Inter Pipeline's (IPPLF) CEO Chris Bayle on Q2 2016 Results - Earnings Call Transcript

| About: Inter Pipeline (IPPLF)

Inter Pipeline Ltd (OTCPK:IPPLF) Q2 2016 Earnings Conference Call August 4, 2016 4:30 PM ET

Executives

Jeremy Roberge - VP, Capital Markets

Chris Bayle - President & CEO

Brent Heagy - CFO

Analysts

Paul Lechem - CIBC

Rob Hope - Scotia Bank

Linda Ezergailis - TD Securities

Robert Kwan - RBC Capital Markets

David Galison - Canaccord Genuity

Steven Paget - FirstEnergy Capital

Ashok Dutta - Platts

Operator

Good day, ladies and gentlemen. Welcome to the Inter Pipeline Second Quarter 2016 Results Conference Call. I would now like to turn the meeting over to Mr. Jeremy Roberge, Vice President, Capital Markets. Please go ahead, Mr. Roberge.

Jeremy Roberge

Thank you, Melody, and good afternoon, everyone. Welcome to Inter Pipeline's second quarter 2016 conference call. Joining me today are Chris Bayle, Inter Pipeline's President and CEO and Brent Heagy, our Chief Financial Officer.

Today, we will discuss second quarter financial and operating results and provide an update on other corporate activities. To start, I would like to remind you that certain information in this conference call may contain forward-looking information that involves risks, uncertainties and assumptions. Such information, although considered reasonable by Inter Pipeline at this time, may later prove incorrect and actual results may differ materially from those stated or implied by our comments today.

Undue reliance should not be placed on such information. A discussion of the related risk factors, uncertainties and assumptions is available on our year-end MD&A which you can find on our website at www.interpipeline.com or at SEDAR.com. I'm going to turn things over to Chris to provide an overview of the quarterly highlights and then on to Brent to elaborate on Inter Pipeline's operating results. I will wrap up the formal portion of the conference call with a focus on Q1 financial results before opening the floor to questions.

Please go ahead, Chris.

Chris Bayle

Thanks, Jeremy. And good morning or good afternoon, everybody. I’m pleased to report that in the second quarter of 2016, Inter Pipeline continue to deliver strong and stable results.

Our funds from operations were $197 million for the quarter, representing a 9% increase over the second quarter of 2015. This positive result was achieved through increases in FFO across all four of our business segments compared to the same period last year.

Also, operationally, we had a very safe and successful second quarter. Notably, our NGL extraction business rebounded to generate second quarter funds from operations of $31 million, which is a 31% increase over the same period last year. This is the result of higher liquids volume produced, improved frac-spread pricing and overall lower operating expenses.

Our European bulk liquid storage business continues to deliver strong results. Higher utilization rates primarily driven by strong demand for Contango storage and the acquisition of Inter Terminals Sweden led to a 44% in FFO compared to the second quarter of 2015. Overall, we expect continue to be high demand for oil and chemical storage throughout our European business.

Of course, there are challenging times during the quarter. May 2016 was particularly tough for those, who live, work and operate in the Northern part of Alberta, due to the wildfires in and around Fort McMurray. In our case, we activated our emergency procedures and as a result, to protect our people and assets in the timely manner without any material financial impact.

Speaking of Northern Alberta, our oil sands business continues to anchor our success yielding solid financial and operating results in the second quarter. Oil sands transportation generated FFO of CAD141 million, up 5% from the same period a year ago.

On the conventional side, FFO was comparable quarter-over-quarter averaging approximately CAD47 million in both periods. Lowered volumes were transported due to less drilling activity and natural declines surrounding our Bow River and Central Alberta pipeline systems. But we were able to offset this with stronger realized volumes on our Mid-Saskatchewan pipeline system and higher revenues from increased midstream marketing activities.

These results demonstrate the strength and resiliency of our business during these difficult times for the energy industry. We continue to believe that we are well positioned to provide our shareholders with long-term positive results.

Now I’ll turn things over to Brent for additional commentary on our second quarter operating performance.

Brent Heagy

Thanks, Chris, and good afternoon, everyone. Now building on what Chris has outlined to you, I’m pleased to report that Inter Pipeline second quarter 2016 pipeline transportation volumes increased over the second quarter of 2015 by more than 150,000 barrels per day. Total average throughput for this quarter was approximately 1,214,000 barrels per day.

