Q4 2019 Earnings Call
Ladies and gentlemen, and welcome to the Boardwalk Real estate investment Trust fourth quarter results Conference call note that at this time all lines are in listen only mode, but following their presentations, we will conduct a question and answer session and if that anytime during this call you'll be quiet meet its assistance. Please press star was it over there operator.
Also note the Polys being recorded today Friday February 28 2020.
I'd like to turn the conference over to James. Please go ahead Sir.
Thank you still the and welcome to the Boardwalk read 2019 fourth quarter results Conference call.
With me here today is Sam Coleus, Chief Executive Officer, Rob Jeremiah President <unk>, Chief Financial Officer, Lisa Russell Senior Vice President of corporate development, and Lisa Spanish Chief Accounting Officer.
Note that this call is being broadly disseminated by way of webcast.
If you have not done so already leased as it be walk dot com flush investors, where you will find a link to today's presentation as well as PDL files with the trust financial statements.
Do you need and supplemental information package.
Starting on slide two we'd like to remind our listeners that certain statements in this call and presentation, maybe considered forward looking statements, although the expectations set forth in such statements are based on reasonable assumptions.
Feature operation in its actual performance may differ materially from those in any forward looking statements.
Information that could cause actual results to differ materially from these statements are detailed in boardwalks publicly filed documents.
At the conclusion of today's presentation, we will be opening up the phone lines for questions. Let's now turn the call over to sample was thank you James and thank you everyone for joining us. This morning, starting on slide three we're pleased to continue building on our track record with our seventh consecutive quarter of growth in F O per unit delivering 16.7%.
Growth in F O per unit.
For the fourth quarter rental market fundamentals in our core Alberta markets continue to improve and our team continues to deliver exceptional product quality service and experience slide four provides a summary of our results with total Epo and thoughtful growth of 17.5% and 20.9 per se.
For the fourth quarter, resulting in 16.8% and 20.1% growth for fiscal 2019 respect fully.
Looking into our same property portfolio performance, our NOI grew by 11.6% for the quarter was 4.3% revenue growth and a decrease in expenses of 4% for the 12 months of 2019, our I know I grew 88.2% highlighted by revenue growth.
4.1% and a decrease in our operating expenses a 0.9%.
Moving on slide five boardwalk offers an exceptional combination of growth and value.
Boardwalk focus on delivering strong NOI growth has resulted in strong growth and at that Oh per unit Trust current I FRS net asset value at $63.72.
And then secondly, higher than our current unit trading price presenting an exceptional opportunity for our investor.
Boardwalk high quality overall portfolio equates to approximately 162000 per apartment door at our current unit price recent transactions in Calgary and Edmonton have averaged over 200000, adore. Furthermore, replacement costs are significantly higher than needs apartment trading prices.
Our exceptional value provides for a unique opportunity for our partners and stakeholders as we continue to focus in on delivering solid growth.
Slide six we illustrate current rental market fundamentals for each of the markets, where we operate boardwalk strives to create value through all stages other rental market cycle.
Approximately 60% of boardwalks portfolio is in Alberta, where rental market fundamentals continue to improve and are moving towards a bounce state in our core markets at Edmonton and Calgary.
Major refining upgrading and oil transportation investments were made earlier in the year along with the continued construction work on the Trans mountain pipeline as well as the upcoming operation of the Canadian section of Enbridges line three pipeline.
The Alberta economy continues to diversify along with increased international migration continuing to increase the population and demand of housing.
And just by the provincial government to decrease corporate taxes will also create a more favorable investment environment in the province, the Royal Bank expects employment growth to nearly doubled to 1.1% in 2020 from 0.6% in 2019.
Grand Prairie is already seen benefits from an improved economy and continues to move into a strong rental market almost fully occupied with a strong demand for rental.
It makes Murray remains in a soft rental market Red deer continues to see improvement as a result of our successful value add investment in this region.
For the fourth quarter Edmonton rail market fundamentals continue to improve and stabilized NOI growth jumped ahead of Calgary for this three and 12 month period.
Our focus on a carrying peak performance culture, along with significant value add capital investment continues to deliver significant gains in Hawaii.
You add lessons learned in our Calgary market are helping us better allocate value added investments into all our other markets in particular in our larger Edmonton market are just catch one region continues to remain in a softer rental market with green shoots up higher occupancy revenue and recent corridor and NOI increased particularly.
