BROOKFIELD ASSET MANAGEMENT LTD

TSX:BAM

Earnings Call Transcript 2018-Q4

[Operator]

Good day, ladies and gentlemen. And welcome to the 2018 Year-End Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host for today's, Suzanne Fleming, Managing Partner, Branding & Communications. You may begin.

[Suzanne Fleming, Managing Partner, Branding & Communications]

Thank you, operator, and good morning, everyone. Welcome to Brookfield's 2018 year-end conference call.

On the call today are Bruce Flatt, our Chief Executive Officer; and Brian Lawson, our Chief Financial Officer; as well Leo van den Thillart, Head of Client Relationship Management.

Brian will start off by discussing the highlights of our financial and operating results for the quarter and Leo will then give an update on fundraising. And finally, Bruce will give an update on the business. After our formal comments, we'll turn the call over to the operator and take analysts questions.

In order to accommodate all those who want to ask questions, we ask that you refrain from asking multiple questions at one time in order to provide an opportunity for others in the queue. We'll be happy to respond to additional questions later in the call time permitting.

I'd like to remind you that in responding to questions and in talking about new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities laws. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events may differ materially from such statements. For further information on these risks and their potential impacts on our Company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website.

And now, I'll turn the call over to Brian.

[Brian Lawson, Chief Financial Officer]

Thank you, Suzanne, and good morning to all of you on the call. So let me start out by saying that we're very pleased with the results for 2018. We achieved record net income and record FFO for the year. We also had a record fundraising year closing $26 billion of private fund capital as we continue to raise capital across our three flagship fund strategies, and also added capital to our newer, long life fund strategies.

Net income was $7.5 billion for the year and funds from operations or FFO totaled $4.4 billion for the year. The FFO result represents a 16% increase over last year. And in fact, it would have been an additional $0.11 higher if not for the impact of year-end volatility on our financial assets. And much of this is already reverse with the market recovery in the first quarter.

So turning to our asset management results first. Fee related earnings increased by 26% to $1.1 billion for the year. This is due to growth in fee bearing capital, which now stands at $138 billion, as well as strong performance fees.

We generated $661 million of unrealized carried interest before costs that reflects continued favorable investment performance within the private funds. And, in fact, we booked - we also booked $254 million of this carry and recorded in our FFO as realize, because we felt there was no longer any meaningful receive claw back. So this was driven by some of the carry that just built up in our first flagship real estate fund and our fourth flagship private equity fund, and both of these recognized carry for the first time. In each case, we've now returned 100% of the capital originally invested in these funds along with the preferred return to our investors.

Looking forward, we expect to earn additional carried interest in 2019 from both of these funds and more generally expected realize carry could reach nearly $1 billion in 2019 across all funds.

So turning to invested capital. Excluding disposition gains, FFO from invested capital for the year increased to $1.6 billion. In particular, we benefited from the contributions from acquisitions made across our businesses over the past two years, but we also had strong organic growth across the portfolio, notably in our private equity business as a result of improved pricing within our industrial operations.

We monetize several investments across the portfolio in 2018, including the reasons to have an Australian energy company in a private equity business, and a logistic business within our North American real estate operations. These gains contributed towards the $1.5 billion of realized disposition gains recorded including FFO and also impacted carry.

At year end, we had approximately $35 billion of deployable capital, and this should grow as we continue to raise capital across flagship and other strategies. Our capitalization also remains very strong with a low debt to cap level, an elevated levels of cash in undrawn lines.

Cash flow and distribution - available for distribution reinvestment was $2.3 billion for the year at BAM itself and that's a 27% increase over 2017. The asset management franchise generated over $1.3 billion as recent fundraising drove growth and fee related earnings and the invested capital generated $1.7 billion in distributions, reflecting strong growth, underlying growth in FFO per unit. And we expect us to continue to increase in 2019 as all of our - as are listed partnerships announced 2019 distribution increases in line with the 5% and 9% target ranges.

So finally, I'm pleased to confirm that our Board of Directors has declared to $0.16 per share a quarterly dividend payable at the end of February or at the end of March and this represents a 7% increase over the prior year.

And with that, I will hand the call over to Leo, who is going to provide an update on fundraising.

