Emera's CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug.12.13 | About: Emera Inc. (EMRAF)

Emera Incorporated (OTCPK:EMRAF) Q2 2013 Earnings Call August 12, 2013 9:00 AM ET

Executives

Christopher Huskilson – President, Chief Executive Officer

Scott Balfour – Executive Vice President, Chief Financial Officer

Rob Bennett – Executive Vice President, Chief Operating Officer

Gerry Chasse – President and Chief Operating Officer, Maine utilities

Jill MacDonald – Manager, Investor Relations

Analysts

Ben Pham – BMO Capital Markets

Juan Plessis – Canaccord Genuity

Paul Lechem – CIBC

Andrew Kuske – Credit Suisse

Robert Kwan – RBC Capital Markets

Linda Ezergailis – TD Securities

Matthew Akman – Scotiabank

Operator

Good morning ladies and gentlemen. Welcome to the Emera second quarter conference call. I would now like to turn your meeting over to Ms. Jill MacDonald, Manager of Investor Relations. Please go ahead, Ms. MacDonald.

Jill MacDonald

Thank you. Good morning everyone and thank you for joining us for our second quarter conference call this morning. Joining me from Emera are Chris Huskilson, President and Chief Executive Officer; Scott Balfour, EVP and Chief Financial Officer; and other members of the management team.

Emera’s second quarter earnings release was distributed earlier today via newswire and the financial statements and management’s discussion and analysis are available on our website at emera.com. This morning, Chris will begin with a corporate update and then Scott will review the financial results in detail. We expect the presentation segment to last about 10 minutes, after which we will be happy to take questions from analysts and investors. Please note that all amounts are in Canadian dollars with the exception of Emera’s Maine and Caribbean utilities where segment results are reported in U.S. dollars.

I will take a moment to remind that this conference call may contain forward-looking information which involves certain assumptions and known and unknown risks and uncertainties that may cause actual results to be materially different from those that are expressed or implied by the comments. Those risks include but are not limited to weather, commodity prices, interest rates, foreign exchange, regulatory requirements, and general economic conditions. In addition, please note that this conference is being widely disseminated via live webcast.

And now I will turn things over to Chris.

Christopher Huskilson

Thank you, Jill, and good morning everyone. Emera delivered Q2 consolidated net income of $44.9 million or $0.34 per share compared to $53.2 million or $0.43 per share in Q2 of 2012. Year-to-date consolidated net earnings increased rather substantially to $167.7 million or $1.27 per share compared to $133.4 million or $1.08 per share for the same period in 2012 – overall, a strong first half of the year. Scott will take you through the details of the quarter later in his remarks.

Beginning with our most recent developments on Maritime Link, in June the project received environmental assessment release from the Federal Environmental Assessment process, as well as environmental approvals from the provinces of Newfoundland and Labrador, and Nova Scotia. Receiving these environmental approvals was the result of more than two years of study and assessment, extensive engagement with First Nations communities in Nova Scotia and Newfoundland and Labrador, as well as consultation with landowners, fish harvesters, local businesses and other stakeholders.

Another important project milestone was achieved on July 22 when we received the UARB’s decision on the Maritime Link. This marked another important step on our journey to project development. The UARB has approved the project subject to certain conditions, including an assurance that additional market priced energy will be available to Nova Scotian customers. Regulatory decisions often come with conditions, and our project agreements anticipated that. We are working with Nalcor to respond to these conditions. The response will be subject to further approval by the UARB. In the meantime, engineering and design work is progressing well as we advance towards final construction estimates for Q4.

In Nova Scotia, Nova Scotia Power’s biomass facility in Port Hawkesbury began commercially operating in July. It is now producing both electricity and steam. The Port Hawkesbury biomass plant can produce up to 60 megawatts of firm, renewable energy and has created 30 new operations jobs. This project was completed on budget and its energy will play an important role in meeting Nova Scotia’s renewable electricity goals while providing an environmentally responsible firm source of energy for our province.

In Maine, our proposed northeast energy link continues to progress. Recently, both Massachusetts and Connecticut issued requests for proposals for contracted renewables. This should drive the need for up to 1,000 megawatts of new renewables in New England and demonstrates that demand is strong. New renewables at some point in this process of procurement will require transmission as the existing transmission system is not capable of delivering all these requirements. We believe our northeast energy project will be well positioned to provide a solution. In addition, this RFP represents opportunity for our first wind investment.

