Greetings, and welcome to the Reliance Steel & Aluminum Co.'s third quarter 2017 earnings results conference call. At this time, all participants are in a listen-only mode. An interactive question and answer session will follow formal presentation. If anyone should require operator assistance during the conference, please press star zero and your telephone keypad. As a reminder, this conference is being recorded. I'd like to turn the conference over to your host, Ms. Brenda Miyamoto. Thank you. You may begin.
Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss our third quarter 2017 financial results. I'm joined by Gregg Mollins, our President and CEO, Karla Lewis, our Senior Executive Vice President and CFO, Jim Hoffman, our Executive Vice President and COO, and Bill Sales, our Executive Vice President of Operations. A recording of this call will be posted on the investors section of our website at investor.rsac.com. The press release and the information on this call may contain certain forward-looking statements, which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainties, or other factors which may not be under the company's control, which may cause the actual results, performance, or achievement of the company to be materially different from the results, performance, or other expectations implied by these forward-looking statements.
These factors include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K for the year ended December 31st, 2016, under the caption Risk Factors, and other reports filed with the Securities and Exchange Commission. The press release and the information on this call speak only as of today's date. The company disclaims any duty to update the information provided therein and herein. I will now turn the call over to Gregg Mollins, President and CEO of Reliance.
Good morning, everyone, and thank you for joining us today as we discuss our third quarter 2017 results. Continued strong execution by our managers in the field drove a third quarter gross profit margin of 28.0%, solidly within our target range of 27%-29%. Demand in the quarter was stronger than we had anticipated, with our tons sold down only 1.2% from the prior quarter. We had expected our tons sold to decline 3%-5% as a result of the typical seasonal trend of lower shipping volumes due to customer shutdowns and vacation schedules, as well as one less shipping day in 2017 third quarter as compared to the second quarter. On the whole, customer sentiment remained positive throughout the third quarter of 2017.
Although many of our businesses experienced the normal seasonal trend of lower shipping volumes compared to the second quarter, certain of our businesses servicing the energy and non-residential construction markets experienced an increase in tons sold. While the uncertainty in the marketplace from the pending Section 232 investigation continues, the level of imports has been declining from the elevated levels reached in the second quarter. Solid demand, along with reduced import levels in the third quarter, combined to support stable to higher average prices, with the exception of stainless steel products. This resulted in our average selling price remaining relatively flat compared to the prior quarter. Hurricane Harvey and Hurricane Irma impacted certain of our operations in the coastal regions of Texas, Louisiana, and Florida in the third quarter.
First and foremost, the safety of all Reliance employees remains our top priority, and we are extremely grateful to report that none of our employees were injured in these storms. Our thoughts and prayers continue to be with all who suffered personal losses as they recover and rebuild. We are also grateful to report that we incurred no material damage to our facilities, inventory, or equipment. That said, many of our facilities in the impacted areas were closed for a few days because of the storms and experienced reduced shipments until our customers reopened. However, by the end of the third quarter, our impacted locations had generally recovered any lost shipments from the periods surrounding the storms with little to no impact on our financial results for the quarter.
Looking forward, we believe incremental demand in the construction end market should increase as rebuilding efforts take hold, which is favorable for Reliance, with non-residential construction being the largest end market we serve. Both shipment levels and average selling prices were up compared to the third quarter of 2016 for all of our commodity categories, including carbon, stainless, aluminum, and alloy. Our alloy shipments were up significantly, primarily due to the improved activity levels in the energy market. As a result of the more favorable pricing environment in the current quarter, our average selling price in the third quarter of 2017 increased 6.8% compared to the third quarter of 2016, contributing to our increased profitability levels.
Given low spreads between import and domestic prices, as well as the expected resolution of the Section 232 investigation by early 2018, we expect imports to remain at current levels for the remainder of the year, with some potential for further declines. We have experienced some price volatility early in the fourth quarter, and currently expect our overall average selling price to remain fairly steady at current levels for the remainder of 2017, with the potential for some downward pressure. However, we are supportive of the recent mill price increase announcements for many of the products we sell and expect to see the higher prices firm up as we move into early 2018. Further, we believe that more meaningful demand improvement is possible if the administration's infrastructure plans are implemented.
