Hersha Hospitality Trust (HT) 2007 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Hersha Hospitality Trust Fourth Quarter 2007 Earnings Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of this conference.

(OPERATOR INSTRUCTIONS)

With that, I would now like to turn the presentation over to your host for today's conference, Bartley Parker of Investor Relations. Please go ahead.

Thank you, Tony. Good morning, everyone. Before we begin today's discussion, management has asked me to make a cautionary comment regarding forward-looking statements.

This conference call may contain forward-looking statements that reflect Hersha Hospitality Trust plans and expectations, including the Company's anticipated results of operations, joint ventures, and capital investment. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the Company's actual results, performance, achievements, or financial position to be materially different from any future results, performance, achievements, or financial position expressed or implied by these forward-looking statements. These factors are detailed in the Company's press release and from time to time in the Company's SEC filings.

With that, let me turn the call over to Mr. Jay H. Shah, Chief Executive Officer. Jay?

Thank you, Bartley, and good morning, everyone. I'm going to start the call with some remarks about our quarter and full fiscal year results and then turn the call over to Ashish, who will provide some additional detail on our financial results and our initial guidance for the full year 2008. After we conclude, we'll be happy to answer any questions.

Despite the uncertainty that clouded the second half of the year that more acutely manifested itself in the fourth quarter, 2007 was a record year for Hersha, both in terms of our financial performance and the many milestones that we reached.

Yesterday evening, we reported 24.7% growth in adjusted FFO per share for the full year ended December 31, 2007. The main driver of our FFO growth was our 70% increase in consolidated revenue and the well-managed flow-through as evidenced by our 76% improvement in EBITDA.

As we've discussed in our prior quarterly calls, we slowed our acquisition pace this past year and placed even greater emphasis on the growth of our young and strategically situated portfolio hotels. Throughout 2007, we worked closely with all of our management companies to aggressively increase our revenue per available room or RevPAR and to implement cost control measures to better optimize our profitability.

Having acquired over 50 properties across the last three years and established an efficient scale, we can become even more selective in adding assets to the portfolio as we move forward. Utilizing our strict underwriting criteria for the year 2007, we purchased seven properties that were immediately accretive in the year with a total of 755 rooms with a median age of one year.

We also acquired the remaining 20% interest in our Philadelphia joint venture from our partners. Three of the hotels that we acquired outright were located in Manhattan, arguably the most robust U.S. lodging market and one that continues to offer very favorable supply and demand dynamics. Our strategy of owning new or newer hotels has enabled us to produce above average RevPAR growth, as these hotels stabilize and deliver above market occupancy and rate gains.

Subsequent to the close of the quarter, we expanded our already significant Manhattan presence with the acquisition of the 45-room boutique, Duane Street hotel in Tribeca and a 93-room independent upscale hotel project at 75 Smith Street in Brooklyn at the corners of Atlantic and Smith. This hotel will be called the Nu Hotel upon completion.

The independent boutique hotel segment is a desirable one for us as it provides strong rate and yield management flexibility. As an upper upscale full-service property, the Duane also provides incremental diversification from select and limited service assets in the Metro New York City area.

Additionally, the Duane Street hotel highlights the benefits of our development loan program, which was how the hotel was ultimately sourced. As we have discussed our New York City portfolio has been a major focus of our acquisition to program and it now generates more than 40% of our EBITDA, including development loan interest income.

Two of our other acquisitions during the year were Residence Inns by Marriott, bringing the total number of Residence Inns in our portfolio to 11. Historically, the upscale extended stay segment has weathered market volatility far better than other lodging segments. Our portfolio now consists of 21 upscale extended stay properties in the extended stay segment, and our portfolio is expected to account for approximately 25% of our 2008 total EBITDA.

As I discussed earlier, our affiliated manager Hersha Hospitality Management, as well as our four independent managers help to produce strong RevPAR for the full year 2007 that was also at the high-end of our guidance. Our consolidated portfolio posted annual RevPAR growth of 16.1% with a 13.7% increase in average daily rate or ADR, and a 2.2% improvement in occupancy to 73.7%. On a same-store basis, which reflects hotels open for the full year 2007 and 2006, RevPAR increased a solid 9%, with a 7.4% ADR growth, and a 1.5% growth in occupancy.

