American Midstream Partners' (AMID) CEO Lynn Bourdon on Q2 2016 Results - Earnings Call Transcript

| About: American Midstream (AMID)

American Midstream Partners LP (NYSE:AMID)

Q2 2016 Earnings Conference Call

August 9, 2016 10:00 ET

Executives

Mark Buscovich - IR

Lynn Bourdon - Chairman, President & CEO

Eric Kalamaras - SVP & CFO

Matthew Rowland - COO

Analysts

Eric Genco - Citi

Richard Verdi - Ladenburg Thalmann

Jeff Birnbaum - Wunderlich

Operator

Good morning. My name is Amy and I will be your conference operator today. At this time I would like to welcome everyone to the American Midstream Partners' LP Q2 2016 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Mark Buscovich. You may begin.

Mark Buscovich

Thank you, Amy. Good morning and welcome to second quarter 2016 earnings call for American Midstream Partners. Our press release outlining second quarter results can be accessed on the Investor Relations page of our website at americanmidstream.com, along with our 10-Q which was filed yesterday with the SEC. A replay of this call will be archived on the company's website for a limited time.

Leading the call today are Lynn Bourdon, Chairman, President and Chief Executive Officer; Eric Kalamaras, Senior Vice President and Chief Financial Officer, and Matt Rowland, Senior Vice President and Chief Operating Officer, as well as other members of the management team. Lynn, Eric and Matt will discuss the results for the second quarter of 2016. Afterwards, we will open the call for your questions.

Please note the cautionary language regarding forward-looking statements contained in the press release. This same language applies to statements made in today's conference call. This call will contain time-sensitive information, as well as forward-looking statements which are only accurate as of today August 9, 2016.

American Midstream Partners expressly disclaims any obligation to update or amend the information contained in this conference call to reflect events or circumstances that may arise after today's date except as required by applicable law. For a complete list of the risks and uncertainties that may affect future performance, please refer to the company's periodic filings with the SEC.

With that, I'll now turn the call over to our Chief Executive Officer, Lynn Bourdon.

Lynn Bourdon

Thank you, Mark. We appreciate everyone joining us on the conference call this morning. Today we will discuss our second quarter results, provide an update on the strategic acquisitions we closed in the beginning of the quarter, discuss steps we've taken to further strengthen the partnership financially and provide an outline on our long-term growth objectives. Matt and Eric will provide details on our second quarter performance and operational updates, after which I will close the call and we will take questions.

This quarter, we continued to demonstrate strong operational performance through our financial - our record financial results for the quarter. These results were driven by our existing assets as well as our recently acquired Gulf of Mexico gathering and transportation assets. Our adjusted EBITDA for the quarter was $36.1 million, the highest in our history since our initial public offering in 2011.

Since we last talked, we have closed on several acquisitions, thereby expanding our Gulf Coast presence. Our operations team have worked diligently on these asset integrations as well as completed several projects to optimize our infrastructure for maximum efficiency and revenue generation. Additionally, we have focused on the financial strength of our balance sheet, for continued strategic growth to accomplish a long-term plan of creating an integrated asset footprint in each area we operate.

At the beginning of the quarter, we announced a significant expansion of our presence on the Gulf Coast, with the acquisition of ventures in several strategic offshore gas-gathering and transportation pipeline assets, interest in two natural gas liquid pipelines, and an incremental interest in Delta House. We are excited about the positive impact these acquisitions are having on our business, and they put us another step closer to reaching our goals in the area. We truly believe that these assets will be high-performing assets for a long time to come. And these assets are a part of the partnership strategy to acquire positions in leading basins and from there, tactically build out our asset base and service offerings to our customers.

And finally, the complementary nature of these assets - of these newly acquired assets are representative of our strategy to provide a complete spectrum of midstream services, from the well head to the end user markets. The partnership plans to continue to expand its global footprint both onshore and offshore to create an integrated suite of assets, while maintaining our focus on consistent organic and acquisitive growth in our Permian, east Texas, Bakken, and terminal positions.

