Molina Healthcare Inc (MOH) 2016 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Molina Healthcare fourth-quarter and year-end 2016 earnings conference call. (Operator Instructions). As a reminder, this conference is being recorded Wednesday, February 15, 2017. I will now turn the conference over to Juan Jose Orellana, SVP of Investor Relations. Please go ahead, sir.

Thank you, George. Hello, everyone, and thank you for joining us. The purpose of this call is to discuss Molina Healthcare's financial results for the fourth quarter and fiscal year ended December 31, 2016.

The Company issued its earnings release reporting these results today after the market close and this release is now posted for viewing on our Company website.

On the call with me today are Dr. Mario Molina, our CEO; John Molina, our CFO; Terry Bayer, our COO; and Joseph White, our Chief Accounting Officer. After the completion of our prepared remarks, we will open the call to take your questions. If you have multiple questions, we ask that you get back in the queue so that others can have an opportunity to ask their questions.

As a reminder, we will be discussing the Company's outlook for 2017 tomorrow during our investor day presentation. Today, we will only be taking questions on our earnings release related to 2016.

Additionally, our comments today will contain forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act. All of our forward-looking statements are based on our current expectations and assumptions, which are subject to numerous risk factors that could cause our actual results to differ materially. A description of such risk factors can be found in our earnings release and in our reports filed with the Securities and Exchange Commission, including our Form 10-K annual report, our Form 10-Q quarterly reports, and our Form 8-K current reports. These reports can be accessed under the Investor Relations tab of our Company website or on the SEC's website.

All forward-looking statements made during today's call represents our judgment as of February 15, 2017, and we disclaim any obligation to update such statements, except as required by securities laws.

This call is being recorded and a 30-day replay of the conference call will be available at our Company's website, MolinaHealthcare.com. I would now like to turn the call over to Dr. Mario Molina.

Thank you, Juan Jose.

While the 2016 results we have announced today are clearly unacceptable, I want to remind everyone that outside of the marketplace issues 2016 was in many respects a successful year. It marked the third consecutive year in which our earnings grew by more than $3 billion. Strong enrollment growth generated 23% more premium revenue when compared to 2015, despite a 4% decrease in premium revenue per member per month driven, primarily by touch and Medicaid expansion rates.

We also lowered medical costs by approximately 3% on a per member per month basis and we continue to reduce our administrative costs. Administrative costs decreased by 5% per member per month for the year; however, ongoing issues related to the Affordable Care Act's insurance marketplace have continued and have had a significant adverse impact on our financial results during the fourth quarter.

I want to emphasize that while the losses that we incurred in the marketplace program are likely to capture headlines and overshadow the operational progress we have made during 2016, it has not changed the positive trajectory in our core business.

In order to stabilize the marketplace program for 2017 and beyond, we believe the federal government must do four key things. First, the federal government must continue to provide cost-sharing reductions and premium subsidies. Second, there must be a strong incentive for individuals to purchase health insurance. Third, there must be more strict validation of eligibility for the special enrollment period, or SEP. We must not allow the special enrollment period to become a substitute for open enrollment. Higher costs from people enrolling through the SEP force insurance companies to raise premiums for everyone. And finally, the flaws in the risk transfer methodology must be addressed now.

Our marketplace challenges are not new and have negatively affected many of the industry to varying degrees. During our third-quarter call, I spent a considerable amount of time outlining the deficiencies and the mechanics behind marketplace risk transfer methodology. As a reminder, the program's key weakness is that it redistributes dollars among health plans based on total premiums, and not purely health risk. The methodology penalizes low cost and low premium health insurers like Molina. This flaw has transformed Molina into one of the largest net payers into the risk transfer pools.

To put this in perspective, 24% of our 2016 premiums were transferred to our competitors. During the fourth quarter alone, we accrued an additional $152 million in risk transfer payments and for the 2016 benefit year we have accrued approximately $520 million. As reflected in the Federal Register in late December, the US Department of Health and Human Services made changes to this methodology and will reduce the statewide average premium in the risk transfer formula to 86% of the statewide average premium, to account for the portion of administrative costs that do not vary with claims.

