LTC Properties Inc (LTC) 2010 Q4 法說會逐字稿

(Audio already in progress) -- (Operator Instructions). Please note this event is being recorded.

This presentation contains forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 as amended and Section 21e of the Securities Exchange Act of 1934 as amended adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking.

You can identify some of the forward-looking statements by their use of forward-looking words such as believes, expects, may, will, should, seeks, approximately, intends, plans, estimates or anticipates or the negative of those words or similar words.

Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operations, business strategy, results of operations and financial position.

A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements including, but not limited to -- the status of the economy; the status of capital markets including prevailing interest rates and our access to capital; the income and returns available from investments in healthcare-related real estate; the ability of our borrowers and lessees to meet their obligations to us; our reliance on a few major operators; competition faced by our borrowers and lessees within the healthcare industry; regulation of the healthcare industry by federal, state and local governments; compliance with and changes to regulations and payments; policies within the healthcare industry; debt that we may incur and changes in financing terms; our ability to continue to qualify as a real estate investment trust; the relative illiquidity of our real estate investments; potential limitations on our remedies when mortgage loans default; and risks and liabilities in connection with properties owned through limited liability companies and partnerships.

For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under Risk Factors contained in our annual report on Form 10-K for the fiscal year ended December 31, 2009 and in our publicly available filings with the Securities and Exchange Commission.

We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements whether as a result of new information, future events or otherwise. I would now like to turn the conference over to Wendy Simpson, CEO and President. Ms. Simpson, please go ahead.

Thank you. Good morning and afternoon. Thanks for joining us for our fourth-quarter and year-end 2010 call. With me are Pam Kessler, our CFO, who will be giving some more specifics about our 2010 year and fourth quarter; Clint Malin, our Chief Investment Officer, who will comment on our pipeline of potential investments; and Andy Stokes, our Senior Vice President of Marketing and Strategic Planning, will give some more color around our continuing marketing efforts.

Yesterday after the markets closed we issued our earnings announcement. We had a very exciting and active 2010. We closed approximately -- closed and funded approximately $95 million worth of acquisitions comprised of skilled nursing properties, assisted-living properties and properties providing a combination of senior care services.

For the first time in recent years our rental income has appreciably increased. Year over year it increased by 9%, which is significant considering that our 2010 acquisitions were closed throughout the year so that 2010 does not include a full year's rent for the majority of our acquisitions. The weighted average rent for these acquisitions is over 10%.

Of the five transactions we closed in 2010, two were with an operator with whom we already had a relationship and three were with three new operators we are pleased to add to our portfolio. We continue to believe that our marketing strategy to target the local regional operator provides us with attractive acquisition opportunities and spreads our risks amongst operators and markets.

Even more exciting for us is that we have already been able to announce our first 2011 acquisition of properties located in South Carolina. This transaction will close on the 28th of this month. Again, this is a regional operator new to an association with LTC.

Right now we have one signed letter of intent that I would say is likely to result in a closed transaction before or close to the end of this first quarter. At this time we are not prepared to discuss the details of this transaction, but look forward to a press release when all the contingencies are resolved and all documents are signed. We would finance this with a draw under our line of credit.

To prepare the Company for an active 2011 we are working with our banks to enter into a new unsecured line of credit. We're looking to upsize the line and have additional availability, again using an accordion feature. Right now it is possible that we can have this new line in place before or shortly after the end of the first quarter. Pricing has not been locked in, but the spreads that we are discussing what our banks have been factored into our projections.

We still have the $50 million shelf with Prudential and this may also be drawn to fund acquisitions. Right now we are very positive about the availability of possible transactions and the availability of funds to continue financing our growth. We are seeing opportunities in skilled and in assisted-living properties. While we currently are slightly higher in investments in assisted-living properties, we continue not to have a bias as to one type of property over another. Clint will give you more details about our pipeline in a few minutes.

Along with our press release we published some supplemental information. On our last call we discussed some additional information that analysts and investors might like to see, and Pam and her staff have spent considerable time preparing this new disclosure. And we will add to it and modify it as we go along to make sure that we are providing useful and needed information.

And you will notice that we have provided pictures of properties that we have recently purchased. We do not have an album of all of our properties, but we will endeavor to make available pictures of new properties and put on our website pictures of our other owned properties as they become available. At this time I will ask Pam to discuss our quarter and year-end results.

