CNA Financial Corp (CNA) 2009 Q1 法說會逐字稿

Good day, and welcome to the CNA Financial Corporation's first-quarter 2009 earnings conference call. Today's call is being recorded. At this time, I would like to turn the conference over to Nancy Bufalino. Please go ahead.

Thank you, Jessica. Good morning, and welcome to the discussion of CNA's first-quarter 2009 financial results. Hopefully everyone has had an opportunity to review the press release and financial supplement which we released earlier this morning and can be found on the CNA website. With us this morning are: Tom Motamed, our Chairman and CEO, and Craig Mense, our CFO. Tom and Craig will provide some prepared remarks about our first quarter results and Tom will follow up with comments of CNA's strategy going forward. We will then open it up for questions.

Before we get started I'd like to advise everyone that during this call there may be forward-looking statements made and references to non-GAAP financial measures. Please see the sections of the earnings release titled financial measures and forward-looking statements for further details. In addition the forward-looking statements speaks only as of today, May 4th, 2009. CNA expressly disclaims any obligation to update or revise of any forward-looking statements made during this call. This call is being recorded and webcast. During the next week the call may be accessed again on CNA's website at www.CNA.com. And with that I will turn the call over to CNA's Chairman and CEO, Tom Motamed.

Thank you, Nancy. Good morning everyone, and thank you for joining us. CNA delivered another quarter of steady performance driven by solid results from our core business. Rate trends were favorable. Renewal retention improved. And the combined ratio again came in under 100. The investment side of our business reflects the effect of turmoil in the financial and credit markets, hence the net loss for the quarter. Still, I am pleased to note that our unrealized loss portion improved from year-end 2008.

GAAP, equity and book value per common share also improved. Our statutory capital position remains strong and we continue to hold substantial cash and short-term assets at the holding company level. Overall, after four months at CNA, I am more confident than ever in our company's financial strength and our franchise in both the specialty and standard lines markets. Today we will be covering three major topics: first, CNA's first-quarter results; next, a review and update on our investment portfolio by Chief Financial Officer, Craig Mense; and finally, I will come back on the line after Craig and provide some detail on CNA's strategies going forward.

As you read in our press release, our first-quarter net operating income was $149 million in 2009 or $0.44 per common share, compared to $221 million or $0.82 per common share in 2008. Our operating earnings reflected solid underlying performance in a highly competitive environment, but were dampened by a lower level of net investment income. The net loss for the quarter of $195 million or $0.84 per common share was driven by aftertax impairment losses of $399 million. Turning to our core business, property casualty operations delivered a first-quarter combined ratio of 98.2 compared with 98.1 in the first quarter of 2009. Favorable development improved the first quarter combined ratio by 3.7 points in 2009, versus 1.3 points in 2008.

Current year catastrophe losses added .9 and 3.2 points in 2009 and 2008 respectively. Before development and current year catastrophes, the combined ratio was 101 in 2009 compared with 96.2 in 2008. The difference was largely due to the impact of rate pressure and several large property losses on the 2009 loss ratio, as well as the impact of employee-related expenses and lower net earned premium on the expense ratio. The favorable development is primarily attributable to property in standard lines and liability in specialty lines. I would also point out that property and casualty operations has now had nine consecutive quarters of favorable development, a trend that confirms our prudent reserving practices.

As for premium volume, net written premiums decreased 1.7%. Excluding currency fluctuation, net written premiums were actually up slightly. In the face of a weak economy, CNA maintained its previewing volume through a combination of strong renewal retention and an increase in new business. Now let's take a closer look at specialty lines and standard lines starting with specialty. Specialty lines delivered a first-quarter combined ratio of 91 in 2009 compared with 92.4 in 2008. Favorable development in the quarter had a 5.4-point impact in 2009 versus no impact in 2008. Before development in catastrophe losses, the first-quarter combined ratio was 96.3 in 2009 as compared with 92.4 in 2008. Specialty lines first quarter net written premium declined 2.2% in 2009 versus 2008. Excluding currency fluctuations, specialty net written premium increased about 1%. In addition, we continued to emphasize the importance of expanding our customer base as measured by a 1.1% increase in policy count.