To put the initial result to this strategy into perspective, our current combined offshore and related Gulf Coast assets, including our High Point system, now cover more than 10,000 square miles of active production in the Gulf and collectively transport a total of 1.6 billion cubic feet per day of natural gas, over 110,000 barrels per day of crude oil, and 45,000 barrels per day of NGLs. In addition to our gathering and transportation assets, we're also rapidly growing our fee-based terminal and storage business. Over the past 12 months, we have added 550,000 of incremental contracted towards storage, and now total over 2 million barrels of contracted capacity. With this latest growth, Harvey is now our single largest storage facility, with over 1.1 million barrels of storage capacity.

Now we'll cover some additional details about our growth plans for this location and the segment as well. Similar to a Gulf of Mexico position, we continue to seek acquisitions that will expand our service offerings along the entire value chain, with the objective of solidifying our position as a leading integrated midstream provider. We approach our transmission as well as our gathering of processing assets with a Lincoln lever philosophy. Our vision is to have assets that begin at the well head and continue on to the ultimate end user. A solid example is our position in the east Texas market with our Longview gathering, processing, fractionation, and liquid distribution system, combined with our marketing capabilities. To the extent possible, we will seek opportunities to duplicate this type of structure where we compete.

I also want to reiterate the strong support from our sponsors and the concurrence of the long-term focus on value creation and persistent growth from American Midstream. Our client has done this by continuing to invest incremental capital as well as through their support of the distribution policy, which is providing low-cost capital we can use for future growth. The decision to maintain our distribution $0.4125 per unit again this quarter is predicated on maintaining a solid balance sheet and achieving our leveraged target while transitioning the company so we can pay all of the preferred units in cash, starting in 2017, as well as move towards a point where we can begin increasing distributions.

We continue to have a confident view of our business for the remainder of the year and at this point, we are comfortable affirming previously stated EBITDA and distributable cash flow guidance for 2016. Eric will provide more detail around our guidance and results in a few minutes.

As we mentioned in last quarter's call, we are moving the accounting, finance, legal, and HR functions to Houston and will identify Houston as our new headquarters. Our commercial operations that were already in Houston will remain here as well. We have just about completed the transition and expect to close the Denver office at the end of the month. I want to thank all of our current and former Denver employees for the tremendous effort they put forth to train their replacements during a time of high personal stress and anxiety about their future. And it goes without saying, our new folks have matched their counterpart with the appropriate level of enthusiasm and dedication to learn their new roles in an exceedingly small amount of time.

And before I turn the call over, I want to take a moment to personally thank Dan Campbell for all that he has done for American Midstream. Dan has been a champion of the company and a huge part of our success. He was very helpful to me when I came on board, and I will miss having him here with us every day. I speak for the whole company, when we wish him well, as he finds new opportunities.

Before I turn the call over to Matt, I would also like to introduce Eric Kalamaras, our new Chief Financial Officer. We're very excited to have Eric join the team and become a large part of American Midstream's next chapter of success.

With that, I'll turn the call over to Matt for a review of our operations.

Matthew Rowland

Thank you, Lynn, and good morning, everyone. In addition to efforts to integrate our new Gulf of Mexico acquisitions, construction activity around our existing assets is significantly ramped up in the second quarter. We have also executed on multiple operating costs savings initiatives across the company which is positioned to maximize operating margins as market conditions continue to rebound. Specifically we have consolidated our field operations reporting structure in a way that allows us to more effectively share resources to promote consistent operations across all of our assets.

We've taken measures to eliminate or renegotiate agreements for rental compression, reduce the number of vehicles and equipment in the field, and initiate a supply chain analysis to achieve cost savings through utilization of common vendors. Finally, we have identified several areas where, by spending minimum capital dollars, we achieve significant cost savings. As a result of these efforts, we expect to realize approximately 2% savings in our 2016 budgeted OpEx expenditures with up to 20% in annual run rate savings.

In our terminal segment, we have seen a significant number of new tanks come on line, and we expect to continue the build out of our Harvey facility. We had 28 acres at Harvey that we are targeting for growth and have submitted the necessary requirements to construct approximately 1.3 million barrels of incremental capacity. Pending permit approval, we expect to begin construction by the end of the first quarter in 2017. We expect total costs for the tankage manifold to interconnects to be approximately $45 million to $50 million.

In addition, we are pleased with the volume of business coming across our new 55-foot draft dock capable of handling 750-foot vessels, which came into service last August. Lastly, we are in discussions to add a second deep draft dock to support the remaining terminal build out.

