Altisource Portfolio Solutions SA (ASPS) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Altisource fourth-quarter and full-year 2013 earnings call. (Operator Instructions) As a reminder, today's conference is being recorded. I would now like to turn the call over to Michelle Esterman.

Thank you, operator. We first want to remind you that the earnings release, Form 10-K, and quarterly slides are available on our website at www.altisource.com. These provide additional information investors may find useful.

Our presentation today contains forward-looking statements made pursuant to the Safe Harbor provisions of the federal securities law. Statements in this conference call and in our press release issued earlier today which are other than historical fact are forward-looking statements.

Factors that might cause actual results to differ materially are discussed in our earnings release as well as our public filings. The Company disclaims any intent or obligation to publicly update or revise any forward-looking statements regardless of whether new information becomes available, future developments occur, or otherwise.

Joining me for today's call are Bill Erbey, our Chairman, and Bill Shepro, our Chief Executive Officer. I would now like to turn the call over to Bill Erbey.

Thank you, Michelle. Good morning and thank you for joining today's call. I plan on spending a few minutes on our key 2013 accomplishments and our vision for 2014. Michelle will provide an overview of our financial performance and Bill will expand upon our 2014 strategic initiatives.

The fourth quarter capped off a year of impressive growth for Altisource with record service revenue and earnings per share. 2013 service revenue was 42% higher than 2012 and since 2009 has grown at a compounded annual rate of 37%. Earnings growth in 2013 was slower as we continued to invest in the business to support our long-term growth. These investments include acquisitions and the development of our next-generation technology.

The strength of Altisource's business model is our ability to support our organic growth through internally-generated cash. The faster our revenue grows, the faster our cash flow grows, generating a steady increase in return on equity. As you can see on slide 7, return on equity has increased from 37% in 2009 to 78% in 2013. To the extent we receive shareholder approval, we intend to continue our aggressive share repurchase program, further increasing our return on equity.

Operationally during 2013 we assisted Ocwen with the boarding of 1.15 million loans onto REALServicing, the majority of which were boarded in the second half of 2013. We also improved the efficiency of our default-related services businesses in our mortgage service segment, supporting our objective to achieve 47% operating margins for these businesses by the end of the first quarter of 2014.

In our financial services segment we markedly improved our performance with service revenue growth of 45% and operating margin expansion from 7% in 2012 to 24% in 2013. In December of 2013 we refinanced our debt at a lower interest rate. This should generate $5 million of annual interest savings in 2014.

During 2013 we used excess cash to repurchase $141 million of our common stock, or 1.2 million shares, at an average price of approximately $117 per share. As I mentioned, 2013 was a year of investment in our long-term growth. In the fourth quarter we completed the acquisition of Equator. The acquisition accelerates our marketplace strategy and diversifies our customer base to include some of the country's leading banks and one of the GSEs.

We also accelerated our hiring and investment in the development of our next-generation technologies. We strongly believe in our future growth prospects and our next-generation technologies are a key component of this growth.

We believe 2014 will prove to be another exciting year for us. We should benefit from the large number of non-GSE loans that were boarded on REALServicing in the second half of 2013 and the loans we expect Ocwen to board on REALServicing in 2014. We are also going to continue to advance our vision for Altisource as the premier provider of real estate and mortgage marketplaces with both content and distribution to the marketplace participants.

In our mortgage marketplace we are focused on two key initiatives: one, continue to provide services to Ocwen's servicing portfolio and, two, growing our origination-related services. In the real estate marketplace we are focused on: one, deploying Hubzu to other institutions and the nondistressed home sales market and, two, providing asset management services to the single-family rental market. Bill will discuss these initiatives in more detail.

I will now turn the call over to Michelle for a financial update. Michelle?

Thank you, Bill. 2013 was a very good year for Altisource. We had four major financial objectives for the year: one, grow service revenue; two, grow cash generated from operations; three, expand our margins in the default-related services businesses; and, four, grow revenue and earnings in the financial services segment. We ended the year firing on all cylinders.

Entering 2013 we knew service revenue would grow as Ocwen boarded the ResCap and Homeward loans on REALServicing. However, we were not complacent. We expanded service revenue for delinquent loans by introducing new products like short build by expanding the percentage of homes sold through auction on Hubzu and by capturing referrals for certain services from the Homeward and ResCap platforms before the loans were boarded on REALServicing.

In our financial services business we significantly expanded the mortgage charge-off collections business and added new clients in the customer relationship management business, contributing to both revenue and earnings growth. As a result of these and other efforts, Altisource's service revenue grew 42% in 2013 compared to 2012 and 7% in the fourth quarter compared to the third quarter of 2013.

The fourth-quarter revenue growth is more impressive when you consider that it is a seasonally slow period for real estate sales and our financial services segment. During 2013 we generated cash from operating activity of $185.5 million, a 59% increase over 2012. As a percentage of service revenue, cash from operating activities increased from 25% in 2012 to 28% in 2013, illustrating the impact of our efficiency initiative.

Our third financial objective for 2013 was margin expansion in our default-related services businesses. We established an objective to achieve operating margins after amortization expense of 47% in these businesses by the end of the first quarter of 2014. We made good progress on this initiative throughout the year, improving operating margins in the default-related businesses from 39% in 2012 to 46% in the month of December.

The operating margins didn't improve substantially until December when we began to receive the benefit of the newly-boarded loans on REALServicing. We believe we are on the path to achieving our 47% target by the end of the first quarter of 2014 as the mix of revenue shifts to higher-margin services as we gain leverage from the slower growth of SG&A and our employee and vendor efficiency initiatives continue.

The financial services segment significantly improved its performance with service revenue growth of 45% compared to 2012 and operating income margins increasing from 7% in 2012 to 24% in 2013. Notably, financial services fourth-quarter 2013 operating income margins remained relatively the same as compared to the third quarter of 2013 despite the fourth quarter historically being a seasonally weak quarter. These improvements were driven by the growth of the higher margin mortgage charge-off collections and customer relationship management services along with cost efficiency initiatives and the asset recovery management business.

During 2013 we also made investments in the business that we believe will drive our longer-term growth. To support our strategy to be a premier provider of real estate and mortgage marketplaces, we acquired Equator and accelerated our investment in the development of our next-generation technology.

During the year we used cash from operations and cash from the issuance of debt to repurchase Altisource common stock for $141 million, to acquire Equator for $63.4 million, and Homeward and ResCap fee-based businesses for $204.5 million. We also invested $34.1 million in facilities and technology to support our growth.

At the end of the year our cash balance was $130.3 million. We plan to use cash to repurchase shares and to support general corporate purposes, including possible acquisitions. Further, to increase our share buyback capacity we have recently filed a preliminary proxy which should have no impact on our share repurchase plan.

Turning to slide 14 and the two service [revenue] scenarios we have shared with you in the past, we updated some of the key assumptions in both of the scenarios. The only difference between scenario one and scenario two remains the volume of non-GSE servicing rights we assume Ocwen will acquire in 2014, 2015, and 2016.

As in the past, scenario one assumes Ocwen makes no additional acquisitions. In scenario two, we assume Ocwen acquires $100 billion of non-GSE servicing per year in 2014, 2015, and 2016, and nothing thereafter. The updated key revenue driver assumptions used for the two scenarios are set forth on slide 15.

While it is difficult to predict these assumptions with certainty and they are likely to be off during any particular period, we believe that they represent a reasonable set of longer-term assumptions. I would also like to remind you that our scenarios do not assume any reinvestment of the cash generated from the businesses.

Finally, I'd like to draw your attention to one of the operating metrics on slide 11. During the fourth quarter of 2013 revenue from origination-related services declined by $3.5 million compared to the prior quarter. This was primarily the result of one of our larger preferred investors eliminating its affinity relationship with Altisource and its other similar vendor partners.

Excluding the impact of this one-time loss, origination-related revenue declined by 10% over the third quarter of 2013 despite the estimated 27% decline in overall origination volume. As a result of Lenders One marketshare growth, for the full year of 2013 our origination-related service revenue declined 1.6% compared to 2012, while the overall US origination market declined 14%.

I will now turn the call over to Bill for a discussion of our operations and 2014 growth initiatives. Bill?

Thank you, Michelle, and good morning. 2013 was a strong year for Altisource. We focused on providing high-quality services to Ocwen's portfolio while intensifying our efforts on our strategic initiatives to diversify and expand our revenue base.

Our 2013 accomplishments, both operationally and with our strategic initiatives, are the building blocks for a strong 2014 and beyond. This morning I plan on discussing how our 2014 strategic focus will propel our growth.

