BROOKFIELD ASSET MANAGEMENT LTD (BAM) 2017 Q3 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Brookfield Asset Management Third Quarter 2017 Conference Call and Webcast. (Operator Instructions) And the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Suzanne Fleming, Managing Partner, Branding and Communications. Please go ahead Ms. Fleming.

Thank you, operator, and good morning everyone. Welcome to Brookfield's third quarter conference call. On the call today are Bruce Flatt, our Chief Executive Officer; and Brian Lawson, our Chief Financial Officer. Brian will start off by discussing the highlights of our financial and operating results for the quarter, and Bruce will then give an overview of our market outlook and Brookfield's investment approach. After our formal comments, we'll turn the call over to the operator and take your questions. (Operator Instructions)

I'd like to remind you that in responding to questions and talking about new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events may differ materially from such statements.

For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website.

Thank you. And I'll now turn the call over to Brian.

Thank you, Suzzane. And good morning to all of you on the call. We are pleased with the results we reported this morning. Funds from operations or FFO totaled $809 million. And looking at the key components, fee related earnings increased by 8% in line with the year-over-year growth in fee bearing capital, which now stands at $120 billion. I'd note that the growth in fee related earnings is below trend but that's simply because we brought nearly $30 billion of new funds online in 2016 and we are in that window between these closings and the next series of flagship funds. In that regard, we continue to make good progress on investing these funds. As you are aware once we've invested 75% to 80% of a fund, we can move on to raising a successor fund. We are through 80% on our real estate fund and so we are currently fund raising in that sector. And our infrastructure and private equity funds are through 45% and 70% respectively.

We are also making good progress in building out our credit business, are continuing to grow our core real estate fund and advancing several other important new funded strategies to develop broader product offerings for our clients and opportunities to continue expanding our fee bearing capital. We are also seeing an increase in the amount of carried interest generated as a number of our larger funds raised several years ago are now through their investment period and into the value creation and monetization phases. This quarter, we generated $367 million of unrealized carried, $786 million on an LTM basis, which will be brought into FFO and net income down the road as the funds are distributed and the claw back potential dissipates.

Performance in the funds has been strong across the board and benefitted particularly from the sale of European industrial business within our first global real estate opportunity fund at exceptional returns and also benefiting, particularly from a very successful turnaround in a large industrial business within one of our private equity funds.

I will now turn to FFO from our invested capital, which increased by 19%. The pickup reflects the contribution from acquisitions, particularly in our infrastructure business, as well as higher generation and pricing in our renewable power business and strong performance in our short-term investment portfolios. Realized disposition gains in the current quarter, including gains on the sales of several office properties, as well as the portion of our investment in Norbord. And we booked $25 million of previously generated carry that was no longer subject to claw back.

Net income prior to tax was $1.3 billion versus $1 billion in 2016, due to the aforementioned operating improvements and fair value gains. After including the impact of tax, which reflected $1 billion recovery in the prior quarter, net income was $992 million compared to $2 billion.

Some of you may have noticed that we included in our shareholders' letter, a discussion on our use of International Financial Reporting Standards or IFRS, and in particular, the use of fair value accounting. As a Canadian company, we are required to report under IFRS, as our company is in 100 other countries, but not the U.S. So understandably, U.S. investors are therefore, less familiar with it, and so we like to periodically touch on this point. We encourage you to read our letter as well as our disclosures in our annual and interim reports to provide more detail on this matter.

However, I will recap the highlights here. First of all, under IFRS, there are a number of asset classes, real estate in particular, that are carried at fair value as opposed to depreciated cost. So it differs from U.S. GAAP in this regard. Most REITs outside the U.S. use IFRS and report their properties at fair value. So we are hardly unique, and this includes Europe, Australia, Canada and the United Kingdom, among others. Second, we have extensive expertise and robust processes around valuing our asset. As an Asset Manager, valuing assets is a core competency and something that we do day in and day out. Valuations are subject to extensive scrutiny, both internally and are also benchmarked against external valuations on a regular basis. Third, we believe that fair value information is useful to investors, but needs to be considering the context of other metrics, and that it is at the end of the day, an estimate. In fact, our primary performance metric, funds from operation does not include fair value changes. We believe that our ability to increase FFO is the primary determinant and creator of value in the long run.

Finally, the real test of our performance and our valuations come when we sell an asset. We are very comfortable with our record on this. Of the more than 400 assets sold over the past 5 years, we've realized aggregate value of $44 billion compared with the associated IFRS values of $41 billion, representing 110% of the value we held them at. And finally, I'm pleased to confirm that our Board of Directors has declared the regular $0.14 dividend payable at the end of December.

And with that, I will hand the call over to Bruce.

Thanks, Brain and good morning everyone. As Brian noted, assets under management and fees associated with them continue to grow at a rapid pace. Most of our operations performed well and we continue to find ways to invest capital, despite a competitive environment. We put that down to largely our 3 main competitive strengths, which are sized, global presence and our operating platforms. Fundraising in both private and public markets for real assets remained strong, as institutional funds continue to allocate greater amounts of capital to our sectors and with interest rates still very low, this should continue for the foreseeable future.

As a number of you know, we held our 13th Annual Investor Day in New York this quarter. For those not able to attend, the presentation materials and transcripts are on our website. We believe they provide a good summary of our business plan. So we encourage you to read them to understand where we're going with the business. We covered overall Brookfield and each of the 4 partnerships that trade on the stock market. And our short story is that we are now benefiting from the work over the last 20 years of building up our institutional relationships. These investors that we built the relationships with are allocating more capital now to real assets because of a few factors: the first one being low volatility; the second being strong returns compared to alternatives; and the third being yield and upside from the assets that we purchased for them.

We expect the percentages of overall capital pools to continue to increase substantially from today's level, and the size of capital institutional funds is growing and the compounding effect of both will be significant on allocations to real assets. As a result of that, if we achieve our plans over the next 5 years, we should double the size of our business by most metrics, which should result in significant growth and intrinsic value of a BAM share. The keys to doing this are successfully looking after all of our fund investors, performing for them and growing each of our listed partnerships, both in size and in returns. And in our presentations we laid out the goals for each of these businesses, and I'll just mention a couple of things on each.

In our property partnership, Brookfield Property Partners were focused on bringing to completion several major development projects, investing our opportunistic capital that we have available and capitalizing on the retail property changes occurring in the United States.

In Brookfield Infrastructure, we're building out each of our businesses that we've built over the last 10 years, but we see today significant opportunity in the global telecom tower build-out and growth in India coming from both population growth more broadly, but more specifically from an under-financed corporate sector.

In Renewable Partners, we are one of the few well-financed renewable companies amid what we see is a once-in-a-generation shift over the next 25 years of the energy stack in most countries to renewables. Lastly, our Business Partners launch has been successful and we're positioned now to make long-term focused decisions, because of our current capital and the ability to make long-term commitments to both partners and counterparties.

These days, the most asked question to us as a management group by investors is how do we put the capital to work and why are we able to acquire certain assets in an otherwise competitive environment. I will highlight our TerraForm investment as it is a great example of why we earn the returns we earn and what differentiates some of the things that we do. Bottom line it's quite a simplistic story, it's just a lot of hard work. In this situation, we followed SunEdison and its affiliates for many years, as we participated in the same markets and many cases competed for the same assets. In 2015, SunEdison encountered serious financial issues. We assessed the situation and considered participating in the organization by buying [indiscernible] and eventually converting it to equity, but based on our knowledge of the asset values and the trading values of the debt we didn't think it was prudent at that time.

We continue to follow the bankruptcy and eventually when SunEdison filed TerraForm Power and TerraForm Global, their 2 yieldcos trade down substantially, and we knew they had great assets. And after the filing of SunEdison, the shares came into a range where we finally saw value. At that point we decided to buy common share eventually making proposals to the boards of both companies and their creditors and ultimately we were chosen to sponsor a recapitalization. All of this led us to recently conclude the purchase of 51% of TerraForm Power and will act as its new sponsor and we expect to shortly close the acquisition of 100% of TerraForm Global, which in aggregate, the 2 transactions will expand our renewable operations by 3,600 megawatt with an investment on our part of about $1.4 billion.

