Q4 2019 Earnings Call
Thank you for saying bite and welcome to the Renaissance Reef fourth quarter and year end 2019 financial results Conference call. At this time all participants are in listen only mode. After the speakers presentation there'll be a question answer session.
A question during the session you need to press star one layer telephone. Please be advised to todays conference is being recorded if your corny further assistance. Please press star zero out like $10 or to your speaker today, Keith acute senior Vice President Finance and Investor Relations. Thank you. Please go ahead.
Good morning, Thank you for joining our fourth quarter and year end 2019 financial results conference call yesterday. After the market close we issued awkwardly really you didn't receive a copy. Please call me at 4.123, 943 zero and we'll make sure to provide you wouldn't want there will be an audio replay of the call available.
About 115 PM Eastern time today through midnight on March then the replay can be accessed by dialing 8558, 0.9 future or five six U.S. toll free one for your four or 53734 years six internationally. The passcode you'll need for both numbers is six seven to five nine.
Finally, today's call is also available Rudy Investor information section of Www Dot run re dot com and will be archived on Renaissance Reis website through midnight on March 15, 2020, before we begin on obliged to caution that today's discussion may contain forward looking statements Nash.
Actual results may differ materially from those disguise.
Additional information regarding the factor shaping these outcomes can be found in Renaissance Reis FCC fine to which we direct you.
With us today to discuss.
Holds for Kevin O'donnell, President and Chief Executive Officer and Bob.
Executive Vice President and Chief Financial Officer, I'd, now like to turn the call over to Kevin Kevin.
Thanks, Steve Good morning.
And thank you for joining today's call.
<unk>, we began 2020 looking I'm feeling very dip in as a company from where we started one year ago.
This journey charted a very intentional path designed to make renren not only more resilient, but also a broader deeper and better partner to our customers.
It has been a long and deliberate truck.
One that has not yet complete but successfully underway.
It has taken us to where we now have a diversified book evenly divided between property and casualty and specialty business. This change was that the behest of our customers, who asked us to deepen and broaden our relationship with them, but also because we saw a path to greater efficiency I'm pleased with where we currently are an excel.
You did about our future horse.
Last year I started the call in January by asking two questions. One year on I think we should ask ourselves. The same two questions. The first is how is that how is our financial performance and the second is have we achieved the years goals and effectively executed our strategy.
Starting with question one.
That was our financial performance.
We grew book value per share by 15.7% and tangible book value per share plus accumulated dividends by 17.9%.
For the year, our return on equity was 14.1% and our operating return on equity was 8% in our casualty segment, we generated a consistent diversifying underwriting profit.
Bob will discuss our financial results in more detail later, but I believe we performed well, especially against a difficult background.
In 2019 or industry experienced approximately 75 billion of insured catastrophe losses.
Including typhoons backside Hagibis in Japan, and hurricane during in the Caribbean.
In addition lost creep on prior year events continue to play the industry.
In casualty line the market is recognizing rages required as losses are being impacted by social inflation from exit exponentially increasing jury verdicts.
An adverse development on recent prior accident years.
For the industry third party capital was constrained in 2019 due to poor returns mounting loss creep and concerns over call it climate change.
Against this backdrop, we deployed more capital.
With respect to our own capital as well as a capital we manage on behalf of our partners. Our partner capital increased by 1.3 billion to 2019 with an additional 525 million raised for the January 1st 2020 renewal.
This highlights our ability to procure the most efficient capital from multiple sources and provides us considerable underwriting capital and financial flexibility and they heading into what we expect to be the best market opportunities we've seen in years.
So in answer to the first question I'm satisfied with our financial performance and the returns we have generated in 2019.
Moving on to question to how have we achieved in two years goals and effectively executed our strategy.
We ended the year with several goals first.
As quickly and effectively integrating TMR as people systems and risk into run rate.
Second was organically growing our business in a strengthening market and third was increasing the operational efficiency of organization by growing operating in corporate expenses lower than premiums.
I'm proud to report we outperformed on these goals Bob <unk> update you on the TMR integration, but it is essentially complete.
An important element of the integration was to continue executing our strategy and organically growing the business.
As the markets improved we focused on expanding and deploying more capital.
Finally, our operational and capital leverage continued to improve and over the previous three years we.
We have more than doubled their gross premiums written while only growing shareholders' equity by 22%, an increasing run rate expenses by only 13%.
