美國再保險集團 (RGA) 2005 Q1 法說會逐字稿

Good day, everyone and welcome to the Reinsurance Group of America first quarter conference call.

Today's call is being recorded.

At this time, I would like to introduce the President and Chief Executive Officer, Mr. Greig Woodring, and Executive Vice President and Chief Financial Officer, Mr. Jack Lay.

Please go ahead, Mr. Lay.

Okay.

Thank you and good morning.

Welcome to RGA's first quarter 2005 conference call.

I'll turn the call over to Greig Woodring, our CEO in just a minute.

Dave Atkinson, our Chief Operating Officer is also here this morning for the call.

Greig will comment on our results and then we'll respond to any questions from our participants.

As a reminder, during the call we plan to make certain statements and discuss certain subjects that will contain forward-looking information, including among others, statements relating to projections of revenue or earnings, and future financial performance, and growth potential of RGA and its subsidiaries.

You are cautioned that actual results could differ materially from expected results.

A list of important factors that could cause the actual results to differ materially from expected results is included in the earnings release issued yesterday.

In addition, during the course of the call, we will make comments about our results based upon operating income, both on a pre-tax and after-tax basis.

Under SEC regulations, operating income is considered a non-GAAP financial measure.

We believe this measure better reflects the ongoing profitability and underlying trends of our continuing operations.

Please refer to the tables in our press release for more information on this measure and reconciliations of operating income to net income for our various business segments.

With that, I'll turn the call over to Greig for his comments on the quarter.

Good morning, thanks for joining us.

I'll make some brief comments on our results and then open the line for questions.

In total, results were at expectation with the high claims in the U.S., and Japan, being offset by stronger results elsewhere.

Primarily, in Canada, the UK, and in South Africa.

Company-wide operating income for the quarter totaled $60.4 million, 16% above the first quarter 2004, which was 52.1 million.

On a per share basis, our reported operating income for the quarter was $0.95 per diluted share.

This represents a 14% increase over the prior year result of $0.83.

Reported net income for the quarter totaled $66.6 million, or $1.04 per diluted share.

The 6% increase on a per share basis over the prior year amount.

Prior-year net income included $18 million in net realized capital gains compared to slightly less than $4 million in gains in the current quarter.

Consolidated premiums increased 11% over the prior year, that's a little less than our expected annual run rate, of continued solid growth in our international locations was part of the story here as well foreign currency translation also helped to (INAUDIBLE-background noise).

Turning to our operating segments, first the U.S., the pre-tax operating income in the U.S. totaled $56.6 million, that's down from 65.3 million last year.

Unfavorable mortality caused the decline, primarily represented by an increased number of large claims, that is $1 million and greater claims in our traditional business.

This is clearly a severity, not a frequency issue in this particular quarter.

We view the high claims as a statistical fluctuation.

It's about one standard of deviation high -- that in claims for the quarter.

Not associated with any particular treaty or company, and we do expect that, although we can never predict these things exactly, that we should see that even out during the course of the year.

Premiums for the quarter were up 7% a little less than with a we would expect for the first quarter, but premium flow can be affected by timeliness of client reporting, minor adjustments as well as client data becoming available at certain times of the year.

Due to the seasonality of premiums, the first quarter premium flow is usually noticeably lower than the other three quarters of the year and these sorts of reporting anomalies have greater impacts, and this was the case in the first quarter this year.

Our asset intensive business contributed $7.8 million in pre-tax operating earnings, a 28% increase.

In this interest rate environment, no new transactions occurred during the quarter, rather we saw some continuing flow on existing treaties.

Assets in this line of business totaled $3.7 billion at quarter end compared to 3.2 billion at the prior year quarter.

In terms of an update on the traditional life reinsurance market, the conditions there continue to look favorable.

No new developments on the competitive or pricing fronts really since our last conference call.

We expect new business volume to be relatively strong given there are fewer competitors in the market, and a less aggressive pricing environment.

Turning to Canada, the Canadian operation continued its string of strong quarters with a modest help from the stronger Canadian dollar as well.

The pre-tax operating income totaled $23.4 million compared to 14.6 million in the prior period quarter, that's up 60% on the U.S. dollar basis, and 49% on a Canadian dollar basis.

There's a slight benefit from a $500,000 release of their tsunami accrual as claims development has been a little less than we estimated at year end.

Mortality was quite favorable for the current period.