In summary, why did this happen. First, we had $1.4 billion to invest, not too many have that amount of capital in a concentrated investment. Second, we understood the business very well, as we owned the same type of assets that they owned, not many others have that. Third, we have flexible capital to lock our toe-hold positions, many don't have the flexibility in their fund or their capital to do that. Fourth, we could be flexible as to buying 100% of the company or 50%. That was very important here and maybe was one of the most important things in the transaction. Most can't do that. Fifth, we have the people to run the business from an operations perspective, few have that. And last, we negotiated for 2 years with counterparties to complete this transaction, not too many can afford that patience. Bottom line, our strength in competing for transactions is usually 1 or all of scale, capital, time, scope, patience or operating skills. In this case, it was virtually all 6 of them.

So with that operator, I conclude my remarks and I'll turn it over to you, and we will take questions, if there are any?

Thank you. We will now begin the analyst question-and-answer session. [Operator Instructions) The first question is from Cherilyn Radbourne with TD Securities.

Wanted to start by asking about the acquisition of Center Coast Capital, which I appreciate is not an overly large deal, but can you just talk about why you decided to buy versus build in that case and whether the retail distribution capability that they bring can enhance the retail distribution of your private funds?

So just for everyone's benefit, the question relates to the acquisition of a master limited partnership manager that largely buys oil and gas master limited partnerships and other master limited partnerships in the United States, which we acquired in the quarter and it was acquired by our public securities group. So we've managed real estate securities, infrastructure securities both long-only and in a hedge fund format for a number years. We never really had -- in fact, we do in the context of our Infrastructure Management, we do MLPs but we never had a specific fund for master limited partnership. And we just felt we found a team that we were really excited about, and they wanted to join us. And so we brought them into the group and we think it's going to be a win-win because our platform will be able to help them a lot and they're bringing those skills to us to manage master limited partnerships. So I think from that perspective, it's a win-win. The second part of your question relates to the retail distribution, which we also acquired. And so we think it's important for their business, we think it's important for our public securities business but more broadly, we think, longer term, it could be much -- it could be important for our overall business as we continue to broaden out the retail clients in different types of distribution that we use across the franchise. So it's -- I'd say, the first decisions were made just of the business we bought, but we think it could be important for the overall franchise longer term.

And then separately, I wanted to ask about some of the expanded disclosure around carry in the supplemental this quarter. We've obviously seen a big jump year-over-year in your LTM generated carried interest. And I just wondered if you could talk about roughly how much of that represents compounding through the passage of time as your funds mature versus specific transactions over the period?

Yes, thanks Cherilyn, it's Brian. So that reflects a couple of things. So first of all, as you've noted, it did step up a fair bit this quarter. And to some degree that's -- as I think, you may have been alluding to the passage of time, meaning that when the funds are in the early stage, that investment period, you are putting the money to work and the fund isn't fully invested until you get through that. And sometimes that will take you a couple of years, at which point of time you get into the whole value creation side of things, and that's when you'll see the generate -- the actual value start to accrete in the fund and enhance the associated performance, and therefore, the carried. That gets essentially the J-curve effect. And then it increases throughout the life of the fund and then taper it off a bit as you distribute things. So I think a lot of it is simply the passage of time, getting the funds put to work, getting into that all, getting to work on the assets, creating the value. And then as I noted in the remarks, sure there have been a couple things in particular where you can then capture and sometimes even enhance that value when you go through the monetization pace. And so in particular, with the industrial portfolio in Europe, it would have been a particular instance of that, where that specific transaction will establish a higher level of carry as well.

Your next question is from Yian Dai with KBW.

My first one is for Bruce, you briefly referenced capitalizing on changes in the retail space in the U.S., in your prepared remarks. So I guess I was just wondering if you could kind of refresh our memories on what you think the market might currently be under appreciating about your current retail investments in their relative positioning? And then also, I guess I'm wondering if you were to be looking to invest further into the space, whether you'd be more likely to look inside of the GDP franchise and stick to what you know or maybe also with that third-party ramp?

