洛茲集團 (L) 2006 Q1 法說會逐字稿

Good day; my name is Jackie and I will be your conference facilitator today. At this time I would like to welcome everyone to the Loews' first-quarter 2006 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. (OPERATOR INSTRUCTIONS). It is now my pleasure to turn the floor over to Josh Kahn, Director of Investor Relations. Sir, you may begin your conference.

Thank you, Jackie. Good morning, everyone, and welcome to Loews Corporation's first-quarter 2006 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 Caroline Group earnings releases and would like either one please go to our website at 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, the CEO of our Lorillard tobacco subsidiary.

Before we begin I'd 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 statement. 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 statement disclaimer. We urge you to read the full disclaimer which is included in the Company's 10-K and 10-Q filings with the SEC.

I'd also like to remind you that during this call today we might discuss certain non-GAAP financial measures such as operating income. Please refer to our earnings release for a reconciliation of non-GAAP financial measures to the most comparable GAAP measures. There will be time for questions after Jim, Peter and Marty have discussed their results. For those of you who have tuned in via our website, 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. Though the first-quarter results were strong as all of our subsidiaries continued to perform well, we reported income of $2.54 per Loews' common share in the first quarter of '06, up from $1.62 in the first quarter of '05. The most notable year-over-year earnings improvement came from our offshore drilling subsidiary, Diamond Offshore, but our insurance and tobacco subsidiaries also recorded higher net income versus the 2005 quarter.

CNA was a significant contributor to Loews' performance during the quarter. It continues to underwrite risk well as indicated by the 97% combined ratio they recorded in its property casualty operations. CNA's property casualty retention ratios improved year-over-year while premium rates remained stable over that same time frame. The Company's investment income in the quarter also increased as investment's balances and interest rates were both higher.

Lorillard saw earnings increase significantly over the first quarter of '05 as sales were higher and promotional spending declined. For Newport both unit volumes and marketshare improved. But as usual, Marty Orlowsky will join as momentarily to lend more insight to our tobacco results.

Diamond offshore continued to benefit from the booming offshore drilling market. The $58 million year-over-year improvement in Diamond Offshore's earnings contribution to Loews reflects record high average dayrates and utilization for the Company's fleet. Offshore drilling marketplace fundamentals remain robust and Diamond offshore continues to replace expiring contracts at higher rates. The Company's backlog also continues to grow. Contracted or committed revenues for the next few years recently reached approximately $5 billion, up from about $1 billion only one year ago.

Boardwalk Pipelines also had a very good quarter. Its earnings improved year-over-year as storage demand increased and wide regional natural gas price differentials continued to drive transportation demand. During the quarter Boardwalk announced that its Gulf South Pipeline subsidiary had committed to build a pipeline expansion that will provide 1.5 billion cubic feet of natural gas delivery capacity from Carthage, Texas to Jackson, Mississippi. This project, which should be completed by the second half of '07, is expected to cost a total of $800 million and increase Boardwalk's annual EBITDA by $100 million.

Boardwalk also recently announced that it would hold an open season for a proposed pipeline expansion project with the capacity to transport 700 million cubic feet per day of gas from Jackson, Mississippi to Florida markets. Overall we are very pleased with the success Boardwalk has had in generating organic growth of its market base.

Loews Hotels continues to enjoy strong lodging market conditions. RevPAR for all the Company's owned hotels increased by nearly 15% as both occupancy and average room rates improved. However, because of gains from the sale of a hotel property realized in the first quarter of '05, the year-over-year change in Loews Hotels’ net income has not confirmed the Company's continuing strong operating performance.

As we disclosed in the press release a few weeks ago, the Board of Directors has declared a 3 for 1 stock split on Loews' common stock. On May 8th shareholders will receive two new shares for every one they already own and the split will be reflected in the price of Loews' common stock on the New York Stock Exchange trading beginning on May 9. We expect that this split will help to improve the trading liquidity of Loews' shares.

In addition, given Loews' financial strength and earnings prospects, our Board of Directors intends to implement a 25% increase in the regular dividend paid to Loews' common shareholders. The Board will vote to approve this measure on May 8th. The new annual dividend rate will be $0.75 per share or $0.25 when adjusted for the 3 for 1 stock split.

