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WGL Holdings (NYSE:WGL)

Q1 2014 Earnings Call

February 06, 2014 10:30 am ET

Executives

Douglas Bonawitz - Head of Investor Relations

Terry D. McCallister - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chairman of Washington Gas Light Company and Chief Executive Officer of Washington Gas Light Company

Vincent L. Ammann - Chief Financial Officer, Senior Vice President, Chief Financial Officer of Washington Gas Light Company and Senior Vice President of Washington Gas Light Company

Adrian P. Chapman - President, Chief Operating Officer, President of Washington Gas Light Company and Chief Operating Officer of Washington Gas Light Company

Gautam Chandra - Vice President of Business Development, Strategy & Non-Utility Operations

Harry A. Warren - President

Analysts

Stephen Huang

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Operator

Good morning, and welcome to the WGL Holdings Incorporated First Quarter Fiscal Year 2014 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions] The call will be available for rebroadcast today at 1:00 p.m. Eastern time, running through February 13, 2014. You may access the replay by dialing 1 (855) 859-2056 and entering the pin# 34014972. If you do not have a copy of the earnings release, you can obtain one at www.wglholdings.com.

I will now turn the conference over to Doug Bonawitz. Please go ahead.

Douglas Bonawitz

Good morning, everyone, and thank you for joining our call. This morning's comments will reference a slide presentation on our website that you can access by going to www.wglholdings.com, clicking on the Investor Relations tab, and then choosing Events and Webcast from the drop-down menu. The slide presentation highlights the results for our first quarter of fiscal year 2014 and the drivers of those results. A reconciliation of our operating earnings, with the results reported in accordance with Generally Accepted Accounting Principles, is provided as an attachment to our press release and is available in the Quarterly Results section of our website.

This morning, Terry McCallister, our Chairman and Chief Executive Officer, will provide some opening comments and a brief recap of our first quarter fiscal year 2014 consolidated results. Following that, Vince Ammann, Vice President and Chief Financial Officer, will review the major items that led to the first quarter results.

Also on this morning's call is Adrian Chapman, President and Chief Operating Officer, who will discuss key issues affecting our business and the status of some of our initiatives. Harry Warren, President of Washington Gas Energy Services; and Gautam Chandra, Vice President of Strategy and Business Development are also with us this morning and available to answer your questions.

Finally, we encourage everyone to review our most recent Form 10-K filed with the Securities and Exchange Commission for a more complete discussion of the risks and uncertainties that could cause actual results to vary materially from the forward-looking statements made this morning.

And with that, I would like to turn the call over to Terry McCallister.

Terry D. McCallister

Thank you, Doug, and good morning to everyone. Our non-GAAP operating earnings for the first quarter, shown on Slide 3 in our presentation, were $51.4 million or $0.99 per share, compared to $58.9 million, or $1.14 per share, in the first quarter of 2013. Non-GAAP operating earnings for the Regulated Utility segment were higher this quarter compared to the prior year. Our utility customer base continue to grow as active customer meters -- average active customer meters increased by approximately 12,000 meters year-over-year for the first quarter of fiscal year 2014. This is the largest increase in customer meters year-over-year since 2007. I'm also pleased to report that the Washington [ph] region experienced little impact from the federal sequestration. We see indications that the local economy continues to improve.

We have accelerated investment plans in all 3 of our utility jurisdictions and we're successfully executing on these plans to invest in the safety and reliability of our utility systems.

Non-GAAP operating earnings for the non-utility businesses as a whole were lower during the first quarter than last year and we forecast in November, our non-utility results this quarter were negatively affected by cost and margin pressures on the electric side of our Retail Energy-Marketing business. Retail electric business continues to be challenged in the short term with volatile and increasing PJM ancillary services cost, which has affected all of the participants in the industry. We are incorporating higher cost into our customer prices going forward. We are also working with PJM and other market participants to improve the transparency of these cost, and create the ability to hedge them. We project that the retail business will return to historical levels of profitability in the coming years as cost structure stabilizes and becomes fully reflected in market pricing.

I remain confident in our ability to achieve our goals for 2014 given our results for the first 3 months. And our earnings outlook for the remainder of the year, we now expect to achieve non-GAAP operating earnings near the high-end of our guidance range of between $2.15 and $2.35 on a consolidated basis.

