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GOODMAN GROUP Interim / Quarterly Report 2008

Mar 11, 2008

64998_rns_2008-03-11_d10e9fc6-ee15-461a-a53d-bf33c1ad451c.pdf

Interim / Quarterly Report

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12 March 2008

The Manager Company Notices Section Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Dear Sir

GOODMAN GROUP DISPATCH OF HALF YEAR REVIEW TO SECURITYHOLDERS

The attached Goodman Group Half Year Review for the half year ended 31 December 2007 and accompanying covering letter were dispatched to Securityholders today.

Yours faithfully

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Carl Bicego

Company Secretary

enc

Level 10, 60 Castlereagh Street Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444 | [email protected] | www.goodmanintl.com Goodman International Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621 as responsible entity for Goodman Industrial Trust ARSN 091 213 839

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12 March 2008

Dear Securityholder

GOODMAN GROUP (“GOODMAN”) HALF YEAR REVIEW 31 DECEMBER 2007

It is a pleasure to enclose Goodman’s Half Year Review 31 December 2007. The Review includes extracts from the interim financial statements. The Interim Financial Report dated 13 February 2008 should be read in its entirety and is available on our website at www.goodman.com.

For the half year, we delivered a profit after tax of $285 million, which includes operating income of $290 million. This represents distributable income of 17.5 cents per security. Over the period, we also increased assets under management by 3% to $38.1 billion and grew specialised business space under management by 8.2% to over $21 million (excluding Goodman Property Investors).

The recent volatile period in worldwide markets has impacted on the global property sector. However, the Group is well placed to withstand the volatility and grow its market share in the long-term. Our substantial global platform and integrated property investment, property services, property development and fund management businesses will continue to reinforce each other through economic cycles.

We remain on track to deliver our forecast growth in earnings per share of 8% for the full year.

Should you have any questions relating to the Half Year Review, please call our dedicated information line on 1300 723 040 (within Australia) or +61 3 9415 4043 (outside Australia) or visit our website at www.goodman.com.

Yours faithfully

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Gregory Goodman

GROUP CHIEF EXECUTIVE OFFICER

Level 10, 60 Castlereagh Street Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444 | [email protected] | www.goodmanintl.com Goodman International Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621 as responsible entity for Goodman Industrial Trust ARSN 091 213 839

Goodman Group

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11% growth in operating earnings per security

$284.9m net profit after tax 8% increase in distribution per security

$21.1b business space assets under management

$1.2b of new developments completed 1,390 people worldwide

  • 1 Securityholder Highlights

  • 2 Group Chief Executive Officer’s Report

  • 6 Regional View

  • 8 Extracts from Interim Financial Statements

  • 8 – Interim Income Statement

  • 9 – Interim Balance Sheet

  • 12 Other Managed Funds IBC Corporate Directory

  • 10 – Interim Statement of Recognised Income and Expense

  • 11 – Interim Cash Flow Statement

Goodman’s diverse portfolio of industrial property and business space, combined with our global leadership in property services, property development and fund management, enables us to deliver long-term, quality results. Our integrated approach to owning, developing and managing property remains the foundation of our success.

Securityholder Highlights
For the half year endedear ended xxxxxx31 Dec 31 0731 Dec 2007 31 Dec31 Dec 2006
Adjusted earnings per security(1)(¢) 17.47 15.75
Distribution per security (¢) 17.00 15.75
Payout ratio (%) 97.3 100.0
As at 31 Dec 2007 30 Jun 2007
Total assets ($M) 9,605.2 9,169.3
Gearing (%) 40.9 41.6
Net tangible assets per security ($) 1.92 1.93
Securities on issue (M) 1,715.5 1,692.7
Market capitalisation ($M) 8,389 11,375

(1) Adjusted earnings per security excludes unrealised gains on property revaluations, mark to market of derivatives and other non-cash adjustments.

