American Water Works Company's CEO Hosts 2013 Meeting of Stockholders (Transcript)

| About: American Water (AWK)

American Water Works Company, Inc. (NYSE:AWK)

2013 Meeting of Stockholders

May 13, 2013 10:00 am ET


George F. MacKenzie - Non-Executive Chairman

Kellye L. Walker - Chief Administrative Officer, Senior Vice President, Secretary and General Counsel

Jeffry E. Sterba - Chief Executive Officer, President and Director

George F. MacKenzie

Good morning. Can you hear me? Thank you very much for coming. We want to welcome you to American Water's 2013 Meeting of Stockholders. I'm George MacKenzie, Chairman of the Board.

Before we begin the formal part of the meeting, I just want to go over a few items. During the course of this meeting, the company may make certain forward-looking statements. Because these statements deal with future events, they are subject to numerous risks, uncertainties and other factors that may cause the actual performance of American Water to be materially different from the performance indicated or implied in such statements. These risk factors are described in our most recent Form 10-K and subsequent SEC filings.

To give access to a greater number of our stockholders, in addition to our traditional meeting today, we are hosting our third virtual stockholder meeting, where investors who are unable to attend in person are invited to listen real-time to a live meeting and vote online, if they elect to do so.

I will chair the formal portion of the meeting. Following that, I will introduce American Water's President and CEO, Jeff Sterba, who will make some remarks, followed by a question-and-answer session, including responding to questions that were previously submitted online by investors. Following the question-and-answer session, we will report on the results of the voting.

The webcast of this meeting will remain on the company investor relations website for the next 30 days.

So it's just about 10:00. To get started, let me make sure that, our people in the back, we're okay to go with the webcast. Very good. Thank you.

I would like to call the meeting to order. As I stated earlier, the Annual Meeting is also being made available by webcast, and I want to welcome all those who are listening in. We thank you very much for your support and your participation.

Everyone should have already signed in at the registration desk. If you have not signed in, please do so. If you have not yet received copies of the agenda or rules of conduct, please raise your hand, and copies will be brought to you.

If you wish to ask a question, please step up to the microphone that has been placed in the central aisle. We will make every effort to address all stockholder questions. However, if due to time constraints, you are unable to ask your questions, we have prepared Q&A forms, which are located next to the question box located in the rear of the room. Please write down your question and contact information, and place it in the question box. You will receive a response to your question as soon as possible following the meeting.

I would like to begin this morning by introducing American Water's Board of Directors. Each of these current directors, including myself and Jeff Sterba, who is seated to my left, will be standing for election. When I call your name, please stand. Stephen P. Adik, Martha Clark Goss, Julie A. Dobson, Paul J. Evanson, Richard R. Grigg, Julia L. Johnson, William J. Marrazzo and, again, Jeffry Sterba and myself here.

Also, seated to my left is Kellye Walker, Chief Administrative, General Counsel and Secretary.

And let me also introduce our auditors from PricewaterhouseCoopers LLP who are available to respond to appropriate questions, Dave Schroeder and Jeff Adeli.

And finally, let me give a warm welcome to our American Water employees in the audience, as well as those who are listening to our webcast. Thank you very much for coming, and we give you a warm welcome.

Let me ask Ms. Walker, please, to comment on the manner in which we will conduct business.

Kellye L. Walker

Thank you, Mr. Chairman. You should now all have a copy of the rules of conduct for the meeting. In order for us to conduct an orderly meeting, we ask that participants please follow these rules. As stated in the rules of conduct, before stockholders address the meeting, they must first be recognized by the Chairman.

If you'd like to ask a question or speak during the meeting, please step up to the microphone placed near the center aisle. Please state your name, indicate whether you are a stockholder or proxy holder and simply state your question or comment. As stated in the Rules of Conduct, please limit your question and/or comments to no longer than 2 minutes.

George F. MacKenzie

Ms. Walker will now report on the distribution of materials related to this meeting and the presence of a quorum.

Kellye L. Walker

Mr. Chairman, the notice of this meeting, proxy materials and annual report to stockholders were mailed on a timely basis commencing on March 28, 2013 to all shareholders of record as of the close of business on March 18, 2013. I have an affidavit of distribution confirming that the notice of this meeting and the related materials were provided to the stockholders of record. A copy of both the notice and the affidavit will be included in the records of this meeting.