To achieve longer-term revenue growth of 15% and earnings growth of 20% or more our objectives are very clear and straightforward. First, we must remain focused on supporting Ocwen and its continued growth, both in the servicing and origination businesses. Second, we must continue to grow the origination business, Hubzu, and our home rental business.

Third, we need to improve our default-related businesses operating margins. And, lastly, we need to invest in next-generation technology to support Ocwen's and Altisource's businesses and our marketplace strategy. I will spend a few minutes on each of these initiatives.

Our relationship with Ocwen is a strong and growing foundation for our business and remains an important priority for us. We continue to focus on providing high-quality compliance services to enhance their competitive position.

Our second initiative is the growth of the origination business, Hubzu, and our home rental business. At the end of the year we had 271 Lenders One members representing 13.8% of the overall origination market. 192 of the members have signed service agreements with Altisource. We continue to believe that our membership growth and the number of signed service agreements is a strong leading indicator of our future origination services growth.

We have two strategies to increase our capture rate of origination-related services. One, facilitating a distribution channel for new origination products for Lenders One members without the source performing origination-related services on those products. And, two, making it easier for the Lenders One members to order and receive services electronically from Altisource and our preferred vendors through our next-generation REALTrans technology.

Given, however, our other more pressing business and technology priorities, we are differing the development of our next-generation REALTrans technology until some of the other technology businesses are appropriately staffed and operating efficiently. While this will defer the growth of our origination services businesses as reflected in the scenario assumptions on page 15 of the slides, it is the right overall decision for Altisource.

Turning to the home sales marketplace, our objective is to significantly grow the inventory of homes available-for-sale on Hubzu and enhance the economics for Altisource. To accomplish this we are rolling out new Hubzu products, increasing the percentage of homes sold on Hubzu through auction, offering Hubzu services to other institutions, and growing Hubzu's nondistressed home sales through our preferred partner program which we previously referred to as our direct to broker program.

We are making progress on each of these fronts. We developed and rolled out a short sale and foreclosure auction sale program and are beginning to see a meaningful increase in referrals. This will ultimately translate into revenue and earnings growth.

We increased the percentage of distressed homes sold on Hubzu through auction from 18.3% in the second quarter of 2013 to 42.7% in December of 2013. Not only do we earn more revenue on homes sold through auction, our clients typically generate a greater percentage of market value on the homes sold.

Although it did not generate much revenue for us in 2013, we signed four contracts with new customers in 2013 and early 2014. In addition, we are in advance sales discussions with three other prospective customers.

Our focus is to continue our sales efforts with these and other prospects and grow the volume of homes for sale on Hubzu. To assist with our sales efforts we are also working to integrate Hubzu with the Equator platform to make it easier for Equator's customers to use Hubzu to sell their REO.

We continue to develop Hubzu's preferred partner program. We have proven the first critical step in the process. We have been very successful in getting real estate agents to list their nondistressed homes for sale on Hubzu. In fact, approximately 40% of the homes on Hubzu today are through this program.

We are not, however, focused on adding new brokers until we have proved the second and last critical step in the process and that is converting these listings to closed homes within the Hubzu ecosystem. Our primary issue is that many of these homes are still closing outside of Hubzu. We are testing several go-to-market and product hypotheses to determine how best to accomplish this. However, for competitive reasons we prefer not to discuss them today.

With respect to the home rental business, we are making very good progress in supporting Altisource residential's growth. Based on residential's recent filings with the SEC, its current portfolio and pending acquisitions total over 3,400 assets. If 50% of these assets become rentals, we could be managing as many as 6,700 rentals just from residential's existing portfolio. This creates a high margin, very stable, longer term revenue stream for Altisource.

Our third initiative is to improve our default-related businesses' operating margins. As Michelle set forth in her prepared remarks, we are optimistic that we are on track to achieve our 47% margin objective for these businesses by the end of the first quarter.

Finally, our fourth initiative is to accelerate the hiring of world-class leaders in our technology services segment to support the development and growth of our next-generation technologies. While this will constrain our technology services segment margins, we strongly believe in our future growth prospects and the investment in our next-generation technology is a critical component of this growth. These four initiatives serve as important longer-term components of our revenue and customer diversification strategy.

At this time we would like to open up the call for questions. Operator?

(Operator Instructions) Mike Grondahl, Piper Jaffray.

Thank you for taking my questions. The first one is just on slide 11 the non-GSE loans at Ocwen of 1.4 million and 355,000 delinquent loans is there anything that still is left to board? And, secondarily, could you talk a little bit about the revenues you would've gotten from the OneWest Portfolio that boarded in November?

Mike, this is Bill. I don't want to give specific numbers, but there still is somewhere between 700,000 and 1 million loans still to board that will take place in the first half of 2014 off of these servicing platforms that Ocwen previously acquired.

With respect to OneWest, we don't typically breakout an individual deal like that, Mike, but as you know, we typically get some of the early referrals around property preservation and inspection and valuation upfront. And then after several months, as the portfolio seasons and we become the asset manager on the REO assets, we start picking up some of the higher-margin business like REO sales.

Okay. And then the 700,000 to 1 million are any of those non-GSE loans?

Yes, I would say, Mike, the majority are non-GSE I'm sorry excuse me --

Majority are GSEs.

Majority (multiple speakers)

I'm sorry, the majority are GSEs. Yes, thank you.

But there are non-GSE.

But there are non-GSE as well.

Okay. Then just last question; gross margins were a little softer in 4Q. Is that just Equator coming on or what would you attribute that to?

You saw gross margins go from 42% in the third quarter to 41%, but you did see improvements in the mortgage services segment from 43% to 45%. The primary reason for this decline is our continued investment in our next-generation technology.

Okay, thank you. I will jump back in the queue.

Steven Eisman, Emrys Partners.

On page 8 of the slide deck you mentioned in the footnote that you've upped your repurchase program to 15% of common stock. Can you just tell us when that will become active?

And my second question is if you look on page 11 of the slide deck and just look at the bottom at Hubzu, I calculate that you generated about $3,400 per home sold, which is pretty significantly higher than the $2,600 to, $2,700 you have done in the past. Can you explain the increase?

Yes, Steve, let me take the second question first. On Hubzu, as we sell a greater percentage of the homes through auction we earn a buyer's premium when those homes sold so that increases the revenue we generate per REO sale. And then on the share buyback (multiple speakers)

I'm sorry; why the change in the quarter? I mean that has been true for a long time.

Well, we've had a program in place to increase the percentage of homes sold through auction so I think that went from 25% to the high 40%s second to the third quarter. So that is a pretty -- that is a big difference.

Okay. And in respectively (multiple speakers)

Steve, there are some approvals we had to get in order -- we needed to expand our auction licenses. In some cases there were some consents we had to get in order to do that that allowed us to increase the number of homes sold through auction.

And on the stock buyback?

Which generated -- and on the stock buyback we filed a preliminary proxy. I think the final proxy is going to be filed today is my recollection. And in the meantime, Steve, we are going to start our share buyback program as soon as our window opens.

And when is that?

It typically opens a couple days after this call.

Okay, thank you.

David Haas, Moore Capital.

Just a follow-up on the buyback. I guess the question is the governor on the pace -- let's just assume that this gets approved. The governor on the pace has generally been under Luxembourg law or under the credit agreements. And so, all else equal, if nothing changes what would be the pace of those buybacks and/or is there any way to change the underlying construct of when you could buy back?

The governor -- it's going to continue to be Luxembourg law and we will continue to evaluate if there is some way we can work to change that. Right now we haven't figured out a solution, but that will be -- if you recall, about 90% of our earnings we can buy back and then our plan would be to go forward with an aggressive share buyback program.

Got it. Okay. And just generally, though, I'm curious how you came up with the 15% number to ask for. Again, is that -- if we had to ballpark the time frame, because obviously I would imagine you are going to project on what you think you could earn over a period of time, is that like a multiyear buyback authorization view or is it potentially accelerated? Or could you do it in a year or two years? How would I think about that?

I mean it is more than one year, the buyback program, is probably the best way to describe it.

Okay.

It's probably, Bill, -- it's probably two years or less though.

Yes, I agree.

Great, that's helpful. I guess the other question is when I look at the charts and those two charts with the service revenue under scenario one and scenario two, it looks like that there's -- at least scenario two is materially different today versus what it was at the investor day in December. And scenario one also looks like the trajectory of service revenue from 2014 to 2015 is also up versus down in the prior slide. So a better look on both of those.

And so I guess the question is, and I know you changed the assumptions and you gave those changes in the operating metrics, but can you give us a sense for maybe ranking what the biggest driver of that upward change is?

