Q3 2021 Omega Healthcare Investors Inc Earnings Call

Good morning, and welcome to the Omega healthcare investors third quarter 2021 earnings conference call.

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I'd now like to turn the conference over to Michele Reber. Please go ahead. Thank you and good morning with me today are Omega CEO Taylor Pickett C. O O Dam Booth CFO, Bob Stephenson, Chief Corporate development Officer, Steven in soft and Megan Kroll Senior Vice President of operations.

It's 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 dispositions 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.

Forward looking statements during the call today, we will refer to some non-GAAP financial measures such as NAREIT F. F O adjusted <unk> 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 Dot Omega health care Dot com and in the case of NAREIT <unk> and adjusted <unk> in our recently.

She'd 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 2021 earnings conference call.

Today, I will discuss our third quarter financial results skilled nursing facility industry trends and operator liquidity issues, we posted strong quarterly results with third quarter adjusted <unk> of <unk> 85 per share and funds available for distribution of <unk> 81 per share we have maintained our quarterly dividend of 67.

<unk> per share dividend payout ratio remains conservative at 79% of adjusted <unk> and 83% of funds available for distribution.

However, approximately seven cents per share of our funds available for distribution is the result of applying letters of credit and other collateral funds third quarter rent and interest obligations.

Fortunately, our liquidity and our balance sheet has never been stronger as we work with our operators to navigate through what is hopefully the tail end of a pandemic.

Turning to skilled nursing facility industry trends.

Positive trends include one occupancy continues to improve and is now 76% for the Omega portfolio to approximately 20% of our facilities are at or above pre COVID-19 occupancy levels.

Three the federal government has released $25 billion in provider relief funding with distribution anticipated over the next several months and for most states continue to support the industry through supplemental Medicaid reimbursement.

Negative trends include one labor and the continuing labor shortage and related increasing wages combined with a dramatically increased usage of staffing agency labor and increased hourly cost two were several months into the recruitment cycle for those operators that took the Medicare advance payments when they pay.

<unk> started.

The repayment of these advances has significantly impacted operator liquidity, including the liquidity of a GMO and golf coast three the pace of occupancy recovery remains a big question, Mark and we could see additional operators face liquidity issues in the coming months.

And for uncertainty regarding the amount and timing of ongoing federal and state support.

Turning to operator liquidity issues and restructuring.

Dan will provide detail regarding specific operator current liquidity and restructuring issues in.

In General these efforts include one or more of the following actions one rent deferrals to asset sales or transitions to a new operator and three in certain cases rent resets with other amended lease provisions. Examples include elimination of purchase options future upward potential.

Rent resets.

Lease extensions or revisions of renewal rates and collateral enhancements adjustments or usage.

Historically in many of our restructurings, one or more of the actions that I've outlined are sufficient to protect the value of our assets and most if not all of the long term cash flow generation from the restructured assets.

We continue to remain hopeful that the outcome of our covered restructurings will yield a similar result.

Finally, I again, thank our operating partners and in particular, the frontline caregivers and staff, who have cared for the tens of thousands of residents within our facilities.

I will now turn the call over to Bob.

Thanks, Taylor and good morning.

Turning to our financials for the third quarter.

Our NAREIT F F O for the quarter was $181 million or <unk> 73 per share on a diluted basis as compared to $15 million or six cents per diluted share for the third quarter of 2020 are.

Our adjusted <unk> was $209 million or <unk> 85 cents per share for the quarter and excludes several items as outlined in our adjusted <unk> reconciliation to net income found in our earnings release, and our supplemental and also on our website.

Revenue for the third quarter was approximately $282 million before adjusting for the nonrecurring items compared to $119 million for the third quarter 2020, the year over year increase was primarily the result of straight line and lease inducement write offs that occurred in the third quarter of 2021.

$42 million related to three operators that were placed on a cash basis in 2020 due to substantial doubt regarding their ability to continue as a going concern.

As previously disclosed a GMO failed to make its 2021 contractual payments for August and September and subsequently October.

During August and September we recorded $8 $4 million of revenue by drawing on a GMO letters of credit and application of their security deposit. Additionally, we recorded a provision for credit losses of approximately $16 $7 million related to the two outstanding loans to a GMO as discussed during our second quarter.

