Good morning, and welcome to the CubeSmart Second Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Charlie Place. Please go ahead

Thank you, Andrea. Hello, everyone. Good morning from Malvern, Pennsylvania. Welcome to CubeSmart Second Quarter 2016 Earnings Call. Participants on today's call include Chris Marr, President and Chief Executive Officer; and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to, or files with, the Securities and Exchange Commission, specifically the Form 8-K we filed this morning, together with our earnings release filed with the Form 8-K in the Risk Factors section of the company's annual report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris

Thank you, Charlie. Thank you all for joining us. If you think about things from a big picture perspective, our strategy is concise and we believe clearly articulated. We focus in three areas. First, maximize the customer value proposition through unparalleled customer service experience. Second, acquire and develop concentrations of high-quality assets located in high quality markets. Third, utilize a conservative balance sheet structure focused on maximizing flexibility with the lowest possible cost of capital. As a management team, we are laser-focused on executing the details of our business plan, and it is rewarding to see the fruits of our efforts in our second quarter results and our raised 2016 guidance metrics. Our systems and people in our marketing and revenue management teams have done an excellent job in seamlessly transitioning the primary drivers of our same-store revenue growth from gains in physical occupancy to gains in net effective rents. Gains in revenue per occupied square foot contributed 6.9% of our 7.8% same-store revenue growth in the second quarter, with physical occupancy gains contributing the remaining 90 basis points of growth. The culture in our operations and facility services departments results in our people delivering our award winning customer service, while relentlessly seeking ways to operate our stores in the most cost efficient manner. These efforts are reflected in our achievement of record high 94.3% physical occupancy, driving down discounts to our lowest ever at 3% of projected rents, while containing operating expenses to a 50 basis point increase over Q2 of 2015. We remain disciplined. Our investment team continues to source attractive opportunities in our core markets that meet our defined criteria. Our acquisitions in newly opened stores are exceeding our budgeted expectations. A benefit of our strong operating platform is the high level of interest from owners and…

Thanks, Chris. Good morning everybody. All of the details of our second quarter earnings release are of course reflected in our earnings release and supplemental information package from last evening. Headline results included FFO per share as adjusted of $0.36, representing 16.1% growth over last year. The [indiscernible] to our expectations entering the quarter came from NOI outperformance in both our same-store and non-same-store properties. Same store revenues increased 7.8% and same store expenses grew only 0.5% resulting in same-store NOI growth of 11%. Revenue growth was primarily driven by a 6.9% increase in rental rates, and 80 basis point increase in average occupancy for the quarter to 93.6%, and fewer discounts and concessions to new customers. Modest operating expense growth was helped by lower utility and property insurance cost. Our net operating income performance in the first half of our summer leasing season is the primary driver for a meaningful increase in our full year 2016 guidance ranges. For 2016, we're now estimating same-store revenue growth of 6.75% to 7.25%, driven by strong net effective rent growth performance. Our same-store expense growth guidance has been improved to a range of 0.5% to 1.5%, primarily driven again by lower utility and property insurance cost. The result is an improved full year NOI growth expectation of 9.5% to 10.25%. And as Chris mentioned, this high 9% implied NOI growth rate for 2016 is a bit higher than our 2013, '14 and '15 same-store growth rates of 9.3%, 9.6% and 9.6% respectively. Also contributing to the improved FFO guidance range is better than expected performance from our non-same-store properties, which are 2% higher occupied and at rates 3% higher than our plan. We're also seeing similar operating expense efficiencies as we are in the same-store pool. All of that adds up to…

Alright. We will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from Gwen Clark with Evercore ISI. Please go ahead.

Hi, guys. At around 20 some percent of NOI, New York City is obviously one of the Cube's largest market. Can you walk us through the performance within the major sub-market please?

