Acadia Realty Trust (AKR) 2004 Q4 法說會逐字稿

Good day and welcome to the Acadia Realty Trust fourth quarter conference call. My name is Anika, and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's conference. If at any time during the call you require assistance please press star followed by 0 and a coordinator will be happy to assist you. As a reminder this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's conference, Jon Grisham. Please proceed sir.

Thank you Anika. Good afternoon, everyone. Thank you for joining us for Acadia Realty Trust's fourth quarter conference call. At this time, I would like to inform our listeners that in addition to historical information, this conference call contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates, and projections about the industry, and markets in which Acadia operates, and management's belief and assumptions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties as discussed periodically in the Company's filings with the SEC. These factors can cause actual results to differ materially from those expressed or implied by such forward-looking statements. During this call management may refer to certain non-GAAP financial measures, including funds from operations and net operating income, which we believe to be meaningful and helpful to investors when discussing results in the REIT industry. Please see our financial and operating reporting supplement posted on our website for a reconciliation of these non-GAAP financial measures with the most directly comparable financial measures calculated and presented in accordance with GAAP. Following management's discussion there will be an opportunity for all participants to ask questions. At this time I'd like to turn the call over to Ken Bernstein, Acadia's President and Chief Executive Officer. Ken, please begin.

Thank you, Jon. Along with Jon, joining me this afternoon is Mike Nelsen. Today we're going to review our fourth quarter as well as our year end 2004 results. We are quite pleased with our results both in terms of our internal portfolio performance, balance sheet strengths and our external growth initiatives. Today in reviewing our results we will walk through the three key components of our business plan. First our portfolio performance. As you can see from our strong same store NOI growth, occupancy gains, and leasing spreads, our portfolio performance in the fourth quarter and for the year remain strong, reflecting the stability and the up side within our portfolio as the progress of our redevelopments continue. Second, our balance sheet. Mike will walk you through not only our strong ratios, but our continued progress in the fourth quarter in limiting interest rate exposure and ensuring strong access to capital. Third and finally, our external growth program in the fourth quarter. We continued to add to the external growth initiatives that we launched in 2004 with the formation of our Fund II and creation of two new platforms. Our New York Urban/Infill Redevelopment Platform and our RCP Venture. After Mike and Jon discuss our financial performance and our guidance I'll walk you through our portfolio performance and update you on our external growth initiatives. Now I'll turn the call back to Mike and Jon.

Thanks, Ken. Jon will now discuss the Company's results of operation for the quarter and the year ended December 31st, 2004.

Thank you, Mike. Following is a brief summary of our financial and operating results for the period. Note that all per share amounts that I discuss are on a fully diluted basis. FFO for the fourth quarter 2004 was $0.25 per share, which is up 13.6 percent over fourth quarter 2003. FFO for the full year 2004 was $0.98 compared to $0.95 for 2003. In comparing the two years, it is important to note that 2004 included a charge of $0.02 per share relating to flood damage at our Mark Plaza property and that 2003 FFO included income of approximately $0.04 from a lump sum additional rent payment received from a tenant in connection with the reanchoring and our Branch Plaza. Adjusting for these factors, 2004 FFO of $1 compared to 2003 FFO of $0.91 represented approximately 10 percent earnings growth.

Earnings per share for the fourth quarter 2004 was $0.32, which included a gain of $0.21 from the disposition of the East End Center. This compares to a $0.02 per share loss for fourth quarter 2004 which included a $0.10 noncash write-off of unamortized tenant improvement costs related to the buyout and termination of the former anchor at the Town Line Plaza Redevelopment Project. For the year earnings per share was $0.65 for 2004 compared to $0.29 for 2003. Same-store net operating income for fourth quarter 2004 increased by 4.1 percent over fourth quarter 2003, and for the full year, NOI was up 3.9 percent. These results for the year were driven primarily by occupancy gains and positive rent spreads on new and renewal leases during the year. Mike will now continue the discussion of our financial condition and 2005 guidance.