The earnings call in June we placed Gulf coast on a cash basis as they informed us they would be unable to pay its rental obligations in Q3. Despite golf coast continued failure to pay we were able to recognize seven $4 million of revenue through the application of their security deposit.

And other collateral against uncollected contractual rent.

It's important to note NAREIT F F O and adjusted <unk> include our ability to apply collateral and recognize revenue related to these operators non payments. However, when this collateral is exhausted and if these tenants continue not to pay we expect that this would reduce our near term financial results, including NAREIT <unk>.

So adjusted <unk> and Fad.

Our balance sheet remains strong thanks to the steps we've taken over the past year to further improve our liquidity capital stack and maturity ladder on the debt side at September 30th we had no outstanding borrowings under our 1.45 billion revolving credit facility and approximately $103 million in cash and we have.

No bond maturities until August of 2023.

On the equity side in the third quarter, we issued one 3 million shares of common stock through a combination over a T M and dividend reinvestment and common stock purchase plan generating $49 million in gross cash proceeds.

Year to date, we have issued seven 5 million common shares generating $280 million in gross cash proceeds.

September 30th over 99% of our $5.3 billion in debt was fixed or net funded debt to adjusted annualized EBITDA was four nine times and our fixed charge coverage ratio was four six times. It's important to note similar to NAREIT F F O adjusted <unk> and Fad.

EBITDA in these liquidity calculations includes our ability to apply collateral and recognize revenue related to the operator non payments previously discussed however.

However, if the collateral is exhausted a decrease in EBITDA will increase our liquidity ratios.

While we believe our actions to date provide us with significant liquidity and flexibility to weather a potential prolonged impact to our business primarily driven by COVID-19, we will continue to evaluate any additional steps that may be needed to further enhance our liquidity.

I will now turn the call over to Dan.

Thanks, Bob and good morning, everyone.

As of September 32021, Omega had an operating asset portfolio of 944 facilities with over 96000 operating beds.

These facilities were spread across 63 third party operators and located within 42 states and the United Kingdom.

Trailing 12 month, operator, EBITDAR and EBITDAR coverage for our core portfolio as of June 30th 2021 decreased to $1 63, and 1.28 times, respectively versus one eight and 144 times, respectively for the trailing 12 month period ended March 31st 2020.

One.

During the second quarter of 2021, our operators Kimball globally recorded approximately $49 million and federal stimulus funds as compared to approximately $74 million recorded during the first quarter.

Mailing 12 month, operator, EBITDAR and EBITDAR coverage would have decreased during the second quarter of 2021 to one point to 2.89 times, respectively as compared to 1.2 for end 0.9 times, respectively for the first quarter when excluding the benefit of any federal stimulus sponge.

EBITDAR coverage for the stand alone quarter ended 632021 for our core portfolio was 1.2 times, including federal stimulus and point 99 times, excluding the $49 million of federal stimulus funds.

This compares to the stand alone first quarter of $1, one seven times and eight three times within without $74 million and federal stimulus funds, respectively based upon what Omega has received in terms of occupancy reporting for October to date occupancy has continued to improve averaging approximately 70.

Five 5%.

From a low of 72, 3% in January of 2021 wall coverages have improved quarter over quarter. The fact that coverage without stimulus remains below one times highlights. The reason why we have had a handful of operators unable to pay rent this quarter and into October.

The lack of or delay in additional federal and state stimulus in certain circumstances, coupled with a very slow occupancy recovery in a tough labor market.

Strained on the cash flow of operators with certain operators be it to early hard for.

For the third quarter, ending September 30th of 2021 the percentage of rent and interest collected including the application of security deposits letters of credit and other offsets was 99%.

Excluding application of the aforementioned collateral items the percentage drops to 93%.

For the month of October 2021, those percentages are 91, and 88% respectively as much of the collateral available for this purpose was utilized in the third quarter.

Turning to portfolio matters in June of 2021, Gulf Coast, and operator, representing approximately $30 million or 3% of annual revenue.

Informed on making up the June rent of approximately $2 $5 million would not be paid and that future rent payments would not be remitted in the coming months.