The first-quarter ratio of new to loss business was 1.4:1, we retained 85.8% of renewal business, two points better than first quarter 2008, and continuing our favorable trend over the past few quarters. Renewal rate decreases have also been narrowing. The average first-quarter decrease in 2009 was 2% compared with 3% in the same period in 2008. Competition in specialty remains persistent and strong in most major lines and geographies. However, there is some moderation in rate decreases and even some rate increases in limited instances such as financial institution, E&O and pockets of the excess and surplus lines marketplace. Overall, I would describe specialty market conditions as consistent with the second half of 2008. As per standard lines, the first-quarter combined ratio was 106.3 in 2009 compared with 104.4 in 2008. Favorable development in the quarter had a 1.7-point impact in 2009 versus 2.6 points in 2008. Before development and catastrophe losses, the first-quarter combined ratio was 106.3 in 2009 as compared with 100.2 in 2008.

First-quarter net written premiums decreased 1.1%. Currency fluctuations had no impact on standard lines premium growth. As is the case in specialty, we are growing our customer base with a 2.1% increase in policy count. The ratio of new to loss business was 1.3:1 in the first quarter. We retained 82.6% of the business available to renew, two points better than the first quarter of 2008.

Rate decreases averaged approximately 2%, the lowest in eight quarters. With respect to the standard lines marketplace, although we have seen rate decreases level off in the quarter, particularly for property business, overall competition remains strong. It is encouraging, however, that there was little evidence of pressure to broader terms and conditions. Even with favorable rate trends in the quarter, we did see more signs of decreasing exposures such as payroll, sales and insured valuations. Initially, these decreases have been primarily limited to our commercial construction business, but now they are spreading to other industry segments as well. These conditions will continue to impact overall price and ultimately premium growth.

Turning briefly to expenses, the property casualty operations first-quarter expense ratio was 31.5%. We continue to run at competitive expense levels while also investing in talent and infrastructure. In summary, our property casualty operations performed well in the first quarter with a 98.2 combined ratio. We continued to see improvement in the key drivers of growth, rate, retention, and increased policy count. Overall, I like our outlook. Now I will turn it over to Craig for a review of our investment results.

Thanks, Tom. Good morning, everyone. As Tom outlined, CNA delivered steady operating performance in the first quarter with solid results from our core P&C business. Continuing to deliver solid operating income is a key financial priority for CNA and one we feel we are well-positioned to achieve. Equally important to us are two additional financial priorities: reducing the overall risk and volatility of our investment portfolio, and maintaining a strong level of capital adequacy. CNA performed well against all three of these priorities in the first quarter despite the continuing turmoil in the financial market.

With respect to our first-quarter operating results, steady, underlying operating performance was dampened by lower investment income and higher expenses. First-quarter pretax invested income was $420 million, compared with $434 million in the prior year period. Excluding trade portfolio losses of $77 million in 2008, net investment income declined $91 million period over period. This decrease was primarily driven by our large short-term position, which stood at $4.7 billion at quarter end coupled with low, short-term yields, as well as losses from limited partnerships. Limited partnership losses were $70 million or a negative 4% return during the quarter, compared with LP losses of $39 million or negative 2% return in the first quarter of 2008.

The LP losses are largely a carryover from last year's fourth quarter. You will recall from our last call that approximately 85% of our LPs as measured by reported values report results on a one-month lag or less. This quarter's LP losses were primarily associated with later reporting partnerships. The partnerships on a current or one-month lag basis reported relatively flat results for the quarter. The decline in net earned premium and the recognition of a higher level of noncash pension expense has put pressure on our expense ratio. This will likely continue in the short term, but we expect our improving top line and disciplined expense management to keep us competitive even, as we continue to make targeted investments in people and infrastructure. The net realized loss in the quarter was driven by aftertax impairments of $399 million. This compares to after-tax impairments of $56 million in the prior year period.

This quarter's impairments were fairly equally distributed across three asset classes: asset-backed instruction products, below investment-grade corporates, and nonredeemable preferred stock. In the asset-backed instruction products, modeled stress cash flow outcomes led us to impair a number investments that we could no longer be assured of 100% recovery. It is important to point out that the impairments were marked to today's depressed market values, even though we would expect the ultimate recoveries on those assets to be significantly greater. In below investment grade corporates, our decisions were driven by both credit issues and capital efficiency consideration. Market conditions allowed us to reduce our bank loan exposure significantly and reinvest those proceeds in high-grade investments with similar yields, improving the capital efficiency of the portfolio. In addition, ordinary portfolio management considerations in an improving but still depressed market contributed to realized losses.