The number of shares entitled to vote at this meeting is 177,616,279. Each share of stock is entitled to one vote. The bylaws provide that a majority of the shares entitled to vote shall constitute a quorum. We have here today, represented either in person or by proxy, approximately 155 million shares or 87.3% of the outstanding stocks. Therefore, a quorum is present.

A certified list of all stockholders of record entitles to vote at this meeting has been available for examination in the Corporate Secretary's Office for the last 10 days.

George F. MacKenzie

On the basis of this report, the meeting is lawfully convened and ready for the transaction of business. Ms. Walker will now report on the appointment of the Inspector of Election.

Kellye L. Walker

Mr. Chairman, Mr. Tom Ty[ph], on behalf of Broadridge Financial, was appointed to act as Inspector of Election. He is seated to the table just adjacent here at my right.

The proxies received from stockholders have been inspected and counted by Mr. Ty. And he also will inspect the ballot or proxy submitted during the meeting, and he will certify the results of the vote on matters to be considered at the meeting.

George F. MacKenzie

Thank you. We will now proceed with the matters to come before this meeting. The first item of business today is the election of directors. American Water's directors are elected by the majority of votes cast. A majority of the votes cast means that the number of shares voted for a director must exceed the number of shares voted against the director.

The board has nominated the following 9 individuals to serve as directors of American Water Works Company Inc. and to hold office until the next Annual Meeting of Stockholders and until their successors are elected and qualified. As I introduced to you earlier, the directors standing for election are: Stephen P. Adik, Martha Clark Goss, Julie A. Dobson, Paul J. Evanson, Richard R. Grigg, Julia L. Johnson, William J. Marrazzo, Jeffry E. Sterba and myself, George MacKenzie. No other persons have been nominated.

If there are no questions or comments, we will move on to the next item.

The next item of business is the proposal to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2013.

If there are no questions or comments, we will move on to the next item. Thank you.

The next item of business is the advisory vote on executive compensation. Specifically, we have asked our shareholders to approve the following resolution: resolve that the stockholders of American Water Works Company Inc. approve on an advisory basis the compensation paid to our named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation table and any related materials in the proxy statement for the 2013 Annual Meeting of Stockholders.

If there are no questions or comments, we will move -- we will commence with the voting. Thank you.

The time is 10:05 a.m., and I declare the polls now open for each matter to be voted on today. All American Water stockholders of record or their validly designated proxies are entitled to vote at this meeting.

If you are a stockholder entitled to vote and have not yet voted or want to change a previously cast vote, please do so now by submitting a ballot or a new proxy card. Online investors who wish to cast their votes, please do so now according to the instructions on the virtual meeting site.

The polls will remain open until everyone present has had an opportunity to cast their vote.

Kellye L. Walker

The ballots will now be disturbed to anyone who wishes to vote in person. Those of you who have already submitted a proxy need not vote by ballot unless you wish to revoke your previously submitted proxy.

If you'd like to have a ballot or if you have a proxy voting card that you would like to turn in at this time, please raise your hand.

George F. MacKenzie

There's one over here.

Kellye L. Walker

Online voters wishing to revoke or/and resubmit a vote should do so now by following the instructions on the virtual meeting website.


George F. MacKenzie

I'm pausing for a minute while our 2 stockholders are changing or casting their vote.


George F. MacKenzie

Thank you. I believe everyone has submitted their ballot -- his or her ballot. As it appears that all ballots have been submitted, I declare the polls closed at 10:08 a.m. Preliminary voting results will be announced at the end of today's meeting.

Let me assure those of you who have just turned in ballots that your votes will be included in the final count and reflected in the Form 8-K that will be filed with the Securities and Exchange Commission within 4 business days following the receipt of final results.

Preliminary results do indicate that each director nominee has received at least 98% of the votes cast and the advisory vote on executive compensation has received 98% of those votes cast.

As the votes are being tabulated, I would now like to turn the meeting over to Jeff Sterba for his report -- prepared remarks.

Jeffry E. Sterba

Well, good morning, and let me welcome you, along with George, to the meeting today, and thank you for your investment in our company. I hope we are earning your trust as an opportunity worthy of continued investment.

