NorthWest Healthcare Properties REIT

TSX:NWH.UN

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen, and welcome to the NorthWest Healthcare Properties Real Estate Investment Trust Fourth Quarter 2018 Results and Conference Call. [Operator Instructions] This call is being recorded on Friday, March 8, 2019.I would now like to turn the conference over to Paul Dalla Lana, CEO of NorthWest Healthcare Properties. Please go ahead.

[Paul Dalla Lana, Chairman & CEO]

Thank you, operator, and good morning, everyone. I appreciate you joining us today. I'm joined by Shailen Chande, the REIT's Chief Financial Officer; and Peter Riggin, the REIT's Chief Operating Officer. Together, we are pleased to share with you our results for the fourth quarter of 2018.But first, I'd like to point out that during today's call, we may make forward-looking statements as defined under Canadian Securities law. While such forward-looking statements reflect management's expectations regarding our business plans and future results, they are necessarily based on assumptions that are subject to uncertainties and risks, which could cause actual results to differ materially. We direct you to all of the risk factors outlined in our public filings.Our results for the quarter were in line with our expectations and include: annualized quarterly AFFO of $0.88 per unit on a normalized basis and a payout ratio of 90%; an 11% quarter-over-quarter increase in net asset value per unit to $12.30, primarily driven by favorable FX movements and fair value gains in the REIT's portfolio; 47.8% consolidated LTV, excluding convertible debentures; and full year 2018 source currency adjusted SPNOI growth of 4.3% compared to 2017, primarily driven by inflation indexation on leases at the REIT's international assets; and all of this underpinned by a 96% plus occupied portfolio and a weighted average lease term of 13 years across an expanded 156-property, 11.2-million-square-foot portfolio.In addition to our focus on operations in the quarter, we ended 2018 and started 2019 working on a number of significant strategic initiatives. In Australia, we have advanced the Healthscope transaction such that we now have definitive agreements to acquire 11 freehold hospital property assets from Healthscope and an AUD 1.2 billion sale and leaseback transaction conditional on the Healthscope-Brookfield transaction, which is progressing well, with a targeted closing in Q2 2019.The high-quality portfolio will be 100% occupied by Healthscope on an absolute quadruple net lease basis, with the tenant responsible for all property operating costs, including maintenance capital expenditures. The leases have a weighted average expiry of 20 years and are subject to fixed annual rent increases of 2.5% per annum, providing strong organic growth, along with an additional potential growth coming from a $500 million plus development pipeline of expansion projects at an approximately 100-basis-point spread over stabilized cap rates on the properties.Through leveraging its capital relationships, the REIT intends to structure the portfolio acquisition such that it will manage the 11 properties, and ultimately, maintain an approximately 25% to 30% ownership interest in the portfolio, resulting in an approximately $125 million to $150 million equity requirement, which is already being funded through its existing investment in Healthscope, which will be rolled into the transaction and previously funded deposits.In Europe, we continue our growth strategy by closing on the acquisition of a number of medical office buildings and rehabilitation hospitals, bringing our total assets in Europe to approximately $700 million, more than doubling over the last 12 months. We were also active in the capital markets, closing in the quarter a $125 million convertible debenture and post quarter, $144 million equity financing, both with significant institutional participation. In addition to this capital markets activity, we're also active on a number of financings and refinancings, much in support of the pending Healthscope transaction.From a regional perspective, firstly, Brazil was on plan for the quarter and the year as a whole with 100% occupancy and continued strong and predictable income. 2018 constant currency adjusted SPNOI was 6.4%. Operationally, the REIT's major tenant, Rede D'Or, continues to deliver outstanding and strong results and expand its business, thereby opening up the possibility for further partnerships with NorthWest, as evidenced by the recent acquisition of Hospital Morumbi in São Paulo for BRL 272 million. The acquisition was our seventh with Brazil's leading private hospital operator.In Canada, we were also on plan, continuing strong performance, with positive currency adjusted SPNOI growth of 1.5% in 2018 and portfolio occupancy up 150 basis points quarter-over-quarter to 93.2%. The quarter also saw positive renewal rent increases with a 5.7% spread on expiring rents as well as the start of construction of a new campus medical office building in St. Albert, just outside Edmonton, with 63% preleasing.In Europe, we were on plan and performing as expected, with positive 2018 constant currency SPNOI of just under 1% and occupancy increasing 80 basis points to over 96.4%. As mentioned earlier, we continue to find good investment opportunities in Europe, allowing us not only to build scale and critical mass in Germany, but also now to build upon our initial 2 acquisitions in the Netherlands.Further, in 2018, the acquisition of 4 rehabilitation hospitals for MEDIAN Kliniken in sale-leaseback transactions also opened the door of growth in the hospital segment of health care real estate, not unlike other parts of our international portfolio, which are characterized by single-tenant, management-light properties secured with 20-plus-year leases indexed to inflation by best-in-class operators, in this case, MEDIAN, which is Germany's largest rehabilitation operator with over 120 facilities.In NorthWest Australia portfolio, portfolio occupancy was stable at 97%, with a weighted average lease term of more than 13 years. Post quarter-end, the REIT entered into a definitive agreement to acquire the 11 properties previously mentioned from Healthscope, and we'll look to further strengthen the REIT's position in the region while also leveraging existing capital relationships.At Vital, per its half-year 2019 results delivered on March 1, 2019, the business reported strong and on-plan results, with positive 2018 constant currency adjusted SPNOI up 6% and stable occupancy of over 99% and a weighted average lease term of 18.5 years. Also, it saw a 1% increase in net tangible asset value to NZD 2.24 per unit, while making progress on a $200 million portfolio of ongoing accretive developments.For the balance of 2019 and building on these strong results, ongoing portfolio improvements and continued supportive trends in the health care industry, the REIT will continue to drive internal growth through the completion of 9 committed, low-risk, value-added developments and expansion projects, again, primarily in Australia and New Zealand, totaling approximately $350 million in total and $160 million proportionate share. In addition to Healthscope property acquisition, NorthWest expects a further $750 million of net investment activity in 2019, split broadly equally between Europe and Australia and New Zealand.Furthermore, we are planning a combination of noncore asset sales, again, approximately $350 million to $400 million, primarily targeted in Canada, as well as $400 million in JV asset sales in Australia. And lastly, NorthWest will increase its JV capital in Australia a further $1.5 billion, to $3.5 billion, as well as targeting a further $1.5 billion to $2 billion commitment similar to the JV commitments in Australia and Europe. I am pleased that we've been able to advance a number of these key, long-term strategic initiatives during and post quarter. Our bigger and better portfolio is supported by long-term inflation indexed assets, and as a result, the REIT is ever -- even better positioned to deliver stable and growing returns to its existing unitholders.Furthermore, we continue to be the real estate partner of choice to the health care industry, which provides exceptional global opportunities to grow accretively and enhance unit outlook value.I'll now ask the operator to open up the call for questions.

[Operator]

[Operator Instructions] Your first question comes from Stephan Boire of Echelon Wealth Partners.

[Stephan Boire, Analyst]

I was just wondering what kind of same-property NOI growth do you expect this year before the effect of currencies?

[Paul Dalla Lana, Chairman & CEO]

Yes, that's a good question, Stephan. I think, again, we've been targeting in the 3% to 4% range pretty consistently in the business. It was 4.3% this past 12 months. So I think those are 2 good data points for you.

[Stephan Boire, Analyst]

Okay, okay. All right. And in terms of your acquisition pipeline -- I'm sorry if I missed it, but what do you expect for the REIT alone this year?

[Paul Dalla Lana, Chairman & CEO]

Yes, we didn't break down those numbers exactly in that format, but in aggregate, I mean, we have a $1.25 billion transaction under way, as you know. We would expect to net a further $750 million. I think that will be split though between roughly -- as I have just said, roughly 50% to the REIT and 50% into Australia, which is likely to use a combination of our existing capital relationships there, the JV and Vital.

[Operator]

Our next question comes from Chris Couprie of CIBC.

[Chris Couprie, Research Analyst]

In your outlook section, you have a point here, increasing investor liquidity by raising new capital and broadening the investor base. Can you explain what you mean by that?

[Paul Dalla Lana, Chairman & CEO]

Well, I think just taking it at face value, Chris, I think we are maybe looking highly likely to be now included in the TSX Capped REIT Index, which is probably some good news that is just happening as we speak now. That comes across next week formally, but it looks like that. And I think just with the increase of our market cap and broader investor appeal in the business and better understanding, we're starting to see both new participants that was evidenced in our recent equity offering in terms of institutional support. And I think just, again, certainly more liquidity and other things. I think, it's that sweet spot of size as well as understanding and some of the more differentiated parts of the business starting to distinguish itself. That said, if I can take a chance to riff on it a little bit, I wouldn't say that we're super happy where we are if we compare ourselves to other peers that are in the health care space that are trading at a meaningful premium to NAV right now. We continue to be a little bit light. Certainly, light on this quarter, coming in at $12.30 a unit. So we see a lot of room to improve through investor participation and understanding, and can hopefully align those 2 up a little bit better.

[Chris Couprie, Research Analyst]

With the Healthscope transaction, obviously, and Vital and so on, the -- your reputation in the Australasian region must be -- or profile must be increasing. Is there any thoughts around doing anything in that region, whether it be through a listing or marketing or anything on that line of thought?

[Paul Dalla Lana, Chairman & CEO]

Yes, I think, certainly, we've already been actively marketing. You recall that we've recently added a new Regional CEO there, Craig Mitchell, who has a strong and distinguished Australian real estate capital markets background, and of course, we have a good and established platform in New Zealand. So I think we're pretty actively marketing, at all times now, the business. And as this transaction works through, it will give us an even more natural opportunity, would highlight that of the REIT's post-transaction $6 billion in assets or so, $4 billion of those [ being ] in Australia and New Zealand. So it's a meaningful part of the business and certainly a natural opportunity, as you note. Haven't fully progressed the dual listing thought, although it's intriguing to us and certainly any opportunity for us to do things that are complementary to the business is, I think, on for consideration. I think -- I mean, what I would say though that we're sort of 90 days out from roughly the closing of that transaction. So having spent a year in the business sort of positioning it for the opportunity and now having the opportunity work its way through the system, we feel like we're in a great place now to both put that into the business and let it do its thing, which is accretive both in terms of earnings and more expansion opportunities, all of the things that we do in the business, as well as open up some of the doors that you talked about. So certainly in the second half of the year, I think we'll be focused on taking as many natural advantages as we can.

[Chris Couprie, Research Analyst]

Sure. And then just lastly on Healthscope, that range of 25% to 30%, kind of, what's going to dictate the ultimate percentage? Is it your desire versus the partner's? And then, let's just say at the midpoint of the range, could you just remind us where you think, let's say, consolidated leverage is going to be once the transaction closed?

[Paul Dalla Lana, Chairman & CEO]

Yes, kind of a few questions in there. So that range is defined by the 2 existing relationships that we have in the marketplace. So, again, as you know, we have a 25% interest in Vital, and our JV is a 70-30 JV equity with our institutional partners. So those are the goalposts of existing relationships, and we've been running our math, splitting that 50-50 illustratively. Those discussions are going to get resolved in the next short while and it will be somewhere between the 2 more than likely. So I think that's the background to that range. And I think the math on each of those goalposts are well known and well described through existing relationships. I'll just maybe let Shailen guide to post-transaction LTV, if that's okay?

[Shailen Chande, Chief Financial Officer]

Yes. Thanks, Paul. And, Chris, in respect of post-transaction consolidated LTV, we don't anticipate any material change. And I'd note that our equity investment in the transaction is already factored into our balance sheet and that we have circa $150 million deployed into our investment in Healthscope currently as well as previously funded deposits, and that will ultimately roll into the property transaction. So no material financing or changes in leverage expected as a result of the transaction.

[Operator]

Your next question comes from Mario Saric of Scotiabank.

[Mario Saric, Analyst]

Paul, I just wanted to run by some of the figures that you highlighted on the call in terms of potential commitments. So as we sit here today, I guess, pro forma Healthscope you disclosed in your investor presentation third-party fee-bearing assets of $3.5 billion, let's say, rounding up. Can you walk us through how that $3.5 billion is anticipated to change based on kind of some of the comments that you made on the call?

[Paul Dalla Lana, Chairman & CEO]

Right. Yes, so I would think broadly, Mario, it will ultimately double. Again, just for everyone's benefit, that $3.5 billion reference that you speak to is the combination of the JV and Vital capital interest in both of those entities that we don't own, just to talk to it directly. And so our target is to roughly double that over the next balance of the year, to be direct. We're in very advanced stages of discussions, and we're in discussions on -- in more than half of that, and we see a market and a world that's increasingly coming into the direction of some of the original premise of the JV that we've spoken a lot about on this call. So certainly, an increasing interest by large institutional partners in the asset class and just a very, very constructive moment in the majority of our geographies around health care and health care real estate by extension. So we find ourselves in a pretty good position in terms of being able to lever that. You'll recall that the JV -- the initial JV that we've done and that we have in place had some pretty specific components to it. It's evergreen, and it has a number of structural features that team will be considering to be important. So we're very focused on replicating that type of capital in an expanded format in Australia and New Zealand as well as [ Europe within the year ].

[Mario Saric, Analyst]

Okay. Sorry, Paul, did you say within the next year or so?

[Paul Dalla Lana, Chairman & CEO]

I think 2019 is our target.

[Mario Saric, Analyst]

2019? Okay. And you mentioned it would include kind of additional penetration in Australia and then perhaps exporting the model into other regions?

[Paul Dalla Lana, Chairman & CEO]

Right.

[Mario Saric, Analyst]

Got it. Okay. That's helpful. Just a couple of other kind of small questions. Just on the IFRS NAV, the disclosed $12.30 compares to a normalized of $12 per unit. What's the difference between $12.30 and $12?

[Paul Dalla Lana, Chairman & CEO]

Two main adjustments. I'll let Shailen answer, but you have to get beyond the 2 to dive into the real detail, but we -- post the equity offering, there was a little bit of near dilution there as is wont in those things, number one. And number two, currency movement to today has given back a tiny bit from the year-end. So those 2 adjustments are the 2, the larger -- did I get that right, Shailen?

[Shailen Chande, Chief Financial Officer]

Yes, yes. Thanks, Paul. Yes, I might say those 2 adjustments are partially offset by an increase in the valuation of our investment in Healthscope. Per our IFRS December 31 statements, we mark that investment as at December 31 Healthscope unit price. And post December 31, that's increased materially as the Brookfield dates got formalized. So there is about a $20 million increase in the value of that investment in Healthscope post quarter-end, which partially offset the impact of FX and the dilution from the equity financing.

[Mario Saric, Analyst]

Understood. Okay. And then on -- just on the fair value gain of $58 million, you noted in the disclosure that some of it was related to recognition of excess planned value in Europe. I was wondering how much of the $58 million would be comprised of that and what the trigger was to recognize the value?

[Shailen Chande, Chief Financial Officer]

Yes, so it's a relatively small amount. I'd say inside of $10 million of the $58 million related to some excess land value in Germany, primarily. The trigger was really an ongoing review of our plans in respect of that land. And as we've continued to explore a potential development opportunity on that land, it became very clear to us to that, that land was worth more than we'd initially carried it at.

[Mario Saric, Analyst]

Got it. Okay. And as more of a broader question in terms of excess land value potentially in Canada, like, internally have you looked at what that kind of value differential could be between the cost of the land for your portfolio today versus what the fair value of that land might be in some instances perhaps a change of use being the driver of the fair value book?

[Paul Dalla Lana, Chairman & CEO]

We haven't in perhaps the same detail as others. There's a couple specific situations that we've previously spoken to. Obviously, we have a transaction under way at 30 Merton Street with an institutional partner there. And I think last quarter, we spoke a little bit about Sheppard in Toronto and, again, some ongoing post-development expansion and, ultimately, land value recognition. I think those are sort of the broader, the 2 main ones, in the business. Obviously, we have other land in the portfolio, and I'd highlight both in Canada, where, for example, we're building in St. Albert, on we have a number of land parcels that are strategic and that we're always looking to expand on. And then in Australia, where we're very, very active and have both at Northwest Australia, and you all have seen a number of transactions this quarter that we've spoken to, smaller ones but that are strategically located sites next to regional hospitals that are in the early stages of future planning. So I think for us, our main [ focus ] -- and the property is pretty geared towards those types of things anyway. So we can always look more in GTA. There's an incredible one in here and this probably is things for us to consider. But again, there are a couple of things that we've targeted are advancing and making progress, but nothing more specifically than that.

[Mario Saric, Analyst]

Okay. And the projected forecast, say, like, $350 million to $400 million of assets in Canada this year. Would it be fair to assume that the dispositioned cap rate on those assets would be fairly comparable to your IFRS cap rate for the region as a whole?

[Paul Dalla Lana, Chairman & CEO]

Yes, I think that's a reasonable assumption, and the target is 2019.

[Mario Saric, Analyst]

Okay. My last question, maybe I missed this with the Vital results, but any update in terms of timing on the management contract discussions there in terms of a resolution?

[Paul Dalla Lana, Chairman & CEO]

Yes, those discussions are ongoing. The target is March 31 in conjunction with potential Healthscope portfolio participation. So -- and that's been announced in that market. So again, at the AGM and again, as part of the half-year results in -- on March 1. So that date stands. Again, and I would just tie that…

[Operator]

Your next question comes from Troy MacLean of BMO.

[Troy Raymond MacLean, Analyst]

Just a question on the $0.88 of normalized AFFO. What level of asset sales does that take into account? Is it only the completed transaction so far? Or does that include the potential sale of the Canadian portfolio -- or of the Canadian assets that you want to sell?

[Paul Dalla Lana, Chairman & CEO]

Yes. So, no, it's only the completed or committed transactions that we have. So it includes Healthscope, obviously, but it does not include any prospective acquisitions or dispositions or JV capital.

[Troy Raymond MacLean, Analyst]

And then just with the development pipeline bigger post the Healthscope transaction and the JV, would it be fair to say that, like, acquisition volume could come down over the next couple of years outside of the JV? Or is that -- like, how do you look at what buckets you have over the next couple of years and where you want to invest?

[Paul Dalla Lana, Chairman & CEO]

Yes, sorry, you're taking me out beyond the guidance here. But I would reiterate, Troy, that the big themes of the business which are incredibly constructive. I think we are in a very, very real moment for health care consolidation and by extension, the need for health care and, say, capital. And our business increasingly is positioned very, very well in all its geographies with leading platforms and leading relationships. I'd highlight that in 2018, we did transactions with all of our major partners. So if we looked at our top 5 tenants, we did transactions with all of them. We've probably announced or will shortly announce transactions in 2019, again, with all of them and that's just the existing group. And every time I seem to say that things like Healthscope are an exception, and again, this business has been targeting that portfolio for -- since the 2012 IPO, frankly, there are more things like this. So all of that environmental -- those environmental observations, I think, apply. So our sense here is that the addition of JV capital is going to be an important tool in our toolkit to allow us to do the chunkier or more concentrated things and that's the reason we put on the initial JV in Australia, because we saw things like Healthscope coming sooner than later. There are other large portfolios in that marketplace that we have some visibility on that could be coming in the next little while. We certainly see similar activity in Europe. And again, our main partner in Brazil just announced another BRL 8 billion internal expansion program coming off for us. It's the same-sized one over the last 5 years. So all of our partners that we know well are continuing to grow and improve their businesses and that offers us opportunities going forward. So we would say that those themes apply to the business in making sure that we have the tools in the toolkit to -- in the right order and the right way to keep pace with our partners as a thing of focus. So that for us leads us to a combination of both improving the existing structure of the Canadian business and making sure that it can grow and do things as well as adding more JV capital and other types of things that we can use to pursue all of these opportunities to full success.

[Troy Raymond MacLean, Analyst]

And then just in Europe, you basically more than doubled the size of the portfolio in 2018. Is there much -- how much more could you grow without meaningfully adding to G&A? And are you happy with the size of the business? Or is that something you still want to get bigger?

[Paul Dalla Lana, Chairman & CEO]

Yes, that's -- I mean, we have a few really specific answers to that, so I'll try and work through them, but the general theme, Troy, is I think we expect to have a similar level of growth in 2019 as we did in 2018, barring any significant one-offs sort of transactions, a number of which are queuing in that marketplace. So we certainly have high visibility on $350 million worth of, we'll call them, incremental tuck-in acquisitions and that's a range of MOBs in our core markets in Germany. We've identified new markets in the Netherlands, as you know, and then, into the rehab hospital space. You will have seen that we did another transaction with a group in addition to MEDIAN, AMEOS Group, another large consolidator there. So we certainly see that combination of activity delivering $350 million of opportunity over the next 12 months with pretty high visibility. And again, I think the platform certainly other than regional management tools for the medical office building part of the business is pretty well sized. That's a 30-plus-person platform now with full sort of corporate functionality, so right from the investment suite down to the operating suite. So we are, I would say, hitting stride in terms of the size of the platform and its relationships, and I think it's sort of been 5 years to get to this point for us. But the path has been quite similar to the one we went through in Canada and then just much bigger markets with more to do. So I think we're very -- feeling good about the existing business there. And around that, I would say that Europe is in a moment of hospital consolidation. We've seen a number of large transactions happening. We are aware of a number of large portfolios queuing, whether they're 2019 or 2020, but certainly, a very meaningful set of opportunities coming down the road that we see potentially being of high interest. So we're certainly working very hard to position ourselves, as we did in Australia, to have the tools in the toolkit to be able to pursue those in the right way and scale. So I think, 2 answers to that question.