In a nonredeemable preferred stock, we impaired our now combined holdings in Bank of America-Merrill Lynch based on the recent downgrades of these securities, as well as the size of our combined position and our desire from a risk management perspective to maintain the flexibility to trade out of that position. It is important to point out that the recognition of all of these impairments had a diminimus impact on capital adequacy, because for the most part, these investments were already held at market value in both our statutory and GAAP financials. We did not early adopt FSB115.2 the new accounting standard that changes the GAAP impairment model. We will adopt a new standard in the second quarter and are still evaluating its impact. Nor did we adopt FSB157.4 the new standard related to fair value of securities in an inactive market. We don't expect the adoption of FSB157.4 next quarter to have a significant impact.

Turning to our investment portfolio, we continue to emphasize diversification, quality and liquidity. The average quality of our portfolio remained double A minus consistent with year end. The effective duration of the total portfolio is now 5.2 years down from 5.8 years at year end. Most of the duration's decrease can be attributed to the increase in short-term investments, combined with the expectation of faster prepayment speeds in the asset-backed sector. The effective duration of asset backing our segregated portfolio to match our life-like long term liabilities with 10 years which is in line with portfolio targets. The effective duration of the remaining assets backing our P&C liabilities was 3.6 years, below our four-to-five-year target and reflecting our large short-term holdings. Our unrealized loss position stood at $4.8 billion at quarter end down from $5.4 billion from year end 2008.

As I have mentioned before, approximately 44% of our unrealized loss position is in long maturity assets that primarily support long duration liabilities such as our long-term care business. Our portfolio showed signs of recovery in the first quarter led by tax exempt and corporate. Pricing improvements were seen across all sectors except mortgage-backed and asset-backed products. The recovery continued in the month of April when the market value of our core securities increased by approximately $550 million. Over time, we intend to reduce our investment risk and volatility, which we believe will drive more consistent investment performance in the future. We expect to accomplish this through an orderly measured process of investing positive operating cash flow and our substantial portfolio cash flows into targeted asset classes. We have been putting new money to work largely in investment grade Corporate and high-grade munis, a trend that will likely continue for a while.

Our liquidity and cash flow continue to be major advantages, we had $5.7 billion in short-term holdings and treasuries at quarter end. In addition, we maintain strong cash and short-term investment balances at the holding company level, approximately $500 million at quarter end. Positive cash flows from operations and principle payments were $641 million in the first quarter. Our $7.3 billion structured securities portfolio continues to be a substantial source of positive cash flow. The short, weighted average life of our holdings continue to serve us well. These investments are paying down quickly, $465 million of principal repayments in the first quarter with an estimated $1.8 billion for the full year. We are reducing the risk associated with structured securities by effectively running off nonagency structured holdings. Our new purchases are relatively modest, and are focused on agency pass-throughs and agency CMOs.

Our third priority is maintaining a strong level of capital. We did see modest improvement in book value and GAAP equity from year-end 2008. In addition, our regulatory capital remains constant with the year-end level. We regularly evaluate our capital adequacy against regulatory, internal and rating agency metrics. Against all these measures, we believe our capital is more than sufficient to support our current ratings. Before turning the call back over to Tom, I would like to report briefly on our noncore business. The life group segment produced a first quarter net operating loss of $22 million in 2009, as compared to a loss of $3 million in 2008. The increased loss was primarily as a result of adverse investment performance on our remaining pension deposit business. Corporate segment had a first-quarter net operating loss of $9 million in 2009, compared with a $5 million of net operating income in 2008. The decline was primarily the result of reduced investment income.

In summary, CNA had a steady first quarter as measured by our progress on our key financial priorities. Our disciplined approach to business fundamentals sustained our ability to deliver solid operating results. We continue to process of reducing risk and volatility in our investment portfolio, and we continue to demonstrate our ability to maintain strong levels of capital adequacy. With that, I will turn it back over to Tom.

Thanks, Craig. In our last conference call I told you that I would be thorough and thoughtful in the assessment of CNA and our direction for the future. So today I will begin to outline our strategies as they relate to growing the top and bottom lines. To put all of this in context, I have visited 18 branch offices, met with a great many agents and brokers, and spent considerable time with our employees and managers to get a balanced view of our strengths and capabilities. We are now going forward with a set of strategies to drive top and bottom-line growth and optimize our property and casualty portfolio.