Thanks, Wendy. I'll be discussing quarter-over-quarter results and I'll refer you to our 10-K that was filed yesterday for year-over-year comparison. Revenues increased approximately $1.4 million primarily due to an increase in rental income from acquisitions and the receipt of $770,000 from the Sunwest bankruptcy settlement. This receipt represents a partial distribution of our claim for unpaid rent and interest and is reflected in the interest and other income line item on the income statement.

Interest expense increased $129,000 due to a full quarter of interest expense on the Prudential senior unsecured notes and higher outstanding balances on the line of credit. The provision for doubtful accounts and notes was higher due to a $385,000 provision for doubtful accounts charge taken to fully reserve a previously impaired mortgage loan secured by land in Oklahoma.

The skilled nursing property that originally secured the loan was closed and sold in a prior year and the borrower continued to make payments on the loan for years. The borrower stopped making payments and is trying to obtain financing to pay off the loan, but has been unsuccessful to date in his refinance efforts. This loan is now fully preserved.

Operating and other expenses increased $426,000 due to transaction costs related to acquisitions, restricted stock vesting and consulting fees. Income from discontinued operations and the gain on sale relates to a skilled nursing property in Virginia in which the operator elected to exercise their purchase option contained in the lease agreement. GAAP requires that we reclassify income and expense related to this property to the line item discontinued operations.

Income allocated to preferred stockholders decreased because the third quarter included a one-time charge of $2.4 million related to the preferred stock redemption during the third quarter. Preferred stock dividends decreased in the fourth quarter $920,000 due to the timing of the redemption.

Net income available to common stockholders increased $4 million due to the acquisition, the Sunwest bankruptcy settlement, the gain on sale, the preferred stock redemption charge which lowered third-quarter and lower preferred dividends in the fourth quarter. This is partially offset by an increase in interest expense, provision for doubtful accounts and G&A expenses.

Fully diluted FFO per share was $0.51 this quarter compared to fully diluted FFO per share of $0.39 last quarter. Excluding the Sunwest settlement and one-time provision for doubtful accounts, normalized fully diluted FFO per share was $0.49 in the fourth quarter. Excluding the preferred stock redemption charge normalized FFO per share was $0.48 in the third quarter.

Thanks, Pam. Now Clint and Andy will give you more specifics on our investing activities. We'll start with Clint and then he'll turn it over to Andy.

Thank you, Wendy. Deal flow toward the end of 2010 tapered off during the holiday season which we had expected. However, activity for 2011 is steadily increasing since January. Including the executed LOI that Wendy previously mentioned, we have an active deal pipeline of approximately $100 million. The dollar value of deals presented to us so far this year is far in excess of the $100 million in our pipeline, but we are being selective on which investment opportunities we pursue.

For the most part we have elected not to spend significant time or resources on large transactions that are being competitively marketed. We see opportunity for us to capitalize on transactions in the $10 million to $50 million range, especially in off-market transactions. Given that we have added a number of new operators to our tenant base since 2009, we are hopeful that these relationships have established a foundation which will lead to more off-market transactions.

We continue to see investment opportunities in skilled nursing, assisted-living as well as properties offering a continuum of care such as in South Carolina. Most transactions in our pipeline will be structured as a sale-leaseback or an acquisition leaseback. However, in one case we are considering a joint venture investment on real estate for an assisted living facility which is just finishing construction. And in another transaction we are considering a purchase with an earnout. Our target yield on new investments continues to be in the low to mid 9% range.

Turning to our existing portfolio, we are seeing a continued interest from our tenants in expansion and renovation projects. We are in various stages of discussion with certain tenants on such projects at six to seven properties in our portfolio which could lead to a total investment of $5 million to $6 million. In addition to these projects, we are in a preliminary discussion with one tenant regarding the construction of a replacement property.

The $4 million addition to the property in Kansas that we have previously discussed on calls is nearing completion and the property is expected to receive its certificate of occupancy in approximately 30 days. To date we have funded approximately $2.5 million on this project and we expect the remainder to be funded by the end of April this year. Now I'll turn the call over to Andy to comment on marketing efforts.