We ended 2007 with over 90% of our rooms as well as our net operating income or NOI aligned with superior brands, such as Marriott, Hilton, Starwood, Intercontinental, and Hyatt. As our fourth quarter results demonstrate, we ended the year very strongly in terms of growth and profitability. And we're particularly proud in achieving what we believe is above market RevPAR growth in our key markets.

During the fourth quarter, our properties in Metro New York City, Metro Boston, and Metro Washington D.C. achieved RevPAR growth rates of 28.3%, 20.6%, and 18.6%, respectively, outpacing industry estimates of 13.5% for Metro New York City, 18.6% for Metro Boston, and 7.4% for Metro Washington D.C.

In New York City, the Manhattan portfolio was the primary driver of our performance. Our Hampton Inn Herald Square, open just three years, achieved occupancy of over 93% and ADR growth of 29% in the fourth quarter of 2007. Our Hampton Inn Seaport, open just two years, was at nearly 90% occupancy in the fourth quarter. Our Holiday Inn Express Chelsea, of which we own 50%, was at nearly 95% occupancy during the fourth quarter.

In Boston, we experienced both occupancy and rate gains. Our urban hotels experienced 2.8 percentage points of occupancy growth to 76.5% and 16.1% ADR growth. Our suburban assets there had occupancy growth of 4.4% and achieved 6.4% ADR growth.

In the Metro Washington D.C. area, the Courtyard Alexandria, open just over one year, saw a slight increase in occupancy and a very strong rate growth of 28.5%, driven by a very aggressive asset management. Our largest property in the Metro Washington D.C. area, the Residence Inn by Marriott in Greenbelt had occupancy growth of 18.2 percentage points increasing to 75.5%.

We traded a slight decline in rate for this, but the increase asset utilization helped to achieve a fourth quarter EBITDA margin of approximately 46%, up 600 basis points from approximately 40% for the same quarter in the prior year.

With that overview of the fourth quarter and full year 2007, let me now turn to Ashish and have him detail our financial results and our initial 2008 outlook.

Thanks, Jay. Our results for the 2007 fourth quarter were among the strongest we've had in our history in terms of the rate of growth and profitability. Due to the seasonality of the Northeast markets, our portfolio had historically achieved fairly poor profitability during the fourth quarter. With our increased presence in New York City, along with the acquisition of the Hyatt Summerfield Suites portfolio at the end of 2006, our fourth quarter financial results have improved significantly.

RevPAR growth for our consolidated portfolio of 55 hotels was over 17% for the fourth quarter. Almost 90% of this growth was attributed to increases in ADR, but we did experience occupancy increases of 1.6% as well. Our overall EBITDA margins also increased by 151 basis points to 36.3% during the quarter.

On a same-store basis, our consolidated portfolio also performed very well with fourth quarter 2007 RevPAR growth of over 12%. Approximately 93% of this growth was due to increased ADR leading to EBITDA margin growth of 190 basis points during the quarter.

Operating income for the fourth quarter grew 75% to $11.9 million from $6.8 million for the same period in 2006. The strict oversight of operating costs and a larger base of assets to help absorb G&A costs enabled us to, once again, report operating income growth in excess of revenue growth.

Our G&A expense for the fourth quarter of 2007 includes approximately $0.02 per share for accrued 2007 incentive compensation. In prior years, incentive compensation was determined and recorded in the first quarter after the end of each fiscal year. While we accrued and paid our incentive comp for 2006 in the first quarter of 2007, going forward, we expect to be accruing this amount in the fourth quarter of each fiscal year. We had not felt this accrual into our fourth quarter 2007 guidance.

Turning to our balance sheet, we ended 2007 with $58.2 million in development loans and $23.4 million in land leases outstanding to 11 hotel development projects. During the fourth quarter, Lehman Brothers purchased the $15 million mezzanine loan outstanding at our Holiday Inn Express on 29th Street in Manhattan at PAR. And we received a repayment totaling $2 million on a separate project.

We also made an additional loan of $5 million for the Union Square Hotel project in New York City. Our development loan program continues to provide us access to developers and properties in high-varied entry markets such as New York City. Since 2003, we have acquired 12 properties from our development loan program and we continue to focus more of our efforts on growing this platform in this capital constrained environment.

