Hello, and welcome to the Office Properties Income Trust Q2 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Olivia Snyder, Manager of Investor Relations. Please go ahead ma'am..

Thank you, and good morning, everyone. Thanks for joining us today. With me on the call are OPI's President and Chief Executive Officer, David Blackman; Chief Financial Officer and Treasurer, Matt Brown; and Vice President and Chief Operating Officer, Chris Bilotto.

In just a moment, they will provide details about our business and our performance for the second quarter of 2020, followed by a question-and answer session with all financial analysts. First, I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company.

Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities law.

These forward-looking statements are based on OPI's beliefs and expectations as of today Thursday July 30, 2020 and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to forward-looking statements made in today's conference call.

Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission or SEC which can be accessed from our website, opireit.com or the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements.

In addition, we will be discussing non-GAAP numbers during this call, including normalized funds from operations or normalized FFO, cash available for distribution or CAD, adjusted EBITDA and cash basis net operating income or cash basis NOI.

A reconciliation of these non-GAAP figures to net income are available in our supplemental operating and financial data package, which also can be found on our website. In addition, we will be providing guidance on this call including normalized FFO and cash basis NOI.

We are not providing reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable effort or at all, such as gains and losses or impairment charges related to the disposition of real estate. Now, I will turn the call over to David..

Thank you, Olivia and good morning. Welcome to the second quarter earnings call for Office Properties Income Trust. If you listen to our prepared remarks, you will note a recurring theme which is that our underlying business is performing incredibly well.

For the second quarter, we produced normalized FFO that exceeded both consensus estimates and our guidance for the quarter. We generated year-over-year same property cash NOI growth of 2.5% also above expectations.

Despite the market uncertainty regarding Office usage and tenant demand for space, we also had strong leasing activity in the second quarter, completing 642,000 square feet of the new and renewal leases for 3.9% roll up in rent and a weighted average lease term of more than six years.

In fact, our year-over-year leasing volume was up approximately 12.5%, while the broader market was down 44%. Our consolidated portfolio occupancy increased 10 basis points in comparison to the prior year and 20 basis points in comparison to the previous year.

Second quarter rent collections remained strong and at the high end of collections for the office sector with 98% of cash rent collected and we have granted minimal rent deferral totaling $2.5 million for the months of April through September, representing only 88 basis points of contractual cash rent over the same period.

As a result of the successful completion of OPIs disposition program in 2019, our balance sheet remains well positioned to weather the impact of the current economic challenges. Leverage has been below our target range for the last three quarters and we have approximately $570 million of liquidity.

In June and July, we issued $162 million of 30-year senior unsecured notes and used the proceeds to pay down our unsecured revolving credit facility. We also entered an agreement to sell a full Property business Park for $25.4 million under our capital recycling program. These transactions further support our low leverage and healthy liquidity.

Our distribution to shareholders is also secure as the second quarter CAD payout ratio was less than 58% and it is expected to be below our long-term target for the full year. Turning to acquisitions and capital recycling.

In July, we entered an agreement to acquire a single-tenant office property in Denver Colorado for a purchase price of $38.1 million. This property is a 100% leased to an investment grade rated tenant for 11.5 years.

Upon concluding diligence and closing, we will provide more detail on pricing and the CAD accretion created by funding this acquisition with proceeds from our capital recycling program. This acquisition is expected to close before our next earnings call.

Although we have temporarily paused our capital recycling program, we believe there may be an interesting opportunity to market a handful of properties beginning in the fourth quarter. Our OPI is not forced to sell assets today, we believe it is strategic to position OPI to opportunistically take advantage of capital should it be available.

This will strengthen both our strong financial profile and stable cash flow that is further supported by our diverse and high credit quality tenant base. I'll now turn the call over to Chris to review leasing and operations.

Chris?.

first, OPIs Board of Trustees consists of 37% women and earns high recognition by the 2020 women on board education and advocacy company. Second, energy management programs led by RMR reduced year-over-year same-property energy by 4.9%.

And lastly OPI earn the 2020 Energy Star Partner of the Year Sustained Excellence Award from the EPA in the Energy Management category. We are proud of these achievements and so this is further testament to RMRs expansive well connected and inform estate operating platform.