In the Caribbean, our subsidiary in Barbados, Light and Power Holdings acquired 52% interest in Dominica Electric Services Limited, or Domlec. While the utility is small with a generating capacity of 26 megawatts, we see growth opportunities around this integrated utility as there is a geothermal resource on the island. If developed, we see this clean energy source having the ability to provide reliable low-cost electricity for Domlec customers.

With respect to other initiatives in the Caribbean, we remain focused on finding less volatile energy sources for our Caribbean customers. For the Bahamian market, and in particular Grand Bahama Power, we believe that natural gas in the form of CNG or micro-LNG could be part of the solution. Specifically, we are exploring a potential solution by moving CNG from Florida to Grand Bahama and are well into conducting front-end engineering and design work to confirm its viability. Our target is to complete these studies and to be in a position to make a final investment decision by the end of this year and to make an export application in the fall.

With that, now I’ll turn things over to Scott who will give you a more detailed update on our financial results. Scott?

Scott Balfour

Thank you Chris, and good morning everyone. Our second quarter results were released earlier this morning and are on the Emera website. As Chris mentioned earlier, Emera’s consolidated net income for the second quarter of 2013 was $44.9 million or $0.34 per share compared to $53.2 million or $0.43 per share for the second quarter of 2012. When the second quarter results are normalized for mark-to-market gains, 2013 adjusted net income was $42.6 million or $0.32 per share compared to $46.3 million or $0.37 per share last year. The $3.7 million decrease in adjusted earnings is primarily due to recognizing $11.6 million of after-tax gains in the second quarter of 2012 on the conversion of Algonquin subscription receipts into Algonquin common shares. There were no similar gains recognized in 2013. Prior gains were partially offset by increased earnings this year in Nova Scotia Power, in Maine and in the Caribbean, as well as increased equity earnings from our interest in Algonquin.

Nova Scotia Power contributed $18.5 million to consolidated net income in the second quarter this year compared to $16.8 million last year. This increase was primarily driven by increased sales, which in turn led to higher electric margin. In 2013, Nova Scotia Power anticipates earnings within its allowed return on equity range and continues to focus on cost control, productivity improvements, and making regulated investments in renewable energy and system reliability. While Nova Scotia Power’s results are currently $5.3 million year-to-date over 2012, we anticipate NSPI’s full-year earnings to be consistent with that of 2012.

Maine utility operations contributed $8.9 million to consolidated net income in the second quarter of this year compared to 7.3 million for the same period in 2012. Results were positively impacted by low growth and lower OM&G expenses due to increased construction overheads as a result of higher capital spending in 2013 and decreased employee benefits.

Caribbean utility operations contributed $7.7 million to consolidated net income in the second quarter of 2013 compared to $5.4 million in the second quarter last year. The higher net income was primarily due to increased electric margin and increased other income associated with the acquisition of 52% of Domlec, the electric utility in Dominica.

Pipelines contributed $6.8 million in the second quarter of 2013 compared to $7.3 million in the second quarter last year. Excluding the effect of mark-to-market adjustments, Emera’s services, renewables and other investments contributed $3.6 million to consolidated net income in the second quarter of 2013 compared to 15.3 million last year. The decrease was primarily due to realizing $11.6 million of after-tax gains in the conversion of Algonquin sub-receipts, as previously mentioned. There were no similar Algonquin gains in the second quarter this year.

That’s all for my financial review, and now we’ll be happy to take your questions.

Question and Answer Session

Operator

Thank you. [Operator instructions]

Our first is from Ben Pham from BMO Capital Markets. Please go ahead.

Ben Pham – BMO Capital Markets

Okay, thank you and good morning everybody. Just on the Maine transmission ROEs, can you elaborate more on the judge’s recommended decision? What’s the main driver for their recommendation of lower ROEs?

Gerry Chasse

Yes, this is Gerry Chasse from the Maine utilities. Thanks for the question. I think the main driver is basically a change in the market rates, but at this point what I think has really happened is we’ve just taken another step along the path where the FERC administrative law judges made a recommendation on those ROEs for both their refund period and the going-forward period, but effectively what he’s done is handed that over to the FERC commissioners to make that final decision, and we expect that final decision will happen sometime in the fourth quarter of this year or the first quarter of next year, and so we’re awaiting that decision.

