Willis Towers Watson Public Limited Company (WTW) Q1 2020 Earnings Report, Transcript and Summary

Good morning and welcome to the Willis Towers Watson's first quarter 2020 earnings conference call. Please refer to our website for the press release and supplemental information that was issued earlier today. Today's call is being recorded and will be available for the next three months on our website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of these and other risk factors, investors should review the forward-looking statements section of the earnings press release issued this morning as well as other disclosures in our most recent Form 10-K and in other Willis Towers Watson SEC filings.

Thank you very much. Good morning everyone and thank you for joining us on our 2020 first quarter earnings call. Joining me today are Mike Burwell, our Chief Financial Officer and Rich Keefe, our Head of Investor Relations. So before we get into our first quarter performance, I want to start by talking about COVID-19 and how we are managing Willis Towers Watson during this global pandemic. First of all, I hope all of you and your families are staying healthy. The safety and well-being of our colleagues has been our primary focus as the COVID-19 crisis escalated and we have mobilized to mitigate the risk to our colleagues. The COVID-19 pandemic did not have a material adverse impact to our financial results for the first quarter of fiscal 2020. However, we expect that the impact of COVID-19 on general economic activity could negatively impact our revenue and results for the remainder of 2020. We are closely monitoring the spread and impact of COVID-19, while adhering to governmental health directives. We have implemented restrictions on business travel, office access, meetings and events. We have thorough business continuity and incident management processes in place, including split team operations for essential workers and work from home protocols which are now globally effective. We are communicating frequently with colleagues, clients and critical vendors while meeting our objectives via remote working capabilities, overseen and coordinated by our incident management response team. Before the pandemic, we were already experienced in working virtually and had implemented collaboration technologies and infrastructure for remote working that we believe are effective. Currently, more than 90% of our 45,000 colleagues are working remotely. For example, our top leaders are spread across the globe and we have effectively operated this way as a management team for a number of years. So we were able to mobilize quickly to address this situation and the agility of our colleagues is remarkable. I am extremely proud of the way our colleagues have adapted. They continue to demonstrate their resilience and their commitment to support our clients' needs and one another.

Thanks John. And I would like to express my gratitude to our 45,000 colleagues for delivering another quarter despite the difficulties we are experiencing as a result of the COVID-19 pandemic. I would also like to thank our clients for their continued support and trust in us. Helping clients solve complex problems is at the heart of everything we do at Willis Towers Watson and we fully intend to continue being a reliable source of strength for the clients we serve around the world as they confront their unique pandemic related challenges. Our first quarter represented a good start to the year with strong organic revenue growth, robust margin expansion and underlying adjusted EPS growth.

Thanks very much Mike. And now we will take your questions.

. Our first question comes from the line of Shlomo Rosenbaum with Stifel. Your line is now open.

Hi. Good morning. Thank you for taking my questions. John, just given the pending business combination with Aon, I wanted to just ask you to maybe comment on what you are seeing in your business right now versus kind of Aon has commented they through a public announcement that they are going to be broadly reducing salaries in anticipation. I am not sure if it's anticipation if there something already going on over there. Is there kind of a strategy difference or end market difference? Since you are merging with them, what is your take on that versus going on internally in your business?

Yes. Shlomo, thanks for the question. So first of all, even though we are merging and maybe especially because we are merging, we have to make sure that we manage ourselves as independent competitors during this time running up to this. And so we are not able to collaborate on anything like how we are handling the market or clients or strategy or anything like this. So we have to come to completely independent solutions. And so it's really hard for me to say a lot about what went into Aon's thing. I think as Mike said, when we looked at it from our standpoint, we wanted to take whatever actions we needed. And we have been very strong in terms of cutting down, attempting to cut down really on all discretionary spending that we have. We want to really cut back to the bone. We want to look to protect our cash flow. We think if we do these things, our judgment is that if we can do those successfully, they will probably be sufficient. But the fact of the matter is, we just don't know. Whether we will have to take stricter action depends in part on how successful we are with these initiatives we have and in part on exactly what the pace of COVID-19 looks like. If we have a V or a U recovery or a W recovery, all of those are different scenarios. And I think what Mike was emphasizing in our discussion is, we think we remain agile and we think we remain ready to react to that. But basically, as the way we approach this was to say that our first and foremost priority is the safety and well-being of our colleagues. The second priority has been making sure we manage the financial health of our business. And that includes making sure we take care of our colleagues from a benefit and compensation standpoint too. So while there are clearly circumstances where we would contemplate something like that, we are hoping to avoid them.

