Q1 2025 Fairfax Financial Holdings Ltd Earnings Call

Operator: Good morning and welcome to Fairfax's 2025 first quarter results Your lines have been placed in a listen-only mode. After the presentation, we will conduct a question-and-answer session. At that time, to ask a question, please press star 1 on your phone keypad.

Good morning, and welcome to Fairfax is 2025 first quarter results conference call.

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Operator: Your host for today's call is Peter Clarke with opening remarks from Mr. Derek Bulas. Derek, please begin.

Speaker Change: Your host for today's call is Peter Clark with opening remarks from Mr. Derek Bolus.

Speaker Change: Please begin.

Derek Bulas: Good morning and welcome to our call to discuss Fairfax's 2025 first quarter results. This call may include forward-looking statements. Actual results may differ, perhaps materially, from those contained in such forward-looking statements as a result of a variety of uncertainties and risk factors, the most foreseeable of which are set out under risk factors in our base shelf prospectus, which has been filed with Canadian securities regulators and is available on CDAR.

Derek Bolus: Good morning, and welcome to our call to discuss Fairfax is 2025 first quarter results. This call may include forward looking statements actual results may differ perhaps materially from those contained in such forward looking statements. As a result of a variety of uncertainties and risk factors. The most foreseeable of which are set out under risk factors in our base.

Derek Bolus: Shelf prospectus, which has been filed with Canadian Securities regulators and is available on SEDAR Fairfax disclaims any intention or obligation to update or revise any forward looking statements, except as required by applicable Securities law I'll now turn the call over to our President and C O O Peter Clark.

Derek Bulas: Fairfax disclaims any intention or obligation to update or revise any forward-looking statements, except as required by applicable securities law.

Peter Clarke: I'll now turn the call over to our President and COO, Peter Clarke. Thank you, Derek.

Peter Clark: Thank you Derek good morning, and welcome to Fairfax is 2025 first quarter conference call.

Peter Clarke: Good morning and welcome to Fairfax's 2025 first quarter conference call.

Peter Clarke: I plan to give you some highlights and then pass the call to Wade Burton, our President and Chief Investment Officer of Hamblawatsa, to comment on investments.

Speaker Change: I plan to give you some highlights and then pass the call to Wade Burton, our President and Chief investment Officer of Hamblett Whatsapp commented on investments and then to Amy Sherk, Our Chief financial officer to provide some additional financial details.

Peter Clarke: And then Amy Sherk, our Chief Financial Officer, to provide some additional financial I'm very pleased to welcome Amy, who is joining us on her first conference call. We had a strong start to 2025 with net earnings of $946 million in the first quarter, up from $777 million in the first quarter of 2024. Operating income from our insurance and reinsurance companies adjusted to an undiscounted basis and before risk margin was $686 million in the first quarter of 2025, down from $977 million in the first quarter of 2024. The decrease was from lower underwriting income due to California wildfire losses of $692 million.

Speaker Change: I'm very pleased to welcome Amy who is joining us on our first conference call.

Speaker Change: We had a strong start to 2025 with net earnings of 946 million in the first quarter up from $777 million in the first quarter of 2024.

Speaker Change: Operating income from our insurance and reinsurance companies.

Speaker Change: Adjusted to a non discounted basis and before risk margin with $686 million in the first quarter of 2025.

Speaker Change: Down from $977 million in the first quarter of 2024.

The decrease was from lower underwriting income due to California, wildfire losses of $692 million.

Peter Clarke: Despite the significant catastrophe losses in the quarter, $781 million in total, our insurance and reinsurance operations produced an underwriting profit of $97 million. Our interest and dividend income was $607 million in the quarter, up from $590 million in the first quarter of 2024, while our share of profits of associates was flat at $129 million. Net gains on investments were very strong in the quarter at just over $1 billion. All in our book value per share increased to $1,080 in the first quarter of 2025 up by three and a half percent adjusted for our $15 dividend.

Speaker Change: Despite the significant catastrophe losses in the quarter 781 million in total our insurance and reinsurance operations produced an underwriting profit of $97 million.

Speaker Change: Our interest and dividend income was $607 million in the quarter up from $590 million in the first quarter of 2024, while our share of profits of associates was flat at $129 million.

Speaker Change: Net gains on investments were very strong in the quarter at just over $1 billion.

Speaker Change: All in our book value per share increased to 1080 in the first quarter of 2025 up by three 5%.

Speaker Change: Tested for a 15 dollar dividend.

Peter Clarke: Our insurance and reinsurance companies are in great shape, writing over $33 billion of annualized premium worldwide. We benefit greatly from our scale, diversification, and exceptional talent and experience of our long-serving presidents and teams that run our insurance and reinsurance companies. And nothing was more evident than that, than this quarter.

Speaker Change: Our insurance and reinsurance companies are in great shape, writing over 33 billion of annualized premium worldwide.

Speaker Change: We benefit greatly from our scale diversification and exceptional talent and experience of our long serving president's and teams that run our insurance and reinsurance companies.

Speaker Change: And nothing was more evident than that than this quarter.

Peter Clarke: I will now give you some additional detail on the components of our net earnings for the quarter. Our consolidated investment return was strong in the first quarter with a return of 2.7%. driven by increased interest and dividend income, stable profits of associates and strong net gains on Consolidated interest and dividend income of $607 million was up 2.8% year-over-year, benefiting from a growing investment portfolio partially offset by lower interest on the mortgage portfolio. Profits of Associates of $129 million in the quarter continues to be driven by Eurobank and Poseidon Corp. offset by losses on the Waterist Run from mark-to-market unrealized losses in its portfolio.

Speaker Change: I will now give you some additional detail on the components of our net earnings for the quarter.

Speaker Change: Our consolidated investment return was strong in the first quarter with a return of two 7%.

Speaker Change: Driven by increased interest and dividend income stable profits of associates and strong net gains on investments.

Speaker Change: Consolidated interest and dividend income of $607 million was up two 8% year over year benefiting from our growing investment portfolio, partially offset by lower interest on the mortgage portfolio.

Speaker Change: Profits of associates of $129 million in the quarter continues to be driven by Euro bank and Poseidon port.

Speaker Change: Offset by losses on the water restaurant from Mark to market unrealized losses in this portfolio.

