Helix Energy Solutions Group, Inc. (HLX) Q2 2012 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the review of Second Quarter 2012 Results Conference Call. During the presentation, all participants will be in listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator instructions). Today’s call is being recorded Tuesday, July 24. I would now like to turn the conference over to Terrence Jamerson. Please go ahead, sir.

Good morning, everyone, and thanks for joining us today. Joining me we have Owen Kratz, our CEO; Tony Tripodo, our CFO; Clifford Chamblee, Executive Vice President of Contracting Services; Johnny Edwards, Executive VP of Oil and Gas; Alisa Johnson, our General Counsel; and Lloyd Hajdik, our Senior Vice President of Finance. Hopefully, you have had an opportunity to review our press release and the related slide presentation released last night. If you do not have a copy of these materials, both can be accessed through the Investor Relations page on our website at www.helixesg.com. The press release can be accessed under the press releases’ tab and the slide presentation can be accessed by clicking on today's webcast icon. Before we begin our prepared remarks, Alisa Johnson will make a statement regarding forward-looking information. Alisa?

Thank you. During this conference call, we anticipate making certain projections and forward-looking statements based on our current expectations. All statements in this conference call or in the associated presentation other than statements of historical facts are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual future results may differ materially from our projections and forward-looking statements due to a number and variety of factors, including those set forth in our Slide 2 and in our Annual Report on Form 10-K for the year ended December 31, 2011. Also during this call, certain non-GAAP financial disclosures maybe made. In accordance with SEC rules, the final slides of our presentation materials provide a reconciliation of certain GAAP measures to comparable GAAP financial measures. The reconciliation, along with this presentation, the earnings press release, our annual report, and a replay of this broadcast are available on our website. I will now turn this over for some opening remarks to Tony Tripodo?

Yes. Owen, did you want to take slide 5 or you want me to start on slide 5?

I am here now Tony, I will go ahead. We are moving on to slide 5 which is the high-level summary of second quarter results. Quarter two’s revenues decreased from $408 million in Q1 to $347 million this quarter with most of the decrease attributable to the Q4000 and the Seawell being out of service for a good part of the quarter as they underwent the regulatory dry docks as well as lower oil and gas revenues resulting from lower production levels. Both dry docks ran longer than we had planned, and consistent with the decrease revenues we also reported lower earnings and operating cash flow. Nevertheless, given the fact that our two historically best contributing assets the Q4000 and the Seawell experienced a lot of non-revenue producing base, we still managed to generate $152 million of EBITDA. On the slide 6 and 7, Quarter two’s reported EPS is $0.42, which is inclusive of absorbing $15 million of impairment charges or $0.09 after tax associated with the decision to cold stack our oldest pipe lay vessel, the Intrepid. The Intrepid was due to for its regulatory dry dock in April and based on the lack of contract visibility in the amount of expenditures that we projected would be required by the regulatory dry dock, we determined that it was better economic decision to cold stuck the vessel. The Intrepid has not really contributed anything to the bottom line for us lately. Canyon, our robotics business unit, as well as our subsea construction continue to put up good numbers in the second quarter. The Express, our other real pipe lay vessel made a nice contribution to our results in Q2 from a Subsea construction project offshore Israel. Our oil and gas production in the second quarter totaled 1.7 million barrels of oil equivalent, down from 2 million barrels of oil equivalent in Q1. Quarter two’s production declined was impacted by a prolonged shutdown of our South Marsh Island 130 deal for repairs as well as natural declines. We continue to benefit from our oil production being sold at Louisiana light sweet prices, which is at a significant premium to the West Texas intermediate prices, realizing $107 plus a barrel net of our oil hedge contracts. In addition, natural gas liquid production along with our natural gas hedge contracts allowed us to realize $5.76 for our natural gas production in Q1. Additionally, we are very pleased to report last week that success from drilling the Danny II well. Johnny will speak to that later. Tony?

Yes. Thanks Owen. From a balance sheet perspective, we continue to strengthen our financial condition. Our net debt position decreased from $560 million at the end of quarter one to $530 million at the end of Q2. Our cash balances increased to $650 million at the end of Q2 from $546 million at year end. So we are in pretty good shape right now and with that, I will turn the call over to Cliff for an in depth discussion of our Contracting Services’ results.