As we've mentioned in the past, debt reduction is among our strategic priorities. To this end, we reduced our total consolidated debt by approximately $46 million during the quarter, including debt amounts from the sale of two of our hotels. Our overall capital structure profile remains favorable with respect to our ability to execute our long-term growth plans. A high percentage of our debt is at rates significantly below the yields on our properties and below our current yield on development loan investment.

Our weighted average debt maturity is 8.2 years, and excluding debt on our land leases, less than 10% of our debt comes due within the next two years. We also have available resources to fund additional growth with approximately $50 million in available capacity on our credit line.

I'd like to move over to the 2008 financial outlook for Hersha Hospitality. As we work through our models of expected financial performance for 2008, we considered a number of factors, including the macro economic environment, changes in the supply and demand characteristics of the markets in which we maintain a presence and the operating characteristics of our own portfolio.

We share the consensus view that the economic environment provides an unclear view of the demand from business group and leisure travelers in 2008. Assuming an environment of more modest U.S. economic growth and no material increases in supply in our core market, we do expect our portfolio to allow us to post another year of adjusted FFO growth for the year ended 2008. Our outlook is predicated upon the continuing stabilization of our young portfolio and the continuing strength of the core urban markets in which our properties are located.

Our low average age with approximately 58% of our rooms less than five years old provides us built-in growth as the properties ramp up and provides us additional opportunities to maximize rate and improve profitability.

Additionally, while we know that two months does not make a trend, the January and February to-date performance of our portfolio has exceeded our prior year results and our internal budgets. While we are currently experiencing a solid first quarter through the end of February, we do not believe it would be prudent to extrapolate this through the entire year, since we cannot control many of the external forces affecting the economy.

Given this backdrop, we expect total portfolio RevPAR for the full year ended December 31, 2008 to be up 5% to 6% with same-store RevPAR growth of 4% to 5%. On a market specific basis, we're projecting high single digit growth in the core urban markets of New York and Boston with low to mid-single digit growth in our Mid-Atlantic and Western markets.

Although our projected growth rates are on the high end of industry forecasts, it's worth noting that these represent a significant slowdown of approximately one-half to a third of what we achieved in 2007.

Given our expectations for RevPAR growth, we believe our net income available to common shareholders will be approximately $13 million to $14.5 million. Our EBITDA is expected to be $119.1 million to $121 million. And our adjusted FFO is expected to be $1.27 to $1.30 to diluted share.

Our forecast built-in an EBITDA margin improvement of approximately 25 to 50 basis points at our hotels. Based on our forecast, we feel very comfortable with our dividend coverage and fixed charge coverage ratios for 2008.

In terms of seasonality, our Summerfield Suites properties in California and Arizona are very solid assets, but only provide a modest amount of diversification benefit, given that they comprise approximately 5% to 6% of our revenue and EBITDA. Therefore, our first and fourth quarters are again expected to be our slowest given the geographic concentration of our portfolio in the Northeastern part of the U.S. with the first quarter being slower than the fourth. This concludes my formal remarks. Now I'd like to turn the call back to Jay.

Thanks, Ashish. 2007 marked another year of great progress and accomplishments for Hersha in terms of growth and assets in quality markets such as New York City and the improved coverage of our dividend. We're looking forward to the continued ramp up of our assets in 2008 and the further improvement in our financial profile from the solid cash flows from our properties and investments.

While there are many uncertain factors that we all will continue to follow in the coming year, we remain optimistic that our strategy will continue to bear fruit in volatile times. We believe Hersha is well on its way to building a dominant hotel company that owns assets in the country's most desirable gateway markets. The low average age of our portfolio, brand affiliations and concentration in the most resilient urban markets will enable us to deliver long-term growth.

Operator, that concludes our prepared remarks. We're happy to open the line for questions.

(OPERATOR INSTRUCTIONS). And we will go first to David Loeb at Baird.

Guys, I want to just start with a question about the guidance from the press release and, Ashish, from your remarks. You noted -- I guess the way you put it was, assuming no material increases in the supply of available rooms in your markets, can you talk about what you do expect to see and whether you see that as material?

David, this is Neil here. On the supply question, it's been one that we've been very focused on, as has been the national media, it seems. So it makes us look very carefully at our internal projections for new supply. I think we're in a good position in that we have only a handful of markets that we invest in. So we've been able to go very deeply through the Smith Travel and the PriceWaterhouse data and really see how much progress is being made on potential sites for hotel development.

