USA Compression Partners LP (NYSE:USAC) Q2 2016 Earnings Conference Call August 4, 2016 ET
Greg Holloway - VP, General Counsel & Secretary
Eric Long - CEO
Matt Liuzzi - CFO
Andrew Burd - J. P. Morgan
John Woodiel - Raymond James
Hilary Cauley - Ladenburg Thalmann
Good day, everyone, and welcome to the USA Compression Partners second quarter earnings conference call. [Operator Instructions] Today's conference is being recorded. I'll now be standing by should you need any assistance. At this time, I'd like to turn the conference over to Mr. Greg Holloway, Vice President, General Counsel and Secretary. Please go ahead, sir.
Thank you, Roxanna. Good morning, everybody, and thanks for joining us. As you know, this morning we released our financial results for the quarter ended June 30, 2016. You can find our earnings release as well as recording of this conference in the investor relations section of our website at usacompression.com. The recording will be available through August 15, 2016.
During this call, our management will discuss certain non-GAAP measures. You will find definitions and reconciliations of these non-GAAP measures to the most comparable GAAP measures in the earnings release.
As a reminder, our conference call will include certain forward-looking statements. These statements include projections and expectations of our performance and represent our current beliefs. Actual results may differ materially. Please review the statements of risk included in this morning's release and in our latest filings with the SEC. Please note that information provided on this call speaks only to management's views of today, August 4, and may no longer be accurate at the time of a replay.
I'll now turn the call over to Eric Long, President and Chief Executive Officer of USA Compression.
Thank you, Greg. Good morning, everyone, and thanks for joining our call. Also with me is Matt Liuzzi, our CFO. This morning USA Compression released our second quarter 2016 financial and operational results, and I'm pleased to report that our team, led by our operations group, continues to execute and navigate USA Compression through what has been a challenging market. We believe these results demonstrate the continued relative stability of our compression services business model.
While the second quarter was impacted by moderate softness in utilization as well as average pricing, given our continued focus on operational excellence, we were still able to generate strong gross margins of over 70%, which resulted in adjusted EBITDA of 37.1 million and distributable cash flow or DCF of 30.5 million for the quarter. Our strong DCF generation resulted in all-in coverage of 1.03 times on a flat distribution per unit of $0.525. Based on our first half results, strengthening demand signals from our customers, and our cautiously optimistic view on the business for the remainder of the year, we have updated our guidance ranges for both full year 2016, adjusted EBITDA, and DCF. Matt will provide more detail on the revised outlook. As in the past, we will plan to continue to provide updates to our guidance throughout the year, both financially and operationally, as we have more clarity in the trends driving our business.
I'd like to briefly remind everyone where we have been and what has occurred through this energy downturn, which has been going on now for almost two years. Crude prices have fallen over 70% from the recent cycle high of over $105 a barrel in June of 2014 to a low below $30 in February this year. Since then, prices have rallied back about 50% to settle in the $40 a barrel range currently. Gas has seen a similar fall, over 70% from February 2014 highs to below $2.00 for much of the first half of 2016. Gas prices have also rebounded, up over 50%, and are hovering around $2.75 per Mcf currently.
Also during this time, and in response to these commodity price changes, the rig count plunged almost 80% to just over 400 rigs, with gas rigs bottoming at just 82 rigs. This volatility and the resulting uncertainty has led to a dramatic decline in new drilling activity levels, and even existing oil and gas production in many areas have been challenged, giving fallen commodity prices.
Now let's consider how USA Compression has fared against that market backdrop and also recount the steps we have taken to mitigate the impact of the volatility in the overall market by maintaining our utilization, pricing, margins, and cash flow as best we can. We believe our performance so far this year supports our thesis that a business comprised of large, infrastructure-oriented compression equipment is a stable, defensive business during market downturns, given its demand-driven, critical nature.
As we came into 2015, we anticipated the market softness. And just like we have done in past cycle, we moved to adjust our future capital spending and commitments for additional compression equipment.
Since the end of 2015, a large portion of our expansion capital has focused on reconfigurations of existing units rather than fleet additions. Looking back to the beginning of 2014, our utilization has fallen from a peak of roughly 95% to 86% in the most recent quarter. And overall pricing is down slightly, just 3% in the most recent quarter relative to peak.
