Octave Specialty Group Inc (OSG) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Ambac Financial Group Inc second quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Charles Sebaski, Head of Investor Relations. Please go ahead, sir.

您好，歡迎參加 Ambac Financial Group Inc 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興將電話轉給投資者關係主管 Charles Sebaski。請繼續，先生。

Thank you. Good morning, and welcome to Ambac's second quarter 2024 call to discuss financial results. Speaking today will be Claude LeBlanc, President and CEO; and David Trick, Chief Financial Officer. They will discuss the financial results of our business and the current market environment. And after prepared remarks, we'll take your questions.

謝謝。早安，歡迎參加 Ambac 2024 年第二季的電話會議，討論財務表現。今天發表演說的是總裁兼執行長克勞德‧勒布朗 (Claude LeBlanc)；財務長大衛‧特里克(David Trick)。他們將討論我們業務的財務表現和當前的市場環境。在準備好發言後，我們將回答您的問題。

For those of you following along on the webcast, during prepared remarks, we'll be highlighting some slides from the investor presentation, which can be located on our website. Our call today includes forward-looking statements. The company cautions investors that any forward-looking statements involve risks and uncertainties and is not a guarantee of future performance.

對於那些關注網路廣播的人，在準備好的發言中，我們將重點介紹投資者簡報中的一些幻燈片，這些幻燈片可以在我們的網站上找到。我們今天的電話會議包含前瞻性陳述。該公司提醒投資者，任何前瞻性陳述都涉及風險和不確定性，並非對未來績效的保證。

Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. Those factors are described under forward-looking statements in our earnings press release, our most recent 10-Q and 10-K filed with the SEC. We do not undertake any obligation to update forward-looking statements.

由於多種因素，實際結果可能與前瞻性聲明中明示或暗示的結果有重大差異。這些因素在我們的收益新聞稿、我們最近向 SEC 提交的 10-Q 和 10-K 報告中的前瞻性聲明中進行了描述。我們不承擔任何更新前瞻性陳述的義務。

Also, in our prepared remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliation of those non-GAAP measures are included in our recent earnings press release, operating supplement and other materials available on the Investors section of our website, ambac.com.

此外，在我們準備好的評論或對問題的答覆中，我們可能會提到一些非公認會計準則財務指標。這些非 GAAP 指標的調節包含在我們最近的收益新聞稿、營運補充資料以及我們網站 ambac.com 投資者部分提供的其他資料中。

I would now like to turn the call over to Mr. Claude LeBlanc.

我現在想把電話轉給克勞德·勒布朗先生。

Thank you, Charles, and welcome to everyone joining today's call. Our reported results for the second quarter were favorable compared to the prior year. We generated a net loss of just under $1 million, adjusted net income of $8 million and consolidated EBITDA of $27 million. David will discuss our financial results in detail shortly. Today, I would like to provide an update on the two strategic announcements we made earlier in the quarter.

謝謝查爾斯，歡迎大家參加今天的電話會議。與去年同期相比，我們報告的第二季業績良好。我們的淨虧損接近 100 萬美元，調整後淨利為 800 萬美元，綜合 EBITDA 為 2,700 萬美元。大衛很快就會詳細討論我們的財務表現。今天，我想提供我們在本季早些時候發布的兩項策略公告的最新情況。

In June, we announced an agreement to sell our legacy financial guarantee business to Oaktree Capital Management for $420 million. This was the culmination of several years of targeted efforts to optimize the portfolio, maximize recoveries and progress the business towards a steady state runoff in preparation for a strategic review.

6 月，我們宣布達成協議，以 4.2 億美元的價格將我們的傳統財務擔保業務出售給橡樹資本管理公司。這是多年來有針對性地努力優化投資組合、最大限度提高回收率並推動業務走向穩定狀態徑流以準備策略審查的成果。

The Oaktree bid was the best value to shareholders, measured on a notional, time and risk-adjusted basis. The sales price achieved was consistent with or above a range of estimated values that we evaluate. The sale of AEC is expected to close during the fourth quarter of 2024, although the ultimate timing will be subject to approvals outside of our control. Upon the close of the sale, we will implement a share repurchase program of up to $50 million to be initiated in the first 3 months of closing depending on market conditions.

從名目、時間和風險調整的基礎來衡量，橡樹資本的收購對股東來說是最佳價值。實現的銷售價格與我們評估的一系列估計值一致或高於。AEC 的出售預計將於 2024 年第四季完成，但最終時間將取決於我們無法控制的批准。出售結束後，我們將根據市場狀況在交易完成後的前 3 個月內實施高達 5,000 萬美元的股票回購計畫。

In making this decision, management and the Board took into consideration our anticipated year-end liquidity and capital position and our go-forward capital needs and obligations amongst other considerations.

在做出這項決定時，管理階層和董事會考慮了我們預期的年終流動性和資本狀況以及我們未來的資本需求和義務等因素。

Following the execution of the share repurchase program, we will evaluate authorizing additional capital return activities measured against other capital deployment opportunities and based on market conditions. Last week, we also announced the closing of the Beat Capital acquisition. I would like to take this opportunity to officially welcome John Cabana and his partners and the entire Beat team to the Ambac family.

執行股票回購計畫後，我們將根據其他資本部署機會並根據市場狀況評估授權額外的資本回報活動。上週，我們也宣布完成對 Beat Capital 的收購。我想藉此機會正式歡迎 John Cabana 和他的合作夥伴以及整個 Beat 團隊加入 Ambac 大家庭。

In Beat, we have found an organization with a similar culture and values. Both Cirrata and Beat employ a partnership model to align interest. The combination offers significant potential for revenue, capital and expense synergies, which we believe will allow us to achieve superior returns and create long-term value for our shareholders.