Oil sands volumes increased 19% to average 1,012,600 barrels per day. These additional volumes were the result of our expansion programs coming online last year.

Now broken down by system, our Corridor pipeline system saw a healthy 52% increase of approximately 113,000 barrels per day compared to the same period a year ago.

Polaris pipeline systems volumes were 42,000 barrels per day or 35%, and volumes on the Cold Lake pipeline system volume - the volume rose there are about 4,000 barrels per day compared to 2015 second quarter results.

Conventional pipeline volumes decrease by 3.5% to 1300 barrels per day from the second quarter of 2015, and this is largely due to reduced producer activity and natural production declines. However, even in light of the weak commodity price environment, transportation volumes have remained relatively consistent compared with last year’s second quarter.

The decline was mitigated by a 7% increase in volumes on the Mid-Saskatchewan pipeline system, which transported 81,500 barrels per day during the period. Volumes on the Mid-Saskatchewan system increased as a result of the connection, reactivations and from the completion of several expansion projects in mid-2015 to accommodate increased regional production from the Viking light oil play.

In our NGL business segment, our straddle facilities processed 2.7 billion cubic feet per day of natural gas. Extracting an average of 94,100 barrels per day, up more than 4,000 barrels per day compared to production in the second quarter of 2015. We also benefited from improved frac-spreads for the quarter. Realized frac-spreads prices averaged $0.45 U.S. dollar per U.S. gallon, up 29% from the $0.35 U.S. dollar per U.S. gallon over the same period last year.

In our bulk liquid storage business, second quarter utilization rates jumped to 97% compared to 93% for the same time from a year ago. In addition to the acquisition of our operations in Sweden, this strong performance was particularly evident in our Denmark Terminals, where we experienced high utilization rates, storage fees and activity levels.

Inter Pipeline’s growth capital invested during the quarter was relatively modest at CAD38 million, approximately CAD14 million was directed in conventional pipeline business segment for the completion of 400,000 barrel crude oil well storage project at Kerrobert, which is expected to enter into commercial service in the third quarter of 2016. As we said before, this will be an important strategic addition to support operations on the Mid-Saskatchewan pipeline system.

Capital expenditures of CAD8.2 million were also invested in our European bulk liquids storage business for a number of tank life extension, modification and reactivation projects.

So in summary, it was another strong stable quarter for Inter Pipeline, and I’m confident that our outlook remains positive. So I’ll now turn things over to Jeremy for a more detailed look at our financial results.

Jeremy Roberge

Thank you, Brent. Our 2016 second quarter financial results were strong. Funds from operations grew by 8.7% to CAD196.7 million, and net income improved by 66.5% to CAD122.9 million compared to the second quarter of 2015.

Increase to both measures was primarily the result for the acquisitions of Inter Terminal Sweden in June of 2015, increased utilization rates in the bulk liquid storage business, higher realized frac-spreads in the NGL extraction business, expanded transportation service on the Polaris pipeline system, and a strong contribution from midstream activities in our Conventional oil pipeline business segment.

Our payout ratio for the quarter was an attractive 70.3% and enabled Inter Pipeline to pay CAD131.4 million of dividends to shareholders. Since inception, Inter Pipeline has distributed approximately CAD3.6 billion in cash payments to our shareholders.

We’ve continue to be diligent in managing our balance sheet, while maintaining financial flexibility. As at June 30, 2016, we had CAD557 million of available capacity on our CAD1.25 billion revolving credit facility. We also ended the quarter with a consolidated net debt to capitalization ratio of 54.2%, which is within management’s targeted level of 50% to 55%.

The majority of Inter Pipeline’s cash flow is anchored by highly stable cost of service contracts with investment grade counterparties. As such, revenue derived from these long-term agreements are typically not subject to commodity price or throughput volume risk.

Adjusted EBITDA for the second quarter totaled CAD251.9 million, which is broken down by contract types as follows: 61% from cost of service agreements, 30% from fee-based contracts with no commodity price risk, and 9% from commodity based agreements that are subject to both commodity price and volume risk.

In aggregate, over 90% of Inter Pipeline’s EBITDA continues to be sourced from stable, cost of service or fee-based contracts.

Now this concludes the formal portion of the conference call. I would now like to turn the meeting back to open the floor for questions. Thank you.

