Q3 2022 Life Storage Inc Earnings Call
Yeah.
Yeah.
Good day, ladies and gentlemen, and welcome to the life storage third quarter earnings release Conference call.
At this time, all participants have been placed on a listen only mode and the floor will be open for questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Alex grass.
Sir the floor is yours.
Good morning, and thank you for joining us today for the third quarter of 2022 earnings conference call of life storage.
Leaving today's discussion will be just Sapphire, Chief Executive officer of life stores, and Andy Gregory Chief Financial Officer.
Fallen prepared remarks management will accept questions from registered financial analyst.
As a reminder, the solid discussing the answers to your questions contained forward looking statements.
To risks and uncertainties and represent management estimate as of today November 3rd 2022. The company assumes no obligation to revise or update any forward looking statements because of the changing market conditions or other circumstances.
The date of this conference call.
Additional information regarding these factors can be found in the company's public SEC filings.
In addition to the press release distributed yesterday.
We furnished our supplemental package.
I shall detail on a result, which may be found on the Investor Relations section on our web site at like storage Dotcom.
As a reminder.
I have a question and answer session. We ask that you. Please limit yourself to two questions to allow time for everyone who wishes to participate.
Please ricky with any follow up questions thereafter.
At this time I'll turn the call over to Joe.
Thanks, Alex say good morning to everyone.
I want to start off first by thinking and recognizing all of our life storage teammates both in Florida at the router company, who continue the hard work to provide support to our customers impacted by Hurricane Ian.
All of our stores in Florida are open for business and that would not have been possible without the tremendous efforts from our teammates.
I would also like to say how thrilled we are that Newsweek awarded us for the fifth year in a row. The best customer Service Award in America for the storage centers category.
This award is a true reflection of the World class team, we have here is life storage.
Now turning to the quarter I am pleased to report another outstanding quarter across all segments of our company.
While we are seeing a return to more normal seasonal trends are operating fundamentals and metrics remained very strong and.
And higher than pre pandemic levels.
We believe we are well positioned as we head into 2023.
To highlight a few notable results and trends from the quarter.
We achieve the same store revenue growth of 14.9% for the quarter over last year.
We continue to see strong and balanced revenue performance across our entire portfolio with 94% of our major markets achieving quarterly double digit revenue growth for five quarters in a row.
Ah realized rental rate per square foot this quarter was 17.1% higher than the same quarter last year.
This is also five quarters in a row of realized rental rates per square foot growth greater than 14%.
Same store NOI growth this quarter is 18.4% higher than the same quarter a year ago.
That puts us at five quarters in a row with same store NOI growth of 18% or greater.
As a result of the strong operating fundamentals, we achieved adjusted funds from operations of $1.73 per share for the quarter, which is 26.3% increase over last year.
That also puts us at six quarters in a row with adjusted funds from operations growth greater than 25 per cent.
In regard to external growth in the third quarter, we acquired 11 wholly owned stores for 217, and a half million dollars.
And subsequent to quarter and we acquired seven wholly owned facilities for $142 million.
We view these acquisitions is complementary to our existing portfolio and four of these properties are coming from our third party management platform.
About two thirds of these properties are stabilized with the remaining and Lisa which will provide strong upside in future years.
Outside of Holy on acquisitions in the quarter, we added to our joint venture portfolio with 15 stores for a 52.7 million dollar investment.
And subsequent to the quarter and we invested in seven stores for $25.3 million.
These joint ventures enable us to participate in top markets and quality properties that provide future upside with a moderate capital investment.
Including joint Ventures are third party management portfolio surpassed 400 stores at the end of the third quarter growing more than 12% over last year with the addition of twenty-five stores this quarter.
We view our third party management platform is a strong strategic pillar for us that drive the income and supports off market acquisition opportunities.
Year to date through October 10, a are wholly owned acquisitions and a consolidated joint venture came from our third party management platform.
As we look towards the full year. We now estimate are adjusted funds from operations per share to increase to a mid point of $6.44 for the year, which would be 27 per cent growth from 2021.
And he will walk you through the quarter in more detail and are positive guidance updates.
But before I handed over to Andy one last time on behalf of myself the board and the entire like storage team I want to thank Andy for his invaluable contributions and dedication to life storage for nearly 25 years.
We wish him all the very best in retirement and thank him for leaving behind a strong finance team that will continue to position us for future success.