Thanks, Clint. It is worth noting that none of our deals in 2010 came from large national providers either in assisted living or skilled nursing; in those deals prices and risk tend to be higher and rent yields lower. So our marketing focus has been on smaller transactions with more conservative prices and better returns.

This will continue with a little more help. We have added an analyst who will do some marketing research. Mark Hemingway, who has been with LTC for many years, was also recently promoted to Vice President. Mark is located in Dallas, he will be putting a bit more time into the prospecting and gardening that develops customers, marketing time at conferences and in the offices and buildings of prospects will probably increase somewhat, say about 20%.

I am speaking here about time, not money. I do not expect our marketing budget to change much. All of our marketing successes in 2010 came from deals which we went out and found. Looking forward we will continue to hone our customer and market knowledge and go out and find more.

Thanks, Clint and Andy. Looking at the year to give guidance is always difficult. With no unusual events happening before the end of the quarter I would project that our quarter would be around $0.50. Then we get into a lot of assumptions and these are some of the assumptions I've used to give you some guidance.

If we're assuming around $50 million of acquisitions closing before the end of the second quarter, and that we did the new bank line and drew $50 million of Prudential availability at around 5.5% interest, our 2011 FFO would be between $2.08 and $2.11.

If you used the same assumptions and did not draw down the Prudential availability because acquisitions look slower in the second quarter, thereby making a better return by keeping our acquisitions drawn under our line of credit, 2011 FFO would be between the $2.11 and $2.14. This guidance is comparable to $1.94 in 2010.

Guidance assumes rental income of about approximately $77 million and mortgage interest income of approximately $6.4 million. 2011 mortgage interest is projected to be approximately $1 million less than 2010 due to maturing loans. And to be clear, these guidance numbers give no credit for any deals or writing any new mortgages in the second half of 2011.

We'll update guidance if we are successful with our growth strategy. These projections also do not consider any other financings such as equity issuance or any necessary accounting entries for novel deal structures. If we do an earnout there are a lot of additional debits and credits flowing around through the balance sheet and sometimes hitting the income statement which are not actual cash numbers but are accounting numbers and the earnout may skew the numbers a little bit, but they're more accounting numbers than actual cash numbers.

We had a great year, as Andy said. We added two new employees, both of them have been very active since their coming on board. Mark has been with us for several years reviewing our properties and he's well respected in the field. And whenever I go out to visit a property they're always asking whether Mark is going to be coming with me. He's a great ambassador for LTC and I look forward to him working with Andy more in Andy's very successful marketing efforts.

Our Board and management team are very positive about 2011. We look forward to a sustained rational growth for the year and even more look forward to reporting successes and being able to increase guidance as a result of these successes. I want to thank our employees for such a great year and challenge them to achieve even more in 2011. Thank you for your attention and I'll now open it up for questions. Amy?

Karin Ford, KeyBanc.

Hi, good morning. I just wanted to see if we could get an update on the sale of the charter school. Is that still expected in the spring and is that baked into the guidance that you gave us?

No, we're not -- it was a private school and we're not counting that cash into the guidance. Because of a relatively high snow level in those areas we're probably not getting as much traction in terms of owners looking at -- or possible owners looking at it. But we have had some school districts interested in looking at the property and we expect that we'll be very actively getting some more marketing efforts in the spring.

Okay. Second question just relates to investments. Would you consider any type of a [Rydea] operating structure on any of the assisted living investments that you're looking at today?

Yes, we would. In fact Andy has been working on a little model -- I say a little model, he's been working on it for a while -- that we can go out and talk to some operators about as a "what if we did this structure" wise. So we are looking at it to use it as a marketing tool.

And what type of size would you be comfortable with to have in operations in your portfolio and what type of yields would you be looking to do on those types of deals?

Well, we've been looking on the rent side to get the same rent yield that we're currently getting. And then the equity part that would be in Rydea, the Rydea entity, we'd be looking at to get an equity type of return in excess of 20%. So that's what we'd be looking at. I think we're most likely to start with very small -- a very small structure Rydea, and I wouldn't expect to see us -- in terms of the impact with the addition to our income, to be more than 5% or 10%.

That's helpful. Last question just relates to NHI and their investment in the preferred. I guess they have -- the new CEO took over recently. Have you talked to them at all? Is there any chance that they potentially convert or redeem their shares?