Peter Clarke: In the quarter we had net gains on investments of $1,060,000 driven by gains on our equity exposures of $780,000,000. Gains on our bond portfolio of $388 million, primarily from U.S. Treasuries due to the decrease in interest rates in the first quarter. And that was partially offset by losses on other investments of $112 million. primarily reflecting unrealized losses on our preferred shares and The net gains of $779 million on our equity and equity related holdings were driven by realized gains and unrealized mark to market gains on Orla Mining, Sigma, our Fairfax TRS, offset by unrealized losses on IIFL Finance, Cleveland Cliffs and Kennedy Wilson.

Speaker Change: In the quarter, we had net gains on investments of $1 billion 60.

Speaker Change: Driven by gains on our equity exposures of 780 million gains on our bond portfolio of $388 million.

Speaker Change: Primarily from U S treasuries due to the decrease in interest rates in the first quarter.

Speaker Change: And that was partially offset by losses on other investments of $112 million.

Speaker Change: Primarily reflecting the unrealized losses on our preferred shares in Detroit.

The net gains of $779 million on our equity and equity related holdings were driven by realized gains and unrealized mark to market gains on oil and mining Sigma our Fairfax Trs <unk>.

Speaker Change: Offsetting by unrealized losses on our F L Finance, Cleveland cliffs and Kennedy Wilson.

Peter Clarke: In the first quarter, we sold our position in Sigma and realized a gain of $179 million. Our original cost was $41 million. We have always said, and please remember, our net gains or losses on investments only make sense over the long term, and will fluctuate from quarter to quarter, or for that matter, year to year.

Speaker Change: In the first quarter, we sold our position in Sigma and realized a gain of $179 million, our original cost was $41 million.

Speaker Change: We have always said and please remember our net gains or losses on investments only makes sense over the long term and will fluctuate from quarter to quarter or for that matter year to year.

Peter Clarke: More on investments from Wade. As mentioned in previous quarters, our bulk value per share of $1,080 does not include unrealized gains or losses in our equity-accounted investments and our consolidated investments, which are not mark-to-market. At the end of the first quarter, the fair value of these securities is in excess of carrying value by $1.4 billion, an unrealized gain position, or $66 per share on a pre-tax basis. This is after realizing a gain on SIGMA of $179 million, which was sold in the first quarter of 2025. In the first quarter, net earnings included $120 million net unrealized gain due to decreasing interest rates in the period.

Wade Burton: More on investments from Wade.

Wade Burton: As mentioned in previous quarters, our book value per share of 1080, <unk> does not include unrealized gains or losses in our equity accounted investments.

Wade Burton: And our consolidated investments, which are not mark to market.

Wade Burton: At the end of the first quarter. The fair value of these securities is in excess of carrying value by $1 4 billion and unrealized gain position or $66 per share on a pre tax basis.

Wade Burton: This is after realizing a gain on sigma of $179 million, which was sold in the first quarter of 2025.

Wade Burton: In the first quarter net earnings included 120 million net unrealized gain due to decreasing interest rates in the period.

Peter Clarke: This consisted of unrealized gains on our bond portfolio of $388 million, which I previously mentioned, offset by the negative impact of the decrease in interest rates on our insurance and reinsurance contracts held of $268 million.

Wade Burton: This consisted of unrealized gains on our bond portfolio of $388 million, which I previously mentioned offset by the negative impact of the decrease in interest rates on our insurance and reinsurance contracts held up $268 million.

Peter Clarke: For the first quarter of 2024, this number was a net loss of 127. Our insurance and reinsurance businesses wrote $8.4 billion of gross premium in the first quarter of 2025. up 5% versus the first quarter of 2024. Our North American insurance segment increased gross premiums by $138 million in the first quarter of 2025, or 6.7% over the first quarter of 2024. Crum Forster continued to grow its specialty business with double-digit growth of 12.8%, driven by its accident and health business, commercial and executive segment, and surplus and specialty line. Northbridge was up 1.9% in Canadian dollars, reflecting continued strong customer retentions and continued rate increases.

Wade Burton: For the first quarter of 2024. This number was a net loss of $127 million.

Wade Burton: Our insurance and reinsurance businesses wrote $8 4 billion of gross premium in the first quarter of 2025.

Wade Burton: Up 5% versus the first quarter of 2024.

Wade Burton: Our North American insurance segment increased gross premiums by $138 million.

Wade Burton: In the first quarter of 2025 or six 7% over the first quarter of 2024.

Wade Burton: Crum <unk> Forster continued to grow its specialty business with double digit growth of 12, 8% driven by its accident and health business commercial and executive segment and surplus in specialty lines.

Wade Burton: North Bridge was up one 9% in.

Wade Burton: In Canadian dollars, reflecting continued strong customer retention and continued rate increases.

Peter Clarke: While Zenith premiums were down 1.8% over the first quarter of 2025 due to the continued competitive workers' compensation market. Our global insurer and reinsurer segment was up 7.8% with growth premiums of $4.7 billion in the first quarter of 2025 over the first quarter of 2024. Allied Worlds premium was up 7.8% in the quarter with gross premiums of almost $2.2 billion. Their reinsurance segment was up 17% from new and renewal business and reinstatement premium from the California wildfires. Its global markets insurance premium was up 6%, primarily from new business, while its North American insurance segment was down 2.1%, primarily from the competitive program and cyber market.

Wade Burton: While zenith premiums were down one 8% over the first quarter of 2025.

Wade Burton: Due to the continued competitive workers' compensation market.

Wade Burton: Our global insurer and reinsurance segment was up seven 8% with gross premiums of $4 7 billion in the first quarter of 2025 over the first quarter of 2024.

Wade Burton: Allied world's premium was up seven 8% in the quarter with gross premiums of almost $2 2 billion.

Wade Burton: The reinsurance segment was up 17% from new and renewal business and reinstatement premium from the California wildfires.

Wade Burton: It's global markets insurance premium was up 6% primarily from new business, while its north American insurance segment was down two 1%.

Wade Burton: Primarily from the competitive programming cyber markets.

Peter Clarke: Odyssey Group's premiums were up 7.9% in the quarter, with gross premiums written up $1.5 billion. This reinsurance business was a driver of the growth, primarily in the United States, and it also benefited from the reinstatement premium on the California wildfire law. Hudson Premium was down with actions taken on its crop and healthcare lines of business. where its gross premium was $781 million up 7.4% in the first quarter of 2025 versus the first quarter of 2024, primarily driven by increases in their reinsurance segment and property and specialty business. Like Allied World and Odyssey, BRIT also had additional premium in the first quarter from reinstatement premium.

