Greetings, and welcome to the STAG Industrial, Inc. First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Xiarhos. Please go ahead.
Thank you. Welcome to STAG Industrial's conference call covering the first quarter 2022 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company's website at www.stagindustrial.com under the Investor Relations section. On today's call, the company's prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts of Core FFO, Same-Store NOI, G&A, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters.
We encourage all our listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. STAG Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Ben Butcher, our Chief Executive Officer, Bill Crooker, our President, and Matts Pinard, our Chief Financial Officer. Also here with us today is Steve Mecke, our Chief Operating Officer, and Mike Chase, our Chief Investment Officer, who are available to answer questions specific to operations. I will now turn the call over to Ben.
Thank you, Steve. Good morning, everybody, and welcome to the first quarter earnings call for STAG Industrial. We are pleased to have you join us and look forward to telling you about our first quarter results. To say the least, we live in interesting times. The daily headlines are dominated by the ongoing and escalating geopolitical turmoil, mounting inflation, and firmly entrenched political polarization. The Fed has, at long last, committed to a rising interest rate cycle, and a post-pandemic new normal continues to evolve. None of this has dampened the vibrant demand for industrial real estate. Consumers are consuming, supply chains are being reworked and optimized, and inventory levels are expected to increase to, if not exceed, pre-pandemic levels. The recently announced cooling off by Amazon is only a small part of the overall strong demand story. A variety of other market participants are aggressively pursuing additional space.
New supply, though elevated, continues to struggle to keep up with this continued heightened level of demand. Good news for owners of this asset class. These dynamics are reflected in the results from our operating portfolio. We continue to experience significant proactive commitment to our spaces from new and current tenants. This has allowed us to achieve greater rental growth and secure record levels of contractual rental escalations. Our team is energized and performing at a high level. Our opportunity set is as large and attractive as at any point in our history. This was a great quarter, and portfolio fundamentals support the belief that this strong performance will continue. The beauty of the STAG investment thesis and our underwriting model is their flexibility.
They give us the ability to react in real time to fluctuating market conditions such as share price, debt rates, cap rates, rate growth, projections, et cetera. Our simple mantra will continue to serve us and our shareholders well. If we can buy it for less than it's worth, we will. If somebody will pay us more than we think it's worth, we'll sell. With that, I'll turn it over to Bill to discuss our operational results.
Thank you, Ben. Good morning, everyone. I want to start off by thanking our team for their hard work this quarter. We are coming off one of the best years we've had as a public company, and our Q1 performance continues that trend. As Ben noted, the industrial fundamental story is very much intact, with demand drivers exceeding expectations and supply in check. Secular demand drivers, including e-commerce, widespread supply chain reconfiguration, and expected increase in inventory levels continue to be strong tailwinds. Rent remains a small fraction of overall logistics costs. Adding space in strategic locations is increasingly the norm for many businesses, a strategic goal for them and positive demand driver for STAG. The current inflationary environment has caused construction costs to elevate significantly. This drives up rents on both new supply and on competitive existing assets, benefiting our portfolio of fungible industrial buildings.
As I mentioned at the outset, this positive backdrop helped our team put together a very strong quarter. Our Core FFO per share was $0.53 this quarter, an 8.2% increase over the prior year. Same-Store NOI was a big contributor of this growth. We continue to improve our leasing spreads and expect those spreads to be consistent with Q1 as we move through the year. Rising interest rates have caused a slight slowdown in the longer-term lease transaction market. Fortunately for STAG, our disciplined process for identifying and closing on industrial acquisitions is focused on relative value. This allows us to still accretively acquire assets that will deliver long-term returns to our shareholders.
Acquisition volume for the first quarter totaled $166.4 million across eight buildings, with stabilized cash and straight-line cap rates of 5% and 5.2% respectively. There are a few larger transactions I would like to highlight that closed this quarter. In January, STAG acquired a 702,000 sq ft warehouse distribution facility located in Kansas City for $60.4 million at a 4.8% stabilized cash cap rate. The building is well located within Kansas City's largest industrial submarket near the I-35/I-435 interchange. Leased for five years to a large national retailer, the building serves as the tenant's sole e-commerce facility. This transaction includes 17 acres of land available for potential expansion or additional parking for the existing or subsequent tenants, providing an opportunity to add additional value to the site.