Beyond pricing discipline, our managers in the field continued their strong execution in terms of inventory management, helping us achieve an inventory turn rate of 4.5 times, consistent with our 2016 inventory turn rate. While we are comfortable with our inventory position, we are working to reduce our September 30th inventory to keep pace with our reduced seasonal shipping levels in the fourth quarter, which should have a positive impact on our cash flow. With respect to capital allocation, we generated solid cash flow from operations as a result of our enhanced earnings and effective working capital management. We expect to continue returning value to our stockholders in the form of quarterly cash dividends and share repurchases. We have consistently paid quarterly cash dividends for 58 consecutive years, and while we did not repurchase any shares of our stock in the third quarter, we will remain opportunistic in our approach.
In addition, we have been executing on our balanced growth strategy through a combination of both acquisitions and organic growth via strategic capital investments. In the first nine months of 2017, we have spent $118.1 million on capital expenditures, primarily on growth activities with a focus on enhanced value-added processing services. As we have stated in the past and will continue to highlight, we believe our gross profit margin improvement over the past two years compared to historical levels directly demonstrates the return on our capital investments. We are also pleased to announce that we closed our acquisition of all the common stock of Ferguson Perforating Company on October the 2nd. Based in Providence, Rhode Island, Ferguson manufactures perforated metal parts for numerous applications in domestic and international markets and specializes in producing highly engineered and complex products for a wide range of end markets.
Ferguson's 2016 net sales were approximately $31 million. We believe Ferguson furthers our product diversification in a niche market and also has the ability to provide highly customized and complex solutions through value-added processing. We are delighted to welcome Ferguson to the Reliance family of companies. In regard to our pipeline for potential future acquisitions, we continue to evaluate attractive opportunities for well-managed metal service centers and processors with end market exposures that complement our diversification strategy. In summary, we are very pleased with our ability to significantly increase our pre-tax income for the first nine months of 2017 compared to the first nine months of 2016, due primarily to the successful efforts of our managers in the field. Through our industry-leading value-added processing capabilities and support from a stable pricing environment, we were able to maintain a strong gross profit margin.
While a level of uncertainty still exists in the marketplace, both pricing and demand levels are better than they were a year ago, and we remain optimistic about the potential for increased infrastructure and equipment spending, which should help support greater earnings power for Reliance going forward. I will now hand the call over to Jim to comment further on our operations and market conditions. Jim?
Thanks, Gregg, good morning, everyone. Before I begin, I would like to take a moment to thank our folks in the field for their continued hard work. I'd especially like to recognize our teams that were directly impacted by the recent hurricanes. We are thankful everyone is safe. We are extremely proud of your hard work and commitment in continuing to support our customers in these regions as they ramp up their businesses. I would also like to highlight our strong gross profit performance in 2017. Our third quarter gross profit dollars were the third highest in our company's history, exceeded only by our first quarter of 2017, that was our highest ever, and our second quarter of 2017, that was our second highest ever.
Our combined gross profit dollars for these three quarters of 2017 resulted in $132.8 million more gross profit dollars than in the same period of 2016. We are very proud of that. I'll discuss demand and pricing for our carbon steel and alloy products, as well as our outlook on certain key end markets we sell those products into. Bill will then address our aluminum and stainless steel products and their related end markets. Demand for automotive, which we service mainly through our toll processing operations in the U.S. and Mexico, remained strong throughout the third quarter. Increased demand in aluminum processing offset moderate declines in processing of carbon steel due to normal seasonal customer closures, including certain extended closures due to model changeovers. Over the past year, we have made investments to expand our facilities to support automotive demand for both carbon and aluminum processing.
We completed construction of our new facility in Kentucky in the second quarter of 2017. We are very pleased with its performance to date. This facility is currently operating at approximately 50% of expected capacity. In addition, our facility in Monterrey, Mexico, which became operational in the third quarter of 2016, continues to perform in accordance with our expectations. Third quarter demand in heavy industry, which includes railcar, truck trailer, shipbuilding, barge manufacturing, tank manufacturers, wind and transmission towers, was in line with levels experienced in the first half of 2017, subject to normal seasonal patterns. During the quarter, we continued to see a slight increase in construction equipment spending, which was encouraging. As a reminder, heavy industry also includes sales to agriculture equipment OEMs, which has been a weaker area of the market.