As we look at it now, in the New York City market, where in the Manhattan marketplace, we're expecting somewhere around or just below 3% new supply in 2008. A lot of these are projects that began several years ago, but due to delays, are now all opening in 2008. In 2009, as we look a little bit further out in 2009, we're probably a little less certain about the number, but we still find it to be below 4% at this stage.

Again, these are assets that still may have not broken ground. But from what we know from architects, we know that they are getting their permits and the like. So less than 3% in '08, less than 4% in '09 is what we're assuming for New York City.

For our other markets, like Philadelphia, we see very little supply on the horizon in 2008. In 2009 and 2010, we expect one hotel to open in each of those years in the CBD marketplace, but not much otherwise. So we're not assuming much new supply in those markets.

In Boston, Cambridge, we're expecting in 2008 to have several bigger box hotels open. Most of them in the higher end, upper upscale or the luxury segment with the Mandarin, the Regent, and the Renaissance expecting to open in 2008. So that will lead to a blip in 2008 where the new supply in the CBD may look as high as 4%. But then in 2009, we see very little new supply in the Boston Cambridge marketplaces. And in D.C. Metro, we're expecting in the 2's -- around 2.5% supply growth is what we're expecting.

You know, David, additionally, we were certainly not relying on some of the speculation about debt markets. But you can imagine at the projects. Projects that are getting done are ones that are financed now. I mean if there were projects to be delivered in '09 that haven't been financed, in '10 that haven't been financed, it's sort of the lack of liquidity and the choked-back balance sheets, the ground stop and the CMBS markets and just contracting operating fundamentals are going to make new projects very difficult to finance, which should have a pretty chilling effect on new supply growth.

Again, we look at a lot more holistically and we try to look around and see who the credible developers are and what's in the ground. And those are the numbers that Neil is sharing with you for our markets.

That's right.

Okay. I appreciate all the details. And in New York City, in particular, with about 3%, a lot of that is in your segment, a lot of that is Sam Chang. And I guess a portion of that is stuff you've got developments on. Does that help or hurt as you look at your competitive position in New York?

I'm not sure how to answer that. I mean some of the new supply is ours. And that new supply is in sub markets within Manhattan that we think are very, very attractive. There's other parts of the new supply that are coming in markets of Manhattan that we think, probably, have more rooms than they should have. And so that doesn't add much comfort for the entire marketplace. But for the assets that we have in New York, we feel relatively protected from them.

To add to what Jay had said, we are starting to see a significant uptake in developers approaching us in New York City for development line financing because they're having so much trouble getting their construction loans. So many of the projects that we have that we are expecting to see opening in the next several years are ones that are still in the market for development financing in addition to construction loans or in lieu of constructions loans. So we're continuing to see opportunities in that regard.

Okay. That's very helpful. Given all of that, though, your outlook seems rather tame. Perhaps a little bit of sandbagging?

Well, you know, David, you know what it is. Things are just so uncertain and we want to give the guidance that can be meaningful for as long as possible to the resurging investment community. And I think that's why we've put out numbers that may have some hedge in them. But, as the year continues to unfold, we feel pretty certain that the next two to three quarters -- the economy is probably -- you know, we might stop seeing bad news in about two to three quarters. And with hotels, hotels are typically always lagging. So, it's really hard to know what 2008 going to hold for our industry.

We have a lot of young assets. And should the macro economic conditions not turn out to be as severe as people suggest that it could, then obviously, there's probably some upside in what we've guided to.

Okay. One more and then I'll get off the phone. Ashish, I really appreciate the detail on the schedule of mortgages and notes payable. Can you give us some color -- on the loans that are coming due in 2008 and 2009 -- do any of those have extension options at your option?

On the loans coming due, yes. The land lease properties do have extension options. Some of the other smaller assets that we have that will be coming due -- most of those do not. We don't see that the coverage ratios on any of those properties would be problematic for us to get those properties refinanced.

Okay. Great. Thanks.

Thanks, David.

And we'll go next to Michelle Ko at UBS.

Hi, good morning, guys.

Hi, Michelle.

I was just wondering -- given that you have more limited service hotels than some of your peers, I was just trying to get a gauge for how the flow-through compares to some of your peers. Some of your peers have said that they need 3.5% to 4% RevPAR growth to generate operating margin improvements. How does this compare to you?