In March, we acquired a 156,000 sq ft warehouse distribution facility located in the Greenville-Spartanburg market for $16.4 million at a 4.6% stabilized cash cap rate. Located in the Matrix Industrial Park in the I-85 South submarket, the building is leased for just under three years to an investment-grade tenant. The tenant has occupied the facility for over 13 years and has a large capital investment in the facility. Rents are well below market, providing an attractive opportunity to create additional value at lease expiration. Also in March, we acquired a 289,000 sq ft warehouse distribution facility, also located in the Greenville-Spartanburg market for $28.3 million at a 5.7% stabilized cash cap rate.
Well located in the Exchange Logistics Park in the I-85 South submarket, the building was 78% leased upon acquisition to three credit tenants with the ability to add value through the lease up of the remaining space. We've seen a high level of activity on the vacant suite and are currently negotiating terms with an existing STAG tenant for this suite. As I mentioned in our last call, we continue to focus on capital recycling in this environment. During the quarter, we sold one building for $35.9 million at a 4.4% stabilized cash cap rate, with the proceeds accretively redeployed into our acquisition closing schedule. There are several other capital recycling opportunities in various stages of evaluation, and we look forward to updating the market as we move through the disposition process.
We continue to expect disposition proceeds in the range of $200 million-$300 million this year, representing an amount higher than the previous years to take advantage of the current pricing environment. With that, I will turn it over to Matts, who will cover our remaining results for the quarter and provide an update to our 2022 guidance.
Thank you, Bill, and good morning, everyone. Core FFO was $0.53 for the quarter, an increase of 8.2% as compared to the first quarter of last year. Cash available for distribution totaled $82.4 million for the quarter, an increase of 13.8% as compared to the prior period. Leverage remains near the low end of our range, with Net Debt to Run Rate Adjusted EBITDA equal to 5.1x. During the quarter, we commenced 29 leases totaling 3.1 million sq ft, which generated cash and straight line leasing spreads of 15.2% and 25.1% respectively. Retention was 58.4% for the quarter. When accounting for immediate backfills, adjusted retention equaled 87.1%.
Cash Same-Store NOI grew 4.8% for the quarter, the highest level on record for STAG. Included in this quarter's same-store is a payment of past due rent as a result of a settlement reached with a prior tenant. That tenant vacated the building in September and was subject to cash basis accounting. The building was re-leased with zero downtime. This payment contributed 40 basis points to this quarter's same-store result, with the full year benefit to same-store expected to be 10 basis points. Moving to capital market activity and beginning with equity. In January, we sold 128,000 shares via the ATM at a gross share price of $45.03, resulting in gross proceeds of $5.8 million. We have not issued incremental equity since January 18.
On March 29th, we fully settled the remaining forward equity proceeds related to our November equity transaction and received $49.7 million in net proceeds, which were used to fund first quarter acquisitions. Subsequent to quarter end, on April 28th, we closed a $400 million private placement transaction with a coupon of 4.12%. The 10-year notes are expected to fund in June. In terms of guidance, we have made the following updates. Our Core FFO per share guidance is increased to a range of $2.16-$2.20 per share, an increase to the midpoint of $0.01 . We've increased our same-store guidance to be between 4% and 4.5% for the year, an increase to the midpoint of 75 basis points.
This increase is driven by the robust demand we are experiencing for our buildings and leasing results that have exceeded our initial expectations. Finally, we have reduced G&A guidance to a range of $48 million-$50 million, a decrease of $1 million at the midpoint. We continue to expect Net Debt to Run Rate Adjusted EBITDA to be between 4.75x and 5.5x. I will now turn it back over to Ben.
Thank you, Bill and Matts. Strong results indeed, with a bright outlook for the remainder of the year. As many of you are perhaps aware, this will be the final time I participate in a STAG earnings call as your CEO. As previously announced, I'll be moving to the Executive Chair role on July first. Bill Crooker, currently our President, will succeed me as CEO. I have full confidence in him, the rest of the STAG team, and the direction of the company. Thanks for your time this morning. We'll now turn it back to the operator for questions.
