Arthur J. Gallagher & Co. (AJG) 2017 Q1 法說會逐字稿

Good morning, and welcome to the Arthur J. Gallagher & Co.'s First Quarter 2017 Earnings Conference Call.

(Operator Instructions) Today's call is being recorded.

If you have any objections, you may disconnect at this time.

Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meanings of the securities laws.

These forward-looking statements are subject to certain risks and uncertainties that will be discussed on this call, and which are also described in the company's reports filed with the Securities and Exchange Commission.

Actual results may differ materially from those discussed today.

In addition, for reconciliations of the non-GAAP measures discussed on this call as well as other information regarding the use of these measures, please refer to the most recent earnings release and other materials in the Investor Relations section of the company's website.

It is now my pleasure to introduce J. Patrick Gallagher, Chairman, President and CEO of Arthur J. Gallagher & Co.

Mr. Gallagher, you may begin.

Thank you, Donna.

Good morning, everyone, and thank you for joining us for our first quarter 2017 earnings call.

With me this morning is Doug Howell, our Chief Financial Officer as well as the heads of our operating divisions.

As we do each quarter, today, Doug and I are going to touch on the 4 key components of our strategy to drive shareholder value.

The first is organic growth; secondly, growing through mergers and acquisitions; thirdly, improving our productivity and quality; and fourth, maintaining our very unique Gallagher culture.

The team executed on all 4 of our strategic priorities this quarter and resulted in a strong first quarter.

Even though our first quarter is seasonally our smallest, I believe this sets the stage for another outstanding year in 2017.

First, let me talk a little bit about the Brokerage segment.

First quarter organic growth was 2.7%, all-in, with base commission and fee growth even a bit better than supplemental and contingent growth.

The 4.8% organic in the first quarter of 2016 set a high hurdle to grow against this year, and I'm extremely pleased with this quarter's growth.

Domestic property and casualty organic growth was a little lower than our all-in organic, while international property and casualty was over 4%.

Property and casualty rates globally continue to be a slight headwind but are being offset somewhat by exposure growth.

Taken together, rate and exposure reduced our domestic property and casualty brokerage organic by about 1 point.

So we really haven't seen much of a change in the U.S. operating environment.

Internationally, the rate environment varies more by geography.

Pricing remains challenging in our London specialty unit, while U.K. retail continues to see modest pricing headwinds.

On a more favorable note, Australia and New Zealand appear to be turning the corner into positive-rate territory.

When combined with the modest economic growth, this is encouraging for our business.

Our Employee Benefit and HR Consulting business posted about 4% organic in the quarter.

Our benefit teams -- our benefits teams remain focused on helping our clients navigate rising health care costs, uncertainties around the ACA and the challenges of attracting, retaining and motivating a global workforce.

Our offering to clients and competitive position has never been stronger as we have a winning combination of insights, tools and service that our smaller competitors cannot match.

When I look at organic going forward, I continue to see an environment much like 2016.

There will naturally be some volatility from quarter-to-quarter, but right now, 2017 organic feels like it will end up being similar to 2016 or maybe even a little better.

Second, let me talk about merger and acquisition growth.

We completed 12 acquisitions this quarter that fair multiples, representing about $63 million of annualized revenue.

As we discussed in our last earnings call, we normally see a lull in activity during the first quarter, but we had a terrific start to the year, benefiting from prior year carryover and a very strong pipeline.

I'd like to thank all of our new partners for joining us, and I extend a very warm welcome to our growing Gallagher family of professionals.

As I look at our merger and acquisition pipeline report, I see about $350 million of revenue associated with over 50 term sheets, either agreed-upon or being prepared.

As I've said in the past, not all these transactions will close, but our pipeline remains strong and is full of small tuck-in opportunities run by entrepreneurs with strong sales skills and excellent client relationships.

Third, I want to spend some time on our productivity and quality efforts.

I'm particularly pleased that our large merger integration efforts are effectively done.

This quarter, we incurred less than $3 million of integration expense, down dramatically from the $14 million we spent in the first quarter of 2016.

The team has done a fantastic job of getting through this final push of integration.

As our Global Chief Service Officer discussed at our New York Investor Day in December, we now are setting our sights towards sharing and implementing our leading-edge service model developed in the U.S. with our units in the U.K., Canada, Australia and New Zealand.