Also noteworthy is that Loews purchased almost 550,000 shares in the first quarter of '06 at prices averaging slightly less than $100 per share. As a matter of policy we do not discuss our future repurchase plans. Nonetheless, our actions over the last quarter are consistent with our view of the price of our stock and our extremely conservative and liquid balance sheet.

I want to alert listeners to the fact that we intend to hold our annual analyst conference on June 9th of this year. Details will follow shortly. Also I want to mention that this is Josh Kahn's last call as our Director of Investor Relations. I want to thank him for his efforts on behalf of Loews and welcome Darren Daugherty who will fill his very large shoes. And now I'll turn the call over to our CFO, Pete Keegan, who will discuss our financial results in greater detail.

Thanks, Jim, and good morning, everyone. Loews Corporation reported consolidated net income of $541 million in the first quarter 2006 versus $346.3 million in the first quarter 2005. Net income for Loews' common stock was $473.4 million or $2.54 per share in the first quarter of 2006 compared to net income of $299.8 million or $1.62 per share in the first quarter of 2005.

Net income for Carolina Group's stock was $67.6 million or $0.86 for Carolina Group's share in the first quarter of 2006 versus $46.5 million or $0.68 for Carolina Group's share in the first quarter of 2005. The improvement in Carolina Group results was driven by a 3.3% increase in total unit volume shipped and a decline in promotional spending. Net income for Carolina Group's stock also reflects the higher weighted average number of Caroline Group shares outstanding during the quarter. The weighted average shares outstanding increased from $68.07 million in the first quarter of 2005 to $78.33 million in the first quarter of 2006 as a result of the sale of 10 million shares of Carolina Group stock by Loews in November 2005. The change in Carolina Group shares outstanding does not affect Carolina Group per share results.

Lorillard contributed $101 million to net income for Loews' common stock in the first quarter of 2006 versus $94.7 million in the first quarter of 2005. Lorillard's contribution increased year-over-year even though Loews' common shareholders held a smaller proportional interest in the earnings of Carolina Group after the sale of Carolina Group's stock by Loews late last year. Lorillard reported charges of $133.1 million and $121.4 million after taxes for the first quarter of 2006 and 2005 respectively. We're approved for obligations under the state settlement agreements.

CNA contributed $217.1 million to Loews' net operating income in the first quarter of 2006 versus $180 million in the first quarter of 2005. Premium rates for the Company's property casualty operations were flat year-over-year, retention increased and combined ratio figures improved to 96.9% in the first quarter of 2006 from 99% in last year's first quarter. Loews' interest in CNA's net realized investment gains and losses improved to gains of $0.5 million from losses of $11.7 million.

Boardwalk Pipelines reported an increase in its first-quarter earnings as the result of robust demand from its gas transportation and storage services. However, because the structure of the Company was changed to a master limited partnership with a 14.5% interest sold to the public in November of 2005, Boardwalk Pipeline's contribution to Loews' net income declined slightly from $37.9 million in the first quarter of 2005 to $37.2 million in the first quarter of 2006. Boardwalk Pipelines declared a distribution of $0.36 per unit for the first quarter 2006, an increase of $0.01 from the $0.35 per unit quarterly distribution outlined at the time the Company went public.

Diamond Offshore's contribution to net profits improved to $72.3 million in the first quarter 2006 from $14.2 million in the first quarter of 2005. These results reflect higher day rates in the first quarter of 2006 versus the first quarter of 2005 and full utilization for all of Diamond Offshore's rig categories in the recent quarter.

Loews Hotels' earnings decreased from $13.2 million in the first quarter of 2005 to $8.5 million in the first quarter 2006 primarily because the first quarter of last year included approximately $5 million in final payments related to the sale of the Metropolitan Hotel in New York. Nevertheless, the underlying operating performance of the Company continues to be strong as lodging industry conditions remain favorable. Occupancy for Loews Hotels' owned properties increased from 72.1% in the first quarter of '05 to 75.7% in the first quarter 2006. And the average room rate for all of its owned properties improved by 9.3% to $200.60.