I haven't talked to them. Justin and I exchange e-mails, like I congratulated him on his promotion and that sort of thing, but we haven't talked to them nor have they evidenced any interest in converting right at the moment. I'm sure he's -- I think they had their earnings release a little -- a couple of days ago. I'm sure he's looking at his liquidity and cash availability and I'm sure he's cast an eye upon that investment. But no, Karin, we haven't had any specific discussions.

Okay, thanks very much.

You're welcome.

John Roberts, Hilliard Lyons.

Hi, Wendy.

Hi, John.

A couple of housekeeping questions first. What are you expecting for -- any thoughts on provisions -- what we should model in for provisions for doubtful going forward? You had a pretty high number in 2010. Would that be a decent run rate for 2011 or are you hoping for less there?

Pam is pulling up her projections right now.

About $200,000.

We projected about $200,000 a quarter.

Okay. So you're thinking about a pretty significant decline from this year?

Yes, you know --

(Inaudible).

-- there were two one-time charges this year.

Yes.

How about G&A?

G&A we're projecting to be a run rate of $2.4 million a quarter.

Okay. That includes the transaction costs?

Yes, that doesn't include projected transaction costs because those are very hard to forecast. So that's just a flat run rate. So if you're assuming any acquisitions you'd need to assume some transaction costs on top of that.

Got you. You mentioned $50 million in acquisitions for the first half. Do you think that's a pretty decent number to use? Are you very comfortable with that?

I'm pretty comfortable with that based on what we see right now in terms of our confidentiality signings and just the way we've seen deal flow happening. So I'm pretty comfortable with $50 million.

Good.

Not an additional $50 million, we've got to [close] the South Carolina deal.

Okay, so $40 million on top of -- basically $40 million on top of what you've got?

Correct.

Okay. That's a great number. I wasn't predicting anywhere near that. And you're not putting anything in the second half of the year. Is that because you feel just so uncertain about the second half of the year about the acquisition environment? Or you just don't feel comfortable projecting beyond the current half?

I don't feel comfortable predicting beyond the first half, not because I don't think that it will be available. But interest rates are changing so much and everything, I would rather wait until at least the first quarter or the second quarter to give real solid guidance for the second quarter in terms of acquisitions. However, if things start picking up and we start -- well, we announce all of our acquisitions anyway. So --

Right.

-- it would be easy to factor them in as we go along.

Okay. Now on the call, I guess it was Clint who said 9% to 9.5% cap rates is what you're looking at. Obviously you've been getting better than that. Can you contrast what you're getting versus what you're looking for?

Well, we're getting -- when we quote it's with straight line (multiple speakers).

So it's a GAAP (multiple speakers).

Okay, so it's 9.5 cash is what you're looking at?

Correct.

Right.

Okay. At what point do you think you might look to put more permanent debt on versus the credit line? I mean, obviously using the credit line at this point and for modeling purposes, as you mentioned, it's too late to do it 2011 if you're using 5.5% debt versus 2011, 2014, versus using a line of credit. At what point, as far as the amount on the line of credit, do you start saying you (inaudible) uncomfortable with that and you want to term it out?

Well, I think I would like to always see at least $50 million of liquidity because we don't want to be sending out LOI's with financing contingencies. And deals we're looking at, $50 million would be a long deal or a pretty good deal for us. So it's important I think for our marketing efforts that we can show that we have a lot of liquidity.

We haven't talked about private placement areas for a while. We'll have to look at that type of debt opportunity. We'll talk to Prudential again about extending or increasing their program with us. So I think when we get to our line being in less than $50 million availability we'd be looking at putting up some more permanent debt.

Okay. And on Karin's question on the school, you've already reserved that entire amount at this point, right, their entire value there?

It's reflected at its appraised value, yes, so we've written it down, yes.

Right. Great, okay, thanks.

Thanks, John.

Jerry Doctrow, Stifel Nicolaus.

Good afternoon. Or good morning maybe now in California. Wendy, I just had a couple things, one detail. Was there acquisition cost in the quarter? We typically have backed those out. I didn't see it, but it might be there somewhere.

In the first -- or fourth quarter?

Fourth quarter.

Let me get that number for you, Jerry. Go on to your next question, I'll pull that number up.

