芬塔 (VTR) 2004 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Ventas Incorporated Third Quarter Earnings Conference Call. My name is Dillon. I will be your conference coordinator for today. At this time, all participants are in listen-only mode. However, we will be facilitating a question-and-answer session towards the end of the conference. If at any time during our conference today, you require assistance, please key "*" followed by "0"; and an operator will be happy to assist you. As a reminder, today's conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today's presentation, Mr. Richard Riney, General Counsel of Ventas Incorporation. Please proceed, sir.

Thank you, Dillon. Good morning and welcome to the Ventas conference call to review the Company's announcement, yesterday, regarding its results for the third-quarter 2004. 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 might differ materially from the Company's expectations, whether expressed or implied. We refer you to the Company's reports filed with the Securities & Exchange Commission -- including the Company's Annual Report on Form 10-K for the year ended December 31st 2003, and the Company's other reports filed periodically with the SEC -- 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 as of this date only, and Ventas expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any changes in expectations. Please note that quantitative reconciliation between each non-GAAP financial measures contained in this presentation and its most directly-comparable GAAP measures are available in the "Investor Relations" section of our website, at "www.ventasreit.com."

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

Thanks, Rick. Good morning to all of our investors and other participants. We want to welcome you to Ventas's third-quarter 2004 earnings call. With me in Louisville, today, are: Rick Schweinhart, our CFO; Ray Lewis, our Chief Investment Officer; and my other colleagues.

Ventas had another great quarter, as we continued to execute our business plan for the benefit of our shareholders. We earned 47 cents of normalized FFO per share, made additional diversifying acquisitions, and refinanced our credit facility at a savings of 125 basis points over our prior rate. The company has about $100 million of new investments under contract or non binding letters of intent, and we recently completed a successful new bond transaction that gives us greater capacity to continue our investment activity through the rest of the year and into 2005. We're really pleased with our progress our year-to-date in obtaining our objectives.

Stated simply, our goal is and has been to increase earnings and decrease risk at the company so that we can produce consistent, superior, risk-adjusted returns for our shareholders. To make Ventas a more reliable company and reduce risk, we are taking action on three fronts. First, we continue to diversify our tenant, geographical and asset base to reduce our reliance on Kindred and our concentration in any one sector of the healthcare and senior housing market. Second, we are committed to maintaining a strong balance sheet that matches our capital structure to our long-term leases and staggers our debt maturity schedule. And finally, we're actively monitoring our assets to minimize the impact of issues that may arise in the ordinary course of our business.

At the same time, we seek to maximize shareholder value and increase earnings and cash flow by making quality new investments in senior housing and healthcare assets that add to our industry-leading organic growth. Second, we're reducing our incremental cost of capital to make those investments accretive to shareholders. Next, we're positioning our portfolio to maximize its expected value, including the value of our reset rate. And finally, we are pursuing contingent company assets, such as our claims against Sullivan & Cromwell for the benefit of our shareholders.

The company's third-quarter results and recent developments show these strategies and principles in action. First, normalized FFO increased 18% this quarter to 47 cents per diluted share. This growth is the result of our lease escalations and accretive acquisition. Year-to-date, we have acquired almost 390 million of new senior housing and healthcare assets. Recent acquisitions include two high-end assisted living facilities and five medical office buildings, each with stabilized in-place cash flow to support our rents. These transactions further our diversification efforts by reducing our Kindred concentration to 79% of our run rate leased revenues.

On the same annualized basis, our rent from non-government reimbursed securities, now, represents approximately 14% of our leased revenues. And on a book value basis, our non-Kindred assets now represent 32% of the gross book value of our portfolio. Our progress on the investment side should accelerate through the balance of 2004 and into 2005. Our acquisition pipeline is active, and we are winning our fair share of deals coming to market. Currently, we have about $100 million in new investments under contract or subject to non binding letters of intent. The type of properties, we expect to acquire, are independent and assisted living facilities, medical office buildings, skilled nursing facilities, and hospital-related assets.

We also completed two important and attractive capital markets transactions, since we last spoke to you. First, we refinanced our prior credit facility at LIBOR plus 125. The initial pricing on our new line of credit represents a savings of 125 basis points over our prior rates. This transaction demonstrates the improving credit quality of our company, the health and attractiveness of our sector, and the reliability of Ventas's assets and future cash flows. Importantly, our new credit facility provides us with debt capacity of $300 million and the opportunity to increase debt capacity to 450 million. It also drives down our cost of debt capital to support our strategic growth and diversification program.