Finally, as noted in our earnings release, I'm also pleased that we're increasing our annual dividend by $0.08 to $1.76 per share. This 5% increase reflects our confidence in our strategic plan and our commitment to provide sustainable dividend growth for investors. This is the 38th consecutive year that WGL Holdings increased the dividend on its accounting stock.

I'm now going to turn this call over to Vince, who will review our first quarter results by segment, as well as our updated guidance for 2014.

Vincent L. Ammann

Thank you, Terry. I'd first like to mention that reconciliations of our GAAP net income and non-GAAP operating earnings can be found in the earnings release that's available on our website. As is our standard practice, I will be referencing non-GAAP operating earnings in my comments.

Turning first to our utility segment. Operating earnings for the first quarter of fiscal year 2014 were $0.97 per share, or $0.12 above the same period last year. The drivers of this change are detailed on Slide 4. As Terry mentioned, we continued to add new meters. The addition of approximately 12,000 average active customer meters improved operating earnings by $0.02 per share. Favorable D.C. usage added $0.02 to earnings, higher asset optimization revenues add $0.01 to earnings, revenues from accelerated pipeline replacement program added $0.01 to earnings; and higher revenues from new rates in Maryland improved earnings by $0.01 per share.

While our operating and maintenance expense also improved earnings by $0.01 a share. These expenses include decreased employee pension and post-retirement medical benefit cost due to changes in planning asset values and valuation assumptions. Finally, the effective tax rate and other miscellaneous items increased earnings by $0.04 per share.

As Adrian will discuss in more detail, cold weather in January affected the operations of our utilities. From a financial perspective, the cold weather drove an increase in asset optimization revenues particularly since January 1, and we expect that will lead to better results for the second quarter.

As a reminder, Washington Gas optimizes the value of its long-term natural gas classification of storage capacity resources. During the period, when these resources are now being used to physically [indiscernible] utility customers. This increase in asset optimization revenues is shared with customers. In fact, our customers will save approximately $8 million as a result of our asset optimization activity in the first quarter.

Retail Energy-Marketing segment's first quarter 2014 non-GAAP operating earnings were $0.02 per share compared to $0.23 per share last year. As detailed on Slide 5, the primary drivers of the decrease were lower electric gross and unit margins on virtually unchanged volumes. Lower electric unit margins were driven as forecasted in November by higher PJM capacity charges and higher PJM ancillary costs. The higher capacity charges affected the timing of margin recognition and will continue through June 2014, at which point, new lower capacity charges will take effect.

We also continue to experience higher PJM cost for load balancing and other ancillary services that negatively affected fixed price contracts. As a reminder, the FC [ph] costs are determined once per year in June during an auction. Ancillary costs fluctuate depending on time, geography and demand, and are designed to support the stability of the transmission.

At the end of the first quarter, Retail Energy-Marketing business served 189,000 electric accounts compared to 186,800 a year earlier. If the accounting increase primarily among residential customers. These customers counts include the contracts acquired from the -- some capital [ph] in October.

The natural gas business compared to the prior year, overall gross margins were lower, unit margins were lower and volumes were virtually unchanged. Unit margins were lower in the first quarter versus the same quarter last year due to the favorable timing in the quarter last year. As we have discussed in the past, the pattern of [ph] margin recognition varies from year-to-year for both gas and electricity.

Retail Energy-Marketing business served 168,000 gas accounts compared to 174,000 a year earlier. The account losses were primarily among residential accounts.

During the month of January, extraordinary pricing conditions in the regional electric markets negatively affected electric margins, and will likely prevent us from achieving our full year earnings target in this segment. Same market conditions will reduce electric margins in January though allowing the retail segment to capture Gas portfolio optimization revenues that partially offsets the decrease in electric margins.

Also note that payouts on weather hedges were also realized based on January's weather, and partially offset some of the higher cost.

Next, I'll move to the Commercial Energy Systems segment. For the first quarter, the Commercial Energy Systems business had an operating loss of $100,000 compared to earnings of $1 million, or $0.02 per share for the same quarter last year. Earnings in this segment were lower compared to the prior year due to lower income from government contracting business. This is driven by a slowdown in both new contract awards and the phase of completion of existing contracts.

