American Financial Group Inc (AFG) 2006 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the American Financial Group 2006 fourth quarter and year-end results conference call. [OPERATOR INSTRUCTIONS] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to your host, Mr. Keith Jensen, Senior Vice President. Please proceed, sir.

Thank you. I'm here with Carl Lindner III, and Craig Lindner, co-CEO's of American Financial Group. I'm pleased to welcome you to American Financial Group's 2006 fourth quarter and full year earnings results conference call. If you're viewing the webcast from our website you can follow along with the slide presentation if you'd like. Certain statements made during this call are not historical facts and may be considered forward-looking statements and are based on estimates, assumptions, and projections, which management believes are reasonable, but by their nature subject to risk and uncertainty.

The factors that could cause actual results to differ materially from those suggested by forward-looking statements include but are not limited those discussed or identified from time to time in AFG's filings with the Securities and Exchange Commission, including the annual report on Form 10-K and the quarterly report on Form 10-Q. We do not undertake to update such forward-looking statements to reflect actual results or changes in assumptions or other factors that could affect these statements.

Core net operating earnings is a non-GAAP financial measure, which sets aside items that are not considered to be part of ongoing operations such as net realized gains or losses on investments, the effects of accounting changes, discontinued operations, and certain non-recurring items. AFG believes it is useful tool for investors and analysts in analyzing ongoing operating trends and as such, core operating earnings for various periods will be discussed during this call. Including the results of Great American Financial Resources, our 81% owned subsidiary listed on the New York Stock Exchange. A reconciliation of net earnings to core net operating earnings is included in our earnings release. Now I'm pleased to turn the call over to Carl Lindner III co-Chief Executive Officer of American Financial Group.

Good afternoon and thank you for joining us. This morning, we released the 2006 fourth quarter and full year results for American Financial Group as well as for our 81% owned subsidiary, Great American Financial Resources. I'd like to cover some 2006 highlights. You can refer to slide three and four of the webcast. 2006 was a record year for American Financial Group. Our outstanding results reflect continuing execution of our long term strategy and our consistent focus on financial and pricing discipline, profitable growth, and on our investment expertise. AFG ended 2006 in the strongest financial condition in its history. We shared this success with our shareholders through a 9% increase in the 2007 common stock dividend. This action, plus our three for two stock split effective in December of 2006 reflect our competence in the Company's long term business and financial outlook.

AFG's shareholder value grew substantially during 2006, exceeding the excellent trend we experienced over the past several years. AFG's stock price plus dividends appreciated 43% in 2006 and over the past four years, its annual compounded growth rate was 25%. We're very pleased with this growth in shareholder value and the market's recognition of the Company's achievements. In fact, AFG's performance was recently recognized by Forbes as one of the top 400 top performing big public companies in 2006. We're very proud of our financial accomplishments in 2006. Our record net earnings of $3.75 per share were more than double 2005's earnings. Record core net operating earnings of $3.14 per share were up 26% compared to 2005.

Underwriting profits in the Specialty, Property, and Casualty operations reached all-time highs, 55% higher than 2005. The 2005 results were dampened by hurricane losses but our growth in underwriting profits was 24%, even when those losses are excluded. Property Casualty groups, investment income grew 13% over 2005 resulting from strong cash flow and higher investment yield. The core net operating earnings reported by Great American Financial Resources increased 24% and statutory premiums grew to record levels.

We completed several lucrative Real Estate sales, generating after-tax gains of $55 million, including the previously announced fourth quarter sale of certain New York Real Estate assets for an after-tax gain of approximately $29 million. Book value per share, excluding unrealized gains on fixed maturities, was 19% above year-end 2005. We continued to have unrecognized pre-tax gains estimated at 110 to $155 million related to our Real Estate holdings. Our 2006 fourth quarter core net operating earnings per share of $0.85 were 15% above the 2005 period.

