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Good day, everyone, and welcome to the Reinsurance Group of America Second Quarter 2018 Results Conference Call. Today's call is being recorded.
At this time, I would like to introduce Mr. Todd Larson, Senior Executive Vice President and Chief Financial Officer; and Ms. Anna Manning, President and Chief Executive Officer. Please go ahead, Mr. Larson.
Thank you. Good morning everyone and welcome to RGA's second quarter 2018 conference call. Joining me in St. Louis in this morning is Anna Manning, RGA's President and Chief Executive Officer.
Anna and I will discuss the second quarter results after a quick reminder about forward-looking information and non-GAAP financial measures. Following our prepared remarks, we'll be happy to take your questions.
To help you better understand RGA's business, we'll make certain statements and discuss certain subjects during this call that will contain forward-looking information, including, among other things, investment performance, statements relating to projections of revenues, premiums or earnings and future financial performance and growth potential of RGA and its subsidiaries.
Keep in mind that actual results could differ materially from expected results. A list of important factors that could cause actual results to differ materially from expected results is included in the earnings release we issued yesterday.
In addition, during the course of this call, we'll make comments on pretax and after-tax adjusted operating income, which is considered a non-GAAP financial measure under SEC regulations. We believe this measure better reflects the ongoing profitability and underlying trends of our business.
Please refer to the tables in the press release and quarterly financial supplement for more information on this measure and reconciliation of net income to adjusted operating income for our various business segments. These documents and additional information may be found on our Investor Relations website at rgare.com.
With that, I'll turn the call over to Anna for her comments.
Thank you, Todd and good morning. As indicated in the earnings release last night, we reported adjusted operating earnings per share of $3.10 compared to $2.95 a year ago. On balance, we consider this to be a good quarter, albeit with some moving parts.
Highlighting the positives. Most of our key businesses reported results that were strong or in line relative to our expectations. Our U.S. individual mortality business rebounded in the second quarter; and EMEA and Asia, which includes our global financial solutions business, performed very well overall. We benefited from a lower-than-expected tax rate, but this was partially offset by lower variable investment income.
The U.S. group results were disappointing, primarily related to unfavorable experience in our excess disability and excess medical business. We continue to take rate action in select areas as appropriate, and we would expect to see benefits from these actions within a reasonable period of time. Our corporate loss was elevated due to some project and regulatory compliance costs, but we expect such expenses to moderate in the second half of the year.
Reported premium growth was 5% and 3% in constant currencies; but adjusting for lumpy items, we put organic growth at approximately 7.1%.
As we indicated at our recent Investor Day in June, we repurchased $150 million of our shares. We are also pleased to announce that we have raised the common stock dividend by 20%, our ninth consecutive year of double-digit annual dividend growth.
While we did not execute on any major transactions in the quarter, we did close on a number of moderate-sized financial reinsurance transactions. Our overall pipeline continues to be very active. With our current strong capital levels, we are well-positioned and have sufficient flexibility to execute on a range of opportunities.
Once again, our global platform and diversified product line have enabled us to deliver a good overall quarter. We see considerable opportunities, we have a proven strategy, and we are focused on executing on that strategy. Looking forward, we remain confident in our proven approach and on our ability to continue to deliver attractive financial results.
With that, I'll turn it back over to Todd.
Thanks Anna. I'll provide a brief financial overview, beginning with capital management investment results and segment-level results. We achieved an adjusted operating return on equity for the trailing 12 months of 9.9%, just shy of our intermediate guidance range of 10% to 12%.
With the strong quarter of share repurchases and deployments to support organic growth, excess capital is $1.2 billion at the end of the quarter. Our quarterly results continue to add to our book value, increasing our book value per share, excluding AOCI, by 22% over the year-ago period.
The average investment yield, excluding spread business, was 4.32%, down 28 basis points compared to the second quarter of 2017 and down 14 basis points versus the first quarter of 2018, reflecting lower variable investment income in the current quarter. Our new money rate was 4.44%, up from 3.8% in the first quarter mostly a reflection of higher interest rates.
The effective tax rate on pretax adjusted operating income of 19.2% was lower than our expected range of 21% to 24%, primarily due to a lower-than-expected impact from the global intangible low tax income or GILTI provision, as well as the effective settlement of some uncertain tax positions during the quarter. While it's difficult to predict the timing of certain items, we expect the full year tax rate to be within our expected range, perhaps towards the higher end.