Premium flow was better than expected on both on original currency and U.S. dollar basis, up 14% in Canadian dollars and 23% in U.S. dollars.

New business opportunities are good, displaying common characteristics with the U.S. market.

Regarding now our international operations, in total, profits were strong, pre-tax operating income was $19.6 million, versus $9.6 million last year, slightly better than anticipated.

Good experience in the U.K. and South Africa, somewhat offset by unfavorable mortality in Japan.

Results in Australia, New Zealand were back on track for the quarter.

Internationally, released about 700,000 of the tsunami accrual, in total, then, we released somewhere around $1.5 million of our tsunami accrual.

Volatility can still be expected going forward for these operations, internationally, particularly at the individual country level.

However, collectively, these operations are gaining some scale and, therefore, some of the individual country volatility may be less noticeable as we -- in the total results as we go forward.

Foreign currency translation added about $1.3 million to pre-tax operating earnings.

Premium flow continues to be good, up about 18% on a U.S. dollar basis.

During the quarter, we also achieved branch status in South Korea, giving us additional credibility in a market that we believe has excellent potential growth.

On a consolidated basis, our effective tax rate was about 33%, slightly lower than the 34% rate last year.

This 1% reduction in the overall tax rate resulted from the realization of a tax receivable which had a $1.6 million valuation allowance against it.

So in conclusion, the bottom-line results were in the expected range as weak U.S. results were balanced by strong the result, elsewhere.

Our expansion into the other international market is beginning to provide a diversification of our earnings which has a stabilizing effect on our results.

In this particular quarter, we saw difficult U.S. results, high claims in Japan, good results in Canada and in the U.K., and in South Africa.

If you think about the prior quarter, the fourth quarter of last year, we had good results in the U.S., good results in Japan, difficult results in Australia, and bad results -- not favorable results, less than favorable results in the U.K., so almost the converse of what we had in this quarter.

We have not seen any correlation up to this point between the different geographies in terms of their quarterly results and deviations from expected.

With that, we'll be happy to take any questions you may have.

Thank you, gentlemen. [OPERATOR INSTRUCTIONS] We will take our first question from Nigel Dally of Morgan Stanley.

Great, thank you, good morning.

I was hoping you can provide us some additional explanation on the U.S. premium growth, why it was below your target?

I understand the seasonality, but hoping you can discuss whether there was any destruction post by MetLife's announcements or if it was more a function of the slowdown in the marketplace.

Nigel, it was really neither one of them, the impact of anything having to do with Met was 0, essentially, in the quarter in terms of operations.

Every quarter, there's always some choppiness in reporting.

Sometimes companies don't report for a quarter, or two, and we're making estimates and sometimes those estimates are off a little bit.

It's often the case, if you look at one quarter to another, you might find that the prior period would have a positive swing and this one has a negative swing.

That's kind of what happened this quarter.

We really expect that 7% is a lot lower than we're going to see as a trend for the year.

Okay.

Just to follow up, previously you told me that you hope to picking up some business from the recent consolidation activity in the market.

Did this prove true so far and has your changing -- has your thinking changed at all looking forward?

I think we're really happy with the results of picking up business with some of the changes going on, both in the U.S. market, and I think you'll see some of the growth in Canada coming about because of the withdrawal of Employer's Re a couple of years ago.

We're seeing the coming on stream of some of that flow of business now.

Thanks.

Thank you, we'll now move on to John Nadol, of Fox-Pitt Kelton.

Hi, good morning, guys.

I was wondering if we could just pursue, maybe, the U.S. mortality a little bit more.

And just get into maybe the question around the Allianz book of business, and whether you see any kind of specific actions that were taken from a mortality perspective in the Allianz book versus your existing book of business in the U.S.?

John, the business is getting a little bit more difficult to separate a lot of the clients are reporting all of their business together to us now.

So we don't really try to separate the Allianz from the other.

But I would say that those large claims, and we're talking about a discrete number of claims, it's not, thousands of claims, you're talking about less than a hundred claims in the million dollar and over category that are pretty randomly distributed and spread throughout our in force block.

Okay.

Thanks.

And then I guess the one follow-up question for you is just related to capital raising.

Any expectations for a need to come to the market this year and if you do expect to come to the market, can you give us a ballpark in terms of maybe the size and maybe the split of debt versus equity?

John, this is Jack, I'll take that.