Thanks, Jon. We continue to maintain a solid financial condition, which is one of the strongest in our sector, as evidenced by the following ratios. All of which include the Company's pro-rata share of our joint venture debt and interest expense. Debt to market capitalization of 30 percent. This compares with 37 percent for the third quarter of 2004. FFO payout ratio is 66 percent for the year 2004, fixed charge ratio of 3.2 times, and 94 percent of our debt is currently fixed rate with an all-in cost of 5.9 percent. This compares with 79 percent fixed as of third quarter 2004, with only a 10-basis point increase in our average cost of debt. We are continually -- continuously reviewing and revising our debt profile in order to minimize exposure to interest rate risk and maintain a rational debt maturity schedule. During the fourth quarter, in our core portfolio, we extinguished 23.8 million of 8.13 percent debt and paid down $47.6 million in floating rate debt.

In our joint venture portfolio, we refinanced the Crossroads Shopping Center mortgage from a floating rate which was fixed at 7.16 percent through a swap, maturing in October 2007, to a fixed rate 5.37 percent loan, maturing in 2014. This refinancing providing Acadia with additional proceeds of approximately $14 million after paying down 1.4 million to one line on the existing swap. As a result of these transactions Acadia's debt is now 94 percent fixed rate with a weighted average maturity of 7 years. At year end, our availability under existing credit facilities aggregated $33 million. During the quarter, Acadia completed an equity offering of 1.9 million shares which provided $28.3 million worth of proceeds. These proceeds were used to further de-lever the balance sheet by retiring $11.4 million of above-market fixed rate debt. The remaining $16.9 million was temporarily used to reduce the Company's borrowings under its lines of credit, and will be utilized to fund future investment activity, including Fund II acquisitions, anticipated mezzanine or preferred equity investments, and other potential investment opportunities. We are in the process of completing negotiations for a $62 million line of credit to supplement our current availability. Borrowings under this line will be on a nonrecourse basis collateralized by first mortgage leans on five of the Company's properties.

Looking forward to 2005, we are projecting FFO per share of between $1.01 and $1.09. Even though we've narrowed this range slightly since last quarter, we recognize the range of our guidance is still rather broad. This is due to several factors. One, internal growth. The Company's same property portfolio including the joint venture properties on a pro-rata basis, is expected to experience strong growth of approximately 4 percent for 2005. This will be driven principally by expected portfolio positive leasing spreads. However, counterbalancing this anticipated growth is our belief in the conservative forecasting of reserves. In 2004, we continued to experience low tenant credit losses in the portfolio, and while we can't predict what the future will bring, in terms of tenant bankruptcies, we feel it prudent to provide a more conservative reserve for potential leasing and credit issues of between a penny and $0.03 above those actually incurred in 2004. After giving effect to these factors we're projecting between $0.01 and $0.03 of internal growth on a net basis.

External growth, we are forecasting external growth of between $0.02 and $0.06. The low end of this guidance should be achieved solely from completed transactions and a preferred equity investment under agreement and expected to close during the first quarter 2005. This is after taking into account the short-term dilution from our fourth quarter 2004 equity offering. The upper end of our guidance anticipates an additional $0.04 from investing activities for a total of $0.06 with external earnings. Fee income and general and administrative expenses. Fee income is expected to increase principally as a result of a full year of asset management fees from Fund II, together with other projected fees. Offset by an increase in general administrative expenses related thereto as well as additional Sarbanes-Oxley related costs. While it is likely that the GNA increases will precede the incremental revenues by one or two quarters, overall for 2005, these factors are expected to provide between $0.00 and $0.02 of growth. As reflected in our 2005 guidance, the fundamentals of our business remain solid. As the visibility of our internal and external growth increases, we will continue to narrow our guidance range through the year. Ken will now continue the discussion.

Thanks Mike. First we're going to review our portfolio performance. As Mike and Jon discussed our strong same store NOI growth within the portfolio continues to be driven by strong leasing and redevelopment performance. Our portfolio occupancy increased 320 basis points to 92.3 percent from 89.1 percent in the third quarter and increased by 470 basis points on a year-over-year basis. The most significant contributors were first, solid leasing activity. We had new and renewal leases totaling 640,000 square feet with average positive rental spreads of approximately 9 percent on a cash basis. Second was the sale of our non-core East End Shopping Center in Wilkes-Barre PA, which contributed to our occupancy gain by about 250 basis points and created 2 percent net earnings accretion. On a same-store basis our occupancy in the fourth quarter over third quarter increased 70 bips and year-over-year our occupancy increased 250 basis points.