So I would just say there is -- our view is that the retail industry is undergoing 3 general changes. The first one is that we came out very strong retail sales over the past 8 years. Since the recession in 2008, retail sales grew exponentially and that can't go on forever. So eventually retail sales levelize out to a normalized amount, and that's the first thing. Second, there is no doubt the Internet is affecting some amount of retail sales, and there's a debate on whether it will go to X or Y percentage of retail sales in America, but there is some form of numbers going in there. And third, there is no doubt there is an overcapacity in the United States for retail and our view is that there is great retail, which will continue to be great retail longer term and there is retail that needs to be repurposed and redeveloped. And there aren't that many great malls available to be purchased, but what we have been taking advantage of both in GDP, and both in our opportunity funds where we have other retail strategies, we've been buying retail centers which are really just forms of real estate being repurposed. And these take very long periods of time, but they can be extremely lucrative if you can repurpose apartments, multi-family hotels et cetera, or office buildings on those parcels of land, because usually what these are, very large pieces of urban land which can be repurposed, because we're in the middle of big cities in the United states and especially on the coast, some of those pieces of land are very valuable. But it takes a lot of skills, money, capital and vision to be able to do it. So everyone isn't capable of doing that.

I appreciate the color. I guess as my follow up, I'd just like to take the discussion of distribution of (inaudible). I know this is still work in progress, but can you talk a little bit about the investments that you've made or are making into growing the distribution footprint across your platform not just in public markets? And do you have any updated numbers around how your client base has grown as you've expanded distribution in your product set and capabilities?

Sure, so, it's Brian, and thanks for that. So I think as we referred to at our Investor Day as well, it is a push to expand our distribution more into the high net worth channels, and in particular, looking at, there is a couple ways that we've been doing it. One is, we have worked with some of the major financial institutions in introducing our funds into their clients and into their high net worth distribution systems. And so that's one element of it, and we've been making some good progress in that regard, and of the past series of our closes, there's been a I'll say, a modest amount of our capital that was placed in that regard, and we're looking to step that up with the next series of funds. And then the other part is working with specific channels to distribute more broadly into their high net worth distributions and we've got a couple of fund strategies that we're working on there. So we don't have any concrete numbers for you today in terms of the quantum of capital that's been placed in that regard, because with the most recent ones, it's still in process. Having said that, I think we've indicated that getting up around the 10% level would be a near-term target in that regard, and we seem to be heading in that direction.

Your next question is from Bill Katz with Citigroup.

I appreciate the color on the International Accounting. Just on that thing, just sort of going back to your Investor Day, and then one of the surveys you took was what would investors like to see more, and it sort of felt like there might be a little bit more discussion around the concept of ENI or economic net income, very much like some of your U.S. counterparts present their information. Where are you in your thinking in terms of your sort of presentation of your financials beyond the funds from operations concept -- construct?

It's Brian. So, yes, actually we're trying to get our disclosures aligned in a way that we can be -- make it easier for folks to benchmark our performance or understand our performance what relative to the other alt managers. And so in that regard, what we have done in the quarter is, while we haven't gone out and explicitly called it economic net income or, I'll come back to that point, but we've essentially captured that for our asset management activities by presenting fee related earnings and generated carry together, which would be essentially what most of the other -- in our view, what most of the other alt managers were doing. Now, the one difference in particular with us is, because we do have a substantial amount of our capital $30 billion some odd invested alongside our clients in our various funds. And so in some cases an alt manager, they would have -- their concept of ENI would also include all of the investment earnings and mark-to-markets and things like that with respect to their investment capital, their investment portfolio as well, which as I mentioned is (inaudible). In our case, that's a much larger number. And so our thinking in that regard is to essentially give people what is ENI for our asset management activities and then that separately gives everybody also the performance of our invested capital. And so you can understand the one relative to the alt, and then the invested capital is just what that investment capital is, and you add the 2 together and setting aside overall franchise value which we would never want to underestimate, that should give you a good sense of the performance of Brookfield. So we try to move along that road, but we're not entirely comparable in that regard.

And then just, sorry, I'll hit the same topic one more time. I'm so intrigued with the sort of the focus on the U.S. retail, not so much in real estate, but just in terms of from a distribution perspective and obviously, this transaction moves along a little bit, the [CCC] deal. When you sort of think about getting the retail to about 10% of your business, was that just a construct of incremental distribution or is that more a function of AUM, and if it's more of the latter, or fee bearing capital, I'm still wondering how you are thinking about the interplay between incremental volume versus economics specifically in terms of maybe margins for the business that we had?