Wade Burton: Odyssey group's premiums were up seven 9% in the quarter with gross premiums written up $1 5 billion. Its reinsurance business was the driver of the growth primarily in the United States and it also benefited from the reinstatement premium on the California wildfire loss.

Wade Burton: Yes.

Wade Burton: Hudson premium was down with actions taken on its crop and health care lines of business.

Wade Burton: Britain gross premium was 781 million up seven 4% in the first quarter of 2025 versus the first quarter of 2024, primarily driven by increases in our reinsurance segment and property and specialty business.

Wade Burton: Like Allied World and Odyssey, Brett also had additional premium in the first quarter from reinstatement premiums.

Peter Clarke: Beginning in 2025, de-insurance, an algorithmic follow-on Lloyd syndicate developed within BRIT was officially separated from BRIT. Key will operate as a stand-alone company and will be reported separately going forward. With annual premiums approaching $1 billion, Key was requiring more of BRIT's resources and with a different business model, it was thought it would be beneficial for BRIT and Key to split. In the first quarter of 2025, Key wrote $204 million of premium, up 9.5% from the first quarter of 2025. Our international insurance and reinsurance operations gross premiums were $1.5 billion, down 5.1% in the first quarter of 2025 versus the first quarter of 2024.

Wade Burton: Beginning in 2025 D insurance and algorithmic follow on Lloyd's Syndicate developed within Brit was exception was officially separated from Brett.

Wade Burton: He will operate as a standalone company and will be reported separately going forward.

Wade Burton: With annual premiums approaching $1 billion.

Wade Burton: Key was requiring more of Brits resources and with a different business model. It was thought it would be beneficial for Britt and key to split.

Wade Burton: In the first quarter of 2025.

Wade Burton: Key wrote $204 million of premium up nine 5% from the first quarter of 2024.

Wade Burton: Our international insurance and reinsurance operations gross premiums were one 5 billion down.

Wade Burton: Down five 1% in the first quarter of 2025 versus the first quarter of 2024.

Peter Clarke: The decrease was driven by the non-renewal of a significant contract at Gulf Insurance that had been experiencing diminishing performance. On a net written premium basis, premium was up 7.7% as the effect of the non-renewal had much less effect on a net basis. Excluding golf insurance, our international operations gross premiums were up 8%. with Fairfax Asia up 16% driven by Singapore REIT, while Bright and Polish REIT also had strong growth in the quarter up 15% and 16% respectively. Our international operations now make up approximately 20% of our total gross premiums, and the long-term prospects of our international operations are excellent and will be a significant source of growth over time.

Wade Burton: The decrease was driven by the non renewal of a significant contract at Gulf insurance that had been experiencing diminishing performance.

Wade Burton: On a net written premium basis premium was up seven 7% as the effect of the non renewal had much less effect on a net basis.

Wade Burton: Excluding golf insurance, our international operations gross premiums were up 8%.

Wade Burton: With Fairfax Asia up 16% driven by Singapore REIT.

Speaker Change: While bright and Polish we also had strong growth in the quarter up 15% and 16% respectively.

Speaker Change: Our international operations now make up approximately 20% of our total gross premiums and the long term prospects of our international operations are excellent and will be a significant source of growth over time.

Peter Clarke: Driven by excellent management teams, underpenetrated insurance markets, and strong local economy.

Speaker Change: Driven by excellent management teams under penetrated insurance markets and strong local economies.

Peter Clarke: The big driver affecting our underwriting results in the quarter was the California wildfire loss. In the quarter, we've recorded $692 million of net losses from the fires. which was within the range we previously disclosed on our year-end conference call. The majority of the losses came from the reinsurance operations at Odyssey, Allied, and Brit. The losses were absorbed by the first quarter cap margin and underwriting income, resulting in a consolidated combined ratio of 98.5 in the quarter. The ability to withstand such a large catastrophe loss in a quarter, while still producing an underwriting profit in the quarter, demonstrates the strength and scale of our insurance and reinsurance operations.

Speaker Change: The big driver affecting our underwriting results in the quarter was the California wildfire losses.

Speaker Change: In the quarter, we recorded 692 million of net losses from the fires.

Speaker Change: Which was within the range, we previously disclosed on our year end conference call.

Speaker Change: The majority of the losses came from the reinsurance operations at Odyssey Allied and Brett.

Speaker Change: The losses were absorbed by the first quarter cat margin and underwriting income, resulting in a consolidated combined ratio of 98, 5% in the quarter.

Speaker Change: The ability to withstand such a large catastrophe loss in the quarter, while still producing an underwriting profit in the quarter demonstrates the strength and scale of our insurance and reinsurance operations.

Peter Clarke: Our global insurers and re-insurers posted a combined ratio of just over 100%, which included the majority of our consolidated catastrophe losses of in the quarter. 748 million out of total catastrophe losses of 781 were within the global inter and reinter segment. Allied World had a combined ratio of 95.7, which included 15.3 points of catastrophe losses. Brits combined ratio was 97.6 with 21.4 points of catastrophes. Key was 98.3 with eight points of cap. and Odyssey had the largest losses on the California wildfires, posting a 105.8 combined ratio and included 29 points of catastrophe loss. Our North American insurers had a combined ratio of 95.5 for the first quarter, led by Northbridge with a combined ratio of 92.1.

Speaker Change: Our global insurers and reinsurers posted a combined ratio of just over 100%.

Speaker Change: Which included the majority of our catastrophe consolidated catastrophe losses.

Speaker Change: In the quarter.

Speaker Change: $748 million out of total catastrophe losses of 781, where within the global insurer and reinsurer segment.

Speaker Change: Allied World had a combined ratio of 95, 7%, which included 15 three points of catastrophe losses.

Speaker Change: <unk> combined ratio was 97, six with 21 four points of catastrophes.

Speaker Change: He was $98 three with eight points of cat and.

Speaker Change: Odyssey had the largest losses on the California wildfires posting a 105 eight combined ratio and included 29 points of catastrophe losses.

Speaker Change: Our North American insurers had a combined ratio of 95 five for the first quarter led by North bridge with a combined ratio of $92 one.