Now, if you turn to slide five, I'd like to cover some 2006 highlights of the overall Property and Casualty Specialty operations. During the 2006 fourth quarter, gross written premiums increased modestly reflecting the impact of continuing rate declines in the California worker's comp operation, which were largely offset by targeted growth in Property and Transportation, and Specialty Financial Group. Net written premiums were up 9%, however, resulting from increased premium retention. Underwriting profit in the 2006 fourth quarter was up 54% compared to the 2005 fourth quarter, and the combined ratio improved 4.3 points. The 2006 quarter was not affected by any catastrophe losses whereas the same quarter last year included 1.9 points, primarily hurricane losses. The 2006 results also benefited from about $10 million or 1.5 points of favorable deserve development compared to about $4 million or 0.7 points in the 2005 period. For the year, underwriting profit was up 55% compared to 2005 with a 3.7 point improvement in the combined ratio. These results reflect the impact of our premium growth, rate adequacy in most of our businesses, lower catastrophe losses, and favorable reserve development of about $61 million or 2.4 points.

Now I'd like to review the results for each of our Specialty business groups on slides six and seven. The Property and Transportation Group produced outstanding growth and profitability during 2006. Net written premiums for the fourth quarter and full year were 14% above each of the same 2005 periods. The premium growth in the fourth quarter was driven primarily by new insurance programs in our 53% owned subsidiary, National Interstate, and new business volume in the Property and Inland Marine Operations. These items as well as additional crop premiums from Farmers Crop Insurance Alliance which we acquired in 2005 contributed to the full year's growth.

This Group's 2006 fourth quarter combined ratio was higher than the same period a year ago, primarily due to lower underwriting results in our trucking operations and higher losses in our run-off home builders operation. Even though the freezing weather conditions affecting the California citrus industry occurred in the 2007 first quarter, the Crop business was required by accounting rules to record $13 million of the estimated $18 million of losses in the 2006 fourth quarter. The Group's underwriting profit for the year was 20% higher than 2005. Higher favorable reserve development and additional profits from Farmers Crop Insurance Alliance contributed to a record year for the crop operation. Strong earned premium growth and higher favorable prior year reserve development in most of the Group's other businesses as well as lower catastrophe losses also contributed to these improved results. The rate increase for the Group averaged about 2% -- plus 2% for the year.

Our Specialty Casualty Group experienced significant improvement in its underwriting profitability and solid net written premium growth in 2006. Even though the combined ratio for the 2006 fourth quarter was about the same as in the 2005 fourth quarter, the underwriting profit was 14% higher reflecting the impact of higher earned premiums. The combined ratio for the year improved 6.4 points. The 2006 results benefited from $10 million or 1.2 points of favorable reserve development as opposed to nearly $30 million or 4 points of unfavorable development in 2005. Prior year reserve development improved in nearly all lines in this group, with the primary drivers being the excess in surplus, general liability, and the executive and professional liability operations.

Gross written premiums were impacted by volume reductions in the excess and surplus lines due to softer pricing as well as stronger competition in several of the primary casualty operations. Net written premiums for the fourth quarter and year increased 10% and 13% over the 2005 periods reflecting higher premium retention in several of our businesses. The average rate for the overall group remains stable in 2006. The Specialty Financial Group reported a lower underwriting loss for the 2006 fourth quarter and year compared to the 2005 period. The 2005 results included a fourth quarter $45 million charge associated with one RBI customer. The 2006 losses continue to be driven by worse than expected results in the automobile residual value business that's in run-off. The RBI losses reflected a decrease in used car sales prices for luxury cars and SUV's. So excluding the effect of the RBI business, the combined ratio for 2006 was 88.7%. All other businesses in this group continue to generate solid underwriting profits.

The increase in premiums in this group continues to be driven largely by the surety, financial institutions, and certain of the lender services operations. Rates in this group were down slightly in 2006 primarily due to lower pricing in the trade credit operations. Our California workers comp business continued its outstanding profitability in 2006. The increases in the combined ratios for the 2006 fourth quarter and year reflect the impact of significant rate reductions which averaged about 30% for the quarter and for the year. These reductions are responses to the improving claims environment that resulted from reform in the California worker's comp laws. We're pleased that the reforms are working to decrease the overall cost of workers comp to the California economy.

The business has continued to benefit from favorable prior year reserve development, reflecting th evolving positive effects of reform over the last several years. 2006 included $20.2 million of favorable development versus $24.4 million in 2005. Due to long tail nature of this business, we'll continue to be conservative in our reserving until a higher percentage of claims have been paid and the full impact of reforms can be determined. Net written premiums declined 18% and 17% for the 2006 3 and 12 month period.