In terms of tenant exposure, as Mike previously discussed, one of the key variables in our guidance is the amount of internal tenant reserves that will actually be used this year. In 2004 our default and bankruptcy reserves actually used were comparatively small, and while there's little on our radar screen to cause us to believe that this historically low rate will change, general prudence causes us to maintain a more conservative outlook going into 2005. More importantly, those leases which we are currently anticipating recapturing appear to be below market with releasing up side so that any FFO loss in 2005 should be short-term in nature. In terms of actual tenant exposure on the radar screen the only notable tenant is KB Toys. As anticipated to date, of our six locations we've now recaptured four. Of those four we've signed new leases at two of the locations with average positive lease spreads of over 15 percent and have identified interest in the remaining two locations at positive lease spreads as well. Thus our anticipated exposure of 1.5 cents of potential dilution in 2005 that we've mentioned on previous calls should be less than a penny in 2005 and, in fact, accretive in 2006. Separate of KB Toys we don't see any current material exposures. However, we do believe that the supermarket industry, for example, will continue to face margin pressure and consolidation. That being said most of our supermarket exposure is in infill market with below market rents. Elsewhere in our portfolio our exposure also seems to be counter balanced with leasing up side. For instance, in Greenwich, Connecticut we are getting back a store at our Greenwich Avenue property that contributes under a penny of FFO on an annualized basis. Thus, we'll have some down time in 2005 and it will create a short-term loss, but that market is so strong that we anticipate a profitable retenanting creating a long-term accretive event. So, to recap, our portfolio performance remains solid with strong NOI growth and occupancy gains driven by strong leasing, non-core dispositions, and the completion of several of our redevelopment projects.

Turning now to our external growth, 2004 was an important year for our further building on our value added acquisition platform. In the second quarter, we formed AKR Fund II with 300 million of discretionary equity to be invested over the next three years. Given the current pricing to stabilize retail properties, we focused our resource in two key value added areas which we launched in 2004. The first was our New York Urban/Infill Redevelopment Program, the second our RCP Venture. In the third and fourth quarters of last year we announced transactions in these two areas that should utilize at least 50 million of our 300 million of discretionary equity, thus keeping us nicely on track for our previously stated goal of investing $300 million of equity, $900 million of growth asset acquisitions over a three-year period.

Turning first to our New York Urban/Infill Redevelopment Program, we're excited by the opportunities that we see in the mid-size urban retail redevelopment arena, especially in the New York area. As opposed to other parts of the country, national retailers are under represented in this market and due to the high density and strong sales potential, retailers can pay profitably very attractive rents. In the third quarter we closed on the Sears building on Fordham Road in the Bronx as our first urban redevelopment project. The redevelopment is proceeding on plan as we previously anticipated based on strong tenant demand and our ability to expand somewhat the footprint of the redevelopment. The cost of the redevelopment project, including acquisition costs, is now estimated to be between 60 and 70 million up from our original 35 to $40 million projection. The anticipated unleveraged yield remains well in excess of 10 percent, and a leverage IRR should be achieved in the mid teens on this project.

In the fourth quarter we announced that we entered into our second urban infill redevelopment, a 16-acre warehouse site located on the border of the Bronx at Westchester County in Pelham Manor, New York. That will convert into a community retail center with at least 200,000 square feet. We anticipate the redevelopment will cost between 30 and $35 million total, and as with the Fordham Road project, this redevelopment also contemplates construction commencing within the next 24 months, and upon stabilization we're projecting the property will also generate an unleveraged yield in excess of 10 percent. From a short-term earnings perspective with respect to both our Fordham Road and our Pelham Manor redevelopments there will be little accretion in 2005. But upon stabilization, these projects, totaling approximately $10 million in gross development costs, should start contributing approximately $0.05 of FFO per year and thus they're helping us build a nice pipeline for future growth. While back ended, these redevelopments, from a total risk-adjusted return perspective, are far more exciting than the short-term accretive, but potentially long-term NAV dilutive acquisitions of stabilized properties that we are seeing.