Net investment income in other, which is comprised of Loews' investment income including invest gains and losses from a corporate trading portfolio, corporate interest income, income from operations of Bulova and other unallocated expenses was $47.4 million in the first quarter of 2006 versus a loss of $32 million in the first quarter of 2005. The year-over-year comparison is aided by the absence of a charge for early redemption of debt in the first quarter 2005.

As of March 31, 2006 total cash and investment at Loews, including the $100 million reserve in Carolina Group, was $3.16 billion. Loews Corporation had debt totaling $1.17 billion. Lorillard ended the quarter with $1.4 billion in cash and investments. The Carolina Group notional debt was $1.53 billion at the end of the quarter. And now I'll turn things over to Marty Orlowsky at Lorillard. Marty?

Thanks, Peter. Good morning, everyone. Revenues increased by $72.6 million or 9% and net income increased by $28 million or 19% in the three months ended March 31, 2006 as compared to the corresponding period of 2005. Operating income increased by $31 million or 14% for the same periods of comparison. Increased unit sales, as has been stated previously, and lower promotional spending accounted for the quarter-over-quarter gain in operating income that offset increases related to various state settlement and tobacco grower buyout payments.

In addition to these factors net income was further positively affected by gains in investment income. As we've stated on numerous occasions, Lorillard constantly reviews its business strategies to determine the best mix of approaches to strike a balance between profit results and Newport's marketshare performance. Based on the brand's trends as well as competitive brand tactics, strategic adjustments may be implemented that could affect our results during any period of time.

Overall domestic industry shipments for Lorillard -- I'm sorry, overall domestic industry shipments increased by six-tenths of a percent in the first quarter of '06 versus the first quarter of '05. Lorillard's total shipments were up 3.3% for the same periods of comparison. Total domestic shipments for Lorillard were up 3.1% in the first quarter of '06 as compared to the first-quarter of '05.

Newport's domestic shipments were up 3.4% for the same periods of comparison. Lorillard's domestic shipment marketshare for the first quarter of '06 was 9.57%, an increase of 0.23 points over the first quarter of '05. Newport's shipment share for the first quarter of '06 was 8.79%, up 0.24% versus the -- up 0.24 points versus the same quarter year ago. On a sequential shipment share basis the first quarter of '06 versus the fourth quarter of '05 was up 0.62 points.

Lorillard's retail database provides the following marketshare information. Domestic share for the first quarter of '06 was 10.07%, up 0.44 points versus the first quarter of '05. Newport increased its retail share by 0.44 points to 9.25% over the first quarter of '05 and on a sequential basis Newport grew by 0.73 share points in the first quarter of '06 over the fourth quarter of '05. The menthol segment accounted for 28.1% of total industry in the first-quarter of '06, up 1.1 segment share points over the first quarter of '05 and Newport achieved a menthol segment share of 33%, up four-tenths of a point for the same periods of comparison. Now I'll turn it back to Josh.

Thank you, Marty. Jackie, we'd like to open the call up to questions at this point.

(OPERATOR INSTRUCTIONS). David Adelman, Morgan Stanley.

Good morning, everyone. Jim, a couple of questions. First, can you enlighten us into your thinking vis-a-vis the share repurchase in the quarter? What were the conditions that triggered the decision to buy back stock in the first quarter of this year as opposed to any time in the last several years when you were not repurchasing shares?

David, as I said in my remarks, we don't comment about our share repurchases, so I'm just going to let that data point stand as it is.

Can you comment at all, Jim, whether or not it was coincidental with the fact that there was the block sale during the quarter?

What block sale?

Wasn't there a large sale of --?

Oh, I can tell you it categorically had nothing to do with that.

Okay. And then, as it relates to Diamond Offshore, can you comment on your interest in perhaps selling down some of your stake? It's doubled in the last year, presumably there's less profit upside going forward as you contract out at high rates over longer periods of time.

We have no interest in selling any of our sharers in Diamond Offshore. As you know, we own just over 70 million shares which is about 54 or 55% of Diamond, and we are positive about the outlook for the business. The earnings estimates on the Street keep going up; they show earnings improvement in '07 and '08 and even into '09. Diamond has annunciated a policy of paying dividends reflective of its financial position and the earnings in the prior year. So we are very pleased to continue owning Diamond Offshore as a source of significant cash flow for the [powering] Company.

