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Executives

Brian Hunt – VP and General Counsel

Phil Trenary – President and CEO

Peter Hunt – VP and CFO

Analysts

Duane Pfennigwerth – Raymond James

Helane Becker – Dahlman Rose

Bob Mcadoo – Avondale Partners LLC

Dave Enotyle (ph) Banc of America

Pinnacle Airlines Corp. (PNCL) Q2 2010 Earnings Conference Call August 3, 2010 10:00 AM ET

Operator

Good day ladies and gentlemen and welcome to the Second Quarter 2010 Pinnacle Airlines Corp. Earnings Conference Call. My name is Alisha and I will be your coordinator for today. (Operator Instructions). I would now like to turn the presentation over to Brian Hunt, please proceed, Sir.

Brian Hunt

Good morning everyone and welcome to the second quarter 2010 earnings conference call of Pinnacle Airlines Corp. On behalf of the more than 7,200 employees of Pinnacle, Colgan and Mesaba, I would like to thank you for your interest in our company. This call is being presented live over the Internet via webcast from our website, www.pncl.com. It will also be available on our site for 30 days after this call.

This presentation contains various forward-looking statements that are based on management’s beliefs as well as assumptions made by and information currently available to management. Although the company believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our website or online from the Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. The company does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.

And at this time, I will turn the call over to Phil Trenary, our President and CEO.

Phil Trenary

Thanks Brian, and good morning everyone. I am also joined today by Peter Hunt, our Chief Financial Officer; and Doug Shockey, our Chief Operating Officer.

I’ll start off by thanking all of our people at Pinnacle, Colgan, and now Mesaba for everything they’ve done in delivering another quarter of profitability for our shareholders. It’s actually a little bit better earnings and Peter will discuss some of the one-time issues when he comes on here in a minute.

First of all, I would like to welcome the Mesaba Aviation folks to the Pinnacle family. Now this transaction provides a lot of benefits for all of our stakeholders. Probably one of the – ones that we think about a lot is this strengthens our relationship with Delta going forward. It has resolved all of our outstanding suits with Delta. It also solves some issues that Pinnacle had and also Mesaba as it relates to the fleet that we operate.

Pinnacle has very large fleet or has a very large fleet of CRJ-200s, but our CRJ-900 fleet only has 16 aircraft. By bringing Mesaba into the family, we now have a large fleet with critical mass with 900s, and we also solved Mesaba’s problem of not having enough CRJ-200s. Mesaba really operating 19 CRJ-200s. So, putting the carriers together means we have the right size fleet in both those aircraft. The other thing it does, the Saab aircraft operating by Colgan, our older aircraft, and Mesaba also has some aircraft that are being phased out of their fleet, their Saabs, they happen to be the newest fleet of Saabs operating in the industry. So, from an operating cost standpoint and customer confidence standpoint, we will be able to leverage that, improve the service we have with that.

Speaking of the aircraft, if we look out into the future, and the aircraft that Pinnacle operates, we will talk a lot about how the CRJ-900 is absolutely the right, large regional jet to operate. The Q400s is an aircraft and class all by itself, it’s going to be a strong competitor going forward. 200s that we have is a relatively new fleet, and we have contracts on those through 2017. As we said, the Saabs is still the airplane that can really do the job that it does.

So, bottom line is we have the right aircraft going forward. The Q400 is bringing us the growth that we have right now, Continental in fact will be taking be a delivery later this week that will go into Continental. All of the Q400 deliveries we have now are the next generation Q400s.

It is our ultimate goal with this to transfer the jets at Mesaba to Pinnacle and then merge the Mesaba and Colgan certificates, so we wind up with all of the jet aircraft being operated by Pinnacle and all the turboprop aircraft at Colgan.

This puts us in a better position than any other carrier to compete some new business we expect to be available between 2011 to 2015. It’s no secret that there is approximately 500 regional jet contracts that will be expiring in that timeframe. Certainly some of those aircraft will remain in the network but a lot of them will be converted to larger regional jets and larger turboprop aircraft. As far as the number and the mix of the two, a lot of that will depend on what happens with scope with the major carriers.

The bottom line is compared to the last time we talked we’re in far more control of our future and this is a transaction that improves the profitability and cash flow for investors and shares a long-term stability for our people.

