you.

thanks.

Thanks.

Our next question comes from Danielle Fise [ph], Fise Research [ph].

Hi. I just was wondering, assuming the Intel and it is going to be voted by the new commission, new members or just the remaining members that attending over the hearings?

Danielle, we believe its going to be decided before the end of this year, which would be the existing members.

Okay. And then assuming it's really a under very low side of what your expectations are, would you... would that change anything to your financing schedule from your point of view of new equity, would that make a difference? Donald E. Brandt - President and Chief Operating Officer, Pinnacle West Capital Corporation; President and Chief Executive Officer, Arizona Public Service Company: No, Danielle, I think... again if you just think about the ultimate, we still have... this is just one part on the base rate increase, which is a late '09 event. So, I think we're ultimately got to see where we end up at the end of day before we make those decisions.

Thank you.

Our next question comes from Paul Ridzon, Keybanc.

Just a follow-up to Ed Heine's question. With O&M $10 million over budget but guidance maintained, what are we seeing as the offsets?

Well, I guess from offset perspective, I guess the reasonable rate of around 250 that Bill re-emphasized for '08 which include the higher O&M. There is many things to go into that guidance and I don't think you can just point O&M as the only thing impacting 2008. If we look at where we are for the year we're 278. If you take out 30 syntax benefit, we're at 248 last year I think we made about slightly positive net income in the fourth quarter, so that would still get to 250 outline people.

Thank you.

[Operator Instructions]. We have no questions in queue. Thank you.

This is Becky. Thank you for joining us today on the call. Couple of people who have missed our analyst meeting on Friday, those slides will be posted on our website and filed as an 8-K Friday morning. So, for those of you who are not be able to be with us, they will be there with respect to those who will be able to with us or who will be attending the EEI financial conference in Phoenix next week. We look forward to seeing you. Meanwhile, if you have any questions or need further details, please contact me or Lisa Malagon. And thank you for calling in.

This concludes today's conference. You may now disconnect. .