Just saskatoon, which is entering into a more balanced market.
We continue to focus you know and gaining market share with targeted value add capital improvements and increasing our operating efficiency, which should continue to provide a positive NOI growth into the foreseeable future, Ontario, and qubec represent over 25% of boardwalks portfolio with both provinces showing strong.
Performance, Ontario continues to deliver solid results with market rents, increasing and vacancies decreasing we've increased our value added investment in our portfolio here to further enhance returns with strong demand in London in Kitchener and to better positioning compete with any new future supply qubec rental market fundamentals haven't.
Route boardwalks nine nine silent portfolio Montreal is nearly fully occupied and is reflected in our sequential revenue for the last quarter, which has increased 1.3%.
Moving onto slide seven.
Got it continues to see high population growth, reflecting a world class standard of living and multi decade high affordability.
Calendar eat wasn't back rank the world's most livable city by the economist intelligence unit ranking almost a perfect score and stability health care culture, and environment education and infrastructure.
Job growth continues to reflect a diversified economy with one of the highest average weekly earnings in Canada female see forecast improving rental market fundamentals. Our newly elected government is working hard to attract top talent to our province by offering more accessible visas for foreign students targeting top.
Yes University graduates as well as creating an attractive tax environment for health biotech startup from.
Slide eight shows our strategy have reengineering, our corporate culture and performance driven team to deliver their best product service and experience building on our brand reflecting on 2019. Our team is proud of the accomplishments. We have made we have delivered strong organic growth.
Published brand and product diversification by repositioning Rad renovating 16% of our common areas in 2019 as well as one lifestyle repositioning in Edmonton, We continue to high grade and geographically diversified continued focus on a solid financial foundation and lastly, delivering on strong.
Unit holder value with a 2019 total return up over 25%.
Our team we're confident we can continue to build on this in 2020 and will provide our outlook at the end of this presentation I'd like to now turn the call over sugar or no Jeremiah.
Thanks, Jim moving onto slide nine Boardwalk continues to target, 48% increases on new and renewing leases in our non rent control markets of Alberta, and Scott you want as shown on slide nine our reported results are in line with our seasonal expectations for 2019. The trust achieved an average of 4% increases on new leases and 6% increase.
This is on lease renewals for rent control markets, where we are subject to legislative increases, we target above guideline increases where applicable and to date have been very successful in achieving these.
As shown on slide 10, all key revenue metrics continued to continue the positive trend total revenues continue to increase as it has been for the past consecutive eight quarters and with the high with with high continued high art can you get high occupancy levels, we are able to increase overall occupied rents, while decreasing incentives and lowering vacancy loss.
Slide 11 shows boardwalks quarterly sequential revenue growth.
Current quarter's results continue to give the overall trend of positive postings.
Yes fourth quarter reported sequential revenue growth of 0.8%.
Slide 12 shows more detail on boardwalk stabilized portfolio for Q4, 2019 trust stabilized portfolio upholstered annualized growth in excess of 11% on revenue growth of 4.3% and cost being reduced by 4% boardwalks, Alberta portfolio NOI growth was over 15%.
Lisa let all regions.
Also of note just catch one posted over 10.6% and alike will sit from quarter on a year to date basis, our stabilized portfolio reported revenue growth of 4.1% and I know I girls in excess of 8.2%.
Boardwalk continues to target its value added investment program to enhance the overall experience offer to our resident members as we continue to selectively invest back into our communities. We are constantly exploring for ways to deliver these programs and more efficient and cost effective ways.
Slide 13 shows our overall progress in our value added strategic investment program since commencing April 3rd program in 2017, we've upgraded approximately 18% of our suites. The renovation level is different by brand and community and has driven mainly by demand over the last few years, we have seen a material shift toward lower caught suite costs.
Investments with an increased focus on its still demanding and common area for these for our communities.
At the end of December we have completed approximately 24% of our commodity and common area upgrades and as we always have we have got possibly looking to deliver these investment programs it more efficient and cost effective ways.
Slide 14 is an example of our strategic value added program.
Landon Park is 62 unit.
At apartment complex in Edmonton, Alberta.
