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Chesapeake Utilities Corporation (NYSE: CPK ) Q1 2016 Earnings Conference Call May 6, 2016 10:30 am ET Executives Beth Cooper – SVP and CFO Mike McMasters – President and CEO Analysts Nathan Martin – BB&T Capital Markets Operator Good morning. My name is Chrystal and I will be your conference operator today. At this time, I would like to welcome everyone to the Chesapeake Utilities first quarter financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to hand the conference over to Beth Cooper. Please go ahead ma’am. Beth Cooper Thank you, and good morning, everybody. I’d like to welcome you to our first quarter 2016 earnings conference call. Joining me today is Mike McMasters, President and CEO. And in addition to Mike, we’re joined by other members of our management team. For those on the phone today, we’re actually hosting today’s call live from Salisbury University in Salisbury, Maryland. The call is being held within the Perdue School of Business, so as Mike and I are alumni of that school, and we owe special thanks to Dr. William [ph] for enabling us to have the call here today, and included within our meeting we have members of the local financial community here in Salisbury. We have a board member. We have distinguished faculty and also many students here in the room. We are very happy here as I said. As usual today, presentation can be found on our website under the Investors section, the Events and Webcasts subsection or you can access our presentation via our IR app. One of the things I maybe like to point out on Page 1 of presentation, when trying to think about the themes and typically at the beginning of each year, we try to look at what are themes going to be for this as presentation. I pulled something from actually Mike’s President Letter in the annual report and basically within his letter he talks about that we’re driving growth by focusing on long-term sustainable growth opportunities. And hopefully today you will see that that’s really been the case our past – in terms of our past success, as well as what we think in terms of our future opportunities for continued earnings and dividend growth. Turning to Slide 2, this is the typical forward looking and other disclosures section. This presentation today will include forward-looking information. I encourage everyone to take a look at our Form 10-K, there is a section called Safe Harbor for forward looking information. Because some of the information that we talk about may actually differ from our actual results, and we discuss those factors that could cause our forward looking information to differ from the actual results. Turning to Slide 3, I’m now going to begin to touch on the first quarter results. And so what you’ll see is for the first quarter, we reported net income of $20.4 million as compared to last year of $21.1 million, a slight decline of about $740,000 over the prior quarter of last year. On the surface, earnings are down, yes, but certainly it’s driven by the weather. Weather represented for us about $0.27 in terms of decline in earnings per share for the quarter. Our growth that we experienced across – a good part of our businesses helped offset the weather impact and ultimately resulted in net income only being down by about 3.5% for the quarter — pretty remarkable. And that’s really been driven by – and we’ll talk about it a little bit later on — growth in our natural gas businesses, service expansions and customer growth and also the contribution of a new acquisition that we did last year. I’m next going to touch on our results by our segments. And included in our press release that we filed on Wednesday, as well as in our Form 10-Q that we filed yesterday, we provide detailed information about the accomplishments and results for our segments. And so I encourage you to take a look at that for more detailed information. In terms of our regulated energy segment, you will see that we generated an increase in gross margin growth of about $1.9 million. That $1.9 million of gross margin growth actually made its way to the bottom line to generate $2.1 million in terms of increased operating income. Overall, we saw an increase of $4.3 million in gross margin, that was driven by $1.9 million related to natural gas service expansions, our Florida Gas Reliability Infrastructure Program which we refer to as GRIP, generated an additional $1.1 million of margins, and natural gas customer growth, driven basically about half on the Delmarva Peninsula and half in Florida, contributed to an additional $745,000. The gross margin was up about $4.3 million, weather that was much warmer than the prior year offset that by about $2.4 million, resulting in that $1.9 million of margin increase that we saw. You will see expenses were pretty flat year over year, actually a slight decline which resulted in a $2.1 million increase in our regulated businesses, that once again helped to offset that significant weather impact in the first quarter. Turning to our unregulated businesses, which are certainly more weather sensitive, and you will see that here in the results. Our gross margin was down by $2.2 million. That was comprised of basically lower volumes of propane gallon sold which represented about $4.3 million. Our margins per gallon – we were anticipating that those would begin to return to more normal levels and we saw that start to happen. That represented about $1.8 million. And then weather basically — the combination of those two, when you think about, first, the $4.3 million and then the lower margins per gallon, that’s about $6.1 million. That was partially offset, as I mentioned, with the inclusion of Aspire Energy’s results in the first