美國再保險集團 (RGA) 2005 Q3 法說會逐字稿

Good day and welcome to the Reinsurance Group of America, Third Quarter Conference Call.

Today’s call is being recorded.

At this time, I would like to introduce the President and CEO, Mr. Greig Woodring and EVP and CFO, Mr. Jack Lay.

Please go ahead Mr. Lay.

Okay, Thank you.

Good morning and welcome to everyone RGA’s Third Quarter 2005 Conference Call.

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

David Atkinson, our COO, is also with us this morning for the call.

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

As a reminder during this call, we plan to make certain statements and discuss certain subjects that will contain forward-looking information.

Including among other things statements relating to projections of revenue or earnings and future financial performance and growth potential of RGA and our subsidiaries.

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

A list of important factors that could cause those results to differ materially are including 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 trend of our continuing operations.

Please refer to the tables in our press release for more information on this measure and a reconciliation of operating incomes and any income for our various business segments.

With that, I’ll turn it over to Greig for his comments on the third quarter.

Good morning and thank you for joining us.

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

Overall, we had strong results driven by favorable mortality experience in the quarter.

On a consolidated basis, operating income for the quarter increased 20%, and totaled $71.8 million.

A record level of earnings for the company.

On a per share basis our reported operating earning increased 19% for the quarter, to $1.13, per diluted share compared to $0.95, a year ago.

These are strong comparisons particularly considering the strength of the prior year results.

Report of net income for the quarter totaled $67.6 million, or $1.06, per diluted share, compared to $39.4 million, or $0.63 per diluted share.

The prior quarter included a settlement in our discontinued access in health business, along with the negative fluctuation in the fair value of embedded derivatives.

Consolidated net premiums were also strong up 19% overall, for the quarter, and 15% year-to-date.

All segments reported good premium growth.

Turning to our operating segments in turn first the US.

Pre-tax operating income totaled approximately $88 million, compared with $78 million last year, up 13%.

Mortality experience was favorable for the quarter, as it was the prior year quarter.

Large claims were at expected levels during the quarter.

Premiums increased 13%, over last year.

These are all good results.

We have not received any claims associated with Gulf Coast hurricanes and don’t expect to receive a significant amount of claims in the future.

Our asset intensive business contributed $4.5 million of pre-tax operating earnings, a good quarter.

Again, no new transactions during the quarter, macro conditions don’t really favor growth in this business currently.

The invested asset base for this business continues to grow about $4.0 billion.

Turning to Canada.

Canada operation had another strong quarter.

Pre-tax operating income totaled approximately $21 million, up 33% from the prior year, a total of $16 million.

Excluding the impact of point currency, pre-tax operating income was still up 23%.

Mortality was favorable and premium flow was strong.

Again, excluding the impact of foreign currency at about $12 million in retroactive premiums related to an [in force] transaction during the quarter.

The increase in premium was still about 19%.

Year-to-date premiums are up approximately 23%, on a Canadian dollar basis, better than our expectations.

Regarding our international operations, results were good overall but somewhat mixed as is usually the case.

Our Europe and South Africa operations reported a strong result with $15 million on pre-tax operating income, well ahead of the prior year total of about $9 million.

We saw good mortality in both the UK and South Africa.

Based specific reported pre-tax operating earnings of all most $4 million, compared with a pre-tax operating loss last year of $1.7 million.

The current quarter is a little below expected, mortality was slightly adverse in a couple of locations, but noting unusual given the size and newness of many of our operations in this region.

In the first 9 months, the combined pre-tax operating units for our international businesses totaled nearly $46 million.

Compared to about $33 million, in the prior year, that’s a 40% increase.

Premiums for the international operations continue to grow and in total, they are up about 21% for the year, when you factor out currency strength or roughly 24% in US dollars.

We continue to be optimistic about our international growth opportunities as we further penetrate our target markets particularly in Asia.

Our run off of discontinued A&H operation reported a $5.9 million loss for the quarter.

Claims and legal fees were slightly higher than we would expect, but just represent typical lumpiness in this run off business.

Turning to a couple of corporate wide items.

We did renew our catastrophe reinsurance coverage in August.

The program provides $50 million of coverage in excess of $25 million re-pension and excludes nuclear, chemical, and biological terrorism.