Based upon our current growth rates, we really would not expect to come to the market in terms of any additional equity capital.

Now, in debt, we look at differently, I mean, we're always considering whether we should term out some of our short-term debt and that sort of thing.

But in terms of equity capital, we really would not expect any movement there.

Now, we do have or we have planned some discussions with the rating agencies, you may recall that two of them took some action in terms of our outlook after the MetLife -- the initial MetLife announcement on January 31.

That has obviously come out with an announcement going the other direction.

So we are planning to get together with those rating agencies and discuss why we feel any kind of a change in ratings is, at least in our view, is not appropriate.

And we'll be having those discussions within the next four to six weeks.

Okay.

And then the lest question for you is this: Did Met have access to your first quarter financials last week?

Yes, they did.

Met does roll up our financials into their own consolidated financials, as you can imagine.

Okay.

Thanks very much.

Thank you, we'll now move on to Jeff Hopson of A.G. Edwards.

Hi, good morning.

Wondering if you can comment on the new business which was down a little bit, and I know the first quarter is not seasonally active, but just curious, you expect new business to be fairly strong this year.

What are you -- what are the clients saying?

How are they reacting to the higher prices, and what gives you the confidence that new business will be active, I guess, for the full year?

Jeff, it's always hard to look at new business in a particular quarter because reporting, especially on new business, is bulky.

But we're pretty positive about the outlook for new business.

We say that because of the -- in treaties that we've been assigned to, and that we've won in the competitive environment of today, we look for this to be a good production year, probably accelerating as the year goes along.

Both in the U.S. and in our international markets, we've been meeting with pretty good results.

We think it's a good environment, we think that there's a lot of reasons to believe that RGA is well-positioned in this environment, and are taking advantage of it to the best of our abilities.

Okay.

And any new comment on client retention?

I think most people expect that retention overall might come down a little bit, but any specific commentary on that point?

Well, we expect that companies may retain a little more as well, Jeff, but it really hasn't happened in any significant way.

We know some companies have increased their retentions on some parts of their business, and others who have actually started to seed more, and that is that there is really not much activity, but we would have expected a little bit more by now.

A lot of talk about it, but not much real action.

Okay, great, thanks.

We'll now move on to Andrew Kligerman of UBS.

Yes, good morning.

A couple of questions.

First just on the mortality items.

I think you mentioned, Greig, that you're less than a hundred claims of a million or more.

Could you detail that a little bit more?

How many claims might you normally expect that exceed $1 million and what did you come in at?

I don't know if I have a good number for what is actually expected.

I can tell you what we've been running generally.

Okay.

We've been running somewhere around say 20 to 30 claims, and we had more like 40 claims this quarter.

Then with respect to Canada, why was Canada so good?

Was it a similar situation of less severity or was it a frequency issue?

It's a little bit of both.

But Canada's had a long string now of pretty good quarters.

At some time when you see this many in a row you begin to suspect that maybe the business is actually going to continue to perform that way.

What we'd have to say is from this point on, we'd expect each operation to regress a little bit to the mean, and Canada to do a little worse in the second and third quarters, and the U.S. to do better and so forth.

But we've had a nice string in Canada of very stable and good results.

Okay.

And then on the new business volume, just kind of following up on Jeff's question, because I believe new business, new in force U.S. life business was around 42-plus billion versus 47-plus in the year ago quarter, and I just had a thought that maybe because pricing in life reinsurance has increased, maybe not -- maybe partly the reporting you mentioned, but maybe also due to higher pricing, primary companies are less inclined to purchase reinsurance, or seed business to reinsurers.

Is that possibly correct or is it just a lumpy quarter?

I don't think that companies' willingness to seed business into the market has affected our production any.

There are instances we know of where companies have been forced to either cancel products or to not -- we typically weren't on those products.

They were very aggressively priced.

If you look at that first quarter, we didn't write four times 47 billion last year in the U.S. market.

I mean, that was a strong reported first quarter.

So I think it's really just the lumpiness of the reporting.

Got it.

And then one last question, just kind of peculiar from an accounting standpoint, just looking at the amortization of deferred acquisition costs, and in the year-ago quarter, it was about 143 million, and in this quarter it was about 144 million.

So the question is, is any particular -- anything stick out as to why the DAC amortization was kind of flattish, even though premiums were up about 10%?

This is Jack, I'll take that, there's no one thing that we can point at.