That said, we have been able to mitigate some of the negative sales impact due to our exposure to mostly small and mid-size agriculture equipment versus the larger equipment. We expect demand in heavy industry to remain at similar levels for the remainder of the year, subject to normal seasonality. Demand for non-residential construction market, including infrastructure, grew at a steady rate throughout the third quarter, though volume remains far below peak levels. While infrastructure spending and any Section 232 actions have been delayed, we remain cautiously optimistic that domestic infrastructure spending will continue to improve with incremental upside possible from rebuilding activity resulting in the recent hurricanes, which provides opportunity for Reliance.
As a result, we remain committed to investing in value-added processing equipment for our businesses that sell into non-residential construction and believe we are well positioned to absorb increased volumes in our existing footprint and cost structure as this important market continues to strengthen. Demand for energy, which is mainly oil and natural gas, steadily improved from the second quarter. We continue to see growth in rig counts and drilling activity with mill lead times extending slightly. Completion activity remains low. Importantly, our businesses servicing the energy market contribute positively to our earnings for the third consecutive quarter. The increased activity in this market is an encouraging sign, and we are well positioned to support demand growth as energy continues to recover.
Mill pricing for carbon steel products we sell into these end markets improved marginally from the second quarter 2017, as mills announced price increases for certain carbon steel products in July and the level of imports began to lessen. Import spread became less attractive and pre-buying ahead of potential Section 232 actions declined. We experienced fairly significant price reductions for certain of our carbon steel products late in the third quarter that will impact us in the fourth quarter. The price increase for carbon flat roll products announced last week are encouraging, and we look for further improvements in carbon steel pricing in 2018. Pricing for alloy products has been steadily improving. We believe that further improvement in activity levels in the energy market should help support increased pricing going forward. Thank you for your attention today.
I will now hand the call over to Bill to comment further on our nonferrous markets. Bill?
Thank you, Jim. Good morning, everyone. First, I would also like to thank our folks in the field for their hard work and commitment to Reliance. To our employees, customers, and their families in the regions impacted by the hurricanes, our thoughts and prayers continue to be with you as you recover from these events. I'll now review pricing and demand for our aluminum and stainless steel products before turning to key industry trends in the markets we sell these products into. Our aerospace performance was very strong in the third quarter and remains one of our top-performing end markets. Today, lead times for aluminum aerospace plate have shortened slightly to approximately 7-9 weeks. The backlog for orders of commercial planes remains strong, and we expect build rates should continue to improve in the fourth quarter, led by single-aisle planes.
We continue to see an increase in activity from many of our defense customers, and our production ramp remains on path with regard to our participation in the five-year, $350 million Joint Strike Fighter program. Further, our entry into the aerospace market in India, through our All Metal Services subsidiary in the U.K., remains on track to become operational by the end of the year. We are maintaining our positive outlook for the aerospace market and look forward to increasing our market share in this area as overall demand continues to grow. Turning to the semiconductor market. Activity remains strong, especially in the U.S. and Pacific Rim regions. We maintain our positive outlook for the balance of this year, as well as into 2018, based on solid demand trends and an encouraging outlook from our customers. Moving on to pricing.
The majority of our sales into the aerospace market consist of heat treat aluminum products, especially plate, as well as specialty stainless steel and titanium products. Pricing and demand for heat treat aluminum plate has remained stable since the last 5% increase, which went into effect in the second quarter. The recently announced increases for aluminum heat-treated products that take effect in January have full mill support and include a 5% increase for aerospace sheet and plate, and a $0.10 per pound increase on general engineering plate. Most of our common alloy aluminum products are sold to sheet metal fabricators that support a variety of end markets. Demand for common alloy aluminum sheet remained relatively stable in the third quarter, with lead times moving out slightly to eight to 12 weeks.
From a pricing standpoint, the most recent price increase for common alloy aluminum sheet that was announced for November, has full domestic support. As such, we believe pricing on common alloy aluminum sheet should improve in the fourth quarter based on the recently announced conversion price increase, as well as an increase in the Midwest spot price. Also, the price increase just announced for aluminum extruded rod and bar of $0.04 a pound slated for January, has full domestic support. Lastly, demand for our stainless steel flat products, which are primarily sold into the kitchen equipment, appliance, and construction end markets, has remained solid. That said, our average selling price for stainless steel products declined during the quarter, driven primarily by lower surcharges.