I will now turn the call over to Matt Brown to provide details on our financial results. Matt..

Thanks, Chris and good morning, everyone.

Normalized FFO for the second quarter was $67.2 million or $1.40 per share, which beat consensus of $1.34 per share and the high end of our guidance estimate of $1.36 per share for the following reasons; an increase in NOI of $0.02 per share mainly due to cost savings initiatives put in place by RMR in response to the COVID-19 pandemic, a decrease in G&A expense of $0.02 per share, mainly due to a decline in our average share price in May and June and a decrease in interest expense of $0.01 per share, mainly due to declines in LIBOR in May and June.

CAD for the second quarter was $45.5 million or $0.95 per share, which resulted in a CAD payout ratio of 57.9%. In July, we declared a $0.55 per share dividend maintaining our previous level. Our dividend is well covered and we expected to be below our target of 75% for 2020.

Rental income property operating expenses and depreciation and amortization all declined as compared to Q2 2019 due to the sale of 29 properties for aggregate proceeds of $666 million since April 1, 2019. G&A expense for the second quarter was $7.2 million compared to $8.7 million for the second quarter of 2019.

The decline is mainly the result of lower business management fees paid to RMR due to lower debt levels from property dispositions since April 1, 2019 and a $0.25 decline in OPI's average share price. In addition, we incurred higher amounts of legal fees in Q2 2019 resulting from our merger with SIR.

As a reminder, our business management fees paid based on the lesser of total market capitalization or assets under management and is currently being paid on total market capitalization. We believe this calculation represents a strong alignment of interest with shareholders built into our management contract with RMR.

Interest expense for the second quarter was $25.2 million compared to $35.3 million in the second quarter of 2019. The decline is mainly the result of $750 million of unsecured senior note repayments since July 1, 2019. $235 million of term loans repaid since April 1, 2019 and a $113 million of secured debt repaid in 2020.

Turning to property level results for the quarter. For the second quarter, same property cash basis NOI increased $2.4 million or 2.5% compared to the second quarter of 2019, which beat the high end of our guidance range of 1.5%.

The increase was driven by an increase in cash received from contractual rent of $1.1 million, which is primarily the result of free rent expiring and decreases in property operating expenses.

In total, property operating expenses decreased $1.3 million, which is made up of $1.7 million of cost savings initiatives implemented by RMR in response to the COVID-19 pandemic in the areas of utility, cleaning and trash removal, offset by increases in insurance premiums in real estate taxes.

Although real estate taxes have increased OPI has successfully saved over $1.5 million from RMR as real estate tax abatement program in 2020.

While the parking income, which represents less than 2% of rental income decreased approximately $500,000 on a sequential basis which was in line with our expectations, the cost savings as a result of COVID-19 exceeded our expectations and contributed to our same property cash basis NOI growth in excess of our estimate.

This is a testament to the conscious and thoughtful efforts to managing expenses by RMR in order to preserve NOI and improve profitability in a period of lower Office utilization.

Based on our current forecast including estimates of G&A expense which can be challenging due to the volatility of our share price in Q3 NOI, which the pandemic also makes uncertain, we expect normalized FFO to be between $27 and $29 per share for the third quarter of 2020 and we expect our third quarter same property cash basis NOI growth to be between 1% and 3% as compared to the third quarter of 2019.

As it relates to the COVID-19 pandemic, Q2 rent collections were strong with 98% of rent obligations collected and 99% collected after adjusting for granted rent deferrals for the quarter. As of July 27, 97% of July rent obligations were collected and 98% collected after adjusting for granted rent deferrals for the month.

During our Q1 earnings call, we reported that OPI had granted rent deferrals to 18 tenants totaling $1.4 million as of July 27th the number of granted requests has grown modestly to 23 tenants.

The total amount of rent deferred to-date is $2.5 million, which represents 88 basis points of the contractual cash revenue over the period of April through September Generally these deferrals include one month of base rent in exchange for 12 increased monthly payments beginning in the fall of 2020.

Based on the April accounting guidance related to rent relief, these rent deferrals have not impacted our revenues. However, they are temporarily reducing our cash flows. To-date no rent has been forgiven or abated.