We followed the bank deal with an issuance of $125 million of 10-year bond. We were gratified by the lease activity of the bond market to Ventas paper (ph) and the excellent pricing on our bonds at 6-5/8%. This bond execution was timed to lock in attractive long-term borrowing rates and to free up revolver capacity to fund our expected acquisitions. Our new bank credit facility and our bond transactions together give the company a nicely staggered debt maturity schedule and solidify our platforms for growth.

With our near-term investment activity more visible and our debt capital in place, we are pleased to provide investors with 2005 normalized FFO guidance of between $1.89 and $1.93 of normalized FFO per diluted share. This guidance assumes that our $100 million or so of anticipated acquisitions close, as and when expected. Consistent with our historical practice, we are not factoring in any additional acquisitions, divestitures or capital transactions into our 2005 numbers. Also consistent with our past approach, our projections include increases in general administrative expense but not a corresponding expansion of our asset base, during the course of the year. As always, we will maintain our commitment to transparency and communications and will update you, as material developments occur that merit changes in our expectations.

Before Rick Schweinhart reports in detail on our third-quarter financial results, I want to cover the status of reimbursement for skilled nursing assets, SNFs, and long-term acute care hospitals, LTACHs. I also want to cover the financial condition of our principal tenant, Kindred, and the performance of our portfolio. Following our presentations, we would be pleased to take your questions.

Reimbursement in our major asset classes is positive and improving, and Kindred and our portfolio have continued to perform well. First, Medicare reimbursement for skilled nursing providers will increase by about 3%, on October 1, 2004. This inflationary update follows the 6% Medicare rate increase for providers that took effect, last October. In addition, the Medicare rates for our long-term acute care hospitals rose approximately 6% to 7%, July 1 of this year, and we will be able better able to assess the impact of that increase when Kindred reports its third-quarter results in November. As a result of reimbursement stability and Kindred's efforts to improve quality care and operating performance, Kindred indicated last quarter that it expects to achieve over $500 million in EBITDAR in 2004. This EBITDAR covers Kindred's expected fixed charges of 270 million by a wide margin and supports the reliability of Ventas rents under the master leases between the two companies.

Finally, our Kindred portfolio continues to exhibit excellent performance metrics that further enhance the reliability of our future cash flows. For the trailing 12 months ended 6/30 of '04, the EBITDAR-to-rent coverage at our Kindred portfolio were a very strong 1.7 times after a 5% management fee. The full-year EBITDARM before management fee coverage for our portfolio were also well in excess of market, at 2.3 times.

With that report, I am pleased to turn the call over to Rick Schweinhart, so he can review our third-quarter financial results in detail.

Thank you, Debbie. Normalized FFO per diluted share increased 18% to 47 cents for the third quarter compared to 40 cents for the third quarter of the previous year. Normalized FFO for the third quarter totaled $40 million compared to $32 million for the third quarter last year. The $8 million increase is attributable to $11 million of revenue increases, offset by an increase of $400,000 for property level expenses due to our 2004 acquisitions of medical office buildings, $500,000 increase in the combined general, administrative, professional fees, and $3 million increase in interest expense.

Last year discontinued rental income of $1.3 million on facilities sold to Kindred in December 2003 was offset by $400,000 of discontinued interest and an unrelated asset impairment of $800,000. GAAP net income for the quarter was $25 million, or 30 cents per diluted share, compared to last year's $32 million, or 40 cents per diluted share. This year's net income was reduced $1.4 million for the write-off of unamortized deferred loan cost on an old revolving credit agreement -- the old revolving credit agreements and $3 million for an increase in depreciation expense due to acquisitions. Last year's net income included an $8 million gain on the sale Kindred stock and a $2 million gain on sale of assets.

Rental revenues and interest income for the quarter totaled $62 million compared to $50 million last year. The increase was due to the May 1st 2004 Kindred escalators, which added $1.6 million; the first-quarter ElderTrust merger and Brookdale facilities acquisition, which added 7.2 million; the second-quarter acquisitions, which added 1.8 million; and the third-quarter acquisitions, which added $600,000.

Interest expense increased $3 million from the third quarter of 2003 to the third quarter of 2004, due primarily to the acquisition borrowing, offset by a decrease in our effective interest rate due to a 125-basis-point pricing improvement in our new revolving credit agreement. In the last year, real estate investments have grown $345 million and debt has grown $174 million, consistent with our long-term capitalization strategy of 50% debt and 50% equity.

At September 30th, our balance sheet remains strong with the pro forma and net debt to EBITDA ratio of 3.7 times. Our debt to capitalization at the end of the third quarter was 28%. Other items of note on the balance sheet compared to the June 30th balance sheet are: real estate investments increased $38 million, reflecting our third-quarter acquisitions. Debt increased $2 million from 852 million at June 30th to 854 million at September 30th reflecting borrowing on the acquisitions. The balance of the acquisitions were funded with operations. And we moved $750,000 from restricted cash to non-restricted cash reflecting its release from the joint tax escrow we have at Kindred. Weighted average diluted shares increased from 80.3 million in the third quarter of 2003 to 84.9 million this year, reflecting our March 2004 2-million share equity offering, options exercises, and continued interest in our drip, which produced $4 million last quarter. Outstanding shares at September 30th 2004 are 84.348 million.

Our recent acquisitions are summarized as follows. Real estate assets increased $38 million. Annualized rents on these assets totaled 3.9 million, or $1 million per quarter. But due to the timing of these acquisitions, only $600,000 of this revenue was recognized in the third quarter. These properties are expected to yield over 9% net of property level operating expenses for the medical office buildings. We are also updating our range on our 2004 guidance to $1.78 to $1.80 per diluted share from $1.75 to $1.79, reflecting actual third-quarter results, our most recent acquisitions, and our mid-October issuance of $125 million of senior notes with 6-5/8% interest.

We are also introducing full-year 2005 normalized FFO guidance of $1.89 to $1.93 per diluted share. Ventas's normalized FFO guidance assumes that our $100 million in anticipated acquisitions close, as and when expected. Consistent with our historical practice, we are not factoring any additional acquisitions or capital transactions into our numbers. Our guidance also excludes the impact of gains and losses on the sales of assets, the future impact of non-cash swap ineffectiveness expense, and other non-cash items.

The main takeaway for the third quarter is that results for the quarter improved significantly over the results of the third-quarter 2003. Effective interest costs continue to improve, and the balance sheet remains in excellent condition.

Back to you, Debbie.

Thanks, Rick. Dillon, we'd be pleased to open the floor to questions, now.

Great. Thank you very much. Ladies and gentlemen, if you wish to ask a question, please key "star" "one" on your touch-tone telephone. If your question has been answered or you wish to withdraw your question, at any time, please key "star" "two." Your questions will be taken in the order they are received. Please key "star" "one." now.

And your first question comes from AJ Rice of Merrill Lynch. Please proceed.

Hello everyone. Just a couple of questions -- if I can ask? First of all, as you look at the SNF portfolio and then the opportunities for acquisition and development, going forward, Debbie, could you maybe just tell us how you are thinking about the -- you mentioned the update they got on October 1, but next year, I know, there is a lot speculation about the rugs through pharma (ph) -- how does that factor into your thinking about development acquisition activity in the SNF area?

OK. Thanks, AJ. We continue to like the SNF as an asset class. We think, that skilled nursing is an asset class that's here to stay and will continue to be a reliable source of revenue for us. We do consider, the impact of potential drugs refinement in our acquisitions and underwriting, it's our current expectation that, that maybe deferred for sometime nonetheless we are taking it into account as we under write acquisitions.

I guess, do you think, that means, you'd do less, you'd be more likely to look at some of these other areas next year, or would do you wait to see how that plays out or it's not keeping you from being involved there?

It's not definitely keeping us from being involved in skilled nursing. We have our own strategic growth and diversification program at work, which and one of the important components of that is to build asset class diversification, because we think, that makes us a more reliable company, from a portfolio management standpoint, and so we have been focusing on as we make acquisitions. We have been acquiring more of the market rate products, as compared to skilled nursing this past year. But we still like skilled nursing and we'd still expect to play in that space.

OK. And then, I'll just ask the other question would be, maybe to that point of diversification. This is first time, I think you guys have made investments in the medical office building this quarter and you mentioned, that some of that is in the pipeline going-forward as well as potentially hospital related assets, those are areas where we haven't got as much focus in terms of new acquisition activity before, what do you see there that it now creates, that as an opportunity?

Well, yes, we did acquire two medical office buildings, with the ElderTrust merger, we've started our investments, and then I'm going to ask Ray Lewis to elaborate a little bit more on the medical office building situation.

Yes, I think you're right in observing that in the past we've really haven't done as much on the MOB side. I think what we've found as we've been out in the marketplace talking with potential, sellers is there is an under served opportunity in the space, for MOB developers and managers, who want to continue maintaining their relationships with the hospitals and the doctors that are in their building and don't want to turn those relationships over to competitors. And we've found, that we've actually been generate premium yield, over what other MOBs are trained for in the marketplace, by not being a competitor in those areas and so the MOBs, that we've been acquiring have all been in the 9% cap rate range win, the market rate for MOBs has been turning down towards 8% and below. So, we think, where there -- that sort of opportunities take advantage of premium pricing, in a collaborative partnership with these developers and sellers, that we can do some good business there.

OK. Great. Thanks a lot.

Thanks, AJ.

Thank you very much, sir. Ladies and gentlemen, your next question comes from Tom Howard of Hilliard Lyons. Please proceed.

Yes. Good morning. Tony Howard. Congratulation by the way on a good quarter.

Thanks, Tony.

I guess, my question is G&A as a percent of total revenues, for the first time in many quarter is below 6% and I was wondering if kind of give any account guidance as, what do you expect that on a run rate and specific given on your forecast, so I think G&A for 2005?

Thank you for that question. On a nine month basis, our G&A, as a percentage of revenue is about 7.5, let's call it, and that includes professional fees, which is how we compute it. We are glad to see that our G&A as a percentage of revenues has been trending down but we do build G&A increases into our guidance for 2005, because we believe that as we continue to improve the company and as these regulatory matters such as Sarbanes-Oxley continue to weigh on public companies that we will see it increase in G&A.

OK. Good. A follow-up on -- about Ray's comments on the medical office buildings. You're seen other healthcare leads doing some joint ventures in this area, especially given some of cap rates are getting lower and lower. I'm wondering what is your attitude or thoughts on joint ventures?

Well, we are always open to structures that will increase earnings and that much value for shareholders and some times joint ventures enable our public companies to do that. We also balance that with our desire to keep a strong balance sheet. And so, again, we would be open to joint ventures but right now nothing is really on the table.

OK. Final question, you've risen your debt issue of 6-5/8, do you consider that as an attractive rate relative to what your stock is now trading at versus the dividend yield? And what will be your outlook as far as -- but no more debt as far as on the percentage basis?

OK. We do think that 6-5/8 unsecured for 10 years is a very attractive rate. And it really does show how far the company has come in the last couple of years in terms of people's belief that company is going to be successful going forward and that our cash flows are reliable. What we are trying to do is to basically fund our strategic growth and diversification programs. As Rick Schweinhart said with a 50-50 debt equity long-term capitalization strategy and have long-term debt maturity that are staggered that match our long-term leases. And so just -- with debt issued with that, it opens up capacity on our revolver. We have quite a bit of capacity now that we can borrow at LIBOR plus 125. And so that's how we expect to go forward as we fund our new acquisitions.

OK. Thank you.

Thank you very much, sir. Ladies and gentlemen your next question comes from Jerry Doctrow of Legg Mason. Please proceed.

Good morning.

Hi, Jerry.

I just had a couple of things. One, I guess, is just on debt cost because obviously you have done these refinancings, which will bring down debt costs. And I was curious if you can give us some guidance as to what you think maybe interest rates will be or effective interest rates are going to be kind of going forward now that you've gotten through those because they were probably effective, I guess, in last quarter but become fully effective in fourth quarter plus as you borrow on the line cost may come down a little bit?

Jerry, this is Rick. If you look at the third quarter we ran on 8.1% effective rate. And as the 6-5/8 comes on that will obviously effect SG&A, as we borrow more on revolver, it will effect that. So we'll have some fairly nice improvement in the effective rate for the next three or four quarters.

