Earnings Call: Q2 2021

Aug 5, 2021

Good day, everyone, and welcome to the Farmland Partners, Inc. 2nd Quarter 2021 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Paul Pittman, Chairman and Chief Executive Officer. Please go ahead. Thank you. Good morning, and welcome to Farmland Partners' Q2 2021 Earnings Conference Call and Webcast. We appreciate you taking the time to join us for these calls. They're a very important opportunity to share with you our thinking and our strategy In a less formal format than public filings and press releases. With me today is Luca Fabri, the company's Chief Financial Officer. I will now turn it over to Luca for some customary preliminary remarks. Thank you, Paul. Thanks to everybody who's on this Call live this morning or is listening to this call to this call's recording. The 2nd quarter earnings Press release went out yesterday afternoon. This call is being recorded and a replay will be available Shortly after the end through August 15, 2021, the phone numbers to access the replay are provided in the earnings press release. For those of you who are listening to the rebroadcast of this presentation, please remember that we will make certain forward looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, the impact of acquisitions, dispositions financing activities, business development opportunities, and we'll also make some comments on our outlook for our business, rents and the broader We will also discuss certain non GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDAre and adjusted EBITDAre. Definitions of these non GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the company's press release announcing 2nd quarter earnings, which is available on our website, www.farmlandpartners.com and is furnished as an exhibit to our current report on Form 8 ks dated August 4, 2021. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors Has me more optimistic than I have been since our IPO 7 years ago. This was a solid quarter, but for the litigation expense. I'll turn To the company specific items in just a moment, but a few comments about the general market trends Farmer profitability is up materially. It is Probably back to the levels we experienced in 2012 2013 era. This has been a dramatic and rapid recovery of farmer profitability since last fall. The big driver there of course is grain prices. But importantly, this is a demand driven bull market. And one characteristic of demand driven bull markets is they usually last for a reasonably long time, At least several years as opposed to a supply shortage bull market, which can end almost overnight when supply recovers in the ag markets. But this demand driven bull market is likely to be with us For quite some time. What that means in terms of the operating business itself Is that our rent renewals that we are doing right now and this is really the first time we've been renewing leases In a strong farm economy, because the turnaround occurred after we put most of the 2021 leases In place, because we're renewing 2022 leases, we're getting increases in row crop rents That are at least in the 7% to 10% range and some as high as 20% or more. Land prices are also up quite dramatically. We have been turning down offers Some of our properties that are materially above what we have paid. As many of you know, over the last several years, Even in a down market, we sold quite a few properties at something in the neighborhood of 15% or 20% premium to our purchase Bryce, we strongly believe that the assets we own are rapidly appreciating and will continue to do so for quite some time. I think the land value appreciation trend should last for several years. It's It's hard to predict out beyond 2 or 3 years, but I think we will have that land appreciation trend with us for quite We have talked in the past that our NAV was in the $14 range. I don't want to get too Specific here because as many of you may know, the USDA land value survey comes out tomorrow And we will do some updating of NAV when that occurs, but we assume that we are appreciating Substantially above the $14 NAV and going to continue to go higher. In a sort of non ag related issue that is very powerful for farmland values, of course, is inflation. There's some different points of view here, but certainly mine is that inflation is with us, Likely to be here with us for quite some time. You can certainly see it in the pricing of almost all goods. That is obviously very good for farmland. Turning specifically to operational and financial performance. As I alluded to a few minutes ago, there really is a lag of almost a year between the time the farm economy And we start to really see it in our profit and loss statement. And the reason for that, Of course, is that we roll over our leases and we roll over about a third of them every year. So when we rolled the leases for the 2021 year late last summer and during the fall, In most cases, we weren't in a strong ag economy yet. As we have gotten to this summer, We are rolling those leases over in a very powerful economy and having very strong success with lease renewals. We are back to buying farms. As you've seen in some press releases, we've bought quite a few Farms and we will continue to do that. We're finding from time to time, some relative bargains even though it's an appreciating market And we will continue to grow the company. As you probably noticed in a press release a few days ago, we have Reopened and restarted, those loans are usually done in the neighborhood of an 