Assured Guaranty Ltd.

Good morning and welcome to the Assured Guaranteed Limited Second Quarter 2023 Earnings Call. My name is Glen and I'll be the operator for today's call. All participants will be in a listen-only mode. So you'll need assistance. You need to signal a common specialist by pressing star then zero on the telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on the telephone keypad. With joy of question, please press star then two. Please note that this event is being recorded. I would now like to turn the comments call over to our host, Robert Tutka, Senior Managing Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator, and thank you all for joining Assured Guarantee for our second quarter 2023 Financial Results Conference call. Today's presentation is made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The presentation may contain forward-looking statements about our new business and credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, financial results, or other items that may affect our future results. These statements are subject to change due to new information or future events. Therefore, you should not place undue reliance on them as we do not undertake any obligation to publicly update or revise them except as required by law. If you're listening to a replay of this call or if you're reading the transcript of the call, please note that our statements made today may have been updated since this call. Please refer to the investor information section of our website for our most recent presentations and SEC filings, most current financial filings, and for the risk factors. This presentation also includes references to non-GAAP financial measures. We present the GAAP financial measures most directly comparable to the non-GAAP financial measures referenced in this presentation, along with a reconciliation between such GAAP and non-GAAP financial measures in our current financial supplement and equity investor presentation, which are on our website at assuredguarantee.com. Turning to the presentation, our speakers today are Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Limited, and Rob Valentin, our Chief Financial Officer. After their remarks, we will open the call to your questions. As the webcast is not enabled for Q&A, please dial into the call if you'd like to ask a question. I will now turn the call over to Dominic.

Thank you, Robert, and welcome to everyone joining today's call. At the halfway mark of 2023, Assured guarantees adjusted operating shareholders' equity per share and adjusted book value per share are at the highest levels in our history, $95.64 and $144.21, respectively. New business production for the first half remained strong, consistent with recent year's results. It was diversified across U.S. public finance, international infrastructure, and global structure finance. The first half PVP of $203 million is the second largest amount a total first half PVP since 2009, and the second time that first half PVP exceeded $200 million during that time period. In July, we completed our transaction with SoundPoint Capital Management involving Assured IM, and separately we sold Assured Healthcare Partners. I will discuss both transactions in a few minutes. For the first half of 2023, insured share of the insured primary municipal bond market was 63% up from 56% in the first half of 2022. We guaranteed 290 new issues totaling $9.8 billion of primary insured parcel. This part amount was fairly consistent with the first half of 2022 despite the total market part being down by approximately 14% in the first half of 2023 compared with the first half of 2022. Our secondary market par reading for the first half of the year was $280 million, bringing our total insured par sold to $10.1 billion in the primary and secondary markets. We continue to see higher demand for bond insurance than we did before the pandemic. First half 2023 insured market penetration of 9% was higher than the 8.8% in the first half of 2022, and significantly higher than the 5.9% of 2019's first half. Total insured penetration for the second quarter was 10.1% for the highest penetration rate since 2009. Additionally, market demand for bond insurance increased significantly in the second quarter of 2023, up 72% from the first quarter of 2023.

Assured guarantees saw an 86% increase in insured parts sold in the second quarter of 2023,

