芬塔 (VTR) 2001 Q4 法說會逐字稿

Good day and welcome to the Ventas Inc. conference call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to Mr. . Please go ahead sir.

Thank you . Good morning as well and welcome to the Ventas conference call to review the company's announcement today regarding its results for the fourth quarter and full year 2001. These items were the subject of a press release that was issued this morning.

Let me also note that the company previously issued a press release advising that this conference call is open to the general public on a listen-only basis over the Internet. As we start, let me express that all projections and predictions and certain other statements to be made during this conference call may be considered forward-looking statements within the meaning of the Federal Securities laws. These projections, predictions and statements are based on management's current beliefs, as well as on a number of assumptions concerning future events.

The forward-looking statements are subject to many risks, uncertainties and contingencies and stockholders and others should recognize that actual results may differ materially from the company's expectations whether expressed or implied. We refer you to the company's reports filed with the Securities and Exchange Commission including the company's annual report on Form 10-K for the year ended December 31, 2001, that was filed today for a discussion of these forward-looking statements and other factors that could affect these forward-looking statements.

Many of these factors are beyond the control of the company and its management. The information being provided today is of this state only and Ventas expressly disclaims any obligation to release, publicly, any updates or revisions to any forward-looking statements to reflect and changes in expectations.

I'll now turn the call over to Debra A. Cafaro, President and Chief Executive Officer. Please go ahead, Debra.

Thank you, . Hello, everyone. Thanks for joining the Ventas 2001 earnings call. We're hosting the call from Louisville today, so I am ensconced by other members of the Ventas senior management team.

Today, I'm going to briefly recap this year's numbers and certain current developments. And, as usual, following our presentation, we'll take as much time as you need to answer any questions you may have. The headline for the year is that Ventas had an excellent 2001. 2001 was the year that we really turned the corner and experienced Kindred's successful restructuring and reemergence as a de-levered and profitable healthcare operator with a sustainable capital structure.

We also experienced a favorable settlement of our disputes with the Department of Justice and put those disputes firmly in the rearview mirror. We further strengthened our balance sheet in 2001 with a substantial amount of additional debt reduction. We improved our cost of debt and our cash flow by the very successful offering of $225 million, all investment grade CMBS fund, in December. We strengthened our broadened our board with the addition of three new members - Sheli Rosenberg, Jay Gellert and Gary Loveman - all independent board members of extremely high stature and professionalism.

And, in 2001, we were happy to instate our normal quarterly dividends, paying 88 cents a share and a four-cent bonus in the fourth quarter Our results for 2001 really reflect only a portion of the impact of these achievements. Normalized FFO for the year was $78.1 million or $1.13 per share. The NAREIT definition of FFO would include the gains that we incurred in connection with the disposition of some of our Kindred equity. And if you include that gain in our FFO, our FFO for the year was $93-and-a-half million, or $1.35 a share.

Net income for the year totaled $50.6 million or 73 cents a share after taking into account an extraordinary item equaling two cents a share related to the debt refinancing that we did in December. These results in total and by line compare favorably with our 2000 numbers.

Breaking down our results for the year, rental income totaled $185.2 million, which was slightly ahead of the $184.5 million net rental revenue number for 2000. Interest income for the year was $4 million for normalized revenues of $189 million for the year. G&A and professional fees fell to 15 million from the prior year's approximately 20 million, an improvement of about 28 percent. Interest expense on our bank debt declined to $87 million this year from $95 million the prior year as a result of our debt pay downs, although interest on the government settlement of $4.6 million took away some of the benefit of that decline.

In the fourth quarter, we monetized over 400,000 shares of Kindred equity by participating in Kindred's successful secondary offering and by dividending Kindred equity as part of our fourth quarter dividends. As I mentioned, our results show a gain of 15.4 million from these transactions, and the approximately $21 million in cash that was generated from disposition of the Kindred equity was used to pay down debt.

Finally, we continued to have strong and above market property level cash flow direct coverages at our properties. Through 9/30 of '01, Kindred's EBITDA covers rent by over two times, and fully loaded with Kindred's overhead, cash flow to rent coverage at our Kindred properties exceeds 1.7 times.

We finished the year with 123 percent total shareholder return, which made us the fourth best performing equity REIT in the NAREIT equity index and one of the top four percent performers on the New York Stock Exchange.

