普登 (UNM) 2016 Q4 法說會逐字稿

Good day, and welcome to the Unum Group fourth-quarter 2016 earnings conference call. Today's conference is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Senior Vice President Investor Relations, Mr. Tom White. Please go ahead, sir.

Thank you, Jim. Good morning everyone, and welcome to the fourth-quarter 2016 earnings conference call for Unum. Our remarks today will include forward-looking statements, which are statements that are not of current or historical fact. As a result, actual results might differ materially from results suggest by these forward-looking statements.

Information concerning factors that could cause results to differ appears in our filings with the Securities and Exchange Commission, and are also located in the sections titled Cautionary Statement regarding Forward-Looking Statements and Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and our subsequently filed Quarterly Reports on Form 10-Q. Our SEC filings can be found in the Investor section of our website.

I remind you that statements in today's call speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements. Also our presentation of the most directly comparable GAAP measures and reconciliations of any non-GAAP financial measures included in today's presentation can be found in our statistical supplement, also on our website in the Investor section.

Participating in this morning's conference call are Unum's President and CEO, Rick McKenney; CFO, Jack McGarry; as well as the CEOs of our business segments, Mike Simons for Unum US; Peter O'Donnell for Unum UK; and Tim Arnold for Colonial Life. Now I'll turn the call over to Rick for his opening comments.

Thank you Tom, and good morning everyone. Our fourth quarter was another excellent quarter for Unum, capping off a very good year.

On the quarter, after-tax operating income per share increased over 5% to $1 per share, and bringing our full-year 2006 (sic - see press release "2016") operating income per share to $3.92, which is a record for our Company. This represents an increase of just under 8% over full-year 2015, which was also above the upper end of our original outlook range of growth of 3% to 6%.

This performance was broad based, and driven primarily by solid premium growth, especially in Unum US and Colonial Life. There was also a very strong operational performance across all of our business lines.

I remain very encouraged by our ability to deliver these results in an environment of still relatively low interest rates, and more recently a weaker British pound. I am equally encouraged by our Company's potential to generate even stronger results as the economy improves and potentially as interest rates move higher.

As we discussed with you at our outlook meeting in December I believe the primary reasons we are delivering these strong results and doing so on a consistent basis is that we are well positioned strategically in the employee benefits market. We excel at the fundamentals of our business in three primary areas: distribution and relationship management, pricing and risk selection, and claims processing and management.

You will see this expertise come through in the premium growth we are generating in our core businesses while also maintaining very attractive profit margins. The reason is that as we pursue this growth, we do so in a disciplined way. Jack will cover this in each of our business lines in his comments in a moment, but let me first provide a few highlights on the quarter.

First, our premium growth remains very healthy. For Unum US, our fourth-quarter growth was up 6% relative to last year. Colonial Life's growth continues to build momentum, as premium growth for the fourth quarter was just under 7%, the strongest rate of growth since 2008.

Sales were also very encouraging in the fourth quarter, as Unum US sales rebounded to increase by 8.5%; Unum UK increased by 6.7% in local currency; and Colonial Life sales also grew 6.5%. In addition we are very pleased with the persistency rates we are experiencing across all of our segments, which helped generate this premium growth.

Second, our profit margins remain quite strong in our core business segments, with ROEs running in the mid-to-high teens. The discipline we follow in the fundamentals of our business, from the pricing and underwriting of new business relationships to the management of our current customers.

This provides a good balance between producing top-line growth and doing so in a profitable way. As you would expect given these growth trends and strong profit margins, we're also generating excellent statutory earnings.

In fact through the fourth quarter and full-year 2016, we generated record levels of statutory income; that is, $885 million in after-tax statutory operating income for the full-year 2016, an increase of 28% over 2015. As a result, our risk-based capital levels and holding company cash position finished the year above our expectation.

This provides good choices for our capital deployment strategy. We start with backing the growth we are seeing in our business, as well as investing to enhance our position in the market.

This is true on both a core basis, as well as acquisitions such as Starmount and NDP. This healthy cash generation has also enabled us to increase our dividends and consistently repurchase our shares with the excess over our growth needs.

Another indicator of performance is the steady growth in our book value per share, which for the fourth quarter increased year over year by 8.5% to $39.02. Book value excluding AOCI increased 9.3% year over year to $39.24 at quarter end.

