Blueknight Energy Partners, L.P.
Q3 2014 Earnings Call Transcript

Published: 7 Nov 2014

[Operator:]

Good afternoon, and welcome to the Blueknight Energy Partners' Third Quarter Investors Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brent Gooden, Media Relations. Please go ahead, sir.

[Brent Gooden:]

Thank you very much. Thank you, and good afternoon. It is my pleasure to welcome you to today's conference call, where we will discuss Blueknight's financial and operating results for the third quarter ended September 30, 2014. Alex Stallings, our Chief Financial Officer, would discuss the financial results for the 3 and 9 months ended September 30, 2014. Brian Melton, our Vice President of Business Development will be pitching in today for Mark Hurley, our CEO. Mark's wife -- Mark and his wife are currently in the delivery room, awaiting the arrival of their child as this call takes place. Mark regrets that he is unable to join this afternoon's call. After prepared comments, Brian and Alex will take your questions. In addition, we will conduct a special Q&A session next week once Mark returns to the office. We will distribute a special notice, and advise you of the date and time of the conference call with Mark. Before we begin, I would like to remind everyone that information on this call may contain certain forward-looking statements that are subject to risk and uncertainties that could cause actual results to differ materially from those anticipated, including uncertainties relating to Blueknight's future cash flows and operations, future market conditions, current and future governmental regulation and future taxation. Please refer to Blueknight's SEC filings for a description of these and other risks and uncertainties that could affect our actual results. Blueknight undertakes no obligation to update or revise any forward-looking statements contained in this call, whether as a result of new information, future events or otherwise. Blueknight Energy Partners L.P. is a publicly traded master limited partnership with operations in 21 states. We provide integrated terminalling, storage, gathering, and transportation services for companies engaged in the production, distribution and marketing of crude oil, asphalt and other petroleum products. We manage our operations through 4 operating segments

[Alex G. Stallings:]