Looking forward, we want to reiterate our 2002 FFO guidance of between $1.24 and $1.26 a share. Assuming no acquisition, no divestitures, no refinancing and no further sales of the Kindred equity stake. We do continue to hold 1.1 million shares of Kindred common stock that we received in the restructuring. We view that as sort of a bonus on our balance sheet, and we intend to monetize those 1.1 million shares to the benefit of the Ventas shareholders, as and when we deem it appropriate.

Given the range of where Kindred equity has traded since they emerged from bankruptcy between approximately 40 million and 65 - at approximately $40 and $65 a share. Our remaining stake of Kindred equity could be worth between 44 and $70 million of cash to Ventas. And as we have said, we would expect to use that cash to further improve our balance sheet in or fund acquisitions.

We have announced an expected 2002 dividend of 95 cents a share, which represents a conservative ratio of approximately 76 percent. On another front we are very close to making a decision regarding the refinancing of the approximately $607 million balance of our bank debt. We continue to consider the full range of options available to the company and are attempting to optimize capital structure and timing.

Once the decision is made, as we always do, we will proceed rapidly to finish the refinancing of our balance sheet. If we're successful, we'll achieve meaningful intrastate savings, we will obtain greater flexibility, and we will create capacity to begin our diversification program.

The nominal interest rate on our existing bank debt is about 10 percent if you factor in our six percent slot. Assuming we can reduce the rate to between nine and nine and a half percent, we will save between three and $6 million a your or four to eight cents a share. However, you should note that a small portion of any intra-savings would be negated by any increase principle balances we might incur in order to pay the cost of any proposed transactions or transactions.

I want to reconfirm for you something we've said before, which is that we fully expect to complete these refinancings by the end of this year. We are very likely to do so by the third quarter. And, with any luck, we will, in fact, complete those transactions in the second quarter of this year.

Another major initiative that we have at Ventas is to build stronger and deeper organizational capabilities. And we've made a lot of progress on that front. First, as we previously announced, we promoted John Thompson to Executive Vice President and Chief Investment Officer. John was originally slated when Ventas was formed in 1998, to oversee the company's growth and diversification efforts. After doing everything but that during the last three years - and I would add that he's done it beautifully - John is now focusing his attention, full-time, on our acquisition efforts.

Secondly, we've made three very important and excellent new additions to our management team. recently joined us as the head of our asset management efforts and we welcome her from , where she had that role previously. , a creative and experienced transaction lawyer, who has been practicing for more than eight years, has recently joined the company, as well and will help us in the legal department, as well as on the acquisition front.

And finally, we recently hired , who was formerly with and who brings with her to Ventas a focus on real estate acquisitions, generally, a focus on healthcare and senior housing finance from her days at as well as a strong Rolodex and process orientation. So, we're very happy about where we - the progress we have made in building infrastructure to lead our acquisition and development efforts.

A final note on that front, we are on the final stages of filling our long vacant CFO position and would expect to announce that hire during the second quarter. We expect our new CFO to come from a healthcare or senior housing operating company and also to be actively involved in our diversification efforts.

So, we think we had a very good year in 2001. We're proud of what we've accomplished. We understand we have a lot more to accomplish, but we feel good about where we are and we feel great about the future at Ventas. So, without further elaboration, I'd like to open the call to your questions.

Thank you. Ladies and gentlemen, today's question-and-answer session will be conducted electronically. If you wish to pose a question at this time, you may do so by pressing the star key, followed by the digit one on your touch-tone phone. Once again, press star, one to pose a question. We'll pause for only a moment to assemble our roster.

We'll take our first question from with Legg Mason.

Good morning, everyone.

Good morning.

Thank you. I have a couple questions. I'm going to just start off with just a quick technical one. Just looking for the diluted shares outstanding for the fourth quarter.

The fourth quarter would be 69.7. The weighted for the year would be 69.4.

OK. And with - looked like there was some additional debt paydowns in the fourth quarter and the first quarter, and I wanted to review what the dividend restrictions were. I think at one point it was 90 percent of taxable income and 80 percent of FFO. Does this eliminate those restrictions?

Under our current credit agreement, we basically can take 80 percent of FFO, and obviously, if that credit agreement goes away, we would have different and presumably more liberal dividend restrictions, if you will.

With the - and the 90 percent restriction is ...

That's gone - that's gone.

OK.

So you don't have to worry about that anymore.