So in summary, it was an excellent year for Unum in 2016. It was a year that saw a lot of volatility in the markets.

Through it we remained steady with our intense focus on the disciplined execution of our business plan and serving the needs of employers and their employees. We are optimistic as we enter 2017 with a great market position, a recipe for top- and bottom-line growth, and a great team. So with those highlights on an excellent quarter and full year, I will ask Jack to cover our fourth-quarter results in grater detail. Jack.

Thank you Rick, and good morning everyone. Rick provided a high-level overview of fourth-quarter results, and now I want to provide a more in-depth view of the themes we're seeing in our business.

First it was an outstanding quarter for Unum overall. Our after-tax operating income per share of $1 is an increase of 5.3% over last year. We achieved these results despite the 33% tax rate in the fourth quarter, which was driven in part by the sharp rise in interest rates in the UK.

Our before-tax operating income increased 7.6% to $346.9 million, the strongest rate of growth we've experienced in many years. As in prior quarters, we continue to be pleased with the strong balance between the operational performance drivers of our EPS growth and the capital management drivers. Leading the growth in before-tax operating income was our flagship Unum US segment, which produced record operating income for the fourth quarter of $240.1 million, an increase of 12.1% over last year.

While each of our Unum US business lines performed well, group disability had an outstanding quarter with before-tax operating income of $89.5 million, an increase of over 35%. The earnings growth was driven by a sharp improvement in the benefit ratio from 81.7% in the fourth quarter of 2015 to 77.7% in the current quarter.

The current benefit ratio includes a 50 basis point reduction in the discount rate for new claim incurrals, and is consistent with the 76% to 79% range that we communicated at the December Investor Meeting. The improvements in the group disability benefit ratio that we have seen throughout the year continue to be driven by favorable incidence trends and the cumulative benefit of rate increases on renewals over the past several quarters. Group disability premium income growth was 3.7% over the year-ago quarter, driven by continued strong persistency levels.

The group life Canadian D line continued its steady performance, with operating income of $56.1 million in the fourth quarter, an increase of 3.3%. Premium income grew 4.9% over the year-ago quarter and the benefit ratio improved slight to 71.5% for the fourth quarter compared to 72% in the year-ago quarter. Lower incidence, lower average claim size and favorable waiver of premium benefits experience drove the improvement in group life.

The supplemental and voluntary lines continued to perform well, producing after-tax operating income of $94.5 million, an increase of about 1% over the year-ago quarter. Premium growth trends remained very favorable, increasing 11.1% in the quarter compared to last year.

It's worth noting that we executed a reinsurance transaction in the individual disability line in the fourth quarter. This transaction lowered premiums by about $25 million, which was offset by a reduction in the sum of benefits and expenses of about $25 million.

It caused a slight elevation of the benefit ratio, but had no material impact on the operating income of the line. The transaction improved the capital efficiency of the product line, thereby improving the future ROE of the line by about 0.5%.

Also in the supplemental and voluntary lines, this was the first full quarter with the acquisition of Starmount and results were in line with expectations. We're excited to now actively offer a Unum branded dental and vision products in the market.

We were very pleased to see the rebound in sales growth for Unum US in the fourth quarter. Our sales increased 8.5% over the fourth quarter of 2015 after showing year-over-year declines in the previous three quarters.

Total group sales increased by 8.2% with very strong growth in short-term disability and group life, driven by sales to existing customers in the large case segment. Overall, we continue to see strong persistency across all of our Unum US lines of business. Obviously this is a key driver of positive premium growth.

For Unum UK, operating before-tax operating income was slightly lower at GBP24.1 million in the fourth quarter compared to GBP24.4 million in the year-ago quarter. Benefits experience was generally favorable, with the benefit ratio improving to 67.6% in the fourth quarter compared to 69.9% a year ago, due primarily to better group life results.

We experienced about a 1% decline in premium income, which was mostly attributable to slower growth we were seeing in the imports block of business, likely a result of the economic disruption created by the Brexit vote in June. Clearly the exchange rate is a negative for our reported translated results, with an exchange rate of 1.24 for the fourth quarter compared to 1.52 in the year-ago quarter and 1.31 in the third quarter of 2016. We expect this to continue to impact reported results in 2017.

