Life Storage Inc (LSI) 2009 Q2 法說會逐字稿

Greetings and welcome to the Sovran Self Storage 2009 Second-Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Ken Myszka for Sovran Self Storage. Thank you, Mr. Myszka, you may now begin.

Thank you, Chris, and good morning and welcome to our second-quarter conference call.

Just a little housekeeping first, as a reminder, the following discussion will include forward-looking statements. Our actual results may differ materially from projected results. Additional information concerning the factors that may cause such differences is included in our Company's SEC filings and copies of these filings may be obtained by contacting the Company or the SEC.

I must say, in our 25 plus years in the storage business, this is the most challenging environment we have experienced. Prior to this, the 1988 to 1991 period was our most difficult time. Then, unlike now, an overabundance of new supply led to a lack of pricing power. Today, there is a notable lack of new stores opening which is a harbinger of good things to come in the future. However, a lack of discretionary income is leading us to a similar result as back then. Potential customers are more than ever shopping for the best deal they can get.

As you see with our press release, the set of circumstances has had an adverse effect on our results of operation, and although our movement activity last quarter was robust, our ability to forecast a return to more normal conditions is murky. Our Revenue Management System continuously employs statistical analysis to maximize revenues at each store and we are running as lean as we can without hurting our store's appearance or our level of service.

Turning to last quarter's results, same store revenues and net operating income decreased by 3.7%, but our efforts to control costs benefitted us with same store operating expenses decreasing by 3.6%.

We were extremely pleased with a net gain of 9,400 customers over Q2 2008 on a same store basis. Sequentially, our same store applicants increased from 79% to 82.6% from the end of Q1 this year to the end of second quarter '09. What's also positive is this trend continued in July with net move-ins up by over 70% to July of 2008.

In other matters, we made no acquisitions for our own account or on behalf of our joint venture, and although we have identified several non-core stores for a potential disposition, no sales occurred last year.

As we have announced before, we have curtailed our expansion and enhancement program. Only four projects that were begun in 2008 have been completed this year at a cost of $5.4 million.

That is all I have to say at this point, I'd like to turn over now to Dave Rogers, our Chief Financial Officer.

Thank you, Ken.

With regard to operations, total revenues decreased $1.3 million or 2.6% from 2008 second quarter while property operating expenses decreased by $600,000 resulting in an overall NOI decrease of 2.3%. These overall results reflect primarily the decline in same store results that we will get to in a minute.

Average overall occupancy was 80.9% for the quarter ended June 30th, and average rent per square foot was $10.16. The overall occupancy rate at the end of the quarter improved to 82.5%.

Same store revenues decreased by 3.7% from those of the second quarter of 2008. This was the result of same store weighted average occupancy declining from that of 2008 second quarter by 130 basis points to 81% and the rents on occupied space dropping 2.9% to $10.06 per square foot.

As Ken mentioned, the quarter end occupancy for the same store pool of 357 properties was 82.6%, which was an increase of 360 basis points during the quarter and we are only 50 basis points behind that of last June 30.

Again, this quarter, we have treated many of our customers to the first month's rent free, this time, to the tune of $3.4 million on a same store basis, which is a 65% increase over last year's second quarter -- 65%.

The leasing environment remains as tough as we have seen and we are of course, by virtue of this, buying occupancy. We have been able to hold the line regarding our rate structure pretty much except for Florida and Phoenix, the in-place rents for the most part have been maintained.

Operating expenses on a same store basis decreased by a total of 3.6% this period despite property tax increases of 6.5%. Except for advertising and marketing cost, all other expenses declined.

Overall then, same store net operating income dropped 3.7% from that of 2008's second quarter. G&A cost for the period came in at $4.3 million, which is pretty much as expected. The $250,000 increase over that of last year's second quarter is primarily a result of increased cost associated with running the joint venture.

With regard to capital matters, as you know, we breached one of our loan covenants last quarter at March 31, and as of the last conference call, expected matters to work out a little better than they eventually did. As it turned out, we did get the expected waiver from our lenders, but it wound up costing us almost $1 million. We have not yet negotiated any further room on the restricted covenant, and we lost our investment grade rating from one of the agencies resulting in increased interest cost on two of our notes.