This change is too little and maybe too late. Had the risk transfer methodology changes that CMS announced for 2018 been in effect for all of 2016 we estimate that our pretax and income would've been approximately $70 million higher for all of 2016. We continue to advocate for changes to the risk transfer methodology. We are also seeking money owed to us for risk corridors. Molina has filed a lawsuit against the federal government in the US Court of Federal claims on behalf of his health plan subsidiaries participating in the marketplace program. The lawsuit seeks the recovery of over $50 million in damages for 2015 and roughly $90 million code for 2016 for the federal government's failure to honor its obligations related to Molina's participation in the healthcare marketplaces. Had the risk transfer methodology changes that CMS announced for 2018 been in effect for all of 2016, we estimate that our pretax income would have been approximately $70 million higher than all of 2016. We continue to advocate for changes to the risk transfer methodology.

We are also seeking money owed to us from risk corridors. Molina has filed a lawsuit against the federal government and the US Court of Federal Claims on behalf of its health plans subsidiaries participating in the marketplace program. The lawsuit seeks the recovery of over $50 million in damages for 2015 and roughly $90 million owed for 2016 for the federal government's failure to honor its obligations related to Molina's participation in the healthcare marketplaces.

Moving beyond issues of public policy to specific Company-related issues, I want to talk further about our marketplace results in the fourth quarter. Many of you will recall that during our second- and third-quarter calls we highlighted four factors that would reduce marketplace profitability in the second half of the year. Those factors were, number one, normal membership attrition; two, the addition of higher-cost members through the special enrollment process; three, higher costs as members reach the limits of the high -- of the cost-sharing provisions of their coverage; and four, increasing utilization as members become more engaged with our care networks.

John will go into more detail in a minute, but I want to point out that the financial impact of the last three of these items was more pervasive in the fourth quarter than we had expected. Those developments not only reduced fourth-quarter performance, but also led us to take a closer look at our 2017 pricing. As a result, we recorded a $30 million premium deficiency reserve in the fourth quarter.

I noted earlier that our management team has identified the marketplace challenges and remains focused on taking action to address them quickly and efficiently. We have therefore increased our marketplace premium rates between 6% and 37% across all of our markets, resulting in an average of about 15%, and we'll continue to advocate for policies that stabilize the marketplace.

With that said, and recognizing that we are one of the nation's largest marketplace providers, we believe there are simply too many unknowns with the marketplace program to commit to our participation beyond 2017. We will wait and see how the new administration and Congress will adjust the program and we plan to evaluate our participation on a state-by-state basis.

On another front, we are disappointed by the court ruling last month which blocked the merger of Aetna and Humana, and while Aetna and Humana have terminated their transaction and consequently their divestiture transaction of Medicare assets to Molina, we remain committed to growing our Medicare Advantage program. We intend to build on the experience we have developed in delivering quality healthcare to nearly 100,000 Medicare beneficiaries in 11 states, and we wish Aetna and Humana the best of luck.

Our company has always been committed to seeing that each of our plans is measured for quality by the National Committee for Quality Assurance. Why does quality matter and why is quality important? There are two important financial reasons. First, a growing number of states are tying reimbursement and patient assignment to quality scores, and second, Medicare links quality scores to our premium rates. We are proud that all of our eligible health plans, 11 in total, have been accredited by the National Committee for Quality Assurance. Furthermore, nine of our health plans have been accredited for marketplace.

Finally, our plans in New Mexico, Utah, and Washington were top-rated Medicaid health plans in their states. We are proud of our continued success as we work to deliver the highest quality care to the population we've served for the last 36 years.

All of our eligible health plans maintained or increased their star ratings for Medicare. Furthermore, our Michigan health plan was the highest-rated plan among Medicare special needs plans for dual-eligible beneficiaries and our New Mexico health plan earned four stars. Despite the difficulties we encountered in 2016, we are looking forward to improvement in 2017. As has been our practice, we will reserve our comments on our outlook for 2017 for investor day tomorrow.

I would now like to turn the call over to John.

Thank you, Mario. Before I get into the fourth quarter and year-end results, I wanted to correct what I believe is a misstatement you made, Mario. You said that this was the third consecutive year in which our earnings grew by $3 billion, and in fact it was our revenues grew by $3 billion, not our earnings. Thank you.

Today, we reported full-year net income per diluted share of $0.14 and a net loss of $1.64 per diluted share for the fourth quarter. On an adjusted basis full-year net income was $0.50 per diluted share and a net loss of $1.54 per diluted share during the fourth quarter.