OK. And I guess when we talked about sort of the asset diversification efforts, obviously, you guys have taken great strides in retaining a lot of talent here, but can you just give us an idea how far along we are? I mean, will we see any potential acquisitions or transactions before, you know, a potential debt refinancing, or is it something that would, you know, would be later down the road?

We continue to focus in a somewhat linear fashion on redoing the balance sheet and then following with acquisitions. I think really, we're leading the acquisition approach, you know, in a two-pronged way. One is to sort of build the machine, which is the people and the - and the sort of infrastructure to make acquisitions as well as reducing our cost of debt, and then I think what you'll see is acquisitions will follow. And John and his team, you know, have begun to look at potential transactions.

OK. Thank you. I appreciate it.

You're welcome, .

We'll go next to with UBS.

Good morning. Just a quick question. In the - in the guidance of 1.24 to 1.26, any assumptions on debt reduction, or does that - is that play through in some of the assumptions, or not?

Good question. It does assume a modest amount of additional debt reduction beyond what we've done, five or so million dollars in the third quarter.

OK and then could you just remind of the progression of the swap and how the on that drops off over the next coming quarters, you know? -

We'd be delighted. The swap is currently 800 million. It stepped down to 775 on 1-1-03 and terminates on June 30 of '03. with that is a new swap that starts at a 450 amount that is at 5.385 and that then steps down in "07 to 300, in '08 to 150.

I'm sorry.

No, that's OK, go ahead.

No, I just wanted to say thanks and nice quarter.

Thank you.

We'll go next to Charles Lynch of CIBC World Markets.

Good morning.

Hi Charlie.

Just a question, Debbie, and for you, John, as well, if you're there. I know you guys don't like looking too far in the future, but I'm just curious about your diversification strategy in terms of the asset profile that you think your portfolio should have over the next few years. Will this be a company focused on senior housing properties? If so are you looking at assisted living as well, and if not can you talk a little bit about what's out in the marketplace now, and where you might, by property type be interested in diversifying into? Thanks.

OK, we would see ourselves basically being a healthcare and senior housing REIT. We will focus really on the range of property types that will be within that label, Charlie, which would range from hospital and hospital related facilities to the assisted or independent living facility assuming that we found ones that we are comfortable with. And when we talk about diversification, we really talk about it's really a matrix, and it includes not only tenant diversification, which we could get obviously by even if we stay in the category and we would expect, by the way, to acquire additional .

But we could get credit diversification by having different tenants, obviously. We would like to get some more sub sector diversification, and somewhat embedded within that is we'd like to have our portfolio be a little less internally correlated and a little less entirely dependent on government reimbursement of one kind or another, which would necessarily push you more toward, at least in part, a little independent or assisted living.

That's great. Thanks, a lot.

You're welcome.

Our next question comes from Gary Taylor with Banc of America.

Good morning.

Hi Gary.

Just had a question. Wondered if you had any early read, out of Kindred, as to how they've reacted to the new reimbursement that was put out last week. And then, secondly, wondered if you could give any color at all with respect to coverage differences for your portfolio versus your .

Happy to. On the PPS, for those of you that are not aware, the government, after promising the PPS regulations for quite awhile, has finally promulgated the regulations. They came out last week.

We have had our own experts looking at them. We continue to study them. We believe that they are generally in line with expectations, keeping in mind that the PPS is intended to be budget neutral, unlike the skilled nursing PPS of a few years ago. The rule continues to be a preliminary one and is in a comment period.

And so the real answer will come, as you know, when the rule actually is finalized and promulgated. But we feel comfortable with the rule as it has been put out.

And then, on coverages, basically, the hospitals have, generally, slightly higher coverages than the skilled nursing portfolio. And, you know, if you want to break out, basically, the hospitals are about two, three times EBIT's and about one and - 1.85 times EBITDA. Whereas the nurse - skilled nursing portfolio - is closer to two times EBIT's and a little over 1.6 times EBITDA.

Thank you.

You're welcome.

Our next question comes from with Merrill Lynch.

Hi. Good morning, everybody.

Hi, .

Good morning, .

I was just wondering - I know a lot of people have asked about acquisition and diversification opportunities, but I was wondering if you could talk a little bit about what you're seeing in terms of competition for both, actually, acquiring the physical assets and then, what's the competitive landscape look like in terms of getting operators or tenants to run these assets, relative to a year ago.

, this is John. The - I guess the market hasn't, from what we've seen, moved a whole lot from when we talked at the end of the third quarter, although there is certainly a little bit more - there is certainly a little bit more activity in terms of deals, although not a flood.

There's also - we've had certainly a lot more conversations with potential tenants. I would say that some of the uncertainty on the Medicare give-backs for nursing homes has continued to sort of cast a pall over deal flow and the spread between sort of buyers and sellers.

Right.

There continues to be a gap there.

OK. And then in the press release, you mentioned the DRIP plan that you guys have enacted, and I was just curious, what's your expectation regarding equity contribution per annum from that?

We had, you know, a modest participation level in the first quarter, and, you know, would expect really not a huge inflow of funds from the DRIP at this point. We have a substantially larger institutional shareholder base than some of our peers, and so would not expect like a huge DRIP participation.

OK. And then just two technical questions. I know you gave the share count number, but one of my other lines was ringing at the time, and I missed that number.

OK. No problem. And we - for those of you who are interested, we are likely to post sort of a first, second, third, and fourth quarter income statement on our Web site just to make it easier for you. And we'll likely attach that in our future annual releases.

The share count for the year was about 69.4 fully diluted. And it was about 69.7 for the fourth quarter.

OK. And then just one - just one last technical thing. In the fourth quarter, the interest income line looked like it jumped a little bit on a sequential basis if I calculated that right. It looks...

Well...

... like it went from about 340 in the third quarter to about 1.1 in the fourth.

What I am showing is basically about a half a million in interest income in the fourth quarter...

OK.

... and we had about 940 in the third, although there was kind of a one-time tax item in that third quarter one.

Right. So - yeah, I'm adjusting for that I guess.

Exactly. And that - and I know you're remembering that. So it was up just ever so slightly.

OK. OK. Great.

We'll go next to with .

Hi. Good morning.

Hi, .

Hi. A couple questions. First off, I missed kind of your point about when you were talking about the refinancing, and you said that it would save you, you know, potentially four to 8 cents, but some of that would be offset by something. I didn't really understand...

Well if, for example, we incurred, you know, 10 or $12 million in cost in connection with the refinancing, which are essentially financed themselves, then that would eat into the aggregate cost savings.

Right. OK.

That's all.

OK. All right, and then in terms of just, as you've added people to, you know, to the - to the management team, what do you think that's going to do then in '02 and maybe going forward in terms of your G&A cost and will some of that come then out of the professional fees?

Yes, I think that basically you can look at between, you know, 14 to $15 million combined G&A professional fees going, you know, looking forward. We do not expect a ballooning of those costs, although there are certain variable expenses in addition to hires. Life insurance costs, and some other things that could make that number vary. But I think that you will not see a ballooning of that number despite our new hires.

OK and then back to the refinancing, just - maybe I missed something, but it sounds like you've got, you know, you're pretty far down the road in terms of, you know, of having new financing in place. So can you just kind of describe what the - what the financing - I mean is this just new - a new bank agreement that would replace this 800 million or is it some combination of ...

Well...

More of mortgage backs and then some bank financing.

Well the one thing that we've done - the way we've tried to do this is to really get far down the road on a couple of different options, and the capital markets that we could attempt to tax would be CMBS, high yield, and the bank market or some combination of all of those.

And we are far along in really refining exactly what each of those pieces would look like and making a final decision about which one or more of them we will pursue. And so, as soon as we do that, you know, as soon as we make that decision, which should be shortly, we will then, I'm sure you'll hear about the specifics of it, and we'll try to proceed to get it closed as quickly as we can.

OK, and...

But we are - we are trying to make a lot of progress .

OK, I'd never doubt that you're trying to make progress...

Thank you.

And would it be fair to say that you, you know, since this swap kind of scales off over time, that you know, maybe you do something like a high yield or some sort of fixed rate, fixed term, you know, longer-term debt in a piece that would be - you know, in other words what there isn't from the - what's not covered by the swap over time, basically.

That is - that is certainly one of the alternatives. Absolutely.

OK. All right. Great. Thanks.

Thank you.

Once again, ladies and gentlemen, please press star, one, to pose a question. We'll go next to with Insight Investments.

Good morning.

Hi, .

Hi. The refinancing of the $607 million. You say it's currently at 10 and, the way you put it was, if it gets to nine or nine-and-a-half, the saving would be axed. Is that - is that a realistic range, then? That's what you would expect - that it would fall within that nine to nine-and-a-half?

Yes.

OK. If there, as you say, when you give your FFO guidance, you're assuming there's no refinancing and no monetizing the Kindred shares. Can you tell us what you're assuming for interest expense for '02 in your FFO guidance?

Yes. We're assuming that we keep our current slot, that we have the current loan agreement in place. And those spreads are 325 and 425 over, with the most - the big chunk of it, like almost 80 percent of it, in the 425 over . And then, we assume, as I mentioned, you know, a $5 or $10 million debt pay down sometime in the third quarter.

But it's a really pretty steady, you know, static state of projection. So, obviously, to the extent we refinance, to the extent we pay down debt with the Kindred equity, those will be - there will be upside in those numbers.

Right. Can you just give me a number? What the interest - what you're projecting for interest expense for '02 in your FFO claims?

Basically, what we have for interest on the government and bank debt and amortization is about $88.5 million.

Eighty-eight-and-a-half. And that includes some number for differed financing fees, like 2 million or so?

It - yes. It would include exactly what we've got in differed financing fees.

OK. Do you feel your stock - the multiple of FFO, et cetera, is being held back, due to your dependence on Kindred - your lack of diversification?

I think that, basically, we have a couple offsetting considerations in our company.

Right.

I think, clearly, the issue that people find the least optimal about our company is the concentration risk, if you will, in having most of our revenue come from Kindred.

Right.

I think that that issue is something that will weigh on our multiple. I think, however, that that is mitigated by the fact that Kindred is a much improved company...

Right.

... I think an excellent operator and one that really is emerging as a, you know, successful, profitable, you know, high margin, de-levered public operator. So we really feel good about them...

Right.

... while recognizing that it is not the ideal structure for us. I think that the concentration issue is also mitigated by the fact that we have substantially higher growth built into our company than our peers, and so I think that kind of balances the concentration issues.

Right.

And I think the other thing that's weighing us down a little bit is the existing, you know, credit agreement that we have and the interest rates that we pay, so that once we can get freed up with that and start making strides toward diversification, I think that we should have certainly, I hope, and I think we would deserve, an above-average multiple, certainly.

OK. I agree with all that. Obviously, where I'm going with this is it doesn't appear that your multiples are being held back by that, and clearly, if you make a lot of acquisitions and diversify enough where Kindred is not the monster it is now to you, you know, if that would be - that would be good, but it'd also be bad because clearly, to do it, you're going to have to suffer some dilution of future FFO growth.

I think that, you know, you've really, as usual, you know, hit on an - the interesting sort of conundrum that we have for the company, which is continue to try to drive FFO growth, which we know is one of the - one of the single, if not the single most important feature that investors like about our company, while at the same time, reducing the risk profile of the company.

And at the same time, you know, and reducing the risk profile hopefully by lessening the concentration to Kindred and also by strengthening the balance sheet. It will be difficult to do all of those things all at the same time. But we do believe that over time, we will make progress on all of those fronts without materially diluting our FFO growth rate.

OK. That's very important for ...

Yes. It's very important to us. Believe me we didn't do all this so that we could ruin it.

I understand. OK, thanks a lot.

Thank you.

We'll go next to David Wilson with Wilson Capital Management.

Good morning.

Good morning David.

You mentioned earlier an evaluation or valuation applied to the Kindred stock. I'm curious, I see it carry on the balance sheet at 55 million and then common stock reserved for distribution at 17 million. If I look at the market value today, it is - if I'm doing this correctly, significantly below the combination of those two valuations. I wonder if you could tell me what you're using to carry, what basis are you using to carry it?

Absolutely. As we were required to by GAAP at year-end the stock was trading at 51.02 and we reflected that valuation on the balance sheet, and as the stock changes in value, because it is a marketable liquid security, at the end of each quarter we will reflect the securities exactly in the same way, which is essentially the price at the end of the quarter as if listed on Nasdaq.

OK. That explains it then. Thank you.

You're welcome.

We'll go next to with UBS Warburg.

Thanks. Most of my questions have been answered, but , I was wondering if you could give any guidance with respect to potential resolution of the tax - the tax audit for the years that were still pending and the potential release of the restricted cash.