Okay. Great. I appreciate that color. And then just one thing on TRANZACT. Can you provide us with what growth was in the last year quarter? I know you didn't own them but just to get a sense of how that is growing? And if the improvement year-over-year in operating margin for the BDA segment, does that have to do with operating leverage, with the change in the seasonality, a little bit of business because of TRANZACT? If you can you give a little bit of clarity over there, that would be helpful.

Yes. Mike, do you want to take us through that?

Yes. Sure, John. Shlomo, thank you for the question. When you look at TRANZACT overall, we have almost 50% of our revenues for the BDA segment really come in the fourth quarter, which obviously encapsulates TRANZACT. And although, we are seeing nominal losses in the first quarter, we have been pleased with what's happened with TRANZACT. So we are seeing, obviously, carrying the expenses in the earlier periods. So small changes in last quarters don't really impacted as much as what we see really happening overall. So, TRANZACT continues to grow very nicely for us. We had 57% growth and it continues to be very, very strong. So again, just looking at the year, Shlomo, obviously over 50% coming in the fourth quarter overall for the BDA segment, TRANZACT being a big piece of it. Obviously, we continue to see growth with it and we are very pleased with the performance of TRANZACT.

Okay. Thank you.

Thank you. Our next question comes from the line of Mark Marcon with Baird. Your line is now open.

Good morning. Thanks for taking my questions. Glad to hear that everybody is doing well. And I had two broad sets of questions. One would basically be, if you could give us a little bit of color with regards to how we should think about the economic downturn? John, over the course of you career, you have been through multiple recessions. Obviously, this one's deeper. Can you just go through a little bit in terms of what you have seen segment-by-segment in terms of second half of March, early April impacts? What your vertical exposure is? And based on your experience, how you think those different segments are going to end up performing? And how they are end up reacting? That's the first set of questions. And then the second set of questions is basically along the lines of, how the associates are feeling with regards to, since the Aon announcement and since they have had time to digest that, how they are feeling about it? And if COVID ends up being really significant, how could that end up impacting the transaction? Thank you.

Sure. Thanks very much, Mark. And what I will do is, I will start with your first question about our colleagues around the world and then I will make a couple comments. But I will ask Mike to take us through the details of what we were seeing in March as a result of COVID. So first of all, I think when we announced the deal on March 9 and of course that was just when particularly in Europe and in the U.S., all of the lockdowns and shelter in place was just beginning to be announced that week are coming out. So it was not a great time for us to be able to get out and talk to our colleagues overall about this. But we have been able, I think, to communicate. We had a couple of meetings that very first week and then we have been able to communicate with folks virtually. I think one thing that was interesting to us is, how quickly our colleagues got what we were trying to do with this combination. And I suspect, being home in the midst of all these lockdown and with this uncertainty from COVID-19 maybe actually helped in some ways because the whole notion of what we were trying to do here is not to be getting bigger but to be getting better and to be building a new firm that is more innovative and more able to address new and emerging client needs than either of the two predecessor firms were. And I think when you see what's happening with the result the COVID-19, it actually strengthens still the case for a firm with that kind of broad innovative capability. And frankly, having to draw a couple of these big mergers before, there is always a time in the very beginning where people are asking questions about what does this mean and how does this fit. I think we have seen a positive embracing of this deal much faster than I had expected. And I think that's in large part due to people being able to see the promise of what we will deliver together. So it's still early days but I think we have had a number of sessions where Greg Case and some of the senior leaders have been able to talk to some of our folks and we have had some sessions where I have been able to talk to some of the Aon folks. And I think we are seeing a lot of excitement from both sides about that. So we continue to be, I think, more excited and more convinced about the rationale for this deal today than we were the day we announced it. And we were pretty excited about it that day. So I think, generally we feel about as good as we think we probably could. Let me just say, you are right, one of the advantages of having been around a long time is that you have seen lots of different scenarios, different recessions, different downturns. I think this COVID-19 one is probably more difficult and more challenging, certainly at least to predict than any of the ones we have been through before. I think the financial crisis is the most recent one in memory. But that was one that we actually, Willis Towers Watson managed through, both Willis and Towers Watson managed through that financial crisis pretty well. And we have large recurring revenues, 80 to 85% of our revenues we pretty much know before we start the year. So that's a big help. I think this crisis, though, low is a is a little bit harder because we are seeing its effect on the general economy. It's whether we have clients that are going out of business, Those are the kind of imponderables that we have to deal with that make this a little bit more challenging. I think we saw some impact. I will ask Mike to take you through some of the details but it's actually hard to strip out some of the COVID impact in the first quarter. We certainly know it affected us in Asia and in fact that when you see particularly in CRB when I was going through some of the growth rates, you saw international was the lowest. Traditionally that's our highest growth rate in CRB. But we had some impacts from the Asia there because February and March was when they were hit by a lot of their lockdowns. It's actually a little bit hard for us to completely isolate that. But Mike, can you take us through some of the segment-by-segment.