We did not want a recurrence of the covenant violation at June 30 so we accelerated some of the steps we expected to take through the balance of 2009. We had just implemented a dividend reduction of 30%, we scaled back our expansions and enhancement program, and due to market conditions, we were already sitting on the sidelines as far as new acquisitions were concerned

We finalized our analysis of some of the properties we thought should be sold and started the marketing process on those. And we issued 1.3 million shares during the quarter through our DRIP share purchase plan. This generated cash proceeds of $29.4 million. And this, combined with the other measures I just mentioned, served to reduce the Company's liabilities by $41 million during the quarter, while providing funding for some $4 million of previously committed expansion projects, and adding $4.2 million to our cash and current asset reserves.

Our capital position is such that our needs are discretionary. We have no forward commitments concerning JV contributions or buyouts, no construction programs to fund, and no properties to acquire until we decide the time is right to buy them. We feel the steps we took in Q2 provide us with the additional room we needed to comply with our loan covenants, and to provide us with some $60 million plus of liquidity.

At June 30, the Company has $500 million of unsecured term note debt and $108 million of mortgage debt outstanding. $26 million of the mortgage debt matures at the end of 2009; the next significant maturities are in 2012. All of our debt is either fixed rate or hedged to maturity.

A quick summary of the debt ratios that everybody has been focusing on more of late than usual, our debt to enterprise value at June 30 using the valuations at that date of $24.60 was 50.9%, our debt to book cost, 43.4%, debt to EBITDA ratio, 5.7 times, and our debt service coverage in the quarter, 2.5 times.

So we think we took some steps during the quarter that were a little tough, but they put us in good stead to get the room we needed on the covenants, give us the liquidity we need and sort of just go ahead and operate our company in an efficient manner.

With regard to guidance, we plan to continue with leasing incentives and aggressive marketing programs to maintain occupancy and grow occupancy through the remainder of the busy season. Nonetheless, we expect same store sales to drop from 2008 levels by about 2% to 4%.

As evidenced by this quarter's results, we have been successful in cutting property operating costs, but we will maintain or even increase marketing, advertising, and curb appeal expenditures. Overall expenses are expected to come in a bit under last year which results in our maintaining our previous forecasted net operating income decline of 2% to 4%.

G&A costs are targeted at between $4.3 million and $4.6 million per quarter. As mentioned, we don't plan to acquire any properties in the near term as we wait for the debt and capital markets to stabilize and for cap rates to settle down.

We are marketing about 15 properties from our non-strategic markets. We hope we could sell some of those in the third and fourth quarters, but we have not factored any such sales into our guidance.

We've put on hold our expansion and enhancement program, working only on those projects that were well on their way in 2008. $5 million was expended in Q2 and we have about $8 million in process to be wrapped up over the balance of 2009.

To give you a better handle on our interest cost, we are obligated on $600 million of long-term fixed rate loans. Our annual cost to carry this debt including amortization of financing cost is $44.3 million. This factors in the impact resulting from the recent rating downgrade. Should we suffer any future adverse rating action, no additional rate increases would result. The only variable component in our debt cost is related to our line of credit which carries a floating rate of LIBOR plus 175, and at present, there is no balance outstanding on the line.

Assuming the above forecast and the impact of the 1.3 million shares issued during the quarter, we expect third-quarter FFO to come in at between $0.65 and $0.67 per share and between $2.70 and $2.74 per share for the full year of 2009.

And at this point, I'll turn things back to Ken.

Thank you, Dave.

That concludes our prepared remarks; we'd be pleased to field any questions you might have out there.

Thank you. We will now be conducting our question and answer session. (Operator Instructions). One moment please while we poll for questions.

Our first question comes from the line of Ross Nussbaum with UBS. Please proceed with your question; your mic is now live.

Hi, guys. Good morning.

Good morning, Ross.

It looks like you did a reasonably nice job of closing the occupancy gap during the quarter since the gap looks like it's narrowed from an average of down 130 bips down to being only negative 50 at the end of the quarter. That would indicate at least to me that your traffic would be up, that your rental rate movement is working. Is that what you are seeing now as we get into the third quarter here?

Well, our close rate is up quite a bit from where we were last quarter on a same store basis. I think that reflects people responding positively to the specials that we are running.