在 Beat，我們找到了一個具有相似文化和價值觀的組織。Cirrata 和 Beat 都採用合作夥伴模式來協調利益。此次合併帶來了巨大的收入、資本和支出協同效應潛力，我們相信這將使我們能夠實現卓越的回報並為股東創造長期價值。

The Cirrata, Beat combination establishes us as a leading insurance distribution platform with exceptional global growth opportunities through both organic and inorganic means. We believe the combined breadth and depth of our capacity relationships, distribution channels and a highly desirable operational environment makes us a premier destination for top MGA talent.

Cirrata 和 Beat 的合併使我們成為領先的保險分銷平台，透過有機和無機方式提供卓越的全球成長機會。我們相信，我們的能力關係、分銷管道和非常理想的營運環境的廣度和深度相結合，使我們成為頂級 MGA 人才的首選目的地。

Our distribution businesses are primarily focused on specialty and E&S lines where specialization and flexibility of rate and form have led this segment to outperform the growth of the broader P&C markets. On a combined basis, Ambac's Specialty P&C businesses are now expected to generate approximately $1.4 billion of premium on a pro forma basis for 2024, essentially doubling the size of our P&C platform.

我們的分銷業務主要集中在特種產品和 E&S 線路上，其費率和形式的專業化和靈活性使該細分市場的成長優於更廣泛的 P&C 市場的成長。預計到 2024 年，Ambac 的專業財產險和意外傷害業務預計將產生約 14 億美元的保費，基本上使我們的財產險和意外險平台的規模增加一倍。

The combined Cirrata, Beat insurance distribution platform now comprises 16 MGAs, up from 5 as of the end of the second quarter. As we seek to accelerate our premium and margin growth, our combined platform is uniquely positioned to continue to attract what we believe to be best-in-class talent as well as top MGAs.

合併後的 Cirrata 和 Beat 保險分銷平台目前擁有 16 個 MGA，而第二季末只有 5 個。當我們尋求加速溢價和利潤成長時，我們的合併平台處於獨特的地位，可以繼續吸引我們認為是一流的人才以及頂級 MGA。

Together, we are better positioned to leverage our key differentiated offerings for the benefit of our MGA partners, which include, first, aligned risk capital, unlike the majority of our insurance distribution peers, we can accelerate the launch and support the continued development and growth of our distribution businesses.

在一起，我們能夠更好地利用我們的關鍵差異化產品來造福我們的MGA 合作夥伴，其中包括，首先，一致的風險資本，與大多數保險分銷同行不同，我們可以加速推出並支持持續發展和成長我們的分銷業務。

Our Lloyd's syndicates and capital-light carriers enable us to align interest with our capacity providers and gives us the ability to incubate and launch distribution ventures more rapidly. This distinct market advantage positions us for strong future growth.

我們的勞合社辛迪加和輕資本承運人使我們能夠與運力提供者保持利益一致，並使我們能夠更快地孵化和推出分銷企業。這種獨特的市場優勢為我們未來的強勁成長奠定了基礎。

Second, as a public company, we offer key risk and oversight controls that benefit our businesses as well as our key stakeholders. And lastly, business agility, supported by our extensive technology-focused shared service offering.

其次，作為一家上市公司，我們提供關鍵的風險和監督控制，這有利於我們的業務以及主要利害關係人。最後，業務敏捷性由我們廣泛的以技術為中心的共享服務產品提供支援。

Turning now to our second quarter results, excluding our Beat business. Our consolidated specialty P&C insurance platform continued to generate strong production with over $165 million in premium, a 75% increase over last year.

現在來看我們第二季的業績，不包括我們的 Beat 業務。我們的綜合專業財產與意外傷害保險平台持續產生強勁的產量，保費超過 1.65 億美元，比去年增長 75%。

Our insurance distribution business placed over $53 million of premium, up 31% over the prior year. This was supported by the ongoing benefit of organic growth initiatives and the addition of Riverton to the platform last August. We also announced the launch of Tara Hill in the second quarter and MGA focused on management and professional lines.

我們的保險分銷業務保費超過 5,300 萬美元，比上年增長 31%。這得益於有機增長計劃的持續效益以及去年八月將 Riverton 添加到該平台。我們也宣佈在第二季推出 Tara Hill 和 MGA，專注於管理和專業產品線。

Going forward, we believe Cirrata's business profile and mix will be meaningfully and positively impacted by the Beat acquisition. We look forward to providing investors with more details on the combined business in the coming months.

展望未來，我們相信 Cirrata 的業務狀況和組合將受到 Beat 收購的有意義和積極的影響。我們期待在未來幾個月向投資者提供有關合併後業務的更多詳細資訊。

Everspan had strong growth in the quarter, generating gross written premium of $111 million, which was up 109% over last year and produced a combined ratio of 109.4%, improving from the 112.7% last year as the portfolio continues to scale and diversify.

Everspan 本季成長強勁，總保費達到 1.11 億美元，比去年增長 109%，綜合成本率為 109.4%，隨著投資組合的不斷擴大和多元化，綜合成本率較去年的 112.7% 有所提高。

This quarter, the underwriting results were impacted by increased loss frequency in commercial auto. As we indicated in prior quarters, we continue to take a cautious approach to reserving and expect some near-term volatility as Everspan's portfolio scales and diversifies across programs and lines of business.

本季度，承保業績受到商用汽車損失頻率增加的影響。正如我們在前幾個季度所指出的，我們繼續對儲備採取謹慎的態度，並預計隨著 Everspan 的投資組合在專案和業務領域的規模和多元化，近期會出現一些波動。

Consistent with our focus on disciplined underwriting, we discontinued the subject commercial auto program this quarter. We believe rates are keeping up or exceeding loss cost trends for all of our other programs.