quarter. We acquired that last year on April 1, April Fool’s Day. And so we didn’t have them in our results for last year and they added about $4.2 million. So ultimately ending in the $2.2 million decline that you see here. Additionally we had about $1 million of higher expenses. Those were the result of Aspire being part of our operations. So overall this business was down about $3.3 million in operating income for the quarter, but all driven by the weather and then the lower retail margins which we had anticipated. The next page is actually a summary of a chart that we include within our 10-Q and also within our press release, looking at the factors from an earnings per share standpoint. And you will see, once again, I started off by saying that earnings last year for the quarter were $1.44. Weather contributed basically to a decline of $0.27. But you will see that growth in our regulated businesses added back $0.15 and the Aspire which is basically $0.06 also added to our earnings. So really a $0.27 per share decline was offset with the exception of $0.11. This is another chart – turning to Slide 7 – that actually shows the weather impact. And on this chart, we actually show a comparison relative to normal weather. Because it’s one thing to show a comparison relative to the prior year but compared to normal, what you will see is that we were down in Delmarva by 13% and down in Ohio by 10%. So we talked a little bit about the growth that we’ve experienced as a company. Strong growth in our natural gas businesses, I know this year, is somewhat offset in the first quarter by weather. But that growth has really been driven by the capital expenditures that we as a company have made, those investments have been made to earn either our target returns or greater than our target returns, and the dollars that we have invested have been very substantial. If you look at last year, we invested approximately $195 million in capital expenditures, $52.5 million of which was related to the Aspire Energy of Ohio acquisition. This year we’re projected to invest another $179 million. And when you look at that just a couple of key points relative to benchmark about those numbers. First, $179 million this year represents just under 30% of our total book capitalization. Our equity long term debt and short term debt are very substantial. When you look at this over the five year period, you will see that we’ve invested — will have invested $679 million. Our total book capitalization today once again is about $700 million. So huge investment that has happened over the last five years and are continuing this year. Our projects this year are comprised of about 82% regulated investments in our natural gas and electric businesses and the key projects that are underway include our Eight Flags combined heat and power plant that we expect to complete mid-year this year. Also, we’re expanding facilities to serve Calpine power plant in Dover, Delaware. We have a reliability project that’s underway and our Gas Reliability Infrastructure Program which replaces qualifying pipes and mains in Florida is another large component of our capital expenditure budget this year. So a very substantial project, the largest of which is our CHP plant, that’s about $40 million. And there are other projects that we’re constantly looking at to hopefully add to our pipeline to add further earnings growth as we move from this point forward. Some of those projects we know will not necessarily be incurred this year but may be incurred next year and we’re constantly looking for new opportunities. So while we have all these capital expenditures, it’s very important for us to have a balance sheet that supports those levels of expenditures. And so as you look at our balance sheet, as I mentioned we’re sitting with about $700 million in total book capitalization at the end of March. Breaking that down, when you look at it from a permanent capital perspective, our equity represents about 71% of that balance. When you look at it from a total capitalization, we’re capitalized about 53% equity and our target is 50% to 60% equity to total capitalization. Wanting to have that strong balance sheet, so we can make the investments that we need for continued future earnings growth. Last year we put into place several facilities with the amount of capital that we’ve expanded. We want to try to align as much as possible of the financing with those projects and those projects coming online. We executed a $150 million revolver agreement with five different banks. Currently at the end of March, we borrowed $40 million under that $150 million revolver. But it’s very important as we’re expanding the levels of capital that we have that short term debt capacity available. We’d also entered into a $150 million private placement shelf agreement with Prudential. And that enables us to basically take that shorter term debt and as those projects are placed into service, we can then finance the long term. And we will seek to utilize those mechanisms, those particular options that we have as well as access the equity markets as needed to always ensure that we’re looking towards that target capital structure that I mentioned. Given the growth opportunities we have, we talked a little bit about on past conference calls and a little bit earlier here in the room, that we recognized last year our ninth consecutive year of record earnings for the company. And we’re hopefully going to continue that trend. But looking at what we’ve accomplished and always trying to align our dividend growth, so it is supported by earnings growth. Earlier this week, our board increased our dividend by $0.07 which represented a 6.1% increase in our dividends, moving it from $1.15 