Omega Healthcare Investors Inc Q3 FY2023 Earnings Call

Greetings and welcome to the Omega Healthcare Investors Third Quarter 2023 Earnings Conference Call. This conference is being recorded. I would now like to turn the conference over to Michele Reber. You may begin.

Thank you and good morning. With me today is Omega's CEO, Taylor Pickett; COO, Dan Booth; CFO, Bob Stephenson; and Megan Krull, Senior Vice President of Operations. Comments made during this conference call that are not historical facts may be forward-looking statements such as statements regarding our financial projections, dividend policy, portfolio restructurings, rent payments, financial condition or prospects of our operators, contemplated acquisitions, decisions or transitions and our business and portfolio outlook generally. These forward-looking statements involve risks and uncertainties which may cause actual results to differ materially. Please see our press releases and our filings with the Securities and Exchange Commission, including, without limitation, our most recent report on Form 10-K which identify specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. During the call today, we will refer to some non-GAAP financial measures, such as NAREIT FFO, adjusted FFO, FAD and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under generally accepted accounting principles as well as an explanation of the usefulness of the non-GAAP measures are available under the Financial Information section of our website at www.omegahealthcare.com and in the case of NAREIT FFO and adjusted FFO and in our recently issued press release. In addition, certain operator coverage and financial information that we discuss is based on data provided by our operators that has not been independently verified by Omega. I will now turn the call over to Taylor.

Thanks, Michele. Good morning and thank you for joining our third quarter 2023 earnings conference call. Today, I will discuss our third quarter financial results and certain key operating trends. The third quarter FAD, funds available for distribution of $0.68 per share was better than expected, modestly exceeding our $0.67 per share dividend. The FAD dividend payout ratio is 99%. The decrease in FAD from the second quarter is due to the reduced rent from cash-basis operators with Levi, as expected, paying $9 million less in cash rent in the third quarter compared to the second quarter. The November 1 Levi asset sales have significantly reduced our Levi exposure. The remaining Levi portfolio is expected to cover above 1.0x. Therefore, Levi should no longer be in the below 1.0x EBITDAR coverage bucket going forward. We continue to have a handful of cash-basis operators, including Maplewood that will impact our go-forward AFFO and FAD making fourth quarter 2023 and first quarter 2024 FAD difficult to predict. However, longer term, we believe all of these assets but in particular, Maplewood are well positioned to generate reliable and growing cash flows and related rent. Turning to the under 1.0x EBITDAR coverage operators which represent 27.5% of total rent. We can break the 27.5% into a handful of buckets. Operators representing 6.2% of the 27.5% are sitting on extremely strong balance sheets and therefore, payment of rent should not be an issue. Operators representing 6.2% have second quarter EBITDAR coverage above 1.0x, and operators representing 1.3% are benefiting from July state rate increases that have resulted in above 1.0x coverage on a go-forward basis. 8.4% represents Levi which I have already discussed. Represents one operator that has already transitioned to a performing credit. That leaves operators representing 4.1%, of which operators representing 1.2% are in active restructurings where we were recently transitioned which leaves a balance of 2.9%, representing eight small operating relationships. I will now turn the call over to Bob.