And I guess I wanted to just talk a little bit about kind of portfolio, the existing portfolio and the new portfolio. I mean, one, I think the supplement is a great addition, so thanks for that. And obviously you have properties in there that look quite attractive.

I think the perception rightly/wrongly is that the existing portfolio of your stuff is somewhat lower quality than some of your larger cap peers -- smaller assisted living units generally non-metro and skilled nursing that has more Medicaid kind of stuff.

And I don't know if you think that characterization is accurate or not, but I wanted to get a little feel for that and maybe contrast with that, if you could, maybe what's the sort of stuff you're buying?

Well, the stuff we're buying isn't that dissimilar to our current portfolio. We do tend to have the smaller assisted living properties, that was the type of the property that the companies were building at that time and they're in smaller suburban areas, they're not in the big metro area. And they're geared for the market. People tend to vision everything looks like LA, New York or whatever, but there's a whole lot of the United States that have very nice properties, smaller properties because that's what is the area around those properties.

Our properties are well maintained and look very lovely for the area. We have some bigger properties, the Sunrise properties are larger. The ones that we recently purchased are not dissimilar to properties that are in our portfolio. Our nursing homes have an appropriate mix of Medicare Medicaid patients. We have put a lot of money into our nursing homes in the last three years and we continue to put a lot of money into those homes.

We walk away from properties that are under maintained and don't have a strategy for additional CapEx in the short term. A lot of our skilled nursing properties are, again, in smaller suburban areas and not large metropolitan areas. We continue to fight this opinion that we have lower quality or lower -- I guess lower quality assets, I don't believe we do. And we are going to be showing that by photograph.

I don't see a benefit, though Andy would argue with me, of hiring a professional photographer to go fly around the country and take photos of our existing properties. So we're trying to get from our properties their marketing material that we could maybe steal a photo or something from so that we can better display visually our properties and hopefully dispel any lingering misconception of the quality of our properties.

Okay. And what's your sort of Medicare/Medicaid mix now on the skilled side?

Do we have that, Pam? Because we don't have our operators give us that information.

Right. I think an analysis Clint has done is what, 40% Medicaid, 60% --?

You're talking across the portfolio?

Yes.

I don't have it in front of me (inaudible) across the entire portfolio, but we could get that information.

Okay.

Okay, that would just be helpful. And then just on reimbursement risks, we've had -- obviously Medicare right now because of RUG-IV seems to be doing quite well for people, but there have been proposed I think across-the-board Medicaid cuts in California, Texas that are still being I think debated by the legislature. But, how are you thinking about reimbursement and reimbursement risk right now?

Well, the operators that we've talked to recently have said that they could all absorb -- they can't absorb a Texas 33% cut, but they're not expecting that that will happen. But they can all absorb a cut that is more reasonable. They're all looking for the RUG-IV to close the gap if not close the gap and add some onto it.

We're cautious about using that in our underwriting as something that's going to be there forever because I figure the federal government is just going to take some focus on that additional revenue under RUG-IV unless the industry can show that that revenue is a savings in another area of healthcare.

So it's taking us a little longer to underwrite things because of the uncertainty in some of the states. Our operators are a little bit concerned that -- they're not concerned but they believe that the smaller operator will not be able to compete in the smaller -- I'm thinking an operator has one or two properties because the complexities that are added on all the time.

So our operators that we've had for a while are not happy about any cuts, but most of them are not concerned that this is going to impact them considerably in the future. Texas aside, if they do something crazy like that it's going to be a concern. But everybody we talk to who we operate with in Texas or just know in Texas is really kind of expecting somewhere between a 3% and a 10% cut.

And then sometimes they think when they talk about that at the 10% range that includes the 3% that they've already experienced. So possibly another 3% or another 7% rate cut. So Texas is indeed a state that everybody has got their eye on.

Our Texas operators are not that concerned for a cut that would be significantly impacting them to the negative. But we're all watching it and the Texas State Association is doing a terrific job in lobbying and trying to work with the Legislature and get them to understand the impact of their proposed cuts.

Okay.

Jerry, to answer your transaction cost question, it was $253,000 in the fourth quarter reflected in G&A that was related to transaction costs. And for the year it was $370,000.

Okay. Thanks. And then last thing for me was just -- I think you sort of described the Sunwest settlement as sort of partial. Is there any more coming on that we should be looking out for or is it pretty much done at this point?

