American Hotel Income Properties REIT LP

Thank you, operator. Good morning, everyone and thank you for joining us for our second quarter 2021 results conference call.

Discussing AHIP’s performance today are Jonathan Korol, Chief Executive Officer; Bruce Pittet, Chief Operating Officer; and Travis Beatty, Chief Financial Officer. The following discussion will include forward-looking statements as required by securities regulators in Canada.

Comments that are not a statement of fact, including projections of future earnings, revenue, income and FFO are considered forward-looking and involve risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our MD&A for the 3 and 6 months ended June 30, 2021, our other Canadian securities filings available on SEDAR, and on our website at ahipreit.com.

AHIP does not undertake to update or revise any forward-looking statements to reflect new events or circumstances, except as required by law. Listeners are urged to review the full discussion of risk factors on AHIP’s annual information form dated March 15, 2021, which has been filed on SEDAR at www.sedar.com.

Our second quarter results were made available yesterday afternoon. We encourage you to review our earnings release, MD&A and financial statements, which are available on our website as well as on SEDAR.

On this call, we will discuss certain non-IFRS financial measures, including NOI, hotel EBITDA, FFO and AFFO. For the definition of these non-IFRS financial measures, the most directly comparable IFRS financial measure and a reconciliation between the two, please refer to our MD&A.

References to prior year operating results are comparisons of AHIP’s current portfolio of 78 properties’ results in those periods versus today. All figures discussed on today’s call are in U.S.

dollars, unless otherwise indicated. I would like to remind everyone that this call is being recorded today, August 11, 2021 and a replay of this call will be available on our website.

Jonathan will begin today’s call with an overview of operational and financial highlights followed by Bruce, who will provide an update on hotel operations. And lastly, Travis will highlight key financial results.

I will now turn the call over to Jonathan Korol, Chief Executive Officer.

Thank you, Kelly and thank you everyone for joining us today for our second quarter financial results conference call. Our Q2 performance saw us achieve our strongest operating results since that pandemic began.

Each month brought sequential improvements in revenue fueled by meaningful improvements in average daily rate. In prior demand downturns, rate has been proven to be slower to recover to prior levels than has occupancy.

What we witnessed in Q2 was rate narrowing the gap to 2019 levels more quickly than occupancy. Our June average daily rate was only 4% behind June 2019.

This bodes well for the speed of the recovery of our business to pre-pandemic levels and future operating margins that we will be able to generate at our properties. Rate-driven RevPAR growth has allowed us to operate our hotels at margins that exceed pre-pandemic levels and meet or exceed those of our lodging REIT peers.

Our net operating income, or NOI margin, in Q2 of 41.5% was 9.4 percentage points higher than Q1 2021, 25.1 percentage points higher than Q2 2020 and 4.4 percentage points higher than Q2 2019. Our margins have also been helped by relaxed brand standards and operational efficiencies unlocked by our hotel manager working with our asset management team.

Going forward, our teams are working hard to ensure that we maximize the permanence of the cost savings and operational efficiencies that we have achieved during the pandemic. Hotel demand continues to be powered by the leisure guest.

Since U.S. vaccination rollouts began in December, the domestic leisure traveler has shown increasing willingness to travel and to spend.

Any demand downturn associated with the Delta variant has not been felt in our portfolio to-date and we are pleased to see July results exceed June’s numbers. Improving revenue and robust operating margin drove Q2 fund from operations, or FFO of $0.14 per unit compared to negative $0.03 per unit in Q1.

This is the highest total and per unit FFO since Q3 2019. On a relative basis, AHIP is one of the few lodging REITs to report positive year-to-date FFO.

These improved bottom line results, together with our strategic equity raise, completed in Q1 resulted in available liquidity of approximately $40 million at the end of the quarter, comprised of both unrestricted cash and revolver capacity plus an additional $34.6 million of restricted cash. We anticipate that opportunities for further improvements in our results lie in the benefits of the future return of the business traveler.

While there is evidence of business transient demand increasing in September, it is too early to comment the magnitude of this increase. We expect any benefits from greater corporate demand to accrue to our midweek rate and occupancy and to improve the results at our 5 Embassy Suites properties, which have so far lagged the broader portfolio recovery.

