Granite Real Estate Investment Trust (GRP.U) 2007 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the MI Developments fourth quarter and year-end results conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time. (OPERATOR INSTRUCTIONS) I would like to remind everyone this conference call is being recorded on Wednesday, March 5, 2008 at 10:30 a.m. eastern time. I will now turn the conference over to John Simonetti, Chief Executive Officer. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining our conference call today. With me today is MID's Chief Financial Officer, Richard Smith. I'm going to ask Richard to take you through our results later in the call and after that, we'll open the lines for questions.

Other members of executive management are also in attendance, and if necessary, I will ask them to participate during the Q&A session as well. Our board of directors met yesterday and approved our financial results for the fourth quarter and fiscal year-ended December 31, 2007.

The board also declared a dividend of $0.15 per share for the fourth quarter, payable on or about April 15, 2008, to shareholders of record at the close of business on March 28, 2008. This morning, we issued a press release with our 2007 fourth quarter and fiscal year-end results. A copy of the press release is posted on our website at www.midevelopments.com.

I'd like to remind our participants that this conference call may include forward-looking statements within the meaning of applicable securities legislation for description of the risks, uncertainties, material facts and assumptions associated with forward-looking statements. Please refer to this morning's press release which includes a discussion of these matters at the end of the text. The press release also includes a reconciliation of the net income of our real estate business to funds from operations.

Last year was a challenging and somewhat disappointing year for our real estate business. At first blush, this is not clearly evident from our financial results, which show that rental revenues from our core rental portfolio of Magna factories and corporate offices increased 8% from the prior year to $167 million, annualized lease payments as calculated at the end of 2007 increased 11% to $177 million. And this all translated into strong cash flows with our 2007 FFO coming in at $142 million.

These are all record numbers. Notwithstanding the reality is that the growth in our financial results was driven primarily from the positive foreign exchange impact of the continued weakening of the U.S. dollar and not from growth in our underlying rental portfolio. Expenditures on Magna-related projects were at our lowest ever during 2007 coming in at $27 million. This is a far cry from our early days as a public company when on average our annual Magna-related spend was roughly $100 million.

Moreover, we haven't received the greenfield project from Magna in over two years. This fact combined with Magna continuing to rationalize its manufacturing facility has for the first time resulted in a year-over-year reduction in our rental portfolio's leasable area which stood at 27.3 million square feet at the end of the year or 200,000 square feet less than at the end of 2006.

Now, I've given you my thoughts and the reasons for the lack of Magna business on prior conference calls. And what's frustrating to me is that Magna's automotive operations continue to perform well, despite the challenges in the industry. And with its strong balance sheet and outstanding technical capabilities, I believe that Magna is well-positioned to grow which means their need for real estate should grow as well, particularly as they expand into Eastern Europe and Russia.

At the end of the day, I haven't given up hope that somehow we'll be able to reestablish a strong and active working relationship with Magna. And further believe that we must continue to explore ways to reopen that development pipeline. Achieving this goal would certainly be a priority for our management team this year.

At this point, I'd like to say a few words about our Magna Entertainment investment. Last weekend, in which we reported the financial results for the 2007 fourth quarter and fiscal year. The results were not good, and the company continues to significantly underperform. And which its board and management is aware of the ongoing multifaceted operational challenges facing the company, which together with its significant debt load continue to result in unacceptable and unsustainable losses.

Our viewpoint, both as a controlling shareholder and as a significant secured lender, is that we remain hopeful of a turnaround in this company's fortunes and which it acknowledges the need for a focus and business-oriented CEO who can lead its turnaround efforts and has indicated that a search is underway. And if a successful turnaround is achieved, I'm still of the view that there remain opportunities to surface value for all MEC shareholders, including MID.

As I've stated before, MEC's significant real estate holdings are fundamentally large, strategic blocks of land in major urban centers which notwithstanding the current U.S. real estate market remain extremely valuable, particularly as rezoning efforts continue to be pursued. In addition, alternative gaming such as slots continues to provide a source of current and future income and MEC has stepped up its effort to find a suitable gaming partner to realize on the potential value from this side of the business.

Finally, MEC continues to take positive action in closing and is working on plans to dispose of marginal and unprofitable operations which together with its efforts to sell surplus real estate should result in a positive impact on its operating results and help strengthen its balance sheet. Having said all this, the question we face as MEC's controlling shareholder is how we continue, if at all, supporting MEC.