compared to the first quarter of 2023, insuring $6.4 billion in the second quarter of 2023, 28% higher than the same period last year. In the second quarter, we also continue to benefit from institutional investor demand for our insurance as we guarantee $4 billion of PAR on 13 transactions that each utilize $100 million or more of insured guarantees insurance. This brought the total number of such transactions during the first half of 2023 to 21 transactions for a total of $5.5 billion. International public finance produced $36 million of PVP during the first half of 2023, up from $30 million in the first half of 2022. Second quarter activity includes a guarantee on a UK regulated utility. And our pipeline of potential international public finance transactions includes a significant number of transactions that we consider likely to close later in 2023. Global structure finance direct PVP with the largest first half amount since 2009, producing $68 million of PVP. We continue to see opportunities with banks, insurance companies, pension funds, and asset-backed investor clients across sectors including corporate and fund finance. In July, S&P reaffirmed our AA financial strength rating with stable outlook for our financial guarantee companies, citing both our very strong financial risk profile a very strong business risk profile, and its annual review of Assured Guarantee. Its report describes many strengths supporting our AA ratings, including S&P's view that we have excellent capital and earnings with a meaningful capital adequacy buffer. You can read the entire report on our website at assuredguarantee.com. In July, we completed the transaction with SoundPoint Capital Management, in which we contributed substantially all of Assured IM, and we engaged them as the sole alternative credit manager for AGM and AGC, in return for a 30% interest in the combined entity. As we have said, we are highly optimistic about this new venture with SoundPoint Capital Management, and believe it will be immediately accreted to our bottom line. In July, Assured Guarantee sold all of its equity interest in Assured Healthcare Partners, LLC. Assured Guarantee will remain a strategic investor concern AHP managed funds while retaining its carried interest in existing AHP managed funds and has received other consideration. Regarding the Puerto Rico Electric Power Authority, PREPA, is our last remaining non-paying Puerto Rico exposure. As we have said all along, we remain committed to negotiating a fair and reasonable settlement that will protect and enforce our legal rights as bondholders through litigation and the Title III plan confirmation and appeal process as necessary. Given the uncertainty in this global economic environment, it's good to reflect on the proven resiliency of our company. In the first year of the pandemic, we saw investor appetite for bond insurance increase. That heightened interest has been maintained in development so far this year, continue to remind investors that the future is often volatile. We have succeeded through decades of economic cycles by delivering on our own commitments to reduce borrowing costs for issuers and protecting against shortfalls in investors' principal and interest payments, while proving our resilience for discipline, risk management, and responsible stewardship of capital. This resilience has positioned us to thrive as business and marketing conditions are creating more incentives for the use of financial guarantees. We believe that we have never been better prepared to serve our clients, protect our policyholders, and create value for our shareholders.