Ben Pham – BMO Capital Markets

Okay, thanks for that, Gerry. Can you remind me what your rate base is that’s subject to potentially lower ROE?

Gerry Chasse

I believe our rate base in transmission – this is a ballpark number, but it’s in the $300 million range.

Ben Pham – BMO Capital Markets

Okay, and is there any pushback on the deem equity?

Gerry Chasse

No.

Ben Pham – BMO Capital Markets

Okay, great. Okay, that’s it for me.

Operator

Thank you. Our next question is from Juan Plessis from Canaccord Genuity. Please go ahead.

Juan Plessis – Canaccord Genuity

Okay, thank you very much. Chris, with respect to the provision on the UARB decision on the Maritime Link that requires assurances for additional market priced energy, can you talk a little bit about where you are in your discussions with Nalcor and perhaps your best estimate of timing as to when you might be able to announce something on this?

Christopher Huskilson

Yeah, thanks Juan for the question. It’s really just a bit too early to say where we are with the process. We are actually spending time working with Nalcor and working our way through the issues, but as you know, that’s going to be subject to a further process that the UARB will run and so that’s really where we are. When we step back and look at where we are with the whole project, we’ve had two major milestones that we’ve hit in the last quarter – both the environmental assessment release and also the decision from the regulator, so we see that as progress for the project and we continue to work with our partner to move that along.

If you look at the actual project development agreements, they anticipated the possibility that a condition could exist, and so we’re working through that under those agreements.

Juan Plessis – Canaccord Genuity

Okay, thanks very much. Is it fair to say that you’re probably well into the discussions at this point?

Christopher Huskilson

Of course. We obviously have an ongoing relationship with Nalcor over many, many things, so this is just one of those things that’s on the table as we work through the project.

Juan Plessis – Canaccord Genuity

Great, thanks. A question perhaps for Scott – in the quarter, you reported a gain on the purchase of Domlec of $2.5 million. Can you explain from an accounting perspective how a gain came about on the purchase of that asset?

Scott Balfour

Yeah, Juan. So it was $2.2 million after-tax in the quarter, and in sort of non-accounting terms you could really think of it as the difference between the purchase price and the rate base that we acquire. So technically, it’s the difference between the purchase price and the fair market value of the assets that we acquired, which really roughly equates to book value or rate base.

Juan Plessis – Canaccord Genuity

Okay, great. Thanks very much.

Operator

Thank you. Our next question is from Paul Lechem from CIBC. Please go ahead.

Paul Lechem – CIBC

Thanks, good morning. There’s some news out of actually a potential LNG project in Nova Scotia in the quarter. Just wondering, does that present any opportunities for you? It’s adjacent to the Maritimes and northeast pipeline. They’ll obviously need power at some point. Have you had any discussions with that project, and do you see any opportunities there?

Christopher Huskilson

Yeah, I think, Paul, there are several proponents in Nova Scotia today thinking about LNG and how the whole thing evolves, and so I think any of that kind of development that might happen in this region would be good for the region and therefore provide some opportunity for investment. Utilization of the pipeline, more gas resources in the region are all very important. One of the things that’s happened in the past little while, as you know, we were challenged for supply this winter and that translates right up into the northeast, so it is going to be very important over the next several years that we find new sources, and Encana coming on with Deep Panuke will be very important, and as well what happens both onshore and with LNG will also be important to the region.

So I think any time something like that is going on, it’s good for the region and at the end of the day will provide opportunities. It’s just very, very early.

Paul Lechem – CIBC

Okay, fair enough. Just quickly on the Caribbean as well, your CAPEX budget for this year seems to be coming down, although you’ve talked about the acquisition of Domlec and you also mentioned the CNG from Florida and work underway there. Can you explain what’s going on there in terms of this year your investment there, and also just on that CNG export – you said final investment decision by end of this year. If you go ahead, what kind of time frame would that be to get that up and running, and what kind of level of investment would that end up being? Thanks.

