Reinsurance Group Of America Inc Q3 FY2020 Earnings Call

Good day and welcome to the Reinsurance Group of America's Third Quarter 2020 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, and welcome to RGA's third quarter 2020 conference call. With me this morning on the call is Anna Manning, RGA's President and Chief Executive Officer; Alain Nehmeh, Chief Operating Officer; Leslie Barbi, Chief Investment Officer; Jonathan Porter, Global Chief Risk Officer; and Jeff Hopson, Head of Investor Relations. We will discuss the third 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. Some of our comments or answers to your questions may contain forward-looking statements. Actual results could differ materially from expected results. Please refer to the earnings release we issued yesterday for a list of important factors that could cause actual results to differ materially from expected results. Additionally, during the course of this call, information we provide may include non-GAAP financial measures. Please see our earnings release, earnings presentation, quarterly financial supplement, and website for discussion of these terms and reconciliations to GAAP measures. And now, I'll turn the call over to Anna for her comments.

Thank you, Todd. Good morning, everyone, and thank you for joining our call today. I hope you are all remaining safe and staying healthy. Let me begin by saying that I am extremely proud of the perseverance and commitment that our employees have demonstrated throughout this crisis. Their well-being remains our top priority. Because of their efforts, our global business operations have continued to run smoothly, and we have continued to provide the superior level of support and thought leadership that our clients have come to expect and rely upon. An important part of our purpose is to help support the needs of families throughout the world who are suffering due to an unexpected illness or death of a loved one. Everyone at RGA is extremely proud of the role we play in helping families when they need it most. Turning to the third quarter results. Last night, we reported adjusted operating EPS of $3.51, which is a very strong performance, especially in the context of this global pandemic. This quarter further demonstrated the resilience and strategic value of our global platform. We have an earnings engine that is well diversified by risk and geography that continues to deliver substantial value as we saw this quarter with favorable performance from many of our key segments and businesses, including EMEA, Asia, U.S. Asset-Intensive and a modest profit in Australia. Included in our consolidated results for the quarter were total global COVID-19 related claim costs estimated at $140 million, which is at the low end of our model’s expected range, and approximately $30 million of favorable longevity experience. Of the $140 million claim costs, $100 million were in the U.S. individual mortality business, with the remaining $40 million spread amongst our other global businesses. Mortality performance in our U.S. individual business, excluding COVID-19, was better than our expectations this quarter, due to very favorable large claims experience. And outside the U.S., overall performance of our traditional business was better than expected even after including the impact of the pandemic. We will provide additional information on the pandemic later in the call. We completed several capital motivated transactions in the quarter, which while not requiring a significant amount of capital, will contribute to our future fee-based earnings. The transaction pipelines are active overall, and include opportunities in many of our regions, including North America, Europe, and Asia. We remain active and at work on transaction opportunities. Our approach to capital deployed during this crisis remains prudent, disciplined, and balanced. In summary, we are very pleased with the overall performance this quarter and with the continuing strength and resilience of our global business. As we look forward, COVID-19 remains both a global health and global economic crisis. And there may be more challenges to come as we move through the winter months. But there are also reasons for some optimism regarding improving treatments, and eventually, vaccines. At RGA, we remain focused on protecting our employees, serving our clients and supporting the industry and society. Our strong balance sheet and earnings engine give us confidence that we can manage through the next phase of the pandemic and emerge well positioned to take advantage of future opportunities. We are intent on doing what is necessary to continue to build on our strong track record of financial performance and in creating substantial long-term shareholder value. Thank you for your interest in RGA. And I hope you all continue to remain safe and well. Let me now turn it over to Todd to go over the detailed financial results.