Alright. Thanks. Good morning all. As you can see, contracting services was slightly down compared to the first quarter with the total revenues of $230 million. However, still $38 million higher than the second quarter of 2011. Our gross profit margins were at 20% lower than both last year and last quarter primarily due to three of our vessels being at the dock for a substantial portion of the quarter. As a result, we have lower utilization for our Subsea construction and Well Intervention vessels at 73% and 67% respectively. We are moving on to slide 7. This slide shows the equity earnings contribution of the Independence Hub, Marco Polo and the SapuraCrest JV. A couple of key highlights here. Our earnings at Independence Hub are lower than Q2 due to the expiration of the supplemental monthly demand fee that ended at the end of the first quarter. Also the $4 million under SapuraCrest JV for the second quarter as recovery. Freely estimated loss, when we completed our exit from this joint venture in April. Moving on to slide 11. As Owen mentioned earlier, the Q4000 was in dry dock longer than we expected which put it at 45% utilization for the quarter. Over the North Sea, the Well Enhancer was 100% utilized for the quarter while the Seawell was in dry dock in April and a portion of May. Outside of our last dry dock, the Well Enhancer coming up in August, our well of engine assets remain fully booked to the rest of 2012 and we continue to improve visibility end of 2013 and 2014 with the Q4000. Moving on to slide number 14 on the robotics side. Canyon continues to experience high utilization for the construction support vessels as well as the trenchers over the North Sea. For the second quarter we added three more ROV systems to our fleet which were mainly put to work on long term contract. Our latest trencher, the T1200 was mobilized on to a spot vessel and put into service in June. We anticipate taking delivery of Grand Canyon vessel in the third quarter as well as continuing to expand our ROV fleet with three more assets. Moving on to slide 13, in subsea we have a strong utilization of both the Express, which finished a campaign offshore Israel. And Caesar, which continues on accommodations work down in Mexico. Due to lack of work moving forward in 2012 and the associated cost for the dry dock, we did decide to cold stuck the Intrepid. We did manage to extend the Caesar contract through July of 2013 and continue to firm up more work for the Express in the fourth quarter when we returned back to Gulf of Mexico. On slide 14. I will leave the slide detailing the best utilization for your reference. With that, I’ll turn it over to Johnny for the oil and gas side.

Good morning. Please turn over to slide 15. Both slides 15 and 16 provide the financial highlights for oil and gas for the second quarter. Production and revenue for Q2 2012 was lower than Q1 for oil and gas. The difference in production, in addition to normal declines, was due to mainly to downtime of two of our larger shelf deals including SMI 130 that Owen mentioned, our facility repairs and downtime from tropical storm Debby. We did have some downtime due to that and downtime in one of our field from third party pipelines. Our production mix in Q2 was 73% oil. Turn it over to slide 16; our operating costs were slightly higher in Q2 with the major difference being in our work over expense cash flow. The higher work over expense were largely a result of the facility repair work on the two shelf properties that I mentioned previously. Looking forward, we are excited about the new oil discovery on our Danny II well in the Bushwood field. We are currently in the process of completing the well. We are waiting on the lab for detail results from the compositional analysis results of the liquid samples obtained by MDT tests, but we expect to flow the Danny II well back to our East Cameron 3D1 facility through the same flow line as we flow the Danny I well. Utilizing the existing infrastructure will allow us to start up Danny II early in the fourth quarter. Danny II should produce in excess of 3000 barrels equivalent per day net to our interest. Also in the Bushwood field, we have the Nancy well, which was drilled in fourth quarter 2008. It’s been completed and is waiting to flow. First production from Nancy is now estimated for Q4 of 2012. This gas well will add over 2000 barrels equivalent net to our interest per day. The Phoenix field and the HP1 continue to produce very well in Q2. We have received the APD and contracted a rig to drill our Wang well. The rig for the Wang will not be available now until early Q4. Therefore, we have scheduled first production for Q1 of 2013. If successful, the Wang well will also add over 3000 barrels of oil equivalent per day net to our interest. Lloyd?