The September and November price increase announcements, each a two-point reduction of discount for commodity stainless flat roll products, appear to have partial support in the market. We also expect surcharges on stainless products to increase in the fourth quarter. Thank you for your time and attention today. With that, I'll now turn the call over to Karla to review our third quarter 2017 financial results. Karla?
Thanks, Bill, good morning, everyone. Our net sales in the third quarter of 2017 were strong at $2.45 billion, up 12.1% from the third quarter of 2016, with our tons sold up 5.3% and our average selling price per ton sold up 6.8%. Compared to the second quarter of 2017, our net sales were down 1%, with tons sold down 1.2% and our average selling price up 0.2%. The combination of overall higher prices and increased shipping levels across all of our commodities resulted in $264.9 million more sales dollars in the third quarter of 2017 compared to the third quarter of 2016. Our gross profit margin in the third quarter of 2017 was 28.0%, down from 30% in the third quarter of 2016, and down slightly from 28.4% in the second quarter of 2017.
The pricing environment was more stable in the third quarter of 2017 as compared to the third quarter of 2016, when we experienced mill price increases that we were able to pass through before receiving the higher-cost metal in our inventory, resulting in enhanced gross profit margins. We're proud of our gross profit margin in the third quarter of 2017. That was well within our target range of 27%-29% and produced $685.5 million gross profit dollars, the third highest in Reliance's history, trailing only the first and second quarters of 2017. As a result of higher metal prices in 2017 compared to year-end 2016, we expect a net LIFO inventory valuation charge or expense for 2017.
We have updated our estimate of our annual LIFO expense to $35 million from our prior estimate of $40 million due to softer metal pricing in the third quarter of 2017 than we had previously anticipated, and our further expectation that current pricing will continue through the remainder of the year. Our updated estimate resulted in LIFO expense of $6.3 million, or $0.05 earnings per diluted share in the third quarter of 2017, compared to our prior estimate of $10 million. We recorded LIFO expense of $10 million or $0.09 per diluted share in the second quarter of 2017. In the third quarter of 2016, we recorded a pre-tax LIFO inventory valuation credit adjustment or income of $11.3 million. Our SG&A expenses were 19.2% as a percentage of net sales, consistent with the second quarter of 2017 and down from 20.7% in the third quarter of 2016.
The year-over-year decrease as a percentage of net sales was primarily due to higher selling prices, which increased our sales. We also benefited from the sale of equipment in the third quarter of 2017 that resulted in a pre-tax gain of $4.6 million and is recorded as an offset to our SG&A expenses. A more typical run rate for SG&A expenses for the third quarter of 2017 would be approximately $475 million. In the third quarter of 2016, we recorded impairment and restructuring charges of $67.3 million or $0.57 per diluted share, mainly related to our businesses servicing the energy end market. In the third quarter of 2017, we recorded an impairment restructuring charge of $2.1 million or $0.02 per diluted share, primarily due to adjustments to our previous impairment estimates.
Interest expense decreased by $3.1 million in the third quarter of 2017 compared to the third quarter of 2016, mainly due to the November 2016 refinancing of our 6.2% senior notes with bank debt. Our effective income tax rate for the third quarter of 2017 was 30.4%, compared to 28.2% in the third quarter of 2016 and 31.2% in the second quarter of 2017. We currently estimate that our full year 2017 effective income tax rate will be approximately 31.5%, excluding any non-GAAP adjustments in the fourth quarter of 2017. Net income attributable to Reliance for the third quarter of 2017 was $97.3 million or $1.32 per diluted share. Our non-GAAP diluted earnings per share were $1.30 in the third quarter of 2017 compared to $1.25 in the third quarter of 2016 and $1.40 in the second quarter of 2017.
Please refer to our earnings release issued earlier today for a reconciliation of our non-GAAP adjustments. Turning to our balance sheet and cash flow. As a result of our higher average selling prices and shipment levels, along with our effective working capital management, we generated $183.1 million in cash from operating activities during the third quarter of 2017. We invested $45.3 million in capital expenditures, paid $32.8 million in cash dividends to our stockholders, and paid down $94.5 million of debt in the third quarter of 2017. At September 30, 2017, our total debt outstanding was $1.99 billion. Our net debt to total capital ratio was 29.0%, and our net debt to EBITDA multiple was 2.1 times, in line with our targeted financial profile. As of the end of the third quarter, we had $827 million available on our $1.5 billion revolving credit facility.
We funded the acquisition of Ferguson Perforating with borrowings on our credit facility in the fourth quarter of 2017. Our effective working capital management, along with our solid earnings, enable us to fund our increased activity levels while maintaining significant liquidity to continue growing the company and returning value to our stockholders. Turning now to our outlook. We remain optimistic with regard to business activity levels in the fourth quarter of 2017, subject to the typical fourth quarter decline in shipping volumes due to customer holiday shutdowns. We estimate that our tons sold will be down 4%-6% in the fourth quarter of 2017 compared to the third quarter of 2017.
Despite recent increases in carbon and stainless steel pricing, we believe our average selling price in the fourth quarter will be subject to downward pressure given lower activity levels with the recently announced mill price increases taking hold in early 2018. Therefore, we expect our average selling price in the fourth quarter of 2017 will be flat to down 2% compared to the third quarter of 2017. As a result, we currently expect earnings per diluted share to be in the range of $0.90-$1 for the fourth quarter of 2017. In closing, we are pleased with our overall financial performance in the third quarter due to the solid operational execution by our managers in the field. We will continue to focus on strong execution of the fundamentals and look forward to improved market conditions that allow us to demonstrate our increased earnings capacity.
We would also like to extend our gratitude to all of our employees that supported our Reliance family members that were impacted by the recent storms. That concludes our prepared remarks. Thank you for your attention. At this time, we would like to open the call up to questions. Operator?
Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Novid Rassouli from Cowen and Company. Please go ahead.
Morning, guys. Thanks for taking my questions. First on imports. I know that you guys historically import about 5% of your steel. I just wanted to see, given the dynamics of the narrowing of international and domestic price spreads, are you guys importing even less than that right now? I'm just curious what the dynamics are there.
On the steel front, this is Gregg. We are importing less than the 5% that we generally do in a typical quarter or year. How much less? Probably a couple of percent less. Yes, the spreads are narrow, the opportunities to buy with short lead times from the domestic producers, we're buying less from offshore and more from our domestic producers. Yes.
Thanks, Gregg. Just as far as the price increases that we've seen, going to your press release about kind of the lower activity that you see and not seeing the benefits of that until the first quarter of next year. Is the lower activity going to keep you guys from pushing those through? I'm just trying to get a sense of acceptance from your customers and how that'll flow through your P&L.
I think Jim can comment on this a little further. I think that you go into the fourth quarter, and I think for maybe the past three or four or five years, we've seen some increases in the fourth quarter, which before that was relatively unusual. Our customers, they're cautious, fourth quarter business slowdowns, less billing days, et cetera. They're less likely to accept an increase as they would when they go into the first of the year. Major resistance, our average order size is around $1,500, $1,600 a piece. For us to get increases in our customer base that are non-contractual, they're basically all spot, is a lot easier than others that are participating with 800-pound gorillas and involved in contracts. I think those price increases, we're happy that the mills are increasing them. We look forward to them holding.
We think we'll see them more in our inventories more into the early part of 2018.
The only thing I'd add is, first of all, we think our domestic partners, they deserve those increases. We're happy to support that, and we always pass increases along immediately to the market.
Got it. Thanks, guys. Just switching gears to the aero side. It seems like it's been a very strong end market for you guys. We have seen some air pockets this year related to some of the destocking in the supply chain. First, I just wanted to see if that had impacted you guys at all or if you guys saw any of that. The second thing is you'd mentioned about potentially growing this end market for you guys. I just wanted to see what ways that you see that best suit you for increasing exposure there. Thanks.
Yeah, Novid, it's Bill. We've heard a lot about stocking and destocking, for us, that really doesn't have much of an impact on our business. If we see where demand is improving, we're going to buy more. If we see demand softening, we're going to buy less. I think it will impact the mills more, that comes more from the OEM side of the business. If you look at our business on the aerospace side, it's been strong and consistent throughout the year. It's an end market we really like. We think there is opportunity for growth. As we mentioned, we've got a location in India that will be operational by the end of the year, and we'll continue to look at those opportunities and look to improve our market share in that end market.
