Rithm Property Trust Inc.
Q3 2017 Earnings Call Transcript

Published: 1 Nov 2017

[Operator:]

Greetings and welcome to the Ramco-Gershenson Properties Trust Third Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to turn the conference over to your host Dawn Hendershot, Senior Vice President of Investor relations and Public Affairs. Thank you. You may begin.

[Dawn Hendershot:]

Good morning and thank you for joining us for the third quarter 2017 earnings conference call for Ramco-Gershenson Properties Trust. With me today are Dennis Gershenson, President and Chief Executive Officer; John Hendrickson, Chief Operating Officer; Geoffrey Bedrosian, Chief Financial Officer; and Cathy Clark, Executive Vice-President of Transactions. At this time management would like to inform you that certain statements made during this conference which are not historical, may be seen forward looking statements within the meaning of the Private Securities Litigation Reform act of 1995. Additionally, statements made during the call are made as of the date of this call. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions, factors and risks that could cause actual results to differ from expectations are detailed in the quarterly press release. I would now like to turn the call over to Dennis for his opening remarks.

[Dennis Gershenson:]

Thank you, Dawn. Good morning ladies and gentlemen. As we are approaching the end of 2017, I felt that it was appropriate to give you a full year’s view of where we stand with our business plan and how we are positioned for the future in light of the ever evolving retail landscape. First, in this challenging retail environment where in we’ve experienced an elevated number of anchor and small shop bankruptcies. We are confident that we will achieve our operating FFO guidance. This result reflects the resilience of our high quality shopping center portfolio and our ongoing ability to backfill those small shop and anchor vacancies with more desirable tenants, which John will discuss in greater detail. Second, we set a goal in January relative to our capital recycling program to match our dispositions with an equal amount of acquisitions. We will also outline our intention to reduce our geographic footprint in Michigan. In the third quarter, we closed on the sale of five non-core Michigan shopping centers for approximately $90 million and sold a data center in Metropolitan Chicago for $6 million. Further, we are in contract to sell an additional Michigan shopping center for approximately $50 million with the expectation of completing this transaction before the end of the year. Upon closing the sale of this $50 million of Michigan assets, we would have sold a total of approximately $175 million. Our sales in 2017 will not include our Jackson Crossing properties the primary asset of which is a partially enclosed shopping center. Earlier in the year, MC Sports a 25,000 square foot tenant filed for Chapter 7 bankruptcy. We determine that our ability to maximize proceeds in this property would best be served by re-leasing the Sporting Goods vacancy. We are currently talking to several retailers for this space. Our acquisitions in 2017 included two centers, purchased in the first quarter for $168 million. As I mentioned, it was our plan to buy and sell an equivalent amount of assets this year. Because we approach the opportunities for additional acquisitions with a conservative capital allocation perspective, I do not believe that we will make another acquisition this year. That said, our acquisition team continues to analyze opportunities that would be consistent with our goals of both owning shopping centers to best position our company to benefit from an Omni channel world and acquire assets that add value for our shareholders. Relative to our interest in promoting a geographically diverse portfolio, it is our expectation by year-end our exposure to Michigan will approximate 20% or less. The accomplishment of this objective as well as achieving our overarching goal to substantially complete the transformation of our market profile and shopping center mix positions us as we head into 2018 with a strong foundation for growth. Currently, over 19% of our shopping centers are located in the top 40 MSAs often in most affluent submarkets. That said, we continue to focus our attention and what we believe to be the most successful shopping center formats for the future. These include dynamic town centers and urban infield environments supplemented by grocery anchored community shopping centers. These asset types position our company to take advantage of the current and future rationalization by retailers of their store counts and store sizes. Allowing our shopping centers to provide the best value, variety, convenience and experience, which includes place making and entertainment all which are located in the most viable markets. I’d now like to turn this call over to John for his prepared remarks.

