Q2 2023 American Financial Group Inc Earnings Call
Good day and thank you for standing by welcome to the American Financial Group 2023 second quarter results Conference call.
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I would now like to hand, the conference over to your Speaker today, Diane Weidner, Vice President Investor Relations. Please go ahead.
Good morning, and welcome to American Financial group's second quarter 2023 earnings results Conference call. We released our 2023 second quarter results yesterday afternoon, Our press release Investor supplement and webcast presentation are posted on Afg's website under the Investor Relations section.
These materials will be referenced during portions of today's call I'm joined this morning by Carl Lindner, The third and Craig Lindner Co Ceos of American Financial Group, and Brian Huntsman Afg's CFO before I turn the discussion over to Carl I would like to draw your attention to the notes on slide two of our webcast. Some of the matters to be discussed today are forward looking.
These forward looking statements involve certain risks and uncertainties that could cause actual results <unk> financial condition to differ materially from these statements.
A detailed description of these risks and uncertainties can be found in Afg's filings with the Securities and Exchange Commission, which are also available on our website.
We may include references to core net operating earnings a non-GAAP financial measure in our remarks or responses to questions. A reconciliation of net earnings attributable to shareholders to core net operating earnings is included in our earnings release.
If you are reading a transcript of this call. Please note that it may not be authorized or reviewed for accuracy and as a result, it may contain factual or transcription errors that could materially alter the intent or meaning of our statements.
Now I'm pleased to turn the call over to Carl Lindner, the third to discuss our results.
Good morning, we're pleased to share highlights of Afg's 2023, second quarter, after which Craig Brian and I'll be happy to respond to your questions.
Reported an annualized second quarter core operating return on equity of 18%, which excludes the accumulated other comprehensive income.
Along side double digit premium growth a strong result in the quarter with elevated industry catastrophe activity.
The higher interest rate environment contributed to meaningfully higher year over year investment income and we continue to be pleased with the performance of our alternative investment portfolio, where returns exceeded our expectations during the quarter.
Our entrepreneurial opportunistic culture and disciplined operating philosophy, we continue to serve us well in a favorable property and casualty market in a dynamic economic environment.
Craig and I, Thank God, our talented management team and our employees for helping us to achieve these results I will now turn the discussion over to Craig to walk us through Afg's second quarter results investment performance and our overall financial position at June 30.
Thanks Carl.
As I begin my remarks, I would like to recognize and congratulate John Berthing, who was elected president of AFG in late June .
John has been a trusted business adviser for over 35 years.
His talents had been projected particularly valuable through his exceptional vision and management of the company's investment portfolio.
Which has significantly outperformed over time.
Please turn to slides three and four for a summary of earnings information for the quarter.
AFG reported core net operating earnings of $2 38 per share in the 2023 second quarter.
The year over year decrease was due primarily to the impact of elevated catastrophe losses and lower favorable prior year reserve development on underwriting profit in our specialty property and casualty insurance operations when compared to the record P&C results reported in the second quarter of 2020.
Two.
These items were partially offset by higher net investment income and a 2023 second quarter.
Now I'd like to turn to an overview of Afg's investment performance financial position and share a few comments about afg's capital and liquidity.
The details surrounding our $14 $5 billion investment portfolio are presented on slides five and six.
Pretax unrealized losses on Afg's fixed maturity portfolio were $587 million at the end of the second quarter compared to pre tax unrealized losses of $630 million at the end of 2022.
And the current interest rate environment, we're able to invest in high quality medium duration fixed maturity securities at yields of approximately five 5%, which compares favorably to the 462% yield earned on fixed maturities in our P&C portfolio during the second.
Quarter of 2023.
We expect to yield earned on our P&C fixed maturity portfolio to increase by about 10 to 20 basis points by the fourth quarter of 2023 compared to the 462% earned in the second quarter of 2023.
This yield compares very favorably to the 363% earned for the full year in 2022.
Looking at results for the quarter property and casualty net investment income was 22% higher than the comparable 2022 period.
These results included an annualized return on alternative investments into second quarter of 2023 of nine 6% compared to a 12, 4% return for the 2022 second quarter.
The return on alternative investments in the second quarter of 2023 was the result of solid performance in both the multifamily housing and the private equity portfolios.
The average annual yield on Afg's alternative investments over the past five years ended December 31, 2022 was approximately 14%.