I'll now turn the call over to Rob. Thank you, Dominic, and good morning to everyone on the call. I am pleased to report second quarter 2023 adjusted operating income increased to $36 million or $0.60 per share from $30 million or $0.46 per share in the second quarter of 2022. In the second quarter of 2023, the largest components of adjusted operating income were the insurance segment, which contributed $106 million of adjusted operating income, and the corporate division, which had a net loss of $50 million In the comparable prior year period, the insurance segment generated income of $55 million, which was partially offset by the corporate division's net loss of $35 million. Higher investment income and fair value gains were the most significant contributors to the increase in insurance segment adjusted operating income. Net investment income increased by $24 million, which was driven mainly by higher short-term interest rates and average balances. We also had fair value gains on Puerto Rico contingent value instruments of $40 million in the second quarter of 2023, compared with losses of $18 million in the prior year. And lastly, we had a fair value gain of $5 million on our alternative investments in the second quarter of 2023, compared with a loss of $34 million in the second quarter of 2022. As of June 30th, 2023, the fair value of investments in Assured IM funds was $350 million. Inception to date, the annualized return on the Assured IM funds was 10.1%, which is in line with our long-term expectation for these investments. These Assured IM funds will now be managed by SoundPoint or Assured Healthcare Partners. We will remain strategic investors in these funds and will commit additional amounts to SoundPoint as the alternative investment manager our U.S. insurance subsidiaries. Net-earned premiums and credit derivative revenues increased $88 million in the second quarter of 2023 from $86 million in the second quarter of 2022. Deferred premium revenue remained steady at approximately $3.7 billion. Accelerations were under $10 billion in the second quarter of 2023 and 2022. As refunding activity remains muted, due to the higher industry rate environment. Lost expense in the second quarter of 2023 was $44 million, and economic loss development was $49 million, mainly due to increases in reserves for certain Puerto Rico exposures. On the insurance regulatory front, I'm happy to report that New York and Maryland successfully completed their five-year joint examinations of AGM and AGC, how two U.S. insurers, and issued clean examination reports with no adverse findings or adjustments. The AGM and AGC examination reports are publicly available on the New York and Maryland regulators' websites. The results of Assured IM were reported in the asset management segment and were about to break even in the second quarters of both 2023 and 2022. In July 2023, Assured IM, excluding AHP, was contributed to SoundPoint in exchange for an equity interest in the combined SoundPoint Assured IM entity, and our entire equity interest in AHP was sold to an entity owned by its managing partner. The transformation of our asset management business from fully integrated subsidiaries to a minority stake in a larger SoundPoint Assured IM combined entity is expected to be accretive to future earnings and provides a stream of income based on asset management fees and will also provide a wider array of alternative investment opportunities. Going forward, our investment in SoundPoint will be accounted for under the equity method, which will simplify the presentation of the asset management results. We are also in the process of evaluating all the consolidation conclusions for the Assured IM, CLOs, and funds as a result of the SoundPoint and AHP transactions, and we expect that we will be able to deconsolidate some of these entities. The resulting changes will be reflected in third quarter financial statements. Expenses associated with the SoundPoint and AHP transactions were $24 million in the second quarter of 2023. This was the primary driver of the increase in corporate division adjusted operating loss, which is where most of these expenses were reflected. Adjusted operating income includes the effect of consolidating VIEs, which was a loss of $18 million in the second quarter of 2023, compared with a gain of $10 million in the second quarter of 2022. A net effect of VIE consolidation is primarily a function of changes in fair value of these entities and insurance losses and benefits associated with the FGVIEs, including the Puerto Rico trusts. In addition to advancing our key objectives in asset management and alternative investments with the SoundPoint and AHP transactions, we continue to focus on our other long-term strategic initiatives to grow the company and enhance shareholder value. In the insurance segment, we have had diversified sources of new and assumed business, which are accretive to key book value metrics. And on the loss mitigation front, we continue to maximize our economic benefit by strategically selling the recovery bonds we received last year as part of the resolution of the majority of our Puerto Rico insured exposures. As of the end of last week, we had sold approximately 99% of the recovery bonds in the investment portfolio and 34% of the contingent of the CBIs. Based on our fair value, we have approximately $14 million in recovery bonds and $340 million in CBIs remaining in our investment portfolio. With respect to our capital management strategic initiative, We resumed the share repurchase program in the second quarter. We currently have $158 million of remaining authorization. In addition, our UK subsidiary paid a dividend of 100 million pounds or $127 million to AGM. And we have a capital plan to distribute additional excess capital from our UK subsidiaries over the next two years. This year's UK dividend provided $100 million in additional AGM dividend capacity in 2023. At the holding company level, we currently have cash and investments of approximately $90 million, of which $43 million resides in AGL. These funds are available for debt service and corporate operating expenses or for the use in the pursuit of our strategic initiatives, including potentially redeeming debt and or repurchasing shares to manage our capital. Adjusted operating shareholders' equity and adjusted book value per share reached new records of over $95 and $145, respectively, due to positive adjusted operating income and strong new business production results for the quarter, demonstrating the value of all of our initiatives. I'll now turn the call over to the operator to give you the instructions for the Q&A period. Thank you.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on the headphone keypad. To withdraw your questions, please press star, then 2. If you are using a speakerphone, please pick up your headset before pressing the keys. At this time, we will pause momentarily to assemble our rooster. With our first question comes from Tommy McJoint from KPW. Tommy, your line is now open.

good morning guys thanks for taking my questions um so i'll start off uh with the big question uh now that new york and maryland audits are complete with with clean bills um can you talk about the next steps toward uh requesting special dividends that have been mentioned before and are there kind of in-process plans to sort of seek out specials from various subsidiaries or are you just targeting just agm or just a agc can you just kind of walk through how that works to

So with the clean audits now, Tommy, we're able to proceed with these requests for special dividends, which we plan on doing. We'll do it to any company that has excess capital. As you've seen, we paid the dividend from the AGUK subsidiary, so we have the same plan for the other subsidiaries as we look at their capital positions. And now with the audit behind us, we're now cleared to do that.

We plan to do that within this next second half of the year.

Okay, got it. And when we think about the residual amount of capital that's, you know, inflowing that might be available for buybacks or potentially the debt redemption, just coming out of the insurance subsidiaries, what are the annualized cash expenses at the holdco level? Like, I guess, interest, dividends, corporate expenses, and then it's kind of like a minimum liquidity buffer that you like?

Yeah, that's exactly right. If you look at PAGE, it's an The presentation, Robert. The equity presentation. The equity presentation. It has a short guarantee overview, Tommy. In there, we say that we have annual net expenses of $50 million, annual dividend distributions of $66 million, and annual debt service of $82 million. So if you add all that up, those are the... uses of funds for the holding company.

