Public Storage (PSA) 2013 Q4 法說會逐字稿

Good afternoon, my name is Jackie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Public Storage fourth-quarter 2013 earnings conference call. All lines of been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

(Operator Instructions)

Thank you. I would now like to turn the conference over to Clem Teng, please go ahead.

Good morning, and thank you for joining us for our fourth-quarter earnings call. Here with me today are Ron Havner and John Reyes. All statements other than statements of historical fact included in this conference call are forward-looking statements subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in today's earnings press release and in our reports filed with the SEC.

All forward-looking statements speak only as of today, February 21, 2014, and we assume no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. A reconciliation to GAAP of the non-GAAP financial measures we are providing on this call is included in our earnings press release. You can find our press release, SEC reports and an audio webcast replay of this conference call on our website at www.publicstorage.com. I'll turn the call over to Ron.

Thanks, Clem. Once again, we had a pretty good quarter, pretty active on the acquisition front, good core growth in same-store facilities. So, let's open it up for questions.

(Operator Instructions)

Ki Bin Kim, SunTrust.

Thanks.

At the risk of wasting one of my questions, could you comment on the stabilized yield? And whichever way you feel comfortable quoting that, whether it be stabilized go-forward basis, on the deals that you closed on this quarter?

Ki, I think I touched on that last quarter when you asked that, and we have properties that just are in fill up, some properties that came out of -- newly constructed. So, today they are somewhere between 0% and 8% cash-on-cash yield.

Over the long-term, and some of them will take two to three years to stabilize, somewhere between 6% and 8% would be my guess.

Okay, and the second question -- could you comment on the Street rate year over year you pushed, and the fourth-quarter year over year?

They're higher.

Any range?

Yes, Ki, this is John.

We had mentioned on our last conference call that one of the things we were going to attempt to do during 2014 to continue to grow our same-store revenue is to push on-Street rates. Last year we got a lot of the growth mostly on increases to existing tenant base, as well as reduced discounts, promotional discounts given. We're going to continue to do those two things, but the other thing that we were going to attempt to do is push Street rates.

I think what you're seeing, if you follow what we've doing with our Street rates, either on our website or otherwise, is that our Street rates are up anywhere from 5% to 10%, depending on what market you look at. We're going to try to continue to do that throughout the year and see how that goes.

Sounds good; thank you.

You're welcome.

Todd Thomas, KeyBanc Capital.

Hello, thanks.

In terms of acquisitions, I was just wondering if you would be able to characterize the pipeline today? You had a pretty strong year in 2013. Any thoughts around following that up with a similar year in 2014, based on what you're seeing?

Well, Todd, we're seeing more product come to market in general; quite a bit fair more product come to market, but of lower quality than the stuff we saw last year. And the lower than, certainly, 2011, 2012.

In terms of our production, in Q1 we've got a property under contract and we've got three developments opening, so we're looking at about close to 400,000 net rentable square feet -- $50 million in Q1.

Okay, and then just a follow-up, I guess, for John maybe, on the balance sheet.

In terms of funding additional deals throughout the year, how should we think about that additional short-term debt? And then utilizing free cash flow to make payments each quarter? What's the preferred method to finance these transactions going forward?

Yes, Todd.

At the end of the year we had borrowings of about $50 million on our line of credit that has since been repaid. We had the $700 million of short-term borrowings; about $100 million of that has been repaid. And we used the funds that we received in January when our partner, our 51% partner in Shurgard Europe, purchased a 51% interest in the loan that we had extended to Shurgard Europe.

As we go forward, we're looking at a variety of alternatives, as we've talked about in the last call, which could include the retained cash flow that we generate. And we'll probably generate somewhere in the neighborhood of about $250 million this year. And that's after dividend requirements and maintenance CapEx.

The preferred market is starting to improve. The last time we talked, the preferred market was pretty much shut down for us, but it has improved quite a bit. It is not what it used to be a year ago, but it has improved. So, we're eyeing -- we're keeping our eye on that.

Other things we can do -- we can expand our line of credit; we have a $300 million line of credit that we will continue to use. But that's an option that we can seek to do, to seek to go to our lenders and see if we can expand that. We are thinking about a variety of things, Todd; but it will depend on how the acquisition flows throughout the year and what our capital needs will be.

Okay, thank you.