And with that I'll hand, it over to handy.
Thanks.
Yeah sure and thank you for everyone. Further congratulatory messages I've received you know, it's it's certainly bittersweet moment.
And I have enjoyed my time here in my interactions with all of you but of course I'm going to look forward to retirement.
And you know joining us in the room here is Alex Kress and I'm excited for the opportunity Alex has ahead of him and.
And confident that life storage remains in good hands.
I've had the chance to work closely with Alex over the last year.
And I will be assisting the transition through the early half of 2023.
So I'm not gone yet.
Now I'm turning back to the quarter.
Last night, we reported quarterly adjusted funds from operations of $1.73 per share for the corner.
An increase of 26.3% over the same quarter last year.
And well above the high end of our guidance.
They continued quarter over quarter increase and adjusted F. F. O was the result of excellent same store and acquisitions performance.
Third quarter same store revenue increased 14.9% over the third quarter of 2021.
Primarily driven by increasing rental rates, although we are seeing a return to more normal seasonal trends.
We remain highly occupied especially when compared to pre pandemic levels.
Same store occupancy averaged 93.1% during the quarter.
And for reference our same store occupancy averaged 90.7% for the third quarter of 2019.
We continued to benefit from strong right growth in the quarter.
Primarily driven by are in place rate increase strategies that led to a significant increase of 17.1% in our achieved same store rates per square foot.
Over the same quarter from one year ago.
As Joe noted.
This is the continuation of double digit rate quilt for the last five corners.
Our existing customer rate increase strategies continued to be effective with weighted average increases above historical norms.
Same store operating expenses grew 6.6% for the quarter versus the last year same corner.
And we're primarily driven by credit card fees.
Repairs and maintenance and utilities expense.
Payroll and benefits increased less than 1% over the third quarter of 2021, and the same store basis.
The net effect of that same store revenue inexpensive performance was the 214 basis point expansion in our quarterly same store net operating income averaging to 72.8% resulted in year over year growth in same store NOI of 18.4% for the third quarter turning to the balance sheet, we support.
Our acquisition activity by utilizing our credit facility and issuing equity securities during the quarter.
Specifically, we do a $153 million from a credit facility.
And issued an additional $80.2 million of common stock via our ATM program during the quarter at a weighted average price of $133.11 per share.
At the start of the quarter, we closed down the refinancing of our existing credit facility that was scheduled to mature in March of 2023 with the refinancing we increase the facility from $500 million to $1.25 billion.
This new facility provides committed liquidity to life story through January of 2027.
With terms comparable to or improved from the terms of the existing facility.
At corner, and we had significant capital available what's.
With $794 million available on our credit facility.
Our balance sheet remains very strong with plenty of capacity and low leverage.
That the recurring EBITDA ratio is at 4.6 times at quarter end and.
And exactly in line with the previous quarter.
Our debt service coverage is that a very healthy five six times at September 30th we continue to have no significant debt maturities until April of 2024 $175 million becomes do.
Are pro forma average debt maturities 5.8 years.
And are weighted average interest rate is 3.4% at quite right.
In addition at.
September 30th 86% of our debt was fixed rate.
We are updating our 20 twenty-two guidance.
We now expect same store revenue to grow greater than our past guidance.
Two between 14.25% and 15.25%.
Which will be driven by improved rental rates. This increase should result in a greater same store NOI growth that.
That we now expect to be between 18% to 19%.
The improve same store performance is expected to be partially offset with the increased cost of capital.
Based on this outlook, we know anticipate core FFL per share for 2022 to be between $6.42 and $6.46.
27 per cent growth over the prior year at the midpoint.
With that operator, we will now open the call for questions.
Thank you ladies and gentlemen, the floor is now open for questions. If you would like to enter the queue to ask a question. At this time you May press star one on your telephone keypad now to enter the cube.
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And the first question. This morning is coming from Michael Goldsmith from UBS, Michael you're lying with life. Please go ahead.
Good morning, Thanks, a lot for taking my question Congrats Andy Congratulations Alex My My first question is on expenses the expense growth was 6.6 per cent during the quarter.
Year to date, you're at 4.6% which implies.
With your guidance it implies an acceleration in the fourth quarter, maybe between seven and 11% range. So I guess the question is kind of how.