Thank you. We will now be conducting a question- and- answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Your first question comes from Sheila McGrath with Evercore. Please go ahead.
Yes, good morning. Ben, I was wondering if you could drill down a little bit more on your Amazon comments. Their commentary really drove the industrial rates down last week when they said they have too much space. What are you hearing from brokers, and what is your view on them retreating, on their impact on demand?
Well, I mean, it's obviously was big news and was taken by a lot of people to be, I think, more meaningful than perhaps it was. Amazon has been signaling in their both their activity and in their earnings calls for some time now, and generally known in the market that they were slowing the pace of the build-out of their their supply chain systems. I think that if you look at the numbers, they were a bigger part of the overall absorption in 2020 than they were in 2021. Indeed, what we've seen from numbers is that they're tracking this year at a rate, again, in terms of percentage of overall absorption, pretty similar to last year. Certainly, they've signaled that slowdown.
Now, what we're seeing anecdotally across our buildings is very aggressive demand from other tenants, other e-commerce tenants not in e-commerce, et cetera, very aggressive, and that's reflected in our operating results. I think it was a little bit of a, you know, a tempest in a teapot, the announcement, but certainly, you know, something that people are paying attention to.
Okay.
Yeah. Sheila, just to add on to that, our exposure is only 3.2% of ABR. We have seven buildings leased to Amazon. Only one was a build-to-suit for Amazon, which has 12 years of remaining lease term. In our near-term lease roll, we have two spaces rolling next year leased to Amazon, which are averaging about 25% below market.
Okay, great. One other quick question. Just your perspective on cap rate trends in industrial, with interest rates moving higher. Your thoughts there, and are you seeing any evidence that the highly levered buyers may be less aggressive on acquisitions in this environment?
Yeah. Sheila, obviously, the most important interest rate is the 10-year Treasury for the real estate market. You know, I think the Fed's moves are likely to affect the short end of the curve more than 10-year. What's really important for us is. Well, first of all, we really haven't seen any impact on cap rates yet. What's really important for us is the impact on our competition. We typically are competing with smaller or local buyers of individual assets who typically use more leverage. Our expectation is that cap rates on the individual transactions at some point will probably go up as their cost of capital is negatively affected by a rise in interest rates. Bill, do you wanna-
Yeah. I mean, that's right. I mean, we typically, as you said, Ben, we see a lag in terms of the change to cap rates when interest rates rise. We haven't seen anything yet. If interest rates stay elevated, there may be a potential rise in cap rates in the back half of the year.
Okay, thank you.
Your next question comes from Emmanuel Korchman with Citi.
Hey, everyone. Good morning.
Morning.
Just given the dislocation in your own stock price, you mentioned that you haven't issued any equity since January. How do you think about your acquisition pipeline? Is there a chance that you simply buy less because your cost of funding has changed? Or how do you offset that?
Yeah. Hey, Manny. We have right now, with the private placement, we executed about $800 million of liquidity. As we see the market today, we're still comfortable with our guidance of acquiring $1 billion-$1.2 billion, but it is with some elevated dispositions that we expect to transact on in at least the first half of the year and some in the back half of the year. No change to guidance. We have plenty of liquidity and comfortable with the guidance we have out there.
The disposition comment you just made, that's in excess of what you've guided to, or you're saying that they're increased-
No, we're com-
... versus where your typical levels of disposition are.
An increase versus our typical levels. We're comfortable with our guidance range of $200 million-$300 million.
Ben, maybe to follow up on the Amazon question- and- answer. There's been some discussion about them potentially putting space in the sublease market. Do you think that that's enough to change the rent conversations that we've been having for some time here?
We haven't seen that in, you know, in our assets. I'm not familiar with that as a widespread concern in the market. Certainly, if they decided that they wanna dump a lot of space in the market, it would have an impact, but we certainly haven't seen that, or heard much about that.
Helpful. Thank you.