The program applies only to our group related businesses such as COLI and BOLI.

Finally, in late September we executed a $600 million, 5-year syndicated letter of credit facility with a $300 million sublimit for cash borrowing.

This new facility significantly increases our financial flexibility; it locks in a 5-year letter of credit capacity and increases our cash borrowing capacity from $175 million, under our previous credit facility, to the $300 million.

So, in conclusion, we’re pleased with the strong operating results for the third quarter and we look forward to continued growth and appreciate your support.

With that, we will now take any question you may have.

[OPERATOR INSTRUCTIONS]

Our first question will come from Jimmy Bhullar with JP Morgan.

Hi, thank you.

I just have a couple of questions.

First, if you could just talk about the pricing environment and whether the rate increases that you’ve implemented over the past couple of years.

It seems like they’re sticking or is pricing coming under pressure now.

And second, if you could just talk about your outlook for premium growth in the US business in 2006, and that’s it.

Pricing environment continues to be quite favorable.

Generally speaking price increases are sticking.

You really don’t -- because of the lags in reporting of the businesses the increase they say is put in today would probably not show up until, actually into ’07, because typical first year rates are zero and you really don’t -- you really wouldn’t see any rate increases showing through the premium lines until ’07.

I would say that generally speaking companies have been talking about increasing their retention for some time.

We are seeing a little bit of a movement in that direction, certainly not a stampede, or a whole flight to that higher retention levels, but we are seeing a little bit of increased retentions.

We would expect the US premium growth to fall below the 10% mark perhaps in the future.

We had said earlier in the year that we expected the growth rate to be about 10% this year.

We’ve been a little bit less than that although this quarter catches up pretty close to that level and we hope the end of the year shows about a 10% increase in the US level.

We’d expect that to fall off a little bit in the following years.

And then could you quantify what you’ve implemented in terms of -- or just ballpark in terms of rate increases, the past couple of years, and what your intention is for ’06?

That’s always a hard one to quantify.

Because we haven’t applied, any sort of across the board factors in terms of our pricing.

What we’ve done is we’ve bolstered areas where we thought based on data our pricing was.

We -- that may include prices like certain old age rates and, or females versus males, or things of that sort.

So, it’s not across the board and depends on the company, the product, the distribution method, and all sorts of other things.

So there is no across the board answer I can give you.

I can say that rates have increased generally speaking and that’s true not only for RGA but I think that’s true for everybody.

And for next year?

I think next year we’ll probably see a pricing environment pretty similar to what we have today.

Probably no more rate increases but -- no decreases either as we go forward.

Our next question will comes from Ken Zerbe of Morgan Stanley.

Good morning.

I was hoping you could provide a little bit more detail on that $12 million retroactive transaction and also what was the earnings impact from this.

It did look like a lot the premium was offset by an increase in policy acquisition costs.

Yes, that represents about -- a couple quarters of catch up for a deal that was dated to a prior date than was just recorded for the first time.

That actual transaction tends to be a high premium with an experience refund, fairly little contribution to the bottom line in that particular transaction maybe a half million dollars or something.

Okay and when you say there was a catch up was that because something on your end, or you did you just not get the information or --

Right.

It’s just a new transaction that was recorded for the first time including about essentially 9 months worth of premium.

Okay.

I guess and then in the US in terms of premiums.

Was there anything that stood out in terms of why premium growth was 13%, this quarter?

There was one situation that had a small amount of catch up in it, in terms of company getting its administration act a little bit better together and I think reporting -- I think that was fairly minor.

It was just more organic growth than anything.

Okay, and then the last question I had.

I’m trying to understand earning volatility in the international operation.

How should we think or what should we think about a sustainable earnings run rate in both Asia and Europe.

Because it seems that earns do jump around quite a bit these markets.

Yes, if you breakdown the markets individually you do get a lot of ups and downs.

If you put all of international outside of the US and Canada you get a much more stable pattern.

You will notice that the UK was very strong this quarter, on the other hand, Asia, which had a very good second quarter had a weaker third quarter, I think you are going to see that.

I think that the bigger they get and the more you lump them all together, the better you are going to be able to project the future trends.

Ken, this is Jack Lay, I might comment that if you look at the Europe and South Africa and Asia Pacific operations on a year-to-date basis that is a better look at a run rate than certain other quarters that have been choppy.