Just as critical is accomplishing these goals effectively was doing so expediently.
In 2019, we moved quickly and efficiently to position ourselves to execute into an improving market.
Most of the heavy lifting is now behind us and we have the increased scale better tools superior access to risk and financial resources necessary to outperform in 2020.
So in conclusion 2019 was an exceptional year when viewed against these strategic objectives.
I'll provide more details on the January one renewal and opportunities we are expecting in 2020 later on the call, but first let me turn over to Bob to talk about our financials up.
Thanks, Kevin and good morning, everyone I'd like to start off was saying we had a good year.
We executed strongly both financially and operationally during the quarter and the year.
Today, I will divide my remarks between our fourth quarter and year end 2019 results.
I'll first discuss our consolidated financial performance before moving onto our segment results investment portfolio returns and finally capital activities.
Starting with our consolidated results and beginning with the fourth quarter, where annualized return on average common equity was 2.5% and our annualized operating return on average common equity was 1.7%.
Gross premiums written for the quarter were $905 million up $358 million were 65% from the comparable quarter last year about two thirds of this was organic growth.
We reported net income for the quarter, a $34 million were 77 cents per diluted common share.
Our operating income was $23 million or 52 cents per diluted common share.
Operating income exclude $18 million of net realized and unrealized gains on investments and $5.7 million of transaction integration and compensation expenses associated with the TMR integration.
We had an underwriting loss for the quarter of $65 million and reported an overall combined ratio of 106.7%.
Now before moving onto our full year results I'd like to provide more clarity on how the non controlling interest from our joint ventures impact our financial statements.
Each quarter, we fully consolidate the results of Deventci, the DG and Vermeer and since we do not only 100% of these entities we removed a portion of their returns that we do not Alan.
For example.
100% of Devinci's results are included in our underwriting and investment income however, because we only own 22% of Davinci, we removed 78% Devinci's returns from our net income this elimination as reflected in the income statement has that net loss or income attributable to non controlling and.
Chris.
Therefore, when these ventures produce positive returns.
The elimination of the income attributable to third party investors is reflected as a reduction to our net income likewise when these ventures have negative results. The elimination is reflected as an increase to our net income.
We've added a new page to the financial supplement it provides a breakdown as a component to the non controlling interest adjustment.
This has always been reflected in our 10-K and 10-Q, but given the increasing significance. We thought it would be helpful. If we included in the financial supplement.
As you will see in the new disclosure for the quarter, we reflected a positive non controlling interest of $2.6 million.
Well, both premier and the DG produced positive returns for the quarter. These were more than offset by negative returns in davinci, resulting in a net overall loss for these vehicles, which is reflected as a positive non controlling interest adjustment.
Now moving on to the full year 2019, where we grew our book value per share by 15.7% and tangible book value per share plus accumulated dividends by 17.9%.
We realized a return on average common equity of 14.1% and an operating return on average common equity of 8%.
We reported net income of $712 million for the year or $16 in 29 cents per diluted common share and operating income was $403 million or $9.13 per diluted common share.
In 2019, our overall combined ratio was 92.3%.
Net premiums earned for 2019 were $3.3 billion up 1.4 billion or 69% year over year.
Now before moving to our segment results I'd like to update you on our operational efficiency, our direct expenses, which are the some of our operational and corporate expenses totaled $82 million for the quarter, which has an increase of $11 million from the fourth quarter of 2018, however ratio direct expense net premiums.
Earned was 8.5% a decrease of almost four percentage points for the same period last year.
Likewise for the year direct expenses were up by $105 million to $317 million, while the ratio of direct expense to net premiums earned decreased by 1.2 percentage points in 2019% to 9.5%.
Adjusting for the impact of $50 million and TMR integration costs incurred in 2019 direct expenses would have been $267 million for the year or 8% of net premiums earned.
Now moving onto our segments, starting with our property segment property gross premiums written grew by $45 million or 23% over the comparative quarter to $245 million. This growth was driven by an increase in other property of $109 billion.
The growth another property was partially offset by $64 million decline in property cat gross premiums written.
We do not typically write much property cat in the fourth quarter outside of reinstatement premiums, which were down this year reflective of loss activity can business mix.
Other property is becoming a larger percentage of our overall property book.
And for the year makes up 34% of property gross premiums written compared to 23% in 2018.