Turning to our segment results, the U.S. and Latin America Traditional business reported pretax adjusted operating income of $68.3 million versus $91.2 million a year ago. Individual mortality experience was in line, while the year-ago period reflected favorable individual mortality claims experience.
As indicated, the group results were below our expectations this quarter, primarily driven by the excess disability and excess medical coverages. As Anna mentioned, we are continuing to take rate actions as appropriate. Additionally, variable investment income was below our average run rate in the quarter.
Premium growth was 2.9%. However, after adjusting for the effects of the modification of an existing health treaty we mentioned back in the fourth quarter, organic premium growth was 5.1%.
Our asset-intensive business reported pretax adjusted operating income of $49.7 million this quarter, down slightly from $49.9 million in the year-ago period and at the low end of our expected range of $50 million to $55 million, primarily due to lower prepayment income in the quarter.
Our financial reinsurance line reported pretax adjusted operating income of $21.5 million in this period. It increased versus $20 million a year ago due to the business activity in the first half of the year.
Our Canada traditional segment reported pretax adjusted operating income of $22.2 million, down from $31.2 million in the prior-year period. This quarter, we had unfavorable individual mortality experience due to a greater number than expected of large claims. We view this as normal volatility.
Premiums were up 18% reflecting the execution of an in-force transaction in the first quarter and the positive influence of foreign currency.
Canada's financial solutions business, which includes longevity and fee-based transactions, reported pretax adjusted operating income of $3.5 million compared to $4.4 million a year ago, with both periods reflecting favorable longevity experience.
Switching to Europe, Middle East, and Africa, our traditional business reported pretax adjusted operating income of $6.5 million, down from $11.4 million last year due to unfavorable mortality experience in a couple of countries, primarily due to a handful of large claims. Reported premium growth was 7% or 2% on constant currency basis.
EMEA's financial solutions business, which includes asset-intensive, longevity, and fee-based transactions, reported pretax adjusted operating income of $59.5 million compared to last year's $26.5 million. Longevity experience was very favorable, with the quarter also benefiting from underlying business growth and favorable foreign currency translation of $3.1 million.
Turning to our Asia-Pacific traditional business, pretax adjusted operating income totaled $58.9 million compared to $53.3 million in the prior year period. Our result this quarter in Asia, which excludes Australia, were ahead of expectations as we saw favorable underwriting experience in most countries across the region.
In Australia, we had a breakeven result this quarter versus a profit in the year-ago period as there was some modestly unfavorable experience in group business on a handful of treaties.
Reported Asia-Pacific traditional premiums were flat year-over-year. Premium growth in Asia, excluding Australia and adjusting for the effects of some catch-up premiums, was 20% or 17% in constant currencies. Australia premiums were down 12%, reflecting the effects of some treaty recaptures at the end of last year.
Our Asia-Pacific financial solutions business reported a pretax adjusted operating income of $2.9 million versus pretax adjusted operating income of $2.6 million in the year-ago period. The quarter reflects slightly better-than-expected experience from the runoff treaty we've mentioned in the past and the addition of new business.
The corporate segment reported pretax adjusted operating loss of $42.9 million compared with $9.5 million a year ago. The results for the quarter reflect some higher project and regulatory compliance cost. Going forward, over the next couple of quarters, on average, we would expect the corporate loss to be in the range of $20 million to $25 million.
In conclusion, on balance, we view this as a good quarter and feel that RGA continues to be an attractive investment opportunity with strong earnings per share, consistent returns, and continued book value growth.
We thank you and appreciate your support and interest in RGA and we'll open the call for questions.
Thank you, sir. [Operator Instructions]
We'll take our first question from Humphrey Lee with Dowling & Partners.
Good morning and thank you for taking my questions. Just want to follow-up on the excess disability and excess medical coverage experience in U.S. traditional. Just wondering, can you drill down a little bit in terms of what are the drivers that you're seeing the impact?
Yes, Humphrey, it's Todd. Well, first, let me start. The U.S. group business, overall since we acquired it back in 2010, has been a good business for us. And it is made up of four lines of business. There's life and accident and health and special risk, disability income, health care, excess coverage, and then health care quota share. And as we mentioned, the business that underperformed in the quarter was the excess DIs or a portion of the DI business and then on the health care excess business.