So with that again to a few more details, I’ll turn it over to Peter Hunt, our Chief Financial Officer.

Peter Hunt

Thanks Phil. Good morning everyone and thank you for joining us today. This morning, Pinnacle Airlines Corp. did report fully diluted earnings per share of $0.32 and as Phil mentioned we did have a couple of onetime items that I wanted to highlight that are in our second quarter results.

First off, I think this should be the last quarter where we have unreimbursed aviation insurance premiums related to our Delta Connection agreements and the amount in the second quarter was $1.7 million that just draws straight to the bottom line. Going forward in the third quarter Delta is, through July they are paying us the full reimbursements associated with our insurance and we’re glad to have that issue being us.

The second item that affected the second quarter related to our interest rate hedging program, we purchased very early in the second quarter, late in the first quarter early in the second quarter some interest rate options. These are options to enter into swap contracts or hedges in the future and they essentially were insurance for us to be able to protect our economics on our Q400 aircraft deliveries that are starting right now.

Interest rates declined throughout the quarter, so the value of our options did decline and we did take a charge of $1.5 million associated with those options. Using an option product versus a traditional swap ended up being a very good move for us because of those lower interest rates.

I’m very happy to report that the first Q400 aircraft that we’re taking delivery of this fall we’ve locked in our financing and it’s under 5%, so the benefits of the lower interest rates going forward more than offset the insurance cost of these options that we have.

Also going forward, the remaining value of those options on our balance sheet is just under $300,000, so we don’t expect any additional charges as we amortize out the cost of those remaining options.

We had one third item as well I wanted to mention. We’ll have some of this in the third quarter as well. We incurred approximately $600,000 of fees, consulting fees and due diligence fees associated with the Mesaba acquisition that those are embedded in our costs in the second quarter as well.

As we turn to our operating statistics, at Pinnacle Airlines we were 108,371 block hours, which was an increase year-over-year of 2% and we completed 70,483 departures which was also up 2% year-over-year.

Our daily utilization on our jet fleet was 8.4 hours, which was up just slightly about 1% versus the second quarter of ‘09. This is the first time in a long time we’ve seen utilization tick up and we’re encouraged by that. I think that’s a factor of the strengthening demand in the entire US Airline industry environment and our partners are asking us to fly a little more which is a good.

We ended the quarter with 126 CRJ-200 aircraft and 16 CRJ-900 aircraft essentially no changes. However, with the acquisition of Mesaba starting July 1, our jet fleet now consists of 57 CRJ -900 aircraft and a 145 CRJ-200s.

At Colgan, our turboprop, we flew 32,795 block hours, which was down 4% year-over-year and our departures were down 3% year-over-year to 26,783.

Our utilization was also down at Colgan 7.6 hours. The primary drivers behind the decline in block hours, departures and the utilization has to do with the fact that we had four aircraft that we had not been flying since January was related to decisions to exit flying we were doing in LaGuardia and through the spring we were determining what to do with those aircrafts long term. They did go back into service in June, three of them, starting at the beginning of June and the fourth went into service in late June. So all of our aircraft are now flying and we expect high utilization very consistent with last year as we look at the third quarter. We ended the quarter with 14 Q400 and 34 Saabs.

Turning to our income statement, we reported total operating revenue of just under $219 million, which was up year-over-year about $7.5 million. Both Pinnacle and Colgan reported increased revenue.

Pinnacle’s revenue was up 4% primarily because of the slightly higher flying and also rate increases in our underlying contracts and Colgan’s revenue was $58 million, was up 2% and despite the fact that we had lower capacity at Colgan, strength in our pro-rate markets, our RASM was up 10% contributed to higher revenue year-over-year.

When you look at operating income, our operating income was just under $20 million and it was down 11% year-over-year, our margin was 9%. And at Pinnacle we reported operating income of $16.8 million, which was actually just down $200,000 year-over-year and despite the fact that at Pinnacle that is where we incurred the $1.7 million of unreimbursed insurance cost.

So returns (ph) at Pinnacle are very favorable going into the first half of this year and when you look at the third and fourth quarter and we now have the removal of that unreimbursed insurance exposure, we do think that we’ll continue to have very positive trends with Pinnacle.