While never exactly the same country to country, we feel we can get our client service model fairly consistent across geographies.

Over the next 2 to 3 years, we will leverage those skills and techniques to help our global units become more efficient, more productive and also deliver the highest quality in the business.

So let me wrap up the Brokerage business with these stats: 8% total adjusted revenue growth on 2% organic; adjusted EBITDAC growth of 14%; and adjusted EBITDAC margin of 24.6%, up 121 basis points over the first quarter in 2016.

So a really solid start to the year for our Brokerage team.

Next, I'd like to move to our Risk Management segment, which is primarily Gallagher Bassett.

First quarter organic growth was 1.6%.

We delivered solid U.S. organic growth of 2.5% organic, while our international results were negatively impacted by a law change in one program in Australia.

Essentially, the law capped the time an injured worker can receive benefits and cost us about $2.2 million of revenue this quarter, which is over a full percentage point of segment organic growth.

The law change will likely be a headwind for our international business through year-end.

However, we did have a number of new business wins in Australia that should allow us to post greater than 3% organic growth for the year.

This past week, our Gallagher Bassett team was at the Annual RIMS Conference in Philadelphia.

Through interactive claims experiences, we showcased our outcome-driven approach to claims management, utilizing our proprietary decision support and benchmarking tools.

It was a very successful RIMS conference, and the team generated an extremely high level of client interest including over 100 new prospect meetings.

Our Risk Management team also recently completed a small acquisition in New Zealand.

This new merger partner will round out our service capabilities in New Zealand with specialization in property and motor classes.

Fourthly, in terms of productivity, the Risk Management team did a great job of holding expenses, allowing us to post adjusted margins of 17.1% in the quarter.

This was solid execution by the team as we continue to make investments in innovative tools, new products and the very best people, all aimed at driving superior claim outcomes for our clients and future growth.

And now let me speak about our unique culture.

I'm very pleased that just a few weeks ago, we were recognized as one of the world's most ethical companies for the sixth consecutive year.

We're honored to be one of only 124 companies globally to receive this award in 2017 and one of less than 70 companies to be recognized 6 years in a row by the Ethisphere Institute.

Let me tell you, this award did not just happen by chance.

We work hard to promote the values that were instilled in our company by my grandfather, Arthur J. Gallagher when he founded Gallagher 90 years ago.

These tenets, articulated in The Gallagher Way, continue to drive our global teams' success today, and we believe that our unique culture is a key differentiator and a competitive advantage.

Okay.

A strong quarter.

Great way to start off our year.

I'll stop now and turn it over to Doug.

Doug?

Thanks, Pat, and good morning, everyone.

Like Pat said, what a nice solid start to 2017.

Today, I'm going to provide my typical commentary on modeling, margins, clean energy, M&A and cash and capital management.

Most of my comments will be using the CFO Commentary document, which is posted on our Investor website.

So let me point out a few things as you model the next 3 quarters of 2017.

Starting on Page 2 of the CFO Commentary, we've provided our guess on the impact from foreign currency exchange rates on both revenue and EPS based on current FX rates today.

For Brokerage, you'll see about a $20 million impact on revenue in the second quarter of '17 but not much in the second half of this year.

However, that doesn't translate into much impact on EPS.

About $0.01 or $0.02 drag in the second quarter but next to nothing in Q3 and Q4.

As for Risk Management, you'll see not much impact on revenue or EPS.

Next, if you flip to Page 5 of the CFO Commentary, where we show you the roll in revenues for the next 3 quarters for mergers that we closed through yesterday.

Then, you'll need to make a pick for revenues related to future mergers that we have not yet closed.

And then finally, I'd suggest that as you roll in revenues for future acquisitions that you use the mid- to late-quarter closing assumptions in your models.

You'll also notice on Page 5, and you heard Pat say just a minute or so ago that Gallagher Bassett completed a nice little merger down in New Zealand, and we've given you those roll-in revenues too.

And finally, as a reminder, remember to apply your organic growth pick to last year's revenues after adjusting for FX, but before roll-in for new M&A revenues.

Let's move to margins.

Adjusted brokerage EBITDAC margin expanded 121 basis points in the quarter.

That's really a terrific quarter with organic growth hovering just around 3%.

Our international operations led the way with really solid margin expansion in the quarter, and the retail teams in the U.K. and Australia are still hard at work improving their margins over the next couple of years.