Our guidance for 2023 reflects a return of approximately 9% or $2 $3 billion portfolio of alternative investments.
Excluding the impact of alternative investments net investment income at our P&C insurance operations for the three months ended June 32023 increased 45% year over year as a result of the impact of rising interest rates and higher balances of invested assets.
Please turn to slide seven where you will find a summary of Afg's financial position at June 32023.
Our excess capital was approximately $700 million at June 32023, which is net of the $235 million in cash deployed to fund the Crs acquisition, which closed on July 3rd and includes parent company cash and investments of approximately.
$550 million.
Our acquisition of Crs provided an attractive opportunity to deploy our excess capital to expand our specialty niche businesses.
During the quarter, we returned $97 million to our shareholders through the payment of our regular <unk> 63 per share quarterly dividend and $43 million in share repurchases.
Importantly, AFG has paid $42 per share in special dividends since the end of 2020, representing three 6 billion returned to shareholders over this period.
Carl what I consider these special dividends and important component of total shareholder return.
We expect our operations to continue to generate significant excess capital throughout the remainder of 2023.
To the point that we could deploy more than $500 million of excess capital for share repurchases or additional special dividends through the end of 2023, which is in addition to the capital returned to shareholders in the first half of 2023.
As you may recall, a portion of our excess capital that we view as available for special dividends and share repurchases is limited by our internal.
Debt to cap target of 30% and that capital number is impacted by unrealized gains and losses on fixed maturities.
However, it's important to note that each dollar of debt repurchased frees up approximately $2 of excess capital for distribution to shareholders.
For the three months ended June 32023, Afg's growth in book value per share plus dividends was three 1% and year to date growth in book value per share plus dividends was 10%.
Excluding unrealized losses related to fixed maturities, we achieved growth in adjusted book value per share plus dividends of four 2% during the second quarter and eight 3% year to date.
I'll now turn the call back over to Carl to discuss the results of our P&C operations and our expectations for 2023.
Before turning to our specialty property and casualty results I'd like to officially welcome Brian Young in the crop risk services team take AFG in the Great American insurance group family.
This team's expertise and contributions will strengthen our ability to serve the unique needs of our crop policyholders.
Crs is clearly a strategic fit within our crop division and solidifies Great American is the fifth largest provider of motor peril crop insurance in the United States and the largest U S owned participant in the United States mode apparel crop insurance program and serves as an example of our nimbleness and efficiency in executing.
A transaction of this nature.
Now if you'd please turn to slides eight and nine of the webcast, which include an overview of our second quarter results.
As Youll see on slide eight.
Gross and net written premiums were up 12% and 10% respectively.
2023 second quarter compared to the prior year quarter year over year premium growth was reported within each of the specialty property and casualty groups. As a result of a combination of new business opportunities increased exposures and a good renewal rate environment.
Second quarter 2023, combined ratio was 91, 9% six one points higher than the exceptionally strong underwriting results reported in the prior year period.
<unk> losses added three five points to the 2023 second quarter combined ratio an increase of two points from the prior year period.
Favorable prior year reserve development in the second quarter of 2023 was four points a decrease of about two two points from the favorable impact of $6 two points reported in the prior year quarter.
Our catastrophe loss experience was consistent with overall industry experience, but losses arising from an increased frequency of storms during the quarter.
Average renewal pricing across our property and casualty group, excluding workers' comp was up approximately 5% for the quarter and up approximately 4% overall consistent with pricing increases achieved in the first quarter.
This is our 28th consecutive quarter to report overall renewal rate increases and we continue to meet.
Or exceed targeted returns in nearly all of our specialty property and casualty businesses in the second quarter of 2023.
Now I'd like to turn to slide nine.
To review a few highlights from each of our specialty property and casualty business groups.
The property and transportation group reported an underwriting profit of $32 million in the second quarter of 2023 compared to $39 million in the second quarter of 2022 higher year over year profitability in our property and inland Marine and Ocean Marine businesses was more than offset by lower favorable prior year develop.
In our transportation businesses.
Catastrophe losses in this group were a manageable $15 million in the second quarter of 2023 compared to $19 million in the comparable 2022 period.
Second quarter 2023, gross and net written premiums in this group were 10% and 6% higher respectively than the comparable prior year period factors contributing to the year over year growth included the impact of increased rates and exposures in our transportation businesses and earlier planting of corn and soybeans and our <unk>.