Well, just to be specific, there is a balance between how much it costs to get incremental retail distribution and to maintain it and to administer it versus bringing in the institutional money. On the other hand, large institutional clients sometimes drive different economics on funds. So there is a fine balance. Our long-term view is, retail high net worth, we're probably never going to do retail, retail. That's what our listed securities are, but retail high net worth is probably an important balance for our broad distribution that we have within the company. And we think it's important and it introduces us to a lot of different groups and people across the world and actually sometimes, even just like on the institutional side, it brings us transactions because you get to know people. And so I'd say, it just helps broaden out our franchise to a greater group of people. And that is helpful.

Your next question is from Andrew Kuske with Credit Suisse.

Given the fact that BSREP II is at 80% invested or committed at this stage and you're going out and really ascertaining interest from clients at this stage on the next fund, what's the dynamic between really fundraising on a pool basis as you've done in the past versus direct investments on assets and what's really the appetite from the client base right now?

So I'd say, it's similar to what it's been in the last 5 years. It's not really that much different. And our investors have been probably all in all institutional managers, investors break out into the categories of, there is a few that do direct investing on their own, there's some that invest in our funds and like us to bring them co investments, and then there's some that just don't have the capabilities and they like us to do the investments for them. And there's different groups and we deal with all of them. And the good news about our business is that we generate large transactions, they often come with co investments and we have our listed vehicles, which do direct investments and often there's things that don't fit the specific funds or the (inaudible) the type of investments that country is in. The concentration limit allows us to bring our clients other types of investments and we do those with many people that come into our fund. So as a first priority, and that often makes sure that we cement a relationship with them. So I'd say, generally that's how it breaks out and it's not much different than it's been over the last number of years.

And then maybe just an extension on that, is there any evolution from either the co-investors morphing into a perpetual kind of construct that you've proposed in the past and specific asset classes?

So our view is that, if interest rates stay low, more and more fixed income allocations are going to flow into these type of products and what the ideal investments are long-term hold relatively modest yield investments with low-risk and those are perpetual funds and that's going to continue to grow and grow and grow. And so we're eventually going set them up in all our businesses and manage those type of assets for the investors and really what they are is, long-term fixed income alternatives to help balance your portfolios with moderate risk.

Okay, that's helpful. And if I may just sneak one more in on Center Coast, how would you compare Center Coast to say, the past deals you have in the history of Hyperion and K.G. Redding, like how is it similar, how is it different?

Yes, each one of these has never been relevant to the overall franchise. But what they brought us was a special capability or people to be able to grow in an area of the business, and therefore I think over the longer term, they're all highly additive. And each one of them has been great in their own way over the past, so that we're not -- we've never been big on buying managers and there are modest amounts of money that we've done it with.

Your next question is from Dean Wilkinson with CIBC.

Bruce, kind of just a bigger picture question for me. Given the amount of capital you've got to invest, doubling of that potentially over the next 5 years, as you look out the next year or so, what do you think the sort of single best opportunity is or perhaps said another way, where are the greatest chances for mispricing of assets and if you had a preference, what would you have sort of been looking towards?

So I would say more broadly, if you look at our business, it's about the franchise tracks, finds, locates. Every fund is filled with 50% of investments which just come because of the businesses that we're in, the people we have, the franchise we have, the relationships we have and they're just singles and doubles and we're just tucking them in. And they're normally in the businesses that we already operate, they are something down the street or something in another city or something just like the one we have. And so I would say, no matter what environment we're in, that occurs. And that's just ready, stable and I'll just call it 50% of all the funds. The other 50% generally changes from time-to-time based on capital flows around the world and where we've set up -- we've set up our people to be able to take advantage of those and we're never actually sure where that's going to be. Over the past 24 months that was in South America and most specifically in Brazil. That's still in existence, but less so than it was 18 months ago because the market has bottomed and recovering. India, we've seen and we've done a number of things, and I think we'll continue to see it because there is an under-financed corporate sector. And therefore, there's a lot of opportunities coming out of that as banks try to take loans through the sectors off their book. But we always surprise ourselves where the opportunities come from. But those I guess, would be the 2 ones is that -- where there is the least capital in the world today at the current time.

So it's fair to say that the view was perhaps a little less domestic than it may have been historically.