Thanks, Brent. We reported $20.2 million of adjusted EBITDA for the third quarter of 2014, as compared to $26 million for the same period in 2013, a decrease of $5.8 million. Third quarter of 2013 included $6.9 million of revenue and adjusted EBITDA related to accumulated crude oil pipeline loss allowance sales as compared to $2.3 million for the third quarter of 2014, which is a decrease of $4.6 million as compared to the same period in 2013. Adjusted EBITDA for the first 9 months of 2014 was $48.4 million, as compared to $58.4 million for the 9 months ended September 30, 2013. The 9 months ended September 30, 2013, included $6.9 million of revenue and adjusted EBITDA related to accumulated crude oil pipeline loss allowance sales, as compared to $4.2 million for the same period in 2014, which is a decrease of $2.7 million as compared to the same period in 2013. BKEP's distributable cash flow for the 3 months ended September 30, 2014, was $15.9 million as compared to $17.4 million for the same period in 2013. In addition, distributable cash flow increased $5.1 million or 48% over the second quarter of 2014. Distributable cash flow for the 9 months ended September 30, 2014, was $36.7 million as compared to $37.9 million for the same period in 2013. The distribution coverage ratio, inclusive of preferred and common unit declared cash distributions, was 1.6x for the third quarter of 2014 and 1.3x for the 9 months ended September 30, 2014. Third quarter of 2014 net income totaled $11.3 million as compared to net income of $10.5 million for the third quarter of 2013. Net income for the 9 months ended September 30, 2014, totaled $18.8 million as compared to net income of $22.7 million for the 9 months ended September 30, 2013. The partnership previously announced the third quarter cash distribution of $0.1345 per common unit, which was a 1.5% increase over the previous quarter's distribution and a 9.8% increase over the third quarter of 2013, as well as a $0.17875 distribution for preferred unit, both of which will be paid on November 14, 2014. A few brief highlights for each segment. Our asphalt services, which is now our single-largest segment, reported steady results as compared to periods in the prior year. Operating margin, excluding depreciation and amortization, was $12.1 million for the third quarter of 2014 as compared to $12.3 million for the same quarter in 2013. Operating margin, excluding depreciation and amortization for the 9 months ended September 30, 2014, was $30 million as compared to $30.4 million for the same 9 months of 2013. Crude oil terminalling and storage. For the quarter ended September 30, 2014, we reported operating margin of $3.9 million, exclusive of depreciation and amortization, which is a decrease of $2.7 million for the quarter ended September 30, 2014, as compared to the same period in 2013. For the 9 months ended September 30, 2014, we reported operating margin of $14.8 million, exclusive of depreciation and amortization, which is a decrease of $6 million as compared to the same period in 2013. The reason for the decrease is due to the crude market conditions at Cushing, which has had a negative impact on overall rates. As of October 30, 2014, we had approximately 5 million barrels of crude oil storage under service contracts with remaining terms ranging from 2 months to 24 months. Crude oil pipeline segment reported operating margin of $5.5 million for the third quarter of 2014, exclusive of depreciation and amortization, which is a decrease of $1.8 million as compared to 2013. For the 9 months ended September 30, 2014, we reported operating margin of $7.8 million, exclusive of depreciation and amortization, which is a decrease of $1 million as compared to the same period in 2013. Our refinery turnaround and the timing and amount of crude pipeline loss allowance sales, which were partially offset by an insurance settlement, affected our overall margins in the pipeline segment. Crude oil trucking and producer field services. We reported operating margin of $1.1 million, exclusive of depreciation and amortization, which is a decrease of $1.2 million for the quarter ended September 30, 2014, as compared to the quarter ended September 30, 2013. For the 9 months ended September 30, 2014, we reported operating margin of $5.1 million, exclusive of depreciation and amortization, which is a decrease of $1.9 million as compared to the same period in 2013. Our trucking volumes remained consistent for the 3 and 9 months ended September 30, 2014 as compared to the similar periods in 2013. Increases in the number of pipeline connected barrels, timing of new production and the average distance barrels are hauled, impacted operating margins. General and administrative expenses. General and administrative decreased $0.3 million and $0.7 million for the 3 and 9 months ended September 30, 2014, as compared to similar periods in 2013. A couple of notes on some other items in our P&L. We had a gain on sale of assets of about $0.8 million for the 3 months ended September 30, 2014, compared to $0.6 million for the 3 months ended September 30, 2013. We had gains on sale of assets of $1.8 million for the 9 months ended September 30, 2014, which compared to $0.7 million for the 9 months ended September 30, 2013. Gains in 2014 are comprised of sales of surplus used property and equipment and $0.8 million recognized in relation to reimbursable capital projects. Gains in 2013 are comprised of sales of surplus used property, and a gain on the sale of a pipeline gathering system. Equity earnings and loss -- or equity earnings or loss in unconsolidated affiliate is attributable to our 30% investment or 30% ownership of Advantage Pipeline. Losses for 2013 as a result of expenses incurred during the construction phase of the Pecos River Pipeline. On September 17, commercial service started. September 17, 2013, commercial service started on Phase 1 of the system. This is consisting of the Highway 18 Station near Grand Falls, Texas, and 36 miles of pipeline connecting to the Long Horn pipeline in Crain, Texas. During the 3 and 9 months ended September 30, 2014, equity earnings of $0.4 million and $0.5 million were realized for the 3 and 9 months ended September 30, 2014, respectively, as compared to losses for both respective periods in 2013. Liquidity. On September 22, 2014, we issued and sold 9,775,000 common units for an offering price of $7.61, resulting in net proceeds of approximately $71.2 million. We intend to use those proceeds for general partnership purposes, including the repayment of a portion of our outstanding borrowings under our credit facility and partially funded the Knight Warrior Pipeline project. As a result of our offering and use of proceeds to reduce debt, our leverage ratio at September 30, 2014, decreased to 3.18x. As of October 30, we had approximately unused commitments of $187.3 million under our revolving credit facilities, which is subject to financial covenant limits. From a capital investment perspective, expansion capital for the first 9 months of 2014 totaled $20 million as compared to $43.4 million in the third quarter of 2013 or the same period of time in 2013. That $43.4 million was inclusive of our $20 million original investment in the Advantage Pipeline. We are currently estimating expansion capital expenditures of $28 million to $33 million for 2014, depending primarily on the amount of capital we are able to spend in the fourth quarter related to the Knight Warrior project. Maintenance capital expenditures for the 9 months ended September 30, 2014, totaled $3.9 million, net of $1.5 million of reimbursable expenditures. We expect maintenance capital expenditures to be in the $7 million to $9 million range net of reimbursable expenditures for all of 2014. With that, I'll now turn it over to our Vice President of Business Development, Brian Melton.