You're welcome.

Jana Galan, Bank of America.

Thank you, good morning.

Can you comment on how the colder snow year than normal winter is impacting operations? If you're seeing significantly lower move-ins; and if that is potentially being offset by current customers staying put? And if you could provide current occupancy?

I can start, and Ron, you can finish.

In terms of move-in volume, during the fourth quarter, particularly in December, we didn't really see a drop-off in move-in activity as the result of the storms. We did, however, start seeing a drop-off in January.

But our move-in volume, basically year-to-date in 2014, is pretty much flat with last year. Other markets are picking up the slack, that where we're seeing drop-offs and move-ins in cities like New York and Chicago and Boston and DC/Baltimore areas.

But you mentioned about move out activity. Conversely, although the move-out activity is also down too. So, people aren't moving in, but people aren't really moving out, either. So, on a net/net basis, it's kind of been a push, so to speak, on the occupancy levels.

In terms of where we are at the end of January, our occupancy was 92.2% versus 91.6% at year-end.

Thank you.

Our next question --

The snow? Let me touch on -- yes, let me just add one thing to that -- the answer to the question.

So, snow in January was up, I think about $1.5 million. We don't have the numbers yet for February, but I would assume that's going to be up at least $1 million in February year over year. Obviously, we don't know what March is going to be. So, $2.5 million at least for Q1, in terms of snow removal cost versus last year.

Thank you.

Ross Nussbaum, UBS.

Hello guys, good morning, I'm here with Jeremy Metz.

Can you first talk about the Shurgard Europe loan? Why was it the right time to sell your stake in that one?

Ross, since we put the loan in place, New York Common was our partner in Europe. Just to refresh, they own 51% of Shurgard Europe; we own 49%. And they have had the right to purchase half that loan. We've given them that right since we put it in place, and the decision to do it was really on their part, and the availability for them to obtain financing to purchase their half.

So, it wasn't a strategic decision John and I are making in terms of when they should do it. It's really them.

It was a contractual right in the partnership, and you just --?

I don't believe it was contractual, but that's -- since they are our partner, we just offered them half the note at any time they wanted it.

Got it, okay. The second question -- John, this is probably for you -- or maybe not.

When I saw you guys go down the debt path at the end of last year, I was convinced that either Armageddon was upon us or hell hath frozen over. Now, I hear some dialogue about potentially expanding the line of credit.

I understand that's in response to the fact the preferred market blew up the end of the year and your yields went to over 7% from the low- to mid-5%s, so I get that you had to do something other than preferreds.

I guess the question I would have is, now that your prefs are trading back down toward, call it 6.5%, what's the threshold at which you would view issuing preferreds to both pay down the term loan and fund acquisitions versus alternative capital sources?

Ross, obviously if we hit a five handle, we would probably be out there hand over fist trying to do some preferreds. But it's not just the yield threshold, Ross. I think the depth of the market is still somewhat suspect.

So, even though they have improved, it's not like we can go out and maybe issue a significant amount of capital to deal with our acquisition activities that happened in the fourth quarter of last year or to basically finance the $700 million. It's bigger than just what the yield would need to be, because I don't think the size would be there, even if the yield was there.

So, we're still evaluating other options, but we are looking -- we're really happy that the preferred market seems to be improving. The ice is thawing; others have gone out and issued preferred, namely, some of the banks.

I don't want to tell you that there's a number, because we don't really have a number in our mind. We're just continuing to evaluate -- we're not in a hurry. We think we have a lot of different avenues to take, and the loan that we borrowed from Wells Fargo isn't due until December -- early December. So we have time, so we're not rushed to do anything at the moment.

Thank you.

Christy McElroy, Citigroup.

Hello, good morning.

About a year ago you had implemented the 50%-off promotion to increase traffic during the seasonally slower time. I'm wondering if you employed that or any other promotion during this past quarter?

It looks like you had a little bit more of a sequential drop-off in occupancy of about 140 basis points from 3Q to 4Q in 2013, versus only about 90 basis points in 2012. Was that quarter-over-quarter change more reflective of what you would expect as a more normal seasonal trend going forward?

Christy, we turn things on and off as we see fit, depending on the market. I would tell you, you're correct, we did do a 50%-off promotion, and we did one in December of 2012. We also did one this December, but not to the same extent, just due to having higher occupancies.