As you are aware, MID has lent both financial and managerial support to aid MEC in its debt elimination and overall turn around plan, and we recognize that the challenge to maintain and improve value for our shareholders to our MEC investment remains a daunting one. At the end of the day, it is critical that MEC continues to focus on its debt elimination plan.

However, one thing is clear, and that is given the state of the overall U.S. economy, MEC couldn't have picked a worse time over the past few years to try to sell significant blocks of real estate. As stated earlier, although we believe that MEC's real estate holdings are still quite valuable, selling them in this market will take longer than anticipated when we made our bridge loan back in September.

And, therefore, we expect that MEC will likely be unable to repay the bridge loan when it matures at the end of May, nor will it be in a position to repay $100 million of reconstruction loans at that time. Moreover, we recognize that MEC will need to seek additional funds in the short term from one or more possible sources in order to give it more time to sell assets and pay down debt.

And in this respect, I and my management team, together with our special committee of independent directors, continue to evaluate the possibility of MID providing further assistance to MEC. This now ends my formal comments and I will now turn the conference call over to Richard. Richard?

Thanks, John. And good morning, everyone. Before I begin, I would like to remind participants that my comments will focus only on the results of MID's real estate business, and unless otherwise noted, all amounts in today's presentation are expressed in U.S. dollars. Annualized lease payments for ALP increased by 11% or $18 million during 2007 to $177.2 million.

At December 31, 2007, approximately three-quarters of the company's ALP was denominated in the euro and Canadian dollar. As a result, foreign exchange contributed $17 million to the increase in ALP due to the continued weakening of the U.S. dollar.

On a sequential basis, ALP increased by $4.1 million from $173.1 million at the end of the third quarter. Again, foreign exchange had the most significant impact adding $3.5 million to ALP. The balance of the increase in ALP was primarily due to two projects coming on stream during the fourth quarter. Representing an aggregate of 39,000 square feet of leasable area. Funds from operations or FFO for the fourth quarter was $39.4 million or $0.84 per share compared to $33.9 million or $0.70 per share in the prior year.

When comparing FFO on a sequential basis, please note that cash taxes in the third quarter of 2007 were positively impacted by $1.1 million due primarily to a favorable tax reassessment involving land sold in a prior year. Excluding this $1.1 million cash tax recovery, FFO for the fourth quarter increased sequentially by $3.2 million or 9% from $36.2 million or $0.75 per share in the third quarter of 2007. Higher revenues and lower cash taxes increased FFO by $4.1 million and $300,000 respectively.

These increases were partially offset by modest increases in G&A costs and net interest expense for approximately $400,000 and $800,000 respectively. In terms of the $4.1 million increase in revenues, rental revenues contributed $2.3 million of the increase.

Once again, driven primarily by foreign exchange. Increases in interest and other income from MEC added $1.8 million primarily due to borrowings under the bridge loan which was made available to MEC in September 2007. Excluding currency translation gains, which are not subject to income tax and the previously noted $1.1 million cash tax recovery, the cash tax rate for the fourth quarter was approximately 13.8% compared to 16% in the third quarter of 2007. Decrease in the cash tax rate on a sequential basis is primarily due to the overall mix of taxable earnings in the various countries in which the company operates.

In terms of the overall tax provision, income tax expense for the fourth quarter of 2007 was positively impacted by a $3.8 million future tax recovery from the reduction in the future tax rates in a number of countries in which the company operates. Excluding the effect of these rate changes and currency translation gains, a total tax provision for the quarter was $6.1 million which represents an effective tax rate of 18.6%. Total tax provision on the fourth quarter of 2006 was $5.1million, representing an effective tax rate of 17.8%. Once again, this 0.8% increase in the effective tax rate is primarily due to changes in the overall mix of the company's taxable earnings in the different countries in which it operates.

In terms of the company's 2007 results, FFO was $4 million higher at $142. 2 million or $2.96 per share compared to $138.2 million or $2.86 per share for 2006. Please note that there are a number of unusual items affecting FFO in both 2007 and 2006. For 2007, FFO included $2.2 million of advisory and other costs incurred in relation to the company's continuing assessment of its relationship with MEC. A $2 million charge relating to the contribution of land located in Simmesport, Louisiana to a [knot] for profit organization in support of hurricane Katrina redevelopment efforts and $300,000 in green light litigation costs.

For 2006, FFO was impacted by a $2.5 million of advisory and other costs incurred in connection with the company's evaluation of certain transactions that ultimately were not undertaken. And by a $600,000 net recovery related to the green light litigation. Excluding the effect of these items and as well as the previously noted tax recovery affecting the 2007 third quarter, FFO for 2007 increased by $5. 1 million or 4% to $144.7 million or $3.01 per share compared to $139. 6 million or $2.89 per share in 2006.

