Stag Industrial, Inc.

Greetings and welcome to the Stagg Industrial Inc. Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Steve Zarros, Senior Associate, Investor Relations and Capital Markets. Thank you. You may begin.

Thank you. Welcome to Stagg Industrial's conference call covering the third quarter 2024 results. In addition to the press release distributed yesterday, we posted an unaudited quarterly supplemental information presentation on the company's website at www.staggindustrial.com under the investor relations section. On today's call, the company's prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts of core FFO, same-store NOI, GNA, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters. We encourage all listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC. and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. Stagg Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Bill Crooker, our Chief Executive Officer, and Matt Spenard, our Chief Financial Officer. Also here with us today is Mike Chase, our Chief Investment Officer, and Steve Kimball, EVP of Real Estate Operations. We're available to answer questions specific to their areas of focus. I'll now turn the call over to Bill.

Thank you, Steve. Good morning, everybody. Welcome to the third quarter earnings call for Stagg Industrial. We are pleased to have you join us and look forward to telling you about the third quarter 2024 results. We are happy to report another strong quarter of operating results. The industrial supply pipeline continues to contract, and absorption remains stable in many of our markets. Availability and vacancy appear to be approaching a trough, although our expectation remains that we won't see an inflection point until the back half of next year. Market rent growth for our portfolio stands at 3.2% through September 30th, keeping us on track for full-year market rent growth of approximately 4%. The leasing market is active with tenants committing to space. I'm happy to report that we have already leased 38% of the square feet we currently expect to lease in 2025, achieving cash leasing spreads of 24.1%. This level of leasing is on a similar pace to last year. On October 22nd, American Tire Distributors voluntarily filed for Chapter 11 bankruptcy. In conjunction with this filing, the tenant entered into a restructuring support agreement with participation from the current holders of its term loans. American Tire Distributors is the nation's largest independent tire distributor with over 80,000 customers. American Tire Distributors operates within seven of our facilities across 841,000 square feet. They represent 1% of our annualized base rent or approximately $6.1 million. In the aggregate, these seven leases have rents at market and all seven buildings are actively utilized. All leases are current with zero missed rental payments. We are monitoring the situation closely. This event is reflected in our updated guidance provided in yesterday's earnings release, including core FFO per share for the year. The acquisition market regained momentum in the third quarter with activity noticeably accelerating post-Labor Day. Acquisition volume for the third quarter totaled $113 million. This consisted of six buildings with cash and straight-line cap rates of 6.7% and 7.2% respectively. During the quarter, we acquired a five-property portfolio totaling 290,000 square feet. The total acquisition cost was $78.1 million with a cash cap rate of 6.9%. The portfolio is located in the supply-constrained Route 128, Route 3 sub-markets of Boston, Massachusetts. All of the buildings are located within close proximity to I-93, I-95, and I-495. The portfolio is 100% leased to five tenants with a wall to 4.9 years and weighted average lease escalations of 3.75%. Subsequent to quarter end, we acquired two buildings for $66.6 million at a 6.3 cash cap rate. On the development front, as of September 30th, We have over 2.1 million square feet of activity across nine buildings in the US. In July, we closed on a five acre land site. The planned 76,000 square foot building will be developed with an estimated delivery date of Q3 2025. In August, we closed on our first single asset joint venture with a national developer. The project will consist of a single 284,000 square feet distribution facility capable of accommodating up to two tenants with an estimated delivery date of Q4 2025. Both projects sit in the North Valley Submarket of Reno, which has experienced robust tenant demand and rent growth over the past several years and continues to be a premier location in the market for distribution tenants. With that, I will turn it over to Matt, who will cover our remaining results and updates to guidance.