Our tenant watchlist currently includes 18 tenants of which 11 are not paying their rents obligations and have not been granted rent deferrals these 11 tenants are mainly building amenity tenants.

In the health and fitness business and quick service restaurant business and represent 20 basis points of OPIs total square feet and approximately $200,000 in monthly contractual rent.

As a result for the second quarter we recorded revenue reserves of $962,000 or 66 basis points of Q2 rental income including $660,000 of AR and $302,000 of straight line receivables which is an increase from the previous quarter. Turning to the balance sheet and capital expenditures.

In June we issued $150 million of 6.375% senior unsecured notes due 2015 and in July we issued an additional $12 million of these notes. In connection with the underwriters exercise of their over-allotment option. These notes can be prepaid without penalty starting in June 2025.

At June 30, we had approximately $575 million of liquidity including $550 million of availability on our $750 million unsecured revolving credit facility. At June 30, our net debt annualized adjusted EBITDAre was 5.9 times, which remains below our target leverage range for the third consecutive quarter.

We currently have $570 million of availability on our revolving credit facility and only $40 million of debt maturities until 2022. Our balance sheet remains strong and we have ample liquidity to weather the current disruptions facing the real estate industry.

We spent $21.9 million on recurring capital during the second quarter including $10 million on building improvements and $11.9 million on leasing capital.

As of quarter end, we had approximately $61.7 million of unspent leasing related capital obligations of which 52% represents tenant improvement allowances managed by our tenants and $15.8 million as leasing capital designated in leases for future years.

Based on our current forecast we expect 2020 recurring capital expenditures to be approximately $92 million which is consistent with our forecast shared on our Q1 earnings call and down from our initial forecast of $110 million. Operator, that concludes our prepared remarks. We're ready to open the call up for questions..

Yes. Thank you. [Operator Instructions] And the first question comes from Bryan Maher with B. Riley FBR..

Yes. Good morning. So a couple of questions. And that you touched upon this and maybe you or David can elaborate on. You have 18 tenants on the watch list eleven not paying seems like they're kind of healthcare fitness QSR type of tenants what's going on there.

I mean what's the plan those tenants not applying for PPP dollars, are they just not wanting to pay you how are you thinking about addressing that?.

Matt, you might deal with that..

Sure. One tenant for example has filed for bankruptcy in that eleven tenants that are not paying. Another example is a tenant that occupied the Gym in one of our buildings in DC and they've said to us that they don't plan to pay rent until kind of inaudible and things stabilize.

So we're working actively with our tenants some of which though with bankruptcy and just declines in business or really struggling right now..

Okay. And then the....

And then -- Bryan one of the things we're being very careful of is not deferring rents where a tenants financial condition might be so bad. At the end of filing bankruptcy we'd rather have delinquent rent that we could file a claim for versus potentially not being in a position to file that claim..

Got it. And kind of moving on to the capital recycling program and I think you made the comment that it was paused, but there were a few assets that may be you might be sold or there is an opportunity to potentially sell in the fourth quarter. David as you look out over the next kind of 6 months to 18 months with COVID and other things going on.

What is your current view as to how that might play out as measured in maybe hundreds of millions of dollars -- $100, $200, $300 over that period of time and what kind of cap rate differentials should we expect between what you might acquire and what you might be able to sell assets for?.

Yes those are good questions Bryan. So I would say during the second quarter, the only potential acquisition opportunities that we have seen have been what I would call very core real estate opportunities and pricing for those very core assets really hasn't changed a whole lot from pre-COVID levels.

There has been very few transactions, for what I would call non-core or maybe value added. We know we have some opportunities to sell some assets where we think the future capital is not as economic as we'd like it to be.

And so we have been more focused on looking at our capital recycling program by comparing the 5-year average cash contribution from assets that we sell versus assets that we buy and what I mean by the 5-year cash contribution is NOI minus capital.

So we're really looking at what I would consider CAD to the company and we believe that we can sell properties with a 1% to 2% differential in that 5-year cash contribution that's that what we're buying is contributing 100 to 200 basis points more in annualized cash contribution than what we're selling. And so, we think we can do this accretively.

Now if we get into the market and we find that there is not attractive bids for what we're selling we won't sell, but our goal would be over the next 18 months to continue our $300 million annual cash with our capital recycling program. That makes sense..