Subsequently on October 14th 2021 Gulf Coast filed for chapter 11 bankruptcy in Wilmington, Delaware as part of that filing the veterans and Omega agreed upon and entered into a restructuring support agreement.

Ultimately and subject to approval of the court amongst other things is the intention of both parties to transition the 24 facilities associated with Gulf Coast to an unrelated third party or parties. At this time. It is too early to predict the ultimate outcome or timing of those transitions since the failure of this operator to pay rent in June.

Omega is at two other material operators ceased paying rent.

The first a GMO, representing approximately $53 million or five 3% of annual revenue stopped paying rent and interest in August of 2021 and has also failed to pay rent and interest in September and October.

Accordingly, Omega drew upon an existing security deposit of approximately $9 $5 million to pay all rent due for August September and a portion of October, thereby exhausting our deposits.

We are in ongoing discussions with a GMO to bring this lease back into compliance and begin the resumption of lease payments. These discussions may involve the re leasing or sale of certain facilities within the portfolio.

The other operator guardian, representing approximately $37 million or three 7% of annual revenue failed to pay its contractual rent and interest in October of 2021, we have been and continue to be an active ongoing discussions with guardian to transition a significant portion of this portfolio to an unrelated third.

Third party.

A number of facilities in vault and the timing of such transitions has not yet been finalized.

Turning to new investments as previously disclosed on our second quarter earnings call on July one 2021, Omega provided $66 million of mortgage financing to an existing operator.

The loan is secured by mortgages on six nursing facilities located in Ohio.

Bears an initial interest rate of 10.5% separately on July 14th 2021, Omega completed $10 million purchase lease transaction for <unk> care homes in the U K.

All of these were added to an existing operator's master lease with an initial cash yield of 8% with two 5% escalators.

Year to date Omega has made new investments totaling $821 million, including $144 million for capital expenditures.

Turning to dispositions during the third quarter of 2021, Omega divested 15 facilities for $110 million.

As of September 30th Omega has divested a total of 45 facilities for approximately $311 million.

I will now turn the call over to Megan.

Thanks, Dan and good morning, everyone.

September HHS, finally announced a $25 5 billion dollar release of funds from the provider relief fund consisting of $17 billion for a phase for general distribution tied to losses incurred for the second half of 2020 and the first quarter of 2021.

And $8 $5 billion associated with the fund set aside for rural providers.

Part of the American Mask You Act.

As the application deadline was October 26, it is too soon to tell what level of funding our operators will receive especially in light of the fact that the determination on what percentage of losses that building will be reimbursed for is not just based on the number of applicants, but also weighted differently depending on the size of the operator, whether it serves a rural versus urban population.

And whether it serves Medicare Medicaid and chip residents.

On the state front, there's been positive news out of the state of Florida as yesterday $100 million in F. Not fun for nursing homes. So it's approved this is extremely welcome news as Florida had not previously provided any stimulus to the industry. It is still too soon to know what the ultimate payout will be for each operator, while we are cautiously optimistic about the benefit.

Both of these federal and state development, we had certainly hoped for a more targeted federal distribution to the long term care space in light of the devastating effect that Covid has had on the industry in terms of Covid itself case counts and Omega facilities have declined over the last two months, which appears to be the delta variant search tapering off.

Thankfully due the vaccination programs the impact from the search is not anywhere near what we saw throughout last year and into early this year.

Vaccine rates for both residents and staff have also been increasing according to reporting into CNS and facilities have started administering booster shot.

Additionally, the interim final rule on vaccine mandated by the federal government on all health care workers with just really where the January 4th deadline for vaccination.

Shortages continue to push that which is exacerbating the slow occupancy recovery.

According to a recent orca and counsel survey 58 per cent of nursing homes have had to limit new admissions due to staff shortages.

This is consistent with what we're hearing from our operators.

Any of them say that the admissions are there, but for the fact that they do not have enough staff to allow them to fill the beds.

So a lot of certain fundamentals are improving with occupancy slowly rebounding and COVID-19 related expenses decreasing operators are facing a double hit from the substantial labor shortages, which are selling the occupancy recovery. While simultaneously also increasingly breck senses exponentially as a result of wage scale adjustments overtime bonuses.

And substantial agency usage.

The expense itself on a per patient day basis for our core portfolio for year to date 2021 is more than four times, what it was in 2019.