Okay. And then Marty, I had a few questions for you. First, what if anything do you attribute the slow ongoing share gains of the menthol category in the U.S. market?

I think part of it is due to the heavy -- and there's been increased use of free product promotions by some of our menthol competitive brands and I think that to some extent has height if you will or stimulated to some extent the menthol category. And then I have no other absolute reason other than the fact that Newport continues to grow as well as some of the other brands, but I think the other brands -- the competitive brands are growing mostly because of free promotional goods. But I think it generally simulates the category.

Do you think that Newport was adversely affected by the competitive menthol spending rates in the first quarter?

Were we adversely affected?

Yes.

I don't think so. I guess the question for us would be how high is up. We've increased our marketshare. We've shown healthy gains and clearly at a lower promotional rate than the principal competitive menthol brands. I can't really say that it's adversely affected us; it may obviously have some effect.

And Marty, although promotional spending was down versus year ago, am I correct that it was up sequentially versus the per pack rate in the fourth quarter?

Yes, that's correct.

Okay, great. Thank you very much.

Judy Hong, Goldman Sachs.

First question for Jim. Can you just talk about the pretty significant increase that we saw in your income from your trading portfolio -- can you just talk about the performance there and what your investment mix is in the portfolio?

Our investment mix is pretty much in cash. We have, as you know, about $3 billion in cash and investment assets and we have under $500 million in common stock. I would say that the big reason for the increase in the investment income is probably due simply to the increase in short-term interest rates. Rates have gone up -- probably last year they were at -- probably at about 2% and this year they're at 4.75. Increased interest rates make all the difference in the world. By and large the fixed-income investments in that portfolio have been kept pretty short.

Okay, thanks. And then just a couple of questions for Marty. As you answered David's question it looks like this promotional spending did step up in the fourth quarter -- or in the first quarter sequentially from the fourth quarter. Can you just talk about how you feel about the payoff you got in the first quarter as a result of this step up?

And then secondly, do you think that the competitive activity that we're seeing in the menthol segment has intensified more recently that will require you to maybe step up or maintain the level of spending at a higher pace than what we saw versus a couple of quarters ago?

I'm not going to comment on how we may or may not react, to answer the last part of your question. In the future, as I've said and I said it today and I've said it any number of times in the past -- we are constantly monitoring not just the competitive activity and spending but Newport's performance in the absolute sense. So we always weigh all of these factors and I make a determination when appropriate as to what we're going to do. But one thing remains constant and it will continue to remain constant and that is that we want to balance, as I've also said a number of times -- balance overall profitability for Lorillard along with Newport's market performance. So whatever judgments we make based on the conditions that play at a given point in time, we'll always have that as a point of reference.

In terms of the response or result, to the first part of your question in the first quarter, we're more than satisfied with the way the brand has responded. As I think we've all seen over time, the brand demonstrates a strong equity basis in the marketplace. We generally tend to be less promoted on the price basis than the competitive brands. And I think that speaks well for the underlying strength of Newport. And so, yes, we're pleased with the -- I think the first quarter results were very strong.

Just following up on the first part of your answer, though. Has the competitive environment gotten more intense in the last couple of quarters versus what we've seen a year ago or several quarters ago that makes you -- assessing the level of promotional spending a little bit differently today than a few quarters ago?

No, to answer your question in a word, no. It has not had that effect. But on the other side of the coin there has been, beginning somewhere midyear last year and continuing through the first quarter, a substantial increase in the use of free promotional goods in the form of a buy one or whatever it is something free promotions at two of our competitive menthol brands. That's in fact. I mean that's increased. However, I would not characterize our reaction to it as being significantly different today than it was in the past -- regardless of what the competition is doing at this point.

Okay, thank you.

Nik Modi, UBS.

Just a quick question for Marty. You had some nice margin expansion in the quarter. I was wondering, aside from obviously reduction in promotions and the nice volume growth, if there's anything else going on in terms of tweaking the cost structure or getting any savings anywhere. Just curious on what else is driving the margin?

Nothing specific in that area, only the fact that we are very good to complement ourselves in controlling our costs. But nothing of any significant unique nature that I would comment on.

And do you see -- Reynolds and Team USA obviously have ongoing cost-cutting programs. Have you identified any opportunities in your cost base or your infrastructure?

We are constantly and constantly look to evaluate our cost structure and seek opportunities to improve our efficiencies, if you will. So that's an ongoing process for us. We don't necessarily make big announcements about those initiatives, but we are always looking at that and that's always a possibility.

Great, and just the last question. Has the promotional activity in the menthol segment subsided in April at all or are you still seeing elevated levels?

April has been about even -- well, it's real early. There are two weeks of April which is really not very inclusive. It's been about the same as a year ago.

Okay, great. Thanks so much.

Christine Farkas, Merrill Lynch.

A couple questions for Marty. Specifically in the quarter we saw an extra shipping day reported out of your -- or in the industry. I'm wondering if you can quantify how much the extra shipping day boosted volumes. And secondly, can you quantify how much the grower's expense was in the quarter? Thank you.

Let me do the growers. The buyout -- bear with me a second, that's too much information. The grower portion was about $22 million in the first quarter. And I'm sorry, what was the --?

The extra shipping day.

I don't think we had an extra shipping day. We did not have an extra shipping day. Some of the other companies may not ship on certain holidays, but I don't believe we had an extra shipping day in here. It was same for us as it was a year ago and I'll tell you that -- just a sec.

Marty, would you like to get that information and call back later?

All right, I have it right here. We didn't have an extra shipping day, I was right.

Okay. I appreciate that, Marty.

Bob Glasspiegel, Langen McAlenney.

Good morning. I wanted to also express my thanks and appreciation for Josh's help over the years doing Investor Relations. You did a terrific job.

Thank you, Bob. I enjoyed it.

On the buyback, is there are an authorization outstanding or is it just go as you see fit?

No, this is the same as it has always been which is that we keep the Board informed of our purchases, but we don't have any specific authorization for a specific number of shares.

Okay. I'm going to make an observation. I know you don't talk about buyback, but I'll make an observation and you can just tell me whether I'm seriously of base on any of my assumptions. And that is that you've been held back a little bit on your buyback even though the stock has been consistently selling well below net asset value over the last several years because of I think a desire to show a sufficient corporate strength so that CNAs and your own ratings could be upgraded. And given that we haven't had, amazingly I think to both you and me, much progress on that part, is this just a reflection that you just have such a cash position at the parent that it isn't going to matter much more on the margin?

All I'm going to do is thank you for your comments.

Okay.

I really don't want to respond to it.

You have not given up on -- I mean, you're still forcefully trying to get the ratings -- doing everything you can to get the ratings improved at both Loews and CNA?

Absolutely positively. And I will tell you that it is very frustrating to me -- if I can get on my soap box for a second, I'll tell you that we've got in excess of $3 billion of cash. We have just over $1 billion of debt. We have securities in the form of our subsidiaries that when added to the cash, total in excess of $22 billion. We have cash flow coming into the company last year of seven or $800 million and for some bizarre reason these rating agencies are concerned that we can't pay or service our $1 billion of debt. Of the $1.1 billion in debt, 300 million is short-term. It is due in November so after the dust settles in November we will have $875 million of debt and Moody's thinks that this credit should be rated BAA 1. I would encourage all listeners to send their cards and letters to Moody's and say, “What are you guys smoking?”

You convinced me.

Send your cards and letters to Moody's.

On your comments on Diamond Offshore, that you love the business long-term, over the last decade I guess when you thought rigs were really cheap you sort of bought rigs rather than bought back stocks sort of viewed that as functionally equivalent. I know there are some companies out there, Transocean and others that are willing to buy rigs. Would you say that you wouldn't sell rigs to in addition to not selling stocks or is that --?

Bob, we bought rigs, we also bought stock and we did lots and lots of upgrades. Even now, though, we are buying some rigs and upgrading. We have two semi submersibles in the shipyard for major upgrades that total about $550 million. And we also have on order two new jack upgrades totaling -- the cost of those total $300 million. So the Company -- Diamond Offshore still has a significant exposure to the business and is very comfortable with its position in the business.

We believe that the upgrades will be very economic. They cost between 250 and $300 million. If you wanted to order a similar rig today it would cost about $600 million. And likewise for our jack upgrades that we have on order for $150 million a piece. My guess is that if we wanted to today we could probably sell those for a significant profit over what we've committed to pay for them.