We do various promotions throughout the year, whether it be 50% off or 25% off, with the dollar, without the dollar -- it really varies. At the end of the day, our strategy is to try to consistently grow our revenue for the long term, not just for one particular quarter or the next six months.

We're looking to try to continue to grow for the long term over the year, and we're looking out at least a year in advance in how we're monitoring our occupancies, our rental rates, our discounts and so on and so forth.

Okay, and then is there a way to quantify how you've seen your mobile traffic change in recent years, versus customers using a computer? I'm not sure how -- if you track that or how closely you track that. But as more people are using smartphones for web browsing, I'm interested to get your thoughts on how you see that increasing trend impacting your business in competition for new customers to your stores?

I will tell you that the mobile traffic has grown significantly. And looking at some of the projections that Google and Yahoo have shown us, they project it to continue to grow significantly.

So, we are spending more money on the mobile devices in terms of the search, and we've invested and improved our mobile website. The traffic has increased quite a bit where, you're correct, customers are using mobile. They are still using desktop, although I think the growth in desktop is slowing down.

But mobile is going to be and is continuing to be a very important avenue for customers to seek us out. And we are going to be there and we're going to spend money to continue to have high prominence in that area.

Do you see a dynamic changing the competitive landscape between larger operators and smaller operators? Or is it the same as online?

Because of the mobile? Mobile -- because the amount of real estate is a lot smaller on a mobile device than it is on a desktop.

I don't know how it's going to change it, I think it's going to change it. I think it's going to make it tougher for the smaller guys to show up, depending on how the user uses the device. Are they going to scroll further down to find a smaller operator when the bigger guys are going to be at the top and in the prominent roles?

I don't know how that's going to play out, Christy. I don't know if it's still early in the game, but my guess it could probably make it tougher on the smaller guys, but I really don't know that.

Thanks so much.

Vikram Malhotra, Morgan Stanley.

This is Landon on for Vikram.

Just had a quick question about your expenses. I noticed a pretty good decrease this quarter. Just wondering if you guys have more room in your advertising budget to see if that change continues?

And then if you could talk about any offsets on the payroll and property tax front, I'd appreciate that.

Sure. On the expenses, last year we told you we were pulling out of the Yellow Pages, and that is the biggest component of the drop year over year in advertising and selling, I think it's about $6 million.

The total advertising and selling expense drop was about $11 million year over year, the other two components being television, and we've got a lot more efficient and strategic in our Internet spending as well. So, we're able to drop our Internet spend, the Yellow Pages, and some television due to good demand.

Going into 2014, I would not expect those trends to continue. We've gotten the benefit of the Yellow Pages, television, maybe even a little more, given the acquisitions that we've had in Internet spend. As John just touched on, we're going to be more aggressive on mobile, and I think we've done a great job of optimizing that platform.

Great.

Your other question was what? Payroll? Property?

Yes, yes, the offset is -- how are you looking at payrolls in the coming year, with any healthcare or anything like that? What kind of property tax expense are you expecting?

Well, I'll let John touch on property taxes. On property payroll, we've got two things going on: increasing medical cost offset by a little more productivity enhancements at the store hour level. So, we'll have fewer store hours because of some of the things we've done, offset in part by medical costs.

So, net/net, I would see property manager payroll up probably 1% to 2% in 2014 versus 2013. With respect to property taxes?

On property taxes, internally we're budgeting a 4.5% to 5% increase in the same-store pool of properties for 2014.

Great.

And then just one other question -- I was just wondering if you could maybe comment on the state of the supply that you guys are seeing come online? And your development pipeline, if you can see that growing significantly? Or what your plans are there?

Yes, development is now in the lexicon of the trade association meetings and development seminars. We've been hearing for the last year, year and a half, more conversations about it. And so net/net, there's more product coming out of the ground today than there was a year or two years ago.

Relative to the base of supply and what we've seen around the country is still very, very modest. The analysis that I've seen from the Self Storage Association and other groups is, it's less than 100 properties. As you know, industry data is hard to come by in terms of exactly how much new supply, but it's pretty modest.

And when you step back and think about US population growth and what I'll call the national organic increase in demand each year, I'd say it's between 400 and 500 properties. And by everything we can tell, we'll still way below that in terms of new product coming on.

With respect to our development pipeline, we started 2012 with 19 properties, 1.4 million square feet, $133 million. And we end the year at about 30 properties, 1.8 million square feet, close to $200 million, and that is growing each quarter, net of deliveries.

As I touched on earlier, in Q1, we'll deliver about 300,000 square feet, $40 million in Q1 of that year end pipeline, and we'll see what we add in Q1 in terms of net/net production. But we've got a number of the key members of the team in place, and they are out there finding product to add to our development pipeline.

I'd expect it to grow, hopefully another $100 million net, over the course of 2014.

Great. Thank you very much.

David Harris, Imperial Capital.

Hello. Now, they're not handing out Olympic gold medals for brevity of prepared remarks yet, but I'm figuring gold medal slot when they do (laughter).

All right, so my question is -- and you may have touched upon this, and forgive me if I missed it -- but Europe is still turning in fairly weak operational performance. Is there any light at the end of the tunnel in sight here yet?

David, Europe, year over year -- I think we were down on same-store NOI about 2.4%, which is probably the worst we've delivered in quite a while. But I'll tell you, things are starting to look pretty good -- or better. Not pretty good; I mean better.

We ended the year for the quarter 82.8% occupied versus 82%. And if you took a sequential chart of what's happened to same-store occupancies, we bottomed in Q1 2013 on a year-over-year basis, down 3.9%. We improved in Q2, Q3 and went positive in Q4 at 1% year-over-year comp.

Now, obviously, when you reduce the occupancy in the portfolio, the comps get easier, but I think we stabilized, and the trend is positive in terms of year-over-year comps. We've also weathered the implementation of VAT in London; and so I'm hoping, I'm anticipating that our 2014 comps versus 2013 in our UK portfolio will be positive. And in fact, we saw that in Q4, where same-store UK was up 5.5% year-over-year.

You've got problems in the Netherlands?

Netherlands -- I think is, we're starting to stabilize there as well. Occupancy in Q4 -- we were up 72.8% versus 71.7%; so we actually turned positive on occupancy in Holland in Q4. Which has been a long time since that's happened.

My second question is this -- and it relates to some of the earlier questions on expenses -- is that I think over the last couple of quarters, you've talked about the reduction in expenses not being on a sustainable trajectory, and that you expect that over time, you would revert to a more normalized 2% to 3%.

In the context of your comments earlier on advertising spend, which is obviously a big item, looks likely to start now trending at least flat, if not quite at the same continued level of a decline. Are we going to see a 2% or 3% expense growth re-emerge with this year? Or is that more of a 2015 phenomena, do you think?

We're not one to give forecasts, but I think John and I have consistently said over the years that when someone is evaluating this business, that they should anticipate expense growth of 2% to 3%. We continue to be vigilant here on expenses; we will continue to be vigilant in 2014.

We're constantly thinking of ways to improve the cost efficiency of our business, so what expenses actually turn out to be in 2014, I can't tell you. But we'll remain vigilant, and ideally, we would have zero expense growth, but I would tell you, long-term you should plan for 2% to 3%.

Okay, great. Thank you.

(Operator Instructions)

Mike Mueller, JPMorgan.

Yes, hello.

I guess as you're heading into the seasonally high period, how do you see the rent increase letters stacking up this year compared to last year, when you think of the size of the increase going out as well as the timing?

Mike, this is John.

I think from my perspective, the timing will be very similar to last year. We start sending out the increases in February and it continues on through probably August, when the bulk of them are finally done. And the bulk of those letters that do go out are really in the June, July, August kind of timeframe. So, I think we'll continue to follow the same pattern.

I think in terms of percentage increases, it will be very similar, again, to what we did in 2013, where we were giving increases anywhere between -- in the range of 9% to 10%. So, I think we're going to continue to do that until we see evidence that suggests that we should do something different.

I guess what I'm trying to tell you is, we're not going to really change our strategy in 2014 from what we did in 2013.

Okay, got it.

And second question -- the non-same-store poll, what was the year-end occupancy level of that?

Hang on, Mike. It was --

Blended basis.

It was 85.4%, Mike.

Okay, great. Thanks.

You're welcome.

Steve Sakwa, ISI.

Hello, good morning, guys.

Hello, Steve.

One expense line item that did go up in the year and also for the quarter was G&A. And I'm just wondering if you can trend there? Was there any maybe allocation issues or things, John, that maybe moved around between property and overhead? Maybe like a reallocation? Or is there one-time expenses in G&A this year? How do we think about that?

First off, we didn't reallocate expenses between G& A and cost of operations. We don't do that.

What you're seeing the increase is really, we're experiencing higher levels of acquisition and development-type overhead. Because we're expanding our development activities and we are also -- we did a lot more acquisitions in Q4. So that helped drive up the G&A cost.

The other thing that drove it up a little bit in the fourth quarter was increased stock-based compensation expense. So that drove it up about -- $4 million of that change was about -- was from stock-based compensation expense.

And John, how much of that would've been transaction-related costs that were --

Transaction-related costs, last year, to put it in perspective, we incurred about $6.3 million. And this year is about $10.5 million. I'm sorry, that was for the full year, though, Steve.

I understand. So, you're saying inside the $66 million, about $10.5 million was one-time transaction costs?

Correct. Now going forward, depending on our acquisition and development activities, that could be higher or lower.

Right. Okay, thanks a lot.

You're welcome.

Todd Stender, Wells Fargo.

Thanks, guys.

Can we get your current thoughts on breaking ground on new development? What your return requirements are? Do you look at that as a spread over your acquisition cap rates? And how you are underwriting things now, versus, say, this time last year?

Todd, this is Ron.

Our development program is relatively new, so there's been no change in how we're underwriting things today versus a year or 18 months ago. And our development program is really structured and targeted around filling in markets where we don't have a presence.

So, certain parts of Phoenix that have grown a lot over the years, where there's an absence of product -- that's where we're targeting. Same in Denver, same in Houston. In a variety of markets around the country, we're trying to build where there is relatively low per-capita self storage, relatively good incomes, and relatively high densities of people relative to that market. And where there's absence of public storage property in that particular submarket.

Returns can range anywhere from, on a stabilized basis, 7% to 12%, depending on the product, the opportunity set of that particular property. Does that to give you some color?

It sure does. And how long would a period be for lease-up, say, in a market like Phoenix?

Lease-up is really a function of the size of the facility. The typical self-storage facility that we're building is probably 75,000 square feet, so we should think, generally we're going to use about three years to stabilization.

Something like Gerard that had 4,000 units built over a period of six months -- we're looking at 4, 4 1/2 years for stabilization at our target rates.

Great, thank you.

Michael Salinsky, RBC Capital.

Good afternoon, guys. You talked a little bit about acquisition opportunities. Just in terms of the market, are you seeing more portfolio opportunities similar to last year early on at this point?

And as we think about Europe, I think you talked about hitting an inflection point. At what point do you start to feel comfortable starting to invest incremental dollars, either be it development or acquisition?

Incremental dollars in Europe, Mike?

Yes.

We're looking at some stuff in Europe. We feel good about where our team has positioned the portfolio, so we're looking at some things in Europe. Most of the opportunity set in Europe, as you would guess, is on the development front, so we're exploring that.

Although I would say it would be modest -- 2 to 4 properties; we're not talking 20 or 30 like here in the US. But we're feeling pretty good about that, and that's a function both of stabilization of operations as well as the tenure of the team over there.

With respect to the US and acquisition opportunities, we are seeing more product come to market. More -- I guess you could call them portfolios; I don't know your definition of a portfolio. Is that more than two properties in a package? But versus a single property deal, so those would be portfolios -- we're seeing more of those.

But as I touched on earlier, of lower quality than we've seen in the past, which is kind of what you would expect, given the robust activity of 2013. Everyone now looks at that and looks at the prices at which some of the stuff traded, and said, well, I'll bring mine to market at that price. So, it's kind of a natural phenomenon.

Appreciate the color; thank you.

Our next question comes from the line of Dave Bragg with Green Street Advisors.

Hello, good morning.

Another question on transactions. Given what you've pointed out as there being a lot more on the market, can you put this in perspective for us as it relates to 2013 transaction volume? As compared to the $1.2 billion that you completed in 2013, what dollar volume, the deals that you underwrote, ultimately transacted?

What percentage of the stuff we underwrote in 2013 did we actually close?

Correct.

It would be a pretty high percentage, because several of our larger deals -- the Stor-All transaction, the Southern, and -- were not even on the market. And most of that, as you recall, was back half loaded.

If you -- I don't know what our transcript was first quarter of last year with respect to our outlook for acquisition volume for 2013, but I'm very confident it wasn't anything close to what actually transpired. And part of that was the people, at least on the larger transactions that we undertook, had not decided to sell their portfolios.

So, where we are today and how the market evolves over 2014, I think can be very different than what people are looking at right now. But our percentage of underwritten was pretty high last year because of the large size of non-marketed transactions.

All right, understood.

And do you have a figure that you can share with us that, in terms of the total institutional-quality storage transaction, dollar volume that did occur in 2013? Just looking to understand your share of that?

No, I don't have that number.

Thank you.

Tom Lesnick, Robert W. Baird.

Hello guys, I'm standing in for Paula today.

Turning back to development and expansion projects for just a second, can you talk at all about how much of that $196 million is expected to come online in 2014? And maybe in broad strokes, the cadence, quarter to quarter, of how that's going to play out?

Sure.

So, let's see, we've got Q4, we had three properties that I touched on, 300,000 square feet, about $40 million. Q2 will be eight projects, mainly redevelopments, $12 million. Q3 will be four, 285,000 square at $23 million, and Q4 will be nine transactions at $69 million.

So, about -- of the $190 million, close to $200 million in the pipeline, close to $140 million we will deliver this year at this time. And that can change on weather. I'm sure some of the stuff we were planning is getting slightly delayed because of the weather right now. But that's kind of what we're looking at today.

All right, that's all I've got; that's very helpful. Thank you.

Ross Nussbaum, UBS.

Hello, guys.

Ron, can you talk a little bit about PS Business Parks from two perspectives? One is, PSA made the decision to invest another $75 million into PSB when they did their last equity offering in the fourth quarter. Can you just remind me the governance around that? Do you recuse yourselves from those kinds of decisions?

And number two, if you are implicitly putting more money into PSB, does that not suggest that you see equal or better growth prospects in PSB than PSA? Otherwise, why not just keep the capital inside of PSA?

I'm not going to get into a comparison of PSA and PSB, Ross. They are slightly different businesses, and their susceptibility to the economy is different.

I will tell you on PSB, and Joe and his team have done an outstanding job, and they just had their conference call. But PSB has been in a downtrend in terms of rates and occupancies for the last couple of years. They've made some great acquisitions that have not yet stabilized, and so we're at a part in the economic cycle where the trends are, I would say, quite favorable.

In terms of our capital allocation decision to PSB, that is a decision made both by the Public Storage Board and the PS Business Parks Board in terms of our continuing investment and Public Storage deciding to actually continue to invest in PSB. It has been a wonderful investment, and I think we were buying last year at $72 a share and so right now, it's turned out pretty good for us.

And just to be clear, from a governance perspective, do you participate in any of those Board discussions, either at PSA or PSB?

Yes.

There's no apparent conflict in wearing two hats and being --

I already have the conflict.

So, there is no apparent conflict; there actually is a conflict?

There is a conflict.

Thank you.

Todd Thomas, KeyBanc Capital.

Thanks, just two quick follow-ups.

I was just wondering, you mentioned, Ron, the Street rates are 5% to 10% higher at this time. As you move through the more active months in terms of leasing in the spring and the summer where there's a lot more turnover, do you think -- is it your expectation to -- that you'll be able to maintain that increase?

I don't know the answer to that. I hope we can, but we'll have to find out together, because my crystal ball is not that great. So, we'll keep doing it, as I mentioned earlier, and when the move in volumes indicate that we can either do something different or have to do something different, we will adjust accordingly. That's how we always operate our business when it comes to pricing.

Okay, and then the occupancy increase is up from the end of December to the end of January. Is that typical to see during the month of January?

You mean the increase in the spread, or the increase -- or the occupancy -- the absolute occupancy itself?

The absolute occupancy. You ended the year at 91.6% and at the end of January, I think you said 92.2%?

Yes, I'm looking back about the past four years, and that has been typical the past four years.

Okay, great. Thank you.

You're welcome.

And that was our final question. I would like to turn the floor back over to Clem for any additional or closing remarks.

I want to thank everybody for participating on our call this morning, and we'll talk to you next quarter. Have a good day.

Thank you, this concludes today's conference call, you may now disconnect.