In our gathering and processing segment, we recently completed a project to replace inefficient compression and improve connectivity of our Lavaca gathering system, which has substantially reduced operating costs. At Longview, our rail terminal was fully operational, which will allow us to aggressively pursue piece stock for dedicated ethane/propane markets attached to Longview.

Pipeline construction is under way to connect our Bazor and Chatom plants, which will also reduce operating costs and improve overall plant recoveries. We expect this consolidation to be complete in the fourth quarter this year. In Bakken, we had added truck unloading capacity on our crude oil gathering system, which has increased overall throughput by 35%, and we are planning to add H2S removal facilities later this quarter, which will allow us to treat off-spec crude and further increase volume.

Our Permian position has strengthened significantly in the second quarter, with operations beginning at the Mesquite facility near Midland. Mesquite provides Permian producers a full-service option to enhance the value of their off-spec NGLs and overall condensates, with capacity to treat up to 8,000 barrels a day, delivered by truck or rail, and with pipeline activity for finished products. We also have multiple projects around the Yellow Rose plant in the Permian, which we expect to quickly more than triple plant throughput and provide an NGL pipeline outlet by year-end.

In our transmission segment, construction of the Midla and Natchez pipeline system is under way and is expected to be complete by year-end. Once complete, annual demand charges will ramp up for the next four years and add an incremental $8 million worth of revenue. We have added several new interconnects on the Alatenn system and have several more under way, which will increase the system's overall firm contract amendments by as much as 35%. On the Magnolia system, we added additional meter compression capacity, which allows for an additional 20,000 [indiscernible] a day throughput, which has been contracted on a firm basis for three years.

Lastly, on the High Point system, we recently filed an application with the FDRC with will allow us to refurbish an underutilized gas pipeline, and convert it to NGL transportation service. We are very excited about this project and hope to be able to announce more specifics very quickly.

Speaking to our integration efforts, in relation to our recent acquisitions, the Henry system, which we acquired from Chevron in April, was fully integrated on July 14 and is now being operated by American Midstream personnel. We are working diligently with our joint venture partners, BP and Enbridge, to transition operations of the Destin and Opiamas [ph] pipelines by year-end. This will allow us to fully realize commercial and operating synergies with existing Gulf Coast assets.

As you may be aware, on June 28, there was a fire at the Pascagoula processing plant, which is operated by Enterprise Products. The Pascagoula plant was processing all our offshore production on the Destin and Opiamas [ph] systems, including Delta House, but has remained offline since the incident occurred. In the wake of this event, we worked with our joint venture partners and other local pipeline operators to ensure that the vast majority of the production lines were quickly brought back online via alternate deliveries, including our own High Point system. Delta House has returned to full production.

Damage to the Pascagoula plant is still being assessed by Enterprise, but they have indicated the plant should restart sometime in the fourth quarter. Until the plant is brought online, we anticipate the alternate arrangements to continue with minimal financial impact to American Midstream. This is an example of the benefit of having integrated assets, as we had multiple options for product delivery and offload points. I would also like to note that we don't expect this incident to impact our previously discussed transition efforts. Throughput on our combined systems is stable at 1 Bcf, with an average throughput of 387 Mcf per day in our gathering and processing segment and an average throughput of 633 Mcf per day in our transmission segment.

In closing, we continue to evaluate numerous opportunities in all areas we operate to acquire assets at accretive multiples with focus on growth or expansion opportunities. Specifically in the Gulf Coast, we're looking at infrastructure assets that could be tied in, repurposed or redirected to meet the changing market dynamics. Particularly given the potential for continued volume growth as the major E&P companies continue their extensive offshore development projects.

I will now turn the call over to Eric to discuss our financial performance.

Eric Kalamaras

Thank you, Matt. And good morning, everyone. It's great to be part of American Midstream and in addition to joining such a great organization, I would also like to thank Dan and the whole management team for his ongoing support through the transition. I've had the pleasure of knowing Dan for nearly a decade, and I wish him continued success.