Novid, this is Gregg. On the inventory side, our inventory turns on the aerospace business is no different than it was a year ago, two years ago. We're very consistent in our inventory turn pattern in aerospace. About 50% of our aerospace business is contractual, we have a little bit of more visibility than we do in our normal type businesses. Okay. Nonetheless, we listen to our customers very carefully. We turn our inventories, we, as a company, have not destocked, restocked, no stocked, or any other stocked, period, okay? We just do what we do every day of the week, and we're pretty consistent. All that terminology coming from the mill on the destocking thing, it could affect them, probably does. It has absolutely no impact on Reliance Steel.
Got it. Thanks for taking my questions, guys. Nice quarter.
Okay. Thank you.
As a reminder, if you'd like to ask a question, it is star one. Our next question is from Philip Gibbs from KeyBanc Capital Markets. Please go ahead.
Good morning.
Morning.
Hey, Gregg. I had a question on October daily sales momentum in terms of what you're seeing there, maybe relative to September so far.
It's pretty consistent with what we experienced in the September market, which is good. It's solid. Basically, the attitude from our customer base is very encouraging. We're having a good ride right now. It's nice to see energy back in the fold, creating earnings for us. Non-residential construction, we had a good quarter in that with our tons up in both those markets, which helped offset about 70% of our business really had a little bit less, more seasonal impact, which we expected. We were pleasantly surprised that non-res and energy reacted as positively as they did from a demand point of view. October, it's following the same guidelines as we saw in September. We feel pretty good about going into the fourth quarter and our guidance of $0.90 to a buck. We feel confident that we'll be within that range.
Gregg, just I guess a good follow-up to that right now, you say non-res and energy may be a little bit better than what you may have anticipated, call it three months ago. We see plate prices falling, beam prices falling, merchant bar prices falling. I think that's alluded to in your guidance on some of the pricing softness.
Right.
Why do you think that is? Particularly in plate, why do we think that is?
Well, if you look at the plate end markets, okay, there's a tremendous amount of plate that's consumed in railcar , shipbuilding, barge, tank, and those heavy industries are off. Some of it had to do certainly with oil. Okay, in particular in railcars , shipbuilding, and the tanks. Those markets have declined much greater than some of the other markets that we participate in. Plate, I'll be perfectly honest with you, it's one of our largest single commodities that we have in the entire company, so we keep a close eye on plate. The fact of the matter is, those markets are down. We're not losing market share, and they'll be back. Right now, plates, it's having a tough haul. That's just the way it is.
As far as the beam pricing going down $80, mini mill going down $60, there was published base prices out there that were a little bit out of whack with the reality in the marketplace, and the mills felt as though evidently that maybe they were losing some market share. In an attempt to kind of shore all that pricing up domestically, they chose to make that horrendous move. Okay. Which we weren't exactly standing on our tabletops and applauding. Okay. Devaluation of our inventory is not the greatest thing that ever happened to Reliance, that's for sure.
Hopefully it created a bottom.
Yeah, there you go.
I appreciate that. I got a quick one for Karla before I jump off. Thanks a lot. Karla, is it implied within the guidance that the gross margin should be reasonably stable quarter-on-quarter? That's my first one. Just a clarification, I think you said you had some equipment sales in the third quarter in SG&A of $4.7 million. Is that correct? Those are my questions. Thank you.
Yes, on the gross profit margin outlook for the fourth quarter, we do anticipate it to stay pretty steady with where we were in Q3. If we see some downward pricing pressure, that could squeeze it a little bit, but we don't think it would be anything too significant. As far as the equipment sales, yeah, it was a $4.6 million pre-tax gain. That was an offset to our SG&A expenses in the third quarter.
Thanks very much.
Thank you.
Thank you.
Thank you. This concludes the question and answer session. I'd like to turn the floor back over to Mr. Mollins for any closing comments.
Thanks again for your support and for participating in today's call. We would like to remind everyone that we will be in Palm Beach, Florida in late November presenting at Credit Suisse Industrials Conference, and in New York in early December presenting at Cowen's Energy and Natural Resources Conference. We hope to see many of you there. Thanks again for joining us, and have a great day.
This concludes today's call conference. Thank you for your participation. You may disconnect your lines at this time.