So, what we saw was a higher incidence of claims, and in the DI space, some reopened claims as well. And just by its nature, this excess coverage can be a little bit more volatile than some of our quota share-type business. So, we are -- we have been and we'll continue to reprice this underlying business as appropriate.
And given that it is fairly short-term in nature -- just the nature of these treaties, they renew on an annual basis, so we have been repricing them and we’ll continue to reprice over the next several quarters as these treaties come up for renewal, and we'd expect that they should return to our expected profitability within the next 18 months or so.
I will mention that we'll have to see what happens when we do go through the repricing and rate increases as the treaties come up for renewal if we end up losing some of the treaties to other players. But like I mentioned, we'll have to see how that turns out.
So, on the excess health care, is this kind of some kind of like a stop loss for the managed care company or in that nature?
It's generally -- on the health care side, it's a layer above an attachment point and then it also though exhaust at a maximum point as well, so it's not an unlimited stop loss.
Okay, got it. And then maybe shifting gears to Asia-Pacific traditional. My understanding is if you remove the impact of the catch-up premiums in 2017 and the actions you're taking in Australia, the premium growth in Asia was actually pretty good at the 20% range. Like, I was just wondering what was the growth -- where the growth is coming from? And then specifically, what type of business you are seeing in the region?
Humphrey, its Anna. Very similar to prior quarters, it's around our product development efforts in the region broadly. We take these new ideas for consumer products to clients, and we get an exclusive arrangement in exchange for those product ideas. So, typically, that would be an arrangement that would cover a couple of years.
And what we're able to do is then leverage that idea from market-to-market, and we further couple that with some new reinsurance structures that also help to manage the capital strains on the business. So, overall, that's our strategy, and that's where the growth is coming from in Asia.
I guess, in a sense, you've been seeing kind of these type of high-double-digit growth for quite some time. Like, is it reasonable to expect you can maintain this level of productivity, at least in the medium term kind of going forward? Or will we start to see a little bit of a tailing off, given how robust the growth has been over the past several years?
Yes. Well, there are a few dynamics at play in Asia. And it's not just the reinsurance growth. It's also the underlying growth in the life insurance market and the penetration rates of reinsurance.
So, when we think of maybe those three pieces, certainly the dynamics, the population dynamics of people moving into the middle classes and never having had protection products, demand for protection products obviously follow that increase. Then -- and that's what's driving the underlying insurance growth.
Then reinsurance, historically in many of the countries in Asia, have been at very low levels and so increasing reinsurance penetration adds to that underlying growth. And then our strategy of competing or I should say of not competing against our competitors, but really looking for exclusives, add those three together and I would say, that where our intermediate expectations are at this level of growth, 15% to 20%.
Got it, appreciate the color. Thank you.
Our next question comes from Jimmy Bhullar with JPMorgan.
Hi. So, just had a question overall. As you think about your business and you look at your sort of earnings power now versus maybe two months -- two quarters ago, three work quarters ago, there's obviously normal volatility across many of the businesses and claims, and that tends to balance out. But it seems like the group business is one where you might have underpriced some cases or your expectations are lower than previously.
So, is that the right assertion? And if you do reprice the book, obviously, margins will come back. But there's a chance that you end up losing some of the cases as well. So, how do you think about just your earnings power growth potential, given what you've seen in the group business recently?
Yes. So, just to give you a sense on the group business, it is a nice group part of our business. But in the two lines that didn't perform are only a portion of the group business and the entire group business -- and the group business premium levels for the quarter were about $150 million, just to size it. So, it's not -- it's a nice chunk of our business, but it's not a big chunk of our business, maybe there’s an ineloquent way to put it.
But I would say if you look at how just the group business performed, it doesn't change our intermediate expectations of what we've stated in the past at 5% to 8% EPS growth, but we still feel we've got a very diversified block of business enterprise-wide, both from a product diversity perspective as well as geographically.
So, we do have -- we can absorb some underperformance on any particular block of business, and hopefully some of the other lines will outperform. So, maybe a long-winded answer to say that we haven't changed our expectations going forward on the underlying earnings power of our company.
Okay. And then, just on your capital deployment. Obviously, I think your comments on the deal pipeline seemed fairly upbeat. How do you look at -- when you're looking at deals, do you look at them versus sort of some threshold on what you can get on share buybacks and -- or not?