And this too is likely to get worse with the vaccine mandate, especially in locations where community vaccination rates are low.

All of this means that the continued support at both the federal and state governments as critical to clearing the path to recovery for the long term care industry as a whole and while we applaud. These most recent effort.

So hope that they recognize the need to provide additional support in the future I'll.

I'll now turn the call over to Steven.

Thanks, Megan and thanks to everyone on the line for joining today.

Spire in New York, Our E. L F memory care high rise at second Avenue, and 93rd Street in Manhattan leased to and operated by Maplewood Senior living opened at the end of March and in the midst of lease up lease up momentum has been solid and in line with our underwriting and expectations Maplewood newest property Maplewood at Princeton in Princeton, New Jersey opened in August with very strong pre lease.

<unk> momentum and a strong early move in pace.

The COVID-19 pandemic poses certain challenges unique to senior housing operators.

While the rollout of vaccines has helped considerably in stemming the spread and adverse effects of the virus operators continue to battle with increasing costs driven by scarcity of labor.

Additionally, private pay senior housing operators have not seen the level of government support provided to other areas of senior care.

Along with continued pandemic related challenges, we saw stability and signs of strength in our senior housing occupancy throughout the second quarter, the strengthening of occupancy its more evident in certain markets than others.

Our maplewood portfolio, which is concentrated in the early affected Metro New York and Boston markets. Some meaningful census erosion early in the pandemic with second quarter 2020 census, hitting a low point of 84% in early June of 2020.

That said their portfolio occupancy level had returned to 88, 6% in August of 2021.

Including the land and CIP at the end of the first quarter Omega senior housing portfolio totaled $2 $3 billion of investment in our balance sheet.

All of our senior housing assets are in Triple net master leases, including our 24 recently acquired Brookdale assets. Our overall senior housing investment comprises 157 assisted living independent living and memory care assets in the U S and U K.

This portfolio, including the 24 Brookdale properties on a standalone basis had its trailing 12 months EBITDAR lease coverage fell four basis points to 0.98 times at the end of the second quarter.

With Covid outbreaks, having affected different markets at various times. This decrease in performance was to be expected rising vaccination rates amongst residents and staff as well as availability of labor are critical to restoring occupancy and performance.

While we remain constructive about the prospects of private pay senior housing the pandemic along with its inflationary backdraft has warranted a far more selective approach increases in labor and construction costs, coupled with supply chain challenges are making attractive projects more elusive well, we make further progress on our existing ongoing developments, we continue to work with our.

Are operators on strategic reinvestment in our existing assets, we invested $96 million in the third quarter in new construction and strategic reinvestment $80 1 million of this investment is predominantly related to our active construction projects. The remaining $15 9 million of this investment was related to our ongoing portfolio Capex reinvestment pre.

Graham.

I will now open the call up for questions.

Thank you we will now begin the question and answer session.

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Today's first question comes from Connor Seversky Burn Berg. Please go ahead.

Okay.

Good morning, everybody. Thank you for having me on the call. So we've got a GMO down but for the other two disclosed tenants Guardian Gulf coast that are.

Not current on cash obligations can you walk through how much revenue was booked in Q3 for each of the operators and then and what company.

What composition, whether that was cash security deposits letters, the letters of credit or so forth.

Hey, Conor thanks for joining us its Bob here.

Yeah, I'll walk through all three of them just to reiterate that we laid them out in the press release, both Dan and I talked a little bit about them I'll start with the Gulf Coast. So golf coast did not make any contractual payments in Q3. However, we recognized $7 4 million of revenue in Q3 through the application of $900000.

And for security deposits.

Remaining $6 $5 million.

We book based on our legal right to offset any unpaid rent against certain Omega sub debt obligations.

Golf Coast as we stated filed for bankruptcy and will not be making any contractual payments in Q4.

We'll use the sub date obligation collateral a record seven $4 million of revenue in Q4.

Looking at a GMO, we recorded $12 $9 million of revenue in Q3.

The $12 9 million of GMO paid $4 5 million in July to cover to cover July right net interest the remaining $8 4 million was pulled from a genome OS security deposits and letters of credit to cover August and September.