At Colgan our operating income was $3 million and that was down $2.2 million versus the second quarter of ‘09. Despite the fact that our revenue was very strong at Colgan with our RASM up 10% on our pro-rate markets, we did have higher fuel costs, our fuel expense went up $1.5 million, our average price pay per gallon was up 40% versus the second quarter of 2009 and we also had increased costs associated with our crews, with labor.

We are gearing up for the introduction of the Q400s coming this fall and that translates into higher labor and training costs, and so those two things combined contributed to the decline in operating income that we had at Colgan.

Looking at our net non-operating expense, our net interest costs were down dramatically versus the second quarter of ‘09. Our net interest was $8.8 million, a decrease of $3.4 million year-over-year and that is related to the significant improvements we have made to our balance sheet versus the middle of 2009.

The repayment of our convertible notes, the restructuring of our auction rate securities and the elimination of the associated line of credit, our total debt has gone down over $200 million versus the same time last year and that’s contributed to a big drop in our net interest.

Now offsetting that, as I mentioned earlier, we do have the charge associated with our interest rate options of $1.5 million and our total miscellaneous expense actually is $1.2 million because there’s about $300,000 of gain associated with revaluing our ARS options and our redemptions that offsets the charge we have on our interest rates.

So you put all that together, our total net income for the second quarter was $5.9 million, down $1.4 million versus the second quarter of 2009 excluding nonrecurring items.

Looking at cash flow in our balance sheet, we ended the quarter with $79 million in cash and cash equivalents and that is lower than what we would have expected. There is one significant item that relates to that and it’s a timing difference.

We prepaid $9.8 million of aircraft rent under our ASA on June 30th; that’s normally paid July 1 and it was paid one day early this quarter. We would not expect to do that again, so that will reverse out in the third quarter and our operating cash flow in the third quarter will be much higher as a result of that.

We also in the second quarter paid out approximately $2 million for our interest rate in our fuel call options that I talked about previously. We have purchased options for all 15 of our deliveries. So there will not be any additional cash flows associated with interest rate options going forward, so that is a one-time adjustment to operating cash flow in the second quarter.

Looking at our investing activities, we used approximately $5.2 million of cash for investing activities in the second quarter. This does include $5.3 million related to Q400 predelivery payments. The bulk of our predelivery payments were financed through EDC but there was one component that was due in May of 2010 that was not financed and this is simply an offset to the cash flows that we will pay out as we take these aircraft deliveries throughout the rest of the fall.

There are no other significant unfinanced predelivery payments that need to be made associated with our aircraft deliveries. However as each aircraft delivers, we will repay the PDP financings and we will have the cash outflows associated with the unfinanced portions of each aircraft long-term.

And then, with our financing activities we used approximately $11.8 million in cash in the second quarter. All of this was related to normal scheduled debt amortization. One note on cash, we ended July actually with cash over $100 million and the big changes there, one big piece of it as I mentioned relates to that swing on the aircraft win where we had a prepayment in June that we did not have in July. But the second piece is associated with our Mesaba acquisition. The acquisition actually contributes to a build-up in liquidity for us because the bulk of the capacity purchase of payments, we had at Mesaba translate into weekly cash payments from Delta and as a result, we actually build up cash, build up liquidity through the introduction of those contracts.

So we ended July with over $100 million and we think that that increase in our capital will stay in effect long-term.

Couple of other notes about the Mesaba acquisition. As we analyzed how this will affect us through the rest of the year, we think that our revenue in the third quarter would be increased by $60 million to $65 million through the acquisition of Mesaba. The one caveat to that is we are analyzing a couple of pass through items that would have no effect on income but we are determining whether they would be portrayed on a gross basis or a net basis in our income statement, the $60 million to $65 million presumes that these items would be on a net basis and that is where we think we will end up, and we are still also analyzing the non-cash costs, as we have to go through purchase accounting from acquiring Mesaba and that does mean revaluing all their assets and determining new lives and new schedules for depreciation and amortization. But we are still very confident that the Mesaba acquisition will translate into positive operating cash flow in each of the third and fourth quarters in addition to the $8 million of liquidity build-up that we have here coming simply from the change in working capital from their contracts.