This community we upgrade the leasing office and the lobby was this week investment of $30000. Upon completion of this investment we adjusted market rents just by $10 per month for each of for each unit based on our past experience with this type of investments we are anticipating a stabilized return well in double digits.
Sorry, <unk> colvard at least the Russell now, we'll update you want to development program.
Thank you Rob Slide 15 provides an update on Breo premium mixed use development Calgary, we're proud to have received or occupancy permit and have taken possession of the property as of February 21st we are in the final stages of Fixturing and setting up the experience center common areas she'll see fitness center in many areas we've.
Turning to hosted Grand opening and have our first resident members in on April 1st 2020.
Fourth lots initial marketing of the project has been well received and we anticipate lease up to progress over the next 12 months.
Our estimated stabilized yield for the project ranges from 4% to 5% with anticipated rental rates at $2.45 to $2.75 per square foot.
Life product the caliber currently treat a cap rates below 4% in Calgary.
Slide 16 provides a brief update on or other active development project construction at 45 Railroad, which is located in Brampton, Ontario is progressing well underground construction is ongoing and anticipate the project to be at great in Q3 of 2020.
Estimated completion of this two towers 365 unit development remains plans for 2020 to 2023, respectively.
[noise] adequate squaring Mississauga, Ontario is our second joint venture partnership with real can't our initial zoning application for 16 and 25 storey mixed use development was received positively and part and the partnership is currently working with the municipality to finalize only anticipated potential construction is planned for 2021.
The timing of boardwalks current development projects are well staggered to best balance our resources.
Our plan development, an appeal region provide an attractive entry into the GTH, where market fundamentals remain strong, allowing boardwalk to enter high growth Undersupplied markets, providing continued progress towards our long term strategic plan.
Further information on each of these developments as well as our previously announced high grading acquisition and noncore sales in 2019 can be found in our appendix that this presentation I would now like to turn the call over to William Wallace.
Thank you Lisa.
I will walk continues to maintain a strong financial financial position slide 17 highlights boardwalks liquidity position at the ended the year to find here as cash on hand committed financing subsequent to December 30, Onest plus the trust line of credit.
Well north of liquidity of approximately 258 million represents 9% Oh that trust total debt.
Yes.
Net of cash was 47% of December 30, Onest reported asset.
The next slide slide 18 highlights boardwalks mortgage maturity schedule and interest service coverage.
Overall weighted average interest at the end of the year was 2.74%.
Approximately 99% of our mortgages are CMHC ensure which are backed by the government lift Canada and enjoy advantageous interest rates on renewal.
Based on a rolling four quarter basis interest rate coverage improved to 2.2 0.7 cents compared to 2.74 at the end of Q3 and 2.68 times at the end of 2018.
Slide 19 shows boardwalks mortgage program completed for the 2019.
2019 year and summarizing our upcoming mortgage maturities for 2020.
In 2019 to trust renewed approximately 519 million have matured on maturing mortgages at a weighted average interest rate of 8%, while extending the term maturity to eight years.
In addition, boardwalk paid off one 2.6 million mortgage upon maturity.
In 2020, approximately 318 million of mortgages are such a mature with a weighted average interest rate up 2.52%.
To date, we have renewed or forward about 41 million at a new weighted average interest rate.
2.35% or an average term of eight years.
Well there have also added 23 million I thought financing and the process.
Kurt five and 10 years, you may see interest rates are approximately 2.3 and 2.4% respectively.
[noise] next slide shows boardwalks announced distribution for the next three months.
Continuing with its strategy of capital allocation optimization.
February March and April record dates Boardwalk has maintained its distribution of 8.34 cents per trusts unit, which equates to an annualized basis. One dollar the trust you.
I will now I'd like to turn the presentation back just half. Thank you. William we have entered 2020 on solid footing and well positioned to continue to deliver solid results in returns to our stakeholders I take in a similar approach as we did in a successful 2019. In addition, we're layering exciting new initial.
To further drive and improve on our product quality service and experience, we're providing all our resident members, while also delivering solid financial results for our stakeholders.
21 provides a couple of examples of this boardwalk is proud to launch in partnership with Yahoo, a new online resident member portal to all of our resident members.
This new portal will provide more self service options to our residents, allowing for direct online payments online maintenance request, a real time chat feature amenity bookings and much more.