Christopher Huskilson

Okay, well so first of all, just in general, I think all you’re seeing is a bit of a timing issue both with generation development and also with the CNG development, and so that’s primarily what is causing any changes. When we look at CNG specifically, we’ve gone through a pre-feed process and obviously it passed that hurdle, and we see economic value in that marketplace for bringing gas in the methodology that we’ve described. Now we’re into the detailed work and so we’re doing the engineering necessary to let us understand exactly what the capital is, so it’s a bit early to say but it’s in the order of 40 to $60 million, that kind of neighborhood, and that’s primarily what we’re trying to figure out now with the feed work.

What we have been able to do is secure access to pipeline capacity in the region. We’ve been able to secure access to port facilities on both ends, and we’ve done the work with the generation supplier so that we know what it’s going to take to convert units that we have in order to be able to burn natural gas. So when we put all those things together, that will give us a final outcome.

The last piece, though, will be to get the export permit, and that’s something that we’re believing that we can apply for this fall.

Paul Lechem – CIBC

Thanks very much.

Christopher Huskilson

Okay, thank you, Paul.

Operator

Thank you. Our next question is from Andrew Kuske from Credit Suisse. Please go ahead.

Andrew Kuske – Credit Suisse

Thank you, good morning. I guess this question is for Chris, and it’s just getting a bit of color and context around the balance of your business development programs internally and all the efforts you have going into the Labrador island link and the Maritimes projects. That’s obviously taking a considerable amount of capital resources, personnel, and then obviously when those projects are done you’re going to have a lot more cash flow in the future. So how are you balancing that full-fledged effort right now with just business development on a normal course business today, and then looking out, say, the next five years?

Christopher Huskilson

Andrew, thanks for the question. I guess first of all when you think about our business, it’s really invested in two regions, one being the northeast and the second being the Caribbean region. So I’ll start with the smaller first, so the work that we’re doing in the Caribbean region is primarily focused on fuel switching, investment in renewables and utilities as the opportunity is there, including base generation. So when you put those things together, there’s a program that would see our strategy implemented and a lower cost structure for customers in that region. That’s our focus for that particular initiative.

If you go to the northeast, it has a very, very similar focus in that it’s about putting more clean energy to work in the region, stabilizing cost for customers, making a better future when it comes to cost structures and opportunity for clean energy, and so we just continue work down that path, whether that’s investment in generation, whether that’s investment in transmission or investment around our existing assets. That’s really the way we look at it, so specifically the projects that we’re doing with Nalcor will make new energy available and there are opportunities for follow-on around that project. As well, what we’re doing in New England whether we’re working with First Wind or whether we’re working on transmission, or whether we’re working to source other gas and things like that. Those all fit together to produce a solution that can provide opportunities for further investment, so we see that activity as being both complementary to what we’re doing with Newfoundland and Labrador and here in the Nova Scotia, but also as follow-on opportunities.

So I don’t think it’s going to get any less busy subject to these projects being put in place, and the other thing that I’d say is that we have built and are building a much stronger capacity in the organization to do these types of projects, and so the fact that we have a team working in the Caribbean, a team working on the Nalcor activities, and a team working in New England today puts us in very, very good shape as we go forward, because for us the biggest single challenge is ensuring that we have the people that we need to get the job done. There seems to be lots of work out there and lots of opportunities for solutions.

Andrew Kuske – Credit Suisse

Okay, that’s very helpful. I guess just related to that, do you have any thoughts on the M&A market as it stands right now?

Christopher Huskilson

Yeah, I always have the same thing to say on the M&A market, and that is that on the utility front it’s challenging because the premiums are so high. On the generation front, it’s all about making sure that if there’s something there, you get it at the right price so that you have an opportunity to make money with it. So I don’t think things change that much.

To me, to make a utility acquisition today, there needs to be a lot of strategic opportunities around it and investment that can go forward, and we don’t see that many of those but we’re always looking.

Andrew Kuske – Credit Suisse

Okay, that’s very helpful. Thank you.

Operator

Thank you. Our next question is from Robert Kwan from RBC Capital Markets. Please go ahead.

Robert Kwan – RBC Capital Markets

Good morning. Just on Maritime Link, outside of the market priced energy conditions, just wondering whether there’s anything else in the UARB decision that caused you any concern.