As Mario noted earlier, poor results in the marketplace program was the primary challenge impacting our 2016 results; however, the rest of our business is faring better. To be clear, fourth-quarter results for our Medicaid and Medicare business were adversely impacted by about $60 million of out-of-period items primarily related to revenue. But even allowing for that, we have good reason to be satisfied with our Medicaid and Medicare performance in 2016.

Entering this year, our Medicaid and Medicare programs were under considerable stress as a result of declining Medicaid expansion margins and disappointing results at our Ohio, Texas, and Puerto Rico health plans. For the full-year 2016, however, the combined medical care ratio of our TANF, ABD, Medicare, and MMP membership decreased to 91.3% from 92% in 2015.

In the past when we've encountered problems, they have primarily related to medical costs. Our issues in the fourth quarter, as we have outlined in the earnings release, are predominately revenue related. In the marketplace, we continue to suffer from reductions to revenue as a result of a risk transfer payment that far exceeded exceed the favorable results we are seeing in the reduced medical expenses.

In our Medicaid business, we continue to experience retroactive reductions to revenue that in some cases extend back a year or more. Unlike many of our competitors that have reported poor marketplace results due to adverse risk selection, which raised their medical costs, our performance issues are linked to a risk transfer methodology that has depressed our at-risk revenue.

Let's take a closer look at what happened in 2016 by starting with marketplace. We think it is worthwhile to compare 2016 results to what we would have expected based on our 2016 pricing. It is important to remember that we developed our 2016 pricing with essentially no visibility into historical risk transfer payments.

Based on our 2016 enrollment, our marketplace program was priced to produce income before taxes of approximately $60 million for the year. Instead, we lost 120 -- $110 million. The $170 million difference between our reported results and our expectations is due to the following four factors. Number one, risk transfer payments were approximately $325 million higher than anticipated in our pricing. Number two, despite this $325 million reduction in revenue for risk transfer payments, medical costs were only $120 million lower than anticipated by our pricing model. In other words, we lost nearly $3 of revenue for every $1 of medical cost reduction. Three, other items increased pretax income by approximately $65 million; and, four, we reported a $30 million premium deficiency reserve for the marketplace in 2017.

Let me take each of these items in order. First, we must address the risk transfer payments. As Mario mentioned during the third-quarter conference call, the marketplace risk transfer methodology penalizes efficient and affordable health plans like Molina, harms our performance, and makes it harder for patients to purchase affordable marketplace policies. And once again, risk transfer contributed to our marketplace difficulties in the fourth quarter. Marketplace revenue decreased 16% in the fourth quarter of 2016, yet our risk transfer remained constant from the previous quarter. This had a negative impact of $24 million on the fourth quarter.

Second, risk transfer payments do not offset higher medical costs on a one-for-one basis. While we recorded $325 million of additional risk transfer, we were only able to offset that with $120 million of lower medical costs.

Last, regarding our premium deficiency reserve, accounting rules requiring the immediate recognition of a loss associated with a group of members as soon as that loss becomes certain. Our premium deficiency reserve is an estimate of the losses we expect to incur in 2017 for those members who had enrolled as of December 31, 2016. The premium deficiency reserve does not include estimated losses for members, including special enrollment period members, who will be active in 2017, but who are not enrolled as of December 31, 2016. So the premium deficiency reserve does not capture all marketplace losses we are likely to incur in 2017, but only those that are truly locked in for 2017 as of December 31, 2016.

We will explain this further when we discuss our 2017 outlook at our investor day tomorrow. We evaluate our marketplace programs for premium deficiency on a state-by-state basis.

Now let's talk about the fourth quarter. We had previously shared with you what we -- that we expected additional challenges in the marketplace for the fourth quarter of 2016. We expected lower financial results in the fourth quarter as a result of four trends -- normal membership attrition, the addition of higher-cost members through the special enrollment process, higher costs as members reach the limits of the cost-sharing provisions of their coverage, and increasing utilization as members become more engaged with our care networks. Throughout the fourth quarter, all of these trends, except the first, that is normal member attrition, were more pronounced than we had expected.

First, the number of members enrolling through the special enrollment process increased by an unexpectedly large amount in the fourth quarter. Because these members bring with them pent-up demand and lower risk scores, they are a drag on profitability compared to those joining us through the normal annual enrollment period. It has been well documented that SEP members come in with higher costs. Specifically, we estimate that the average medical care ratio for those SEP members that enroll during the fourth quarter of 2016 was 185%.