Thanks, Anna. I will review the financial results, investments and RGA's capital and liquidity position. Beginning with consolidated premiums, we reported premium growth of approximately 1% as we continue to see some temporary slowdown as a result of the impact of the pandemic around the world, as well as a significant anticipated premium reduction in Australia. The effective tax rate on pre-tax adjusted operating income was 20.4% for the quarter, below the expected range of 23% to 24% due to the release of valuation allowances, base differences in foreign jurisdictions, and favorable adjustments from tax returns filed. Turning to the segment results listed on slides 6 and 7 of the earnings presentation. The U.S. and Latin America Traditional segment earned $22 million pre-tax. This we consider to be a very good result in light of the pandemic. Our individual mortality experience, excluding COVID-19, was favorable. Excess individual mortality claims totaled $60 million, including COVID-19 claims. Let me provide a little more detail. Approximately $100 million of claims are attributed to COVID-19. The approach used to attribute COVID-19 claims is consistent with that used in the second quarter. We had very favorable large claim experience of approximately $85 million, which helped to offset COVID-19 related claims. As we have discussed with you in the past, volatility is an inherent part of our business, and part of the value proposition of reinsurance, and this volatility goes in both directions. We also saw an elevated frequency of non-large claims in the quarter. This is consistent with CDC reporting of significant levels of excess deaths in the general population above specifically identified COVID-19 deaths. We believe a portion of which is likely related to COVID-19. Jonathan will provide an update on the pandemic shortly. Also in the U.S. Traditional segment, our individual health and group businesses in total were slightly ahead of our expectations. Our U.S. Asset-Intensive business reported a very good result, benefiting from favorable investment spreads in equity markets. U.S. Capital Solutions reported an increase in adjusted operating income resulting from new business growth. Moving to Canada, the Traditional segment results reflected modestly unfavorable claims experience primarily due to the impact from COVID-19. Our Financial Solutions segment performed well, reflecting favorable longevity experience in the quarter. In the Europe, Middle East and Africa segment, our Traditional business results reflected unfavorable mortality experience, primarily driven by COVID-19 claims in South Africa and the UK. EMEA's Financial Solutions business had a very good quarter, reflecting favorable longevity experience, the majority of which we believe is related to COVID-19. For our Asia Pacific Traditional business, Asia had a very favorable experience overall in most regions. COVID-19 related impacts were immaterial, reflecting some moderate benefit to our morbidity experience, offset by a moderate negative impact from our mortality experience. Australia had a modest profit as both individual long-term and disability income claims experience was better than projected. Our Asia Pacific Financial Solutions had another good quarter, benefiting from the growth of business in Asia. The Corporate and Other segment reported pre-tax adjusted operating loss of $37 million, more than the average run rate primarily from lower variable investment income and increased interest expense due to the June 2020 senior debt issuance. Moving on to investments, the non-spread portfolio yield ended the quarter at 3.66%. Variable investment income was below the average run rate, as realizations of alternative investment sales continued to be slower than in previous periods. Our increased cash levels put some downward pressure on yields as did lower new money rates. We believe our portfolio was defensively positioned coming into the crisis. Credit performance continues to benefit from diligent security selection, as well as economic reopening, policy responses and open markets. Our portfolio average quality of A was maintained, and credit impairments were modest in the quarter. As shown on Slide 10 of our presentation materials, our excess capital position at the end of the quarter increased to $1.5 billion, a robust level providing flexibility as we move through the winter months. Our strong business performance in the quarter absorbed the impact of COVID-19, funded our organic growth, furthered the dividend, and added to our net excess capital position. RGA's leverage ratios remain at comfortable levels following the second quarter senior debt issuance and our liquidity remains strong with cash and cash equivalents at $3.3 billion. Looking forward, we expect to see some level of ongoing COVID-19 impacts that will negatively affect our earnings until this crisis is resolved. However, we continue to view this as manageable and believe that our strong balance sheet, the power of our earnings engine, and the benefits of our globally diversified franchise, positions us to emerge from the pandemic in good shape to continue to produce attractive returns to our shareholders over time. I will now turn the call over to Jonathan Porter, our Global Chief Risk Officer, who will provide some thoughts and updates on COVID-19.