As alluded to in Q1, we continue to face challenges inherent in a very tight labor market that affect our ability to attract and retain labor for certain positions. Later on, Bruce will discuss some of the dynamics currently at play in the U.S.

economy, which contribute to these challenges. Given our conviction around the long-term escalations in demand trends, we are pursuing opportunities to invest in capital improvements to our existing properties as well as to expand the size of our portfolio footprint.

We expect those efforts to accelerate over the coming months, with capital beginning to be deployed towards renovation work in the latter half of the year. We continue to monitor opportunities to grow and are actively underwriting transactions that would expand our portfolio of premium branded select service hotels across the U.S.

And with those recent highlights, I will now turn the call over to Bruce to discuss second quarter hotel operations. Travis will then highlight key second quarter financial metrics.

Bruce?

Thank you, Jonathan and good morning everyone. We were pleased to see the momentum of the first quarter’s revenue growth continue and accelerate in Q2.

The portfolio has seen sequential RevPAR growth since the beginning of 2021 and the percentage revenue increases between April and July were substantive. Looking at the second quarter, June RevPAR of $84.28 represents a 19% increase over April RevPAR par of $70.79.

As a whole, Q2 RevPAR of $76.53 exceeded Q1 2021 RevPAR of $57.01 by over 34% pointing to meaningful signs of revenue recovery for AHIP’s portfolio. Q2 2021 RevPAR is at 80% of the same period in 2019.

Total occupancy for our 78 hotels in the second quarter averaged 70%. On a monthly basis through the quarter, April occupancy was 68.6%, May occupancy was 68.4%, and June finished at 73.1% occupancy for the month.

In Q2, weekend occupancies range between 80% and 83% driven by leisure segment demand. Midweek occupancy in Q2 was in the mid to high 60% range.

When we look at the three distinct segments of AHIP’s portfolio, occupancy for the quarter was led by our 24 extended stay properties at 81.1%. Our 49 select service hotels had occupancy of 67.1% and our 5 Embassy hotels had an occupancy of 59.5%.

Although revenue increases year-to-date have price have been primarily driven by occupancy, as Jonathan mentioned, we are very encouraged and pleased by the rate growth we have seen every month since the beginning of the year. In particular, in Q2, the AHIP portfolio saw average daily rate increases from $103.16 in April to $115.33 in June, representing an 11.8% increase during the quarter.

These Q2 ADRs represent between 88% to 96% of ADR levels the portfolio experienced in Q2 of 2019. In fact, our July 2021 ADR was $119.71, that’s at 100% of the July 2019 ADR achieved.

As we move beyond Q2, July preliminary results have portfolio occupancy at 73.2% with RevPAR at $87.62. The leisure segment continues to be the dominant driver of demand across our portfolio.

As vaccination rates have improved across the United States, we have seen continued and consistent leisure demand growth as domestic travelers break-free from COVID restrictions and concerns to travel to see family, friends and enjoy vacations. From a group segment perspective, the demand catalysts are youth sports, family reunions, small weddings as well as medical logistics and construction project work.

We are seeing some growth in the traditional group meeting business with group sizes in the 10 to 30 person range, primarily driven by small to medium-sized companies. Corporate segment performance continues to significantly lag leisure demand.

We believe that we will see some improvement in corporate segment demand as we passed Labor Day. This market segment has been the most sensitive to travel during the pandemic period.

In general, larger corporate clients continue to have stricter travel policies with many offices still closed. We anticipate a more meaningful recovery of this segment in 2022.

Weekends continue to outpace midweek occupancy as a result of the strong leisure segment demand. Friday and Saturday nights continued to be peak demand nights with RevPAR achieving 25% premiums over midweek room nights.

Geographically, New Jersey where AHIP has 6 hotels and Texas, where we have 10 hotels ran 87.9% and 78.7% occupancy for the quarter respectively. New Jersey also delivered AHIP’s highest RevPAR of the 22 states where we operate at $109.99 for Q2.

Overall, we have seen business and occupancy recover as being quite balanced across our 78 hotels in 22 states. Only 2 states had occupancy of less than 60% in the quarter, Ohio at 50.7%, where we have 2 larger Embassy Suite products that cater more to corporate and group and conference market segments and Oklahoma at 49%, where we have hotels that have been heavily impacted by the downturn of oil and gas in that state as well as significant new market supply.