Yes, John. So I will maybe take it from the HCB segment and then give you in each of the segments and a little bit further color of what we are seeing by line of business. So if you look at our retirement business, from a risk standpoint, what we are seeing is, we continue to see a lower interest rate environment. So we expect bulk lump sum activity to increase. However, some sponsor may be hesitant and have been hesitant, given the reduced funding stats that they see in their plans, but nonetheless, some maybe wish to act and they may do it this year or in looking at their ROI or they may be thinking about this over longer term. But we continue to see opportunities for people to look at BLS work, bulk lump sum work, that have diversified allocation strategies and liability driven investment strategies such that they can limit the damage to their funding levels. And so we continue to see that as an opportunity. In our health and benefits business, our HCB business, we see revenue opportunities around off-cycle products, bundled solutions and voluntary benefits. We have also been seeing rather H&B retention rates in some of the geographies, obviously due to COVID. They are not putting any kind of changes high in their list and this is obviously helping to offset the risk of reducing the business sales. From a challenge standpoint, unemployment, with the increases in unemployment and the ultimate result in lower commission, it has an impact on lower commission revenue, just in terms of thinking about it. From a CRB segment standpoint, we are seeing opportunities in risk analytics services, our risk management consulting activities. We are seeing obviously in the aerospace industry and John mentioned this just in terms of general economic conditions or you are seeing stuff as it relates to hospitality areas and even to some degree, the global finex and finance solutions, lower deal volumes and lower M&A activity obviously having some impact overall. If you look at our IRR segment, our reinsurance business, clients are using reinsurance as protection. Damage to investment portfolios and consequent drop in capital surplus means that most clients are likely to retain their current levels of reinsurance purchase. We are obviously continuing to see rate increase and a tailwind from rates. And obviously we are seeing some risk as pressure from clients are continuing to look for ways to look at reductions. And back to the earlier question around TRANZACT, it has been very strong for us in our BDA segment. The retiree client interest, there continues now to be a continued uptick and people looking at cost savings. And obviously, where we present in our BDA segment a real opportunity for people to manage their cost particularly in a pre and post 65 through our exchange operations. So hopefully to give you some feeling flair what's actually happening across our segments without going in any more detail, John, I think I will pause there and just to kind of hopefully gave some color to the question.

That's terrific. Can I just ask one quick follow-up? Can you just talk about what your percentage exposure is to the areas that seem to be the most affected, whether it's aerospace, hospitality, global finance, maybe some real estate companies? How are you thinking about that?

So let me just comment on that overall. By client, there is no client that even gets up to 1% of our revenues. So when we look at it by industry, we don't have high exposure to any particular industry with the exception of insurance, really financial generally, but insurance in particular. But that's not an area that we have seen has been particularly affected by this. So we are not particularly worried about any industry affects, Mark.

Great. Thank you very much.

Thank you. Our next question comes from the line of Elyse Greenspan with Wells Fargo. Your line is now open.

Hi. Thanks. Good morning. My first question. So I understand there is a lot of uncertainty out there right now and get the desire to want to pull the outlook for the year. but I guess could you give us a sense like, as you may see things, even if it's a big range or maybe it's more qualitative throughout your different businesses, how does the organic, the level of slowdown potentially inorganic growth that we could see over the next three quarters? And then as part of that question, is there a lag in some of your businesses, meaning that we could actually see, potentially see more of a slowdown in the third than what might see in the second quarter?