Until we determine what those non-cash costs are, the depreciation and amortization, we can’t give specific guidance on how Mesaba will affect our net income and our earnings for the rest of the year but we are confident that the acquisition will be accretive in 2010, both from a net income basis and from an operating cash flow basis.

Last item I wanted to mention is the Q400 growth program. We did already take delivery of the first of our 15 Q400 aircraft and as I mentioned, it was financed at a rate under 5%, we are very pleased with that and we are scheduled to take one more aircraft in September, six aircraft in the fourth quarter, six more aircraft in the first quarter of 2010 and then the very last one is scheduled to come in April 2010.

So before we open it up for questions, just my closing comment would be that we do expect to have a good second half of 2010, will financially benefit from the settlement of our insurance fee (ph) with Delta as we look at the second half year-over-year and also will benefit from the additional summer flying we have added with Colgan in our pro-rate markets. And with the addition of Mesaba, we think we are on the right path to growing our profitability.

So with that, we would like to open the call up for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Duane Pfennigwerth from Raymond James.

Duane Pfennigwerth – Raymond James

Just wonder if you have any thoughts on utilization of the combined fleet with Mesaba in the mix?

Phil Trenary

I don’t see much change in that as far as the (inaudible) as we look at it. The network that we operate is a complementary. So any changes you expect to see will be very minor, up or down on that, they add 900s have (ph) very good utilization. In fact some of the markets operate by – Mesaba is actually longer than what Pinnacle flies. So I don’t anticipate seeing much change on that.

Peter Hunt

And I would agree with that, I would say long term, for the reason Phil mentioned early on the call, the fact that we have a small fleet of 900s and Mesaba has a small fleet of 200s by putting them together, we will have some efficiencies that would increase the availability for Delta to increase the utilization if they choose to in the long-term. But certainly in the near term, we don’t think there would be any big changes to utilization.

Duane Pfennigwerth – Raymond James

And then just can you help us with sort of the incremental net interest expense you expect starting in the third quarter? And then I know it’s early and you still have I guess some accounting adjustments to consider but can you help us at all with sort of a 2011 pretax margin on this incremental business? Thanks.

Peter Hunt

Sure. On the interest, the entire debt that we financed with Mesaba was $62 million, and it’s at a 12.5% interest rate, and that translates into interest each quarter of just under $2 million and as we pay that debt down in 2011, the amount of the interest will go down ratably as well but if you look at the third and fourth quarters, you can assume interest of, I think it’s around $1.9 million a quarter that we would have from the addition of the new note.

We are not prepared to specifically give a lot of guidance for 2011 at this point but we have given the guidance on the cash flow that the target in our contract is $18 million for all of the Mesaba flying. There is some variability there based on our underlying costs but that is our target and we think we should be close to the target at least initially before we start incurring a lot of integration costs from combining the fleets. And when we look at the income statement, we do think the income will be lower than $18 million because we will have depreciation and amortization associated with the assets that we just bought and we don’t know exactly what that number is until we finish the valuation of it. But it will have a positive effect on operating income and pretax income, we do believe that it will, net of the interest.

Duane Pfennigwerth – Raymond James

And that is before the interest expense, that $18 million?

Peter Hunt

Well, it will be positive on operating income and we believe net of interest, it will still be positive on pretax income as well.

Operator

Your next question comes from the line of Helane Becker from Dahlman Rose.

Helane Becker – Dahlman Rose

I was reading the documents actually yesterday and I thought the original guidance was $12 million to $18 million in cash flows with kind of the lower ended of the range in the short term and the higher end of the range towards the latter part of the agreement. So could you just explain the difference? It seems like you are modeling a higher cash flow number now going forward, which isn’t bad, but I want to make sure I understand it correctly.

Peter Hunt

Sure and I am glad you are bringing this up because I do want to clarify. For the next two quarters, when we don’t have much in the way of integration costs, I actually think we should be at the higher end of the annual target in terms of cash flow because the target is $18 million in our contracts. The reason it would be lower and as low as $12 million is that over the next couple of years as we integrate the operations, there will be dislocation costs, we will be moving crews around as we combine the fleets, there will be some training events associated with combining the fleets, there will relocation costs for some of the support functions if we move any of those functions here to Memphis. And so, as we look at in 2011 and 2012, there is actually a lot of reasons why we won’t be at that $18 million. We don’t think we would ever be at a level below $12 million now and that’s why we have the range there.