Looking forward with respect our Urban/Infill pipeline for 2005, we are working on several projects of similar size and scope. We have two projects also totaling about $100 million in development costs that we anticipate commencing shortly. One is under agreement for property in northern Manhattan, and another is in Brooklyn, which we anticipate putting under agreement shortly. Again, these may not provide significant accretion in 2005, but should start contributing in 2006, 7, and beyond, and should provide earnings growth upon stabilization similar to the estimated $0.05 from the Fordham and Pelham Manor projects.

Turning now to RCP in the first quarter, we launched the second component of our growth strategy, our Retailer Controlled Property or RCP Venture. As we previously discussed in detail the venture is with the Klaff Organization and its long-term partner Lubert-Adler. The focus of the RCP Venture is to acquire retailer controlled properties working both with financially healthy and distressed retailers to create value from their surplus or liquidating real estate. In the fourth quarter we commenced our first RCP venture investment with our participation in the acquisition of Mervyn's where we joined the investment consortium of Sun Capital, Cerberus, and our RCP partners. The Mervyn's investment is proceeding as planned. While the Mervyn's transaction is not anticipated to provide more than a penny of initial accretion in 2005, we are confident that the longer term earnings contribution over the next few years will be well in excess of our usual mid-teens plus leveraged returns on equity -- on our other similar sized equity investments. In terms of 2005 activity, for RCP, our participation in the Mervyn's acquisitions is the first of what we hope will be several exciting and profitable investments with our partners in our RCP Venture who we feel have clearly proven themselves to be one of the premier groups in this arena. We look forward to expanding this venture and we'll keep you advised as to our progress.

Along with our two investment platforms that I just discussed, we have periodically made and anticipate continuing to make additional mezzanine and preferred equity investments where the transactions are compelling both from a strategic and a financial perspective. We are seeing opportunities to invest capital at attractive risk adjusted returns in assets that we would be thrilled to own at our level in the capital structure. This will not be a major portion of our growth strategy, but does it enable to us further enhance our capital recycling capabilities such that the repayment of prospective mezzanine investment should coincide nicely with our anticipated three-year Fund II coinvestment requirements. We are looking at approximately $25 million of such investments this year and will keep you posted as to our progress.

In terms of our general acquisition outlook we are confident that whether through our RCP Venture, our Value-added Redevelopments or other opportunistic investments that may arise, that there will be sufficient opportunities to move the needle on a company of our size. We recognize that estimating short-term external growth is made more difficult by these more back-ended investments. Our current pipeline includes more of the same, but it also includes a host of potentially immediately accretive transactions, predicting which will hit and when is always a difficult process, thus this is part of the reason for our broad 2005 guidance. Nevertheless we're going to continue to remain disciplined, focus on creating real estate value that, whether accretive in 2005 or not, will translate into long-term shareholder value.

To conclude, we continue to be pleased with our business model, all three components of our business plan are on track. Our core portfolio performance remains strong. Our balance sheet is solid and we've strengthened it further by limiting our exposure to rising interest rates and by extending maturities. Our dividend pay out is one of the strongest in our sector and this puts us in a position to provide our shareholders with not only a safe dividend, but also one that can grow as our earnings growth continues. Third and finally our acquisition initiatives are laying the foundations for strong future growth. Both our New York Urban/Infill platform and our RCP Venture are enabling us to invest in exciting value-added opportunities at a time when even the most secondary shopping centers are trading at unprecedented cap rates. During a period where capital is easily available and worthwhile acquisitions are extremely difficult to complete we're very excited by the investments we're making. When the cycle shifts, our strong balance sheet, dry powder and accretive acquisition structure should be that much more valuable to our shareholders. I would like to thank and congratulate the member of the Acadia team for their hard work, dedication and focus in 2004 and their strong results that accompanied this effort. And at this point I would be happy to take any questions.

Ladies and gentlemen, if you wish to ask a question, please key star followed by 1 on your touch-tone telephone. If your question has been answered or you wish to withdraw your question, press star followed by 2. Please press star 1 to begin. Please stand by for your first question. And our first question comes from the line of Michael Bilerman of Smith Barney. Please proceed.

Good afternoon. Jon Litt is on the phone with me as well.

Hi Michael. How are you?

Good, I was wondering if you could talk about -- you said you have identified investments expected to close in the first quarter. Is that related to these two redevelopment opportunities or is there something else?

