Operator: Welcome to Forest City Enterprises Fourth Quarter and Year End 2012 Earnings Conference Call.
The Company would like to remind you that today's remarks include forward-looking comments that are covered under Federal Safe Harbor provisions. Actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Please refer to the risk factors outlined in Forest City's annual report on Form 10-K filed with the SEC for a discussion of factors that could cause results to differ.
This call is being recorded and a replay will be available beginning at 2.00 p.m. Eastern Time today. Both the telephone replay and the webcast will be available until April 28, 2013, 11.59 p.m. Eastern Time.
The Company would like to remind listeners that it will be using non-GAAP terminology, such as operating FFO, FFO comparable property net operating income and pro rata share in its discussions today. Please refer to the Forest City's supplemental package which is posted on the Company's website at www.forestcity.net for an explanation of these terms, and why the Company uses them, as well as reconciliations to their comparable financial measures, in accordance with Generally Accepted Accounting Principles.
At this time, all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the Company's prepared comments.
I would now like to turn the call over to Forest City's President and CEO, David LaRue. Please go ahead, Mr. LaRue.
David J. LaRue - President and CEO: Thank you, Stephanie. Good morning, everyone. Thank you for joining us today. With me today is Bob O'Brien, our Chief Financial Officer. Our results for the fourth quarter and full year 2012 went out yesterday after the close of the market. I hope you had a chance to review them. In a few minutes, I'll ask Bob for his comments on our results. After that, I'll give an update on our pipeline and offer some thoughts then we'll get to your questions.
As you saw in our press release we are pleased with the results for 2012. FFO, operating FFO and overall comp NOIs were all up over prior year as were revenues and net earnings. Our portfolio continued to show strength particularly in multifamily where we had strong comp – strong growth and comp NOI throughout the year. 2012 is also year of significant progress in executing on our strategic plan. As many of you are aware, the key drivers of the plan are building a strong sustaining capital structure, focusing on our core markets and products and achieving operational excellence throughout our business.
Let me touch on a few of these highlights for the year that tied to these drivers. We successfully opened four new properties in our core markets, the largest being Barclays Center in Brooklyn. We started seven new projects. Six as a multifamily, these include apartment projects in Denver, Dallas, Washington D.C. as well as B2 Brooklyn, the first multifamily component of Atlantic Yards. We disposed of 12 non-core assets generating cash of approximately $129 million. We completed the sales substantially all of our land development business after having announced our plan to exit the majority of that business at the beginning of the year.
We launched a strategic capital partnership with Arizona State Retirement System to create a $400 million multifamily development fund targeting five of our core markets. We brought TIAA-CREF into our partnership at 8 Spruce Street in Manhattan in a transaction that valued the building at a record $1.05 billion and resulted in proceeds to Forest City of $129 million.
During the year and continuing into 2013, we completed a number of capital market transactions that resulted in reduced fixed charges and improved debt metrics. We negotiated a new three-year $465 million revolving credit facility that closed the line just after year-end. We made strategic investments to strengthen our mature portfolio including major renovation of our Charleston Town Center mall and approximately 700 unit rehabs and a number of our apartment communities and other improvements.
Lastly, we achieved $19 million in cost savings to date from process improvement, procurement and energy management initiatives undertaken over the past two years. These benefit tenants, our partners, and us at Forest City. We expect those savings to grow these programs are fully embedded throughout our business. We'd be happy to talk to you about any of these during the Q&A, but now let me turn the call over to Bob. Bob?
Robert G. O'Brien - EVP and CFO: Thanks Dave, good morning everybody. On today's call, I'll be referring to our results in our earnings release and supplemental package that are available through our SEC filings, as well as in the investors section of our website. I'll focus most of my comments on results for operating FFO, a metric we introduced in the second quarter of 2012. As a reminder, we believe operating FFO provides investors with a picture of how our core operations are performing by removing transactional one-time and non-recurring items that tend to distort total FFO for any given period.