Sales in Unum UK remained favorable, increasing 6.7% on a local currency basis in the fourth quarter. The increase was well balanced by product line and by segment. We were also pleased with the improvement we saw in persistency, which was 87.3% for 2016 compared to 86.3% in 2015.

Colonial Life again produced very strong and consistent results, with before-tax operating income of $79.9 million for the quarter, an increase of 3% over last year. Premium income growth continues to accelerate, increasing 6.8% for the quarter.

Our benefits experience remains generally in line with expectations and recent trends. In addition, our sales trends for Colonial Life remained positive with an increase of 6.5% for the fourth quarter. This increase was driven by success in the larger end of the commercial market in the public sector.

We also saw very good balance with new account sales increasing 6.9% in the quarter, while existing account sales grew by 6.3%. For the full-year 2016 Colonial Life sales increased by 10.3%, which is the fourth consecutive year we've seen year-over-year growth, a very strong result through a difficult economic environment. Persistency also improved in 2016, increasing to 79.3% from 78.5% in 2015.

Finally for the Closed Block, operating income was $34.6 million in the fourth quarter of 2016 compared to $28.1 million in the year-ago quarter. In the individual disability line, the interest adjusted loss ratio was 84.7% in the quarter compared to 87.2% in the year-ago quarter.

The underlying benefits experience was in line with our expectations, but the reported benefit ratio in the fourth quarter of 2015 was impacted by a reserve discount rate adjustment we made as a result of unusually high bond call activity and related miscellaneous investment income. For the long-term care line, the interested adjusted loss ratio was 89.1% for the quarter improved from the year-ago ratio of 89.7% and the third-quarter 2016 ratio of 93.8%.

The year-over-year improvement was driven primarily by favorable mortality experience and the impact of persistency on active life reserves. I will point out that since the fourth quarter of 2014 reserve adjustment, the interest adjusted loss ratio has been 89.4% within the long-term ratio of 85% to 90% that we expect. Adjusting for the impact of the large group case termination which impacted the loss ratio in the third quarter of 2016, this two-year cumulative loss ratio would be 88.1%.

I continue to be pleased with the progress we're making in the Closed Block, particularly in the long-term care line. The yields achieved on new money for the long-term care business have consistently exceeded the assumptions we have built into our reserves. Also, we continue to make good progress in achieving rate increases in our in-force long-term care business.

We received some notable approvals recently and continue to make good progress against the assumptions we used in our reserves. The landing spot, whereby a policy holder can avoid a rate increase by electing to slow down the policy benefit inflation rate, has been viewed favorably by consumers and regulators alike.

These actions, combined with the underlying performance of the Block, improved the statutory results for the Fairwind captive. As a result, we have been able to maintain the strong capital position of Fairwind while reducing the level of cash contributions for 2016 relative to 2015.

So to summarize, our overall financial performance for the fourth quarter was outstanding, highlighted by good premium growth, favorable persistency trends, very good benefits experience overall and favorable expense trends.

These trends in turn generated excellent statutory income. After-tax statutory operating income for the fourth quarter was $260.6 million, a 43% increase over the year-ago quarter. For the full year, our after-tax operating statutory income totaled $884.6 million for 2016, an increase of 28% over the 2015 total of $689.2 million. These results reflect our strong benefits experience across the majority of our business lines.

As you know, statutory results drive capital strength and free cash flow generation. We finished 2016 with a risk-based capital ratio for our traditional US insurance companies in excess of 400%.

The strong 2016 statutory earnings will result in increased dividends from our insurance subsidiaries and will allow us to continue to build holding company cash next year. Our holding company's cash position totaled $594 million at year-end 2016, which was slightly ahead of our Investor Day outlook. We repurchased $103 million worth of shares in the fourth quarter and our full-year repurchases totaled $403 million.

Looking now at investment results, new money yields have improved since the election in early November. While the 10-year and 30-year US treasuries rallied by 85 basis points and 75 basis points respectively during the fourth quarter, we've seen some give-back as corporate [bond] spreads are somewhat tighter. All considered, we're feeling better about the environment for new money yields.

In summing up 2016, we reported after-tax operating income per share of $3.92, an increase of 7.7% over 2015. This exceeded our outlook for the year for growth of 3% to 6%, primarily due to strong operating performance across many of our businesses which more than offset the negative impact from the declining interest rates and the British pound. All three of our core business segments showed year-over-year growth in before-tax operating income for the full-year 2016, with Unum US increasing 7.6%, Unum UK increasing 3% in local currency, and Colonial Life increasing 1.6%.