[Brian L. Melton:]

Thank you, Alex. I'm going to spend a few minutes discussing our quarterly results for operations, and then I will focus on updating you on some of our major commercial projects going forward, with an emphasis on our Knight Warrior project. Overall, third quarter results were consistent with our expectations and with analyst expectations. As previously mentioned, our asphalt segment, which typically experiences its best results in the third quarter, did so again this quarter. Our segment continues -- the asphalt segment continues to generate significant cash quarter-after-quarter and we continue to work with our customers to improve service and throughput in each of our facilities, and to increase profitability for both Blueknight and for our customers. As previously mentioned by Alex, our crude terminalling segment experiences some challenges during the third quarter with downward pressure on storage rates at our Cushing terminalling facility, which was a reflection of the current crude storage market during the third quarter. The good news is we believe that Cushing storage market, we may have seen a floor on storage rates, and to this point, we recently signed a new long-term customer with a contract that began October 1. We're also seeing renewed interest in Cushing as a result of recent changes in the crude oil market, as well as our success in attracting new customers based on our ability to deliver top-notch services, namely, blending -- our blending capabilities and our connectivity at Cushing. Previously discussed, Cushing optimization program is nearing completion, and we've added additional connectivity and blending capabilities to our terminal. In fact, one of the reasons we're able to secure the new customer contract that we did during -- starting October 1 was due to the recent Cushing connectivity enhancements that we made at our facility. We're satisfied with our consistency of our trucking volumes during the quarter. However, as Alex mentioned, we did experience decreases in the overall operating margin primarily due to a couple of different factors. First, in certain areas of our trucking operation, we did experience a number of crude oil barrels that got pipe connected during the quarter. This impacted our revenue mix, as well as the average length of haul, which ultimately impacted our margin during the quarter. As a result, we're redeploying or repositioning some of our trucking equipment in order to better improve our utilization going forward. Second, since we transported new areas of production, there are sometimes timing issues related to the consistency of production of new wells. For instance, we may deploy transportation assets to a new area or new field in anticipation of volumes coming online. Those volumes may be delayed due to a number of factors, including weather or scheduling of oilfield service operations. As a result, we may not transport the barrels in the -- as timely as we had originally anticipated. These issues will be addressed over time, as production does eventually come online, becomes stable and more predictable going forward. Moving on to our pipeline business. We are very -- we are extremely pleased with our efforts and progress made in this key segment. The investments we made over the past 2 years to expand our pipeline business are delivering strong financial results for Blueknight. As an example, 1 year into the operation of our southern Oklahoma Arbuckle pipeline, during the recent months of October and November, we experienced operations of that system at full capacity, and as a result, we prorated customers on our mainline system. As a result, we are exploring additional projects to increase the throughput on our Oklahoma system to better service our producer customers in the growing Woodford and SCOOP areas of southern Oklahoma. We are also pleased by the volume increases and positive financial results for our west Texas Pecos River Pipeline. As Alex previously mentioned, Phase 2 of that pipeline from Highway 285 to Crane, commenced operations on October 1. Volumes continue to ramp up, and we expect this favorable trend to extend well into 2015. The completion of Phase 2 includes an additional 29 miles to the west to capture volumes in Reeves, Culberson, Pecos and Ward Counties. Further, we're continuously exploring additional options to add gathering systems, truck stations, as well as a potential expansion further west of the Pecos system. As we've indicated previously, the pipeline business segment will primarily drive the partnership's growth in the coming years, as we extend our reach into new areas. Therefore, we're very excited about the strong response we receive today, but our plan to construct the 160-miles 16-inch diameter Knight Warrior pipeline, that will service producers in the growing Eaglebine, Woodbine, crude oil production area of east Texas. Once complete, the Knight Warrior pipeline will provide customers an efficient, direct link to the Houston Gulf Coast and refinery complex. During the quarter, we secured multiple additional long-term shipper commitments, one of which is the transportation agreement with a joint venture between Vitol and SEI, Vitol being a 50% owner and Blueknight's general partner. The estimated $300 million Knight Warrior project is a transformational project for Blueknight, and is progressing well and is on track for a March 2016 start up. We have currently purchased our option to all surface properties associated with the Knight Warrior project, as well as we've recently added senior engineering and management resources here at Blueknight to support this project, and we will soon be awarding contracts for engineering land management and construction. Those conclude our prepared comments. Operator, I'll turn it back over to you to open the call up for questions.