Separate of those.

And what are the identified investments, then?

We have identified one preferred equity investment, or two, and a small mezzanine investment as well.

What's the dollar amount in the preferred and what's the yield on that?

It will be -- they will below double digit, ranging 10 to 15 percent. The dollar amount is probably about $20 million.

What's the leverage effectively on the assets?

They tend to be fairly conservative, the 75 to 80 percent range.

Separate from your mez piece?

Including our mez piece. In other words, where there's securitized debt out there, that is significantly under levered but can't be defeased or paid off, it's a good opportunity for us to put in mezzanine equity that we think is very safe on a risk-adjusted basis, and whether we earn 10, 11, 12, or 15 percent it works quite well for us.

Okay. What do you think of mez equity kind of going from the 85 to 95 percent level. You're saying this piece only takes it up to the 75 level?

Yes. Correct.

And the term is the same term on the mortgage debt or a different term?

It varies based on-- lets say, you know, in each case we have clear exit strategies where we don't to have worry about another source of capital coming in to take is out other than refinancing or sales.

And you want to do this wholly owned on your balance sheet or do this within the funds?

We're looking at them in both different ways depending on the size and specifics. Many of them will be wholly owned. Again, right now we are underlevered and have capital where we can put to work and then as we get it back over the next 12 to 24 months it goes nicely into our Fund II obligations. Remember we have $50 million of the 300 that we want to invest over the next three years, so it's not only accretive day one, but as we get it back we will be putting it into even more, hopefully highly accretive 15 to 20 percent return instruments.

And the two deals --The two new redevelopment opportunities are those with your venture with P.A. as well?

Correct.

What would your interest be in terms of net to Acadia in terms of your share?

If it's $100 million transaction, we probably will use -- the two combined will probably use about two-thirds debt, so there's $35 million of equity. We are just under -- well, we are 90-plus percent of the equity, meaning Fund II, Acadia is 20 percent of that.

And those are typically done 50/50 though, right, with PA?

No, above a very high hurdle, then they get additional profit participation.

Can you talk a little bit about how Mervyn's is going? Have any of the stores been sold? What is the business plan going to be, and sort of how well Acadia starts to harvest in value.

It's a little early for us to start talking about it. What I did say is it is proceeding on plan. Not trying to be coy about it, but it's a very fluid process. We're pleased with how it's going and as soon as we can give you more color we certainly will.

Have you been in the market with any stores yet? Has the process been started in effect?

When we talk about the process as an operating business and before we closed, that process was moving. We had not made any comments as to the real-estate component of this and we are still not commenting at this point.

Just want to turn to same store NOI. I think you said that most of the same store NOI comes from occupancy and rents and rollovers, but when you sort of look at the detail from page 17 in your supplemental, it looks likes expenses for the year came down, or essentially flat. They were down 13 percent in the quarter. Is it more it expense driving it rather than top-line?

For the year it's clearly mostly revenue driven. For the quarter, it is mostly expense driven, but that's more or less just timing differences related to tenant movement. You're only talking about $300,000 of revenue, give or take, and we think that the year end results are more indicative of long term performance.

The 3.9 versus the 4.1 which is still, we think, pretty strong for the retail sector.

Right. and revenues were up 2.6 but your expenses were flat so you did more on the expense side than did you on the revenue side.

Certainly expenses, you know, did contribute to the performance, but revenue drove it significantly as well.

When you look out to 2005 I think you talked about 4 percent primarily driven by positive spreads on renewals, but you only had 6 percent of your portfolio rolling next year. I don't know how you get 6 percent rolling, let's call it up 10, translating into 4 percent same-store growth.

Well, it is both being driven by renewals and lease-up as well.

Do you have sort of an occupancy target that you're looking to get to?

We've said all along that we're shooting for give or take 1 percent a year, and that certainly is the goal for 2005.

Okay. Then last question, just Ken, I know you're flush with liquidity and your debt levels are down, but at some point do you consider selling more non-core assets given your commentary about the market where you're seeing more secondary assets trade at really high valuation?