8% interest rate or an 8% return to the company. We will intend to continue to expand that business. That loan program is fundamentally Based on asset value they have in land, we generally will only make a loan on a farm we would be happy to own. And if the farmer would happen to default on the loan, we don't fund and we intend to help that organization continue to grow That business, which obviously increases our management fees, but also increases the total number of acres we own or manage. We are also exploring some other off balance sheet, asset management businesses to increase the scale of the company and to give us Multiple ways to grow, even if we are not happy with the equity price at a given point in time. A few comments about the litigation. The other another big event in this last quarter was that Quentin Matthews Also goes by the name of Rota Fortunae admitted that he essentially made up. It's a very powerful Full admission that he made. It went so far that he has been banned, as we understand it by Seeking Alpha From further publishing of any sort, since he intentionally Seems to have intentionally misled the market and caused a great deal of damage to the company and to our investors. We believe that that is a major step in the repair of the company and management's reputation. We also believe that it makes it clear that the class action is frivolous. It does still continue against us, Believe it or not, hard to imagine with that admission on the part of Rota Fortunae why the plaintiffs And their counsel in the class action think they still should have claims against the company, but they are at this point at least still pursuing that. We do hope they will drop those cases. Some of the derivative cases Have been voluntarily dismissed since that occurred. We think that the admission of Rota Fortunae Substantially increase the probability that we get a recovery from SabrePoint, the hedge fund that was involved with all of this. And we think that the elevated legal spend we've seen in the last quarter or 2 Should taper off at least for a while, as some of these cases appear to either be going away Or lessening, at least in the amount of time that we spend on them. With that, I'm going to turn it back over to Luca to go through some of the key financial highlights for the quarter. Luca? Thank you, Paul. I will not kind of read out to you all the financial metrics that are contained in the earnings release that went out last night. There is, However, one measure that I want to draw your attention to that I think is the most meaningful. If you look at the our financial performance year to date in terms of AFFO, And you have probably seen in our earnings release that we are showing both AFFO as usually calculated And we also further adjusted it to kind of take out the effect of the various Kind of legal items in progress in terms of litigation. And we believe that this latter kind of really reflects Our true core business, year to date, we are showing an AFFO of negative $0.02 versus negative $0.03 for the same period last year. Now in this so it's an improvement. In this I just want to remind you also that we have we are subject to a very kind of high degree of seasonality in our earnings because while our Cost structure is by and large, its majority, constant through the year, Kind of evenly spread through the 4th quarters of the year. Our revenues tend to be very concentrated in the 4th quarter because of Participating in lease structures. So just a quick reminder of that, especially for newer shareholders that joined the company here recently. Also wanted to mention our acquisition disposition activity. Year to date, we have completed 4 acquisitions for almost $30,000,000 We've also sold 15 properties for a total consideration of $31,000,000 and a gain of 3,500,000 Now the majority of these asset dispositions were made to deal with funds. So we are effectively retaining this asset base as kind of for revenue generation purposes through In the Q, we incurred a new debt in the form of a short term bridge loan of $40,000,000 The interest expense actually for this loan was almost in 50% paid by the seller of the property underlying this transaction. Year to date, however, our total indebtedness is down $6,000,000 not very much, but certainly in line with our intent of Gradually reducing the leverage in the company. Also in we are seeing a very strong cash position right now as of the end of the 2nd quarter, we have about $40,000,000 of liquidity available to us for acquisitions and other purposes. Also, we have engaged in quite a bit of activity of equity issuance activity through our at the market program. Specifically, we issued about 2,000,000 shares at an average price of about $13.11 generating net proceeds Of a little over $25,000,000 As we sit today, the fully diluted share count of the company is 34,000,000 300,035 shares. This concludes my remarks. Thank you for your time this morning and your interest in Farmland Partners. Cole, we would like to begin the question and answer session. Thank you. And we will now begin the question and answer session. And our first question today will come from Dave Rodgers with Baird. Please go ahead. Hi, Paul. Hi, Luca. Thanks for all the details in prepared comments. Paul, I wanted to go back to the leasing spreads. It's obviously the first time I think since you've come public we've seen these strong leasing spreads. So it's a great thing to see. I wondered if you could give us a little more detail on the 7% to 