Commercial Energy Systems segment continues to add new solar energy projects to it's portfolio. As of December 31, we have over 50 megawatts of installed commercial solar. In the past, these projects represent over $157 million in capital investments, and we continue to see a robust pipeline of future solar projects. We have an additional 6 megawatts currently under contract or in construction.

During the first quarter of commercial solar assets generated 9,100-megawatt hours of clean solar electricity. I'll turn it back to the investments such as American Solar Direct, Skyline Innovations and Echo, are also reported within the Commercial Energy Systems. These ventures now represent $100 million in capital investments since inception. Several projects achieved commercial operations and began generating electricity during the first quarter, positioning Commercial Energy Systems to be on track to deliver forecasted results for the full year.

Finally, I'll move to the Midstream Energy Services segment. After adjustments to reflect storage in inventory valued at current market, prices the whole solar energy solutions business had non-GAAP operating earnings of $0.02 per share compared to $0.07 per share in the same period, the prior year. The decrease reflects lower realized storage margins.

Our natural gas market remained largely subdued through December. The extreme cold weather in January created significant volatility to natural gas prices and provided opportunities to midstream to generate attractive margins in this portfolio of low-cost storage and transportation assets, allowing us to raise our expectations from this segment in fiscal year 2014.

Finally, I'll state fiscal year 2014 earnings guidance. We now expect to achieve non-GAAP earnings per share near the high-end of our guidance range of between $2.15 and $2.35 a share on a consolidated basis.

As noted earlier, utility is performing better than planned, in part due to favorable usage in the District of Columbia and higher asset optimization revenue primarily driven by extremely cold weather in January. On the non-utility side, the extremely cold weather in January have had both positive and negative impacts. The outlook for Midstream Energy Services business has been positively impacted by the optimization opportunities.

The gas side of our Retail Energy-Marketing business has also been positively impacted by optimization opportunities. However, the cold weather also drove higher cost in the electric side of this business unit that we believe will more than offset these benefits.

Note that notwithstanding the extraordinary circumstances in January, we did see evidence during the first quarter that the higher ancillary cost levels in PJM markets are being appropriately reflected in new pricing to customers. Therefore, we expect to realize what this margins will improve in the long term.

Finally, as stated earlier, our Commercial Energy Systems business is on track to deliver forecasted earnings for the year.

I'll now turn the call over to Adrian for his guidance.

Adrian P. Chapman

Thank you, Vince. And good morning, everyone. I'm pleased to provide you with an update on our operations and regulatory initiatives.

We have experienced rather severe winter weather so far, and I'm pleased to report that we've delivered gas to our front customers on an uninterrupted basis. The weather has resulted in substantial throughput increases, although normalized from a customer bill perspective for our Virginia and Maryland customers.

We have incurred higher expense as a result of the impact of the weather on operations, primarily as a result of responding to a slightly higher level of leak holes [ph] and manning our peak shaving facilities for extended periods of time while meeting the high demand for gas from our customers. However, the weather has also provided us with enhanced pipeline asset optimization opportunities at the utility that will benefit customers through PSC endorsed sharing mechanism below the cost of gas and additional revenues to help offset our increased operating expense.

Terry and Vince described in our comments regarding utility customer growth for the quarter. We continue to realize sustained customer growth and are on track to achieve our full year target of 13,000 additional meters, or 1.2% growth rate, due to the strength of our local economy. The other component of our revenue producing rate base investment includes our Virginia SAVE program. We've ramped up our pipeline replacement activity in Virginia, consistent with the approval of our expanded accelerated pipeline replacement SAVE program at a level targeted at $40 million per year. We're also sustaining the pipe replacement activity in Maryland and the District of Columbia, consistent with prior regulatory approvals.

I'll address our expansion requests shortly, as I turn to our regulatory activity.

You may recall that in November, Washington Gas filed an application with the District of Columbia for approval of a weather normalization adjustment, or WNA. The WNA will be similar to mechanisms we already have in place in Maryland and Virginia. And specifically, will provide an adjustment for changes in usage due to weather.

Comments of the file regarding the application, we await a ruling from the commission on how the case will be handled procedurally. We did not hedge for the revenue effects of whether creation from the District of Columbia this year, and has been described are benefiting from the additional customer usage.