So I really think it’s 2011 and 2012 where we will have the pressure and probably at the low end of that range on the cash flow.

Helane Becker – Dahlman Rose

Okay, and then on the $1.7 million of insurance, so how do we adjust that number, was that a revenue item or was that a cost item, and so the revenue reimbursement?

Peter Hunt

Yes, it will show up as revenue because the cost is already in our operating cost, the increased year-over-year shows up in our other operating expense line but the reimbursements from Delta that flow through our revenue were lower by $1.7 million. So that is where you will see the effects starting in the third quarter.

Duane Pfennigwerth – Raymond James

So based on what you are seeing, as we are thinking about this, we have got, for third and fourth quarter $1.7 million more in revenue in other revenue for insurance plus $60 million to $65 million in other revenue or in passenger revenue for Mesaba. Can you give us any sense, I know this is kind of Duane’s question asked differently, can you just give us any sense of what the margin was like when you did the acquisition on their business? What we they earning on their business?

Peter Hunt

Well, I think it will be, it’s going to be lower than the $10 million, just simply – 10% I mean – just simply because, you know, if you look at the cash operating margin of $18 million a year or roughly $4.5 million a quarter, the cash component of that is less than 10%. What we are still analyzing is the amount of non-cash cost we will have from the depreciation and amortization and until we have those numbers solid, I am really not prepared to give a GAAP income statement-based operating margin projection yet.

Duane Pfennigwerth – Raymond James

Okay that’s fair enough. And then just in terms of what you can say about passenger traffic in the markets that you are flying. I know you are not really in control with your inventory, but can you just talk about your load factors and how that’s compared to last year or compared to expectations for the going forward time frame?

Peter Hunt

Sure, I mean the piece of it that we obviously focus on the most is the pro-rate planning we do, because we have direct exposure to passengers. And traffic is very strong in all of our markets over the summer. As I mentioned in the second quarter, our RASM was up 10%. Most of that was based on higher loads, more so than higher yields. As we look at the third quarter, we think demand in those pro-rate markets will still remain strong. We don’t focus as much on load factors and/or capacity purchase agreements, but what you can see is that in our Q400 operations, our load factor was down ever so slightly, fairly consistent year-over-year and our load factors in our jet plane were actually – I think they were down as well – just getting the number here – yes, they were down actually a little bit more, 2.6 points. My guess is, and this is a total guess, that Delta is managing for yield in a strong fare environment and that’s why you see loads down a little bit.

Phil Trenary

From a RASM standpoint, on the pro-rate flyings, it’s actually a little better than that considering that we have a large segment of revenue in the Saab business, it is the essential air service or contract revenue for the government. So the part that we manage has been doing very well.

Duane Pfennigwerth – Raymond James

Okay. And then just one last question, on the Saab agreement, I think you had 34 aircraft, but wasn’t – and how many of those aircraft are actually – I felt that read that they were being retired between now and 2012, (inaudible) least and so then you said that you have four out and went back into service by July 1. So, I am just kind of wondering how I should think about that.

Peter Hunt

Sure, well, we actually have two Saab fleets now, and when I was talking about the four that relates to Colgan. We’ve 34 Saabs at Colgan Air and then 32 Saabs flying at Mesaba. Our Colgan Air flying is stable long-term flying. We don’t have any intentions of any major changes there. At the beginning of the year, we took four aircraft out of service in LaGuardia, and that was primarily related to the fact that US Air and Delta were doing the slot swap deal. And if that had gone through, we would not have had the opportunity to continue to fight for US Air at LaGuardia.

So, we went ahead and pulled out of that plane early on in the year. The slot swap didn’t go through. And so, we went back into some of those markets over the summer and we are now looking with US airways as to whether we should stay in these markets long-term. I think there is a very good chance that we will stand some of those markets long term. But we are still working through that. So, that’s the reason why we had four aircraft out of service in the first quarter and part of the second quarter, but they are now all back into service as of the end of June and flying – full scheduled flying for the third quarter of 2010.