Creating more optionality in the where residents experience their homes. The trust believes that further efficiency and 24 seven self service can be gained while also creating new resident friendly forms of communication I.
Additionally board arc has had great success in Alberta, partnering and selling boardwalk exclusively priced Internet and TV services. This program began in our Alberta portfolio in Q2, 2019 and has been strong penetration today.
The trust estimates that once fully stabilized the trust and Hawaii will improve by two to 400 basis points in Alberta looking forward. The trust as excited to begin expanding on the service across its portfolio.
[noise] [noise] the core values.
Of our foundation have always supported a focus on our environment, social responsibility and our governance from our sustainable self regulation since 1999, and our energy efficient use of pictures appliances and building envelopes to reduce our carbon footprint and save on our end.
Energy costs.
Slide 22 provides a summary of the boardwalk SG initiatives, we are proud that boardwalks Golden Foundation in which we have always operated aligned well with modern day SG.
We're excited to launch our inaugural he asked you report along with our 2019 annual report in the coming weeks.
Looking forward into 2020 on slide 23, the trust anticipates, a continued positive trend of stabilized property analyte growth.
This growth is expected to be tempered by upward pressure in certain uncontrollable operating expenses, such as property taxes insurance and utilities.
Boardwalk 2020 stabilized NOI growth is expected to range between 4% to 7%.
FFO per unit results to range between $2.65 to $2, an 80 cents an AFFO per unit results to range between two and a corridor to to 40 for trust unit, excluding onetime nonrecurring retirement costs, we are anticipating in the second quarter 2020 I just.
Finally, the trust expects to invest between 175.2 million to 194 million in capital investment in 2020.
The trust reviews, its financial guidance regularly and will provide updates on a quarterly basis, we'd especially like to recognize both were bertaux Jeremiah and William Wong for the 26, and 18 years of inspiring service respectfully and together building, a strong foundation and well mentor team.
For an even brighter future we have as a result of their significant contribution.
We will forever be grateful.
We wish both Robin William Health.
Piece joy in abundance in their future.
We'd now like to open the phone lines for questions Sylvie. Thank you, ladies and gentlemen, if you don't have a question. Please press star followed by one I've touched on something you will hear eight suite on prompt acknowledging your request and if you should wish to withdraw your question simply press star followed by too and we do assets if using a speakerphone. Please.
If the handset before passing any Keith. Please go ahead in press Star One now should you have the question.
And the first question will be from Brandon Abrams at Canaccord Genuity. Please go ahead.
Hi, good morning.
Good morning, Brian.
Just wondering if you could provide some guide in for property taxes.
For 2020, specifically in Albert I know, there's been a few changes.
In Edmonton and Calgary.
So I'm just wondering if.
You have any color there.
Hey, Brandon its James here.
You're absolutely right Sam pointed out in one of the headwinds that we have coming into 2020 is uncontrollable expenses in one of those as property taxes, especially here in Alberta, So when we look at Calgary and Edmonton that the dynamic that we're seeing is increased assessed values for purpose built rental combined with flat to slightly down assessed.
Thanks for single family homes.
The net result of that is purpose built rental is taking a bigger portion of the residential property tax pool.
And that's half that dynamic is happening for both Edmonton and Calgary when we look into Calgary there is a second dynamic thats.
That we're going to see where we're seeing a property tax shift from city council potentially moving more of the tax burden from commercial towards residential their net effective that we're looking at mid to high single digit increases in Edmonton and potentially double digit increases in Calgary.
Sadly I mean, that's one of the that's one of the expense line items that we do as everybody knows act we actively negotiating.
Negotiated work with city Council and work with a assessment departments to negotiate or assessments, but structurally in Calgary Sadly, there's a potentially some significant changes they're going to have a negative impact on our property tax expense this year.
And it's Robin just out of genes point I think he's a 100% right. This upward pressure there we're doing our best to look at our controllable costs to ensure we maintain those and look at downward pressure on those wells, who is we're trying to balance off some of that we don't know if we can do it fully but what's your working hard at it.
Well, we really have to commend our industry leaders Calgary apartment Association with all other.
Calgary apartment providers that are having great discussions with the cydia Calgary and there's already been some flexibility and we've already realized.
Less.
Increases than was originally was contemplated and so we're very pleased with the.
Friendly discussions, we're having with our municipal.
Civil servants and our.