[John Hendrickson:]

Thank you, Dennis. Good morning everyone. I want to spend a couple of minutes to provide color on a few operating metrics, including same-centers, occupancy and other leasing statistics for this quarter as well as cover our expectations for the rest of the year. First on same-center, same-center NOI with redevelopment grew 1.4% during the quarter. The most significant driver of this growth was minimum rent, which grew a strong 2.7%, thanks to a number of redevelopments coming online. Year-to-date, same-center with redevelopment growth was 2.3% impacted 30 basis points due to the timing of recovery income last year that will reverse itself next quarter. For the rest of the year we have clarity on nearly all variables that could impact future results including a watch list and as Dennis mentioned on the disposition activity which solidifies our expected year-end same-center pool. Therefore because of our comfort in the balance of this year’s result and the retention of the few properties including our Jackson, Michigan assets we now have tightening our same-center NOI guidance for the year to 2.5% to 3%. Regarding occupancy, at the end of the quarter physical occupancy was 92.6% and leased 93%. Both lower than last quarter due primarily to the closure of Gander Mountain in Jacksonville, Florida an 81,000 square feet. We are presently in active negotiations with multiple tenants for the space and expect to have at least half of the square footage leased before the end of the year. Remember, we also lost a 61,000 square feet Gander Mountain this quarter in Michigan, but already have the full space leased at a 23% rental increase and expect the new tenant to open by the end of this year or first quarter 2018. Looking forward, as I mentioned last quarter we will be getting back one of our two remaining Kmart at the end of November. As was the case with the Gander boxes, we anticipated this possibility, which allowed us to initiate a search for the replacement. In fact, we are now documenting new leases with three quality value oriented retailers that will significantly improve the merchandising of the center, while providing 37% more rent than we have been receiving. We expect to have these signed before the end of the year and are pushing for second half 2018 opening. Largely as a result of these box repositionings we will likely finish the year at a physical occupancy of around 92% and leased occupancy around 94% as we finalize deals on these boxes and other vacancies through year end. Leased up of new space in today’s environment is taking longer, but we continue to focus on and opportunities remain for long-term value creation in the portfolio. Turning to rent spreads, during the quarter comparable rental growth was 12.3% including renewals spreads of 7.7%, 140 basis points better than 2016’s full year average. Looking forward to our expectations for next quarter, we continue to believe our result in leasing spreads for the year will be comparable to last year with high single-digit rollover spreads despite lower total transaction. As I mentioned last quarter total transactions for the last two quarters have been lower largely because of the timing of renewals. In 2016 we were able to get ahead of future expiration and thus we have less expirations now than in the recent past. But reported renewals transactions are down even as we continue to experience above average renewal rates and are farther ahead of expirations for the balance of this year and next. As we near the end of 2017 retail shopping center real estate remains in transition, however the opportunities in our portfolio and tenant demand remained strong setting the stage for the company sustainable growth in the second half of 2018 and into 2019. As we open new anchor and execute on our development pipeline. That’s all I have in prepared remarks, and I’ll turn the call over to Geoff.

[Geoffrey Bedrosian:]

Thanks, John. Good morning, everyone. I'm happy to report our operating results for the third quarter are in line with the financial objectives we outlined earlier this year. Operating FFO for the third quarter was $0.34 per share, unchanged from the third quarter of 2016, as higher cash NOI our redevelopments of $0.01 was offset primarily by higher interest expense from increased borrowings on our line of credit of $0.01. Operating FFO was down $0.01 on a sequential basis as we recognized the impact of our dispositions during the quarter. Our same-store operating portfolio continue to record solid minimum rent growth of 2.7%, reflecting the quality improvement in our portfolio. On the transaction front we generated net proceeds of $94 million from all of our property dispositions in the quarter. The execution of these dispositions also facilitated the completion of our 10/31 exchanges returning an additional $26.1 million previously held in escrow. In total the company generated $120.1 million in net proceeds from property sales in the quarter. Turning to the balance sheet, net debt-to-adjusted EBITDA decreased to 6.6 times at the end of the quarter as a result of our disposition activity and we’re on track to meet our year-end target of net debt-to-EBITDA of 6.5 to 6.7 times. From a coverage ratio perspective we ended the quarter with solid interest in fixed charge coverage ratios of 3.6 times and 3.0 times respectively. During the quarter we amended and extended our $350 million unsecured revolving credit facility to a new four year term. The credit facility matures September 2021 and can be extended one year to 2022 through two six months options. Pricing on the facility is unchanged as we maintained our previous leverage based pricing grid. Borrowings are currently priced at LIBOR plus 135 basis points. Additionally the facility allows for increased borrowing capacity of up to $650 million through an accordion feature. We are very fortunate to have the consistent support of a strong bank group that help facilitate this transaction. From a debt management perspective, we will continue the unencumbered assets as outstanding mortgages mature. We anticipate repaying $36.8 million of mortgage debt in the fourth quarter and accessing the long-term debt markets through a private placement of unsecured notes. Proceeds from any notes offering will be used to offset our mortgage repayment and reduced the balance of our revolving credit facility. The repayment of our mortgage debt in the fourth quarter will result in no-debt maturities in 2018 and only $3.4 million in 2019. Turning to guidance, we are narrowing our operating FFO guidance from $1.34 to $1.38 per share to $1.35 to $1.37 per share. Our range reflects the a tighter band on our same-store NOI guidance as John mentioned of 2.5% to 3% and asset sale of approximately $50 million in the fourth quarter. As Dennis mentioned earlier, we are very focused on completing our capital recycling objectives through the remainder of the year as we position the company for long-term growth. This concludes the team’s prepared remarks. I would like to turn the call back to over to the operator to open the line for questions.