On the positive side, increases to FFO arose from a $4.8 million increase in revenues and reductions in G&A and net interest expenses of $900,000 and $2.3 million respectively. On the negative side, higher cash taxes due to the company's increased earnings reduced FFO by $2.9 million.

Turning now to cash flows, the company's cash balance at the end of December was $110.9 million, representing a decrease of $47.3 million from the prior quarter. Sources of cash during the fourth quarter amounted to $37 million including $34.8 million from operations, $1.1 million of loan repayments from MEC, and another $1.1 million from foreign exchange. Cash used during the fourth quarter amounted to $84.3 million, including $40.2 million used to repurchase shares under the company's normal course issuer bid, $9.9 million of capital expenditures,$27.1 million of advances under the loan facilities to MEC and $7.1 million of dividend payments.

With respect to the MEC bridge loan, a further $26.5 million was advanced during the fourth quarter, bringing the total balance at standing to $38.3 million at year-end. Subsequent to year-end, an additional $11.7 million was advanced such that the current outstanding bridge loan principal balance net of the repayments received when MEC sold land located in Porter, New York, it's $47.9 million. Combined with our project financing facilities, the total amount outstanding from MEC now stands at approximately $247 million.

In terms of our share buybacks during the quarter, the company repurchased 1,175,100 class A shares under its normal-course issuer bid at a total cost of $40.2 million, bringing the total number of shares repurchased during 2007 to approximately 1.6 million.

As John outlined in his comments, the pace of Magna Development work continued to be slow during 2007, and this is further evident by our minimal development pipeline. At the end of the quarter, the company had two properties under development for Magna in Germany, representing an aggregate of 85,000 square feet of leasable area with a budgeted cost of $12.1 million of which $9.5 million had been incurred at December 31. Subsequent to year-end, the company commenced two additional projects for Magna, one in each of Germany and Mexico, representing an aggregate of 57,000 square feet of leasable area at an estimated total cost of $6.6 million. This concludes my formal remarks. Operator, we will now open the lines for questions.

Thank you. (OPERATOR INSTRUCTIONS) Your first question comes from David Einhorn from Greenlight Capital. Please go ahead.

Hey, good morning, John.

Long time, David.

Yes, sir. As you know, three years ago, the MID board adopted a bunch of resolutions, determinations. I was wondering if you could comment on the progress that's been made on each of those over the subsequent three years, and what the status is of achieving those targets over the forecast period?

You're talking about the additional relations of the board at the time we reviewed your proposals?

Yeah. I can go through them with you, if you don't know.

Oh, I think I know what they are, David.

Okay.

I mean, obviously back in 2004 was it, 2005, when you made those proposals, we said that we would take on debt and try to achieve a leverage ratio of 35% over that time, and we can do that either by taking on debt to buy properties for the Magna work or perhaps even return capital to shareholders by way of increasing our dividends or buying back stock. I think on the stock buyback, we've done that when we can, and we're subject to blackouts, we can't buy back stock but obviously we've been out there buying shares, as you can see in Q4.

One thing I will say is that the playing field has changed rather significantly since 2005. I'm sure you're aware that raising debt in this environment has been a daunting task to say the least, and more so, I would say that the financial flexibility that our company has today compared to what it was in 2005 are significantly different. Having said that, when we look at those targets we clearly need to consider what financial flexibility this company may need going further, and raising a significant amount of debt to get to 35% in this environment is very, very difficult to do, and that's something our board's going to have to continue to look at as we get close to our 2009 target date, which is what I believe we outlined back in 2005.

And how are you doing on the policy of regularly increasing the dividend?

As I said, David, returning capital to shareholders, you can do two ways. You can increase the dividend or return capital by buying back stock. We've been out there buying back stock, so, again, we'll have to continue to evaluate that as the year progresses, and as the economy progresses as well. We'll see how that unfolds.

Oh, okay. I thought that was a separate determination by the board to regularly increase the dividend. How are you doing on minimizing the possible adverse impacts on MID's investment in MEC of an unfavorable third-party financing or its preparation to consider providing funds to address just short-term liquidity concerns?