Sure. So if we start in the Bronx, the Bronx has had new competition, and that new competition in terms of stores that compete directly with an existing CubeSmart, it has the least impact. So if you think about the three main Burroughs, Brooklyn, Bronx and Queens. In the Bronx, the stores that compete - new store that compete with an existing CubeSmart have been from another brand. And so there, we saw good occupancy growth, occupancy was up for our 9 same-stores there 1.2% over the last year, revenue rate was up about 4.8%, revenue was up 6.9%, NOI was up 13.5%. So I think the Bronx is a good proxy for when you see some level of new competition, new supply, but new supply that isn't competing - we’re not competing with ourselves. Brooklyn, the 8 stores there you have two things going on. One, in 2015, we had a benefit from two of our competitors closing their stores. One, on Atlantic Avenue was taken [indiscernible] domain by the city of New York for the Atlantic Yards project, second storm Flatbush Avenue was sold for another use. So our Brooklyn stores in 2015 got a wonderful benefit of a significant number of those existing self-storage customers from those other two brands migrating into a CubeSmart. So you have a removal of supply in 2015 in Brooklyn, which helped us tremendously last year. So this year, the comps were particularly difficult, and then on top of that, you have new supply, where we are competing with ourselves. So there in Brooklyn, you saw a 3% drop in occupancy, 1.5% growth in asking rate, 3.3% growth in revenue and 6% growth in NOI. Queens, basically falls right in the middle. New supply particularly on Jamaica Avenue, new supply from us. So we’re competing with ourselves. And there, you saw basically flat occupancy, revenue up 4.5% and NOI up 5.5%. So I guess the final market Staten Island, where we had neither new competition nor anything unique in the prior year, asking rates are up 18%, revenue is up 19%, and NOI is up 26.5%. So in trying [ph] to see what happens market-by-market, you also get a sense for the fact that quite often and we can get into this for Huston and Denver in some other markets. There are a variety of factors going on similar to what was unique in Brooklyn in 2015. , :

Yes. That was helpful. And just one quick follow up. It seems like Brooklyn is clearly getting a bunch of supply. Can you just quickly talk about your outlook for that Burroughs specifically? I know you are doing a development deal in that area also.

Yes. When we look at what’s in development there. There are nine stores that will compete within existing Cube, three of those are controlled by us, so six properties that will compete with us and not controlled by Cube. Again, I think when you look at Brooklyn, 1.4 square foot per capita today, when you look at the expected deliveries between now and 2020 that will grow to an ending square foot of 1.9 square feet per capita. Moving on to the Bronx, 2.5 today, everything that’s being developed about 800,000 square feet between now and 2020 that moves to 2.9 square foot per capita. Queens, 1.7 today, 855,000 square feet coming online between now and 2020 and that moves to two square feet per capita. So we look at the three Burroughs in total, 1.8 square foot per capita today, the increase about 3 million square feet, you end up with a growth in expected population at 2.2 square feet per capita by the time you get to 2020. So I’ll compare that across the country, look at markets that are performing excellent today, LA 3.7 square feet, Boston 4, Philadelphia 4.1, Miami 4.6, Washington D.C. 3.9. So again, supply exist, that exist throughout the country. I certainly feel very comfortable that what’s on that for the Burroughs of New York City is digestible. And in the long run, we’ll continue to be the best storage market in the United States.

Okay. That is helpful. Thank you very much.

Our next question comes from Todd Thomas of KeyBanc Capital Markets. Please go ahead.

Hi. Good morning, everyone. This is Chris Smith on for Todd today. Based on yesterday’s calls, it sounds like move-in rents in July are lower year-over-year. Just wondering, what you guys are seeing from move-in rates? And if you give us a little bit of insight on that?

Sure. Again, it’s a micro market business, each company’s exposure in varying markets is different. For us today, our asking rents relative to this week last year are up 4.6%.

Great. And then just a pivot toward acquisitions a little bit, wanted to see what the pipeline looks like, and if you’re seeing mostly single asset deals or portfolios on the market. And what pricing is like we could kind of fills in [ph] on that a little bit?

Sure. So macro [ph] what we’re finding fits the strategy, I articulated in the opening remarks as tended to be the single asset transactions, where we’re targeting a specific store in a specific sub market and trying to work out a transaction with that owner. As well as the fact that, as I mentioned, our third party management program, I mean the growth is nothing [ph] short of spectacular. That program didn’t exist in 2010. Today, we manage 277 stores. Many of those are really recent vintage purpose build stores that we find to be great acquisition candidates at some point, and we’ll continue to reap the benefits of that. From a portfolio perspective, what we’ve seen out there has largely been the more suburban secondary markets, with pricing that just feels awful tight to the A markets. And so we’ve been and then the concept of a portfolio premium makes that tight pricing even more difficult to get your mind around. So we’ve largely been on the side lines from those transactions.