As mentioned on our last call, Oklahoma only represents 7% of the portfolio key count. Our 78 hotels continue to outperform their respective competitive sets with a RevPAR index of 115.3.

We are pleased with our overall index performance, but it’s worth noting that the index performance comparisons to Q2 2020 are quite noisy given the amount of hotel closings and consolidations within our portfolio and concepts during that period. In Q2, our hotel manager continued strict cost containment initiatives, which coupled with strengthening ADR have yielded strong margin growth across the portfolio.

Operating efficiency gains contributed to Q2 NOI margins of 41.5% compared to 32.1% in Q1 of 2021 and 16.4% in Q2 2020. When compared to Q2 2019, NOI margin has improved 4.4 points from 37.1%.

Similar to Q1, several factors have contributed to margin growth, improving average daily rates, relax brand standards and cost containment initiatives put in place at the beginning of the pandemic. Currently, the portfolio is operating at 56% of 2019 staffing levels.

This is up from 51% in Q1. We would expect to see this percentage increase as we normalize at higher demand levels, in particular at our Embassy Suites properties.

However, we anticipate that some of the savings we are currently seeing will become permanent, providing for a leaner and more efficient operation model. Our hotels have continued to operate with relaxed brand standards surrounding complementary services and housekeeping through Q2.

As a complementary services comparative in the first half of 2021, our comp services cost, inclusive of labor, were in the $2.15 CPOR range. In 2019, our comp services cost was in the $5 CPOR range.

Housekeeping for the first half of 2021 was in the $5.20 CPOR range versus $7.60 CPOR in 2019. We do not anticipate a return to 2019 brand standards and believe that we will have a leaner operating model going forward.

That said, we have adjusted and improved our comp services breakfast offering as we entered Q3 and our brand partners are evaluating a daily housekeeping service upon request model, with Hilton being the first brand partner to formally adopt this new housekeeping standard. Both of these items will add some cost back into the business from what we experienced through the first half of 2021.

There continued to be many cost and service variables impacting our hotels today. And it’s too early in the recovery to provide specific margin guidance.

The greatest challenge to operating our hotels today is our hotel managers’ ability to recruit and retain staff in the hotels. We believe that this is a challenge that will remain through the economic recovery period.

Many factors contribute to this dynamic, including ongoing availability of government assistance, increased competition in the labor market for employees, wage rates, and in some instances, employee reticence to return to work while the pandemic is ongoing. Through the first half of 2021, our capital spend was focused on requests related to life safety and asset preservation.

Year-to-date, we have committed $2.8 million in capital repairs and improvements with $1.7 million of that being committed in Q2. We have not undertaken any capital renovation projects to-date, but anticipate completing two small PIP projects in Amarillo in Q4 that had been suspended at the onset of the pandemic.

As we are seeing the financial recovery of our business take hold, we are discussing with our brand partners what our PIP program may look like in 2022 and beyond. And with that update on hotel operations, I will now turn the call over to Travis to highlight key financial and capital metrics for the quarter.

Travis?

Thank you, Bruce. We are seeing ongoing improvement in operating and financial results.

These trends have resulted in sequential improvements in most key metrics and positive hotel EBITDA in every month since May of 2020. In the first 6 months of 2021, we have made meaningful improvements in our capital structure and liquidity that positions us for the ongoing recovery in the hospitality sector, while providing protection from possible downside scenarios.

The preferred equity issuance, amendments to our credit facility, temporary suspension of the distribution and improvement to operating cash flow have all contributed to this improved financial position. For the 3 months ended June 30, 2021, reported revenues increased to $63.6 million as compared to $27.3 million for the same period last year.

Reported net income for the quarter improved to $0.5 million compared to a loss of $20.8 million in the same period last year. Diluted income per unit for the quarter was a positive $0.01 compared to a diluted loss per unit of $0.26 in 2020.

This is the first positive income since the third quarter of 2019. Reported funds from operation or FFO, was $11.5 million or $0.14 per diluted unit.

This is the highest total and per unit FFO since the third quarter of 2019. With our revised credit facility, we have covenant waivers during 2021.

We anticipate being able to satisfy our covenants once they take effect in 2022. In addition, the fixed borrowing base amount on our credit facility is set to expire at the end of the year although we do not expect a reduction in 2022.

