Simon Property Group Inc (SPG) — Q2 2019 Earnings Call Transcript

Thank you, Crystal. Good morning, everyone, and thank you for joining us today. Presenting on today's call is David Simon, Chairman, Chief Executive Officer, and President; also on the call are Rick Sokolov, Vice-Chairman; 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 a 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 at investors.simon.com. For our prepared remarks, I'm pleased to introduce David Simon.

Okay. Good morning. We had a very productive quarter, and are pleased with our financial results. Results in the quarter were highlighted by funds from operation of $1.06 billion or $2.99 per share. Adjusting for the prior year for a non-cash investment gain from IPCO, ABG Exchange and the impact of external leasing costs, our FFO growth rate was 4.9% per share. We continue to grow our cash flow and report solid key operating metrics. Our comp NOI increased 2% for the second quarter, and total portfolio NOI increased 1.6% for the quarter. Retail bankruptcies in the second quarter impacted our comp NOI by over a hundred basis points. Year-to-date comp NOI has increased 1.8%. And to put this in perspective, our comp NOI grew 3.6% in '16, 3.2% in '17, and last year 2.3%, and we continue to comp it on a NOI base of more than $5 billion. Leasing activity remained solid. Average base rent was $55.52, and our leasing spread was $16.53 per square foot, an increase of 32.3%. And we're pleased that our sales momentum from our retailers continued in the second quarter. Reported retail sales per square foot for our malls and outlets was $669 per foot, compared to $646 in the prior year period, an increase of 3.5%. Just to give you a fun fact, we have over 77 properties; that's right, 77 properties that, if you average their total sales, will be over $900 a foot. So 77 over $900 a foot, and you can see that clearly in our reported retail sales on an NOI weighted basis of $852 compared to the $669 per foot. Occupancy would be 95.5%, compared to 94.4%, and our average base minimum rent would be just a little over $73 per foot. In new development, we broke ground on a luxury outlet in Normandy, which is our first designer outlet in the Western Paris catchment area and our third outlet in France. This center is projected to open in the second quarter of 2021. Construction continues on three international outlets in Malaga, Spain; Bangkok, Thailand; and West Midlands, England, all scheduled to open in 2020. Queretaro, in Mexico, opened and its full grand opening will be in the fall of this year. We continue to expand our international outlet presence in growing markets, adding to our overall franchise value with high rates of return. As I mentioned in the press release today, we have 42 international outlets after we finish the four that are currently under construction. In terms of redevelopment, we have a lot going on. We have 30 properties across all our platforms in the U.S. and internationally, with our share of net cost of approximately $1.7 billion. Our extensive identified pipeline is over $5 billion in new development or redevelopment across all our platforms. These significant redevelopments and transformations will continue to fuel our profitability. Importantly, we will fund these accretive projects through our internally generated cash flow, and they'll continue to serve our communities. Our properties generate significant property taxes and significant sales taxes for their jurisdictions that fund the police, fire, schools, etc. We continue to play a very important role in the livelihood of the communities we operate in. Now, regarding liquidity, you'll be pleased to know that we have $6.8 billion of liquidity, net of our outstanding CP balance. During the quarter, we purchased 1.05 million shares of common stock. We continued, in July, to purchase another 630,000. So, we have combined, over the last essentially four months, repurchased 1.68 million shares. This further represents our strong balance sheet, which continues to be a significant advantage in our area. We announced a dividend increase; we're now paying $2.10, an increase of 5% on a trailing 12-month basis ending June 30. Over the last three years, our dividends have grown at more than 8%. Another fun fact: we have paid more than $30 billion to our shareholders in cash in dividends, which is a remarkable number. As a reminder, our annualized current dividend yield of more than 5% is 300 basis points higher than the 10-year treasury, and our dividend is more than one-and-a-half times covered by our annual FFO. We continue to reinforce our guidance at $12.30 to $12.40 despite some headwinds, which include lower lease settlement income, lower distribution income from our international investments, a stronger dollar, the redevelopment going on with our anchors, accelerated redevelopment, including Northgate, and some unanticipated bankruptcies and some of our accelerated SPO costs. To conclude, we produced another good quarter of results and operating metrics. There's no company in our industry that has the reach and impact on the communities that we have, and we continue to focus on the long-term. We will continue to invest in our product and generate the kind of returns that will grow our earnings, cash flow, and dividends. We're now ready for any questions.

