Kestrel Group Ltd (KG) 2014 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Maiden Holdings first quarter 2014 earnings conference call. At this time all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, this conference call is being recorded.

I will now like to turn the call over to Noah Fields. Sir, you may begin.

Good morning and thank you for joining us today for Maiden's first quarter 2014 earnings conference call. Presenting on the call today we have Art Raschbaum, Maiden's Chief Executive Officer, along with John Marshaleck, our Chief Financial Officer. Also in attendance is Pat Haveron, President of Maiden Re Bermuda.

Before we begin I would like to note that the information presented here today contains projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on current expectations and future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from these expectations. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K, and our quarterly reports on Form 10-Q.

Some of our discussions about the company's performance today will include reference to both non-GAAP financial measures and information that reconciles those measures to GAAP as well as certain operating metrics, and may be found in our filings with the SEC and in our news release located on Maiden's Investor Relations website.

Please also note that unless otherwise stated, all references to common share data in today's discussion are on a debited share basis and comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013. I will now turn the call over to Art.

Thank you, Noah. Good morning and welcome to our first quarter earnings call. Over the past few quarters, we've discussed a number of key drivers to strengthening earnings and operating ROE, among those have been our reduced cost to capital following the first quarter repayment of our 14% coupon trust preferred securities, our growing investment portfolio, the continued solid growth in our core underwriting portfolio, and the impact of the US pricing environment, particularly -- in particular for our AmTrust reinsurance segment.

I'm very pleased to report that our first quarter results reflect a favorable impact of each of these drivers. For the quarter, Maiden realized operating earnings attributable to common shareholders of $25.6 million, or $0.34 per diluted common share, while annualized operating return on equity was 12.6%. This compares favorably to the first quarter of 2013 earnings level of $21.1 million and an annualized operating return on equity of 9.8%. Our first quarter 2014 results reflect the highest level of operating earnings per share and operating return on equity since early 2009, and we believe that we're positioned to continue to strengthen both going forward.

As you may know, Maiden's business model is focused on lower volatility, non cap reinsurance support of regional and specialty insurers. As a result of that focus, our performance is typically more stable than severity-oriented companies, and we see much less variability in results. The first quarter reflects that relative consistency. In addition to strong operating earnings and strengthening operating return on equity, our book value in the quarter grew from $11.14 per share to $11.47 per share or 3%.

While John will provide more detail on our financial highlights and the balance sheet, I'd like to focus on business development and underwriting in my discussion. Maiden's net premium written in the quarter totaled $709 million, that's a 3% increase from $689.1 million in the first quarter of 2013. While on the surface, the growth rate looks relatively modest, it's important to note that in the first quarter of 2013, Maiden was still generating $76.6 million from the NGA Quota Share contract, which as you may know, was mutually terminated in August of 2013.

A more relevant way to look at growth is to focus on our two core active business segments; that would be the diversified reinsurance segment and the interest quota share reinsurance sergeant. In combination, both of these segments increased by 16% from the prior year, or from $612.4 million to $710.6 million. While the second quarter will reflect a similar comparative anomaly, in the final two quarters of 2014 the growth rate will no longer be influenced by the prior year NGAC segment. More importantly, the run rate growth potential for the two active core segments is strong.

The diversified segment year-on-year growth rate was 9%, reflecting growth from all segments, Maiden Re in the US, our international insurance services business and Maiden Re in Bermuda. In the US, Maiden Re continues to benefit from continued organic growth from its existing client base along with several new client relationships entered into at January 1st. Deal flow in the segment remains strong, both in our treaty segment and facultative operations. And as we mentioned at year end, we're seeing an elevated level of competition, particularly for larger pro rata transactions.

We're maintaining our disciplined underwriting approach and we're focusing on leveraging our strongest points of differentiation, including our expense efficiency, our unique collateralized trust and our client-centric business platform. While the environment will likely remain competitive, we see many opportunities to continue to build our portfolio. Two of our priorities for this year have been the expansion of products for our core clients as well as the continued development of our higher margin facultative segment. Both of these initiatives are well underway. We're also in discussions with a number of prospects who are looking for capital to support their growing businesses.