10% increase that you talked about, maybe the percentage of acreage or the percentage of the portfolio in total that you achieved that on, Maybe some regional color and then any thoughts around kind of where permanent crops come in and if there's a base reset you'd expect to see at any point in the near term? Yes. So the 7% to 10% is what we currently would expect portfolio wide on renewals. We think it may be a little bit of a conservative number, but it's sort of based on the amount. It's kind of a conservative Comparison of the relatively small percentage we've already done. I mean, we probably of the re leasing process, We're 25% of our way through it in the sense of at least a handshake or a signed lease. Those numbers are coming in at that 7% to 10% range or above in many cases. So I'm comfortable saying that I think we'll get through the whole process at 7 to 10 or better. But a couple of things break our way. We may come out of this at a plus 10% across the board. We have some large leases where we're trying for 20% increases. We've got some numbers about How the improved grain prices change profitability per acre and revenue per acre, if you remember that. So think about it this way. We frankly think rents ought to be going up almost that much, maybe not all of it. The biggest beneficiary of higher grain prices Should be the farmer themselves. But the 2nd biggest beneficiary ought to actually be the landlord in our view. And so we're working pretty hard to push it. In terms of regional color, strongest increases in the Midwest. As you all Probably recall like $400,000,000 of our portfolios in the State of Illinois alone, that'd be 35%, 40% of the whole portfolio is there. And those in the places where we're getting increases there are quite strong really running 10% Or better than the Illinois renewal so far. The rest of the other grain producing regions, High Plains, Delta and Southeast, a little below that, but more like maybe call it 7% or 8%, 9%. But we think some of those will come around and be stronger as time goes by. But As is typical, the Midwest responds most rapidly to changes in crop price In terms of the rental market, important to note, and I know you know this Dave, but embedded in your question, We should see a significant increase in rents in each of the next 3 years because we roll over, as I said, roughly a third of the portfolio at a time. Appreciate that color, Paul. And I guess maybe a follow-up question with regard to the acquisitions and the pipeline. Can you talk about what the acquisition Pipeline looks today, I mean, now that you're kind of back in the acquisition market, give us a sense for what you've been underwriting and where the yields are coming out today if you're seeing this Appreciation in land combined with the productivity, are cap rates changing much and what are your investment cap rates today? Yes. So the deals we've done recently here have had We announced a really large transaction in Louisiana a month ago or so. That transaction came in, in kind of a Low to middle 4s in terms of current yield, the cap rate on the property. We announced a couple of numbers. I think we haven't added a lot of property in the core of the Midwest because we're so heavily weighted there already. Although we will continue to add those, I think realistically those are going to be in the low 3s. But we intend to continue to grow this portfolio Kind of maintaining, the cap rate against asset value that we have today, if not gradually improving it. And it's really just a balance of how rapidly we want to grow. If you drop your cap rate expectation by 10 or 15 basis points, which actually is quite a bit when you think about it. But if you drop it that amount, You'll win almost every deal, but we're we don't have unlimited cash and we're trying to do the best deals, not all the deals. And so right now, we're pretty happy with cap rates, but I think you should expect them to get done in the row crop area Between a low of 3 and a high of 5 or just over 5, and it's very regionally dependent Where do those cap rates come out? And then, sorry, just the early part of that question, just the pipeline overall, do you have a pipeline number or something that you're looking at? Yes, we do have We've got quite a few deals. We've got a few under contract all right now and we've got quite a few we're looking at. Certainly measured in the kind of $50,000,000 plus in pipeline, not to say that all those deals get done, but we have enough to keep us busy for the next couple of months for sure. All right. Thank you, Paul. And our next question will come from Rob Stevenson with Janney. Please go ahead. Good afternoon, guys. Just to piggyback on Dave's question. So in terms of crops and locations You're targeting here going forward, any differences to the historical mix of what you've done in the past? Or is it more of the same? Is anything looking particularly More attractive to you these days or less attractive? So let me start with the general and then go to the specific. So the general posture and policy of the company is that we want to have a broad diversified portfolio That reflects food output on a nationwide basis. What that has historically meant and still does is something like seventythirty row crop specialty. And we will in Relatively broad strokes stay close to that, meaning kind of think of it as sixty-forty to 70five-twenty 5 kind of bracket It's where we want to stay. As far as specific regions though in a tactical sense, We find, as I said, that rent