Christopher Huskilson

I guess I’d just say that we do have conditions, and those conditions clearly—we have to respond to every one of them. Many, many of them were responded to, I would say, on the stand, so I think the regulator put forward conditions that would really just essentially codify what was put forward on the stand, so those are conditions that we would have seen throughout the hearing. The others also, I think, emerged through the hearing as well, so I don’t think anything that came in that decision was a surprise to us after having gone through the hearing, so I think we’re well prepared both through our agreements and through our relationships to be able to respond, and that’s what we’re doing.

Robert Kwan – RBC Capital Markets

Okay, so it sounds like really it’s the market priced energy and working through that. That’s obviously the key condition, but it’s probably the biggest one. It doesn’t seem that there’s much else that’s of concern.

Christopher Huskilson

Yeah, certainly that’s the one that we’re focused on, working with our partner, and the timeline is still something that’s hard to predict. It’s too early to tell what the timeline will be at this point just because of the fact that there will be a process but it’s not clear what the process is. So the UARB has, though, said that they will deal with it in an expedited fashion, and we think that that’s very appropriate and we’re working with that.

Robert Kwan – RBC Capital Markets

That’s great. Just a last question on within services, renewables and others, and utility services specifically. I know revenue isn’t necessarily an indication of earnings, but revenue generation in the quarter was the lowest in the last couple of years. Q1 ’13 looked a little soft as well. Just wondering if there are underlying trends.

Christopher Huskilson

So maybe I’ll just make a general comment and Scott might want to chime in in more detail, but I think just fundamentally it’s a project-based business, and so since it’s a project-based business, as projects get going, that sees high levels of revenue, and as they wind up then they are looking for other projects. So to some extent, the slowdown in the Caribbean market has been part of that, and also I think award of contracts in this region have been slower than expected as well.

Scott, I don’t know—

Scott Balfour

No, I think that’s a good answer.

Robert Kwan – RBC Capital Markets

Is there anything on the horizon? Is this a temporary lull but you’ve got good sightline into either back half of the year or very late in the year?

Christopher Huskilson

Well again, we’re working on a couple of generation projects in the Caribbean, and the services business is on that, so timing is always difficult to predict. And then lastly, they would be working hard to get some work out of the development that’s going to happen in Labrador, so those are the things that timing is—we’re waiting for the timing.

Robert Kwan – RBC Capital Markets

Okay, great. Thanks.

Scott Balfour

And today, Robert – I mean, a good number of the activities in SRO come from equity accounted investments, so revenue and earnings contributions are the same so the swing of that revenue profiles a little differently, obviously. So when you look at, you know, assets like Bear Swamp and our investment in Algonquin, increased contributions in earnings don’t necessarily drive a magnified increase in revenue, but nonetheless we do continue to see increased contributions in earnings.

Robert Kwan – RBC Capital Markets

Great, thanks Scott.

Operator

Thank you. Once again, please press star, one at this time if you have a question. Our next question is from Linda Ezergailis from TD Securities. Please go ahead.

Linda Ezergailis – TD Securities

Thank you. I realize it’s a dynamic planning process, but perhaps you can just give us an update on what your financing plans are for the next year, based on what you see in your CAPEX and how you’d rank different options.

Scott Balfour

Yeah Linda, I think that answer is probably not a whole bunch different than what you’ve heard before in the sense that we continue to look at our balance sheet on a continual basis towards balancing our capital structure roughly to 35% equity, 10% pref and 55% debt-like structure, and as we profile out our capital spending requirements – and obviously Maritime Link and Labrador Island link investments are notable within that, with that timing profiled in our investor deck and on our website, that we’ll continually just look to rebalance and take the capital requirements outside of what the business itself generates and look to raise capital progressively through all three forms of common equity, preferred share equity, and debt in order to maintain that target capital structure. So we’ll probably over every 18 month kind of period likely cycle through or touch each form of capital, always working towards maintaining that balance.

Linda Ezergailis – TD Securities

Great, thank you.

Operator

Thank you. Our next question is from (inaudible) from Scotiabank. Please go ahead.

Matthew Akman – Scotiabank

Hey, it’s Matthew Akman. Good morning. Question on Nova Scotia Power – can you hear me?

Christopher Huskilson

Yes, go ahead, Matthew.

Matthew Akman – Scotiabank

Thanks – sorry, guys. Nova Scotia Power – I think there is still some modest rate-based growth here, but you’re guiding to kind of in-line earnings with last year. I’m just wondering where you see the modest headwind? Is it in operating cost, and I guess maybe update us on whether you think you can still earn what’s in the allowed ROE band next year with the settlement that you entered into?