In terms of liquidity metrics, at June 30, 2021, AHIP had total available liquidity of approximately $40 million with an additional $34.5 million of restricted cash held in various reserves with the loan servicers. While liquidity decreased from the end of the first quarter, this was primarily attributable to the $16 million repayment of a deferred purchase price in connection with AHIP’s acquisition of 12 premium branded hotels in December of 2019 and a catch-up of other accrued liabilities.

In the second half of 2021 EBITDA is expected to exceed required cash flow for principal and interest payments and capital expenditures. This is based on the expectation that hotel EBITDA will continue to improve.

Management expects to reestablish the dividend in 2022 at a level that will be sustainable in the long-term. In 2020, we were able to obtain relief on all 20 of our CMBS loans.

This relief included a referral for funding FF&E reserves for 6 months, repayment of this deferral over 12 months and covenant waivers. The majority of these deferrals have now been repaid and most of the portions will be repaid by the end of this year.

We are in discussions with loan servicers on further covenant waivers on 5 CMBS loans, where trailing 12-month cash flows have not yet exceeded required thresholds. We have two underperforming non-core assets in Pittsburgh which generate little or no FFO.

In December of 2020, we made a request to the loan servicer for these two single property non-recourse loans, that the loans be transferred to the special loan servicer in order to negotiate modified loan long-terms. We are now in discussions with the servicer and believe that resolution is forthcoming.

These discussions do not impact any of AHIP’s other loans. I will now turn the call back to Jonathan for closing remarks.

Thanks, Travis. In closing, we want – we continue to gain enthusiasm on the recovery of our industry and the outlook for AHIP in particular.

As we look ahead, we will continue to focus on the key messages that we have communicated in the recent past. Operationally, we will maintain our focus on cost containment and margin enhancement so that as demand continues to increase, we optimize flow through to our bottom line.

We will continue to protect the balance sheet near-term and to leverage over time. We pursue – we will pursue accretive opportunities to deploy capital in our existing portfolio and through new acquisitions.

With our end goal remaining to drive total return for our unit holders through unit price appreciation as well as reinstating our unit holder cash distribution at a sustainable level and at the appropriate time. So with that overview of our second quarter and recent initiatives, we will now open the call to questions from analysts.

Operator?

Thanks and hi guys. Maybe just following up on Jonathan to your last comment there in regard to the distribution, can you maybe give us an update on when you expect to be in a position that you are able to reinstate the distribution?

And to that point, when would you like to reinstate the distribution. Would you want to hold off longer just to retain capital?

Sure. Thanks, Mark.

So, couple of things to watch and be aware of with respect to the distribution. First is our credit facility.

The payment of distributions is not permitted during the current covenant waiver period under the last amendment of our credit facility. And that waiver extends until the end of 2021 and thereafter will remain subject to the satisfaction of certain financial covenants under that amendment.

But secondly, which is more of a gets to your point regarding our – what we would like to do, our business has seasonal fluctuations in FFO over the calendar year. So we would like more visibility to what normalized cash flow will look like over the coming quarters.

And in addition to cash flow, we will be monitoring capital needs, acquisitions and dispositions and distributions required for AHIP to maintain its REIT status. So, based on the expectations that hotel EBITDA will continue to improve, we would expect to reestablish the distribution in 2022.

And what that level will be and when it will be exactly in 2022, it will be a topic of discussion over the next few months with management and with our board.

Okay, great. And then you also mentioned looking at growth and acquisitions, to what extent have you still been pursuing acquisitions over the past little while and should we expect anything in the remainder of the year?

I wouldn’t expect anything to be closing prior to the end of the year. But we have a pretty robust deal pipeline.

There is more deals being marketed, both from brokers and off-market. That’s the biggest – that’s the biggest change in Q2.

We are going to have more pricing discovery as those deals get consummated. And as results improve, sellers are becoming more emboldened to stick to their asks that they had in 2019.

So, it’s going to take a while for us to shake some of the bills loose. But, we have the team and the individuals in place to do that.

And we will be continuing to pursue.

Alright. Great.

And maybe just lastly, with those transactions that you are saying with sellers that are putting properties up for sale, what type of valuation metrics are you seeing right now?

So, as results are improving, sellers are pricing deals to stabilize 2019 cap rates. And what that means in many cases now is close to 7% cap rates on 2019 levels, once you account for post-closing CapEx requirements.