[Leo van den Thillart, Head of Client Relationship Management]

Thank you, Brian. Thanks, Brian, and good morning, everyone calling in. I'm pleased to have this opportunity to give you an update on our fundraising activities, both reflecting on 2018 and looking forward to 2019 and beyond. Let me start by saying that excellence in investor service is one of the key priorities of our clients' service group and everyone at Brookfield. We work hard to ensure that we have the right people on the ground servicing our investors.

Today we have a large established team of relationship managers overseeing our private fund investors that now totals about 50. These professionals are spread around the globe in key markets to help address investor needs in real time. We've also recently expanded our team to include 10 relationship managers dedicated to working with our high net worth investors and new private wealth channel.

In terms of our fundraising activities, 2018 was our most successful fundraising year yet with 26 billion of capital raised into our funds. We launched to successor flagship funds, one in private equity and one in infrastructure. And just a couple of weeks ago, we closed fundraise for our third flagship real estate fund. We also continue to raise capital for several long life perpetual funds and credit products, which I'll talk about in a moment.

Looking at our flagship funds, earlier this year, as I mentioned, we closed on our largest real estate flagship fund to date as rep three at 15 billion, which is 50% larger than our original target of 10 billion and is the second largest real estate fund ever raised. For this fund, we also raised more capital from high net worth investors than ever before, they represented almost 10% of capital raised.

Last March, we launched our fifth private equity flagship fund and have raised over 7 billion to date and are pleased that over 80% of investors have recommitted from its predecessor fund. Last fall, we also launched our fourth flagship infrastructure fund, which we expect will be significantly larger than our existing 14 billion funds. In addition, for the first time, we've also created a dedicated renewable power sleeve, which means that investors in that fund can increase their investments in renewables.

Beyond our flagship funds, we continue to diversify our product offering through scaling existing fund strategies and launching new ones. We now have four long life perpetual funds, sometimes referred to as open end as they're always open to receive new capital from investors. These include a diversified U.S. real estate fund and a U.S. real estate, senior mezzanine and lending fund. Both were launched a few years ago and are getting solid traction in the market.

Last year, we also launched a long life perpetual global infrastructure fund, which had its first close in December at approximately 1 billion. We also launched and had a first close of a diversified Australian real estate fund. These long life products appeal to investors who are seeking exposure to fixed income like predictable cash flows, lower volatility and a preference for longer duration investment exposure. We see these strategies as a huge growth opportunity for the firm and believe they can scale to become very large in the mid to longer term. These products appeal to a broader group of investors that we believe enabling us to further diversify our investor base.

We also continue to grow our private credit business, which has historically been focused on real estate. In the last couple of years, we've expanded into other asset classes that we know well like infrastructure, where we now have funds dedicated to infrastructure loans.

Beyond our long life, perpetual offerings and credit funds, we continue to explore new opportunities where we see strong investor demand, and importantly, an alignment with our core competencies. One such example is our special opportunities program, which is designed to deploy capital into equity credit and hybrid transactions that don't otherwise fit within our traditional fund mandates. We see compelling investment opportunities for this strategy and significant long term growth potential, as many of our investors are increasingly looking for access to bespoke programs like this.

Turning now to our investor base. It remains largely institutional and as well diversified across sovereign wealth funds, public and private pensions, endowments and foundations and financial and insurance companies. We have a substantial investor base - excuse me - we have a substantial investor base in North America with large amounts of capital also coming from Asia, the Middle East and Europe. Over the last three years, we have grown our investor base by 75% and it now totals over 600 investors. Continued diversification growth of our investor base remains a key priority for us.

On that point, another area of focus has been the private wealth channel, which represented 10% of capital raised in 2018. In this channel, we work with banks, registered investment advisors, independent wealth managers, as well as direct ultra-high net worth investors and family offices. We are excited about this channel and the momentum we have going into 2019. To highlight, we raised almost 2 billion of capital from the private wealth channel and our latest flagship real estate fund.

Looking ahead to 2019, we see potential for another year of robust fundraising across our products. We also see a continuing trend of investors pooling capital into larger asset managers and we think that Brookfield will be a beneficiary of this continued consolidation.