與我們對紀律承保的關註一致，我們本季終止了主題商用汽車計畫。我們相信費率與我們所有其他計劃的損失成本趨勢保持一致或超過。

At the same time, Everspan maintains a strong pipeline of program opportunities which we believe will further our goals to diversify the portfolio, support growth, reduce our combined ratios and deliver strong future ROEs.

同時，Everspan 保持著強大的計劃機會管道，我們相信這將進一步實現我們的目標，即實現投資組合多元化、支持增長、降低綜合成本率並實現強勁的未來股本回報率。

I will now turn the call over to David to discuss our financial results for the quarter. David?

我現在將電話轉給大衛，討論我們本季的財務表現。大衛？

Thank you, Claude, and good morning, everyone. For the second quarter of 2024, Ambac generated a net loss of just under $1 million or $0.02 per diluted share improving from a net loss of $13 million or $0.29 per diluted share in the second quarter of 2023.

謝謝克勞德，大家早安。2024 年第二季度，Ambac 的淨虧損略低於 100 萬美元，即稀釋後每股 0.02 美元，較 2023 年第二季的淨虧損 1,300 萬美元，即稀釋後每股 0.29 美元有所改善。

Adjusted net income increased to $8 million or $0.18 per diluted share for the quarter compared to adjusted net income of $3 million or $0.07 per diluted share in the second quarter of 2023. Our results for the second quarter 2024 were impacted by several items including $5 million of net gains from minority strategic investments in InsurTech-related businesses, $12 million of net gains from the termination of a retiree benefit plan and approximately $16 million of legal and advisory expenses related to the acquisition of Beat and the sale of AAC.

本季調整後淨利增至 800 萬美元，即稀釋後每股 0.18 美元，而 2023 年第二季調整後淨利為 300 萬美元，即稀釋後每股 0.07 美元。我們2024 年第二季的業績受到多個專案的影響，包括對保險科技相關業務的少數策略投資產生的500 萬美元淨收益、終止退休人員福利計畫產生的1,200 萬美元淨收益以及約1,600 萬美元的法律和諮詢費用涉及收購 Beat 和出售 AAC。

In addition, during the second quarter, we continued to experience significant growth in our specialty P&C businesses. Cirrata premiums placed grew 31% to over $53 million from $41 million in the second quarter of 2023, driven by the acquisition of Riverton and 11% organic growth.

此外，在第二季度，我們的特種財產險和意外傷害業務持續實現顯著成長。在收購 Riverton 和 11% 的有機成長的推動下，Cirrata 保費從 2023 年第二季的 4,100 萬美元成長了 31%，達到超過 5,300 萬美元。

Gross commissions were $13 million up 32% compared to the second quarter of 2023. Revenue benefited both from the acquisition of Riverton and 12% organic growth. EBITDA was $2.4 million $2 million after minority noncontrolling interest for the second quarter of 2023, up 47% and 54% from the $1.6 million, $1.3 million after minority noncontrolling interest, respectively, reduced in the second quarter of 2023. The resulting gross EBITDA margin was 18.1% this quarter compared to 16.3% in the second quarter of 2023.

佣金總額為 1,300 萬美元，較 2023 年第二季成長 32%。收入受益於收購 Riverton 和 12% 的有機成長。2023 年第二季的 EBITDA 為 240 萬美元，扣除少數非控股權益後為 200 萬美元，較 2023 年第二季減少的 160 萬美元和 130 萬美元分別成長 47% 和 54%。本季的 EBITDA 毛利率為 18.1%，而 2023 年第二季為 16.3%。

This margin expansion was largely driven by organic growth including an A&H policy renewal, which shifted to the second quarter of 2024 would have been the third quarter. We expect Cirrata's earnings and margin profile to be positively impacted in the third quarter by the inclusion of two months of Beat's results with the closing of the acquisition effective July 31.

這項利潤率擴張主要是由有機成長推動的，包括 A&H 政策更新，該政策更新至 2024 年第二季度，本應為第三季度。我們預計，隨著收購於 7 月 31 日生效，Cirrata 第三季的獲利和利潤率將受到 Beat 兩個月業績的正面影響。

Everspan's net premiums written in the quarter of $32 million were up 254% over the prior year period based on a retention rate of approximately 29% of gross written premium of $111 million. This compares to a 17% retention rate of gross premium written of $53 million last year.

Everspan 本季的淨承保保費為 3,200 萬美元，較去年同期成長 254%，基於 1.11 億美元總承保保費約 29% 的保留率。相比之下，去年毛保費 5,300 萬美元的保留率為 17%。

As was the case last quarter, both the growth in net premiums and higher retention levels stem mostly from workers' compensation and nonstandard auto programs written in the back half of 2023 as assumed reinsurance.

與上季的情況一樣，淨保費的增長和保留水準的提高主要源於工人賠償和 2023 年下半年作為假設再保險制定的非標準汽車計劃。

Earned premiums and program fees were $27 million and $3 million, up 248% and 60%, respectively, from the second quarter of 2023. The loss ratio of 85.1% in the second quarter of 2024 was up from 73.7% in the second quarter of 2023. Year-to-date, the loss ratio was 80.5% compared to 70.4% last year.

已賺取保費和項目費用分別為 2,700 萬美元和 300 萬美元，較 2023 年第二季分別增長 248% 和 60%。2024年第二季的虧損率為85.1%，高於2023年第二季的73.7%。年初至今，損失率為80.5%，而去年為70.4%。

The second quarter loss ratio included 6.9 percentage points of prior accident year development. mainly driven by increased frequency in commercial auto. This elevated commercial auto frequency also led to 4.2 percentage points of the catch-up from the first quarter of this year. The 2024 accident year loss ratio, excluding both prior period development and inter-period catch-up was 73.9% compared to 69.5% in the second quarter of 2023.