Yes. Great. And then I was going to ask you about your Denver property that you acquired them a little bit more interested in your comments on the property near Union inaudible and what you might be doing there.

Can you just give us a little bit more color on what that asset currently is, how much you might spend I think you said it might come back online around 2023. Just a little bit more color on that would be really helpful..

Sure Chris do you want to address that..

Sure. Hey Bryan. So this is a building as noted in Washington DC about a Block from Union Station it's largely occupied by the GSA, who is going to be relocating to another location to consolidate with other agencies.

And so in doing so, we've been looking at opportunities and had proactively over the last couple of years purchased density credits to grow the building by two floors or working up kind of close to about 125,000 square feet of density credits and really this is a fluid process.

So we're really focused on, I guess a handful of options one we talked about this mixed use option which includes office retail and some form of maybe more by family component and the other option that we're also focus on is just kind of a single tenant lease to kind of more of the existing building with the GSA.

and we're actually in conversations with the GSA for potential user that could take the entire building. But that's a process we have to go through it. It's a competitive bid process and will still require capital. And so that's probably the kind of the lesser NOI play, but lesser risk play.

And then on the mixed-use side, again we would get additional square footage. I think we get higher rents and we're also in some active conversations with tenants that we think could be meaningful for kicking off a project.

And so the timing is, is if the GSA still vacates by the end of Q1 2021, we should be well positioned to proceed with the desired option and anticipate that delivery can happen in early 2023..

Great. Thank you very much..

Thank you. And the next question comes from Adam Gabalski with Morgan Stanley..

Hey guys. Thank you for taking the question. I just wanted to ask a little bit more about the assets that you said might be targeted for sale, I I'd like you said previously you guys don't really need to sell any more assets lever to sort of below your target and it's been there for a while now.

But so these assets that sort of might come up for sale and might sort of become part of the capital recycling, are these assets where the fundamentals and the cash flow picture has changed meaningfully over the sort of next five years, amid COVID or these sort of assets that were always potentially slated for sale? And just sort of how that the potential opportunity for more sales kind of came about?.

Sure. It's a good question. And the short answer is, these are assets that we had targeted for the next phase of our capital recycling program, but put them on pause because there is - this disruption in the property transaction market due to COVID.

So they are not a resolved the performance of the properties are not a result of COVID, but they are assets that we identified probably nine months ago for potential capital recycling. In the fourth quarter 2019, we opportunistically sold a building in Houston as part of the hedge quarter campus for Noble Energy.

It wasn't an asset that we were marketing to sell, but the tenant came to us and basically said, we'd like to buy and they were willing to pay a price for that property that we thought was very high relative to long-term value. Fast forward to a couple of weeks ago, Noble being acquired by Chevron and that building has high potential of going Vegas.

And so what we're trying to do at OPI is position us to be opportunistic. And the only way we can be opportunistic is to have properties in the market, find out how the market prices those assets and if we find the pricing acceptable, we will transact. If we don't, we'll pause and begin and wait.

But I think that is the right strategic move for the company..

Got it. Makes sense. And then I guess just more broadly, I mean it seems like you guys are becoming very flexible as far as sort of capital allocation priorities with the new sort of development project and the acquisition in Denver.

I'm just wondering like is there any chance that you guys just continue to sort of shake-up that mix and maybe re-invest more capital into buildings that were slated for sale or maybe even institute new buyback share buybacks or anything like that.

And just sort of broadly how COVID in the current environment that we're in has shifted your capital allocation priorities..

Yes, it's a good question, I wouldn't necessarily say COVID has shifted our capital allocation priorities.

But we spent 18 months repositioning our balance sheet and putting ourselves in a position where we could be more strategic with allocating capital, COVID kind of put that on hold, but again we want to be opportunistic generate good returns with our capital. We have done across the RMR platform a lot of development and redevelopment.

So we have that capability and assets that are located in core markets where we believe we can grow rents long-term, we would much rather redevelop those assets then we would sell them vacant.

And so I think you will see in our portfolio over the next three to five years, we have probably three, maybe four potential interesting redevelopment opportunity. That we are exploring now to be able to position ourselves to make a strategic decision..