increases come more quickly in the Midwest and so does appreciation. So we are actively and aggressively pursuing opportunities in the Southeast, The High Plains and the Delta right now, the biggest deal we've done recently was in fact in the Delta and Louisiana, Because you get sort of a brief window where you know the appreciation is coming, Because you're seeing it already in the Midwest, but it just hasn't quite shown up in the value expectations of sellers In some of the other regions away from Midwest. And that's we're just sort of trying to take advantage of that right now. So I'd say we're a little more focused on the Southeast and the Delta than the Midwest. But The Midwest is such an important and growing region. We'll continue to grow the portfolio there as well, just probably not quite as rapidly As we will on the Delta in the Southeast. Okay. And then Paul, how should we be thinking about acquisitions over the next couple of quarters On FPI's balance sheet versus doing deals for the managed portfolio? Yes. So I think you should think most of them will be done in the SPI portfolio. Unless it's in an opportunity zone, we will do it at FPI. And even some of the deals in opportunity zones, we'll end up taking because I think we have slightly higher access to capital than the Opportunity Zone fund does. But we're We are and we think our shareholders should be largely different. If we do in the opportunity zone, we get Nice fee income, the phrase our overheads and we don't have to commit additional capital. And if we do it In the public company owned portfolio, it's a win win for shareholders to just fundamentally grow the scale. And we love the idea of having ways to grow this business without necessarily having to Issue equity or raise debt on the directly on the balance sheet of the public company. I think that's good for shareholders. Obviously, we're Going down a path that many other REITs have gone down in other sectors and it's worked pretty well to be able to have multiple sleeves of capital to grow your portfolio at all points in time. So that's a path we're trying to follow. Okay. That's helpful. And then, earlier in the call, Paul, you said that you're expecting the litigation cost to moderate for some period of time. Given how impactful every sort of $500,000 is still to earnings, what type of magnitude should we be expecting in terms of the tapering off of the Litigation costs in the back half of the year, you guys have been doing sort of call it $2,500,000 a quarter year to date. I mean is it half that? Is it a quarter of that? Rough numbers, I mean, where should we be thinking how should we be thinking about that? Yes. Well, I'm going to hazard a guess Because I'm a very direct person, as you know, Rob. But I will certainly be wrong, but I'll give you my honest opinion. I think it will be in the neighborhood of half or a little more than that, that we still incur. So think of it as 50% to 60% of what we've seen in the last couple of quarters. If you look at the posture of the two cases, One of the case against Rota Fortunae and the hedge fund kind of 2 separate enterprise 2 separate entities that We're going after there. The Rota guy, Quinn Matthews has given up and accepted and admitted that he did Fundamentally did something improper and paid us a bunch of money and will continue to pass. That, we don't have to spend any money there anymore. The business decision on the case against Savor Point, which is in Texas courts, it's in the federal system, but in Texas, we're going to have to make a financial decision there on whether we think we can recover more than it costs to continue to Sue, right now we think we can. And so for now we're still going after that case. It's in a pretty slow we find it more frustrating Then the cases that we had against the perpetrators of the short and distort, that those cases in our opinion are driven by lawyers. I mean, no one after what Rota Fortunae admitted can believe that it's a legitimate case to pursue against the company management. And it's just beyond the pale. It's so frivolous, So unfair to our existing shareholders in the company that we still have to litigate that, but the court system is unfortunately Incredibly tilted against companies and shareholders and in favor of class action lawyers. It is what it is and we're going to continue to fight it. But some to the credit of a couple of the what they call the derivative cases, Those folks stepped up and said we're voluntarily dismissing because given what Rota has admitted, it's not going to make any sense to pursue it. Hopefully, that will happen in the class actions. Again, though, that case is in a bit of a slow moving point of view. The discovery in that case is closed. And Discovery was, of course, one of the biggest pieces of the cost structure in that case. Okay. Are there any important dates that we should be aware of with regards Either of those outstanding litigations over the remainder of 2021 or are they likely to be stretching into 2022 at this point? Well, I think the class action is likely to get it's probably a late a 4th quarter resolution in the class action cases It would be my point of view. That's kind of the next big, not that it will get to trial by then, but that's the next Big chance to see that case disposed of in its entirety, I think. And as far as the case against the hedge fund, If we continue to move forward on that, which at least now I think we will, like I said, it's really just a business judgment About whether we