Thank you, Bill, and good morning, everyone. Core FFO per share was $0.60 for the quarter, an increase of 1.7% as compared to the third quarter of last year. Cash available for distribution for the third quarter totaled $88 million. We have retained approximately $75 million of cash flow after dividends paid through September 30th of this year. These dollars are available for incremental investment opportunities, debt repayment, and other general corporate purposes. Net debt to annualized run rate adjusted EBITDA was 5.1 times, and liquidity stood at $974 million a quarter end, inclusive of available forward ATM proceeds. During the quarter, we commenced 20 leases totaling 3.3 million square feet, which generated cash and straight line leasing spreads of 24.6% and 34.3% respectively. As of today, we have achieved 99.5% of the leasing we expect to accomplish in 2024, or approximately 13.2 million square feet at cash leasing spreads of 28.5%. There are six large leasing spread outliers totaling 1.2 million square feet that featured aggregate positive cash leasing spreads of almost 100%. Excluding these leases, cash leasing spreads would be 22.5% for the year. As mentioned by Bill, we have accomplished 38% of the square feet we currently expect to lease in 2025 achieving 24.1% cash leasing spreads, spreads that are relatively in line with the adjusted 2024 level. We achieved same-store cash NOI growth of 4.4% for the quarter and 6.1% year-to-date. We've increased our annual same-store cash NOI guidance to a range of 5.25% to 5.5% for the year, or a 12.5 basis point increase at the midpoint. Moving to capital market activity. In the third quarter, we issued 2.3 million shares on a forward basis under our ATM program at a gross average share price of $39.89, resulting in gross proceeds of $93 million. As of today, we have $164 million of forward equity proceeds available to fund at our discretion at a net share price of $38.86. This equity will be used to pay down the revolver and match funder acquisition and development pipelines. On September 10th, we refinanced our $1 billion senior unsecured credit facility. The refinanced revolving credit facility matures in September 2028 with two six-month extension options and no change to pricings or covenants. Subsequent to quarter end, we fully repaid our $50 million private placement no day, which matured on October 1st. Moving to guidance, we made the following updates. As previously mentioned, we have increased the cash same-store growth expectation to a range of 5.25%, to 5.5%, an increase of 12.5 basis points at the midpoint. Additionally, we have increased and narrowed the range of expected acquisition volume to a range of $500 million to $700 million. G&A expectations for the year have been decreased to a range of $49 to $50 million, a decrease of $500,000 at the midpoint. These guidance changes result in core fulfilled guidance revision to a range of $2.38 to $2.40 per share, an increase of one penny at the midpoint. I want to note that we've also added a new slide to our supplemental information package. Given the increase of development projects, we've added the slide to detail each project in our development pipeline. This can be found on page 10 of our supplemental informational package. I will now turn it over to Bill.

Thank you, Matt, and thank you to the rest of our team for their continued hard work and achievement towards our 2024 goals. We'll now turn it back to the operator for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. We ask that you please limit yourself to one question and one follow-up question. One moment, please, while we poll for your questions. Our first questions come from the line of Craig Mailman with Citi. Please proceed with your questions.

Hey, good morning. Bill, maybe just going back to your commentary about the leasing market getting more active over the last year or so, you guys have become less active than historically, partly on cost of capital and then just deal flow. What do you think it is now that's really kind of opening up uh, the deal pipeline to you guys, is it just a cost of capital or are you just seeing better opportunities out there and kind of what, um, do you think we could get back to sort of the baseline level of acquisition you guys are doing a couple of years ago?

Yeah. Thanks Craig. And just to clarify, you're, you're referencing the acquisition market, right? I thought I heard leasing market. Oh, sorry.

So no acquisition market. Yes.

Yeah. Okay. Yeah. Um, Yeah, I think that's a number of things. I think it was pent up, call it seller demand to sell properties. So we've seen a lot more properties on the market. I think with rates stabilizing for a period of time, it reduced the bid-ask spread. So you saw a lot of transactions occurring. And I think there's just a lot of confidence that where we can buy properties a building, the cap rates we can pay for it, but that's market. So we're seeing a lot of opportunities. Our pipeline, as you saw, moved a little bit north of $4 billion, which was nice to see. About 75% of that pipeline is individual assets across the CBRE tier one markets. About 20% of that pipeline is, you'd call it portfolios, anywhere from a little five buildings or more. And about 5% of the pipeline is development. So I think regarding your second part of your question and what pace of acquisitions we can achieve, I think it's going to be subject to interest rates and seller expectations. When we look at transactions, we price transactions to be a creative day one. And typically, you know, with some growth embedded in it, whether it be from, you know, escalators or mark the market. And we make sure that those acquisitions fit the sub markets that they're in really well. So certainly happy with the progress we've had on the acquisition front this year. We raised our guidance. We've had a bit of success subsequent to quarter end and we closed another 67 million of acquisition subsequent to quarter end. So the pace right now is really strong. Typically the fourth quarter is, the biggest quarter with regards to acquisitions. We'll see if that pans out this year. But overall, we're really happy with what we're seeing in the acquisition market.