Crop insurance business.
Nearly all the businesses in this group reported growth in gross and net written premium during the quarter.
We continue to stay focused on rate adequacy, particularly in our property business as we consider higher reinsurance costs and higher property catastrophe loss attachment points overall renewal rates in this group increased 6% on average in the second quarter consistent with pricing achieved in this group for the first quarter of 2000.
'twenty three.
So we are well into the growing season in our crop insurance operations.
Corn and soybean crop development is ahead of last year with crop conditions slightly worse than last year at this time.
But still tracking close to trend line yields overall.
Commodity pricing is in acceptable ranges with corn and soybeans down.
Down around 15% and 4% respectively.
When compared to spring discovery pricing.
Our integration of the crop risk services business is going well.
As a reminder, the majority of this of the Crs crop business written for the 2023 calendar year was recorded on Aig's books.
The small amount of premiums generated for AFG in the second half of 2023 are included in our premium guidance with what we know at this time our guidance continues to reflect the expectation of an average crop year.
Although adequate moisture over the next six weeks, we will be very important.
Specialty casualty group reported an underwriting profit of $95 million in the 2023 second quarter compared to $130 million in the comparable 2022 period lower levels of favorable prior year reserve development in our workers compensation businesses and adverse development in our public.
Entity business were partially offset by higher levels of favorable prior year reserve development in our executive liability business.
Underwriting profitability in our workers comp businesses overall continues to be excellent.
The businesses in the specialty casualty group achieved a very strong 86, six calendar year combined ratio overall in the second quarter, an increase of six five points over the exceptionally strong 81% achieved in the comparable prior year period.
Second quarter 2023, gross and net written premiums both increased 7% when compared to the same prior year period, three fourths of the businesses in this group reported year over year growth. The primary factors contributing to the higher premiums included increased exposures in higher renewal rates in our excess and surplus lines.
Business, new business opportunities strong policy retention and rate increases in several of our targeted market businesses and payroll growth and our workers' comp businesses.
This growth was partially offset by lower year over year premiums in our executive liability business as we maintain underwriting discipline in a challenging competitive environment, particularly in public D&O.
Renewal pricing for this group, excluding our workers' comp businesses was up about 6% in the second quarter and was up 3% overall.
Specialty financial group reported an underwriting profit of $10 million in the second quarter of 2023 compared to an underwriting profit of $37 million in the second quarter of 2020 to.
The decrease was primarily due to higher year over year catastrophe losses in our financial institutions business and lower profitability in our surety and fidelity businesses.
Catastrophe losses for this group were $19 million in the second quarter of 2023 compared to $3 million in the prior year quarter.
Contributing to a combined ratio of 95% for the second quarter of 2023.
16, six points higher than the very strong 78, 4% reported in the comparable period in 2022.
Second quarter 2023, gross and net written premiums were up an impressive 40% and 36% respectively when compared to the prior year period all of the businesses in this group reported growth during the quarter, we acted on opportunities to grow our financial institutions business as a result of <unk>.
<unk> economic factors, including rising foreclosure rates and the addition of new accounts, both of which helped fuel the year over year growth in the quarter.
Overall renewal rates in this group were up approximately 2% and for the second quarter.
While we believe rates are adequate we continue to monitor insured values to ensure appropriate premium levels for increased exposures.
Now please turn to slide 10, where youll see a full page summary of our 2023 outlook.
Overall, we continue to expect an ongoing favorable property and casualty market with opportunities from growth arising from new business opportunities continued rate increases and exposure growth.
Based on results reported in the first half of the year and expectations for the remainder of the year. We now expect Afg's core net operating earnings in 2023 to be in the range of $10 15.
To $11 15 per share a decrease of <unk> 85 per share at the midpoint of our previous range of 11% to $12 per share.
Our revised guidance would produce full year 2023 core return on equity of approximately 20%.
This revised guidance reflects our updated full year expectations for underwriting profit.
Partially offset by an increase in expected net investment income our guidance continues to reflect an average crop year.
As Craig noted we've increased our expected return on all alternative investments for the full year 2023, approximately 9% compared to 13, 2% earned on these investments in 2022.