Before I introduce the rest of our executive leadership team, I'd like to take a moment to acknowledge 2 folks, our -- one is our newest board member that was previously introduced, Paul Evanson, as well as our recently named Chief Financial Officer, Susan Story. The experience and knowledge they both bring add significant value to American Water and further strengthens our leadership team and our board. Susan, if you'd stand for a moment, I want to say thanks. And go on and remain standing while I introduce the rest of the senior management team.

These are the folks that I have the pleasure of working with every day: John Bigelow, Senior Vice President of Business Services; Sharon Cameron, President of our Market-based Operations; Walter Lynch, President of our Regulated Operations; Mark Strauss, Senior Vice President of Business Strategy and Development; Kellye Walker, General Counsel, Chief Administrative Officer and Secretary up here to my left. This team, working with our 6,700 employees, is making a real difference for you, our shareholders. Go on and sit. Thank you very much.

In 2012, we challenged ourselves to increase the momentum of the previous year and become a company where continuous improvement is increasingly ingrained into our culture. It sounds basic enough, but when you see this kind of a culture really take root, you find a pathway to sustainable and profitable growth for our company and shareholders, for the communities we serve and for the employees that are really our heart and soul. The impact of this culture is reflected in the results American Water delivered in 2012.

Financially last year, we reported an 8% increase in revenue, an 18% improvement in cash flow from operations and a 20% increase in diluted earnings per share from continuing operations. Our consolidated return on equity was 8.3%, with about 30 of those basis points due to the hot dry weather in the mid-continent last year. So on a weather-adjusted basis, our return on equity was just over 8%, and that's about a 49 basis point improvement over the prior year.

Also, remember that there's roughly an 80 basis point cost of debt at the parent level remaining from the period of German ownership, one of those gifts that keeps on giving. So utility level actual returns in 2012 exceeded 9% for the first time.

In recognition of this financial performance, our board continued its long-standing commitment of providing and annually increasing the dividend payment to you, with -- and we also accelerated one additional payment so that shareholders could take advantage of the 2012 tax rates.

In 2012, the annualized dividend rate was increased from $0.92 a share to $1 per share, and we recently announced a 12% increase to an annualized $1.12 per share. Our owners enjoyed slightly more than a 20% total shareholder return in 2012, better than 94% of all 66 utilities that make up the Dow Jones U.S. Utility Index. This total return has increased an additional 7% as of last Friday so far this year to a total return of approximately 37% since the beginning of 2012.

If we look at the 3-year period ending the end of 2012, our total shareholder return was about 84%, better than 95% of all companies that make up the Dow Jones Utility Index. And our operating efficiency ratio for that same 3-year period, and remember, this is the ratio of our regulated operations and maintenance expense to total revenue, so it's per dollar of revenue, declined from 47.7% in 2009 to 41.5% in 2012, a 13% improvement.

In addition, last year, we became the first U.S. water utility named to the Dow Jones Sustainability North American Index. Being recognized by this sustainability index represents a stake in the ground for the U.S. water industry and our company. It represents our organization and employees' significant dedication to a strong code of ethics, to corporate governance, environmental sustainability, employee engagement and community involvement.

As I previously noted, these results are being driven by a commitment to continuous improvement. A critical component of that improvement is our ability to plan, build and execute on our corporate strategy. And this is how we can ensure a sustainable and resilient utility of the future.

The investments that we make in our systems, nearly $2 billion over the last 2 years, plays a huge role. Whether it's a new plant to meet future water needs and wastewater requirements; replacement of aging underground infrastructure to ensure clean water and necessary fire pressure; or the ongoing effort we're taking to update our critical business systems, it is all linked to improving the service we provide our customers.

I think last year, I talked to you all about the equation that we think of: value in the eyes of our customers has got to be greater than the price they pay, and the price that they pay has got to be greater than the cost we incur to provide that service. And keeping that equation, V greater than P, greater than C, keeping that equation in balance is kind of our guiding light as we go forward.

I'd note that to date, this is relative to our business transformation or our IT systems conversion, we may be one of the very few companies that has managed such a large encompassing IT systems project, because this involves our financial systems, our revenue CIS generating systems and our asset management systems, on schedule and on budget, at least so far. The track record and experience of putting in these systems is not something that you necessarily crow about. But I think, honestly, we may actually make it on schedule and on budget, which may be a first, at least in the utility industry. So my compliments to all American Water employees on that success so far. We still have a little ways to go. We expect to have the systems fully operational by the end of 2013.