Looking forward, as I always say, it's tough to expand margins if organic isn't at 3%.

Moving to integration.

Pat said it, but it deserves mention again.

Our international integration efforts are basically done.

We only spent $3 million this quarter versus $14 million last year first quarter.

Looking forward, we have just a few small IT projects that are wrapping up by the end of the year that might cost us about $0.01 or so a quarter.

Again, excellent work by our international folks for posting solid organic expanding margins, all the while putting finishing touches on our integration efforts.

Moving to the Risk Management segment.

Posting EBITDAC margin of 17.1% keeps us in the running for our full year pushing 17.5%.

The team did some really good work to hold their expenses and overcome the first quarter revenue headwind Pat talked about down in Australia.

That said, you heard Pat say, we do have a strong new business pipeline in Australia that should help us a lot towards the end of the year.

Moving to clean energy.

Even with the warmer winter than normal, we had a solid first quarter with net after-tax earnings coming right around the midpoint of their estimates.

You'll also see on Page 3 of the CFO Commentary that we didn't change our outlook much for full year 2017.

We're still forecasting a nice step-up from 2016.

But there is a little bit of movement in our estimates between the second, third and the fourth quarter, so please adjust your models accordingly.

After-tax credits on our balance sheet, effectively a receivable from the government, at March 31, we have over $500 million, which will help reduce our future cash taxes paid for many years to come, perhaps even past 2025.

One thing to highlight in the corporate line within the Corporate segment.

The midpoint of our guidance was an after-tax loss of about $6.5 million.

We beat that by about $3 million.

All of the beat versus our guidance comes from more income tax benefit from the new accounting standard for income taxes related to employee stock-based compensation.

In other words, we had more stock option exercises than we forecasted in the first quarter, resulting in more tax gains.

As for cash, first quarter tends to be our smallest cash generation quarter.

But at the end of the quarter, we had over $300 million of available cash.

Our efforts to unlock our bank account consolidation efforts and wind down integration efforts are clearly working.

As for mergers and acquisitions, we used about 260,000 shares this quarter for tax-structured exchanges, but recall, we prebought those shares mid-2016.

You'll also see on Page 2 of the CFO Commentary that our weighted average multiple crept up to about 8.5x.

There were a couple of specialty shops that commanded a slightly higher multiple this quarter.

But as I look at our pipeline, I see us coming in for the year below 8x, and it looks like we can fund deals in 2017 with cash and debts.

So those are my comments.

Solid organic, great M&A, terrific margin expansion and an excellent cash position.

A really solid first quarter that sets us up nicely for the rest of 2017.

Back to you, Pat.

Thank you, Doug.

Donna, I think we're ready to go for some questions and answers.

(Operator Instructions) Our first question is coming from Kai Pan of Morgan Stanley.

So first question on this expense ratio reduction in the Brokerage segments.

If you look back since the third quarter 2014, your quarterly run rate about $140 million.

Pretty consistent despite you've been growing your business.

So could you talk a bit about how do you control that expense?

And can you keep the same level here going forward that you will have natural leverage as you grow your top line?

Yes, great question, Kai.

Yes, our operating expense ratio and then just the absolute amount, the teams have done a terrific job as we start to take our sourcing initiatives, our real estate initiatives, leveraging our IT.

Even this quarter, our ability to go out and source our office supplies contributed in the quarter.

So you'll see us being able to hold that operating expense ratio into the future as our sourcing efforts.

We're getting great traction in Australia and in the U.K., using a lot of the techniques that they're good at, we're good at.

And together, we've done a really good job of controlling those expenses.

Okay.

So even at just sort of like a low to mid-single-digits organic growth -- like below 3% organic growth, if you can hold this line we'll still be able to see some margin expansion?

Well, I don't know.

I've always said that if -- if it's tough to expand margins if you don't have 3% organic growth in the brokerage space.

And we've done it -- if we have prolonged 3%, yes, maybe there's margin expansion in there.

Okay.

Second question is on your contingents and supplements.

In the past 2 years, you've been growing year-over-year about, if you add them together, about 15%.

But this quarter is kind of flat year-over-year.

I just wonder anything that's behind it and -- because it's a high-margin business, would that -- if that is slowing down, would that impact an sort of potential margin expansion?

Yes, good question.