Increased utilization, driven by special enrollment membership, was compounded by higher pharmacy costs as the number of prescriptions filled by our members, especially early refills, increased during the month of December. Per member per month pharmacy costs increased by approximately 10% over the new November run rate. Whether these developments were a result of patients being worried about losing their coverage after the November elections, we don't know, but there is no doubt that these developments put pressure on our fourth-quarter results.

The increasing costs borne by Molina as members reach the limits of cost-sharing provisions of their coverage was also a factor in our poor fourth-quarter performance. The share of total member pharmacy costs borne by the Company, for example, increased from 82% in January 2016 to 88% by December. Marketplace medical cost trend was 4% for the year, but the per member per month cost spiked in December.

Of course, the risk quarter program of the Affordable Care Act was designed to partially mitigate the damages of situations like ours. As all of you know, the federal government has not met its obligations under the risk core door program and we have not recognized any benefit from this program in the results we are sharing today. Nevertheless, we are pursuing collection of the amounts due us as part of that program. To support our belief that we are entitled to the risk core door payments, consider that Judge Thomas Wheeler recently ruled that the federal government is liable to Moda Health for all unpaid risk core door payments.

This gives Molina reason for optimism as the facts in our lawsuit are similar to those in the Moda Health case. The $140 million owed to Molina for risk core door payments, if realized, would give a truer picture of the financial results of the marketplace program.

Leaving the marketplace and looking at our business as a whole, our total premium revenue for the year was up 23% from 2015, with year-over-year increases in all programs. It's important to note that nearly 75% of all new premium revenue came from programs other than the marketplace. I want to emphasize that margins in our TANF, ABB, and Medicare programs improved in 2016 over 2015. To put it another way, our traditional business lines of Medicaid and Medicare are improving, despite the deterioration we experienced in marketplace.

Our management of administrative expenses also improved in 2016. Our general and administrative expense ratio decreased to 7.9% for the full-year 2016 compared to 8.1% in 2015.

Finally, at December 31, 2016, days and claims payable was flat sequentially at 47 days. And the Company had cash and investments of nearly $4.6 billion, including in excess of $260 million at the parent company. As disclosed Tuesday, the termination of our purchase agreements with Aetna and Humana will result in a $75 million breakup fee, which we will recognize in the first quarter of 2017.

As a reminder, we will be hosting our investor day conference in New York City tomorrow, Thursday, February 16, at 12:30 PM Eastern time. At that presentation, we will be discussing the Company's outlook and strategy for 2017. We look forward to seeing you there. If you are not able to attend in person, we encourage you to join the webcast.

This concludes our prepared remarks. We are now ready to take questions on the quarter and the year, but we'll save questions on our outlook for tomorrow's call.

(Operator Instructions). A.J. Rice, UBS.

Thanks. Hello, everybody. I'm sure there will be plenty of discussion about the marketplace, but I thought I might ask you about some of the other states that you are flagging here. It sounds like more on the Medicaid side. I think you are flagging Ohio, which it looked like was an issue early in the year, but it sounded like that was turning around and now it sounds like the MLR increased 310 basis points. Can you tell us what's going on with that? Any update on maybe a little more flavor on Puerto Rico? And then, Texas is one you've talked about, but it wasn't flagged today. Any update on what you're seeing there?

Sure, A.J. So on the Medicaid side, we did talk about Ohio early in the year. The first quarter was a bit rocky for us, then we were able to bring the medical cost down in Q2 and Q3. I think that in Q4 is the normal seasonality, as opposed to anything else. In Puerto Rico, we did again flag that earlier in the year and have had some very good results in improving the profitability of the Puerto Rico plan. Texas, again, we cited early, but the Texas issues again are largely behind us.

Kevin Fischbeck, BofA Merrill Lynch.

I guess with the exchange business, if you could go into a little detail about the other items. I guess it was a $35 million favorable number. What was that related to? And I think you said that you would look at exchanges on a state-by-state basis. Are there any state exchange products that were profitable in 2016?

It's Joe speaking. To your first question, that $35 million variance from pricing is a combination of things. It's lower admin costs than we anticipated, plus a little bit more revenue around some other aspects of the program. In total, it added up to about $35 million.

Regarding the individual state performance, we don't normally give that, but I can speak to Texas particularly as being a state where we are doing relatively well on the marketplace program. We feel real good about Texas. Florida is hanging in there, California hanging in there, so those three states.