In 2012, extreme weather highlighted the importance of long-term planning and appropriate investments to ensure reliable service through a more resilient supply and delivery system. During the extreme drought in the summer of 2012, we saw the benefits of recent water supply investments in our southern and midwest service area.

And when Hurricane Sandy hit the East Coast, destroying more than 8,000 homes, our dedicated employees, preparation and system enhancements kept the water flowing even through widespread flooding and sustained power outages. We had over 4,000 generators, either stationary or mobile, that were in operation during the course of that storm and the aftermath of that storm, some being on for over 2 weeks.

As we build resiliency into our systems to help withstand weather volatility, we have to leverage technology and innovation. For example, in coastal areas, we not only have our systems map through our GIS, which is our geographic information system that allows us to know where our facilities are, but it only plots where they are relative to certain landmarks like roads and things of that nature, but we're expanding our use of GPS facility mapping so we can actually find pipes, meters and valves, even when 2 to 4 feet of sand, destroyed buildings and debris litters traditional landmarks like roads and curbs. So in the aftermath of Sandy, when you go out to the barrier island, we frankly -- finding where our infrastructure is was a challenge because the fact that you have it mapped is interesting. But if you don't know the distance where the curve is, it's kind of hard to tell where the middle of the road is. With a GPS system, we are able to find within 1 foot the actual location of every single one of our facilities in those areas that we had GPS mapped. We were also able to help other utilities that didn't have that information, but they knew where their facilities were relative to our system, they could find their underground facilities. And we actually helped cities who did not know where to plow because they could not see where the road was to clear the sand and debris. We could actually help them locate curves because we knew the distance, the width of the road and we knew exactly where our line was in the road, and so we could map the road so that they could actually go through and plow because you just couldn't see anything.

Planning for and mitigating the impacts of increasingly volatile weather is just part of the challenge that American Water and the water industry faces. The reality is that the current system of many of the water and wastewater systems in the U.S. is unfortunately near failure. From raising awareness of the situation with key decision-makers to offering communities access to our expertise, to developing innovative solutions that benefit our current and future customers, we continue to play a leadership role in helping address is enormous challenge.

Quite frankly, if this country is going to bring water and wastewater infrastructure up to speed, it's going to take much greater collaboration between the public and private sectors. This challenge cannot be the government's burden. It does not have the capital and other resources needed for the job.

American Water and our industry are working with the Federal Government, making recommendations to help ensure stable and affordable financing for water infrastructure projects, and the private market is ready to be tapped. Our mix of legislative and regulatory tax code reforms, along with accessibility to programs such as state revolving funds, are some of the solutions that we presented to Congress and the administration.

Solutions also lie in the advancement of technology, but there are challenges. Let me just mention one. There's a perceptible lack of external incentives to accelerate many aspects of water innovation. For example, the low incremental cost of water. When you think about it, what's the marginal cost of water? We spend some money on chemicals, and we spend some money on pumping, but what's the cost of the water itself? We have a culture that believes it's free. So when you have a free commodity, what's the incentive to conserve it? What's the incentive to reduce water losses?

So this low incremental cost of water makes investing and reducing underground water leaks, where over 20% of treated water in the U.S. is lost, challenging to capital constrained water systems. For many communities with limited funds, the investment in out-of-sight buried infrastructure may not be as attractive to officials as competing needs, whether it be pension funding, a new park or rebuilding a decaying, yet visible bridge.

Another example is reuse technology, which takes what has historically been viewed as a waste stream and turns it into an integral part of our overall water supply for many, though not all, uses. Reuse technology can increasingly compete with the true cost of treated water, but not when water rates are artificially kept low and don't reflect the true cost of that water.

We're committed to helping ensure that informed decisions reflecting true water costs are increasingly made to enable the critical notion of One Water to guide our company's efficient and our country's efficient water future.

So when you think about it, we have a tendency to think about drinking water, storm water, wastewater. And in reality, they're all part of the whole, and they need to be considered collectively when you think about the water supply of the future.