To counter the top-line softness, we have been laser focused on wringing out operational efficiencies and realizing OpEx and SG&A savings, as evidenced and demonstrated by the increase in our gross margin percentage, up from mid 60% range to now pushing 70%; and our EBITDA margin percentage, up from a low of 50% range to high in the upper 50s range over that same period.
Additionally, we have realized some efficiencies related to our maintenance capital spend, which has been yet another lever at our disposal to help drive DCF. Finally, we have maintained our distributions to our unit holders and kept sufficient coverage on an all in basis all while keeping our leverage in check and well within our covenant levels.
So with the backdrop of one of the steepest drops in the energy business in decades, our average utilization dropped from peak to trough by less than 10%. Pricing is down just 3%. But most importantly, given our ability to wring out costs and drive operational efficiencies, our adjusted EBITDA and DCF have been largely stable.
Our operational team has done a fantastic job in managing our business through this downturn. And we believe this performance is a testament to USA Compression's expertise, dedication to customer service, and our strategic focus on large, infrastructure oriented compression applications.
I'd like to expand a bit on recent trends in utilization as well as pricing. As I mentioned, utilization was a bit soft in the most recent quarter, declining from roughly 89% on average in Q1 to 86% on average in Q2. As has been the story for the last few quarters, this decline was mostly driven by our customers' continued exercise in optimizing their compression needs, typically in areas with flattening to declining volumes, such as legacy dry gas areas in the Mid-Continent, as well as a drop in our active small-horsepower fleet, which is typically used in crude oil related gas lift applications.
As we have discussed many times, our business overall is characterized by stability due to the critical nature of our infrastructure oriented assets. And while we have seen a decline in utilization during this downturn, it is important to consider our performance and relative stability against other businesses more tied to the drilling cycle, where we have seen utilization and, correspondingly, revenues down significantly sometimes 50% or even more.
Additionally, whereas some of our competitors in the compression space have chased lower margin deals to juice their utilization in the short-term, we have made a conscious effort not to enter into marginal or unattractive deals, which we believe are value destructive over the long-term, and find it more prudent to hold onto certain idle inventory for the eventual rebound in the market. As I have touched on, we have also experienced a slight decrease in pricing during this downturn. The overall decrease is driven by a drop in average pricing on the small horsepower portion of our fleet, which is mostly used in gas lift applications.
As a reminder, this portion accounts for only about 15% of our fleet and typically earns much higher revenue dollars per horsepower than large equipment. This decrease was partially offset by a slight increase in pricing on the large horsepower midstream infrastructure equipment. Through the downturn over the last 18 to 24 months, we have continued to see stability in rates on the large midstream equipment, which is a result of both the nature of these assets, which are critical to the gathering and processing activities of our customers, as well as the longer-term nature of the contracts.
In general, due to the high barriers to exit as well as the low cost of compression to our customers when compared to the overall natural gas value chain, typically just a few pennies or more per Mcf we find that our large horsepower compression assets continue to be very sticky on both pricing and utilization, as well as staying in the field beyond the primary contract term. That was where we have been and how we got to where we are now. I will now turn to what we are presently seeing in the compression market and how we think utilization and pricing may trend for the remainder of the year and on into 2017.
On the large horsepower infrastructure portion of our business, which constitutes roughly 85% of our fleet, we are cautiously optimistic that we have seen the worst and are bouncing along the bottom in terms of a trough in utilization. And we are hopeful to turn the corner as we continue through 2016 and into 2017. Our quote activity has begun to improve, both in number as well as quality of jobs. As you may expect, many proposal requests over the last year or more have been price checks. But we are now seeing quotes for new projects related to continued midstream infrastructure buildout. In response to gas prices approaching $3 on a spot basis and over $3 on the 2017 strip, as well as the macro demand factors we hit on every quarter and in our investor presentations, we are hopeful that many of these large infrastructure projects that have been delayed will now be moving forward full steam ahead.
In fact, we have multiple strong indications from upstream and midstream customers for large project installations, mostly in the Marcellus Shale and the Permian Delaware Basins that we believe will move forward later this year and into 2017, including some already contracted projects. The types of projects you're seeing are our bread-and-butter: multiple large horsepower unit installations under long-term contracts with blue chip customers.