As far as the number of calls, it is a little murky because although, on a same store basis, our call center -- number of calls were down a little bit, the Internet, which is more difficult to track, that is up substantially. So we think the demand -- the interest in self storage is still there and we had a good quarter as far as move-ins are concerned. You are right.

And move-outs, are those slowing? Where are those looking year-over-year?

They are still a little bit higher than they were last year, but the pace is down. It was less than 3% more move-outs this quarter than there were at the second quarter of last year.

Where is street rents today versus where they were last year?

Street rents are down about 2.9% primarily as a result of Florida and Pheonix. I think most of our markets are holding. We have not had to reduce rates in most markets. We are bringing customers in through the first month or first month-and-a-half incentives. So for the most part except for those two markets, we have been able to hold rates.

So that does not include incentives. So if I think about throwing in added use of incentives, sort of a net effective street rate would be down more than that?

No, actually, that does include street rate -- it does include incentives. The 3% down is with incentives.

Got it, Okay. And then what are you doing on renewals right now in terms of pricing?

You mean the current customers from month to month?

Yes.

Well, it depends on -- it is so case by case. In situations where one particular site has high occupancy -- persons coming due, we will raise their rates based on what we see there. But in many instances where we have higher vacancies, we're rolling those over, especially as we get closer to the slower season.

I'm sorry, you are rolling -- I missed the last comment.

The people, we are not going to be raising any rates on most units and most people at this point, especially where there is high vacancies, so we are getting into the slower season now.

[Back end of] August.

And then final question, on the 15 properties that you are marketing for sale, I don't want you necessarily to bid against yourself, but roughly, in what kind of a range do you expect to see cap rates for your product types [where we sit by the type of zone]?

Everything that we have is offered in the low 8s. The four that we have under contract are coming in the higher 8s, so it in the -- with an 8 handle. But these stores are -- they are some one off properties in markets that we're -- we don't have a big presence in obviously, if there is only one there, so they're tougher stores. I would not say that --- you know, we are happy in the 8s, I think, on selling these, although we would not be with most of our stores. Those 15 can go in the 8s and we'll be happy.

And that is trailing in place forward NOI?

Six months annualized -- recent six months annualized.

Great. Thank you.

You're welcome.

Our next question comes from the line of Paul Adornato with BMO Capital Markets. Please proceed with your question; your mic is now live.

Hi, good morning.

Good morning, Paul.

I was wondering if you could talk a little bit about the customer characteristics of customers that come in with free rent?

They're everybody. I'm not quite sure I understand where you're going with that.

Well, do they tend to stay as long as customers that don't come in under incentives? I realize that everyone is coming in under an incentive these days, but compared to other periods.

That is a good question because we are tracking that very, very closely, Paul, and we are pleased to see that almost month by month, it is within like 50 basis points difference one way or the other, because we tracked the year before when we weren't offering the move-in specials or name your own price with where we are now, and it is almost -- it is very insignificant as far as the different. In three months, it might be better this way and then four months it would be better the other way, so we are pleased with the length of stay with these people.

And now you are offering more than one free month at any stores?

Yes. Well, what we'll do sometimes is it depends on when they're coming. If they are coming at the beginning of the month, they'll pay maybe half of that month and name their own price for the second month.

If it is they are coming in the second half of the month, they'll pay the balance of that month, pay their admin fee and name your own price. So it probably averages out to maybe a little bit more than a month is what most people are getting.

And how has your small business customer performed during the recession?

Well, if you include contractors, awful. I mean down in Florida, where we have suffered a lot of vacancies, the construction industry is dying or dead, and we have lost a lot of people there. But otherwise, we haven't heard of many people leaving. I'm sure we had some along the way, but the biggest problem has been in the construction industry.

And Dave, down the road, if you are able to achieve better credit ratings, will that lower your interest rate on those pieces of debt?

Yes. One of our loans, the bank term note of $250 million requires us to have two rating agencies at investment grade. So that would save us not a great deal, it would save us $900,000 a year but only about 37.5 basis points on that note.

The other -- one of the other notes, $150 million term note requires us to have no adverse or no noninvestment grade rating, so that is the one that's going to be a little tough. If it sits on its rating with a BB plus, we are going to be in this situation where we wind up paying 8% on that loan instead of 6%, so that's the bugaboo.