Hey, good morning.

Good morning.

David, I was wondering if you could break it down for us and talk about what you're seeing on the mall front in terms of trends in traffic versus what you're seeing in the outlets, anything that's going better than you expected so far this year, or even lagging a bit? And maybe just as a follow-on, what your expectations are for Dressbarn here.

I would say, in the mall business, sales are up, traffic is reasonably good. There's ups and downs, but overall it's up slightly. In the outlets business, we're skewed a little bit more towards tourism, and because of the strong dollar and some implications of what's going on in the global environment, traffic there is flattish, but sales are more flattish as well. That's really a function of the big tourist centers in the outlet business, which are essentially flat where we would expect them to be up. Overage rent is up in the mall business, but it's a little under plan in the outlet business. Generally, absent the strong dollar and the decrease in overall tourism in the U.S., we would be performing well ahead of our plan. The unanticipated bankruptcies are something we're dealing with. Yet, even with that, we've produced the 2% comp NOI growth. As for Dressbarn, it is what it is. We'll see what happens; it's insignificant to us in the scheme of our operation.

The only thing that I would add is that the trends David talked about are manifesting themselves in the interest we're seeing from our retailers. There's still a steady stream of retailers seeking to find space in our properties, and the properties continue to improve through the addition of retailers that are making a difference in our trade area presence.

Appreciate that. And David, can you just talk about the investment in Black Ridge and Allied eSports, just what drove this and what sort of larger opportunity you possibly see here with that?

Look, we think there's huge momentum going on about eSports and venues. We may consider the mall a great place to host those kinds of events, and in a setting like that, it drives sponsorship income, traffic, and reinforces our real estate as the place to be for the community. We have many options beyond just Allied about bringing those kinds of venues to our real estate. The explosion in the location-based entertainment area is incredible from where it was a decade ago to today. We have a dedicated team looking at all sorts of operations and venues to bring them into our real estate, that will broaden the mix, invest in the community, increase traffic, and bring sponsorship opportunities, food, and beverage. Given the department store's situation, regaining square footage gives us opportunities to bring in such venues. Yes, it's a lot of work, but we now have the ability to incorporate these capabilities into our real estate and do it at accretive returns.

The only thing I would add is that we've been doing this for over a decade, because we have a strong relationship with Merlin through our Mills portfolio, and we've got lots of great experiences there that demonstrate the viability of our properties for these types of uses. So, we're building off of strength to implement the initiatives David just discussed.

All right. And lastly, just sticking somewhat along those lines, looking back at the investment you made in Aero alongside ABG and your experience you've had since that time. How do you think about making similar investments? Would you do it again? What would you look for just given some of the distress situations out there? I wonder if this is something we could see you doing again shortly?

I think it's very possible. We're going to be very smart about it, Jeremy. It's interesting because, as you know, we had plans to grow just to the private placement where we decided to keep our stock, but certain shareholders sold, and new shareholders came in. We decided not to keep our entire stake. We believe in the company, but that stake, based on its current raise in terms of new shareholders coming in, is worth $153 million, and we basically put no money in it. We still have the Aero OpCo, which we own 44%, and it's projected to generate $65 million in EBITDA. So, this investment isn't too bad for us. We're certainly as strong as the private equity guys when it comes to the retail investment, so I wouldn't rule it out. We've made a ton of money in Aero, and we love being partners with authentic brands group. We'll work together on other distressed situations because there are some out there. We'll invest in companies that we believe have a valuable brand and that have significant volume worth selling. They just bought Sports Illustrated, which has great intellectual property. We might invest in that as an example. There could be Sports Illustrated eSports, gaming, food, and beverage opportunities, and we will be at the forefront to be as creative as we can. We're investing in our properties to benefit both our shareholders and the communities.

Thanks for your time.

Sure.

Hi, good morning everyone.

Good morning.

Just off of Jeremy's last question but maybe from a slightly different angle. Given that past experience with Aero and Nautica, and the insights you've gained from these investments, and your discussions about being on many creditor committees in the past, how are you approaching retailer restructurings and bankruptcies differently than in the past? Or maybe differently than what some of the other mall REITs have the capability to do that might give you a competitive advantage with tenant fallout and bankruptcy activity having picked up again this year?