Yes. The East End transaction where we were able to shed what was clearly, in my view, a non-core asset at a very attractive price and it also then had along with it the extinguishment of above market debt, so it was immediately accretive, are the kind of transactions we're always looking to do. I don't sit there in our portfolio and think we have any major time bombs, but the pricing is very attractive out there, and where we can do it and recycle it, especially where we can do it where it won't have any material impact short term on our earnings, we're certainly going to do it. And we've in the past been very willing sellers when we thought it was appropriate so nothing would prevent us from doing that again.

Do you have any of that baked into your '05 numbers?

No. Right now, we have no earnings impact one way or the other. But that doesn't mean that there wouldn't be an FFO-neutral disposition. So it doesn't -- you know, on the whole, the way we're looking at it, depending on if we can redeploy that capital one way or another, we can do as many of those as the opportunistic market permits and it should not have any material impact on our earnings.

Okay. Thank you.

Your next question comes from the line of Michael Mueller of J. P. Morgan. Please proceed.

Hi. Going back for a second, the preferred equity investments that are identified at this point, the $20 million is that combined, or is that per investment?

Right now, that's -- we're looking at 20 to 25 in aggregate total, and then that would probably be it, both for the year and until the capital started being returned.

Okay. Is there a new plan for the Sears building? Because you were talking about the costs going up. It looks like maybe 20 to 30 billion.

As I said, we've been able to expand our footprint, if any of you have visited, there are adjacent parcels. so we are in the process of doing that. The tenant demand has been very strong. I'm not going to get into the specifics. There have been some things in the press about whether Sears is staying or going. It's a fluid situation but the level of interest is in fact stronger than we originally anticipated so that's enabling us to expand the scope of the project. Not dramatically, but that was a pretty significant increase dollar wise going from the 35 to 40 to the 60 to 70 range.

Okay. Lastly, can you just walk us through in a little bit more detail the timing of the cash flows that relates to KB Toys and the four locations, what's cash flowing now, what's not, and when the changes will occur?

Sure. Jon, you want to do this with me? Of the six, two are currently cash flowing because they have not rejected those. Of the remaining four, --.

of the remaining four, we have at our Brandywine property we have a new tenant that's in and paying rent, so that's not dilutive. We have another location at our Soundview Marketplace which will not -- we don't anticipate will be released in 2005 but rather early 2006. We have another location, two other locations, one, Walnut Hill, where we've signed a lease and they're moving in, in the second quarter, and then another one where we have strong interest in -- and we think we'll close the deal during the year. So all combined, net, we're talking very minimal dilution. It's actually less than a quarter of a penny as a result of KB movement. And then it will actually turn positive in 2006 when we lease up the last two locations.

So Walnut Hill is second quarter this year or next year?

This year.

Thanks.

We'll end up with north of 10 percent positive lease spreads on all of it.

Okay. Thanks.

Our next question comes from the line of Ross Nussbaum of Banc of America Securities. Please proceed.

Hi, good afternoon.

Hey, Ross.

Ken, can you talk about the sequential occupancy change in the fourth quarter? What drove the big increase there?

Two main components as I walk through and --.

Right. Ross, in total it was 320 basis points fourth over third quarter. The effect of the East End was about 250 basis points, so putting it on a same-store, you know, platform, or analysis, it's a 70-basis-point increase, and that really is driven by two or three leases -- larger leases throughout the portfolio. Maybe a total of about 30,000 square feet in total.

Got it. And Ken talk a little about your -- in your acquisition pipeline for this year what's kind of the minimum yield threshold that you're not willing to go below?

Well, it depends on risk, Ross. Historically, we have not dipped below kind of the 8 percent yield on anything that approaches stabilized. We have not dipped below the 10 percent on redevelopment activity where we've got to work hard and it takes a couple years, and, you know, we're always looking at different types of opportunities, different situations that may make sense, but because of our size we haven't needed to be a 7-cap winning bidder on the portfolios that you like to write about, much less a 6.25 cap. So in our pipeline and what we are currently anticipating for our earnings growth we have not included us winning the bid on X Y Z portfolio being put up for auction.

Thank you.

Once again, ladies and gentlemen to ask a question please key star followed by 1 on your touch-tone phone. At this time, gentlemen, there are no further questions. I'd like to turn the call over to Mr. Bernstein for closing remarks. Please proceed sir.

I'd like to thank everybody for listening, and we look forward to speaking with you all soon.

Once again we thank for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.