Thanks, Todd. I'll be reviewing three topics today: our Q3 COVID-19 model, how our Q2 COVID-19 impacts are tracking relative to updated cause of deaths reporting, and our longevity results relative to our model expectations. Starting first with the prior quarter. Recall that our Q2 COVID-19 claim cost estimates were based on specifically reported COVID-19 claims, adjusted to account for incomplete cause of death reporting as well as incurred but not reported claims. As Q2 cause of death information has continued to complete in Q3, results are tracking very nicely with this method. We've used the same methodology to arrive at the previously mentioned Q3 estimate of $140 million of pre-tax COVID-19 claim costs. Our COVID-19 estimates only include claim costs that we think will ultimately be reported with our COVID-19 cause of death. Turning to the current quarter. We continue to refine our model assumptions and projections based on data from both our own reinsurance book, as well as external sources. Our update this quarter resulted in some underlying pluses and minuses. But on balance, there is no change to our claim cost rules of thumb for our major markets. As Anna mentioned, our Q3 COVID-19 excess claim costs were at the lower end of our range this quarter. As a reminder, I will repeat the caveat provided in prior quarters: our model is based on a number of underlying assumptions reflecting our analysis of internal and external data as well as the application of expert judgments, and therefore, our estimates are subject to a range of uncertainty. I also wanted to provide some insight into our longevity experience this quarter relative to our model expectations. We've previously discussed our estimate of the potential offsetting impact from our longevity business of about 10% of our mortality claims, but with longer reporting delays. Our longevity results in Q3 were approximately $30 million pre-tax better than expected, which is in line with our model expectations. While cause of death information is not reported on our longevity business, we believe most of this experience is COVID-19 related. It is also important to keep in mind that our mortality business and longevity business do not have the same geographic concentration, and therefore, this offset relationship may change depending on country-specific COVID experience. Let me now hand it back to Todd.

Thank you, Jonathan. We'd now like to open it up for your questions.

And our first question today will come from Andrew Kligerman with Credit Suisse.

So it seems like you've seen a real heat up of these effectively reinsurance of annuity blocks, whether they're fixed annuities, indexed annuities, variable annuities. And I'm curious as to how RGA might play into that environment. Is that an area of interest to you? Or would it be something for Langhorne Re? And yes, that's the question.

Good morning, Andrew. Yes, we have been participating in those block transactions for a very long time. Our Asset-Intensive business includes both fixed annuities and asset-intensive longevity annuities. And we've also been active in the longevity swap markets around the globe. This isn't new for us. We've won our fair share of those transactions, those blocks that come to market. Perhaps I'll ask Alain to comment on what we're seeing in some of the underlying product lines and perhaps in some of the markets, Alain?

Sure, Andrew. Look, generally, I'd say, a healthy pipeline across all of our lines of business, whether it be longevity, Financial Solutions or Asset-Intensive as Anna alluded to. I think in terms of whether RGA or Langhorne Re, both are equipped to do those types of transactions. We typically have a size criteria in which we separate whether it'll go into RGA or Langhorne. But both are able to respond to those needs.

So do you think that something sizable could be imminent? Is your appetite a little bigger now?

Look, I think 'imminent' is always a difficult word. These transactions tend to be lumpy in and of themselves. Certainly, in this environment, there's potentially a little bit more lumpiness. But we're certainly active with both RGA and Langhorne. Clearly, we haven't closed the transaction yet in Langhorne, but it's not for lack of claims, it's not for lack of opportunity.

Got it. And then just a follow up. I mean...

Andrew, maybe I could just add a comment as well. I think we're well-positioned in those markets because for a couple of reasons, because we can support almost all the risks that are sitting on the clients’ balance sheet. So as mentioned earlier, fixed annuities, longevity, mortality, because we take both insurance risks and market risks. We're comfortable doing both. And I think that gives us a lot of flexibility. And then I think we're also well-positioned because of our differentiators. We're a strong, well-rated counterparty. We have a very good reputation for execution certainty. When we say that we're going to do something, we deliver to our clients. And we have very deep client relationships. That well helped us win business in the past. We've been at this for a number of decades. And I expect it will continue to help us win our fair share of these block transactions going forward. Sorry, I didn't mean to cut you off. I think you had a follow-up question.

Thank you for the follow-up. In APAC, the mortality rates were very favorable. Can you provide some insights on that and whether you believe Australia can maintain a breakeven status for the foreseeable future?

Yes. I'd love to say that we're going to call this a win in Australia. I still think it's too early. I'll ask Alain maybe to provide some comments on what we're seeing there.