to $1.22. What’s important also to note is that this was a 13 th consecutive year of dividend increases upon the prior year. So it’s not that we’re just increasing our dividend at the prior year’s amount, we’re actually stepping it up beyond that. We paid a consistent dividend for over 55 years. For the last 13, we’ve been constantly increasing each year. And as I mentioned, our focus is on dividend growth that’s supported by earnings growth and we expect a significant growth potential that we see in our businesses to continue to provide the opportunity for superior dividend growth in the future, just as it has in the past. Just a little bit of information, turning to Slide 11 in regards to our gross margin, I talked a little bit about our growth. You will see that last year in the middle of the chart, basically we recognized about $25 million from projects that we had placed into service in 2014 and thereafter. Those projects coupled with new projects that are coming online are expected to result in gross margin this year of about $44 million. So we’ve identified $19 million of margin increase that we’re expecting this year and those same projects are going to add an additional $7 million beyond that next year. So where is some of that gross margin growth coming from? I talked a little bit about the Aspire Energy transaction that we did, and you will see on here that basically that added — third column – that added about $4.2 million of gross margin for the quarter. Serving the Calpine power plant in Dover is at a considerable margin. They’re operating right now under our short term service agreement and ultimately when we place additional services into place next year at the beginning of the year, they’ll be under a long term contract for approximately 20 years. That added additional margin for us. And then last, the Gas Reliability Infrastructure Program added $1.1 million that I talked about earlier. So you will see from projects that have really already been done or set into motion, $15 million. We have two additional projects that are underway, that are going to add some incremental margin, the Eight Flags project, combined heat and power plant, that’s going to add $3.7 million and then next year will add $7.3 million dollars on a fully annualized basis. So a lot of growth that’s happened in the last several years. A lot of growth that we see happening from here on out in terms of projects that we’ve identified, and there are also many other projects on the drawing board. As always, thank you for your support and interest in our growing company. I believe this continues to be very exciting time for Chesapeake, as exemplified by our strong financial results. And certainly the weather was a downer in the first quarter but the amount of growth that the company experienced was able to match a large part of that weather impact. Now I will turn the call over to Mike who will expand on our strategic growth initiatives, our long term performance results and our commitment to continued growth for our shareholders. Mike McMasters Thanks, Beth. I guess I want to turn to Slide 13, 14 I guess – Slide 14, I am going to start talking about our strategic platform for growth. This is a pretty important slide for us as a company. We actually show this to our employees quite a bit, in addition to our board of directors and investors. We start at the bottom and work our way up engagement strategies, basically what we are trying to do is to get our employees more engaged in the company’s efforts. And we do that by allowing them, I guess, the opportunity to get more engaged in the communities that we’re serving. And so what we’re finding. I guess, with our efforts to do that is that we’re getting — I’m going to say — improved community relations. We’re getting improved productivity and therefore improved growth. And one of the key things that we have to do as a company, I guess, the first job really is safety. And so if we can maintain a safe system, we can maintain a reliable system, we take care of our customers and the communities, then we’re positioned for growth. Without those strategic ingredients, growth becomes more difficult. It’s fairly easy to sell services when they look at your track record and see that you’re doing – you’re in a very good development. The next step in the process, moving up the triangle, is developing new business lines and executing existing business unit growth. You think about a utility — as the utility matures, it becomes more and more difficult to grow, and you will see that a lot in the electric industry today. And so what we’re having to do is, so let’s think about things differently. Let’s not just stick to the same services we’re providing, now let’s expand the services that we can provide. In addition, let’s look beyond our current service territories and see if we could grow outside of our territories to help increase our growth, and that’s how you get numbers like the $100 million worth of CapEx et cetera. And then finally, all that shows up in results. And you can see safety awards, community service awards, achieving top quartile growth in earnings, achieving top quartile growth in shareholder return. Turning to Slide 15, there are several things here, and just in a moment ago, I want to point to the last bullet on the slide. This is the fourth consecutive year for the Chesapeake, it was recognized as the Top Workplace. Well the significance of that just says, the engagement strategies are working. It is allowing employees that participate in community service activities. Our executives generally, I want to say almost every time, are also participating whether it’s the Food Bank, Steve is on a couple of different boards, at the time the