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-----BEGIN PRIVACY-ENHANCED MESSAGE-----Proc-Type: 2001,MIC-CLEAROriginator-Name: [email protected]: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQABMIC-Info: RSA-MD5,RSA, KpAToQTY5d+gbSttHbFI4Zq9S1WpWdeta/TvVM657Yu7aAP1fg8n8q98pUUz2EQi hwgIE3oaLvLpkQnIN2JO5A==

0001193125-06-193317.txt : 200609190001193125-06-193317.hdr.sgml : 2006091920060919162416ACCESSION NUMBER:0001193125-06-193317CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:36CONFORMED PERIOD OF REPORT:20060919ITEM INFORMATION:Regulation FD DisclosureITEM INFORMATION:Financial Statements and ExhibitsFILED AS OF DATE:20060919DATE AS OF CHANGE:20060919

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:AVISTA CORPCENTRAL INDEX KEY:0000104918STANDARD INDUSTRIAL CLASSIFICATION:ELECTRIC & OTHER SERVICES COMBINED [4931]IRS NUMBER:910462470STATE OF INCORPORATION:WAFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:001-03701FILM NUMBER:061098275

BUSINESS ADDRESS:STREET 1:1411 E MISSION AVECITY:SPOKANESTATE:WAZIP:99202BUSINESS PHONE:5094890500

MAIL ADDRESS:STREET 1:1411 EAST MISSIONCITY:SPOKANESTATE:WAZIP:99202

FORMER COMPANY:FORMER CONFORMED NAME:WASHINGTON WATER POWER CODATE OF NAME CHANGE:19920703

8-K1d8k.htmFORM 8-K

Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September19, 2006

AVISTA CORPORATION

(Exact name of registrant as specified in its charter)

Washington1-370191-0462470

(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

1411 East Mission Avenue, Spokane, Washington99202-2600

(Address of principal executive offices)(Zip Code)

Registrants telephone number, including area code: 509-489-0500

Web site: http://www.avistacorp.com

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section7 Regulation FD Disclosure

Item7.01Regulation FD Disclosure.

The information in this reportshall not be deemed filed for purposes of Section18 of the Securities Exchange Act of 1934, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth byspecific reference in such filing.

On September20 and 21, 2006, management of Avista Corporation (Avista Corp. or the Company) will be participatingin meetings with investors and will provide a business update presentation. A copy of the business update presentation is furnished as Exhibit 99.1.

Section9 Financial Statements and Exhibits

Item9.01Financial Statements and Exhibits.

(d)Exhibits

99.1Business update presentation dated September 2006, which is being furnished pursuant to Item7.01.

Neither the furnishing of any presentation as an exhibit to this Current Report nor the inclusion in suchpresentation of a reference to Avista Corp.s Internet address shall, under any circumstances, be deemed to incorporate the information available at such Internet address into this Current Report. The information available at AvistaCorp.s Internet address is not part of this Current Report or any other report furnished or filed by Avista Corp. with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AVISTA CORPORATION

(Registrant)

Date: September19, 2006

/s/ Marian M. Durkin

Marian M. Durkin

Senior Vice President, General Counsel
and Chief Compliance Officer

EX-99.12dex991.htmBUSINESS UPDATE PRESENTATION

Business Update Presentation

1 We answer to you. Business Update September 2006 NYSE: AVA www.avistacorp.com Exhibit 99.1

2 We answer to you. Corporate Summary Regulated Non-regulated Energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses Incorporated in 1889 and headquartered in Spokane, Washington Avista Utilities is a company operating division comprising the regulated utility operations that provides electric and natural gas service to customers in Washington, Idaho and Oregon Avista Advantage is a business process outsourcer that provides facilities resource management Avista Energy provides electricity, natural gas and hydroelectric portfolio optimization and management, as well as risk management services

3 We answer to you. Avista Utilities

4 We answer to you. Avista Service Territory Electric Customers 338,000 Gas Customers 297,000

5 We answer to you. Q2 YTD 2006 Results 3,547 new electric customers 4,080 new natural gas customers Extended service to: 1,683 electric development lots 3,719 gas development lots 0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 2002 2003 2004 2005 Q2 YTD 2006 Electric Gas Customer Growth Forecasted growth for the next four years: 2+% for electric customers 3+% for natural gas customers