And just from a competitive standpoint, I know you guys are in markets with other REITs, but largely not as much overlap. I mean, is that the competitive advantage here that your local peers may just need to source financing and you guys are all cash and that's giving you surety of close, like, is there a differentiator for you guys or is it solely just your cost of capital is getting better? You could maybe be a little bit more flexible on price and that's what's, you know, getting the deal flow back up.

Yeah, I think it's a combination. It depends on what markets we're in, who our competition is. And a lot of our competition has been private equity and it's a large institutional private equity. I think we still have a cost of capital advantage against some of those folks. But then it comes down to maybe their return metrics may be a little bit more aggressive than ours, or they have, you know, they're underwriting differently. But oftentimes, we do compete against small local regional private equity where not only do we have a cost of capital advantage, but we have that surety of close. And over the years, especially in the fourth quarter, there's been opportunities where sellers need to close a disposition, in their case, an acquisition, in our case, by year end. And because of the processes and the people we have in place, we're able to close relatively quickly. So surety of close is a priority for some sellers. So there's oftentimes that we're not the highest bid, but because of our reputation, because of our broker network, and our surety of close were able to get those transactions. So short answer to your question, it's a combination of cost of capital, advantage, reputation, and surety of close.

And if I could sneak one more quick one in, any comment on what the Exeter transaction during the quarter kind of means potentially for the valuation of your portfolio?

Yeah. I don't want to talk specifically about other transactions in the market, but I think as we view our portfolio, we view the sub-markets our portfolio are in, where the supply-demand dynamics are heading, we feel like there's a lot of upside to our portfolio going forward and frankly are happy with where the portfolio is going.

Great. Thank you.

Thank you.

Thank you. Our next questions come from the line of Nick Thillman with Baird. Please proceed with your questions.

Hey, good morning, guys. Maybe touching a little bit on 2025 leasing, appreciate sort of the update on spreads, how they're tracking thus far. Do you think that's kind of indicative of where, as you look at 25 roll, is that a good representation of what you guys is rolling and what you kind of expect for the full year?

Yeah, Nick, we'll give a range for our leasing spreads that we always do in our February guidance for 2025, but this is indicative of what we expect at this point. But we'll give a range as we move into 2025.

And then maybe a follow-up for Matt on just bad debt, maybe what was it in 3Q? Appreciate the update on American Tire, but any other tenants on the watch list or things we should be watching out for?

Yeah, hey, good morning, Nick. So in terms of the watch list, it's similar as it was 90 days ago. We've experienced about $1.4 million of credit loss through September 30th, which is about 23 basis points. You know, we maintained our guidance. We did raise same story rating score for flow. You know, this compares the guidance to 50 base points for the year. We expect that to be a real number. We expect to incur that. But the theme across our credit events is, you know, really centered on, you know, weakness and highly levered low margin businesses. And, you know, our analysis is fully captured in the guidance that we gave for the year.

Thank you.

Our next questions come from the line of Eric Borden with BMO Capital Markets. Please proceed with your questions.

Hey, good morning, everyone. Maybe just starting with developments, you know, I appreciate the new disclosure there and the new slide and the stuff. I was just wondering if you could provide an update on potential tenant interest as it relates to your Greenville Spartanburg assets and your Powell Road assets. Bill, I think you mentioned in your prepared remarks that, you know, uh, availability and, you know, leasing the environment appears to be troughing and, and we could see a potential increase, you know, through the back half of 2025. So just curious, you know, are more tenants kind of kicking the tires today and, you know, could we potentially see those leased up in the upcoming quarters?