My comments today will focus on an overview of the second quarter financial results, including our balance sheet, capital expenditures, risk management activity, and reiteration of 2016 guidance. For the second quarter, the partnership reported gross margin of $32.3 million, nearly flat to the prior year period. The partnership reported second quarter EBITDA of $36.1 million, an increase of approximately 150% over last year. The growth in adjusted EBITDA is primarily a result of growth in fee-based cash flow from Delta House and other Gulf Coast assets.

As a reminder, we purchased our initial 12.9% interest in Delta House in September 2015 for $162 million. The Delta House transaction was part of our strategy to build an integrated offshore system.

Second quarter distributable cash flow also increased significantly, up 165% over the prior quarter to $25.4 million. We announced a second quarter distribution of $0.41 per quarter per unit, or $1.65 annually, which will be paid August 12. Our resulting distribution coverage will be approximately 1.9 times and we intend to utilize incremental cash flow to invest in organic growth projects and strengthen the balance sheet. At the current distribution rate, no incentive distribution right payments are made, which means we have effectively taken steps to lower our cost of capital.

Direct operating expense was $16.2 million for the quarter in 2016, compared to $14 million for the same period in 2015. Corporate expenses were $11.4 million, of which $3.8 million were nonrecurring due to our Denver to Houston transition. Recurring corporate expenses were $7.6 million versus $5.6 million last year. Its pro forma increase was primarily related to a larger asset base from our recent acquisitions. As of June 30, 2016, the partnership had $672 million outstanding under its senior secured revolving credit facility and at the end of the quarter, with leverage of about 4.2 times. This is down from 4.6 times at year-end.

For quarter end, capital expenditures totaled $22 million, including approximately $1 million for normalized maintenance capital. As it relates to risk management, we took advantage of declining rates in further strengthening the partnership's financial position, with execution of a $100 million interest rate swap, with fixed LIBOR rate of 1.3%, beginning January 2018. In total, we have $300 million in interest rate swaps at around 1.3%.

As it relates to commodity risk management activities, for the rest of 2016, we have hedged approximately 43% of expected NGL exposure and approximately 56% of expected crude oil expenditure. We have not hedged any ethane and could benefit from an uplift in prices that follow prolonged periods of a rejection.

Now realizing we already have a 90% fee-based cash flows, our commodity risk raises our EBITDA to less than 5% commodity exposure, which puts us at the top of our peer group.

Last quarter, we updated our 2016 guidance with adjusted EBITDA in the range of $125 million to $135 million and distributable cash flow in the range of $85 million to $95 million, which are increases of approximately 100% year-over-year. We feel quite comfortable with previously announced guidance and will likely be toward the higher end of these ranges to combine with better than expected returns of our recent acquisitions, volumes and pricing that are projected 2016 levels in execution of cost containment initiatives.

We are guiding at full year distribution coverage numbers greater than 1.5 times and leverage of approximately 4 times. In order to maintain balance sheet strength, we intend to pay distributions on all preferred equity, including the recently issues Series C units at the rate of 50% cash and 50% pay in kind for the remainder of 2016 and transition to paying all preferred equity with 100% cash in 2017. With this, we still expect healthy 2017 distribution coverage.

Now, in conclusion, with the recent Gulf Coast acquisitions and the steps we have taken to strengthen the partnership's financial position, we are well on track to deliver record 2016 financial results and long-term sustainable cash flow growth to our unit holders.

And now, I'll turn the call back over to Lynn.

Lynn Bourdon

Thank you, Eric. To summarize key themes from today's call, we are pleased with the performance of the partnership for the first half of the year, both operationally and financially. For the remainder of the year, our continued focus as a leadership team is to deliver on three key objectives: first, execute strategic and accretive organic growth projects and acquisitions; second, maintain financial stability; and three, generate long-term distributable cash flow growth.

With that in mind, we look to leverage our existing assets portfolio and strong customer base to seek strategic acquisitions and organic opportunities that will solidify us as an integrated provider in the areas we operate. Through this philosophy, we intend to invest significantly over the next several years to further diversify our midstream footprint and related cash flows.

In closing, we are excited about the near- and long-term prospects for American Midstream and we remain focused on executing our plan to deliver meaningful cash flow growth for our unit holders. I also want to thank our great team of employees, who delivered critical services for our customers day and night while operating safely and being good stewards of the environment and communities in which we live and work. Thank you for joining us today, and we will now open up the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Eric Genco of Citi. Your line is now open.