Peter Clarke: from Forster had an underwriting income of $50 million or a combined ratio of $95.4. While Zenith, our workers' compensation specialist, who are feeling the effects of multiple years of price decreases in the workers' comp space, had an elevated combined ratio of 106.3, representing an underwriting loss of $11 million. Our international operations delivered a combined ratio of 96.7 for the quarter. Fairfax, Asia had a great start to the year with a combined ratio of 93.6, with all its companies producing an underwriting profit, except for Falcon Thailand. Falcon Thailand had a combined ratio of 105.3. adversely affected by nine points of losses from the devastating earthquake in Myanmar that also affected Thailand.

Speaker Change: From Forrester had an underwriting income of $50 million or a combined ratio of 95 four.

Speaker Change: While zenith our workers' compensation specialist.

Speaker Change: Who are feeling the effects of multiple years of price decreases in the workers' comp space had an elevated combined ratio of 106, three representing an underwriting loss of $11 million.

Speaker Change: Our international operations delivered a combined ratio of $96 seven for the quarter.

Speaker Change: Fairfax Asia had a great start to the year with a combined ratio of 93, six with all its companies producing an underwriting profit except for Falcon, Thailand.

Speaker Change: Falcon, Thailand had a combined ratio of 105 three.

Speaker Change: Adversely affected by nine points of losses from the devastating earthquake in Myanmar that also affected Thailand.

Peter Clarke: Latin America had a strong quarter with each of their companies coming in under 95%. Producing a consolidated combined ratio of 94.1. Colonnade, who writes business across Eastern Europe, had another grey quarter at 91.3, and Bright in South Africa posted a 96.3. Golf Insurance, the largest company in our international operations, had a combined ratio of 99.4 in the first quarter, negatively affected by the large losses in the quarter and the expense dragged from the loss of a large contract in its Kuwait operations.

Speaker Change: Latin America had a strong quarter with each of their companies coming in under 95%.

Speaker Change: Producing a consolidated combined ratio of $94 one.

Speaker Change: Colonnade, who writes business across eastern Europe had another great quarter at 91, three and.

Speaker Change: And bright in South Africa posted a 96, 2%.

Speaker Change: Golf insurance the largest company in our international operations had a combined ratio of 99 four in the first quarter.

Speaker Change: Negatively affected by the large losses in the quarter and the expense drag from the loss of a large contract and it's Kuwait operations.

Peter Clarke: We were confident they will return to their historical sub-95 underwriting results. In the first quarter, our insurance and reinsurance companies recorded favorable reserve development of $219 million for a benefit of 3.5 points on our combined ratio. Each of our major segments recorded favorable reserve development, with releases primarily coming on short tail property business. We are focused on setting our ongoing reserves at conservative levels, especially on long tail long.

Speaker Change: We were confident they will return to their historical sub 95 underwriting results going forward.

Speaker Change: In the first quarter, our insurance and reinsurance companies recorded favorable reserve development of $219 million or a benefit of three five points on our combined ratio.

Speaker Change: Each of our major segments recorded favorable reserve development with releases, primarily coming on short tail property business.

Speaker Change: We are focused on setting our ongoing reserves at conservative levels, especially on long tail lines.

Peter Clarke: Through our decentralized operations, our insurance and reinsurance companies continue to thrive, writing over $33 billion in annualized gross premium. strong underlying margins, and as we said before, led by our exceptional management team. Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2025.

Speaker Change: Through our decentralized operations, our insurance and reinsurance companies continue to thrive writing over 33 billion and annualized gross premium.

Speaker Change: Strong underlying margins and as we said before led by our exceptional management teams.

Speaker Change: Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2025.

Wade Burton: I will now pass the call to Wade Burton, our President and Chief Investment Officer of Hamblawatsa to comment on our investment. Thank you, Peter, and good morning. There's volatility in stock markets, bond markets and the economy. The good news is Fairfax has historically benefited from And to end the first quarter of 2025, we think our stock and bond portfolios are in great shape for the environment we're in. Here's why. Starting with our $48 billion fixed income portfolio, $33 billion is in government treasuries with what we think is the right duration to lock in a significant amount of interest income, but short enough that we can capture the opportunity if rates move up.

Speaker Change: I will now pass the call to Wade Burton, our President and Chief investment officer of handler Lotsa to comment on our investments.

Speaker Change: Okay.

Speaker Change: Thank you Peter and good morning.

Speaker Change: Theres volatility in stock markets bond markets and the economy. The good news is Fairfax has historically benefited from volatility.

And to end the first quarter of 2025, we think our stock and bond portfolios are in great shape for the environment. We're in.

Here's why.

Speaker Change: Starting with our $48 billion fixed income portfolio $33 billion in government treasuries with what we think is the right duration to lock in a significant amount of interest income, but short enough that we can capture the opportunity if rates move up.

Wade Burton: Duration is 3.3 years and book yield is 5.1%. Government bonds are the safest, most liquid, easiest to sell securities and they are 70% of our fixed income portfolio. Second, out of a $69 billion investment portfolio, we have $5.9 billion invested in mark-to-market stocks, less than 10% of the total. And we think our stocks are, for the most part, cheap, financially sound, and well-positioned to weather any storm. Third, our associated and consolidated investments are carried at $10 billion, so 14% of the total investment portfolio. This includes 2.4 billion in Eurobank and 1.9 billion in Poseidon. Eurobank is very sound and cheap and run by a great CEO in Fakih and Karavias, who also has a great team supporting him, including his right-hand man, Costas Vassilidis.

Speaker Change: <unk> is three three years and book yield is five 1%.

Speaker Change: Government bonds are the safest most liquid easiest to sell securities in there are 70% of our fixed income portfolio.

Speaker Change: Yeah.

Speaker Change: Second out of our $69 billion investment portfolio, we have $5 $9 billion invested in mark to market stocks less than 10% of the total.

Speaker Change: And we think our stocks are for the most part cheap financially sound and well positioned to weather any storm.

Speaker Change: Third our associated and consolidated investments are carried at 10 billion, so 14% of the total investment portfolio.

Speaker Change: This includes $2 4 billion in Euro bank, and $1 9 billion and Poseidon.

Speaker Change: Eurobank is very sound and cheap and run by a great CEO and <unk> <unk>.

Also has a great team supporting him, including his right hand man cost as fast Alere.

Wade Burton: Greece is growing much faster than the EU average and has an outstanding government in place. Presidin is a financial and operating company in the shipping business with long-term contracts backed by financially strong customers with outstanding balance We believe we have great visibility into the earnings of these two holdings, which are almost 40% of Associates and Consolidated Investments. and like Fairfax itself, both companies generate a lot of capital. In 2024, net income of Eurobank was 1.5 billion euros. and net income of Poseidon, 600 million US dollars. Reminder, we own 32% of Eurobank and 43% of Poseidon.