I think we would characterize the year-to-date rate so far is pretty much what we would expect.

Okay.

Alright, great, Thank you.

[OPERATOR INSTRUCTIONS] Next we move on to Andrew Kligerman with UBS.

Hey, good morning, two questions.

First, last quarter you characterized the unfavorable mortality as having been represented by about a 1.8 standard deviation.

Could you give a similar-type estimate for this quarter’s favorable mortality in the U.S.?

That 1.8 represented the standard deviation only looking at large claims, Andrew.

Oh, okay!

That was the million dollar in over policies and that was the source of the deviation, if you will, from expected.

If we were to look at that same block of policy, they large claims actually didn’t perform wonderfully this quarter, they were more at a normal level.

We basically had a good mortality result and good revenue result elsewhere in the book this quarter.

I see, would you want to give a standard deviation on the entire book, or maybe you just don’t even have that?

I do not have that off of the top of my head, but we can certainly get that--

Not critical, I get a good picture here.

Then, with respect with new entrance, we have seen [Whilten] enter the markets, could you comment on some of the new players that are coming in and if you think that a few of them may start to get aggressive as we have seen in past years with new entrants?

The situation in the market now, is that there are 5 large reinsurers and several smaller ones, including some of the new entrants that you referred to.

We have seen a couple of the new entrance become part of some treaty’s where they are one of a panel of reinsurers involved.

We don’t really believe that if there is only one or two that are aggressive prices they are going to sway the market because the market will still look to the 5 large reinsurers and as long as those 5 companies maintain their price levels I think we are going to not see a very overheated market again.

And the top 5 seem pretty rational?

They do.

Excellent.

Thanks a lot.

Our next question will come from John Nadel with Fox-Pitt & Kelton.

Good morning guys.

You know, Greig Woodring, I think last quarter you guys had talked about, if we looked out over an 8-previous quarter period, that at the end of March, your mortality was a little under 100% actual-to-expected.

Then certainly through the end of June that spiked and turned the other way so that it was a little over 100% actual-to-expected.

Could you give us a characterization of where you are now through the end of September on a similar type of deal?

I don’t think we have rolled back that 8-quarter result from the end of this quarter.

If you looked at -- my suspicion is that you probably are still a little bit higher than expected.

Okay, do you think -- this quarter doesn’t appear to be, in terms of mortalities, just on a consolidated basis, doesn’t appear to me to be that unusual if we look back to let’s say a 2 year period from ’03-’04.

Would you agree, was there anything in your mind really sticks out as something that you would say you were surprised, you know, very positively surprised?

No, I would say it was a good solid quarter.

Better than expected mortality, but we have quarters like this from time-to-time.

It is not so unusual that it would cause us to be very surprised.

Okay.

Then maybe switching the top-line growth and I am thinking really about Asia-Pacific, you know the election recently of [Kuoizumi] and certainly his policies that are more well-known maybe a little bit more open to Western investment and the implementation over a lengthy period of time of some new capital requirements and some new privatization.

Can you speak to maybe what you are seeing there, what you are expecting from, especially from Japan over time?

Yes, all of the things that you mentioned are positive, but they form part of the fabric of an environment that was already changing to be more favorable in terms of increased use of reinsurance, but it happens very slowly as well.

So, we do expect that the Japanese market will begin to look more like some of the Western markets in terms of its use of reinsurance, although, that will happen very gradually.

Our own business there is picking up nicely.

We have established relationships with most of the companies that operate in the Japanese market and we get business from most all of them, with a couple exceptions, and we are very positive about the future of the Japanese operation.

How big is your operation on the ground there?

In terms of people?

Yes, in terms of people and number of—

I believe we have about 25 people, give or take, and that is about $80 million dollars to premium we would expect this year up from about $55 million last year.

Okay, terrific.

Then, just a last question for you guys.

You know, if you look at some of the growth you are seeing, certainly it looks like it accelerated a little bit in the third quarter, U.S. maybe slows down a bit going forward but does it cause you to change your views at all or think maybe more specifically about capital needs in 2006?

I would assume that that capacity will cover that but any comments there?

Hi John, this is Jack, I will take that.

No we have not changed our outlook with respect to capital raising.