Great. Thank you very much guys.

Thanks.

Our next question is from Smedes Rose from Citigroup. Please go ahead.

Hi, thanks. I just - I wanted to ask you just a couple of questions on the expense side. It looks like the pace of property taxes continue to increase sequentially. And just wondering, if there is any particular regions, where you're seeing maybe bigger increases, and if it's –if that's all of is - if that’s been in line with your expectations? And then also just we've seen a range of property level payroll expenses from the companies that are reported thus far. You guys were able to reduce your personnel cost year-over-year. But could you maybe talk about what you're seeing in terms of wage pressures either given recent unemployment coming down or expectations for various hikes and minimum wages going forward, and how you're kind of thinking about that?

Hey, Smedes, it's Tim. Thanks for the questions. Let me see if I can [ph] hit them all. The real estate taxes, there has been nothing that has surprised us. We accrue to what we expect to be the rate in many states that bill on arrears. We continue to see pressure in Chicago land, we anticipate pressure in Texas and Florida. So nothing is really changed there. Sometimes the number bumps around more, so because of successful appeals either in the current year period or in the prior year period that creates the comp. So that's more typically the driver than changes in our expectations for the cost. And also, those large states we true up our expectations at the end of the year, typically in the fourth quarter when we get better visibility into those three large areas. On the Payroll side, I think you have - couple of different things moving all over the place. For us, our payroll cost have been relatively straight forward. And that we don't experience any pressures that others may, as a result of pressures on minimum wage in certain parts of the country, we have not been a minimal wage employer. So we're not having to make adjustments to capture that. I think one of our peers talked about on their call, they had something in their comp that created a weird swing related to workers compensation. We don't have anything like that. So those are the primary drivers as to why our number perhaps is more predictable and flatter than the others.

Okay. Thanks. And then just wanted to ask you, as you look out - it sounds like new supply isn’t coming online being particularly competitive with you. But just in general, can you maybe give your updated thoughts on just supply growth overall. It sounds like maybe from some of the other causes, while maybe it's accelerated a little bit in terms of the pace of supply coming on board. I’d be curious to hear your thoughts on that.

Yes. This is Chris. Smedes, it’s been 90 days since we last talked about this. Supply continues to grow at a modest pace. It's a big country. And so when you look at 3,800,000 square miles in the United States, there is a little bit of storage everywhere. And so it continues as you would think it would, right? Basic economics say, when you have a fabulous business with spectacular growth and cash flow, new supply should come in. Again, I can't emphasize enough the barriers that exist between green initiatives in Washington D.C., permitting process in Miami, the government's desire to reduce the availability for parcels for self-storage in New York. And just the general, not my backyard and many suburban communities. So it's a difficult and long process. We certainly are experiencing it where we're developing. And so I do believe that it will continue to a manageable pace of growth. You may see a particular submarket or micro market that gets a few stores that wants that, but the demand is there, and I think the supply will be absorbed over the long-term.

Okay. Thank you very much.

Our next question is from Gaurav Mehta from Cantor Fitzgerald. Please go ahead.

Yes. Thanks, good morning. So you made some comments on pricing in secondary and suburban markets being quite strong. I was wondering, as you look at where the cap rates are. Have you - are there any assets in your portfolio that you may want to sell into these trends.

Yes. Well, we do continually look at that obviously. We sold a little bit shy of $0.5 billion worth of assets. So we're happy with our portfolio. We continue to look at some of these markets, where we have a limited presence and analyze whether it makes sense to relocate capital out of there. So it’s an ongoing process. We don’t have anything on the market today. I don’t expect that it will be a material amount of proceeds, if we elect to sell a few assets here and there, but nothing eminent and nothing upscale.

Okay. Then on the expense side, you raise your G&A guidance. I was wondering, if you can provide color on what’s driving it?