Speaker Change: Greece is growing much faster than the EU average and has an outstanding government in place.

Speaker Change: The siding as a financial and operating company in the shipping business with long term contracts backed by financially strong customers with outstanding balance sheets.

Speaker Change: We believe we have great visibility into the earnings of these two holdings, which are almost 40% of associates and consolidated investments.

Speaker Change: And like Fairfax itself, both companies generate a lot of capital.

Speaker Change: In 2024 net income of Eurobank was $1 5 billion euros.

Speaker Change: And net income of Poseidon $600 million.

Speaker Change: A reminder, we own 32% of Eurobank and 43% of Poseidon.

Wade Burton: Both also have the same mindset as Fairfax in terms of benefiting from volatility. The worse it gets, the better they will perform over the longer. Our outstanding investment team is on the lookout for opportunities and watching our investments closely. There is much apparent uncertainty coming from the tariff negotiations, and many companies are struggling with constantly changing numbers. Tough to buy and price products with Tariffs changing day to day. We've looked at our universe of investing companies under this view of uncertainty and think all will thrive over the long run. Our long-term investment horizon and lack of call on our capital is a huge advantage in uncertainty.

Speaker Change: Both also had the same mindset as Fairfax in terms of benefiting from volatility the worse. It gets the better they will perform over the long run.

Speaker Change: Our outstanding investment team is on the lookout for opportunities and watching our investments closely.

Speaker Change: There is much apparent uncertainty coming from the tariff negotiations and many companies are struggling with constantly changing numbers tough.

Speaker Change: Tough to buy and priced products with tariffs changing day to day.

Speaker Change: We've looked at our universe of invested companies under this view of uncertainty and thank all will thrive over the long run.

Speaker Change: Our long term investment horizon and lack of call on our capital is a huge advantage in uncertain times.

Wade Burton: Lastly, we have a lot of cash. We have $2 billion cash in investments at the holding company. We also have $8 billion in cash in short-term treasuries at our operating. So to summarize, between the cash, the durability and capital production of our investee companies, the small percent of our portfolio in mark-to-market stocks, and our very safe and high-earning fixed income portfolio, we think we are in good shape to weather these uncertain times and then take advantage.

Speaker Change: Lastly, we have a lot of cash we have $2 billion cash and investments at the holding company. We also have $8 billion in cash and short term treasuries at our operating companies.

Speaker Change: So to summarize between the cash the durability in capital production of our invested companies the small percent of our portfolio and mark to market stocks and are very safe and high earning fixed income portfolio. We think we are in good shape to weather. These uncertain times and then take advantage of them.

Amy Sherk: I will now pass it over to Amy Sherk, our CFO. Thank you, Wade. I'll begin my comments by discussing the impact changes in interest rates had on our consolidated statement of earnings in the first quarter of 2025, and specifically the effects it had on discounting of prior year net losses on claims and our fixed income portfolio. Net earnings of $946 million in the first quarter of 2025 included a net benefit of $120 million, reflecting the effects of decreases in interest rates during the quarter, which was comprised of net gains on bonds of $388 million, primarily unrealized, that was partially offset by a net loss reported on insurance contracts and reinsurance contracts held of $268 million.

Speaker Change: I will now pass it over to Amy Sherk, our CFO.

Amy Sherk: Thank you Wade I'll begin my comments by discussing the impact changes in interest rates had on our consolidated statement of earnings in the first quarter of 2025, and specifically the effects. It had on discounting of prior year net losses on claims and our fixed income portfolio.

Amy Sherk: Net earnings of $946 million in the first quarter of 2025 included a net benefit of 120 million, reflecting the effects of decreases in interest rates during the quarter, which was comprised of net gains on bonds at $388 million, primarily unrealized that.

Amy Sherk: Was partially offset by a net loss reported on insurance contracts and reinsurance contracts held at 268 million.

Amy Sherk: Comparatively, net earnings of $777 million in the first quarter of 2024 included a net loss of $127 million, reflecting increases in interest rates, which was comprised of net losses on our bond portfolio of $319 million, primarily unrealized, that was partially offset by a net benefit on insurance contracts and reinsurance contracts held of $192 million.

Amy Sherk: Comparatively net earnings of 777 million in the first quarter of 2024 included a net loss of 127 million, reflecting increases in interest rates, which was comprised of net losses on our bond portfolio of $319 million primarily.

Amy Sherk: The unrealized that was partially offset by a net benefit on insurance contract and reinsurance contracts held at $192 million.

Amy Sherk: When you compare the year-over-year change on a pre-tax basis, the changes in interest rates resulted in an approximate $250 million movement in our pre-tax earnings. With the adoption of IFRS 17 generally, an increased decrease in interest rates will result in a decreased increase to the carrying value of both the company's fixed income portfolio and net liability for incurred claims for insurance contracts. While the change to the carrying value of each will not necessarily be equal in magnitude, when there is movement in interest rates, the impact on our company's net earnings is mitigated.

Amy Sherk: When you compare the year over year change on a pre tax basis. The changes in interest rates resulted in an approximate 250 million dollar movement in our pre tax earnings with the adoption of Ifr as 17 generally an increase decrease in interest rates will result in a decrease in crew.

Amy Sherk: <unk> to the carrying value as both the company's fixed income portfolio and net liability for incurred claims for insurance contracts.

Amy Sherk: While the change to the carrying value of each will not necessarily be equal in magnitude. When there is movement in interest rates the impact on our company's net earnings is mitigated.

Amy Sherk: Please refer to page 31 of the MD&A within the company's interim consolidated financial statements for the first quarter of 2025 for a table that presents the company's total effects of discounting and risk adjustment on our net insurance liabilities and the effects of changes in interest rates on the company's bond portfolio. Set out in a format the company believes assists in understanding the company's net exposure to interest rate risk.

Amy Sherk: Please refer to page 31 at the N DNA within the company's interim consolidated financial statements for the first quarter of 2025 for a table that presents the company's total effects of discounting and risk adjustment on our net insurance liabilities and the effects of changes in interest.

Amy Sherk: Rates on the company's bond portfolio set out in a format. The company believes assist in understanding the company's net exposure to interest rate risk.