I would suggest that when you take a look at the acquisition line, you kind of look at that in conjunction with the reserve line.

Because there is some interplay --.

Right.

-- between DAC and the reserves that are set up.

And that's why you almost have to take a look at the two of those in conjunction.

I see.

You also have a situation where quarter-to-quarter that DAC line in particular can move a little bit, but it tends to even out throughout the course of a year, and so I would direct you back to kind of longer term annual sort of present of premiums in terms of your expectations going forward.

Super.

Hey, thanks a lot.

Next we'll hear from Vanessa Wilson of Deutsche Banc.

Thank you, good morning.

Could you talk a little bit about the lag that we might see given the consolidation trends?

You cited Canada, and getting a little more business off the back of Employer's Re leaving that market, but just so we have clear in our minds what kind of lag we should be thinking about?

Well, Vanessa the typical lag for new business reporting is anywhere up to, say, six months.

You typically expect to get half of the 2005 issues in 2005 and half of them in 2006.

Especially when there's a brand-new product or a new treaty switching to a new reinsurer, it might be maybe even more than that at times.

So you begin to see some of that flow on about with a six-month lag, and then after that, remember things build up in the reinsurance business, and begin to start from a fairly low premium base and build up as time goes on.

So a competitor could decide to exit or scale back, and it might be a year before maybe one of their customers launches a new product?

Well, you might get that treaty switched over to you, and you might start getting some flow within six months.

You wouldn't be getting any renewal premiums or --.

Okay.

-- multiple-year premiums probably for more like 18 months, and so you'll see a ramp-up.

But it will happen with a lag to it.

Okay.

And then also on the question of pricing, are you able to give us any sense in maybe the term market and the UO market, from anecdotal evidence, it seems that prices particularly in term have stabilized and ticked up.

But could you give us any kind of sense of the magnitude of that and what you're seeing in terms of trends?

Well, it's always hard to say because we only see what our price in globals are doing, and we've raised our prices a little bit simply in a reflection of the overall market environment.

But some of the direct writers will tell you they've seen 20% type increases.

We haven't seen -- we haven't passed through anything like that.

If you were to go back a couple years, would you say prices fell pretty consistently?

Yes.

Yes.

Prices were falling every year, probably for a period of time they fell more than the mortality improvements.

Okay.

And then stabilized in '04, and so you're talking about an '05 pickup?

Yes, I think -- even '04 you probably saw a little bit more favorable pricing.

Okay.

And then back on the mortality, is there any piece of that that's in your facultative book versus your treaty book?

Well, Vanessa, actually a lot of it was in the facultative.

When you deal with large policies, that's where the large policies often are.

So facultative was hit disproportionately this quarter.

That's a reflection of the fact that they have bigger policies.

And then Greig, I have just two last questions, one is on the U.K., or other international, I'm presuming it's the U.K.

What's going on there?

There was a particularly strong quarter.

Is this is a sustainable number?

And how should we think about that business?

Is it one time in nature, is it recurring?

No, we think that overall international's fairly recurring.

What you saw this quarter was good results in some of the markets and bad results in other markets, and it's going to be that way, I think, all the time.

That is to say, you're going to have -- some of the markets will have negative experience, and others will have positive experience.

The U.K. has now become our biggest market internationally.

And it probably carries the most weight.

On the other hand, you see that a country like Japan can also swing results because they have a number of large policies in the Japanese book, and that can, in itself, sufficient size to swing results as well.

But I guess, Greig, we don't get a lot of good feedback on the U.K. market in terms of competition and regulation and I'm just wondering, what is about that market that makes it appealing for you as a reinsurer?

Well, it's probably the second largest risk reinsurance market in the world after the U.S.

I think it's bigger than any of the other markets at this stage.

The comments you're getting I assume are from direct writers.

It is going to be a fairly competitive market this year on the risk side.

We have basically attacked that market by going mostly after risk business, not after some of the other types of business available in the market.

Such as annuity business and so forth up to this point.

And we think it's a very good market.

We've established ourselves as one of the major reinsurers in the marketplace, and are on treaties with the largest carriers in the marketplace.

Okay.

And then any update we need on Argentina or the A&H block?

There's really no news on Argentina during this quarter.

I can say the same thing about A&H, frankly.

We're winding down to a handful of things there really wasn't any movement on the A&H front this quarter either.