第二季的損失率比上一事故年度的損失率高出 6.9 個百分點。主要是由商用車頻率的增加所推動的。商用車頻率的上升也導致比今年第一季追趕了4.2個百分點。不包括前期發展和期間追趕的 2024 年事故年損失率為 73.9%，而 2023 年第二季為 69.5%。

One of the ways Everspan manages exposure is through sliding-scale commissions, which is recorded against acquisition costs and linked to loss performance. For the second quarter of 2024, sliding scale commissions produced a benefit of 5.6% compared to a 4.2% benefit last year. The expense ratio was 24.3% in the second quarter of 2024, down from 39% in the prior year quarter, benefiting from the overall growth at Everspan.

Everspan 管理風險的方法之一是透過浮動佣金，該佣金根據收購成本記錄並與虧損業績掛鉤。2024 年第二季度，浮動佣金的效益為 5.6%，去年為 4.2%。2024 年第二季的費用率為 24.3%，低於去年同期的 39%，受益於 Everspan 的整體成長。

In addition, the expense ratio benefited this quarter from the increase in sliding scale commissions of 140 basis points noted earlier. The resulting combined ratio for the second quarter was 109.4%, an improvement of 330 basis points from the respective prior year period.

此外，本季的費用比率受益於先前提到的浮動佣金增加 140 個基點。第二季綜合成本率為 109.4%，較去年同期提高 330 個基點。

The year-to-date combined ratio of 104% is down meaningfully from 117.1% last year to date. Everspan's combined ratios overall are continuing to trend downward as the business grows in third to five suffice. And as noted by Claude, we have taken decisive action to contain the losses in commercial auto.

年初至今的綜合成本率為 104%，較去年同期的 117.1% 大幅下降。隨著業務增長三到五就足夠了，Everspan 的綜合成本率總體上繼續呈下降趨勢。正如克勞德所指出的，我們已採取果斷行動來遏止商用汽車的損失。

Excluding commercial auto, Everspan produced a loss ratio for the quarter of 68.7%. For the quarter, Everspan experienced just over a $1 million tax loss compared to a roughly breakeven result for the second quarter of 2023. For the second quarter, the legacy financial guarantee segment generated net income of $11 million versus a net loss of $9 million in the prior year period.

不包括商用汽車，Everspan 該季度的虧損率為 68.7%。與 2023 年第二季大致損益平衡的結果相比，Everspan 本季的稅收損失略高於 100 萬美元。第二季度，遺留財務擔保部門淨利為 1,100 萬美元，而去年同期淨虧損為 900 萬美元。

The year-over-year improvement was primarily driven by higher discount rates and a onetime gain related to the termination of a benefit plan. Consolidated investment income for the second quarter was $36 million compared to $35 million in the second quarter of 2023.

同比改善主要是由較高的折現率和與終止福利計劃相關的一次性收益所推動的。第二季綜合投資收入為 3,600 萬美元，而 2023 年第二季為 3,500 萬美元。

The improvement stemmed from higher average yields on fixed income securities, which increased 60 basis points over the same period. Consolidated loss and loss adjustment expenses were $18 million in the second quarter of 2024, compared to $7 million in the second quarter of 2023.

這項改善源自於固定收益證券平均報酬率的提高，同期上升了 60 個基點。2024 年第二季的合併損失和損失調整費用為 1,800 萬美元，而 2023 年第二季為 700 萬美元。

ARIS ban losses grew by $17 million compared to the prior year to $23 million. Legacy financial guarantee produced a net benefit of $5 million favorably impacted by higher discount rates versus lower discount rates in the prior year and favorable credit development.

ARIS 禁令損失比前一年增加了 1,700 萬美元，達到 2,300 萬美元。舊財務擔保產生了 500 萬美元的淨收益，這得益於較高的貼現率（相對於上一年較低的折現率）以及有利的信貸發展。

Shareholders' equity of $1.37 billion or $30.25 per share at June 30, 2024 compared to $30.19 at March 31, 2024. The net loss in the quarter was more than offset by a $4 million unrealized gain on available-for-sale investments. Adjusted book value of $1.32 billion or $29.23 per share at June 30, 2024, was up 1% from $29.03 per share at March 31, 2024. At June 30, 2024, AFG on a standalone basis, excluding invents and subsidiaries, at cash, investments and net receivables of approximately $202 million or $4.47 per share.

截至 2024 年 6 月 30 日，股東權益為 13.7 億美元，即每股 30.25 美元，而 2024 年 3 月 31 日為 30.19 美元。本季的淨虧損被可供出售投資的 400 萬美元未實現收益所抵銷。截至 2024 年 6 月 30 日，調整後帳面價值為 13.2 億美元，即每股 29.23 美元，較 2024 年 3 月 31 日的每股 29.03 美元增長 1%。截至 2024 年 6 月 30 日，AFG 在獨立基礎上（不包括發明和子公司）的現金、投資和應收帳款淨額約為 2.02 億美元或每股 4.47 美元。

I will now turn the call back to Claude for some closing remarks.

現在我將把電話轉回給克勞德，讓他發表一些結束語。

Thank you, David. This quarter represents an inflection point for Ambac as we made significant progress on all key strategic priorities, first, completing the transformation of Ambac to a pure-play specialty P&C company by entering into an agreement to sell our legacy financial guarantee business to Oaktree Capital.