That's a good question. I would say we have another, what is it called, arrow in my quiver? But we certainly have the ability to help. Beyond what you might do on leases, we can become an investor in a distressed situation. I'm not sure we would do it alone, but with someone like ABG, we've worked well historically with General Growth and now Brookfield. We have the ability to look at becoming more than just a real estate player, but rather a buyer of these brands. That's the major difference now; we also have the ability to underwrite the business much better than in the past. We weren't left in the dark about what the right rents should be in a workout scenario. We have resources and friends with Brookfield, and our team can rapidly run through any retail scenario to find the right fix. We were decent at it a few years ago, but now we're pretty good.

Okay. And then just with the straight-line rent adjustment elevated in Q2 and somewhat volatile over the last couple of quarters. I wonder if you could provide some insight into what's driving that, perhaps impacted by some of the lease accounting stuff? And how we should think about the impact to GAAP non-cash rent adjustments for the full year?

Yes. With the new capacity pronouncements, we historically have never straight-lined our comp, even though, as you know, a lot of our comp is fixed with growth in it. We have to straight-line that because of the new pronouncements. Again, our comp NOI, Christy, as you know, takes out any straight-line impact. So, it's basically cash, but that's all there is to it. When you look at kind of the increase in straight-line less the -- now that we can't capitalize our leasing costs, it's basically less than 1% differential, in terms of our FFO per share. If you look at the comp NOI, we strip it out in any event. But simply put, we never straight-lined comp expense, and now we have.

Okay. So we should expect it to remain elevated moving forward, because of the straight line?

Well, certainly this year. Then I think you'll see it normalize more normally. We also write off strictly, we have to rise -- when you have a bankruptcy, we've had straight-line write-offs this year. If you have a tenant that goes into bankruptcy, then any straight-line rent or straight-line candidate you may have for that tenant is going to be written off. So we've had certainly some of that as well.

Got it. Okay, thank you.

Sure.

Thanks. Good morning. I guess just a couple of questions first, maybe to start on the leasing environment. I mean, you and Rick touched on it a little bit, that there's good demand. I mean, can you just elaborate a little bit more? You said you've been impacted about 100 basis points from bankruptcies this year. I'm just wondering, David, how you sort of look at the tenant watch list and the potential tenants you're still kind of working with the restructure? Where do you feel like we are in that pendulum or timeframe of getting to the end of that? And just 2020, do you expect to begin to show a little bit of light at the end of the tunnel?

Well, I still think there are a couple out there without naming names, Steve, that we're monitoring. We'll have to see where that goes. It's hard for me to give you an exact response specifically to that question other than there are still a couple we are monitoring and we'll see how it ultimately resolves. Not that this is of interest, but it's not a reflection of our business. And I know that's a statement that's hard to believe, but if you look at the bankruptcies, each of these folks had choices and decisions that led them to that point, as opposed to it being reflective of our business. I know that's difficult to accept, that's a statement many find hard to believe but if you look at bankruptcies, each one has its story; things and decisions they made led them to that point. The important point being these bankruptcies are not endemic of our business. We're much more diversified than the mall business. Yes, it’s not where I’d like to see it, but it’s still comping up a couple of percent.

Part of that is demonstrated by the fact that our occupancy trends have held up quite nicely despite all these bankruptcies. There’s still a broad array of tenants that are seeking to come to our properties whether they're new concepts, digitally native retailers, or traditional retailers who are still growing significantly. We are actually adding a lot of food to our properties, and all of that contributes to our sales growth and NOI growth.

Okay, I appreciate that. Thanks. David, just a small point, the total portfolio NOI was up less than comp, which is not normally the case. Your share of NOI from investments was down. Is there anything for us to focus on as we think about or...

Remember, we sold our interest internationally in HPS; that accounts for the biggest reduction. In addition, we have a lot of redevelopment going on. You can see that number reflects a number of properties that are essentially taking a setback because of redevelopment efforts. So those are the biggest ones that stood out to me. Tom just mentioned FX. When you factor those in, I'd say those are the three significant elements: HPS’s sale, FX, and then the effects of redevelopment.