Yes. So Elyse, let me just say, I think the reason we did, the reason we did pull the guidance is because we saw the uncertainty had what we considered a relatively wide range. Now having said that, we are very fortunate. There are some industries like aviation or hospitality or others that have really seen enormous hits to their revenue. And we are very fortunate in the sense, we are not going to be seeing that. But on the other hand, could we see our revenue decline from what it would have been, may be even at a double digit rate for the remainder of this year? That's not impossible. We think that's on the more extreme scenarios. But depending on how bad you think the hit's going to be to general economic activity, certainly we do well when the economies are doing well and we do less well when the economies are doing poorly. So as we looked at it, that's kind of the range we thought about. Could we get to a double digit decline? That's pretty extreme but it's not impossible. So those are the kinds of things that we looked at it. We didn't attempt to do much more than that, Elyse. We did some scenario planning on this. But there are just so many variables there that we quickly found we couldn't get to too much more than that. But I think the good news is, as I said, we are not in some of these really distressed industries where they are going to see enormous hits their revenue. We don't see that. As I mentioned in the beginning, the kinds of services that we provide are services that our clients need in difficult times as well as in good times. And so we, for the most part, see those continuing. Now, in terms of, are there some lags? I think the one area that probably comes to mind the most is, we have always seen in our human capital and benefits area, in our talent and rewards. It's the most discretionary of all the services that we have. And it's the one where clients will sometimes end up delaying or maybe canceling projects when there is difficult economic activity. So could we see that occur and lead into the third quarter from the second quarter? Yes. And that's something that we have seen in prior downturns. The one thing that makes it a little bit different here is that we see some upsides for this kind of work also, because clients are faced with having new ways of working, having new deals that are going to be working out for their employees. And we think there may be some opportunity to help clients with that as we go through. So maybe this is a talent and rewards has some upside that we wouldn't normally see in a downturn. For most of the rest of our businesses, I don't think we see that kind of a lag. I think it's going to be more or less tied to the overall economic activity. I think sometimes in a downturn with retirement, we can see that we actually have a little pickup in activity right in the beginning because our clients are very concerned with their funded status, with their contribution levels, with their accounting cost. So we actually get a bit of a pickup of that, at least in the very early months of a downturn. And so that might make the third quarter a little worse than the second. But it might be because the second quarter has a bit of pickup. So I hope that's helpful,.

John, maybe I would just one comment to yours there is that I think it's also just to emphasize the point you made which is when you look at our business, for example in our HCB business, we have a lot of work that is nondiscretionary and repeat. For example, in retirement that we have going on a recurring work, if you think about it. And the non-recurring work or discretionary projects, yes, you are definitely seeing a slow-up in the timing of that is debatable. But it's being replaced by COVID related support work. The agile of our colleagues and the way they are responding and supporting our clients in the marketplace is truly amazing in what they are doing in terms of replacing that revenue. So, sorry, John, I just wanted to emphasize that point you made.

No, thanks very much Mike. And I think one of the, as is usual with most things about COVID, so Mike right on point with what he is saying. The only difficulty is as to how that, does that outweigh some of the downturn from some of the discretionary projects to get delayed or not. We don't know the relative size of these movements, Elyse.

Okay. That's helpful. And if we look at BDA segment for the quarter, the margin actually did better year-over-year and better than I would have thought. And as I recall with your original guidance for 2020, you had pointed to TRANZACT as being a hindrance to margins in the first part of the year, just due to how that business comes online. So the BDA segment like performed. Was there something going on within that quarter? Or was it just ongoing improvement maybe in the business away from TRANZACT?

Yes. I mean I think they just had a good quarter, is what we would say. I think the biggest point we wanted to make in thinking about the impact of TRANZACT this year versus last year is that last year we had TRANZACT only at the end of the year. And of course, that's when it's highly profitable in those quarters and this year we had them for the full year and we do have a negative but still compared to and improvement in BDA. And frankly, BDA is a business that we expect to be strong this whole year.

That's helpful. One last question. Have you guys ever disclosed your transportation and entertainment cost as a percent of your expenses? Or is there some way you can give us some context, some way to kind of understand how much your expense base could benefit from the slowdown in T&E cost due to COVID and the lack of traveling?