Importantly, given our previously mentioned deliberate decision not to chase low margin deals for the sake of juicing utilization, we believe that as the market rebounds we will have a supply of in-demand large horsepower equipment on hand, readily deployable to meet the demand from our customer base without needing to make significant capital expenditures. This fact, coupled with an anticipated short supply of large horsepower equipment in the future based on conversations we've had with our major component suppliers and fabricators, results in our optimism surrounding the longer term picture for compression services demand.
Finally, we think that continued capital constraints and/or capital allocation decisions, as well as issues related to labor, safety, and reliability by upstream and midstream operators alike, will result in a continued migration to increased outsourcing of compression needs. We are cautiously optimistic that the pendulum beginning to swing in the right direction, again, based both on the indications from customers related to incremental compression needs as well as our anticipated slowdown in equipment returns in the back of this year.
That said, it may still take some time to redeploy our in-stock large horsepower equipment, given the lag time between increased activity levels and compression equipment installations. We believe that service rates on large horsepower equipment will continue to be stable, as they have been historically, based on all of the factors we have already touched on.
Furthermore, given the possible scarcity of large horsepower equipment as the market rebounds, we are hopeful there could be opportunities to push through more substantial increases in the eventual up cycle. The smaller horsepower portion of our fleet likely continues to be under some pricing pressure, given the lower barriers to exit for our customers and the relative oversupply of that type of equipment in the market. But we are optimistic that our level of service and reliability will continue to be a differentiating factor to our customers. As crude oil producers have more conviction related to stability in future commodity prices and overall supply/demand fundamentals, we believe we are well positioned to capitalize as the market turns around.
Overall, we believe the infrastructure-oriented, demand-driven nature of our business model is built for stability in markets like these. And we will continue to proactively manage the business to maintain stability in margins and cash flows, as we have done for the past 6 to 8 quarters.
Turning to the macro picture, we continue to be bullish on the long term domestic natural gas supply. Importantly, we believe we are in the right spots where activity is expected to return first: the Northeast, principally the Marcellus; West Texas, the Permian and Delaware Basins; and the SCOOP/STACK plays in Oklahoma. Additionally, we now have a presence in the Rockies and are well positioned to capitalize on increasing activity in the DJ Basin and the Niobrara in the future.
While there have been some slight decrease in overall natural gas production domestically, even as demand for natural gases continue to rise, the EIA expects that higher gas prices will contribute to a reversal of the production declines seen during the first half of 2016
An example of activity levels returning: Southwestern Energy, who had zero rigs running companywide for the first half of 2016, recently reinitiated drilling with its first rig in the Northeast Marcellus and announced its intent to add three more rigs in the Marcellus by the end of Q3, increasing its total capital spend in the area to roughly 350 million in the second half versus only 44 million in the first half. We continue to believe that both the gas supply and gas demand pictures appear to be robust in future years as well.
On the oily side, as we have mentioned, we see continued activity in West Texas, particularly in the Delaware Basin. Given the stacked horizon potential in these areas, E&P operators are still able to earn attractive returns on incremental drilling and new production. We expect the same big four demand factors we touch on every quarter will continue to drive natural gas demand growth for the foreseeable future. We have seen positive developments related to the industrial demand, driven by new petrochemical facilities, such as Shell's new major ethylene and polyethylene project near Pittsburgh; as well as pipeline exports to Mexico, which the EIA reports averaged 3.5 Bcf per day year to date, which corresponds to an increase of about 90% over the five-year average. This expected increase in natural gas demand will drive increased infrastructure investment throughout the U.S. of which compression will continue to be an important part.
As we mentioned last quarter, the INGAA now estimates a need of 23 billion to 30 billion of capital for compression for gas gathering lines through 2035, which corresponds to well over $1 billion of projected compression investment annually. We also see positive trends related to storage, with injections down materially year-over-year and recent results coming in below research consensus. This is due in no small part to the hot summer we are having as well as switching from coal to natural gas due to EPA-mandated environmental requirements. Natural gas is and will continue to become more and more important over the coming years, and compression remains a critical and essential part of the overall natural gas infrastructure investment.