Hey Gaurav, it’s Tim. The increases is, it’s handful of things. Continued investment in technology, particularly in marketing and revenue management. And to support our continued growth, we’ve grown as you know pretty significantly in store count, when you look at both our owned and managed store count. So keeping up all of the inherent platforms to support that growth. I think about our G&A over the past 4 years, I had just look at this to - in case somebody had asked. And if you look at over the last 4 years, our G&A has grown on a compounded basis over the last 4 years at about 2%. And I think, if you look at our G&A load relative to our peer group, we compare quite favorably.

Okay. And lastly, for the assets that you’re acquiring or that you’re acquired till far. How many of them came from the third party platform?

In the quarter, we did not acquire any stores that were from the third party platform. The acquisitions in the quarter were all from independent sellers.

Okay. Thank you.

Thanks.

Our next question comes from Ki Bin Kim from SunTrust. Please go ahead.

Thank you. And good morning, guys. Could you just tie up a few stats, you guys were talking about, primarily, what percent of your customers during the quarter were getting - some type of motion? And if you can talk about how that level of motion per customer has trended over the last year?

Hey give us one second here, Ki Bin to grab that information.

Oh maybe while you look for that, I can ask my second question. Just overall in New York City [ph] for your major Burroughs. Could you just help us put new supply picture in perspective. How much has been opened so far in '15, maybe year-to-date '16 or '16 overall? And what is their projection for like '17, '18. So that we can have a good size of the trend of new supply.

Sure. When you think about the Burroughs of New York and what has opened in 2016, a total between if you take all the Burroughs, Manhattan, Queens, Brooklyn, Bronx, Staten Island, we have 11 having opened, we have 25 in some stage of development. And then relative to your question on promotions, I think Tim has that answer.

Yes. Hey, Ki Bin. Chris has touched upon that our discounts as a percentage of revenues were as low as they’ve been at right around 3%. The percentage of our customers receiving a discount is down just over 10%, this quarter compared to same quarter a year ago. And the dollar amount of discount is up 8%, which isn’t surprising, because rates are up. So your discounts, your discounts per, - your dollar amount per discount effectively mirroring your increase and asking rates makes sense, but we’re just giving them to 10% fewer people.

And so, is that 10% fewer people amongst the pool of new customers or just the portfolio?

New customers.

Okay. Thank you very much.

But not promotions, it’s just obviously, we’re not giving promotions to existing customers.

Yes. It’s also just a math of what’s the denominator. But thank you, guys.

So about 45% of the customers coming in during the quarter received some form of promotion.

Okay. Thank you.

Thanks.

Our next question comes from David Corak of FBR Capital Markets. Please go ahead.

Hey, guys. The New York development asset that you guys added. Is that redevelopment and conversion type asset?

Yes. That is an existing building that had a different use. So the shell will remain intact. It effectively is a refit out of the interior for self-storage.

Right. What are the yields on that versus some of your typical product that you do? And maybe just touch on yields that were on your pipeline at this point, and where - how they have changed over the past year?

Yes. We don't have anything else in that particular marketplace. So it's hard to compare that relative to say purpose build in terms of trying to make a comparison on yield certainly from a risk perspective, different risk profile given that the existing structure remains intact, and it's simply a refit out of the interior. Yields in general across the development pipeline. I've really - have not changed much at all from last quarter particularly. We continue to see the same kind of spreads to a stabilized asset in that marketplace that we've been seeing for over the last, almost the last 12 months.

Okay, great. And then, and switching gears a little bit. Looking at Chicago, it's one of your best quarters that you put up in a while, while your peers really continue to struggle there. Can you add some color on what you are seeing there? Is it micro market driven? Or are you getting a bit of pricing power back there?

Yes. Chicago, it's been a challenge for many operators there. We got some good - we've been able to hold and gain physical occupancy. The challenge has been on the rate side over the last several quarters. I would say we've just seen - it's been a cycle, the North side had been performing better than the South side. I would say this quarter the South side caught up, which is encouraging. Still for major markets, as you look at the data we provide, Chicago is below the average. And it's just got a variety of challenges there, it's not one specific thing. But we’re pleased a lot of it's comes back to what I talked about at the beginning, it's just the attention to detail having the right folks in the properties focused on the right things. We don't take properties in and out of our same-store pools throughout the year. So in Chicago, we have a redevelopment going on in Kildeer, so there 104 less Cubes to rent at that property relative to what was there last year. So the revenue on that property, including our same-store Chicago pool is down about 14%, just as the nature of we don't have as much space to rent as we did last year. Again, we don't for one property like that, we don't move them in and out of the pool. So, yes, we’re encouraged that things seem to be holding in Chicago. We don't see any signs of anything spectacular.