humanity, for building homes, also and the Food Bank, Steve joined that network as well, these different services. So there is also of different things that our executives are doing and our employees are doing and that’s driving team work and engagement. Turning to Slide 16, I guess to the community side, we get a lot of stuff here but one of the things I will point out here. There are several awards here that were very important to us. The second bullet — Central Delaware Chamber of Commerce Excellence in Business Award for Corporation of The Year. Again, that was based on our community contributions, and the last bullet, just last few months, we got an award — Jefferson Awards in Delaware for Outstanding Service by a Major Company. And so it’s these types of awards that are telling us that we are accomplishing something that our employees –our employees are doing great things and the communities are recognizing what we’re doing. Strategic planning and thinking is one of the key processes that we have for growth. The way we attack I guess strategic planning and thinking is that we set very high growth targets in our strategic planning process – targets that really we could not hit if we kept doing the same thing. So it forces us every year to help — what are we going to do differently tomorrow to help accelerate our growth. We involve every business unit. Just about every employee in the company, at some point of time is involved in the strategic planning process. Every business unit is very much involved in the strategic planning and process. If you roll the clock back probably 10 years, maybe 15, I don’t know how far back it was, we used to do the strategic planning in the corner office. And so the slower speed we’re getting — we would talk about all this stuff and we would write this plan out and we’d put it on the shelf. And next year we go pull it off the shelf. Do it again and nothing ever really happened. So we changed the whole way we approached that and said, okay, let’s get the business units in here. Let’s ask them, what do they see happening in their markets and how can we grow the company, and through that change in the process it took two or three years. But we all of a sudden started getting great ideas coming in the door and the business units were engaged and empowered to execute those plans. That’s a significant change for us. We monitor the conditions that we’ve –or the assumptions that we had in the strategic plan. Constantly, we update the board on that constantly. And we make changes to the plan if necessary when circumstances dictate. Turning to Slide 18, this is another part of the process — part of our growth process. We formed a Growth Council several years ago. The Growth Council — same type of approach. We want to get all the business units involved in the growth council. What the council does is it evaluates the strategic objectives or plans, or actually initiatives that we’re working on, if you bring in specific projects, they’re involved with challenging, the business unit leader that brought the project in, asking good questions, forcing a real thorough evaluation of the project. In that council we had legal counsel, we’ve got engineers, accountants, every business – just operations people, a whole variety of people that you look at the same thing from a variety of perspectives. And that actually is part of our key to sustaining our growth as well. If we’re making good investments we’re going to get returns. We’re going to be able to continue to attract capital. And obviously you can’t grow if you’re not getting the capital. I guess a follow-on here, to give you an idea of how we look at these things – this is a form of illustration but you can see, start with information gathering, identifying opportunities. About 50% of the projects that we’re looking at are in that category. We weed out some of those, we get down to feasibility analysis. About 20% of the project would be expected to be in that category. And then proposal development, offer negotiation, and execution, as you can see, we’re weeding projects out of the opportunities that we see as we work our way down. It was probably a year ago, I think Beth and I were in Boston and somebody asked me, if we ever rejected a project. And I was sitting there, I was actually stumped for a minute, and I think, we reject almost all the projects. And then I’ve been thinking about it, after it occurred to me that, I guess that would be a question if you’re doing a lot of – making a lot of capital investments, the expectation might be from the other side as well. You guys are just doing everything that you come across the table and we do have a strategic set of criteria on these projects as well. So we’re not just doing anything that looks like to be profitable or making sure we’re sticking to things that we understand and that’s what we know how to do with this with our strategic plans. Turning to Slide 19, it’s something about — looking around what are the results of all the stuff. Beth gave you a pretty good picture of that. But this is just something that we look at all the time. So you’re looking at the ROE which is the vertical axis and you’ve got the capital expenditures force horizontally. And you’ll see Chesapeake in the top right hand quadrant, which simply means that we are above the 50% in both ROE and also CapEx, so we’re deploying a tremendous amount of capital. And we’re maintaining returns and that’s a pretty big challenge. You can see how few companies are over there near us and when you do that you’re going to drive EPS growth. All these other dots are just a variety of companies. It’s the electric and combination companies, it’s also an industry index for people that we use in