謝謝你，大衛。本季對Ambac 來說是一個轉折點，因為我們在所有關鍵策略優先事項上都取得了重大進展，首先，透過簽署協議將我們的傳統財務擔保業務出售給橡樹資本，完成了Ambac 向專業財產險公司的轉型。

Second, establishing a leading insurance distribution business through the combination of Beat and Cirrata. The execution of these strategic priorities is not an endpoint, but the beginning of our future. We have strong conviction that Ambac's go-forward business strategy provides a tremendous opportunity to create additional value for our shareholders.

其次，透過Beat和Cirrata的合併，建立領先的保險分銷業務。這些策略重點的執行不是終點，而是我們未來的開始。我們堅信，Ambac 的前瞻性業務策略為我們的股東創造額外價值提供了巨大的機會。

The continued growth of our insurance distribution business, which has been materially advanced by the recent acquisition of Beat Capital Partners and positions us as a leading pure-play specialty P&C business. Our focus remains on maximizing long-term shareholder value, which we are committed to doing by growing our specialty P&C businesses as well as through prudent capital allocation. I look forward to updating you on our progress in the coming quarters.

最近收購 Beat Capital Partners 大大推動了我們保險分銷業務的持續成長，使我們成為領先的純專業財產險業務。我們的重點仍然是最大化長期股東價值，我們致力於透過發展我們的專業財產和意外險業務以及審慎的資本配置來實現這一目標。我期待向您通報我們未來幾季的最新進展。

Operator, please open the call for questions.

接線員，請打開電話提問。

[Operator Instructions] Our first question comes from Giuliano Bologna with Compass Point. Please proceed with your question.

[操作員說明] 我們的第一個問題來自 Compass Point 的 Giuliano Bologna。請繼續你的問題。

Maybe to kick off one of the notes in the presentation highlights that there's some potential obligations to fund minority interests at the MGAs, particularly range from $250 million to $370 million. I'm curious about the potential timing of that? And if you could maybe accelerate some of those or internalize some of the minority interest before some of those obligations are along the way.

也許首先要強調的是，在簡報中，有一些潛在義務需要為 MGA 的少數股東權益提供資金，特別是 2.5 億至 3.7 億美元之間的義務。我很好奇這可能的時機？如果你能在其中一些義務履行之前加速其中一些或內部化一些少數股東利益。

Giuliano, thanks for the question. Yes. So those obligations relate primarily to the puts and the calls that we have with the MGAs that are currently part of the Cirrata family as well as now with the acquisition of Beat. So typically, when we partner up with these MGAs, we acquire about 80% on average 60% to 80% on average of MGAs and the remaining minority interest of 20% to 40%, we enter into foot call arrangements. So we're coming to a point where on some of our earlier acquisitions, we're in the foot call period for our first acquisition and others will be coming at a regular cadence at this point, including with Beat, which our first put call would be in 2026.

朱利亞諾，謝謝你的提問。是的。因此，這些義務主要與我們對 MGA 的看跌期權和看漲期權有關，這些 MGA 目前屬於 Cirrata 家族，以及現在收購了 Beat。因此，通常情況下，當我們與這些 MGA 合作時，我們會收購平均 60% 至 80% 的 MGA 約 80% 的股份，以及剩餘 20% 至 40% 的少數股權，然後我們會進行實地考察安排。因此，我們已經到了這樣一個階段：在我們早期的一些收購中，我們正處於第一次收購的認購階段，而其他收購將在這一點上定期進行，包括我們的第一次看跌期權的 Beat將於2026年。

So we can't really accelerate them, but we are in a point in time in our evolution at Cirrata that these puts and calls are becoming in the case of the call, exercisable and the put, which should be more of the obligation could be put to us. So we do anticipate over the next couple of years, that we'll be exercising some of those calls and/or responding to some of those puts, which ultimately would be funded by cash on the balance sheet as well as potentially some external financing.

因此，我們無法真正加速它們，但我們正處於 Cirrata 發展的一個時間點，這些看跌期權和看漲期權正在成為看漲期權、可行使的看漲期權和看跌期權，這應該是更多的義務交給我們。因此，我們確實預計在未來幾年中，我們將行使其中一些看漲期權和/或回應其中一些看跌期權，這些最終將由資產負債表上的現金以及可能的一些外部融資提供資金。

Then a slightly different topic. There's a discussion about $6 million share repurchase authorization, I'm curious about two different aspects around that. The first one is if there's any ability to accelerate any of that before potential of AAC closes, and the second one is $50 million is not necessarily immaterial to your market cap and you still have a 5% ownership

然後是稍微不同的話題。有一個關於 600 萬美元股票回購授權的討論，我對圍繞該問題的兩個不同方面感到好奇。第一個是在 AAC 的潛力結束之前是否有能力加速其中任何一個，第二個是 5000 萬美元對於你的市值來說不一定不重要，而且你仍然擁有 5% 的所有權

limitation in place. I'm curious if there's any any way to lift the 5% cap or if there's any interest in between the 5% cap or how you could work around that $50 million repurchase program executed?

限製到位。我很好奇是否有任何方法可以提高 5% 的上限，或者是否有人對 5% 的上限感興趣，或者如何解決已執行的 5000 萬美元回購計劃？

Giuliano, the $50 million is a plan that we have indicated we will initiate immediately post close of the AAC transaction. We do have some additional capital available between now and close, but we have earmarked that for other business purposes and just prudent capital management. We're going to wait until we close the AAC transaction to officially launch into that. You're right, it is a -- on the larger side, if you will, in terms of buybacks relative to our market cap, although as we've indicated, we believe that our share trading values are below our view of the value of the company, and we believe that, that gap, we hope will reduce between now and the closing of the transaction, potentially and actually with the close of the transaction.