Also in the District of Columbia, the Public Service Commission issued an order in our base rate case in May of last year, that deferred this position on our request to implement the initial five-year phase of an expanded accelerated pipeline replacement program pending further review. Comments and replies were filed by interested parties, and we currently await a ruling from the commission. There is no deadline for commission action, but if approved, the program will begin to positively impact earnings.

In Maryland, Washington Gas filed a request in April of 2013 with the PSC of Maryland for a $28.3 million annual increase in revenues. November 22, the PSC of Maryland issued an order granting an overall increase of $8.9 million. The order approved a return on equity of 9.5%, resulting in an overall rate of return of 7.7%.

The order clarified that Washington Gas is authorized to amortize the cost related to the change in tax treatment, Medicare Part D, but denied the appeal on recovery of the cost to initiate our outsourcing agreement was accentual.

Washington Gas filed with the Baltimore City Circuit Court an appeal of the PSC of Maryland's rule on capital structure, return on equity and recovery of the cost to initiate the outsourcing agreement. That appeal is pending before the court.

Also in Maryland, the STRIDE law is now in effect. And in early November, Washington Gas submitted an application before the commission requesting approval for an expansion of our original accelerated replacement program with an annual surcharge to recover the cost of our proposed infrastructure replacement projects.

Washington Gas proposed of spending approximately $200 million over the initial 5 years of the program to expedite replacement and reinforcement of losses. The case is being heard by a public utility law judge whose decision will be issued by March 21, 2014. The Maryland Commission is expected to rule on the STRIDE application within 180 days of the filing date, and therefore, we expect the final decision in early May 2015.

BGE submitted a STRIDE application prior to our filing and we are encouraged by the favorable order issued recently in this proceeding. The commission also ruled recently on Columbia Gas of Maryland STRIDE plan. But in that proceeding, the plan was rejected on the grounds that Columbia's replacement work had decelerated rather than accelerated work at the law [ph] to encourage.

The commission encouraged Columbia to submit an amended application, which the commission said it would consider on an expedited basis.

I'd now like to turn the call back to Terry for his closing comments.

Terry D. McCallister

Thank you, Adrian. I am encouraged by our business performance so far this fiscal year, and I look forward to giving you further updates as the year progresses. I would like to highlight a few developments that occurred during the first quarter.

First, an update on our investment in the Constitution Pipeline project. In December, the FERC announced that the final environmental impact statement would be complete in June 2014, with the federal authorization decision deadline for the project in September 2014. As a result of longer than expected regulatory permitting process, the pipeline's target in service date has been extended to late 2015 through 2016. We continue to evaluate additional midstream opportunities similar to our competition pipeline investment.

We have the financial strength and flexibility to take advantage of these and other strategic opportunities for growth. We look forward to discussing new developments in this area during our upcoming analyst conference in March.

As mentioned, both our utility and midstream businesses [indiscernible] recent period of extremely cold weather in the Northeast. We continue to believe strongly that this confirms some critical need for additional infrastructure to serve these areas and our continued participation in these businesses.

I'm also pleased to report that Washington Gas Energy Systems recently signed an agreement to install Bloom Energy fuel cell for a major retailer in England. The fuel cell will be installed in 2014 and the agreement includes a 20-year purchase power agreement.

These assets speak of attractive economic returns similar to commercial solar assets that provide us with another avenue and actively pursues similar utility like service generation opportunity to complement our commercial solar portfolio of assets.

We remain confident that our diversity of business portfolio in the range of positive investment opportunities are available will allow us to achieve our long-term growth strategy. As you heard today, we are on track to meet or exceed our earnings targets for the year for all business segments, except our Retail Energy-Marketing business.

Finally, as I mentioned earlier, we look forward to seeing many of you at our 2014 analyst conference on March 13 at the New York Stock Exchange. At that meeting, we'll be discussing our plans for the future. For those of you that can't attend the conference in person, a webcast and presentation slides will also be available on our website.

That concludes our prepared remarks, and we'll now be happy to answer your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Steven Huang with Kelson Capital.

Stephen Huang

I guess I was just trying to get a better understanding. On the retail business, I know it's been a tough struggle to start with, what -- are you guys forecasting that the retail component alone will still stay profitable for the year?

Gautam Chandra

Yes. Steven, this is Gautam. We're still expecting a positive result on our retail. As Terry mentioned, January may have dampened a little bit, but we're still expecting to have positive results.