Got it. That's really helpful. And I guess just one more from me, I mean, the balance sheet is in really good shape as you guys have said.

I'm just wondering how does this environment sort of change your target leverage does it change at all are you guys planning to be sort of more conservative for the next year or two? And then maybe be willing to let leverage take out back charge sort of mid to high-end of your prior stated ranges.

What are the sort of latest thoughts on how this environmental affects -- effects your leverage targets and the available liquidity to continue that sort of capital recycling?.

Yes. It's a good question. We don't have this real interest right now issuing equity to take our leverage down. So our primary tool is capital recycling.

And so I think we haven't changed our guidelines as it relates to target leverage is still rate is that 6% to 6.5%, we're fine being modestly below that, but our ability to be successful we're selling assets, we'll have a big impact on how we buy assets and how we address the development. I hope that helps answer your question..

Yes, absolutely. Thank you guys..

Thank you. And the next question comes from Michael Carroll with RBC Capital Markets..

Yes. Thanks. David I just want to talk a little bit about your comments about the development. I guess, first you said, there was what a handful of developments that you could pursue this currently in the portfolio.

I guess, what's the timing there, and would you need to have a tenant move-out like the one do you feel free to pursue those projects or what's the expectation?.

Sure. What we've got, as Chris talked about 20 Massachusetts Avenue, which would be probably kick off beginning of the second quarter of 2021.

We have two other buildings that are currently occupied where one we know the tenant will vacate, it's in a high growth market where we believe we could substantially grow rents that would likely be something that begins more 2023, and then we've got an asset in the Boston market, where we are not sure whether when or if the tenants will vacate.

But it is located and in an area of Boston where we could do a very interesting redevelopment. But that is probably more 2024, 2025. So these are reasonably well spaced, which we think makes a lot of strategic sense for the company..

Okay. And then with the -- and I believe that's the DOJ that's in the Massachusetts Avenue building that's moving out. I mean, do they have a building that they are planning on moving to. I guess, what's the chances that they will holdover and stay in there a little bit longer through 2021..

Yes. It's actually CIF, and they have been working on a build-to-suit for a while. We've actually been, I guess, working with them for the last three years to get them out of the building. And so they've -- we've done short-term extensions with them during that time period to accommodate their build-to-suit..

Okay. And then is that build-to-suit done and ready for them to move in the beginning of next year..

Chris, you want to address that..

Yes. It is complete. They're already starting -- they have already contracted to pay rent on that building, and so it's just a function of them phasing out and moving over. So at this stage, there is no, if there is no reason to believe that they would stay past lease expiration at the end of Q1..

Okay. And then, I guess, Chris I hear you correctly in your remarks about that there is a tenant looking at that Massachusetts Avenue building. So there is a debate. If you want to or if you can lease it to somebody else or pursue this redevelopment..

That's correct. I think with either option, it's going to be a significant investment. I think just to reposition for a full building user for a long-term lease in the neighborhood of 15 plus years or mixed use development is going to require kind of substantial development on other side.

Okay. And then….

Yes. It’s an interesting opportunity Mike, because clearly, doing a government lease for 15 years is a less risky opportunity, but it provides a much lower return. And so we're just going to have to address that as both progress..

Okay. And then the government hasn't awarded that to you yet so that you're still waiting on their decision there..

That is correct..

Okay. And then I guess last one for me is the mixed-used option. I'm assuming that you would pursue that more on a speculative basis and I guess are you prepared to do that if the market remains a little bit more uncertain like it is today..

Chris, do you want to answer them..

Yes, I think that. Yes, I mean, it would be on a speculative basis. But as I noted we are in various levels of conversations with tenants that we believe, Dave could help accelerate some leasing on the onset, but I think idea – ideally, if we don't have.

I would say, kind of this GSA user teed up and ready to go, we would pursue the mixed-use option, it provides kind of a more attractive yields. And I think provides a little bit more certainty around leasing long-term than waiting for another large user as a full building occupant..

But Mike we think we could. The next use option. We think we could be 50% pre-leased before shovels are in the ground..

Okay. Great. Thank you..

Thank you. And next question comes from [Indiscernible] with Mizuho..