I haven't forecasted that in as far as going down. I think we're going to have to sit there until we can either get -- there is a bunch of things that would have to happen to get them to come around with a better rating, and if you have been reading their research, and that of Standard & Poor's and Moody's, all of them are a little bit guarded to say the least on the outlook for the REIT and the CMBS industry going forward.

Okay, thank you.

Thanks, Paul.

Thank you. Our next question comes from the line of Stephen Kim from Macquarie, please proceed with your question, your mic is now live.

Hi. Just to follow up on that previous question, I think the last time we spoke, you mentioned that you were getting -- attempting to get a new rating from a different agency? Any progress there?

We have agreed across the board to wait until the second quarter numbers were in and the impact on the covenant, so we will be doing that in the coming weeks.

Got you, and in terms of your DRIP programs, how much is left in terms of -- how much do you have left in the program and have you done anything after the second quarter?

No, we haven't done anything in July, don't have any plans for August. And we have 1.7 million shares left on a $3 million total plan --- 3 million share plan.

Last question, if I could just follow up on your comment here on street rates, where were your street rates at the end of the first quarter compared to the end of the second quarter, and also, what is the gap between in-place and street rates?

Well, in-place, I will answer that part for your first -- we are in a pretty good position with respect to our current customers. We got about one-third of our current customers, their rates are above our street rates, and over 50 couple percent of our customers are below our street rate. And the balance in the range of about 13% and 14% are at our current rate. So we feel pretty comfortable when we are getting new people in for the most part will be -- though people are leaving, we will be replacing them with at least similar rates or higher rates going forward.

With regard to our street rates, except for Florida, we are on par pretty much -- we are at an all-in $10.06 effective rate, which factors in the heavy discounting. We were at $10.11 at 3Q, which is [factoring] similar discounts, so street rates have not budged much at all quarter to quarter.

And when you said --- when you gave the breakdown for in-place versus street, so on average, is there a positive gap?

There is a positive gap as far as we are concerned, and that is our current customers are paying less than what we'll be charging new people coming in.

Great. That's all I have. Thank you.

Thank you. Our next question comes from the line of David Totie with Citigroup. Please proceed with your question; your mic is now live.

Good morning guys, Michael Bilerman is here with me as well.

Good morning.

You mentioned why -- I know you touched upon the change in concessions. You went from a first month free and a second month name your price to a discounted first month, are you finding that you had some pricing strengths that drove the reduction in that concession or are you finding that change keeps customers in place a little bit longer?

Well, the reason we are doing it is -- we are doing it selectively, and I don't mean to say we are doing it across the board. Where we have a little bit more pricing power, more occupancy, we will put that in place. If it is below a certain level at the various unit sizes, we will still have the old special back there.

Okay, and are you rolling out any other types of experiments on the concession side in other markets?

At this point, no.

Okay. And then just going into the second half, obviously, it's a little bit weaker for storage in general under normal circumstances, what do you expect your concession strategy to be relative to the third and fourth quarter?

I think that they are going to be similar. Generally -- we are starting in August, historically, we start seeing more move-outs than move-ins. It'll be interesting to see how we do this time.

But I think we'll probably have to remain aggressive selectively. And I really have to stress selectively because, as I said this before, at a specific store, we might be running a special on particular unit sizes and yet charging a premium on other unit sizes. So generally speaking, we will be aggressive with our specials, but we will be selective as far as trying to get premium prices on certain units.

Okay, and then relative to pricing, do you have any sense of what -- it is well known what the public players are doing, but what is happening on the private side? I know they were late to the game in terms of discounting and free rent, is there any acceleration in pricing aggression from the 90% (inaudible)?

Well, historically, what we have seen is the independent owners that they have been more concerned with occupancy -- occupancies and rents, so we have seen them trying to be a little bit more aggressive in their specials. Fortunately, we have the ability to -- with the Internet, with the call center, the truck usage to have some advantages that they don't -- but they are a little bit more aggressive than they have been.

Okay, and then my last question is just related to the transaction market, given that you're preparing some assets to go to the sales market, are you seeing any indications that there is an uptick in transaction activity or a closing of the bid-ask spread, any change in that environment over the last couple of months?

There is very little going on, Dave. There is a couple of [mode] packages out there, and there are a lot of players that still have their stores on the market without much movement in the bid-ask spread.