First, further developed and deepened industry-specific technical expertise while maintaining a broad appetite. Second, manage our mix of business to improve profitability. And third, extend our geographic rate reach within an expanded US footprint and more focus on international opportunities. I would now like to walk through these strategies one at a time. With regard to technical expertise and appetite, CNA today has a very strong franchise in several industry segments, including construction and health care among others. In these industry segments, we have demonstrated to our agents, brokers and clients, that we have deep expertise in underwriting, risk control and claims. This approach has translated into strong profitability and market presence which gives us confidence to venture more deeply into other underwriting segments where we have expertise.

We believe that our approach to risk in our strongest businesses is a core competency that can be expanded into other industry segments. Therefore, in addition to the industries in which we already have an edge, like construction and health care, we will be focusing on the following core industries: technology, manufacturing, retail, wholesale distributors, business services, commercial real estate, education, financial institutions, and professional services. For each of these industries, we will leverage expertise that already exists across CNA. We will cross-sell both commercial and specialty products where it makes sense from a profitability perspective. By taking this approach, CNA will be known as the Company that understands its customers and provides products and services they value most. Everything I have said is in addition to our broad appetite for good risks regardless of industry or size. At the same time, we believe that developing deeper expertise in selected industries will provide more opportunity for growth and profit.

Moving on to our second strategy: managing the mix. This continues to work begun under my predecessor. In the next few years, specialty businesses will be our major growth engine. These businesses have a long track record of strong profitability. The current dislocation in the specialty marketplace is opening up a range of opportunities such as: financial institutions, D&O, and professional liability. Turning to our standard lines businesses, in addition to the industry segments I've just described, we will focus our growth strategies on monoline opportunities, such as: umbrella, marine, property and equipment breakdown. As these segments become a bigger part of our standard portfolio, we expect to see improvement in our profitability. The ability to manage our mix is just a nice-sounding idea without agents and brokers to make it happen. So let's me now say a few words about distribution.

CNA currently does business in the United States with 3,000 contracted agents and brokers. This is a relatively small number compared with our competitors. I have been pleasantly surprised with the loyalty and tenure of our agents. It is our desire to increase our volume with each agency that has chosen to do business with us. At the same time, we will look to appoint new agents in cases where is our current distribution partners do not have clients or expertise in our expanded industry segments. We will focus on developing relationships with producers for whom we can be a significant market in our chosen industries. We also have decided to increase our presence in the excess and surplus lines arena, where distribution is dominated by wholesalers. We believe the ability to be an entrepreneurial player in a business where there is freedom from rate and form constraints will afford us a great opportunity to grow and make money, particularly when the pricing in the retail market improves.

Moving on to strategy three: geographic reach. Our US agents consistently tell us that speed, ease of doing business and personal relationships with local underwriters are important to them. We already have a significant local presence with 32 branch offices in the United States. Our strategy calls for expanding this footprint by opening five new US branches over the next year, adding resources and increasing authority at the point of sale. CNA is viewed predominantly as a player in the US market; however, we have operations in Europe, Canada and Argentina. They account for a relatively small percent of our worldwide net written premium but we believe represent a significant growth opportunity.

Our first order of business is to further develop our European business. We see the opportunity in Europe to strengthen established positions in financial lines, cargo, property and casualty, while also pursuing specialized risks in emerging areas such as health care, technology and renewable energy. We will approach the Canadian market much like our US operations. We are in the early stages of reviewing our Latin-American operations and we will certainly update you as we complete our analysis. Now that we have completed our strategic review, we have begun the process of aligning internal resources with our strategies. We will invest where necessary while continuing to focus on disciplined expense management. Overall, we expect that a better alignment of resources will result in cost savings and the ability to fund and support our strategies going forward.

In summary, CNA will further develop industry-specific technical expertise while maintaining a broad underwriting appetite. We will manage our mix, expanding our profitable, specialty businesses, and improving our returns in standard lines. We will expand our US branch footprint to drive growth with existing and new producers and we will further develop our European operations. It is an ambitious agenda, but I firmly believe we are up to the challenge. Good things have been happening at CNA for some time now. We have a strong market franchise, a proven record of specialty underwriting excellence, people with leadership and technical talent and the liquidity and capital resources we need to move forward on our strategies. In our last conference call, I said that I joined CNA because I saw a tremendous upside. I see it even more clearly now. With that I'll turn it back to the Operator and let's begin the Q&A.