Your next question comes from Blaine Heck with Wells Fargo.
Great. Thanks. Good morning. Just digging into the pricing environment and expanding on that a little bit more. There was a pretty wide range in terms of walls on your acquisitions from 2.9 years at the low end to 9.9 years at the high end. Can you just talk a little bit about whether those short deals are pricing differently than those with longer walls and how you're thinking about rent bumps on acquisitions with a lot of lease term remaining. Are you able to find deals with embedded rent bumps that are sufficient to offset the increasing rate and inflationary environment?
Yeah, Blaine. I mean, obviously, every lease or every transaction that we look at has different parameters. Some have short leases, some have long leases, bigger rent bumps, lower rent bumps, higher expected market rent growth, lower expected rent growth, you know, mark-to-markets. There's all sorts of different parameters that affect the return. What doesn't change, generally speaking, is the return thresholds that we utilize to make sure that we're getting, you know, good long-term accretive returns for our shareholders from the acquisition. I haven't gotten to use this word as much as I usually do. We're agnostic as to most of those parameters. We're just not agnostic as to the required returns. Bill, do you want to add anything to that or?
Yeah. As I said, Blaine, we haven't really seen any pricing changes yet. It's a little. It's too soon for that. We've always bought various lease terms, whether it be a vacant asset or a long-term lease. As I mentioned, the 2.9-year lease term asset that we acquired in Q1 is well below market, and we'll be able to unlock some value there in three years. The 9.9-year lease term was a very strong credit at a straight-line cap rate of 5.7%. Very accretive to our bottom line.
We are in terms of-
Great.
Rent bumps. As you allude to, we are getting not only in our leasing activity, but in our acquisition activity, we are seeing higher contractual rent bumps. Got it. That's really helpful color. Retention during the quarter was obviously a little lower than the guidance range. Can you just talk about whether that was expected in the first quarter? What drove that lower retention? Was it, you know, just expansions as you've talked about on prior calls, or was it kind of a drive on your part to increase rate that maybe wasn't well-received by some tenants? Just, you know, a little color there would be helpful.
Yeah, it was expected, Blaine, and part of the expectation was driving rates on those leases. We saw some average occupancy decline in our same-store pool. That was because of these non-retained tenants. We did backfill a lot of those spaces in the second quarter already. Expected was in our budgeted numbers. A big driver was us rolling those leases up to market.
Yeah. Blaine, one of the things that is a sort of a hallmark of the of this very, very strong industrial market is downtime, not only for us but of all market participants, is much lower than sort of long-term trends. Retention becomes less of an issue as you have lower downtime.
Great. Thanks, guys.
Next question, Michael Carroll with RBC.
Yeah, thanks. I want to go back to Bill, your comments on cap rate. You kind of implied or said that cap rates could potentially rise in the back half of the year. I mean, can you give some color on that? How much do you think that they could rise and that is just assuming interest rates stay where they are right now?
Well, historically, the correlation has been about, you know, 50% of the rise in the 10-year is impacted to cap rates. With the demand in industrial, I'm not sure cap rates will rise that much just because of the fundamentals we see. Right now, as I said, we haven't seen anything today. If these interest rates stay elevated, we certainly could see some increases in the back half of the year.
Yeah. If you look at the 10-year, we've seen a 100-125 basis point increase. What Bill alludes to in terms of the depth of the capital chasing industrial, I think will tend more to slow down how long it takes for that impact to occur. I think it'll get itself into the market over time, the rise in cap rates, especially on the individual transactions where we're most active.
When you're looking at new acquisitions, are you adjusting your underwriting for those longer lease duration type properties? I mean, are you increasing the returns that you need on those specific assets?
The answer to that is no, because we're looking at returns over a long period of time. The feature of those deals is that they have a fixed, you know, rent for longer periods of time. That doesn't mean that they're less attractive to us. It may mean that we can't justify paying as much in the interest rate environment, et cetera. No, our model is able to analyze those transactions at the same time we analyze shorter-term transactions and produce, by analyzing the cash flows over time, look at them on an effectively risk-neutral basis.