Last year, we had a nice step-up in our supplementals and contingents in the first quarter that contributed to the 4.8% organic.

Our base last year, I believe, if my memory's right, was about 3.5%.

Our base this year is 2.9%.

So it's all not all that dissimilar on the base commission and fees year-to-year.

Supplementals and contingents again, geography between the 2, I wouldn't worry about that too much.

But in total, I think the step-up after last year and holding it this year was good work.

We still believe that there are opportunities for us, especially as we buy -- continue to buy businesses to roll them into our supplemental and contingent programs.

I think our relationships with the carriers are really good right now, so I see that line kind of being consistently growing.

But it's always going to be a little bit lumpy.

Okay.

Lastly, just quick one and on the clean coal.

For 2017, it looks like you're on track to achieve 10% year-over-year growth.

Do you have any sense about 2018?

Not at this time.

We need to look at coal consumption.

We still -- our plants are running well.

I don't really have a thought about that right now, Kai.

(Operator Instructions) Our next question is coming from Elyse Greenspan of Wells Fargo.

I wanted to follow up on some of the comments you gave in terms of organic growth.

You guys printed around a 3% in the Q1.

And Pat, your comments imply you'll -- comment about last year's level, which was 3.6%.

So I guess, how do you envision the step-up as we go through the remainder of the year?

And as you think about getting 2017 looking like 2016, how do you see the components moving forward domestically and internationally, especially as you point to the market potentially turning harder in Australia and New Zealand?

And one other question on that front.

Did you say what the wholesale organic growth was in the quarter?

I didn't mention it.

Let me take a look at it.

I'll get that.

You answer the first question.

Let me answer the first part of your question, Elyse.

First of all, over the last few years, as you know, we've built a much more balanced portfolio.

We're now are one of the bigger players in New Zealand, Australia, Canada and the U.K. So we get the benefit of that balance.

Organic in the United States this past -- in the property/casualty area was a struggle this quarter, and I think we're going to see some improvement there.

I also think we'll see some improvement in organic at Gallagher Bassett as the year unfolds.

Our Benefits business was particularly strong in the quarter, and I see that continuing to strengthen.

Australia and New Zealand were strong and Canada was strong.

So with that balance, and really what I'm seeing in the rate environment is, when I say that we're down 1 percentage point from rate and exposure, that's a great market for us.

Really, we've been almost flat with regard to rates with some up, some down.

Property, in particular, over the last 4 years has been down significantly.

But by and large, we have not seen the swings in the property/casualty market over the last 5 to 6, 7 years that we've seen for the last 40 years.

And I think that's a great environment for our people to be out producing, and I think that we'll have a good new business here.

We've got a very strong pipeline.

I can look at that in sales force.

And the bottom line, it just feels like last year.

I think we will probably do about the same as we did last year, maybe even a little better.

On the wholesale side, Elyse, first, let's define wholesale.

When you look at our program business, our program business was basically flat.

We have some commercial auto in there that the markets are shifting on that.

You've seen that in some of the carrier's reports.

So as markets come in and out, that's flat, so they held in there nicely.

Our open brokerage, I think, was over 5% for the quarter, and then our binding businesses were somewhere around 3% to 4%, something like that.

So we had good results across our wholesaling platform other than maybe in the program business.

All in, maybe in the mid-2s.

Okay.

Great.

And then, in terms of thinking about the organic for the remaining 3 quarters, do you guys have a view, kind of following up on the earlier question in terms of how the growth you might see in the supplementals and contingents?

I mean, they did see strong growth in the Q1 last year, but a bit more even throughout the year.

So as you think about the organic growth for the -- all 3 quarters, do you think that the growth within supplementals and contingents will pick up?

I think it will outpace base, commissions and fees.

So I think that in total, supplementals and commissions will actually contribute to more organic growth relative than how it did this quarter.

Also, one of the things about organic growth, other than maybe a year or 2, in the last 10 years, our first quarter organic growth has historically been the lowest organic growth quarter.

Not just seasonality, but in percentage-wise of organic growth.

So last year that wasn't the case, and maybe one other year in the last 5, it wasn't, but -- so we feel -- as we look at property, we don't see as much as the headwind this year as we come into the second quarter.

Of course, that can always change.

So that's why we feel that this year, we should end up like last year or maybe a little better.

Okay.