How much is this a function of a rising expense environment. How much of this is a function of just maybe an easier or more difficult comparison on the expense side and then how how do you think you manage your expenses kind of heading into next year, given you've already done a lot of great things to reduce expense.
<unk> how much further opportunity do you have.
It's a good question, Michael and thanks for the compliment when you look at the fourth quarter I think there is inflationary pressures and you saw that through the first three quarters. The big difference in the fourth quarter is our property taxes and the fourth quarter of 2021, we had a great benefit on the property tax line.
To the tune of almost $4 million. So we have a very tough comparable and that's what's driving the change from Q3, two four and that growth and expenses that line item just in the quarter will probably be over 20% for the fourth corner. So that's what you're driving and nicking the NOI growth in the fourth quarter.
But it's it's a tough comparable more than anything else everything else inflationary pressures, we've seen those throughout the year with control them well day's team's doing a great job on the payroll line in other lines Iron am we still have some work to do but you know we're comfortable with the inflationary pressures and controls we have in place and the technology where.
<unk> the biggest thing will be D property tax line in fourth quarter.
Okay. So maybe like the the true run rate of expenses closer to your year to date growth rather than kind of what's implied in the fourth quarter.
Well without the property taxes, yes, yes, it would be very similar in Hawaii and the <unk>. If we didn't have that property tax comparable in the fourth quarter I know, what I would probably grow 12 to 13 per cent, but obviously in the guidance you can see it's less than that from the property tax impact.
Got it and then just kind of the the topic of kind of returning to seasonal trends.
Can we dig a little bit deeper in terms of like how this quarter played out that was kind of similar to <unk>.
A normal seasonal.
Third quarter would look like versus what was definitely like did it start a little bit later, the <unk> through the quarter and kind of how that sets up.
That's up kind of like the back half sets up the fourth corner I guess.
And just give in that you know last year was probably since there wasn't any seasonal there was less seasonality. The gap. This year to last year is obviously going to widen but like do we expect kind of like as we get kind of the seasonal left early next year, that's kind of like the gap.
Last year kind of narrows again.
You know I think the seasonality is about what will you expected you know, let me look at the occupancy and again, what we're trying to maximize revenue about the I can see his training as we thought a little bit higher than the normal seasonality decline is what we're seeing that's what we forecast. It I think that's a surprise to the upside has been <unk>.
<unk> I mean, they really hung in well during the corner, we had <unk> roll up for 22 straight months, and then coming through the quarter. We saw some deceleration where we send some saw rent rolled down in September in August it was pretty glad slightly negative. So I think rates have performed better than we thought.
The acquisitions have also performed much better than we expected.
Compared to our underwriting acquisitions are.
Performing much better and that's just.
Platforms, you know once you put acquisitions on our platform and we're talking about the 2021 acquisitions that are performing better than we expect it from a right side from an occupancy side. So it's a combination of things that you know, it's a little different than normal seasonality trends true.
But.
Has been above our expectations, Michael Joe I'll add that you know obviously you had mentioned that the occupancy declines are a little bit higher than seasonality, but that wasn't that wasn't unexpected up as you know we've been very aggressive with the rate increases this year and we will continue that you know through the third quarter and so.
We expected to move out and we we're not surprised with what's been very encouraging is that demand has been there actually in the third quarter. Our movements were seven per cent higher than last year, which was an excellent year. So we think that's gonna continue through you know twenties you know the spring season, we think demand and feel good that demand is going to be there.
And you know we'll start the year off you know what an occupancy level, which we feel is a good start to the year and we'll be able to build up on that as we go through the spring season.
Thank you Congrats again guys. Good luck in the fourth quarter.
Thanks. Thanks.
Thank you. Your next question is coming from Sneeze Rose from city.
Each of your lines advice. Please go ahead.
Hey, good morning. This is naughty entrees needs just had a question about the uninsured damages add back to core Epistyle.
More interested to know if that includes tenet reimbursement claims or if it's more of a like it's a property damage and if any of those costs are expected to be recouped.
Hi, Mary it's a combination of two items site, the uninsured damages about $2.6 million.
A million dollars of that was our customer insurance claims that were above our normal trance, we pay customer insurance claims every month right things happen in storage, whether it's floods and fires those things happen every month. This hurricane was very unusual. It's the first time, we had customer claims at it back from a hurricane event, we weren't self.