And any minimum liquidity buffer? You talked about having 90 on hand right now.

Yeah, we generally keep that. That's generally what we keep as our liquidity buffer. It's generally six months worth of debt service.

Okay, got it. And then just lastly, some debt due next year that you guys have have talked about potentially redeeming. Can you walk through some of the puts and takes about how you're thinking about your existing debt to capital leverage right now, how comfortable your rating agencies are with that threshold and kind of why you might consider redeeming it?

We're actually constantly evaluating whether or not we should redeem it, whether or not we should refinance it. And it all depends on whether or not we feel that it's appropriate. If we want to go and refinance it, it's all about price, execution. If we think it's more appropriate to redeem, then we'll go redeem. But right now, if we could refinance at appropriate rates, then we would want to do that. But we have a number of quarters before we have to evaluate that.

Got it. Thank you. Thank you.

We have our next question. It comes from Brian Meredith from UBS.

Yeah, thanks. I'm wondering if you could dive a little bit into the Puerto Rico loss development, kind of what happened there, and maybe if you can just kind of frame, you know, what's the potential additional Puerto Rico loss? I mean, there's going to be a cap, obviously, to what's your debt services on prep and stuff.

Brian, like we've always said in the past, we have to react to any new information on any exposure that we've got that we believe has the probability of a claim. So, obviously, there's been some new information on PREPA. We have to update our scenarios. We have to then adjust our probabilities and look at what the reserve change is going to be. Obviously, PREPA, you know, the offers currently on the table are insulting to say the least. So, obviously, our view is litigation is the path that we're going to take, and there's been nothing that changes my mind that I've seen so far in the marketplace. So we just go along with the information provided to us and adjust our models accordingly. But my view is that this is a litigation situation anyway.

Is the law solely just the additional reserves solely PREPA related?

Predominantly PREPA. Predominantly. Okay.

Great. And then a second question. I'm just curious. I read through the S&P report and maybe I just missed it. But is there a kind of capital buffer over and above the AAA level that you all have now?

Of course. If I keep that capital buffer above the AAA, I think the last number we gave you was in the $1.6 or $8 billion number. $1.8 now. Remember, S&P notches us down. Even though we're at $1.8 capital at AAA, they still only call us the AA company, which is beyond insulting as well.

Gotcha. All right. Thanks, all. Appreciate it.

Thank you.

Thank you. Our next question comes from Jeffrey from Downing and Partners. Jeffrey, your line is now open.

Thanks. Good morning. Good morning, Jeff. Rob, I think you mentioned, or Dominic, that you would request special dividends from any company with excess capital. how do you think about true excess capital uh now that the business is growing again um and the fact that you know you're you're being held to a triple a capital standard as a double a company um i have to imagine that that 1.8 billion buffer is not necessarily all excess and i want to say we go back 20 years ago triple a companies might have retained 5 800 million cushion Is that the right way to think of what is true excess capital across the companies, or is there a different framework to consider?

Remember, we've got a lot of regulators in our business, so not only do you look at S&P, but you also have to look at the states, have to look at the other agencies. But I think the excess capital position of the S&P number is a fairly good number, and growth by and large itself will not significantly impact that. You remember, as we write business, we get the benefit of the on our premium reserve as part of the capital calculation. So the business is not that dilutive to capital excess. And I think we'd lose about maybe 12 to 20% of the PVP would be of the business written in terms of additional capital. So it's not a big number. So to get excess capital, like I said, you have to go through all the measurements by all the entities. There are different hurdles that you have to meet. There are different buckets that get counted. So we look at all companies and go through the entire process of evaluating those criteria to see what excess capital, you know, we have and therefore what can be divvied out to help us do the capital management program that we've been implementing.

And that'll be part of the discussion with the regulator. So, you know, we start with, Jeff, with the 1.8. We want to keep a cushion of a number based upon what we believe is appropriate. And, you know, in years past, the number would have been higher because of the volatility of Puerto Rico. And now maybe we can lower that buffer as such. But you never want to be in a situation where you actually, you know, you jeopardize ever, you know, a downgrade can put you in a situation where you drop below that AAA level. So a cushion is, we're going to always keep a conservative cushion.