Thanks, Taylor and good morning. Turning to our financials for the third quarter. Revenue for the third quarter was $242 million, before adjusting for certain nonrecurring items compared to $239 million for the third quarter of 2022. The year-over-year increase is primarily the result of timing related to operator restructurings, revenue from new investments completed in 2022 and '23, and short-term investment income, partially offset by asset sales completed during that same time period. Our NAREIT FFO for the third quarter was $161 million or $0.63 per share as compared to $159 million or $0.65 per share for the third quarter of 2022. Our adjusted FFO was $182 million or $0.71 per share for the quarter, and our FAD was $174 million or $0.68 per share and both exclude several items consistent with historical practices and outlined in our NAREIT FFO, adjusted FFO and FAD reconciliations to net income found in our earnings release, as well as our third quarter financial supplemental posted to our website. Our $0.68 of FAD was $0.02 less than our second quarter FAD of $0.70. As Taylor mentioned, the $0.02 decrease compared to the second quarter was primarily the result of Levi, cash-based operators and the impact of additional weighted average shares, partially offset by the incremental short-term investment income. Our fourth quarter FAD will be impacted by a number of items, including the timing of payments received from cash-based operators and the availability of security deposits. The full quarterly impact of rent and interest on new investments. The third quarter repayment of the $105 million seller's note and other asset sales, restructurings, or re-leasing of a few small cash-based portfolios, and short-term or overnight interest income earned on balance sheet cash. Interest expense related to the term loan, offset by bond and HUD repayments, and the weighted average shares outstanding impacted by potential equity issuances. Turning to the balance sheet, this is another quarter where we continued to strengthen our liquidity, capital stack, maturity ladder and help protect our overall cost of debt. We started the quarter with approximately $350 million of cash on the balance sheet. During the quarter, in addition to paying our $0.67 dividend and making regular bond interest payments, we paid off a $350 million bond that matured in August. We entered into a $428.5 million term loan that has a 2-year maturity with two 1-year extensions at our option, effectively a 4-year term loan. We swapped the term loan rate from floating to fixed at just under 5.6%. Lastly, we issued 4 million shares or $126 million of equity to continue to delever. In total, we ended the quarter with over $550 million of cash on the balance sheet. 99% of our $5.3 billion in debt was at fixed rates and our net funded debt to annualized adjusted normalized EBITDA was 5.01x and our fixed charge coverage ratio was 4.0x. Looking forward, based on the current capital markets, our pipeline and at April 1, 2024, $400 million bond maturity, we expect to continue to be opportunistic in the equity market, while targeting leverage below 5x. In summary, consistent with the commentary provided last quarter, we still expect our fourth quarter FAD per share to approximate our $0.67 dividend. However, as Taylor mentioned, it's hard to predict given the number of items I've laid out that may impact FAD. I will now turn the call over to Dan.

Thanks, Bob and good morning, everyone. As of September 30, 2023, Omega had an operating asset portfolio of 883 facilities with approximately 86,000 operating beds. These facilities were spread across 65 third-party operators and located within 42 states and the United Kingdom. Trailing 12-month operator EBITDAR coverage for our core portfolio as of June 30, 2023, increased to 1.15x and versus 1.1x for the trailing 12-month period ended March 31, 2023. During the second quarter of 2023, our operators cumulatively recorded approximately $13.2 million in federal stimulus funds as compared to approximately $5.8 million recorded during the first quarter. Trailing 12-month operator EBITDAR coverage would have increased during the second quarter of 2023 and to 1.07x as compared to 1.02x for the first quarter when excluding the benefit of any federal stimulus funds. EBITDAR coverage for the stand-alone quarter ended June 30, 2023, for our core portfolio was 1.21x, including federal stimulus and 1.15x, excluding the $13.2 million of federal stimulus funds. This compares favorably to the stand-alone first quarter of 1.18x and 1.15x with and without the $5.8 million in federal stimulus funds, respectively. Occupancy for our overall core portfolio has continued to recover from a low of 74.6% in January of 2022, mostly located in the state of Florida. During the course of the restructure, Omega has transitioned 48 facilities, 46 through outright asset sales and through re-tenanting, including 29 facilities that were sold on November 1, 2023, for gross proceeds of $305 million. We are now down to six remaining transition facilities, including two in Florida and four in Louisiana which we are hopeful to transition in the near term. Post these recent sales and in anticipation of closing our six remaining transition facilities, Omega's portfolio with Levi will include a total of 31 facilities which include facilities in North Carolina, two in Virginia, nine in Pennsylvania, six in Mississippi and one in Florida. During the third quarter and for the month of October of 2023, Levi paid partial rent of approximately $2.5 million per month. Maplewood, in the third quarter and for the month of October of 2023, continued to shortpay its contractual rent by $1 million per month. We currently are working with Maplewood and the estate of Greg Smith to address these shortfalls. In anticipation of January 2024 rate increases and improved occupancy at the second Abe facility in Manhattan, Maplewood believes there is a pathway forward to meet its full contractual rental obligations. However, the timing at this point is unknown. To date, including October, we have applied $4 million of the $4.8 million security deposit to cover the rent shortfalls. Guardian, on Omega's first quarter 2022 earnings call, Omega announced that we had entered into a restructuring agreement with Guardian Healthcare after agreeing to sell 12 facilities, eight in Pennsylvania and four in Ohio. And successfully releasing eight facilities, all located in Pennsylvania. In May of 2022, Guardian resumed making full contractual rent and interest payments on its remaining portfolio of 16 facilities. Subsequently, in May of 2023, Omega sold 10 additional Guardian facilities, leaving only six remaining facilities, one in West Virginia and five in Pennsylvania. Recently, in the third quarter of 2023, Guardian informed Omega that they intend to exit the nursing home industry entirely and needed to transition the remaining facilities with Omega. At that time, Guardian ceased making its contractual rent payment of approximately $1.5 million per month. Since that time, Omega has been using Guardian's $7.3 million security deposit to cover rent. The security deposit will be substantially depleted after applying full contractual rent to December of this year. Since becoming aware of this situation, Omega has sought to re-tenant the remaining six facilities with the goal of concluding the transitions by year-end. At this point, Omega is in discussions with a potential new tenant with the goal of a year-end close, subject to the normal due diligence satisfactory documentation and regulatory approvals. In addition to the aforementioned restructurings and transitions, Omega is working with several other relatively small operators on various restructurings. Turning to new investments. On August 29, 2023, Omega closed on a sale lease transaction for one facility in Virginia for $16 million. The facility was added to an existing operator's master lease with a national cash yield of 10% with 2% annual escalators. On September 8, 2023, Omega closed on a $40 million sale-leaseback transaction for 14 care homes in the U.K. concurrently with the acquisition, Omega entered into a master lease for the care homes with a new operator with an initial cash yield of 10.2% with 2.5% annual escalators. Subsequent to the third quarter, Omega closed on two additional transactions. Specifically, on October 2, 2023, Omega provided $38 million in mortgage loans to a new operator to purchase two assisted living facilities in Pennsylvania. The loan bears a blended interest rate of 9.3% and have terms that range from 3 to 5 years. Additionally, on October 2 of 2023, Omega closed on a purchase lease transaction for one facility in Maryland for $22.5 million. The facility was added to an existing operator's master lease with a national yield of 10% with 2.5% annual escalators. During the third quarter, Omega closed on a total of $106 million in new investments, including $24 million in capital expenditures. As of September 30, 2023, Omega has closed on $418 million of new investments, including $53 million in capital expenditures. Turning to dispositions. During the third quarter of 2023, Omega received $99 million in proceeds related to facility sales. As of September 30, 2023, Omega has divested 27 facilities for a total of $161 million in gross proceeds and as previously mentioned, on November 1, 2023, Omega sold 29 Levi facilities for total gross proceeds of $305 million. I will now turn the call over to Megan.