Sure It back and 17, when Harvey hit from our customer insurance claims the other $1.6 million as the damages from our properties that is uninsured. So it's deductible portion of the damage that incurred and those repairs are ongoing all of our properties are open and going through the repair. So we don't.
Back to any continuing there there is no recruitment on any of those costs, though that that 2.6 million one that'd be recouped.
Okay, great. Thank you and just saw and started pretty management could you see two at the pipeline. It's looking like that as he think about next here do you have a sensible at net ads could look like.
You don't matter, we continue to be really pleased with our efforts of the third party management team Ah reputation is out there in the industry, we're getting looks from a lot of new potential owners the pipeline through the fourth quarter is going to remain strong and we're going to be opening stores and put in my storage brand on several new stores through the end of the year. So we're.
Very excited about the pipeline and we think that's gonna continue through next year.
Great. Thank you uhm and congrats to Alex and Andy.
Thank you.
Thank you.
Your next question is coming from <unk> from Bank of America was it your lines live. Please go ahead.
Good morning, Thanks for taking my question.
Wondering if you could get an update on <unk> 10 through the end of October cares L. <unk> you you can cast and color on data points around.
Occupancy rate.
Great.
Alright would like to kind of hear how that trying to get through October .
Sure Yeah, you know Lizzy the the move in in the same store I'm, even in October we're pretty much on top of last October . So those look good move outs continued to be higher so we saw and it's pretty much a normal seasonality dropped from September to October 60 basis points and occupancy. So we ended up tobar at 91.8, but.
That's pretty typical rates as they typically do this time of year trend downward although the street right in October we're pretty much down on the same level. They were in September it didn't it didn't go any further south so we're happy with what we see there.
Okay, great. Thank you.
And I was wondering if you could comment on how late fees dot dot <unk> at three to corner uninteresting anything.
Any pick up right anything different and to October I saw.
A similar to what we saw last quarter late fees and delinquencies have returned to normal what we saw pre pandemic, which is not good for our customers obviously, they're they're not their balance sheets are just aren't as strong as we saw the last few years, but it is good for revenue actually does the late fees are back to normal levels you are over.
The year bad debt and it's about 1% of revenue that had turned it down all the way to about a half a percent of revenue during the pandemic.
Back to pre 10th pandemic levels at at that 1%. So as long as we don't see a significant rise from where we're at uhm. We're comfortable it looks alright customers are acting very similar to what we saw in 18 and 19.
Okay. Thanks for the color and congrats Andean Alexander transaction.
Thank you.
Thank you. Your next question is coming from Hong Liang Jong from J P. Morgan hung in your line is life.
Yeah, Hey, guys first of all congrats on the both of you I was wondering if you could talk a little bit.
Your continue the ability to grow ranch, considering it sounds like Street <unk>.
<unk> are still lower than where they were this year and move him apparently expected to continue to be higher.
Yeah, I think you know the <unk> the street right, you're right have come down, but how we're growing our rent's is really it's the current customers and what we're doing with our easy Alright program, you'll get an existing customer rate increase we've been very aggressive the whole year and we continue to be aggressive.
The data tells US differently you know we think we can continue to do.
Increase our current customer <unk> customers above normal levels. So you know I think that's the big driver of what you're seeing and I can place right growth.
Got it and he says he also just the you know we obviously a monitor to supply we don't talk too much about it because it has been muted and I think with the rise in interest rates and you know again the cost of construction is high and you know we feel pretty good about this new supply coming on and obviously when there's a lot of new supply those street rates get some pressure but.
We don't see that happening you know.
Anytime too soon.
Yeah. So it's fair to say your E C R I's or stone trading higher than historical yes.
Yes.
Yeah, and then if I could take one last one day, you've been pretty active on the acquisition market. So far this year could you talk a little bit about what how you're seeing cap rates trend so far.
Sure. Yeah. We you know, we obviously you know hit our guidance and we'll probably that'd be there for the rest of the year, but you don't get a very active year. We've added to some very great markets. Some class a store some lease up stores. So fully stabilise stores I think if you look at the beginning of the year to what we just recently closed in Phoenix, probably the the.
The change of cap reaches about about 75 to 100 basis points.
You know, which is allowed us it could do to find good deals you know, it's it's there's a lot of product out there, but right now given the capital market situation. You know, we're seeing more more deals come back to market that didn't close or didn't trade you know I think there'll be there in the beginning part of the year, but I think right now you know most buyers are on pause.