Amy Sherk: A few comments on our non-insurance companies during the quarter. Non-insurance companies reported an operating loss in the first quarter of 2025 of $41 million compared to an operating income of $17 million in the first quarter of 2024. Excluding non-cash impairment charges recorded at BoatRocker in relation to its recently announced strategic transaction with Blue Ant and certain members of the BoatRocker management, the non-insurance companies reported stronger operating income in the first quarter of 2025 compared to the first quarter of 2024, principally reflecting increased operating income at the of sleep country on October 1st, 2024, and higher business volumes at rest.

Amy Sherk: A few comments on our non insurance companies during the quarter.

Amy Sherk: Non insurance companies reported an operating loss in the first quarter of 2025 at 41 million compared to an operating income of $17 million in the first quarter of 'twenty 'twenty four.

Amy Sherk: Excluding noncash impairment charges recorded at bolt rocker in relation to its recently announced strategic transaction with Blue and certain members of the boat Rocker management then.

Amy Sherk: Non insurance companies reported stronger operating income in the first quarter of 2025 compared to the first quarter of 2024, principally reflecting increased operating income at the restaurant and retail operating segment, primarily related to the consolidation of sleep country on October 1st 2020.

Amy Sherk: Four and higher business volumes at recipe.

Amy Sherk: A few comments on transactions within the quarter. On March 23, 2025, BoatRocker entered into definitive agreements whereby Blue Ant will become a public company via a reverse takeover of BoatRocker, pursuant to which BoatRocker will acquire all shares of Blue Ant by exchanging 1.25 BoatRocker shares for each share of Blue Ant. Concurrently, BoatRocker will sell certain of its production and distribution assets to a privately owned company controlled by certain members of BoatRocker's management. As a result, BoatRocker recorded impairment charges in the first quarter of 2025. Closing of the transaction is subject to various conditions and is expected to be in the second quarter of 2025.

Amy Sherk: A few comments on transactions within the quarter.

Amy Sherk: On March 23, 2025 volt rocker entered into definitive agreements, whereby blue and we became a public company.

Amy Sherk: A reverse takeover of boat rocker pursuant to which felt rocker will acquire all shares of blue and by exchanging 1.25.

Amy Sherk: Rocker shares for each share of blue at.

Amy Sherk: Concurrently boat rocker will sell certain of its production and distribution assets to a privately owned company controlled by certain members of boat Rockers management.

Amy Sherk: As a result boat rocker.

Amy Sherk: We recorded impairment charges in the first quarter of 2025.

Amy Sherk: Closing of the transaction is subject to various conditions and is expected to be in the second quarter of 2025.

Amy Sherk: Upon closing, the company expects to apply the equity method of accounting to its investment in the surviving company.

Amy Sherk: Upon closing the company expects to acquire the equity method of accounting to its investment in the surviving company.

Amy Sherk: On March 28, 2025, the company sold its equity interest in Sigma, a water and wastewater infrastructure business that the company accounted for under the equity method of accounting, for a total consideration of $327 million, comprised of cash consideration of $284 million and a retained ownership interest in Sigma through a new limited partnership interest of 16.1 percent with a fair value of $43 million at closing. As a result, the company recorded a realized gain of $179 million. in its Consolidated Statement of Earnings and classified its 16.1% retained ownership interest at fair value through profit and loss.

Amy Sherk: On March 28, 2025, the company sold its equity interest in Sigma a water and wastewater infrastructure business that the company accounted for under the equity method of accounting for a total consideration of $327 million comprised of cash consideration at two <unk>.

Amy Sherk: And $84 million and our retained ownership interest in Sigma through a new limited partnership interest at 16, 1% with a fair value of $43 million at closing.

Amy Sherk: As a result, the company recorded a realized gain of $179 million.

Amy Sherk: And its consolidated statement of earnings and classified at 16, 1% retained ownership interest at fair value through profit and loss.

Amy Sherk: And during the first quarter, Recipe repurchased and cancelled its common shares not owned by Fairfax, which increased Fairfax's ownership interest in Recipe from 84 to 100%. Recipe increased its borrowings by $132 million to partially fund this repurchase.

Amy Sherk: And during the first quarter recipe repurchased and canceled its common shares not owned by Fairfax, which increased Fairfax has ownership interest in recipe from 84% to 100%.

Amy Sherk: The recipe increased its borrowings by $132 million to partially fund this repurchase.

Amy Sherk: Subsequent to March 31st, 2025, on April 21st, 2025, Quest spun off two of its subsidiaries in a non-cash distribution to its shareholders. The company received one equity share of each of Digitide Solutions and Blue Spring Enterprises for every equity share of Quest it held. The company has recorded its investments in Digitide and Blue Spring at their respective fair values on the date of spin-off, and we expect to apply the equity method of accounting to each and will continue to apply the equity method of accounting to our remaining investment in Quest. DigiTide and BlueSpring are expected to become publicly listed in India during the second quarter of 2025.

Amy Sherk: Subsequent to March 31st 2025 on April 21, 2025 Quest spun off two of its subsidiaries and a noncash distributions to its shareholders. The company received one equity share at each of digitized solutions and Blue Spring enterprises.

Amy Sherk: For every equity share of quest. It held the company has recorded its investments in digitizing and Blue spring at their respective fair values on the date of spin off and we expect to apply the equity method of accounting to each and we will continue to apply the equity method of accounting to our remaining investment in class.

Amy Sherk: Digiti didn't blue spring are expected to become publicly listed in India. During the second quarter of 2025.

Amy Sherk: I will close with a few comments on our financial condition. Maintaining an emphasis on financial soundness, at March 31, 2025, the company held $2.1 billion of cash and investments at the holding company, had $200 million of its $2 billion unsecured revolving credit facility drawn to supplement short-term holding company liquidity, and the holding company also continued to own additional investments and associates, and consolidated non-insurance companies with a fair value of approximately $1.7 billion. Holding company cash and investments support the company's decentralized structure and enable the company to deploy capital efficiently to its insurance and reinsurance operations.

Amy Sherk: I will close with a few comments on our financial condition, maintaining an emphasis on financial soundness at March 31, 2025, the company held $2 1 billion of cash and investments at the holding company had 200 million of its 2 billion unsecured revolving credit facility drawn.

Amy Sherk: Lament short term holding company liquidity and the holding company also continued to own additional investments and associates and consolidated non insurance companies with a fair value of approximately $1 7 billion.

Amy Sherk: Holding company cash and investments support the company's decentralized structure and enable the company to deploy capital efficiently to its insurance and reinsurance operations.

Amy Sherk: At March 31, 2025, the excess of fair value over carrying value of investments in non-insurance associates and market traded consolidated non-insurance subsidiaries was $1.4 billion compared to $1.5 billion at December 31, 2024. The pre-tax excess of $1.4 billion is not reflected in the company's book value per share, but is regularly reviewed by management as an indicator of investment performance. The company's total debt to total capital ratio excluding non-insurance companies increased to 25.3% at March 31, 2025, compared to 24.8% at December 31, 2024, primarily reflecting the company's $200 million draw on our revolving credit facility and redemptions of all of Series F, E, M, and M preferred shares, partially offset by increased shareholders.

Amy Sherk: At March 31, 2025, the excess of fair value over carrying value of investments and non insurance associates.

Amy Sherk: End market traded consolidated non insurance subsidiaries with one 4 billion compared to $1 5 billion at December 31 2024.

Amy Sherk: The pretax pre tax excess of one 4 billion is not reflected in the company's book value per share, but it is regularly reviewed by management as an indicator of investment performance.

The company's total debt to total capital ratio, excluding non insurance companies increased to 25, 3% at March 31, 2025, compared to 24, 8% at December 31, 2024, primarily reflecting the company's 200 million dollar draw on our revolver.

Amy Sherk: The credit facility and redemption of all of series F.

Amy Sherk: E N and M preferred shares partially offset by increased shareholders' equity.

Amy Sherk: The preferred shares were redeemed for $419 million Canadian or $291 million U.S. dollars and we recognized a $61 million foreign exchange gain in equity. Common shareholders equity increased by $356 million to $23.3 billion at March 31st, 2025 from $23 billion at December 31st, 2024, primarily reflecting net earnings attributable to shareholders of Fairfax of $946 million and other comprehensive income of $111 million, primarily related to unrealized foreign currency translation gains, net of hedges as a result of strengthening of foreign currencies against the US dollar. This was partially offset by payments of common and preferred share dividends of $353 million.

Preferred shares for our Red teams for $419 million Canadian or 291 million U S dollars and we recognized a 61 million foreign exchange gain in equity.

Amy Sherk: Common shareholders' equity increased by 356 million to $23 3 billion at March 31, 2025 from 23 billion at December 31, 2024, primarily reflecting net earnings attributable to shareholders of Fairfax of 946 million and other comprehensive.

Amy Sherk: Net income of 111 million, primarily related to unrealized foreign currency translation gains net of hedges as a result of strengthening of foreign currencies against the U S. Dollar.

Amy Sherk: This was partially offset by payments of common and preferred share dividends of $353 million.

Amy Sherk: and purchases of 205,610 subordinate voting shares for cancellation for cash consideration of $289 million or U.S. $1,406.49 per share.

Amy Sherk: And purchases of 205610 subordinate voting shares for cancellation for cash consideration of $289 million or U S $1406 49 per share.

Amy Sherk: And lastly, book value per basic share was $1,080.38 at March 31, 2025, compared to $1,059.60 at December 31, 2024, representing an increase per basic share in the first quarter of 2025 of 3.5% adjusted for the $15 per share common dividend we paid in the first quarter.

Amy Sherk: And lastly book value per basic share with 1080 38 at March 31, 2025, compared to 1050 960 at December 31, 2024, representing an increase per basic share in the first quarter of 2025 or 3.5% adjusted.

Amy Sherk: For the $15 per share common dividend, we paid in the first quarter.

Peter Clarke: That concludes my remarks for the first quarter of 2025. I will now turn the call back over to Peter.

Amy Sherk: That concludes my remarks for the first quarter of 2025, I will now turn the call back over to Peter Thank you.

Peter Clarke: Thank Thank you, Jaeme.

Speaker Change: Thank you Amy we are now happy to take on any questions you might have.

Peter Clarke: We are now happy to take on any questions you might have. Thank you very much.

Peter Clark: Alright, Thank you very much.

Operator: If you would like to ask a question, please press star 1, please unmute your phone and record your name clearly when prompted. Your name is needed to introduce your question. If you care to withdraw your request, press star 2. So again, please press star one.

Peter Clark: If you would like to ask a question. Please press star one please on mute your phone and record your name clearly when prompted your nae.

Speaker Change: Jim is needed to introduce your question if you cared or withdraw your request press star two.

Peter Clark: Again, Please press star one.

Nick Priebe: Our first question is from Nick Priebe with CIBC Capital Markets. Answer, your line is open. Okay, thanks.

Speaker Change: Our first question is from Nick Priebe with CIBC capital markets. Sir Your line is open.

Peter Clark: Okay. Thanks, I was just wondering if you could talk in a bit more detail about how the site might be impacted by.

Wade Burton: I was just wondering if you could talk in a bit more detail about how Poseidon might be impacted by the disruption in global trade. Like, my understanding is that the business of their customer base is highly sensitive to global trade flows, specifically shipment of goods between China and the US. And I recognize the contracts are long duration, but does lower shipping demand translate to lower charter rates at renewal and lower residual values for container ships sold in the secondary market? Like, I'm wondering if you can just help us better understand what the primary risks are to that business if trade flows do slow dramatically between China and the US.

Speaker Change: The disruption in global trade.

My understanding is that the business of their customer base is highly sensitive to global trade flows specifically shipment of goods between China and the U S and <unk>.

Speaker Change: I recognize the contracts are long duration, but does lower shipping demand translate to lower charter rates at renewal and lower residual values for containership sold in the secondary market, but I'm wondering if you could just help us better understand what the primary risks are to that business. If trade flows do slow dramatically between China and the U S.

Wade Burton: Yeah, no, no, thanks, Nick, for that question. And no, we're quite, we're quite excited about the the prospects of Poseidon. Like you said, they have long term fixed contracts in place for many, many years. And they have, you know, new production coming on board. And talking to the management team, they're quite confident that the tariffs will not have and uncertainty economic uncertainty around the world will not have any significant effect on their business. So the management team is outstanding. And, you know, by locking in these contracts was, it was a huge plus for them. So we're very excited about the prospects of Poseidon.

Speaker Change: Yeah No no. Thanks, Nick for that question and no we're quite we're.

Speaker Change: We're quite excited about the.

Speaker Change: The prospects of Poseidon like.