1

long-term + focus consistent strategy

Group Chief Executive Officer’s Report Gregory Goodman

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For the half year ended 31 December 2007, Goodman Group delivered a profit after tax of $285 million, including operating income of $290 million. This equates to distributable income of 17.5 cents per security. It is a solid indicator of a strong full year result and the Group’s ability to meet its projected growth in earnings per security of 8%.

These half year results demonstrate the strength of our business model and the diverse platform across regions. For the half year, approximately 78% of the Group’s earnings came from Asia Pacific with the balance being contributed by Europe.

In this period, the Group’s total assets under management grew 3% to $38.1 billion. Our specialist business space under management increased 8.2% to over $21 billion (excluding Goodman Property Investors (GPI)). We commenced $1.5 billion of new property developments; 61% of them within our funds.

During the half year, Goodman secured a new $835 million five year debt facility and closed the Goodman PLUS hybrid issue. Since balance date, the Group has also entered into two new facilities for a total of $1.3 billion. These activities provide cover for maturing facilities and new sources of flexible capital.

It has been a volatile period for markets worldwide and the global property sector has felt the impact of the uncertainty. Direct real estate markets are largely unaffected with the exception of the United Kingdom, where values have fallen 10% on average. The Group is well placed to withstand the volatility and grow its market share in the long-term.

Business space assets under management

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Japan New Zealand
$1.3 billion $1.3 billion
China/
Hong Kong Singapore
$1.2 billion $2.7 billion
Australia
$6.5 billion
Europe
$8.1 billion
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Goodman’s financial strength comes from the diversity of its geographic markets and revenue sources. Approximately 80% of our income is derived from recurring sources such as management fees and property rentals. The Group’s current gearing was reduced to 40.9% as at 31 December 2007.

2

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Group Operations

This half year period saw strong results across all our business units and continued activity across the Group’s property investment, property services, property development and fund management divisions.

Earnings by business segment

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Property Management
development services
21% 27%
Property
investments
52%
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Property Investment

Goodman’s property investment portfolio grew by $0.5 billion to $5.8 billion. This portfolio includes direct property investments, warehoused assets and cornerstone investments in our existing managed funds.

The direct property investments continue to perform well across all key performance indicators. The occupancy rate remained high at 97% and the weighted average lease expiry remained strong at 4.8 years. Our commitment to building long-term customer relationships is demonstrated by a retention rate of 71%.

Our top customers are leaders in their respective industries, including Coles, DHL, Linfox, T-Mobile, Toll and Verizon.

We are building a strong portfolio of warehoused assets to help facilitate our development of managed funds in China, Japan and Europe.

Property Services

Goodman’s property services division manages more than 13 million sqm of industrial property and business space around the world. Our staff meet the day-to-day needs of around 1,900 customers by delivering everything from fit-out and facilities management to accommodation services.

Our proactive approach to property management has seen an average rental growth of 3.2%.

We are continuing to work with our customers globally to improve the environmental performance of our properties in line with Goodman’s sustainability policies. In Australia, we are in the process of undertaking an Australian Building Greenhouse Rating of our entire commercial portfolio. This review will look at the portfolio’s overall energy performance and enable us to benchmark it for future energy improvement.

Total property investments

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Cornerstone
investments
39%
Warehoused
assets
13%
Direct property
investments
48%
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3

Group Chief Executive Officer’s Report (continued)

Property Development

Goodman’s property development work underpins its property investment, property services and fund management businesses. As long-term owners of our assets, we are committed to developing and maintaining them to the highest standards. We aim to deliver competitive returns from investments and attractive premises for our customers.

We completed a 55,000 sqm purpose-built distribution centre for DHL in Kangqiao, Shanghai. In Europe, we commenced work on an 80,000 sqm logistics facility worth more than $200 million for liquor distributor Constellation. We are also developing properties for repeat customers Bosch-Siemens in Germany and Nissin in Poland.