[Operator:]

[Operator Instructions] Our first question comes from Gabe Moreen with Bank of America Merrill Lynch.

[Gabriel P. Moreen:]

A question on, I guess, Knight Warrior. Just given the incremental sign-ups you've had there, can you just talk about how much you've got committed now, I think, relative to that 100,000 barrel a day initial size?

[Brian L. Melton:]

We are slightly over 50% committed based on the initial 100,000 barrel initial capacity. And as you recall, the pipe is capable of producing around 200,000 barrels a day, with an initial capacity of 200 -- or 100, excuse me, and we currently have commitments of just over 50% of that.

[Gabriel P. Moreen:]

Great. And talking also, I guess, about -- so shifting gears to kind of Cushing. Can you -- you talked about that long-term contract you got signed up recently. Care to quantify kind of what rates you're seeing? And I guess, also, for the near-term contracts that you got expiring over the next couple of months, is that something that you've already have to renegotiate in the current cycle or is that -- were those longer-dated contracts?

[Brian L. Melton:]

We don't disclose individual storage contract rates at Cushing. It is a function of time or how long the contract is, as well as their use of the storage, as well as the amount of storage they take out with us. We are pleased in that the contract that we renewed in August was replacing. It was actually at a higher rate for some of that contracted barrels that rolled off, and so we are seeing some upward pressure of storage rates at Cushing, primarily a function of the market. We previously have come through a pretty severe bout of backwardation. That market is now fairly flat with some contango in the outer years. And so we feel like, hopefully, we've have got a tailwind now relative to some of our storage contracting -- re-contracting efforts.

[Gabriel P. Moreen:]

Great. And then, I guess, just the last one for me for now is just the Oklahoma kind of expansion opportunities. How close are you, I guess, you're thinking about getting to final investment decision there? And given where things are progressing right now, did you have an idea what size of that project could be?

[Brian L. Melton:]

We don't. We're talking a variety of different projects, some of which would involve relatively modest expansions of our existing system, all the way up to complete new builds of systems to either enhance takeaway volumes or service different areas that we're not servicing today. So it's really early to say what the ultimate size and scope of those projects could be. But I will say, we're having multiple discussions about that, and talking to a number of different producers and marketers about various options.

[Operator:]

Our next question comes from Matt Schmid with Stephens.

[Matt Schmid:]

Yes, obviously, the pipeline segments, they're making a nice contribution this quarter. How should we think about the continued growth from the Pecos River Pipeline? Just what's kind of the current utilization there, and how should we think about the volume ramp with Phase 2 now becoming operational?

[Brian L. Melton:]

We're pleased in that we're continuing to see a nice, steady volume ramp on our Pecos system. We are really filling up our truck stations as we add additional capacity via new truck offloads into our pipe. We're very quickly filling those stations up. So we've been very pleased up to this point with the progression of volume. We're operating probably -- at current capacity, we're probably operating somewhere around 50% of current capacity, and so we do anticipate continued volume growth into 2015. The system is expandable with additional compression or additional pumping capabilities to be able to essentially double our existing capacity today, and we're chasing opportunities to be able to do gathering systems, as well as hard-connect additional producers directly to our system, as opposed to trucking volumes. So we continue to chase a number of different opportunities. We're fortunate in the areas that we operate that there's a lot of drilling activity and a lot of anticipated production growth coming on.

[Gabriel P. Moreen:]

Okay, great. And then on the potential expansion into the northern Delaware. Is there any update there? Is it just kind of in line with your previous time frame at looking at a potential project there?

[Brian L. Melton:]

We continue to have discussions on that. We continue to talk to a couple of key producer customers in that area, and so we continue to advance commercial discussions on that, but nothing to update as of today.

[Operator:]

The next question comes from Michael Tanzer with DG Capital.

[Michael Tanzer:]

A couple of quick questions. So if you could just remind me the initial shipper agreement that you signed on the Knight Warrior product. What percentage of that 100,000 barrel capacity was that?

[Brian L. Melton:]

Are you referring to the Vitol-SEI contract?

[Michael Tanzer:]

No, the initial shipper one.

[Brian L. Melton:]

I think that might have been the Vitol-SEI contract, and I think we disclosed that -- the volume in that contract. Did we not, Alex?

[Alex G. Stallings:]

Right. The initial contract in that was 40,000.

[Michael Tanzer:]

40,000, got you. So you've signed up an incremental 10 on top of that?

[Alex G. Stallings:]

Slightly over that. That's correct.

[Michael Tanzer:]

Got you, okay. And then, I guess, now that the oil prices come down a bit, have you seen any sort of push back in capital spending or, I don't know, any sort of muted discussions coming from the producers in the Woodbine Eaglebine area?

[Brian L. Melton:]

We have not. There's been a few recent announcement by producers along the lines of various programs that they're rolling out for 2015 or in a couple of cases, where they've made -- they brought in partners to help with their drilling programs. We've actually seen the opposite. We've seen fairly recent announcements, and all the producers that we talk about are actually increasing their capital budgets for the Eaglebine area, primarily as a result of, one, the drilling economics there and the quality of the crude, the ability to be able to sell it at a premium to some of the values they're -- they may be receiving in some of the other areas that they're active in.

[Michael Tanzer:]

Understood. That sounds pretty good. Just like based on prior return targets, one number you've thrown out before was sort of a mid-teens return on a cash basis or just for the other, let's say, 7, 8x EBITDA on this project. What kind of capacity utilization on that first 100,000 barrel capacity would you have to hit to hit that return target?

[Brian L. Melton:]

We typically model all of our projects off of kind of a downside and expected and then an upside case. I think the terms that we talked about were kind of our expected case. I can tell you, we have not yet achieved our expected case, but we're very close from a volume commitment standpoint. So -- and I think we had no updates relative to kind of our financial guidance on the overall projects. I think we feel very good about kind of the initial targets that we talked about on the project, and we continue to move forward on commercial discussions, and our focus is really on filling up our initial capacity, and then looking forward to an expansion of the system.

[Michael Tanzer:]

Got you. And so you think that, that, let's say, $45 million number, based on the $300 million CapEx, that's pretty -- that's your base case, pretty achievable in your view, given what you see?

[Brian L. Melton:]

We think that there's no change kind of in our previous guidance. We continue to think that those levels of economics are achievable.

[Michael Tanzer:]

Okay. And then just a totally different topic. On the -- Mark talked a lot about the -- being very excited about the Pecos extension project. Is there a possibility of that happening? And I know as head of business development, you're probably working one-on-one with or one-on-a-lot with potential shippers for that project. And so, I guess, in terms of deal time horizon, one thing I think investors have been a little disappointed with on the Knight Warrior project was just how long that sort of took to get over the line, and I realize that's definitely not your fault. The shipper had to go out and essentially contract with individual producers to pull the trigger on that final investment decision. But when you're thinking about the current environment and you're thinking about the economics of the Pecos extension and the play, and you're thinking about time horizon, how do you -- is this going to be maybe in -- maybe 3 months or is it going to be like 18 months before we could see like a tangible deal come out of that?

[Alex G. Stallings:]

It's always dangerous to predict timing when you're working on commercial agreements with other parties just because there's a lot of factors that go into that. I guess, I would say, we continue to be -- have very thoughtful commercial discussion with a number of parties. So we continue to chase producers. They continue to make capital commitments to the area. A lot of them, frankly, are just now setting their 2015 capital budgets and allocating capital to various areas, and they're kind of doing that in the backdrop of pretty dramatic drop in crude oil prices, and so it's a pretty fluid process as they do it. We continue to bleed that area. There's a tremendous resource base there. So there's going to be plenty of drilling activity going forward. It's a question of timing, and when the producers eventually need to make a commitment, they will. And so we want to stay in front of them, and make sure that we're presenting competitive options for them and the timing will take care of itself. It's hard to predict what that is. I would think it will definitely be sooner than 18 months, but it's hard to predict if that's going to be a 1-month, 3-month or 6-month process so...

[Operator:]

[Operator Instructions] Our next question comes from Lin Shen with Hype.

[Lin Shen:]

So for your Cushing storage, what is the current utilization rate for the storage there?

[Brian L. Melton:]

We are above 90% utilized on our current capacity, our current storage there, which is in that we have a couple of tanks that are undergoing 653s currently, and we have several more planned, and so as those come off of 653, we'll put them back into contracted commercial service.

[Lin Shen:]

Okay, good. So their utilization rate is pretty high. So you're adjusting -- and you just hope to see improving rate based on the market condition?

[Brian L. Melton:]

That's correct. That's correct.