Okay, thanks. Lastly, I just noticed the average base rent per foot, which factors in a lot of things, including lease restructurings and others was up a more modest 1.2% to 1.3%. Can you enlighten us on that number versus the lease spreads you're seeing and obviously changes in occupancy?

I would say that's largely a function of the workouts that we're having to navigate.

Okay, thanks a lot.

Sure.

Thank you. I wondered if you could categorize the store closings in outlet space versus mall space. Are they experiencing store closings through a comparable degree or are they more concentrated in the malls?

I would say the last few bankruptcies have also had outlet exposure. So, they are more comparable. A couple of years ago it was primarily the mall that was impacted; now they're similar. There's not a trend that outlets are better or worse than the malls when it comes to store closings due to bankruptcies, they're more similar in that regard.

Great. And then obviously being very active in redevelopment, I wondered if you could categorize what inning you think you’re in, in terms of major anchor repositioning. I recognize you're always going to need to continue this, but in terms of this major push, how far along do you think you are?

I never played baseball, but I would say we're in the third inning.

Okay, great. Thank you very much.

Thank you, Craig.

Hey, good morning. Good morning out there.

Yes, well…

I think it's kind of like Neil Armstrong. Okay, he's a very thoughtful individual.

Right.

Just a couple of questions here. First, David, sort of following up to Christy's question about the leasing spreads from straight line rent. First, how much of the increase in straight-line rent is due to increased leasing activity? Because if I look at the leasing spreads, they've really jumped over the past year. I don't know if that's purely mix, or maybe this is the benefit of backfill. If I look at your tenant improvements over the past year, they've gone up a little bit, but nowhere near as much as the rent spreads have jumped. So I'm trying to understand how much of the jump in rent spreads is purely just due to mix versus actually getting better tenants, and some of that leaking into higher straight-line rent?

We certainly continue to straight-line our rental income beyond comp. I don't have the breakdown for you, but there’s rent spreads. Continue to be healthy. A lot of that will be significantly enhanced as we're getting back very cheap space that we can rent. That's the future growth for the company, and we’re spending capital. It all feeds into generating our cash flow and future NOI growth, leasing spreads, and that will be part of straight-line rent income.

I would confirm your observation that our tenant allowances have been very stable over the years, and there has not been a noticeable increase at all. It's business as usual at the leasing.

Should they -- Rick, the rising releasing spreads, is this purely a mix or should we expect these to move down to the mid-teens, or are these going to stay elevated?

That's why you have a job; you’ll see it when it happens. The bottom line is, we are though at the greatest opportunity we've had as a company, and I can't underestimate how some people could look at the demise of certain anchors as a sign of impending doom. We see it as a significant opportunity because we’re getting the chance to take that space, and redevelop it with creative returns on investment and higher rents. That trend will continue, whether it's up five bucks down is just a quarter-to-quarter change. That's why we have a $5 billion pipeline; it's our business going forward. It's important for the market to understand that.

Right. Rick, I just want to make sure this wasn’t any definitional change, or accounting change. I’m just trying to get to, because obviously, it's impressive. So just want to understand if this is definitional change, accounting change or…

Not at all.

Okay. The second question is just quantifying; obviously you got Forever21 pretty small, but overall, your comments about what your guidance has endured as far as headwind, stronger U.S. dollar, tourism, all this stuff. Where are you trending as far as your bad debt budget? Presumably your budget whatever it is, 100 basis points or something like that for the year, where are you trending on whatever your budget is, where you are trending on that year-to-date?

I would say we are higher. I don't have the exact number, but it's higher than what we budgeted because we had some unanticipated bankruptcies. Unfortunately when we do our model, it's the end of last basically November/October. We're now in July, and we've had a lot of stuff to deal with. So, it's definitely higher than what we budgeted.

Okay, thank you.

Sure.

Hi, good morning. Maybe on the leverage side, net debt to NOI has been coming down to 5.1 times now. Investors like to see this, so I was wondering what's driving this decision from Simon's side versus spending more on, say, development, buybacks, or something else.