We would not, at this point, expect any sort of equity sort of offering over the near term or even intermediate term.

Now, that could change with, you know, large M&A opportunity, change in the views of the ratings, that sort of thing.

But, we really do not expect that.

We are taking a look at potentially refining our capital base at this point, but as you stated, we do have some leveragability and that would be the most likely way that we would access additional capital at this point.

Next we move on to Vanessa Wilson with Deutsche Bank.

Good morning.

When you and Greig talked about the credit facility, the letter of credit facility, the 5-year facility, should we think about that as your interest in being involved in the Triple X or A Triple X market more?

Vanessa, you should really look at it in 2 ways.

It certainly does give us some flexibility with respect to warehousing Triple X business.

It may not be a good long-term answer but it certainly does give us flexibility over the short-term to warehouse that business.

It is also prudent just from the standpoint of liquidity for the overall enterprise.

We like the idea of having a call on that degree of funding, should some of that come up whether it is M&A related or anything else that would require some additional liquidity in a hurry.

For triple X business, Vanessa, this is the mode we would typically want to operate in and as we would warehouse it until we got to a sufficient size and then we would securitize it.

Okay, and just going on on that subject, Greig, if you are warehousing Triple X using your credit facility, do the rating agency’s look through that leverage or is that using up some of your debt capacity?

In the short-term if we are financing with letters of credit, they would not count that in our leverage ratio, but they would certainly be very aware of what is going on there.

We would not expect to overuse that facility for Triple X.

Okay, and just changing subjects, can you update us and give us a sense of where you are on Argentina?

What is open -- what is next step if any?

Yes, we have continued to make good progress I would say, during the third Quarter in commuting those liabilities, we have now commuted somewhat over 70% of the liabilities that existed at the end of the year out and we are proceeding on the rest of them.

We are doing it at pretty much, the levels we expected to do it and hope to get as much progress done in the fourth Quarter as the third Quarter.

Okay, and on the UK, John Nadel asked you about Japan and kind of what your expectation was there, could you kind of talk a little bit about the UK market which has been a success for you so far?

It is a very mature market and that in and of itself may provide opportunities, but where should we think about that going for you?

Well, the UK market is one where the risk business, as they call it, comes very much from the mortgage activity in the UK market.

A lot of the risk policies or mortality-risk policies are taken out in conjunction with mortgage, something like 85%.

That market has cooled off considerably after a rapid and prolong growth spurt in the UK so that the direct writers are now seeing substantial decreases year over year in their production, which will translate to the reinsurance market with the lag.

Now we are still young enough there that we are growing a little bit in the UK market, but expect our grown rates to slow down considerably in the UK, and they are already now this year, in the UK market.

Okay and my last question is on the A&H business, you did have a pretty sizeable number for this quarter.

It is about $.09 a share, where is this going to go?

We talked about this for such a long time, you know, I mean this is unending.

Yes, we are now more than 7-8 years into this runoff since we have closed it and some of these issues are more than 10 years old where we get claims we didn’t know about.

We believe we are near the end but again, we are rustling through some final situations but it is very unpredictable, if we could predict it we would be able to close it off but we can’t predict it at this point.

But we do believe we are getting closer to the end by quite a bit here.

But I think that given that it is representing a percentage of net income every year, you know, I think if you could maybe next quarter give us a look forward as to where it is going to end because it is destroying small amounts of value every quarter, and if this continues below the lines, you know, as if we are not supposed to look at it, but it really is eating up value.

We will try to do that as best we can, Vanessa, as I said it is a very difficult process.

The Honesty Re court decision that happened a couple year ago actually broke a large jam in reporting which trickles through the whole industry, so -- we would have thought that by now we could get a better handle on it but there is actually been more flow last year and some of this year than the years before that decision was reached, so once that wave breaks through we do expect that we will see a big profit in the activity on the A&H side.

Okay, that is helpful, thank you.

Let’s move on to Jeff Schuman with KBW.

Good morning.

I was wondering if you could talk a little more about cat cover.

I guess, as long as I can remember which may no be long enough you have had a pretty general cat program in place, I think you capped it on 9/11, now you’ve scaled back to pretty narrow coverage on just group, business and [certain causes], what is the cat market that tight, or what’s your thinking?