Thanks, Dan and good morning, everyone. From an occupancy perspective, the slow positive trends have continued with the number of core facilities now recovered at 37%, up slightly from the 35% reported in the first quarter. Additionally, 26% of core facilities that have not yet fully recovered are at or above 84% occupancy. While the staffing shortage situation continues to ease slowly, there's still large variation by market and occupancy is still believed to be impacted. As noted last quarter, in June, ACA released the results of a survey of 425 nursing home providers results of which showed that 52% are still limiting new admissions due to staffing shortages. Agency expense on a per patient day basis for our core portfolio for second quarter 2023 dropped to four times where it was in 2019 in comparison to the five times we reported last quarter. Despite the continued staffing limitations in the industry, as expected, CMS moved forward releasing a proposed staffing mandate on September 6. And while it was not as onerous as it was believed it might be, it is certainly not palatable given the current state of play. Included in the proposal is a requirement for an RN to be on-site 24/7, along with required RN hours per resident day of 0.55 and required nursing aid hours per resident day of 2.45. And while the 24/7 RN requirement is a 2-year delayed implementation for urban facilities and three years for rural, the required hours per resident day for RNs and nursing aids is a delayed implementation of three years for urban facilities and five years for rural. With the industry still in flux post-pandemic, predicting out where the state of staffing will be at that time is difficult at best. The comment period for this proposal is open through November 6 and ACA has been bringing to light some of the difficulties of the proposed mandate, most importantly, the fact that it is currently unfunded. While it is too soon to tell what the ultimate outcome of this proposal will be, we hope that if a final mandate is indeed imposed that CMS will hear the voices of the industry and implement a fair, balanced mandate that is realistically achievable by whatever delayed time frame is ultimately set. I will now open the call up for questions.