So you're saying that you're more a buyer or you're more up an upgrader and a buyer than a seller at the current prices recognizing that it could change tomorrow?

I didn't say that entirely, but what I am saying is that when we look at the operating income that we're able to earn from the rigs compared to the value that we might conceivably be able to sell them for -- especially after we take into account any tax that the Company might have to pay on such a sale, that the arithmetic to us is pretty simple and we don't want to sell our fleet.

Okay, thank you very much.

(OPERATOR INSTRUCTIONS). Carol [Lynn], [Fortis].

First of all, thanks again, Josh, for your help over such a long period of time. I wish you well. My next question is -- I'm very impressed with your financial performance and your balance sheet and cash flow. And I think it's very nice that you increased the dividend payment to Loews' shareholders. How about Carolina Group shareholders like us?

Well, that's up to the Board of Directors of Loews. But what we've said previously is that the Board's goal is to pay down the notional debt of Carolina Group which currently stands at $1.5 billion, and then once that's paid down then all the cash flow that the Carolina Group receives from Lorillard could conceivably be paid in the form of a dividend.

All right. I think that would become a very impressive dividend in fact. My second question -- actually my final question is would you please discuss your position on the most recent MSA payments? As I understand it, you and Reynolds American both chose to really open discussions on what the amount is that you will owe even though Altria Group went ahead and paid the full amount that was assessed. Could you discuss that, please?

Yes. First of all, from a technical standpoint, we did make a payment. The only difference is we paid it into what we call a disputed account which was set up under the provisions of the MSA. The basic issue that we're dealing with here is that we believe given the finding of an economics firm in the first phase of the process to determine whether or not the companies were due any money from the MSA due to market share losses as a result signing the MSA. The economics firm found that the major -- the original signing of companies -- the original manufacturers that signed the agreement did in fact lose market share and were entitled to the equivalent of a $1.1 billion roughly adjustment.

We and Reynolds opted to divert a portion of that $1.1 million that we feel is related to us -- in our case it was about $109 million -- into a disputed account. And Reynolds -- I don't recall their number but they did the same. Philip Morris did not put any money in a disputed account; however, they publicly stated that they too believe, even though they did it -- they made the payment the way they did, they believe they're entitled to the adjustment as well.

So the issue now is the second phase of the process, which we believe given the terms of the MSA, that there should be an arbitration panel established that looks at each state's actions over the time period involved as to whether or not an individual state enforced the provisions of the MSA as they should have under the MSA agreement. We believe given our interpretation of the MSA agreement itself that the arbitration process is the way to go at it. The states contend otherwise and they are filing individual complaints in individual state courts and want to make it a matter of individual actions at a trial court level.

We are obviously taking an opposing view and in fact two state courts agreed with our position -- when I say "our", it's not just Lorillard, it's Philip Morris and Reynolds as well -- that it should go to arbitration. In Connecticut a lower court and in New York an appellate court ruled that way. So that's where we are right now.

Okay. And this is for payments from the '05?

No, this is going back to '03.

Thank you very much. It will be interesting to see how this works out.

Jerry Solomon, Bear Stearns.

Just a follow-up on the MSA issues you were discussing. The MPM adjustment you took was for payments dating -- '04 payments related to '03 shipments. Has Lorillard made a decision whether to file for an MPM adjustment request for '04 similar to what was done in '03?

We will be in the process of doing that, yes. And the whole thing starts over again; it goes to the economic firm, which is an arbitration panel, they have to make their decision. So the clock starts ticking all over again.

So you have given notice to the states or the attorney generals that you're going to do (multiple speakers)?

I don't recall the exact technical status, but we will be in the same position.

Thank you very much.

Thank you. I'm showing no further questions and I would like to hand the floor back to the speakers for any further or closing comments.

Thank you, Jackie. As a reminder, we plan to hold our annual analyst conference this coming June 9th. More details will be made available soon. A replay of this call will be available on our website shortly. The earnings conference call held earlier this morning by CNA, our [P&P insurance institute] will also be available on their website, CNA.com. Thank you for joining us this morning.

Thank you. This does conclude today's teleconference. You may now disconnect your lines and have a wonderful day.