Giuliano，5000 萬美元是一項我們已表示將在 AAC 交易結束後立即啟動的計劃。從現在到交易結束，我們確實有一些額外的可用資金，但我們已將其指定用於其他業務目的和審慎的資本管理。我們將等到 AAC 交易結束後才正式啟動。你是對的，從更大的角度來看，如果你願意的話，就相對於我們市值的回購而言，儘管正如我們所指出的，我們認為我們的股票交易價值低於我們對價值的看法我們相信，我們希望從現在到交易完成之間，這種差距會隨著交易的完成而潛在地和實際地縮小。

But we do have strong conviction to deploy the full $50 million if market conditions are appropriate depending on where stock price is and as it relates to the 5% limitation, while that is something that we'll keep a close eye on as we progress. We have developed a plan to mitigate the risk of that. But we won't be using that as a hard line in the event that there was potentially some shift. That's something that we'll be prepared to deal with, although we're not looking to create ship that would, in any way, jeopardize the NOLs.

但我們確實有堅定的信念，如果市場條件合適，根據股價的情況以及與 5% 的限制相關的情況，我們將部署全額 5000 萬美元，而隨著我們的進展，我們將密切關注這一點。我們制定了一項計劃來降低這種風險。但如果可能出現一些轉變，我們不會將其用作強硬路線。這是我們準備應對的事情，儘管我們不希望製造出會以任何方式危及 NOL 的船隻。

And then just thinking about -- obviously, there are two moving parts between now and the closing of the transaction in terms of holdco liquidity moving around. But I'm curious, when you think about further out, I'm curious how you think about holdco leverage and how much leverage you might be willing to use the holding company level to fund additional growth opportunities Yes. or just different investments for the platform.

然後想想——顯然，從現在到交易結束之間，控股公司流動性的變化有兩個變化的部分。但我很好奇，當你進一步思考時，我很好奇你如何看待控股公司槓桿，以及你可能願意使用控股公司層面的槓桿來為額外的成長機會提供資金。或只是對平台的不同投資。

Sure, Giuliano. So we are not afraid to leverage, certainly, we could use leverage if it makes economic sense. We want to -- we're going to leverage the company, whether it's because of puts and calls or other acquisition opportunities, it's going to be measured against what the profile of those investments and acquisitions are to make sure that we have the right leverage for the balance sheet that protects the balance sheet in the today. That's our primary goal is to grow the business in a responsible way and protect the balance sheet and optimize the financial flexibility.

當然，朱利亞諾。所以我們不害怕槓桿，當然，如果槓桿具有經濟意義，我們可以使用槓桿。我們想要——我們將利用該公司，無論是因為看跌期權和看漲期權還是其他收購機會，都將根據這些投資和收購的情況進行衡量，以確保我們擁有正確的槓桿作用保護當今資產負債表的資產負債表。我們的主要目標是以負責任的方式發展業務、保護資產負債表並優化財務靈活性。

But as a normal course company and growing company now, leverage makes a lot of sense, and it's one of the ways that we can optimize our cost of capital and the efficiency of our balance sheet, so I think over a longer term, as a normalized level of leverage could be in the range of 2 to 3 -- 2 times to 4 times EBITDA that may peak up at certain point in time depending on short-term transactions. But as a normal cost that seems to be the level of leverage that would make sense for us over the long term.

但作為一家正常發展的公司和現在正在成長的公司，槓桿很有意義，它是我們優化資本成本和資產負債表效率的方法之一，所以我認為從長遠來看，作為標準化槓桿水平可能在EBITDA的2 至3 倍至2 倍至4 倍範圍內，根據短期交易，可能會在某個時間點達到高峰。但作為正常成本，從長遠來看，這似乎是對我們有意義的槓桿水平。

I'm just very helpful. Appreciate the time and I will jump back in the queue.

我只是非常樂於助人。珍惜時間，我會插回隊列。

Yes.

是的。

Our next question comes from Deepak Sarpangal, with Repertoire Partners. Please proceed with your question.

我們的下一個問題來自 Repertoire Partners 的 Deepak Sarpangal。請繼續你的問題。

Thank you. Good morning, Claude, David and Chuck One quick follow-up first, just given the first question from Giuliano on the call potential obligations or opportunity. So on Slide 15, you had listed this $250 million to $370 million over the next 5 years. How much of that relates to Beat and how much -- versus how much of it relates to the previous acquisitions?

謝謝。早安，克勞德、大衛和查克，首先我們快速跟進一下，剛剛回答了朱利亞諾在電話會議中提出的第一個問題：潛在的義務或機會。因此，在投影片 15 上，您列出了未來 5 年的 2.5 億至 3.7 億美元。其中有多少與 Beat 有關，有多少與先前的收購有關？

Certainly, it will -- the relative value, if you will, will shift depending on the performance of each of the businesses. And these are typically structured in a way that's a result of a multiple of future EBITDA. So giving that range gives an effect to a few things. So ultimately, the larger portion of that is related to Beat, that's the smaller portion of it at current expectations of performance is related to the existing MGAs.

當然，相對價值（如果你願意的話）會根據每項業務的績效而改變。這些的結構通常是未來 EBITDA 倍數的結果。因此，給出這個範圍會對一些事情產生影響。因此最終，其中很大一部分與 Beat 有關，而按照當前的性能預期，其中較小部分與現有 MGA 有關。

And maybe this touches on the comment David just made about the company being in a stronger position and ultimately, the most efficient balance sheet, including a certain amount of leverage. But in the range that you gave for $250 million to $370 million, you previously said that those multiples should be similar to what you paid for Beat, so let's call it, roughly 16 times EBITDA. So if I take $250 and $370 million divided by 16 we're talking about probably an incremental $15 million to $23 million of EBITDA that you can acquire.