I would -- like our -- if we went through the real estate fund, the last real estate or the current real estate fund we're investing in just closing off, despite the environment that we've been in, which has been very good, and we've been sellers of a lot of assets in Europe and in the United States. I think I'm just going to guess here, I think 50% of the portfolio that we invested in a $9 billion portfolio of equity was invested in the United States. So despite that, because of the advantages we have of size, capital availability, skill, geography, et cetera we were able to find 50% domestic investment. So we always find things, but on balance 2009 -- reflecting back to 2009, we hadn't thought United States would be where all our many would go and it just so happened, why would you go anywhere else if you could buy 50% of replacement cost in the United States. So it just all depends on what capital flows.

The next question is from Neil Downey with RBC Capital Markets.

On the subject of, I'll call accrued versus realized carry, we do see a list of your private funds in your supplemental information package. Can you help us think about which funds in particular over the next, let's call it 2 years are really moving through that monetization stage, obviously we've seen the deal to sell Gazeley in Europe and that's closing, I believe, in the fourth quarter and you generated sizable carry accrual on that. But which funds are going to continue to go in through that monetization stage?

Hi, Neil, it's Brian. So I'd say, the fund that you point to there which would be our first global real estate opportunity fund BSREP I is definitely into that mode. We've got a couple of the private equity funds that are a little bit further along in terms of their vintage, and you know they are bit smaller but they have stepped into that phase as well. And then, I'd say-- it's a general observation. You tend to get us likely shorter investment duration within the private equity in the real estate opportunity funds, than for example on the infrastructure fund. Those tend to be a little bit longer dated. So I'd say those ones will take a little bit longer in terms of getting into the actual distribution phase, and hence locking the carry. Having said that, the infrastructure funds as we've noted, they would be the last ones already 40% and that's pretty big fund. So there's a fair bit of capital at work and has been invested and hence is accreting in value and therefore generating carry even if it's not getting through the claw back period and brought into FFO.

(Operator Instructions) The next question is from Mario Saric with Scotiabank.

Just looking at the percentage of your respective flagship fund that committed real estate infrastructure private equity at 80%, 45% and 70% respectively. When you launched these funds, how does -- how are the commitments kind of phased or capital deployment compared to your original expectation on the various fund?

I would say they are generally pretty much in line. And part of the reason why I say that, by the time you're getting towards the end of raising the funds you've already, you're always looking around for those investment opportunities and you are always processing them through. So you have got some pretty good visibility. And in some cases, you can have a fund that you know it's going to be pretty well spoken for within the first year. The investment period is 3 years for a reason, to give you that time to go through it. But just given the comments, Bruce made earlier in our ability to have visibility on a number of things either say generate tangential to our existing businesses and operations and then the things that we find more opportunistically, is such that we find, we can put the capital at work at a measured pace, but one that's generally shorter than the investment period.

And my second question is, I appreciated the color on singles and doubles in the letters to shareholder, especially on the back of a pretty exciting whole series that we've seen but as you get bigger over time, presumably, you've indicated scale is very important in your ability to source transactions and how we deploy capital. As the funds get bigger and Brookfield's gets bigger, how should we think about the proportion of singles and doubles versus home run that others may not necessarily be able to compete on?

I would say that our, if you look back and I think I see no reason it wouldn't be the same going forward, just the general investments we make that are straight down the middle, based on our franchise that can earn us an easy 15% or 20% return depending on the type of investment we're making, which fund, probably a half of the fund, and that just give us a good base of investments. We're taking not a lot of risk and -- they we can find them easily, and the other half is allocating capital to the most interesting jurisdictions. And we kind of try to balance it out to make sure that we have a balance of both in each different type of fund.

And then maybe just on real estate in particular, have you seen any change in kind of client attitude towards opportunistic versus our Core Plus versus Core on the margin?

Yes, for real estate, I would say opportunistic is highly sought after. People want returns in their funds and we see no basing of allocations to opportunistic real estate globally. Some institutions are always and have been for years, worried about interest rates, and therefore worried about buying core real estates, but there is an enormous amount of other people behind them that have been buying for core real estate. So I think there's still a lot of investors for all of those products.

This concludes the question-and-answer session. I will now hand the call back over to Ms. Suzanne Fleming for closing remarks.

Thank you, operator. And with that we will end today's call. So thank you everyone for participating.

This concludes today's conference call. Thank you for participating and have a pleasant day.