I'll wrap up by recapping our strategy through this energy cycle downturn. We have aggressively hit the brakes on our expansion capital spending, down approximately 80% year-over-year, and have lived within our existing capital structure. Having kept leverage below 5 times, we have continued to focus on maintaining high fleet utilization by providing superior levels of service to our customers. And finally, we have wrung out operational, SG&A, and maintenance cost savings throughout the organization, resulting in the highest gross margins and EBITDA margins of our public peers. Quarter-after-quarter through this down cycle, we continue to prove out the stability of our business model, which focuses on critical infrastructure and must-run compression equipment while also remaining flexible to efficiently respond to changing market conditions. We remain bullish on the outlook for compression over the long-term, given the attractive macro fundamentals for growing natural gas demand and continued infrastructure buildout. We believe our business model, which focuses on large, infrastructure oriented equipment and our strategy through this downturn will put us in a position to capitalize on incremental demand as the market rebounds.
I will now turn it over to Matt to walk through some of the financial highlights of the quarter and our updated guidance ranges. Matt?
Thanks, Eric, and good morning, everyone. As Eric mentioned, USA Compression reported another solid quarter of results against a tough market backdrop. For the second quarter of 2016, USA Compression reported revenue of $63.5 million, adjusted EBITDA of $37.1 million, and DCF of $30.5 million.
In July we announced a cash distribution to our unitholders of $0.525 per LP unit, which results in a DCF coverage ratio for the quarter of 1.03 times. Taking into account the impact of the DRIP program, our cash coverage ratio for the quarter was 1.33 times. With the support of our largest unitholders, we continue to strike a balance between DRIP and cash paid distributions.
This quarter, Riverstone elected to reduce its DRIP participation by taking 50% of its distributions in cash, joining Argonaut Private Equity, who again has elected to go all cash pay. By methodically working our way towards less reliance on the DRIP program, we believe we can maintain critical financial flexibility in this market while advancing towards the ultimate goal of eliminating our need for the DRIP.
Our total fleet horsepower as of the end of Q2 was similar to where we ended Q1, adding only a few large horsepower units to the fleet. Our revenue-generating horsepower at period-end was down slightly relative to Q1 at 1.4 million horsepower. We continued to rein in our expansion capital spending, investing only $4 million in the quarter; and total expected expansion capital spend this year remains between $40 million and $50 million.
We continue to expect to take delivery of only 15,000 new horsepower in 2016, with the remaining 7,000 horsepower to come in the third quarter. And we currently have no further commitments to add additional new compression equipment beyond 2016.
As Eric mentioned, our strategy in this market is to work off the backlog of existing in-demand large horsepower units in our fleet as incremental compression demand arises before spending new capital on compression equipment. The remaining expansion capital for 2016 will be spent on certain compressor package components, equipment reconfigurations, IT infrastructure, trucks, and other items necessary to support the business.
Our average horsepower utilization for the second quarter was 86.1%, down roughly 2.5% in sequential quarters from 88.7%, and down from 90.5% in the second quarter of 2015. Utilization was down, mostly due to a decrease in both our active and on-contract pending fleet, as customers continue to optimize their compression needs. Pricing, as measured by average revenue per revenue generating horsepower per month, was down slightly to $15.52 from $15.72 in Q1 of 2015 and down from $15.83 year-over-year, mostly due to declines in pricing in our smaller horsepower equipment.
Turning to the financial performance for the second quarter, total revenue decreased 4% compared to the second quarter of 2015, primarily driven by a decrease in our contract operations revenues. Gross operating margin as a percentage of revenue was 70.6% in the second quarter, consistent with gross margins last year.
Adjusted EBITDA decreased approximately 4% to $37.1 million in the second quarter as compared to $38.6 million for the second quarter of 2015. DCF in the quarter was $30.5 million as compared to $31 million for the same period last year, a decrease of 1.6%.
Net income in the quarter was $3.3 million as compared to a $15.9 million loss for the second-quarter 2015. Net cash provided by operating activities of 36.5 million in the quarter increased slightly relative to 34 million in the same period last year. Operating income increased to 8.5 million as compared to an operating loss of 11.4 million for the second quarter of 2015. Maintenance capital totaled $1.6 million in the quarter. As Eric briefly discussed, we have worked this year to optimize our maintenance capital spending, which has resulted in significant savings so far this year.