Sure. Thanks, Anna. And then maybe I will call it a win in Australia. Just from the perspective, the industry obviously still has work to do to get through its issues. So you're still reading and hearing about some issues in Australia. Certainly, we've been very focused on managing our bottom line, sometimes at the expense of our top line. And so you'll see that we have seen premium come down in Australia. We've been certainly very active on portfolio and claims management, and I think we're seeing results from that. It's probably too early to claim that we're going to see this type of pattern continue and continue to improve, but we're still going to stay the course and continue to actively manage that bottom line. So certainly, very pleased with what we've seen so far and we're going to remain hard at work. In terms of Asia, a good quarter there as well. We've, I think, talked in the past about treaty reporting in Asia being a little bit lumpy. And so we have had good mortality and morbidity experience, but we've also probably been helped a little bit by some of the lumpiness in the reporting on the bottom line.

Next, we'll move to Humphrey Lee with Dowling & Partners.

Just about the non-COVID deaths in the U.S. I was wondering if you can provide any additional color in terms of the frequency portion versus the large claims portion, anything specific that you saw in the quarter?

In the recent quarter, we experienced a decline in both the number of large claims and their average size, which positively influenced our results. As Todd indicated earlier, short-term fluctuations are a natural part of our operations and can vary in both directions. It's encouraging to see a positive trend this quarter. While these fluctuations tend to balance out over time, they significantly contribute to the value of reinsurance. Regarding your question about the frequency of non-large claims, I'll turn it over to Jonathan to provide insights based on the CDC reporting and our operations.

Yes, thanks, Anna. This quarter, we analyzed our claims experience for smaller-sized policies and noted an increase in frequency. We believe this aligns with the data from the CDC that Anna referred to. So far this year, the CDC has reported around 80,000 excess deaths not attributed to COVID-19, with more than half occurring in Q3. When we compare these excess deaths to various metrics of our business, the experiences we observed this quarter are quite consistent with that. However, as Anna mentioned, we should expect some fluctuations in that number as well, so please keep that in mind.

Okay. Got it. As we consider the morbidity results for the quarter, Asia has shown some favorable experience. In the U.S., both individual health and group also appeared favorable. With the different economies reopening and some shutting down again, how should we view the utilization of health-related products in the fourth quarter?

Yes, you raised an excellent point. Year-to-date, we have observed positive overall trends in our global morbidity business. Some of this can likely be attributed to the reductions in people seeking diagnostic testing and medical visits. We experienced something similar during the SARS pandemic when people avoided hospitals and other medical appointments, and our morbidity experience remained positive during that time. Thus far, the short-term effects of the COVID pandemic on morbidity have been favorable. However, I would note that in the long term, we may encounter some negative health consequences for those who have survived COVID, especially the long haulers. It is currently challenging to estimate this, and it may be premature since even medical experts cannot confidently predict whether the health conditions observed will be permanent. We will certainly continue to monitor the situation closely. It's important to keep in mind that any negative long-term impacts on morbidity are likely to be less significant compared to our mortality impacts due to the nature and scope of our business.

Next, we'll move to Erik Bass with Autonomous Research.

A couple of quick follow ups. Just with your excess capital at $1.5 billion, it sounds like from your comments, you feel like you're in a position to put some of that to work if attractive opportunities emerge, particularly for block deals.

Yes. As I mentioned in my prepared remarks, our capital management through this crisis is really one of being prudent and cautious, but we are active at looking at transactions. And the attractive opportunities are something that we continue to pursue.

And then on the excess mortality and the CDC data, it sounds like some of this is certainly COVID related. But I guess, do you have any more sense of what's driving this? And is it all related to the pandemic? Or is some of that kind of the trend that we've seen a worsening kind of population mortality and something that could continue post the pandemic?

Yes. I'll maybe provide some brief comments, and then I'll ask Jonathan to weigh in. It's very hard to separate out the cause of all of those non-COVID-specific excess deaths that are being reported in the population. I don't think it's unreasonable to assume that some of them might be unreported COVID claims. There's a lot of inconsistency in the state-level reporting and the local-level reporting. Some may be indirectly linked to COVID. So think about people who are delaying visiting their doctor or delaying going to hospitals. So although they're being reported as excess non-COVID related, I would be cautious in interpreting that. Jonathan, is there anything else that you'd like to add?