Yeah, we're constantly updating our model with the forward curves, so that's obviously impacting pricing on longer term leases when the forward curve increases.
Okay. Just last one for me. I mean, how comfortable are you, increasing leverage and kind of hitting that top end of that range, maybe with minimal amount of equity and more focused on asset sales? I know historically, you like to be towards that lower end. I mean, are you willing to kind of creep towards the top end, just given some of the dislocation that we're currently seeing, if it persists at least?
Yeah. Hi, Mike. It's Matts. Let me walk you through our guidance and the reason why we set it up this way. As we sit here today, we can operate within our current guidance, you know, at the low end of acquisitions, the high end of dispositions, and not issue an additional dollar of common equity, and we would hit that 5.5x. We're very comfortable with the balance sheet as now. We're comfortable at 5.5x. This is a promulgated leverage range driven by our investment-grade ratings. You know, speaking to either Fitch or Moody's, they're comfortable at leverage higher than that. You know, we have a guidance of 5.5x. We could operate there. We have room to go higher and not engender any ratings issues.
Really kind of the takeaway here, Mike, is we can run this business model, we can run this guidance that we have right now without needing common equity this year.
Good. Thank you.
Next question, Jamie Feldman with Bank of America.
Great. Thank you. I guess just going back to your Amazon comments, I think you said you had two expirations with them next year. Do you have any sense of their plans for those spaces?
Not for now, Jamie. They're fully utilizing the spaces. They're fungible spaces. One is a second-gen space to Amazon. One is the building we developed in Burlington, New Jersey. The buildings fit the markets really well. We don't have a view on whether Amazon will wanna renew or not, but as I noted, the average of those two spaces are about 25% below market.
Okay. You have a view on a lot of markets given your, you know, portfolio diversification. You know, as you sit here today or you think about that news, I mean, do you think there's certain markets, certain types of buildings that, you know, you'd be more concerned about? Just any buzz from any of your market leaders about what they may be hearing that you might be able to share?
Yeah, I would say if there was a, you know, a build-to-suit Amazon building that had, you know, a year or two left of lease term, I would be concerned about that. We have one build-to-suit for Amazon in our portfolio, which has a little over 12 years of lease term. It's really the specialized buildings, Jamie, with three, four levels of mezzanine that would cause us some concern as those are probably priced well above market. Again, we don't, even the build-to-suit that we have in our portfolio that has 12 years lease term is at market. Fortunately for us, our underwriting contemplates specialized buildings, and it really dings that in our underwriting, so we don't have many, if any, of those buildings in our portfolio.
Okay. Thank you. You know, to your comments and potentially cap rates backing up, can you just talk to us how you're modeling your IRRs now? I mean, how do you think about what's changed in your underwriting assumptions, whether it's rent growth or exit cap rates or anything else?
Yeah. Jamie, obviously we try and update in real time everything that's gonna affect cash flows going forward, and that is basically everything you can think of that will affect the future results from owning that asset. We have at least temporarily backed up our thresholds a little bit because of the fact the fluidity in the market, you know, allowing the repricing, if you will, of assets to occur. We've given ourselves a little bit of extra cushion. Given that and given our experience in the market to date, that has not affected at all our expectations as to guidance.
Okay. That makes sense. You know, you're starting to get kind of a better same-store ramp, you know, with better leasing spreads, which I assume means, you know, more cash flow flowing to the bottom line. How should we think about your prospects to grow the distribution going forward with this, you know, with better kind of internal growth metrics?
Yeah. Hey, Jamie, this is Matts. Our first quarter payout ratio is 80%. We communicated a couple years ago that we wanted to bring that payout ratio to the 80% level. You know, we'd like to be there for this year. You know, we'll continue to evaluate it, but we're getting close to the point where we think that we can begin growing the dividend distribution in line with our CAD per share growth. It may not be this year, but we're getting close to the moderation level that we had communicated.
Okay. All right. Thank you.
Thanks, Jamie.
Next question, Dave Rogers with Baird.