Yes the cat market is very expensive, and originally, before 9/11, our program had vast amounts of coverage for very low prices and the upper layers of that coverage were real cheap.

Today’s market you don’t get much of a price break for any layer of coverage.

People use their price capacity at a certain price and it doesn’t matter almost what level if that, so it becomes very expensive to buy large amounts of cat cover to the point where we end up with a situation where we have a high deductible and very little value because we are not likely to penetrate through that level at any incidence.

That 9/11 incident today would hardly, well it wouldn’t hit today’s cat cover, and it wouldn’t have it last year’s cat cover either.

But where we see our biggest exposure is on things like group-like coverage’s like COLI and BOLI and we have provided for that cover.

We do also provide or buy separate cat cover for sports teams and things like that might travel together and then they may have several individuals on them but the broad base coverage you are talking about just doesn’t seem economic anymore.

And is the group cover more critical because you have some geographic concentrations to go along with it, is that the idea or what?

Yes we do and they are unknown.

We haven’t been able to get information from our clients, which would tell us with any degree of accuracy, how many people work in the same building or anything like that, so we are a little bit blind there and we know what groups we have and where there headquarters were when the policies were taken out.

It is you know, these COLI and BOLI cases make people scatter over time.

And, your new coverage does that pay on [five-lives] for an event, or what is the number at this point?

Your old one was five-lives per group, is that--

Yes I think it is the same, I believe it is the same, if we hit the retention level we were talking about there the five lives is almost it will be a moot point.

Okay, Greig, you talked a little about each of the outlooks for U.S. premium growth, talked about maybe going off a little bit next year, I am just curious to how you – trying to put that in context -- how do you see the market growth at this point, is the U.S. market growing in ’05 and do you think it will grow in ’06?

Yes I think the market will grown okay in ’05, remember, ’05 reported business to us and to the other reinsurers will be an even mixture of ’04 and ’05 business because it is generally about a 5 or 6 month lag in the reporting.

So what you are seeing is what happened this year and last year.

The first part of this year and the last part of last year.

I would expect you might begin to see the industry’s production tail off towards the end of next year a little bit.

And just to be clear, when you say tail off do you mean that the margines of new businesses assumed would sort of tail off and you would see some sort of growth in [imports] potentially or what exactly—

Yes, that is a good way to put it.

Okay, corporate segment always had some volatility, could you just give us a quick reminder of what is in there and maybe what we should expect, if there is anything that we can sort of think about in terms of products and anticipate how those numbers roll forward?

Jeff, this is Jack, it is a little difficult to predict.

One issue there is that we tend to, or we do allocate investment income to the various segments based upon their own economic capital needs and you can almost think of the corporate segment as kind of a default segment.

That is any additional investment income involved to that segment so that is a primary driver of the revenue string there to the extent to which we have unallocated investment income and you can see that it was down considerably in the third quarter, this year versus last year.

Okay.

And then lastly, just following up on Vanessa’s question with A&H there have been a couple challenges with A&H over the year, one is that profitability wasn’t what was expected, of course the other challenge has been just I guess, sort of the transparency, the very long tail associated with that business, other than maybe A&H or Argentina, are there any other parts of your business where the profitability today may be okay but we should be aware of any particular issues in terms of the long tail that could be waiting out there, any other sort of complicated business like that?

No, most or all of our business is pretty much straight-forward mortality risk business year-by-year with the exception of the business on financial reinsurance which is very short-term and the asset business which is a spread business.

Okay we’ve tended of think of A&H and Argentina being anomalous types of business and that is the right way we look at it?

They are.

They are.

Alright, thank you.

[OPERATOR INSTRUCTIONS] Let’s move on with Eric Berg with Lehman Brothers.

Thanks very much a few questions.

Greig you said more than once, in the course of this call that you do expect the growth of the company or certainly the core U.S. business, to slow somewhat next year from the rate of growth this year.

But I’m not clear why.

What is happening in the marketplace that would lead you to reach such a conclusion?

Two things Eric.

First of all, it’s just sheer size.

I mean the book that we have now is getting larger all the time and growing at those compound growth rates that we had been growing at becomes impossible at some point along the way.

And secondly, companies are imbalanced probably are going to retain more of the mortality risk at the direct seating company level in the future.