Stephen Huang

Okay. And when you guys take into account the weather benefit for asset optimization and weather for the utility, because I know when we initially set the guidance, it was with weather normalized, how much of that assume that you're now embedding weather in the overall guidance now for asset optimization and utility benefit on the utility category?

Vincent L. Ammann

This is Vince. We haven't changed our position. All of our results are reporting our weather-normalized results. What we're talking about on the asset optimization is just the additional opportunities that are created by pricing and demand that occurs in these cold weather times and where those assets that are not being used to meet our utility requirement are just all that much more valuable to other off-system buyers. So the results are still, we view them as still weather normalized. It's just that volatility and pricing and demand is higher in colder weather.

Stephen Huang

Right. So, I guess if you didn't assume -- because most of the utilities, they always strip out when weather is and give us a breakdown. So I'm just trying to get a better understanding, because if I roll, I don't want to over add 2015 if I set the baseline, because we go back to weather normalizing and give us our new guidance in the upcoming year, that we reset down. But I just want to make sure that I don't add too much for the weather portion that could possibly be a one-time event.

Vincent L. Ammann

The $0.99 that we're reporting on the consolidated basis does not have the impact of weather, per se, in those results. So the utility results that we're reporting, it is not if -- there -- any colder weather benefit is stripped out. What we do have is the benefit in the District of Columbia that we've said, which is additional usage. That weather normalized usage, we do happen to see sometimes in our history, we see higher, non-weather related usage associated with colder weather and sometimes it's higher, sometimes it's lower. So we do strip out the weather related usage from what we're referring to as -- in our non-GAAP earnings. So I think that's...

Stephen Huang

Right. Because 2 of your states are weather normalized, right?

Vincent L. Ammann

Yes. The other 2 states are weather normalized, and the D.C. is not weather normalized. But we normalize the results for D.C. before we report them in non-GAAP earnings.

Stephen Huang

I see. Okay, so the higher usage number that you said, that's weather normalized $0.02?

Vincent L. Ammann

That's right.

Stephen Huang

Okay. The last question I have for you is, your neighbors, Dominion has announced that they're going to sell their retail business, at least on the electric side. You guys seem to be pretty optimistic about the future of retail. Would you guys look at buying that or -- because you have a great balance sheet or is this something that's too big for you? I mean, how should we think about you in looking at the expansion of that business?

Vincent L. Ammann

Steven, we heard about the Dominion exit as well. We usually don't comment on whether we're looking at an acquisition or divestiture so can't speak specifically on that. Our view of retail still is that we expect it to come back to a historic contributions in the next couple of years. So we're still optimistic about this.

Stephen Huang

It's a very big deal, so I didn't know if you guys felt like you wanted to keep the business mix the way it is, and you didn't really want to like expand significantly into that world.

Terry D. McCallister

Steven, this is Terry. We've been in this business for a long number of years Steve, 17 years or something. So we've seen kind of retailers come, and retailers go and [ph] up there should be a lot of exit and we stayed in there and we continued to do well when that happens, subsequent to that. So we're kind of in this business, I don't know that we're going to run out and look at buying Dominion or not, but we generally don't comment on that.

Vincent L. Ammann

One thing that we did see in the history in the past. The last time there was a big sort of I'll say shake out in the electric and retail business was following the credit crunch in 2008. And in 2009, Washington Gas Energy Services had record earnings. So our optimism is kind of based on history of saying when there's a shakeout players leave the industry, that usually whether you pay for bringing those customers on by buying a book or you just win the customers in the open market. There tends to be more opportunities for growth in the wake of those kinds of events than there was prior to it.

Operator

[Operator Instructions] The next question comes from Ted Durbin with Goldman Sachs.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Just sticking with the retail electric question. I guess, there is development foot now but are you still thinking about the long-term margins here as sort of $5 to $6 a megawatt hour as a sustainable number or this changes ancillary market or what not is that, should we think about that as be reducing lower potentially?

