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Hospitality Properties Trust (NYSE:HPT)

Q1 2012 Earnings Call

May 07, 2012 1:00 pm ET

Executives

Timothy A. Bonang - Director of Investor Relations

John G. Murray - Principal Executive Officer, President, Chief Operating Officer, Assistant Secretary and Executive Vice President of Reit Management & Research LLC

Mark Lawrence Kleifges - Chief Financial Officer, Principal Accounting Officer, Treasurer and Executive Vice President of Reit Management & Research LLC

Analysts

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Daniel P. Donlan - Janney Montgomery Scott LLC, Research Division

Wes Golladay - RBC Capital Markets, LLC, Research Division

Unknown Analyst

Operator

Good day, and welcome to the Hospitality Properties Trust First Quarter Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Tim Bonang. Please go ahead, sir.

Timothy A. Bonang

Thank you. Good afternoon. Joining me on today's call are John Murray, President; and Mark Kleifges, Chief Financial Officer. John and Mark will make a short presentation, which will be followed by a question-and-answer session. I would note that the recording and retransmission of today's conference call is strictly prohibited without prior written consent of HPT.

Before we begin today's call, I would like to read our Safe Harbor statement. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on HPT's present beliefs and expectations as of today, May 7, 2012. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call other than through filings with the Securities and Exchange Commission or SEC.

In addition, this call may contain non-GAAP financial measures including normalized funds from operations or normalized FFO. A reconciliation of normalized FFO and EBITDA to net income, as well as components to calculate AFFO, CAD or FAD, are available in our supplemental package found in the Investor Relations section of the company's website.

Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our Form 10-Q to be filed with the SEC and in our Q1 supplemental operating and financial data package found on our website at www.hptreit.com. Investors are cautioned not to place undue reliance upon any forward-looking statements.

Now I would like to turn the call over to John Murray.

John G. Murray

Thank you, Tim. Good afternoon, and welcome to our first quarter 2012 earnings call. Today, HPT reported first quarter normalized FFO of $0.78 per share.

Focusing first on our travel center investments, first quarter performance of HPT's 185 travel centers included continued strong per gallon fuel margins on flat fuel volumes and increases in non-fuel sales and gross margin. Property level rent coverage for HPT's travel centers was approximately 1.3x for the quarter, up from approximately 1.2x in the 2011 quarter. In addition to its improved operating results, TA's financial position remains sound with approximately $95 million of cash on hand at quarter end.

Turning to HPT's hotel investments. First quarter RevPAR decreased 0.5% for our comparable 288 hotels and increased 0.4% at our 290 hotels, including the 2 new Royal Sonesta Hotels, driven by a 3.5 percentage point decrease in average occupancy to 64.1% and a 5.9% increase in average daily rate to $100.88.

During the quarter, we had 86 hotels under renovation for all or part of the period, including one hotel in our Marriott No. 1 portfolio, 25 hotels in our Marriott 234 portfolio, 52 hotels in our IHG portfolio, 7 Hyatt Place hotels and one Radisson. The impact of these renovations, primarily from reduced occupancies because rooms were out of service, was significant as RevPAR was up 5.6% quarter-over-quarter for the 204 non-renovation hotels but was down 14.6% at the comparable -- at the 86 comparable renovation properties. GOP margins at the 204 non-renovation hotels increased 160 basis points.

Average daily rate growth for our 290 hotels was 5.9% in the first quarter of 2012, an increase in each portfolio and for 14 of our 15 brands this quarter, compared to last year as our operators continued to manage guest mix and pushed rate during peak travel periods. Despite an unsteady macroeconomic environment and excluding renovation hotels, we have continued -- we have seen continued occupancy rate and RevPAR improvement in 2012 as we did in 2011, and we continue to press our managers to focus on revenue management and cost control. Our managers' 2012 RevPAR forecast for our hotels are in the range of 5% to 8%.

There is optimism about the ongoing lodging recovery as a result of constrained supply growth, continued steady demand and increases in average daily rate in GOP margins. Although modest economic growth continues to create uncertainty about the sustainability of this recovery, we continue to see steady growth and a greater share of that growth from rate than occupancy, which helps margins.