Now let's review our Annuity and Supplemental Insurance Group managed by Great American Financial Resources as shown on slide eight. Statutory premiums for the 2006 fourth quarter were nearly double those in the 2005 fourth quarter, reflecting significantly higher fixed indexed annuity premium. We reentered that market in the second quarter of 2005 and experienced significant growth since then. Excluding the effect of $100 million of fixed annuities transferred to us in the first quarter of 2005 from policyholders of an unaffiliated company in rehab, 2006 premiums were up 65% over 2005 due to higher sales of fixed indexed annuities and 403-B annuities.

Core net operating earnings from continuing operations for the 2006 3 and 12 month periods as reported in Great American Financial Resources earnings release are 22% and 24% above the comparable prior year period. The increase for the quarter is due primarily to recent acquisitions including the Cirrus Group purchased in August. The full year increase reflects the improvements in the fixed annuity operation resulting from a recent acquisition and higher Real Estate income, primarily from a one-time payment on our Palm Beach Marina, higher earnings in the life operations resulting from an improvement in mortality experiences and lower expenses in that operation, plus earnings from the recently acquired Cirrus and earnings from the proceeds received in connection with the first quarter sale of a Puerto Rican sub.

These items were partly offset by an earnings decrease in the supplemental insurance operations resulting from the effect of lower first year premiums, higher lapses and higher loss experience. The strategic purchase of the Cirrus Group made us a major player in the Medicare Supplement market and expanded our distribution network. Integration of Cirrus has been proceeded well and we've been pleased with the performance of these operations.

Now let's turn to slide nine. Our overwriting goal is to increase long term shareholder value by using our strong balance sheet and excess capital to intelligently expand our businesses. On slide nine, we've outlined important aspects of our strategy that we believe will be drivers for the future and allow us to achieve that goal. Our operational focus on specialty niche markets within the Property and Casualty, Annuity, and Supplemental Insurance industries will continue. Over the last year or so, we've completed several acquisitions and continue to look for additional opportunities that support this strategy. We're also pursuing internal growth opportunities for our existing Specialty Insurance businesses, in particular within the Transportation and Inland Marine Operations and for our annuity operations.

We remain committed to our strong underwriting culture, pricing discipline, and risk management philosophy. These are important factors to our success in producing strong underwriting results that are outperforming the industry over a long period of time. We'll nurture relationship-based distribution networks that will result in strong and lasting partnerships and contribute to business retention and continuity. We'll leverage our investing expertise to achieve investment returns that will continue to outperform the market. Our long term objective is to achieve returns on equity between 12 and 15%, along with consistent growth in book value. We plan to maintain our strong balance sheet.

At AFG, we're enthusiastic about this year. Our expectations for 2007 are outlined on slide ten. Property and Casualty Specialty operations should generate net written premium growth in the range of 4 to 7% while maintaining a stable combined ratio, and its investment income is projected to increase between 4 to 6%. Excluding the California workers comp business, our expectation is that rates in our overall specialty operations will hold steady or decline slightly as some of our markets become increasingly competitive.

We expect continued double digit growth in the Property and Transportation Group, fueled primarily by improved geographic penetration by our Property in Inland Marine Operations. Additionally, we're planning to expand our trucking program to include liability for owner Operators and coverage for small fleets. That's businesses with one to five trucks. This group should also maintain its excellent underwriting track record. We expect the Specialty Casualty Group's underwriting margins to remain strong and premiums to be flat or increase slightly over 2006 levels. The underwriting margins of the non-residual value insurance businesses and the Specialty Financial Group should remain strong and the overall premiums expected to grow modestly. We expect the results of our run-off residual value business to improve.

This is the last year in which there are meaningful number of cars with expiring leases. The ultimate outcome of these contracts is dependent on fluctuations in the selling prices of used cars. We do expect this overall group though to achieve an underwriting profit in 2007. The effect of 2006 filed rate changes in the California workers comp group should resulted in overall rate decrease of approximately 14% of net business in 2007. As a result, we anticipate that this group's 2007 premiums will decline in excess of 10%. Combined ratio is expected to increase somewhat but should be in the mid 80s or below still producing excellent returns.

We previously announced our intent to perform a rigorous ground up review of our asbestos and environmental exposures every other year. Accordingly, we will perform such a study during 2007. We continue to observe the movement of offshore entities in the primary insurance. Over the long term, these tax advantaged riders are of concern. We're working with other domestic insurers to promote an equitable solution to this issue.