Bridges depicting the positive and negative factors impacting operating FFO for the quarter and the year can be found on Pages 31 and 32 of the supplemental package. I don't intend to walk through all the variances, but when you look at the two bridges, you'd see a number of common factors impacting both the quarter and full-year results. Among the positive factors are increased NOI from the mature portfolio, reduced interest on the mature portfolio, increased land sales, primarily at Stapleton and increased FFO from new property openings.
There are also common negative factors impacting results for both periods. By far the largest of these is reduced capitalized interest on our under construction pipeline. We'll also note that of the total $35.5 million of reduced capitalized interest we reported for the year, almost half of that came in the fourth quarter, which primarily reflects the third quarter opening of Barclays Center arena, the last of our large New York under construction projects. As the full year bridge shows, our operating FFO ended the year at $234.7 million, up a little over 3% from $227.5 million in 2011.
Turning to FFO for a moment, total funds from operations in 2012 were $267.4 million or $1.27 per share compared with $178.2 million or $0.88 per share for 2011. I should point out that a significant factor in the magnitude of the FFO variance was the impairments we took at the end of 2011 on our land held for divestiture as a result of our decision to divest most of our land business. The 2011 Land impairment was also a significant factor in the magnitude of the year-over-year variance in net earnings.
Turning to some of our operating metrics for the year, overall comp NOI was up 3.2% with increases of 7.3% in apartments, 2.1% in retail and 2.1% in office compared with the full year 2011 results. In the residential portfolio, comparable average occupancies for 2012 were 94.7%, up modestly from 94.5% last year. Average monthly residential rents in our comparable apartments in our core markets were $1,597 for the year, a 5.3% increase from 2011 and average monthly rents across all of our comparable apartments were up 4.7% year-over-year.
In retail, comparable retail occupancies were basically flat compared with year-end 2011. Sales in our regional malls averaged $470 per square foot on a rolling 12-month basis, up 6.1% compared with the same period in 2011, and new same space leases in our regional malls were up 11.3% over prior rents. In Office, comparable occupancies were down 12 basis points at year-end. On a rolling 12-month basis, rent per square foot in new office leases decreased 2.8 % over expiring leases. As we indicated in our press release, the decline in office rent per square foot for new office lease is primarily driven by the timing of a lease expiration at our University Park at MIT life science office park in Cambridge. Basically we had the lease at MIT expired during the year and this space was not immediately refilled. We had several re-signings in MIT at excellent rates, as well as new office leases in other markets, but they didn't offset the expiration as this statistic is not reported on a comp basis.
Dave mentioned briefly our capital market transactions during 2012 and continuing this year. In July 2012, we issued an additional $125 million of our 2034 senior notes and used the proceeds to retire that same amount of our 2015 senior notes, effectively extending that maturity 19 years at approximately the same interest rate, while maintaining the flexibility to call that debt at any time. In October and December of last year, we executed separate exchange transactions of the majority of our convertible preferred stock for common stock and cash and after year-end, we will announce the redemption of both remaining preferred stock, which took place earlier this month and the remaining 2015 notes, which takes place tomorrow.
Between the exchanges in 2012 and this month's redemption, taking out these two securities reduces annual fixed charges and dividend payments and interest expense by approximately $20 million. Dave also mentioned our new revolving credit facility. We're very pleased with the new facility which has improved pricing and more favorable terms. It will also give us additional flexibility in operating the business. I want to thank all of our allied banks for their ongoing commitment and confidence in Forest City.
Let me pause here to go a little deeper on the topic of reduced capitalized interest and its impact on our reported results. Since our year-end 2011 conference call, we have talked several times about the fact that we expected a significant reduction in capitalized interest. As we target maintaining our under-construction and under-development pipeline at no more than 15% of total assets going forward, that also effectively resets the ongoing level of capitalized interest we will be reporting.
I'd also want to point out that our goal in 2013 is to meaningfully accelerate non-core asset dispositions. Asset sales have always been a part of our strategy for raising equity to invest in our business. Over the past 10 years or so, we've average proceeds from sales of approximately $120 million per year. For 2013, we are targeting proceeds from sales in the range of $200 million to $250 million. We expect to use the proceeds from these dispositions to delever, invest in our portfolio, and take advantage of new opportunities in our core markets and products. Of course, there can be no guarantee we'll be able to reach that target for non-core dispositions, our clear goal, however, is to accelerate non-core dispositions in the near-term.
So, the significant reduction in capitalized interest, combined with an accelerated pace of asset dispositions, are expected to impact our overall FFO and operating FFO results in the near-term. Offsetting these factors, we expect continued improvement in our core operations, together with interest rate savings and reduced fixed charges, as well as the continued ramp-up of recently opened properties. As a result of these factors, we expect our 2013 FFO and operating FFO to be relatively flat to our 2012 results. Obviously, we'll be happy to answer any questions about this during the Q&A.
As I hope most of you have seen, Fitch ratings recently issued in the initial rating on Forest City at BB minus with a stable outlook. The rating gives us an additional benchmark to measure our progress as we continue to delever and work to improve our balance sheet and debt metrics.
Before I turn it over to David, let me just remind everyone on the call, that we will be converting to a calendar year-end at December 31st of this year. We will report a two month sub-period for November and December and then be on a calendar basis going forward.
With that let me turn it over to Dave for an update on the pipeline and some closing thoughts. Dave?
David J. LaRue - President and CEO: Thank you, Bob. All of our efforts including those Bob just outlined are establishing a stronger Company with a solid foundation for future growth. That will take time even with aggressive execution. But we are confident in our strategic direction, pleased with what we've achieved to-date and optimistic about the Forest City's future. With that said, there is still clearly work to be done on our balance sheet and in our portfolio as well.
In that vein let me take a moment to talk about Westchester's Ridge Hill Center in Yonkers. It is the project that gets the most questions from investors these days and we certainly understand why. It is a focal point of our team too. There are several things I'd like to comment on concerning Ridge Hill. First we have a solid plan to complete the lease up and stabilization of the property. We have the right talent focused on doing so and we are confident we will get there. You will see in our year end pipeline that we have added approximately $23 million of costs to Ridge Hill, most of which is additional tenant allowances that will help us execute on the continued lease up.
Second all of the data of Westchester's Ridge Hill is already on our balance sheet. That means from here on every new lease we sign and every that creates additional dollars that will take on in the project is immediately accretive to our results. We now anticipate that the Center will stabilize at a sub-5% cash on cost return, which is below our original pro forma. Like this we believe in the long-term value of this investment given the quality of the asset and market in which it sits.
Turning to our 2012 openings and projects under construction, our largest opening was Barclays arena in Atlantic Yards in Brooklyn. The arena has already welcomed approximately 1.4 million visitors for a wide variety of sports and entertainment events, including approximately 45 sold-out events to-date. 82% of forecasted contractually obligated revenues for the arena are in place. Day-of-event revenues have been in line with our expectations and with strong results for concessions, in particular.
During the fourth quarter, we began construction on B2 BKLYN, the first residential tower at Atlantic Yards, immediately adjacent to Barclays Center. This 32-storey tower will have 363 units, half of which will be reserved for low, moderate, and middle income households. In partnership with Skanska, a global construction group and leader in prefabricated building components, B2 will be built using modular construction that we anticipate will lower cost over time, create less waste and reduce truck traffic during construction, which are amongst some of the benefits. Modules will be produced at 100,000 square foot facility in Brooklyn Navy Yard beginning this summer.
At The Yards in Washington D.C., we opened Boilermaker Shops, a 39,000 square foot office/retail property during the fourth quarter. Two other properties at The Yards are under construction. Lumber Shed is a 32,000 square foot adaptive reuse office building with street-level retail that is expected to open in the third quarter of 2013. Twelve12 is a 218-unit apartment property with a grocery store, a fitness facility at street-level. Twelve12 is expected to open in the third quarter of 2014.
At Stapleton in Denver, we opened two new multifamily properties in 2012. In the first quarter, we opened 85-unit first phase of Aster Town Center and is 91% leased. At the beginning of the third quarter, we opened Botanica Eastbridge, a 118-unit apartment community that is 53% leased.