will recover more than we than it cost to get it. That case will drag into the 2022 year unfortunately. Okay. But like I said, we'll be doing the one that I can't just stop doing is a class action case. I mean, they make stuff up and we have to respond. It's like the water torture. It's unbelievable. All right. And then last one for me, Guco, where from a debt cost standpoint today, where are you Finding the best capital and what is that being priced at for you these days? Well, right now, the average Cost of debt across the entire debt kind of loan portfolio that we have is just shy of 3%. We are looking some of the repricing going forward, it's a little bit under some uncertainty, mostly because of what's Going on with LIBOR, so there is still we are still going through a process of figuring out what's the right benchmark. The Anointed future replacement of LIBOR is not quite ready for primetime yet, and we find that the prime Rate is not a good kind of benchmark. So it's a little bit uncertain how that will kind of play out here In the future, but we are in active conversations with lenders existing and new. So But I should be able to give some more kind of meaningful update maybe next quarter. Okay. Thanks guys. Appreciate the time. Our next question will come from Craig Kucera with B. Riley Securities. Please go ahead. Hey, guys. We saw a sequential pickup in the cost of goods sold line item. I believe that's affiliated with your development properties. Can you comment on what you're budgeting for 2021 in that regard for replanting trees and vines and things of that nature? Yes. Luke, I'm going to turn this to you, if you know the answer. That line, I don't think reflects Vines and trees, it reflects the input costs accumulated over time As it relates to the farms we direct operate, when we direct operate, it is usually a farm that There's been some sort of redevelopment process, but it won't be you would end up capitalizing The tree and the vine costs, this is the actual operating costs of those farms and then offset by the revenues. Luke, I don't know if you can take it To the specifics that Craig asked for, I certainly can't. Yes. No, I also don't have the I figure my fingertips that you are asking for, Craig. However, the variation in that number from year to year is not so much related to The to kind of input costs, but to the number of properties and to which properties we are directly operating in each given crop year. So the on the other side, on the revenue side, there is some variability also within the same farm. And just as a reminder, we usually direct operate on a very opportunistic basis, Kind of depending on specific circumstances with tenants and with crops and development status and so on and so forth. So hope that helps, but unfortunately I don't have the specific number ready for you. That's fine. I can circle back offline. And I guess my second question relates to the decision to reopen Farm Lending. Is that really tied So kind of getting close to winding down litigation and feeling like a lot of those allegations are behind you or are you actually seeing increased demand for those types of loans that you want to take advantage of? We had incredible demand for that program all the way through the last 3 years. We lost an immense amount of revenue by not keeping that program open, but we thought that since it was the core of the accusations against the company, that it was just sort of imprudent to keep Making loans, plus we were taking our capital and buying our own stock back at Something like $0.50 on the dollar in our opinion. And so it just didn't seem like a very good place to deploy capital with those Issues, overhanging. As we saw the stock price recover and then had That one of the major sort of perpetrators of the short distort attack admit that his article was largely Paul, we felt like it was great to get back in that business. What we like about that That it addresses one of the challenges of our asset class. This is a relatively low Current yield asset class. It is a wonderful long term hold, depreciation, low risk Asset class, but look, investors want some yield as well. And so the loan program really helps us in our view there, because it gives us a reasonably strong current yield and still exposure to farmland with a Relatively low risk profile associated with that. And then on the off chance that a loan doesn't get repaid, we're happy So we're kind of thrilled to be back in the business. Just felt like While the stock price was so depressed and it was and the litigation was as heated as it was for a while, It was hard to beat. Come from Buck Horne with Raymond James. Please go ahead. Hey, thanks for the time. Just curious if you could just walk us through how drought conditions are playing out across Your markets and farms over the course of the summer here, if there is any issues with water shortages in your neck of the woods and Kind of any thoughts on potential impact for specialty crop performance later this year? Yes. So we'll divide it into specialty crop and California in particular and then the row crop regions. The row crop regions where we own farmland have largely been actually pretty rainy and wet this year. The drought, the severe drought you read about in the row crop production regions actually starts clearing the Pacific Northwest, We in agriculture call the PNW and it runs from kind of Washington and Oregon all the way across Montana, the Dakotas, end of Minnesota. We have one farm in South Dakota. It's Kind