Crombie Real Estate Investment Trust

TSX:CRR.UN

Q2-2025 Earnings Call

[Operator]

Good morning, everyone, and welcome to Crombie REIT's Second Quarter 2025 Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 7, 2025.

I would now like to turn the conference over to Kara Cameron, Chief Financial Officer of Crombie. Please go ahead.

[Kara Cameron, executive]

Thank you, and good day, everyone. We would like to welcome you to Crombie REIT's Second Quarter 2025 Conference Call and Webcast. Thank you for joining us. This call is being recorded in live audio and is available on our website at www.crombie.ca. Slides to accompany today's call are available on the Investors section of our website under Presentations and Events.

Joining me on the call today are Mark Holly, President and Chief Executive Officer; and Arie Bitton, Executive Vice President, Leasing & Operations.

Today's discussion includes forward-looking statements. We want to caution you that such statements are based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see our public filings, including our management's discussion and analysis and annual information form for a discussion of these risk factors.

Our discussion will also include expected yield on cost for capital expenditures. Please refer to the development section of our management's discussion and analysis for additional information on assumptions and risks.

I will now turn the call over to Mark to discuss Crombie's strategy and outlook.

[Mark Holly, executive]

Thank you, Kara, and good morning, everyone. Crombie's second quarter results demonstrated the continued momentum and further solidified our position as an essential REIT. In a dynamic market environment, our strategy delivered exceptional performance, substantiating our disciplined approach and reinforcing the value of our coast-to-coast necessity-based retail portfolio.

Our value creation is built on 3 pillars: own & operate, optimize and partners. These pillars guide our approach and capital allocation, and they delivered solid results this quarter. Let me drill into our performance across each pillar.

First, under own & operate, our grocery-anchored retail platform remains the foundation of our success. At the end of the second quarter, 83% of our annual minimum rent was derived from necessity-based tenants and committed occupancy reached 97.2%, the third consecutive quarter of record highs.

Our disciplined and proactive approach to operational excellence and lease management continues to underpin performance, and we remain well positioned to maintain solid occupancy levels throughout the remainder of the year.

Same-asset property cash NOI grew 2.8% with year-to-date performance at 3.0% at the top end of our target range. These results were driven by embedded rent step-ups, solid renewal spreads and new leasing activities.

Our renewal spreads of 10.8%, up from 10% in the first quarter reflects the continued demand for our properties across all markets. These operational results translates directly into our cash flow performance in the quarter with FFO per unit growing 6.3% year-over-year and AFFO per unit growing by 7.1%.

Located at the center of thriving communities across Canada, our properties generate consistent traffic and repeat visits. This steady engagement makes them highly valued by retailers, leading to sustained tenant demand and contributing to our portfolio's resilience through economic cycles. Portfolio management remains central to our ownership strategy. Through a disciplined approach to capital allocation, we continuously evaluate a portfolio to ensure our assets create unitholder value.

This quarter, we acquired 4 grocery properties in Atlantic Canada totaling 146,000 square feet for a combined purchase price of $21.2 million. We also sold our 140,000 square foot Main Street office property in Moncton, New Brunswick for $8.5 million and completed a strategic land swap at our Barrington Street development site in Halifax.

These transactions reflect our ongoing commitment to strategically curating a portfolio that focuses on long-term stability, sustainable growth and value creation by recycling from underperforming into high-quality necessity-based retail properties. We are also focused on unlocking embedded value through targeted investments within our portfolio and advancing entitlements and development opportunities, which is the objective of our second value driver, optimize.

This quarter, we expanded our investments in nonmajor developments. We completed 11 modernizations and continue to advance projects totaling $41.6 million with an estimated $12 million remaining to complete. These current initiatives are expected to deliver yields between 6% and 7% and are designed to enhance asset performance and support long-term income growth while maintaining a disciplined and efficient approach to capital allocation.

Our approach to major development activities remains thoughtful and deliberate, which is particularly important in today's market. This quarter, we achieved several zoning milestones across our entitlement pipeline, including rezoning approval for Broadway and Commercial in Vancouver. And in our Toronto properties, we secured zoning approval for Toronto East, submitted an application for Danforth and continue on advancing planning at McCowan and Ellesmere.

Our approach to capital allocation remains flexible yet deliberate. We maintain a structure that enables us to invest opportunistically across acquisitions, non-major developments and major development initiatives based on return profiles. This balanced strategy positions us to remain agile in responding to market opportunities while creating consistent long-term value for our unitholders.