In summary, our main focus continues to be providing excellence and investor service and outstanding investment returns. In terms of product offerings, our focus is twofold. First, to continue to raise flagship funds that provide attractive risk adjusted returns for our investors. And second, to continue to expand the diversity and breadth of our product offerings in areas like our long life funds and special opportunity program.

With that, I'll turn the call over to Bruce. Thank you.

[Bruce Flatt, Chief Executive Officer]

Good day, everyone, and thank you, Leo. 2018 was a strong year in the global economy with considerable political drama. And towards the end of the year, as a result of that a lot of stock market volatility. But behind that volatility, most companies reported good results and as Brian noted, ours were no exception.

Assets under management for the overall business are now over $350 billion. And during 2018 in aggregate, we committed $35 billion into a number of opportunities for investment globally, including an $11 billion portfolio of office and residential properties in four premier U.S. market, a carve out of a global battery maker for vehicles, the purchase of Westinghouse Electric Company, the take private of Saeta Yield - and the take private of Saeta Yield the portfolio of 1,000 megawatts in wind and solar facilities in Spain.

Each one of these acquisitions is quite different, but they all have one or more of the following in common. They are large in size and therefore we found and find that the competition was limited. They are diverse in nature, so many market participants cannot work on these transactions due to their limited global reach. Thirdly, they require significant operational enhancements to generate the value that creates the outsize returns that we want and need. This is where our 100,000 operating team members come in.

We're also active on dispositions in 2018. In total, we sold $14 billion of more mature assets, including a large U.S. logistics business and Australian based oil and gas company. Virtually, all of these were sold at exceptional returns. Today, we have approximately $35 billion of deployable capital for activities and this amount of money should grow as we continue to raise capital, as Leo was mentioning across our flagship and other strategies.

Turning to economic fundamentals. They generally remain strong globally as we observe across all of our businesses. In specific markets, and I'll mention a few, the U.S. economy while slowing from the pace of '17, early '18 continues to be strong with interest rates still at historically low levels and we expect that to continue. Economic momentum in Europe has been slow for a while, due to - and certainly over Brexit, Italian issues and long term structural components of the market. We expect activity to be better once the outlook on Brexit becomes clear. But in the meantime, we always find select opportunities to deploy capital.

South American markets where we invest have been recovering nicely with Brazil the slowest. But Brazil is now set to recover than a new government is in place. We will continue to make tuck-in acquisitions around our businesses, and monetize investment as the currencies and economies recover.

Asia continues to increase its importance in the global economy. And while trade issues are disruptive, possibly and are so in the short term and growth is slowing, due to large numbers, these countries are extremely important to the investment markets globally and we will continue to judiciously increase our investments in India, China, Japan and South Korea.

Market volatility in late 2018, as Brian mentioned, had an impact on many of the investments we own that are publicly listed, but most of that performance has recovered in the last month. We have often asked by investors, which Brookfield stock they should own BAM or one of our four listed partnerships. We describe each in our recent letter to shareholders and believe that each has a spot in a diversified portfolio of investments. Because while each carries the Brookfield brand and owns and operates high quality businesses, each one is distinctly different and has a specific goal of being best-in-class in their specific area of expertise, asset management, real estate, renewable power, infrastructure or private equity.

Of course, BAM is a significant owner of each of these listed partnerships benefiting from their cash flows and value creation, but is focused and driven today and increasingly in the future by our asset management business.

While each of these five securities is different, they are all investments that we expect will generate significant value creation over the longer term. And like our private institutional clients, who invest with us across our suite of private funds, these partnerships are designed to do the same for listed securities investors.

I'd sum it up by saying pick one, pick all five, but rest assured, we will work hard to make them all great investments.

Operator, that completes my remarks and I'll turn the call back to you for any questions there may be from the lines.

[Operator]

Thank you. [Operator Instructions] Our first question comes from Cherilyn Radbourne of TD Securities. Your line is now open.

[Cherilyn Radbourne, TD Securities]

Thanks very much, and good morning. First, with regards to the latest property fund, just wondering if you can speak to the level of institutional versus high net worth demand and how you think about allocating the funds to those two client groups relative to a hard cap and the fund size?