Calgary apartment Association and all Calgary apartment providers. So we're we're very happy in the efforts were all making to control or uncontrollables through through friendly discussions.
Right. Okay. Yeah, that's a very helpful. I'm, just taking a look at a.
The loss to lease calculation in the M. DNA and it looks like you know, Quebec and Ontario.
Early thinking that began.
Mark to market.
Opportunities.
9 million and 14 million respectively. I'm, just wondering if you could remind us again, what your turnover is in your portfolio for those two market just to get a sense of how quickly you might be able to capture that.
Earn its Rob, Ontario is actually decreased our turnover down to about 14% from 17% the year before and Quebec is staying about the same so we're able to <unk> looking a little more aggressive in Quebec market to be able unpleasant, but in both of those markets, particularly in Ontario, we've been extremely successful and getting above guideline average increases we've actually one most the ones we went.
Into to get increased close to 5% in some cases higher than that but you have to have to bounce off as it was a maximum you can give every year on those challenge, we're having to be honest as we have a lot of backlog files with the Ontario system, there to be able to get approved but the good news is when they were approved we were they understand that we are having squeezing costs.
We've invested capital back into our properties and they understand the expectation of getting return.
Right, Okay, and then just last question.
All right turn it over and Sam I don't Wanna get you in trouble here necessarily but I mean, we had the the frontier decision or Teck resources.
Earlier earlier this week.
Deciding not to go ahead with the project given kind of the a political and regulatory uncertainty I. Just you know from a business owner perspective C O perspective.
Maybe just your views on a on the.
Investment income <unk> investment climate, there and I know the a sentiment in Alberta right now.
Oh, we're seeing record diversification as we have seen historically in any kind of resource down cycle. Our economy gets more diversified very similar to what happened in Denver, and even in Texas and so there's always the silver cloud to silver line.
Turning to every cloud and diversification is definitely one positive we're seeing more sustainable growth as a result, as well and we've got a city.
Both major cities of Calgary, and Edmonton much much bigger than historically they were in the eighties and so there's a urbanization ratchet effect that urban.
Economists have discovered many many decades ago and want to city gets to a certain size. It it experiences what's called the ratchet that back then that's as a result, why we continue to grow and we're seen market share growth as a result of our brand diversification.
Where we're moving ahead and we're gaining ground in every effort that we're doing and so.
We're all about figuring out what to do with.
Chips that we have to play with and we really cant thank our team.
Not for the innovation.
The thinking outside the box and blood sweat and tears that we're all pouring out to deliver exceptional performance in a really really tough economy, what happens in a better economy is pretty obvious and when the resource sector does turnaround because we continue to consume fossils.
And as and it's necessary.
As a bridge to a more sustainable and renewable energy future when that when that happens a and and when further diversification.
Kicks in we'll see even better results and will be extremely well position with the best team and culture and brand that we've ever ever had and so.
We're we're moving ahead.
With or without tech.
Right, Okay, that's very helpful.
Thank you I'll turn it over.
Thank you.
Ladies and gentlemen, as a reminder, if you do have a question. Please press star followed by one on your Touchtone phone.
And your next question will be from Mario Saric at Scotiabank. Please go ahead.
Hi, good morning.
Just a focusing on the or the guidance the before to 7%.
Same store in Hawaii guidance are you able to break that down between the same store revenue in same store expense growth.
[noise] historically, well again, our strategy on the revenue side, Mario was 48% on renewals and new leases that I'd, probably argue that it's fair to easily to say registries, roughly 4.5% revenue top line growth.
And then again, obviously the difference coming due on the expense side, but again, we are really working hard on the controllable expenses, which represent about 50% of total expenses in place. So we're very optimistic that we're going to be able to do better than we think.
But we do know and as as.
As James really how that there's there's going to be upward pressure on property taxes utilities not as much the more upward pressure, there's going to be on the news the carbon tax be replaced back in Alberta.
So we don't see massive growth there, but it will be upward pressure on that'll get you down to roughly the range. We're looking at.
So found work you're expecting to be with margin expansion.
Yes, we are anticipating continued margin expansion with because our revenue numbers are going to grow fast in their expense numbers are okay. So just on me on the revenue.
Numbers I'm, just trying to get a sense of your confidence.
In those figures are W. Two hours almost 30% I guess.