Thanks, Johnny. Turning over to slide 17. Slide 17 provides a summary of our current commodity heads positions for the second and half of 2012 and for the fully year of 2013. For the remainder of this year, we have approximately 2.6 million barrels of oil equivalent hedged, which covers approximately 79% of our forecasted Q3 and Q4 combined production. For the fully year of 2012 we have hedged approximately 74% of our estimated combined oil and gas production of 7 million barrels of oil equivalent. During the second quarter, we entered into additional Brent crude oil hedges for 2013 and as a result we have hedges in place totaling approximately 3.7 barrels of oil equivalent. Our 2013 floor price were all hedges as approximately $100 per barrels. And for natural gas, the floor price is slightly above $4 per MCF. Regarding our oil hedges, approximately 90% of our current hedges in place by volume for the remainder of 2012 and for 2013 are based on the Brent benchmark as it continues to be a significant spread between WTI and Brent. The actual spread in the second quarter between WTI or what we asked to receive for our Gulf of Mexico crude sales was approximately $13 per barrels. Turning over to slide 19. And this slide profiles our current gross and net debt levels and liquidity position at June 30. Gross debt of $1.18 billion was essentially unchanged for March 31, but our net debt decreased $29 million to $531 million as our cash on hand increased to $650 million from $620 million. And our current net debt to book capitalization ratio stands at 25% at June 30. Our liquidated position remained at a very health $1.1 billion, the same as the end of the first quarter. Over to slide 20. Slide 20 provides a current update on our overall debt maturity profile as of June 30. There have not been any significant changes in the debt profile since the end of March other than schedules loan amortization totaling $2 million. I would like to point out that the holders of our remaining $3.75% convertible senior notes due in 2025 have at first option to put the box to us in December of this year. After this optional put of the 2025 convertible senior notes, our next near term maturity is not until July 2015 when our credit facility matures. Maturity dates of the term loans and the revolver which comprise the credit facility can be extended into 2016 if we have refinanced or repaid the remaining $275 million, over 9.5% senior unsecured notes in full by the 2015 maturity date. Tony?

Thanks, Lloyd. As we move on to slide 22, we are holding our EBIDAX forecast for all of 2012 at greater than $600 million. The key variables impacting this forecast. In addition to the commodity price assumption shown on this chart are little or no tropical storm disruptions impacting our oil and gas business from this point on and beyond set of production from Danny II at the beginning of Q4. As Johnny mentioned, we expect to complete this well by mid-August. We have lowered our production forecast for the entire year at 7 million barrels of oil equivalent based on some of the downtime we had in Q2 and this is slightly lower than our original forecast of 7.5 million barrels. Furthermore, we have adjusted our oil and commodity price forecast to reflect the down tag in all prices we have seen since the end of Q1. We now forecast, realize $98 for our oil production for the remainder of 2012 net of hedges. Again, despite the lower production levels and oil price assumptions, we still expect to generate in excess of $600 million of the EBITDA for the year and this is directly the result of the strong outlook for our contracting services business. Our well Intervention vessels continue to expand backlog and the Q4000 is now booking backlog in the 2014, while the Seawell and Well Enhancer nearly fully booked for 2013. Robotics continues to run at high-activity levels for both the oil field and the renewable energy markets. The Grand Canyon is expected to join the ROV support vessel fleet in August. And our newest trencher, the T1200 is already in water and contributing. Our CapEx estimate for 2012 is now $635 million, up from our original forecast as a result of the announcement we made this morning on the acquisition and conversion of the D5-34 drill ship, which is estimated to have an all in capital cost of $180 million. Additionally, $130 million of the $635 million in CapEx slated for the new Q plus Well Intervention semi, of which we have already paid some $60 million in the first quarter. Aside from the Grand Canyon, for our robotic fleet, we have contracted two additional ROV support vessels under long-term charter arrangements based on a very favorable outlook for the ROV business. Both for the oil field and for the renewable energy market. Both of these vessels are copycats for the Grand Canyon vessel. And these two vessels are expected to be delivered in 2013 and 2014 respectively, and will either replace existing long term chartered vessels in our robotics fleet or depending upon market conditions will actually serve to increase our ROV support capacity in the future. I will skip slides 27 and 28, I’ll leave them for our reference and at this time, I’ll turn the call back over to Owen for closing remarks.