For Q4, we had $115000 of security deposits remaining which we pulled in October the partially cover October rent the.

<unk> fourth quarter contractual revenue and interest was $12 8 million for a GMO, which will only be recognized in Q4 to the extent the GMO make any additional payments.

Dan stated ease in ongoing discussions with the GMO to bring that lease back into compliance.

And the final one was Guardian Guardian meet all its contractual payments in Q3, and we recorded $9 $3 million of revenue.

And as Dan stated in his prepared remarks, our guardian failed to pay the contractual rent and interest in October yet.

Yet he is in active negotiations with Guardian, So Q4 revenue will be determined by the outcome of the negotiations. We currently have seven $4 million and letters of credit related to the Guardian.

I hope I covered all of that.

You did thank you that was very helpful. Then.

I know you just mentioned Guardian, but for GMO and Gulf Coast is there any can you give us any sense of what kind of capacity is left in these backstops to continue booking revenue, assuming I'm, assuming they're not paying cash in Q4 up to Q1.

Oh for Gulf Coast.

Basically when we and at the end of Q4, we will have exhausted all the collateral there from GMO standpoint, I think there is still a personal guarantee sitting out there of roughly $8 million.

And no more scared of deposits.

Okay, Okay, and then and then for a GMO you mentioned you mentioned.

Some conversations to get that leased back into compliance I mean, what would that take necessarily downsizing the portfolio in may.

Maybe shoring up of Gmos operations that way of providing working capital and just just any color there appreciate it.

So you know the the discussions is as we indicated our ongoing.

So it could be a whole host of different things that could involve some sales or some transitions.

There is some.

Virtually all of our operators expect to have some federal stimulus money received either by the end of the fourth quarter.

Early in the first quarter and then.

Also out there Megan talked about some Florida stimulus money that we also expect to get in.

Probably the end of the fourth quarter and into the first quarter. So so there is some some money on the horizon from both.

The federal government and from the state of Florida, specifically.

Okay.

Got it okay. That's very helpful. I'll leave it there. Thank you.

And our next question today comes from Amanda Sweitzer of Baird. Please go ahead.

Thanks, Good morning.

Sign up on your comment about agent the expense being used by your operators about four times higher today do you have any data on what percentage of overall compensation or operator expenses that represents and then have you seen any moderation in that.

I didn't see you said you ended the fourth quarter.

We haven't been seeing any agency moderation. Unfortunately, I mean, it's gotten worse, probably over the last quarter or two.

It's just a really really tough market out there and I would have to to find out what percentage that represents but.

It's just tough from a labor perspective right now.

Barry tremendously by market as well.

Yeah that makes sense.

And then on capital allocation and you can see that list of assets. What have you seen in terms of demand and pricing for underperforming assets in the private transaction market today.

So interestingly enough.

You know underperforming assets are still producing.

You know sales prices that would equate to a more normalized environment or there are people that are buying based upon.

Say for instance, 2019 results pre pandemic.

And then they're also buying them off of historical bad values in the states that they're picking up so.

We have not seen that buying activity Wayne, it's still pretty hot market right now.

Yeah.

And do you think the underlying volume or demand for that type of asset that way deep enough. If you weren't a gallon tried to sell additional ACA Tonight.

Well, we have been selling assets and and right now it still runs pretty deep. So we're hoping that continues for the foreseeable future.

A couple I appreciate the time.

And our next question today comes from Nick Joseph at Citi. Please go ahead.

Hey, This is Michael Griffin on for Nick wanted to touch kind of on external growth opportunities and sort of how you view the current attractiveness of your cost of capital versus any future potential external growth opportunities.

You know.

While we are <unk> been pretty successful as a seller because the market is hot.

You know opportunities are somewhat limited because the buyer market is hot and things are getting bid up.

We're not in the market right now are buying a lot of distressed assets.

So we're really looking at more sort of off market transactions with our existing operators.

We're seeing a.

A fair amount of volume in the U K.

But in the United States right now, it's a pretty tough market to be investing in.

And then the cost of that.

The cost of capital side, obviously, it's not particularly attractive for us, but as Bob noted, we have cash on the balance sheet and.

That we're recycling capital that makes sense for us.

