Simon Property Group Inc
NYSE:SPG
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
136.79
183.75
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Simon Property Group Inc
You don't have any saved screeners yet
Good day and thank you for standing by. Welcome to the First Quarter, 2021 Simon Property Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to turn the conference over to your speaker today, Tom ward, senior vice president of investor relations. Please go ahead.
Thank you, Laurie. Thank you all for joining us to SPG. Presenting on today's call is David Simon, Chairman, Chief Executive Officer and President. Also, on the call are Brian McDade, Chief Financial Officer; and Adam Reuille, Chief Accounting Officer.
Before we begin, a quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995 and actual results may differ materially due to variety of risks, uncertainties, and other factors. We refer you to today’s press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today’s date.
Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today’s Form 8-K filing. Both the press release and the supplemental information are available on our IR website@investors.simon.com. For those who would like to participate in the question-and-answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question, so you might allow everyone the opportunity - with interest the opportunity to participate.
For our prepared remarks, I’m pleased to introduce David Simon.
Good evening. I'm pleased to report that our business has significantly improved after having addressed the impacts from COVID 19, including the restrictive governmental orders that have forced us to shut down as well as reduce our operating capacity. Thankfully, those restrictions are now being lifted. I'm pleased to report our continued improvement. Our profitability and cash-flow generated for the first quarter. First quarter funds from operation was $934 million or $2 48 per share. FFL increased approximately $150 million or $0.31 per share compared to the fourth quarter of 2020.
Our international operations continue to be affected by governmental closure orders and compacity restrictions. And in fact, the quarter was negatively impacted by approximately $0.08 per share, compared to our expat expectations. Given the closures that have occurred internationally, we also recorded additional COVID impacts in the first quarter of approximately $0.07 per share from based upon basically domestic rent abatements, and uncollectable rents.
We generated $875 billion in cash from operations in the quarter, which was an increase of 18% compared to the prior year period. We collected over 95% of our net build rents for the first quarter. And our inline Taubman collections are back to pre COVID levels in the approximate 98% range or operating metrics in the period were as follows mall and outlet occupancy. At the end of the first quarter was 90.8% down 50 basis points compared to the fourth quarter of 2020.
This a 50 basis point decline for the quarter is approximately 75% 75 basis points less than the average historical seasonal decline from the from the fourth quarter, the first quarter average base rent was $56 07 up 60 basis points a year-over-year, leasing spread declined for the 12 trailing 12 months, primarily due to the next two deals that have fallen out of the spread calculation that have resulted in a increase to the average closing rate by approximately $8 per square foot for the trailing 12 months pricing continues to improve with the average opening rate per square foot for the trailing 12 months of approximately $60 per foot.
And as you can see in the lease expiration schedule included in our supplemental are expiring rats for the next few years are less than $60 per square foot. Keep in mind that the opening rate included in our spread calculation does not include any estimates for variable lease income based on sales in certain circumstances in addressing tenant COVID negotiations last year. We in certain cases agreed to lower our initial base rent in exchange for lower unnatural sales breakpoints, allowing us to participate in the improved sales performance as the economy recovers.
Now we think that will end up being a very smart move on our behalf. Those deals are, are included in the average opening rate at the lower base minimum rent and does not include our estimation of what the percentage rent could be. And we'll obviously believe those contributions in time. We'll add to our cash flow.
Leafy momentum has continued across our portfolio. We signed 1100 leases for approximately 4.4 million square feet, and we have significant number of leases in our pipeline. Our leasing volume in both number of leases in squirt square feet was greater than the volume in each of the first quarter of 2020 in 2019. The improving domestic economic environment shopper sentiment have increased shopper foot traffic and sales across our portfolio.
As I mentioned, increased in traffic for our open air and suburban centers has been very encouraging and retail sales continued to approve across the portfolio with higher sales volumes in March compared to 2019 levels. We opened west Midlands designer outlet. Our second outlet in the United Kingdom in early April this was behind schedule was supposed to open in the fall of 2020, but was delayed due to COVID restrictions. We're pleased that this has now been lifted and we're now able to open and serve the shoppers.
During the first quarter, we started construction of our fifth premium outlet in South Korea. We're excited about that opportunity and hopefully by now with respect to our brand and retailer investments you've seen that we've been able to add significant value there. Our local brands within spark outperformed their plans in March and April on both sales and gross margin led by Forever 21 and Aeropostale for the two months combined spark outperformed the sales plan by more than $135 million. And our gross margin plan by more than $75 million.
We're also very pleased with the JC penny early results. They continue to be above our plan. Our company's liquidity position at penny is strong at $1.2 billion and balance sheet is in very good shape with leverage of less than 1.2 times net debt to projected, but we continue to add new brands to to that, to the JC penny portfolio. And we expect growth to to be our focus going forward.
Just a quick update on Taubman. We're very pleased with our partnership and the results in the first quarter. Our teams have collectively shared and implemented many best practices and are adding value to the assets we expect to step up redevelopment plans with mixed use opportunities throughout their TRG portfolio capital markets. Very similar to what we always do. We're very active. We completed $1.5 billion at senior note offering at 1.9, 6% weighted average term of 8.4 years.
We also completed a $750 million Euro note or your own note, shouldn't say dollar at one and an 8% coupon at a term of 12 years. We use those proceeds to completely repay the $2 billion unsecured term facility associated with the Taubman deal, as well as pay off our a $550 million senior notes. We've also refinanced six mortgages for $1.3 billion, our share, which is 589 and an average interest rate of 3.36.
That market is continuing to improve. And at the end of the quarter, with all this activity, we have $8.4 billion of liquidity consisting of $6.9 billion available on our credit facility. $1.5 billion of cash glued in our share of JV cash and reminder that is net of $500 million of us commercial paper, outstanding and quarter end. We paid a dollar 30 per share in cash in terms of our dividend on April 23rd. And then finally as you've seen given our first quarter results, we are increasing our full year 2021 FFO guidance from $9 50 to $9 75 per share to $9.72 to $9 80 per share.
