SEGRO plc · LSE:SGRO
SEGRO — FY2007 Earnings Presentation
79 slides from SEGRO's earnings presentation, February 2008
Slide 1: Preliminary Results 2007
0 WHERE BUSINESS WORKS PRELIMINARY RESULTS 2007
Slide 2: Today's agenda
Today’s agenda Ian Coull Welcome David Sleath Review of 2007 Ian Coull Strategic opportunities Q&A Poznan, Poland 1
Slide 3: SEGRO 2007 – a transformational year
SEGRO 2007 – a transformational year Delivering on our strategy critical mass in Continental Europe restructuring complete: sold US/SH&P REIT status Delivering a strong operating performance excellent profits + 7.7% record lettings + 69% Delivering future growth development pipeline in g
Slide 4: David Sleath, Finance Director
DAVID SLEATH Finance Director
Slide 5: 2007 Review
2007 Review Strong operating performance • excellent profits + 7.7% • record lettings + 69% Adjusted NAV down 9.2% • UK valuation down 9.5% • Continental Europe valuation up 6.2% Strong financial position • Gearing of 56% • Available facilities £1.1bn Slough Trading Estate, UK 4
Slide 6: Headline financial numbers
Headline financial numbers 2007 Change Adjusted profit before tax - continuing operations only £131.3m Up 31.8% - continuing plus discontinued £153.7m Up 7.7% Underlying tax rate 1.4 % Was 14% Adjusted diluted EPS 32.2p Up 28.3% Adjusted diluted NAV per share 704p Down 9.2% Dividend* 23.0p Up 21.1%
Slide 7: Adjusted profit before tax
Adjusted profit before tax* Up 7.7% 2007 2006 £m £m Continuing operations (UK & Europe) Net rental income 203.9 188.8 Joint ventures 4.0 5.5 Trading property disposals 22.0 5.9 Other income 18.4 8.5 Administration expenses (34.5) (25.5) Operating profit 213.8 183.2 Net finance costs (after capitalis
Slide 8: Net rental income
Net rental income Up 8.0% £6.4 m £(11.8) m £9.3 m £11.5 m £(9.9) m £(11.8) m £19.3 m £2.1 m £203.9 m £188.8 m Net rental Acquisitions New Re-lettings & Lease Disposals Space Increase in Other Net rental income 2006 developments rent reviews surrender returned property income 2007 premiums operating
Slide 9: Lettings
Lettings Up 69% Europe UK Total 000’s square metres 596 353 331 298 298 224 184 152 169 103 107 49 2004 2005 2006 2007 8 1 Excludes pre-lettings
Slide 10: Vacancy rate
Vacancy rate Down 2% 11.6% 10.8% 10.9% 8.9% 8.7% 5.9% Underlying Underlying 8.5% 8.0% 2006 2007 2006 2007 2006 2007 UK Continental Europe Group 9
Slide 11: Pre-lettings
Pre-lettings 167,000 sq m already secured Customer Location Sq M Rent pa £000’s O2 Slough, UK 10,226 2,970 Harris Systems Winnersh, UK 6,736 1,813 Jacobs Winnersh, UK 11,148 3,381 Leading Bank Slough, UK 13,935 1,807 MicroChip Winnersh, UK 2,787 645 Lansdon Camberley, UK 3,983 354 Decathlon Gliwice,
Slide 12: UK rental growth 1.4% above ERV
UK rental growth 1.4% above ERV By Region Reviews * Renewals Lettings ALL % % % % Slough Trading Estate 2.8 2.9 1.5 2.1 London Markets 1.6 2.9 1.1 1.7 National Markets 4.3 0.7 (0.3) 0.8 UK Total % 3.0 1.7 0.6 1.4 * NB. Excludes fixed uplifts which benefit SEGRO, but were negotiated in previous perio
Slide 13: Well-timed and executed US disposal
Well-timed and executed US disposal Profit on disposal 2007 £m Gross proceeds 1,470.7 Selling costs (20.2) Net proceeds 1,450.5 Debt repaid (602.7) Consideration received 847.8 Net assets disposed (407.0) Cumulative exchange translation loss recycled on disposal (3.5) Profit on sale before tax 437.3
Slide 14: Adjusted diluted NAV per share
Adjusted diluted NAV per share Down 9.2% 31.1p 5.3p (49.2)p 34.0p Other (79.0)p 66.0p Profit after tax on Deferred tax Adjusted sale of US adjustment on US Sale 774.9p profit after tax (21.2)p (57.6)p Dilution Property adjustment valuation Ordinary for share losses dividends 704.3p consolidation pai
Slide 15: Yield shift