[Brian Lawson, Chief Financial Officer]

Thank you for the question. So we see demand or demand for that fund about a 90 to 10 split, 90 across institutional investors and about 10% from the private wealth channel as I mentioned. In terms of sizing and predicting that, we do a little bit of advance work with the various partners that we have and try to anticipate that and so we can size it appropriately.

[Cherilyn Radbourne, TD Securities]

Great. And then separately, I was wondering, Bruce, if you could expand a little bit more on your view of the new administration in Brazil? And what do you think that capital flows into the country have recovered to the point where there might be an opportunity to monetize some of the investments that you made close to the bottom of the recent cycle?

[Bruce Flatt, Chief Executive Officer]

So, thanks for the question. I just say that foreign direct investment has started to go into Brazil but it hasn't really recovered to any major extent. I think that you will see it start over the next while as more positive things come build in the country, pension reform getting voted through in a number of the economic things that are done by the government and the appointments that have been made.

So I don't think you've seen that happen yet, but it will occur overtime. And as a result of that, when I say well use the markets to monetize or bring some capital out of the country from our investment period, I'd say that's not in probably in 2019, but it will be at some point thereafter. Specifically related to the country, we've always said it was a good country to invest in. We found the rule of law and other things in the country to be within the standards we operate and we've always done very well there. I would just say that, I think having a government in place that can make forward looking decisions compared to where we've been over the last couple years is highly positive. And I think most business people in Brazil and that are looking at Brazil are energized and reinvigorated by that situation.

[Cherilyn Radbourne, TD Securities]

Thank you. That's my two.

[Operator]

Thank you. And our next question comes from Dean Wilkinson of CIBC. Your line is now open.

[Dean Wilkinson, CIBC]

Thanks. Good morning, everyone. Bruce, in your comment on the market environment, looking out you made the observation which we generally agree with it. We're likely to see a recession at some point in next few years and certainly that's what the bond yields are indicating to us. So against that and given $34 billion of liquidity and what could be another banner year of fundraising, are you happy to sort of take the foot off the accelerator, a bit on acquisitions and let the puck come to you or how are you thinking about that in the context of what could be a slowing environment?

[Bruce Flatt, Chief Executive Officer]

Yeah. So I would just say our business is about investing capital but there are times when you should I guess we try to take macro, look at the macro environment. There are times when you should heavy up investment because anything that you can buy probably will be successful. And I would suggest 2009 was one of those periods. If you had $1 to invest and in hindsight, this is certainly true, almost anything you bought, it would have been a successful investment, didn't really matter what happened.

There are times when you should be one where - you should doing some things and not doing other there are times when you shouldn't be doing anything. I would say given our scale of our business, given the global nature of our business and given most of our returns come out of operating excellence as opposed to financial returns, we always find things to do within the market. You wouldn't imagine we could have bought three companies out of bankruptcy last year and one of the best markets that you would have found for business performance. And so I would just say, we're very focused on making sure we find this bulk opportunities, but we feel no, we're not compelled to invest the cast we have, we have long investment periods should that be available.

And on a corporate level, I would say we're ensuring that our balance sheets are as strong as we possibly can make them to ensure we have cash around to do all the things that we will want to do and may have to do with respect to our investments is that we go through a recession at some point in time. So it's not - it's the time to be wary but also were opportunistic.

[Dean Wilkinson, CIBC]

I guess in that context not going out into the market then the easiest thing is to either be buying back shares of either the listed issuers or parent company, right?

[Bruce Flatt, Chief Executive Officer]

Yeah. Look if you're - if you traded lesson tangible value, it's a very easy investment decision to repurchase securities. We did some in the fourth quarter of 2018 and as cash builds, we'll consider that going forward. So that's certainly an easy investment to make because you know what to have, what you're getting it.

[Dean Wilkinson, CIBC]

Yeah, that makes sense. My second question is just on, the tremendous opportunity I guess it is sort of the infrastructure runways as you put it there. And I guess, one of the bigger things is not just capital but private enterprise has definitely been more effective and running, not just building a lot of those - and with large scale infrastructure projects. Do you see the future of this less PPP and more sort of fully contracted out or what is that, what do you think that looks like?