Eric Genco

Good morning, guys. I wanted to ask and follow up - I think I heard you say that there wasn't much of a financial impact in the quarter from the fire at Pascagoula but was there really any impact in the quarter and do you view, I guess, this sort of first quarter as normalized results for that acquisition at this point?

Matthew Rowland

What I would say is the events happened in late June, so we didn't really see much of an impact in June. We would anticipate there would be some impact in the third quarter which we haven't talked about, but overall, and I think what our intent in communicating is that, for the year, we don't expect to see much of an impact from the event.

Eric Genco

Okay. And then I also wanted to follow up on the Harvey terminal. I think it was mentioned at 1.3 million barrels of incremental capacity for $45 million to $50 million starting maybe in 1Q 2017. Can you talk about how long you expect to be spending on that and how long it would take to bring all that capacity up online?

Matthew Rowland

That's a great question, and part of that is a function - it's going to be a function of customer demand and how quickly they're looking for that. So we've kind of done, kind of from a pro forma, anywhere from two to three years, is probably what that looks like.

Eric Genco

Okay, thank you very much. I'll jump back in the queue.

Operator

[Operator Instructions] Your next question comes from the line of Richard Verdi of Ladenburg. Your line is open.

Richard Verdi

Hi, good morning. And thank you for taking my call, guys. I'm really under the weather and not feeling well, so I apologize if you've addressed this already. I'm struggling to think straight here and someone has both of my inquiries to my questions, and I'll jump back in queue. So the first question, when I look at the quarter it looks really good overall, with the shortfall versus our model coming from the investment unconsolidated. So that said, could you please give us some color on what the internal expectation is for the ramp there in Q3 and Q4? And the second part of my question is what is out there that American Midstream see that could cause a positive or negative impact on the exterior [ph] expectation for the line item? That said, I'm going to jump back out now. Thank you for the time and answer.

Matthew Rowland

Thank you, Richard. I hope you feel well here pretty quick. You know, I'm going to ask you a question in just a second about your first question. In response to the second question, we generally don't anticipate any type of surprise as we go through the third or fourth quarter, based on where we see things today. Our operations are actually continuing to improve, as we see, really, our commercial teams have been identifying a number of new opportunities, and Matt alluded to a lot of those.

Our terminals group is doing a fantastic job, Mike Souter [ph] and his team over there are just doing a superb job of taking care of our customers, and they've been able to show a significant growth on a pretty quick pace, so you know we're looking for rapper new opportunities out of that area and the gathering and processing side is really started to pick up, and his team are identifying things out in the Permian side that we expect will start to come online and that's what Matt was talking about, relative to yellow Rose and new volumes coming online out there, and Ryan in his team the gas side both offshore and onshore or finding new customers we've added a fair number of a new contracts any sort of work with the securing some new additional commitments on our Alabama assets up there, and that's what Matt was talking about when the we talked about the increase in the transmission sector.

So we're really looking for positive things as we finish the year as we see both recovery from some sectors is really just as a function of our folks getting out and finding new business and really driving forward the American midstream story with our customers. We you know we have anticipated that the crude oil markets and gas markets would be dismal, really for the whole year we don't expect any change to that, would love to have pre back up at 50 box or 60 box, but I don't think that we're counting on that, and in this kind of goes to what we get what we done from a hedging perspective that Eric referenced, where we tried to solidify the commodity exposure piece, we hedged up pretty much above into really where the market is and we like that position and yet we've left the I think peace open because we continue to expect to see some ethane recoveries moving forward the new export docs at thinker going to going to lead the charge there will also have new petrochemical plants come online for the next year and half or so, and that's going to continue to drive ethane recovery relatively gas.

So you know there may be a little bit of upside, as Eric said you know we all have a tremendous amount of exposure on that show it is not needle changing but it's it helps round out little dips that you might have an and other places. So I think we're really looking for us just to maintain continue to demonstrate our operational excellence across our organization, we did a fair amount of work in the second quarter around cost and cost management restructuring some things in the organization they already given us benefits mass organization has put some owned compression out in the field, and in exchange the cost structure in our performance out and in the Lavaca [ph] area, so we really like where we are.

And Richard, if you don't mind, go back help me out with the ramp up question, I wasn't sure exactly where you were asking the question about the ramp up in the third and fourth quarter?