In the European based automotive segment, Maiden ISS, which is underwritten by Maiden Bermuda, we are actively working with our new business development team to expand our portfolio to other auto OEMs. In the quarter we experienced growth from strengthening rate levels from our auto reinsurance relationships, and a number of marketing initiatives with our partner insurers and manufacturers. The team has a number of new programs that are under development.

With regard to AmTrust, we continue to see strong growth, chiefly from their small account orders compensation portfolio. Net written premium assumed from AmTrust totaled $419 million, compared to $344.8 million in the first quarter of 2013. That's a growth rate of 21.5%. We're very comfortable with the quality of the workers' comp underwriting, as AmTrust remains focused on low severity segments and maintains pricing discipline.

While Maiden's not participating on the AmTrust assumed reinsurance of the Inforce Tower portfolio. As this business renews in AmTrust, Maiden will assume its 40% share under the terms of the contract. We believe that overall growth in this segment will remain strong throughout the year. Of course, the NGAC segment is in run-off and have generated no written premium in the first quarter.

From an underwriting perspective, our overall combined ratio was 97.7%, which is slightly higher than the 97.5% registered in the first quarter of 2013. Our diversified segment, which includes our US platform Maiden Re and our Bermuda non-interest underwriting business, experienced a higher than anticipated combined ratio for the quarter. Our combined ratio for the quarter was 99.4% compared to 97.5% in the first quarter of 2013. This was driven significantly by higher than expected non-catastrophe property losses in our US subsidiary, Maiden Re.

In an unusual coincidence, we saw elevated property loss activity among several different clients in entirely different areas of the country. It's important to note that this loss activity largely emanated from long-standing profitable account relationships. At this point, we do not see these losses as indicative of a trend. Absent this loss activity, Maiden's diversified loss ratio for the quarter would have been 97.4%.

In the AmTrust segment our combined ratio improved slightly from 95.9% in the first quarter of 2013 to 95.3% in the first quarter of 2014. The reduction is largely driven by an improvement in the business mix as the small account worker's compensation segment earned premium continues to significantly outpace the growth of the other AmTrust segments.

Our analysis of AmTrust pricing trends in this segment continues to reflect strong pricing, which should drive continued strong under writing performance. As we have commented in the past, the AmTrust segment is the most direct way for Maiden to enjoy the strengthening of the US primary pricing environment over the last year.

Despite the slightly elevated overall combined ratio of 97.7%, the quarter-to-quarter operating return on equity improvement remains strong, and it reflects the impact of the repayment of the 14% coupon trust preferred securities and growth in our invested asset portfolio. With an operating return on equity of 12.6% in the quarter, we can see the increasing enhanced earnings power of the platform.

In the past, we've commented on our targeted combined ratio of 96% and operating return on equity target of 15%. In fact, given the growth in our invested asset portfolio, our earned premium levels, and our reduced cost to capital today, a combined ratio of 97% would produce a 15% return on equity. And a target underwriting performance, the 96% combined ratio, Maiden's return on equity would now be over 16.5%.

We're very pleased with the quarter, which reflected continued progress towards strengthening Maiden's earnings and enhancing shareholder returns. I'd now like to turn the call over to our Chief Financial Officer, John Marshaleck, to review the quarter in greater detail. John?

Thanks, Art, good morning. As Noah stated earlier, unless otherwise stated, all references to common share data are on a diluted share basis. And comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013.

Net operating earnings for the quarter of 2014 -- for the first quarter of 2014 were $26 million or $0.34 per diluted common share, compared with $21 million or $0.29 per diluted common share. That income was $2 million compared to a net income of $28 million. For the quarter, net income was adversely impacted by a total of $28 million, driven by non-operating non-cash items. Specifically, the redemption triggered accelerated amortization of the value of the shares issued with the trust preferred security notes and original transaction cost.

The trust preferred securities served the company well at a time when capital was scarce. Going forward, Maiden will enjoy a substantially reduced cost of capital. The enhancement to our earnings run rate level is clearly evident in the enhanced operating earnings for the quarter. In fact, the full impact of the improved cost of capital was not evident in the first quarter as we paid 15 days of interest on these securities, at a net cost of approximately $0.5 million.