Thanks <unk>.
Thank you.
Thank you.
Your next question is coming from Spencer all the way from Green Street Spencer Your lines lie. Please go ahead.
Thank you I believe you mentioned earlier that you I saw rent the hold down in September I was just hoping you asked to provide an update on what that rank volodymyr Netflix like today.
Yeah Spencer in the quarter. It was very slight right. It was less than one per cent rolled down when you looked at the corner as a whole but in September it was about eight per cent rolled out Oh, that's not that a typical as you get the later parts of the year I think I went back to 2017 and in 2018 and that was maybe four to five so.
It's not a typical as we go through the typical slow season of the year, but it is different than what we saw last 22 months right, where we had rent roll up so it's definitely back to <unk> more normal trends coming off with somebody high rates.
Okay, and then you just need to start going back to the E. T. R. I come in and are you able to provide an update on the provide commentary around with the magnitude that you actually sent out maybe on average in the corner.
<unk> you know it's been consistent throughout the year Spencer High teens, you know, we'll we'll evaluate you know.
What we're gonna do early in in 2023 right now the volume of increases has an insignificant as what we'd do earlier on to the year. So we we still feel comfortable with with those high teens.
Okay, Alright, thank you that.
Okay.
Thank you.
And the next question is coming from once in Umbria from BMO capital markets.
Your line is life. Please go ahead.
Alright. Thank you maybe procure just on the acquisition side. So do you expect to remain active in.
And could you just.
Maybe help us get a sense of where the staple ideal.
You would expect or our underwriting currently given the changing cost of capital today.
Yeah, I mean, well, we're probably on the Holy one side you know.
Probably not be too active for the remainder of the year you know unless we start seeing cap rates continue to move higher which I don't think it will happen I think you know the five five and a half range is probably the the highest Ah Ah seller will will be willing to trade you know, but we have you know they have we have the lever to work with our JV partners and we've been.
Very active this year close to half a billion in deals with a J V partners and will you know will continue to use that option. If we don't feel comfortable doing a wholly owned deals and obviously, if we're going to continue to grow a third party platform. You know I think a lot of buyers are probably on the sidelines through the rate the remainder of the year. One so I think you know will.
See where where you know.
Where the capital markets are heading into 2023.
Will kind of that'll kind of dictate how active will be on the Holy on front door or on the J V front or obviously both.
Okay, and you guys had been pretty acquisitive for for a good stretch here just curious if you could give us any sense of what the quantum of benefit presumably would be the.
The same store revenues.
For next year is the pool changes.
Yeah, why don't I didn't do the analysis of that 2021 acquisitions that'll come in in the pool I will tell you. This year they have grown tremendously better than we expected I think even come to to to keep with Sri those that pool of 2021 acquisitions. The revenue just from quarter to quarter grew like double what same store groups. So.
That's just the power of our platforms and what they do in that first year year and a half when we put him on the platform. So that performing well I would think it is going to give us a little bump I just haven't quantified. It's it's tough to change the as you can see from our same store pool analysis, we show the last three years groupings. It has.
Impact of it a whole lot and I would think by the time. They go in and 20 twenty-three, it's not going to be a significant increase.
Can I sneak one more in what's your plan on the line of credit you've got.
Four 456 as at the quarter and should we think about like a secure place here at some point or just curious on how you plan to manage that line exposure and your views on rights I guess as a part of that yeah.
Yeah, I think we're we're very comfortable with a line of flexibility we have with that line capital markets right now really aren't matching up so I think we're comfortable you know.
Leaving things on that line, it's a small portion of our total debt as you can see in some 86% of my dad is fixed rate as of the end of the quarter, but we're comfortable there at some point in the future when the capital markets opened back up yes, we would term that out that's typically what we do but there's no no hurry on that we've got great flexibility.
And no no true needs when you look at our needs, it's really driven by acquisitions. Joe said you know there's a pass on those now yeah, we're pretty happy one with the execution of our of our new revolver, we kind of snuck. It in there in the summer at a window when the banks were willing to Landon, we've got some great terms and provided us.
Great flexibility and and really you know prior to doing that you know our line was a half a billion in in our our availability is much greater than that today because of it.
Great, Thanks, and congratulations to Indianapolis.