A few years ago, American Water formed an innovation development program to specifically look for new technologies and accelerate their validation and acceptance within the industry. What we effectively did is took a group of very skilled scientists and said, "Instead of only looking inside, being internally focused become externally focused. Go out and try to find the technologies of the future that need to be tried at scale in a system, and work with them so that we can provide a seedbed in which they can be tested. And oh, by the way, in return, we'll take a small interest in that business. Maybe not so small. But we have the opportunity to facilitate the bringing on of that technology into the water world, having it tested and as well as taking an economic interest."

You got a firsthand look for those of you that had a chance to look back at the boards that are up in the back and possibly to talk to Dr. Mark LeChevallier or any of his other team members, where they explained some of the exciting things we're working on at American Water. For example, we're a pioneer in using technology that sends daily acoustic sounding data on parts of our water system that can alert us to potential leaks. It's cheaper to fix a leak that's on the verge of occurring or is just starting to happen than when you have a complete rupture and you've got all the disruption that's associated with a pipe burst.

We're also working with an Israeli firm to dynamically reduce water pressure in parts of our system during low customer use period, as lowering water pressure when demand is low will reduce the amount of water loss and the frequency of pipe failures and structurally challenged systems.

We also continued to leverage the interdependency between water and energy using Smart Grid technology to capture untapped efficiencies and in-house developed and patented processes that reduce the energy used in wastewater treatment, certain types of wastewater treatment, by 30% to 40%.

Now new technology also opens the door to growth. Earlier this year, we signed an agreement with a company that developed a standardized communications platform that creates interoperability among meter manufacturers. Before, each of the meter manufacturers had their own technology and proprietary software and they had the capability of extracting data out of that meter. And so consequently, once you've committed to one meter provider, guess what, you're kind of stuck with that technology.

So what we did instead is work with a group of very creative software engineers that creates an overlay system that can now extract and translate data into one usable format so that we are able to effectively commoditize meters. We don't care so much now whose meter we buy. That opened the door to over $7 million per year of savings by being able to commoditize and enable competition, a much greater level of competition, between the manufacturers of meters.

But in addition to seamlessly integrating different types of meters, this platform is able to receive many different kinds of data from the water distribution network, including pressure, water quality, leak detection and flow. This makes for a powerful tool, not only for meter reading and billing purposes, but for the collection of real-time system data so we can better manage and operate our distribution network.

These technologies help improve the efficient use of the capital we invest, the operating costs we incur, the quality of service we provide to our customers and the impact we have on our shared natural environment.

Obviously, growth is a key for us, and that's anchored by the $950 million we're investing this year in regulated infrastructure and systems. We also continued to expand into new markets and offer new services. So in 2012, we acquired a total of 16 systems, adding more than 55,000 customers to our base. We closed on the sale of our regulated operations in New Mexico, Arizona and Ohio to rationalize our geographic presence and improve our long-term returns.

As we reported last week on our quarterly call with The Street, we have had several successes in our growth strategy since the start of the year, including the completion of 5 tuck-in acquisitions and the signing of 2 agreements for acquisitions that will add more than 22,000 customers to our base.

We've also entered into multiple agreements with shale gas production companies to build water pipelines to support drilling operations in the Marcellus Shale area, while also providing the public their much-needed clean water service, because they're now basically -- their only source of water is wells. Just 3 of these pipeline extensions that we have done with XTO, one of the major drillers out there, it's really Exxon, in their estimation, not ours, will reduce the number of water truck hauls in a single Western Pennsylvania County, this is Butler County, by over 500,000 over the next 5 years. When you think about the environmental impact of 500,000 large truck hauls on roads, communities, diesel fumes, et cetera, and it's not insignificant.

In 2012, we doubled the revenue from hydraulic fracturing contracts and have a number of similar pipeline projects under development.

But let me also say that our first and foremost responsibility relative to shale development is to serve as the first line of detection and defense for the headwaters and the source waters that provide the water that we drop on to serve our customers. So we consistently and continually test the waters and provide that information to the environmental regulators so that we know first whether or not there is any issue or any risk that may be occurring.

As a public utility, we also have an obligation to provide water to any customer, including these drillers.

Our Homeowner Services business extended into 10 more states this last year and was competitively selected to partner with New York City to provide Service Line Protection Programs to 650,000 eligible homeowners. This program, which was just launched in mid-January, has already attracted more than 80,000 new customers and nearly 160,000 contracts.