I’m not talking about a big move backwards, but I would say around the edges we’ve certainly seen a couple companies start to make that transition to retaining a little bit more business and reinsuring less.

When you talked about the -- I think you used the word favorably to describe the pricing environment.

What does that mean?

Does that mean that prices are increasing but at a slower rate than they had been increasing?

Is that the idea?

No, I’m talking about the following situation.

Typically, we get a request for a quote and we put a price on it; we send it out and the companies accept it.

In past years, the situation had been -- we and many other reinsurers get a request for a quote; we get feedback from the customer that the top 3 are -- top 5 however they want to split, it are at this level can anybody raised their offering.

You got through several iterations and a very competitive situation.

Today, pretty much the environment is our price is our price, and it is being accepted and there is not quite the same level of back and forth.

My final question relates to a statement you made just a few moments ago.

Maybe this just reflects my lack of knowledge of the really fine, fine details of the business, but when you said that first year rates are zero, does that mean that -- literally zero?

That on certain treaties there is no cost to the cedant in the first year of the relationship with RGA?

Correct.

The first year premium is most often zero.

And that reflects the fact that the direct company has a lot of front-end expenses and that is a way of cushioning that strain on them.

Eric, this is Jack.

Greig is really referring to the cash flow in the first year.

Yeah, that’s the cash flow.

It will certainly do incur a premium the first year and maybe some margin.

There is a GAAP premium but there is -- it is imputed -- it’s offset by commission.

It’s not -- it’s not actual cash flowing.

Right.

That was a helpful elaboration.

Thank you, Jack.

I’m done at this point, thank you everyone.

Our next question comes from Jeff Hopson with AG Edwards.

Could you update us -- your thoughts, on the development, the securitization market and I guess your participation in it, as we move forward here?

Yeah, Jeff we’ve been following it very closely and talking to a lot of people of an extended period of time.

It’s good to see the terms and conditions be coming a lot more favorable in that marketplace, as there has been a few of these securitizations done.

As we’ve said I think before, we had taken all our Triple X business with issue dates of 2003 and prior and handled that Triple X exposure with long-term funding privately, if you will.

But we are looking to the securitization market to handle 2004 and later issues. 2004 issues are just about complete now.

We’ve gone far enough into 2005, that most of the 2004 issues are complete, so I think we will be looking very seriously at securitization in the short term.

Our final question comes from David Myrtle of Kohls (ph) Capital.

With respect to Katrina has that upset any of the reporting relationships you might have for example, Pan American or anything like that?

Well, it certainly has upset the Pan American reporting relationship.

I think they’ve had significant disruption and I guess they have relocated to Dallas.

And we’re obviously tolerant of any difficulties they may have been under.

There’s no material effects on you, correct?

No material effect on us, no material effect on any of the other reporting relationships that we know of.

Okay.

My other question, reading through the National Underwriter recently, I noticed that in some ways cedant’s have been saying that relationships with likely reinsures has been deteriorating.

And, I noticed in the same issue that you had been life reinsurer of the year and from my own conversations with you in the past, it’s my guess that relationships with you have not deteriorated.

My question is -- am I correct and if so, what counter ailing soft advantages are you gaining from your popularity with cedant?

Well, to some extent we have not had relationships fall off in the same proportion as perhaps others have in the business, but I think that we’re part of the same environment and we’ve been fighting some of the same battles.

I think we’ve tried to do it with sensitivity and intelligence in separating clients into the ones who deserve special attention and the ones that don’t deserve special attention on some of these issues.

But it’s been a difficult time for reinsurers and direct cedant in there relationships, as there have been a couple cases where underwriting integrity has broken down at certain cedant companies.

Not many -- buy numbers, but enough that has caused a lot of concern around the industry -- reinsurance industry.

And, it’s just made for an environment where the reinsurer and the direct insurers are somewhat at odds from time to time.

And, RGA is no exception to that although, I think we try to do it with a little bit -- well with as much marketing sense as we possibly can.

Very good.

Hey, still happy to be a shareholder, good quarter.

Thank you.

And gentlemen, there are no further questions at time I would like to turn the call back to you for closing additional marks.

Okay.

Thanks for everyone who joined us here this morning.

We look forward to hosting the next call in January to report our fourth quarter results.

With that, we will end the call.

Thank you.