I think the way we've been dealing with MEC, clearly they've got issues and everybody knows that, but at the end of the day, David, right from the start, we had a significant investment, which we made very clear. We think there's still opportunity there, although I will admit it's been trying to try to get them to turn around and improve the operations. We're going to continue to assess that. I think whatever financing we put in place we've done so prudently. With the assistance of our special committee. And we'll have to see what we do this go-around. As I said in my call -- in my formal comments, we don't think the bridge loan will be repaid by the end of May. And I think we'll continue as we have in the past. We'll study it, take recommendations to our special committee and move on from there.

Have you succeeded in establishing a more stable capital structure MEC to pursue its strategic plan?

Well, MEC has a list of assets that it will sell and that's what it needs to do, it needs to sell a significant amount of assets, hopefully at some point near the tail end of that process there will be some equity that they can issue and we'll have to assess at that point if MID will participate in a raise offering or some other form of equity raise. But it's all part of a larger plan that will be, hopefully, over the course of the next year, so it will be carried out.

All right. Last one, then I'll let someone else go. Just coming back to your question about the difficulty of financing. What efforts have you made over the last three years to obtain additional financing and has the company had a failing in those efforts?

We constantly look at whether we need to raise debt. Obviously over the last two years, there hasn't been a lot of spend on the real estate side for matters and reasons that I'm sure you're closely aware of. As I said in my call, we used to have a lot of Magna work. Aside from the challenges in the industry, constant reinforcement by shareholders in what we should be doing with our balance sheet has curtailed, perhaps.

Magna's want to put money or assets into MID, which really there hasn't really been a need to raise a lot of debt. So I think in today's environment, we have assessed how much debt we could raise and it's nowhere near what we could have raised back in 2005, which is why I said the comment earlier on our financial flexibility, in my mind, has been significantly curtailed given the state of things in the U.S. economy.

So have you actually approached potential lenders who said no you can't borrow this additional money?

I wouldn't say they said no, I just think that the amount we could raise is significantly different today than it was back in 2005 when the board made their additional recommendations.

Okay. Thanks. I'll let another questioner ask some questions.

Very good to talk to you, David.

You're next question comes from Peter Sklar from BMO Capital Markets. Please go ahead.

John, before I ask on the MEC issue, I have some housekeeping questions. Typically, you update us on Magna plant closures, I notice that there was no commentary. Should I conclude that Magna did not announce that they were closing any additional plants during the quarter?

I think any plants related to MID, I think you could take that that they haven't.

Okay. And what about subsequent to the quarter?

No. Nothing after the quarter either, Peter.

Okay. I notice that you purchased a sizable amount of stock during the fourth quarter, but you have not purchased any stock in the current quarter to date. What are your blackout rules with respect to your quarterly financial reporting, is that what precluded you from buying stock?

That's right, Peter. We've had our NCIB out there, Richard mentioned to you we bought back 1.6 million shares. Most of that's in the fourth quarter. And you're right, we're automatically blacked-out from buying back stock during our regular quarter end and year-end trading blackout.

So what are the rules regarding the timing?

I've got Richard Crofts here, and I think he can be more specific. I think our regular quarter end or year-end trading blackout will end when?

The regular quarter ending blackout would end after we issue the results.

Tomorrow?

Tomorrow morning. However, we do, in addition to the regular quarter and year-end trading blackout, we do also implement securities trading blackouts whenever we have knowledge of material information with respect to MID or MEC, which has not been generally disclosed to the public. For that reason, Peter, we obviously can't tell anybody at any given time whether MID has or has not implemented a securities trading blackout.

Right.

We're not in a position to be able to answer the question of whether we'll be in a blackout later this week.

Yeah, that I understand. But when does the blackout commence with respect to regular quarterly reporting?

Typically, the blackout commences, assuming there's no other reason for us to be in blackout, our regular policy commences with the month after the quarter end. So for the quarter that ends -- the year-end, it would be different but for incoming quarter, for example, March, our policy could go into effect from the end of April until we release the results for Q1.

Okay. So likewise for Q4, your blackout would have commenced at first?

Typically, that's right. we would commence it February, although, again, unless there are other reasons for us to be in blackout. Year-end's a little different because we have our annual planning session, which typically means you're reviewing more information so it's often our year-end blackout will go into effect earlier than a quarter end blackout.

Okay, I understand. John, I guess a question for Richard. We're a little confused in all these ins and outs on the tax provision, it kind of came fast and furious during the call.

Yes.

Take us through the ins and outs that are first maybe go through the provision and then what's impacting cash taxes.

Well, the only thing that's in the fourth quarter, the only item that was really affecting the provision is reductions in future tax rates of about $3.8 million. That's the only item that is actually affecting the overall provision.

That had a positive impact of 3.8.

Yes, it did. It was a net recovery. To the future rates of decrease giving us future income tax recovery.

Okay.

And then for the fourth quarter of 2007, in terms of cash taxes, there's really nothing impacting those numbers. I referred to, on a sequential basis, the fact that there was a $1.1 million net cash tax recovery in the third quarter, and that related to a positive tax reassessment that we received for land sold in a prior year.

Is that first quarter or fourth quarter?

That was the third quarter. So I referred to -- I did a sequential analysis of the third quarter versus the fourth quarter. So you need to bear in mind that in the third quarter, there's a positive cash tax recovery of $1.1 million

Okay. And the foreign exchange gain does not trigger any provision or [more]?

Yeah. The currency translation gain did not trigger any tax, it is not subject to income tax. We repatriated funds from a foreign operation and the repatriation itself was not subject to tax.

Okay. On the Magna Entertainment issue, I assume from your comments that you believe that the full $80 million bridge will be fully drawn going into the May 31st deadline, is that true?

That's right, Peter.

All right. What's your interpretation of why they've not been able to recruit a suitable CEO?

You know, it's a unique business. The horse industry is not an easy one to understand, and I think there are few horsemen with that knowledge of that industry, you know, to really bring more of a business view on how to run that business, because it's not solely the horses, it's the slots, it's gaming, it's entertainment, it's trying to understand what people want. Then you've got the technology aspect of the business as well. So I think it's difficult for MEC to find someone with that broad knowledge.

Having said that, I think MEC's arrived at a point that maybe what you need there is someone with a lot more, in short term at least, someone with some turnaround experience and taking a critical look at all the operations and trying to assess how best to package this company going forward, and then start growing again. So I think it's really a unique business, and trying to find someone with all those different talents hasn't been easy.

Right. And on the Gulfstream Park, the slots operations continue to generate losses. Do you believe that there's some equity value there where they could sell an interest in those slots operations? I'm just wondering where you're arriving at your thinking there, because the underperformance at Gulfstream park, I mean, at least for us has been quite surprising.

And for us as well, Peter. I think with the slots in the clubhouse, that doesn't make sense. We have also had opportunity to talk with people in the gaming industry and they said no, clearly, the slot facility has to be separate from the clubhouse and built differently.

Having said that, we do have conversations with gaming people who see a lot of upside in the slots from where they are today, and so if you can strike the right partner, perhaps, or at least reconfigure things properly at Gulfstream, we still believe you can get those net wins up, and produce a profit there. So we see equity value there, because it's not just our view, we hear it from other people in the industry who also share that view as well.

Right. Okay. Thanks very much.

Thanks, Peter.

Your next question comes from Sam Damiani from TD Newcrest.

Thanks. Good morning.

Good morning.

Again, a few smaller questions up front here. So, on the cash tax outlook, about 14% in the fourth quarter, is that your expectation for '08?

I think, on a go-forward basis, the fourth quarter just in terms of mix came, our cash taxes came down because we've had more MEC interest income which we've set up to get tax favorably.That should continue as long as we're earning more interest income there from our bridge loan, the rate may actually come a tad lower in the first quarter. But I think if you have benchmark somewhere around 15% on cash taxes, that's a good rule of thumb right now.

Okay. And was there any unusual fee income recognized in the fourth quarter?

There was fee income in relation to the loan facilities to MEC during the quarter were approximately $1.1 million. So included in the $7.2 million of interest and other income was fee income of 1.1.

That would be an amount in excess of kind of a normal quarterly rate; would that be right?

Yeah, in part, Sam, as you know with the bridge loan facility is set to mature on May 31st, issued in only mid September. The amortization of the commitment fee of 3% being done evenly over the period of time. Over the maturity.

Okay. And on the plant rationalization front, there was a mention last quarter of a European plant where the cancellation was going to result in MID making a payment to Magna in the amount of $2 million. What's the latest on that situation?

Well, we still agreed to pay them $2 million, we've accrued that in our balance sheet, we haven't paid it yet, there's some ongoing cleanup that needs to go with that facility which Magna needs to undertake. As long as they continue with that, I'm sure at some point we'll pay over the $2 million. We're looking to free up that facility as quickly as possible because we are talking to people over in the U.K. to develop that property or residential purposes, and we're getting a lot of interest.

Is the residential market kind of turning [South] over there right now?