I don't think we have ever disclosed that. We have seen our travel costs. So we actually have guidance out for our folks not to be traveling right now. And as we start to see things opening up, obviously we will be relaxing some of that. But throughout most of the world, we have people not traveling. I think one of the things we expect is, as we come back and we actually have a task force working on this, we don't think we are going to return to the same ways of working. We think there are some things that we are doing with virtual meetings and with work from home that will become a feature of what we do. And so even when we come back, we will be traveling again but we probably won't be traveling the same way or as frequently as we did. And so we will have to see how that impact all plays out. But for the moment, we have had a reduction in our travel and entertainment expense. Of course, we have had some increase in the cost for our webhosting and some of our virtual meetings. But it's been a net net savings.

Okay. Thank you for the color.

Thank you. Our next question comes from the line of Greg Peters with Raymond James. Your line is now open.

Good morning. I realize that you are limited in what you can comment about the pending transaction. But I am curious if you anticipate any slowdowns with regulatory approvals as a result of COVID? And with the stock down as much as it is and the market has obviously moved down too, but since the announcement, I never really envisioned that the company would be sold at a price below $200. Can you update us on shareholder feedback?

So I think first of all, Greg, on the regulatory front, the regulators are working virtually and I think they are, like a lot of other people, some of this is new to them. But I think they have become pretty good and reasonably efficient at that. At the margin, will that mean that things will be a little bit slower? Perhaps. But I think we don't see this as being an enormous impact. I think with regard to the feedback from shareholders, we have had pretty positive feedback from shareholders. I think they see the value of the opportunity and they feel good pretty about what we can accomplish as a combined firm. And as I said, I think they see this as the next step in the evolution.

And then my second question is just around ASC 606. Obviously, when you are setting up the revenue assumptions and the accounts receivable on that revenue, there is embedded assumptions around numbers of employees, et cetera, especially like in HCB. And with the dramatic rise in unemployment, I am wondering about how you think your ASC 606 assumptions might change through the year as a result of just the chaos that's unfolding?

Mike, you want to comment on that?

Yes. I will, John. Yes, we really don't see a meaningful change as it relates to it in terms of thinking about, Greg. It's a good question. It's something we were obviously looking but at this stage, right now we don't see a meaningful change as it relates to the numbers.

Okay. Thanks. And I guess the final question I should ask is and I know you have covered this a little bit in your comments, John. But I feel like among the corporate world, there is growing sense of social responsibility because of this rising unemployment. And do you think that's going to impact the synergy objectives when we think out a year or two just because it seems so relevant with number of companies and industry with no layoff pledges, et cetera. And I asked the same question to Marsh as well. So I thought I would throw it at you too.

Yes. I think we want to make sure that we have -- we don't want to have people that we don't have work for in this thing. And I think some of our synergy targets are probably around that. A lot of our synergy targets are also around non-people related costs also. But I think we will take this all into account. But we want to be a company, Willis Towers Watson has always been and I think Aon has been and I think the combined firm will be a company that offers meaningful work and meaningful jobs and has great opportunities for our colleagues. And I was asked earlier about how our colleagues feel about the combination. And I think one of the things that's been very positive is people see the increased opportunities that are going to be coming from the combination of the firms. And so I think that's the excitement.

Thank you for your answers.

Thank you. Our next question comes from the line of David Styblo with Jefferies. Your line is now open.

Hi. Good morning. Thanks for the question. I think you guys earlier talked about 80% to 85% of revenues, knowing what those are going to be for the year. Can you parse that down a little bit more so that we could understand what types of projects within there still might get pushed out? For example, does that include things like in talent and rewards where there is an annual survey that's done to benchmark employee pay or salary? And I know the types of works that would be at higher risk of getting pushed out? And then if you could provide some color about the other 15% to 20% that's not known or renewable every year, what type of projects those are so that we could just have a sense for puts and takes as you are evaluating the risk going forward?