We now expect approximately 10.5 million of maintenance capital in 2016. Cash interest expense net was 4.6 million for the quarter. Outstanding borrowings under our revolving credit facility as of June 30, 2016, were $735 million, resulting in a leverage ratio of 4.97 times at quarter end relative to our covenant level this quarter of 5.95 times. Additionally, as we indicated on our previous calls, as the year progressed and we gained more clarity around trends in our business drivers, we would be in a position to provide updated guidance. At this point in the year, we are updating our full year 2016 guidance to reflect the following ranges. Full year adjusted EBITDA of $140 million to $150 million, and DCF of $110 million to $120 million. As you will note, these updates reflect the tightening of both ranges as well as a slight increase in the DCF guidance, mostly driven by our previously mentioned maintenance capital optimization efforts.
Finally, we expect to file our Form 10-Q with the Securities and Exchange Commission as early as this afternoon. With that, we'll open the call up to questions.
[Operator Instructions] And we will take our first question from Andrew Burd with JPMorgan. Please go ahead.
Eric, I think you highlighted a few large product installations that you see in kind the future, and I think you also indicated that some of those you have under contract. Can you go into a little more detail there? Maybe quantify the horsepower amount and the timeline? And would those require incremental investment by USAC, or whether you have units in the lot that can be redeployed?
Andy, maybe a fair way to answer that is a fair number of these projects have been identified by various members of our customer group coming into the downturn, and some of these projects were frankly delayed. So I think we have a fair amount of visibility in the basins we've identified: the Permian, Delaware, and then the Marcellus, with some of our existing core customers. Some of the equipment we have in inventory, some of the equipment we are able to source from inventory that has been repatriated as units have come back, and we have seen that nominal decline in our utilization over the last 18 to 24 months. I think it is also fair to say that for the back half of this year, we really don't contemplate needing to go out and purchase any additional equipment over and above what we have already previously committed to.
Great. And then I think you had also discussed -- obviously Southwestern is a large customer of yours. That's been disclosed a lot in the past. Remind us if you serve them in their Marcellus footprint and what type of involvement you might have as they accelerate production, as you outlined?
Yes, we have dealings directly with Southwestern and various of their subsidiaries. And also, you may recall, Andy, that Southwestern up in the Marcellus monetized some of their gathering assets. And we worked with the successors in ownership to those assets as well. So to the extent Southwestern does pick up activity, with our dominant footprint that we have in Appalachia and some of the long-standing both contractual relationships and just commercial relationships with their service providers, we will be the beneficiary of some of their increased activity.
Great. And then final question on kind of what a recovery looks like, and kind of what we are going to see once we've hit bottom: how quickly do you think, once you've kind of identified a bottom and see some tightness, especially with larger units, how quickly do you think you can get pass price increases along to customers?
That's one of those difficult questions to answer. Some of it has to do with availability of equipment. You know, there's a fairly substantial lead time to source the large component inventory. Lead times right now on some of the bigger equipment are running roughly 20 weeks for the individual components. And more than likely when demand picks up and we start to enter into commitments to purchase equipment, as do some of our major competitors, those lead times will start to go out. So if you go back and look at past cycles, when you saw a bottom, you would start to see utilization trend upwards a few percentage points over the next few quarters. And then you'll start to see pricing become a little stickier at that point in time.
So I don't think it's something you're going to see immediately. But I do think this is something that as utilization of our collective fleets in the industry goes up, lead times for equipment gets longer, you'll start to see some upward pricing on pressure.
Excellent. Thanks for taking my questions.
And we will take our next question from John Woodiel, from Raymond James. Please go ahead.
First off, great cost execution in the quarter. What I was really hoping was that you could provide a little bit more color around pieces on the cost side. I assume that most of those are structural in nature, but if you could go into, kind of looking into how much of those are variable, and might be derived from fuel lubricant costs, and might increase a little bit as we move forward?
Sure, John, it's Matt. And I think, you know, we've talked about it in the past, but I think a little bit. We obviously don't get into the details of what makes up those costs. But I think when we think about it, even going back to the beginning of last year, when we sort of really kicked off kind of the cost savings initiatives companywide, we kind of guided people towards gross margins kind of in that upper 60% range.
So I think as we have kind of come through now, you know, a full six quarters of the implementation of this program, all those margins have stayed very consistent. So we think there's a good chunk of it that is very structural in nature. I mean, to your point, some of the fuel costs and whatnot, as commodity prices rise, we will see a little bit of a tick-up in that. But as we've looked at it, we think the margins, kind of in the range where they are now, in the high 60%s, we even ticked above 70% this quarter. We think that's very sustainable going forward.