Customers are showing increasing interest in improving the environmental performance of the properties they occupy. Goodman’s property development and management teams work with customers to achieve these goals and perform in line with Goodman’s sustainability policies. Talavera Corporate Centre in North Ryde won the New South Wales Urban Taskforce’s 2007 Development Excellence Award, with the judges commending its use of environmental best practices and for enabling jobs to be provided closer to people’s homes.

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customer
manage+
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n v
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w l
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+
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Fund Management

Goodman’s New Zealand listed fund, Goodman Property Trust (GMT), purchased a 50% interest in the Highbrook development project, which has an end value of $1.1 billion. In order to fund this acquisition, GMT successfully completed a $242 million equity raising from New Zealand public and global institutions. GMT is now the largest listed property trust in New Zealand and eligible for inclusion in the NZX Top 10 Index for the first time.

Goodman continues to invest in its fund management business, which represents a strong growth opportunity. Our total assets under management grew 3% to $38.1 billion, comprising $25.1 billion in Europe and $13 billion in Asia Pacific.

This half year saw significant movements in the Group’s European managed funds. The Goodman European Logistics Fund (GELF) merged with Celogix, giving the fund combined assets worth $1.6 billion and the capacity to increase to $2.3 billion. GELF now has 56 properties under management.

Completed developments

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2008 [(1) ] 1,156
2007 1,230
2006 512
2005 240
2004 192
2003 168
sqm (000) 0 250 500 750 1,000
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(1) Six months to December 2007.

In the UK, a combination of improved energy efficiency and utilisation of renewable energy at Gemini Business Park and Dagenham’s Closed Loop Recycling Facility have resulted in the reduction of potential operational energy related to greenhouse gas emissions by between 35% and 50%.

4

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Goodman Property Investors

GPI is one of the UK’s leading property investment and services providers, with $17 billion in funds under management. During the period, it received new mandates totalling $1.7 billion.

Eurozone Fund of Funds, launched in 2006 and comprising investments in a number of euro denominated specialist sector focused funds, raised over $438.5 million. This came from 23 investors, including predominantly UK and Continental European pension funds.

We were delighted when GPI’s Two Rivers Limited Partnership won the UK Specialist Fund of the Year Award at the EuroProperty Investment Awards 2007.

Capital Management

The Group continues to responsibly manage capital and risk to enable the ongoing execution of our business strategy. Goodman’s approach to raising equity remains conservative for the listed property sector and in the current half year we took steps to further reduce our gearing.

We have firmed up our capital position and started to take advantage of the new avenues available to us since switching our credit from secured to unsecured in the 2007 financial year.

This has provided greater flexibility to proactively manage debt and equity. During the period, the Group secured a new $835 million debt facility for a term of five years, and more recently two new facilities for $1.3 billion.

The Group closed the Goodman PLUS hybrid offering with approximately $327 million in demand. This is our first debt capital markets issue and does not dilute ordinary Securityholders. It also reduced the Group’s gearing to 40.9%. The Group retained its credit ratings of Baa1 from Moody’s and BBB+ from Standard & Poor’s.

Outlook

We believe the business is strongly positioned operationally and financially. Over the past few years we have developed a substantial global platform and our integrated property investment, property services, property development and fund management businesses continue to reinforce each other through economic cycles.

The increasing geographic diversity of our investments will minimise the effect of fluctuations in individual markets and give us a range of options to offer our existing customers when they want to expand their operations.

We have continued to focus on developing income from recurring forms of revenue, which gives us strong, lasting organic growth streams. With these platforms in place, we are confident in meeting our forecast of 8% growth in earnings per security for the full year.