[Operator:]

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Collin Mings with Raymond James. Please proceed with your question.

[Collin Mings:]

Hey, good morning.

[Dennis Gershenson:]

Good morning, Collin.

[Collin Mings:]

Just to start, can you maybe just discussed the expected cap rate on the $50 million asset that’s under contract to start right now? And then just more broadly just provide us an update what you are seeing as far as the transaction market in terms of cap rate trends and just buyer appetite out there?

[Catherine Clark:]

Sure, this is Cathy. I will answer that. For fourth quarter acquisitions we should see cap rate -- disposition in the high 7, I think it’s where it will come out. As far as the market for acquisitions I think that environment remains very competitive for the kind of property we are trying to buy, cap rates there are generally about the same. So we are happy that we were able to buy our two properties early in the year and we will continue to look at properties that come to market and of market deal, but we remain disciplined in what we are looking for. On the disposition side, we are just seeing high volume of properties in that space and buyers are taking a little longer to complete their diligence, lenders are a little more conservative so that resulted in a little bit longer timeframes to get to closings. But having said that fact we will end the year at right about $175 million in dispose and we will reduce our Michigan percentage to 20% or less.

[Collin Mings:]

Okay, that’s helpful. And just recognizing you don’t have 2018 guidance out there yet, but just as we approach 2018 given your goals around leverage as well as redevelopment spinning that continues would you expect to be a modest net seller in 2018 or should we expect more details at the Investor Day?

[Dennis Gershenson:]

One you will certainly get more details at the Investor Day, but I think our strategy will remain the same that we want to match our dispositions either with acquisitions or with our redevelopments so that we are truly in a position not to suffer any real dilution.

[Collin Mings:]

Okay, two more quick ones from me. John, can you just may be touched on the big jump in TI during quarter? I apologize if I missed that in the prepared remarks.

[John Hendrickson:]

Sure, Collin. When you look at the leasing activity this quarter there was an anchor in that and with anchor deals these days require more TI. And if you think about for the full year as we lease our anchor boxes that I talked about you should look for litter higher average TIs of where we are today on a four quarter average. But if you remember that four quarter average right now is $39, last year it was -- for the full year it was $53 a foot. So we probably expect to be somewhere maybe in between there.

[Collin Mings:]

Okay, that’s helpful. And then just last one Geoff, can you just maybe touch on the expected pricing, update us on the expected pricing as it relates to the debt private replacement?

[Geoffrey Bedrosian:]

Yes, Collin I think it’s probably safe to say treasuries plus 220 basis points.

[Collin Mings:]

Okay, great. See you guys in December. Thanks.

[Dennis Gershenson:]

Thanks, Collin.

[Operator:]

Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

[Todd Thomas:]

Hi, thanks good morning. Just following up on that private placement there Geoff, any sense on the size of that and what about the timing?

[Geoffrey Bedrosian:]

Sure Todd, how you are doing? So, as far as timing it’s been consistent to what we articulated earlier in the year as guidance in the fourth quarter. So, I would expect something between now and the end of the year for sure. And then on the sizing standpoint it would be approximately $75 million.