Yeah, good morning, everybody. Wanted to ask about the acquisition pipeline. Looks like it was just down a little bit, and obviously it can't go up every single quarter. Curious if maybe a mix of asset change in there, less coastal assets or migration markets, more Midwestern assets, some additional color on maybe kind of what that pipeline looks like and if you've had to change necessarily the pipeline to kinda hit those returns that you're discussing.
Hey, Dave. The pipeline hasn't, you know, really changed from what it's been over the past several years. Q1, there's always a dip in the pipeline as transactions, you know, Q4 is the largest quarter of industrial transactions. As transactions close, they come off of our pipeline, and it takes a little while to build up that pipeline. If you go back five, six years, this is the largest pipeline we've ever had in Q1 at $3.7 billion. Really it's just a seasonal adjustment of the pipeline.
The pipeline looks the same as it's always looked in terms of makeup.
Yep.
Same kind of assets.
Okay, that's helpful. Maybe a follow-up on the debt side, maybe for Matts. The debt that you talked about having recently issued sounds like it'll fund later in the year. Is that the debt that you anticipate paying off the CMBS with, or do you have more capital plans on the debt side as the year progresses?
Hey, Dave. Yeah, the $400 million private placement will fund at the end of June. You know, as we sit here today, as Bill mentioned, we have liquidity approaching $800 million. In terms of that $46 million of CMBS, we're taking a look at the term loan. We also have the $150 million term loan that matures in January of next year. As we sit here today, we're absolutely gonna refinance the CMBS out of the CMBS market. It will become unsecured debt. There's a possibility maybe we combine it with the refinance of that term loan. We have options as we sit here today.
Okay. Thank you.
Thank you.
Once again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Vince Tibone with Green Street. Please go ahead.
Hi. Good morning. I wanted to follow up on the earlier questions on cap allocation. Based on your comments thus far, it seems you're reluctant to increase the amount of dispositions as a funding source. Just given you can sell assets or even a mid-sized portfolio or at cap rates that are inside your implied cap rate and only marginally higher than your current cost of debt, just can you help me better understand why asset sales shouldn't be a bigger part of the capital plan here, given, you know, where your share price is and your current cost of capital overall?
Yeah. Hey, Vince. We, you know, we contemplated greater asset sales when we put our initial guidance in February, and that's the $200 million-$300 million. That's still the plan. As Matt's noted, you know, our plan right now, our guidance implies no equity issuance this year and operating within our guidance ranges. We've proved over the years to be prudent allocators to capital. It's certainly something we'll look at as we move through the year. If the environment stays the same, we may choose to increase our dispositions as we move through the year. Right now, we're very comfortable with the guidance, and it is an increase over prior years.
Okay. Thank you. Could you then discuss which of your markets are experiencing the best trends in market rent growth and leasing spreads today?
Yeah. We operate in a number of markets. In one of our newer markets that we really started to penetrate a few years ago is Sacramento. We're seeing some great trends in that market. We're seeing some great trends in our Philadelphia, Boston, Las Vegas markets. Overall, the portfolio is operating very, very well. Market rent growth is the strongest we've ever seen it, and it's making its way through our leasing stats.
Yeah. The other thing I would say is that, you know, we've talked about this before, is that, you know, our model takes into account the different parameters that are associated with different markets. We see, we're not saying that, you know, Ontario, California is a better market than, say, Dayton, Ohio. They're different. If we take into account all those parameters, you can evaluate asset purchases in those two markets on a relatively equal footing. We're not saying that the results, the long-term results, operationally from the asset in Dayton will match the one in Ontario, but if you buy it for the right price, you can have similar returns.
Got it. No, it's really helpful. Thank you.
Thank you.
Thank you. I will now turn the floor over to Ben Butcher for closing remarks.
Well, I'll start off by saying I'm surprised nobody asked me what I was gonna be doing in July. I appreciate the fact the focus was on the business, and I'm happy to have us focus on the business in this call and for you all to focus on the business because our operational results are reflective of the really good place that STAG is in terms of its portfolio and its people. As I step down in July from CEO, as I said in our prepared remarks, I'm highly confident of our ability to move forward under Bill's leadership as CEO, and with the really strong rest of the team, and as I said, great prospects for the future. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.