Question-and-Answer Session

Operator

Thank you. We will now take questions from the telephone lines. [Operator Instructions] The first question is from Paul Lechem from CIBC. Please go ahead, your line is open.

Paul Lechem

Thank you. Good afternoon. Just a couple of questions on the M&A front, if I may. Few asset packages which is being sold in the last little while, the Husky midstream assets and then Devon's share of access.

I was just wondering, if you can talk about may be your participation in any of those processes, how close you might have been in terms of valuations, just may be if you can discuss your - how your participation is in these types of asset sales that are be going on? Thanks.

Chris Bayle

Hi, Paul. It’s Chris speaking. Yes. Once again, I’m sorry like, we really, we’re really precluded from commenting specifically on acquisition package, whether it’s already been transacted on or potentially could be transacted on for a variety of reasons.

But generally, I can say what I said in the past, which is we - in this marketplace, Inter Pipeline does consider itself in acquiring mode. We think this is the right environment for an organization with a balance sheet such as ours, and a stable business profile to look to enhance our overall, I guess suite of assets through an accretive acquisition.

So we are looking and we continue to look, and we won’t have anything to comment on regarding that until - if it went something is actually completed on our part.

Paul Lechem

All right. I mean, do you have any comments about may be the valuations and how competitive you might be in terms of any of these process. I'm not talking about actual numbers, but just in terms of maybe, if you can describe qualitatively, are you in the hunt here or they just way out of your valuation parameters, anything you can discuss on that front?

Chris Bayle

I guess, the only thing I can say regarding that is that, I believe we can be competitive on any asset package that we think is a good fit for us. I have no doubt there.

Paul Lechem

All right. But maybe just moving on a little bit on the M&A side, how wide-reaching is your casting? Are you sticking to most of the pipeline side of things, would you even look as far reaching as power assets? You're looking more over - still in Europe. Can you discuss any of the parameters that you might be putting around your search right now?

Chris Bayle

Yes. Sure. No, that’s a fair question. We do consider ourselves a disciplined acquired, we do have as part of our long-term strategic plan. A desire to both grow the existing core assets, our core areas of business that we’re in today, which is storage, NGL extraction and pipelines.

But we do consider our mandate broader than that, it largely encompassing all energy infrastructure assets that we think are accretive, and would add to the overall quality of our business. Specifically, talking about - I guess, geographies in general, we are primarily focused on things in North America and Western Europe, so we’re not casting our net - it’s not a worldwide net by any means. But broadly speaking, we would consider anything that’s in call it a physically, politically and regulatory stable country.

Paul Lechem

Okay. Last question on the NGL business. Frac-spreads have come off a little bit since quarter end, any updated thoughts on your hedging strategy in that segment?

Jeremy Roberge

Well, hi Paul. It’s Jeremy. We certainly are looking at frac-spreads all the time, now as far as a forward curve goes for 2016 around $0.30 and 2017 around just over $0.32. And so we think those levels are not a place, where we look to hedge.

We think that right now, we just go to an open position, so we’re not looking at locking and anything at these sort of levels.

Paul Lechem

Okay. Thanks, Jeremy. Thanks, Chris.

Operator

Thank you. The next question is from Rob Hope from Scotia Bank. Please go ahead, your line is open.

Rob Hope

Yes. Thank you, and good afternoon, everyone. May be just a follow up on one of Paul's question. Just in terms of an asset that would be a good fit for Inter Pipeline, just to clarify on that, so is that anything that would be accretive and in the energy infrastructure bucket or would you look to leverage some sort of operational synergies from those assets, just given your other existing assets?

Chris Bayle

Of course, if there is an operating synergy that’s a huge bonus. So that would clearly factor significantly into a decision to acquirer business. But we don’t - we doesn’t have exclusively be an operating synergy for us to feel comfortable transacting. I’d point to some of our acquisitions in Europe for example how, and Sweden, we - there is no clear operating synergy. Because we didn’t have any operating assets in Sweden, but commercially, there were great synergies between that business and Denmark as an example.

So we look at deals like most acquirers from really a multifaceted approach.

Rob Hope

All right, that's helpful. And then switching gears on Q2 call, some of the oil sands operators have spoken a bit more favorably upon expansions of some in situ projects. Just want to get a sense of your conversations with those producers has picked up and become more favorable over the last couple months in terms of new volumes for your system?