也許這觸及了大衛剛剛發表的評論，即公司處於更有利的地位，並最終擁有最有效的資產負債表，包括一定程度的槓桿。但在您給出的 2.5 億至 3.7 億美元的範圍內，您之前說過這些倍數應該與您為 Beat 支付的價格類似，所以我們稱之為 EBITDA 的大約 16 倍。因此，如果我將 250 美元和 3.7 億美元除以 16，我們談論的 EBITDA 可能會增加 1500 萬至 2300 萬美元。

But tell me if my math is incorrect, but what that looks like to me is that effectively -- because I know some of these are contingent on performance that in those scenarios, you're talking about roughly doubling your EBITDA, at least as it relates to something like Beat, correct?

但請告訴我，如果我的數學不正確，但在我看來，這確實有效——因為我知道其中一些取決於績效，在這些情況下，你所說的 EBITDA 大約會增加一倍，至少是與Beat 之類的東西有關，對嗎？

So there's two components of that. First of all, the existing MGAs we have set schedules in terms of what the multiples are. And there's certainly a range there of multiples we could pay for the minority interest but I don't believe any of those touch 16. I think the range on those -- I know from 10 to 14, let's say, and then, of course, as it relates to Beat, we have acquired 60%, so the opportunity to acquire additional 40%, nearly comes close to doubling of course, the available EBITDA there.

所以這有兩個組成部分。首先，我們根據現有的 MGA 倍數制定了時間表。當然，我們可以為少數股權支付一定的倍數，但我不認為這些倍數會達到 16。我認為這些範圍——我知道從 10 到 14，比方說，然後，當然，因為它與 Beat 有關，我們已經收購了 60%，所以收購額外 40% 的機會幾乎增加了一倍當然，可用的EBITDA也在那裡。

But also in the Beat structure, you may recall, Beat owns a number of MGAs in which they own a majority stake 60% to 70%. And we also have negotiated for the ability to acquire those minority interests or a portion of minority interest in the actual MGAs at a discount to that multiple that you mentioned.

但在 Beat 結構中，您可能還記得，Beat 擁有許多 MGA，其中他們擁有 60% 至 70% 的多數股權。我們還就能夠以低於您提到的倍數的折扣收購實際 MGA 中的少數股權或部分少數股權進行了談判。

Yes.

是的。

Okay. Yes. So I mean, I think the point being that given that effectively, there's likely some EBITDA growth involved in that? And with David's comment that you do have both access to and a willingness to borrow prudently when it makes sense that some portion of that incremental EBITDA would effectively increase your cash available for -- from debt financing. So some of that would kind of further reduce kind of the amount of reserve that you might need.

好的。是的。所以我的意思是，我認為重點是，考慮到這一點，可能會涉及一些 EBITDA 成長？大衛的評論是，當增量 EBITDA 的某些部分將有效地增加您的可用現金（來自債務融資）時，您確實有機會並願意謹慎借貸。因此，其中一些會進一步減少您可能需要的儲備金額。

And I think there's a lot of interesting information on the Slide 15. I guess one clarification wanted to make is that in your current plan, which I understand is conservative and prudent -- you've got the initial $50 million share repurchase plan. And as Claude referenced, you'll be able to consider and evaluate additional capital returns beyond that measured against other opportunities. It looks here that you also have a $50 million cash reserve and that you are assuming the repayment of the bridge and co-investment. So -- but even after all of that at the bottom of this slide, there's almost $200 million of excess cash available to both grow the business as well as for additional capital returns. Is that correct?

我認為第 15 張投影片上有很多有趣的資訊。我想需要澄清的一點是，在你目前的計劃中，我認為這是保守和審慎的——你已經有了最初的 5000 萬美元的股票回購計劃。正如克勞德所提到的，您將能夠考慮和評估除了與其他機會相比之外的額外資本回報。看起來您還有 5000 萬美元的現金儲備，並且您正在承擔橋樑和共同投資的償還費用。所以，但即使在這張投影片底部的所有這些之後，仍有近 2 億美元的多餘現金可用於發展業務以及額外的資本回報。這是正確的嗎？

That's correct.

這是正確的。

And so -- and even in the event that you were able to utilize some debt financing once you repay the bridge that could be well over $200 million and still leaving you with a $50 million cash reserve. So really liking the position that we should be in as we approach the close of this deal. And then I thought it might be helpful to get a better sense of verification because it was a really interesting comment that Claude made about first of all, I appreciate like a lot of work that would have gone into the merger proxy and there's a lot of information there.

因此，即使您在償還過橋貸款後能夠利用一些債務融資，金額也可能遠遠超過 2 億美元，並且仍然為您留下 5,000 萬美元的現金儲備。因此，當我們接近這筆交易時，我們真的很喜歡我們應該處於的位置。然後我認為這可能有助於獲得更好的驗證感，因為這是克勞德首先發表的一個非常有趣的評論，我很欣賞合併代理中的大量工作，並且有很多那裡的信息。

You've got the initial share repurchase program and it is depending on market conditions. But -- so obviously, there's all kinds of things that could happen, especially by that point. But you have the flexibility both to adjust that in either direction, including, as you referenced, if the stock price is in a position where it remains substantially dislocated from fair value. You have the ability to do a significant amount more than that $50 million, correct?

您已經制定了初始股票回購計劃，這取決於市場狀況。但是——很明顯，有各種各樣的事情可能發生，尤其是到那時。但是，您可以靈活地向任何方向進行調整，包括，正如您所提到的，如果股價仍處於與公允價值嚴重脫節的位置。你有能力做遠遠超過 5000 萬美元的金額，對嗎？

That is correct.