For us, it's probably not that high of RevPAR growth that we need to get operating flow-through. And of course, if we can get that RevPAR growth from just rate-based growth, I would say that it could be even in the 2.5% to 3% RevPAR growth that we could experience -- that we could easily get flow-through from that.

Okay. Great. Also wondering how the sale of the Central PA assets is going and if you would use those proceeds to reduce debt or for future acquisitions?

Michelle, we would -- we are not targeting anything right now. We're not actively marketing anything right now that's for sale. We continue to evaluate that portfolio. And absolutely, if those assets were to be sold, we look at debt reduction as a priority. But as Neil mentioned, there's also so many large good deals coming about from these development loan programs, we'd also take a look at potentially recycling into the development loan program.

Okay. Can you tell me more about the pricing in the acquisition market, you know, what you're seeing out there?

Michelle, what we're seeing is really all over the place, still. There seems to be kind of the disconnect between sellers and buyers is still there. So we're still seeing pricing for existing assets in markets like New York City still being, at times, even below six caps. In other markets around the country, we're probably more likely to see eight cap acquisitions this year than we were last year and the years before. But unfortunately, it's not across the board. It's still very spotty and I think it's because in the market, there really just hasn't been enough transactions to really set a trend and to get sellers expectations rightly, kind of reset.

It's really a little too early to tell, but I think what I've heard from some of our peers that 7.5 to 8.5 in secondary kind of markets -- I think that that's about right. But it is a big range. And we're starting to see in the last one month, of seeing the volume pick up in terms of number of deals starting to hit the market. So hopefully, that's a reflection that sellers realize that the last six months of hesitation might be a trend and that they have realigned their expectations. But we're not sure about that. But we're signing a lot of CA's these days.

And Michelle, this is Jay. I think we need to just see a few more deals to get some comps to give a real meaningful answer on that. Neil's ranges are right to what we're seeing now. But you are not seeing that many deals getting done within that range -- that's sort of the ask.

The additional complicating factor is we need to find out where debt bits are going to come out as well. Because at the end of the day, everyone's buying the cash-on-cash return and that's going to drive the value. And right now, people are -- it's sort of a game of chicken. Lenders are unwilling to lend because they don't know the price of the asset. And sellers aren't willing to give a price of the asset because they don't know where the lenders are going to come out.

And just one data point, or a handful of data points. There happens to be three or four hotels on the market being widely marketed in New York City, right now, that are more, kind of, select service kind of boxes. But their targeted pricing on those is close to $600,000 a key -- in between $550,000 and $600,000 a key, which remains kind of a forward seven cap or something like that. So that's what we're seeing in the kind of markets we look at. And at this point, that doesn't feel attractive yet to us.

Right. Okay, great. Thank you so much.

We'll go next to Will Marks at JMP Securities.

Good morning, guys.

Good morning, Will.

I have a question on just in terms of guidance, how different markets are looking. And based on Smith Travel, looks like a pretty wide disparity. Philly and Washington look like they're, kind of at least to-date through the end of February, flat to low single digit RevPAR growth. Whereas, high single digit in Boston and New York. Are you seeing that with your hotels?

Well, this is Ashish. Yes, that's exactly what -- pretty close to what we're seeing. We're still seeing very good growth in New York and Boston. Our Mid-Atlantic portfolio is, on a same store basis, experiencing sort of low to mid-single digit growth rates. But what we are seeing is strong stabilization from some of our assets in those markets, in the Mid-Atlantic and Philadelphia region. So, absolutely, the disparity is there. There is high single digits in those markets that you mentioned and sort of mid to low in the other ones.

Okay, great. One other question, unrelated, on your dividend. As I recall, you never cut your dividend back in 2001. First, can you confirm that? And second is what was the thinking at the time -- what does it really take for a dividend cut?

Well, we can confirm. We've never cut our dividend. So in 2001, we were the only lodging company outside of HBT to not cut our dividend. And as far as what does it take to cut our dividend, what we can tell you is that we've run a lot of sort of downsize scenarios throughout the year. And we would look at a scenario such as 2001 when the national RevPAR dropped by 7%.