Chris Bayle

I would say that the tone is certainly improved over the last few months. We’re nowhere near the days of 2, 3 years in terms of the shared volume of conversations we’ve having. But tone is improved, I think producers are getting a bit more comfortable, there is number of producers below lot of cash on the balance sheet.

The amount of opportunities out there is still extremely limited. But it is encouraging.

Rob Hope

All right. That’s helpful. Thank you.

Operator

Thank you. The next question is from Linda Ezergailis from TD Securities. Please go ahead.

Linda Ezergailis

Thank you. Just wanted to get an update on some of your cost control initiatives. Earlier this year, you mentioned that you were looking for further opportunities to lower your cost structure, whether it be to Inter Pipeline shareholder benefits or your customers. And I'm just wondering if you can give us at least an updated sense on timing in which you might realize those benefits and what the nature of them might be and magnitude ideally?

Brent Heagy

Sure. Linda, this is Brent, and I can respond to that question. Actually, I think you’re starting to see to our financial results even currently right now some of the impact of those initiatives. Particularly, if you look in our NGL extraction business segment, we’ve actually been able to bring down some of our controllable cost.

Obviously, some of the non-controllable cost, such as power and fuel have come down, but we’re certainly seeing the impact of these initiatives, particularly in the NGL segment.

And we continue certainly from an operations point of view, and also from G&A point of view. And our G&A cost of actually, if you exclude really moving into the new office space this year and sort of this one-time non-cash charge that we had for the onerous lease. Our G&A cost have been relatively stable.

And I would say also to on the operation side and our other business segments, quite an effort and especially in this environment to make sure that we’re really being prudent about cost and where that does flow through those charges to our customers. We’re really putting a big emphasis on that. And I think we’ve been quite successful at it through this year.

Linda Ezergailis

But there’s maybe a bit more to go?

Brent Heagy

Yes. I think maybe, there is a bit. We’re continuing to emphasize cost discipline in the organization, and we still think that there is some more room that we can find some savings.

Linda Ezergailis

Great. Okay. And just as a follow-up question, in terms of your capital allocation decision making process, how do you balance kind of a few factors related to growing proportion of stable cash flows may be allowing for a higher payout ratio for dividends, may be even instead buying back shares versus retaining capital to keep your powder dry for future investments knowing that right now at least you too have access to the capital markets, can you just walk through how you assess that, I guess, these days and periodically?

Brent Heagy

Well, I think Linda, generally speaking, our call it sustaining and growth capitals for the year actually matches up well with our total FFO produced in our business. So we’re essentially soft funding all of our capital with the available FFO over dividends.

So the really - to the extent, looking into the future, we think that’s kind of going to continue, so at least short to medium-term. So really wouldn’t be any need to consider share buybacks.

And ultimately, I think as we come out of this current commodity cycle, there will be ample growth opportunities for Inter Pipeline and share buybacks just will never be on the table.

Linda Ezergailis

Okay, that's helpful. And may be just a final big picture question. I realize you've been opportunistic quite successfully in the past, including your foray into the oil sands initially. But how might you think of - if you're unconstrained by opportunities, what might be an ideal business mix long-term, either in terms of asset type or geographies or contract mix with some sort of, I guess, nod or consideration also for risk in the business including foreign exchange or commodity exposure, how you think about limits to that over the long-term?

Brent Heagy

I think we view our long-term business as call it quite flexible. We there is kind of few in our business. One is, we very much enjoy our large cost of service component to our cash flow. And we intend to retain that call it strong basis in our business.

And secondly, certainly like fee-based cash flow in our business. Now we said many, many times over the last - I can’t tell you how long, but we’re not anti-commodity exposure in our business, we just enjoy tremendous growth in our cost of service and fee-based business over the past number of years here which is proportionately strong the commodity exposure on the business.

And when we look at it, we see an opportunity to maybe introduce on a call it on a sensible basis, some additional commodity exposure, but still keeping it consistent with where we’ve been let’s say 5, 6, 7 years ago.

And from a geographic perspective, we’ve always signaled for quite a while that we really like our bulk liquid storage business, we think it would be well worth to grow it. But we kind of get a soft target of maybe 20% of consolidated EBITDA would be the right size for that business. And that means we can double that over the next number of years, before we hit that target.

Other than that, let’s come into broad parameters that we look at our business under.

Linda Ezergailis

Okay. And in terms of asset type, there's no kind of ideal mix either from a cyclicality perspective or anything like that in terms of natural gas, crude oil, et cetera?