Thanks Tony. Well, things are pretty exciting for Helix right now. As you know we put a lot of effort into building our balance sheet strength and refocusing on the company’s service contracting. We are well positioned for the increasing demand that we see for our services especially in well ops and robotics. And we are into the initial phase of some exciting expansion of our capacity in these areas. In well ops over the past 12 months we have or are adding one new Intervention riser system that we are currently running to produce for use on their contracted drill rigs. We are in construction on another system that will be deployed on a newly chartered vessel. To process or modifying this new chartered vessel for application to the light Well Intervention market in 2013. We announced and started work on the Q plus, the next evolutionary step-up from the Q4000 for heavy Intervention market starting early 2015. And we’ve just announced the acquisition of a drill ship that we’ll modify for heavy intervention in the flood and abandonment market. We’re also beginning the construction of another intervention riser system and we’re assessing additional vessel addition depending on financial strength as we believe we’ll still be asset constrained following these additions. In robotics, we have or are adding 10 world-class vehicles, all of which have their first full year of contribution in 2013. We’ve successfully introduced ROV drill as a new and vital technology for the geo-technical quarrying market. We’ve now taken delivery of our new T1200 Trencher as Tony mentioned which recently went into service on an interim vessel as we await delivery of the new build chartered vessel, the Grand Canyon. We’ve also committed to two additional new build vessels that will be added to our fleet, one each in 2013 and 2014. We do see the demand and have intentions of continuing this growth. All this is pretty exciting for us and will be reflected in our 2013 forecast as we go through our budgeting process later on this year. And at this time we’ll be happy to take any questions.

Thank you. (Operator instructions). Our first question comes from the line of Jim Rollyson with Raymond James.

Good morning guys. Owen, could you give us a little more detail on the Discover 534 just in terms of once you get this converted and up and running maybe what kind of capacity you think this holds maybe in relation to the Q4000 and kind of relative pricing for this asset versus what you’ve got in the intervention fleet today?

That’s an awful lot, Jim. I don’t know how specific I can get on everything right now. She is a drill ship. She’s had a remarkable career drilling. She’s very successful. We are going to be making some modifications for her to make her more efficient for the intervention market and we’re targeting heavy intervention. So it should be able to do most of what the Q4000 can do. But I think primarily we’ve had a lot of interest from clients, not just in the Gulf of Mexico but from other regions as well looking for a P&A solution and we just are completely asset constrained. So by having this asset it allows us to tackle the demand that we’re seeing from clients in a number of regions as well as perhaps shift some work off the Q4000 and make it available for other work.

Are there opportunities or do you have any desire to pursue any other assets like this for similar type business or is this kind of a one off deal based on customer demand?

I think we’ll let sort of the market dictate that, Jim, as well as our balance sheet. We can only – I think we’re adding assets about as aggressively as we can and right now given our financial strength. We don’t want re-lever the company back up. And we also are pretty maxed out on the human resources that we have for initiating growth. So we’re moving about as aggressively as we can. We are like I said in my comments that we are still assessing other options and we’ll be looking for additional vessels in the future because this is something that’s going to be enough to meet all the demand that we’re seeing.

Sure. Last one for me. You guys have been pretty positive in commentary about the robotics business, obviously adding some assets, some more world class ROVs and support vessels etc. Can you maybe characterize kind of how the pricing is in that business today and how you see that going forward maybe compared to what it’s been over the last few years?

Cliff, I think you’re probably closer to the answer a little better.

Okay, yeah, sure. Well, the pricing is one thing, but sheer volume of work is the other. Besides our traditional oil and gas work where we started, there’s also the wind farm work, the renewable energy work that’s continuing to grow at a pretty aggressive rate in Europe. So that’s one side of it over in the North Sea and over on the Gulf of Mexico side we’ve also – after post Macondo and the permits getting re-released and rigs coming back to the Gulf etc. We’re anticipating more work in the Gulf that we’re already seeing that we’ve tied up with a major contractor here who we’ve got a pretty good relationship for doing construction work. As far as the pricing, they’re continuing to creep up. It’s a bit of a supply and demand thing so different times of the year different regions are higher. But we’ve also seen some of the post hurricane work in the Gulf several contractors popped up and after all that hurricane work we’ve done those contractors seem to be evaporating. So there’s less players here in the Gulf of Mexico. So we do anticipate the rates to go up while we’re contracting these three boats.