Richard Verdi

Yes, I'm sorry I think I may not have been clear and like I said I'm struggling here. I appreciate your well wishes thank you. In that the line item for the investment from unconsolidated - so that was the one area where I was a little below and everything else looked really good, so I am just wondering if that was more of a function of Maybe we're a little bit too aggressive in the sense of a week's, because you didn't get a full quarter's positive intact from that, and then I know that there is some sort of ramp in Q3 and Q4 that lying, so I'm just you know with everything that happened in April on the inquisitive front I was just wondering if you can give us some sort of sense of what Q3 and Q4 might look like with a book it's you think will look similar to Q2, one that line or do you think there should be some sort of rapid you get a full quarter and maybe any sort of positive upside there as well as possible.

Matthew Rowland

Okay, Richard. thanks for clarifying that and it's a real good question I think one what you should expect we did not get a full quarter for some of the newly acquired assets, and that's where some of this bomb came from given the incident that Matt indicated we would probably see a little better of relaxation in the third quarter probably more of a pick-up that more than compensates that in the in the fourth quarter, or we may see in and what's hard is things are recovering if things are changing out here and it's a very dynamic situation, we really think that we could see where some of the recovery and in the third quarter.

so Matt given you a really clear answer but I think in the end what we're really comfortable with it is not a year-end basis factory guidance, we really feel comfortable with that and that's where we try to take all of that and is looking at how that blends together. Our operations team and Matt and his crew have done a phenomenal job with managing the situation around the past. Ryan and his coordination with our customers and other relative pipeline operations have really, really met to minimize the impact of this whole thing. So that's how we see this.

Richard Verdi

That's actually very good, that's actually very helpful. I appreciate that. Thank you. And also I wanted to say congrats on the reaffirmed guidance so I appreciate the time guys.

Operator

Your next question today comes from the line of Jeff Birnbaum of Wunderlich. Your line is open.

Jeff Birnbaum

So couple of questions for me; first, listen I want to wish Dan Campbell well, as well as since like you guys did. So I apologize if I missed it but was there an update that you gave on CapEx guidance for the year and if not, kind of where do you think that lands now given that you're well on your way towards $65 million to $70 million guidance and it's later than number of projects and potential new projects there in during the prepared remarks?

Lynn Bourdon

Jeff, that is a good question. I don't know that we really made that very clear so we appreciate you asking that question. We're still in that $60 million to $70 million range and so we haven't changed that guidance.

Jeff Birnbaum

Okay. So it sounds like a lot of - whether for Harvey or for some of the transmission items that were mentioned by Matt, that does more of 2017 cash outflow I suppose?

Lynn Bourdon

Yes, so the discussion that Matt had around the Harvey build out, we're not anticipating that we would begin any of that new construction until in 2017, we're still applying for permits and still working on that which we expect to get in the early fourth quarter timeframe. So that capital spend will be in 2017.

Jeff Birnbaum

Okay, great. And then I think you did mention some of the onetime costs from the Denver closing, if you wouldn't mind just sort of repeat that. And do you have a sense of some of the other - between some of the various streamlined cost and asset rationalizations that you've been looking at, kind of a total impact from all that?

Lynn Bourdon

I'll let Eric talk to the transition expansions but we really haven't identified or detailed out a lot by lighting around some of those things. I think we generally just talk about one a consolidated basis on that aspect.

Eric Kalamaras

So, this is Eric. We've referenced $3.8 million as the cost for the transition, so on a fully pro forma basis you'd look at something close to $7.7 million of corporate expenses. That's relative to last year which we've set as $5.6 million. And that delta, as I've mentioned in prepared remarks was really to function that with larger S&Ps [ph].

Jeff Birnbaum

Okay, perfect. That's all for me. Thanks guys.

Lynn Bourdon

Thanks, Jeff.

Operator

[Operator Instructions] There are no further questions at this time. I will now turn the call over to Lynn Bourdon for closing remarks.

Lynn Bourdon

Thanks, operator. I'd just want to thank everybody for joining us on the call today. We appreciate all of your questions and your interest and we look forward to speaking with you on the next quarter call. Thank you.

Operator

This concludes today's conference call. You may now disconnect.

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!