Yield shift Equivalent yields End June 2007 End 2006 2007 West London – Industrial 5.2% 5.2% 5.5% Rest of UK - Industrial 5.6% 5.5% 6.2% France 7.3% 7.2% 7.1% Germany 7.7%* 7.3% 7.5% Belgium 7.0%* 6.7% 6.7% Central Europe 7.2%* 7.0% 6.9% * Estimated 14
Slide 16: Investment property valuation
Investment property valuation Valuation Surplus/ Surplus Surplus/ 31.12.07 (deficit) (deficit) £m 2007 % H1 07 % H2 07 % UK Industrial 2,666 (9.9) 1.3 (11.0) UK Offices 562 (7.9) 6.5 (13.2) UK Retail 228 (8.6) 1.6 (10.1) Total UK 3,456 (9.5) 2.1 (11.3) Continental Europe 932 6.2 9.1 0.2 Group totals
Slide 17: Cash flow
Cash flow £25m increase in free cash flow 2007 2006 £m £m Cash flow from operations 181.9 137.6 Net finance costs (excl. capitalised interest) (124.6) (122.8) Dividends received 2.5 35.7 Tax (net) 4.1 (11.6) Free cash flow 63.4 38.9 REIT/SIIC conversion charge paid (44.5) - Capital expenditure (756.
Slide 18: Capital expenditure
Capital expenditure Total investment of £777 million Land Development Purchases UK £143 m £76m Acquisitions UK £91m Development Continental Europe £112 m Acquisitions Continental Europe £355m Total investment £777m* 17 * Including investment properties, development properties, traders and share of j
Slide 19: Disposals - proceeds
Disposals - proceeds Continental Continental Europe Europe - Traders - Investment £36m properties £1m UK - Investment UK properties - Traders £185m £48m Total divestments £270m 18
Slide 20: Financial strength
Financial strength Balance Sheet Summary Total property assets £5.2bn Gross debt £2.0bn - weighted average interest rate 5.5% - at fixed rates 83% - average maturity 10.5 years - next maturity (2010) £125m Net debt £1.7bn Gearing ratio 56% LTV 34% Interest cover 2.4 times Available cash and faciliti
Slide 21: Future capex
Future capex Indicative 2008 capital expenditure plans £m Development expenditure - construction in progress 135 - authorised but not started 89 - other potential starts 106 330 Approved acquisitions - income producing properties 166 (MPM, Neckermann.de, DHL) - land purchases 62 228 Total potential
Slide 22: Quality of income and covenant
Quality of income and covenant 1,674 customers • Top 20 = 29% of rent Average lease length • 6.3 years to break • 8.6 years to expiry 74% UK lease renewals in 2007 73% UK breaks not exercised Slough Trading Estate, UK 21
Slide 23: 2007 Review
2007 Review Strong operating performance • excellent profits + 7.7% • record lettings + 69% Adjusted NAV down 9.2% • UK valuation down 9.5% • Continental Europe valuation up 6.2% Strong financial position • Gearing of 56% • Available facilities £1.1bn Slough Trading Estate, UK 22
Slide 24: Ian Coull, Chief Executive
WHERE BUSINESS WORKS IAN COULL Chief Executive
Slide 25: SEGRO enters a new phase
SEGRO enters a new phase Delivering on our strategy Delivering a strong operating performance Delivering future growth Frankfurt, Germany Frankfurt, Germany 24
Slide 26: Delivering on our strategy
Delivering on our strategy Transformational momentum in 2007 2003 – 2006 2007 Changed culture January April August December Restructured portfolio REIT SEGRO Sold Sold Implemented strategy to SEUSA SH&P become the leading pan-European provider of Flexible Business Space 25
Slide 27: Delivering on our strategy in 2007
Delivering on our strategy in 2007 Achieved critical mass in Continental Europe Completed management restructuring Capital recycling Excellent leasing performance Thales, Crawley 26
Slide 28: Achieved critical mass in Continental Europe
Achieved critical mass in Continental Europe Total property assets £1.4 billion (includes trading properties, land and CIP) 27
Slide 29: Current and prospective markets identified