Okay. Actually just to clarify that SG&A being a little bit lower, the number, is that like a bonus accrual? Like earlier, we had like Anthem (multiple speakers)

No, it's just about the usual things, commissions, just allocation of admin costs, things like that.

Dave Styblo, Jefferies.

Maybe just to circle back to the exchanges, the numbers staying better, the pressure -- it looks like there's about $1.20 of pressure in full-year 2016. Is that sort of the right way to think about it, at the end of the day you were not able to participate and ultimately had to exit? Is that the earnings release that we would think about on 2016 or are there some other puts and takes? And also, I'd like to ask about perhaps any negative SG&A leverage that might be associated with that.

Sure, Dave. I want to be careful because when you asked what would happen if we got it, we are beginning to get into forward-looking guidance type things.

But the way that you described -- the way I would say the puts and takes were for marketplace, it really relates to the risk transfer. If you look at that, we ended up transferring $350 million in excess of what we priced it at. Now, if the risk transfer methodology were structured in a more accurate way, you would expect almost a one-for-one decrease in medical expenses, the idea being we would have healthier members, so their costs would be lower. But, in fact, our costs were only $120 million lower than pricing, so that differential really speaks to where the miss comes in the marketplace.

Okay. And then on a CMS release today, they talked about some of the exchange rules and I didn't get a chance to fully look through that, being on the road today. Was there anything in there that really meaningfully will help you on that? I don't think I saw in the quick headlines there was anything on the risk adjusters there, but curious to hear your takes and thoughts about rules around the special enrollment period and what they did right and got right on that, and that should help you versus what else you need besides what you've discussed earlier about the risk transfers.

Hi, this is Mario. We're going to discuss that tomorrow during our outlook discussion, but I do think it is a positive step, but it's not going to solve the really big issue that we have, which is risk transfer. It addresses a number of other things and we'll go over those tomorrow.

Sarah James, Piper Jaffray.

Thank you. I realize that [hits] is fluid, so I'd rather focus on the core. You've been talking about high-acuity members, ABD and MMP contracts continuing to mature towards the run rate in 2016, and if I look at the timing of contract wins, it makes sense. I can see an absolute improvement on year-over-year MLR, but I'm wondering about the pace.

So is MLR on the new high-acuity membership -- I guess those gained over the last, call it, two years or so, both ABD and MMP, improving at the pace that you would have expected? How long do you think is the path to normal margins on that book? And do you still think that ABD and MMP is a 1.5% to 2% net margin business?

That's a great question, Sarah. I would say that we are progressing along the plane that we wanted to for the higher-acuity members.

We did have a bit of a hiccup, for example, in Washington when we rolled out the integrated program down in southwest Washington. I think the state and the state tax [lawyers] realized that they mispriced that business somewhat and we've been working with them to correct that. But the medical management efforts that Dr. Wilson and his team have put in place have really stabilized utilization, brought it down, and we do think that we're making good progress.

Got it. And then, just a clarification. You mentioned in the press release some rate pressure being reversed in January 2017. I'm just wondering if that was specific to the fourth quarter, because it's a bit unusual to talk about rate pressure so late in the year for the rate reset, so if you could clarify that a little bit more.

Sarah, it's Joe speaking. What we were just trying to point out there is in those three states where we have seen some margin pressure, Ohio, Illinois, and Washington, we did receive some pretty decent rate increases effective 1/1/17, which we'll go into more details tomorrow. But I would just say that in today's state funding environments you generally don't get 4% to 5% rate increases without there being some pressure on margins.

Ana Gupte, Leerink Partners.

This first question is around Medicaid expansion. It does look like you had a pretty big sequential MLR increase, just on our early read of this, as opposed to TANF and CHIP. I'm just trying to understand what's going on there. And you talked about December being the pressure point. Was that flu and more cost related or something else? And was that a big contributor in the deterioration and loss ratio in some of the states that you had, Ohio, California, and Illinois Q over Q?

Hannah, it's Joe speaking. Two points I'd make about Medicare expansion. First, as we spoke about in the first quarter, just we started this year with rates on Medicare expansion coming down, which lowered margins. We also, if you recall, we had a Medicaid expansion rate cut in California midyear.

The additional item that's happened regarding expansion in the fourth quarter is our determination that we were going to have to take a charge of about $40 million, $45 million, out of period related to an item in New Mexico involving contractual interpretations on our Medicaid expansion contract.