This is an increase of $0.20 per share at the bottom end of the range and $0.05 at the top end of the range or a 13% or $13 cent increase at midpoint. And that represents a six and a half to 7.6% growth rate compared to our 2020 results. So in conclusion, please, with the results encouraged with what we're seeing in terms of sales, traffic, retail demand and you know, we continue to you know, to you know, to, to continue to increase our performance and our profitability ready for questions.
First question is of Rich Hill of Morgan Stanley. Your line is open.
Hey, David, good afternoon. Had a quick question on the guide. Look, we we've argued that the guide looks pretty conservative because I think if you assume, no, in a Y growth versus 2020, you can sort of get to the high end of the prior range. And so the, the revision looks fairly conservative to us. I recognized there was some lease termination benefits in this quarter, so maybe you can just walk us through how you think about the cadence of that, of that guide in 2Q 3Q, and 4Q?
Well, Rich you can't blame us for being conservative. Can you? after dealt with for14 months? We did, we did not just a couple things. You know, we, we the least settlement income was kind of in our plan. One, on the other hand, we did not, we gave our initial guidance. We did not expect the negative results that we that we saw in Europe primarily they set, so that hurt us by 8 cents and that, you know, that's still going to underperform given the restrictions for the rest of the year., because that locked down amazingly took a lot longer and it lasted a lot longer.
So unfortunately in Europe you know, there are still dealing with COVID that will have an impact. And then I would say we, as, you know, in the first quarter, we did deal with still have some abatement and some bad debt, so to speak that also affected us as $0.07.
So we still think we're, you know, there may be some further activity in that we don't know. It's pretty much behind us at this point, but we're conservative, we've got Europe I think the comment of why we didn't give you a number, but we expect in the us to do better than what we initially thought. And I hope you're right. I hope we're conservative, and I hope we do better than what we've what we're guiding to, but, you know, it's just been you know, a traumatic time for this company and our folks. And you can't blame us.
Understood. I have one follow-up question, and hopefully I'm not putting words in your mouth, but I think on the last earnings call, you had talked about total core portfolio X Taubman being in the 3% to 4% range for 2021. And I note that total total portfolio was plus four and this quarter, including Taubman, if I read it correctly. So, how should we think about the total portfolio growth going forward recognizing you haven't guided, you know, is that three to four, still accurate, meaning that there should be a pretty significant ramp over the next several quarters?
Let's separate the two, I think when we talked about our cop, we thought we were going to be in the four ish range just conp excluding Taubman. So you know, to be, clear, at least that's what our, my intent was when we had, our year end call. We expect to be a little bit above that. I mean, we still don't know, as I mentioned to you because of COVID and some of the negotiations with retailers, we're betting a little bit more so to speak on the com because of the sales aspect of it, but we would hope to, you know, be around 5% on that, you know, as we look at it and then often you know, we're just putting that in, based on our plans, they're off to a pretty good start and that's where you get the portfolio numbers.
So the comp NOI should be in the 4% to 5%, hopefully on the high end of that range. And then we, we itemized Taubman because we didn't want to confuse people. We were just going to show you those results. Then next year, you know, 20, 22, we'll just have the TRG portfolio, our copy. So you'll see Taubman the rest of the year, the way it's outlined.
It does. It does. I can follow up with Brian, Tom offline on some wonky accounting questions, but that's helpful call her I'll, I'll be back in very well.
I pride myself in being a walk. So if you're ever bored, you can call me anytime.
Our next question is from Steve Sacra of Evercore. Your line is open.
Thanks. Good afternoon. David, I was wondering if you could just comment a little bit more on kind of the leasing momentum and you talked about the 4.4 million feet down in Q1. Maybe just give us a little bit more color, kind of what the pipeline sort of looks like. What types of tenants are you seeing, you know, is there you know, a focus, whether it be food, whether it be on apparel, whether it be on entertainment, just, you know, what are you seeing on the leasing today?
Well keep my fingers crossed, but we're, actually seeing really good demand across the board. Very interestingly, the restaurants demand is this at the, you know, it's a very high, you know, as a very high level. We're seeing a lot of restaurant tours that for some of the fixed space that was vacated, they want to come in, retrofit it get open quicker. So we're seeing really good demand there.
I think some of the, a strong retailers are growing their business significantly, you know, American Eagle is a great example. You know urban Outfitters is a great, another great example of two companies that just popped to mind that have, you know, we have multiple deals in the works on we're probably 80% done Steve on our renewals that's far. And you know I'd say we generally feel pretty good and much better than we felt you know, in a long time.
And I, and I just think, you know, the we're seeing a resurgence in brands, so let's, let's take a great example of you know you know, a company Crocs Crocs was hot a decade ago. People thought it had lost its Mojo. Maybe it had, you know, it's now killing it. So we're seeing footwear, we're seeing apparel. We're seeing another, a lot of brands in the that are new, that are coming into the you know, that great retail real estate. So I, I've seen basically a resurgence across the board and our team is very, very active. We're also seeing demand from entrepreneurs, local regional, so PR pretty good. You know results are coming I think you'll start to see in the upcoming quarters. Okay.
Thanks. And I guess that sort of details into sort of my followup, when you think about kind of the occupancy trend, and I appreciate your comment that the drop, you know, sequentially was maybe less than, than what you'd normally see seasonally, but you do you feel like occupancy at this point is now at the bottom and, you know, you start to see that kind of improved throughout this year into next year. And then same with kind of leasing spreads. Is, does this kind of mark the bottom here in leasing spreads?
Well, again, I think we gave a rather lengthy explanation on leasing spreads and the thing I would focus on it is mixed driven. So that's the first point. The other thing is as part of COVID you know, we were doing renewals where low, we had lower base rants and more natural break points, which I think, you know, hopefully based on sales trends are going to actually we're gonna actually made a, a pretty good bet on that.