Our planned 2012 and 2013 capital program is extensive, with approximately 200 hotels expected to be renovated during that period. Our 2012 and 2013 results are likely to continue to be choppy due to these renovations and the timing of hotel brand conversions. We are pleased with the operating performance of the 36 hotels that completed renovations in 2011, with RevPAR up 14.3% and GOP margin up 580 basis points at these hotels in the first quarter of 2012 versus 2011.

We told you last quarter that first quarter RevPAR would be flat because of the volume of renovation activity. There will continue to be renovations in the second and third quarters, but the pace will slow compared to this past quarter. We expect 73 hotels will be under renovation during all the parts of Q2 but only about 20 in Q3 and Q4. Renovation activity is expected to pick up again in the first quarter of 2013. We have tried to schedule as many renovation projects as possible for periods when they may create the least disruption to hotel performance. Nonetheless, there will be projects underway during each quarter, and the impact will partially offset growth from properties not under renovation. Our managers' 2012 RevPAR growth expectations, which I mentioned earlier, reflected these renovation disruption expectations.

As we told you during our year-end call, we closed on the Sonesta acquisition on January 31, acquiring the 400-key Royal Sonesta Hotel in Cambridge, Massachusetts and the leasehold interest in the 483-key Royal Sonesta Hotel in New Orleans, Louisiana for $150.5 million. The acquisition of these 2 hotels was part of a larger transaction in which an affiliate of our manager acquired Sonesta.

Sonesta has continued as manager of the Cambridge and New Orleans Hotels for HPT. This quarter, RevPAR at the Cambridge and New Orleans Royal Sonestas increased by 49.3% and 22.5%, respectively. Gross operating profit increased 153% and 34%, respectively. The outsized gains in Cambridge partially reflect the fact that 1 of the 2 rooms towers was under renovation in the first quarter of 2011, but also the hotel's great location and reputation and strong Boston lodging fundamentals.

New Orleans is having a great year with a strong convention calendar and citywide events like the NCAA Final Four. As the leading hotel in New Orleans, the Royal Sonesta has obviously benefited from these activity levels.

Part of our strategy in acquiring the 2 Sonesta hotels and establishing an affiliated relationship with Sonesta was to enable us to have improved growth opportunities. We have previously reported on rebranding opportunities. Since the closing of the Sonesta transaction, we have given notice to IHG of our intent to convert the Crowne Plaza Hilton Head, InterContinental Baltimore, Staybridge Suites Burlington Massachusetts and the Crowne Plaza Philadelphia to Sonesta brands.

The Hilton Head conversion was completed on April 27 and is now operated by Sonesta as the Sonesta Hilton Head resort. The Baltimore hotel will become a Royal Sonesta. The Burlington hotel will become a Sonesta ES Suites, Sonesta's new upscale extended-stay brand, and the Philadelphia Hotel will become a Sonesta. Renovations are planned at each of these hotels. We are currently evaluating possible one-off acquisitions in key cities to continue to grow the Sonesta relationship.

Before I turn the call over to Mark, I want to provide an update on the Marriott and IHG properties that may be removed from those portfolios in connection with the contract amendments we completed in 2011. We have decided not to sell the portfolio of 20 select service Marriott hotels. We are in discussions with Marriott regarding the budgets and timing for renovating these 20 hotels.

We currently have a sale agreement on the St. Louis Airport Marriott for $35 million, and the buyer is completing diligence. The closing is expected to occur in the second quarter of 2012.

With respect to the IHG hotels, we are in discussions about rebranding 20 of the hotels with the hotel company. It would be a new third-party brand manager relationship for HPT. We're also considering rebranding 15 additional IHG hotels to Sonesta brand. HPT and IHG have agreed to retain and renovate 3 Candlewood Hotels, which had been considered for sale or rebranding.

I will now turn the presentation over to Mark to provide further detail on our financial results.