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Gregory Goodman Group Chief Executive Officer

5

Regional View

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  • global scale local expertise

6

Office Locations

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Adelaide Amsterdam Auckland Barcelona Birmingham Brisbane Brussels Budapest Christchurch Eindhoven Fukuoka Glasgow Hamburg Hong Kong Istanbul Langenfeld London Luxembourg Madrid Melbourne Milan Munich Nagoya New York[(1)] Osaka Paris Perth Prague Reading Shanghai Singapore Sydney Tokyo Warsaw

Business Space
Asia Pacifc
Business Space
Europe
GPI
Total
Total assets under management ($B)
$13.0
$8.1
$17.0
$38.1
Number of funds
6
4
34
(2)
44
Number of investors in business space
focused funds(3),(4)
803
29
832
Number of business space properties
321
164
244

(1) Representative office only. (2) Includes mandates and funds. (3) For listed funds only includes number of benefical investors with more than 50,000 units. (4) Goodman Property Trust as at 30 September 2007. (5) This figure is the total number of Goodman customers globally. Customers with a presence in Europe and Asia Pacific are counted in the figure of each region. (6) This includes employees of Macquarie Goodman Asia Hong Kong (MGA), Ascendas MGM Joint Venture (in which Goodman Group holds a 40% interest) and employees of J-Rep (in which MGA, a Joint Venture between Goodman Group and Macquarie Group, holds a 53% interest).

7

Extracts from Interim Financial Statements

Extracts from the interim financial statements have been provided for your convenience. The Interim Financial Report dated 13 February 2008 was lodged with the Australian Securities Exchange and Australian Securities & Investments Commission and is available on our website at www.goodman.com. You should read the interim financial statements and accompanying notes in their entirety.

Interim Income Statement

Consolidated
For the half year ended 31 Dec 2007 31 Dec 2006
$M $M
Revenue
Gross property income 167.8 200.2
Fund management 87.8 55.8
Property services 37.1 30.4
Development management 138.1 170.5
Dividends/distributions from investments 16.8 10.8
447.6 467.7
Property and Development Expenses
Property expenses (29.8) (33.6)
Development expenses (110.0) (144.3)
(139.8) (177.9)
Other Income
Net gain from fair value adjustments on investment properties 54.6 31.1
Net gain on disposal of investment properties 81.7 20.2
Net gain on disposal of controlled entities 67.4 79.8
Share of net results of equityaccounted investments (9.3) 31.6
194.4 162.7
Other Expenses
Employee expenses (80.0) (36.2)
Administrative and other expenses (55.0) (46.6)
(135.0) (82.8)
Earnings before interest and tax 367.2 369.7
Financing Costs
Financial income 5.7 2.6
Financial expenses (70.3) (53.6)
Net fnancingcosts (64.6) (51.0)
Proft before income tax 302.6 318.7
Income tax expense (16.2) (16.0)
Proft for the halfyear 286.4 302.7
Proft/(loss) attributable to Shareholders 7.0 (1.7)
Proft attributable to Unitholders 277.9 304.2
Proft attributable to Securityholders 284.9 302.5
Proft attributable to other minorityinterests 1.5 0.2
Proft for the halfyear 286.4 302.7

8

Interim Balance Sheet

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Consolidated
As at 31 Dec 2007 30 Jun 2007
$M $M
Current Assets
Cash 160.2 81.8
Receivables 453.7 815.5
Inventories 7.5 20.6
Current tax receivables 1.0 6.0
Other assets 145.8 61.5
Total current assets 768.2 985.4
Non-current Assets
Receivables 46.5 7.1
Investment properties 5,159.3 5,360.0
Inventories 13.7 8.1
Investments accounted for using the equity method 1,794.3 1,092.1
Deferred tax assets 10.7 6.5
Other financial assets 467.3 407.0
Property, plant and equipment 22.4 21.3
Intangible assets 1,322.8 1,281.8
Total non-current assets 8,837.0 8,183.9
Total assets 9,605.2 9,169.3
Current Liabilities
Payables 282.0 324.6
Current tax payables 46.2 37.5
Interest bearing liabilities 1,699.4 2,276.6
Provisions 169.2 143.0
Total current liabilities 2,196.8 2,781.7
Non-current Liabilities
Payables 25.9 105.3
Interest bearing liabilities 2,327.4 1,585.0
Deferred tax liabilities 83.4 96.2
Provisions 25.8 22.9
Total non-current liabilities 2,462.5 1,809.4
Total liabilities 4,659.3 4,591.1
Net assets 4,945.9 4,578.2
Equity Attributable to Shareholders
Issued capital 192.3 178.9
Reserves 89.5 126.9
Accumulated losses (25.0) (57.4)
Total equity attributable to Shareholders 256.8 248.4
Minority Interests
Equity Attributable to Unitholders
Issued capital 4,122.6 3,993.2
Reserves 216.0 254.9
Retained earnings 28.0 58.0
Total equity attributable to Unitholders 4,366.6 4,306.1
Other minority interests 322.5 23.7
Total equity 4,945.9 4,578.2
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9