6 We answer to you. 2006 Utility Capital Expenditures Total Utility capital expenditures results in an additional $80 million to netrate base 230 kV Upgrades $29 Other $7 IS/IT & Security $10 Gas $11 Environmental $10 Growth $40 Electric Transmission & Distribution $26 Generation $27 $160 Million Total CapEx * * Excludes Automated Meter Reading

7 We answer to you. Transmission System Upgrades Palouse 230 Line Lolo Substation Beacon-Bell 230 Lines $29,200 2006 $20,835 2007 Benewah Fiber Optic and C. Fork RAS $21,926 2004 $27,104 2005 $21,041 230 kV Upgrade Total CapX Boulder Sub & 230 Lines Dry Creek Sub & 230 Lines Beacon-Rathdrum Line 2003 Palouse 230 Line Lolo Substation $29,200 2006 $20,835 2007 Benewah Substation Fiber Optic and C. Fork RAS $21,926 2004 $27,104 2005 $21,041 230 kV Upgrade Total CapX Boulder Sub & 230 Lines Dry Creek Sub & 230 Lines 2003 230 kV Construction Schedule and Cost Trend ($ thousands) Total project cost is approximately $120 million through 2007

8 We answer to you. Noxon Rapids/Cabinet Gorge Turbine Upgrades Avistas two largest hydro projects Noxon Rapids Improve efficiency, reliability and eliminate operating restrictions Replace turbine runners on Units 1-4 Requires $31.4 million of capital over the next seven years Capacity increase of 38 MW, bringing total capacity to 570 MW Noxon Rapids Dam Cabinet Gorge Unit #4 turbine upgrade Scheduled September 2006-March 2007 Project cost $6 million Capacity increase of 10 MW, bringing total capacity to 271 MW Cabinet Gorge Dam

9 We answer to you. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Peakers Average Load (with reserves) Hydro Base Load Thermal Contracts Gas Dispatch Annual Average Loads and Resources 2008-2016 (in aMW)

10 We answer to you. Integrated Resource Plan (IRP) Over half of future energy needs are met with renewables, plant upgrades and conservation A Request for Proposal for up to 35 average MW of renewable energy was issued to the public on January 4, 2006 Energy and Capacity deficits begin in 2010 and 2009, respectively. Over a period of ten years, Avistas 2005 IRP calls for acquisition of: 69 MW of Conservation 400 MW of Wind 80 MW of Other Renewable Resources 52 MW of Hydroelectric Efficiency Upgrades 250 MW of Coal-based Generation Resource Mix 14% 3% 22% 19% 42% 3% 8% 26% 11% 52% 0% 10% 20% 30% 40% 50% 60% Wind/Other Renewables Contract Gas Coal Hydro 2006 2016

11 We answer to you. Avista Utilities Regulatory Update Authorized 48% 10.25% 8.88% Oregon Natural Gas (implemented in October 2003) 43% 40% Common Equity Level Return on Equity Rate of Return Jurisdiction and service 10.40% 9.25% Idaho Electric and Natural Gas (implemented in September 2004) 10.40% 9.11% Washington Electric and Natural Gas (implemented in January 2006) $73 million $66 million $466 million $141 million $845 million Gas Gas Electric Gas Electric Oregon Idaho Washington Rate Base

12 We answer to you. Electric Power Cost Mechanisms Idaho PCA $0 90/10 Sharing 90/10 Sharing Power Supply Costs in Base Rates $0 Washington ERM 90/10 Sharing + $10 Million 50/50 Sharing + $4 Million Power Supply Costs in Base Rates -$4 Million -50/50 Sharing -$10 Million -90/10 Sharing

13 We answer to you. Washington Production and Transmission Update Filed August 31, 2006 Increase of 8.8% or $28.9 million in revenue Rates effective on or before February 1, 2007 Increase driven by: Additional investments in Avistas hydroelectric and thermal generating plants Upgrades to 230 kV transmission system Higher operating costs for purchasing and generating electricity Request includes pro-forma period loads for the 2007 calendar year Proposing to pass on to customers the reduction in average cost of debt Not proposing changes to the capital structure, the cost of equity or O&M and A&G expenses (000s) Production Revenue & Expense $7,416 26% Increased Power Costs to Serve Load Growth $13,224 45% Transmission Investment $1,761 6% Transmission Revenue & Expense $769 3% Generation Investment $5,681 20%

14 We answer to you. Purchased Gas Adjustment Filings Nov. 1, 2006 Nov. 1, 2006 Nov. 1, 2006 Proposed Effective Date 8.8% 3.2% 8.1% % Increase $11.0 m $2.7 m $16.7 m Amount Aug. 31, 2006 Sept. 14, 2006 Aug. 31, 2006 Filing Date Oregon Idaho Washington

15 We answer to you. Advantage IQ

16 We answer to you. Advantage IQ Bill payment processing and related services for large, multi-site customers Started in 1996 Today we manage $10.0 billion annually in customer payments Pay over 500,000 bills per month supporting 180,000 sites in the United States and Canada $75 million in client savings in the past two years from bill errors Management services include electricity, natural gas, water, sewer, waste and telecom expenses

17 We answer to you. Advantage IQ serves more than 350 customers in the following industry categories Casual Dining Education Medium Box Retail Commercial Banking/Finance Convenience Stores Government Small Box Retail Big Box Retail Entertainment Grocery Hospitality Airlines Communications Fast Food Industrial

18 We answer to you. Revenue Growth $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2003 2004 2005 2006 Projected 35% increase over 2004

19 We answer to you. Net Income ($2,000) ($1,000) $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2003 2004 2005 2006 Projected 2006 Guidance $0.10-$0.12

20 We answer to you. Advantage IQ Growth Opportunities Existing Customers We grow as our customers grow Expanded services New Customers New Services Advanced analysis, budgeting, consulting Supply Management International Acquisition/Merger/Monetization

21 We answer to you. Avista Energy

22 We answer to you. Avista Energy Energy Marketing and Resource Management Adding customer value through our experience and knowledge of the integrated gas and electric systems. Teck Cominco Chelan PUD

23 We answer to you. Avista Energy Overview 51 employees headquartered in Spokane, Washington Deep operating experience within the region Four employees in Vancouver, BC office Natural gas end-use marketing with over 250 customers Two employees in Montana Natural gas end-use marketing with over 12 customers Strong record of financial performance Annual Average Return on Equity approximately 15% (1997 to 2005) Net income of $277 million since 2000 Total dividends to Avista Capital of $176 million Lancaster Generating Station

24 We answer to you. Avista Energy Business Model How the business operates Marketing energy to wholesale and large end-use customers Moving energy between locations, by transporting to higher price markets Moving energy between time periods, by storing it in the interim Capturing price differences between commodities, by converting gas into power Speculating on future price movements

25 We answer to you. Firm Electric and Natural Gas Resources SASKATCHEWAN Medford Mid-Columbia Chelan Malin COB Spokane AECO Sumas Stanfield Lancaster (270mw) BRITISH COLUMBIA ALBERTA Jackson Prairie Storage John Day (2.7 BCF) Kingsgate Teck Cominco Clark PUD (280 mw) To Rockies MONTANA IDAHO OREGON Electricity Transmission BPA PGE Hydro Facilities - Chelan PUD - Teck Cominco Location Spread Time Spread Gas Pipeline Transport GTNC WGPW Natural Gas Storage - COBB (Montana) - Jackson Prairie Inter-commodity Spread Natural Gas-fired Generation - Lancaster Project - Clark County PUD - Barrick Goldstrike Mines COBB Storage (.74 BCF) * * Barrick (Nevada) (115 mw)

26 We answer to you. Avista Energy Key Contractual Assets and Strategic Agreements Power Generation and Transmission Lancaster 270 MW CCCT power project 250 MW of NW point-to-point transmission (BPA) 200 MW of firm AC intertie transmission capacity Chelan PUD: real-time management of 2000 MW hydro system Teck-Cominco: 450 MW hydro optimization Clark PUD: 280 MW CCCT optimization Barrick Goldstrike Mines: 115 MW thermal optimization Columbia Power Corporation: 70 MW hydro optimization in 2007 Natural Gas Jackson Prairie Natural Gas Storage (2.7 million MMBtus working capacity; 100,000 MMBtus per day) Nova/ANG/GTN: long-term natural gas transport 250 plus end-user customers and growing Clark County PUD: fuel manager (48,000 m/day) City of Ellensburg: utility operations (storage, transportation, commodity, scheduling)

27 We answer to you. Avista Energy Growth Opportunities Improve recent ROE performance Grow asset base that we manage for other firms Grow end-use gas customer business Consider strategic alternatives

28 We answer to you. Financial

29 We answer to you. Consolidated Earnings $0.60 $0.89 $0.72 $0.92 $0.91 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 2002 2003 2004 2005 Q2 YTD 2006