Got you that's very helpful. And then you noted the mortgage loan investment this past quarter, just curious your appetite for those going forward and then would you rather see more of those or you know kind of other opportunities for future growth.

Our bread and butter still remains you know buying the fee simple.

Title to the property as mortgages are sort of.

Either accommodations or some structural nuances that requires Ah.

Our mortgage loan versus the <unk>.

Of the actual assets so.

You know we'll still.

Do mortgages, but it's pretty limited and it's not our our mainstay.

Okay. That's it for me thanks for the time.

Thank you and our next question today comes from two actually you saw there.

With credit Suisse. Please go ahead.

Hi, Yes, good morning, everyone I wanted to understand a little bit better what's happening at the federal government level in regards to providing additional kind of help for the sector I think you're.

Correct me, if I'm wrong, but you mentioned that you had released the final 25 billion in the emergency funds, if any of that come into skilled nursing and exactly whats happening on the lobbying front to kind of help skilled nursing operators nip to fight another day.

So they havent released everything in the fund at this point, what they agreed to release with $17 billion that was left in the fund.

Well, it's eight 5 billion that was related to the rural providers that was part of the American Rescue Act.

And.

It's really tough to tell that's for all providers that now so that's not necessarily directly to this industry. So it's tough to tell how much it's going to go to the industry, particularly.

Part of it is going to be based on the number of applicants right. So they have to put in thousands and thousands of pages of data related to their losses for the second half of last year in the first quarter of this year.

So it's the number of applicants that are putting money are applying for it as well as you know whether they're rural versus urban providers.

A variety of other factors so it's difficult to tell how much will actually come to the industry.

Gotcha, and then anything else from a lobbying perspective is it possible that the Medicare advanced payment get stopped or anything else could potentially happen just to kind of give operators a little bit more breathing room.

I think arc is constantly lobbying the government to give them more from the provider relief fund and hopefully in a more targeted fashion, but in terms of the Medicare advance payments I don't think that's going away anytime soon so I think first of all just continue paying that out I think most operators will have actually paid back most of those advanced payments.

Either by the end of the first quarter or early into the second quarter of 2022.

Gotcha. Thank you.

And our next question today comes from John Pawlowski with Green shoe.

Please go ahead.

Thanks for the time.

A question about the the distribution of EBITDAR coverage across the groups. So the 16%.

[noise] of rent. That's currently below one times I'm trying to better understand kind of the current level not on a trailing 12 month basis. So a couple of quarters from now where does this number trend.

Best guesses on where this number Charles as you can see the.

The labor cost issues.

Really flow through the financials in kind of a trailing 12 period rolls rolls forward.

Uh Huh I wish I had the answer to that I would say that you know the.

There was a.

Chunk of federal stimulus money that came out sort of.

At the beginning of last year, which runs through these EBITDAR.

Coverage buckets, if you will.

And as there has.

There's been no or little federal stimulus money, though those quarters are dropping off so the coverages are naturally going away because of the lack of federal stimulus money.

We bought them down I would say that at least on a quarter to quarter basis up he had heard the stats there we saw improvement on a standalone quarterly basis within our portfolio.

We hope that continues and if it does then then this trend should should see since start to reverse itself.

Okay.

Okay.

And then is there anything that you mentioned in her opening remarks just the.

Potentially the vaccine mandate, causing more.

Another kind of shot of pain in terms of the labor pressures in certain states are there any.

Any regions of the country, you're worried about tipping into kind of the the troubled bucket in the next few quarters that we haven't seen yet.

You know I'm not going to call out states by name, but there are areas of the country, which have lower vaccination rates right than others.

So yeah there are.

Those particular states are going to feel the vaccination mandate harder than than those with higher vaccination rates. That's just a fact.

So we could see some of that come through when the when the mandate kicks in on January.

Alright, Thank you for the time.

Ladies and gentlemen, as a reminder, if you'd like to ask a question. Please press Star then one.

Okay.

Okay.

And ladies and gentlemen, this concludes our question and answer session I'd like to turn the conference back over to Taylor Pickett for any closing remarks.

Thanks, Thanks for joining us this morning, as always feel free to reach out to the team.

In particular, Matthew or Bob for any follow ups, you may have a great day.

And thank you ladies and gentlemen. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful weekend.