That's great. In fact, our head of tax is on that exactly at this moment and didn't join us this morning. The - you know the audit process grinds slowly, given that it's a government process. I would expect that we would know something definitive by the end of the year, and I do view that as you sort of foreshadowed, as an asset, an additional money available to the company.

Thank you.

Again, ladies and gentlemen, that was star, one. We'll go next to with .

Good morning.

Hey .

John, you've mentioned in talking about acquisitions, the spread between the buyers and sellers. I was curious if you could be at all specific about kind of what cap rates you think people, you know, buyers and sellers are looking at for various properties, types.

Honestly , it's hard to answer the question because nothing's really gotten done or not a lot has, I should say, that aren't - that aren't - don't have - I think unique circumstances. So, you know I think, you know, what I'm hearing people - the feedback I'm getting from people is that, you know, they're hearing from other of our peers that they would do things that, in the - short of 10-and-three-quarters or 11 percent cap rate on skilled nursing facilities. I don't see a lot of those transactions getting closed.

OK. And Debbie, is - as you put together this team to do acquisitions, how - what kind - what's kind of the charge to them? How are you going to measure success and how do they get compensated and motivated, in terms of the, you know, of the acquisitions that need to get done or whatever for their - for their jobs and kind of hurdle rates on deals. Can you just kind of give us a bigger picture as to what we might see transpire, going forward?

OK. We'd be happy to do that. And you've asked a really, I think, important question in terms of compensation and motivation. I learned a long time ago that more companies have been ruined by paying acquisition people on volume than you can shake a stick at. Because there would not be any - anything of that nature adopted at Ventas.

Basically, the acquisition people will be charged with finding accretive transactions that are in sectors and are - that are with operators in the sectors I described, where we have confidence in the quality of the operator, first and foremost. And the credit worthiness of the operator or, at least, again, of the property.

The transactions should be accretive. They should - they should be financable in a way that would move us. They should be accretive, assuming their finance in a way that would move us toward the goals that we have set for ourselves.

And, hopefully, will be a little creative, if you will, at least for some of them, and use our, you know, pretty frankly high power sort of regal and structuring background to be able to come up with transactions that really hit that bull's eye I described, that would be accretive, as well as, basically, you know, not diluting our FFO growth. And also reduce our risk.

And, I can't be more, you know, specific than that at this point, although I would like to do so for you.

And when you say dilutive, are you - do you mean dilutive versus, you know, the - whatever the FFO ends up being for 2002 versus, you know, the current stock price or whatever that kind of yield is. And transactions need to be that? Or, versus...

Well, I think, you'd look at it on a, you know, accretive, in the current year, as well as how it affects the company's overall growth rate, looking forward. So, you'd look at both of those things. And, you know, we, obviously, are going to look at things like replacement costs, position of the asset in the marketplace, you know, et cetera, et cetera.

But I - and I just can't be more specific than that at this time. We want to report to you when we've actually done a transaction that we can tell you about, and we'll be much more comfortable, you know, at that point, obviously being more specific.

If you did an acquisition - if you made a sizable acquisition - I don't know what sizable would be for you guys, but, you know, 200, $300 million, and...

Yes.

... you needed to finance it tomorrow, what would be the most likely cost of debt or however you would think about financing that?

Well, I think that, given that we're about half levered right now, you know, we would - we would look at, first of all, what the, you know, what progress we had made at that time. And if you want to take a steady state example right now, I think we would have the options, frankly, to finance it with high yield debt, some combination of debt and equity, if you will.

You know, we've been very careful about not diluting the shareholders and not issuing equity, but obviously, any transaction would be underwritten in a way to make sure it makes sense if we did in fact finance part of it with equity.

We also, hopefully, when we do our debt refinancing, will have capacity on some kind of revolving line so we could finance it in whole or in part with that kind of capacity, and then later cycle it, you know, have it financed is some other way, you know, to sort of use that as bridge financing, if you will.

So I think we have a lot of different options, and I hope that's a helpful answer for you.

Yes, it is. Thank you.

You're welcome.

And ladies and gentlemen, it appears we have no further questions at this time. I'd like to turn the conference back over to Ms. Cafaro for any additional or closing comments.

No closing comments other than that I hope we can be as responsive to our investors this year as we have in the past. We really appreciate your confidence in us, and we are working hard to make more money for the shareholders this year. So thank you very much for your attention and participation.

Once again, ladies and gentlemen, that does conclude today's conference call. Thank you for your participation. You may now disconnect at this time.