In the first quarter of 2014, net premiums written totaled $719 million, an increase of 3% compared to the first quarter of 2013. The diversified reinsurance segment's net premiums written totalled $292 million, an increase of 9%. As Art mentioned, the growth in the diversified reinsurance segment's premium was a result of expanding existing client relationships as well as increased new business.

In the AmTrust Quota Share reinsurance segment, net premiums written increased by 22% to $419 million, driven by a strong rate environment, and increased payrolls for businesses such as workers' compensation. The limited net premiums written in the NGAC quota shares segment reflects the termination of that contract as of August 1st, 2013. Net premiums earned of $519 million increased 6%, or $31 million.

Earned premiums increased 2% in diversified reinsurance segment to $199 million. The AmTrust quota share reinsurance segment earned premiums were up $85 million or 38% to $305 million. The NGAC Quota Share segment net premiums earned were $15 million in the first quarter of 2014, down 79%, reflecting the mutually agreed termination of the NGAC Quota Share reinsurance contract as of August 1st, 2013.

Record net investment income of $28 million in the first quarter of 2014 increased 27%, driven by growth of investable assets and lower amortization of the mortgage-backed securities. The average yield on the fixed income portfolio is 3.57%, with an average duration, including cash, of 4.5 years. This compares to an average yield on the fixed income portfolio at the end of 2013 of 3.48%, with an average duration, including cash, of 4.3 years.

The new money yield on fixed maturities in the first quarter of 2014 was 3.56%. During the first quarter of 2014, the book yield improved due to fewer mortgage-backed security paydowns, any elimination of low yielding rates securities. The current duration of our loss reserves is 4.2 years.

Our investable assets at March 31st, 2014, were approximately $3.5 billion. Which was the same amount as of -- at December 31st, 2013. This includes a cash balance of approximately $223 million. And operating cash flow for the quarter was $144 million.

Net loss and loss adjustment expenses of $351 million were up $16 million. The loss ratio decreased by .8% -- percentage points to 67%. The combined ratio for the first quarter of 2014 totaled 97.7% compared with 97.5%.

General and administrative expenses for the first quarter of 2014 totaled $15 million, compared with $14 million. The general and administrative expense ratio dropped to 2.8% in the first quarter of 2014, versus 2.9%.

Total assets increased 3.3% to $4.9 billion at March 31st, 2014, compared to $4.7 billion at year-end 2013. Shareholders equity is $1.2 billion, up 2.3% compared to December 31st, 2013. Book value per common share was $11.47 at the end of the first quarter of 2014, or 3% higher than at December 31st, 2013.

I will now turn it back over to Art for some additional comments.

Thank you, John. As we typically do, I'd like to provide a brief commentary on the markets that we operate in. In the US, in general, the rate of primary pricing increase is moderating. While that's not true in every jurisdiction and every line of business, it is effectively a broad trend.

Specific to Maiden, the small account worker's compensation market has undergone a significant amount of change over the last several years, and in several markets the pricing environment remains relatively strong. For Maiden, AmTrust strengthened these markets has been a strong asset and a driver of solid underwriting performance. For the near term, we do not see these conditions changing dramatically.

In the personal lines markets in the US, we believe that general pricing and loss cuts trends remain, for the most part, favorable. And in the international markets that we serve, in general, the pricing environment for us is positive. Specifically in Germany and the UK, our partners have been achieving rate level improvements.

From a reinsurance perspective, while the great influx of capital into the sector has, for the most part, been focused on severity markets, such as property, cat and excess casualty, we do believe that diversified global insurers have increased their interest in our market segment. We continue to maintain confidence in our ability to compete effectively with our operating of balance sheet efficiencies and our client centric business platform.

As we've commented in the past, we continue to believe that as the implementation of solvency two draws closer, the need for capital solutions for small to mid-sized European insurers will intensify. We're positioning ourselves to be an active solution provider in select markets in Europe.

Beyond the core opportunities in our traditional reinsurance markets, our auto OEM focused ISS development team is actively pursuing a number of opportunities to broaden their customer base and reach. We remain confident in the wisdom of our highly differentiated unique strategy and business platform, and our ability to continue successful growth serving the needs of regional and specialty insurers.

Before I end the discussion, I'd like to take a moment to update you on several key management changes at Maiden. The first is somewhat bittersweet for me, and actually for the entire Maiden team. John Marshaleck has announced his intention to retire at the end of 2014.

For Maiden and its predecessor companies at GMAC, John has been a vital part of the development and the success of the business. For over 30 years, John has guided and mentored the entire team. For me personally I relied on his -- and valued his thoughtful leadership over that entire time. Fortunately, John has more than contributed and laid the foundation for our continued success. In his remaining time at Maiden, John will become our Chief Operating Officer, providing support and mentoring to his successor and the broader organization.

And consistent with our succession plan and with the full support of me, John, and the Board, his successor is Karen Schmitt, President of our US subsidiary, Maiden Re. Karen has a strong, diverse professional educational background. She has been with Maiden and GMAC Re for 15 years and her contributions have been considerable over that time. I know that Karen will do an outstanding job as our CFO and continue to provide strong leadership throughout the organization.

As Karen moves on to the CFO role, and again consistent with our succession planning, [Tom Hyatt], who is currently head of our US treaty operations, will become President of Maiden Re in the US. Like Karen, Tom has a strong technical background and a successful track record developing and building business units at Maiden and GMAC Re.

We're very fortunate to have a deep leadership team at Maiden. And I'm confident that our new CFO and President of Maiden Re will help to maintain our success. Thank you for listening.

This concludes our prepared remarks. Operator, could you please open the lines for Q&A?

(Operator Instructions). Our first question comes from Bijan Moazami of Guggenheim. Your line is open.

Good morning, everyone. Congrats, Karen. And John, we're going to miss you. My first question is a long one, if you bear with me. I'm looking at your AmTrust contract. And if we look at AmTrust, the share of the small commercialized business for them is expanding quite dramatically, which has a lot of worker's comp. That has lot of investment income. And also it traditionally has the lowest loss ratio at AmTrust. And there is a little bit of a divergence between your loss ratio, which you're decreasing it rightfully so, and AmTrust, which is increasing it -- building reserve cushion, at least.

So I guess the question is that when the city commission contract comes for renewal, how do you base your seating economics? It based on your loss ratio or their loss ratio? And based on 97% combined ratio, where you are going to be generating your return on equity targets, AmTrust at 95.3% is already above that. So should we be expecting a lower seating commission from AmTrust at some point? Thank you.

Yes, Bijan, I'd say it's premature to speculate on what our negotiating position will be at the renewal of the contract. Obviously, we look at our performance, our combined ratio, and certainly we've been generating, we believe, strong returns on the AmTrust relationship over the last several years. And we are benefiting, as they are, from their efforts in a strong primary market.

You mentioned earlier the loss ratio differential. And I think some of that -- the biggest part of that loss ratio differential I think is driven by the Inforce portfolio or assumption that AmTrust is currently taking on from the Tower transaction. So we do not participate in that -- which I think actually they alluded to in their call, a higher level loss ratio for them.

So I hate to be evasive about it, but I think it's a little early to necessarily define our negotiating posture. I will tell you that from our perspective, our focus is on ensuring that we maintain strong returns in our business. I think our focus is also on lowering our diversified combined ratio. The first quarter is a bit of an anomaly and that has not been our run rate the last several quarters. But we had a little bit of elevated loss activity on the property side, and we thought prudently, we raised the loss ratio for the quarter.

Great. And my next question is actually a number question, which I can't figure out. Operating income of $25.6 million and share count of 84.6, wouldn't that come up to $0.30 a share in operating income?

Bijan, this is John. There's one adjustment that has to be made. And when you convert the share -- we have a convertible preferred issuance, and fully diluted computation assumes that they're converted to common stock, obviously. And then you have to add back to the operating number the dividends on the preferred. So that's the adjustment that you're probably not seeing there.

You take your operating earnings and add back the dividends on the preferred -- on the convertible preferred and then you obviously increase the number of shares on the fully diluted basis. So you're just trying to get them to equal. Without that adjustment, you would be double counting the reduction in the operating earnings for the preferred shares.

I see. Perfect. Thank you.

Thank you.

Thank you. Our next question comes from Randy Binner from FBR. Your line is open.

Good morning, thanks. I have a couple topline questions and just a follow-up on what Bijan was alluding to on Tower. So AmTrust is kind of better defined for us what they're going to be writing on the Tower book. And I just wanted to clarify, Maiden's not participating in the unearned premium reserve transfer. But shouldn't we assume, all things being equal, that you would take 40% of what they're onboarding with Tower now that they've kind of better defined for us what that's going to run? It's going to run about $360 million a year for them in gross premiums. I just want to kind of bet a better feel for how we should approach that in the model.

Sure, Randy. I think I did mention in the call that we do expect that, as that business converts to AmTrust, that we will take on that business. So if that is effectively the run rate going forward, we would expect to see our 40% share of that incremental growth.

Okay, perfect. That got lost in the commentary for me.

I'm sorry.

No, that's perfect. On diversified Re -- we were thinking more single digits for growth there and it was 9%, which is a good result. You said deal flow is good but you said competition is high as well. And so can we still think of mid single digits as kind of the right way to model top line growth there?

It's obviously not a perfect process predicting forward. And that's why we generally don't give revenue guidance. I will tell you that in the quarter, as we saw in terms of trend in 2013, we're seeing good organic growth from core relationships. So the extent that our clients are growing, we grow along with them. So we're optimistic that organic growth will continue. We're also actually in discussion with clients that are having us look at maybe new layers or new segments of their programs. And we did see some new client growth.

From our -- in terms of our target and expectations, I'd love to see the current growth rate be a year long run rate. We'll just have to see how business development comes in over the next quarter. We are in active discussion with a number of potential new clients right now. We'll -- and again we'll see how we fare. I wouldn't necessarily say that we can't repeat the current quarter but we'll just see what occurs in the next quarter.

That's great. I'll stick with the topline just for one more before I drop back. So is it more US where you see the opportunity or more international? You mentioned your year-on UK initiatives move on, pricing there has been good, I think you're getting pricing from events that you didn't take losses on, in Germany and the UK in particular. I think you had looked a little farther east than Germany and so that's probably slowing down. Can you just give us feel for how we can expect that piece, international versus US, to help move that top line higher for diversified Re?

Yes, we actually had pretty good growth in our international business. And some of that again was driven by that growth rate or by the points that you referenced, the price strengthening. But also some program expansion, and we have a number of programs that we think will come on this year in the international services business. So for the quarter I think our growth rate was about 15%, somewhere in that range, on the ISS piece of it. Hopefully we'll see that trend continue there.

The other area that we still -- it's a slower kind of trajectory for us but nonetheless something that we're committing resource and focused on is really our expansion into the European market in select markets, and with small to mid size companies that might be capital constrained. We think we have some effective solutions that can help a number of the companies in that space. So I think that's another area where we'll see continued opportunity to grow.

And as we commented, in the US diversified segment, we keep orienting ourselves on strengthening the things that are the most profitable for us. And our efforts have been very focused on building additional products for our regional clients, including umbrella, which we are rolling out to a number of clients, and we think opportunities to expand exist there. And secondly, our facultative casualty business, which has been a great business for us, the team's done a wonderful job. We've added a number of customer relationships that should generate incremental revenue this year in that segment as well.

So when you look at the various pieces, we see a lot of positive development work going on that should bear fruit. The unknown is what the competitive market looks like for the rest of the year, in terms of our existing customer base. But we're certainly focused on maintaining our relationships.

All right. That's perfect. Thank you.

Thank you, Randy.

Thank you, our next question comes from Ken Billingsley of Compass Point. Your line is open.

Good morning.

Good morning, Ken.

I wanted to ask a question on -- start at the top for net earned premiums. So premiums written were inline with our expectations, in fact, a little bit stronger, but the way the earned pattern is working out was a little bit slower. Can you just talk about maybe some of the mix of the business, where this -- the earned pattern may be a little bit longer and stretched out?

Yes, Ken, this is John Marshaleck. The first quarter of the year we do book on -- especially the diversified reinsurance book in the US -- we do book some excessive loss contracts. So you book the written premium up front, and then earn it off over the year. Now, the quota shares are pretty much evenly earned throughout the year, they're booked and earned as they are reported to us. So you do get a little bit of a change in the earned premium pattern when you just look at the first quarter.