Uh, yeah. I mean, I think as we said on our last call, our expectation for, you know, the, um, The two Greenville-Spartanburg assets we expect to lease in Q3 25. The other Greenville-Spartanburg asset, the casual drive, that tip is a 12-month lease-up period we underwrote. That one, as a reminder, it was sister building. When we acquired that project, we also acquired a fully completed project. building that we end up leasing up shortly after closing for, I think it was like a seven and a half percent cap rate. So on the casual drive, I think we're closer to the seven cap rate range. With respect to that market, it's a market that has great demand drivers. The buildings are positioned extremely well near the inland port, can service light manufacturing users or distribution users. and it's a market that has experienced some excess supply. Um, you know, that supply is getting absorbed. It's going to take a little bit of time. Um, but we've had a fair bit of activity on all three of those buildings. Um, nothing to report yet. Um, but overall still expect to, um, you know, lease it up in our, you know, in our prior, uh, as we noted in our prior quarter and that Q3 25 range for the first two. And then, um, about a year lease up for the last one.

That's helpful. And then maybe one for Matt. Sorry if I missed this in your prepared remarks, but could you just provide an update on your same-store average occupancy loss expectations for the remainder of the year?

Yeah, absolutely. So there was no change. So if you recall, last quarter we had adjusted our guidance. Initially, at the beginning of the year, we had guided the market to 50 basis points of average occupancy loss. You know, we've seen some successes. We've seen, you know, retention has ended up at the higher end of our range. We're guiding to 75%. So we adjusted the expectation down. So we're still assuming 25 basis points of average occupancy loss on the year.

All right. Thank you very much.

Thank you. Our next questions come from the line of Jason Belcher with Wells Fargo. Please proceed with your questions.

Good morning. Just wondering if you could talk about any common themes or characteristics in properties you sold recently or are targeting for sale this year. To what extent are there specific markets you may be looking to exit or maybe tenant industries or categories you're trying to avoid?

Yeah, with respect to the markets, we have that CBRE tier one focus. So I would expect most of our dispositions that are non-core to be in the non-CBRE Tier 1 markets. We'll have dispositions on an annual basis that are opportunistic where we feel like we've achieved the most value out of that asset and we'll realize that value and redeploy that capital. With respect to what we sold this quarter, And that was a non-core asset, I think we spoke about on the previous call, that was sold for a 7.1 cap rate. But overall, we're really happy with that execution, given our view on the asset.

Great, thanks. And then just one more in terms of kind of the slowdown in construction we've seen this year. To what extent have you seen land prices decline and And how are you thinking about maybe adding or building up your land bank for development opportunities in the future?

Yeah, we've seen land prices stay relatively flat throughout the year. Right now, with our development initiative, we're not buying raw land. We're really focused on sites that are permitted. And so a little, you know, not as far out on the risk spectrum. But we still continue to see a lot of opportunities to acquire permanent land for development. So that will continue to be an initiative for us, and we feel like we can continue to grow that throughout the years.

Great. Thank you. Thank you.

Thank you. Our next question is coming from the line of Michael Carroll with RBC Capital Markets. Please proceed with your questions.

Yep, thanks. Bill, just kind of building off of that last question, how do you think about new development starts? I know it does look like you bought a few land parcels this past quarter. I mean, are those sites that you want to break ground and start developments on, or do you want to lease up some of your projects that are currently under construction and complete it before you start pursuing new starts?

Yeah, the ones that we did buy, those were permanent, and we've already broken ground on those, Mike. So, We're not sitting on any land parcels that are permitted, ready to go. So everything that we have on that development slide, we've broken ground. As I mentioned earlier, we underwrite a 12-month lease-up period upon building completion. So you can underwrite or model when that revenue should be coming in. And with respect to new opportunities, we'll continue to evaluate it. I like the... laddered call it development schedule that we have uh right now and we'll as we add new properties it's going to take you know call it 9 to 12 months to build it and then another 12 months to lease it so we can continue to ladder these developments and when i when i look at some of the uh the newer developments the tampa developments uh will be completed in the fourth quarter those are getting some really good interest. It's not a pre-leasing market, but we feel really good about the suite sizes, how they fit the market. The Nashville property, that was on land we owned in the portfolio. We were able to permit that, break ground on that. That's going to be a very successful market, and Nashville is one of the stronger industrial markets today. The Portland development, that's a 10-year build-to-suit to a strong credit And that is in the high sixes from a cap rate perspective. So that's a great transaction. The Reno market, we like both those locations. I mentioned that in my prepared remarks. It's one of the premier sub-markets within Reno and sweet sizes that I think will fit the market pretty well. So overall, really happy with the way the development initiative is coming along. and comfortable adding to it, assuming it's a building that we can put up that will fit the sub-market well.