Okay. And then, obviously, the excess capital has been a challenge to the ROE. And I'm wondering, your previous target for buyback was $500 million annually supported by specials. And that was... picking away at that excess capital issue, does the clearing of the five-year audit allow you to consider being more aggressive with trying to correct the size of the company and right-size that ROE, or is it more of a long-measured race?

I think it's kind of a combination of both, Jeff. We will continue to evaluate what's the best course of action to take, and if we see the opportunity to accelerate, we can still meet all the requirements that we have relative to the regulation and rating agency will do that. Obviously, where the stock trades versus where the book value are is a huge advantage for us in terms of accretion to the bottom line, accretion to the book value numbers, et cetera. So we look for every opportunity to accelerate if we can. We've been following that process for a lot of years. We've gotten to where we've gotten. We've seen what the results have been. Now it's time to really put the rest of the strategic plan together and really correct the company as we now clear the audit. I have Puerto Rico basically behind us in the rear view mirror. We've got good growth opportunities across all of our business units. We've got an asset management now. It's functioning profitably. So I think we're in a great position to do exactly that.

Okay. And then my last question. I'm sorry.

I just wanted to just emphasize what Dominic just said at the end. Everyone should focus on the fact that we had an asset manager that was basically zero, break even, right around that. And now we've combined with sampling that is profitable and will be accretive day one. So that's a significant part of our growth opportunity.

Okay. And then my last question is, you had some migration on your BIG list. It looks like one credit in particular went from one to two. Can you elaborate on what is occurring with that healthcare exposure?

Yeah, as we talked about, we've seen some stress in the healthcare marketplace, and there we looked at our healthcare credits and take appropriate actions where we saw fit. remember most of those credits are still highly protected and therefore we've got opportunities from workouts other you know measures that we take to save the credit or if you result in the payment but we've got to be mindful of how we look at our internal ratings okay thanks thank you

Our next question comes from Jordan Helmuth from Philadelphia Management. Jordan, your line is now open.

Hey, guys. A couple of different questions. One on page 38. For a lot of the past decade, there's been the story that AGO is a melting ice cube. In page 38, this is the first time that the PVP has actually increased. Could you say emphatically at this point that the declines will have stopped given the strong production and the company is growing again?

Well, we think the opportunity for growth is as good as it's been over the last number of years, and we're optimistic about what the year looks like and what next year looks like. So, the interim reserve is growing. PVP is getting higher.

So, as you point out, I'm not going to say emphatically and absolutely nobody can say that I don't have that kind of power or that crystal ball.

At the end of the day, we're as optimistic as we've ever been relative to the market opportunities that we see across all of our business units. As Rob mentioned, we also have a functioning asset management division as well that will create opportunities for both the insurance and investment side.

And Jordan, we're seeing on financial guarantee the great pipelines in U.S. public finance, global structured infrastructure, global structured finance, and international infrastructure. All of our three three legs in financial guarantee business, we have very strong pipelines.

And in addition to growing again after years of shrinking the flat, if you look at page 48, you're below investment-grade percentage is the lowest level it's been in over a decade at this point. So not only are you growing in with better credit quality, that alone should give the regulators more confidence than not less confidence to improve a buyback or a special dividend. Is that a reasonable way to think about that?

I think everything is reasonable in today's marketplace, including blood, investment grade, Puerto Rico, growth opportunities. The other noise in the company ought to be basically dealt with, the audit dealt with, et cetera. However, I'm getting a little sensitive to the melting ice cube or the continued rundown of the business. Remember, we were one company that bought four and a half other companies. We had five and a half other companies earning business to a highly redemptive market for, you know, early redeems. That caused earnings to spike. We've been running consistently good business over a number of years, but because we've had five and a half companies that are on our premium reserve, it looks like we were declining. But we couldn't have written in business any faster than we did. And that offset of five and a half companies earning and one company writing in the depressed market, it's caused a drop in the volumes in terms of our premium, but not our premium reserve. But I think, as you've said, you've kind of corrected the ship now. And now that most of that has run off or been redeemed, it's now time to start focusing on growth across all of our business units.

And the final question is, you know, given the delayed or back-end part of the buyback, you weren't sure if you could hit the 300 base, much less the 500 buyback. Without commenting on what you will or won't do, do you think you have, with the special dividend from the UK, the capacity to at least do the $300 million this year?