I don't have the specifics in front of me and we definitely gave you the assumptions so you could compare what was in the drivers in the prior investor deck to today's. I know we did increase, for example, the percentage of homes sold through auction and we built in our short-sale program which is probably substantially more revenue than was in the prior deck. So those would be a couple of items, Dave, but I don't know offhand the specifics.

That's terrific. That's helpful. We will go back and look through.

I guess the last question I have is just -- and I am not going to ask you to comment on anything Ocwen-specific with respect to the halting of the Wells Fargo transaction. That would clearly have an impact on Altisource. But I guess I'm just curious if you have started to have any sort of dialogue with the DFS around how to move forward?

I think from Altisource's perspective that really is a better question served for Ocwen.

Okay. All right, thanks very much.

Fred Small, Compass Point.

Thanks for taking my call. The first question I had is just looking at scenarios one and two on the scenario -- the service revenue scenarios. How should we think about the probability of scenario two, $100 billion in 2014, 2015, and 2016?

I think that would require us to comment on Ocwen's acquisition, so I don't think we are going to do that on this call. I shouldn't say that; we are not going to do that on this call.

Okay, got it. No problem.

In terms of the origination-related revenue, I guess the numbers there change it a little bit in the forecast on basis points of Lenders One origination volume. What is needed -- and when I look back sort of since there have been numbers on it, it has been around 1.5, 2 basis points which is where it was in 2013. What is needed to get it from there to 4.5 basis points and what drove the decline in the forecast from a little over 6 to 4.5 for next year?

Really what the members are asking for is they want to make it very easy for us to order services from their loan origination system and deliver it back to them. And we are postponing that project and as a result we changed the assumptions for the service revenue for the basis points in the origination business. That's the primary reason for the change.

But longer term, I think those assumptions are -- I'd be disappointed if we didn't hit these assumptions.

Got it. And even with the deferral you can get from 1.6 to 4.5 basis points sort of revenue on the origination volume?

Yes, we think that's a fair assumption.

Okay, got it. And following up on the Hubzu, the revenue per sale, that was way up so thanks for the color on that. Does the higher revenue per sale have a big impact on Hubzu's margin?

Yes, of course.

And in the past you have stated on calls I think that Hubzu's pretax margin is somewhere north of 60%, so is that still consistent or is it way up from that now?

Just to clarify, that was the Hubzu business by itself excluding our assets on our brokerage business and we really look at the business today with both the brokerage business and the auction business together. But the margins are very, very attractive in this business and as we continue to sell more through auction the margins will continue to be strong.

Is it north -- are the operating margins north of where overall mortgage services margins are?

Yes.

Okay, got it. Then I guess the technology services margin was way down. It looked like comp and benefit cost was way up there in the fourth quarter. Is that one-time or is that a new run rate and the revenues just haven't come through yet from the additional loans?

We will get some additional revenue from the additional loan boardings that are going to take place this coming year, so the revenue should increase. And we are definitely investing in personnel in both our legacy and next-generation technologies and that will continue to constrain the margins in this segment, partially offset by the benefit from Equator. And we gave you our thoughts around that I think on the day we announced the acquisition.

Got it. Then just to make sure I understand; when you talk about the default services margin getting back north of 47%, how much of mortgage services overall is default services? Or do you consider default services when thinking about that margin?

It is the lion's share of that segment. It is everything other than the origination business and we tell you roughly what our origination revenue is each quarter.

Okay, got it. Thanks a lot.

(Operator Instructions) [Adam Friedman], Millennium Partners.

Thanks for taking the call. I just was wondering -- I know an earlier caller asked about what is going on with Ocwen and you said let's leave that up to Ocwen. It's been -- Altisource has been a great investment for some time obviously, based on the Ocwen relationship, and Ocwen is sort of the 800-pound gorilla here in this space. The buyback story, which a lot of the questions have been about and which some -- your own commentary is about, is a nice part of the story.

Again, we don't -- the reason to own Altisource is for the business, not for the buyback specifically. So can you just comment; when a company that has such a huge customer like Ocwen as part of the business model runs into a problem like this, how do you see that? The commentary coming from Lawsky himself suggests that Ocwen will not be winning any new business for an extended period of time. So how would you suggest modeling the future based on how we have been modeling the past?

Look, (multiple speakers)

We gave you two revenue projections in the slide deck and you can make your choice as to where you think it comes around those.