Wow.
Thank you. Your next question is coming from Florida tongue from Evercore.
Your line is life. Please go ahead.
Hi, Jean I, It's Florida from ever call me can you can now so congratulations on the coin cloud right now.
I can sign I guess my classroom like that okay.
Download <unk> 1090 levels fight philosophy, 245th so what level of <unk>, where you start to be cautious and it sounds for your smartphone motion discounts him to update more advertising $19 because I say it is.
That moment.
You know, we're obviously very pleased with where occupancy is today, we're still like you know above pre pandemic levels and we don't see a lot of new supply coming on so you know, we'll we'll run promotions, where it makes sense and you know we can be very selective in markets and unit sizes as to where we want to build occupants.
<unk> and and we'll do that as and when needed but right now we're very comfortable with our occupancy levels. We think it's a great spot to be ahead. It is a 2023 I think we learned and you know probably 2020th 2021 that you know.
We were almost too occupied have you been to the spring leasing season, we didn't have a lot of availability. So I think the position. We're in now in our occupancy levels are are you know in a good spot had into you know spring of 2023.
Okay. Yeah, that's really helpful. Thank you so much.
You're welcome thank you.
Thank you and as a reminder, ladies and gentlemen, if you would like to join the queue to ask the question you can press star one on your telephone keypad at this time to enter the queue. Once again, ladies and gentlemen, that'll be star one on your telephone keypad at this time to enter the queue, if you'd like to ask the question.
The next question, Sir is coming from <unk> from choice.
In your line is <unk>. Please go ahead.
Thanks to morning, Congratulations on Andy and Alex.
Excuse me.
First I got basic question I know the average turnover in your portfolio is about 5% to 6% of your tenant's turn every month.
But a lot of times you know that turned the same space <unk>. So when you look at it from a full your perspective like how much of your <unk>.
You know I I think it's you're right. Some of those are so it's probably about you know if you look at 3% a month is about the average true turn so you'll look at that it's somewhere around 36 per cent of the portfolio changes or.
Okay, and when you think about the E. P. R. I program I think you mentioned that the rake the magnitude of increases spilled a mid teens or.
Or hiking, but when you look at it going into next year. You know what are some of your high level of thoughts on your ability to keep that program the fame or given what's happening with street <unk>. Yeah. How are you thinking about altering that program.
You know the beauty of the program keep it. It's you know something that I don't have the we don't have to make a decision today you know what.
Something we look at each month.
You know each week, if we have to.
You know there's a lot of data that's gonna come in over the next couple of months with regards to the economy and the bed and you know consumer balance sheets demand. So you know it allows us a great flexibility to be you know to be very reactive and make smart decisions and that's what we'll do you know I think we're gonna be in a good.
Spot I think will be in a position to do you know you see our eyes at our level y'know higher than what we used to do pre pandemic will it be as good as this year I'm not sure we'll beside probably early January February and when the letter start going up.
Okay, and you know you're looking for revenue growth has alright.
Banding, but but it is decelerating, which is not a surprise.
<unk> saw everything about four point.
Over the past couple of quarters each quarter.
Alright, and your <unk> fourth quarter and pie guidance call for about 10 per cent and maybe we can say that conservative so maybe it's with a higher than that by the time, we end the year, but you know there's four point tasteful deceleration is that realistic.
To think about that going into 23 as well.
You know I think you know, we're not guiding the twenty-three yet and it would be tough to say I think we're gonna start to the year in a good spot like you say if we end the year at 10 were starting January close to that so I think we started a year and a strong spot how it flows through the year will depend on D. C. R. I's they are driving allowed to that revenue growth has you know says we have.
That decision yet will it be somewhere between pre pandemic and what we've done the last year.
Maybe walnuts deceive will watch the attrition rate of those easy arise that will be the driver. We do we'll have a little bit occupancy right, we'll have a little bit of potential more occupancy as we go into the next busy season and then we had this year. So maybe there's a combination there, but it's tough to tell right now as you say make those decisions as we see the data is going.
Through the next few months.
Okay. Thank you guys.
Okay well.
Thanksgiving.
Thank you and this does conclude Q and a session for today's call I would now like to turn the floor back to Joe Sapphire for closing remarks.
Well just thank everybody for joining today's call. We look forward to seeing many of you in a couple of weeks in San Francisco.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.