As we outlined for you at our Outlook Meeting back in December, our outlook for growth in 2017 also calls for growth in after-tax operating income per share of 3% to 6%. I'd say that our view on earnings potential for 2017 has not changed, but with our out-performance in the fourth quarter and the higher starting point for earnings going into 2017, we would be looking for our growth rate to be a little lower in that range as we begin the year.

To wrap up my comments, I'm very pleased with our results for the fourth quarter and for the full year. It was an outstanding year.

We are executing very well on our strategies, with a focus on maintaining pricing discipline, generating strong persistency and growth in our core business segments, delivering on renewals to maintain our profit margins, and meeting new money yield targets for the long-term care. This success gives us a great foundation to continue to build and grow upon as we move into 2017. Now I will turn the call back to Rick for his closing comments.

Thank you, Jack. We will now move to your questions. And as I conclude our prepared remarks, I want to reiterate how pleased we are with our overall results for the fourth quarter and full-year 2016.

I'm encouraged by the positive momentum we have going into 2017, which will serve us well as we manage through the year. Let me now ask the operator to begin the question-and-answer session.

(Operator Instructions)

We will take our first question from Jimmy Bhullar from JPMorgan.

Hi, I have two questions. First on the US business, if you could just discuss the operating environment and whether you are starting to see a benefit from wage inflation and hiring in the numbers? And also just how pricing trends were as went through renewal season for the past year?

And then secondly on UK, how susceptible do you think your business is to Brexit and potential workforce reductions at some of the large financial services companies, whether you've seen is it already, or are you expecting that? And how much of that is baked into your guidance for 2017?

Great, thank you, Jimmy. Let Mike start with the view on the US market.

Sure.

Thanks, and good morning Jimmy. Yes, the two parts to your question. I would say we continue to see a nice gradual increase to the tailwind of national growth.

That shows up just straight directly into premium on the employer-funded business, and it shows up in our voluntary plans as well where we had really strong re-enrollment results for the fall and headed into 2017.

I think in terms of the market, the second part of your question. First and foremost for us is the ability to renew our existing client base, and we saw persistency just north of 90% in the group lines again, and we're able to hit our pricing targets through the renewal cycles. So feel very good about that.

Encouraged to see a little over 8% sales growth as well. Now, a good chunk of that came from existing client sales, both cross-selling and enrollment.

But the very smallest end of the market, small case group insurance, we actually saw an increase year over year on new client sales. Those are the shortest sales cycle clients, so that's probably the most current view.

And as we mentioned at the Outlook Meeting, this is the first year in a few where we're not going in with new business price increases on the group side. So reasonably optimistic that we've got a rational marketplace out there, probably tempered just a bit by the mid-market, which remains quite competitive.

Great. Maybe we'll good over to Tim Arnold at Colonial Life to hear his view on the market as well.

Thanks, Rick. We're encouraged by the growth we're seeing in the small case market especially, the employment growth. And the wage inflation also helps us when we go back out to re-enroll an existing client.

We have employees who are earning more and [needing] more income protection and more protection through some of our other products as well. So we're optimistic about the environment.

Great. Your second question was on UK Brexit. Peter O'Donnell, do you want to hit on that, both what we're seeing today and then how we're thinking about that going into 2017?

Yes, thanks for the question. In terms of what we've seen in 2016 is basically a slight slowdown. You've seen in our premium numbers that we had very strong sales. We also had very strong persistency, but wage growth was relatively weak as was employment growth.

And we think that business investment is down at the moment, and people are being cautious about the future. What we haven't seen is a significant exodus.

What I would say is, that's quite unlikely moving large parts of complicated financial services to the EU is incredibly complex and high risk. So if you move [into] derivatives trading, it's hugely complicated to manage and regulate. And the City of London remains a good place to do business.

What we are hearing from some of our clients is they may set up some offshore sites where they will move some jobs, but relatively low at the moment, to enable them to continue trading in Europe. But we're not seeing any indication of any mass exodus at the moment.

I think in our outlook what we factored in was really a continuation of what we saw in 2016. We think wage growth will remain slow, even with inflation going up. We also think that people will be cautious about business investment until we're clear on the exact Brexit implications.