As far as our annuity and supplemental group, we expect the businesses within this group to produce strong results and the premium momentum will continue. We are working on several product and distribution initiatives that should help our premium growth in 2007. We'll continue to seek opportunities to profitably employ our excess capital. We're considering expansion of existing lines of business as well as targeted acquisitions. Later in the year, we anticipate examining our dividend levels as well. As previously announced, we're projecting AFG's 2007 core net operating earnings to be between $3.23 and $3.43 per share. The high end of AFG's earning range assumes that some excess capital will be put to work to expand our businesses profitably. These expected earnings exclude the potential for significant catastrophe and crop losses, adjustments to asbestos environmental reserves and large Real Estate gains. Now we would like to open the lines for any questions anybody has.

[OPERATOR INSTRUCTIONS] Your first question is from the line of Charlie Gates with Credit Suisse.

Hi, congratulations on a great quarter, guys.

Thank you.

A couple of questions. I guess question number one: I think Carl, in your remarks, you indicated that fourth quarter results were reduced by $13 million of crop losses, though basically, the problem didn't occur until '07? Did I get that right?

You did, Charlie, this is Keith. What that generates from is what we call a premium deficiency, a consideration. We looked at what the total premium was that we had related to the California crops and compared that against what the known losses were and concluded with the concurrence of our auditors that the premium deficiency reserve of 13 million needed to be set up.

Okay. The second question, when would you logically expect the review of asbestos environmental liability reserves to be completed?

I guess we're probably thinking that it could be somewhere towards the end of the second quarter or into the third quarter.

Correct.

Somewhere in that area.

My third question, could you speak to competition in your Specialty Casualty segment and in answering question, to what extent do you see shift from the excess in surplus lines market to the standard market?

Certainly. Let me just say to start with, most of our markets remain competitive. This past year, when you, in our Specialty Casualty segment, our overall rates were very stable. In fact, probably up a percent, so we were pleased with how we finished out our pricing there for the year, and really looking into this next year, we probably expect our Specialty Casualty rate to be down slightly. As you kind of implied, there's quite a bit of competition for the excess in surplus lines business, with some of that moving. Our business is down as others is, so other parts of our business in Specialty Casualty, our mid-continent, home builders business and other parts of our general liability business continue to grow some, so each part of the business is a little bit different.

I think you're right. It's really in the umbrella and the excess in surplus lines where we see probably the most competitive pricing activity happening, and generally the market on larger accounts and reaching down to some mid-level accounts, we're not as big a large account rider as many, so we're not seeing that quite as much.

Carl, if you were to go back through history, what period of time was similar to this from a competitive standpoint with regard to excess and surplus lines in your Casualty business?

Well, I think -- any of the last couple of cycles would have been similar, except this seems to be or it don't seem to be as dramatic pressure through this cycle and it probably continues to be interest rates continuing to be as low as they are, particularly if you look back compared to some other cycles.

Thank you.

Your next question is from the line of John Gwynn with Morgan Keegan.

Craig, this question might be for you. PNC, net investment income was up almost 13% for the year but only a little over 8% for the fourth quarter. Does that reflect a change in short-term balances or whatever?

John, the mix of the portfolio didn't change a lot. Honestly, I would have to go take a close look at that. The mix of the portfolio stayed pretty much the same. We did invest a little bit more, John, during the year. We did increase our investment in common stock, so that would have had some impact on that number, although not of the magnitude that you just described.

Okay, I'll get back to you later on that.

Okay, we did take common stock holdings up I think 150 or 200 million, something in that neighborhood in total for the consolidated portfolio during the year.

Okay. Carl, would you comment on -- it appeared that the Specialty Financial and your Property Transportation books had a spike in the expense ratio during the fourth quarter. Is there anything unusual going on there?

The expense ratio can particularly in those segments can kind of move up and down quarter by quarter, and I don't, Keith, are you aware of any kind of unusual thing going on in this quarter?

I'm not. I think it's probably just a matter of the mix of premium that was written during the quarter.

Okay, and Keith, the pace of levering on your supplement, you showed the regulars dividend capacity, and is that a prospective if the 484 , what you can pay in--?

That's what we would look to in '07, John.

Okay, good. And Keith, your California crop exposure is about 20 million roughly in premium in '05. Was that about what it was in '06?

It was roughly in the same ballpark. That didn't move much at all.

Okay.

John that was probably the worst event, worst frost in 20 years.

Right. Keith, by your reckoning, what is your debt-to-capital ratio at the end of '06?

It's about 22%.

22?

Yes. Okay. And that would not include the unrealized fixed incomes in the shareholders equity.

Right, right. And Keith, you didn't figure out a way to get Barbero in under that deficiency reserve, did you?

Actually as a practical matter, we had Barbero fully reserved.

Great. That's all I have. Thanks.

And your next question is from the line of Ron Bobman with Capital Returns.

Hi, congrats on the quarter and the year. Thanks for taking my call. I had a question. In the slide presentation I think it was, Carl, when you were discussing '07 outlook towards the end of the presentation, you had talked about a couple of transportation, I don't know you call them initiative but sort of plans for '07 in the transportation area and I just wanted to understand, is that National Interstate or is that sort of AFG--?

That's actually, I think what I was referring to was actually Great American. We've done physical damage for owner/operators for a long time, and it's logical for us to expand that, to include liability for owner/operators small fleet kind of stuff , businesses with one to five trucks. That's really a Great American business.

Okay. And do the two entities, National Interstate and Great American, are there any sort of operating synergies that they do go to market together on, or no?

Not really. There's a small amount of business that is funded on Great American paper, but it's very de minimus.

Yes, that's what I was getting at. Okay, thanks a lot.

Your next question is from the line of [Abeh Shloth] with Maxim.

Congratulations on a great quarter. First of all, on our senior convertible notes, how much of those are still outstanding, how many have been converted, have any been converted, and at what price are they convertible at this point?

They are -- a very minimal number of them have been converted, almost none. I think 300 or something in that ballpark. And I'd have to go look for the price. I don't have that off the top of my head.

Have we been hurt recently by the storms in Florida?

Very minimal.

Okay, thank you again.

And your next question is from the line of Dan Baransky With Fox-Pitt Kelton.

Hi, yes, I guess I have several questions here, so sorry if I monopolize the call a little. Did I hear correctly that you've already reserved for Barbaro so there for there should really be no earnings impact in this quarter?

That's correct. Our total net exposure, Dan, was $4 million.

So no earnings effect then?

There was in the fourth quarter. There will be none on a future basis.

There was in the fourth quarter?

Yes. It was fully reserved in the fourth quarter.

So that would be also on top of this $13 million charge you had?

That's correct.

Okay. And on the residual value business, do you have what the actual dollar impact was for the quarter?

The charge that we took in the quarter was $24 million.

Is there any sense to get an idea of just how much exposure is left? I mean, do you have sort of the granular detail down to actually how many cars are left insured and sort of what the, I guess the lease amount is at the end? Do you have that level of detail yourself or do you have that level of detail you can provide so we have a sense of what's out there and we can apply our own percentages and thought processes to that number or?

We do have that detail but we've not disclosed that.

Okay, how about maybe as a sense of if you had a certain level of exposure at the end of '06 or '05, I guess, how much has run-off in '06 of that exposure is, 50% of the exposure? How much are we down?

I think the way to look at it is with the charts that we took in the fourth quarter, what we have assumed is that used car prices will decline 0.3% a month from now until all of the cars come off lease, and that assumption is a more rigorous or aggressive assumption than we previously used. We previously assumed that it would not decline that rapidly because it hadn't been our history. In the past year, there has been declines and so we've tried to put the charge in line with what the decline rate is.

And do you have any sense of how that compares against what the actual number was for '06?

The actual number would have been slightly better than that.

Okay. The other expense line item at 17 million versus 9.5 in the year ago quarter, was there anything extra special in there?

Two things are diving that. Number one in our retirement savings plan, deferred comp plans which have positions in AFG stock, the increase in the stock price has caused an increase in those expenses as well as those are the places that we charge the stock option expense. Is there any way to think about what a sort of more normalized run rate would be in there? Is it going to be all over the map? I mean, just any sort of guidance you might have on that? I think as I look at the results on the fourth quarter, I don't expect that our stock price will run up 45% a year and in all future years and so that clearly would drop 2 to 3 million off the number you're looking at and the rest I think is fairly stable.

Okay, great. I guess you gave a number, I think maybe in the third quarter conference call of your estimation of your excess capital which included, I think, the capacity to dividend up to the holding company and debt levels and such. Do you have a reestimation of that number now that we're at the end of the year?

We are just a little short of 400 in that number at the end of the year. I think it was between 375 and 400.

And that's calculated at a debt to total capital of 25.

Correct.

Well, I guess, what has prevented you from being in the market at all for your own shares at this point in time, considering that you do have a fairly sizeable amount of excess capital.

Well, I think we've had, since we've seen opportunities to do things like Cirrus and other transactions and internal growth in the business, those are probably our first priorities, though, over long term, we won't rule out doing some share repurchases if we think that's the most prudent investment of our excess capital.

Okay, and the negative cap loss number in the quarter, what was the driver of that?

We had over accrued for some of the hurricane catastrophes so we thought those accruals down to--.

For the '05 cats?

Correct.

Is there any sort of way you can quantify what that benefit was?

I don't have that right with me. I'm sorry.

Okay. The other thing, California workers comp, I'm a little surprised that the year-over-year rates in the fourth quarter were off 30% and if I heard correctly, is there any sense that the magnitude of the rate increases can decelerate moving forward or how should we think about that in 2007?

Definitely the rates going forward, the rate declines will decelerate. We would expect that with the actions that we've taken, and our rates probably will be down 14% or so through the year. I mean, in 2007, and then probably as the year moves forward, probably at the end of the magnitude declines and as you move farther away from the cumulative effect impact of the decreases we've taken over the last year or so.

Okay, and how are loss trends looking there? I mean, have they sort of been static with where you've been? Do they seem to look like they're getting any better or worse than where they've been over the past year or so?

Well, we continue to be very happy with loss trends there. We feel very comfortable that even with the rate decline I just mentioned that our profitability will continue to be excellent. On this line of business, again keep in mind even a low 90s combined ratio produces an excess of a 20% return on equity.

Okay, and I guess the last thing, it was a number question. Do you have the reserve impacts by the different segments during the fourth quarter?

Keith, do you got that?

In terms of development?

Yes, either favorable or adverse?

Sure. Property and Transportation was about 4 million favorable, casualty was about 2.5 unfavorable, financial was about 7.5 favorable, Cal-comp was about 3.5 favorable, and then miscellaneous other things were about 3 million adverse.

Well, the other number again was?

3 million adverse.

And I take it you're not including the 24 million then in the specialty financial of 7.5 million number or?

That's correct. We do not include that because the premium is not recognized until the vehicles come off lease so as a practical matter, reserves aren't established. We deal with it through premium deficiency analysis.

Okay, great. I'll let someone else jump in the queue here. Thank you.

And your next question is from the line of Ken Zuckerberg with Fontana Capital.

Yes, good afternoon. A question for Keith and then one for Carl. Keith, just to follow-up on some of the previous questions, when we think about the holding company capital and also internal views about free cash flow, would you be able to comment at least as to 2006 what you view as internal free cash flow, unencumbered I should say?

Unencumbered cash flow? Let me just take a quick look at something I've got here.

Keith, I can also ask Carl the other question in the interim if that's helpful. Carl, when we look at the business mix and we put all of the pluses and minuses of your competitive position as well as pricing trends, do you anticipate any major shift in mix on a go forward basis?

Well, I think because of the Property and Transportation Groups continued double digit growth that we expect and because of workers comp, the decline reflecting the rate decreases, probably the biggest changes are going to come in those two pieces with California Comp being a smaller percent of the mix and Property And Transportation being a larger.

Great. Very helpful. Thanks.

And I guess the way that I'd respond from a parent company perspective on free cash flow in '06, parent company cash increased almost almost $100 million, in addition there was $100 million of dividends, so 200 million coming from the Property and Casualty operations available to go up to the parent, and then another 40 to 50 that would be various charges and tax allocations. So I'd look at it from a parent perspective, it's about 250 million of cash flow coming from operating.

And of course there were some increases because of asset sales earlier in the year as I recall too; right?

That's correct, but those would be included in what I'm giving to you.

Okay, very helpful. Thanks, Keith.

And at this time, there are no further questions.

All right thank you. We appreciate your joining us for the conference call and we'll look forward to reporting our first quarter to you. Thank you, and goodbye.

Thank you for your participation in today's conference. This does conclude the presentation. You may now disconnect. Have a wonderful day.