Our underwriting results for the first six months of 2023 included elevated catastrophe losses, and lower profitability in our specialty casualty group, primarily due to lower favorable prior year reserve development in workers' compensation and the impact of social inflation on selected businesses.
Based on these results and our view that these trends will continue for the second half of the year. We now expect a 2023 combined ratio for the specialty property and casualty group overall to be between 89, and 91% revised upward two points at the midpoint from our previous guidance of <unk>.
87% to 89% about half of the change in guidance is due directly to the second quarter results.
The other half driven by our view that the same factors impacting second quarter results would continue for the rest of the year or.
Our guidance for growth in net written premiums is now expected to be in the range of 5% to 8% an increase of two points at the midpoint of our previous range of 3% to 6% growth in this range will establish a record for net written premiums for the year, excluding crop, we expect 2023 year over year.
Growth in the range of 6% to 9%.
Now looking at each sub segment.
Based on our results through the second quarter, we continue to expect a combined ratio in the range of 90% to 93% and our property and transportation group.
This guidance continues to assume an average.
Crop earnings.
For the year.
We continue to expect net written premiums for this group to be in a range of flat to up 2%.
Our premium growth guidance factors in the impact of spring commodity futures pricing and related volatility on crop rates.
This will negatively impact premiums and related exposure year over year, and our crop business, most notably in the third quarter of 2023, when the majority of our annual premiums are recorded.
As a result of these factors, which are offset slightly by additional premium from Crs. We now expect net written premiums in our crop insurance business to be down 4% for the full year 2023.
Excluding crop growth in net written premiums in this group is expected to be in the range of 2% to 3% slightly lower than our original expectations.
Growth for the year will be tempered by the non renewal of about $50 million in premiums related to underperforming transportation accounts.
And growth in our alternative risk transfer business, which has higher premiums sessions.
We now expect our specialty casualty group to produce a combined ratio in the range of $85 to 88% an increase of two five points at the midpoint of our previous guidance, reflecting lower levels of favorable prior year development.
Primarily related to workers' compensation and.
In the first half of the year and more conservative loss picks with regard to our social inflation exposed businesses. Our guidance continues to assume strong profitability in our workers compensation businesses overall, but at a higher calendar year combined ratio when compared to the exceptional results reported in the <unk>.
Prior year.
We continue to expect net written premiums to be 5% to 9% higher than 2022 results. Excluding workers' comp. We now expect premiums in this group to grow in the range of 5% to 9% a decrease of two points at the midpoint of our previous guidance, reflecting a continued challenging competitive environment in our.
Executive liability business.
We now estimate the specialty financial group combined ratio to be in the range of 89% to 93% up four points from our previous range of $85 to 89%.
Acting elevated catastrophe losses in the second quarter and the expectation of higher catastrophe losses in the second half of 2023 as a result of the strong growth in our financial institutions business through the first half of the year.
Growth in net written premiums for this group is expected to be in the range of 23% to 27% up significantly from our previous range of 6% to 10% as a result of the opportunistic group growth in our financial institutions business base.
Based on results through the first six months of the year, we continue to expect renewal rates overall to increase between three and 5% in our specialty property and casualty operations overall, excluding workers' compensation, we continue to expect renewal rate increases to be in the range of 4% to 6%.
Craig and I are proud of our proven long long term track record of value creation, and we believe that our entrepreneurial opportunistic culture combined with our strong balance sheet and financial flexibility position us well for the remainder of 2023.
We now open the lines for the Q&A portion of today's call and we'd be happy to respond to your questions.
Thank you.
We will now conduct the Q&A.
And answer session.
To ask a question. Please press star one on your telephone and wait for your name to be announced.
Withdraw your question. Please press star one again.
Please standby, while we compile the question and answer roster.
Our first question is from Paul Newsome with Piper Sandler Your line is open.
Good morning, I was hoping for a little bit more details on the specialty financial slash financial institutions group.
Growth.
And maybe why well first of all I think that's forced placement insurance right.
Got it.
Correct me if I'm wrong.
And again, that's declining lender placed property.
Yes.
So.
Why is that an opportunity.
Market.
The whole insurance in general retail business.
Business right now what makes that so attracted today.
While historically our business has had great returns.
For a long period of time.
I think what's changed is.
Rising.
For closure rate.
Rates.
And.
As you said some of the.
Opportunity.
Because of market disruption to write new accounts.