[Troy Raymond MacLean, Analyst]

And then, just finally, would any of the assets in Europe potentially make its way into the JV you have? Or is that you'll have to do something separate to do -- to have a JV in Europe?

[Paul Dalla Lana, Chairman & CEO]

It's a great question, Troy. I don't think we're quite as far advanced on that yet. It's not unimaginable. I think the themes that we lived in Australia are the ones that we know best. Obviously, that seeding a relationship with tangible things makes it a little bit easier for people to have visibility and certainty that it's not a theoretical exercise, if you will, not that we ever approach it that way, but -- and clearly, from the capital side, that's one of the considerations. So it's -- that's what we did in Australia, of course. So that playbook worked well and continues to work well. So I'd say it's possible. But it's not a requirement and really, we want to make sure that we have clarity of investment focus, and our focus is, again, certainly within the business in Europe broadly on the cure side of the health-care real estate space. And so we want to be able to do all those things. We like that complementary fit of long-term hospital assets and certainly enough office building space and so finding a partner that has similar views and wants to do all those things in a multi-market format with the combination of things that we bring to the table is certainly where we're thinking. So again, it's not an absolute requirement, but it's a possibility, and I think we are working through that.

[Operator]

Your next question comes from Tal Woolley of National Bank.

[Tal Woolley, Research Analyst]

I just wanted to start on the balance sheet. You've got some -- I think you've got a small convert and some credit lines to roll prior to the end of the year. When you think about going forward and given what your plans are, do you have a sort of set idea on like what sources of that capital you want to use between secured, credit or bank debt and converts post the Healthscope closure?

[Paul Dalla Lana, Chairman & CEO]

Thanks, Tal. I'll let Shailen speak to that, if it's okay.

[Shailen Chande, Chief Financial Officer]

Tal, so in respect of our 2018 -- or 2019 maturities, I'm very much anticipating to refinance in normal course and a lot of them are rolling shorter-term facilities. In terms of our broader strategy on the balance sheet, I continue to emphasize that we have really a balance sheet that's quite flexible and poised for both deleveraging as well as significantly accreting -- or accretive refinancing. We have about $250 million of corporate and property level financing with a weighted average interest rate of just about 7%. And in the context of today's market, that could be refinanced at significantly lower rates to the tune of about 200 basis points. So that would probably take us to a bit more of an unsecured strategy relative to what we have today. And then as we look to grow in various regions, we also note that we look to leverage those respective capital structures, and we note the accretion that comes through from our in-country financing, specifically in Germany as well as in Australia, when we have the benefit of our JV partner.

[Tal Woolley, Research Analyst]

Okay. And then my last question is just on, as you -- your investment priority seemed to be very much outside Canada, mostly from what you mean -- or from what you discussed earlier. Is there some sort of threshold of having assets outside Canada where you start -- where tax planning becomes a little more complicated? Like, I guess, I'm just wondering because you'll have so much outside of the country. Is there a size at which that sort of maintaining the REIT structure and -- or just, yes, your tax planning gets a bit more complicated?

[Shailen Chande, Chief Financial Officer]

Yes, Tal, I'm happy to take that on. There is a lot embedded in that question, and -- I mean, I guess, at the highest level in terms of minimum Canadian content, if you may, for REIT or SIF status. That's not necessarily a driver, and we don't see that as being a constraint. We are a REIT -- I mean, a SIF in all of our regions and that hasn't posed an issue historically, and we don't see any constraints around that.

[Operator]

[Operator Instructions] There are no further questions at this time. Please proceed.

[Paul Dalla Lana, Chairman & CEO]

Okay. Thank you, operator, and thank you, again, to everyone participating on the call. We do appreciate your interest in NorthWest. Goodbye, and have a good day. Thank you.

[Operator]

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