Financial services as a percentage of your premium base in the market, is it -- I think it's about 20%, 25%.

Yes, it's around 20%, but it spreads across a lot of non-investment banks. So we would have a lot of the retail banks that would be very UK-oriented. It's not quite as significant as that when you look at what's truly affected.

You think about industries, exporters where we were also exposed particularly well because of weak sterling. The tech sector is doing well over here. So we've got a pretty balanced portfolio already.

Okay, thanks.

Thanks, Jimmy.

Moving on, we'll take our next question from Mark Hughes from SunTrust.

Good morning, Mark.

Yes, good morning. Could you talk about the Starmount acquisition? Just thinking about how the sales would be distributed over the four quarters. It's obviously making a nice contribution, dental and vision there.

I think you did $10 million in new sales in the quarter. How should we think about that number for next year in terms of overall sales and how would it be distributed through the year?

Mark, we appreciate the question. We're very excited to have Starmount as part of the fold and how that fits strategically with us.

I'm sure they're listening in, many of our new employees there. So we certainly welcome them. Mike, you want to talk about our outlook and how we see the business overall?

Yes, good morning Mark. Delighted to talk about Starmount. The way I think about it is, what you see in the fourth quarter is the Starmount branded and Starmount distributed results. We are now in the market as of the January 1 with Unum branded dental and vision products.

And so I would expect that the sales would ramp up through the course of the year as we bring it out to initially about half of the 50 states and begin to bring Unum sales people and client managers to bear on the portfolio. The seasonality of the business will track with our group insurance more broadly. So you will see, in general, fourth quarter being our strongest sales quarter, which is another reason why it will ramp up as we go through the year.

Thank you. And then when we think about the sales outlook for Colonial, double-digit growth for the full year, kind of high single digits in the fourth quarter. When you look at your recruiting, your pipeline, let's say, how do you think we should look at 2017?

Tim?

Thanks, Mark. We are optimistic about 2017. The leading indicators that we evaluate for our sales progress are all trending favorably.

The recruiting that we experienced in 2016 was strong and above our internal plans. The growth in our sales offices was also very strong. Growth in sales managers was very strong, and we continue to see great opportunity in the marketplace.

Thank you.

Yes, Mark. I would add that we're actually making investments in the expansion of our footprint in the Colonial Life sales force and are very encouraged by recent success there, and will continue to do that in 2017 and beyond.

Thank you very much.

Thanks, Mark.

Moving on we will take our next question from Seth Weiss from Bank of America.

Good morning. Thanks for taking the question. Just wanted to follow up on the reinsurance transaction in supplemental and voluntary.

Sorry if I missed this in the prepared commentary. That $25 million impact on premium offset in the expense line, should we expect that to be ongoing or is that just something unique to this quarter?

Yes, I would expect it to be ongoing. That's the seeded premium, the benefit and expense piece that offset it, seeding commissions as well as some risk sharing. So I would look at that as affecting those lines at that level, but having no material impact on really the operating income of the line in improving the capital efficiency.

And if we think about your top-line guidance that was given for 2017, should we just adjust that down accordingly? Or was that contemplated, the reinsurance transaction, when you gave that guidance?

That would have been in there.

Okay. Thank you.

(Operator Instructions)

Moving on we will take our next question from Sean Dargan at Wells Fargo.

At the December Investor Day, Jack mentioned the possibility of basically paying another party to come up with an LTC solution. You did build the cash balance at the holding company. I'm just wondering if you have gotten any closer, if you have any more insight about what type of appetite there might be from traditional or nontraditional counter-parties?

Jack, you want to hit on that?

It is a complex thing with long-term care. I would say we're not imminent in terms of having a solution.

The rise in interest rates certainly helps the bid/ask spread in that. So we continue to be active in the market.

We continue to talk to people. We continue to work with our regulators.

And so it's clearly something we focus a lot of attention on. But I wouldn't say that anything is imminent.

Sean, you also talked about the increasing cash position and capital buildup that we have. I wouldn't equate those two. But Jack, maybe you want to talk about our capital generation, where it is today and how we're thinking about it?

We feel really good about our year-end capital position based on the extremely strong statutory earnings that we had in 2016 which will drive 2017 dividends. We expect that position to continue to build.