Thank you.

We'll now move on to Jeff Schuman of KBW.

Good morning, I was wondering if we could just quickly review the tsunami numbers, you said you released was it 1.5 million overall.

That's right, Jeff.

That's pre-tax.

That's right.

Were there two sources, two buckets for that?

Well, actually, it was spread amongst a number of the operations, we released some in some of the Asian operations, in the U.S. in Canada.

Some of the European markets, so it was pretty well spread.

Of your remaining provision for sort of IBNR, is that for the U.K. or where is the remaining piece, basically?

There's some in the U.K., there's some in Australia, there's some in Canada.

Those are the three largest pieces.

The remainder is split pretty much.

And I didn't quite follow on the tax item, did you say there was some kind of -- you recognized some kind of receivable of a 1.6 million; is that correct?

Yes, that we had a valuation reserve allotted against, so to speak.

So we reduced that reserve by 1.6 million.

So you reduced the taxes there about 1.6 million?

That's right.

Okay.

Any updates on Australia, the results were a little softer last year, and I think you talked about doing some reviews.

Is there anything new in terms of your views on that business?

We're still going through a lot of reviews on the overall pricing levels and where we feel the Australian operation is headed.

We've cleaned up the data, we're now beginning to sift our way through and understand the data in the first quarter.

Basically, the first quarter for Australia came out -- Australia/New Zealand I'm talking about together, came out pretty much right on expected as far as we were concerned.

So we were happy to see that that reverted back, but there's still a lot of investigation going on there in terms of looking and understanding what the data means right now, and we'll be doing that through the next three or four months as well.

And lastly, how should we think about the relationship with MetLife at this point?

I mean, historically, Met has characterized RGA as being basically non strategic.

I think a lot of us thought this might be a point when they would exit the investment, that didn't happen.

Is it a change in strategy?

Is it a matter of pricing or demand for the property?

How should we think about this decision?

Well, I don't think, Jeff, it's really a change in strategy.

And I don't think that at the bottom of it changes in our stock price had any effect on the ultimate decision, although I'm sure that was factored in.

But, I think you'll have to ask Met those questions directly rather than have us speak for them.

But they're pretty much back where they were in terms of their level of involvement with RGA.

How would you characterize the level of strategic interest in the property?

Pretty much where it was, say, four or five months ago.

Which was?

Which was they view it as a strategic --.

I'm sorry, I wasn't clear.

I mean, obviously when Met announced they were considering a sale, I'm sure one of the things that happened was a solicitation of interest from possible strategic buyers.

I'm just wondering if that was a fruitful process or not?

Well, again I really don't know all that went on behind the scenes.

I know that there weren't any strategic buyers that we dealt with from this end.

So it didn't seem like there was a single strategic buyer that rose their hand up far enough for us to work with them.

Okay.

Thanks a lot.

Thank you, we'll now move on to Eric Berg of Lehman Brothers.

Thanks.

I have several questions, too.

For starters, if the prices that you're charging your seeding company customers have been increasing for two years, I would have thought we would see an increase in profit margins, or at least an improving loss ratio.

Am I not thinking about this right?

Well, you remember, first of all, Eric, that this new production gets blended in, that it has the lowest margin at the beginning, and that widens out over time.

And you're only a couple years into it.

And then secondly, you have to mask out all of the fluctuations and things that happen just by statistical chance.

So it's kind of hard to see until you have a longer period of time to look back on it.

Okay.

Next, you mentioned in your, Greig, in your prepared remarks that this was a small number of larger than expected claims.

I'm just wondering, is that really necessarily a better state of affairs than a frequency issue?

You mentioned it for a reason.

Is it better that we have a small number of really big claims?

I mean, big claims are expected to be small in the first place.

So --.

No, it's not any better in terms of the satisfying result for the quarter.

But it's better only in the sense that when there's a high frequency of claims, you worry about -- more about a particularly bad treaty or a sort of misassessment of the mortality trend, whereas with -- when you're talking about, say, 40 claims, that was all the deviation, you're dealing with simply a statistical fluctuation within the realm of, like you said, it works out to about a standard deviation.

Okay.

My final question is, while I certainly acknowledge that growth remains very rapid in terms of year-over-year change in premiums in Europe and South Africa, it looks like if you look at the trend over several quarters, growth is slowing to what I would consider to be a more reasonable level.