Speaker Change: Like you said they have long term fixed contracts in place for many many years and they have new production coming on board and talking to the management team. They are quite confident that the.

Speaker Change: The tariffs will not have and uncertainty economic uncertainty around the world will not have any significant effect on their business.

Speaker Change: So the management team is outstanding and bye.

Speaker Change: By locking in these contracts was a it was a huge plus for them. So we're very excited about the prospects of this item.

Speaker Change: Next question please.

Stephen Boland: Our next is from Stephen Boland with Raymond James. Your line is open. Good morning. I just want to talk a little bit about California.

Speaker Change: Our next is from Stephen Boland with Raymond James Your line is open.

Stephen Boland: Good morning, just wanted to talk a little bit about California. When you see these events and the magnitude of losses.

Wade Burton: When you see these events and the magnitude of loss, Does this make you want to revisit your reinsurance coverage, why or why not? Thanks for the question. No, yeah, the California wildfires was, it was a significant event and, you know, we think probably close to a 40 billion dollar industry loss and we take most of our exposure on the reinsurance side, CAD exposure that is, and we like it that way. We like it that it's, in our minds, it's easier to control. We know what limits we have outstanding and our do a really, really good job, you know, measuring their exposure and make sure it's within their risk tolerances.

Speaker Change: Does this make you want to revisit.

Speaker Change: The reinsurance coverage.

Stephen Boland: Water or wide dog.

Thanks for the question.

Stephen Boland: No yeah, the California wildfires was it was a significantly significant event and.

Stephen Boland: We think.

Stephen Boland: Close to a $40 billion industry loss and we took most of our exposure on the reinsurance side cat exposure that is.

Stephen Boland: And we like it that way, we like it that it's a in our minds, it's easier to control we know what limits, we have outstanding and our companies do a really really good job measuring their exposure and make sure and it's within our risk tolerances.

Wade Burton: So, an event this size, you know, the loss we had was well within our you know, risk appetite and in the range we expected.

Stephen Boland: So when an event. This size you know the loss, we had was well within our.

Stephen Boland: Risk appetite and in the range we expected.

Wade Burton: But If you look at the underlying results, you know, in the quarter, after a significant event like this, we were still able to produce, you know, $100 million underwriting profit, which again, just shows the strength of and scale of, of our insurance and reinsurance operations globally.

Stephen Boland: But.

Stephen Boland: If you look at the underlying results in the quarter. After a significant event like this we were still able to produce.

Stephen Boland: $100 million underwriting profit, which again just shows the strength.

Stephen Boland: And scale up of our insurance and reinsurance operations globally.

Tom Mackinnon: Next question, please. Our next is from Tom MacKinnon with BMO Capital. Your line is now open. Yeah, thanks. Good morning.

Stephen Boland: Next question please.

Tom Mackinnon: Our next is from Tom Mackinnon with BMO capital. Your line is now open.

Tom Mackinnon: Yes, thanks, good morning.

Wade Burton: With lots of holdco cash here, I'm just wondering how you would prioritize deployment of it here. You're buying in some prefs, would you look at buying in the remainder here? Buying in some minority interests? You've done some, would you look at buying in more? And buying in any comments? Thanks. Thanks for the question, Tom. And you're exactly right. You laid out a lot of the capital allocation decisions that we look at. Number one is our financial strength. And as we've always defined it is, you know, we want to keep that cash and our total securities in the holding company.

Tom Mackinnon: Are you with lots of Holdco cashier I'm, just wondering if how you would prioritize them.

Tom Mackinnon: The deployment of its here would are you buying in some press, which look at buying and the remainder here.

Tom Mackinnon: Buying in some minority interests.

Tom Mackinnon: <unk> done some would you look at buying and more.

Tom Mackinnon: And or buying back stock so if you could.

Tom Mackinnon: Remind us of your priorities, there and any comment.

Tom Mackinnon: Thanks.

Tom Mackinnon: No. Thanks for the question, Tom and you're exactly right you laid out a lot of the capital allocation decisions that we look at number one is our financial strength and has had as we've always defined it as you know we want to keep that cash and marketable securities and the holding company, we want to make sure we have no short.

Wade Burton: We want to make sure we have no short term maturities, debt maturities. So nothing significant for three years. And then we like to have that $2 billion credit facility. So that's how we look at financial strength and then well capitalized insurance. Second thing, you know, we have about 500 million of preferred shares that are coming up at the end of the year, we're going to look at that. We took out our preferred shares in in the first quarter and late in December. On the acquisition side, as we said before, we're not interested in any major acquisitions, but we do have minority interest in Odyssey and Allied that, you know, companies we know really, really well, performing very, very well.

Tom Mackinnon: Term maturities debt maturities, so nothing significant for three years, and then we like to have that $2 billion.

Tom Mackinnon: Our credit facility. So that's how we look at financial strengths, and then well capitalized insurance companies.

Tom Mackinnon: Thing you know we have about 500 million of preferred shares that are coming up at the ended the year, we're going to look at that.

Tom Mackinnon: We took out our preferred shares in in the first quarter and late in December.

Tom Mackinnon: On the acquisition side as we said before we're not interested in any major.

Tom Mackinnon: Acquisitions.

Tom Mackinnon: But we do have minority interest in Odyssey in Allied that you know.

Tom Mackinnon: Companies, we know really really well performing very very well so over time, we'd like to buy buyback those minority positions and then we still think our stock price is is very good values and Hum and will continue to buyback our shares but.

Wade Burton: So over time, we'd like to buy back those minority positions. And then we still think our stock price is, is very good value. And, and we'll continue to buy back our shares, but not at the expense of our, our Financial Strength.

Tom Mackinnon: But not at the expense of R. R.

Tom Mackinnon: Financial strength.

Operator: Next question, please. Thank you very much.

Tom Mackinnon: Next question please.

Speaker Change: Thank you very much as I have no further questions I would like to turn it back to management for any closing remarks.

Operator: As I have no further questions, I would like to turn it back to management for any closing remarks.

Operator: Well, if there are no further questions, thank you for joining us on our first quarter 2025 conference call. Thank you, Fran. As we are concluded, thank you everyone for your participation.

Speaker Change: Well if there are no further questions.

Speaker Change: Thank you for joining us on our first quarter 2025 conference call.

Speaker Change: Thank you Fran.

Speaker Change: Yes. We are concluded. Thank you everyone for your participation. Please disconnect at this time.

Operator: Please disconnect at this time.