[Brian Lawson, Chief Financial Officer]

Well, I guess the infrastructure story fits really into two categories, where is the money coming from and if interest rates stay lowest, they are not to stay as low as they are today. But I'd say the long bond in the United States, which is 2.7% today or the 10 year, 2.7%, if it's below 5%, I think you're going to see a very significant amounts of capital continue to shift from institutional investors and long term sovereign investors into the infrastructure space. And so that's the first thing. Then so the money will be there. On the supply side, governments are over indebted or need the help as you suggest to build this kind of infrastructure. And I think it's going to be all the above. I think they will do PPP's. They will sell infrastructure that's built to owners if they can do it in countries that can achieve that and have the ability to do it from their populace and they'll build new infrastructure with private builders. The easiest thing to do is for government to take on high risk projects is for government to take the risk on new Greenfield infrastructure and then sell it to owners at another price, because they in essence are the government, they can do things that most private owners can't do. And as a result of that, that is a valuable thing. But I truly think it'll be all three of the above. And each infrastructure builder, contractor, owner, investor will be able to find their own niche like we have.

[Dean Wilkinson, CIBC]

That's great. Well, let's hope the government can build a pipeline. I will hand it back. Thanks, everyone.

[Bruce Flatt, Chief Executive Officer]

Thank you.

[Operator]

Thank you. Our next question comes from Sohrab Movahedi of BMO Capital Markets. Your line is now open.

[Sohrab Movahedi, BMO Capital Markets]

Hey, thank you. Brian, I just - maybe the answer to this question is what Bruce already talked about, but the higher level of liquidity that you running with it, I think it's almost like a record level now. Is that more defensive or is intended to - are you intending to play offense with it?

[Brian Lawson, Chief Financial Officer]

I would say it's a - it's a bit of both, frankly, and we always want to make sure that we are in a position to play very strong defense respond to things. But to Bruce's point, there are always a number of opportunities that we seem to be able to avail ourselves when it comes to investments. The size of the funds are larger and so the level of investment activities is larger overall as well. And so we think that give us to carry enhance levels of liquidity, because a part of what Brookfield does as the asset manager and why we like to have that liquidity is it does enable us to facilitate investment opportunities as they come along and work with the funds in the list of issuers in that regard. So it's really a bit of both.

[Sohrab Movahedi, BMO Capital Markets]

And so do you think you're around the desired level so to speak right now or do you think there's still room to add to it as you I guess raise more capital?

[Brian Lawson, Chief Financial Officer]

Yeah. If you can - if you can add to it at the - I'll say, at the right cost and in the right way, we invariably find great opportunities to put it to work. So if we have opportunities to increase, we believe we will.

[Sohrab Movahedi, BMO Capital Markets]

Fair enough. And then maybe just quickly for Leo. Leo, any chance you could kind of break down for us, I know you raise across all geographies, but maybe be a little bit more specific on that, how much of the fundraising maybe is coming from the Middle East in the first instance? And then within the private wealth stuff, if you could give some color as to which geography that money's coming from as well?

[Leo van den Thillart, Head of Client Relationship Management]

Sure. So North America is a substantial part of our region, regions where we raise capital around 50% I would say. The balance is distributed equally through rest of world with the Middle East anywhere on a year between 13% to 18%, Asia similar and then Europe with a tiny bit now also coming from Latin American. And in terms of the private wealth, about 60% is coming from North America, the majority of that from the U.S. and we see demand accelerating in Asia and the Middle East.

[Sohrab Movahedi, BMO Capital Markets]

Okay, thank you. And maybe I can just sneak a quick one in for Brian. The cost, are we around right steady state and from here kind of nominal other inflation like type growth from here. Is that fair? Brian?

[Brian Lawson, Chief Financial Officer]

Well, okay. So in terms of - in terms of the margins, we've been very consistent and expect to see that status - see the same sort of we see the future. In terms of the actual magnitude, the nominal of the costs, I think, really you've seen that step up over the years as we continue to expand both I'll say geographically as well as into different asset classes and product types. So while there's definitely some benefits of scale. We will also continue to invest in our operating base, really together what Leo's talking about as well just in terms of ensuring, we continue to deliver excellent client service, make sure that we're innovative in terms of the product that we're offering. So we feel very comfortable with the margins and will continue to invest and scale our capabilities.