Current and prospective markets identified France Poland Slovakia • Paris • Warsaw • Bratislava • Lyon • Poznan • Marseille • Lodz (Strykow) Italy • Lille • Gdansk • Milan / Turin • Katowice / Wrocaw / • Bologna / Parma / Verona Krakow Benelux Czech Republic Spain • Brussels / Antwerp
Slide 30: Investment criteria - approach to market analysis
Delivering on our strategy Investment criteria - approach to market analysis Location Political & Economic Market Land & / or Rental Growth Business Environment Scale Planning Potential Environment Constraints Paris 999 999 999 999 99 Warsaw 99 99 99 99 99 Bratislava 99 99 99 9 99 Budapest 99 9 99 9
Slide 31: Scale and momentum in Continental Europe
Delivering on our strategy Scale and momentum in Continental Europe 91 933 9 1, 559 3 24 503 276 Countries Employees Lettable space Capital Value* (000’s sq m) £m 30 June 2004 Dec. 2007 * Investment properties
Slide 32: More balanced portfolio
Delivering on our strategy More balanced portfolio Continental Europe 21% Slough 15% Slough 29% Continental Europe 44% London 13% National 30% London 20% National 28% £4.4bn investment portfolio c.4.7m sq m total portfolio - by value end Dec 07 - built space end Dec 07 31
Slide 33: Portfolio by space
Delivering on our strategy Portfolio by space* as at 31 December 2007 Offices Retail 3% Offices Retail Logistics 7% 1% 4% 5% Industrial Industrial Logistics 30% 85% 65% Continental Europe 2.1m sq m UK 2.6m sq m Offices Retail 6% 2% Logistics Industrial 31% 61% Group 4.7m sq m 32 * Includes trading p
Slide 34: Management restructuring
Delivering on our strategy Management restructuring Group Business Development UK Continental Europe Sustainability Lodz, Poland 33
Slide 35: Delivering future growth
Delivering future growth The industrial sector SEGRO’s development pipeline SEGRO priorities and outlook LHR1, Heathrow 34
Slide 36: Long term resilience & outperformance of Industrial
Delivering future growth Long term resilience & outperformance of Industrial IPD Property Returns 13.1% 12.2% 12.4% 11.6% 10.9% 10.5 ALL Industrial ALL Industrial ALL Industrial Thales, Crawley, UK 1980 – 2007 1987 – 2007 1997 – 2007 35 27 years 20 years 10 years
Slide 37: Lower cyclicality of Industrial sector
Delivering future growth Lower cyclicality of Industrial sector £m Slough Trading Estate – Rental Income 80 Gulf War 75 70 Black Wednesday Credit 65 Credit Crisis LTCM Crunch 9/11 60 55 Gulf War Dot Com Crash 50 45 40 35 30 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 36 19 19 19 20 20 20 1
Slide 38: Scale of development pipeline potential
Delivering future growth Scale of development pipeline potential Space Strykow, Poland • 106,000 sq m completions in 2006 • 367,000 sq m completions in 2007 • 576,000 sq m of potential completions in 2008 • Total pipeline of 2,490,000 sq m 37
Slide 39: Scale of development pipeline potential by space
Delivering future growth Scale of development pipeline potential UK 824,000 sq m Continental Europe By Space Not yet Authorised For 2008 441,000 sq m 353,000 sq m 342,000 sq m 250,000 253,000 sq m sq m 117,000 113,000 110,000 sq m sq m sq m 61,000 44,000 54,000 sq m sq m sq m Completions Completions
Slide 40: Pipeline potential by rental value
Delivering future growth Scale of development pipeline potential UK By Rental Value when completed £54m Continental Europe Potential total of £192m £45m 11% yield on future expenditure 8% including current book value £23m £17m £15m £16m £14m £8m CIP Potential Starts Potential Starts Potential Starts
Slide 41: Development pipeline - critical factors
Delivering future growth Development pipeline - critical factors Zoning Scale and pace of development • 24% of total pipeline fully approved • but also ability to swiftly curtail if need be • 62% zoned or with outline approval • Total of 86% with at least outline approval Management expertise