our index for marketing our performance and then Chesapeake. So it’s not cherry picking of the peer group, it’s actually a broad range of companies. So then what happens – Beth talked about nine years of record earnings, so if you look at the blue line, I am on Slide 20, look at the blue line. Record earnings per share, the blue line climbing from roughly, you can see that $1.20 up to almost $2.80. Over this time period, ROEs maintained, actually climbing a little bit which is pretty hard to do in that kind of environment, up to little over 12. So it’s been a very successful process that we’ve been implementing and it requires a lot of discipline. So also shareholder returns, so what happens with this. We’ve looked at broader comparisons. This was something Beth was just I guess thinking about one day and did a lot of work to come up with some numbers. And when we looked at and we thought these numbers were little scary, little high. It was, what we can — nobody’s going to believe us. So we asked one of our investment bankers to tell us – help us with the analysis and they put together their own and so we use theirs. The numbers are consistent. But as you can see 84 th percentile in five years and then after that you get 86 th percentile for one year, 80 th percentile for three and then 89 th , 10. So substantial I guess [indiscernible] measure there. With an annual large shareholder returns, you see the median — we joke around about this too. Utility business sometimes is pretty tough to grow as you get bigger. So you will see a negative 5.1% could be weather related, could be pricing relate type of thing. And you can see Chesapeake over the 75 th percentile in all four periods. Once again we go to the S&P 500 — maybe the NYSEs big in our peer group. If you go the S&P 500 similar type results for 73th percentile in five years and then up over 75 in the other two periods. So it’s just I guess a measurement of our discipline. This is a table that we use periodically on Slide 23. The lightly shaded blue or those metrics where we didn’t hit to 75 th percentile, all the others we were at 75 th percentile. We have another table that shares — we have basically, 18 out of 20 times was 75 th percentile. So again things that we’re very proud of, and again you can go back to the processes that we talked about earlier, that are responsible for that, obviously the people that are executing on those processes. So now what are we doing tomorrow? We talked about what we did yesterday. One of our key I guess brand values is simply that we don’t rest on our laurels and so we like to celebrate the victories but we know that really it’s about what we do today and tomorrow, that’s going to count. And so here’s a few of the projects that we actually mentioned these. You can see we’ve got three projects here on Delmarva, the White Oak expansion, Beth talked a little bit about the impact of that on earnings. That’s just obviously a significant project for us. We’ll be constructing that soon. I guess we’re still working with FERC to get approval to do that. The TETCO capacity expansion in the second row is an interesting opportunity that comes and goes really. With the TETCO, it’s obviously connected to TETCO, Texas Eastern. And there’s lower cost of gas on Texas Eastern than there are on other pipelines that are nearby. And so what happens is customers may not have subscribed to move gas on that pipe, that section of the pipe, but when those prices change and TETCO become significantly cheaper than the other place, all the companies or the major companies are interested in trying to get more gas off of TETCO, that are subscribed to use long term capacity or just to use short term interruptible capacity to do that, so we get some earnings supplements from that line. The next box down, Eastern Shore Natural Gas System Reliability, going back to the polar vortex that showed some weaknesses and some upstream systems, and that’s flowed through to us. We also learned things about our system so we’ve done – we’re working on a distribution system to improve that. We also have a filing with the FERC to improve our transmission systems and we have to be ready for low gas pressures coming into our system lower than we historically had seen in the past. So it’s an important thing and reliability is obviously a critical issue for us. Florida and Ohio. Florida Public Utilities has a Gas Reliability Infrastructure Program, Beth talked about that. Once again that’s about safety and reliability. It was a very little to natural gas prices now. It was an opportune time to look at and is strengthening your system, so we’re doing that. Eight Flags, Beth talked a little about that as well. That project is expected to come online in June or July of this year, so it’s I think over 90% complete, was the last number we heard, just as strong as we get actually. Aspire Energy of Ohio, that was the acquisition we did last year. So all of these things, if you look at these Eight Flags, it’s a completely new service we never provided. Aspire Energy of Ohio, completely new service territory. We weren’t serving — and the services are slightly different than what we provided. So you’re getting two out of the six big projects are either new service or new territories. And it’s a picture of Eight Flags, it’s actually – the picture was taken with them celebrating the safety. I mean there was – I forgot the number of days now per hour – 60,000 hours of — without an injury, without an incident. So there’s safety, there is special celebration going on there. But the significance of Eight Flags, first, it’s a new service, we didn’t know how to do that. I want to go back even to the beginning. We got a phone call, that hey, we’re