Extracts from Interim Financial Statements (continued)

Interim Statement of Recognised Income and Expense

Interim Statement of Recognised Income and Expense
Consolidated
For the half year ended 31 Dec 2007 31 Dec 2006
$M $M
Amounts Recognised Directly in Equity, Net of Tax
Effect of foreign currency translation 5.8 (0.5)
Cash fow hedges:
– Losses taken directly to equity (78.3) (4.6)
– Losses transferred to Income Statement 4.7
Change in fair value of available-for-sale equitysecurities(net of deterred tax) (15.8) 38.8
Net income recognised directlyin equity (88.3) 38.4
Proft for the half year 286.4 302.7
Total recognised income and expense 198.1 341.1
Attributable to:
– Securityholders 196.6 340.9
– Other minority interests 1.5 0.2
Total recognised income and expense 198.1 341.1

10

Interim Cash Flow Statement

Consolidated
For the half year ended 31 Dec 2007 31 Dec 2006
$M $M
Cash Flows from Operating Activities
Property income received 186.6 218.5
Other cash receipts from services provided 185.8 262.4
Property expenses paid (17.5) (66.1)
Other cash payments in the course of operations (168.7) (228.9)
Dividends/distributions received 39.5 31.9
Interest received 5.7 2.2
Finance costs paid (55.1) (33.2)
Income taxespaid(net of refunds) (11.7) (12.9)
Net cashprovided byoperatingactivities 164.6 173.9
Cash Flows from Investing Activities
Proceeds from sale of controlled entities (net of cash disposed)
Proceeds from sale of equity investments (net of cash disposed)
Proceeds from deferred settlement and sale of investment properties
Payments for intangible assets
Payments for acquisition of controlled entities (net of cash acquired)
119.4
153.6
1,288.4
(11.9)
(176.1)

145.6
398.1

(341.1)
Payments for equity investments (846.3) (565.8)
Payments for investment properties (977.2) (512.5)
Payments for property, plant and equipment (4.2)
(0.8)
Net cash used in investingactivities (454.3) (876.5)
Cash Flows from Financing Activities
Proceeds from issue of securities
Proceeds from issue of Goodman PLUS hybrid securities
Loans (to)/from related entities
Proceeds from borrowings
Repayments of borrowings
16.9
326.8
(45.8)
2,550.0
(2,334.5)
212.5

24.4
2,539.6
(1,818.3)
Dividends and distributionspaid (145.3) (235.0)
Net cashprovided byfnancingactivities 368.1 723.2
Net increase in cash held
Cash at the beginningof the halfyear
78.4
81.8
20.6
23.3
Cash at the end of the halfyear 160.2 43.9

11

Other Managed Funds

Listed Property Funds
Goodman Property Trust(1)
Sector Business/Industrial
Number of properties 27
Total assets $1.1 billion
Unit price $1.33
NZX code GMT
Ascendas Real Estate Investment Trust(2)
Sector Business/Industrial/Logistics
Number of properties 79
Total assets $2.7 billion
Unit price $1.95
SGX code Ascendasreit
Unlisted Property Funds
Goodman Australia Industrial Fund
Sector Industrial
Number of properties 102(3)
Total assets $3.2 billion
Macquarie Goodman Hong Kong Logistics Fund
Sector Logistics
Number of properties 17
Total assets $1.1 billion
Goodman European Logistics Fund
Sector Logistics
Number of properties 56
Total assets $1.6 billion
Other
Europe/UK Wholesale
Sector Business
Number of funds 3
Number of properties 61
Total assets $4.8 billion
Goodman Property Investors
Sector Diversifed
Number of funds 34
Number of business space properties 244
Total assets $17 billion

(1) Listed on the New Zealand Exchange and based on Goodman Property Trust’s results for the half year ended 30 September 2007. However, its total assets increased to $1.3 billion as at 31 December 2007.

(2) Listed on the Singapore Exchange and based on results for the quarter ended 31 December 2007. Managed by Ascendas-MGM Funds Management Limited, which is a 60/40 joint venture between Ascendas Land (Singapore) Pte Ltd and Goodman Group.

(3) Including development properties.

For more information on Goodman Group’s products, please visit www.goodman.com, call 1300 791 100 or email us at [email protected]. For Ascendas Real Estate Investment Trust, please visit www.a-reit.com.

12

Corporate Directory

Goodman Group

Goodman International Limited

ABN 69 000 123 071

Goodman Industrial Trust

ARSN 091 213 839

Responsible Entity

Goodman Funds Management Limited ABN 48 067 796 641; AFSL Number 223621

Offices

Registered Office

Level 10 60 Castlereagh Street Sydney NSW 2000 Australia

GPO Box 4703 Sydney NSW 2001

Telephone 1300 791 100 (within Australia) +61 2 9230 7400 (outside Australia) Facsimile +61 2 9230 7444 Email [email protected] Website www.goodman.com

Other Offices Adelaide Eindhoven Madrid Prague Amsterdam Fukuoka Melbourne Reading Auckland Glasgow Milan Shanghai Barcelona Hamburg Munich Singapore Birmingham Hong Kong Nagoya Tokyo Brisbane Istanbul New York[(1) ] Warsaw Brussels Langenfeld Osaka Budapest London Paris Christchurch Luxembourg Perth

Security Registrar

Computershare Investor Services Pty Limited

Level 5 115 Grenfell Street Adelaide SA 5000

GPO Box 1903 Adelaide SA 5001

Telephone 1300 723 040 (within Australia) +61 3 9415 4000 (outside Australia) Facsimile +61 8 8236 2305 Email [email protected] Website www.computershare.com

Custodians

Trust Company Limited 35 Clarence Street Sydney NSW 2000

Perpetual Trustee Company Limited 123 Pitt Street Sydney NSW 2000

Auditor

KPMG

10 Shelley Street Sydney NSW 2000

ASX Code

GMG

(1) Representative office only.

Directors

Mr David S Clarke, AO Chairman Mr Gregory Goodman Group Chief Executive Officer Mr Ian Ferrier, AM Independent Director Mr Patrick Goodman Non-Executive Director Ms Diane Grady Independent Director Mr John Harkness Independent Director Mr James Hodgkinson Non-Executive Director Ms Anne Keating Independent Director Mr James Sloman, OAM Independent Director

Company Secretary

Mr Carl Bicego

This Half Year Review for the half year ended 31 December 2007 has been prepared by Goodman Group (Goodman International Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as responsible entity for Goodman Industrial Trust (ARSN 091 213 839) and their controlled entities). The details in this Half Year Review provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision relating to your financial needs. This Half Year Review is not an offer or invitation for subscription or purchase of securities or other financial products. This Half Year Review does not constitute an offer of securities in the United States. Securities may not be offered or sold in the United States unless they are registered under the US Securities Act of 1933 or an exemption from registration is available. Past performance is no indication of future performance. All values are expressed in Australian currency for the half year ended or as at 31 December 2007, unless otherwise stated. March 2008.

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www.goodman.com