As a reminder, we accessed proportional business through our other property book and due to the nature of this business. It carries a higher acquisition expense ratio.
As this business becomes a greater part of the property segment acquisition expenses May increase.
Our property segment reported an underwriting loss and $87 million and a combined ratio of 118.6% in the fourth quarter property catastrophe reporting a 141% combined ratio and other property reporting an 88.6% combined ratio.
Current quarter losses in property Cat were primarily driven by typhoon Hagibis.
On our last call, we announced an estimated net negative impact for the fourth quarter related to typhoon hagibis of approximately $175 million.
We remain comfortable with this estimate as you saw in our financials, we have allocated $128 million a net negative impact specifically hagibis with the remainder of being incurred under our aggregate covers so to be clear our estimate has not changed.
We have also reallocated 22 million in net negative impact from the third quarter events to 2019 aggregate losses.
Well this reallocation primary that relates to types in fact side, our estimates for both facts and Dorian remain the same at $103 million and $52 million respectively.
For the year gross premiums written in our property segment grew by $670 million for 38%.
This broke down to growth of $246 million for 18% and our property catastrophe classic business and $424 million or 103% and our other property classes business.
For the full year, our property segment reported underwriting income $209 billion and that combined ratio of 87%.
Now moving onto the casualty segment, where our gross premiums written for up $313 billion or 90% in the fourth quarter of 2019 over the comparative quarter.
Proximately two thirds of this quarterly growth was organic.
We reported underwriting income of $21 million, and then combined ratio of 95.9% for the quarter.
The current accident year loss ratio for the casualty segment was 68%.
For the year gross premiums written for $827 million were 53%.
Half of this growth was organic.
The segment reported underwriting income of $46 million and a combined ratio of 97% for the year.
Now moving to fee income, where total fee income was $13 million for the quarter with management fees contributing $24 million and performance fees being negative $11 million.
The negative performance fees were driven by the cat activity in the quarter, primarily hagibis, which triggered the reversal of previously accrued performance fees overall, our quarterly fee income was up by $5 million relative to the comparable quarter for the year total fee income was $114 million up $24 million from.
2018.
Now turning to investments, we posted total investment results of $131 million for the fourth quarter, which includes mark to market gains of $18 million for the year total investment results were $838 million with $415 million in mark to market gains.
Our fixed maturity in short term investment return for the quarter was $97 million and overall net investment income for the quarter was $113 million almost flat compared to the third quarter.
This quarter, we have enhance our disclosures in the financial supplement to include retain total investment result.
This delineates the net investment income and mark to market results that apply to our retained investment portfolio.
In short this is the quarterly investment returns that contributes to our net income and the remainder is what belongs to our partner capital.
The $113 million at a net investment income, we retained $91 million a retention of about 80%, which is consistent with the full year 2019 and 2018.
In the fourth quarter, our managed investment portfolio reported yield to maturity of 2.1% and duration of 2.9 years on assets and $15.7 billion.
While our retained investment portfolio reported yield to maturity of 2.2% and duration of 3.6 years on assets of $11.2 billion.
Now moving onto capital management, the fourth quarter was once again active from a capital management perspective, as Kevin mentioned, we had a successful capital raise in preparation for one more renewals raising over $525 million and Upsilon and the DG effective January 2020.
This is in addition to the $1.3 billion and partner capital that we raised across our various joint ventures in 2019.
Looking forward to 2020 on March 15th the $250 million tranche of 5.75% senior notes will mature.
As a reminder, last year, we issued $400 million at 3.6% senior notes due in 2029.
Consequently, we remain in a strong capital and liquidity position going into 2020, and with an improving interest rate environment.
Anticipate additional opportunities to deploy capital into the business as such we did not repurchase any of our shares during the fourth quarter.
Before I turn it back over to Kevin I want to update you want to change that we'll be making to our operating income calculation.
Starting when the first quarter 2020, as you know operating income excludes net realized and unrealized gains on investments attributable to shareholders transaction integration and compensation expenses associated with the TMR acquisition and income tax impact associated with these exclusions.
With the addition of TMR.
And they're non dollar balance sheets, we will be refining or methodology to also exclude foreign exchange gains and losses.
Well, we hedge our economic FX exposure, we sometimes experience accounting driven volatility that overtime should be relatively neutral in terms of bottom line impact.
And finally I'd like to update you on our Tamar acquisition with the one one renewal behind US we have re underwritten effectively all of the TMR book renewing the deals which met our strategic and financial thresholds.