So I don't think you'll see that as the mix changes and gets more stable. And that's why, you know, we pointed out to kind of where, what you see expiring. I would hope for that. You you'd see that essentially that decrease go away with time is that goes out. So that that's, that's the first point. And then I think occupancy, I would think, you know, we would see improvement clearly where we were at the end of the end of last year, by the time we get back up to a year end.
So I would expect that a reasonable improvement on 2020 versus 2021, we're not going to get back to 2019 levels in 2021, we look kind of Milton little more in 2022, 2023 level. But that's a little bit of a guesstimate, but the demand, frankly, you know, I don't want to oversell it. You know, that's not my style, but, you know, I mean you know, we've got, and I don't like naming names, but even though I named two already we're just making deals with them across the board with a bunch of people we do ask some, still have some difficult relationships and negotiations that we're dealing with.
And again, I won't name, but, you know, so to the extent it's not the occupancy uptake is not as robust as you think it's primarily because we've taken the tactical response that look, we're not, we're, we're not, we're not going to, you know, if, if they're not paying what we think is fair, we're just, we're just rather sit on empty space. And that's a judgment that I hope investors will appreciate that having done this for quite some time, we're not always going to get a right, but the fact of the matter is we're gonna, try and do fair deals, but to the extent that it's too, one-sided, you know, we're just gonna, we'll sit on the space. So what, we still have a few of those kinds of scenarios that will probably play out in 21.
Right. Next question is from Caitlin Burrows with Goldman Sachs. Your line is open.
Hi there. Maybe just following up on the occupancy point. So lease termination fees were significant in the quarter, and I think you mentioned that was kind of your plan. What made you comfortable allowing this tenant or multiple tenants to move out early and Simon take that termination income rather than them keeping them in occupancy?
Yeah, that's a really, that's really an art. It's a good, good really good question. It's really an art versus science. It's really a function. We don't really like to do it, but, in some cases we think the space is really good and we'll be able to, you know, ring the bell on the lease termination income and then lease it up. And so, you know, we get the benefit of both if I get the present value of that leaf stream more or less, and then I have the space to lease, that's pretty good business for us to do. And, and that's the case.
That's what we saw in Q1. So we basically, in a lot of cases, took the net present near a hundred percent of the net present value of that leaf, got the gut, you know, got the money, got the cash. Then we have the space and then what we set up, that's pretty good. Caitlin, that's pretty smart to do pretty thoughtful to do our space. Isn't going anywhere. Our malls aren't going anywhere. There's still great. Real estate demand is picking up. So, you know, in some cases we'll, that's the kind of trade we'll make. We're not taking real discounts of NPV. And you know, and obviously we're very sophisticated in running in the math to see what the fair deal is.
Okay. and then maybe on the acquisition front Simon raised equity later in 2020, and I think some of it was earmarked for possible property acquisition. So just wondering what you're seeing in terms of opportunity and I guess, willing sellers. And is there any commentary on whether you're more interested in potential us or international?
Well, I think you know, we, we have built a great portfolio over a long period of time. We don't need anything to, you know, to continue you know, to run profitably and grow earnings now, after having, you know, dealt with 14 months, 15 months of of COVID. On the other hand, if there's some, you know, a few properties here and there that make strategic sense, we're willing and able buyers event the sellers, you know, the oven they flow and, you know, sometimes their expectations aren't where we think they should be.
Obviously we're very active with, Taubman. We think that's going to turn out to be a very, very good deal for everybody involved. So it's not like we haven't just done a significant transaction. And you know, we think there's lots of upside in, in the portfolios we work with the admins to, you know, to, to recover from COVID.
So, you know, we're, we've got our eye out you know, we're -- we've got a great network. We can always enhance it. But you know, we also, we're looking at content, you know, and you know, where, you know, what do I mean by content? Well, you know, you'll see as we point out to the value creation in some of our content deals over that this year or next, you'll see our ability to create significant value off balance sheet. You know, that I think you know, helps us with content and what we're trying to do in terms of positioning our real estate for the future.
Next question is from Alexander Goldfarb of Piper Sandler. Your line is open.
Good afternoon, David, how are you? It's earnings. We got a bunch of stuff still going on. Life is good. So two questions here saw the Eddie Bauer news. And if my ability to read English is correct, it looks like you did that in the traditional ABG investment rapper, not in the spec. So a two-parter for my first question, just you, I know last time in the call, you said this back, we'll do a lot more than just traditional retail, but maybe just walk through, thoughts on how stuff goes into, you know, just remind us how stuff goes into the ABG rapper versus fact, and then to the disclosure on page 16, which you guys have for awhile, but it does show, you know, the benefit from these retail investments starting to come through, which really shows that, Hey, these things are making money, but to that point, just sort of curious how many, how much of the brand and [indiscernible] is coming from Simon centers versus coming from non Simon centers?
Well, we don't, we don't really go through that, but you know, I know these are retailers that have essentially a very broad portfolio and so they get a lot of their, they get a lot of their profitability from, stores and e-commerce outside of our portfolio. So just to touch on your last one. So just a quick note on Eddie Bauer.
So Eddie Bauer will, we will partner with ABG to buy the IP which we think is terrific. It's been around a hundred years, celebrated a hundred year anniversary, I think last year. It was the first re first company to create the down jacket. And it, in 2019, it did $786 million of sales. And we are, we are buying the IP at a, a fraction multiple a lot less than one time said, if you look at where brands are being priced, you will have noticed that you know, we get we'll, do a great deal.
In addition, we are buying spark will buy the operating company, which we're partners with ABG on for essentially the working capital and and they'll operate the stores. And we think, you know again, they're going to add $30 million to $40 million of EBITDA to spark this year projected we'll do about $130 million of EBITDA, but that doesn't really come through cause we depreciation, we don't add that back for FFO and, the light, but you know, so spark is doing fantastic.