Our first question comes from Jonathan Hughes with Raymond James.

Could you provide more details or background on what transpired at Guardian and their choice to leave the skilled nursing sector? I remember they faced some challenges last year and underwent a restructure. It appears that their operations improved and then declined again. Could this be more related to a real estate issue with that portfolio instead of an operational problem? Any insights would be appreciated.

Yes. We've gone through a couple of repeat structures with Guardian over the last couple of years, and their decision to exit the industry entirely was quite a surprise. I think it's reflective of various issues. The management has chosen to leave the business, and frankly, they have a lot more facilities than just ours. However, they have been struggling lately. They faced significant liquidity issues and decided to exit, and we are looking to replace them as operators.

Okay. And then, Taylor, in your prepared remarks, you mentioned that 2.9%, almost 3% of operators are in the sub 1x EBITDAR coverage bucket and I don't think those have been restructured, none individually or that impactful, but together they're almost a top 10 tenant. What's the expectation for each of those? I understand the amount of strong balance sheets or other businesses to paying with rent, but some are actually negative on EBITDAR coverage. I guess should we take a more conservative approach there in terms of rent forward?

I feel pretty comfortable with that profit, Jonathan. Every one of those eight credits has a slightly different story. But in terms of looking at it as a whole, any type of discount will be minimal. So we're not particularly worried. If you look historically, that's the type of percentage we've had in the underwind bucket for many, many years. Typically, those things work themselves out over long periods of time; I expect this to be exactly the same.

Okay. And then one more for me, if I can sneak one in. What's the investment pipeline look like today in terms of size and yields, and I realize deals take time, but when do you think we could see more robust fee simple, so owned versus loans, acquisition activity?

We could go back years, and we could state that the pipeline is choppy. I would say that it's borderline robust at this point, still choppy. We're still seeing a lot of deals in the U.K. We're seeing a fair amount of deals in the U.S. Again, size is choppy. So I can't predict what we're going to see in '24 at this point, but I think it would be similar to what we've seen so far in '23, which we just under, I guess, $0.5 billion in new investments in the year to date.

Our next question comes from the line of Vikram Malhotra with Mizuho.

This is Georgi on for Vikram. Just on Levi and Maplewood, like from a cash flow perspective, how should we think about the range of outcomes in 2024?

So I think for Levi, it's worth just taking a little half step back at that whole restructured. So to date, the 46 assets that have been sold have generated $515 million of proceeds. The six assets that still need to be transitioned a little bit of wood left to chop for Dan are likely to be sold, and we're looking at a price point north of $40 million. So call it $55 million, $56 million of sales proceeds from Levi, the two assets that were released were released for $2 million. The balance that Dan mentioned are in extremely strong states, North Carolina, Virginia, Mississippi, to a lesser extent, Pennsylvania. That will generate on their own an enormous amount of cash flow, supporting a lot of rent. But as we said, we're still chopping the wood with Levi. Where that ultimately falls is a positive timing, not predictable over the next couple of quarters. Then Maplewood is a little more predictable. We'll have rate increases normal rate increases in January. That covers a big part of the gap, but you could continue to have expense pressures in this industry. We continue to look at the fill of Second Avenue, which is hugely important on an incremental basis. That's really the driver. But as Dan mentioned, we can map that out principally driven off of the occupancy fill-up in Second Avenue at some point in '24, maybe was going to have sufficient cash flow to pay the contractual rent, but that timing is a little bit questionable as well. Longer term, we're really comfortable with both sets of assets.

That's helpful. And just a second question. Can you provide more color on what has been seen on the labor side and how states are preparing for the minimum staffing? And if you can highlight any states that have the potential to increase Medicaid rates or address minimum staffing with funding, that would be very helpful.

Yes, I mean, look, I don't know that any states are really addressing the minimum staffing at this point because it's a little too soon to tell what's going to happen there. The comment period is up next week. We're just waiting to see what ends up coming out of it. As you know, there's a delayed implementation for most of it. But certainly, the rural areas are going to be hit a little bit harder than the urban areas once it does kick in. In terms of rate setting, again, none of these rates are impacted by the staffing mandate at this point, but we do watch especially our top 10 states really carefully and have seen positive things over the last several months, thinking in July and October; talked a little bit about Florida and Texas. Last quarter, we did hear from one of our operators that the California 10% FMAP increase is going to continue until they have a rebasing of that rate which typically happens in January but might be a little bit delayed. North Carolina FMAP got put into their rate as well. So feeling decent on the reimbursement perspective but still too soon to tell what's happening with the staffing mandate.