Mark Lawrence Kleifges

Thanks, John. First, let's review the first quarter operating results for our hotel properties. As John discussed, we had 86 properties or about 30% of our hotels under renovation for all the parts of the first quarter. As would be expected, this level of renovation activity had a negative impact on the operating results of our hotel portfolio, with revenues at our 288 comparable hotels down approximately $920,000 or less than 0.5% versus the prior year quarter. Results were more favorable if you exclude hotels under renovation during the first quarter, with revenues at our remaining 202 comparable hotels up $8.7 million or 4.2% quarter-over-quarter.

Our strongest performing portfolio was our Marriott No. 1 portfolio with a revenue increase of 6.4%, while revenue for our IHG portfolio, which had 52 properties under renovation, decreased 4.2% quarter-over-quarter. Our newly acquired Royal Sonesta Hotels in Cambridge and New Orleans generated revenue increases of approximately 42% and 18%, respectively, for the months of February and March.

Renovation activity also took its toll on hotel profitability, with gross operating profit for our comparable hotels down $4.1 million or about 4% quarter-over-quarter and GOP margin percentage down 130 basis points to 33.3%. Excluding hotels under renovation during the quarter, GOP increased $5.5 million or 8.1%, and GOP margin percentage increased 120 basis points to 34% for our comparable hotels. The Marriott No. 1 portfolio, which had only one hotel under renovation during the quarter, performed very well with a 14% increase in gross operating profit and a 280 basis point increase in GOP margin percentage.

Cash flow available to pay on minimum rents and returns for our comparable hotels increased $2.5 million or 4.5% quarter-over-quarter. Excluding hotels under renovation, cash flow available to pay our minimum rents and returns increased $10.2 million or about 27% from the 2011 first quarter. Our Marriott No. 1 portfolio contributed the majority of this increase, with cash flow up 24% from the prior year quarter.

Turning to coverage of our minimum returns and rents. In 2012 first quarter, our Marriott 234 and IHG portfolios had coverage of around 0.7x and 0.5x -- I'm sorry, 0.5x and 0.7x, respectively, relatively unchanged from the 2011 quarter. During the first quarter, Marriott made payments to us of $6.9 million under its guarantee of the Marriott 234 portfolio.

During the quarter, we also applied the security deposit we hold in connection with our IHG agreement to cover payment shortfalls of $16.3 million. We currently expect the IHG security deposit to be sufficient to cover any additional payment shortfalls before the portfolio returns to 1x coverage. Because the Marriott security deposit is exhausted, if cash flow is less than our minimum returns, Marriott will fund the difference up to 90% of our minimum return subject to a cumulative guarantee cap of $40 million. We currently expect this guarantee to be sufficient to cover up to 90% of any additional payment shortfalls before the portfolio returns to 1x coverage.

At quarter end, all other payments due under our hotel operating agreements were current. Information regarding our security deposit and guarantee balances at quarter end is included in our Form 10-Q, which will be filed tomorrow.

Turning to our travel center portfolio. Performance continued to improve this quarter, with property level EBITDAR at our 185 centers up $8.8 million or 15% versus the 2011 first quarter. Fuel volumes remained relatively steady, and per gallon fuel margin increased this quarter, resulting in a 9.2% increase in fuel gross margin compared to the 2011 quarter. Non-fuel revenue and gross margin increased 6% and 2%, respectively, quarter-over-quarter.

Property level rent coverage improved from the 2011 first quarter and was 1.29x for our TA centers and 1.39x for our Petro centers. Earlier today, TA reported first quarter 2012 corporate level EBITDAR of $49.7 million, an 11.6% increase from the 2011 first quarter. TA's EBITDAR coverage of total cash rents at the corporate level was 0.92x for the seasonably weak first quarter. On a trailing 12-month basis, coverage was strong at 1.33x.

Turning to HPT's operating results for the first quarter. This morning, we reported normalized FFO of $96.4 million or $0.78 per share. This compares to first quarter 2011 normalized FFO of $102.4 million or $0.83 per share. The decrease in normalized FFO was primarily due to the loss of $6.4 million of income as a result of the temporary elimination of FF&E reserves for the IHG portfolio and the $3.7 million increase in preferred distributions due to our January 2012 Series D preferred share issuance. These decreases were partially offset by a $6.6 million increase in our minimum returns and rents versus the prior year quarter.