The type of transactions that we are seeing, and that we hope to play with these 15 stores, is kind of local market, local owner, local banks type of thing, with the traditional 30% plus equity and a 5 year mortgage with a 20 year [RAM] to finance it. But it is very spotty and there is just nothing on the radar. And like I said, there is a lot being offered but it has been offered for several quarters, if not a couple of years now. So there is very little data that we can put on our graph and say this is what's going on.

Great. That's helpful. Thank you.

You're welcome, Dave.

(Operator Instructions). Our next question comes from the line of Michael Salinsky with RBS Capital Market. Please proceed with your question; your mic is now live.

Good morning, guys.

Good morning, Mike.

Dave, a quick question for you. The mortgage you got maturing later this year, what is the plan for that at this point?

Well, we are going to have some cash flow resulting from the dividend cut. We expect to have some proceeds from the sale of at least a couple of assets. And barring either of those, we will just pay it off on the line until we get the proceeds from the sale of the assets.

Okay, so you are selling the underlying assets under the mortgage right now?

The properties we are selling right now have no mortgages. They are all unencumbered.

Okay.

We would just use the proceeds from those unencumbered sales to buy out the encumbered loans.

Okay, second question. You guys have pretty good occupancy improvements throughout the quarter, where is occupancy now in the portfolio and how does that compare on a year-over-year basis as of the end of July?

At the end of July our occupancy is about the 83.1% and it is about maybe 3 basis points higher than what we were last year at this time.

Okay, that is helpful. Additionally, on the expense front, you guys had a very good quarter from expenses. Can you provide a little bit more detail? It didn't appear that there was real estate taxes, but where on the operating side are you guys finding the cost cuts, is it personnel, is it cutbacks in advertising, where are those coming from?

Well first, regarding advertising, no, if anything, we are going to be spending more money there. We think that is wise spending of dollars. Where it is is out in the field, renegotiating some contracts as far as the pest control, trash, lawn, those sorts of things. We renegotiated our Dri-Guard maintenance program. We reviewed our staffing requirements and so we are running, as I mentioned earlier, as lean as we can, savings some dollars there.

We reduced our 401k and match -- which has helped there too. So it is all across the board, both here in Buffalo as well as out in the field.

Okay. And finally, Dave, you widen the same store revenue guidance, yet you took the expense guidance significantly down, yet you also reduced overall guidance. Obviously, there are some moving pieces, can you kind of walk us through what the impact is from the expenses and the revenues as well as the additional shares issued during the quarter. And I think the guidance -- that is actually a little bit higher than you were anticipating last quarter? I think you had said it was an insignificant increase and now, I think it is 5% to 7%.

Well, I guess I might have used that unfortunate choice of words that you are talking on the last part about G&A cost. We have always said we were planning on -- about an extra $1 million this year just to run the JV. So that insignificant was an unfortunate choice of words in the past. But essentially, the overall forecast has not changed on an NOI basis.

I think we're doing -- we are being a little bit more cautious on the revenue but we have saved on expenses so the overall NOI of 2% to 4% decline has stayed. And I think we have been there -- pretty much that's what we've been expecting all year, that 2% to 4% decline in NOI, and continue to.

The overhead and obviously, it is about plus or minus $250,000 per quarter. The interest expense -- we put in the guidance when we issued the special press release in the middle of May after we found out what the impact was of the rating drop and the update on the loan negotiations, so that hasn't changed.

Really, the factor that resulted in us dropping guidance was solely the 1.3 million shares and the dilution impact of those 1.3 million shares. We wounded up paying $25 million or $26 million worth of debt at a rate of well under 3%, so we didn't gain much in the interest expense savings and we had to divide it -- all of it by 1.3 million.

So I got a few questions on this, but I'm sorry we do a little bit better job on the press release. But I can say here is our guidance change for the balance of the year is basically same operating characteristics, same overhead [front] characteristics, just more shares and not a corresponding interest rate benefit.

Okay, thank you.

You're welcome.

Thank you. Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question; your mic is now live.

Hi, Jordan Sadler is on with me as well. So regarding the DRIP, do you plan to continue using that in the second half of the year?