Eddie Bauer adding that the spark will be really beneficial. And then we're you know, we're beginning to create kind of a whole outdoor apparel with you know, with the brands that we have with Nautica and, and so on. And then and then I think the IP of Eddie Bauer will be you know, will have growth associated with it under the ABG umbrella,
But as far as like your thoughts of this going into there, like, so is the stack really just for more like technology or efficiency, cost investments, not, not retail?
Well, this is not in the spec, the spec is available to do kind of what we told the market, things outside, but this is like a core ABG spark transaction that you know, the synergies associated with folding this, into spark, doing the following the same game plan that we've done with all the other brands we bought is essentially a no brainer.
Okay. Second question is David ESG certainly a growing you know, investment outlook and a lot of funds looking for it, but yeah, there's more talk you know, in retail, you know, about the efficiencies of physical versus online, clearly individual boxes being shipped, you know, intuitively doesn't make sense, driving trucks, whether it's gas or electric through neighborhoods, doesn't sort of compete versus folk shipment to the to the malls and shopping centers.
So what are you guys doing to address this, not just on the white paper you did a few years ago, but more collectively whether individually or an industry to really highlight and showcase the environmental benefits of physical retail to the investment community and, and to, you know, the local communities as a whole versus, you know, just, you know, what the industry has dieted before, which as I say, you've done the white paper, et cetera.
Well Alex you know, this reminds me of the, you know, it's, we, if you can sense hesitation it's because you can sense frustration. Physical shopping on questionably is better for the environment than e-commerce. And we have written studies on it. We have discussed it and you know, right now nobody cares it's our job to, you know, have the community's care.
And I think part of why people cared less was obviously because of COVID and, you know, priorities were focused elsewhere, but I think it's a real focus for us in the future to explain the merits of our physical footprint and what it means for carbon footprint physical stores. These are the, e-commerce not to mention you know, all of the energy costs, server costs, et cetera, packaging, you know, you can go on and on and on about the costs associated the carbon footprint of e-commerce compared to physical.
And I will refute anyone. And I think others have tried to say that e-commerce is, has a less carbon footprint. That just is not true. So, you know, we have our jobs to do much, you know, reminds me, you we got to get the government to care, we got to get governments to act. And it reminds me that I've been around enough to know that, you know, e-commerce internet sales, taxation, we talked, we talked, everybody said, you're right.
Nobody did anything until, you know, thankfully the Supreme court overturned the quilt decision to level the playing field. There is no reason in addition to that, that retail real estate should be taxed 10 times. What, what a warehouse and distribution facilities are test 10 times. But, you know, hopefully when we give our pitch to local jurisdictions, real estate, assessors, government authorities, and so on, they will care. We do. And, you know, but we, you know, I'm open to ideas on how to get the message out. The message is clear to me. Hopefully people will care.
My next question is from Michael Bilerman from Citi. Your line is open.
Great good afternoon, David. You know, what to ask you about sort of development and redevelopment spending? You're obviously, I think enthusiastic as all of us are about the recovery and everything is happening. How do you think about increasing the deployment of either into new assets or into existing assets? If you look on page 25 of the supplemental, I think that's more than $30 million may be, the lowest I've seen in years. And I think back, I think over the last decade, David, you've put like $8 billion to work in your assets. So how should we think about deployment of capital over the next couple of quarters, or at least announcements of investing more capital when you also think about the investments you can make in Taubman's assets, which I think the schedule excludes?
Yeah, yeah. It's absolutely you know, a very valid observation. I mean, with, with COVID we shut things down we've frankly stopped construction, certain projects and midstream one is cause we had to because you know, governmental orders too is, you know, we didn't, we didn't necessarily see any light at the end of the tunnel when you, you know, you basically have 230 properties shut down across the country.
So the good news is, you know, we're able, we were able to do it. We did it, you know, without incident, we did it justly fairly appropriately. And now we're starting back up, Michael, we're still going, you know, it's, we're still a little conservative on that front, primarily, you know, we still have concerns about, you know, we just want to make sure we're through the COVID that crises that we've all had to deal with.
But it's, it is a goal of ours and a focus of focus of ours, you know, to, to crank this up. Now, the good news it's there, it's ready, we've rethought some projects. I think I mentioned this last time, you know, a couple of the California projects, we have more retail than, you know, then we probably will now. And you know, w we're evaluating supply and demand when it comes to other mixed use components of it.
The good news is without question the silver lining in surviving this this you know, very tough time for all of us has been that, that, you know, wasn't too long ago and it's like clocks, you know, it wasn't too long ago where, you know, suburbia was like, forget about it. Right. So to me, and I mentioned this, I don’t know, two calls ago, suburbia is hop.
Suburbia is the place to be and, you know, we just happen to have, you know, a lot of great, well located suburban real estate that we tend to take, we'll tend to take advantage of. And I don't think this is a short term scenario. I think this will play out for several years. So, you know, we've got some really good stuff and you know, the redevelopment pipeline we'll, we'll pick, we'll pick up.
And I think you know, our experience in knowledge and execution will clearly help, you know, the Taubman portfolio is great, suburban real estate, more or less. And you know, there'll be great opportunities to, to, you know, to add to that we're already working on as an example you know, they have, they have a big re a big development in cherry Creek, which will end up being a major mixed use opportunity for the, for TRG that, you know, that we're, we're there to help you know, the partners sort through as, as it develops.
So. when we're thinking about the slide at the end of the year, do you think it could be easily be at, let's say a $2 billion run rate when you include Taubman in all the projects that you're accelerating, I'm just trying to get a sense of how much, and also just given your overall enthusiasm about the results and where you see traffic and sales and leasing. I'm just trying to get a sense of how much that will translate into incremental capital above and beyond what you've already identified?
Well, again, it's all about questions, I would say to you by year end. And this is a guest and Brian is looking at me shaking his head. No, but I would, when you look at, we've got a couple of things in Europe that we'll probably do, I, when you put it all together, I would say again, the spend will be over a year, plus we'll end up having a pipeline probably at about a billion dollars of stuff, you know, that we'll have committed to by year end again, don't hold me to that number, but that would be kind of my gut feel.
Yeah, there'll be stuff that we'll talk to Michael. So don't forget about that piece because we projects that get delivered for the year that will ultimately reduce that number.
Right. And then this is a follow-up you know, it clearly, there's a lot of people going out and doing things, and I don't know if it's revenge shopping or stimulus shopping, but there are certainly much more people going out and shopping. How are you able to discern how much of this is just that just like we've been stuck around for so long. I just need to get out and do something I want to go shop versus something that's longer lasting. And are you able to sort of tease out anything from the analytics in terms of well times or conversion rates or any certain retail categories that are seeing, you know, more long lasting benefits than maybe one type of shot in the arm?
Well, I, I think that's the big question, right? So that's why we continue to be conservative because between being cooped up between being, locked down between the stimulus between celebrating that we're the country still around and we're still, you know, we're still going to try to get back to normal. There's clearly some level of euphoria around that. It would, it would be impossible for me to tell you what percent that is.
But that's why we, you know, we're being conservative on the other hand, we're still seeing pockets of the country three, you know, that, haven't really, I've seen that yet. You know California is a great example you know, parts of the, you know, New York region you know, there's still no international tourism, which we would expect to see in 2022.
So even if its kind of like stabilizes or, just kind of normalizes, there'll be other pockets that I think we'll pick up as the entire country reopens, I mean, let's take California versus Florida. I mean, this, the world's been opened up and Disney land, I think just open, right. So, California has a nine month lag and you know, we've got, you know, we're, we've got, real presence in California as you know that we'll see the benefits.
And then I, and don't underestimate, I do believe, you know assuming and this was a global, no issue, but I do think people are going to start to travel again globally probably won't happen, you know, much until, you know, ended this year or, or certainly in 2022. But, you know, we're going to see a picture of that pick up for that. We might see that in, you know, we might see that in in Europe just because the Chinese has stayed at home you know, with the Chinese come here, we can see that here. So, you know, there, there are elements that will pick up the Slack to the extent that, you know, the last couple of months have been you know, really really nice to see.
Our next question is from Derek Johnston of DB.
Hi, everybody. Thank you. Hi, David. So we touched on this a bit, but our store checks are pointing to a pretty high level of online order fulfillment from the mall, or the retail store itself? And is this a tenant last mile approach that you're seeing gaining any type of traction? And especially since distribution space have gotten so costly, are retailers talking about this? And could there be a growing trend at work here, kind of the merger between online and in-store?
While there's no question that, most of these sophisticated retailers really want to be, I don't want to use all the buzzwords but seamless between online and ship from store, pickup and store all of that stuff. It's interesting, when we talk to retailers, the majority want to do that, some like to fulfill it still in the distribution facilities. So it's not uniform across the board. But they all want, they all want a seamless experience, they want to be able to offer, clearly pick-up in store or deliver from store in a lot of cases with shipping delays, that's much more advantageous to them.
Handful would prefer to execute out of their distribution facilities. But I'd say the vast majority are moving toward seamless pickup, ship from store, using that as so to speak ability to fulfill from the physical stores, a real advantage to them, in terms of delivery costs, and so on. So yet though, there's a few that find it more efficient to do otherwise.
So, it's like everything else in retailing, there's not a one size fits all, but it's a good trend. And I think they need their footprint, with the connection for the retailer, lots of retailers will tell you that, not to be repetitive, but as we said, and others have said, look, when they close the store, and that's their store in that marketplace, they lose the e-commerce business, or vice versa, when they open a store, their e-commerce business goes up.
So, they look at it in totality. I think with all the ability now to study the consumer better with all the data, you're able to do a much better job.
Yes, thank you. That makes sense. Could you expand on some of the early reads from the J.C. Penney investment? I know you spent some time on Forever 21 and Arrow, and even called out J.C. Penney briefly, what are you seeing importantly at J.C. Penney? How have the trends held up there? Are there any re-merchandising wins or early successes that you'd like to expand on?
Well, I think we've been mostly like all of our deals, when we buy a retailer has a bankruptcy, we're in the stabilization mode, and the capital preservation mode. We've accomplished both of those already, as I mentioned to you in the call, we've got $1.2 billion of liquidity, an undrawn ABL, so we're in good shape, we’re bringing new merchandise brands to it but importantly some of the other brands that were nervous about us, when I say nervous, not about Simon and ABG but nervous when you go through a bankruptcy, reestablishing those relationships. And giving the vendors comfort that we're going to be around and able to pay for the goods has been really rewarding. And we're seeing more and more confidence from the vendor community so when you go through bankruptcy, that not only landlords get burned, but vendors get burned.
And so it's very important for us as new owners taking penny out of bankruptcy, that we give the vendors comfort that we're going to be around to do it now. The ultimately move toward growth is the future of what we're working on. We're not there yet. We've stabilized it. We’re bringing in new brands. We've got lots of ideas in what to do there. But the first goal is to right size the company, strengthen the financial capabilities, repairing vendor relationships that we need to do, stabilize the morale and so on.
Obviously, that's hard to do in COVID, when people are working remotely, but I've been proud of the execution. And so far the results are planned as above where we thought it was going to be.
So that's very encouraging. But in order to turn J.C. Penney into a 21st century retailer, that's still work in progress.
Understood. Thanks, David.
Thank you.
Our next question is from Craig Schmidt of Bank of America, your line is open.
Thank you. I'm thinking about sales per square foot. If you were to annualize 1Q sales, are you within spitting distance of your pre-COVID sales per square foot? Or is there still a way to go?
Well, the best I would say, depends how far you spit, Craig, okay? It depends if you play baseball or not. And what do they call them, when they have the right to do that, what is it? That’s the word I'm looking for. So just to give you a sense of, the best way for us to look at it is March, March of ‘19, to March of ‘21. I mean, we're way over March of ‘20. I mean, we're 130% above March of ‘20. But put that aside, because that, I would say to you, when you put it all together in March of ‘21, compared to March of ‘19 comparable, so same basically stores were like a little under, we're like minus 7%, 8%, okay.
Now I think April will be ahead of so when you look at April and March together, I think we're going to be ahead of sales for April, March of ‘19. April, March of ‘21. Okay, Is that helpful?
Yes, that's very helpful.
And I think that's the way to do it. So yes, I think we're in spitting difference. And I think we'll be ahead by as April sales come rolling. And if you put the two months together we’ll be ahead.
Great. And then I know you were talking earlier about possibly ramping-up redevelopment and developments, would you think more would be spent on mixed use efforts, or anchor repositioning?
I think we'll end up given the move towards the suburbs and what's happening there and away from CBDs, I actually, I mean again, this is just a gut feel. So I actually think they'll probably be more toward mixed use. I really do.
Okay, and then just finally, are you planning to introduce a lot of your brands into J.C. Penney, like [indiscernible] Eddie Bauer department and J.C. Penney future?
I think it's not just SPARC brands, but it could be ABG brands, remember, ABG owns a lot of, they have the IP for a lot of different brands. So the answer is without question, they'll be, it takes time obviously to design it, manufacture it and get it in there, but I would think in ‘22, maybe even like ’21, we'll start to see a lot of the ABG brands end up in J.C. Penney.
Okay, that's it for me. Thanks.
Thank you, Craig Schmidt.
Our next question is from Floris Van Dijkum of Compass Point. Your line is open.
Afternoon guys. Thanks for taking my question. David, maybe obviously, very encouraging so far talking about comp sales of 4% to 5% this year for your historical SPG portfolio, presumably Taubman is going to see something similar. Are you working on any initiatives in the TRG portfolio? I'm thinking more of one of the things that sets SPG apart from some of its peers is your focus on specialty leasing, kiosks, things like that, is that going to be more of an element in the TRG portfolio?
Are they going to remain a more traditional high-end retailer? Or do you, where do you see the revenue opportunities in TRG in particular, and could that same-store growth actually be higher, as a result of not having some of these things that SPG has had in the past?
Yes, I think that the short answer is without question, we've actually, wasn't that they were first of all, you can execute any program, we have and still maintain a high-end mall, but put that aside, we just have this, we just have a lot of, we have a lot of resources to bear, I mean we've got a big field operation we're basically in most all of their markets.
And I think by doing local leasing, specialty leasing sponsorship, at the rate, and at the level that we do, we're going to see significant upside in TRG. And in fact, we basically implemented in many cases, the existing SPG Salesforce for no better word, to start selling our product to that portfolio.
So that's actually been implemented, and we're at work on it. So and the working relationship to execute that was honestly, great. And a lot easier than what I had to deal with folks, when we came in, okay, so and I think it's been very, it's been the relationship, the coordination on leasing, and development, me and Rick and Taubman’s doing all of that stuff has been excellent.
And yes, the short answer is, there is upside, and we've got that, they were limited in resources, frankly to do it. Not out of neglect or out of a different point of view, it didn't have the people, the scale to do it, here we go. So we're ready. And we're doing things like insurance, that we have more scale to bear, there's all sorts of those things that we're bringing to bear without with open arms on both sides.
So I do think, that that portfolio will have a little bit higher up tick with time than probably asked, because we already do it, and they don't. So, we'll hope to see some of the benefit of that in the future.
Great, thanks. And maybe one follow-up. If you could maybe comment, you're now on both sides of the table, if you will, you're the landlord, and you also own these retailers. Does your confidence that you're exuding in this call, partly stemmed from the up tick that you're seeing in the retailers that you've made an investment and maybe if you could share some of the growth in maybe sales for those retailers, and you sort of comment a little bit about that, but also the growth in EBITDA that you potentially see going forward for the retailer part of your business?
Well, I mean obviously, that data that helps us, so I mentioned in the call Floris that literally just two brands, two brands in SPARC, Forever 21 and Aeropostale are literally $135 million over their plan already. Now their February wasn't as great. As you know, remember February had a lot up tick in COVID. But and so it’s sure, I mean, it does, it’s a great reference point and it does give us confidence. We're seeing similar good results in Penney.
But importantly, our guys across the board talked to all sorts of retailers, from luxury, to moderate to department stores, people are feeling pretty good. And look at the retail stocks. I mean the real retail stocks have blown past us. I mean, I had Tom do a thing for me, we’re still below our COVID, pre-COVID price, yet the retailers are in many cases 200% higher than what they were, so the answer is, yes.
We have a lot of data. We understand the consumer better than ever, but importantly, we have content now that allows us flexibility and knowledge that we didn't necessarily have before.
Thanks, David.
Sure.
Our next question is from Mike Mueller of JPMorgan. Your line is open.
Yes, hi. In terms of the $0.07 of COVID reserves and abatements, was there any prior period collections that were positive offset within it that may not repeat?
Nothing, nothing material. We did collect deferred rent of how much, Brian?
Yes, the deferrals we collected $100 million of previously deferred rents. But that was earnings that we recognized last year was simply working capital adjustment, Michael.
Yes, so that didn't flow through the P&L. But it's always good to see a collection of deferred rents. So but not anything noteworthy at all, Mike.
Okay, that was it. Thank you.
Thanks.
Our next question is from Linda Tsai of Jefferies. Your line is open.
Hi, just looking at your NOI overview disclosure on Page 16. It looks like your share of NOI from retailer investments and also corporate and other NOI sources were down a bit sequentially. What was driving that?
Well, Linda, it’s Brian, with respect to the NOI from retailers, you got to remember the seasonality of the retail business, typically, first quarter is the low mark. And so you're actually seeing a positive contribution here relative to historical sequentially versus fourth quarter, you would be down because the fourth quarter is obviously the biggest point in the year.
With respect to corporate and other NOI sources, we do provide the breakdown of that, what you see is the coming through that line is an increase in lease settlement income. And then offsetting that is some further reductions from our auxilary lines of business in the first quarter relative to the first quarter of last year. So Simon Business Ventures those kind of businesses were down relative to a full-quarter last year.
Thanks, just in terms of the strength in 1Q leasing, can you just talk about who the backfill options are, are they existing retailers or more new to market?
I missed the question. Well, there's a lot I mean, there are, I hate naming names but you've got a lot of the B2C guys that are growing their business, I mentioned to you American Eagle is growing their business, Urban Outfitters is growing their business. So, it's really across the board restaurants, the luxury folks product Gucci, Louis Vuitton, I mean it really is encouraging, you got it is really encouraging to see it, not in one particular category, but across the board, Levi's Route 21, [indiscernible] Marc Jacobs Bottega Veneta, Style Milan, as SPARC is growing some opportunities. And you've got, we had a Golden Goose Open Warby Parker, Craghoppers, a UK outerwear brand. I really miss Rick, when this happens. Okay, so I'm going to have him come in for a cameo. Okay. I don't do as good a job as Rick, but when it comes to that, but it is across the board.
Thanks for that.
Sure.
Our next question is from Haendel St. Juste of Mizuho. Your line is open.
I guess that's me. Thank you for taking the question. Hi, David.
How are you doing?
I’m doing well, sir. Hope you’re too.
Yes, thank you.
So a question on occupancy and you talked a bit earlier about rebuilding the occupancy, the timeline, but I guess I was more curious, specifically from a cash paying perspective. I think you said you could be back in 2019, occupancy levels by perhaps 2022 or ‘23. But what do you think will be the cash flow impact of that? Is that another year out? So maybe this is more like 2023?
While there's clearly a lag impact, yes, so I think that's a fair statement. I mean, we've run lots of numbers, when do we get past our ‘19 numbers? We're certainly not going to get there this year. We're certainly not going to get there next year, could it be ’23, ‘24? You know, look it's so dependent upon the economy. And what's out there, but I think the ability to see that closer than what we thought, a few months ago is there. So that's the goal. And every day we're grinding to make that happen.
Fair enough. Fair enough. Thank you for that. And just a couple of follow-up on the guide, I understand the restrictions that are still ongoing, beyond your control the international portfolio, but I was curious, maybe you could talk to me about what's implied in the guidance offered international this year, you mentioned the $0.08 drag in the first quarter. Is that a level we should expect again in second quarter, and when you expect that to improve? And also one for Brian, I was curious about the level of bad debt reserves you're carrying at the end of the first quarter year, and perhaps maybe speaking to the broad industry exposure or probability of recovery of some of that and anything implied in the guide? Thank you.
Well, I'll do Europe, I mean, Europe, we will see further impact in Europe Q2, against our plan, my guess is probably in the $0.04 to $0.05 range if I had to guess. And then I'm hopeful we'll be on plan the rest of Q3 and Q4 as it picks up now. To the extent that there's anything like the U.S. where there's some pent-up demand, we may see that.
We may see a little bit about performance in Q3, and Q4. But we're not anticipating it, but clearly, we're going to see in the $0.04 or $0.05 range compared to our plan and our guidance, the Europe and when I talk about international, it's really Japan is the squishiest because of COVID and their caution obviously, with the Olympics coming up. So, that could be another $0.02 international.
Haendel, with respect to your other question, about recoverability of the reserves, I mean at quarter-end, we were appropriately reserved, as you heard us say that we did not get any positive impact in the first quarter from that. And that's our expectation from the balance of the year, the reserves that we're establishing, we expect to be true reserves and write-offs, not a recovery.
Okay, and that level again, so what was that at the end of first quarter?
With consistent with prior years but we're not giving out individual levels.
Okay, fair enough. Thank you.
Our next question is from Ki Bin Kim of Truist. Your line is open.
Thank you. Good evening. So just going to your Top Tenant list. Noticed some decreases in store counts for at least for top five. Just a little bit of an open end question here but just curious if you can provide any color and should we expect some further follow-up?
Well, I mean, look, I think all of the retailers were very conservative in dealing with COVID. And if these leases happened to expire, during that awful shutdown, and the restrictions and all of that, I mean they close stores. So there's going to be, and like I said earlier, I mean there's going to be a few retailers that, we're not going to be able to find a happy medium where we may lose their entire fleet.
And that's I mean we're ready for it. And it's a lot of our expectations are already in those numbers. So, we'll see but yes, I think they'll be for some of the big, big retailers, they've announced public store closings, I don't want to get into which that all that's out there is public. But they're all sending their fleet. And the fact of the matter is, if they do, they do and we're used to lease enough space.
Okay, and can you just comment about some of the lease clauses and language that's being used today for the new lease deals? And I'm just in particular, more curious about as tenants have more out, I know you mentioned more percentage rent deals as they had points. But I'm just curious if there's some other language with regard to like future pandemics and things like that, that might create some variability?
Not really, I mean, there's always a lease here or there with 20 plus 1,000 leases. Now there's always some variability, but the reality is, during the COVID renewals, those were difficult to sit discussions, everybody was under enormous pressure. And in some of those cases, like I said earlier, we reduced our base rent for debt on sales. We'll see, maybe we did a better deal than what we thought, we had done at that time. Okay. Believe me, I prefer to have the higher base rent.
But no one is. There's no, there's very few, very focused on pandemic language. And at this point, there's no material or even meaningful trend in that language. And I would say, generally lease terms, it depends on the retailer, maybe in some cases, they're very similar what they been, we're very focused on lease terms.
We don't willy-nilly just do a deal to do a deal. And there's a lot of give and take, and I would say there's no real super trend that's going on in lease terms. There's always a give and take, but nothing of note that, that I think we should share at this point.
Okay, thank you.
Sure.