considering. This is Rayonier on – that we’re considering going off the grid, really electric utility on to the aisle. And so that means okay, we’re not going to use the electricity. And so we were looking at things, concerns about earnings deteriorating. So the team in Florida walked into the plant, just did a tour, brought some experts and got some experts involved to help us look at opportunities in the plant. And they came up with the idea, well, we could build a combined heat and power plant here and lower your steam costs. And we can scale it up on the electric generation side, because we’re the electric utility and we can buy the power cheaper from this facility than we can buy from on the grid — from the grid. So we turned what was a loss into a win. So as a result of this, Rayonier is saving money. They’re actually expanding their facility now. Two big wins are for Rayonier. For us, we have lower cost power coming into our electric system. So that’s going to help the customers on Amelia Island as millions of dollars of savings associated with that, and in early we had higher earnings. So it was a very big deal, very creative, it was a new service, a good job. And on top of all of that, we used a lot of our different capabilities. Obviously the electric utility was involved, had to build a pipeline, reinforced our pipeline there, we had a gas pipeline. So our gas, or distribution company – gas distribution companies involved and then also we have a company that’s marketing — natural gas marketer that was involved in solving the problem as well. So we took a variety of skills that we had across our entire company to help solve that problem. So that’s really talked about our strat plan and what we’re trying to do, be flexible, be able to do a lot of different things, solve customers’ problems has been a key factor in our success. So with that, I’ll turn it over to questions. Question-and-Answer Session Operator [Operator Instructions] Your first question comes from the line of Nathan Martin with BB&T Capital Markets. Nathan Martin Good morning everybody. Thanks for taking my questions. I guess, first just kind of given the current gas LDC M&A environment and obviously your clear goals to grow, would it be reasonable to assume you guys would execute possibly another deal or two by the end of this year? And kind of – if so, you mentioned you’re continuing to look at opportunities outside of your current territories. Are there any certain types of geographies you’re prioritizing, or would you basically consider anything if the returns and strategic fit are there? Mike McMasters I guess, let me do the first question first. When it comes to acquisitions, we are constantly looking for acquisitions. And you know how that works, you have a hard time, that you can look at it, 10, 100 — you look at a lot of acquisitions. And it’s very difficult to get anyone in particular to the finish line. And so forecasting out is just extremely difficult to do that. At least we just don’t do that but we are looking at several opportunities in that regard and we’re probably — always will be looking at several opportunities. You know that, funnel when you have that first – the top piece of the funnel, and you’ll have a lot of things in there that fully won’t come to fruition. Very few actually get through. So we can’t really forecast that. I’m trying to think the second question now. Nathan Martin Basically as far as geographies — you guys are continuing to look at opportunities outside of your current territory – Mike McMasters There’s maybe a natural tendency for us to be focusing on primarily the East Coast. We’ve been in Florida since the 80s, and so we are comfortable in Florida. And when we’re comfortable in Florida, that we’re going to be comfortable as we look to Georgia et cetera, in contiguous states. And we’ve got — I think primarily the focus is on the East Coast. If we saw something good that was East Coast – I am including Ohio in the East Coast, in that definition. As we get much further west of Ohio it maybe becomes – I don’t know, we’re having seen anything over there actually, so we don’t spend whole lot of time looking that far west. But that’s not to say that tomorrow if we don’t find something that’s attractive and strategic fit that we would look at it. Nathan Martin Thanks for that color. And then just in the same vein, I mean, looking at these opportunities, just trying to figure out where you lean more towards regulated, unregulated, or again is it just come down to strategic fit? Mike McMasters We are a different right — the regulated and unregulated. Aspire Energy of Ohio has basically gathering system delivering gas to either interstate pipelines or delivering gas to LDCs. And so we’re perfectly comfortable in that business. There is some commodity risk associated with that business. But we’re comfortable with that. So it is not whether it’s regulated or unregulated, it’s really what’s the opportunity and the strategic fit. End of &A Operator [Operator Instructions] There are no further questions at this time. I would like to turn the call back over to President and CEO Mike McMasters. Mike McMasters Thanks everyone for joining us on the call today and for your interest in Chesapeake Utilities. We’re here in Salisbury with members of local community at our meeting, and want to thank Salisbury University again for allowing us to use their facilities. We’re proud of what our team has accomplished for shareholders in the past and remain committed to working hard to deliver superior shareholder returns in the future. Thank you. Operator This does conclude 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. 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