We can't comment on that, but remember, everything's predicated on special dividends. And we're one down, two to go.

But if with the one down, do you have the capacity to do the $300 million?

Like I said, do the math. We won't publicly state that or not.

I mean, we did, obviously, you know, we got the $100 million. I said in my commentary that it helps It increased our dividend capacity by 100 million. So if we are, and we are going to look for a special dividend.

Okay, thank you.

Thank you.

Thank you. With our last question comes from . Your line is now open.

Thank you. Congrats on this great performance again. One thing I'd be curious about is maybe following up on Jordan's train of thought. It looks like you're, as of right now, you're given to pass in the back half of the year for the balance of 23 came up by $7.87 or $7 million or $7.5 million ballpark AGM. And there's also an increase in OG RE. So you're up about $100 million there for the back half of the year versus where you were last quarter. And you also had kind of a back half weighted schedule. Is it fair to think about, you know, you're deploying, you know, a little bit more in the back half plus 500 million that you're getting before thinking about the settled dividends from potentially AGM or AGC? Is that a good way to think about like, think about your buyback capacity or how that could, you know, at least scale up based on what we know today?

It's a way to think about it, Giuliano, and obviously we said it was backed and weighted, and we've got a lot of other plans and especially special dividend requests from the U.S. regulators that will significantly enhance that. But remember, you also have the volume issue in terms of how much stock you can buy back on any given day. So we might actually run out of what we can buy back relative to the trading base volume. That could be a problem. But, you know, we expect to have significant funds to be able to look at capital management. as one of our key strategic objectives.

And when we were saying it back-end loaded, we would take into account that we were expecting to get this dividend from the UK subsidiary. That's why it was back-end loaded. And down to a really important point, you know, you get this towards the end of the year, you know, based on you can only buy back a certain, based on your volume, what you trade during the day. So the good news is if we get it, it's going to help us going forward with our capital management program. It just might bleed into the next year.

Yeah, that's very helpful. Then thinking about special dividends, I realize that there's probably no perfect timeline to think about, but I'm curious when you think about making requests for special dividends, is that usually a relatively quick turnaround in terms of weeks or a few months, or can it stretch out over a few quarters?

Well, time is of the essence, so we're going to try to put as much pressure as we possibly can. As you said, as Luke said, doing the audit was the real criteria, and then getting a clean audit opinion with no adjustments proposed, I think, gives us an opportunity to really take advantage of that strong audit result. And, of course, the excess capital position and the company's position with the regulators anyway, I think we're in good shape relative to getting a special request. And, obviously, time is of the essence in getting it into the states.

And remember, we're going to do our best to put a plan in place. Hopefully, we do have to deal with the regulator and their schedules. So we can only control what we put in front of them.

That's very helpful. Then one last one is around new business.

It looks like you did a decent reinsurance transaction in the quarter. I'd be curious about two things. Is there a good pipeline of reinsurance opportunities similar to that or that resemble that reinsurance transaction out there? And also, I'm just curious about thinking about the cadence of new business. It seems like it's picking up and I'd be curious to know. I thought about the pipelines. Do you think it's going to continue to show up? I realize it's not going to be perfectly linear on a quarter to quarter basis.

Well, we continue to look for opportunities across all of our markets, both direct and reinsurance business. And that doesn't change. Obviously, it goes to our underwriting standards before we accept a piece of business. And that's the philosophy. And we'll continue to follow that. If there's business out there on both either the reinsurance side or the direct side, we're more than happy to entertain it. But as we talked about, our direct business pipelines are very, very strong. who are very optimistic about the rest of the year in terms of what we're able to achieve from a PVP point of view, driving that on our premium reserve higher and higher.

That's great. I really appreciate the time and the questions, and I will jump back into the queue.

Thank you. Thank you, Julian.

Thank you. This concludes the question and answer session. I would now like to turn the conference back over to our host, Robert Tucker, for closing remarks.

Thank you, operator. I'd like to thank everyone for joining us on today's call. If you have additional questions, please feel free to give us a call. Thank you very much.

Thank you. This concludes today's conference call. Thank you all for attending. You may now disconnect the lines. Have a great day.