Our next question comes from the line of Michael Griffin with Citi.

This is Avery on for Michael Griffin. A question on the Levi's sales. I'm wondering if you can give us a sense of the per bed valuation on those sales? And how many more of the Levi assets are targeted for sale, if any?

So as I mentioned, we've got six more assets targeted for either sale or release and the price per bed over the course of the 48 that we talked about is in a range of between $90,000 and $100,000 per bed.

Great. And just a follow up, how are you guys thinking about future equity issuances to fund investment activity versus continuing to tap the debt market? And I know you want to keep leverage below that 5x. So just how are you thinking about funding needs for investment opportunities?

Yes. We sit down and we take an 18-month approach looking at the capital markets and our needs. As I said, we have over $2 billion of current liquidity with the combination of the $600 million of cash on our balance sheet as well as the untapped credit facility. We have access to the ATM, and again, we don't look at it any day by day but we have a longer-term approach looking at that. We know we have two debt maturities coming up, one in April of 2024 and early in '25. We will be opportunistic if it calls for that.

Our next question comes from the line of Connor Siversky with Wells Fargo.

Thanks for having me on the call. Broadly speaking on acquisitions, external activities. So we've seen a lot of activity in the past three weeks or so. Some transactions have been received better than others. At the same time, we're fielding a lot of questions for some REITs with the cost of capital on the margin of generating accretion of whether or not they kind of take the jump here and continue to invest. Whereas OHI doesn't have that problem; your cost of capital is very strong. I mean, do you look at the current environment as an opportunity to really get aggressive and chase acquisitions? Or do you look at something like the minimum staffing requirement and work on those parameters of risk in your underwriting framework and try to be more cautious given what you're seeing right now?

So it's a little bit of both, right? We’re prepared to allocate as much capital as possible to our existing operators and opportunities. But the underwriting has to include some risk adjustment for a variety of things, including minimum staffing. But from my perspective, we don't take our foot off the pedal. It's just incorporating those risks into how we think about allocating capital. As Dan mentioned, we're close to $0.5 billion year-to-date and the pipeline is pretty robust. So we'll continue to look at very opportunistically at what's out there.

Okay. And then just to follow up on that point. Earlier in the call, Megan mentioned that the labor environment remains more challenged in the rural areas versus the urban areas. I mean, does this also imply a willingness for OHI maybe to sell out of those rural assets in favor of concentration in urban areas?

Well, you've seen us sort the portfolio pretty actively for a number of years, and obviously through COVID, we've done a lot of that. I would say that there's not a whole lot more to do, but when you think about much of our disposition activity, it has followed that pathway, a little more challenged labor. So I don't have an expectation of large dispositions, but we'll continue to sort the portfolio as we always have.

Our next question comes from the line of Juan Sanabria with BMO.

I just want to circle back on Guardian. I mean how much interest did you receive when those assets kind of came to the market? And I mean, did you it sounds like you have one specific operator you're pretty far along with right now. But did you run a process? Or did you target a few operators? I guess how did that initially work?

Yes. We have existing operators in the state of Pennsylvania and, of course, we know other operators in the state. So we reached out to operators that we know, first and foremost, that we do business with and also operators that we know are in the state of Pennsylvania and still doing business. So there's a pretty broad net that we threw out there looking for new operators. It’s just a matter of narrowing it down to the right one.

And then I guess how much interest when you started offering up those assets to potential operators? How much interest were they in those properties? And then kind of off of that, I mean can you provide some color on how those assets are performing today? And will these new operators be willing to step in at a stabilized rent rate? Or do you need to have some type of ramp-up as operations kind of stabilize and improve?

Those are the discussions that we're having as we speak. It's a good question. Those facilities are not performing exceedingly well. I would say there was interest, but it wasn't an overwhelming amount of bids that were put in at the end of the day.

Our next question comes from the line of Nicholas Yulico with Scotiabank.

Bob, I guess maybe just going back to the cash on the balance sheet, trying to get a better feel for how we should think about how much of that could be earmarked for investments versus you did talk about the debt maturities you do have in April.