Thank you. Today's question and answer session will be conducted electronically. (Operator Instructions) We'll pause for just a moment to assemble our queue. We will take our first question from Bob Glasspiegel with Langen McAlenney.

A question for Craig and a question for Tom. My question for Craig is, thank you for your April commentary. That was a pre-tax or after-tax number on the gain, the $550 million?

That is pre, Bob.

Okay. You say $1.8 billion of your topical assets mature in 2009. The MBS CMO ABS CDO?

Yes, principal payment of a billion eight, yes, in 2009.

What are the unrealized losses on that segment, ballpark?

Of that $1.8 billion? I am not sure. Why don't you go into Tom's question.

Because I am interested -- basically any data, how much of your -- what the duration of your underwater assets are and how much of it will we see that you actually did a pretty good job on your asset selection in a relatively quick time period. That sort of thing. Any data that will support that.

Well, here is a couple of things you can keep in mind. First, our -- the weighted average life of the entire structured portfolio is something around three years. And this quarter as an example, you saw the book value of that portfolio go down $500 to $600 million. And about $500 million of that was little less than $500 million. $465 million was principal repayments, and some of that was market value changes. So I think --

It goes down by maturing, that is good. If it goes down by declines, it is less good. Obviously --

Right. And that's why -- and I'd also tell that you $150 million of that $465 million was from subprime and [all day] and all this stuff is paying off relatively quickly, and -- in something you ought to see emerge fairly quickly over time.

Okay. Are you going to get back -- give me that number on the $1.8 billion, that would be great. Tom, any key hires that you have made? You have been on board for four months officially, typically new management brings in new people at key spots.

Yes, I would say, first of all, Bob, that we are going to be continually upgrading the talent where it is needed. We did hire a new leader in our wholesale excess surplus lines area by the name of John Angerami, who has a long experience in the P&C industry, and in particular did run a wholesale excess surplus lines operation for another carrier, and we are looking to build that out pretty quickly. We will, in that area as you probably know, hire teams of people because that is the way that business operates, so we are very actively in the marketplace looking for teams to build out our excess surplus lines capability today. But we are looking to upgrade where necessary, and we have a lot of searches underway.

You are please with the overall financial and systems and talent of the Company?

Yes, more detail than could choke a horse. There is a lot of information here. And a lot of our decisions obviously going forward on strategy are based on the ability to do deep dives in surgical, I'll say, cuttings of the business, so that we have pretty good confidence that the areas we have picked out are going to be profitable for us going forward.

Thank you, Tom.

Okay, Bob.

We will go next to Dan Johnson with Citadel Investment Group.

Great. Thank you for taking the call -- question rather. Two, if you would. One on the business, one on the portfolio. On the business, within the standard lines, if you can look out over the next year or so, looking at pricing, expectations, looking at competitive environment, looking at loss inflation scenarios. What is the realistic timeframe for getting the combined back down below 100? And sort of given the trend that it's on, does it have a better chance of hitting 110 first, and then -- I do have -- a second question.

I guess to start, we wouldn't even mention 110 around here. You're going in the wrong direction. Clearly we are looking at what we call our standard lines portfolio. There are certain areas of the portfolio that are underperforming, and we are either taking action in the form of nonrenewal or significant rate increases, and if that business leaves, so be it, but we are not going to tolerate underpricing on our portfolio. So, you've seen rate improvement in the quarter over last year's first quarter, and improved over year-end 2008. So we continue to push rate. As I said, there is no deterioration in terms and conditions which we believe will help us on the loss side over time, if we can maintain the portfolio the way we see it.

So we will continue to push rate in the standard lines. We wrote a lot of new business. New business in the first quarter of 2009 was 13% higher than new business in the first quarter of 2008. So we are pretty pleased that we are in the marketplace. We are getting treated favorably in standard lines as well as specialties, so we continues to write new business to replace some of that business we are running off that quite honestly is not profit willing. We believe that the business we are writing today is priced quite sufficiently to have an underwriting profit well below 100.

The business you are dropping obviously is not that acceptable profitability. But for it seem a decent part of the business, aren't we still looking at an upside-down gap between most pricing trends and most lost cost trends, or do I have that backward?

Actually frequency is down mid-single digits. So we view that as a favorable trend. Yes, there is lost cost inflation, but frequency down is a good thing because typically when frequency is up it breeds severity. So we are optimistic that the decline in frequency will help us over time as we grow the business at, I would say better rates than historic rates.