And if you do look at them versus your share buybacks, to what extent do you think you would be more active at buybacks if your stock price continues to decline versus otherwise? Or does the stock price play a big part in how much you decide to deploy towards buybacks?
I think we've been pretty consistent that we are managing our capital over the longer period versus quarter-to-quarter. Now certainly, we really like deploying our capital back into the business into transactions that meet our sort of risk appetite as well as meet our expected return profile.
So, first and foremost, that's what we would like to do, and the pipeline does look relatively active right now. That being said, we have -- we're happy with the amount that -- of stock that we repurchased during the quarter, the $150 million.
And I would point, too, that we do have over $200 million of share repurchase authorization still in place. So, as we go forward, we'll certainly take a close look at the deal pipeline as well as the opportunity to potentially buy back some more shares.
We'll take our next question from Kenneth Lee with RBC Capital Markets.
Hi, thanks for taking my question. Just one on the EMEA financial solutions. What's been driving the favorable longevity experience, any detail that you can give on that? Thanks.
Yes. So, it's a combination of couple of things. One is that underlying business has performed well for us, especially in the quarter. As well as in the quarter, we're somewhat dependent on the timing of information from our clients reporting to us.
And during the quarter, we did have some catch-up reporting to that, added to the overall favorable experienced during the quarter. So, it was a very strong, very favorable quarter, part of which related to some client-reporting catch-up.
I would add -- yes, I would add that the underlying longevity performance is a fair proportion of what you're seeing there. In other words, it's the opposite of mortality. So, we're seeing a larger number of people who had our longevity products dying than we had expected.
And we'll move on to our next question from Erik Bass with Autonomous Research.
Hi, thank you. And thanks for the comment on how much premium the group business contributes. Can you remind us what you would think of as a typical level of earnings that the U.S. group business would contribute on either a quarterly or annual basis? And then what was the amount this quarter?
Yes. So, what's the best way to size it? We'll probably expect anywhere from about $10 million or so a quarter. And this year, we had -- during the quarter, we had a loss of about $13 million.
Thank you. And that's -- so it's really those lines, I think, that you talked about that were affected are sort of 25% or so of the business overall. So, it's just really outsized negative performance in that particular area.
That's right.
Got it. And then on the variable investment income, can you just quantify how much below what you would think of as a normal run rate you saw this quarter and maybe the geography of that?
Yes. So, for the quarter, it was about $0.07. So I would say for the quarter, it was sort of spread approximately, say, 50% of that would be to the individual or the traditional U.S. line and then about 25% to global financial solutions or asset-intensive and then the rest in corporate.
Got it. Thank you.
We'll take our next question from John Nadel with UBS.
Hi, good morning. Todd, I think you mentioned in your prepared remarks the idea that, while it's been a little bit volatile and maybe there's still some moving parts yet, you think your tax rate to be at the upper end of that, I believe, it's a 21% to 24% range for the year. I think if I'm doing the math right, I'm at 22% on a year-to-date basis through your first two quarters.
I mean, so should we be modeling -- are you sort of signaling to us that we should be modeling a tax rate that's sort of above the upper end of your range for the back half of the year to bring the full year toward that 24%?
No, I think probably what I'm signaling is that just early on with this tax reform, things are a little bit volatile and a little bit more difficult to predict, as we and as I think as well as some others still sort out how some of the newer provisions, predominantly the GILTI and the BEAT provision work.
We're a little bit over in the first quarter, as you remember, and better in the second quarter. But yes, year-to-date, we're looking squarely within the expected range, yes, and probably hedging a little bit just due to the volatility in these calculations, saying towards the higher end. But it's very difficult to -- it's really difficult for us to project exactly where that's going to come in for the full year.
Okay. That's helpful. And then if I could go back to the longevity business in EMEA. It's still favorable. Can -- along similar lines to the discussion and quantification of U.S. group, can you give us some sense for just how favorable EMEA results were relative to a more typical expectation? It seems like it was very significant.
Well, probably the best way for me to size it for you, if you look at the total EMEA segment, which includes the traditional lines and the longevity, and financial solutions business, I would say my best estimate of a run rate over the few -- next couple of quarters or so is $50 million to $55 million, pretax.
Yes, that's helpful. And then with respect to the U.S. traditional and the -- particularly the group piece there, I guess you're sort of -- you're signaling to us I believe that since we need some repricing on a couple of those different blocks of business, that we ought to expect that there should be some pressure from that business on an ongoing basis as that -- as you go through that repricing. Is that what you're saying?