Hi, good morning. Just wondering if you guys can provide an update on Technicolor and tailored brands. It looks like Technicolor the annualized revenue in your top tenant list declined a bit and moved to number 13 from number 10. Just curious about the function of their recent restructuring and on tailored brands.

I know there is some reporting on store closures and layoffs. So just curious about any updates there..

Yes, Chris, do you want to address that?.

Sure. I'm here on Technicolor. With their restructuring it was a restructuring primarily around debt obligations and it was largely impacted kind of its Europeans parent on holdings. And so it didn't have a direct impact on the kind of the U.S. entity side, which is what we have with our lease.

And so that's actually progressed based on the plans submitted and they've received certain approvals through the various milestones actually as early as this week.

So, what it's going to do is it's going to give them additional liquidity and access to capital to implement or manage through their business plan so I think we feel relatively optimistic based on kind of the restructuring and the approval that their business should continue kind of as proposed. For tailored brand--.

Chris Can I interrupt you for a second?.

You can..

Yes. So, Technicolor, separate from their corporate restructure in France we did a renegotiation of their rent of their lease with us in in Huntsville, Alabama and that is what resulted in the -- them dropping from number 10 to number 13..

Okay, great..

I am sorry Chris, go ahead with Tailor Brand..

Yes. Now, for Tailor Brands, I guess, a couple of different things one there is the news about kind of a potential bankruptcy that they anticipate in Q3 which is something that we're monitoring.

They have furloughed a lot of their employees and kind of some of the challenges with their brick-and-mortar stores reopening as just kind of making a little bit more difficult for them to continue with their current plan, but the building that we have in Houston is their corporate headquarters I think we view that as mission-critical.

We've been having conversations with the local team on kind of any indication about what they might do. And I think at this stage it's business as usual until I think some of their filing occurs in Q3.

And so it's something we are monitoring closely but with no real indication on whether or not there might be an impact to the buildings that we have with them..

Thanks. That’s helpful. And did you guys see any uptake in shorter term renewals in the quarter and may be from non-government tenants it looks like the weighted average lease term on renewals is about 5.1 years, but just wondering if that might have been skewed by any larger long-term renewals.

I know in your prepared remarks you mentioned a seven-year renewal..

Yes. So, this this is Chris. I guess, there's a couple of short-term renewals that we did for the quarter and I would say that in both cases it's consistent with just kind of the environment where these tenants reside and so for example we did. So, we did two short-term renewals between three and four years of term.

One of them with a building a tech company in Austin Texas. This is a tenant who has been in the building for 10-plus years and over the last I would say two or three renewal has only done three-year deal and I think that's consistent with what we see a lot happen and often in general.

And so it's not a surprise that they did three-year deal and I think when you're dealing with a market like Austin where rents have grown tremendously over this last cycle where this positioned us to do is take advantage of the upside and so for example with this most recent renewal we had a 23% increase and our roll-up in rent.

And so I think that's just kind of shows in this particular case how there is a benefit.

And then the other building is with the government in California and this renewal was closer to four years and it was really just part of a strategic plan as they put together their overall kind of global plan for the building long-term, but we don't view that as any specific risk with its strategic location..

Yes. So, generally, yes, we always have some short-term renewals. When we do our quarterly leasing but there is nothing that occurred during the second quarter that we would say is COVID-19 impacted because people are trying to evaluate what their space needs. There was nothing out of the ordinary..

Okay, great. That's helpful. And then one last one. You haven't touched on this earlier how should we think about G&A going forward given that it's been closer to seven million in last few quarters I think you guys previously guided to a wider range of 79 million so just curious how we should think about that in the back half..

Matt do you want to address that please?.

Yes. So, the Q2 G&A expense was $7.2 million as I covered in my remarks. Based off where OPI share price is trading currently, that remains a good run rate for Q3 and Q4..

Okay, that's it for me. Thank you..

Thank you. And at this time there are no more questions. So, I would like to return the floor to David Blackman for any closing comments..

Thank you, operator, and thank you for joining us today. Before we disconnect, I'd like to thank our teams across the RMR platform for their exceptional efforts and dedication to our business in the face of the global hardship. Our strong second quarter earnings and operating activity is the result of your dedication and exceptional efforts.

So, thank you. Operator that concludes our call..

Thank you. As mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines..