洛茲集團 (L) 2005 Q2 法說會逐字稿

Good morning and welcome to this Loews Corporation second-quarter earnings conference call. Today's call consists of remarks by Loews' management and the question-and-answer session. (OPERATOR INSTRUCTIONS). I will now turn the call over to Mr. Joshua Kahn, Director of Investor Relations. Please go ahead, sir.

Thank you, Maria. Good morning, everyone, and welcome to Loews Corporation's second-quarter 2005 earnings conference call. I'm Joshua Kahn, the Investor Relations Director for Loews.

If you have not yet received a copy of today's Loews Corporation and Carolina Group earnings releases and would like either one, please go to our Web site, Loews.com.

Jim Tisch, the Chief Executive Officer of Loews, and Peter Keegan, the Chief Financial Officer of Loews, will lead today's discussion and will be joined by Marty Orlowsky of Lorillard.

Before we begin, I would like to make a few brief disclosures concerning forward-looking statements. This conference call will include the use of statements that are forward-looking in nature. Actual results achieved by the Company may differ materially from those projections made in any forward-looking statements. Forward-looking statements reflect circumstances at the time they are made and the Company expressly disclaims any obligation to update or revise any forward-looking statements made during this call. This disclaimer is only a brief summary of the Company's statutory forward-looking statements disclaimer. We urge you to read the full disclaimer, which is included in the Company's 10-K 10-Q filings with the SEC.

I'd also like to remind you that, during this call today, we may discuss certain non-GAAP financial measures, such as operating income. With regards to such financial measures, please refer to our earnings release for reconciliation to the most comparable GAAP measures.

There'll be time for questions after Jim, Peter, and Marty had discussed our results. For those of you who have tuned in via our Web site, please call 877-692-2592 during the Q&A session if you'd like to ask questions.

Now, I'd like to turn the call over to our CEO, Jim Tisch.

Thank you, Josh, and good morning.

Loews' performance in the second quarter reflects continued good business conditions for all of our subsidiaries. Each of our holdings recorded improved operating income for the period, while some even registered quite significant gains. As a result, earnings per Loews common share rose to 2.03 in the second quarter of '05 from $1.99 per share in the second quarter of '04. There are lots of moving parts in the numbers. Pete Keegan will get to the details in just a bit.

CNA's income before investment gains and losses improved in the second quarter, helped in part by a federal incomes tax settlement that offset losses relating to a community reinsurance contract. CNA's property/casualty unit recorded a combined ratio of slightly less than 100 and the Company as a whole generally performed on target. A replay of CNA's second-quarter conference call, which took place earlier this morning, is available on CNA's Web site if you'd like more detail on the results.

Lorillard's earnings increased significantly over the second quarter of '04, as sales volumes grew materially while promotional spending was generally unchanged.

Newport's volumes improved more than 6% and its marketshare was also higher. In just a moment, Marty Orlowsky, the man behind the wheel of Lorillard, will provide all of the relevant details about Lorillard's performance this quarter.

Diamond Offshore continued to benefit from very robust market conditions in offshore drilling. The company's earnings contribution to Loews increased by almost $27 million, as net income improved dramatically. Diamond Offshore's results reflect the remarkable increase in dayrates across all rate categories. Demand for rigs has been so strong that most of the Company's fleet is now contracted or committed through 2005 and well into '06. As was indicated in a recent press release issued by the Company, Diamond Offshore's Board of Directors has elected to double its quarterly dividend and it will consider paying a special dividend in the first quarter of '06.

Boardwalk Pipelines also enjoyed smooth sailing in the second quarter. The addition of Gulf South pipelines to Boardwalk in December of '04 makes a year-over-year earnings comparison meaningless for the second quarter. But nonetheless, Boardwalk continues to deliver the low double-digit cash-on-cash after-tax return on equity that we set as a target.

Loews Hotels was again the beneficiary of a strong lodging market. Net income increased as RevPAR for all of the Company's owned hotels improved by nearly 12%, as room rates rose significantly.

Finally, Loews has elected, for the time being, not to refinance the $1.15 billion of 3 1/8% exchangeable notes that we had repaid in April. Cash flows from subsidiaries are anticipated to provide Loews with sufficient levels of capital for foreseeable corporate purposes. Additionally, reduced leverage and our continued significant net liquidity position should serve to bolster further the Company's very strong credit profile.

So, to summarize, Loews Corporation has under $1.20 billion in long-term debt and more than $1.7 billion in cash. To editorialize, when will the rating agencies take note of our AA financial position?

Now, I will turn the call over to our CFO, Pete Keegan, who will discuss additional details relating to the financial performance of Loews this quarter. Peter?

Thanks, Jim, and good morning, everybody.

Loews reported consolidated net income of 433.8 million in the second quarter of 2005, versus consolidated net income of 410.5 million in the second quarter of 2004. Net income for Loews common stock was 378.1 million or $2.03 per share in the second quarter 2005, compared to net income of 369.9 million or $1.99 per share in the second quarter of 2004.

Second-quarter 2005 results include a benefit, primarily at CNA, of 109.2 million after taxes and minority interest related to a federal income tax settlement.

Net operating income for Loews common stock, determined by excluding from net income net investment gains, was 358.6 million in the second quarter of 2005, versus 269.9 million in the second quarter of 2004. Net investment gains for the second quarter of 2005 were 19.5 million in the second quarter of 2005 versus 100 million in the second quarter of 2004. The variance relates primarily to CNA's investment portfolio, which I'll cover in just a moment.

Net income for Carolina Group stock was 55.7 million, or $0.82 per Carolina Group share in the second quarter of 2005, versus 40.6 million or $0.70 per Carolina Group share in the second quarter of 2004. Income for Carolina Group stock increased in the second quarter of 2005 as total cigarette volume grew 5.3%. The increase in income for Carolina Group shareholders reflects improvement in Lorillard's operating performance as well as the higher weighted average number of Carolina Group shares outstanding during the quarter. The weighted average CG shares outstanding increased from 57.98 million in the second quarter of 2004 to 68.10 million in the second quarter of 2005 as a result of the sale of 10 million shares of Carolina Group stock by Loews in December of 2004. Loews Group currently holds 60.8% of the total shares and share equivalents of Carolina Group.

Lorillard contributed 106.9 million to net income for Loews common stock in the second quarter of 2005, versus 104.8 million in the second quarter of 2004. Lorillard's contribution to Loews' net income grew despite the year-over-year decline in Loews' common shareholders interest in the earnings of Carolina Group. Lorillard reported charges of 139.8 million and 142.8 million after taxes for the second quarter of 2005 and 2004 respectively to accrue its obligations under various state settlement agreements.

CNA contributed 251.3 million to Loews' net operating income in the second quarter of 2005, versus 162.3 million in the second quarter of 2004. The results at CNA were helped in part by a federal income tax settlement that offset losses related to the commutation of a reinsurance contract. CNA's property and casualty business saw its combined ratio increase to 99.9%. Underwriting results were impacted by current-year accident losses reserve charges established by CNA Surety relating to a large national contractor.

Loews' interest in CNA's net realized investment gains declined to 15.2 million in the second quarter of 2005 from 108.8 million in the second quarter of 2004. This $93.6 million decline was primarily driven by equity and derivative security results, which in 2004 included 95.8 million from the disposition of CNA's equity holdings of Canary wharf Group PLC, a London-based real estate investment.

Boardwalk Pipelines again registered a solid performance in the quarter, contributing 13.7 million to Loews' net income. The year-over-year improvement in Boardwalk's second-quarter net income is primarily due to the addition of Gulf South pipelines, which Boardwalk purchased in December of 2004.

Diamond Offshore's contribution to net profits improved to 19.9 million in the second quarter of 2005 from a loss of 6.7 million in the second quarter of 2004. This improvement reflects the continued strength of the offshore drilling market. Dayrates and utilizations were significantly higher for all of Diamond Offshore's rig categories in the quarter. As Jim mentioned earlier, Diamond Offshore recently declared an increase in the quarterly cash dividend of $0.125 per share and announced that it was considering paying a special cash dividend in the first quarter of 2006.

Loews Hotels again benefited from the strong travel and leisure market, which was a significant factor behind the increase in our hotel chain's second-quarter net income to 15.8 million from 7.9 million in 2004. The average room rate for all owned hotels improved to $199.27 in the second quarter of 2005 from $176.95 in last year's quarter, an increase of 12.6%. Occupancy for all hotels was 81.3%, down slightly from 81.8% in the second quarter of 2004.

Net investment income and other, which is comprised of Loews' investment income, corporate interest expense, income from operations at Bulova, equity earnings from Majestic Shipping Corporation and other unallocated expenses, declined from a loss of 3.4 million in the second quarter of 2004 to a loss of 49 million in the second quarter of 2005. 34.2 million of the second-quarter 2005 loss is attributable to a hedge put in place as part of plans to refinance a portion of the 1.15 billion of 3 1/8% exchangeable notes that we called in April. As Jim previously indicated, given the current capital position and anticipated cash flows, Loews has chosen for the time being not to issue new debt.

At June 30, 2005, total cash and investments at Loews was approximately $1.68 billion. There was 1.16 billion of long-term debt at the holding company level at the end of June.

Now, I will turn the call over to Marty Orlowsky of Lorillard.

Thanks, Peter. Good morning, everyone.

At the Lorillard level, second quarter of '05 operating income of 250.8 million versus 232.6 million in the second quarter of '04 was up 10.4%. Net income of 162.6 million for the second quarter of '05 was up 11.8% versus that same quarter in '04. Strong unit wholesale shipments for the second quarter of '05, as compared with the second quarter of '04, were the primary contributor to Lorillard's most recent quarter's financial performance and to a lesser extent slightly lower litigation expenses and interest income related to a refund of income taxes paid in prior years. Offsetting some of these improvements were higher costs related to settlement payments, as well as the assessment charges resulting from the tobacco grower buyout.

For the six months ended June 30, 2005 as compared with the corresponding period of 2004, operating income increased by 9.7% and net income was up 11% respectively with many of the same factors affecting second-quarter comparisons having similar effects in the full six-month periods ending June, 2005 and 2004.

Strategically, Lorillard has and will continue its often-stated approach of balancing profitability and Newport market performance, i.e. adjusting promotional spending in line with the brand's trends and competitive factors. The first half of 2005 resulted, as reported, in strong unit volume and income gains when compared with the same period a year ago.

Financial performance during the second half of 2005 will be faced with some challenging comparative results, as achieved during the second half of 2004, given the strong results during that period. Any one of a number of variables, such as promotional spending levels, timing of expenditures and expenses, that may occur during the third and fourth quarters of 2005 versus those of the same quarters in 2004 may cause differences in their ultimate performance outcomes when comparing each of the quarters on a year-over-year basis.

As a reminder, our decision-making, relative to managing the business, is not focused on specific quarter-to-quarter comparative results but assumes a longer-term perspective in terms of building a solid future base of business.

Total Lorillard wholesale shipments were up 5.3% and domestic shipments were up 5.2% comparing the second quarter of '05 with the second quarter of '04. The increased unit shipments were the primary contributors, as I stated earlier, to the improved operating income and net income results. Lorillard outperformed the industry in terms of its shipment performance for the second quarter of '05 as compared with the second quarter of '04 -- 5.2% versus minus 2.6% respectively.

Lorillard's share of the domestic market improved 0.7 points in the second quarter '05 versus the second quarter of '04, achieving 9.4% of the total domestic market. Newport's domestic shipments were up 6.2% in the second quarter of '05 compared with the comparable period a year ago.

During the same period, Newport's share of the domestic market was up 8.6%, up 0.7 points as compared with the second quarter of '04. Newport's share of domestic premium brand segment was 12% in the second quarter of '05, versus 11.4% in the second quarter of '04, up 0.6 points.

Viewing Lorillard performance based on the Company's retail database, reflecting movement from the wholesale (indiscernible) retail accounts, Newport's share was 8.97% in Q2,'05, versus 8.23% in Q2 '04. Its share of the menthol segment was 33.1% versus 30.7%, an increase of 2.4 segment share points for the same period.

Now, I will turn it back to Josh.

Thank you, Marty. Maria, we'd like to take questions at this point, please.

Thank you. The floor is now open for questions. (OPERATOR INSTRUCTIONS). David Adelman with Morgan Stanley.

Good morning, everyone. A couple of things -- first, Jim, on the corporate side, any progress you can report vis-a-vis the credit rating agencies on either CNA or Loews' ratings?

No, not particularly. We are in constant communication with them, but you'll know about the changes in our ratings almost simultaneous with us.

Okay. Then can you give us the data at the holding company level, the cash and the debt level at quarter end, please?

The cash was about 1.7 billion, and the debt I believe was just -- (multiple speakers) -- yes, 1164 -- under 1.2 billion.

A longer-term question, Jim, on the pipelines -- as those businesses cash flows grow over time, would you look to lever those businesses up somewhat more to increase the cash flow stream being dividended to the parent company?

No, we're not looking to increase the leverage of our Boardwalk Pipelines. It is now a solid tripled-B rated credit, and that is really where we want to keep it.

Then I have a couple of questions for Marty. First, Marty, the cost of goods sold in the quarter, excluding excise tax and excluding the MSA, were up 25% on my calculations, from 129 million to 160 million. What was the cause of that increase?

Well, I think, David, that you may not have extracted the grower buyout component. That would be the only factor to explain that. If you exclude that, that's about two-thirds of what you are referring to. So, I'm not sure what your calculation is based on, but I'm assuming, based on your numbers, that you didn't take out the grower -- (multiple speakers).

That's correct. That's not included in the MSA number you provide, correct?

Correct.

Okay. Then what was Newport's retail market share, as you calculate it, in the quarter?

Newport's retail market share was 8.97%.

That's an all-time record, presumably. Right?

Yes, it is, and so is total Lorillard share.

Then, could you characterize -- last question -- why did the overall menthol competitive dynamics, in particular whether you're seeing increased shelf space on Kool as RAI emphasizes that brand?

We're seeing some degree of increased shelf space. Obviously, (indiscernible) their merchandising approach, but it's not necessarily affecting Newport to any great degree. So, our position has been pretty stable. In fact, we've managed to increase from (indiscernible) our presence at retail. But we certainly haven't lost any ground.

Bob Glasspiegel with Langen McAlenney.

The hedge, how does the mechanics of that work? Is it still on place for Q2, and what's sort of going to drive the --?

We are no longer hedging. Since we've decided not at the present time to issue any new long-term Loews debt, we're no longer hedging against -- (multiple speakers).

So that hedge was closed out sometime in the third quarter.

Okay, so there may be some ongoing minor losses in Q3?

Maybe even a gain!

Okay. If three years, two years from now, your cash position is at 3 billion at the parent and you've got no debt and the rating agencies haven't budged, I mean when do we declare defeat on our goal to improve the credit rating and take the buyback as an option?

First of all, you make the assumption that, as soon as the rating agencies change their ratings, that we will buy back shares. That is not necessarily the case. We make the case all the time that we really don't want to discuss our share repurchases. We do it from time to time as we see fit.

The reason we focus so on our share repurchases, with respect to rating agencies, is because, for some of the rating agencies, CNA's rating is contingent, at least in part, on the Loews rating. We want to see two things happen with respect to CNA's rating. Number one, we want to see the negative outlook come off; and number two, we would ultimately like to see CNA's rating increased from A- to A. Now, that does have us rated at an A but Moody's and Standard & Poor's still has CNA rated at A-. So -- and by the way, Pete reminds me, Loews is rated as an A at Standard & Poor's, and it's mind-boggling to me that Moody's has us rated at BAA-1.

Can I try another check at the same question? You know, for the last year and a half, you've persuasively argued that your stock was undervalued and in fact I think you were demonstrably right with that assessment, based on how the stock has performed. But you are not in a position to buy back the stock, I would think, because of this desire to get an improved rating, which hasn't happened. Believe me, you've been very persuasive on why the rating agencies are wrong, but they could stay wrong for a foreseeable time or look at the world differently than you're looking at it. Am I wrong in saying that you thought the stock was cheap, but you didn't buy the stock back because of a desire to get the ratings improved?

That's generally true.

Okay. At some point, if they don't budge, I mean, if the economics of the excess liquidity that you're having just isn't worth whatever negative impact you're having on CNA, it would seem to me. I guess that's more a statement that a question, but is that factually incorrect or -- (multiple speakers)?

I'm not going to talk about our share repurchase program. I just don't want to talk about it.

Okay, fair enough. Thank you very much.

Bonnie Herzog with Smith Barney.

It's actually Kate McShane for Bonnie today. I just have a quick question. We were surprised about how strong Newport's growth was during the quarter, so comparable period was strong as well. So I was wondering what management attributes this growth to. Is it completely due to taking market share that perhaps Salem is giving up because of RAI's new brand strategy, or has there been any shift in growth of the menthol category as a whole?

Well, the menthol category has been relatively flat; it not huge. I think there's a little bit of growth in there. But what we attribute the gain to in the volume is greater responsiveness to our -- well, let me step back for a second. I've said, on previous calls and on other occasions, that we are constantly evolving and adjusting our promotion approach to Newport. Some of the changes that we made coming into this year resulted in greater responsiveness, in particular in two marketing areas of importance on the volume side to Newport, where we had a much stronger response to the nature of the promotion spending that we implemented in those marketing areas. In the third large marketing area for Newport, we've seen continuing growth.

Now, whether or not that's -- obviously, that has to be derived from other brands. Salem has declined, so to some extent, we're probably gaining some business there. Kool has been relatively flat, and so we are -- and then obviously there are other menthol brands out there, so I can't attribute it to any one brand necessarily. Clearly, it is in response, as I said, to the basic approach we took through the second quarter with respect to our promotion strategy.

Okay, thanks very much.

Patrick Bova (ph) with Goldman Sachs.

Good morning. I just had one quick question for Marty. By my calculation, your tax rate jumped up to 41% in Q2. I was wondering if you could explain that from about 39% last year.

I'm afraid I don't have the answer to that. We can get back to you on that.

I also had a second question for Jim. Was your decision not to refinance the $1.7 billion in debt -- is that an indication that you might feel less inclined to make acquisitions?

First of all, it was 1.15 billion that we didn't refinance, and it really doesn't say anything about acquisitions. What it does is that we are really very pleased with the shape of the liability side of our balance sheet, that we are comfortable having under $1.2 billion of debt and that we are comfortable with the cash balance of about $1.7 billion and that we also foresee, in the near future, getting significant amounts of cash flow coming into the Company. So, we're very pleased with our financial position right now.

Brad Smith with Merrill Lynch.

Yes, thanks. I just had a couple of quick questions with some numbers that were talked about in the opening preamble. I just wanted to confirm the tax benefit flowing to Loews from CNA. I think I heard the number 109.2 and I just wanted to confirm that.

The 109.2 was the total tax benefit that Loews received. The vast majority that is CNA. There were some small pieces that related to other parts of Loews.

okay, great. Thanks. It's the 104.4 that was from CNA, I guess.

The other question that I had was with respect to the swap loss after-tax. Again, in your press release, it's 28.2. I thought I heard 34.2. Was there something else affecting that? Hello?

As we say, will have to get back to you on that.

That's fine. Then the last question, while I appreciate you don't want to talk about your share buy back plans, could you just refresh the dividend policy of the Company, please? Thank you.

Yes, the Company pays a dividend I think of $0.15 a quarter, which is $0.60 a year. That is determined on a quarterly basis by the Board of Directors. It has been at that level for a number of years now.

Yes, that was precisely my point. Is it somehow -- I mean, you know, we have some liquidity built up in the Company. Is it tied to the earnings outlook for the Company, or is it just a set amount?

Historically, Loews has not been a yield stock. Historically, Loews has carried significant cash balances. The reason we've done that is because it's given us the opportunity to make timely purchases of shares and other businesses. So, for example, because we had cash on our balance sheet, we were able to help CNA when it had a need for capital; we were able to invest in Texas Gas and then in Gulf South pipelines. We put more than $1 billion cash equity into those businesses. We're able to do that all because we have the cash on the balance sheet. That's our philosophy; that's the way we like operating; and that's really how we can sleep well at night.

Okay, terrific. My last question, just dealing with the capital that was provided at CNA when it needed it -- can you give us an update as to when you can see that capital returning to Loews Corporation?

Well, the terms of the preferred stock that Loews bought in CNA call for CNA to repay that -- begin to pay dividends on it once CNA's ratings have increased.

Okay, thank you very much.

Michael Millman with Soleil Securities.

A couple of questions -- just could you also tell us what the notional amount was on June 30?

The notional debt was just under $1.8 billion; it was 1.797 billion.

1.764 billion. Actually, we've added that, Mike, to the Carolina Group press release, so that reference is actually in there.

Thank you. Also, maybe you mentioned -- your book value was up about $4 sequentially, twice the earnings. What generated the difference?

That was most probably the marked-to-market on our fixed-income portfolio, primarily at CNA. If you'll notice, at CNA, it also had an outsized impact on the increase in CNA's book value.

Okay. I'm also I guess a little surprised that, given the strength in the hotel business, which you enumerated, that the occupancy rate was down. Could you discuss what contributed to that?

Hold on one second.

I think it's just a function of rate (indiscernible).

We don't have an exact answer. We can get it for you, though. But the thing that we monitor most closely is the RevPAR, the revenue per available room, and that was up rather significantly. In the hotel business, you have to make the choice between rate and occupancy, and RevPAR really is the meshing of those two metrics and we believe a much, much better metric for how you're doing and what your profitability is than is occupancy.

RevPAR was up about 12%?

Yes.

Also, can you discuss -- last year, you sold some of the Lorillard stock. Conversely, in the last year, you've actually purchased Diamond Offshore stock. Could you discuss whether you see much more opportunity upside in Diamond than in Carolina Group?

We sold some Carolina Group, I think, in the fourth quarter of last year, but we didn't repurchase -- we didn't purchase any shares of Diamond Offshore. Or I should say, we didn't purchase any significant shares of Diamond Offshore; there were a few thousand shares that we were purchased, but that was it.

More importantly though, is that suggesting that you see much more upside in Diamond Offshore at these levels than you do in Carolina Group?

I don't understand the question, because we haven't done anything in either one of those stocks in at least seven or eight months. The valuation has changed dramatically in that time period.

Should we expect some transactions over the next six or eight months?

(LAUGHTER). I'm not going to answer that.

Just answering -- clarifying a question that was asked a little bit earlier on the loss from the hedge, the correct number is the $34.2 million that I mentioned in my comments. The footnote on Page 5 of the Loews press release, that number was a slightly out-of-bid number, so the correct number is $34.2 million after-tax.

(OPERATOR INSTRUCTIONS). Sachin Shah with Cathay Financial.

Congratulations on the quarter. A couple of questions -- since there is a possibility that DO (ph) might pay a special dividend in the first quarter of next year, basically what are your plans to do with the proceeds? Maybe make acquisitions?

No, we have no plans at all. We like to, as I said before, we like to accumulate cash here. We feel very comfortable holding it and using it at an opportune time, but right now, we have no plans for it.

Also, in light of GE's acquisition of Central Gas a couple of weeks back, which I think works out to be roughly 10.7 times EBITDA, so my question is to you guys, what steps is the Company planning on taking to possibly realizing (indiscernible) pipeline value to shareholders?

We're just continuing to operate the pipeline business, our pipeline business. We like the business that we've created; we've created an integrated pipeline that rings the Gulf of Mexico and goes up to Lebanon, Ohio, and we think it's an attractive holding for us.

Okay. On a similar subject, I believe you mentioned, back in June's analyst conference, that the Company would be exploring various initiatives to increase the liquidity in the stock. I just wanted to kind of get an update on that process.

Yes, it's rather difficult these days, but we have been badgering a number of securities firms to take up coverage of Loews. I would encourage anyone that's listing on this call that (indiscernible) any of the major securities firms that aren't currently covering Loews to take a coverage -- to do that. Send your cards and letters to the Director of Research at Citigroup or CSFB. We make ourselves as available as possible for them to take up coverage and we very much like it. We also make ourselves accessible to investors, should they have questions, and we're doing all that we can in order to try to increase liquidity in the stock.

Okay. I think, finally, I just wanted to find out the operating income and D&A for Boardwalk Pipelines and Loews Hotels, if you have it.

What numbers do you want?

The operating income and D&A possibly?

Depreciation and amortization.

Let me give you the D&A. Hold on just a second. For pipelines, depreciation and amortization was $17.9 million in the second quarter of 2005. What other entity did you want it on?

For Loews Hotels please also.

For Hotels, it was 6.8 million for the second quarter of '05.

And just the operating income?

We don't put out an operating income number.

David Rice (ph) with Brookville (ph) Capital Management.

My question has been asked. Thank you.

Gentlemen, I'm showing no further questions at this time.

Okay, very good. Thank you very much, operator.

Thank you for joining us this morning. As a reminder, a replay of this call will be available on our Web site in just a few hours. The earnings conference call held earlier this morning by CNA, our P&P subsidiary, will also be archived for replay later on its Web site, CNA.com. Thank you again.

Ladies and gentlemen, thank you for your participation. This does conclude your teleconference. You may disconnect your lines at this time and have a wonderful day.