You know, it's slowing, it's softening, nowhere to the extent like in the U.S. It's not even comparable. It's softening a bit, but we're seeing a lot of interest. There isn't a lot of developed land left in that part of the world which is why a lot of people have stepped up and tried to partner with us to do something there.

Can you just remind us, what was the rational for MID making a payment to Magna in this case when obviously MID owns the facility and Magna has six years left on the lease?

It really had to do with the -- Magna was thinking to move to another facility or rationalize some operations over there, and we needed to entice them to move as quickly as we can, because we understood what the underlying value of that land was, and we know when Magna moves a facility, they're going to incur some costs, some closing costs and so forth.

And it was really our way to say, I mean, two things, one, to try to entice them to move out of that facility as quickly as possible, but at the same time to try to maintain some good relations with them. Magna was also aware that we stood to make a very good buck off this, so paying over the $2 million in light of what we think we can make from this property was not really significant in the whole scheme of things. We end up with a happy customer at the end of the day.

And just on the buyback, you're obviously very active at the $30 level late last year, you're down below $23 today, any reason we should not expect the buyback to resume in full force next week?

As I'm looking at my general counsel, if he comes to me and says we're still subject to some trading blackout, then that's probably a reason why we wouldn't be buying back in full force.

Are you saying that there's a chance the blackout's going to continue beyond the normal quarterly --

Sam, there's always a chance. Right, we're always evaluating things, both at the MID and MEC level, and MEC's constantly evaluating things at their level. It's going to be a call which I rely on my counsel to make the right one whether or not we're blacked out.

As you think about helping out MEC through May 31st and beyond, how big of a commitment do you see the company being prepared to make?

I really can't answer that right now. We're obviously doing our analysis. I think we'll start making presentations to our special committee, they'll review that along with their financial advisors to see what is the right amount, if any, Sam. So I can't really comment on an amount today.

Okay. That's good for me. Thank you.

Thanks, Sam.

Ladies and gentlemen, if there are any additional questions at this time, please press the star followed by the 1. As a reminder, if you're using a speakerphone, please lift the handset before pressing the keys. Your next question comes from [Tim Rice from Rice Holders]. Go ahead.

Good morning. My question relates to the MEC bridge loan and the potential acquisition from MEC properties in settlement of that. In the last conference call, I was left with the impression that you were actively evaluating some MEC properties with the idea of, in effect, swapping some of the bridge loan indebtedness for some of their properties. And yet it sounds to me like from what you're saying today that there's nothing actively being evaluated at the moment. Is that a fair impression for me to draw?

I don't think so, Tim. I think we're evaluating many things, we're still looking at those properties. Things have taken a little longer, but I don't think you read into that that we're not looking at possibly buying them anymore.

So, I guess given the fragile state of the MEC balance sheet, it would seem to me that certainly from their perspective, there's a fuse here that seems rather short and you've made it clear this morning that you don't expect this to be -- their bridge loan to be settled by expiration date. Can you give any time frame as to when we might reasonably expect you to make a decision on these properties?

You know what, Tim, I really don't want to put a fixed date on that. I mean, clearly we've got to let the special committee take their time and look at this with all the time they need. I think buying properties of that size, including the joint ventures interest of four city in this environment, we have to take a second look, if not a third look on what those values are.

Things have changed significantly in the U.S., particularly in the state of Florida, notwithstanding, I think there's a lot of interest in these properties because of their location, because of their size, and because of their potential. So I don't want to peg a date. I'm going to let the special committee take whatever time they need to assess this. And we continue to work with them in this regard.

Well, let me ask it this way -- Would it be reasonable to assume the decision would be made in the calendar year?

Possibly. Again, Tim, I think MEC needs to sell a lot of assets in a very short period of time. Is that period of a month or over the course of the next 8 to 10 months, I think they should. As quickly as they can. But again, even though they need to do it quickly, to the extent that we're interested, we're going to take whatever time we need to properly evaluate these alternatives.

Okay. Thanks very much.

Thank you, Tim.

Okay.

Your next question is a follow-up from Sam Damiani from TD Newcrest.

Thanks, you've just answered the question.

Thank you, Sam.

There are no further questions at this time. Please continue.

Okay. Well, listen, thanks everyone for participating in the conference call. It was really nice to hear from David, I haven't talked to you in about four years, but nevertheless, you asked some intelligent questions there. We hope to see you guys in our Q1, actually will be our annual meeting over in May, and I'm sure shortly we'll be issuing a press release letting everyone know what the date is. So until then, we're going to sign off. Thank you.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.