Rob Bennett

Hi, it’s Rob Bennett here. I’m not sure what you meant by modest headwinds, but I can say that it is the plan through the rate settlement agreement that we entered into last year for the two-year period to earn within our allowed range.

Matthew Akman – Scotiabank

Okay, I guess just to get specific, there is rate-based growth in NSPI in 2013 versus ’12, right?

Scott Balfour

Yeah, but it’s very small, Matthew, recognizing the reduced capital spend. The capital budget as we announced earlier this year for that rate-based growth is very modest this year, unlike the growth that we’d seen in past quarters.

Matthew Akman – Scotiabank

So yeah, I mean, that’s why I was saying modest headwind because I figured there was a little bit of ROE compression in there. Is it operating cost or fuel expense, or--?

Rob Bennett

Matthew, there is some level of ROE compression from the settlement that we entered into last year, but for this purpose I think it’s appropriate to consider that the rate base is relatively constant over the few years that we’re talking about here, and the earnings will be about the same as they have been last year, for example, relatively flat.

Scott Balfour

Yeah, and I think, Matthew, it’s fair to say that that’s pretty much been articulated in the settlement, so it really is expected that Nova Scotia Power would sit pretty flat through that settlement period.

Matthew Akman – Scotiabank

Yeah, not looking for a lot of growth, just thought there might be a bit. Okay, that’s understandable. If I could just move to Maine, there was some discussion about the ROE potentially coming off. Are you guys still booking for the first six months of the year the 1114?

Scott Balfour

Yeah, so we haven’t made any changes until we get a decision from FERC, and that’s something that, as Gerry said earlier, we expect probably Q4, Q1. But until we get that, it’s really impossible to say where it is and so we’re just continuing on our existing numbers until that happens.

Matthew Akman – Scotiabank

I’m just wondering—I just don’t know why the comment that it would have a more material impact on ’13 than in the future.

Scott Balfour

Yeah, so the point there was that the FERC decision has a period of—it’s impacts rates prospectively but it also has a retroactive adjustment, and what came out of the administrative law judge is that they’re actually looking at that differently. They are looking at the rate application retroactively different than prospectively, which is interesting. But from our perspective, for example, if the FERC decision happened December 31 of 2013, it would impact 2013 for five quarters because it is a 15-month retroactivity period, whereas in 2014 it would only impact it for four quarters. Now, that comment was made before we saw at least the one recommendation, which we hadn’t before, that they may look at the retroactive and prospective rates differently; but nonetheless, there is a 15-month retroactive period whereas obviously going forward it only impacts a fiscal year at a time.

Matthew Akman – Scotiabank

Okay, so even though the ROE is a bit lower than ’13 going forward, it’s still a bigger impact because of 15 months. My last question is on the Caribbean. There have been some improved efficiencies in fuel costs with the new generation, and that showed up a lot in the first quarter; second quarter, not so much. I’m just wondering if that’s kind of seasonal or are the earnings sort of flattening out there a little bit? I’m talking especially Bahamas.

Christopher Huskilson

Yeah, I think there is a seasonal effect to the business for sure, just like there is in the northern systems; but as well, I think we’re continuing to stepwise progress and so, you know, you’ve seen the progression that happened in Q1. You’ll continue to see more progression through the piece because it’s not quite finished in the transition that we’re making, but it’s more materially there than not.

Matthew Akman – Scotiabank

Okay, so we shouldn’t take the quarter—because that’s the gain in the quarter, it’s down a little bit year-over-year, but we shouldn’t take that as a new trend?

Christopher Huskilson

No, I wouldn’t. No.

Matthew Akman – Scotiabank

Okay, thanks guys. Those are my questions.

Christopher Huskilson

Okay, thank you, Matthew.

Operator

Thank you. Once again, please press star, one at this time if you have a question. There are no further questions registered at this time. I would like to turn your meeting back over to Ms. MacDonald.

Christopher Huskilson

Okay, we’ll I’m not Ms. MacDonald but thank you very much. Just like to thank you all for participating today and your interest in Emera, and hopefully everyone will have a great day. Thanks a lot.

Operator

Thank you. Ladies and gentlemen, the conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

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