I haven't checked them off 20 minutes in terms were talking but.
So this year.
So does how does the sudden drop in the oil price kind of impact your confidence or ability.
To shave off the half month to month of expenses per year.
The history is is really clear in a really tough economic environment Theres a real.
<unk> increased demand for affordable housing and we're certainly seeing that and haven't seen that over the last several years and so we've seen a market share growth as a result of a flight to affordability and and so we continue to experience that along with more stringent.
Mortgage qualification rules and we've had amazing January and February rental months.
We've rented far more rentals in the middle of Bridget January which holds.
Have revenue effects in February and were.
Renting way more move out then move outs in February which will have positive revenue numbers in March and so we're seeing.
Very strong response in January and February to rentals, and we're really encouraged.
As far as a result of the.
Rental stat that we're currently see we're very well positioned as a result.
For a strong seasonal spring, that's typical and we're seeing occupancy rise.
In the middle of winter, which is a reflection of the again phenomenal performance that our team.
We can't thank our team enough for the innovation and blood sweat and tears and the value add repositioning the brand diversification and we've got a lot of choices and we can compete with everybody in the marketplace, especially with the brand new product to that Weve introduced.
With our Breo.
And our partner real can in the northwest really exciting.
Brand new product very unique product larger a larger unit sizes, and it's a lot different than the brand new product.
That was recently introduced in that area and so we're already having great response.
From that and renting backend because of the flexibility that consumers need because of the uncertainty.
The last thing.
That that an uncertain individual needs as a fix mortgage and location that's very expensive to move if there's a change in job and that that's still a big reason why we're we're doing so well and gaining market share in this marketplace, new new migrants is while marry our another big Big source.
New renters, when a new Albert and our Canadian comes in.
They typically rent and so we're seeing we're seeing good good response and demand from.
My grandson, we're working very close with the communities that are welcoming.
New a new Albertans the Canadian.
To be on top of a their list as to where to lift.
Okay.
Your your 40% given.
Kind of their commentary on the brand and.
You evolution of the brand and stealing market share or because of a 40% what would your best estimate view of what you expect the market the overall market to do.
I you know what in God, We trust everybody else bring data pad map or dot com, it's pretty well flat.
You know the the data.
CMHC pretty well flattish to slightly positive. So we're way ahead by hundreds of basis points.
On the market and you don't want Great service product quality inexperienced always win always said, it's a timeless.
Proven strategy for for every business.
Okay. My last question just pertains to slide 21 of the doctrine.
The toast relationship in terms of incremental revenue coming from.
<unk>.
Venture.
Two to 400 basis points of incremental.
And why.
Is that are you, saying that is on top of.
Total Alberta in Hawaii.
Delivered in 2019 like the 130 million first we are you saying that.
So I potential is 2% to 4% of owners.
The 130 million over time, and how much of our if so how much of our would be baked into your 2020 yards.
Mario its James here, that's correct. So weve as you saw in the slide we actually started this program back in March of 2019, and we've had fantastic success with its so we've seen some of the benefits of it in 29 team.
We see once we get to March April we would have had a full year of turning.
All of our residents under the program.
On the hundred 70 million, you're absolutely right. So its two to 400 basis points swing as a result, <unk> program onto that 170 million now we expect that to be fully stabilized for 2021.
But sort of for 2021.
Correct, Yes, yes, there is there some benefit here in 2020 likely on the or end of that range, but once we get into totaling 2021, we can be a or strive to.
Meets the top end of that two to 400 basis point range for her to analyze.
That's great. Thank you I, just wanted to take or the opportunity to wish her robin away, while they're in their next stage.
<unk>.
Thanks, very much thank you Mary.
Thank you ladies and gentlemen, once again, if you do have a question. Please press star followed by one on your Touchtone phone.
And at this time as to how we have no other questions I would like to turn the call back to user.
We would like to end this call by thanking our amazing team loyal residents and all our stakeholders were pleased with the improving rental market fundamentals the exceptional value we continue to provider residents.
Our investors and for the continued great service from our team we would again like to thank both Roberto Jeremiah and William Wong for their invaluable contribution where we will forever be grateful.
Thank you again, everyone for joining us this morning and God bless.
Thank you Sir.
Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines have yourselves a great return.
Okay.
Right.
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