30 We answer to you. AVA Dividend Payment History $0.12 $0.125 $0.130 $0.135 $0.140 $0.145 $0.100 $0.105 $0.110 $0.115 $0.120 $0.125 $0.130 $0.135 $0.140 $0.145 $0.150 Dividend Increase Occurred Dividend Payment Trend $0.12 per share dividend initially paid Dec. 15, 1998

31 We answer to you. Percent Change in Stock Price Compared to Northwest Utilities and the S&P MidCap Utilities December 31, 2002 through September 1, 2006 PSD +1.90 AVA +107.18 IDA +54.09 CGC +28.40 S&P +64.90 NWN +42.09 -20% 0% 20% 40% 60% 80% 100% 120%

32 We answer to you. 2006 Earnings Guidance $(0.05) Other $0.10-$0.12 Avista Advantage $0.20-$0.30 Energy Marketing & Resource Management $1.00-$1.15 Avista Utilities $1.30-$1.45 Consolidated

33 We answer to you. This presentation contains forward-looking statements, includingstatements regarding the companys current expectations for future financial performance and cash flows, capital expenditures, the companys current plans or objectivesfor future operations, future hydroelectric generation projections, projected energy deficits in future periods and other factors, which may affect the company in the future. Such statements are subject to a variety of risks, uncertainties and other factors, most of which are beyond the companys control and many of which could have significant impact on the companys operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from the thoseanticipated in such statements. The following are among theimportant factors that could cause actual results to differ materially from the forward-looking statements: weather conditions, including the effect of precipitation and temperatures on the availability ofhydroelectric resources and the effect of temperatures on customer demand; changes in wholesale energy prices that can affect, among other things, cash requirements to purchase electricity and natural gas for retail customers, as well as the market value of derivative assets and liabilities and unrealized gains and losses; volatility and illiquidityin wholesale energy markets, including the availability and prices of purchased energy and demand for energy sales; the effect of state and federal regulatorydecisions affecting the ability of the Company to recover its costs and/or earn a reasonable return; the outcome of pending regulatory and legal proceedings arising out of the western energy crisis of 2001 and 2002, and including possible retroactive price caps and resulting refunds; changes in the utility regulatory environment in the individual states and provinces in which the Company operates as well as the United States and Canada in general; the outcome of legal proceedings and other contingenciesconcerning the Company or affecting directly or indirectly its operations; the potential effects of any legislation or administrative rulemaking passed into law,including the Energy Policy Act of 2005 which was passed into law in August 2005; the effect from the potential formation of a Regional Transmission Organization; wholesale and retail competition; changes in global energy markets; the ability to relicense the Spokane River Project at a cost-effective level with reasonable termsand conditions; unplanned outages at any Company-owned generating facilities; unanticipated delays or changes in construction costs with respect to present orprospective facilities; natural disasters that can disrupt energy delivery as well as the availability and costs of materials and supplies and support services; blackouts or largedisruptions of transmission systems; the potential for future terrorist attacks, particularly with respect to utility plant assets; changes in the long-term climate of thePacific Northwest; changes in future economic conditions in the Companys service territory and the United States in general; changes in industrial, commercial andresidential growth and demographic patterns in the Companys service territory; the loss of significant customers and/or suppliers; failure to deliver on the part ofany parties from which the Company purchases and/or sells capacity or energy; changes in the creditworthiness of customers and energy trading counterparties; the Companys ability to obtain financing through the issuance of debt and/or equity securities; the effect of any potential change in the Companys credit ratings; changes in actuarial assumptions, the interest rate environment and the actual return on plan assets with respect to the Companys pension plan; increasing health care costs and the resulting effect on health insurance premiums paid for employees and on the obligation to provide postretirement health care benefits; increasing costs of insurance, changes in coverage terms and the ability to obtain insurance; employee issues, including changes in collective bargaining unit agreements, strikes, work stoppages orthe loss of key executives, as well as the ability to recruit and retain employees; changes in rapidly advancing technologies, possibly making some of the currenttechnology quickly obsolete; changes in tax rates and/or policies; and changes in, and compliance with, environmental and endangered species laws, regulations, decisions andpolicies, including present and potential environmental remediation costs. For a further discussion of these factors and other important factors,please refer to the companys Annual Report on Form 10-K for the year ended Dec. 31, 2005 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. Theforward-looking statements contained in this presentation speak only as of the date hereof. The company undertakes no obligation to update any forward-looking statementor statements to reflect events or circumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipatedevents. New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the companys business or the extent to which any such factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-lookingstatement.

34 We answer to you.

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