And you sort of how the rate (inaudible) similarly come down to or we should just do the math and sort of work it through?

Again, the obvious -- the better way to do is lower the 6-5/8 and then as the debt goes up, bringing it on at the incremental borrowing rate. And what you will see is, it improves probably, go down a little bit in the out months, throughout quarter.

OK. And just one or two additions, do you have straight line rent for the quarter?

We do. It's about 600,000 for the quarter.

OK. And just one or two other things, THI, which is a tenant of yours and also involved in managing IHS, and there is a lot questions about them because of the folks that are kind of throwing(ph) the HIS assets, now may be mine or that sort of thing. Just any color on sort of that company, where it stands, how they are doing in terms your asset that you own with them?

Yes, well, THI as you know has also experienced a change in management. They are managing also the integrated assets as well as some assets for us. I think that THI is -- it's fair to say, subject to a few stresses and strains right now as of those big acquisitions and so on. But they are doing well and our portfolio and continue to be current with us.

OK. And then, I was wondering if you could just give a little more color on the acquisition environment? Generally, I mean a couple of your peers have talked that they are seeing more interest in the banks, more competition, yield seem to be coming down. I just wonder if you can kind of categorize what you are seeing out there?

Yes, I think that's right. We are seeing more capital into the marketplace. We are certainly seeing yields coming down. I think, you know, as we look at it, yields still remain about 500 basis points over treasuries. And when we match fund with that, we remain, I think, in the normalized investment environment for ourselves. I think if you look at cap rates or yield by asset class, you're seeing them range between 8.5 and 10%. You're seeing, you know, independent assisted living between 8.5 and 9, skilled 9 to 10, MOBs, as I mentioned 8 to 9. And some of those actually even, occurring below 8 and than hospitals, up around 10% range. So all of those ranges are anywhere between 50 and 100 basis points below where we would have seen them at this time last year.

OK. And you mentioned hospital acquisition is there -- kind of some kind of specialty hospital type, I assume not general acute?

I think we would look at those specialty hospitals and general acute care hospital.

Mr. Schweinhart here is quite the hospital expert.

All right. Thanks

Thank you very much sir. Ladies and gentlemen your next question comes from Robert Mains of Advest. Please proceed.

Hi Debby, actually this is Kemra Miller (ph) for Rob. You may have touched on this but the two assisted living facility purchases that you made this quarter, you described them earlier in the call as high end. It's out of 161 -- little over 161,000 per unit it seems like a bit of a big price tag per unit, can you give us little more information about those facilities?

We can.

Hi Kemra, this is Ray.

Hi Ray.

I think the thing you keep in mind here is these are newly constructed five years old facilities in infield high end suburb locations around major metropolitan areas. You know we're buying these at, at what I believe is well below replacement cost, for instance if you were to look at what Sunrise is developing their facilities for, and I would say that these assets are absolutely Sunrise quality. You know they are including the working capital it takes at lease these things up, are developing in access in many circumstance of $200,000 per unit, particularly in locations like this.

OK.

So, we feel that the price that we paid for these is fair.

OK. Thank you.

Thank you.

Thank you very much. Ladies and gentlemen, your next question comes from Rick Anderson of Maxcor Financial. Please proceed.

Thank you and good morning.

Good morning, Rick.

The straight-line rent number of 600, I know we've talked about this a few weeks ago, but does that include the deferred rental income component?

I need to understand your question. We have -- there are two possible things that we could be talking about. One is traditional straight-line rent where basically we have 600,000 per quarter of that. And since 2001 the Company has brought about 600,000 a quarter in additional non-cash Kindred rent that is the sum of about a $5 million cash payments Company received at the emergence of Kindred from bankruptcy and it tends to value the 10% of the stock that the Company received when Kindred emerged from bankruptcy. So, those are two separate items each -- confusingly each of them is about 600,000 a quarter.

That's the point I wanted to make. I know it's not straight-line rent but act like it sort of.

Except we the money.

Expect you have the money.

Yes.

The debt offering -- would you be able to quantify it all. How diluted it was during the quarter since you used it initially to pay down the line?

Well, we didn't close until the mid October.

OK.

So, it wasn't diluted at all during the quarter.

On go forward basis it's around 800,000 beds per quarter.

Until you put that money to work?

Until we put that money to work.

Any....

That's just taking the revolver rates versus the..