We think that we might get another $200,000. But again, I guess contingent on cash that they have coming into the bankruptcy trustee and all that sort of thing, so we'll book it when we see it.

Okay.

Yes, it's probably -- we've taken out -- it's one time probably anyway, but just wanted to --.

Yes, absolutely.

Okay. Thanks, that's all for me.

Thank you, Jerry.

Mark Lutenski, BMO Capital Markets.

Good morning, I'm on with Rich as well. A quick housekeeping question first. You mentioned that you expected about $1 million less in mortgage interest income in 2011. I was wondering if you could give us an idea of when the timing of that -- is that ratably throughout the year or is there a specific quarter that that sets in.

It would be ratably throughout the year.

Okay. And I think in Clint's comments he mentioned that there was a potential to do a joint venture acquisition. I was wondering if that's a one-off situation or is that something you're considering more widely with acquisitions going forward?

It's a relatively unique situation. It's a developer who built a building and he would like -- he's going to stay in operations. But he'd also like to stay -- have some skin in the game under the real estate. So we're discussing with him a possibility of doing a joint venture so that he could have some additional appreciation.

It's a brand-new property, so the true value of it will be seen in the future rather than today. So that's why we're looking at a joint venture situation. We're not against joint venture situations, but it's not a significant part of our strategy.

Okay. I think Rich has a question as well.

Thanks, good morning to everybody out there. I guess I want to -- just a couple of quick ones on -- by the way, much improved disclosure, so kudos to that, thanks for listening to all of us. Not often do people listen to me, so --. Me and Jerry I guess with that one.

But anyway, on the page 7, portfolio statistics, you talk about the issue of portfolio quality and all that and if you look at the issues of living -- occupancy of 76% -- can you kind appeal back the onion on that? And also the skilled nursing which is -- I would characterize that as below average relative to what you might think for higher-quality products? So can you kind of talk about the occupancy issue with those two segments?

Yes. The occupancy -- in putting the occupancy in for the assisted living, that is our entire portfolio which includes assisted-living concepts. If you were -- and I debated this just excluding them outright, but we did a whole portfolio on the skilled nursing and other senior housing so, to be fair, I did not exclude them.

If you were to exclude ALC, we're at 88% occupancy for the rest of our assisted living properties which I think is probably about average. And then in terms of skilled nursing, the 80% -- we have been traditionally about 80% in our skilled nursing property. So I don't -- for us that's normal and to get that coverage on 80%, I mean they were underwritten at that. So I think we're very comfortable with the 80% with that coverage.

Okay, that's fine. And then along those same lines on the coverage disclosure, could you kind of bookend the 155 coverage on the assisted living? And maybe comment on the prospects -- I know we've talked about these segments of your portfolio where you have a below one coverage, can you talk about progress you're making there?

Sure. The only operator that we have below one coverage on, and it is only one of the master leases, is ALC.

Right.

And they have increased in that portfolio about 10 basis points. So we are seeing steady increase and that is also true in occupancy for ALC. We saw a 91 basis point increase. So it is -- it's slow and steady. So if that trend continues I could foresee it being back to a normal coverage of one -- over one two coverage. But I think it's going to be slow and hopefully steady.

But as has been the case in the past, they continue to be current, they continue to -- they're not missing on anything, is that correct still?

That's correct. They're continuing to maintain properties and continue to be current with their rent.

Okay, great. Thank you.

You're welcome. Thank you, Rich.

(Operator Instructions). John Roberts, Hilliard Lyons.

Hey, Wendy, just a quick follow-up. You mentioned that you hadn't worked any equity issuance in your modeling. I would assume -- are you going to use your ATM program on an ongoing basis to access capital?

Well, we did do our due diligence calls on that, so it will be active for this quarter. I'm not saying that we're going to use it, but it's the cheapest way to get equity at this --

Sure.

-- point. So, but we haven't included it in any of our projections.

But if you do use equity you're probably going to just do it sort of on a one-off basis using that drib and drab sort of deal?

Yes -- unless there's a compelling reason to do something else.

Okay, great. Thanks.

(Operator Instructions).

Okay, I guess we're done. Thank you, Amy, and thank you, everyone, for being on this conference call and we look forward to issuing press releases on acquisitions and talking to you next quarter. Have a great day. Bye-bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.