Looking at our third value creation pillar, partner, the Empire relationship remains our foundational partnership and continues to be a significant advantage. We are pleased to have deepened our relationship with our acquisition in the second quarter. Additionally, our investments in modernizations with Empire improve asset quality, increase rental income and create a halo effect that extends to other tenants at these properties.

As I discussed last quarter, we've been expanding our partnerships beyond this foundation through our new joint ventures with Montez in Halifax and Wesgroup in Greater Vancouver. These programmatic partnerships deliver immediate value, stabilize cash flow through management and development fees, accretion to FFO and the ability to unlock value from high potential assets without constraining our capacity to make core retail investments.

These partnerships contributed $2.4 million to revenue from management and development services in the quarter. We expect this revenue stream to contribute at similar levels each quarter over multiple years, providing a solid baseline of recurring cash flow.

Last night, we announced a $0.01 increase to our annual distribution. This important milestone reflects the stability of our platform, the discipline of our strategy and the strength of our balance sheet. Over the years, Crombie has maintained steady distributions through a range of economic cycles while growing FFO and AFFO and meaningfully reducing its payout ratios. This increase signals a continued commitment to dependable long-term growth.

Our prudent approach to capital allocation, investing in grocery-anchored retail, optimizing our portfolio and deepening our existing partnerships while forming new ones continues to generate accretive growth for our unitholders, which is underpinned by our financial strength and our commitment to people and culture.

With that, I'll turn the call back to Kara to walk through our financial results.

[Kara Cameron, executive]

Thank you, Mark. Our second quarter financial results reflect the strength of our platform and the consistency of our execution. The numbers tell a clear story. We continue to deliver on our strategic priorities while maintaining disciplined capital allocation and a strong flexible balance sheet.

Let's start with quarterly earnings. Funds from operations per unit grew by 6.3% year-over-year and adjusted funds from operations per unit increased by 7.1%. This growth was driven by strong leasing performance, rent escalations and recurring revenue from our strategic partnerships.

We also benefited from the full year consolidation of the Davie Street residential property this quarter versus Q2 of last year, following our acquisition of the remaining 50% interest in the fourth quarter of 2024 as well as lease termination income. Property revenue increased by 6.4% in the second quarter, supported by acquisitions, new leasing activity and contributions from both lease terminations and the Davie Street residential consolidation, as previously mentioned.

Building on Mark's comments, we continue to see healthy demand for well-located grocery-anchored retail, and our leasing team has done an excellent job at capturing that demand. Revenue from management and development services totaled $3.3 million in the second quarter, bringing our year-to-date total to $4.4 million. Approximately $2.4 million in the quarter was directly attributable to our Montez and Wesgroup partnerships.

We expect these programmatic relationships to contribute at similar levels each quarter throughout the entitlement process with potential upside beyond this baseline as additional projects advance with our partners. Management and development service revenue over and above the amount related to these partnerships in the quarter was generated from various projects with Empire.

During 2024, we recorded $2.1 million in deferred revenue related to development management services provided to a third party. Our performance obligations were completed subsequent to the quarter and the full amount will be recognized in our third quarter.

Joint venture earnings were a bit softer this quarter, primarily reflecting higher operating expenses at Bronte related to suite turnover repairs and bad debt. These pressures were partially offset by lower finance costs following the CMHC financing we put in place last year. Performance at Le Duke remains strong with stable occupancy and solid rental performance. Across the residential joint venture portfolio, rental rates had held steady, and the assets continued to perform well in their respective markets.

Turning to expenses. G&A represented 5.3% of revenue, consistent with the first quarter. Excluding employee transition costs and unit-based compensation, G&A was 3.9% compared to 3.8% in the first quarter of 2025, reflecting a normalized run rate.

Turning to finance costs. Interest expense was higher year-over-year, primarily reflecting the net issuance of senior unsecured notes in 2024. This increase was partially offset by lower interest on our credit facilities, driven by reduced average loan balances. Overall, our financing strategy continues to support our growth while maintaining discipline on spending.

Our balance sheet remains strong and flexible. Debt-to-EBITDA stands at 7.84x, while our payout ratios are 66.5% for FFO and 75.1% for AFFO. We maintain ample liquidity with $678 million in available capital and $3.9 billion in unencumbered assets. We continue to proactively manage our debt maturity ladder, focusing on fixed rate financing and unsecured structures to ensure stability and consistency.