In addition, we have successfully piloted a program to provide other utility line protection programs and will be rolling these out to existing customers of our water and wastewater service line protection programs this year.

We will continue to offer the scale, scope and efficiency of our operational water resource and capital management expertise to other utilities through tuck-ins and other acquisitions, as well as well structured, long-term market-based concession arrangements.

One of the things, as we've talked before, that we decided to not pursue that the company had previously pursued was this kind of contract O&M business where you sign a 3- to 5-year contract to operate a municipality systems. Quite frankly, what happens is you make a big investment to get it operating well, and then they may decide to take it over because you've cleaned it up for them, or that they then put it back out for bid, and you're now -- all the value that you've put into it is effectively -- has already been reaped. So we're focused on very specific kinds of contractual relationships.

Through our continued focus on delivering our goals and creating a culture of continuous improvement and excellence, we're building the sustainable utility of the future. On behalf of the company, we want to thank you for your continued support.

Now let me just mention 2 other things from an environmental side that I'm particularly proud of the company for achieving. We've reduced our greenhouse gases since 2007 by over 16%. We also have maintained an exceptional track record on the performance of our wastewater and water treatment facilities.

Let me just give you a statistic, which I think I may have mentioned last year. If you look across the country at the notices of violation for water systems only, this does not include wastewater, there's about 12,000 or so. There's about 80,000 total notices of violation, but a lot of those are for reporting violation. So if we talk about violations of maximum contaminant standards, so it's really, you've got something in the water that shouldn't be there. So there's about 12,000 or so across the system. We're roughly 5% of the water supply system. So that would say somewhere around 600. Last year, we had 2. Whereas the average in the industry would say we should have 600, last year, we had 2.

In terms of reporting violations, our performance is about 130x better than the average utility. That says an awful lot about the deep ingrained culture and commitment of the people of American Water, and it is just a pleasure to work with them.

So we're excited about what we know we can achieve and hope that you are, too, as we move into the future.

With that, I'd be happy to answer any questions you may have regarding our performance and prospects. And I know George is prepared to do the same if you have any questions regarding board matters, compensation, governance and the like. Thank you.

I know we had a chance to visit with a number of the shareholders at both here in the hall and in an earlier session, but I would be pleased if you've got some questions, particularly those that I can defer to our senior team to make sure they're staying on their toes.

Any questions?

This might be one of the shortest shareholder meetings after -- I've had 13 of these as a CEO. This might turn out to be one of the shortest ones.


Well, thank you all very much.

George F. MacKenzie

Thank you very much, Jeff. And I just want to congratulate Jeff and the management team for the breadth and depth of the impressive work being done on this precious resource of water to benefit shareholders, as well as all stakeholders, particularly as we look at all the environmental issues. So I just really want to congratulate you, Jeff, and the team. Thank you very much.

At this time, I will review with you the results of the voting. Ms. Walker, would you please report on the votes?

Kellye L. Walker

Surely. Mr. Chairman, I'm pleased to report the preliminary results of the balloting as follows. The Inspector of Election determined and reported the number of shares of stock represented at this meeting to be 155,002,855. And the Inspector has confirmed to me that he's supervised the count of the votes and the ballots and has confirmed the election of 9 directors. Each of the individual candidates was elected by a majority of the votes cast.

The Inspector has also confirmed that the ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2013 was approved by at least 99% of the votes cast.

The Inspector has also confirmed that the advisory vote on executive compensation was approved with at least 98% of the votes cast.

George F. MacKenzie

Based on the report provided by Ms. Walker, I declare that the 9 director nominees are duly elected directors of American Water to hold office until the next Annual Meeting of Stockholders and until their successors are elected and qualified. I further declare, as approved, the ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2013. And finally, I declare, as approved, the advisory vote on executive compensation.

If there is no further discussion, the final matter to come before this meeting is to conclude the meeting. All those in favor of concluding the meeting, say, yes, and those oppose, say, no.


George F. MacKenzie

Thank you. I declare that the 2013 Annual Meeting of Stockholders is now concluded.

I would like to express my appreciation to all the stockholders who submitted their proxies but were not able to be present in present. The directors, officers and employees of the company appreciate the loyalty and confidence of all the stockholders.

And, Jeffry, do you have any final words to say?

Thank you very much for coming, and that concludes the meeting.

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