We try to manage our balance sheet with great care. We have the pipeline we can pursue; we have no capital constraints on the pipe, but really human resource and permitting constraints. We are very focused on supply and demand in those specific markets because, as you know, a lot of the redevelopment efforts will be mixed-use elements. We can only go as fast as permits and human resources allow. It takes time in certain markets, especially in California where we have significant opportunities at a site in Seattle with Northgate. It could approach a billion dollars given opportunities we see. We must clear the way first, which we're on track to do. So, back to your question, the biggest constraints are human resources and permitting. We don't want to be reckless with our balance sheet. As Rick mentioned, we are generally very thoughtful about capital allocation; we don’t bat 1000 but are careful. We may take on opportunistic buybacks, but we can't go too far due to capital distribution to maintain REIT status.

Got it, okay. And then maybe just, you do have a history of raising FFO guidance for the vast majority of quarters in the past. So just wondering if you could give some detail on how results played out during the quarter, how that related to your own budget, and what prevented you from raising the full-year guidance? I know that in previous questions you mentioned potentially that bad debt was trending a little higher than you had originally predicted.

Yes, I probably bored you. But the reason we haven't raised guidance this year is a few factors. First, we have lower lease settlement income than we budgeted. Second, we have lower distribution income from our interest in international investments, which doesn't show in our FFO. Not to be boring, but we have cash accounting—cost account still exists, right? We only book what cash we receive. We anticipated slightly higher distribution income from our investments but have not seen it due to the stronger dollar and unanticipated bankruptcies. On average rent, we are trending above in the mall business, but below in the outlet. This is not indicative of our operation. It's a function of tourism and a strong dollar reducing traffic domestically, and we're not alone in this statement.

Got it, okay.

Sure.

Hi, David. Good morning. First of all, thanks for reporting prior to the open. It's nice and refreshing to have it mixed up from the deluge of companies reporting after the close. I appreciate the color on FFO guidance. I wanted to also maybe talk about retail overall and maybe how you are thinking about some of your investments. So firstly, could you provide an update on your stake in American Eagle and if you would think about increasing that? It looks like that's been a solid investment, and then also an update on the Test consumer-facing platform as well.

Having just completed a board meeting last week, I believe they are doing an excellent job. They've positioned themselves well, their balance sheet is much better than their peer group, and their cash flow continues to improve overall given their ongoing sell-off of assets. We’ve seen a company that continues to operate better and better over the years we've invested. Unlikely we would ever increase above 30%, as we would have to offer the whole company. Right now it's not in our plans, but we may reconsider in the future. With Sibrian, we are still active. We have 12 retailers, about 3000 brands online, we're going through the kinks to allow access. If you are one of our loyalty members, we have another 15 or so in the process of being added. Our plan is to publicize it in the third quarter. We've got a lot of interesting things happening with that platform beyond just this, but I can't share much more right now beyond that.

Got it. That’s it for me. Thanks for the transparency and thoughts, David.

Sure, no problem.

Thanks, David. I just want to go back to the topic of redevelopment and also address the total portfolio NOI growth. I appreciate how redevelopment has a disruptive NOI effect with some attractive payoff down the road. Can you provide us a sense of timing when we might start to see overall portfolio growth benefit? It is not showing up in numbers this year. You indicated we’re in the third inning of this process. Should we expect this ongoing drag on total portfolio NOI growth, or will it change in the next year or so?

To be clear, there are three major elements regarding the slowdown: currency impacts from the stronger U.S. dollar, the asset sale, and our ongoing redevelopment. The reason for flat projections is these contributing factors to potential growth into the future. I believe you'll start to see benefits in 2020, but it will take time.

Thank you for the clarification. I understand. I appreciate it.

Sure.

Hi, your weighted average interest cost is quite attractive at 3.49%. In 2020, some higher-rate debts are maturing for both consolidated and JV debts. With the 10-year having trended lower, do you think you'll achieve some interest rate savings on these upcoming maturities?

Hi, Linda. Yes, as we look into the future and into the current interest rate environment, certainly there would be some upside if we remain in this environment for a longer period.

Thanks, and hopefully I heard this correctly, the bankruptcy impact on SS NOI year-to-date was 100 basis points, but given subsequent comments about fallout being higher, does that mean the full-year impact on SS NOI would be greater than 200 basis points?

Let me clarify. We had kept that live growth at 2%. Generally, based on our budget, we would have been a little over three without the unanticipated bankruptcies. Our goal for this year is still at 2%.