這是正確的。

And I guess, just for the voice of doubt because we certainly have a view that there's been a lot of very favorable progress and development with the company, and we appreciate your stewardship of that without predicting the future based on how things currently stand today at anything -- if hypothetically, we were at today's stock price around the course of the deal. Would you agree or disagree that the overwhelmingly attractive use of capital would be to take advantage of that and to create accretion and benefit from this wide disconnect in your share price for fair value.

我想，這只是為了提出質疑，因為我們當然認為公司取得了很多非常有利的進展和發展，我們感謝您的管理，而沒有根據目前的情況來預測未來任何事情——如果假設的話，我們在交易過程中的股價就是今天的。您是否同意，最具吸引力的資本用途是利用這一點，並從股價與公允價值的巨大脫節中創造增值並從中受益。

Yes. Certainly, at these levels, and I think we're closer to certainly the numbers that we were pre-announcement, where we are today. There's tremendous return value. So we have strong conviction into that range, and we will always continue to balance it against other opportunities that we're looking at. But I think we're now looking at this from a much longer-term perspective on growth and value creation than simply the events of the sale of the purchase. We have very strong conviction around our growth prospects for this combined throughout a Beat platform going forward. And we are also going to be very active in working with the investor community to ensure that our message is getting out there on our growth opportunities going forward.

是的。當然，在這些水平上，我認為我們肯定更接近我們預先宣布的數字，也就是今天的數字。有巨大的回報價值。因此，我們對該範圍充滿信心，並且我們將始終繼續將其與我們正在尋找的其他機會進行平衡。但我認為我們現在正在從更長遠的角度來看待這個問題，即成長和價值創造，而不僅僅是出售購買的事件。我們對整個 Beat 平台的成長前景充滿信心。我們也將非常積極地與投資者群體合作，以確保我們的訊息傳達到我們未來的成長機會。

So we will keep those considerations in balance. But given where the stock price is today, there's no question that we are -- we have strong conviction in purchasing our stock at these levels and we'll do that for so long as there's opportunities to do that.

因此，我們將平衡這些考慮因素。但考慮到今天的股價，毫無疑問我們會在這樣的水平上購買我們的股票，只要有機會，我們就會這樣做。

Look, we think that the growth opportunities are really exciting. And again, we think that the market hasn't really come around to fully appreciating that. And so hopefully, we can't take advantage of both of those situations, the inorganic growth opportunity, the organic growth investments and buying ourselves at a very large discount. And effectively buying down the price of our already attractive acquisitions. One quick clarification as well second call, which is on the transaction costs I think there was a footnote on Slide 22, if I'm not mistaken, that the Q2 noncompensation expense included the costs related to the transactions totaling $15.6 million, can you -- how much of the transaction expenses have already been expensed versus remain to be expensed. And then how much of the transaction expenses have already been paid versus still need to be paid?

看，我們認為成長機會確實令人興奮。再說一次，我們認為市場還沒有真正充分認識到這一點。因此，希望我們不能利用這兩種情況，即無機成長機會、有機成長投資以及以很大折扣購買自己。並有效地降低我們已經很有吸引力的收購的價格。一個快速澄清以及第二次通話，這是關於交易成本的，我認為幻燈片22 上有一個腳註，如果我沒記錯的話，第二季度的非補償費用包括與交易相關的成本，總計1560 萬美元，你能 - - 有多少交易費用已支出，有多少仍待支出。那麼已經支付的交易費用和還需要支付的交易費用有多少呢？

Sorry, I didn't hear the latter part of that, but

抱歉，我沒有聽到後半部分，但是

I just -- I was curious how much of it was already expensed because I know in the merger proxy, there was like I think it's like $22 million total, including the past two years and then -- but there was like $6 million contingent on the close of the AAC sale and some of it may have already been expensed in the P&L. So kind of like what's booked the amount that's been accrued or expense? And then what's the amount that like has actually been dispersed, if you will remaining. Yes.

我只是 - 我很好奇其中有多少已經支出，因為我知道在合併代理中，我認為總共大約有 2200 萬美元，包括過去兩年和然後 - 但有大約 600 萬美元取決於AAC 出售結束時，其中有些可能已計入損益表中。就像預訂了應計金額或費用？如果你願意留下的話，那麼實際上已經被分散的數量是多少。是的。

So the amounts in the first quarter were primarily accrued expenses. What's to come is really banking fee related to investment bankers on each of the transactions. So additional expenses to come and there's, of course, variability in some of the legal expenses say a significant portion of the expenses have been accrued, but there is some additional expenses that will be incurred in the third quarter as it relates to Beat and then assuming it closes in the fourth quarter of the AAC transaction fourth quarter for the AAC transaction.

因此，第一季的金額主要是應計費用。即將到來的實際上是與每筆交易的投資銀行家相關的銀行費用。因此，額外的費用將會出現，當然，一些法律費用存在變化，也就是說很大一部分費用已經應計，但第三季度將產生一些與 Beat 相關的額外費用，然後假設其在AAC 交易的第第四季完成AAC 交易的第四季。

But congratulations on closing the Beat deal and look forward to closing the AAC transaction as well. And continuing to advance our various strategic priorities.

但恭喜完成 Beat 交易，並期待完成 AAC 交易。並持續推進我們的各項戰略重點。

Thanks so much.

非常感謝。

There are no further questions at this time. This concludes today's teleconference. We thank you for participating. You may disconnect your lines at this time.

目前沒有其他問題。今天的電話會議到此結束。我們感謝您的參與。此時您可以斷開線路。