So potentially not improving next year, but constant steady?

Well, to put that property back online that will create some improvement in it off itself. And again, continue to - it continues to be a great market from an occupancy perspective. And we would expect that we'll be able to push back on rents again at some point. We've seen this in Denver, where we just reached a point on rents, where we were able to get and keep occupancy, we just didn't have the ability to push. And now, you come back couple of years later, you are able to start it all up again. So it's a good market. It will be fine in all front.

Fair enough. That's all from me guys. Thanks.

Thanks.

Our next question comes from George Hoglund from Jefferies. Please go ahead.

Hi. Good morning, guys. So my question is one of the things that people are trying to figure out now is how much can performance among the public reaps the diverge? And you guys talked about that asking rates are up over 4% or as for some of the [ph] peers, it's down year-over-year. And in the last downturn, actually [ph] one of the larger peers was very aggressive about lowering rents to boost occupancy. And it seems like that same peer maybe on divergence getting more aggressive with lowering rate and increasing discount. So I guess, just wondering, sort of this time around or now given sort of the competitive landscape. How much can one of those operators have an impact on the rest of the public peers? If basically for one of you guys gets very aggressive on lowering rates to boost occupancy, and sort of how much divergence can we see among the public peers? Things have been great for everyone, but now how much can we see things differ?

Yes. George, that's - it's a complicated question. Because you're asking us to not only run our business, but run other people's business as well. So I really can't speak for what any other competitor maybe thinking. The reality is, we have to be able to price and compete with the stores that surround us. And so that's not only the REIT [ph] competitors, but it's the private competitors. And again, underlying all of that is one would hope that the public competitors are in business to create value for their shareholders and maximize the revenue from each customer, and the private owners are motivated to make money for themselves. So we just focus on our business, we'll continue to run our business. It's almost impossible for me to predict how we may vary from the others, because I'm not in their conference room looking at their information.

And I guess, just one more question. How much of a difference do you think revenue management will make this time around? Seems though no one really had sophisticated systems back in the last downturn. I mean, if things do soften, and if supply does become an issue. How much the difference will revenue management make this time around?

Yes. It should make a significant difference. I think without a doubt, I don't know anyone who in any business had gone through what we went through in the United States during the great recession. So as management team obviously live through it as did the other major operator. So I think you have lessons learned what worked what might not have worked. And then the sophistication in the systems and the people is significantly better today than it was five years ago. So I think, the answer is it will make a difference in a positive way.

And George just a pile on to that. I think it's not only in the areas in the sophisticated - in the sophistication underlying the revenue management systems and team. I think it's equally important to focus on internet marketing and how we capture our customers. We have a - we as a large platform, and others, who have large platforms have a much bigger advantage today than we did entering the great recession from that perspective as well.

All right. Thanks guys.

Thanks.

Our next question comes from Todd Stender from Wells Fargo. Please go ahead.

Hi, thanks. Tim, you highlighted that the non-same-store pool is exceeding plan. And I know it's a fraction, it's only about 7% of your portfolio. But is there any difference in how you manage this piece of the portfolio? I know it's likely newly acquired stuff, but maybe a little more aggressive on pricing. Any real differences there?

Yes. It's the same. And that we are trying to maximize revenue and cash flow from every property, whether that’s in the same-store or not the same-store. Of course, as a property is comparing how pricing and discounting works on a stable property versus a lease out property, there is certainly inherent differences in the product from a revenue management standpoint as to how to operate those facilities. But the end goal for both is to is obviously to maximize the performance. So you will see - you will typically see high levels of discounting in a lease up assets than you would in a stabilized asset. That's pretty intuitive. And but other areas as far as how much you push on asking rates, how much you think, how you think about rate increases to existing customers. Those areas are pretty similar.