So that was the only reason is New Mexico? It wasn't anything you saw in some of the others states I just talked about that had this issue?

No, no, again, as far as Medicaid expansion, the big dip really took place January 1, 2016, when new rates rolled in.

Okay. So you still maintain that the worst of the rate pressure is behind us and you're not going to see pressure going forward on expansion?

Yes. I think we've certainly seen -- and we'll talk more about this tomorrow, we've actually seen a little bit of relief in Washington.

I think our point would be -- our attitude would probably be that over time as the Feds stop funding expansion so much, that those margins are probably going to approach the TANF and ABD margins, which is why we're so pleased with the progress we have made this year in TANF and ABD.

Then on the exchanges, if I could get a little bit more clarity around -- you talk about the (inaudible), which I'm assuming is risk adjusters, and those seem to have come in a lot worse than expected, and then you talk about risk corridors not delivering and you saw some cost pressures, but you didn't see the relief from risk corridors. Can you talk about what percentage of the miss was risk adjusters relative to risk orders? And I understand Moda might have won the case and all, but that's a lot more dicey, right, than risk adjusters.

So, this is Mario, first of all, on the risk corridor issue, we do believe that we are owed the money and our case is very similar to the one that was filed by Moda, so we do believe that we'll prevail in that.

The biggest single problem we have, and we started saying this earlier in the year, is the risk corridor methodology, the fact that we are a plan that has relatively low premiums relative to the statewide average really hurts us. And to give you an example, in California where we operate only in southern California, the costs in northern California are about 30% higher, so it drags up the statewide average and further magnifies the problems that we have.

The basic problem that we have today and going forward is around risk transfer. I think the secondary problem is the special enrollment period, and perhaps the new regulations will address that, but we need to continue to press for some relief on the risk transfer issue.

The risk transfers corridors or adjusters or both? I'm still not (multiple speakers)

There are three Rs, so there's reinsurance, risk corridors, and risk transfer. Right now, the first two have gone away and the risk transfer remains, so it's going to be a problem going forward unless something is done and that's what our advocacy efforts are focused on.

Hi, Ana, it's Joe. Just to be clear, I think from the terminology you're using you would relate risk transfer to risk adjustment.

Okay. And if you don't get what you have -- what you need with advocacy, might you consider exiting for 2018?

Yes.

(Operator Instructions). Gary Taylor, JPMorgan.

Hi, good afternoon. I just wanted to get a little more color on page 2, and maybe I missed this and I think Joe might have just alluded to one of the items. But items two and three, so when you talk about items, $25 million related to 2014 and 2015, is that prior-year development or is that specific contractual issues? And it sounds like maybe number three was the New Mexico thing you had just mentioned, but I wanted to clarify.

That's correct. Both of those items relate to unique issues specific to states, one being the New Mexico item I talked about, the second one being in the state of Illinois where the state pulled back on Medicare rates and risk-adjusted them back to the beginning of 2016. So it's not prior-period development as you would think of it in terms of a claim -- claims liability. It's specific contractual revenue issuance.

Got it. And the $1.21 per-share loss related to marketplace, I presume -- I'm sure that includes the full risk-adjusted payment you are talking about, but the PDR impact is also included in that $1.21?

Bear with us one second. I'm trying to find the $1.21 you're talking about.

I saw it -- I thought you said --

At the very beginning. Yes, yes, that is correct. That $1.21 does include the impact of the $30 million PDR.

Tom Carroll, Stifel.

Your stock is going to be on sale here tomorrow and probably for a little while. Has the management team discussed doing anything like maybe pulling in a share repurchase some time during the first quarter or discuss a policy like that, especially with the breakup fee coming from the Humana deal?

Hi, Tom. This is Mario. We do have an authorization for share repurchase from the Board, but we're not planning to do a share repurchase at this time.

You don't think that would be something that would maybe support the stock or show some confidence in your planning and everything you're doing going forward? There just hasn't been any talk of that at all?

No.

Okay. Thank you.

There are no further questions at this time. I'll turn the call back to the presenters.

All right. Thank you very much for joining us today, and just a reminder that tomorrow we'll be discussing the outlook for 2017. We'll be at the Parker Meridien at 12:30 PM and please join us in person. If you can't, it will be webcast. We look forward to talking to you tomorrow.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.