[Todd Thomas:]

Okay. And then John, the Gander Mountain that you talked about, so one is completed already, one is in the works, when might we expect cash rent to commence for the one that’s already leased? And you talked about the 37% higher rent spreads for the Kmart box that you are expecting, what are your expectations on the two Gander boxes?

[John Hendrickson:]

Sure, Todd. So first off the Gander box that we did lease already, that was a 23% spread. And the tenant is actually working, we were able to deliver the space immediately after Gander closed and are working to trying to get open this year, but it may fall in the first quarter of next year for the actual rent commencement. For the other box, the other Gander box we are working to finalize at least with for half the space it’s probably slightly higher rents on a per square foot basis. And we’re pushing to try to get that opening before the end of ‘18. But again that also may fall in anchor boxes because we have to manage [ph] the space and it takes time for the work that might fall into the first quarter of ‘19, but we are pushing to get that open end of ‘18. Regarding Kmart, we are finalizing those leases and as I mentioned we have a 37% spread on that Kmart box. And again we are documenting the leases and we are pushing to also get those open at the second half of ‘18 and feel pretty good about that.

[Todd Thomas:]

Okay. And then you mentioned that leasing is taking a little bit longer in the current environment here, can you just provide some additional color on that comment?

[John Hendrickson:]

Sure, I mean, it’s hard to measure exactly in any given quarter, how many transactions we do I mean I look at our volume more on an annual basis than any given quarterly basis. But you will see besides the renewal spreads that I talked -- I mean, the renewal transactions that I talked about leasing this quarter new leasing is a little down this quarter. But when I look at our volume of deal that we have for the fourth quarter, it’s truly in pace for the full year that we have done in ‘15 and ‘16. So I feel good about where we are lined up for the full year, it’s just the fact that the reality is that just deals that we had already queued up, we didn’t get signed by the end of the year, I mean, the end this quarter for different reasons for every deal, but feel very good about our momentum overall.

[Todd Thomas:]

How about the -- how is the leasing shaping up for your 2018 expirations, how far through that pipeline are you at this point?

[John Hendrickson:]

Well we are ahead of -- as I mentioned -- we mentioned those comments on the renewals, we are ahead of where we were at this time last year related to finishing out 2017 expirations and also dealing with 2018 expirations. So I feel good about it.

[Todd Thomas:]

Okay, thank you.

[Operator:]

Our next question is from George Hoglund with Jefferies. Please proceed with your question.

[George Hoglund:]

Hi, good morning. One question on Ascena the number of leases went down to 27 from 29 last quarter. Was that related to asset sales or do they close any stores?

[John Hendrickson:]

It's related to asset sales, George.

[George Hoglund:]

Okay. And then just what's kind of your outlook going forward? One related to Ascena and then also how are kind of the store closures and rent adjustments with some of the retailers that came out of bankruptcy like the Gymboree, Payless and rue21?

[John Hendrickson:]

Sure. So first off on Ascena, we've done a portfolio review with them. We have 27 locations as you mentioned. And as we do the review, I mean, the reality is they're looking to close they reported 10% to 15% of their store. So for us it will likely be two to three maybe four small shop locations that close between now and mid-2019 is the expectations. So it's not something that will be too big of an impact for us. Obviously it’s somebody that we're keeping very close eye on. In general to see make sure their operations don’t deteriorate more. Looking generally at your question about other impact of closures this year, Rue21 of the 12 locations we had we actually had eight of them closed. And the other ones have continued to operate. And I don't believe there was any if there was any rent release there to keep them open it was minimal. With Payless we didn't lose any of those locations. And there wasn't rent release in general. I mean, as we're talking about rent release in general, the timing we haven't had any general rent release issues. Our tenants coming to us except in the case of bankruptcy right before they file bankruptcy they always call trying to see about getting a rent reduction. And obviously the biggest tenant now for us is Toys that's currently in bankruptcy. We have two locations; the conversation so far with them has been conversation about remaining in both locations. But we might actually have some rent reduction there specifically at one location, which will be -- have a fairly minimal impact overall to our '18 numbers.

[George Hoglund:]

Thanks. Appreciate the color.

[John Hendrickson:]

Sure.

[Operator:]

Our next question is from Vincent Chao with Deutsche Bank. Please proceed with your question.