So you say it is definitively one or the other, there is no --?

No, no (multiple speakers).

Okay.

We are just giving you different points for you to do your own evaluation.

Okay. Do you have any -- just conceptually on what is going on right now, do you feel like this is the early stages of what Lawsky might do? Trying to get your arms what -- this sort of came out of nowhere obviously, so as an investor in the space is there anything you can add as far as what you might be anticipating or the time frame that this could take?

It is just hard to start modeling the future a few days after this news breaks, which is pretty significant news. Is there anything you can add other than just saying let's let Ocwen answer that?

No.

All I would say is, look, we gave you two scenarios and even under scenario one our growth is very attractive service revenue growth and we are pretty good on the cost side. And we generate a lot of free cash flow and with that free cash flow we can do other things. So I think -- and then it is really up to you to decide where between scenario one and scenario two we fall.

So if Ocwen, let's say, doesn't -- isn't allowed to attract any new portfolios going forward, let's say they are just halted -- as Lawsky said, halted indefinitely -- you are comfortable with the next couple of years with the growth?

We think we have put together a very attractive -- look on the left side of page 14, we think we have put together a scenario that, assuming Ocwen doesn't buy any additional portfolios, which I am not saying is the case or not the case, we can grow revenue very attractively.

We tell you roughly what percentage of revenue we generate in operating cash, which I think was 28% in 2013, so that generates a lot of free cash flow that should allow us to support our existing business and to do other things.

Right, okay. I appreciate it. I just hope you guys can understand the concern that might exist after this news breaks considering the significance of Ocwen to the whole sector.

We are, again, just trying to -- anything you guys can sort of talk about going forward, too, I think would help the story, because it's this unknown and there is still so little detail out there and where this might go. So anything you guys can add going forward that would be helpful. Thank you.

Mike Grondahl, Piper Jaffray.

Just a follow up. Could you give us maybe a little bit more update on Equator on what you are trying to accomplish with that acquisition in 2014? Then was there some amortization tied to Equator in the quarter? I am just trying to -- if you have that amount it would be helpful.

Mike, there was $600,000 of amortization of the intangibles in the fourth quarter related to Equator and that is -- we owned it for about a month and a half.

And then with respect to Equator and we are implementing our integration plan, Mike, it's going well. We are setting up sales meetings based on the relationships that Equator has and its customers and those meetings are going well. And we are just working on executing on the plan that we presented when we announced the acquisition.

Okay. Then maybe just a little bit more color. Hubzu has, I think you said, four new relationships with third parties and in discussion for three more. How would you expect those distressed assets or REO -- what type of volume is possible in 2014 from those four?

Mike, we are not going to give you the guidance on that, but some of those customers that we've signed have the potential to be very meaningful sellers of REO. We give you an assumption in our earnings slides on page 14 -- sorry, it's on page 15 -- in terms of sales. But we are in very active discussions and negotiations with some of the larger banks that could move the needle for us should we not only secure those deals and should they give us a meaningful portion of their business.

Okay, great. Thank you.

Lee Cooperman, Omega Advisors.

Thank you. You know it's obvious that there is a lot of controversy surrounding us because of that tie to Ocwen, but one thing I find interesting is the de minimis amount of insider selling and the rather large insider ownership, which is evidence of a high degree of confidence.

I'm curious with the free cash flow we are generating and the large insider ownership, would you guys ever contemplate just saying get the public out and just own the whole thing, and just take our cash flow and further shrink the cap and be a private company? Or is a public ownership integral to what you are trying to do?

And related to that, since you've insisted in the past that your buybacks are all accretive, what is the highest price you have paid for any meaningful amount of shares in the buyback so far?

Bill, I will leave it to you to take the first question, if you like.

Lee, this is an excellent question. I mean at the time being we are not contemplating taking the Company private, but as Bill mentioned in one of his comments, we are trying to figure out ways to, if you will, release the restrictions that we have with respect to Luxembourg law. We all are committed and, as you said, own large ownership positions and through the buyback program we will continue to own more of the Company.

And then the question about -- I know on average your buyback has been very productive, but I am just curious to know the high area you paid so far on the buyback.

I think we were in the 140s.

140s. Thank you, good luck. Appreciate the response.

At this time I am showing no further questions. I would now like to turn the call back over to Michelle Esterman.

Thank you, operator. Thank you for joining our call today. Have a great day.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.