And then in terms of the margin within the Brokerage business, I mean, it was pretty stagnant, 120 basis points is pretty strong in the quarter.

From your comments, I know you pointed to pretty strong international margin expansion, but it doesn't seem like it's anything that's one-time in nature that would potentially cause us not to see a good level of margin improvement when we think about going forward, right?

There wasn't anything really one-time in the numbers.

Not really, no.

I think it's just steady, steady improvement.

We are -- our international folks are doing a terrific job of bringing the franchises together, working hard about trying to -- we understand that there are synergies, and there's economies of scale.

And they're doing a good job of getting after it.

Okay.

And then one last question, if I may, on the deal front.

You guys mentioned pretty strong pipeline there.

Have you seen any change in private equity interest in the group?

I know last quarter, there was -- when you kind of speculated what potential tax changes could do to deal prices as well as interests in the brokerage space.

Have you seen any of that play out?

Or is it we're kind of waiting to see actually how the tax changes in the U.S. will take shape?

No, I don't see any hesitation out there, Elyse.

This is a frothy market.

I mean, there's a lot of private equity money that wants to be in the brokerage space.

And every single deal is going to have private equity competitor, it's going to be a fiercely fought deal.

But frankly, also Elyse, those that we're actually courting and those that are actually merging with us have decided that they want to be with a strategic.

They want our capabilities.

They want our resources.

They don't want to be part of a roll-up.

They're looking to sell insurance with us.

They believe that their family and our family together will be better.

So yes, there's price competition out there.

And of course, that always keeps it interesting at the negotiation table.

But by and large, we're looking for those partners that want to take a fair price to come sell insurance together with us.

Our next question is coming from Adam Klauber of William Blair.

Pat, I think you mentioned that the economy -- the impact to the economy exposure is pretty much level, if I heard correctly.

Are there some regional differences where some regions are actually helping and some are more neutral?

I can't really pick out too much on that, Adam.

I think probably the West Coast is getting a good lift.

We still, I think are still seeing some decrease in the whole energy play in the South and the oilfields.

Our Northeast seems okay and Midwest is fine.

So I think that bottom line, we're just feeling that our customers are -- their businesses are in pretty good shape.

We had a Board Meeting this week, and we invited a customer to come in.

The board had asked to meet someone that actually work with us.

And he was a small manufacturer locally, about $100 million, $150 million manufacturing firm, U.S.-based.

They do fire suppression work, sprinkler systems, things like that.

And he was very bullish on his opportunities.

So I think I see that when I bump into customers across the whole spectrum.

Okay.

But then on the benefits side, I think you said the growth there was doing well.

With some of the noise about ACA repeal, and obviously, change in administration, has there been any slowdown in the decision-making?

Or just clients pulling back saying we just want to wait until we see what's going to happen?

Or is the market -- would you say the market's proceeding more along normal lines?

No, I think the market's proceeding along normal -- well, let's put it this way, I don't think that market's seen normal since the ACA was instituted.

We've got 30-plus people in our compliance department, most of them are lawyers.

And that is all around having to help our customers comply with all these regulations across the board.

And at the same time, they're trying to balance that with the problem they've got of cost increases with the problem they've got with the war for talent.

So that is right at the heart of what we do for our clients.

And that -- there's no stepping back from that.

That's a constant concern, and it provides us with basically, constant opportunities.

And frankly, Adam, the beauty about it is the small guys can't do it, right?

So we're doing acquisitions in the benefits space.

And frankly, I can tell when they come in, when I meet them, if they have met our compliance people or not.

Because when they come in, to be perfectly honest, they're cocky about the ACA.

They know it, they can handle it, they're working with Ernst & Young or Deloitte, ta da da da da.

Once they've met our compliance people, they're scared.

It's a whole different deal.

They go, "Oh, we're supposed to be advising our clients on all of that?" So it's a great opportunity for us.

Couldn't be better.

Okay.

And then on U.S. retail, nice to see acquisitions have picked up.

How about growth in the producer force side from acquisitions?

Are you growing the force?

Is it more...

Yes, doing nicely.

You always have a trained program -- sorry, sorry, didn't mean to cut you off.

Is it more from the training program?

Or you're actually hiring from the outside or both?

We've grown our producer headcount 3 ways.

First of all, I'm really excited.