Great. Helpful color. Thanks guys.

Our next question comes from the line of Martin Malloy with Johnson Rice & Company. Martin Malloy - Johnson Rice & Company: Good morning. You mentioned that you’re building a few other well intervention systems. Is there any help you can give us in terms of the capital cost of those systems and the returns that you look for?

The capital cost is a little difficult to nail down because you have differing regulatory environments for each of the regions in the world. We’ve been doing a lot of the work over the last few years in trying to standardize. But handle hard, I can’t tell you that we’ve got one standard that suffices everywhere. The capital cost I can tell you ranges from $15 million to $35 million depending on the type of system requested. Martin Malloy - Johnson Rice & Company: Okay. And then with regards to the Caesar vessel, has there been any change in terms of the outlook for potentially getting some pipelay work for that vessel after the Pemex job that it’s currently on?

Yeah, I can probably answer that Owen. Well, I think as I said in the slide section there we’re contracted down in Mexico now through July of next year and our plan is to we’re actively bidding S lay pipe work for the Caesar now and our plan is to continue that and stop the work down in the accommodations in the end of July and we’ve got some more commissioning work to do at the end of that in July. It will probably take a couple of months and then roll straight into pipelay is our plan. Martin Malloy - Johnson Rice & Company: Okay. Thank you.

systems: Martin Malloy - Johnson Rice & Company: Okay, great. Thank you very much.

Our next question comes from the line of Joe Gibney with Capital One. Joe Gibney – Capital One: Thanks. Good morning. Cliff, question for you on the Express. A lot of the Intrepid stacking I’m sure was a asset specific issue, but you referenced firming up a little bit more work for the Express in the fourth quarter when it gets back in the Gulf of Mexico. Has anything changed in your outlook for that particular asset as you look into next year? Does pipelay feel and look a little bit softer given your ascertations of the market and your decision of stacking the Intrepid? Just curious if you can comment about what you’ve got in the queue for the Express perhaps near term?

Yeah. We’re pretty bullish about the Express. It’s in the North Sea right now doing some work. It will come back over here. It’s got a pretty extensive backlog when it gets here. I think it’s got basically the rest of the year we have maybe a 20 day hole or so we could – to fill up. So we feel pretty good about the Express as far as our utilization for next year. There’s not a lot of those type of assets in the Gulf here where we plan on using the vessel and it remains to be seen whether we take it back to an RC any next year or not. Joe Gibney – Capital One: Okay, that’s helpful. And John, just a question for you. Just want to clarify a little bit about your comments about Danny II production. You referenced in excess of 3000 barrels in that per day. Your previous figure was 3600. Is that still attainable or are you sort of going to hold judgment here until we can complete the well here by mid August? Just trying to ascertain whether or not that is lower than initially expected or where we stand on that?

I don’t think our rate projections on Danny II have changed yet. I was just being maybe a little more conservative until we actually get the lab results from the MDT samples that we took in the well. We don’t have – we opened up one of the chambers and we know we had black oil in the chamber. So we know we have an oil well but we don’t know exactly what the gas to oil ratio is and our position there yet. So I don’t think we have had anything else that would give us any change there. Joe Gibney – Capital One: Okay, fair enough. Appreciate it. Last one for me, just clarify the number of world class ROV additions. I thought it was six for the year. I don’t know if that’s still on track. I thought I heard referenced it to 10 for the year out of Owen. I just wanted to clarify what world class ROV additions in ’12 is. Is it six or is it 10?

Yeah, I think what Owen was saying there was, his comment was that they have a full year of contribution in 2013 because they’re staggered in. Some came in end of last year. Some are coming in through this year, some will come next year. So as they staggered in they’re all going to have contribution for ’13. Joe Gibney – Capital One: All right, fair enough. Thank you. I’ll turn it back.

Your next question comes from the line of Michael Marino with Stephens. Michael Marino – Stephens Inc.: Good morning. First question for Tony. I know it’s a little early to ask about 2013 CapEx, but Owen you rattled of a bunch of things that you guys are pursuing and with I guess the conversion and then the new build. Could you give us a little bit of insight into how much you kind of expect to spend on the contracting side, just maybe ballpark it for us in 2013?

Well, we have no plans to buy another drillship at this time. So that won’t be reflected in our CapEx guidance. We’ll spend a like amount in 2013 for the Q Plus as we will in 2012. We have very scheduled payments to the shipyard on the Q Plus. I would expect 2013 CapEx to be lower overall and really a lot lower because of lower spending on oil and gas. Without the Wang well in 2013, without Danny II in 2013, we should expect a lot lower CapEx in total. So I think overall you’re going to see our capital spending lower in 2013. Michael Marino – Stephens Inc.: What do you expect total cost for Wang and Danny II to be?

Round numbers, Johnny?

175 million.

Together total, yeah. Michael Marino – Stephens Inc.: Okay. And then just as a follow up for Owen. I guess previously you talked about the Caesar being a non-core asset. Is that still the case and maybe if that thing can prove up its capability in pipelay you would look to divest that or where do you – what are you thinking there?

I don’t think that our aspirations with the Caesar have changed. We still consider it non-core to our group of services that we offer to the extent that we could find another home for it we’d be open to it. Michael Marino – Stephens Inc.: Okay, perfect. Thanks.

Our next question comes from the line of Joshua Jayne with Simmons & Co. Joshua W. Jayne – Simmons & Co.: Thanks. First question on contracting services. Gross margins were a little bit light from the dry docks, but with the number of them behind you for the year how can we think about a progression for the back half of the year and can we get back to Q1 levels?

Josh, I think certainly the dry docks weighed on our margins, both from a volume standpoint, plus we incurred incremental R&M expenditures associated with the Q4000 while she was in dry dock. So I would expect at minimum that our gross profit margins will increase in our contracting service business going forward with the only counterbalance to that being the Express was probably our highest earning asset in Q2. It came off of a very successful project in Israel and has a little bit of that in July, but won’t be as profitable in Q3 as it was in Q2. So that will taper some of the increase in gross profit margins in Q3.

With that vessel we have a transit back across the Atlantic with it as well and we’ve got a dry dock at the Enhancer.

Yeah. And Enhancer dry dock should not be as prolonged as either the dry docks in Q2 as she’s a much newer vessel. So right now we’re not anticipating any surprises on the well Enhancer but you never know once you get into dry dock. But overall I think to answer your question, it’s a long answer to say we expect margins to go up. Joshua W. Jayne – Simmons & Co.: Sounds good. Another one just on floater rates in general. We’ve seen a number of positive deepwater filtration in the Gulf for the past couple of weeks with some contracts extending out into 2016. Could you talk about how this frames your optimism around the Q4000 and if pricing has continued to inch higher as you increase your backlog on that vessel?

I think with rates going up very well for our heavy well intervention assets. Just seeing that Josh, period. It can only help. Joshua W. Jayne – Simmons & Co.: Okay. And then last one on the balance sheet. Does this acquisition lower the probability that you might take out some of your high yield debt at the beginning of next year and could you just talk about sort of your plans for the balance sheet over the next couple of quarters?

Josh, I think that’s a very perceptive question and I think the answer to that is we are less likely to call the high yield notes in early 2016 and we might, but otherwise if we had acquired the D 534. The jury is out, but I think we’re going to be less aggressive about doing that, I’ll just say that. Joshua W. Jayne – Simmons & Co.: Okay.

Our next question comes from the line of Anthony Gugel with Upstream. Anthony Gugel – Upstream: Yes, hi. Just one question, do you see increased competition in the well P&A market? Could that be another drive for acquiring the D 534? And I ask also particularly because I heard Diamond Offshore's call and they made reference to the P&A market in the Gulf, specifically mentioning the ocean Saratoga.

I’m sure that the demand in the P&A market is going to create well there’s going to be more demand than what can currently be provided. So yes, I do expect other competitive offerings to be in the market on the P&A side. I think it’s important for us. We have long term assets coming specifically targeting the heavy intervention side. A lot of our utilization is taken on our current assets by P&A. So it was important for us to have a P&A offering both to free up near term asset availability and to fill the market demand between now and when our new asset, the Q plus arrives. Anthony Gugel – Upstream: Okay. Thank you.

And there are no further questions at this time. I would now like to turn the call back to you for any further presentation or closing remarks.

Okay. Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you participate on our third quarter 2012 call in October. Thank you.

This concludes today’s conference call. You may now disconnect.