As of June 30, 98% of our debt carried fixed rates, 61% of our debt was unsecured and our weighted-average term to maturity was 4.5 years. During the quarter, we received a credit rating upgrade, which reflects the strength of our balance sheet and our disciplined approach to leverage and liquidity management. This upgrade enhances our long-term funding flexibility and supports our ability to access capital at attractive rates, further reinforcing our commitment to prudent financial management. This was a strategic objective we set for ourselves, and I am very pleased that our team's focused execution delivered this important milestone.

As Mark mentioned, we were active on the acquisition and disposition fronts during the quarter. Let me flag a few key accounting items related to those transactions. The strategic land swap at our Barrington Street development site in Halifax resulted in a $5.4 million gain as the fair value of Barrington Street land exceeded its cost.

Main Street office disposition in Moncton generated $8.5 million in proceeds, with $3.8 million provided as a 0 interest vendor take-back financing repayable over 3 years. This disposition had a positive impact on occupancy in the quarter of approximately 20 basis points and had minimal impact on our NOI. As announced last quarter, The Marlstone sale into our joint venture with Montez was completed in the second quarter.

And with that, I'll turn it back over to Mark for closing remarks.

[Mark Holly, executive]

Thanks, Kara. Looking ahead, we remain focused on executing the fundamentals that drive long-term value, growing FFO and AFFO through operational excellence and disciplined leasing, maintaining high occupancies across our portfolio and delivering attractive return on invested capital.

We will continue advancing our entitlement pipeline, investing in nonmajor development initiatives, pursuing strategic acquisitions that strengthen our essential retail portfolio and expanding partnerships that create value while preserving financial flexibility.

Prior to closing, I'd like to highlight the release of our 2024 environmental, social and governance report last night. Our latest reports reflect the depth of our commitment to sustainability and our people.

With that, we'll open the lines for questions.

[Operator]

[Operator Instructions] Your first question comes from Sam Damiani with TD Cowen.

[Sam Damiani, analyst]

Congrats, everyone, on a good quarter. Just the leasing commentary, obviously, sounds still very, very positive. Just wondering if there's any change in tone in your leasing discussions and your outlook since last quarter and if there's any new retailers of concern on your watch list?

[Arie Bitton, executive]

Sam, it's Arie. I would say that the general theme over the last quarter continues to be the same as it was last quarter. Demand is still strong. Our tenant conversations indicate that there are still many tenants in growth mode and expansion mode, and we're looking to see how we can fit those into our portfolio.

With respect to our tenant watch list, we've said before, we actually see that as more of a benefit. If you think about the [ land force ] Peavey Mart disruption that actually left us with a tenant replacement with 0 rent interruption and more than a 6-figure uplift in NOI on that particular one.

So, like we say, like some of these potential tenant watchouts are great for our portfolio. There's a number of tenants that have been on our watch list. Claire's announced yesterday for us a 1 location tenancy at Avalon Mall, and we've got plenty of interest there should they leave. We understand it's one of their better stores. So again, we monitor these tenancies, but there's nothing of note since last quarter.

[Sam Damiani, analyst]

That's super helpful. And just on the lease termination fee income, $2.7 million in the quarter. I didn't catch if there was some detail behind that, if it was 1 tenant or a bunch of smaller amounts?

[Kara Cameron, executive]

It's Kara. So, it was actually a bit of deferred revenue that we had on the balance sheet that we were actively pulling down over time in relation to the lease term. And then when we sold the property, we released the balance sheet of that deferred revenue, which led to that termination income increase.

[Sam Damiani, analyst]

Got it. Okay. Okay, last one for me, just on Broadway & Commercial. I mean, I think it's been an active file this year. Anything new in terms of your plans and what you plan to do with that particular project?

[Mark Holly, executive]

Sam, it's Mark. We are pretty proud that we were able to get it zoning approved. That happened in the quarter. We still got a little ways to go, though, to get it enacted. As we called out, we have about 6 months plus to go to get it enacted. We continue to work with our partner. The good news is, the asset continues to generate revenue for us as it's on the Crombie books, it has an active grocery store on it. So, at this point, we're evaluating. We're working on some underwriting, but we're definitely not shovel-ready at any point in the near future because we still have a bit of ways to go here. So, we're still working through it.

[Operator]

Your next question comes from Lorne Kalmar with Desjardins.

[Lorne Kalmar, analyst]

Maybe just on the development fee side, obviously, great to see it bump up this quarter. And based on your commentary, it sounds like it's going to stay there for a little while. I think last quarter, you talked about the development fee increases being offset by G&A in 2025. Is that still the case? Or now with the higher revenues, that's no longer the case?

[Mark Holly, executive]

Lorne, it's Mark. We did talk about it last quarter that we were taking an increase in the G&A and Kara talked about it on the prepared remarks that we've reached the spot where we're running at around just above 5%, and that is reflective of the extra expenses we're taking on as those employees were once being capitalized for the project and no longer will be able to because they're within the joint ventures, and we're performing services for those joint ventures. So, what you're seeing now is probably a good run rate to carry for the rest of the year.

[Lorne Kalmar, analyst]

Okay. Perfect. And then you guys had a little bit of an uptick in rent growth on the leasing side this quarter. Obviously, one quarter doesn't make a trend. But do you guys think you can keep pushing higher? Is sort of the 10%, 11% levels where you think you're tapped out?

[Arie Bitton, executive]

Lorne, obviously, for us, the last number of years, historically, we've been more in the mid- to high single digits. Very proud of what the team has been able to push through. I would say that it's one of the current signals as to how the market is doing. We believe that just given today's discussions, we can sustain that for some time. How long that lasts, we don't know. But like I said, right now, all indicators are that tenants have a healthy appetite for our space.

[Lorne Kalmar, analyst]

Okay. That's very helpful. And then just last one for me. On the acquisition side, you guys managed to tuck in a couple this quarter. What's the outlook for the balance of the year in 2026?

[Mark Holly, executive]

So, we were able to acquire 4 grocery properties, all with an Empire banner on it, which we're pretty proud of as it has made an acquisition of about $20 million, so that's sort of allocation of capital. And where we can invest in core, Lorne, we're going to. As we look back into the rest of 2025 and look forward to 2026, we'd like to acquire more grocery-anchored.

There's a lot of other folks that would like to continue to acquire grocery-anchored. So, we're being selective, making sure it fits into the portfolio effectively, making sure that there's a potential further upside once we acquire it through modernizations and intensification. So, we're -- the acquisition team is out there and trying to uncover opportunities for us. So, we continue to work on it. It's a focus for us. We'd like to do more.

[Operator]

Your next question comes from Brad Sturges with Raymond James.

[Bradley Sturges, analyst]

Just following on the line of questioning there just on acquisitions. Just with what got completed in the quarter with the 4 assets, wondering if you can add just any more color in terms of the going-in cap rate or comments around lease term and rents versus -- in-place rents versus market would be helpful.

[Mark Holly, executive]

So, to give you a bit of color, all were bought and they all had market rental rates attached to them based on our analysis of our other properties and where they sat in the rental ladder. In terms of cap rates, we don't disclose individual cap rates, but if you sort of look within the MD&A and our ROC cap rates, that's generally reflective of where these landed.

And so, we're pretty proud of what we were able to get there. They'll be accretive to FFO right away. They support our strategy of grocery-anchored. As we've called out, these locations are only 1 building, and they're only occupied by a grocer. And so, our view is, we're agnostic to where that is in the country because of the relationship that we have with Empire and some of the insights that we're able to do through modernizations and intensifications.

We think there's further upside on all 4. Over time, we'll be able to reinvest through modernization. So, in terms of contractual rent step-ups, they're fairly consistent with the rest of our portfolio, term commitments, fairly consistent with our WALT. They have renewal options. And so, yes, we're pretty happy that we're able to tuck these in.

[Bradley Sturges, analyst]

Okay. My other question relates to the distribution increase decision. Good to see. Just wanted to maybe get a little bit extra color in terms of the Board's decision-making in terms of what factors were at play at landing at the new distribution rate and ultimately deciding now is the time to increase the distribution.

[Mark Holly, executive]

Yes. We're pretty happy we were able to put that out last night. Definitely, distributions has been a part of our consideration over the last couple of years. What I would say is the strategy, if you step back, what are we strategically focused on, and we're focused on growing FFO.

And over the last few years, we've really pushed that. We're getting healthy numbers. We're -- we see good growth in that. Our payout ratio is now in the mid-60s for FFO. We're at a really healthy level that allowed us to increase the distribution -- to do a distribution increase.

And when we step back and look at our allocation of capital, we think this is a good use of capital to return that to unitholders, but we also look at other parts of how we deploy the capital. So, buying 4 grocery-anchored locations is also part of that strategy. So that was some of the thinking that went into it. It definitely is a part of our view as we consider our allocation of capital.

[Bradley Sturges, analyst]

And in terms of just distribution policy going forward, is it the plan as you continue to grow FFO to become more of an annual distribution increase? And then is that FFO payout of mid-60s, is that kind of the target you have in mind going forward?

[Mark Holly, executive]

There's no internal policy on distribution increases, Brad. But what I can say is, based on the trends that we've been seeing with our FFO growth and the payout ratios, distribution increases is absolutely a part of the consideration each year.

[Operator]

Your next question comes from Michael Markidis with BMO.

[Michael Markidis, analyst]

Just wanted to circle back. I know this is last quarter's news, but just the strategic partnerships that you've got Montez and Wesgroup. It's quite clear what the benefits are in the near term to Crombie just with respect to earning development fees and sharing of the capital expenses. Maybe if you could just circle back and give us some more color in terms of the longer-term opportunity costs and what the partner is gaining that you're sort of kitting up in exchange for those benefits in the near term.

[Mark Holly, executive]

Michael, look, to your point, we're proud that we are able to stand up those 2 partnerships. We've talked about partnerships as one of our strategic pillars.

There -- in Atlantic Canada with Montez, there's 3. We were able to sell 50% of an active development construction site. And from that, we were able to take some proceeds in. We're able to clip some fees today, and then they will share, obviously, in the upside as we lease it up and get it stabilized.

For Barrington and Brunswick, we're going to lead those development initiatives. So, we're going to get paid, as you've called out, through fees. The upside for them is that they'll be able to participate if we decide to pull the trigger and advance into the development. And so, the advancement for Montez is now they've got interest in 3 core retail assets, or residential assets in and around our retail platform.

For Wesgroup, we've always talked about our grocery locations in Vancouver as some of the best real estate in Vancouver. They are all active sites with grocery on it. And so, when we look at that, we look at it from finding a partner that can come in with some expertise to help us in that market, come in with a balance sheet to help us soften the blow. And so, the upside for them is now they've got optionality to participate in a development that they otherwise would not have been able to get access to. And for us, it's all the benefits we've talked about in the past.

So these are providing flexibility, optionality, bringing higher and best use value to these properties while we continue to hold them on our balance sheet, collect rental income. We're being mindful of our strategic partner with Empire, making sure that we do the right things in terms of when they're going to redevelop the site. So, there's a lot of benefits near term and long term.

[Michael Markidis, analyst]

Okay. And then just if, let's say, you don't build and you decide to monetize, does that mean the partner benefits from 50% of the density value going forward?

[Mark Holly, executive]

There is formulas in the contracts that if we decide to pause on putting a shovel in the ground, maybe because market conditions are not right or if one party would like to advance versus the other. I can't go into the details of it, Michael, but there are mechanisms that the partner or either partners can walk away. It is not at the fair value of what it is going to be entitled at or the value that is created at it. There's some formula in it that protects Crombie.

[Operator]

Your next question comes from Tal Woolley with CIBC Capital Markets.

[Tal Woolley, analyst]

Just again on the partnership, what sort of due diligence are you doing on the prospective partners, particularly financially before you sign these things?

[Mark Holly, executive]

Extensive due diligence. We have a very robust process that has oversights, controls, risk profiles. It involves all aspects within our business from the marketing team to the people and culture team, to our leasing ops team, finance team. We also retained support from financial institutions outside that helped us validate who these partners are.

And so, as we've called out, we used Scotiabank for Atlantic Canada and BMO for Western Canada. And we went through a very rigorous process looking at who's out there, what activities have they been in the longevity of their platform, the people behind it, their strategic intents, do they line up with our cultures and our values.

So, what I'm trying to illustrate, it was exceptionally extensive and which took some time. And we weren't in a rush. So, we want to be very selective on who we picked, and we landed on Montez and Wesgroup, and we're really excited that we're forming partnerships with them because we think they're best-in-class.

[Tal Woolley, analyst]

Okay. And then I appreciate you giving sort of some -- a little bit of outlook there on fees going forward. I guess one of the things that I'm just interested in is exactly like what are the triggers for fees being earned? Are these like milestone payments? Is it just an ongoing monthly payment? Or is it billable hours? How does sort of these fees get recognized? What are the triggers?

[Kara Cameron, executive]

It's Kara. These are ongoing paid-for-performance arrangements. And so, as we actively work through the entitlement process or the construction process in the case of The Marlstone, it is more of a continuous payment plan.

[Tal Woolley, analyst]

And that would be based on invested capital or just...

[Kara Cameron, executive]

Pay for performance, pay for service. Yes.

[Tal Woolley, analyst]

Okay. Got it. And then just on the credit rating upgrade, do you have an estimate of like what you think the savings are that you can achieve now? And do you think it opens up -- materially makes a difference in terms of debt availability for Crombie?

[Kara Cameron, executive]

Yes. Good question. I think we were already achieving some of the benefits of the upgrade when we were going out to the market for our debenture raises. There may be some tightening there that we will be privileged by. But really, it is about achieving unsecured pricing on our bank lines. So that upgrade allowed us to have pricing more similar to what we were getting from a secured basis pre-upgrade.

So, what is the amount? I mean, we've kind of said within the 25-basis point spread differential on some of that. So, that ebbs and flows, obviously. And the additional thing, I think that you asked, too, is, we really have a low amount of floating rate debt. So, we're at the 2% mark right now. So, the upside will be more in the future. We don't have a lot drawn right now.

[Tal Woolley, analyst]

Okay. And then lastly, I guess this is probably a question for Mark. Are you interested in pushing the Board towards a distribution policy?

[Mark Holly, executive]

Not to push them towards a distribution policy, Tal, but we're happy that we were able to get the approval to proceed with one last evening. We're happy where we are on the capital allocation strategy between acquisitions, between non-major investments, major investments. Our FFO payout ratios are in a great spot, healthy. So, not forcing or pushing, but it is definitely part of the considerations each year.

[Tal Woolley, analyst]

Okay. Yes, I'd just add, I think investors appreciate there being sort of a spelled out, something that they can expect. And that tends to be more when the stock price gets rewarded for.

[Mark Holly, executive]

Yes. Fair comment, Tal. Definitely something we'll take into consideration.

[Operator]

[Operator Instructions] Your next question comes from Pammi Bri with RBC Capital Markets.

[Pammi Bir, analyst]

Just looking at some of the changes in the joint venture asset, the fair value change from Q1. Can you maybe just comment on what the components of that increase were? I think some of that might be just from the additional assets transferred into the JV. But I'm also curious if there were any increases tied to the rezoning approvals at Broadway & Commercial and Toronto East.

[Kara Cameron, executive]

Yes. Thanks for the question. It's Kara. You're bang on. It was the movement of [ The Marlstone ] as well as some right to develop payments were in there as well. The recognition of entitlement was nominal to the overall fair value change.

[Pammi Bir, analyst]

Okay. So, I think with Broadway & Commercial, I think you mentioned -- I think it was early 2026 in terms of the enactment of the bylaws. So, is that sort of the expectation as to when there could be a bigger mark there? Or is that just not really being contemplated at the moment?

[Kara Cameron, executive]

So, we recognize entitlement value on stages. And so, each time we hit a specific milestone, we take a fair value upgrade. And each one of those stages, there's not big jumps. So, it's fairly moderated throughout the process. So, we're not anticipating a large movement in fair value overall.

[Pammi Bir, analyst]

Okay. Last one, just coming back to those 2 projects again. Is it -- as they get, I guess, in the final stages of rezoning here, are these now perhaps more likely candidates to monetize or not really or still too early in the process?

[Mark Holly, executive]

Too early in the process, Pammi. We're got to get it through enactments. Market conditions are part of that assessment where we are on our investment profiles. So, too early to tell at this point.

[Operator]

There are no further questions at this time. I'd now like to turn the call back over to Kara Cameron for any closing remarks.

[Kara Cameron, executive]

Thank you, Pam, and thank you, everyone, for joining our second quarter financial results conference call. We look forward to speaking to you all on our third quarter financial results conference call in November.

[Operator]

Ladies and gentlemen, this does indeed conclude your conference call for today. We thank you for participating and ask that you please disconnect your lines.