Okay, great. Thanks so much.

Thank you.

Thanks. Hi, everyone.

Just wondering, can you guys give us any insight into what the ADR and occupancy has done thus far in August?

Sure. And Lorne, it’s Bruce.

So, cutting through the first eight days of the month, occupancy is at 70.7%, ADR is at $118.34. So, that translates to a RevPAR of $83.71.

Okay. Thank you.

That was very helpful. And then, obviously, the Delta variant is a bit of a concern and the resurgence of cases, how do you guys see that impacting the portfolio, if this does continue to – if case counts continue to rise?

Yes. So far, we haven’t seen any impact to our portfolio in demand, Lorne.

I think what will be interesting to see is how it affects companies willingness to allow their employees to travel. And that’s something that’s a moving target and something that will gain more visibility to post Labor Day.

Okay. And then I guess, maybe just lastly, kind of more high level.

Obviously, fundamentals are improving. And you guys had some great results.

What do you guys think the market is missing here?

In what context, Lorne?

In terms of like the unit price, hasn’t really seem to budge much, even despite the results, what do you guys think you need to do to kind of get the unit price moving upwards?

Well, we are going to continue to do what we are doing right now, which is running our business and optimizing our results. Hopefully, as time goes on the market sees that – sees the improvement, the sustained improvement.

And we are rewarded for that. But right now, we are going to focus on what we are doing and what you see in front of you, which is to improve the results within the portfolio.

Fair enough. Thanks so much.

I will turn it back.

Thanks.

Thank you. Just a couple of questions on the operational side, I find that 2021 versus 2019 disclosure is very helpful.

What would that disclosure, which I think you have on Page 14 of the MD&A? What would that look like if we just focused on the corporate side?

Focused on which?

On the corporate segments as opposed to brand just like, where – which corporate activity in your portfolio today relative to 2019 levels?

Yes. Bruce, we might have to follow-up on that question specifically.

But Bruce, do you want to just give your high level feeling?

I think, Mario yes, we can do a little more homework. But I would tell you, it’s probably around the 35% or 40% range of where it was.

And leisure is over performing compared to 2019 levels.

Got it. Okay.

And then secondly, in terms of margin Bruce, I can appreciate that visibility is relatively low with respect to guidance. But if I ask the question a little bit differently, if we step back and hypothetically assume that ADR gets back between ‘19 levels based on that corporate demand recovery that you are hoping or anticipating, like, what’s the confidence level like that the margin of ’22 would be higher than in 2019, given some of the expected permit cost reduction you are anticipating?

Yes. I will give you the short answer first, which is our confidence level is high that we will be entering into an environment here with higher operating margins in 2022, than they were in 2019.

But let me add some color to that, which is number one. As you pointed out the margins – improvements in margins haven’t only been cost driven.

As we have alluded to the recovery, we have had in rate has had tremendous flow to the NOI. Let – on the cost side, let me just speak briefly about the brands, which is really the – one of the biggest dynamic with the brands which is affecting costs.

And the brands be at Marriott, Hilton or IHG, they are currently sorting out what the guest experience will look like, once we get through all of this. And that’s a complicated analysis.

Marriott has 30 plus brands, and they each have their own swim lane. And so when they make a decision on one, it affects what happens in the others.

But what I can say is that they all acknowledge that we are not going back to 2019 brand offerings. So, as Bruce pointed out, the most recent evidence we have had on this is Hilton’s announcement in June, making housekeep an on demand item for non-luxury brands.

And we are going to be a tremendous beneficiary that given that we have 30% of our hotels are extended stay. So, we expect more announcements like this in the coming months from the competing brands, which will allow us to answer your question more – in more detail.

But I think it’s safe to say that 2022 margins are going to be higher than they were in 2019.

Okay, that’s helpful. And then just in those discussions with the brand, as opposed to focusing on the cost and kind of focusing on the customer experience.

Have you seen or heard anything in terms of trends coming out of this pandemic that may change? So customers want a, b and c much more than the pre-pandemic?

And how do you think about positioning the portfolio to capture evolving trends and preferences or customer preference?

Yes. Mario, it’s Bruce.

I think cleanliness is right up at the top of the list from a customer perspective. And I think our brands ability to communicate the steps they are taking to provide a clean and safe environment within the hotels is at the top of the list for what the consumer is looking for today.