We exceeded the two primary metrics that we set out at the time of the acquisition as we retained greater than $700 billion of TMR premium and we'll achieve an after tax earnings run rate contribution greater than 100 billion by the end of Q1 2020.
When I think about the integration, it's the operational successes behind the financial ones that are even more importantly.
We have a single view of risk our key systems, our integrated we deepened our bench strength and our people are working extremely well together going into 2020.
We will benefit from the increase scale and operational efficiency. The TMR has brought us because of the significant time and effort. We spent on integration activities in 2019.
We are free from distraction and well positioned to capture opportunities in this improving market.
And with that I'll now turn it back over to Kevin for more details on our segments.
Thanks, Bob.
I'll divide my comments between our property segment in our casualty specialty segments, starting with the discussion of 2019 results and then moving to the January one renewal and opportunities for 2020 after that we'll take your questions.
For the full year in 2019, we grew gross written premiums in our property segment by 670 million or 38% to 2.4 billion a substantial portion was organic particularly the 103% growth in other property reflects the opportunity we've seen Ian DNS property Maher.
Yes.
We experienced a number of large natural catastrophes in the quarter.
Last quarter, we Preannounced and continue to hold 175 million net negative impact from Typhoon Hagibis, which was based on a 15 billion dollar industry loss.
We are monitoring the reports on Hagibis and expect to learn more as we approach the four one renewal and if the facts change so will our estimate.
Last year I discussed the impact of Hurricane Hermine is lost Creek and noted it would be by itself one of the largest events in 2018.
Fast forward, one year and we continue to experience billions of dollars of lost creep in Florida.
And not only from hurricane or amount, which made landfall two and a half years ago.
But now also from Hurricane, Michael which dropped almost a year and a half ago suffice it to say, we have not yet realize the benefits of last year's itll be reforms.
This is deeply disappointing.
Several Florida Domestics, there now close to exhausting their 2017 private market reinsurance. This is yet another indicator of the deep structural problems afflicting, Florida.
In addition, as I discussed last quarter, Florida is increasingly exposed to the effects of climate change such as rising sea levels increased rainfall and flooding and intensifying hurricanes.
Although it is easy to talk about the June renewal.
Hi can save these two factors are materially impacting our view of Florida and will result in the need for substantial rate increases.
Florida has always been in it will always be an important market for run rate.
We have been leaders in this business for decades.
That said, we reduced our exposure to Florida domestic companies last year and I'm prepared to do so again if rate increases do not meet our return hurdles.
At the same time, we're exploring additional means we're accessing wind risk in this market.
2019 was an active year for Japan was typhoons backside hagibis, causing widespread damage.
Lost Creek from Typhoon JV also continues to be an issue.
Our team of scientists meteorologists and engineers believed that climate change will further increase the natural catastrophe risk Japan basis Sea level rise will intensify storm surge rainfalls will increase and average typhoon intensity will be stronger and it'll be more typhoons of category for intensity or greater.
Typhoons, Hagibis and facts are likely Portland.
Impact of climate change will have on Japan.
Weve underwritten the Japanese market for 25 years and greatly value. The long term relationships, we have developed with their clients.
Taken as a whole however, the unprecedented scale of storms in Japan over the last two years has caused us to increase our view of typhoon risk.
Unfortunately, the price increases the Japanese market experienced last year up in more than offset by the post renewal last week from Typhoon JV.
Substantial rate increases are needed for one to accurately reflect sudan's elevated level of risk.
As I discussed on our Q3 conference call the property market experienced a V shape renewal at January Onest.
Both primary insurance and retro rates were up materially, but reinsurance rates on lost free business were only up slightly.
Lots affected business, such as treaties exposed to California, wildfires experienced material rate increases that renewal and complex commercial risks for more stressed.
A key element of our strategy is to build options to access the full spectrum of risk, which allows us to adjust our portfolio makes between different classes of business increasing on the best in decreasing on the worse.
So while our topline premium increased marginally the underlying business mix shifted materially to focus on the most profitable lines. We wrote less primary reinsurance risk we sold more retro as its rates were more attractive, but it was most efficient against our partner capital and we will recognize its benefits through IND.
Priest fees.
Finally, we grew our other property book materially as this is how we accessed primary property.
As a reminder, we take cat risk in our other property portfolio and in 2020 with additional exposure to got activity from this portfolio.