[Lin Shen:]

And also in the press release, you said you think you are seeing the floor for the Cushing storage rate. So for modeling assumption, is that reasonable for me to assume that the contribution from Cushing storage should be improving quarter-by-quarter from the current quarter?

[Brian L. Melton:]

I think part of that will be a function of we do have some legacy contracts that roll off early next year. But I think for renewals of recent contracts, I think that's a true assumption. Alex, do you agree?

[Alex G. Stallings:]

I would agree with that.

[Lin Shen:]

So what's the percentage with your legacy contracts? Do you have them now?

[Alex G. Stallings:]

I'm sorry, what was the question?

[Lin Shen:]

No, just the -- like your current utilization, how much is still the legacy contract you have -- you're supposed to renew next year?

[Brian L. Melton:]

I would -- we've disclosed the number, but I think it's safe to say we probably have about around 20 to 20 -- call it, 20-ish percent that will need to be renegotiated and within kind of the next year.

[James Jampel:]

This is James Jampel from HITE. One last question if I could. I think on previous calls, you've mentioned that there was a consolidation opportunity in the asphalt terminal business. And I was wondering if that's something that you're still seeing as being a major contributor?

[Brian L. Melton:]

We do. We hope to be active in the M&A arena and the asphalt arena. And so similar to our crude oil segment, we are having or have had a number of commercial discussions about various potential transactions that could happen in the asphalt business. We like that business, and we would hope to grow that business over time with probably primarily acquisitions as opposed to greenfield development.

[James Jampel:]

And when would be your target date for making the first acquisition in asphalt?

[Alex G. Stallings:]

Once again, it's hard to predict M&A and the timing of that. I don't think we have anything currently eminent, but we have had just commercial discussions over the last quarter or 2. And so we'll continue to have those, and it's hard to predict what the timing or outcome of those might be.

[Operator:]

Our next question comes from Jerome Parsons (sic) [Jerry Parsons] JP Consulting.

[Jerry Parsons:]

Just as a follow on to the question previously, there's been a lot of talk about the crude oil business. How should we think about the maintenance of -- the current cash flows and/or growth of the cash flow in the asphalt side of the business?

[Alex G. Stallings:]

The asphalt side of business, and we've always said this, it's not going to be a -- it's going to be a lot more sporadic in terms of growth. I mean, it's typically going to be a 1% to 3% growth per year type of the business, unless we have some success on some type of a transaction. I mean, it's not -- it just doesn't have the -- it's not going to have a 10% or a 15% random growth opportunity. It's going to be -- from our perspective, it's a very stable business. But it's not really doesn't have a lot of growth potential. Now having said that, the way our contracts are all geared is that once a minimum threshold is hit, so most of our contracts have kind of a base level of revenue, and once that base level of revenue or that base level of volume commitment runs through the facility, then we receive incremental revenues. So typically, in quarters 3 and in quarters 4, you're going to see some incremental cash flows from our asphalt business because of the -- because those minimums have been exceeded, and that's really what you're seeing in Q3. You'll probably see a little bit more of that in Q4. But from just a base business perspective, I mean, typically, we think about that business growing about 1% to 3% per year, and then as Brian mentioned, we're looking for opportunities to make acquisitions, to do some consolidation, further consolidation in asphalt. It's just the opportunities there are much less than in the assets you may typically see available on the crude oil side just because there's a lot fewer of those types of facilities, and they just don't change hands very often.

[Jerry Parsons:]

Are the cash flows that have been generated today, are those from long-term contracts or can you speak to how those contracts are oriented, and what might be the end game on that?

[Brian L. Melton:]

Yes. I mean, right now there are 2,000, most of them expire in '16 and we have a number of them also expiring in 2018.

[Operator:]

There appears to be no further questions at this time. So I'd like to turn the conference back over to management for any closing remarks.

[Alex G. Stallings:]

Just again, I wanted to say thanks to everyone for joining the call. Again, we're very apologetic and sending along Mark's apologies for not being able to join today. Hopefully, you will understand that. We actually tried to time this conference call around baby Hurley, and for whatever reason, we just missed it all a bit. So as Brent mentioned at the outset of the call, Mark is going to have us set up a special session next week. If any of you would like to join, we'll make that call available to you, and we'll have Mark on at that time. So again, thanks for your participation today, and let us know if you have any other questions. Thanks.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.