Brent Heagy

No. We think all types of energy infrastructure could fit well within our business over time. Keeping in mind, again, I know I have repeated this quite often is, we are very focused on franchises. Not interested in having a variety of small scale investments that gives us competitive advantage.

But to the extent, we can see making a sizable investment in the new area of energy infrastructure, because it’s a franchise to go from. That we would consider on a fair way.

Linda Ezergailis

Right. Thank you.

Operator

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

Robert Kwan

Afternoon. May be just continuing on the M&A theme. Chris, you've mentioned the term accretive a couple of times here. Can you just talk about what's important to you as you think about - I assume it's a cash flow focus, how important is immediate accretion, how much important is accretion to say your plan three to five years out?

And then the third being does it factor into your analysis, what the market may be looking at from a valuation multiple, i.e., one in acquisition might get to where your stock trades and therefore you could get cash flow accretion but value dilution?

Chris Bayle

When I talk accretion, I’m talking FFO per share accretion. That’s we think the open test for business like ours. And the current fact, there is nowhere to hide. You should be doing deals with ultimately increased cash flow per share.

Now does it have to be accretive in the first month, two months, six months? Not, necessarily. We certainly think that is notable goal, and the deals we’ve done in the past and sit in that those test.

We’re not slavish to one particular metric, we have to look at deals, deals are generally very complex and you have to look at for a variety of perspectives to get comfortable, whether in order to make sense for our shareholders and the business at large.

What was the second part of your question?

Robert Kwan

Just in terms of - you have obviously talked about the metrics around cash flow. Just do you think about the valuation multiple, and the type of business you're acquiring and what that might do and what the market might do to the valuation multiple? Does that factor into your analysis?

Chris Bayle

Absolutely. There is a number of energy related business that we could acquire accretively, but saw multiples far lower than ours. That’s all part of being disciplined and then Robert, as we need to look at the quality of the businesses that we’re - I guess merging into our own, and be very comfortable as a management team. And our Board of Director needs to be comfortable, but the overall acquisition and business mix sense long-term.

So it’s not just a multiple gain by any means.

Robert Kwan

And just, I guess, when you say long-term does that kind of mean like in the sense of - are you accepting of where the market may be valuing assets today, or do you feel that by acquiring, you can kind of show what you can do with the business over time, or you might be looking at longer-term valuations for that similar type of asset?

Chris Bayle

Yes. That’s certainly possible. Businesses like ours, they’re going to be around for 40, 50 years. So I think it’s management must look at deals from a long-term perspective. Ultimately, how we can make money from over a long period of time, not just the next six months. That’s in my mind, how you build a very successful long-term business.

Robert Kwan

Fair enough. If you just look at, say, maybe the deals, I guess potential deals that you would have looked at over the past year, are you able to quantify, roughly speaking, how many you might have looked at, how many you didn't get pass the first round, and may be how many you got to the final bidding stage?

Chris Bayle

We look at a lot of deals, Robert. Particularly, in bulk liquid storage, there is a tremendous amount of deal flow. Just in over six month period, we can look at 10 deals in Europe. And we probably, literally looked at over 200, since we’ve been in that sector. And we’ve done just small

We consider ourselves extremely choosy, whether it’s overseas or back home.

And I think - our track record that up, we tend up - we hopefully buy businesses that really add to the business long-term. And that’s our intention in the future.

Robert Kwan

Okay, that's great. May be if I can just finish with a quick question. On the conventional side of things, there was a mention in the MD&A around heavy oil reactivation. I'm just wondering, was that a previously shut-in production or is that something that was being trucked out and is now flowing, and I guess just as you think about third quarter, are those volumes still flowing on the system?

Chris Bayle

I don’t think I’m in a position honestly to answer that. The answer is that, that’s probably get back to you

Robert Kwan

Okay. That’s fine. Thank you.

Operator

Thank you. Your next question is from David Galison from Canaccord Genuity. Please go ahead, your line is open.

David Galison

Good evening, everyone. So I guess, I'd touch on the M&A front and sort of expand on Robert's. Just - you already talked about valuation. But I guess how are the whole counterparty aspects are sitting into your valuation process as well?

Chris Bayle

Do you need from kind of a credit risk point of view?

David Galison

Yes. I mean, if you're buying assets, is there a minimum level that you're looking at if the customers support those assets?