Yes. Maybe I'll just talk about what we might expect to see. So yes, I mean, I agree, it's hard to determine what level of excess deaths will continue in the future. Yes, there definitely seems to be, and you can see this on the graph, I think, that we provided from the CDC, correlation between the level of COVID-denoted deaths and the excess deaths, which I think could lead you to the conclusion that some of these are definitely related to COVID. I think, as Anna said, it's likely in the short-term that we will continue to see, therefore, some excess deaths in the U.S. But we are looking at data in other countries, too. So we've seen, specifically, as an example, the UK, excess death has reversed post the large spikes in COVID mortality. So it's not clear, I guess, to what extent these may or may not continue in the future. But based on other countries' information, things have turned around.

And then Todd, just quickly, do you have an estimate of how much ongoing impact will be on the top line from the higher level of mortality claims? I would assume that does have some impact on premiums?

Sorry, Todd?

Yes. I think, look, in the near term, we'll see some impact on the top line as we go through this. I don't have a specific estimate of how much. Maybe that could be sort of hard to estimate.

Next, we'll go to Ryan Krueger with KBW.

When you provided the COVID sensitivity, did that account for any unreported COVID-related excess mortality that you're observing now, or is it strictly focused on COVID deaths?

As Jonathan mentioned in his prepared remarks, it is specific to deaths that are coded as COVID, and we estimate will eventually be coded as COVID, as cause of death complete. It does not include any of the excess frequency of what's being reported as non-COVID deaths. Jonathan, have I accurately described what we've included in our estimates?

Yes. Yes, that's exactly right, Anna. So as an example, the $100 million that we've attributed to COVID in the U.S. would just be looking at COVID reporting as opposed to including an amount for the excess deaths as well.

Is another way to think about it that COVID deaths seem to be trending towards the low end of the sensitivity? We're observing additional deaths that are not classified as COVID. But maybe when you combine those figures, it still falls within the range that you've provided?

Yes, I think it depends on what you use as the numerator in that calculation. If we include what we anticipate the excess claims will be due to these additional deaths, we would likely still be at the low end of the range. However, if you consider only the higher claims and focus solely on the COVID-reported deaths, then yes, you might see higher figures, but they would still remain within the range provided.

Okay. And then just one last one. Excess capital increased $300 million in the quarter, you had good earnings, obviously, but that seemed like a pretty big increase. Do you have any more color on what drove that?

Yes. Ryan, it actually increased by $100 million from $1.4 billion to $1.5 billion. It was primarily the earnings generation in the quarter, the net earnings in the quarter, less some deployment in the organic business growth. And then the amount of dividends we paid out.

And next we'll move to John Barnidge with Piper Sandler.

Now that you're a couple of quarters into this pandemic, how do you think about growth in terms of whether you're seeing any signs of a lasting increase in demand for life products, and additionally, whether primary life insurers are looking to use more reinsurance to reduce their exposure?

Yes. I think I'll turn that over to Alain to provide some comments on what we're seeing in the various markets around the globe.

Sure. Thanks, Anna. I think we're seeing companies report higher sales, which is expected given the slowdown during COVID. The key question is how much of this will continue once we get past the catch-up phase. There is hope in the industry that as digital services expand, we will see increased sales in the middle market, where people are beginning to recognize the need for insurance. I believe this trend may persist, but it's likely too early to determine definitively. Regarding the use of reinsurance, we have not observed significant changes recently in our reinsurance pools. I don't anticipate any major developments in that area either. We are seeing active transactions as companies manage their balance sheets, though there is some variability in that activity.

If I could add just one other thought. As economies recover, we would expect to see growth in some of the credit-based products that would naturally follow. And those are very popular products in many parts of Europe and the UK and would add maybe as travel morbidity comes back in Asia, we would expect sales of protection products in markets like Hong Kong to benefit. And finally, I see the potential for opportunities for growth opportunities on the organic side, around designing consumer products that are better suited for this globe and likely low and long interest rate environments, product opportunities for simple and affordable products for the consumer that better align with their needs and with their resources. So I think product innovation will accelerate as a result of the virus. And product innovation is something we're already doing, and we're very good at.

Next, we'll move to Dan Bergman with Citi.

I guess, first, could you provide a little more color on the unfavorable variable investment income in the quarter? Just kind of what were the key drivers and how much impacted Corporate versus the Other segments? And just given markets have been pretty volatile lately. So any updated thoughts on how that portion of investment income might trend into the fourth quarter and ahead?