Sure. Dave, thank you for the question. So let's just think about it and then I will try to hit the highlights versus every single line of business here. But if you look at our HCB segment, think about retirement, whether they are being done for trust or for a client, they are done every year. So we have multiyear arrangements that are in place and we can never take for granted servicing clients. But we have multiyear arrangements that are in place in terms of doing that. So I don't know what, think about it maybe 70-30 or something like that that's recurring and nonrecurring just in terms of thinking about that. And if you look at nonrecurring, they are thinking about, do they do bulk lump sum work as I mentioned in my earlier comments or other types of projects. You are seeing some of that retrench in terms of the nonrecurring side of that equation. But equally, if you look at our CAS business or you look at our talent and rewards wants business, people are thinking about how do they manage their workforce, how do they deal with COVID-19. And so we are seeing the nature of those projects either shut off but change, but those annual surveys are very important to the client base in terms of what they are looking for. So we have multiyear arrangements sitting in HCB. We feel although the mix is changing, you are seeing some questions around some of that discretionary spend but people are looking at how do they manage COVID-19 and we are putting solutions on the table. If you move to our CRB segment, I think obviously you are seeing general economic conditions. I think John mentioned this in his comments. I mean, look, if you are not putting up a construction project or obviously you are seeing aerospace or hotels and anything related to the hospitality and entertainment spot are out there. But yet people still are looking at insurance. They may not buy much insurance but they still look at insurance needs and we are seeing that. And we are obviously seeing, we are very fortunate to see a bit of tailwind on price in reinsurance. And when you think about that, our retention rates are going up really high because it's not first on people's mind to say, I am going to change my relationship. I really want to manage that relationship. And if you look at our IRR segment, in particular, reinsurance again, the people are keeping their relationships in place that are multiyear to be their investment business on multiyear relationships that are there that are included. So in the BDA segment, our long term relationships in terms of various agreement and arrangements that we have on our exchanges. So yes, there is, like John said, it's 15%, 20% that's discretionary. But we feel pretty good about it. We are very fortunate to be in this situation to help our clients be successful and manage through it. But we are thinking about how it is that we manage the changing nature of the work and obviously meaningfully going after discretionary spend to make sure that we manage our cost based aligned with where our revenue is.

Okay. Thanks for that. And then second one would just be on transaction with Aon. What gets you guys comfortable with potential overlap risk on the reinsurance book? How do you guys characterize that market? And to the extent that you would be concerned about divestitures?

So, look, we have had some extraordinarily good advice on the antitrust from some of the leading law firms in the world. And we feel pretty good about our ability to bring the two firms together.

Okay. And then lastly, just on TRANZACT. I appreciate the year-over-year growth color there. I am just wondering about the impact of Corona there. How is your ability then to transition all those folks to work from home and not miss out on potential call volume? And then also on the demand side, if seniors are deciding not to shop as much, given some of the comment that we have heard out of Humana about a slowing sales cycle? Curious what you guys are seeing from those trends as of going into April? I know March was absolutely strong year-over-year. But is the slowdown perhaps in some senior buying manifesting down to TRANZACT right now?

So, Mike, do you want to take that?

Yes, if I could, John. So Dave, thanks again for the question. I think Gene and his management team in BDA have done an outstanding job of reacting to changes that have been happening from COVID-19 and be able to work remotely. In John's prepared, he talked about 90% to 95% of our people, our colleagues are working from home and that includes TRANZACT. So much so that it's really between Gene and his leadership team and even specifically drilling into TRANZACT, have done a really good job of migrating the business to be able to run virtually. And it's truly impressive, frankly, how well they have been focused on serving clients and their ability to do it and such. It comes to some of the things John said is, we are really asking ourselves, what should be the ongoing business model going forward based on the work that they have done. So I think kudos to our team and the agility of the management team. We feel good about how well they have reacted to it and just we feel really good about what that means and we are very blessed and lucky to have that team in the way that they responded.

And just the other thing I would add is that we have not seen a decline in senior buying as a result of this. I think there is some impacts that makes some seniors a little less reluctant to buy. But on the other hand, we have seen more people at home with time to look at these opportunities also. So we don't foresee that as being a major issue. As I said, we expect BDA to be strong through the remainder of the year.

Great. Thanks.

Thank you. This concludes today's question-and-answer session. I would now like to turn the call back to John Haley for closing remarks.

So thanks very much everyone for joining us on the call today. Again, as I said at the beginning, I hope you and your families, all stay safe and we look forward to updating you with our second quarter results. So long.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.