Yes. Nick, again, take a big picture approach to that. I mean because cash is fungible. We're sitting with $600 million today. If we could deploy that, the pipeline is choppy; it's robust but choppy. We can deploy it right away in acquisitions. That would be the first dollar spent, absolutely. But again, we'll sit down and look based on the pipeline and based on that debt maturity coming up, how we want to fund it. I mean, right now, we have the cash and we have the availability and we do have the ATM.

Okay. The second question is about Levi. Considering you've navigated most of the transitions or asset sales, do you have any insights on the potential reinvestment with the proceeds? When we look at the prior rental rates for Levi when it was generating full payments compared to the expected new rent equivalents, is there a rough percentage you can share regarding how that has changed? Will it be around 70% or 80%? I believe you mentioned an 80% recapture rate for operators undergoing transitions and asset sales like this in the past.

Yes. You're exactly right. We were pretty conservative in our thinking there. Nick, I think when this is a result, we'll be pushing 90% or north.

Our next question comes from the line of Alex with Robert W. Baird.

Just a question on the Guardian assets. What's the historical timing of releasing those senior housing assets?

In general, it could take anywhere from 3 to 12 months. It's a pretty wide range depending on whether it's a sale and the sale being financed or whether it's just re-tenanting.

And second one is have labor cost/shortages actually gotten better? Or has it just stopped getting worse?

I definitely think it's getting better from what we hear from our operators. I mean, we are seeing agency come down quarter-over-quarter which is a good sign. Operators are definitely feeling less tension there but it still exists, right? So it's going to take some time before that rights itself. I definitely think it's improving.

And last one. And how much did you guys buy the Levi assets for? And what's the replacement cost for those?

Some of those assets date back to 1995, I think, 1998, I don't know off the top of my head. Some of those assets have been on our balance sheet for over 20 years.

Our next question comes from the line of John Pawlowski with Green Street.

Megan, a question for you on just sector-wide occupancy. Just curious, why do you think occupancy hasn’t seen a bigger benefit from just the cumulative closures of facilities over the last several years?

I think we've seen a large percentage of our portfolio actually recover. It is very specific to the region you're in. For example, in Florida, the staffing issues are so strong that’s why the occupancy hasn't recovered. In different places, the story will be different.

As the months and years go along again with just supply being down, it would suggest kind of almost a structural change in demand if significant amounts of regions aren't back to a pre-COVID occupancy which again should be adjusted higher for closure. So are you incrementally more concerned about it's broader than just labor issues delaying the recovery in occupancy?

No. I mean, look, I think it's going to get there. We've got demographics on our side that's coming into play. Quite frankly, at some point, as those demographics come back into play, we're going to have maybe a shortage of nursing homes in certain areas.

Okay. Last question for me. Just curious whether you think Guardian could be a leading indicator for other operators that may just be fatigued and then staring out at a burdensome labor mandate? Do you see other operators? Do you see this as the beginning of a wave of additional operators back to the new business?

I believe Guardian is quite unique and stands out from the rest of our portfolio, which does not face similar challenges. It's worth noting that the overall operating environment in Pennsylvania has been challenging. While we have a significant presence in Pennsylvania, most of our operations are with large master leases, where the pressures felt in the state are balanced out by strong performance in other regions. Therefore, while this may indicate potential issues for operators focused solely in Pennsylvania, we do not view it as a significant problem for us.

Our next question comes from the line of Juan Sanabria with BMO.

I just want to circle back on Guardian. I mean how much interest did you receive when those assets kind of came to the market? And I mean, did you it sounds like you have one specific operator you're pretty far along with right now. But did you run a process? Or did you target a few operators? I guess how did that initially work?

Yes. We have existing operators in the state of Pennsylvania and, of course, we know other operators in the state. So we reached out to operators that we know, first and foremost, that we do business with and also operators that we know are in the state of Pennsylvania and still doing business. So there's a pretty broad net that we threw out there looking for new operators. It’s just a matter of narrowing it down to the right one.

There are no other questions in the queue. I'd like to hand the call back to Taylor Pickett for closing remarks.

Thanks, Doug. Thanks, everyone, for joining today. As always, please reach out to the team with any follow-up questions you may have. Have a great day.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.