Great. One last one on this and then on to the investment question. When you look at the book of business today and sort of segregate it between stuff that you think has got a good chance and you want to stick with, again this is just within standard and compare that to the book where you are not quite so sure that rates or terms, or whatever will change sufficient enough to help with the combined. Sort of how big is that second book that we are more apt to get out of rather than price up?

It is really not a premium issue as much as it is a loss severity issue. So, we think any, I'll say shortfall in premium by running this stuff off, we can make up. And we think we get a multifamily better return by getting rid of this stuff because on the loss ratio side it is considerably higher than what our combined ratio is that we report. So we will be shedding, I'll say, bad business and we will be adding better business, and from a premium standpoint, we don't see a decline because of that runoff.

Okay. Great. And then the second question on the asset side, for Craig. Will you point out, if you would, an asset class or two that you think performed very well for you in the first quarter, that those of us on the outside who deal with aggregated statistics or high-level indices numbers might not fully have appreciated the performance of CNA's relative to such an index?

Well thing that -- let me offer some comments and then we also have with us here today Richard Scott who is our new Chief Investment Officer. So when I finish here for a second, I will ask Richard if he'd like to add any comments. But the two big areas that performed [particularly] well is what I said in my remarks were tax exempts and corporate, particularly high yield corporate. Would you like to add anything to that, Richard?

Yes, I think when you look at the dynamics of what was going on in the market in the first quarter, municipals, which had really been hammered going into the end of last year staged a very strong recovery. Their pricing much more than offset the back-up in treasury rates. Corporates rallied in dramatically in terms of spread, and in price performance, the lower rated you were, almost invariably the better your price performance was. Rate improvement offset the spread movement with regard to most of the very long duration stuff, so the dollar prices didn't change much on that part of the corporate book, but realistically, spreads came in quite dramatically during the first quarter. And as Craig mentioned, high yield of all types including our relatively significant bank loan portfolio performed quite well, and we used frankly the rally in bank loans to make fairly significant sales of the portfolio during the first quarter.

How would you say the nonagency prime portfolio performed?

Nonagency prime was probably an underperformer for the quarter relative to the rest of the books.

Down a couple percent or something bigger would you say?

That is probably fair.

Great. Thanks for taking my many questions.

(Operator Instructions) We will go next to [Jeffrey Payne] with Private Management Group.

Yes. Hey, good morning. You kind of answered my question in the last call there. I was trying to get understanding of the dynamics where you had the realized losses in the quarter, but such a good improvement in the OCI there.

I'm sorry. So your question was the realized losses and a --

Yes. Just the dynamics where you had the dichotomy, you had the real-life losses in the quarter, but yet OSI actually showed pretty good improvement.

Well, you would remember that the investments are carried at, but we have been very disciplined of really carrying our investments at exit prices and market values. So those investments are already carried at those lower market values when we decided to recognize the impairment. So they had really no impact on OCI and the recognition, and they had limited impacts on regulatory capital because they were also carried at the market values from the regulatory standpoint.

Okay. Well, I appreciate it, and good luck with the new strategies there.

Thank you.

Thank you.

(Operator Instructions) We will go next to Richard Greenberg with Donald Smith & Company.

Craig, you filed a $2 billion mixed security shelf, which included everything including common stock and warrants. I was wondering what is the reasoning behind that, and could you tell us the scenario barring a further major decline in your credit portfolio, your investment portfolio, under what situation would you possibly issue common stock, convertible stock, warrants, anything dilutive to current book value?

Richard, the reason for the registation was just simply to keep fresh our shelf, so that we could, in the event that the market conditions improved, go to the market for either -- for debt or equity. At this point in time, I don't really foresee any circumstances that will lead us, again barring, as you said, significant decline in assets or asset value, going to the market for additional equity.

Okay. Thanks a lot.

(Operator Instructions) At this time we have no further questions. I would like to turn the conference back over to Nancy Bufalino for any additional or closing remarks.

Thank you, Jessica. And thank you all for joining us today. Once again, I call your attention to the disclosures concerning forward-looking statements and non-GAAP measures. A taped replay of today's conference call will be available for one week immediately following this call until May 11. You can see the replay details in our earnings release. We appreciate your participation in today's call. And thank you again for joining us.

That does conclude today's conference. We thank you for your participation.