Setting aside vaccination rates and all the rest, there are still concerns that are pandemic related. And it all revolves around I think, the cleanliness of the product.

So, more focus on that going forward.

Okay. Thank you.

Hi. Good afternoon.

I know you guys mentioned that you haven’t really seen the impact from the Delta variant yet. But in the face of the two 3330, even though there was a little bit of a dip, that the rebound, because we could read them pretty quickly that it should probably follow some more trend, if there was a little bit of a pause because of the Delta variant?

What we are – I think we are not seeing any evidence of a dip other than what we would typically see in seasonality within our portfolio. And we expect that seasonality to follow the trends that we saw in prior years, so, no evidence of a dip beyond that Joanne.

Okay, that’s good to hear. But just I guess, maybe, would you maybe provide a little bit more color, I guess, learning now in August, which of your markets continued to exhibit the most strength, if you will?

Yes. As I – Joanne, it’s Bruce.

As I mentioned in my comments, we have actually seen a pretty balanced rebound across the portfolio. Look, Texas, New Jersey, North Carolina, certainly all demonstrating some operational strength.

So – but again, it’s pretty balanced. As far as what we are seeing.

Even with Florida, I would tell you that over the course of the summer, Florida has been seeing more business than they typically would have, because of domestic travelers heading to that market, as opposed to leaving the country for summer vacations and such.

Right. And that makes sense.

I wish I could go, but maybe just last one for me. Switching gears, maybe, to the balance sheet side of things.

It’s nice to see that, leverage continues to tick down modestly. And just kind of remind me what your goal is, in terms of your overall leverage over the longer term?

Joanne, it’s Travis Beatty. We don’t have a long-term leverage target other than lower.

The focus over the last 15 months has been to survive the pandemic and maintain liquidity, which I think we have been successful with. We are in a good spot from a liquidity perspective and with respect to upcoming maturities and our revolving credit facility.

I think now it’s the time we can turn our attention to leverage and the medium to long-term target is to get closer to our peer group. But that’s going to take some time.

And we are going to have to consider that objective in the context of the growth we would like to do and the level of the distribution. So, our intention is to bring that down over time.

But it’s going to depend on those factors and the ongoing COVID recovery.

I guess, I didn’t want to grow, but would you look at some asset sales, potentially, as well, to help with some of that deleveraging or?

Yes. I mean the dispositions are always as we look to high grade our portfolio over time, we are always looking at possible dispositions.

We don’t have anything that we are marketing right now. It’s certainly another lever we could pull as we do what Travis just spoke about.

Okay, great. Okay, that’s it for me.

Thanks. Thanks so much, guys.

I will turn it back.

Thank you.

Thank you, and good morning.

Good morning.

Following up on Joanne’s question, if we think about the net balance of acquisitions and dispositions, do you think AHIP will be a net acquirer or net seller over the next 12 months?

I would expect to be a net acquirer Matt over the next 12 months. But of course, that comes with the typical caveats that Travis just outlined.

But our intention is to grow this portfolio.

And do you have any sense for the quantum of potential acquisitions?

Well, right now in the market, there is anywhere from one and twos and in markets that we know to larger portfolios of 10 and up. And we are underwriting all of those opportunities.

I think that there is a portfolio premium to be paid for the tenant-up category. And we have to have strong conviction that those are deals that meaningfully improve the quality of our asset base.

But, we would also be quite happy with the ones and twos. We have the team in place to be able to execute on those deals and multiple deals simultaneously.

And to the extent you are able to transact on larger portfolios, is that something that you would consider issuing equity for?

Yes.

Okay. And maybe changing gears to the margin, following up on some of Mario’s comments.

If we think about the near-term cadence over the next two quarters or three quarters, do you think that will remain elevated north of 40% similar to Q2 or how should we think about that near-term trajectory?

I think you would expect to track a similar trend line that you would see in Q3 and Q4 with margins between Q2 and Q3, remaining very strong. And then as RevPAR pulls back in the typically seasonal quarters of Q4 and Q1, you would also see a commensurate pullback in margins.

Alright, guys, I appreciate the commentary. I will turn the call back.

Thank you.

Thank you.

Thank you again, everyone. Thank you for joining us on our call today.

And we look forward to speaking with you in November when we report our third quarter 2021 results.