As we look at our capital position, I would say our uses for it have remained very consistent. That's continuing to invest in our core businesses.

We will continue to look at the M&A market for opportunities. We continue to look at our dividends and support our dividends, and continue to maintain our payout ratios. And then finally, we look at share repurchase.

Our stock prices run up, but we will tend to be very consistent and predictable in our share repurchase and capital plans. We're not going to over-react to current stock prices.

Actually, we still feel that at $46 a share that our stock is a good investment and we're willing to put money into. We will be building cash this year and would expect to build cash into the future as well.

We will be looking very closely at what to do about it. There's a lot of unanswered questions out there on interest rate, tax reform, the economic environment. But as we get more clarity about where those things are going to land and take stock of where we are, I expect we will be communicating more in the future about our capital plans.

Great. Thanks.

Thank you, Sean.

(Operator Instructions)

Moving on we will take our next question from Ken Billingsley from Compass Point.

Good morning. I had two questions. One, on the investment portfolio looking at the balance sheet, total investments from third quarter, fourth quarter were down about $2 billion.

It looked like reserves were down $1.5 billion, and then AOCI adjustment was $500 million. Was this related to the reinsurance transaction, or could you just explain to me what the moving parts were?

No, that had more to do with the mark-to-market basis of the balance sheet with the rising interest rates we saw in the third quarter. Reserves were down, but market value of assets were down a commensurate amount.

Okay. But there's not a connection between something that happened from a reserve?

No, it's nothing in the underlying performance of the business or the reserve level.

Or the reinsurance transaction.

From a book value perspective, things were pretty consistent.

And my next question, having -- I'd like you guys to look back at 2013. I'm just trying to get an idea of what you think ACA reform may have on the impact of sales and persistency. And looking back at 2013, that was the year before the mandate went into place, there was a decline at Unum US and Colonial Life in nearly every segment for sales and persistency.

Now, it bounced back in 2014. Was this a distraction for customers as they were focused on what was going on with ACA? And could we see that in the future as reform is in place and they have to focus on how that's going to impact their business, maybe less focused on employee benefits?

Great, thanks Ken. We'll start with Mike and then we'll go over to Colonial Life.

Ken, you have an excellent memory. 2013, we absolutely did see markets freeze up a bit as employers and their advisers tried to sort through the implications of ACA. A small tweak to the commentary, though, it was a slowdown in sales, persistency was actually strong through the period because business didn't tend to move.

As we look into 2017, you are right. There is uncertainty around the administration and the future of the Affordable Care Act. It's something that we're watching really closely.

I would say, though, on balance we're quite optimistic that we won't see a slowdown like we did back in 2013. It seems more unlikely, given the fact that we'll be unwinding requirements versus putting new complex requirements in place. In that regard it's likely to be less disruptive.

I would say in general as you're unwinding, employers are slow to make broad-based benefits changes unless they're compelled to by new regulation. So I could see a more conducive environment than we saw back in 2013. Tim, I don't know if you've got a view on Colonial Life.

I agree with that, Mike. The slowdown in Colonial Life sales in the third quarter of 2013 was also amplified by the fact that we were making a number of changes in our distribution system and leadership, which have helped us become more effective but created a little bit of a slowdown in that same period when ACA was being implemented.

So like Mike, we are pretty optimistic that any changes at this point would be less impactful than need for America's workers to have the kinds of benefits that we offer has never been greater. We've talked to you guys before about the 30% of the American households that have no life insurance and significant under-insurance and disability, increasing medical deductibles, which all play in our favor as we think about the marketplace.

Great. Thanks for taking my questions.

Thank you, Ken.

And at this time that will conclude today's question-and-answer session. I would like to turn it back over to our speakers for any additional or closing remarks.

Great. Thank you. We appreciate the questions this morning. I think that it's a little bit reflective of we had a very straightforward and very positive quarter, which was a great wrap to the year.

We thank you all for taking the time to join us this morning. We look forward to seeing many of you in the coming weeks. We are going to be quite active out in the market at various investor events over the several weeks, and look forward to telling you our story in greater detail as we do that.

So appreciate the time. And we'll talk to you soon. Operator, that now completes the fourth-quarter 2016 earnings call.

Thank you. And as they said, everyone, that will conclude today's conference. We thank everyone for their participation.