Harry A. Warren

This is Harry, Ted. I'll take that. I think that the discussions that we've had like sort of earlier at the outset of the fiscal year about margins, not so much because of ancillaries per se, but we're seeing margin compression in large commercial electric sales. So I think that's probably going to weigh on the range of our results little bit going forward. That's really where that's coming from. I think as we've mentioned in the script, on the ancillary side, we're seeing some of those costs stabilize in a range that we're now slicing into our deals. And we're getting the kind of forecast at overall levels of margins in the first quarter that we had in our original forecast. So we think we're able to recover some of those higher ancillaries. So I think what's with the other ups and downs, shakeout, the change in capacity charges from year to year, getting these ancillaries to reflect in, we are seeing a low tighter margins on those large commercial electric sales. But some of those other pieces should shake out.

Vincent L. Ammann

I think we had guided slightly below the 5 to 6 number at the beginning of this fiscal year. And I think what we're seeing is we're able to stabilize and hold that slightly lower number for the electric.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Yes, I mean even just going to the Analyst Day last year where you sort of talked about your long-term plan for 5 to 6. I guess that's where I'm trying to go and do we think this market has sort of taking a step down for whether it's the large commercial side or what not, or do we think that's still a good long-term number?

Gautam Chandra

I think based on what we see at this point in time, we think it's a limit bit lower longer-term expectation. It's hard to say with competitive dynamic, as Vince mentioned, if the recent events cause a change in the market structure, that may change again. But from what we can see, I think the electric margins are a little bit lower than the 5 to 6.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Got it. And then, again, I'm not trying to front run your analyst meeting, but I guess given that outlook and some of the other moving pieces you've had since last year, do you still feel comfortable with the 7% compounding your growth, I think it was up for '16 you had out there, and there's a lots of put and takes in stand. So I'm just wondering if that's something we should still feel good about or should be thinking -- talking about the long-term growth outlook?

Terry D. McCallister

Ted, this is Terry. I think while we modify that say 5% to 7% growth rate, we're actually doing quite well in most of our non-utility businesses but with, I'll call it which this year for Energy Services business. We kind of modify in the 5% to 7% range for that outlook. So kind of in the same vein, but we'll have more for you in March on what we think that will be.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Got it. And then, Adrian, sometimes we hear from you in terms of your plans for sort of rate case filings and what not? Anything on the general rate case front that you're seeing on the jurisdictions where you are going to make it to file?

Adrian P. Chapman

One of our advocacy messages when we were working for the STRIDE law in Maryland was that to be able to make that commitment to spend the money to accelerate the replacement, adding a surcharge will help us spread out the time between rate cases. And so knowing that BGE got a favorable ruling, we think that we should get a favorable ruling. Certainly our commitment to spend that money was there beforehand to get a surcharge with it will help spread out the time. So we usually don't give a forecast of actual rate cases, but knowing that Virginia has the surcharge recovery in place for acceleration, Maryland has it pending and will have a decision this spring and we still look for favorable review in the D.C. filing for expanding our acceleration there. Having those programs, having that rate base addition with revenues that go along with it will help us spread out the time between rate cases.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Got it. And then sort of last one for me, it's just on M&A as well. I'm actually thinking more on the utility side, the Regulated Utility side. Anything on your radar now that we couldn't specifically know but there happens to be transactions in the last couple of years, how are you thinking about the opportunity to clear more regulated assets?

Terry D. McCallister

Well I'll give you -- this is Terry. I'll give you kind of the same answer we normally give. They are always on our radar screen and obviously, there's a couple of them floating around out there, and we'll take a look at them and if we think they make sense, we'll do something with it, and if not we won't. How's that?

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Maybe I'll ask a little bit more. Is there anything where you see some stuff or there might be synergies that you may be able to pick up, because you maybe a bigger operator or have more of a focus on cost control and things like that?

Terry D. McCallister

Again, all of those things make sense sometimes, but again, it's going to be specific to each individual opportunity.

Operator

If there are no further questions. I'll turn the call back for Mr. Bonawitz for any additional or closing remarks.

Douglas Bonawitz

Okay, thank you for joining us this morning. If you have any further questions, please don't hesitate to call me at (202) 624-6129. Thanks again, and have a great day.

Operator

Again, I would like to remind everyone that you can listen to a rebroadcast of this conference call at 1:00 p.m. Eastern time today running through February 13, 2014. You may access the replay by dialing 1 (855) 859-2056 and entering pin# 34014972. This concludes our conference call for today. Thank you for participating. All parties may disconnect now.

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