The net impact over all of these changes is a more profitable property book that consumes less capital in the tail.
We continue to share risk through traditional retro and other structures well retro has become more expensive relative to recent years, we strategically focused our purchase to continue to support our clients, while maximizing the efficiency of our retained underwriting portfolio.
Our latest Mona Lisa Cat Bond transaction was a key component.
Our gross to net strategy.
Providing 400 million of protection.
Relatively attractive pricing.
The retro capacity, we raised through Mona Lisa is very efficient capital, leaving us in a strong positioning heading into 2020. It has been several years since we last access the cat bond market and our ability to do so successfully is yet another indicator of our agility in sourcing the most efficient capital as market conditions change.
Our partner capital business augmented our gross to net strategy at the January 1st renewal.
Davinci Upsilon and Vermeer provided us with additional additional flexibility to match desirable risk with efficient capital.
At a time that retro markets up diminished capacity.
Looking forward to pricing be cannot continue indefinitely.
2020, we into anticipate property rates will continue to increase especially in the U.S. in Japan.
We also expect retro any ines to remain attractive I'm optimistic about both the opportunities that will present themselves in our superior positioning to benefit from them.
For the year, we grew gross written premiums in our casualty and specialty segment by 53%.
This is across all subclasses, reflecting a mix of organic growth as well as the impact of TMR and resulting in a better balanced and more diverse portfolio.
We constructor casualty portfolio to have an attractive return on risk and continue to achieve scale in this segment.
As a result, we're generating a stable diversifying earning stream producing 46 million of net endorsing income and a combined ratio 97 for the year.
Casualty and specialty markets were broadly up at the January 1st renewal.
Rate increases achieved by our customers have been above plan and expected to continue in 2020. We believe this rate change is greater than the increase in loss trend.
We also saw significant improvements in terms and conditions, including broad based reductions in ceding Commission that were also a larger than anticipated.
The improved trading conditions should be sustainable for the foreseeable future as insurance companies that recognize the need for rate and have been disciplined and decreasing supplied to the market.
As we move into 2020 of these improved trading conditions should allow us to continue to profitably scale, our casualty business, resulting in improved operational leverage and consistent underwriting profit.
Social inflation continues to impact the casualty industry.
Our casualty underwriters have navigated effectively this market by being rigorous about selecting the best risks and Overweighting our portfolio in a more attractive classes, while avoiding the most challenging.
We benefit from close coordination between our underwriters claims reserving in pricing functions.
And our aided by tools that allow us to quickly recognized loss trends.
More importantly, we have a strong underwriting culture that focuses on the bottom line.
For the fourth quarter was a solid close to a strong year, which we rapidly and effectively integrated TMR materially grew our topline while increasing our operational efficiency, all while delivering strong underwriting and investment results.
As always we remain on resolutely focused on executing our strategy maximizing shareholder value and are excited about the opportunities ahead of us in 2020 to deploy material capital that increasingly attractive returns. Thank you and with that we'll turn it over to questions.
Thank you at this time I'll like to remind everyone in order to ask the question. Please press Star then one all your telephone keypad again that star one to ask your question well pause for just a moment to compile the Q1 day roster.
Your first question comes from Ryan Tunis with Autonomous your line is open.
Hey, Thanks, yes.
A couple of the first one is just thinking about.
I guess the cat loss activity in 2019.
It seems like your end.
Market share of that on a net basis was was little bit higher than it wasn't 17 18, if we think about maybe like a 60 billion dollar industry cat year.
Im wondering how much of that grows.
Jimmy was attributable to the actual.
Growth in the size of you book or the nature of the type of loss events, we experienced.
So.
Yes, I think it's a good question and I think sometimes thinking about what's an average cat year from an industry perspective, it's difficult to related to what happens with the reinsurance portfolio. What happened last years, we had several large events, we had hagibis backside Dorian.
All of which has the low ben's become larger theres going to be a disproportionate effect on reinsurance.
I think the things affecting us.
2019 are we had a different retro.
Protections in 2019 than we had in 2018 and where the storms hit where places where we had a little bit less retro so we.
Tend to protect the southeast wind pretty aggressively and we had the losses in Japan, which is a little bit more of a net book.
The size of the book, which is the second part of your question played a role but that was not the biggest component of it it was much more around the size of the retro we have protecting the portfolio.