So it's been a great business, it's been a great business high returning high return on equity business for us for forever.
Sure.
Just had a lot of it was heavy had a heavy cat quarter.
And the six months of the catastrophes were $17 million to $18 million higher than last year for instance.
Do you have any thoughts.
Keeping up with cost inflation in that business given.
Property in general has been a tough place to be to keep up with literally inflation issues.
Are you doing things in there.
We can offset those tissues.
Oh for sure.
Pricing is just one component.
I think on that business like.
We're focused on getting proper insured values as inflation is taken.
Values up that's definitely.
Part of our strategy.
Great.
Maybe turning to the workers' comp business, obviously, historically really good business.
Can you talk about sort of what maybe happened from the <unk>.
<unk> changed there that might.
<unk> reduced the favorable reserve development or we're just not getting as much.
Yes.
You can see improvement as we've had.
Sure.
How many years.
Yes, I mean, the reality is with.
With rates I mean.
To start with.
Our overall calendar year underwriting results through six months in last year outstanding.
We we.
We expect 2023 to continue to be it's just not going to we're not going to have combined ratios.
At the same exceptional.
Levels as in the past.
On an accident year basis, we're still projecting a good overall accident year underwriting profit.
Sure.
We had that last year.
We're still projecting.
A healthy accident year underwriting profit through six six months and for 2023.
Again, just not.
The underwriting margins just won't be at the same outstanding levels is what they've been in the past.
When.
Even though our loss costs continued to be.
<unk>.
Pretty benign and loss ratio trends are in check.
With rates.
Declining over time.
For us and the industry.
There's just not going to be the same levels of underwriting margin there.
No I was just wondering if there was obviously the guidance change so there must have been sort of trend.
<unk> change I guess.
Was different than what you thought at the beginning of the year.
That's what I was asking about.
Hi, Paul This is Brian so.
In recent years, we've just continued to see claims.
<unk> settled at lower than our initial expectation and having lots of favorable development coming out of workers comp.
This year in the first half of this year.
As we've as we've reacted to claim settlements were seeing things still come in better than our initial expectations as not as much better as before so it's still it's still a very good result does not is not developing as favorably as it had in some of the more recent years. So so still really good results just when we see that in the first half of the year knowing.
<unk> that we take a prudent approach to things. We we have are reacting to that.
Settling closer to our established reserves and not releasing as much.
Let's move folks to ask questions I appreciate the help those.
Thank you very much.
Our next question comes from Michael Zaremski with BMO. Your line is open.
Hey, great good afternoon.
Firstly.
Follow up too.
To Paul's question and Brian .
Your answer.
Is it on the work comp is it just a <unk>.
Small change in <unk>.
Medical.
Yes.
Trendline.
Not on the indemnity side is that just to just to.
Kind of put a period in that conversation.
This is Brian on the on the medical cost side, we are watching for that we haven't experienced a big uptick in expense, but we are mindful of that and we are considering that as we as we look at <unk>.
Setting our current accident year Im looking at reserve releases, so while we haven't experienced.
Big uptick in medical cost, we know that that may be coming.
Okay got it maybe just.
Keeping on.
Loss cost inflation levels.
You guys have.
<unk> already given us a lot of.
Good.
Detail on the in the prepared remarks.
Earnings release, but maybe we can kind of further unpack.
The social inflation aspect that that you brought up is it is it touching.
Marcel commercial auto or it sounds like a number of lines.
<unk>.
Is it is it just kind of a small inching up.
Diversification or is it.
Certain vintages, you'd like to call out or maybe we can unpack that conversation a bit more.
Sure.
Commercial auto the social inflation impacts nothing new we've been raising rates, particularly in the commercial auto liability side of commercial auto.
For 10 years or so.
So clearly social inflation continues to impact commercial auto.
We haven't really changed the guidance for our property and transportation work were.
Happy we're pleased with the underwriting performance of our overall commercial auto through six months and.
And 2022 and with continued price increases that were that were getting.
We're trying to stay that way.
That said commercial auto liability.
A focus where probably where a lot of the social inflation.
Hits is not where we want it to be.
Probably still at 100 102 accident year combined ratio.
As we look at this year, so we're continuing to take.
Take strong rate.
Commercial auto year to date, I think we've taken another 10% in rate.
He gave you a perspective because of the ongoing.
Social inflation.
And that.
So in commercial auto.