[Vincent Chao:]

Hey, good morning guys. Just a question on the renewals again, so obviously lower levels of renewals leading to lower volumes this quarter. But I was just curious if there has been any changes in either the move out rate or a retention rate, how everything think about it over the past couple of quarters?

[John Hendrickson:]

No, Vince. This is John. No actually it's actually higher this year than it has in recent past. So as I probably mentioned in past calls, that's something I keep a very close eye on if that starts to slip. But in general that has remained high and in fact a little higher than typical.

[Vincent Chao:]

Okay. And then on the rent spreads that you quoted for some of the back filled larger boxes, you also talked about higher TIs for those kinds of boxes. So I guess on a net effective basis, what kind of economics we're looking at for some of the deals that you mentioned, the Ganders and Kmart's?

[John Hendrickson:]

Sure, I mean, it depends on the deal, but especially on the larger boxes like the Kmart, I mean, we will have to be putting in capital to split the box. As I mentioned, we have three tenants so that will be splitting the box. So they end up having more capital, so that’s probably a push from a net effective basis. But Gander Mountain example that I gave you is certainly a value accretive from a net effective standpoint, because we didn't split the box and we still got it strong. And fairly minimal capital for boxes these days, and still have that strong 23% spread.

[Vincent Chao:]

Okay, that’s helpful. And then maybe just a question on the trajectory of same-store NOI growth, which sounds like you have good visibility on. You've mentioned a 30 basis point swing negative this quarter for timing of recoveries versus maybe a plus 30 benefit next quarter. So net 60 basis point swing from third quarter to fourth quarter. That gives you sort of the 2%. And then as the rest of the upside implied by the guidance range, is that just coming from known commencements that will boost the numbers there in the fourth quarter?

[John Hendrickson:]

Sure, that's correct. But keep in mind that my 30 basis point swing was on our year-to-date number. So there will definitely be an uptick in the fourth quarter. If you look back at the 2016 recovery rate you will see it was choppy that up to the third quarter recovery rate was much higher than what you saw for the full year and that was simply of the timing of our recovery. So, you do have a dip in occupancy overall in the portfolio to the box closures that I have mentioned, but there still is rent commitment related to our redevelopment pipeline. That gets you back to your overall ending backward in the guidance we gave.

[Vincent Chao:]

Got it. And then just one question on that in terms of the openings we’ve from a couple of your peers that opening are getting delayed for a variety of reasons and that’s actually [indiscernible] some people in terms their NOI outlook. I was just curious if you’re experiencing similar trend in your portfolio?

[John Hendrickson:]

Generally not, except the one example I give you of Gander box I talked about that I don’t know yet, they are still pushing to get open this year and might fall into next year, but in general we have pretty good visibility on our openings and we feel very good about.

[Vincent Chao:]

Okay, thanks.

[Operator:]

Our next question is from Craig Schmidt with Bank of America. Please proceed with your question.

[Craig Schmidt:]

Great, thank you. Thinking about your watch list, I am wondering how that compares to your watch list a year ago? And just in general how you are feeling about store closings relative to the aggressive pace in ‘17?

[John Hendrickson.:]

Hi Craig its John. It’s a good question when you look at forward at the watch list there are still a few names on there they have been on there for a while now like Sears of course is still on there, but will be left with just one box to deal with next year if we do get it back and at a very well rent, but we do have to address it. So, I mean in general there has been things that have settle down, obviously Gander was on our list last year, the Golfsmith was on our list a year-ago and those have settle down, but those other new names that we are taking a look at that still makes those cautiously optimistic that we are getting to the end of the work outs here and we are certainly -- but our eyes wide open at and trying to do what we did with both the Gander and Kmart is to get a head of issues so that we can be well prepared once if there are any issues.

[Craig Schmidt:]

Great, that’s helpful. Thank you.

[Operator:]

[Operator Instructions] Our next question is from Michael Mueller with JP Morgan. Please proceed with your question.

[Michael Mueller:]

Hi. Dennis your comments on assets sales on a go forward basis, I know you are going to give more details at the Investor Day, but the way I took your comment and I just want to see if I am reading into it the correct way. I think you said something like you wanted to match fund asset sales with acquisitions and redevelopments and I wasn’t sure if that was the statement for post 2017, you are back to the normal routine of doing that or if it was just meant as being just a bigger picture overtime statement and not necessarily after this round of asset sales we’re kind of back to normal course. I mean, what’s the right way to read what you said?