With respect to Mesaba’s fleet, those fly exclusively for Delta and the deal that we worked out with Delta is that those will be retired as the head leases that Delta has with Delta’s lessors mature, and those lease expirations all happen starting this Fall and going out through the middle of 2012 as you noted. So, there are 32 Saab aircraft at Mesaba that will decline down over time. And the way that we structured our capacity purchase agreement with Delta is that over that two-year period, it’s basically kind of a cost-based deal. We have a little bit of risk based on our operating performance. But our cost will be reimbursed under that contract from Delta, without really any effect on our income, positively or negatively, as we manage that fleet down on behalf of Delta.

Operator

Your next question comes from the line of Bob Mcadoo from Avondale Partners LLC. Please proceed.

Bob Mcadoo – Avondale Partners LLC

Hi guys, thanks. You mentioned that the new Q400s are the next generation Q400s. What’s the difference between the old and new?

Phil Trenary

A lot of the treatment that the – it’s actually the treatment that CRJ-900 Nextgen has, they are doing the same thing to the Q400. And what that is specifically the overhead bins can accommodate roller boards. So, it’s very much (inaudible) experience. The sidewalls are sculpted out to provide actually more shoulder room for the customers. The lighting is all the cool lighting with the LED light throughout the cabin. But just an overall from the experience standpoint it becomes as good as any large regional jet product out there and on par with the narrow bodies of the mainline.

Bob Mcadoo – Avondale Partners LLC

So, it’s an interior, it’s not an operational kind of difference?

Phil Trenary

That’s correct.

Bob Mcadoo – Avondale Partners LLC

Okay. Secondly when you talk about cash at the end of July being over $100 million, and then you talked about how the weekly cash payment of Mesaba was going to build your cash. When we think about the $100 million at the end of July, does that include the full buildup from Mesaba or is there still going to be some more buildup, by the time it’s on 2-4 weeks of Mesaba, that’s really kind of where we are?

Phil Trenary

Yes, I think that’s really where we are Bob. You know, we’ve got a full month of that effect in there. So, the working capital contribution there, essentially Mesaba operates in a negative working capital position because we get the cash quickly upfront, but the associated accounts payable cost, the associated payroll cost trend out a little bit longer over time. And we’ve got that buildup, that effect, now factored in for the month. So, it’s that kind of roughly $8 million to $10 million of additional liquidity that we expect to have long term.

Bob Mcadoo – Avondale Partners LLC

And then, part of that same question, you said you have this payment that you made a day early. How big was that payment?

Phil Trenary

It was $9.8 million. And we would not normally do that and I don’t think we should do that again, I guess is the answer there. I mean it’s due July 1, it’s due the first of every month and this quarter, we just had it set up to go one day early, didn’t intend to.

Bob Mcadoo – Avondale Partners LLC

Okay, very good. Thanks.

Operator

(Operator Instructions). Your next question comes from the line of Glen Ingalls from Banc of America. Please proceed.

Dave Enotyle (ph) Banc of America

Hey good morning. This is actually Dave Enotyle (ph) calling in for Glen. Just one quick question. Could you give us your planned CapEx and scheduled debt repayments for 2010 through 2012?

Phil Trenary

Sure. We’ll file our 10-Q a little later today. And that I think will have some information on both of those items, especially will the debt amortization. What I’ll tell you on CapEx, well we don’t – with the acquisition of Mesaba, we don’t have a very detailed forecast yet. We are still – we are putting that together for 2011 and 2012. We would not expect overall there to be significant CapEx other than anything related to new aircraft. And we’ve got the 15 aircraft coming in, most of which are financed. If you look at the CapEx to support the fleet that usually runs $8 million to $10 million a year at Pinnacle and Colgan, we think another $2 million to $4 million will be associated with the Mesaba operations that we have on top of that. And as I said, there will be more information in our 10-Q related to both of those topics. I think you can get all the debt amortization out of there as well.

Operator

There are no further questions at this time. I would like to turn the call over to Philip Trenary for closing remarks.

Phil Trenary

Thank you again. Thanks for joining us this morning. We just (inaudible) that we feel very good about where were in the day, and even better about where we are in the future, and we appreciate your support. Thank you very much.

Operator

Ladies and gentleman, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.

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THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

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