Okay. I mean, is there, I guess, off of that, is there a limit to how big you want the pipeline to be that's not yet leased? I mean, at what point do you want to kind of slow that down? And then just second to that, what is your capitalization policy? So should we assume that these Greenville-Spartansburg assets will roll off capitalization on the beginning of 2025 if they're not leased?

Yeah, that's right. I think from a capitalization policy, that's just GAAP. So I think it's 12 months is what the allowable time is to capitalize interest on that, wages on that, sorry. I'm getting a look from Matt. So with respect to GAAP and development, it's something that we're evaluating. I mean, certainly if you look at The total invested capital here, it's a very low percentage on our total overall enterprise value. We'll continue to evaluate that. Obviously, the build-to-suits bring a lot less risk than some of the more speculative developments that we have on here. I think anywhere in that right now is a newer initiative, somewhere in that circa 5% of enterprise value is probably where we feel comfortable. But it'll be well-laddered. It'll be diversified across geography, across suite sizes. Okay, great.

Thank you. Thanks.

Thank you. Our next questions come from the line of Jessica Zhang with Green Street. Please proceed with your questions.

Hi, good morning. I was just wondering if you could provide some color around the drop in retention rate this quarter. Was it driven by any particular leases?

It was, there was one lease that was a non-retention, but we backfilled it with zero downtime. And so we didn't include that in the prepared remarks. Maybe we should have. But if you factor that one in, our retention adjusted for immediate backfills is about 73%. So it was really just one outlier that we didn't retain them, but we backfilled it with no downtime.

Okay, great. Thank you. And then just maybe one more. On the occupancy side, are there any material non-move-outs in 25 that we should be aware of?

No, no material non-move outs. At this point in the year, there's leases rolling in the back half that we're unsure that whether they're going to retain or not, but nothing material that's known move out at this point.

Okay, great. Thank you.

Thanks.

Thank you. Our next questions come from the line of Rich Anderson with Wedbush. Please proceed with your questions.

Hey, thanks, Tim. Good morning. So if we go to American Tire, what is the bull and bear case there in terms of things that could transpire? You said you're monitoring, but you're sort of devising some plan Bs. And also, where do the rents sit relative to market? Maybe there's an opportunity here in some cases, just if you can add some more color to the extent you can.

Yeah. And on average, the leases are pretty close to market. I don't want to dive too much into this. We're speculating, right? It's their company. They filed, but if you read some of the public information out there, it's very good support from their lenders. I think it's going to come down, it appears it's going to come down to their evaluation of their distribution network and how they're utilizing the buildings and whether they affirm or reject leases. As you can probably see, figure out with our guidance this year, there's not a lot related to ATD credit loss. The buildings are utilized. These are buildings that fit the sub-market well. They're highly functional buildings, healthy sub-markets, and with leases generally at market. So will the Bull and Bear case, I mean, I think the Bull and Bear cases, they vacate all leases or they stay in all leases, but I think The answer will be, you know, we have to figure out and see how things shake out in the first quarter next year.

Is it still too fresh to, like, sort of already think about optionality should, you know, something come at you? Or are you sort of sitting tight and just monitoring at this point?

I mean, we've got some views on this. It's just nothing I want to publicly comment on right at this point. Okay.

Fair enough. Second question on the acquisition window, you know, the pipeline issue. you know, up relative to last quarter. But you referenced sort of stable interest rate environment, which, you know, was yesterday's news at this point. I'm wondering how quickly does that pipeline kind of ebb and flow as the macro changes? You know, we've had, you know, quite a change at the longer end of the curve in the more recent past. I'm wondering how much you know, how quickly that 4-2 can go to something below 4, you know, with some suddenness?