There'll be a -- maybe a little pressure. But again, we're already repricing some of this business. And I would think we would view our balance sheet on the underlying business in fairly good shape. So, maybe a little bit of pressure in the second half, but I wouldn't expect that like the quarter that we had this quarter to repeat itself.
Okay. And I think, last one really quick one. You mentioned the new money yield in the quarter and I missed the number. But is it at or almost right on top of your existing portfolio yield? Is downward pressure from rate effectively over at this point?
We're getting close. I mentioned the new money rate for the quarter was 4.44%. So, it's fairly close, I think, to the overall portfolio rate.
Okay, all right. Thank you.
Our next question comes from Ryan Krueger with KBW.
Hi. Thanks. Good morning. On the deal pipeline, I mean, it certainly seems like all signals within the industry are that it's a -- that things are pretty active right now. For the types of properties that you're specifically interested in, I guess, how would you compare the pipeline today versus where it's been the last couple of years?
I would characterize it as a strong pipeline, Ryan. It's also a varied pipeline. So, we're seeing a broad range of opportunities. We're seeing annuities, structured settlements, interest-sensitive business, some [Indiscernible] business and some mortality.
We're seeing it both in North America and Europe, although I will say that there is more in the U.S. than Europe right now. And we're seeing all sizes, we're seeing small, medium, larger deals.
We're looking at the deals that best fit RGA, best fit our capabilities and our risk appetites. And we're remaining selective around product designs and our ability to effectively manage the full set of risks. So, -- and also, obviously, the overall risk/return proposition. So, I would characterize it as a very active market and the pipelines are strong.
Thanks. And then on the financial re-transactions, are those -- were those material? Should we expect much of an uplift in, I guess, the Fin Re earnings from the ones that you mentioned that you did in the quarter?
We did a handful in the quarter. But I would say, they were all modest sizes.
Okay. Thank you.
We'll take our next question from Dan Bergman with Citi.
Thanks. Good morning. I guess, to start, I just wanted to follow-up on the questions around the block deal pipeline. I just wanted to see if there are any trends you're seeing in terms of the level of competition for deals? And how pricing is holding up? Is it still rational?
Yes. So, I'll start with competition is strong. A number of the competitors have quite a bit of available capital ready to deploy. Now, our competitive approach is really to target those opportunities where we can leverage our expertise, our execution certainty, and target opportunities where we believe we have the greatest chance of success. And that comes about where we can bring a new idea or go through a repeat transaction. Those are really our sweet spots.
Now, I would share with you that the three deals that we completed in the first quarter, those are examples. Of those three deals, two of those, where we had limited competition because we had a new deal, a new idea, and a new structure. And on the third deal, we got a last look because of repeat business with a very well-established client, and we had strong relationships.
So, I'd say, competition in general is very strong. But we believe we're well-positioned. We're optimistic our strategy will continue to hold up. And we expect, over time, we're going to win our fair share of deals where price isn't the primary factor.
Got it. That's very helpful color. And then if I could, maybe one just on U.S. individual mortality. It was nice to see that bounce back from the first quarter. So, I just wanted to see if there's any additional color you can provide around how the block performed this quarter. And maybe how results came in over the course of the three months? Just trying to get a sense of whether there seemed to be any spillover of flu-related claims from the first quarter.
Sure. So, yes, we think it's likely that there were some additional flu-related claims in the quarter. But overall, our claims ended up in line. It was a broad rebound. And what I mean by broad rebound, it was across all the areas. So, nothing really to note, other than we're very happy to see it.
Got it. It was very helpful. Thank you.
We'll take our next question from Alex Scott with Goldman Sachs.
Hi, thanks for taking the question. The corporate costs that you mentioned that, I guess, were a little elevated this quarter, can you provide some details on what those were? And I guess, I think you suggested that maybe they would fade over time. Like how quickly will those go away? Are you expecting any to persist into the third quarter?
So, yes. So, a big portion of it was some costs that we had to spend or money we have to spend to comply with some privacy and data protection regulations over in Europe. It's called the GDPR.
And so we have budgeted for some of those costs. But the sort of go-live or effective date was late May and so some of the costs ended up being accelerated into the first half of the year, as we wanted to make sure we're ready to go when that regulation came in to play.
So, that's a big piece of it, and that's why we -- Anna mentioned and I would echo that we would expect it to moderate as we get into the second half of the year as a bit -- some of that sort of initial push was in the first half of the year.
Okay. And another question I had was on Australia. Can you talk at all about just what you're seeing in terms of claims practices, claims development? Any update on sort of what the Royal Commission is doing down there?
And if you could also just remind me, is there one specific quarter were you kind of do a review of the modeling of some of the claims development that we should be thinking about?
Yes. We haven't seen any direct evidence that companies have changed their claims practices, either as a result of the Royal Commission or just for other reasons. We're -- our focus in Australia has been on these rehabilitation efforts on improving performance.
And that involves being very active in terms of engaging with our clients, especially around claims practices on improving claims processes. And we're not seeing anything at this point with respect to any movement, any deterioration in those practices.
Now, with respect to your second question, we review that on a quarterly basis. We're reviewing our assumptions quarter-by-quarter.
Okay. Thanks. Maybe if I could sneak in one last quick one. I know you guys have talked in the past about just increased volatility in earnings over time may be related to like the vintages, seasoning, that sort of thing.
I mean, can you give us any way to kind of think about the breakdown or sort of what percentage of earnings may be or we should expect for like the first half versus second half in a typical year now? Any kind of guidelines you could provide there?
Well, let's talk about our U.S. individual mortality business. So, there are two elements here, one is seasonality and the other is volatility. Seasonality, we would expect to increase as people get older because hard winters, severe flus, they're going to have a disproportionate impact on the older ages. So, as business ages, we would expect seasonality to also follow that.
Now, there are lots of reports out there with observed patterns of seasonality in just about every country. You can see it in the population statistics, you can also see it when you look back over long periods of time in our business.
What makes that difficult to pinpoint is the second element, which is volatility. And volatility is really around -- more around the size of claims. It's in large part, driven by the experience on what we call the large claims, which are claims over $1 million.
All I can suggest is that you -- and we provided this information in our investor materials. If you look back over the last number of years, there's definitely a clear pattern of first and second quarter lighter than third and fourth quarter results.
Okay. Thanks.
[Operator Instructions]
We'll take our next question from Andrew Kligerman with Credit Suisse.
Hey, good morning. A lot of my -- the questions I wanted to know have been asked, but just maybe a little color would be helpful. So when you're thinking about the group business, what exactly -- you've been writing it for so long in this excess areas. What do you think you missed? How did you miss on those numbers?
I think there were a few elements in there. One had to do with the composition of the business. So, in other words, the sizes -- the average sizes of the business we were taking on. And in hindsight, I would say that perhaps we weren't reflecting that as quickly as we might have.
Then there's also an element around the excess medical. Now, we've taken what we think as a measured approach to supporting some of these ACA-related businesses and Medicaid expansion businesses. So, our approach has been to limit our exposure to this business to a small portion of our total U.S. group business.
They're in volatility, as I'm sure you're well aware, around that business. We took this approach in order for us to continue to support our clients, but we established clear limits in our exposure. Some of that is also what you're seeing in the second quarter results.
And Anna, do you think -- so do you feel pretty confident you can get that $20 plus million delta back over the next 18 months?
Well, we're certainly going through a very detailed repricing effort. As Todd mentioned, we may lose some of that business and we're prepared as we are in every other instance around the globe. If we're not able to reestablish our margins, we're not going to go for topline growth, we're clearly focusing on bottom-line.
Got it. And then just lastly, on that variable investment income, you talked about the different business geographies of where it was placed. But what investments exactly kind of didn't deliver as you would have anticipated?
Yes. Well, we do our best to sort of project out what the underlying. These can be sort of real estate joint ventures and that type of thing. So, we try to do our best of expecting when certain properties or investments would be right for getting out of. And we don't always predict the timing perfectly. So, really, mainly, it's some underlying partnerships and real estate ventures.
And just timing. Okay, great. Thanks a lot.
And that concludes today's question-and-answer session. I'd like to turn the conference back over to Mr. Larson for any additional or closing remarks.
Well, thank you everyone for joining us on our second quarter call this morning. We appreciate the continued support. And if you have any questions, please let us know. Thank you very much.
Thank you. And that does conclude today's presentation. Thank you for your participation. And you may now disconnect.