Understood and then on the specialty casualty side.
I guess, obviously, you talked about how you're being vigilant about the toward trends and all that I'm. Just curious you know.
Did I was any of that had an impact on your loss picks here in 2019 or is it one of those things, where you're kind of monitoring it and.
Okay.
Maybe not releasing reserves quite as fast.
Just curious if.
The actual corn environment has put any upward pressure on your loss ratio and casualty specialty.
Yes, let me start with pricing and then I'll move to reserving from a pricing perspective, what I mentioned is I think the the rate change that we're seeing is above the loss trend that we're observing so our pricing.
Curves are pricing picks are actually dropping we're not moving that to our reserving ratio. So.
So our reserving ratios are.
Our consistent with what they've been historically, but where we are observing trend, we are making adjustments and pushing pushing the the ultimate expected.
So we are reflecting the change in trend in our.
Our legacy book.
And we are not.
Recognizing the improved pricing terms in the in the current renewals.
Thank you.
Yep.
Again to ask your question. Please press star one.
Your next question comes from Jimmy Bhullar with JP Morgan Your line is open.
Hi, Good morning, I just had a question on the casualty business outcome like as the reserve are you.
They have you been overly conservative in your reserves given these.
Social inflation issues that you've observed.
Or are you basically assuming that the trends will be consistent with how they've been but not get worse.
Yeah reserving is always a an area of focus for any any risk taking company in this business and it's something that we put a lot of attention too.
We believe that our picks are appropriate and we take in all factors that it.
That we think will affect the ultimate the ultimate dates. So we are looking at a loss trend. We are looking at a rate environments. We have historic rate monitoring tools all of that is resident within the mix that we have but we feel like they are appropriately. We we stand by that was our best estimate.
Yeah, I think the reason I was asking is in response to the Peter's question, you sort of implied that you've been adjusting your pricing for it.
You are not building in an extra question in your reserves if trends continue to do it.
Yes, so there is always.
Looking at our book there historically is a difference between reserving and what reserving Actuaries, we'll reserve and what pricing our actuaries, we'll expect.
We do as a as a general rule, we wait for development of about 30% of the curve before we take any measure that would be.
So to be.
The positive trend in pricing so even if there even if our pricing actuaries are accurate in their assessment of today's risk it'll take a couple of years before that would be reflected by our actuaries is just the nature of the reserving process.
Okay, and then on your cat business in terms of premiums fourth quarters, obviously, not a good big quarter. Your premiums were down, but it's usually not at the quarter anyway seasonally.
What are you seeing in terms of.
Primary company behavior in terms of purchase.
Okay.
Insurance, just in our companies buying more or less given how much prices have gone up.
It's.
If I have to put a blanket statement out I would say, it's the demand for reinsurance is relatively flat there are some new purchases.
Some larger players that have come into the market I think we have great relationships and great access that we tend to have opportunities where there is even limited growth, but if you asked for a blanket statement I would say relatively flat.
Okay, and then just lastly, if I could ask one more youre you seem fairly positive on pricing and seems like you're confident that.
For one then midyear renewals, you'll continue to see upward modes and pricing what gives you that comfort given that.
Some of the issues that have caused this off pricing over the past few years like excess capital in the industry. So there's still out there so.
And just if you could.
Share some insights on why you're optimistic about pricing.
Yes, the comments that you're referring to or have to do at the property cat renewals at four one yes.
So I'll comment on that.
At four one type we have.
I have had ongoing discussions with our partners in Japan. They recognize that the change that was put through the market for JV.
It was inadequate based on the development that we've seen since for one on JV. In addition, the size of Hagibis and the size of facts I I think will become more clear as we approach to four one.
Renewal and historically the Japanese market as has responded as good partners when Theres losses do recognize there is a need for additional rate.
Within Florida, I think theres substantial structural issue in Florida.
We've seen loss group, we've seen in effective legislation change with regard to Ob and as we look at that market. Our view is it goes up or we reduce so I'm not going to forecast what the change will be but I will say unless we see changes that meet our return expectations. We will reduce in 2020 like we did in 2019.
Okay. Thanks.
Yes. Thank you feel like asked the question. Please press Star one again star one task the question.
There are no further questions at this time.
Well that we appreciate you joining today's call.
Thank you for tuning in and we look forward to speaking to you next quarter. Thank you.
This concludes today's conference call you may now disconnect.
Okay.
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