Slide 42: Acquisition case study – Ullo, Hungary
Delivering future growth Acquisition case studies – Ullo, Hungary Land with development opportunity €16m land acquisition price 143,000 sq m to be built Acquisition completed in March 2007 38 ha, Ullo, Hungary 41
Slide 43: Acquisition case study – Neckermann.de, Frankfurt
Delivering future growth Acquisition case studies – Neckermann.de, Frankfurt Income producing with development €197m acquisition price Initial yield 8.1% Income of €15.6m Redevelopment opportunities Neckermann.de, Frankfurt Initial €160m completed in Oct. 2007 • Balance completed in 2008 F
Slide 44: Acquisition case study – St Exupery, Lyon
Delivering future growth Acquisition case studies – St Exupery, Lyon Income with scope for asset management €44m acquisition price 6.7% net initial yield • rising to 7.5% as vacancy is let up Warehousing & light industrial Asset management opportunities Satolas Green Business Park, Lyon Acq
Slide 45: Development pipeline driver – excellent momentum
Delivering future growth Development pipeline driver – excellent momentum 353,000 sq m = Not yet Authorised 250,000 253,000 sq m sq m 117,000 113,000 sq m sq m 61,000 54,000 sq m 44,000 sq m sq m UK Europe UK Europe UK Europe UK Europe Completions Completions WIP Potential Starts 44 2006 2007 End of
Slide 46: Priorities for 2008
Priorities for 2008 Maintain strong financial position Lease aggressively Develop selectively Sell opportunistically Acquire land in CEE Possibly acquire investments in UK in H2 Poznan, Poland 45
Slide 47: Market outlook
Market outlook Occupier demand • UK ++ Western Europe + Central & Eastern Europe +++ Investment market • UK -- Western Europe - Central & Eastern Europe + Lodz, Poland 46
Slide 48: UK occupier enquiry levels
UK occupier enquiry levels Simple non-scientific monitoring No. of Enquiries 2004 2005 2006 2007 2008 630 530 430 330 230 130 30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 47
Slide 49: Market outlook
Market outlook Occupier demand • UK ++ Western Europe + Central & Eastern Europe +++ Investment market • UK -- Western Europe - Central & Eastern Europe + Lodz, Poland 48
Slide 50: Delivering future growth - summary
Delivering future growth - summary The Right Strategy The Right Assets The Right People St Denis, Paris, France 49
Slide 51: Appendices
O WHERE BUSINESS WORKS Appendices
Slide 52: SEGRO's Flexible Business Space strategy
Delivering on our strategy SEGRO’s Flexible Business Space strategy Industrial locations developed to optimise value… Industrial Parks Warehousing & Logistics Suburban Offices 51
Slide 53: The UK portfolio
The UK portfolio Total property assets £3.8 billion 52
Slide 54: Exploiting opportunities for attractive returns from development across Europe
Delivering future growth Exploiting opportunities for attractive returns from development across Europe Illustrative returns UK France Germany Central (pre-tax) Europe % % % % Yield on development - on TDC 7.0 – 7.5 8.0 – 9.0 8.0 – 9.0 8.5 – 9.5 - on future spend 10.0 11.0 11.0 12.0 ‘Take-out’ yield
Slide 55: Property gains and losses
Property gains and losses 2007 2006 £m £m Investment properties - UK (394.2) 367.4 - Continental Europe 56.6 24.8 - Realised profits on disposals 3.0 4.8 Development properties (47.6) 0.5 (Losses)/Gains in income statement – continuing (382.2) 397.5 SORIE 11.2 15.4 Share of joint ventures’ valuation
Slide 56: Active portfolio management in the UK
Active portfolio management in the UK UK Disposals UK Acquisitions Location Price + /- Location Month Price Initial £m Book £m Yield % Elstree 20.5 0.9 Enfield Sept. 12.6 7.9 Basildon 29.9 (0.1) Feltham Sept. 6.1 4.3 Farnborough 23.8 9.7 Colnbrook Nov. 26.5 4.1 Gloucester 9.6 (0.4) Frimley Jan. 3.8