Is that a -- is my assessment correct, that growth had been sort of extremely rapid in '03 and the first half of '04, and that we're now sort of moving towards a strong rate of growth but a more reasonable rate of sustainable growth for the European business?

Well, I think you're right.

Yes, I think you're right.

Remember, in the U.K. a lot of those treaties tend to be fairly large, and so every time you take on a new one, you get a big surge of big increase percentage.

And then you have to overcome that over time.

So I think that you will see that drop down in the U.K., and elsewhere.

We had a big surge in Asia over, say, the fourth quarter last year, and the first quarter -- I'm sorry, the fourth quarter of '03 and the first quarter of '04, and that's starting to moderate as well.

Thank you.

Thank you.

We'll now move on to David Merkle of Huffy Capital.

Hello, we're shareholders, and I appreciate that Met decided to sell the buildings in Manhattan, rather than selling its stake in RGA, which I think was a really good economic move.

With respect to your U.S. mortality, are there any other cofactors aside from size?

I'm sure you slice and dice your mortality every which way.

Were there any other cofactors that showed up as unusual?

No, there really weren't.

Actually, the frequency of claims, if anything, was a little less than expected.

There were no particular treaties, no particular errors, business that had been and has been over the course of its time, performing well.

Just had fluctuations.

But we have looked at it, in this particular quarter the analysis was easy because the problem stood out very clearly.

Okay.

Now, as you mentioned, and from my own experience as a life actuary, there's a -- size is somewhat corollary with facultative.

I would assume that you do a separate mortality study of your facultative data.

Are you seeing any increased data selection there?

No.

No.

Okay.

When we do a mortality study or a profitability study, we will typically look backwards eight quarters or so, at least to get enough data to have an actual to expected comparison that has some validity.

Sometimes more than that.

That tends to smooth things out.

Also, we usually don't use the current quarter, we use periods where everything can be sort of washed out in terms of reporting noise.

So, what we've seen over the last period of time, is mortality's been tracking pretty well, pretty favorably.

So for automatic and facultative, they've both been trending fairly favorably?

Right.

I mean, this quarter we'll move our actual to expected ratio up, but it will still be below 100% for the last 8 or 10 quarters, or whatever it is we'll look at.

Very good, I appreciate it.

Thank you. [OPERATOR INSTRUCTIONS] And we will move on to John Nadol of Fox-Pitt Kelton.

Hi guys, I just have one follow-up question for you, and that's this: I think in response to a question before, Greig, you characterized the results on an aggregate basis from international as what you might call kind of recurring, maybe a little bit of fluctuation country by country, but overall, that's a level that you would view as sustainable over time.

And I guess my question is this: Does your current guidance -- no mention of a change in guidance as a result of this release, and I'm just wondering if your current guidance takes that into account or not?

Let me clarify, John.

I think our international results this particular quarter were in balance a little bit on the good side.

Okay.

But I wouldn't say it's way far above where we would expect -- have expected this quarter to turn out.

It was just a good quarter in balance.

But within that good quarter, there was the typical ups and downs of all the different operations.

Okay.

We would expect that the international operations will continue to show good margins, continue to grow.

As the business ages, you're getting into periods where you're collecting actual renewal premiums, margins are widening.

We've been at this for a number of years now, so you are beginning to see some stability, I think, creep into those overall aggregate numbers, even though country-by-country, you might find a lot of ups and downs.

But while this quarter was a good quarter, it wasn't one that was shocking to us.

It wasn't really a huge surprise, it was just a good quarter, better than expected perhaps a little bit.

Okay.

And then just one quick follow-up, that's with the level of sustained kind of low interest rates, I'm not sure if anybody kind of got into this with you, but just want to get a sense for your comfort relative to existing earnings guidance with rates where they are, and being so stubbornly low.

Yes, John, this is Jack.

We really contemplated rates in this particular frame, so to speak, in our initial guidance that we issued last quarter.

So that's another way of saying that the rate environment really hasn't changed our outlook in any respect.

Fantastic.

Thanks guys.

[OPERATOR INSTRUCTIONS] Gentlemen, it appears we have no further questions at this time.

Okay.

Well, thanks to everyone for joining us for the first quarter results call.

And to the extent any other questions come up, you can call us here in St. Louis and we'll respond as best we can.

Thank you very much.

This will conclude today's conference.

We again would like to thank you all for your participation, and have a great day.