All right, that's very helpful. And then you all touched on this a little bit earlier, but obviously you're going to try to use up the utilization gap that you have been your current equipment base first. But when you're thinking about building out your fleet going forward in 2017, are you going to be looking for kind of firm customer commitments and projects in place? Or will that be built mostly on spec, just given the time delay of that?
A fair way to answer that is when we look at peak to trough. And as we indicated, our utilization from peak to trough is approximately 9 percentage points or so. As we start to see utilization ticking back up 2, 3, 4, 5 percentage points, we'll start to have indications from our customers of what their future demand is going to look like. And if you think logically what we're seeing in the marketplace, a fair number of some of our longer-term, larger customers have announced that they have added additional rigs, SCOOP/STACK, Delaware, Permian. And we are starting to see some activity like that up in Appalachia as well.
These are folks who were able to lock can hedges last quarter or early this quarter at very attractive pricing, in the low to mid 50s on oil. And we have some guys that actually locked in some $3.50 gas. So with the drilling costs like they are, they are obviously very economic projects. So we've got folks who now have 18 to 24 months’ worth of developmental visibility. And when our sales team sits down with their technical teams and commercial teams, we get a pretty good indication of what their plans look like. Most of the time, we will not have firm contracts in place. This is a little bit like you want to go out and buy a new car, and you order a car, and you go to the car lot, and somebody's got one on the lot that meets 85% or 90% of your requirements. You tend to buy that car off the lot.
So I think our business works a lot the same way. There are points in time where we do actually get some contracts in advance of ordering equipment. Generally, we'll make a commitment and we'll stagger things on a quarterly basis. So we're not making years’ worth of financial commitments, but a few quarters at a time. And typically what we see by the time that equipment is ready to be built, we tend to have contracts in place, so that when we are paying for the equipment, many, many times it actually leaves the fabricator goes directly out to a job with a primary term contract of 2 to 5 years.
Right. So it seems like, for the most part, your business model hasn't really changed too much when thinking about CapEx. I appreciate the color, guys. Thank you.
And we will take our next question from Rich Verdi with Ladenburg Thalmann.
This is actually Hilary Cauley on for Rich. And most of my questions have been asked, so just a few quick ones. For Q2, I was wondering if you could tell us what the order of the strength for the months were there. Was April the weakest, with May and June getting stronger sequentially? Or variability there?
Excellent question, and I think a fair way to answer that is as the year has progressed, we have started to see tick-up in commodity pricing. The order book started to improve and has continued to improve from the beginning of the quarter toward the end of the quarter, and now even on forward into the third quarter. So we're starting to see strengthening demand rather than variability in demand or a tick down in demand. We're actually seeing improvement month over month for the last three or four months.
Okay, great. So you're expecting July to be even stronger than Q2 ended off?
I think we're off to a good start.
Okay, great. And then just kind of a high level question for you, if you guys see any kind of large left-field items out there that could be impacting you guys over the next 18 months or so?
No, Hilary; it's Matt. I don't think there's anything out there that we see. Again, I think our commentary pointed to the fact of customer, the general tone of customer conversations, and Eric just mentioned some of the order type stuff. So I think where we sit now, we hope to just kind of keep chugging along and get through this. I think a little bit of stability in commodity prices will help all of us out.
Okay, great. Thanks for taking my questions.
And it appears we have no questions at this time. I would like to turn the call back over to Eric for closing remarks.
Thank you, operator. The entire USA Compression team thanks everyone on the call today for your continued support of and interest in our Company. We continue to believe that we have a differentiated and superior business model to those of our various peers, public and private alike.
We continue to demonstrate our ability to maintain our margins and our distributions due to the stability that our demand driven focus on the larger horsepower infrastructure oriented compression business offers in comparison to other sectors of the energy business. As we have the past almost 2 decades, we will work to continue delivering exemplary levels of compression services to our customers. And we remain laser focused on our balance sheet, our leverage, optimizing cash flow, and maintaining appropriate levels of coverage. I look forward to our third quarter up the call sometime in early November. Thanks again.
This does conclude today's conference. You may disconnect at any time and have a wonderful day.
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: email@example.com. Thank you!