All right. That’s helpful.

And Todd, I think a little bit - it's Chris, a little bit of context. If you think about both occupancy and rent as the drivers for the 49 same-stores versus our expectation going into the year, the occupancy is about 300 basis points in excess of our plan and the asking rents are up about 1.3% greater than our plan.

Okay. Thanks, Chris. And then, it looks like you're acquiring in Colorado, Illinois and Texas, just depending on submarkets we've been hearing more supply in Denver, Chicago and some in Texas markets. Can you be specific on where you bought in the quarter? And maybe you talk about some of the operating metrics at occupancy and maybe rents relative to market in those facilities?

Sure. As specific as I can be. So in the quarter from the Texas perspective, the acquisition we did was in Austin. A non-stabilized store. So we bought that early and it's lease up, had about 1% current yield at acquisition. We expect that store to stabilize somewhere in the mid-60s range. In Chicago, similar situation. Garwood, Woodridge are the submarkets. Again non-stabilized stores, they were a little bit more mature, so yields going in the mid-3, mid-4 range expectations there that they'll stabilize again, kind of in that low-6 to high-6 range. Colorado was a Denver asset, stabilized going in yield right around six. And again, there is supply in all of those markets. But when you get into the submarket level, we continue to be very optimistic about long-term performance in Denver certainly in Austin and in Chicago.

Great. Thank you.

Our next question comes from Jonathan Hughes with Raymond James Financial. Please go ahead.

Hey, good morning guys, congrats on the quarter. I think, I know there’s another development deal move from JV to wholly-owned. Just curious what's the reason for that and can we expect come onto your balance sheet in the future?

Hey Jonathan, this is Tim. We had a - during the quarter, we had a joint venture that we bought our partner out. So we moved it from wholly-owned, that particular, the venture had a mechanic in it that allow that to happen pretty efficiently, giving our partner the ability to stay in for a period of time if they elected to or to monetize, and get some liquidity, and they chose to do that. So typically in our development joint ventures long-term, we would love to own them 100%. So that one happened according to plan that we would like to follow up with all of our joint venture developments.

Is there a similar feature in the other 3 JV developments you have to buy out the partner?

Yes. Either there is a mechanism in all of them to [ph] process and for us to buy them out. They often work a little bit differently, but they'll have the same objective, which is to have a smooth and prearranged methodology to value our partners interest and provide for a smooth [ph] transition.

Okay. And then earlier you mentioned, Chris might have mentioned rates are up 4.6% this month versus last year. Could you give us an update on where occupancy is today versus last year?

Yes. Occupancy today is about 40 basis points over the last year. This will be a big weekend for us, this last weekend in July. Right now based on the reservation flow, we would expect that by Sunday night. It’s probably the - going to be the peak for the year. And we think that's going to come in somewhere flat to slightly up from June 30, so somewhere between 94.3 and 94.5 is our best estimate at this moment as to where we're going to be peak out.

Okay. And then thanks for the update on NOIC earlier. Could you maybe give us a similar update on maybe any new supply you're seeing in Miami. And do you see given as there are two other large markets for Cube?

Sure. When we went through and also a lot of detail in the first quarter call and last 90 days, there really hasn't been a tremendous amount of change there. The Washington D.C., Baltimore market, MSA in terms of what's in development there that would compete with us, and is not Cube-controlled would be four projects. And in Miami, if you think about what's in development there that would compete with us not Cube-controlled, we have 7 projects on our list there.

Okay. And as you're expected to - those are just in a total pipeline, not necessarily expected to open it in the next year, right?

No. Once we get them into that number, I would expect they would open in the next - by the end of next year, yes.

Okay. Alright. Thanks for taking my questions.

[Operator Instructions]. That concludes the question-and-answer session. I would like to turn the conference back over to Chris Marr for any closing remarks.

Well, thank you all very much for listening to our quarterly update. Obviously, a solid performance by Cube and an optimistic look at the balance of 2016. Continue to be very pleased with where we are and how we're positioned in the cycle, and look forward to updating you all again, when we release our third quarter results. Thanks. And have a great rest of your summer.

The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.