EBITDA was $142.3 million in the first quarter, and our EBITDA to total fixed charges coverage ratio for the quarter remained strong at 3.1x. In February, HPT paid a common dividend of $0.45 per share, and normalized FFO payout ratio was approximately 58% for the 2012 first quarter.

With respect to our balance sheet and liquidity, at quarter end, we had cash of $148 million, which excludes $60 million of cash escrowed for improvements to our hotels and had no outstanding borrowings on our revolving credit facility. During the first quarter of 2012, we made capital fundings in excess of FF&E reserves of $62.6 million related to the ongoing renovation of hotels in our Marriott 234 and IHG portfolios and to fund improvements to our Sonesta hotels.

In connection with planned renovations at our IHG and Marriott 234 hotels, we expect to fund improvements of approximately $172 million and $42 million, respectively, during the remainder of 2012. During the first quarter, we also made capital fundings under our leases with TA totaling $13.1 million, and we currently expect to fund up to an additional $75 million of improvements to our travel centers in 2012.

Turning to our recent financing activities. In January, we completed an offering of 11.6 million shares of our 7 1/8% Series D preferred shares, raising net proceeds of approximately $280 million. We used a portion of the net proceeds to fund our January acquisition of the 2 Sonesta hotels for approximately $151 million. In February, we redeemed at par all of our outstanding 8 7/8% Series B preferred shares for approximately $86 million.

In March, we entered into a 5-year $400 million unsecured term loan, which bears interest at LIBOR plus 145 basis points. This loan is pre-payable at any time without penalty. Also in March, we've repurchased approximately $71 million of our 3.8% convertible senior notes that became critical to us. Approximately $8 million of these notes remain outstanding.

Finally, in April, we redeemed at par all of our 6.85% senior notes due in July 2012 for approximately $103 million. As of today, we have approximately $94 million of cash on hand and no amounts outstanding under our $750 million credit facility.

In closing, we remain optimistic about the prospect of continued improvement in the operating results at our travel centers, as well as the positive impact our extensive renovation program will have on the future performance of our hotels.

Operator, that concludes our prepared remarks. We're ready for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll go to the line of Jeffrey Donnelly.

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

What is the rent coverage and RevPAR of the 4 IHG hotels that are now to be pulled out of IHG and put into Sonesta?

Mark Lawrence Kleifges

The rent coverage is about 0.8x. I don't know the RevPAR off the top of my head.

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

And do you guys have a sense of how much you'll be investing in the remaining IHG portfolio assuming that they all remain with IHG?

Mark Lawrence Kleifges

Well, we know that for the hotels that are definitely staying with IHG, we know that we have another $172 million -- $171 million, $172 million this year, and there'll be additional monies in 2013. And we're still -- we're firming up those estimates.

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

And just from a practical standpoint, how do you guys end up, I guess, negotiating the arrangements with Sonesta just considering that RMR is sort of on both sides of the transaction? Do you guys have to get a third party involved or I'm just curious from a logistical standpoint?

John G. Murray

The valuations and exit rates for hotels that are still part of the IHG arrangement were negotiated with IHG, so those -- and they were then shared with our independent trustees who approved the IHG amendments. So we have approval to remove those and rebrand those properties at those values or higher. So it was approved by our independent trustees.

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division

Just one last question. I don't know if you guys have it. But I think you said in your release that at the end of the quarter, from the Marriott 234 agreement, there was $24 million of guarantees or deposits left. Do you have a sense of where that stands today, like maybe in early May or at the end of April?

Mark Lawrence Kleifges

No. We're going to put -- we're in the process of updating that -- those numbers through -- I think that the -- Marriott is on the 13-period system, so we're going to provide in our Q when we file it tomorrow. We'll provide an update through the most recent period.

Operator

[Operator Instructions] And we'll go to the line of David Loeb.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

John, I'm not sure you really answered the question that I thought Jeff was asking, and I was interested in that, so let me ask it a different way. When you're negotiating a management arrangement for a newly rebranded Sonesta Hotel, who negotiates that?

John G. Murray

There was a negotiation that took place at the time that we were acquiring Sonesta, and we engaged an outside consultant to do a benchmark study of a third-party management contract terms in the hotel industry. And based on that benchmarking study that was done by an independent firm, our independent trustees signed off on contract terms that were within those parameters and also on the pooling agreement. So that as we converted hotels from the IHG portfolio to the Sonesta portfolio, if we decided to do that, that the new rebranded hotels would fall under that same -- those same contract terms and become pooled together.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Okay. So basically, any additional contracts that you sign with Sonesta, any hotels that are rebranded will have those same terms as the initial ones?

John G. Murray

Yes, I think that's what everybody should expect going forward. Unless there's something particularly different, we could go -- we could run that by a new scenario by our independent trustees. But I think we've got -- it was an extensive study done, and I think that both sides are comfortable with the terms. They look very similar to most other third-party hotel management contracts that you see among all REITs out there.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Okay. And then in the supplement, it talks about -- it actually has a number in -- for annual minimum return, minimum rent for the Sonesta 1, Sonesta 2, which, I guess, are now 2 hotels but soon going to more. Is that really only relevant in measuring whether HPT has the right to terminate Sonesta?

Mark Lawrence Kleifges

To terminate as well as for purposes of calculating when the manager would qualify for incentive fees on the contract.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Okay. So that's -- so that 1.0 coverage, that's the threshold for incentive fees to kick in?

Mark Lawrence Kleifges

Correct, and keep in mind that John mentioned the pooling agreement. So all hotels managed by Sonesta, with the exception of the New Orleans leased hotel, will be pooled for purposes of calculating whether we received our minimum return.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Okay that does make sense. So as you go forward -- I guess this is another thing that maybe Jeff was kind of getting around the edges of. But as you take hotels out of IHG where there is a minimum return requirement and put them into Sonesta where there's not except for the calculation or basically where you're floating relative to the market as any other REIT TRS leased hotel would be, do you expect in the near term or in the intermediate term that there will be a decrease in the cash flow coming from that?

Mark Lawrence Kleifges

Well, for the 4 hotels that we have announced that we're going to rebrand, there will be a shortfall initially because the minimum return under the IHG contract will be reduced by $9.9 million. And as I said, these hotels were covering at about 0.8x on a trailing 12-month basis, so there's a shortfall there. If you look at all of the hotels combined that we're thinking of converting potentially to the Sonesta brand, they actually -- hotel cash flow over -- on a trailing 12-month basis is greater than the amount or minimum return under the IHG contract will be reduced. So if we convert all of the hotels that we're considering, there will be no -- at least on -- based on historical cash flows, there will be no decline in our cash flow.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

And in fact, an increase in your cash flow, if I heard your numbers right?

Mark Lawrence Kleifges

Based on historical numbers, yes.

John G. Murray

But we will be renovating all of the properties within 6 months after conversion, so that's another reason why there will be a drop off.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

Okay. So that makes sense. There would be a drop off during renovation but presumably, you would expect to have an increased return from those going forward, albeit with a slightly higher risk profile?

John G. Murray

Yes.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

And for the hotels that you may decide to retain in Marriott or InterContinental, am I looking at the math right to say that you'll keep the 8% or 9% minimum return on those, but any additional dollars that you put in to renovate those under those systems will also carry that 8% or 9% minimum return?

John G. Murray

That's correct.

David Loeb - Robert W. Baird & Co. Incorporated, Research Division

That sounds like a good deal.

Operator

We'll go to the line of Dan Donlan.

Daniel P. Donlan - Janney Montgomery Scott LLC, Research Division

Was just curious on the 4 hotels that you guys are rebranding as Sonesta. Why did you decide to rebrand those? And then secondly, what portion of the guests are -- were being derived from the IHG reservation systems?

John G. Murray

The -- those are art and -- a combination of art and science in terms of the timing and which hotels went first. And it involved -- to some extent, it involved a negotiation with IHG. Contractually, we were required to convert the Hilton Head property first. The other properties, we converted based on the timing that seem to work best for Sonesta and that -- there were a few different reasons why that would work out better. We thought -- Sonesta's currently manages larger full-service hotels in the Royal Sonesta Hotel brand here in the U.S. And so converting hotels like Baltimore that fit nicely into that type of hotel asset work best, so that's why Baltimore is one of the next ones. There -- Sonesta's created a new upscale extended-stay brand, and so that's one of the -- and Burlington is the closest hotel to Sonesta's headquarters here in Boston, so that's why Burlington was next. Philadelphia, again, is a large center city hotel close to Baltimore and close to Boston, and so it was really for ease. Second part of the question was -- I'm sorry?

Daniel P. Donlan - Janney Montgomery Scott LLC, Research Division

Yes, just what portion of the guests -- I guess really, Baltimore and Philadelphia, what portion of the guests are generated to the IHG system?

John G. Murray

It varies. It varies, but it was probably in the 30-ish percent range.

Daniel P. Donlan - Janney Montgomery Scott LLC, Research Division

Okay. And then as you go forward, are these kind of like test cases, to a degree, with Sonesta in how you guys decide to revamp future hotels? I guess it would seem to me, given Sonesta's full service experience that the Crowne Plazas might be better rebranched for Sonesta initially. Is that a fair assumption for us to be making or?

John G. Murray

Well, there are more hotels that have potential under the Staybridge brand right now that are potential conversion candidates. So -- and I think that not having created a new brand, there will be an effort to get a little bit of mass within that brand. So I think you'll see a mix of Staybridge and Crowne Plaza conversions.

Daniel P. Donlan - Janney Montgomery Scott LLC, Research Division

Okay. And then I might have missed this because I got disconnected from the call. But I think you guys were talking with another major brand about potentially rebranding hotels, some of your hotels, I think, in the -- maybe the IHG portfolio. What's going on there?

John G. Murray

We're still in the process of negotiating documents. We're hopeful that, that will move forward, but we don't have a firmly committed deal. We have an agreed term sheet and documents that are going back and forth. It covers 20 hotels. We're hopeful that we'll be able to complete and announce that transaction this quarter. But until it's done, it's not done.

Operator

Next, we'll go to the line of Wes Golladay.

Wes Golladay - RBC Capital Markets, LLC, Research Division

You mentioned the potential for acquisitions. Can you give us some color on the size of your pipeline and what markets you might be looking at?

John G. Murray

Well, we're looking at a number of different possible alternatives. The footprint that we're initially laying out with the Sonesta brand is really from the Baltimore -- from the Boston market where they are today down through New Orleans and to Houston, but primarily along the coast. And so our initial focus with acquisitions that are going to go to the Sonesta brand is going to focus on key markets that -- where we don't have that representation today. So we've been looking at hotels in New York, Washington D.C., Miami, and those would probably be the area -- the markets that get the most attention for Sonesta now. We won't -- obviously, we won't ignore opportunities that come up in Chicago or San Francisco, but the focus is really on the East Coast right now that -- as we increase the awareness for the Sonesta brands.

Unknown Analyst

Okay. And on the term loan, you guys currently have that floating. Is the game plan to leave that float for awhile or are you guys looking at permanent financing on that?

Mark Lawrence Kleifges

I think that the game plan right now is to allow that to float. We think the interest rate environment on floating rate debt is very favorable today. We don't see that changing in the near term. However, if our view changes, we can prepay that at any time. And if we decided to do that, we'd probably issue senior notes to take it out.

Operator

At this time, I have no further questions. I'll turn it back over to Mr. John Murray.

John G. Murray

Thank you all for joining us today. We look forward to seeing you at NAREIT and the NYU Hotel Conference in New York later or next month. Thanks.

Operator

Ladies and gentlemen, that does conclude your conference call for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.

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