Acadia Realty Trust (AKR) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the first quarter 2006 earnings conference call.

[OPERATOR INSTRUCTIONS]

As a reminder this conference is being recorded for replay purposes.

The Company would like to inform its 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 market and with Acadia operates, and managements beliefs and assumption.

Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties as discussed from time to time in the Company's filings with the SEC. These factors can cause actual results to differ from 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 they believe to be meaningful and help investors when discussing the results in the REIT industry.

Please see Acadia's financial and operating report and supplement posted on this website for reconciliation of these non-GAAP financial measures with the most directly comparable financial measures calculated and presented in accordance with GAAP. Following management discussion, there will be an opportunity for all participants to ask questions.

At this time I would like to turn the call over to Ken Bernstein, Arcadia's President and Chief Executive Officer, please proceed, sir.

Thank you, good afternoon.

Joining me are Mike Nelsen and John Grisham and today we're going to review our first quarter results. In reviewing our results, we'll walk through the key components of our business plan, all of which contributed to last quarter's strong performance.

First in terms of our core portfolio, as you can see from our strong paying store in (inaudible), our portfolio performance in the first quarter continued to drive our internal growth with performance at the upper end of our internal expectations.

We'll review these results and discuss some retenancing opportunities that we see arising in the portfolio. In terms of our balance sheet, our discipline with respect to limiting our interest rate exposure has enabled us to continue to maintain very strong financial ratios. Mike will walk you through these ratios and our ongoing fine tuning.

Third, and finally, with respect to our external growth platform, in the first quarter, we continued to both harvest projects as well as plant the seeds for future growth, on the investment side, we continued to focus on our key external growth initiatives, first our New York urban infill platform, second, our RCP venture and on the harvesting side, in the first quarter, we closed our highly profitable Brandywine recapitalization. Additionally, we continued our periodic asset recycling within our core portfolio.

After Mike and John discuss our earnings and balance sheet, I will update the status of these initiatives and now I'll turn the call over to John.

Good afternoon, before we discuss earnings results for the quarter, I'd like to take a few minutes to discuss the impact of the new consolidation rules on our financial statements.

As a result of EITF 04-05, we are now required to consolidate our investments in our Funds I and II which was effective January 1st of this year. Accordingly, all of the assets, liabilities, revenues and expenses of our funds are included in our financial statements for the first quarter 2006. The other fund investor's share of these accounts are reflected as minority interest on the consolidated balance sheets and income statements.

The reason we are required to consolidate under the EITF is due to the high level of control that we exercise over our funds. This has provided us with the necessary discretion essential for our opportunistic investment program. Historically, our investments in the funds have been presented on an equity or unconsolidated basis in our financial statements. We now are also presenting our historic financial statements on a consolidated basis so as to be comparable with the current year presentation.

Although Arcadia still earns and collects management fees from all of our funds, the fee income and expense line items in the income statement have been eliminated as a result of the consolidation. For 2005, Brandywine was a Fund I investment, and thus included in the consolidated Arcadia financial statements.

In January 2006, the Brandywine portfolio was recapitalized where by the fund investors effectively sold their interest at a significant profit and Arcadia retained it's 22% share in a new joint venture with the buyer. As a result, we now account for our Brandywine investment on an unconsolidated basis and reflect our share of income as equity and earnings of unconsolidated partnerships in our income statement.

All this being said, we realize that these changes make it more difficult to compare our current versus historic results. In an effort to provide the highest level of transparency, the financial statements included in our quarterly financial reporting supplement reflect a pro rata consolidation of all of our investments and joint ventures. This is consistent with our presentation in previous supplements and provides a high level of comparability between current and historic periods.

Now on to earnings for the quarter. FFO for the first quarter 2006 was $0.28 per share. In comparing this to fourth quarter 2005 of $0.26, the following were the key variables. As we stated last quarter, fourth quarter '05 included $0.03 of Mervyn's promote income which was offset by $0.04 of one time G&A. Adjusting for these results, our results would have been $0.27 for the fourth quarter.

First quarter 2006 of $0.28 increased $0.01 over this adjusted fourth quarter '05, primarily as a result of one, $0.015 of Mervyn's promote and operating income, two, $0.01 of net Brandywine 41 adjustment. This is net of the (inaudible) costs that we incurred in the first quarter and then $0.02 of disproportionate G&A in the first quarter which is not anticipated to recur in the remaining quarters in 2006.

Turning now to earnings per share, ETS from continuing operations for the first quarter 2006 was $0.12, this compares to $0.13 for the year ago quarter. Recall that first quarter 2005 included $500,000 of income or $0.015 per share related to an insurance claim adjustment. Discontinued operations represent activity from our Soundview Marketplace on Long Island and the Bradford Shopping Center in Pennsylvania, both of which currently are being marketed for sale.

Now, I'd like to turn the call over to Mike.

Good afternoon.

First, I'd like to discuss our balance sheet. We continue to maintain a sold financial condition as evidenced by the debt to market capitalization of 30% as well as a 2.9 to 1 fixed coverage--six charge coverage. 91% of our debt is currently fixed rate with a sub-6% all in cost. FFO and AFFO payout ratios of 64% and 68% respectively.

During the quarter, we completed a $20.5 million 10 year fixed rate financing of a wholly owned asset at 5.4% and a $30 million floating rate financing of a Fund II property. The effect of these transactions increased our fixed rate debt waiting from 88% to 91%. Subsequent to quarter end, we paid down $15 million of Fund II floating rate debt and are in the process of refinancing the Brandywine portfolio with fixed rate 10 year financing.

Following these transactions and before the effect of the redeployment of Arcadia's share of anticipated proceeds of approximately $35 million from the Brandywine refinancing, fixed rate debt will increase to 92%. As a result of our greater than 90% fixed rate waiting, we've been able to maintain a less than 6% cost of debt despite an over 2% increase in (inaudible) over the past year.

We continue to focus on a debt profile to minimize our interest rate risk and maintain a balance debt maturity schedule. Now, I'd like to turn to our 2006 earnings forecast. As we've announced we're maintaining our guidance for the year of between $1.14 to $1.19. As John mentioned, first quarter results of $0.28 included in net, $0.005 of income, which is not anticipated to recur in future quarters. This is expected to be counter balanced by a reduction of between $0.01 and $0.015 of seasonal related operating expenses. Accordingly, $0.29 represents a reasonable base run rate for the balance of 2006. The key variables that could impact our forecasted range continue to be tenant performance and incremental external growth.

Now, I'd like to turn the discussion back to Ken.

Thank you, Mike.

First we're going to review our portfolio performance. Our portfolio continues to produce solid staying store NOI growth of 4.7% with our portfolio occupancy at 93.7% and new and renewal rent spreads at 8.7% In terms of occupancy, this year we're in the process of recapturing what could total as much as 90,000 square feet of occupied space that could temporarily bring our occupancy slightly below 93%. You're seeing a little of this impact in our first quarter occupancy with the balance occuring over the next few quarters.

We're in the process of releasing this space at attractive lease spreads such that the short term decline in occupancy should be more than offset by higher quality tenancies and higher rent. This square footage is primarily in five properties, most significantly Bloomfield Hills, for example, where we're recapturing almost half of this vacancy and expect to reassemble the space to add one of the two large national electronic's retailers as well as smaller tenants such as Panera Bread and a high end furniture retailer.

This activity should be long-term accretive but could impact our occupancy by up to 100 basis points at some point during this year. This retenancing is in our current forecast both in terms of our '06 NOI and FFO. In terms of tenant exposure, our portfolio also continues to benefit from strong tenant performance as we continue to reiterate or tenant default rates and related reserves to actually utilize continue to remain very low and on a microbasis, there's little on our radar screen to cause us specific concerns of this changing, however, from a macroperspective, we are very carefully watching consumer trends in general and their potential impact on our retailers and our shopping centers and as always, these internal reserves remain an important variable in our 2006 outlook.

Turning now to external growth, along with strong portfolio performance and solid balance sheet metric in the first quarter our external growth initiative continued to make important contributions to our performance, both in terms of harvesting value already created and laying the groundwork for future growth. In the first quarter, we continued to focus on the key drivers of our external growth program and in doing so we completed several important transactions.

With respect to our New York urban infill program as we previously laid out, we continue to see interesting opportunities in the mid-sized, urban retail redevelopment arena especially in the New York metro area. We now have seven New York redevelopment projects, these projects could aggregate up to 1.5 million square feet and total acquisition and redevelopment costs of approximately $350 million.

As we discussed on our last call, we are now including on page 31 of our quarterly supplement a brief status estimate of timing and cost of this pipeline. It's important to note that timing, cost, and returns can shift and the goal of this schedule is only to give an estimate of our current status. We'll then update this schedule as we progress.

In terms of anticipated returns as a general matter we continue to see high levels of interest for metro urban assets both by tenants and investors and we continue to anticipate our unleveraged returns on total costs to be in the 9% to 11% range.

Here's a brief status update on the seven projects in order of estimated completion. First, Liberty Avenue in Ozone Park, Queens, construction has commenced on this CVS anchor project which we announced last quarter and that will also include a self storage facility. We expect that construction will be complete later this year and start contributing to our earnings in the first half of 2007 with satellite leasing and lease of the storage phasing in over 2007 and 2008. We expect the total cost of this ground leased property to be approximately $15 million.

216th Street in Northern Manhattan, in the first quarter we signed a 15 year lease with the New York City Department of Human Resources to relocate the agency from our Broadway at Sherman property into this vacant building which we acquired in the fourth quarter.

Construction has begun and should be completed in the first half of next year. The total cost of this project will be approximately $24 million and not only will we receive an attractive return on this development, but this relocation ensures the timely vacating of HRA from our Broadway at Sherman site enabling that redevelopment to proceed.

Third is Pelham Manor in Westchester, we'll redevelop this 16 acre warehouse site located on the border of the Bronx and Westchester and we'll convert it into a community center anchored by a Home Depot. We're in the process of finalizing the anchor leasing, vacating the existing warehouse tenant, and working through the municipal approval.

We expect the construction to commence on or before the first half of 2007. And the development to begin tenancing in the first half of 2008 with a cost currently estimated to be $35 million.

Fourth, Canarsie, Brooklyn, this 530,000 square foot warehouse property will be redeveloped into a Home Depot anchored development that along with additional retail will also include self storage. Unlike most of our New York transactions to date, which can be completed as of right--this development is subject to various approvals and are closing on the contract is conditional on receiving those necessary approvals.

Assuming the approvals are received as anticipated we expect commencing construction in the first half of 2007 and delivering the property in the second half of 2008, with an estimated cost of $55 million.

Fifth, 161st Street in the Bronx, the property's a 220,000 square foot office building located directly opposite the newly constructed 750,000 square foot Bronx courthouse complex and three blocks east of Yankee stadium. The new courthouse which is slated for opening later this year will dramatically transform 161st Street while the property is currently 100% occupied we intend to convert a significant portion of the current office space into retail uses for an incremental cost of approximately $20 million and a total cost of $70 million. We expect beginning this process in the first half of 2007 and completing it in phases but hopefully, by the second half of 2008.

Next, Fordham Road in the Bronx, 117,000 square foot property that currently anchored by a Sears with its lease expiring without options in July of 2007. We'll redevelop this into a multi-level retail and commercial building with up to 270,000 square feet.

The total cost of the redevelopment project including acquisition costs is currently estimated to be $100 million, but that may change depending on the scope of the project. As has been our game plan unless we recapture the Sears lease prior to its expiration, we anticipate commencing construction shortly after its recapture in July 2007 and completing in the first half of 2009.

Finally, our Broadway at Sherman project in Northern Manhattan, the property is directly across from 4 Trion Park, which is home to the cloisters (ph.) it's our plan to redevelop the current 140,000 square foot building to a 300,000 square foot project with approximately half remaining commercial and half being used for a new residential tower.

It is very likely that we will not directly develop the residential portion. As we discussed in connection with our 216th Street redevelopment we plan on vacating the existing New York City HRA Department early next year and commencing the construction of the property shortly thereafter in the second half of 2007, and completing the redevelopment in 2009. The total cost for the 175,000, approximately, square feet of commercial development component is expected to be $55 million.

So from an earnings perspective as we stated on the last call, the seven redevelopments while providing little accretion in 2006, upon stabilization, these projects should start contributing between $0.08 and $0.16 of FFO depending on the ultimate size and development returns that we are able to achieve. With these earnings phasing in between 2007 and 2009, thus, they're helping us build a very nice pipeline for future growth.

The second key component of our growth strategy is 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. In 2004 we commenced our first RCP Venture investment with our participation in the acquisition of Mervyns, as we discussed on the last call, several important transactions were completed in 2005 with respect to this investment where 174% of our $24.5 million investment has already been returned.

In the first quarter, an additional $2.8 million was distributed to Arcadia and its fund of investors increasing our return to 185% of our investment and contributing just under $0.01 of FFO to our first quarter earnings. And while it's premature to count future profit, it's clear to us that this will be a very successful investment.

In terms of additional RCP investment activity we're continuing to work on a wide variety of potential opportunities and as we stated in the last call, with respect to the announced Albertson's transaction, which includes our RCP Venture partners, we anticipate participating in the consortium acquisition, however, due to the pending nature of the transaction and certain confidentiality agreements we're not commenting on the transaction at this time.

In addition to our New York Urban Infill program, our RCP investment activity as we previously announced in the first quarter we successfully closed on two additional investments as part of our ongoing asset recycling program. First was Clark & Diversy in Lincoln Park, Chicago, the second was the A&P Shopping Plaza in Boonton, New Jersey.

Additionally in the first quarter we listed two properties as discontinued operations with respect to to these two centers we're contemplating the sale but do not yet have a firm agreement. As in the past, these sales are part of our ongoing harvesting and asset recycling where we can continue to build a more powerful portfolio by selling assets with certain characteristics that are not compatible with our long-term growth strategy.

In the event of a sale, there would be potential tax issues and short-term employment issues, however we've already identified one asset to recycle into and anticipate other assets will be identified in the normal course of business such that any dilution from this would be short-term in nature. As we have done consistently over the past several years we're continually looking to refine our portfolio, both for redevelopment, re-leasing and asset recycling so that we can maintain a portfolio that is high barred entry assets and strong growth potential.

Along with asset recycling in the first quarter, we also made significant progress on the harvesting front. As previously announced as well as discussed in detail on the last call in the first quarter we closed on the very profitable recapitalization of our 1 million square foot Bloomington, Delaware shopping center, portfolio triggering our 20% promote interest and all future distributions from the fund and as a result of the promote interest, Arcadia's ownership interest in the balance of Fund I has increased from 22% to 38%, additionally as detailed in our supplement we anticipate earnings significant promote income ranging from $18 million to $23 million over the remaining lifes of the fund.

So to conclude we continue to be pleased with our first quarter performance and our business model. All components of our business plan are on track, our core portfolio performance remains strong, our balance sheet is solid and finally, our acquisition initiatives are laying the foundation for strong future growth.

We're investing our time and resources and capital in value-added opportunities that, while more back-ended from an earnings perspective appear to us to be very attractive on a risk adjusted basis.

Simultaneously we'd be done with the profitable harvesting of early investment which will provide significant earnings potential over the next several years. I'd like the thank and congratulate the members of Arcadia for their hard work and accomplishments last quarter and we would at this time be happy to take any questions.

[OPERATOR INSTRUCTIONS]

Your first question comes from the line of Ross Nussbaum with Banc of America Securities, please proceed.

Hi, it's Christine McElroy with Ross. What are you looking for in terms of additional acquisition volume this year both within the funds and on your own?

Generally, in terms of what we do on balance sheet is part of our asset recycling and my guess is it would be less then $50 million.

And then in terms of the fund and I know it makes this more complicated for modeling purposes, but the way we look at the volume overall is not what are we necessarily paying for the asset, the acquisition price for the total redevelopment costs, and we then shooting for between our various different ventures and thus, when we start talking about RCP it gets even difficult to extrapolate but in general, we're looking to put out approximately $100 million of equity on a two-thirds leverage basis of $300 million of gross and we think that again, assuming that the deals make sense, that's a target we'll be able to achieve with the first quarter including slightly less then a third of that.

Okay. At Fordham Road, how should we be thinking about incremental income in 2009 from a modeling standpoint, because you're currently earning income there, right? But does that income essentially go away during redevelopment?

Yes, most of that goes away.

Okay, and then, do you have any additional promote income from Mervyns included in your '06 guidance?

No, no. It's that--we obviously had the $0.01 in the first quarter that we discussed but in our forecast there is no other--no additional anticipated Mervyns' promote income.

Okay, and then lastly, can you remind me, the uptick in your joint venture NOI as a result of the Brandywine transaction is that a pretty good run rate for the rest of the year?

It is, as you recall, as we discussed at year end related to the the Brandywine transaction, the payment of our promote did not come out of the proceeds of the transaction. Rather, scheduled to come out of future Fund I income so we're effectively receiving 100% of the Fund I income at this point until that Brandywine promote is paid and we anticipate over--at least over the next two years that will be the case.

Great, thanks, guys.

Your next question comes from the line of Michael Bilerman with Citigroup, please proceed.

Hi, good afternoon. Actually, John, on that point, after the two years, your interest then in Fund I and what you are earning would go back down to the 38% that you now own of the fund?

Exactly right, that's right.

Maybe a question, Ken, you think about the other Fund I assets that you have which could trigger another $15 million of promote income, if they're sold, according to your schedule, what's the timing right now? I'm thinking about harvesting the other assets in the portfolio.

That's a great question. What we said on the last call was over the next three to seven years. And what--three to seven years from now we'll still say three to seven years but that's not likely to be the case.

The largest single portfolio in that, the Kroeger, Safeway portfolio has certain lock-ups in it that make it hard to harvest that one before 2009. Other than that, as assets reach stabilization, we're always are looking at what's in the best interest to maximize the value and things could happen quicker or we could put financing on them and determine that the cash flow make more sense.

For your modeling purposes and for our assumptions right now, we're assuming it over the three to seven years, but if it changes we'll certainly let you know.

Okay, and then maybe just walk through the Brandywine recap in terms of the debt that's currently on the asset, what you expect in terms of loan size and loan cost, and then also, talk a bit about the fact that you guys, I think, you guys gave a bridge loan, somewhere I guess, $44 million-is at a 9 yield. Talk about how all this will work.

Okay, effectively, as we sit here, there's currently $90 million of debt on the Brandywine assets of which $30 million is to an outside party and the balance is $60 million is split between the what I'll call the AII investors which were our original investors that loan money as a bridge and Arcadia that loaned about $17 million--$17.5 million as a bridge.

Those--that's the amount that's earning 9. So, of that $60 million, $40 odd million is being earned by the AII investors and Arcadia is earning the 9 on the $17.5 million.

We're currently talking about refinancing the whole portfolio at a total debt level of about $170 million. After taking out normal costs, the $170 million, probably provides somewhere in the neighborhood of $165 million of proceeds pays off $90 million of debt, which leaves about $75 million to be distributed.

We would get our the 22% of that $75 million or approximately 15, and then be repaid our $17 million--$17.5 million ahead of the proceeds, therefore, that's how we get Arcadia's share being $32.5 million, $33 million, $35 million, depending on how things squeak out. That's the profile.

And what's the rate?

And on a go forward basis, that $170 million will be put on, again, as a 10 year fixed and we've locked in interest rates on about half of that? About half of that, and we're looking to close on the balance.

So, we're looking at a rate probably 6.25 all in, somewhere in that magnitude or 6?

Well, what we've locked in is a little bit below 6 so I don't know where it's going to be when we close this. But that's probably 6, 6.10 would probably be a good guess.

And you're not part of the AII investor group?

No, we are not.

And then maybe, Ken, just on RCP, you said you're looking at a couple or a handful, I don't remember which word you used, of deals.

I think it was wide variety.

Wide variety. Can you just comment a little bit more about that variety and how more difficult these deals are becoming, I think your Mervyns' transaction obviously was looking back, has been an excellent one where you've been able to reap the benefits of the real estate. It's just a much more competitive environment and so maybe you can give a little flavor of what sort of things you were looking at?

Right. I think it is more competitive and more complex, because you've seen at the very large cap deals, a melding of private equity and real estate much more so than in some of the earlier transactions. Toys R Us being a prime example.

Our focus, because of both, where our geographic focus is, our size, and expertise, we tend to spend more time on smaller transactions as well, where again, their probably more real estate and redevelopment focus, but then also, we're continuing as part of our RCP Venture to be good partners and participate where we think it makes sense in some of these larger transactions, I think our partners have a similar perspective and no one feels like we have to do the next large transaction so we're going to continue to see where there may be more value added real estate focus transactions, and I suspect that's where we're going to be spending most of our time and in those because their still very complicated, while there is a fair amount of competition, we think we're in a really good position when a retailer has a significant amount of real estate and needs to try to monetize it. We're in a very good position both in terms of our real estate expertise and our learning curve in terms of how to handle it, to do that in an effective way.

Okay. Thank you.

Sure.

Your next question comes from the line of Paul Adornato with Harris Nesbitt, please, proceed.

Hi, thanks, good afternoon.

Hi.

Given the amount of activity that we've seen out of your New York City Urban Infill Program, I was wondering if there were opportunities in other cities? I know you did one small transaction in Chicago, anything else outside of New York that might be similar?

Similar, yes, Paul. What we're finding is the national retailers have a much higher level of interest from Metro Markets in term of their responsiveness and the rent they can pay in general.

But in particular, with New York, and given that these deals tend to have a lot of heavy lifting and given that we're seeing a pretty nice pipeline of these deals here in New York, we're going to be very careful about undertaking heavy lifting in other cities that may not have the same 24 hour dynamics and have not been as significantly underretailed.

Certainly, certain parts of Chicago are interesting. And there are other--but only a handful of other cities that really excite us that way. I would expect us to do that, but we're not rushing to. We're have happy with the pipeline we're creating and given our size we think we can be fairly choosy about where we pick to spend the time and energy.

Okay, and does PA have interest or activities outside of the New York City area?

Not in our venture but they do own separately and before us, other real estate and other types of real estate.

Or, perhaps, have retailers asked you to go to other urban areas, based on your New York City experience?

Yes. Just because they ask doesn't mean it makes sense.

Right, and finally, you mentioned this a little bit about capital flows into real estate, and that perhaps the smaller deals, the tougher redevelopment projects is kind of your sweet spot, but in the press where--it just seems like there's also a lot of capital flowing into those type of deals with all sorts of venture capital like real estate money flowing in and I was wondering if the spread between kind of the redevelopment hairy projects and the institutional quality real estate is still as wide as you'd like?

There's always more capital out there then we'd like except when its ours. And I would always like a wider spread but I think--what your really asking is the ratio between acquiring stabilize at, let's say a 5, 6 or 7. And--versus redeveloping to a 9, 10 or 11, right now, we have found that that ratio to do the value-added is more compelling.

That's not always the case. Brandywine, Kroeger, Safeway, while both having value-added components to them were primarily about existing cash flow from Target, Lowe's, Kroeger, Safeway, etc.

When the rebalancing occurs--and it may be starting with this shift in interest rates--we're thrilled to shift and buy current yield. Right now, the spread for the high quality locations, the spread is still wide enough to justify the heavy lifting that we have to do.

We couldn't buy the kind of assets that we're building in New York City, or we could, but the cap rates would be dilutive even with today's interest rates.

Thank you very much.

Your next question comes from the line of Michael Mueller with JP Morgan, please, proceed.

Hi, a couple of things. First of all, I know you mentioned no Mervyns in guidance going forward for the balance of '06. Could you just talk a little bit about the operating income that was booked during the quarter not the promote and why doesn't that recur--does it recur, does it not recur, is it just seasonal income that goes away, is that what the deal is?

Yes for the first quarter, the income was very strong from OpCo. We probably had about $0.005 with our share that flowed to us ultimately and certainly OpCo, Mervyns' operations have been doing fantastic and exceeding all expectations. We just think it's wise to maintain a conservative bias here and for purposes of forecasting, not assume that Mervyns creates a lot of income for us.

Okay, and going back to a prior question on PA. Are all the New York City retail-related deals coming from them going to you guys first?

Yes.

Okay, thanks.

Great.

[OPERATOR INSTRUCTIONS]

There are no further questions in the queue.

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

Thank you for your participation in today's conference, this concludes the presentation, you may now disconnect. Have a great day.

Thank you.