Why don't I ask Todd to address the first part of your question regarding our experience in the third quarter? Then I will ask Leslie to share some insights on the future environment.

Yes, Dan. If you look at the third quarter and look at it sort of historical run rate for the variable investment income, which it does bounce around a little bit, we were probably approximately $14 million off pre-tax of that historical, more recent run rate. That helps put it a little bit in context for you. And that was primarily in the Traditional segment and some in Corporate.

Hey, Dan, this is Leslie. Thank you for that. Looking ahead, it's important to note that our underlying asset base which generates less favorable investment income is still present and is expected to deliver the returns we've historically seen over time. While it's challenging to predict in the short term, I believe that as our activity in those markets has resumed, we'll begin to see a return to our typical performance, hopefully by the fourth quarter.

And Dan, I just want to add one more point. We believe that most of the value is still intact. It’s primarily a timing issue. We account for most of these alternative investments on a cost basis, which means we only recognize income when we actually sell the underlying venture or property, rather than marking it to market each quarter. Therefore, we do see that most of the value remains, and it will mostly depend on timing.

I guess maybe just moving to Corporate. Just given all the recent moving pieces like the debt issuance and the impact of the pandemic on the expense level, things like that, I just wanted to see if you had any update on how we should be thinking about where that corporate loss might trend over the next couple of quarters?

Yes. We have been indicating, as you know, on average the $25 million loss range, which is still a pretty good place to start, and then maybe add in. Since we’ve raised the proceeds back in June, we haven't fully invested those longer term. So there is a little bit of a drag here from the interest expense on the debt. So it's going to be probably a little bit elevated the next couple of quarters or so, and then we'll provide you with better, more up-to-date guidance as we do every year in the early part of the next year.

And next, we hear from Brian Meredith with UBS.

This is Mike Ward on for Brian. So I appreciate the commentary about the potential for deploying capital into some block transactions going forward. But I was just curious, with your stock trading at about 20% discount to book value currently, just wondering if there are certain hurdles we need to cross with respect to COVID mortality or even the economy before you might consider resuming some of the repurchases?

We paused our share buyback program in the second quarter as we want to see more clarity and less uncertainty regarding the virus and the economy. Our focus will be on maintaining financial strength and flexibility over the next couple of quarters, particularly through the winter months. We will reevaluate share buybacks as part of our capital management strategy, considering specific opportunities, returns, and other uses of our capital, such as potential projects, dividends, and share repurchases. Our approach has successfully balanced reinvesting in the business and returning capital to shareholders through dividends and buybacks. We plan to continue this strategy, but we prefer to see a significant reduction in uncertainty and more clarity about the resolution of this crisis before moving forward.

That's really helpful. And then just a quick one on operating expenses or consolidated G&A. If I'm recalling correctly, I think lower expenses last quarter contributed about $0.50 to the quarter. This quarter, maybe it looks like it was a little bit around half of that. So just wondering if you could comment at all on your expectations going forward. Have there been opportunities you've taken maybe to keep some of those expense savings ongoing?

Todd, will you please...

In the second quarter, the impact of COVID led to significant adjustments in our incentive compensation, for both short-term and long-term programs. We also experienced savings in travel and entertainment costs. This quarter's savings were more closely tied to travel and entertainment costs, as well as savings from hiring new employees and some delays in project activities. It seems reasonable to expect that travel and entertainment expenses will remain lower in the coming quarters since travel has diminished. While we anticipate continued savings, they won't be as significant as what we experienced in the second quarter, and are likely to resemble what we saw this quarter.

And maybe longer term, it's not unreasonable to expect that some of those travel and entertainment costs will become permanent savings. I also think we're learning a lot in this virtual working environment, and we might see some improving cost footprint around our real estate. We're looking at all elements of our operating model. And I would expect that what we're seeing, some of that will come back, but other parts will remain permanent savings.

Yes. In this quarter, I would estimate the savings to be around $15 million. I'm not sure what figure you were referring to, but I would place it in the $15 million range, plus or minus.

And that will conclude the question-and-answer session. At this time, I would like to turn the call back over to Mr. Larson for any additional or closing remarks.

Okay. Thank you. Well, thank you, everyone, for your continued support and interest in RGA, and we'll conclude the call. Thank you very much.

And that will conclude today's call. We thank you for your participation.