What's the overall impact of bankruptcies on same-store estimates for 2019?

As we mentioned, the year-to-date impact's around 100 basis points.

Okay, thank you.

Sure.

Good morning, everyone. Thank you. You've covered a lot. So just one for me if you don't mind. David, I like malls, but acknowledging that sentiment on malls have been pretty poor in 2019, frankly worse than the fundamentals. Nobody knows your business better than you. When you look past '19, with 2020 and beyond fast approaching, what is the management team most excited about opportunity-wise or strategically speaking?

Thank you for your great question. The most exciting yet also difficult thing we face is redeveloping our centers. We're doing this with substantial properties such as Northgate. Yes, it involves immense work and effort, but it is also highly exciting! We've been constrained on how to evolve some properties due to the presence of department stores. With that space back, we can imagine a broader vision of what these centers can become. Instead of being confined now, our limitations will revolve around our creativity and how we receive permits, grounded on supply and demand. That to me is the most thrilling opportunity. Secondly, our high-quality portfolio and balance sheet establishes stability of cash flow, even amid ongoing turmoil in retail. We continue exploring opportunities beyond our current landscape.

Thanks, David.

Sure.

Yes. Hi, David. You mentioned you have 77 assets that generate more than $900 per square foot in sales. Can you give us a sense as to what portion of your pro-rata NOI those assets represent?

I don’t have that number readily available, but I would note that it's well over 50%. It’s probably around 70, give or take.

Got it. Okay. And pushing it a little further to the opposite end, how small is the contribution from the assets doing less than 500 a foot?

I don't have that number at the top of my head, but...

Okay.

No worries.

Hey, good morning everyone. I'm looking at the international properties in the total NOI bucket. I see that’s been growing about 4% year-to-date. First question is that largely comparable? What is driving that strength?

It's largely comparable, other than there may be an expansion here or there. Remember that’s also impacted by FX. It’s likely that it would be even higher without the currency issues.

Would you consider putting that in the total bucket and maybe adjusting on a constant currency basis?

We have discussed it. It could be beneficial to do that occasionally since many overlook the diversity and high-quality portfolio we hold. Ultimately, it serves our purpose to keep them separated so we don't face additional questions.

Hey, it's Michael Bilerman here with Christy. David, I wonder if you can sit back and consider the mall or retail competitive landscape from a landlord perspective. You talked about turmoil with the retail industry impacting different peers in various ways, especially those that don't have the strength in capital or balance. I wondered if you could talk about your market share of retail leasing. Do you believe you're getting a disproportionate share of retailer store openings or fewer share of retailer store closings, given retailers' desire to be in your portfolio against many other options?

I don't think I’ve referenced our peers in this call, other than the strength of our real estate. I can say we've always had that position due to our quality real estate. The stability of our organization and the knowledge that we will continue to invest in our assets helps. Without numbers, whatever that means, landlords matter. Maybe in a booming time they matter less, but I am convinced that as retailers look at whether downsizing, restructuring, or growing, they consider their partners.

Can you discuss your outlook on the fifth platform initiatives? You’ve had some progress between the outlet online business, eSports, CBD shops, and more. How should we think about how you're allocating time on all these initiatives? Moreover, how should we consider the capital spent toward additional programs driving those assets?

You'll see more from us, but I can't precisely quantify it since it remains opportunistic. All expenses are leverage-based. We don't throw money at things hoping it sticks; instead, we're making exceptionally calculated risks. I am hopeful that this evolution will demonstrate our company is more than a mall company, we've always defined ourselves that way.

This question addresses your decision to spin off WPG, recognizing those assets could’ve been relatively more valuable for growth. Would you see a possible opportunity to re-aggregate in that space or is that not on the table?

It's not on the table. There are many opportunities ahead of us, but that isn’t high on the list.

How does the U.K. market, going through difficulties impacting retailers, rank according to your priority moving forward? The stocks there are facing challenges given leverage positions.

I'm more concerned about my team's upcoming season with Crystal Palace. I want to experience a solid year rather than engaging with relegation struggles each year. That's more of a pressing concern.

Thanks for your time, David.

Sure.

Okay, thank you, and have a great rest of your summer. We'll talk to you soon.