There's been a change we're just continuing to be aggressive in and how we take rate there.
I think.
The adjustment in our guidance really kind of came in the specialty casualty.
Part of our business and.
In the quarter, we talked about public sector.
We saw from in the 2015 to.
Ryan I think 2019.
Yes, 2015 to 2019, so public sector business, we started to see the impact of social inflation, there about five years ago through higher valued awards higher jury verdicts and other large settlements that business is coming out of coverage of casualty coverages.
In excess of self insured retentions for municipalities and school districts other business other entities that serve the public. So we took rate action beginning a number of years ago. So we're really seeing the issues are in those 2015 to 2019 accident years as Carl mentioned.
Yes.
Some of the actions that we're taking is.
And that we've cut capacity, we've tightened aggregates, we have been increasing rates increasing attachment points a lot of this business is.
Excess of higher Retentions or annual aggregate deductibles that are retained by our pool clients.
Our reinsurance policy soften our risk here and our layered approach to structuring our business.
It has helped us achieve better pricing, particularly in California.
Those are some of the things that that we're trying to two.
<unk>.
And our approach in the business to get it to the kind of returns that we're most that we like.
Okay.
That's helpful and maybe just lastly on the <unk>.
Competitive environment and also just being cognizant that now.
She is Roe.
Alright very high levels.
Peer leading but just we've.
We've seen.
Pricing power for certain.
Insurers and some of the indices to the broader indices kind of accelerate a bit quarter over quarter, whereas I believe.
Total companies for Afg's pricing and a little bit more flattish.
Despite some of the.
Inflationary trends <unk> been educating us about so.
Any.
The competitive environment.
Certain areas that are just.
Still kind of maybe a bit hyper competitive or or.
Youre just not looking too.
We need to take as much rate in certain areas.
Comp where profitability is still excellent.
Yes.
The only.
The only area that.
We see.
As Scott and a lot more competitive as the whole public D&O arena, that's where we see rates where there has been.
A big change in rates that with rates going down 15% to 20%.
I mean that said on the rest of our D&O book, our small accounts the pricing has been pretty stable.
And that so.
And that.
In the past.
I thought there was more competition on the higher excess liability layers.
Through six months.
That seems to have tightened up a little bit.
We're getting rate in.
One of the businesses is growing a little bit so if anything I think.
I've seen may be a tightening.
And that area.
So we like that.
So would you just as a last follow up would you say the industry is.
I'm trying to push through the higher reinsurance costs Q.
To the insured ultimately.
Is that taking place in that or is that kind of a multi year process or maybe it just doesn't need to happen because of higher interest rates.
Are you are you talking about the increase in the.
Property reinsurance.
<unk> reinsurance sure yes.
Yes, no I think definitely when you look at overall industry pricing, particularly on.
Large national account property accounts.
And coastal exposed.
There is large rate increases being taken in.
Terms and conditions changes in <unk>.
Business moving more business moving into the E&S side.
Our.
We're seeing opportunities on the property side also but we have less of an appetite for coastal property and earthquake exposed property than our peers. So we're just we're not making the same bets as what others are.
In the coastal areas and.
And or the high the highway exposed conductive areas in them.
Thank you.
Thank you very much for your question.
As a reminder, if you would like to ask a question. Please press star one on your telephone.
Our next question comes from Meyer Shields from Keefe Bruyette <unk> your.
Your line is open.
Great. Thanks, Good luck.
Two I think fairly quick questions first.
You mentioned.
Losses within surety and fidelity in the quarter and I'm wondering whether you are viewing that as.
Sort of a trend.
In line with economic weakness or just the line inherent randomness.
I don't think were seeing it as a trend. It's just it's just sort of the nature of the business there can be.
Bumps in the claims from time to time.
Okay, perfect and then just for understanding.
Given your expertise in transportation.
It would lead you to decide to non renew.
A block of premium rather than Remediated.
I think there are some programs and some things that you do that you just don't think.
Can be remediated with with price and terms so.
Okay understood. Thank you.
Thank you.
I'm not showing any further questions at this time.
Greg can now turn the conference back to Diane Weidner for closing remarks.
Thank you for joining us this morning and of course, if there's any follow up items feel free to reach out to the IR Department. We hope you all have a great rest of your day.
This concludes today's conference call. Thank you for participating you may now disconnect.
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