[Sohrab Movahedi, BMO Capital Markets]

Thank you very much.

[Operator]

Thank you. [Operator Instructions] Our next question comes from Brian Wu of Citi. Your line is now open.

[Brian Wu, Citi]

Hi, good morning. Thank you for taking my question. Bruce, with respect to the $1 billion realize carry target in 2019, which seems a bit faster than expected. Can you elaborate on the factors contributing to the favorable realization environment, and perhaps what you expect the timeline of those really realizations to occur? Thank you.

[Bruce Flatt, Chief Executive Officer]

So, I would just say as follows. There are periods of time and it probably goes back to the question of where we are in the market cycle. There are periods of time when one should be investing all the dollars, it can reasonably afford to invest because all returns will be good. And there are times when even though markets may be good, if you've made a lot of money, and if you have achieved the plans within your portfolio, sometimes it's good to take money off the table. So there's a number of our funds which are at the couple of our funds in particular, but a number of them where we're at a point where asset recycling is - asset sales is very effective because we both achieve the plans we had for the assets and it's a good environment to be able to sell assets i.e. there are lots of buyers on the other side who are willing to pay the price that we feel is fair. And it may not, for them it's a price that will be a vis-à-vis great, most the assets we have by this point in time if we achieved our plans have turned into phenomenal assets that have great long term cash flows in them and the buyers will earn a different return than what we are and because we did all the work and took a lot of time to get there. But what they then have is a phenomenal asset to own for the next 5, 10, 15, 20 years. And so that's really what we're at a point in the cycle and doing. It happens to be a good point to do that.

[Brian Wu, Citi]

Great. Thanks for that. And regarding compensation specifically, there's a noticeable increase quarter-over-quarter. Is there any unusual items this quarter worth calling out or was that associated with the build out of new initiatives and perhaps timing of fundraising and is that a good run rate going forward?

[Brian Lawson, Chief Financial Officer]

Yeah, and I think Brian. It's Brian Lawson. You hit the nail on the head there. It's really as expected and in line with the level of activity in scaling the business.

[Brian Wu, Citi]

Great. Thank you very much.

[Operator]

Thank you. And we do have a follow-up question from Sohrab Movahedi of BMO Capital Markets. Your line is now open.

[Sohrab Movahedi, BMO Capital Markets]

Hey, thanks. Brian, I just wanted to come back to the liquidity position and get a sense of does the asset liability management risk tolerance change at all. Will you go away - how we - as far as the - you're not sitting on cash obviously, so where you invest that and what sort of yields you are looking to generate while you actually find the right investment opportunity. Is there any risk that liquidity could get deployed and something that could result in short term losses?

[Brian Lawson, Chief Financial Officer]

Yeah. Well, I would say for one thing is, as Bruce and I both pointed out, we did have a step down in the - we took them down with mark-to-markets on some of our financial assets right around year end, those obviously have largely bounce back. It really comes down to what we deploy that capital in and that liquidity. And you'll see us do that in a few different ways, part of which may be, for example, assisting and building out some of our credit strategies where we've invested in portfolios of credit securities. So in that I'd say has a sort of a dual purpose. But if we're raising capital and we have it in mind for liquidity, then that will obviously reflect a view towards capital preservation. And so we'll deal with that accordingly and measure that appropriately in how we think about liquidity. Also recall that a lot of our liquidity is also in the form of undrawn credit facilities which of course are not subject to market volatility. So we look at a mix of things depending on what our outlook is both in terms of capital flows and market environment. And sometimes we will actually take risk off the table in terms of monetizing certain assets and turning them into cash and ensuring our lines of fully withdrawn and undrawn at same time.

[Sohrab Movahedi, BMO Capital Markets]

Okay. So you're - I mean the direction on your appetite for risk in that liquidity pool hasn't increased if anything has gone down?

[Brian Lawson, Chief Financial Officer]

No, I'd say it is consistent.

[Sohrab Movahedi, BMO Capital Markets]

Consistent. Thank you.

[Operator]

Thank you. And ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Suzanne Fleming for any closing remarks.

[Suzanne Fleming, Managing Partner, Branding & Communications]

And with that, we'll end the call for today. So thank you, everyone for joining us.

[Operator]

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.