We're coming into June, and we're going to have 400 kids domestically in our internship program.

We're going to introduce 400 new young bright people to this industry.

And I'm hopeful that we'll hire a good portion of those, so that's number one.

And by the way, that's domestic, so if you add the additional, about 100 globally that we'll do, so we'll end up introducing about 500 young adults to this business.

Secondly, we grow producers, of course, is through acquisitions.

And you guys can see that every day, every week.

And then, of course, we're out looking for new people.

And about 2 years ago, we started a program that we call Hire Right.

At Hire Right is an effort to go out and find really good salespeople that are not in the insurance business.

They can sell copiers, pharma, whatever it might be.

Find people that have no call reluctance that really likes to get in front of people and sell and teach them insurance.

And that is going extremely well for us and is adding to our organic headcount in the producer force.

So I feel really good about that.

So can you give us just a ballpark to -- should the producer force x acquisitions grow in the 2%, 3% range?

Or is that a little too much?

I don't have a number, Adam.

Our next question is coming from Mark Hughes of SunTrust Robinson Humphrey.

What about tax reform?

Any early thoughts on what that could mean for the clean coal business?

Mark, did you say -- just repeat your question.

You kind of broke up on us.

Yes, sorry.

Any early thoughts on what tax reform could mean for the Corporate segment, for the clean energy business?

Yes.

Actually, in the CFO Commentary, we republished our pro forma, where we took 2016, and we ran it assuming a 20% federal tax rate.

So we did that pro forma for you.

We published that in January.

It's still out there.

We didn't update it, but it's -- we did -- pro forma on history doesn't change that much.

How do I feel about it -- the tax strategy?

I believe that the credits that we have will continue to have value going forward.

I believe that -- it's a credit, it's not a deduction.

So $1 under old written tax and under new tax is the same.

And overall, even with tax reform, we're going to reduce our taxes even more because if AMT goes away, we'll actually be able to use our credits even more.

So I feel good about it.

I think we've got a good inventory of credits that have a long life on it.

We have the ability to produce more credits also going forward.

But remember, this law sunsets on credits in 2021, so we've got 4 more years of generation on it.

But I think that that will create an inventory and a warehouse that could stretch well into the late 20s.

And then any comments on line by line.

You had pointed out, I think, that property wasn't as much of a headwind.

Anything else you would call out as being particularly strong or weak from your perspective lately here?

Well, I think, first of all, the world of risk is certainly growing every single quarter.

Right now, I think the one that is -- that gives us the most opportunity and the most concern is cyber.

And cyber is a very strong offering and something that all of our clients really need.

Property, as you know, has been down significantly over the last 4 years and now is really kind of relatively flat.

Transportation is a bit of an issue.

That's really kind -- it's an issue to our clients if those prices are going up.

And then I'd think I'd look across regular or general reliability umbrella, et cetera, et cetera, as basically flat.

Yes, I think -- just probably -- and I'll just give you some actual numbers.

If we go back to first quarter '16, commercial property, by illustration, was off according to our data here, 5.1%.

In this quarter, we saw it only up 1.4%.

If you look at marine, marine was down 5% in the fourth quarter '15.

It was actually up 1.7% this quarter.

Package is flat.

Commercial auto is flat, so -- professional lines is flat.

Workers' comp shows a little bit of an uptick this 1 quarter.

So you're kind of seeing that in the charts here on where rates are that I'm not giving you quarter-over-quarter negatives.

I'm giving more flats or slightly up.

Very helpful.

Then I'll have to ask, any thought on clean trends within the Risk Management business if you think about the kind of the U.S. workers' comp business?

What do you see?

See claim trends up about 1%.

Yes, our claims offering -- our U.S. business was up 2.2%, pretty -- in the quarter, so overall...

Anybody else, Donna?

Not at this time, sir.

Do you have any closing comments today?

Yes, yes, I do.

Thank you.

I'd like to thank everyone again for being with us this morning.

We believe we started off 2017 on an excellent footing, and our focus remains on executing on each component of our value creation strategy.

We will grow organically.

We're going to grow through acquiring the best mergers.

We will improve our quality and productivity, and we're going to invest in what we believe is a strategic advantage, which is our unique culture.

Thanks for being with us today.

We appreciate it.

Thank you.

This does conclude today's teleconference.

You may disconnect your lines at this time, and have a wonderful day.