Right.

fixed debt (ph) rates.

Right. Got it. Regarding future capital raises you mentioned 50-50 debt equity. How would preferred issuance fit into those categories, have you contemplated preferred?

Yes. That's a good question. First of all in terms of the 50-50 the one thing that I think is important to state first is, that we would expect to fund our near term investment activity after revolver and don't have to go back to the equity market. We've got both from a credit statistic standpoint, as well as the capacity standpoint the ability to acquire you know quiet a bit without all basically using revolver debt. So that's very positive. On the preferred side, we think preferred is a great slice of capital to use. For the company, we do monitor the market and under the right circumstances, I think if we could be opportunistic we would certainly consider it.

OK. Was the 750 escrow in your guidance that's 1 penny?

No, that doesn't have an income statement impact. It's really just a balance sheet item.

OK.

It's -- we had it in restructured cash because it was fitting in the escrow with Kindred, about 1.5 million and we shared that with them 50-50 until we just, as we received deferred then we moved it from restricted cash in to non restricted cash.

OK.

These gentlemen's are nodding their heads.

With regard to transaction in the future, you mentioned $100 million that's now in your guidance. First question, how much of an impact did that have to 2005, if you would strip out the 100 million what impact would that have in your -- on your guidance for the next year?

That's another good question. I think it really would take it down about, maybe a nickel or so. So, the -- high yield and the acquisitions are kind of a push frankly.

OK. And then you mentioned, things are looking more visible to you regarding transactions, and future transactions, were you just referring to that 100 million or you referring more bigger picture?

We were being little picture -- we were just really referring to about a 100 million of near-term investment activity that we have, good visibility on as you know, we want our guidance to be reliable and so - unless we feel pretty good about something. We don't want to include it in our numbers.

OK. And my last question is, again for '05, with the layering on of new properties non-Kindred, non-master lease properties what would sort of your weighted average same-store growth to be in 2005, if you know, is that 3.5 escalator is getting ordered down overtime?

As we diversify in growth, we -- Kindred escalation which as you know represent about 80% of our portfolio in which are great and provide us with 6 or 7% FFO growth standing alone. Those gets diminished as we do external growth and so we're trying to balance diversification growth with the diminishing of that Kindred vary above average growth rate. So, right now I think all in we're looking at about a 3% as close to 3.5% top line growth as we've added 20% of non-Kindred assets.

Got it. Perfect. Thank you very much.

You are welcome. Thank you.

Thank you very much sir. Again ladies and gentlemen, if you wish to ask a question, press key "star" "one" now in your touch-tone telephone. And your next question comes from Patrick Basag (ph) of Invesco. Please proceed.

Hi, Debra.

Good morning.

Good morning. Just a quick question. And you mentioned that is about 100 million in acquisitions under contract, other than there are low guidance, can you talk a little bit about maybe it uses the pipeline or preference - or is your preference still in your portfolio, large deals or - can you just talk to that a little bit?

Yes, we can.

Hi, Patrick, it's Riney, I think, in terms of preference between large and small transactions, clearly our preference is to do large portfolio transactions in that, you get the leverage of work over a larger investment, that having been said, those are aphosodic it difficult to predict, so we want to make sure that we're staying active. So, we're finding good transactions on the smaller side $15 million to $20 million bi-sizes that we can do. To make sure that we're continuing to add to our diversification and staying active, as we continue to pursue the larger transaction. So, that's creating a more consistence flow I think of investment activity for us as you've seen over the last few quarters.

OK. But doesn't mean that you're not -- you're still looking at these, apart transaction?

No, we absolutely are, and I think near the Brookdale, and ElderTrust transactions are good examples of where we've been able to find transaction that wanted to do compete and win those.

OK. Thank you.

Thank you.

Thank you very much, and again ladies and gentlemen that's "star" "one" for a question. And at this time we have no further questions.

All right, Joe. I'd like to thank everyone for your participation this morning; we sincerely appreciate your interest and your support. We're very happy that we're on track with our plan; we're executing our strategic growth and diversification program. And we look forward to seeing all of you soon. Thanks again.

Thank you, very much ladies and gentlemen, for your participation in today's conference call. This concludes your presentation, and you may now disconnect. Have a good day.

CONFERENCE CALL CONCLUDED