Yeah, I mean, the pipeline's dynamic. The assets roll on and off it every week. It's not going to go from 4-2 to 3 in a matter of a week. But assets, a lot of times assets will sit on the pipeline if they don't trade. So I think when you think about just the broader transaction market and And what's happened, at least in the past couple years, as you've seen, is spikes in interest rates. And there's a little bit of a pause in the market. And sometimes sellers reset expectations, and sometimes they don't. And that sometimes results in a pause in the acquisition market. So for us as net buyers, we adjust our returns immediately with our cost of capital. So the benefit... of the team we built is that we're, you know, we're looking across all the CBRE tier one markets and evaluating opportunities from, you know, high net worth individuals to large institutional private equity. And we're adjusting our returns immediately. So we think there's still, you know, still some really good opportunities, even with some elevated 10 year rates right now.

Okay, great. Thanks very much.

Thank you.

Thank you. Our next questions come from the line of Brendan Lynch with Barclays. Please proceed with your questions.

Great. Thank you for taking my questions. Maybe on the development, excuse me, the acquisition pipeline, can you just talk about the characteristics of the assets that you're looking for in terms of value add or fully leased or market condition considerations?

Yeah. I mean, it's CBRE Tier 1 markets. Its building needs to fit the submarket well. it's made up about 75% individual assets, 20% portfolios, 5% developments. The individual assets, some of those are value add. I don't have the exact breakout, but it's a wide range of opportunities. Similar to past years, similar to this year, we can buy assets that have, it's a vacant asset to an asset that has a 10-year lease term. We evaluate all the aspects of the transaction when determining whether to put a bid in for it.

Great. And in the past, you've called out El Paso as being a market of particular strength. Can you give us an update there and maybe any others along the border that are performing particularly well?

I mean, El Paso is still performing well. I mean, certainly seeing a little bit of an uptick in vacancy there with some new deliveries, but still a very strong market. I'm going to look across all the markets. A lot of Midwest markets continue to be strong. Detroit, Milwaukee, Minneapolis, Chicago. Sacramento is strong. Tampa is strong. I mentioned Nashville earlier with our development. That's a really strong market. And then the weakness, continued weakness in Columbus, Indy. I mentioned Philly on the last call. Philly, southern Jersey is some weakness there. Not too dissimilar from what we've seen this last quarter. I'd say on the whole, though, you're seeing markets generally, you know, absorption improving kind of quarter over quarter, at least staying flat and net absorption staying flat on a lot of our markets. And it feels like we'll see some pretty good recovery in the back half of next year. Great. Thank you for the call.

Thank you.

Thank you. Our next questions come from the line of John Peterson with Jefferies. Please proceed with your questions.

Great. Thank you. Appreciate your time. One more question on American Tower. One of your peers has a similar situation. They talked about how there's a security deposit in place that can contribute to top-line rents in the case that they don't pay. Do you guys have anything like that with American Tire, and what would be the duration on it?

Nothing material. I will say, just as I said, the prepared marks, they're current on all the rent. There's no AR related to them. We've been to all seven of our facilities. They're actively utilizing our facilities. They're highly functional facilities in healthy submarkets.

Got it. Okay. All right. Appreciate that. And then Maybe just one other, maybe somewhat more broad question, but what impact is election uncertainty having on your business right now, whether it's closing on transactions or the leasing market?

You know, it's an interesting question, John. I mean, we've heard from brokers that tenants, larger tenants, are waiting on the election to make a decision. I don't know what the reason for that that is other than maybe buying some time and just getting some certainty. But it feels like it's being used for a reason to delay decision-making in the leasing market. With respect to the acquisition market, I don't think it's really played a factor in that, but more on the leasing market and delaying decision-making.

All right. I'll ask you to follow up question and narrate on what you think once we get results. Thanks, guys.

Thank you for not asking it now.

Thank you. That does conclude our question and answer session. I would now like to turn the floor back over to Bill Crooker for closing remarks.

Thank you all for attending the call. And thank you to the analysts again for their thoughtful questions. And we look forward to seeing you all soon.

Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.