Late in the year we began work on a third apartment property Aster Northfield, which will add 352 units. It will be the first apartment community to be constructed North of Interstate 70. I know a number you on the call have visited Stapleton and you know that the bulk of our development activity to date has been on the south side of this 4,700 acre property.
With the new I 70 interchange that opened in 2011 access to Stapleton, particularly to the north has been greatly enhanced, which opens this entire area for additional development. As we noted in our press release, 2012 marked the 10th anniversary of the first residents moving to Stapleton. Today the community is home to approximately 15,000 residents and includes 4,700 homes, 779 rental apartments, 2.1 million square feet of retail; nearly 400,000 feet of office space, 1.2 million square feet of flex R&D space, eight schools, 800 acres of parks, open space and trails.
Of the total acreage designated for development at Stapleton we have acquired approximately 1,800 acres to date with 1,142 acres remaining for future development. At the end of the fiscal year we opened 203-unit Continental Building in our Mercantile Place on Main development in Downtown Dallas. First move-ins have begun and the opening has received substantial reviews and media coverage in the region. With the Continental we now have more than 700 apartments in Downtown Dallas.
During the fourth quarter, we began construction on West Village, a new, 381-unit apartment project in the Uptown area of Dallas. We expect to open West Village in the third quarter of 2014.
In Boston, construction continues on 120 Kingston, our 240-unit apartment building on the Rose Kennedy Greenway near the border of the Boston's financial district and Chinatown neighborhood. We expect the property to open in the second quarter of 2014.
Finally, construction continues on Stratford Avenue, a 128-unit multifamily project in Fairfield, Connecticut, with completion expected in late 2013.
It's now time to get to your questions. So, let me close by saying that as always we continue to monitory economic and market conditions, but we are pleased with our results and progress in 2012 and thus far in 2013. We believe our focus on strong urban markets and our pipeline of entitled opportunities give us a competitive advantage and that our advantage is sustained by our proven skill and efficiencies of operators and asset managers. We are confident in our strategic direction and we are optimistic about the future of Forest City.
We'd like to thank all of our investors for their continued support and interest in our business. With that, let's take some questions. Operator?
Operator: Sheila McGrath, Evercore Partners.
Sheila McGrath - Evercore Partners: You've mentioned asset sales of $200 million to $250 million. I'm just wondering your rationale for ramping up the sales and if that gets you to a leverage level that you're targeting by year end?
David J. LaRue - President and CEO: Bob, do you want to first take that?
Robert G. O'Brien - EVP and CFO: Sure. Thanks Sheila. Yes, so net proceeds out of sales in that range $200 million to $250 million. At our historical leverage ratio against market, that's – its 60% leverage, that's north of $0.5 billion worth of real estate that we – at our share that we would hope to sell. Sheila, I think that our debt metrics as we've talked about are a work in progress. I don't think that's going to get us all the way to where we ultimately want to be, but it's going to give us a substantial amount of capital to continue to delever and continue to improve our debt metrics. I think we believe and the market seems to be bearing it out. You saw we sold an apartment building just outside Detroit just a week or two ago at a very attractive cap rate that – the market is now given where interest rates are and given where capital is, amenable to looking at and buyers purchasing in secondary markets. So we're going to divest in those non-core markets to try to raise capital to improve our balance sheet and invest in our balance sheet. As I tried to indicate in my prepared remarks, clearly that's going to have a – that's going to dilute our FFO because we're not going to – we don't believe even with the capital and the interest rates where they are that the lost FFO from property sales will probably not be fully offset by the investment of those proceeds in the balance sheet, at least in the near-term. But we're moving our NOI from where it is today in some of these non-core markets into the core markets and thereby increasing the quality of that NOI long-term
Sheila McGrath - Evercore Partners: And then, Bob or David, could you be a little bit more specific on – are these asset sales joint ventures in some of your larger assets or they're 100% focused in non-core markets?
Robert G. O'Brien - EVP and CFO: I think our primary focus is then we certainly brought investors into some of our higher profile assets like the retail portfolio in New York like our MIT transaction. So, the focus, given the improvement in the economy and then more greater availability of capital is to focus on those non-core markets. So it's not as critical. That being said, I often say that everything is ultimately for sale at a price, and if we can get full value in some of our core markets or products, that's something that we would consider. But for the most part, at least in our plan, is that's been of our interest in some non-core products and non-core markets.
Sheila McGrath - Evercore Partners: Two more quick questions. I was just wondering if you could talk about your thoughts. I know you amended your line of credit to allow more stock buybacks. So just wonder, if you could talk about your thoughts on stock buyback, eventually a dividend, and all in context of deleveraging, is this something that we shouldn't expect this year; just give us your thoughts on balancing those initiatives?
Robert G. O'Brien - EVP and CFO: Dave, I'll try and I'll ask you to kind of follow-up. So, we wanted the flexibility for a variety of reasons. Obviously, our stock has, as many, have been quite volatile and it falls – while we have often said, and analysts indicate that we sell at a fairly steep discount to our NAV. But at times it gets dramatically lower, and it's at times like that we might want to be opportunistic. But I think the use of capital to buy back stock is probably lower – (not probably), is lower on the priority list than deleveraging our balance sheet. We think that is one of the key components of our strategy to help allay some investors' concerns about the level of leverage, the level of our fixed charge coverages. We made a lot of progress over the last few years. We expect to continue to do that. So we would not at least as we look at it today, given our liquidity anticipate a significant use of our capital to buy back stock. But we have to obviously want to be opportunistic to the extent that there is a dislocation in the marketplace. Dave?
David J. LaRue - President and CEO: I would add that you asked a question from a priority standpoint. Again balance sheet and deleveraging is number one. The other two whether it's the stock buyback or dividend is a way to return capital to our investors and at the appropriate time in that – in our execution of our strategy and based upon the portfolio generating substantially more recurring cash flow because of that deleveraging. Those other opportunities for investment to return capital to stockholders, does come into the discussion. But that as Bob indicated would be after we have continued to focus on that first priority.
Sheila McGrath - Evercore Partners: Last quick question. The next line item just for modeling purposes and I know you don’t give guidance, but it was a bug swing in the quarter. I am just wondering, how should we think about that into 2013?
David J. LaRue - President and CEO: Yes. I think the quarter was just a recognition and true up of capital that had been returned based upon prior losses that we incurred during the development of Barclays Center. As I think we stated or you could recall, we had an obligation to fund operating losses above $60 million until we had opened the Barclays Center. We did that and fulfilled that obligation and then after the arena opened and the true-up occurred, that recognition of capital in this quarter resulted in that change. As we look forward, again, we I think effectively owned – we and our original – the original investor group owned 20% of the (theme) and as you go forward, it would be no more than that 20% that we would fund on future losses. So, again, you won't have that, I think, volatility of us being 100% and then recovering going back.
Operator: Samit Parikh, ISI.
Samit Parikh - ISI: Thanks for taking my questions. I wanted to ask you a little bit more on Ridge Hill. I know you spoke shortly about it in your comments. But with Legoland opening yesterday, and I guess the UNIQLO on the way, can you just talk about what you have out there or just give us the sense of the momentum on what you have out there at retailers in terms of LOIs and since you re-casted this new loan on the asset, is it sort of more lenient in any way in terms of your ability to sign leases that may be more favorable rents for the retailers just to get sort of leasing and NOI moving in the right direction on this asset?
David J. LaRue - President and CEO: Let me address the first part of that which is momentum, and again, we realized and we stated before that we have been making great progress in terms of opening the tenants and the deals that we had signed and had committed over the time to that same time singing and executing new leases was falling behind our expectations. With the opening -- the continued opening of quality tenants going from Lord & Taylor last year and Apple last year and Brooks Brothers this week and Legoland this week and with UNIQLO opening in mid-April is our current projection or anticipated opening. We think we have a plan and positive momentum to continue to build on. As you know we don't make aware everybody what LOIs we have out there, but based upon continued increase in visitors for the Center and traffic for the Center. Again, Legoland alone is projecting over 350,000 visitors a year that come to the shopping center. We think we've made it past that inflection point and have with regard to the bank trying to stabilize the property. We're looking to stabilize the property over the next two years, so that'll occur in 2015. Our bank line does not have I guess restrictions in it in terms of what flexibility we have to do deals with tenants. What we have been able to do with the recasting this pro forma, adding the additional tenant allowance that I mentioned during my comments is I think set in motion a plan and with available capital to allow the leasing team to execute on that strategy and again prove out that return that I mentioned.
Samit Parikh - ISI: So, you said now you're expecting less than 5. Is there more of a specific you can give us? Are you thinking like 4 or lower than 4, somewhere between 4 and 5 now under the yield stabilization?
David J. LaRue - President and CEO: Again, I didn't say sub-4. So, again, you're in that right range when I say sub-5.
Samit Parikh - ISI: Then moving on, I guess, to call it – you got some important approvals I think recently, one at Cambridge. I believe you received an important approval to move ahead with building a new building for Millennium I guess on 300 Mass Ave and you're also moving ahead, I believe, with sort of your redevelopment plan. I know it's pretty sizable at Boston. Just wondering if you could give us any sort of comments on and details on timing and what you're thinking about planning there?
David J. LaRue - President and CEO: Yeah, thank you for the question. The deal 300 Mass Ave at our University Park project did receive approvals. We are 100% leased in that building with Millennium which is our current – I think our second largest tenant overall in our office portfolio, but they are going to take the building which is approximately 250,000 feet. We anticipate that that will get under construction by later summer or early fall of this coming year and again, we are very excited about being able to serve the tenants' needs while we add to our own real estate portfolio in that very strong market. Ballston, we have been looking at that market. If any of you have seen the property, it really sits in a great submarket in the Washington D.C. area. We've owned the property for quite some time and we are looking at a redevelopment that enhances the retail while it allows for the addition of either residential units or other needs that – it could be in the market, it could be a hotel, it could be et cetera. It could be additional office if we find a tenant. So, the redevelopment plan, because of the dynamic of that market, is flexible, but with the overall plan, we see enhanced value opportunity, specifically in the retail, by making it more attractive, and I think it match the market demands better than it does now.
Robert G. O'Brien - EVP and CFO: Dave, let me just comment on MIT, just so over there everybody is clear. We will do that development in joint venture with MIT as we did the balance of the park. They own part of the land on which we're going to build. But we will be a 50-50 partner with MIT in that transaction; similar to the way we were originally in MIT. HCN is not part of this transaction, at least not initially. We may explore that once the building is open. I just want to make sure people are clear about our ownership interest there.
Samit Parikh - ISI: On Barclays Center, it looks like you had a pretty good pick-up in NOI there. It seems like momentum is really picking up the Center, you're signing a lot of new events. Are you still thinking 2016 stabilization – do you think it could be earlier and do you have any sense of what you're expecting in terms of annual NOI for '13 out of this Center?
David J. LaRue - President and CEO: Yes, we're still anticipating again 2015-2016 stabilization. That will be the – and I think '15-'16; that's the hockey season where the Islanders finally move into the Center. We have projected that $70 million stabilized NOI number to occur once the Islanders are in and we have the benefit of that additional acre at the property. In terms of ramping up between now and then, without giving you a specific number, I think 82% of the contractually obligated rent being signed allows us to have substantial increase in our revenues over the course of this 2013 operating year, and move towards that stabilized projection. So, without giving you the exact number, we are on track; I would tell you with moving towards that stabilized $70 million NOI.
Samit Parikh - ISI: And then last question, for Bob, sir, what are you seeing from your lenders on refis on the sort of fixed rate debt that's maturing at 5.9% this year? What are you getting back in terms of terms?
Robert G. O'Brien - EVP and CFO: Yeah, it's a pretty robust market as I'm sure most of the participants on the call are aware of. Lenders are lending. Certainly, the stuff is coming up in our portfolio was all stabilized, well leased. As you referenced, we highlight just under 6% interest rate on $700 million, almost $800 million of stuff that mature in this year. Interest rates are 4% or below give or take and pretty generous terms and pretty robust competition out there. So, we feel, there is a real opportunity this year to accelerate those refinancings, work with our lenders to lower our overall interest rate and obviously interest expense, improving our debt metrics further. It's clearly an attractive financing environment.
Samit Parikh - ISI: Do you think you can get terms like what we've seen from some of the REITs who are trading down from mid-5 to low-4s or is it not going to be that aggressive?
Robert G. O'Brien - EVP and CFO: Well, I think it will be. We'll have some things to announce probably by mid-year and a couple of our regional centers are coming due at the end of this year. We are already in discussions with some of the life companies who have providing financings in the past to get them to lock-in, so they don't have competition and in order to do so they are going to be pretty aggressive. So, I think it will range from sub-4 to mid-4s, but probably an average theme is 4 to 4 in a quarter range and most of our stabilized property this year, so again it's a fairly nice pickup.
Operator: Trish Azeez, BMO Capital Markets.
Trish Azeez - BMO Capital Markets: Back to the disposition pipeline, what do you anticipate in terms of timing, are we expecting just equal kind of fourth quarterly increments?
Robert G. O'Brien - EVP and CFO: Yes. I think obviously it's kind of hard to accurately judge exactly when these things are going to close. Each buyer has their own due diligence and there is always challenges and documentation. I would expect that probably won't see a lot of activity before the end of the second quarter. I think it will pick up in the third quarter, in the fourth quarter this year, so probably more happening in the middle of the year to the end of the year in that range.
Trish Azeez - BMO Capital Markets: I know you guys don't give guidance, but there were pretty large swings in the other commercial income, last year, I think $21 million -- $29 million in the first quarter and then losses of around $15 million and $18 million in the second and fourth quarters. Can you provide just some color on anything coming down the pipe that might cause similar sizable swings in 2013, maybe any large projects you guys are reconsidering?
David J. LaRue - President and CEO: I can't off the top of my head right now recall what those major swings are, but again as we continue to stabilize our portfolio, it doesn't mean that we won't have a potential sale of an asset that was in our development pipeline for example which could cause a peak swing in terms of revenue, so maybe an outlet sale or a shopping center or another development parcel or an asset that was held in that development pipeline. On the downside, I think if you look at 2012, we had two major write-offs from that development pipeline. One being when we decided to write-off and abandon our efforts in India and the second was in this past quarter when we wrote off our investments that we had in our the Cantera site in Washington D.C. So, those were a hit to that and again those are substantial hits. I think between the two it could have been approximately $25 million on that write off. So we again look at our pipeline or projects under development on an ongoing basis. We evaluate in the case of these two that it was no longer feasible for us to continue to carry those or want to carry those and made the decision to write them off, but that is an ongoing process that we do at each quarter.
Trish Azeez - BMO Capital Markets: Just lastly with your conversion to the calendar year reporting. Do you plan to release your 2012 results with the December 31, 2012, year-end prior to the first quarter earnings release?
Robert G. O'Brien - EVP and CFO: Sorry. I am not following your question.
Trish Azeez - BMO Capital Markets: You'll be converting to the 2013 calendar year reporting this quarter, so this coming quarter and you will be reporting first quarter earnings. Do you plan to release your 2012 results as if they ended December 31, 2012 before that earnings release, just so analyst and investors have a chance to update their models?
Robert G. O'Brien - EVP and CFO: So we will be running as we have on a one-month delayed compared to most of the other real estate companies for all of 2013. That period will be the November, December period. So the fourth quarter will be a two month quarter. Going forward from 2013 we will go back to give calendar year comparable information once we get hit 12/31/13.
Operator: With no further question in queue, I will turn the call back over to Mr. David LaRue for closing remarks. Please proceed.
David J. LaRue - President and CEO: Thank you, Stephanie. I would like to thank all of you for your confidence in our Company and especially in the strategy that we've outlined which we believe continues to highlight and enhance the value of our Forest City Enterprises and that value improves the benefit obviously of our stockholders, the communities where we do business and where we operate and the associates. So, again, thank you. Have a good day. Happy holidays to everybody and we will talk to you in next quarter. Thank you.
Operator: Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a great day.