But there's really not -- it's just an annual thing. There's nothing unusual about that. And we did have a fairly large quarter for AmTrust in the first quarter. And there was a large unearned premium balance that came along with that. They may experience some more things when they book the earned premium on their contracts -- or their policies as well. So I think that's what's causing that -- maybe that difference that you're seeing there. But it's pretty much a normal earning pattern.

Thank you. On the AFFI quota share loss pick of 65.4% it's the lowest since 2011. I know you talked about strengthened rate improvements there. Are you seeing anything that is a trend that you could extrapolate, either it's going into future quarters or anything that's maybe causing you to set those picks, again, at the lowest level since 2011?

What's interesting about it, it's less the picks being set lower than it is the change in the mix. Because if you look at the percentage of small account worker's comp now versus three years ago, it's much more significant. So that component of the AmTrust business, on a relative basis, generates a lower loss ratio. So when you blend them together that's predominantly what's pulling down the combined. John?

Yes, that's correct, and it is a business mix question there.

And just adding onto the Tower group business as you bring it in, I would assume that you would be setting the slightly higher picks for that business as well? Or would you be running at the same picks for the current AF side business?

Well, our expectation is that when that business migrates to AmTrust, that it will be underwritten, priced, evaluated much like all of their small account worker's comp business. So I think what makes the ratio higher in the assumption that AmTrust has taken on has largely been that they didn't underwrite and price the initial business. So that probably is running at a little higher rate than they would expect that business to run once it comes onto their portfolio. So, no, I don't -- I would think that the new business as it converts to AmTrust, will behave much like the existing AmTrust portfolio.

On the investment portfolio, I know you talked about slower amortization on the DS portfolios. Any shift in your investment mix or philosophy going forward, given obviously a slight change in rate expectations over the next 24 months?

No real change at all there. Ken, we're just the same as before -- mix, we're not changing that as well. We've just -- we expect it to continue on as it is.

Okay. Last question is, were there any reserve releases during the quarter?

Very minor -- not reserve release, we had a minor deterioration in one of the underwriting years, less than $2 million. But, no, nothing significant.

That was less than $2 million?

Yes.

That's a net number?

Yes, net number, yes.

Congratulations to Karen and Tom. And I know it's a little early, but I want to wish you the best, John, and congratulations on the quarter.

Thank you, Ken.

(Operator Instructions) Our next question comes from Bob Farnam of KBW. Your line is open.

Hey there, thanks and good morning. Just a couple of clarifications. Am I hearing right, you're kind of officially changing your target combined ratio to 97%?

No. That was my fear when I put that together. All I'm trying to reflect is that the earnings power has grown to a level that, as we do hopefully get to that 96% level, where we originally thought that would produce a 15% return, it looks like, given our current mix of business, the productivity of the investment portfolio, the continued growth in the asset portfolio and our cost to capital, that will actually produce a bigger return at target than we originally contemplated.

Got it. I just wanted to make sure that was clarified.

No, we don't -- the goal is still the goal. And there are always challenges to getting there and business mix affects that. But, no, we remain focused on that 96% target.

Okay. And the second one is just more of a nuance. Taking out the non cat property losses, you had 97.4% rather than the 99.4% in diversified. I'm just curious if that's taking out all the non cat property losses? Or if you have some sort of assumption in there for a normalized level of non cat losses.

There is assumption in there for a normalized property losses and our loss picks, Bob. So that would include that -- the original loss pick would include some property losses.

And when you take out -- in other words, did take out 100% of those non cat property losses or did you keep in some sort of normalized level to get to the 97.4%?

We kept in a normalized level.

The logic for that, particularly on excess property is you don't know when excess losses are going to come in, right? But when they come early, we think it's prudent to reflect the higher impact in the quarter. And then we'll see what next quarter looks like and the following in terms of how that adjusts. It's not unusual for us to see other accounts which perform better than target as well. So it's premature to assume that all of that loss is going to affect us.

All right. Okay. Thanks. That's it for me.

Thank you very much. Appreciate it.

Thank you and I'm not showing any further questions at this time, I'd like to turn it back over to Noah Fields for closing remarks.

Thank you very much. Thanks all for joining us today and we look forward to speaking with you soon. Have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the programming, you may all disconnect. Everyone have a great day.