What we've done is said, okay, make it even more catastrophic. Double that, make it a 15% sort of RevPAR growth across the industry, across the markets. Compound that with sort of 300 to 500 basis points of margin loss. I think at that point, you get to a situation where we would still be at about a one-time coverage on the dividend.

Right. Okay. Perfect. That's all I need, thank you very much.

(OPERATOR INSTRUCTIONS). And we'll return to David Loeb at Baird.

A couple of follow-ups. Can you give a little background on why Lehman wanted to buy one of your development loans? And what does that mean about your option to buy that or your interest in buying that hotel down the road?

Well, in fact, in that case, David -- this is Neil -- we sold our mezzanine position on the Holiday Express Chelsea, but we maintained our ownership position in the asset. So we had a mezz piece outstanding as well as a 50% ownership in the asset. And we felt that that mezz piece, which was kind of a fixed rate of return -- it helped us get the deal in the beginning, but at this point, we could reinvest that $10 million or pay down debt with that $15 million slug versus keeping it in that asset. So it was a way for us to recycle our development loan proceeds.

I think what we thought was interesting about it was that it shows kind of the institutional great nature of some of these development loans that we make. They're able to sell them to institutional buyers at par in the market like we're in today. It was a good loan with great coverage and it served our purpose for the first few years. And at this stage, it's best to use that capital to pay down debt.

Okay. And that definitely makes sense. Ashish, could you give us a little more color on what the seasonality is likely to be this year, either FFO or EBITDA -- kind of, how the quarter is split out?

Sure. As far as how the quarter is split out, we would be looking for less than 10% of our FFO to be generated in the first quarter. We would be looking at somewhere in the 30% to 35% range for the second and third quarters and then the remainder coming from the fourth quarter.

Okay, and that less than 10% is even without the accrual for the comp?

That's correct.

Okay. And just one follow-up on the debt. Probably the largest one you've got coming due next year is the Manhattan hotel, 373. That's also a floating rate loan. Is that one that you would refinance or does that $22 million have an extension option?

I don't believe that $22 million odes have an extension option. That debt was one that we actually assumed when we purchased the asset. We believe that by next April when the debt is due that if there is a turnaround in the CMBS markets, we'd probably look to fix the debt on that asset. Its coverage and its performance would bear at least that amount of debt. But if the CMBS market [doesn't bounce] back, we think it would be a pretty easy piece of debt to refinance. And we'd probably even look at potentially putting it into our credit line.

And that's the hotels that, essentially, the lobby is a Starbucks?

That's right.

That's right.

Very high margin, very high flow-through?

Yes, exactly.

Okay. And I guess just to follow-up on the asset sale question, what's the criteria? Is there a hurdle rate you're looking for for asset sales? And is that likely to be the primary source of cash as you look to convert development loans into equity or put new cash into acquiring those hotels?

Yes is probably the answer to both of those questions, David? But, in terms of pricing, generally, we do have kind of a cap rate in mind for Central Pennsylvania -- somewhere in between kind of an 8 and 8.5 cap. That said, we've been able to find opportunities where we can sell at a higher value than that on certain assets. And so we're just exploring our options with them.

Some of them have debt that is securitized on top of them, so we need to be very careful on how we parse out this portfolio. But we do believe that the right buyer is individual owner operator groups in the region. And so we do need to come up with a plan so that the sales are timed at the same time because of the debt that's on top of them.

Are there other assets that you are also looking at the possibility of selling to an advocate or far outside of Boston or other suburban markets?

Yes, we are, we are. We have not made a big listing of any of these, but our assets management group has been talking to a lot of owner operators in the markets that we deem non-core for us or the assets that we deem non-core. So a lot of conversations in the works right now.

I guess if you pulled the trigger on some of those, you'd have some near-term dilution, just because the cap rate differential in what you sold and what you bought. But it sounds like you'd have much better growth prospects.

That's absolutely right.

Okay, great. That's all I had. Thanks.

We are standing by with no further questions at this time. I'd like to turn the call back over to Mr. Jay Shah for any closing or additional comments.

If there are no further questions, I'll just thank everyone for being with us this morning, your continued interest in HT. If any questions occur to anybody after the call, please feel free to call us in the office. We'll be available here for the rest of the day. But thank you and have a good morning.

This does conclude today's conference. We do thank you for your participation. You may disconnect at this time.