Our next question is from Vince Tibone of Green Street, your line is open.
Hi, good evening. How sensitive is your NOI this year to tenant sales? It would be helpful if you could provide some guideposts there. For example, just if tenant sales this year came in at 2019 levels, how different would it be if let's say tenant sales were 10% higher this year than 2019?
Well, it's very complicated. It's very complicated because it's lease by leases, whether they're natural or unnatural break is, it's when it hits. It's what they tell us what we audit. And so the simple answer, Vince, as much as I like to tell you, we don't really guide to that. We do it in our own budgets. But we're a big company, sophisticated company, lots of ins and outs. And I think that's how we want people to think about us as opposed to, what the percent rent is here versus there, it kind of ebbs and flows. We'd like people to think about us a little bit in a more broader context.
That's helpful, any rough ballpark like is it a 20 bps impact, if that 10% swing in sales are the 2% or 3%, I mean any kind of rough sense because tenant sales obviously that you kind of the one of the big markers we're following, but just trying to get a sense of how much it really matters for FFO or NOI this year?
Well, I mean, I say simply, if we end up in ‘19 sales, we'd be happy. How's that?
Okay, it’s fair.
Smiling, okay.
Okay, fair enough.
I do not smile, take some, picks him a lot to smile.
One more for me, it looks like temporary tenants continue to take more space in the portfolio, can you discuss the overall strategy as it relates to backfilling space with the lower rent paying temporary tenants, and just whether you expect the square footage lease to be temp tenant to move higher or lower from here?
Well, look I mean frankly, we have more space. So because we've lost space. So remember, as you know, we don't add that into our occupancy unless it's a year lease. We also like again, we like doing business with local and regional entrepreneurs that are bootstrapping their way up to try and build the business. We've had, I mean our most famous retailer and that is a Finish Line, when they came in, and it's Finish Line from Indianapolis, but those guys started with one store.
And they grew, obviously, they were just bought by JD Sports. But I mean, we don't know who the next Finish Line, we did the same thing with LIDS, where they started with one or two stores. So you never know, we like that business, it also creates a uniqueness to the real estate and the local, I was actually just reviewing the book
that our specialty leasing folks put together for me every quarter.
The mix and the customer care that these people have with their communities is great, the products getting better and better. So it's an important part of our business, we have more space to fill, because of either bankruptcies or some of the larger folks because of COVID, reducing their store counts.
So we're proud of that business. We like working with entrepreneurs, we like finding the next Finish Line, the next LIDS, we don't know where it'll be, but that's what our people try and do. And it also makes the real estate look and feel better than a vacancy.
And if you walk one of our centers, I hope you feel like and obviously, there's frictional vacancy, because if you're building out a store, somebody's moving in or out, but I want people to feel like it's full, the last thing you want to do is, you walk down Madison Avenue, you know there's kind of a problem in it, right? So, when they walk a Mall, I want them to feel like, it feels good.
So it's just a good solid part of our business. I'm proud of what we do there, proud of the people that we lease to. And that's the business we’ll continue to foster and again, not always, doesn't always work out for the entrepreneur and for us, but it's something that we like to, we like to focus on.
Makes sense. Thank you for the time.
Thank you, Vince.
Thanks, Vince.
Our next question is from Juan Sanabria of BMO Capital Markets. Your line is open.
Hi, good evening. I was just hoping to touch on Michael Bilerman’s earlier question on the development and redevelopment schedule and just saw the expected yields come down a tick, a couple of the different buckets. Now I was just curious if that was more of a, a mix issue or if the underwriting has changed on expected rents or the timeframes have widened out as a result of COVID, if you could provide any kind of, that'd be helpful?
Hey, Juan, it's Brian, this is simply mix. You know, every time we produce a schedule every quarter there's projects that come in and out. And so it's a, it's a mixed change over time from that from the fourth quarter.
Great. And then a second question is just the retailer EBITDA contribution, I believe you spoke to a $260 million member for 2021. Just curious on what your sense for that number is now kind of pre Eddie Bauer. If you have it handy?
Well, Eddie Bauer won't close. It'll be higher, but Eddie Bauer won't close probably until two months. So it'll be higher. How's that is that helpful. The two 60 included our share of everything including penny. So work love that now. So we're going to, hopefully again, you know, retail is, you know, it does have its ebbs and flows, but we're, you know, we're projecting to be greater than that already without Eddie Bauer.
And then I think Eddie Bauer you know, once it closes we'll, we'll clearly add to that. I mean, it's going to be a very good deal for spark there. I'm a little nervous could spark my guys at spark. We've done have done a great job. Mark Miller CEO, Dave CFO you know, are thoughtful, conservative, great stewards of the brands great partners of me and Jamie Salter of ABG.
I'm just nervous because they were really excited about Eddie Bauer and I'm like, you guys are never excited about anything now I'm nervous. Okay. But now the waves, they think it's going to be a great addition. Just one thing to point out obviously is, is relative to our retail investments. We don't add back depreciation and amortization. So the FFO contribution is much less than the EBITDA contribution.
All right. Next question is from Greg McGinnis of kosher Scotia bank. Your line is open.
Hey, David, just to maybe touch on that last question a little bit differently on the last call, it was a $0.15 to $0.20 contribution FFL from the retail investments. So is it fair now that there's a higher number assumed for the contribution to guidance? Okay.
Yeah, I think that's to say I don't, I don't know Greg, what the number is off the top of my head, but it should, hopefully it will out perform our initial budget.
Okay. And then just kind of rounding out the guidance questions. Could you tell us what's built in regarding additional lease cancellation income, Nothing, material for the balance of the year?
Nothing really on our, on our radar.
Okay. Thank you very much. Thank you. There are no further questions on queue. I will turn the call over back to David Simon for any closing remarks.
Thank you. Thanks for your interest and all your questions and look forward to talking
To you soon. Take care, ladies and gentlemen, this concludes today's conference call. You may all disconnect. Thank you.