[Dennis Gershenson:]

It’s the former was that we are back to the way we handle things before. Basically, the transformational aspect of what we had hoped to accomplish in 2017 will be complete with the one exception of the Jackson, Michigan assets. So, as soon as we are in a position we’ll see those up, but other than that there’s always that either fully mature assets or what we would proceed as lower quality assets that are always those of the portfolio we have talked about and will talk about at the Investor Day. What we believe are those assets that we want to own for the future. And so, we will be just on an opportunistic basis framing out some of those non-core assets for much better opportunities be the acquisitions or redevelopments.

[Michael Mueller:]

Okay, that was all I had. Thank you.

[Dennis Gershenson:]

Thank you.

[Operator:]

Our next question is from Floris van Dijkum with Boenning and Scattergood. Please proceed with your question.

[Floris van Dijkum:]

Great. Thanks, guys. Obviously the market likes your results. So kudos, I wanted to follow-up on the dispositions question. It seems that obviously you’re trading at a significant discount, you’re trading at a very low multiple, you could argue that your stock is not being valued appropriately and certainly you’re not getting much credit for your earnings. Dennis, what would you say about increasing your dispositions and maybe at some point if you get your debt-to-EBITDA ratios down further, maybe even looking to buybacks stock at a 25%, 30% discount. What’s preventing you from doing that instead of reinvesting?

[Dennis Gershenson:]

Well, Floris we always take a very conservative approach to our capital allocations. We definitely had an objective for 2017. I don’t want to say that stock buybacks are necessarily financial engineering, but when we’ve generated free cash flow and we can use that for a potential stock buyback, which is of course we would need our Board to fully support such a concept. At this juncture, we have a significant opportunity in our redevelopments. And so we plan to deploy our capital in those areas. At such time as we think that we do have that cash available for stock buyback as oppose to selling off strategic assets, then we’ll do so. And one more comment, we will be lowering our debt ratios, and that will come from more organic growth as we bring these new tenants that John referenced both in ‘17 and in ‘18, online.

[Floris van Dijkum:]

Great. The other question and just out of curiosity, I mean, the Kmart rent spreads, I know that Seritage [ph] has been doing a lot of the stuff and they typically get 3 or 4 times multiples on rents. What is difference about this Kmart box to not get -- or you guys not putting as much capital into the space, or I’m just -- I don’t know the location, maybe you can give us a little bit more color about 37% rent pop is not bad. But, it doesn’t seem to be as high as some of the other ones that are being achieved by some of your peers?

[John Hendrickson:]

Sure, Floris, it's John. I personally have disappointed the 37% spread. But, obviously it’s market dependent, in this case we’re taking an 86,000 square foot box in a market outside of Milwaukee. And so that we are not putting probably as much capital, I’m not sure, if you’re comparing it to from a Seritage standpoint of how much capital they’re putting in and what markets they’re in. But certainly we feel good about the spreads we’re generating and believe that even generating a 86,000, typically keep in mind too on these Kmart boxes, they’re not the most efficient to spilt up. And that you often lose square footage, but in this case that spread demonstrate that we’re able to actually utilize most of the space and overall on a growth rent standpoint make that increase. I think, the other box in Crofton that we have is the rent that’s even lower than what we’re leading with here. And in a market, different than obviously what we’re dealing at Crofton, Maryland by the way that we’re dealing with in the Milwaukee. So, I think there also be very good opportunities there, even if we do lose some square footage in the box.

[Floris van Dijkum:]

Great, thanks John. Thanks for the color.

[Operator:]

[Operator Instructions] There are no further questions at this time. I’d like to turn the call back to Dennis Gershenson for final comments.

[Dennis Gershenson:]

As always I’d like to thank you for your continued interest in the company. We hope that you’ll all join us for our Investor Day in New York on December 11th. As part of that event we’ll be outlining our specific plans for 2018, as well as the rationale for our positive outlook on growth and value creation over the next two to three years. Have a good day.

[Operator:]

This concludes today conference. You may disconnect your lines at this time. And we thank you for your participation.