of right on the edge of it, been affected to some degree, small row crop farm, but they've gotten a few rains. I think it'll be not a great year, but an Okay, Yair. And away from those areas, Eastern Colorado, what happens, because it has to do with that where the jet stream is sitting, If you get the Northern Rockies as dry as they are, you tend to get the Central and Southern Rockies and the Plains East of them wetter. Eastern Colorado has had 1 and Western Kansas had 1 of the wetter years that it's had in quite some time. So you're we're pretty much okay is the answer on the row crop side. On specialty crops in California, very difficult water environment in California. We've got enough water to finish out all the on our farms this year, but the price of that water has gone up. So as a line item in your cost structure of the tenant And it is and as that relates to our crop share profit, probably going to be hurt a little bit by that increased cost. But on balance, this will be in our view will be a better year for specialty crops Then last year, now granted that's off a pretty low base, but even with the water problems, it should be better than last year Because the markets are back open, if you recall and listened to conference calls for months, I mean for multiple quarters with us, Our lemon crop basically was unsold last year and that sort of thing isn't happening this year with the reopening From COVID. So all in all, water has gotten more expensive. We have for this season enough to get the crops done And the overall year will be better in 2021 than 2020. All right. Sounds good. Thanks for that update. It's a lot of color. Thank you. And my follow-up is just kind of more of a strategic question. Just thinking through Utilizing the ATM and certainly, Tabings and Low Cost Equity, but still, you raised Well below your when you believe NAV and of course you believe NAV is of course rising here. Just walk us through the rationalization of that trade off of Issuing equity below NAV in terms of the impact for shareholders and if that trade off continues to make sense Now that the stock is maybe closer to $12.13 here. Well, as you noticed, we issued the stock The average price of $13.11 So we sort of agree with you on the question As it gets close to 12, probably don't want to be issuing a lot of ATM stock, particularly within the NAV is higher. Obviously, every time we go to issue equity of any nature, our first consideration is how does it compare To the is it accretive in a balance sheet sense? And then the second question is, Is it accretive in an income statement sense and we have to manage back and forth between those two things At sort of $14 plus, our view was, look, we can do things with that money That increase the cash flow of the company defray the overheads of the team across the bigger asset base in a way that on balance It's a positive for investors. If we're and as the price goes lower that vacation gets harder and harder to make. I don't exactly know where that line is except to tell you that Certainly, when the stock was down at $7 or $8 our few was we're not selling any of it. And the stock was $20 we tried to sell a lot of it. And that's what you saw with the ATM. I appreciate the explanation. Thanks guys. Good luck. Yes. And our next question will come from John Judy, Private Investor. Please go ahead. Yes. Good afternoon. I just had a question on your preferred B Stock, what's your thinking is on that? I know you can Mandatory converted coming this October, certainly at the cost of that is running, I guess, 6% plus The appreciation you're looking 8%, 9% at least. And just kind of what you're thinking right now is what you intend to do with that? Yes. I don't think we've made up our mind what we intend to do with it, but I'll give you a bit of a framework on how we think about it. The first is we have a lot of flexibility. I think we have any time between October 3 years from then To make a decision and to do either buyback of cash or to convert it, we want to maintain The flexibility to do either of those things, we think we're in an environment where our stock is going to continue to appreciate. We think the Asset values are going up in our asset class pretty rapidly. So there's a set of arguments about waiting and watching that appreciation and hopefully the stock price will appreciate with it. And then there's a set of arguments like you begin to make that say It's a relatively expensive piece of paper. And if we could get it taken out, we should do it sooner rather than later. So So we're going to watch it and just do whatever we think is the best for long term shareholder value At the time, it was an important point that we don't need to be in a rush, but we're certainly focused on. I don't really have any further answer than that. Thank you. And this will conclude our question and answer session. I'd like to turn the conference back over to Paul Pittman for any closing remarks. Great. Well, thank you all. This has been, as I said at the beginning, an exciting Order for the company, a lot of really good news in terms of what we're going to see come in terms of increased earnings In the coming year as well as putting some of the litigation behind us and seeing land values go back up and go up strongly. So we feel like we're in a good place and we'll have a good year in front of us. Thank you for the continued interest in our company and look forward to talking with you again next quarter. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.