Chris Bayle

Well, it’s definitely that certainly is a factor we consider very closely. We look at - when we’re looking at buying up an energy infrastructure business asset or whatever. We have to look to where we’re getting the revenues and cash flows from what the credit of those parties are, how well contracted it is, and get comfortable that the overall - it sounds like kind of a fluffy statement, but the rest reward balance has to be there.

And that really plays into whether we’re interested in that asset, and what we’re going to pay for?

David Galison

Okay. And then just touching on the European storage business, I mean obviously it's a growth focus for you. Has any of the issues in the Europe and the UK had an impact and your strategy over there?

Chris Bayle

That’s a fair question. I would say, no, the Brexit in particular is causing lot of consternation, certainly in Europe and as well as around the world.

For us, our - doesn’t really impact just our UK base business, which is above say roughly a third of the consolidated EBITDA from bulk liquid storage business. And to date, the only impact we’ve seen is simply on the pound Canadian dollar exchange rate. And I think it’s softened about 10%.

It’s just too soon to tell what the long-term impacts are going to be? First off, the Brits haven’t even triggered their exit, yet, it’s likely not going to happen for quite some time. And we don’t really anticipate today, there will be a material impact on the day-to-day business that we do in the UK and to materially affect our approach to acquisitions in the area.

David Galison

That’s all I had. Thank you very much.

Operator

Thank you. The next question is from Steven Paget from FirstEnergy Capital. Please go ahead, your line is open.

Steven Paget

Thank you. Inter Pipeline appears to be making use of its European real estate, adding tanks when and where it makes sense. Would IPL have opportunities to add tanks or terminals on its lands in Hardisty or Edmonton?

Chris Bayle

We’ve been looking for ways to do that for almost as long as I worked at Inter Pipeline, which is fairly long period of time. We've never found a way to build a sizable terminal yet, and get appropriate return we felt. There is a lot of established players in those areas, as everybody knows.

And it’s difficult to compete with the Greenfield terminal against established players. It’s not impossible, but difficult. So we’re still looking for that opening to break into the market, because long-term we think that’s a great place for company like Inter Pipeline to be given the sheer amount of [indiscernible] that we move in and out of those two markets.

Steven Paget

Thanks, Chris. Your NGL infrastructure counterparty, Plains Midstream, just closed its purchase of Spectra's Empress business. Now, could Plains purchase of Spectra which includes NGL extraction as well as sales pipe, did that open up opportunities for IPL to do more business with Plains?

Chris Bayle

I don’t think so. Their acquisitions of Spectra doesn’t really have any direct impact on our day-to-day business in our NGL extraction. We already do a significant amount of a business with Plains to date. Ultimately, we view it as kind of net positive that Plains now has that extra additional extraction plan in Empress.

Steven Paget

Thank you. Those are my questions.

Operator

Thank you. The next question is from Ashok Dutta from Platts. Please go ahead, your line is open.

Ashok Dutta

Thank you. Hi, good afternoon. Just wanted to check on two things. There's additional capacity on the Mid-Saskatchewan pipeline. How is that coming along in terms of getting additional shippers?

Chris Bayle

Definitely, we’ve seen the impact of low commodity prices on the call it the pace of the take out for the incremental capacity. So growth certainly had moderated since call it the mid-2014, but overall, we are I’d say extremely pleased at how well Mid-Saskatchewan pipeline volumes has held up. And the expansion that we undertook has still been an attractive investment for us even today.

And we have high hopes for in the future once commodity prices kind of return more towards historical norms.

Ashok Dutta

Okay. And the second one is the diluent line for JACOS. Are you guys looking to complete that by the third quarter, given that there is uncertainty about the Hangingstone project?

Chris Bayle

There is no uncertainty in our end. Actually, we actually finished construction of that connection in Q1 I believe, and it just entered commercial service in jet in July.

So that project is unfolding commercially as expected.

Ashok Dutta

Okay. Alright. Thanks. That’s all that I had.

Operator

Thank you. There are no further questions registered at this time from the telephone lines.

Jeremy Roberge

Okay. Thank you for participating on our conference call today. Please note our third quarter financial results will be issued in the afternoon of November, the 3, 2016. And our conference call scheduled to be held on the morning of November the 4, and additional details on the conference call will be provided on our website. Thank you very much

Operator

Thank you. The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.

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