No, we don't. The way we are structured right now is we have got a bunch of debt that is fixed rate -- it is fixed to term, but we like the debt we have even though we got bumped on the rate, so we don't have any use of proceeds. As I mentioned in the prepared remarks, virtually all of our expenditures going forward are discretionary. And I think we would probably -- we would issue equity if we saw a great opportunity down the road, but it has to be a great opportunity. And we would do it in a -- we need more than we could raise through the DRIP.

The idea of raising this stuff this quick was basically we saw something coming June 30 perhaps, we didn't want to trip again. And we could have -- we didn't even have time to cut the dividend enough this quarter to make up for it. It was just such a thing as, here we are May 15, knowing we got 6 weeks until the next report date.

We thought we were okay at May 15 but a little hiccup on operating results can trip our gross asset value. So I said, what can we do to fix this and just put it to bed? So we --- boom, we went out and raised about 5% of our overall shares and put it in the bank and paid off all the debt we could pay off.

But going forward, we'd be reluctant to do an equity raise because we don't really have use for proceeds. And so I'll just quality it by saying, if something good comes along, you might see us, but we don't see it on the horizon right now.

Okay, then switching over to operations, what month or -- for your portfolio have you typically seen -- switched to a net move-out month? And then I guess based on your own internal models and projections, where do you think occupancy might end up say at the end of this year?

Well generally we will see -- towards the middle to end of August is where we see -- start seeing more move-outs than move-ins historically. It will be interesting to see this year what the specials we're running with, maybe we can change that around.

As far as where it's going to be at the end of this year, as I said in my opening remarks, visibility is really, really difficult. We are going to work like hell to get everybody that we can in here and keep the people we have, but I certainly don't see us going lower than where we were at earlier this year, but I really can't give you a number.

Okay, and then just quickly, when you look at Texas, it seems to be moderating but it still outperforming most of the rest of your market, do you think that this continues or are you seeing some more weakness in Texas and why do you think it continued to outperform like this?

Well, part of it -- parts of Houston where we got some benefits from the Hurricane Ike a while ago, and all those move-outs it seems have gone. The economy there seems to be stronger than we are seeing in some other -- certainly in Florida and we do have a good presence in Texas.

There are a couple of soft spots for us. The Forth Worth area had some issues, San Antonio has some issues but generally speaking, we just -- we think it's really the economy is stronger there than what we are seeing in some other parts of the country.

It is Jordan here. I just had a question about asset sales. I may have missed this, what is the expected volume? I think you said 15 properties you have got teed up -- is that $40 million, $50 million?

About just over $40 million.

It's $40 million. And in terms of the market, I think you said they were one offs but -- anything specific -- I mean, would they be states where you had smaller exposures and just wanted to save some expense money in terms of management as well?

Yes, that and just -- in some cases, when we went through the process, we look at stores that have run their course in terms of we can't do any more in the way of expanding them. Believe it or not, in this environment even some of them are at 90% plus occupancy and the ability to push those much further, we are not going to get much more growth out of them.

We have got a couple of in contract on the -- in Southern Massachusetts, near Fort Bragg North Carolina and in Salisbury, Maryland. Those are four names I'll give you just to give you a flavor for the towns we are talking about and they just don't fit.

And they have maxed out, we think for the most part, in terms of potential or they might require considerable capital improvement that we are not going to recoup. Those are all the factors that went into some our decisions.

Is this cash going be expended or unencumbered, as you mentioned, the -- so is this cash [actually] going to sit on the balance sheet basically, or are you going to try and opportunistically buy back some of the notes or what?

I think first, what we would do is pay down the $26 million that matures at the end of this year. That is really all we have got in the next couple of years that is coming due, but we would first knock down that debt with cash. And then -- I feel like an idiot sitting here saying we are going to buy back stock right after we issued a bunch of shares, but --

Not stock but -- oh, you would rather buy stock than the debt?

No, no. I feel like -- I thought that's what you meant by optimistic.

Just the notes, like your term notes, if you could --

I don't think those are opportunistic unfortunately. I think, despite the covenant breach, I think we are considered a pretty good borrower and our lenders are sitting there and they're -- I don't see any opportunity to buy any of our notes at a discount.

Okay, thank you.

Thank you, there are no further questions at this time, I would like to turn the floor back over to management for any closing comments you may have.

I just want to thank everybody for their interest and their participation in our Company. We look forward to speaking to you in a couple of months. Have a great day.

Thank you.

Ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time and we thank you for your participation. Have a wonderful day.