Slide 57: Strategic acquisitions in Continental Europe
Strategic acquisitions in Continental Europe Income with development potential Extract from full list Month Price Initial Space Income Location & Occupier €m Yield 000 €m % sq m Germany Neckermann.de* Oct. 197 8.1 310 15.6 Income France DHL** June. 160 7.0 210 11.2 producing with Italy Alcatel-Lucen
Slide 58: Reconciliation of gross rents
Reconciliation of gross rents UK Continental Group Europe £m £m £m Gross rents per Investment Portfolio Table 212.4 42.7 255.1 Less rents included within share of joint ventures’ (5.8) (0.4) (6.2) results Add trading property rental income - 9.9 9.9 Total rents per Income Statement 206.6 52.2 258.8
Slide 59: Like-For-Like Rents
Like-For-Like Rents Rental income for the year UK Continental Europe Total 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £m Like-for-like rents on properties owned 174.4 172.1 25.8 22.2 200.2 194.3 Properties acquired 8.9 2.3 14 4.5 22.9 6.8 Properties sold 3.2 12.2 - - 3.2 12.2 Rent from development
Slide 60: Quality of Income & Covenant
Quality of Income & Covenant As at 31 December 2007 Corporate Occupiers Annual Annual Rent Rent £m £m 1. Neckermann.de 10.4 11. UCB 3.6 2. Deutsche Post 9.9 12. Heathrow Airport 2.5 3. Tesco 6.7 13. UPS 2.4 4. Thales 5.9 14. Argos 2.2 5. Mars 5.5 15. Regus 2.1 6. Antalis 5.5 16. Kingfisher 2.1 7. Ka
Slide 61: UK Customer Retention
UK Customer Retention Leases renewed and breaks not exercised Leases renewed Breaks not exercised 79% 78% 78% 73% 74% 73% 55% 56% 2004 2005 2006 2007 Latest IPD data related to 2006 events and indicated 73% breaks not operated with 34% leases renewed, (Figures exclude cases where tenants relocated t
Slide 62: Lettings and space returned
Lettings and space returned year to 31 December 69% increase in lettings, net £17m new income By Area By Rent Lettings1 Space Lettings2 Space2 Returned Returned 2007 2006 2007 2006 2007 2007 UK: 000’s Sq M 000’s Sq M 000’s Sq M 000’s Sq M £M £M Lettings of new developments 88 38 Existing vacant 148
Slide 63: Excellent lettings performance – UK customers
Delivering on our strategy Excellent lettings performance & healthy occupier demand Customers in UK Location Sq M Rent pa £000’s Thales Crawley, UK 34,462 4,960 Character Options Heywood, UK 12,157 468 Eddie Stobart Heywood, UK 9,720 514 Interconnect Exchange Slough, UK 7,222 847 Savvis Slough, UK 5
Slide 64: Excellent lettings performance – Continental Europe customers
Delivering on our strategy Excellent lettings performance & healthy occupier demand Customers in Location Sq M Rent pa £000’s Continental Europe DHL Rumst, Belgium 42,433 1,221 Kuhne & Nagel Germany & Czech Republic 26,135 925 Canal Toys Marly La Ville, France 18,100 607 Pregis Silesia, Gliwice, Pol
Slide 65: EPRA adjustments
EPRA adjustments 2007 2006 £m £m Property gains (382.2) 397.5 Property gains in joint ventures 1.6 4.2 Gains/(losses) on derivatives 1.9 4.2 (377.8) 405.9 Tax on EPRA adjustments 4.0 320.0 Total EPRA adjustments (373.8) 725.9 64
Slide 66: Exceptional items
Exceptional items 2007 2006 £m £m Profit from the sale of Slough Heat and Power 7.7 - Debt repayment penalty on early US loan redemption (16.4) - Total exceptional items (8.7) - SIIC/REIT conversion charge (13.9) (81.9) Tax on exceptional items 6.7 (3.4) Exceptional items after tax (15.9) (85.3) 65
Slide 67: Profit Adjustments – Continuing Operations
Profit Adjustments – Continuing Operations 2007 2006 £m £m EPRA adjustments Property gains (382.2) 397.5 Property outgoings 0.9 - Property gains in joint ventures 1.6 4.2 Gains/(losses) on derivatives 1.9 4.2 Total (377.8) 405.9 SIIC/REIT conversion charge (13.9) (81.9) SIIC/REIT deferred tax revers
Slide 68: Net assets per share
Net assets per share As at 31 December 2007 2006 £m £m Equity attributable to ordinary shareholders 3,005.8 3,383.3 Less shares held by ESOP (16.8) (10.6) 2,989.0 3,372.7 Add back: Deferred tax on revaluations 31.9 182.4 Deferred tax on capital allowances 35.1 31.9 Other - 61.8 Diluted adjusted net
Slide 69: Triple Net NAV (NNNAV)
Triple Net NAV (NNNAV) As at 31 December 2007 £m p Diluted adjusted NAV 3,056.0 704 Fair value of debt, net of tax 44.9 10 Deferred tax on investment properties - In respect of capital allowance 35.1 (7) - In respect of revaluation surpluses 31.9 (8) Fair value on trading properties 74.3 17 Diluted
Slide 70: Taxation
Taxation 2007 2006 £m % £m % Underlying tax charge - Current 2.4 2 12.1 12 - Deferred (0.5) - 1.8 2 Total tax on adjusted profit before tax 1.9 1 13.9 14 SIIC/REIT conversion charge 13.9 81.9 SIIC/REIT deferred tax reversal (30.2) (416.1) Other deferred tax 12.3 14.2 Total tax charge (2.1) (306.1) 6
Slide 71: Deferred Tax Analysis
Deferred Tax Analysis 31 December 2007 UK Continental Total Europe Group £m £m £m Deferred tax in respect of - Capital allowances 0.1 37.3 37.4 - Revaluation surpluses 1.4 30.5 31.9 - Other timing differences (4.3) 0.4 (3.9) (2.8) 68.2 65.4 70
Slide 72: Capital expenditure analysis
Capital expenditure analysis Continuing operations only 2007 2006 £m £m Capital expenditure on investment & development properties Land purchases 74.8 11.2 Development expenditure 186.4 175.2 Acquisitions of income producing properties 423.6 158.6 684.8 345.0 Expenditure on trading properties 77.5 1
Slide 73: Translation Exposure
Translation Exposure 31 December 2007 £1,728 £1,503 £1,507 £m £1,288 £215 £225 £219 £221 £6 Euros US Dollars Total Assets Liabilities Net exposure Net exposure of £221m represents 7% of Group Net Assets 72
Slide 74: Recurring Interest Cover
Recurring Interest Cover* Twelve months to 31 December 2007 Interest £m Income £m Net borrowing cost 100.1 Net Rental Income 203.9 Add back capitalised 6.5 Property Trading 22.0 Deduct interest income (16.6) Admin Charge (34.5) JV Income 4.0 Recurring net interest cost 90.0 Recurring Income 195.4 Co
Slide 75: Analysis of Net Debt
Analysis of Net Debt As at 31 December 2007 2006 £m £m Bank loans and overdrafts 646.6 784.5 Bonds & long term unsecured loans 1,322.3 1,522.9 Mortgages & secured loans 80.2 77.1 Gross debt excluding preference shares 2,049.1 2,384.5 Cash balances (348.3) (161.4) Net debt excluding preference shares
Slide 76: Debt Analysis
Debt Analysis As at 31 December 2007 GROSS DEBT £2,049.4m Secured Bank Funding £80.2m Unsecured Bank Private Placements £36.8m Funding £646.6m 2% 4% 31% 63% Unsecured Bonds £1,285.8m 75
Slide 77: Basis of Reporting Adjustments – Key Definitions & Glossary
Basis of Reporting Adjustments Key Definitions & Glossary Adjusted earnings per share Dividend cover EPS based on adjusted profit before tax and excluding deferred tax on Adjusted earnings per share divided by the ordinary dividend per share. investment properties. Earnings per share (EPS) Adjusted
Slide 78: Basis of Reporting Adjustments – Key Definitions & Glossary
Basis of Reporting Adjustments Key Definitions & Glossary Hectares (ha) engaged in property investment activities and must meet certain ongoing qualifications. SEGRO plc and its UK subsidiaries have elected for REIT status The area of land measurement used in this report. The conversion factor from
Slide 79: Forward Looking Statements
Forward Looking Statements This presentation may contain certain forward-looking statements with respect to SEGRO’s expectations and plans, strategy, management’s objectives, future performance, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty